Council Regulation (EC) No 1507/98 of 13 July 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
Date: 1998-07-13
Institutions: Council of the European Union
Subjects: India, Ukraine, anti-dumping duty, import, originating product, potassium

L 200/4

EN

Official Journal of the European Communities

16. 7. 98

COUNCIL REGULATION (EC) No 1507/98

of 13 July 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,

C. PRODUCT UNDER CONSIDERATION AND

Having regard to the Treaty establishing the European
Community,

(7)

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
from countries
the European
not members
Community (1), and in particular Article 9(4) thereof,

of

Having regard to the proposal submitted by the Commis-
sion after consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

(4)

(5)

(6)

A. PROVISIONAL MEASURES

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 potas-
sium permanganate
falling within CN code
2841 61 00 originating in India and the Ukraine.

B. SUBSEQUENT PROCEDURE

Following the imposition of the provisional anti-
dumping measures, the complaining Community
industry and both the Indian and Ukrainian coop-
erating exporting producers submitted comments
in writing.

The Ukrainian cooperating exporting producer,
who was the only interested party to have so
requested, was granted a hearing.

The Commission continued to seek and verify all
information it deemed necessary for its definitive
findings.

Parties were informed of the essential facts and
considerations on the basis of which it was
intended to recommend the imposition of defin-
itive anti-dumping duties and the definitive collec-
tion of amounts secured by way of provisional
duties. They were also granted a period within
which to make representations subsequent to this
disclosure.

The oral and written comments were considered
and, where deemed appropriate, taken into account
in the definitive findings.

(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as amended by Regula-
tions (EC) Nos 2331/96 (OJ L 317, 6. 12. 1996, p. 1) and
905/98 (OJ L 128, 30. 4. 1998, p. 18).

(2) OJ L 19, 24. 1. 1998, p. 23.

LIKE PRODUCT

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

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

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 exam-
ined and since it was found that indeed no such
deductions should have been made, corrections to
the export price were made accordingly.

(8)

(9)

(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 meth-
odology set out in recitals 24 to 26 of the provi-
sional 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 estab-
lished is also 5,6 %.

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Official Journal of the European Communities

L 200/5

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.

investigation. The

information submitted
the
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 ma-
terials as well as granting pre-payment for deliv-
eries, would have necessitated certain adjustments
to the export price.

In this respect, it has to be stressed that this rela-
tionship, interrupted in 1997, could not be investi-
gated due to the lack of cooperation from the sole
importer
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.

in question.

(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.

(16)

2. Prices of the dumped imports and price

undercutting

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
submitted information concerned
and newly
importers who either did not cooperate or only
insufficiently cooperated with the Commission’s
investigation. This information could not, there-
fore, 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

In this respect it should be recalled that, as indi-
cated in the provisional duty Regulation, the calcu-
lation of price undercutting was made by
comparing the prices of the Community industry
as
its weighted average prices,
including those of the Community producer in
question, with prices of the Indian and Ukrainian
exporting producers.

a whole,

i.e.

Moreover, it should be stressed that, as noted in
recital 37 of the provisional duty Regulation, the
Commission based the price undercutting calcula-
tion 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 prac-
tice 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 assess-
ment of the situation of the Community industry,
data relating to the German producer’s situation
had been fully excluded from the analysis.

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Official Journal of the European Communities

16. 7. 98

(see recital 31 of

Again, this allegation is not correct as the provi-
sional 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
the
present Regulation), and its profitability data were
not included when determining the injury indi-
cator ‘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 Qu(cid:146)mica del Nal(cid:155)n) consti-
tuting the Community industry.

(21)

the situation of

It was also alleged that, on balance, the injury indi-
cators did not show that the Community industry
was experiencing material
injury. The exporting
producers based this allegation on an improvement
of
the industry following the
previous imposition of anti-dumping measures on
Chinese imports by Council Regulation (EC) No
2819/94 (1) and the data relating to the exceptional
the product
year
concerned increased substantially because
of
climatic circumstances.

1995 where demand for

of

industry.

Indeed, prices

It is considered that these considerations should
not detract from the weak overall situation of the
the
Community
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 recov-
ering 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
the
situation of

the Community industry after

(1) OJ L 298, 19. 11. 1994, p. 32.

imposition of anti-dumping measures concerning
Chinese imports.

(22)

(23)

4. Conclusion on injury

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

investigation,

In order to show that the injury suffered had not
been caused by the dumped imports subject to the
current
exporting producers
the
brought forward three main other potential causes
of injury: pressure of Chinese imports, the partic-
ular 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
whelming cause of injury was Chinese imports.

the over-

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.

2. Competitiveness

the
industry/self-inflicted injury

of

Community

(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
substantial undercutting by Ukrainian and
of
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,
Indian and Ukrainian
exporting producers’ prices undercut in fact the
average Community industry’s price.

the

In addition, while it is a mere assumption that the
current restructuring is in itself a proof of ineffi-
ciency 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.

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Official Journal of the European Communities

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3. Changes in the pattern of consumption

1. Interest of the Community industry

(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.

(29)

on

are

ozone

still marginal

treatment, waste-water

As regards substitute products, it should be recalled
that potassium permanganate is mainly used for
potable water
treatment,
chemical and pharmaceutical manufacture, metal
refining and disinfectant. Four substances were put
forward as emergent substitute products to potas-
sodium dichromate, mono
sium permanganate:
potassium persulphate,
and hydrogen
peroxide. The first
three products mentioned
above, even if sold in significant quantities on the
Indian market,
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-
in the Community and only
treatment
marginally used in other applications. Ozone can
be potentially seen as a substitute product to potas-
sium 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 permanga-
nate 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 import-
ance at the expense of potassium permanganate.

sector

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 prod-
ucts 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,
findings concerning
causation, as set out in recitals 51 to 72 of the
provisional duty Regulation, are hereby confirmed.

the provisional

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 reluc-
tant
anti-dumping
proceeding as anti-dumping measures would serve
only the Spanish producer because of its allegedly
dominating position.

support

current

the

to

This argument was not supported by any evidence.
The German producer is a complainant, which
cooperated fully in the investigation and did not
make any indication that
it would no longer
support the current anti-dumping proceeding.

the product,

Furthermore, as noted in the provisional duty
Regulation, in the absence of measures, the exist-
ence of the Community industry as a whole would
ultimately be at risk. Moreover, given the price
sensitivity of
the
measure would, to a large extent, equally help the
German producer
to obtain a more favourable
market position. In any event, anti-dumping meas-
ures 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.

is likely that

it

2. Conclusion on Community interest

(30)

It is therefore confirmed that there are no compel-
ling reasons not to take action against the injurious
dumping
findings
concerning Community interest, as set out in reci-
tals 73 to 86 of the provisional duty Regulation, are
hereby confirmed.

found. Accordingly,

the

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.

H. COMMUNITY INTEREST

(32)

(28)

The only comments submitted on this issue were
in respect of the Community industry’s interest in
seeing the dumping practices counteracted.

2. Form of duty

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.

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16. 7. 98

As indicated in recitals 11, 14 and 93 of the provi-
sional 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 potas-
sium permanganate with a minimum purity of
the Ukrainian minimum price
99 % while
equalled the price for potassium permanganate
with a minimum purity of 99 % since this country
only exports this grade.

in view of

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,
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.

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
the Ukrainian exporting producer and that
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.

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 1

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 applic-
able to the net, free-at-Community-frontier price, before
duty, shall be:

(cid:190) 5,6 % for potassium permanganate originating in

India,

(cid:190) 36,2 % for potassium permanganate originating in the

Ukraine.

3. Unless otherwise specified, the provisions in force
concerning customs duties shall apply.

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
anti-dumping duties shall be released.

3. Level of duty

(33)

Since, for each country concerned, the injury elim-
ination margin established is higher
than the
dumping margin, the definitive anti-dumping duty
should be based on the respective dumping

Article 3

This Regulation shall enter
into force on the day
following that of 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, 13 July 1998.

For the Council

The President

W. SCH(cid:154)SSEL