Proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of potassium permanganate originating in India and the Ukraine and collecting definitively the provisional duty imposed
Date: 1998-06-22
Institutions: European Commission
Subjects: India, Ukraine, anti-dumping duty, import, potassium

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.06.1998 
COM(1998) 382  final 

Proposal for a 

COUNCIL REGULATION (EC) 

imposing a definitive  anti-dumping duty on imports of potassium  permanganate 

originating in India and the Ukraine and collecting definitively  the 

provisional duty imposed 

(presented by the Commission) 

EXPLANATORY  MEMORANDUM 

(1)  By Regulation  (EC) No  178/98 of 23 January  1998(l), the  Commission  imposed 

a  provisional  anti-dumping  duty  on  imports  into  the  Community  of  potassium 

permanganate  originating in India and the Ukraine.  Further to the imposition  of 

the  provisional  measures,  interested  parties  submitted  comments  in writing  and 

were granted an opportunity to be heard by the Commission. 

(2)  The  Commission  accepted  the  claims  made  by  the  Indian  and  Ukrainian 

exporting  producers  in  respect  of  certain  deductions  to  the  export  price  and 

consequently  revised  downwards  its  calculations  of  dumping  (from  6.8%  to 

5.6% for India and from  40.4% to 36.2% for the Ukraine). 

(3)  All  interested  parties  were informed  of the main  facts  and  considerations  on the 

basis  of  which  it  was  intended  to  recommend  the  imposition  of  definitive 

measures and  granted  sufficient  time to make representations.  The  submissions 

made were examined and taken into account where appropriate. 

(4) 

In  accordance  with  Article  9(4)  of  Council  Regulation  (EC)  No  384/96,  the 

Basic  anti-dumping  Regulation,  the  Commission  therefore  proposes  that  the 

Council  impose  definitive  anti-dumping  duties  on  imports  into  the  Community 

of  potassium  permanganate  originating  in  India  and  the  Ukraine.  Given  the 

extent  of  the  injury,  it  is  also  recommended  that  the  Council  collect  the 

provisional  anti-dumping  duties  to  the  extent  of  the  amount  of  the  definitive 

duties imposed. 

OJNoL  19,24.01.  1998, p. 23 

1 

COUNCIL REGULATION (EC) No 

/98 

of 

1998 

imposing a definitive  anti-dumping duty on imports of potassium  permanganate 

originating in India and the Ukraine and collecting definitively  the 

provisional duty imposed 

THE COUNCIL OF THE EUROPEAN  UNION, 

Having regard to the Treaty establishing the European  Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on 

protection  against  dumped  imports  from  countries  not  members  of  the  European 

Community0\ and in particular Article 9 (4) thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after  consulting  the 

Advisory  Committee, 

Whereas: 

A.  PROVISIONAL  MEASURES 

(1)  By  Commission  Regulation  (EC)  No  178/98(2)  (hereinafter  referred  to  as  'the 

provisional  duty  Regulation')  a  provisional  anti-dumping  duty  was  imposed  on 

imports  into the Community  of potassium  permanganate  falling  within  CN code 

2841 61 00 originating in India and the Ukraine. 

OJ No L 56, 6. 3.  1996, p.  1. Regulation as amended  by Regulations (EC) No 2331/96 (OJ 
L317, 6.12.1996, p. 1) and No 905/98 (OJL  128, 30.4.1998, p. 18). 
OJNoL  19, 24.1.1998, p. 23 

4  eu 

B.  SUBSEQUENT  PROCEDURE 

(2)  Following 

the 

imposition  of  the  provisional  anti-dumping  measures,  the 

complaining  Community  industry  and  both  the  Indian  and  Ukrainian  co 

operating exporting producers submitted comments in writing. 

(3)  The  Ukrainian  co-operating  exporting  producer,  who  was  the  only  interested 

party to have so requested, was granted a hearing. 

(4)  The  Commission  continued  to  seek  and  verify  all  information  it  deemed 

necessary  for  its definitive  findings. 

(5)  Parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 

which  it  was  intended  to  recommend  the  imposition  of  definitive  anti-dumping 

duties  and  the  definitive  collection  of  amounts  secured  by  way  of  provisional 

duties.  They  were  also  granted  a  period  within  which  to  make  representations 

subsequent  to this disclosure. 

(6)  The oral and  written comments were considered  and,  where  deemed  appropriate, 

taken into account in the definitive  findings. 

C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 

(7)  As no comments or new facts were submitted by any interested  party with regard 

to the definition  of the product concerned and the like product, the findings  made 

on these  issues, as set  out in recitals  8 and  9 of the provisional  duty  Regulation, 

are  confirmed. 

D.  DUMPING 

1)  Normal value and export price 

(8)  In the absence of further  arguments concerning the establishment  of normal value 

and  export  price,  the  provisional  findings  as  set  out  in  recitals  10 to  17  of  the 

provisional duty Regulation, are hereby  confirmed. 

2)  Comparison 

(9)  The  Ukrainian  and  Indian  exporting  producers  claimed  that  no  deduction  to  the 

export  price  for  certain  ancillary  costs  and  credit  costs  respectively  should  have 

been  made.  These  issues  were  examined  and  since  it  was  found  that  indeed  no 

such  deductions  should  have  been  made,  corrections  to  the  export  price  were 

made accordingly. 

(10) In the absence of any other new arguments concerning comparison, the remaining 

provisional  findings,  as  set  out  in  recitals  18  to  23  of  the  provisional  duty 

Regulation, are hereby  confirmed. 

3)  Dumping margin 

General 

(11) In  the  absence  of  new  arguments  concerning  the  determination  of  the  dumping 

margin,  the  methodology  set  out  in  recitals  24  to  26  of  the  provisional  duty 

Regulation is hereby  confirmed. 

India 

(12) The dumping  margin definitively  established  for  India, expressed  as a percentage 

of the CIF price at Community frontier  level, is as follows: 

Universal Chemicals and Industries Pvt. Ltd., Mumbai: 

5.6% 

As  this  company  is  deemed  to  represent  100 % of  the  Indian  production  of  the 

product  concerned,  the  residual  dumping  margin  definitively  established  is  also 

5.6%. 

Ukraine 

(13) The  dumping  margin  definitively  established  for  the  Ukraine,  expressed  as  a 

percentage of the CIF price at Community  frontier  level, is 36.2%. 

E.  COMMUNITY  INDUSTRY 

(14) As no comments or new facts  were submitted  by any  interested  party  with regard 

to  the  definition  of  the  Community  industry,  the  findings  made  as  set  out  in 

recital 27 of the provisional duty Regulation, are hereby  confirmed. 

F.  INJURY 

1)  General 

(15) Comments  were  made  by  the  exporting  producers  in  respect  of  the  provisional 

findings  regarding  the  following  injury  factors:  prices  of  the  dumped  imports, 

price  undercutting  and  the  situation  of  the  Community  industry.  No  other 

interested party expressed any contradicting view. 

2)  Prices of the dumped imports and price undercutting 

(16) The  Indian  and  Ukrainian  exporting  producers  both  contested  the  provisional 

findings  concerning price undercutting and claimed  in particular that  information 

they  had  previously  submitted  (in  the  form  of  "offers"  or  invoices)  had  been 

disregarded  without  sufficient  detailed  explanations.  They  again  submitted 

information  concerning  resales  of  the  product  concerned  in  the  Community  (in 

the  form,  inter  alia,  of  invoices)  obtained  from  a number  of  unrelated  importers 

allegedly showing the absence of price undercutting. 

It should be noted, however, that the previously  and newly  submitted  information 

concerned  importers  who  either  did  not  co-operate  or  only  insufficiently  co 

operated  with  the  Commission's  investigation.  This  information  could  not, 

therefore, be verified  during on-the-spot verifications  (in particular as regards the 

existence  of  possible  credit  notes  reducing  actual  sales  prices  or,  in  the  case  of 

"offers",  as  regards  the  question  whether  such  offers 

led  to  actual  sales 

transactions  or  not).  In  any  case  it  covers  a  very  small  part  of  the  imports 

concerned  and  examined  by  the  Commission.  Moreover,  in  support  of  their 

contention  that  the  Commission's  price  undercutting  findings  were  not  correct, 

the  Indian  and  Ukrainian  exporting  producers  had  submitted  calculations  based 

on figures  concerning  their export price on the Community  market which did not 

match  the  corresponding  verified  figures  they  themselves  reported  in the  course 

of  the  investigation.  The  information  submitted  cannot  therefore  invalidate  the 

findings  of  clear  price  undercutting  as  set  out  in  recitals  36  to  38  of  the 

provisional  duty  Regulation. 

(17) The  Ukrainian  exporting  producer  again  claimed  that  its  "special  relationship" 

with  its  sole  importer  in  the  Community,  allegedly  consisting  of  the  importer 

financing  the  purchase  of the  raw  materials  as  well  as  granting  pre-payment  for 

deliveries, would have necessitated certain adjustments  to the export price. 

In  this  respect,  it  has  to  be  stressed  that  this  relationship,  interrupted  in  1997, 

could  not be  investigated  due to the  lack  of co-operation  from  the  sole  importer 

in question. Indeed, despite repeated requests from  the Commission, the company 

in question  failed  to submit  relevant data. Therefore,  adjustments  claimed  by the 

Ukrainian exporting producer could not be granted. 

(18) As regards the Community  industry's selling price used  in order to determine the 

price  undercutting  margin,  it  was  alleged  that  data  reported  by  the  German 

producer (Chemie GmbH Bitterfeld-Wolfen)  had been disregarded. 

In  this  respect  it  should  be  recalled  that,  as  indicated  in  the  provisional  duty 

Regulation,  the  calculation  of  price  undercutting  was  made  by  comparing  the 

prices  of  the  Community  industry  as  a  whole,  i.e.  its  weighted  average  prices, 

including those of the Community producer in question, with prices of the Indian 

and Ukrainian exporting producers. 

Moreover, it should be stressed that, as noted in recital  37 of the provisional  duty 

Regulation,  the  Commission  based  the  price  undercutting  calculation  on  import 

sales  figures  adjusted  for  post-importation  costs,  i.e.  for  customs  duty,  loading 

and  warehousing  costs  and  credit  costs  (prices  were  adjusted  to  a cash  payment 

level),  in  conformity  with  the  Community  Institutions'  established  practice  and 

as requested by the exporting producers in their submissions. 

(19) The undercutting margins of 26% for the Ukraine and 8.4% for India as set out in 

recital  38 of the provisional duty  Regulation, are accordingly  hereby  confirmed. 

3)  Situation of the Community industry 

(20) The  exporting  producers  alleged  that,  in  the  assessment  of  the  situation  of  the 

Community  industry,  data  relating  to  the  German  producer's  situation  had  been 

fully  excluded  from  the analysis. 

Again, this allegation  is not correct  as the provisional  findings  were  based  on an 

overall  assessment  of  the  situation  of  the  entire  Community  industry.  Only  the 

costs  of  production  of the  German  producer  were  disregarded  in the  calculation 

of the  injury  elimination  level  (see  recital  31 of  the present  Regulation),  and  its 

profitability  data  were  not  included  when  determining  the  injury  indicator 

'profitability  of the Community  industry'.  Indeed, it was found  that these  figures 

were likely to be influenced  by the current restructuring  of its operations. This is 

in conformity  with the usual practice of the Community  Institutions, consisting of 

disregarding  extraordinary  items  in  accounts.  In  any  event,  had  the  German 

producer's  data  relating  to  these  two  items  been  taken  into  consideration,  the 

situation of the Community  industry would have been found  to be even worse. 

All  other  injury  indicators  were  examined  taking  into  consideration  the  verified 

information  given  by  both  the  German  producer  and  the  Spanish  producer 

(Industrial  Quimica del Nalôn) constituting the Community  industry. 

(21) It  was  also  alleged  that,  on  balance,  the  injury  indicators  did  not  show  that  the 

Community  industry  was experiencing  material  injury.  The exporting  producers 

based this allegation on an improvement  of the situation of the industry  following 

the  previous  imposition  of  anti-dumping  measures  on  Chinese  imports  by 

Council  Regulation  (EC) No 2819/94  (3) and  the data  relating  to the  exceptional 

year  1995  where  demand  for  the  product  concerned  increased  substantially 

because of climatic circumstances. 

OJL 298,19.11.194, p. 32 

It is considered that these considerations should not detract from  the weak overall 

situation  of the  Community  industry.  Indeed,  prices  of  the  Community  industry 

decreased  by  10% from  1992  to  the  investigation  period  (April  1996  to  March 

1997), in a very price-sensitive  market, and the Spanish producer  recorded  losses 

for the same period, while the Indian and Ukrainian exporting producers undercut 

the Community  industry's  prices significantly  and doubled  their  market  share of 

potassium permanganate on the Community  market. 

It should  also be recalled  that the injury  indicators have to be seen  in the context 

of an  industry  recovering  from  past  dumping.  Accordingly,  the  injury  indicators 

should be assessed bearing  in mind the overall historical  situation  of the market, 

which  had  been  affected  by Chinese  dumped  imports, with  a consecutive  impact 

on the Community  industry's state and with certain positive consequences for the 

situation  of  the  Community  industry  after  the  imposition  of  anti-dumping 

measures concerning Chinese imports. 

4)  Conclusion  on injury 

(22) In the  light  of  the  above  and  in  the  absence  of  other  arguments  concerning  the 

determination  of injury,  the provisional  findings  laid down  in recitals 28 to 50 of 

the provisional  duty  Regulation, according to which the Community  industry  has 

suffered  material injury, are hereby  confirmed. 

G.  CAUSATION 

(23) In  order  to  show  that  the  injury  suffered  had  not  been  caused  by  the  dumped 

imports  subject  to  the  current  investigation,  the  exporting  producers  brought 

forward  three main other potential  causes of injury:  pressure of Chinese  imports, 

the particular situation of the German producer and certain alleged changes in the 

pattern of consumption. 

1)  Impact of Chinese imports 

(24) The  exporting  producers  argued  that  the  overwhelming  cause  of  injury  was 

Chinese imports. 

In this  respect,  it  should  be  noted  that  the  Chinese  imports  have  been  countered 

by  a definitive  anti-dumping  measure  imposed  in  November  1994  and  virtually 

ceased  after  1994.  The  Chinese  imports  could  not,  since  then,  be  regarded  as a 

cause  of  the  injury  experienced  by  the  Community  industry,  particularly 

noticeable  at  the  end  of  the  five  year  period  examined  for  the  assessment  of 

injury,  i.e. during the period  1  April  1996 to 31 March  1997. 

10 

2)  Competitiveness of the Community  industry /self-inflicted  injury 

(25) It  was  alleged  that  one  of  the  complainants,  the  German  producer,  is  inefficient 

and undercuts its competitor's prices on the Community  market. 

In this respect  it should  be noted that  the findings of  substantial  undercutting  by 

Ukrainian  and  Indian  exports  were  based  on  data  including  sales  prices  of  the 

German  producer.  It  was therefore  confirmed  by  the  investigation  that,  contrary 

to  the  allegation  made,  the  Indian  and  Ukrainian  exporting  producers'  prices 

undercut in fact the average Community  industry's price. 

In addition, while it is a mere assumption that the current restructuring  is in itself 

a proof of inefficiency  of the Community  producer  concerned,  it was  established 

that  the  dumped  imports  weakened  the  position  of  this  producer  and,  in  fact, 

impeded the improvement of its economic  situation. 

3)  Changes in the pattern of consumption 

(26) The exporting producers argued that the injury  suffered  was also due to a change 

in  the  pattern  of  consumption  resulting  from  competition  from  emergent 

substitute products. 

As regards substitute products, it should be recalled that potassium  permanganate 

is mainly  used  for  potable  water  treatment,  wastewater  treatment,  chemical  and 

pharmaceutical  manufacture,  metal  refining  and  disinfectant.  Four  substances 

were  put  forward  as  emergent  substitute  products  to  potassium  permanganate: 

sodium dichromate, mono potassium persulphate, ozone and hydrogen peroxide. 

II 

The first three products mentioned above, even if sold  in significant  quantities on 

the  Indian  market,  are  still  marginal  on  the  Community  market.  Sodium 

dichromate is not in use in the Community due to its cancerogenic  characteristics. 

Mono-potassium  persulphate  is a chemical  product totally  unknown  in the water-

treatment  sector 

in  the  Community  and  only  marginally  used 

in  other 

applications.  Ozone can be potentially  seen  as a substitute  product  to  potassium 

permanganate  in  water  treatment.  However,  use  of  this  product  is,  for  the 

moment,  limited,  and  cannot  be  considered  to  have  had  a  significant  impact  on 

the  Community  potassium  permanganate  market  and  the  situation  of  the 

Community  industry.  Finally,  hydrogen  peroxide  cannot  be  considered  as  an 

emergent product because it has been used as an industrial oxidiser  for  as long as 

potassium permanganate and did not gain  importance at the expense of potassium 

permanganate. 

It  is  therefore  considered  that  none  of  these  alleged  substitute  products  have 

significantly  affected  the  pattern  of  consumption  of  the  product  concerned. 

Accordingly,  the  alleged  emergence  of  such  products  cannot  be  construed  as  a 

significant  alternative source of injury  to the Community  industry. 

4)  Conclusion on causation 

(27) None  of the above  factors  can  be considered  to  have an  impact  such  as to  break 

the  causal  link  between  the  dumped  imports  and  the  injury  suffered  by  the 

Community  industry  in this case. Therefore,  the  provisional  findings  concerning 

causation,  as  set  out  in  recitals  51 to  72  of  the  provisional  duty  Regulation,  are 

hereby  confirmed. 

12 

H.  COMMUNITY  INTEREST 

(28) The  only  comments  submitted  on this  issue  were  in  respect  of  the  Community 

industry's interest in seeing the dumping practices counteracted. 

1)  Interest of the Community  industry 

(29) In this respect, it was argued that the imposition of anti-dumping  duties would be 

against  the  interests  of  the  German  producer,  which  was  allegedly  reluctant  to 

support  the  current  anti-dumping  proceeding  as  anti-dumping  measures  would 

serve only the Spanish producer because of its allegedly dominating  position. 

This  argument  was  not  supported  by  any  evidence.  The  German  producer  is  a 

complainant,  which  co-operated  fully  in  the  investigation  and  did  not  make  any 

indication that  it would no longer support the current anti-dumping  proceeding. 

Furthermore,  as  noted  in  the  provisional  duty  Regulation,  in  the  absence  of 

measures, the  existence  of the Community  industry  as a whole  would  ultimately 

be at risk. Moreover, given the price sensitivity of the product, it is likely that the 

measure  would,  to  a  large  extent,  equally  help  the  German  producer  to  obtain  a 

more  favourable  market  position.  In  any  event,  anti-dumping  measures  are  not 

designed to prevent competition on the Community market. Rather, their purpose 

is  to  allow  Community  producers  to  compete  on  a  level  playing  field  with 

imports in the Community. 

13 

2)  Conclusion on Community  interest 

(30) It  is therefore  confirmed  that  there  are  no  compelling  reasons  not  to  take  action 

against  the  injurious  dumping  found.  Accordingly,  the  findings  concerning 

Community  interest,  as  set  out  in  recitals  73  to  86  of  the  provisional  duty 

Regulation, are hereby  confirmed. 

I.  DEFINITIVE  MEASURES 

1)  Injury elimination level 

(31) As  no  comments,  other  than  those  concerning  the  need  for  adjustment  to  the 

export  price, requested  by the Ukrainian  exporting  producer  in order to take  into 

account  its  special  relationship  with  its  sole  importer  in  the  Community  (see 

recital  17  of  the  present  Regulation),  were  received  with  regard  to  the 

methodology  used  in calculating  the  injury  elimination  level, the  findings,  as set 

out in recitals 88 to 90 of the provisional  duty Regulation, are hereby  confirmed. 

2)  Form of duty 

(32) The  provisional  measures  were  imposed  in the form  of  a variable  duty  based  on 

minimum  prices.  The Ukrainian exporting producer  requested  that the  minimum 

price  concerning  the  Ukraine  should  be  set  at  the  same  level  as  the  minimum 

price applicable to imports from  India. 

14 

As  indicated  in  recitals  11,  14  and  93  of  the  provisional  duty  Regulation,  this 

situation arose from  the  following: 

Although  both  minimum  prices were based  on the domestic  prices  of  the  Indian 

producer, the Indian  minimum  price was the weighted  average of the  lower price 

for  potassium  permanganate  with  a  purity  below  99%  and  the  higher  price  for 

potassium  permanganate  with  a  minimum  purity  of  99%  while  the  Ukrainian 

minimum  price  equalled  the  price  for  potassium  permanganate  with  a  minimum 

purity of 99% since this country only exports this grade. 

Given  this  factual  background,  the  request  made  by  the  Ukrainian  exporting 

producer  could  not  be  granted  as  the  difference  in  minimum  prices  reflected  a 

difference  in  the  exported  product  types  concerned.  However,  in  view  of  the 

different  existing  product  types  it  was  examined  whether  the  use  of  different 

minimum  prices  for  India  and  the  Ukraine  might  result  in  a  discriminatory 

treatment.  It  was  also  examined  whether  the  use  of  this  form  of  anti-dumping 

measure was appropriate with a view to removing the injurious  effect  of dumping 

for all the different  types in which the product concerned exists. 

15 

In  this  respect  it  is  clear  that  if  in  the  future  both  countries  were  to  export 

potassium  permanganate  with a minimum  purity  of  99% exclusively,  the  Indian 

exporting  producer  would  benefit  without  justification  from  a  lower  minimum 

price  compared  to  the  minimum  price  established  for  the  Ukrainian  exporting 

producer  and  that  the  anti-dumping  measure  imposed  would  not  ensure  that  the 

effect  of dumping would be removed. 

Such  non  desirable  potential  effects  outweigh  the  arguments  which  motivated  at 

the provisional  stage  the decision  to depart  from  the usual  form  of  anti-dumping 

duties. Accordingly,  the definitive  anti-dumping  duty  should  take the  form  of an 

ad valorem duty. 

3)  Level of duty 

(33) Since,  for  each  country  concerned,  the  injury  elimination  margin  established  is 

higher  than  the  dumping  margin,  the  definitive  anti-dumping  duty  should  be 

based on the respective dumping  margins, namely  5.6% and 36.2% for  India and 

the Ukraine respectively. 

J. COLLECTION OF THE PROVISIONAL  DUTY 

(34) Given  the  magnitude  of  the  injury  suffered,  the  amounts  secured  by  way  of 

provisional  anti-dumping  duty,  under  Regulation  (EC)  No  178/98,  should  be 

definitively  collected  to the extent of the amount of the definitive  duties imposed, 

HAS ADOPTED THIS REGULATION: 

Article  J 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  potassium 

permanganate  falling  within  CN code  2841  61  00 originating  in India and  the 

Ukraine. 

2. 

The  rate  of  the  definitive  anti-dumping  duty  applicable  to  the  net,  free-at-

Community-frontier  price, before duty, shall be: 

- 5.6% for potassium  permanganate originating  in India, 

- 36.2% for potassium  permanganate originating in the Ukraine. 

3. 

Unless otherwise specified,  the provisions in force concerning customs duties 

shall apply. 

17 

Article 2 

The amounts  secured  by way of the provisional  anti-dumping  duty  imposed  pursuant 

to Regulation  (EC) No  178/98 shall be definitively  collected  at the  level of the duties 

definitively  imposed  on  imports  of potassium  permanganate  originating  in India and 

the Ukraine. 

The  collection  shall  be  limited  to  the  amounts  secured.  In  addition,  the  amounts 

secured  in excess of the definitive  antidumping duties shall be released. 

Article 3 

This  Regulation  shall  enter  into  force  on  the  day  following  its  publication  in  the 

Official  Journal of the European Communities. 

This Regulation  shall  be binding  in its entirety  and directly  applicable  in all  Member 

States. 

Done at Brussels, 

1998. 

For the Council 

The President 

18 

ISSN 0254-1475 

COM(98) 382 final 

DOCUMENTS 

EN 

02  11  10 

Catalogue  number  :  CB-CO-98-395-EN-C 

ISBN  92-78-37272-2 

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