Commission Regulation (EC) No 1845/98 of 27 August 1998 imposing a provisional anti-dumping duty on imports of certain large electrolytic aluminium capacitors originating in the United States of America and in Thailand
Date: 1998-08-27
Institutions: European Commission
Subjects: Thailand, United States, aluminium, anti-dumping duty, electronic component, import

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Official Journal of the European Communities

28. 8. 98

COMMISSION REGULATION (EC) No 1845/98

of 27 August 1998

imposing a provisional anti-dumping duty on imports of certain large electro-
lytic aluminium capacitors originating in the United States of America and in
Thailand

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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
the European
Community (1), as last amended by Regulation (EC) No
905/98 (2), and in particular Article 7 thereof,

not members

of

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

A. PROCEDURE

In October 1997 a complaint was lodged by the
Federation
for Appropriate Remedial Anti-
Dumping (FARAD) on behalf of Nederlandse Phil-
ipsbedrijven BV (The Netherlands) and BHC
Aerovox Ltd (United Kingdom). The complainants
represented a major proportion of Community
production of
the like product. The complaint
contained evidence of dumping of the said product
and of material injury resulting therefrom, which
was considered sufficient to justify the initiation of
a proceeding.

1997,

on 29 November

Consequently,
the
Commission announced by a notice (hereinafter
referred to as ‘Notice of Initiation') published in
the Official Journal of the European Commu-
an anti-dumping
nities (3)
proceeding with regard to imports
into the
Community of certain large electrolytic aluminium
capacitors originating in the United States of
America (hereinafter referred to as ‘USA') and in
Thailand and commenced an investigation.

initiation of

the

The Commission officially advised the producers/
exporters and importers known to be concerned as
well as the representatives of the exporting coun-
tries concerned and the complainant Community
producers, about the initiation of the proceeding.
Interested parties were given the opportunity to
make their views known in writing and to request a

(1) OJ L 56, 6. 3. 1996, p. 1.
(2) OJ L 128, 30. 4. 1998, p. 18.
(3) OJ C 363, 29. 11. 1997, p. 2.

(4)

(5)

(6)

hearing within the time limit set in the Notice of
Initiation.

A number of producers/exporters in the countries
concerned, as well as complainant Community
producers and importers made their views known
in writing. All parties who so requested within the
above time limit and indicated that
there were
particular reasons why they should be heard were
granted a hearing.

The Commission sent questionnaires to parties
known to be concerned and to all the other com-
panies which made themselves known to the
Commission within the deadline set by the Notice
of Initiation.

The Commission sought and verified all the in-
formation it deemed necessary for the purpose of a
preliminary determination of dumping, injury and
Community interest and carried out investigations
at the premises of the following companies:

(a) complainant Community producers:

(cid:190) Nederlandse Philipsbedrijven BV (Zwolle,
The Netherlands) and its related company,
Industrie GmbH
(cid:153)sterreichische Philips
(Klagenfurt, Austria), (hereinafter referred to
as ‘Philips');

(b) importers:

(cid:190) Acal Electronics Ltd (Bracknell, United

Kingdom),

(cid:190) Beck Elektronik Bauelemente GmbH

(N(cid:129)rnberg, Germany);

(c) producers/exporters (cid:190) USA:

(cid:190) Matsushita

Components
Electronic
Corporation of America (Knoxville, USA),

(cid:190) United Chemi-con Corporation (Illinois,

USA).

(7)

The investigation of dumping covered the period
from 1 October 1996 to 30 September 1997 (here-
inafter referred to as the ‘investigation period'). The
examination of injury covered the period from 1
January 1993 up to the end of the investigation
period (hereinafter referred to as the ‘period consid-
ered').

(8)

(9)

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Official Journal of the European Communities

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It should be noted that anti-dumping measures
were imposed in 1992 (1) and 1994 (2) in respect of
imports of the product concerned from Japan, the
Republic of Korea and Taiwan. These measures are
currently under review (3).

sold by the Community industry, because of differ-
ences in terms of size, lifespan or terminal style
configuration and that, therefore, these imported
products and the products manufactured and sold
should not be
by the Community producers
regarded as being like products.

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

The proceeding covers large, non-solid, aluminium
electrolytic, electrical capacitors with a CV product
(capacitance multiplied by rated voltage) between
8 000 and 550 000 micro-coulombs
(lC) at a
voltage of 160 V or more (hereinafter referred to as
the ‘LAECs'), currently classifiable under CN code
ex 8532 22 00.

instrumentation,

LAECs are electronic components used in virtually
all types of electronic equipment, in the computer,
telecommunications,
industrial,
military, automotive and other consumer markets.
In particular, the types of capacitors covered by this
proceeding are used in consumer electronics
durables such as television sets, videocassette re-
corders and personal computers.

LAECs are produced in many different
types
depending, inter alia, on their capacitance, the
rated voltage, the maximum operating temperature
and the type of
style configuration.
terminal
it was found that all
Despite these differences,
these types shared the same basic physical and
technical
as
defined above were therefore considered as a single
product.

and uses. LAECs

characteristics

(10)

The Commission found that there were no differ-
ences in the basic physical and technical character-
istics and uses of the different types of LAECs sold
on the domestic market of the exporting countries
and those exported from these countries to the
Community. Therefore, these LAECs were consid-
ered to be like products within the meaning of
Article 1(4) of Council Regulation (EC) No 384/96
(hereinafter referred to as the ‘Basic Regulation').

(11) One producer/exporter and the cooperating im-
porters in the Community claimed that some of
the products originating in the countries concerned
which they sold on the Community market were
not comparable to the products manufactured and

(1) OJ L 353, 3. 12. 1992, p. 1.
(2) OJ L 152, 18. 6. 1994, p. 1.
(3) OJ C 365, 3. 12. 1997, p. 5; OJ C 107, 7. 4. 1998, p. 4.

(12)

The Commission established that, despite these
differences, the products manufactured and sold by
the Community industry and those imported in the
Community from the countries concerned had the
same basic technology and were both produced
according to world-wide applicable industry stand-
ards. Both products had also the same applications
and uses, and they were consequently interchange-
able and were competing with each other. There-
fore, in the light of the above, the products manu-
factured and sold by the Community industry and
those exported from the countries concerned to the
Community must be considered like products.

C. DUMPING

USA

Normal value

(13)

revealed

producer/exporter

The verification visit carried out at the premises of
one
partial non-
cooperation of this company because this company
failed to report a considerable part of its domestic
sales. In accordance with Article 18(1) of the Basic
Regulation, the domestic sales not reported in the
questionnaire reply were included for the purpose
of determining normal value based on prices and
constructed normal value. For that purpose, the
domestic prices used for the unreported quantities
sold were set at the level of the highest prices of
identical LAECs types which had been reported.

(14) As far as the determination of normal value is
concerned, the Commission first established, for
each producer/exporter, whether its total domestic
sales of LAECs were representative in comparison
with its total export sales to the Community. In
accordance with Article 2(2) of the Basic Regula-
tion, domestic sales were considered representative
when the total domestic sales volume of each
producer/exporter was at least equal to 5 % of its
total export sales volume to the Community.

This was the case for all producers/exporters.

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(15)

(16)

(17)

The Commission subsequently established whether
the types of LAECs sold domestically could be
considered identical or directly comparable to the
models sold for export to the Community.

similar

or
exporter.

types

sold by the other producer/

sold for export

For each of the types sold by the producers/ex-
porters on their domestic markets and found to be
to the
comparable to types
Community, the Commission established whether
domestic sales were representative, within the
meaning of Article 2(2) of the Basic Regulation.
Domestic sales of a particular type were considered
representative when the sales volume of this type
on the domestic market during the investigation
period represented 5 % or more of the total export
sales volume of a directly comparable type sold for
export to the Community.

(21) Consequently, in accordance with Article 2(3) of
the Basic Regulation, normal value was constructed
the
by adding to the manufacturing costs of
exported types a reasonable percentage for selling,
general and administrative expenses (SG&A) and a
the
reasonable margin of profit. To this end,
Commission
SG&A
examined whether
incurred and the profit realised by each of the
producers/exporters concerned on the domestic
market constituted reliable data. Actual domestic
SG&A expenses were considered reliable when the
domestic sales volume of the company concerned
could be regarded as representative (see recital (14)).

the

establishing

the
The Commission then examined whether
domestic sales of each type could be considered as
having been made in the ordinary course of trade,
by
the proportion of profitable
domestic sales to its total domestic sales of the type
in question. Where the volume of LAECs sold at a
net sales price equal to or above the calculated cost
of production (profitable sales) represented more
than 80 % of the total sales volume, normal value
was based on the actual domestic price, calculated
as a weighted average of the prices of all domestic
sales made during the investigation period. Where
the volume of profitable sales of LAECs repres-
ented up to 80 % but more than 10 % of the total
sales volume, normal value was based on the actual
domestic price, calculated as a weighted average of
profitable sales only.

The actual domestic profit margin was used when
the number of LAECs sold at a net sales price
above the calculated cost of production represented
more than 10 % of the total domestic sales volume
of the company concerned. This was the case for all
producers/exporters.

(22) One producer/exporter requested an adjustment to
the manufacturing cost for start-up costs related to
new machinery.
the new
machinery did not reach the expected production
capacity measured in terms of direct material,
direct labour, depreciation and manufacturing over-
head.

It was claimed that

(18)

In such cases, normal value was based for each type
on the basis of the prices paid or payable, in the
ordinary course of trade, by independent customers
in the domestic market of the exporting country, as
set out in Article 2(1) of the Basic Regulation.

(19) Where the volume of profitable sales of LAECs
sales
represented less
volume,
it was considered that domestic price
would not provide an appropriate basis for normal
value.

than 10 % of

the total

this

that

investigation

The
claim
revealed
concerned the normal replacement of old ma-
chinery and was depreciated according to the
it was
standard accounting method. Moreover
found that the use of the new machinery was not
characterised by low capacity utilisation levels since
no start-up phase could be demonstrated. It was
consequently concluded that no adjustment could
be made in this respect.

(20)

In such cases, constructed normal value had to be
used in preference to domestic prices of other
producers/exporters. Due to the large number of
different types it was not possible to find identical

(23)

The same producer/exporter requested an adjust-
ment to manufacturing costs for trial production of
a new type of capacitor. It was claimed that the
costs related to this production should be excluded
since it would not be an accurate standard to judge
the real costs involved in full commercial produc-
tion.

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research and development

It was established that these costs related to the
production of a new type of capacitor covered by
the scope of the investigation. The costs concerned
were in fact
(R&D)
expenses. The Commission allocated all R&D
expenses
incurred in the investigation period
which related to the product under investigation to
the cost of production. Given the nature of R&D
expenses,
i.e. they normally benefit current and
future sales of products, this approach was consid-
ered the most appropriate from both an economic
and an accounting point of view, since the current
production benefited also from R&D expenses
incurred in previous periods. Consequently,
the
request for an adjustment could not be accepted.

production and a final conclusion will only be
made at the definitive stage of the investigation.

Export price

(26)

In all cases where exports of LAECs were made to
independent customers in the Community,
the
export price was established in accordance with
Article 2(8) of the Basic Regulation, i.e. on the basis
of export prices actually paid or payable.

(27) However, in most cases the export price was made
to a related party. In those cases the export price
was constructed pursuant
the
Basic Regulation, i.e. on the basis of the price at
which the imported products were first resold to an
independent buyer.

to Article 2(9) of

(24) Moreover

as

the

the

producer/exporter

concerned
requested an adjustment to manufacturing cost as
audited depreciation costs were
far
concerned. It claimed that the methodology used
for calculating the depreciation was not accepted
by the tax authorities and therefore the audited
depreciation cost should be replaced by the depre-
ciation cost used for tax purposes.

This request could not be accepted since the
producer’s/exporter’s depreciation costs reported in
its audited accounts were established according to
generally accepted accounting principles of
the
country concerned and reasonably reflected the
costs associated with the production and sale of the
product under consideration. Moreover, the invest-
igation revealed that the depreciation methods used
in the audited accounts have been utilised histor-
ically. For that reason the Commission did not use
the reported figures, although legitimate for tax
reasons, but used instead the producer’s/exporter’s
normal depreciation method.

(28)

(29)

In such cases, adjustments were made for all costs
incurred between importation and resale and for
profits accruing,
in order to establish a reliable
export price, at the Community frontier level.

The profit margin was provisionally established on
the basis of the information made available by a
number
the
Community, i.e. on average slightly above 5 % on
turnover.

independent

importers

in

of

Comparison

(30)

For the purpose of ensuring a fair comparison
between the normal value and the export price, due
allowance in the form of adjustments was made for
differences affecting price comparability in accord-
ance with Article 2(10) of the Basic Regulation.

Level of trade

(25)

Both producers/exporters purchased from related
companies a substantial part of their materials used
in the production of capacitors. It was claimed by
the inter-company
the producers/exporters that
prices should be used when calculating the cost of
production on the ground that these sales were
made at market prices and included a profit. For
provisional measures these inter-company prices
have been used for the calculation of dumping.
However, the Commission has not yet finalised its
investigation whether the inter-company prices can
form a reliable basis to determine the cost of

in level of

(31) One producer/exporter requested an allowance for
differences
trade based on Article
2(10)(d)(ii) of the Basic Regulation. The producer/
exporter stated that a related company performed,
on the domestic market, certain functions which
are carried out on the export market by its Euro-
pean sales subsidiaries. The company claimed that
when constructing the export price pursuant to
Article 2(9) of the Basic Regulation, certain costs
incurred by the related sales subsidiaries in the
Community are deducted from the price paid by
the first
independent customer which are not
deducted from the domestic price, thus bringing

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the constructed export price to a different level of
trade as compared to the normal value. According
to the producer/exporter,
this difference in the
level of trade between the domestic and export
to its
requires therefore an adjustment
market
normal value in order to allow a proper comparison
between normal value and export price.

In this respect the following should be noted. The
reconstructing the export price by
practice of
deducting the costs incurred by the related impor-
ters brings the price of a sale to the first indepen-
dent customer to the level of an arms’ length price
at the Community border. In the present case the
resale price from the related importers was found to
be at the level of prices charged to distributors or to
companies using the capacitors in their production
of electronic goods, i.e. end users. No price differ-
ence was found between these two sales channels.
A deduction of the costs incurred in selling to the
two categories of customers results in an export
price which is nearer to that of the manufacturer in
the chain of distribution. On the domestic market
the producer/exporter claimed that its related sales
company made its sales through identical sales
channels as in the Community, i.e. to distributors
and to the user industry of capacitors. However, the
producer/exporter
the
distributors on the domestic market and the inde-
pendent distributors on the Community market
were not quite comparable as the latter group iden-
tified more closely with retailers.

itself pointed out

that

Moreover, as already pointed out above, the on-spot
investigation revealed that the exporting producer
in question failed to report a substantial part of its
domestic sales (see recital (13)). The Commission
was therefore unable to verify the prices and also
the level of trade of these sales and could not
sufficiently
the
producer/exporter regarding domestic and export
levels of trade.

ascertain the

allegations

of

the level of

provide the requisite evidence in support of the
claim for a level of trade allowance and the obser-
vations presented above, the Commission acknow-
ledges that
trade on the domestic
market may not correspond exactly to that on the
export market and that the reconstructed export
price is nearer to the manufacturer in the distribu-
tion chain. In order to take account of this to
ensure so far as possible that the price comparison
is made at the appropriate level, the Commission
has adjusted normal value by 10 % of the gross
margin of the producer/exporter in question.

Credit costs

(32) An adjustment to normal value was claimed by one
producer/exporter in respect of credit costs. The
investigation revealed that the amounts of credit
costs were inflated by applying an artificially high
internal company interest rate. An adjustment was
therefore only granted on the basis of an interest
rate for short-term loans found in the audited
accounts of the producer/exporter concerned.

(33) Other allowances for differences in import charges,
transport,
insurance, handling charges, discounts
and commissions have been granted where applic-
able and justified,
i.e. when a claim was made
within the time limits set for that purpose, and
when the party concerned could demonstrate the
effect of any alleged difference on prices and price
comparability.

Dumping margin

(34) According to Article 2(11) of the Basic Regulation,
the weighted average normal value by type was
compared with the weighted average export price.

(35)

The comparison, as described above, showed the
existence of dumping. The provisional dumping
margins expressed as a percentage of the cif import
price at the Community border are the following:

Article 2(10)(d)(ii) of the Basic Regulation states
that when an existing difference in level of trade on
the export and the domestic market cannot be
quantified because of the absence of the relevant
levels on the domestic market of the exporting
country, a special adjustment may be granted.
Despite the inability of the producer/exporter to

(cid:190) Matsushita Electronic Components
Corporation of America (Knoxville,
USA),

(cid:190) United Chemi-con Corporation

(Illinois, USA),

19,9 %,

24,6 %.

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Dumping margin for non-cooperating companies

as some small
established in the Community.

to medium-sized producers are

(36)

For non-cooperating
dumping
margin was determined on the basis of the facts
available.

companies,

a

Since the overall level of cooperation was high, it
was considered appropriate to set
the dumping
margin for the non-cooperating companies at the
level of the highest dumping margin established
for an investigated producer/exporter. There is no
reason to believe that a non-cooperating producer
had dumped at a lower level. This approach was
also considered necessary in order to avoid creating
a bonus for non-cooperation and an opportunity
for circumvention.

The margin, expressed as a percentage of the cif
import price at
is the
following: 25,5 %.

the Community border,

Thailand

(37) No company replied to the questionnaire for

producers/exporters.

In view of the non-cooperation from the produ-
cers/exporters in Thailand the dumping margin
had to be established in accordance with Article 18
of the Basic Regulation on the basis of the facts
available. In this respect it should be noted that the
information available was limited. As far as the
export prices from Thailand were concerned statist-
information was only available for a wider
ical
product
is
range. Moreover, since this product
commonly sold by the domestic producers directly
to industrial users and not via traders it was not
possible to obtain reliable price information on the
Thai domestic market. The only information which
was made available to the Commission was the one
provided in the complaint and it was therefore
provisionally decided to use this information for
the determination of dumping.

(38) On this basis, the margin, expressed as a percentage
of the import price at the Community border, is
39,5 %.

D. COMMUNITY INDUSTRY

Community production

(39)

Four large producers of LAECs, i.e. Philips, BHC
Aerovox Ltd (United Kingdom), Vishay Roeder-
stein GmbH (Germany) and Siemens-Matsushita
Components GmbH & Co., KG (Germany), as well

(40) One of

this producer was

the large producers, Siemens-Matsushita
Components GmbH & Co. KG (M(cid:129)nchen,
Germany)
is a joint venture between a German
company and a Japanese company and is related to
one of the exporting producers in the USA. There-
fore,
excluded from the
Community industry, in accordance with Article
4(1) of the Basic Regulation on the grounds that
through its relationship this producer was shielded
from the injurious effects of dumped imports. It
should be noted that
this producer was also
excluded from the Community industry in the two
previous proceedings concerning LAECs.

(41)

Some producers/exporters claimed that one of the
complaining Community producers, Philips, could
the Community
not be considered as part of
industry, on the grounds that another company
within the Philips group, namely Philips Consumer
Electronics BV, had been importing LAECs from
the USA during the investigation period.

its biggest

The investigation revealed that Philips Consumer
Electronics BV, which bought around 40 % of
traditional
Philip’s output and was
customer, had imported LAECs from the USA
during the investigation period, as components for
its own production of electronic products. It was
noted that
the LAECs imported were used by
Philips Consumer Electronics BV exclusively as
components for its own production of electronic
products and that the imported LAEC were never
resold on the Community market.

The choice of Philips Consumer Electronics BV to
be partly supplied by US exporters was made
possible by the structuring of the Philips Group in
different profit centres, which are all independent
and free to source their materials from any produ-
cers which can give the best market conditions.
This choice did not presuppose that the primary
interest of Philips went
from producing to
importing.

these reasons,

it was considered that

For
the
imports made by Philips Consumer Electronics BV
can be viewed as a perfectly legitimate business
decision, since it imported the dumped products
only to a limited extent, continuing to rely on its
parent company for a majority of its requirements.
These imports were considered as a necessary
commercial measure until
the time when fair
conditions of competition were restored in the
Community market.

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It was therefore concluded that no reasonable
grounds existed to exclude Philips
from the
Community industry. It should be noted that the
same conclusion was reached in recitals (10) to (12)
of Commission Regulation (EEC) No 1451/92
imposing provisional anti-dumping measures on
imports of LAECs originating in Japan (1).

(42) One of the exporting producers further argued that
Philips should be excluded from the definition of
the Community industry, since it is related to a
producer in the USA, North American Philips,
which is active in the production of LAECs.

Information made available to the Commission
indicated that North American Philips only
produced for the North American market and that
this producer did not export LAECs
to the
Community during the investigation period.

Therefore, the Commission concluded that Philips
should not be excluded from the Community
production.

(43)

Based on the above, the Community production
consisted of all companies producing LAECs in the
Community, with the exception of Siemens-
Matsushita Components GmbH & Co., KG
(Germany). These
are hereinafter
referred to as ‘the Community producers'.

companies

(47)

(48)

(49)

In these circumstances, the situation of the sole
co-operating complainant Community producer,
Philips, was considered. It accounted for 41 % of
the total estimated Community production of the
product subject to investigation in the Community
and thus
constituted a major proportion of
Community production pursuant to Article 5(4) of
the Basic Regulation. Consequently, this producer
will hereinafter be referred to as the ‘Community
industry’ within the meaning of Article 4(1) of the
Basic Regulation.

E. INJURY

Preliminary remarks

The geographical scope of the investigation was the
Community as composed at the time of the initia-
tion of
the Community of
fifteen Member States.

the proceeding,

i.e.

It should be noted that the analysis of any injury
suffered by the Community industry has to be
made in the light of the existing anti-dumping
measures imposed in 1992 and in 1994 in respect
of imports of the product concerned from Japan,
the Republic of Korea and Taiwan. As stated above,
these measures, which consist of anti-dumping
duties, are currently under review.

Community industry

Community consumption

(44) As mentioned above, two Community producers
actively supported the complaint. However, one of
these two complainant producers, BHC Aerovox
Ltd, could not submit the information requested
therefore,
within the deadlines
set
the Community
excluded from the scope of
industry.

and was,

(45) Another

large Community producer, Vishay
Roederstein GmbH (Germany), expressed support
for the complaint but did not complete the ques-
tionnaire of the Commission.

(50) Consumption was calculated as the sum of the sales
in the
the Community
made by
Community, an estimate of the Community sales
of
and the
company excluded from the Community produc-
tion as well as the volume of imports into the
Community.

the other Community producers

industry

(51) As regards the volume of imports, account was
taken of the fact that the CN code within which
LAECs fall embraces other types of capacitors not
covered by the present proceeding and that, there-
fore, no precise figures concerning total imports of
the product concerned could be obtained from the
Eurostat statistics.

(46) One small to medium-sized Community producer,
Trobo SA (Spain), expressed support
the
complaint, but did not provide full information to
the Commission. All other small to medium-sized
Community producers remained silent.

for

(1) OJ L 152, 4. 6. 1992, p. 22.

As concerns the volume of imports from the coun-
tries concerned,
it was based on an estimate
provided by the Community industry, adjusted to
take account of the verified information submitted
by the cooperating exporting producers in the
countries concerned and the importers in the
Community.

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(52) On the above basis, Community consumption
increased between 1993 and 1995 from 70,7
million units to 89,2 million units, then declined to
82,5 million units in the investigation period.
Overall consumption increased by 17 % over the
period considered.

it was found that these LAECs competed with
each other and with the like product manufac-
tured by the Community industry also as these
products were sold through comparable sales
channels.

(57)

(58)

(59)

(60)

(61)

(53)

(54)

Imports on the Community market from the
countries concerned

Cumulation of the effects of the dumped imports

The Commission examined whether imports of
LAECs originating in the USA and Thailand
should be assessed cumulatively,
in accordance
with Article 3(4) of the Basic Regulation.

In this respect, one of the co-operating exporting
producers argued against
the cumulation and
claimed that the increase of the imports originating
in Thailand over the period considered had been
far more important
the
imports originating in the USA and that LAECs of
Thai origin were sold in the Community at prices
significantly below the prices of LAECs originating
in the USA.

than the increase of

(55)

The Commission examined these
arguments,
taking account of the conditions of Article 3(4) of
the Basic Regulation, according to which the
effects of imports shall be cumulatively assessed
only if it is determined that:

(cid:190) the margin of dumping established in relation
to the imports from each country is more than
de minimis as defined in Article 9(3) and that
the volume of imports from each country is not
negligible, and

(cid:190) a cumulative assessment of the effects of the
imports is appropriate in the light of the condi-
tions of competition between imported prod-
ucts and the conditions between the imported
products and the like Community product.

(56) On this basis, the following provisional conclusions

have been made:

(cid:190) as stated in recitals (35) and (37), the dumping
margins found for the two countries concerned
were above the de minimis level and, as stated
in recital (58), the volume of imports to the
Community from these countries could not be
considered as negligible,

(cid:190) as regards the conditions of competition, the
investigation
LAECs
demonstrated
imported from the countries concerned, consid-
ered on a type by type basis, were alike in all
their essential physical and technical character-
istics and thus interchangeable. Consequently,

that

In the light of the above, the Commission consid-
ered that all the criteria set out in Article 3(4) of the
Basic Regulation were met. The imports from the
countries
examined
cumulatively.

concerned were

therefore

Volume and market share of the dumped imports

The volume of the cumulated dumped imports into
the Community of LAECs originating in the USA
and in Thailand increased by 51 % over the whole
i.e. from 11 million units in
period considered,
1993 to 16,9 million units in 1995 and then
remained stable at 16,6 million units in the invest-
igation period. Their cumulated market
share
increased from 15,6 % in 1993 to 20,2 % in the
investigation period, an increase of 4,6 percentage
points.

Prices of the dumped imports

The investigation has shown that the average sales
prices of the dumped imports from the countries
concerned were significantly below the sales prices
of the Community industry throughout the whole
period considered.

For the purposes of the determination of price
undercutting,
a comparison was made, on a
type-by-type basis, between the prices charged by
the producers/exporters concerned to unrelated
importers in the Community or, where applicable,
the prices of
related
importers to the first independent customers in the
the Community
Community and the prices of
industry to independent buyers.

the producers’/exporters’

the following criteria
For the type comparison,
were used, i.e. the capacitance, the rated voltage, the
operating temperature and the type of terminal
style configuration. These criteria are the principal
influences on the sales prices and the customer’s
purchasing decision. Where, on the basis of the
above
and
Community produced types were found, closely
resembling ones were used.

exported

identical

criteria,

no

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28. 8. 98

(62)

The two American producers/exporters claimed
that the size of the LAECs should also be taken
into account when comparing imported types with
types produced by the Community industry,
because the cost of an LAEC would be directly
related to its dimension.

In this respect, it should be noted that the neces-
sary information to address this claim was made
available to the Commission only at a late stage of
the proceeding. A preliminary examination of this
information showed that the undercutting levels for
similar types were comparable, whether or not the
size of the imported LAECs was taken into consid-
eration. Therefore, for the purposes of the provi-
sional determination of undercutting, the size of
this
the LAECs was not considered. However,
matter will be further examined.

(63) As regards the imports originating in the USA,
transactions from the cooperating producers/expor-
ters or, where applicable,
transactions from the
producers’/exporters’ related importers were used.
These represented a large proportion of the total
imports into the Community from this country as
reported by Eurostat. For the products originating
in Thailand,
in the absence of any cooperation
from exporting producers in this country, prices of
the dumped imports were established by reference
to the information available, namely the purchase
prices of LAECs originating in Thailand for the
two
in the
Community.

cooperating unrelated importers

(64) As regards the sales made by the Community
industry, due to the large number of different types
of LAECs, the price comparison was made on the
transactions representing
basis of a selection of
approximately 70 % of the volume of sales of all
types of LAECs made by the Community industry.

(65)

The sales prices of
the Community industry
considered were adjusted, where necessary, to ex-
works level. As far as the comparison of sales prices
of export transactions made directly to unrelated
customers
is concerned, adjustments were also
made to the producers’/exporters’ selling prices to
take account of customs duty paid and an allow-
ance in respect of post importation costs and profit.
All prices were compared after excluding all
discounts and rebates and at a comparable level of
trade.

(66) As a result of

the following
this comparison,
weighted average price undercutting, expressed as a
percentage of the Community producer’s prices,
were found:

(cid:190) USA: between 0 % and 25 %, on average 9 %,

(cid:190) Thailand: between 0 % and 41 %, on average

12 %.

Situation of the Community industry

Sales volume of the Community industry

(67)

The volume of sales of the Community industry on
the Community market increased between 1993
and 1995 from an indexed 100 to an indexed 118,
but then decreased to an indexed 88 in the invest-
igation period, i.e. an overall decrease of 12 % over
the period considered.

Market share

(68)

The development of sales volume compared to that
of the Community consumption shows that the
market share held by the Community industry
decreased from an indexed 100 in 1993 to an
indexed 75 in the investigation period.

Production, capacity and capacity utilisation

(69)

Production by the Community industry increased
between 1993 and 1995 from an indexed 100 to an
indexed 123, then decreased to an indexed 98 in
the investigation period. This represents an overall
decrease in production output of 2 % over the
period considered. However, this output decreased
by nearly 20 % between 1995 and the investigation
period during which the abovementioned earlier
increase was nullified.

(70) Capacity increased by 21 % between 1993 and
1995,
then
remained stable through 1996 but
increased by a further 15 % in the investigation
period. It should be noted that the increase in
capacity between 1993 and 1995 was in line with
the development of the apparent consumption on
the Community market over that period of time.
The increase in capacity in the investigation period
was due to the development of a new range of
so-called ‘radial' LAECs.

(71) Assessed in the light of
capacity,

the development of
utilisation
capacity
production and
increased between 1993 and 1994, from an indexed
100 to an indexed 109, but declined steadily there-
after to an indexed 72 in the investigation period.

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(72)

(73)

Stocks

the

evolution of

stocks held by

The
the
Community industry showed an irregular trend.
These stocks increased between 1993 and 1995
from an indexed 100 to an indexed 168,
then
declined in 1996 to approximately an indexed 125
and increased again in the investigation period, to
an indexed 252. The number of days of sales repre-
sented by the stocks held by the Community
industry nearly tripled over the period considered.

Evolution of prices

increase, prices

the Community
The average sales prices of
industry to unrelated parties increased between
1993 and the investigation period by 44 %. During
the same time, average export prices from the USA
and Thailand increased respectively by 49 % and
from the
58 %. Despite this
exporting countries concerned undercut signifi-
cantly the Community industry’s prices during the
investigation period. When assessing these figures,
it should be borne in mind that the consumption
of the product concerned substantially increased
from 1993 to the investigation period, that the
evolution of average selling prices
is heavily
dependent on the product mix and that the price
development on the Community market was influ-
enced by the imposition of previous anti-dumping
measures.

Profitability

(74)

The financial results of the Community industry,
expressed as a percentage of net sales, showed a loss
of close to 6 % in 1993. These results
then
improved and in 1995 the Community industry
recorded a profit of close to 7 %. However, after
1995 the situation significantly deteriorated and it
was found that
in the investigation period the
Community industry was approximately at break-
even point.

It should be noted that the increase in profitability
between 1993 and 1995 coincided with the period
immediately following the imposition of anti-
dumping measures on imports of certain LAECs
originating in Japan (1992) and in Taiwan and the
Republic of Korea (1994). It also coincided with a
period of growing sales, both in volume and in
value, and of increasing production levels.

cant drop in production and a decline in the usage
of capacity installed, with a consequent increase of
unit costs. Indeed, the share of fixed costs in the
unit cost of production increased and other SG&A
costs increased as well, as a result of the more
difficult market conditions.

Investments

(75)

Yearly investments made by the Community
industry increased between 1993 and 1996 from an
indexed 100 to an indexed 576. Investments ceased
in the investigation period.

(76)

(77)

(78)

Employment

Employment levels in the Community industry for
the product concerned declined during the period
considered by 26 %, as a result of a higher effi-
ciency on one hand and of a general restructuring
on the other hand, due to the declining financial
results after 1995.

Productivity

Productivity of the Community industry, measured
as output per person employed, increased between
1993 and 1995 from an indexed 100 to an indexed
128, essentially as a result of the decline in employ-
and the increase in production levels.
ment
Productivity declined after 1995, due to the strong
decrease in production, but went up again in the
investigation period,
to an additional
decline
in employment. Overall, productivity
increased by 26 % during the period considered.

further

Conclusion

The investigation has shown that the Community
industry has
suffered significant price pressure
throughout the period considered from the imports
originating in the USA and Thailand, which were
entering the Community market in growing quant-
ities and which undercut the Community indus-
try’s selling prices by up to respectively 25 % and
41 % in the investigation period. In addition, the
Community industry has endured a considerable
drop in sales, market share and production, at a
time of growing demand on the Community
market (+17 %).

On the other hand, the decline in profitability after
1995 should be seen in the light of the Community
industry’s decline in sales, which triggered a signifi-

(79)

Furthermore, the Community industry’s financial
situation, after an improvement between 1993 and
1995, was unsatisfactory and largely insufficient to

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28. 8. 98

maintain investments and R&D, since a break-even
situation was found for the investigation period. It
should be noted in particular
injurious
dumping from the USA and Thailand took place at
a time when the industry was recovering from past
dumping.

that

(85)

Furthermore, it was found that the imports from
the countries concerned significantly undercut the
Community industry’s prices. As
stated above,
given the price sensitivity of the market, any down-
ward pressure on prices tends to have an immediate
impact on the market.

(80)

Finally, employment levels decreased continuously
over the whole period considered.

(81) Overall, it should be noted that the situation of the
Community industry particularly deteriorated in
the later years of the period considered (1995 to the
end of the investigation period).

(82)

has

provisionally

In the light of the foregoing analysis, the Commis-
sion
the
Community industry has suffered material injury
within the meaning of Article 3(1) of the Basic
Regulation.

concluded

that

F. CAUSATION OF INJURY

Preliminary remarks

(83)

The Commission examined whether the material
injury suffered by the Community industry was
caused by the dumped imports from the countries
concerned or whether other factors had caused that
injury.

For this purpose, it is recalled that the Commission
already established in previous Regulations on
imports of LAECs into the Community that the
Community market for this product is transparent
and price sensitive. As a consequence, the mere
availability of low-priced dumped imports on this
market has a perceptible and immediate impact on
its overall situation.

Effects of the dumped imports

(84)

The investigation has shown that the decline in
sales, market share and production levels suffered
by the Community industry during the period
considered coincided with a significant increase of
the volume and market share of
the dumped
imports from the countries concerned. Indeed, the
volume of these imports increased by 51 % and
their market share gained nearly five percentage
points over the period considered, from an indexed
100 in 1993 to an indexed 129 in the investigation
the
period. At
Community industry declined by 12 % and its
market share declined from an indexed 100 in
1993 to an indexed 75 in the investigation period.

the same time,

the sales of

(86) As concerns the Community industry’s financial
situation, it should be borne in mind that at the
beginning of the period considered, this industry
was
recovering from past dumping from
imports of certain LAECs originating in Japan,
Taiwan and the Republic of Korea and was making
losses.

still

imposition of

In 1994 and 1995,
the Community industry’s
financial situation improved. This improvement
also coincided with the
anti-
dumping measures on imports of LAECs from
Japan, Taiwan and the Republic of Korea. It is also
to be noted that, during this time, due notably to a
growing demand on the Community market, the
Community industry was able to increase its sales
volume and prices. This industry also increased
production, as well as productivity and reduced
costs of production and selling expenses. This
enabled the Community industry to show profits in
1995.

the profitability of

From 1995 onwards,
the
Community industry deteriorated again, despite an
increase in average selling prices, comparable to
the increase of the average selling prices of the
imports concerned. This decline was essentially due
to a decline in sales, which caused a drop in
production and a consequent decrease in capacity
utilisation and, until 1996,
in productivity. Unit
selling costs increased as well, due to the difficul-
ties faced by the Community industry to market its
products.

(87) Moreover, the Community industry could not suffi-
ciently benefit from the effect of the abovemen-
tioned anti-dumping measures, as the re-establish-
ment of undistorted trading conditions and the
recovery of
injury was
this industry from past
undermined, from 1995 onwards, by the dumped
imports
from the USA and Thailand. These
imports remained stable in volume terms between
1995 and the investigation period, despite a decline
in consumption and,
increased their
market share. In this respect, it should be noted
that most of the producers/exporters located in the
USA and in Thailand are related to Japanese
manufacturers of LAECs.

therefore,

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Official Journal of the European Communities

L 240/15

(88)

Finally, it should be noted that, as a result of the
declining financial
restructuring
efforts, employment levels decreased continuously
over the period considered.

results and of

Other factors

(89)

The Commission examined whether the material
injury suffered by the Community industry could
have been caused by factors other than the dumped
imports. In particular, the Commission looked at
the trend in consumption in the Community
market,
the Community
industry and its marketing strategy, as well as the
evolution and impact of imports from third coun-
tries not included in the present proceeding.

the performance of

(93)

Community consumption

from the

must be stressed that, as stated above, as a result of
increasing imports made
countries
concerned by the present investigation at dumped
prices, the Community industry could not make
full use of its production capacity and was materi-
ally injured. In these circumstances, it is considered
that, irrespective of any cost advantages, even if
these were accepted, this dumping of the produ-
cers/exporters caused injury to the Community
industry.

further claimed that

It was
the Community
industry was less advanced in product innovation
and miniaturisation as compared to the producers/
exporters in the countries concerned and that, as a
the Community industry’s
result of
product range was not as complete as the exporting
producers’ range, which rendered the Community
industry’s products less attractive to customers.

this delay,

(90) One

of

the

cooperating

producers/exporters
claimed that the decline in sales suffered by the
Community industry after 1995 was due to a
general downturn in the economic cycle of the
LAECs market.

It should be noted that the Community consump-
tion declined by 8 % between 1995 and the invest-
igation period and that, during the same period, the
sales of
the Community industry decreased by
25 %, i.e. a far larger decrease than the Community
consumption. Moreover, between 1995 and the
in
investigation period, despite
consumption,
the cumulated dumped imports
originating in the USA and Thailand remained
stable in volume terms at the high level of 1995
but increased their market share.

the decline

Performance of the Community industry

(94)

(91)

(92)

Some of the producers/exporters argued that the
injury suffered by the Community industry was not
due to the dumped imports, but resulted from a
lack of performance of the Community
general
industry. In particular,
the following comments
were raised:

It was argued that the producers/exporters were
more cost-efficient and more productive than the
Community industry and that this advantage in
terms of costs of production enabled these produ-
cers/exporters to sell LAECs at lower prices.

However, without examining the issue as
whether
actually enjoyed any kind of cost advantages,

to
concerned
it

producers/exporters

the

The Commission compared the product ranges
offered by the co-operating parties. This compar-
ison showed that, during the investigation period,
the Community industry offered a wide range of
products, largely comparable with regard to phys-
ical and technical characteristics as well as applica-
tions and uses to that of the producers/exporters,
including miniaturised types. It was also found that,
as
the
Community industry was able to produce ‘special’
or ‘custom’ designs, according to specific needs of
specific customers. It was also found that
the
Community industry introduced, at the beginning
of the investigation period, new series of miniatur-
ised LAECs, largely comparable to the miniaturised
imported products.

the usual practice in this

industry,

is

Finally, the producers/exporters claimed that the
Community industry sold overspecified LAECs in
terms of lifetime. This over-specification resulted
in substantially higher selling prices than those of
the producers/exporters concerned.

The results of the investigation have shown that the
Community industry manufactured LAECs
in
accordance with the specifications requested by
their customers. Moreover, it was found that the
catalogue lifetime specifications of the Community
industry were not always based on the same criteria
as compared to the those of the producers/expor-
ters, as different ways existed to express the lifetime
of LAECs (e.g. ‘total load life', ‘test life', ‘endurance',
etc), depending on the measurement criteria used.
In this respect, no evidence was provided that the

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28. 8. 98

alleged overspecification of the Community indus-
try’s products resulted from anything other than
the different criteria used to measure the lifetime.
Therefore,
in these circumstances, the argument
cannot be considered as being substantiated and
the allegations of these producers/exporters cannot
be accepted.

Marketing strategy

(95) One

of

the

cooperating

producers/exporters
claimed that the Community industry focused its
marketing strategy on end-users and neglected
other sales channels, notably distributors. It was
further claimed that, since end-users generally exert
a much stronger downwards pressure on prices, this
explained the losses incurred by the Community
industry.

it was

However,
the Community
found that
industry sold a significant proportion of its output
to distributors. Moreover, no differences between
the Community industry’s and the producers’/
exporters’ sales prices to end users and to distribu-
tors could be identified. Therefore, this claim could
not be accepted.

Imports from other third countries

(96)

It was found that
the overall market share of
imports from third countries not concerned by this
proceeding increased by four percentage points
during the period considered. The Commission
examined in particular imports from Japan, the
Republic of Korea and Taiwan, which represented
approximately 90 % of the imports from countries
other than the USA and Thailand in the invest-
igation period and account for nearly the entire
above increase in the market share of other third
countries.

(97)

The imports of LAECs originating in Japan, the
Republic of Korea and Taiwan are currently subject
to anti-dumping measures, which are under review.

Since the cumulated market share of Japanese,
Korean and Taiwanese imports increased during
the period considered from 35 % to 38,9 % and
since it was found that the average sales prices of
these imports were below those of the Community
industry, it cannot be excluded that these imports
contributed to the
the
injury
Community industry, despite the anti-dumping
measures in force.

sustained by

situation of

the Community
disadvantageous
industry,
the investigation has also shown that
these factors were not such as to break the causal
link between the imports subject to the invest-
injury suffered by the
igation and the material
Community industry.

This conclusion is drawn in particular given the
decline in sales and the loss of market share of the
Community industry, over a period during which
demand in the Community increased globally,
which coincided with a notable increase in the
volume of imports originating in the USA and
Thailand, at prices which undercut those of the
in a period
Community industry. Consequently,
where the Community industry was
trying to
recover from past dumping practises from other
third countries it was unable to benefit from the
increased demand on the Community market, but
it was also unable to benefit from the economies of
scale which would have resulted from an increased
sales volume,
the Community industry could
have maintained its market share. Moreover, as a
result of this decline in sales, the average profit-
ability of the Community industry was again on the
decline after 1995 and so were employment levels
and investments. Therefore,
it is concluded that
dumped imports from the countries concerned
caused material injury to the Community industry
during the period considered.

if

G. COMMUNITY INTEREST

Preliminary remarks

(99)

the

The Commission provisionally examined, on the
basis of
information submitted, whether,
despite the dumping and injury findings, compel-
ling reasons exist which would lead to the conclu-
sion that it is not in the Community interest to
impose measures in the present case.

For this purpose, the Commission has considered
the impact of the imposition and non-imposition
of measures
involved in the
all parties
proceeding.

for

Collection of information

Conclusion

(98) Although it cannot be excluded that some of the
imports from other third countries and the recent
reduction of Community consumption may have
contributed to the loss in market share and the

(100)

In order to assess the impact of
the measures
currently in force, the Commission requested infor-
mation from all interested parties known, including
parties in the upstream industries, the Community
producers, importers/distributors and the users. It
should be noted that no replies were received from
the upstream industries.

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Community industry

Nature and structure of the Community industry

(101)

is

It
recalled that, although the Community
industry only consists of Philips, other Community
producers,
to medium-sized
and small
companies, are spread over most Member States.

large

While the large producers are part of internation-
the smaller Community
ally diversified groups,
producers are for the largest part
family-owned
small to medium-sized companies.

(102) Replies to the Community interest questionnaire
were only provided by the Community industry
and by a smaller producer located in Spain, which
expressed support
the imposition of anti-
dumping measures.

for

Viability of the Community industry

dumping,

improved notably,

the financial situation of

(103) The present investigation has shown that, between
1993 and 1995,
the
Community industry, which was recovering from
past
essentially
because of restructuring and rationalisation efforts
made by the Community industry. The growing
demand and a general price increase in the
Community coinciding with the imposition of
anti-dumping measures in 1992 and in 1994. The
industry also proved its technological commitment
by introducing a new range of so-called ‘radial'
LAECs in 1996 and miniaturised LAECs types near
the beginning of
the investigation period. This
demonstrated that the Community industry is still
viable, provided that fair conditions of competition
are restored. After 1995, as a result of the dumped
imports and the decline in volume of sales, market
share and production levels resulting thereof, the
the Community industry
financial
worsened again. At the end of the investigation
period,
the Community
industry indicated a break even situation, which is
not sufficient to ensure a proper return on cumu-
lated investments and R&D.

the financial results of

situation of

Effects of the existing measures

(104) Concerning the anti-dumping measures currently
in force on the imports of LAECs originating in
Japan, Taiwan and the Republic of Korea, it should
be noted that, between 1993 and 1995, coinciding
the
with the

these measures,

imposition of

Community industry was able to improve its finan-
cial situation, notably through an increase in sales
prices and sales volumes. During this same period,
the cumulated market share of the imports origin-
ating in the abovementioned countries remained
stable at 35 %.

(105) After 1995,

regards Japan,

the cumulated market share of

the
imports originating in Taiwan and the Republic of
Korea remained stable. As
the
volume of imports originating from that country
and their relative market share increased, despite a
decline in Community consumption. However, it
should be stressed that the anti-dumping measures
applicable on the imports of LAECs originating in
Japan cover a narrower range of LAECs than that
covered in the present proceeding concerning
imports from the USA and Thailand. Therefore, the
Japanese producers/exporters have been able to
continue to sell a number of types of LAECs on the
Community market, without paying any anti-
dumping duties.

Effects of the imposition or non-imposition of
measures on imports originating in the USA and
Thailand

(106) While the Community industry was in process of
it was
recovering from past
confronted to the impact of the dumped imports
originating in the USA and Thailand.

injurious dumping,

If such dumped imports are allowed to continue
further, the Community industry will face a further
deterioration of its already weakened position with
the strong possibility of partial or total shut-down.
This would leave the Community without at least
loss of
one major player, with a consequent
research and development and employment. More
importantly, given the size of
the Community
industry, this may influence future conditions of
competition.

(107) On the other hand, from the experience of the
existing measures on Japan, Taiwan and the
Republic of Korea, it can reasonably be expected
that, if measures were imposed, the Community
industry should be able to increase its
sales
volumes and its market share and thus its produc-
tion levels and its production capacity utilisation.
This would in turn lead to substantially lower costs
per unit and to an improvement of its financial
situation.

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28. 8. 98

Likely effects of the imposition of measures
on the importers/distributors

companies which submitted information was more
than 18 % in the investigation period.

producers/exporters,

(108) Only two importers in the Community, not related
to
the
proceeding. They submitted that the imposition of
measures in the current proceeding would have
deleterious effects on the importers of the product
concerned in the Community.

cooperated

in

(109) The investigation showed that, for both these unre-
lated importers, LAEC only represented a small
proportion of their activities, in terms of turnover
and profit contribution. It is therefore concluded
that, in the circumstances and in the absence of
any other substantiated comments, the imposition
of measures in the present proceeding would only
have a minimal impact.

Likely effects of the imposition of measures
on the users of the product concerned

(110) Two categories of users were identified:

(cid:190) the manufacturers of power supply devices.
These power supplies are then incorporated in
finished consumer electronics goods,

(113) While the Commission acknowledges

that

the producers/exporters

the
consumer electronic industry is highly competitive
and that every reduction in cost is important, it
must be stressed that the lower prices being offered
countries
by
concerned are the result of unfair trading practices,
which are
to the
Community manufacturing industry. Moreover, no
information was submitted which would indicate
supply manufacturers delocalised
that power
production outside the Community as a result of
measures being imposed on imports originating in
Japan, in the Republic of Korea and Taiwan.

and detrimental

injurious

in the

(114) As regards the manufacturers of finished consumer
electronics goods, one large producer of monitor
display products submitted that the imposition of
anti-dumping measures on LAECs would result in
increased purchase costs and could therefore affect
their manufacturing operations in the Community.
However,
analysis
performed in the previous proceedings concerning
LAECs, has demonstrated that the cost of an LAEC
in the total cost of a finished consumer product,
rarely exceeds 1 %. No information has been
provided to the Commission in the present
proceeding, which would contradict this finding.

the Community

interest

(cid:190) the manufacturers of finished electronics goods.

(115)

to

the

industry’s

information available,

(111) As regards the manufacturers of power supplies,
according
this
industry employs some 12 000 people and repre-
sents a total turnover of approximately ECU 1 500
million. Submissions were received from a number
of companies accounting for approximately 9 % of
total
turnover and employment and
whose consumption of LAECs in the investigation
period accounted for approximately 5 % of the
total Community consumption, according to avail-
able
expressed
strong concerns over the imposition of measures in
the present proceeding. These companies argued
that the imposition of measures would result in a
significant increase in purchase costs, which could
force a significant number of companies to de-
localise production outside the Community, with a
consequent significant loss of employment.

information. These

companies

(112) The examination of the facts has shown that the
cost of an LAEC represents approximately 4 % of
the total cost of a power supply device. It was also
the weighted average profitability,
found that
the
expressed as a percentage of net sales, of

In these circumstances, it is concluded that the
impact on final users should duties be imposed on
LAECs can be considered as negligible in view of
the low share of costs represented by capacitors in
the total cost of the end product. It should be noted
that the same conclusion was reached in all the
other
proceedings
concerning imports of LAECs.

anti-dumping

previous

Conclusion on Community interest

(116) Given the rate of increase of the imports from the
USA and Thailand over the period considered and
the behaviour of the producers/exporters on the
Community market to constantly and significantly
undercut the prices of the Community industry
and to take market
from the
Community industry, there is a likelihood that, in
the absence of measures, this trend will continue
and further aggravate the injury caused to the
Community producers.

share

away

28. 8. 98

EN

Official Journal of the European Communities

L 240/19

(117) The effects of the imposition of measures can be
expected to enable the Community industry to
improve profitability through increased production
levels, with consequent beneficial effects on the
competitive conditions on the Community market
and the reduction of the threat of closures and
reductions in employment. The beneficial effects
are also expected to assist the Community produ-
cers to finance investments and R&D in order to
become even more competitive on the market.

(118) As regards the users and distributors, any expected
price increase would only create limited disadvan-
tages.

(119)

by

the

interests

involved,

In balancing all
the
Commission has taken special consideration of the
fact that the Community industry might be forced
to shut down if correction to the unfair trading
practices
is not
provided and the medium-term advantages for the
lower prices
user industry of being supplied at
might then disappear. Indeed, in all likelihood, the
important Community
disappearance
producer may
of
competition on the Community market.

the producers/exporters

one
influence

level

total

the

of

(120)

is,

It
therefore, concluded that no compelling
reasons exist which would indicate that it is not in
to impose provisional
the Community interest
duties.

H. PROVISIONAL DUTY

Injury elimination level

(121) Having established that the dumped imports under
consideration have caused material injury to the
Community industry and that it is not against the
Community interest to take action, the measures
envisaged should be imposed at a level sufficient to
eliminate the injury caused by these imports
without exceeding the dumping margins found.

expenses of the Community industry plus a reason-
able level of profit.

for

On this basis, the weighted average export prices
for those product types used in the determination
of price undercutting were compared,
the
investigation period, with the actual weighted
average selling prices charged by the Community
to cover
industry increased, where appropriate,
production cost plus a profit margin of 12 % of
turnover. The export prices used and the adjust-
ments made for the purpose of this determination
were the same as those described in recitals (60) to
(65).

The profit margin of 12 % was considered, for the
purpose of a preliminary determination, to be the
this being the profit
appropriate profit margin,
margin used for the injury margin determination in
the previous proceeding concerning imports of
LAECs originating in Japan. The Commission did
in the
not
Community market since the investigation in that
proceeding which could justify a change in the
profit level chosen.

find any changed circumstances

Moreover, it should be noted that this level of profit
margin is lower than the average profit margins
realised by the cooperating producers/exporters
concerned.

(123) For non-cooperating exporting producers in the
USA, the injury margin was determined on the
basis of the facts available, i.e. the highest injury
margin found for cooperating companies.

(124) For the producers/exporters in Thailand, none of
which cooperated, the injury margin was based on
the information supplied by the cooperating unre-
lated importers in the Community. In addition, the
highest injury margin found was applied to the
share of imports not covered by these cooperating
unrelated importers. On that basis, a total weighted
average injury margin was then computed for the
totality of the Thai imports concerned.

(122) The removal of such injury requires that the prices
of the dumped imports should be increased to a
non-injurious level.

Results of the calculation

For the purposes of calculating the necessary price
increase, i.e. the injury margin, the Commission
considered that the prices of the dumped imports
had to be compared with selling prices reflecting
the total costs of production including SG&A

(125) The above comparison showed the following injury
each producer/exporter,
for
free-at-
the net,

elimination levels
expressed as a percentage of
Community-frontier price:

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EN

Official Journal of the European Communities

28. 8. 98

Country

Company

USA

Matsushita Electronic Components Corporation of
America (Knoxville, USA)

United Chemi-con Corporation (Illinois, USA)

Other manufacturers

Thailand

All Companies (non-cooperation)

Injury
margins

27,8 %

28,9 %

28,9 %

39,4 %

Provisional anti-dumping duty

(126)

In the light of the foregoing, it is considered that provisional anti-dumping duties
should be imposed on the level of the dumping margins found, but should not be
higher than the injury margins set out in recital (125) above. The proposed provi-
sional duty rates (in % on the cif Community border, customs duty unpaid) are as
follows:

Country

Company

USA

Matsushita Electronic Components Corporation of
America (Knoxville, USA)

United Chemi-con Corporation (Illinois, USA)

Other Manufacturers

Thailand

All (non-cooperation)

Provisional
duty

19,9 %

24,6 %

24,6 %

39,4 %

I. RIGHTS OF INTERESTED PARTIES

(127)

In the interest of sound administration, a period should be fixed within which the
interested parties which made themselves known within the time limit specified in
the notice of initiation may make their views known in writing and request a
hearing. Furthermore, it should be stated that the findings made for the purpose of
this Regulation are provisional and may have to be considered for the purpose of
any definitive duty,

HAS ADOPTED THIS REGULATION:

Article 1

1. A provisional anti-dumping duty is hereby imposed on imports of large electrical
capacitors, non-solid, aluminium electrolytic, with a CV product (capacitance multiplied by
rated voltage) between 8 000 and 550 000 micro-coulombs (lC) at a voltage of 160 V or
more, falling within CN code ex 8532 22 00 (Taric codes: 8532 22 00 11; 8532 22 00 13;
8532 22 00 91 and 8532 22 00 93) originating in the United States of America and Thai-
land.

The rate of

2.
free-at-
Community-frontier price, before duty, shall be as follows for products originating in:

the provisional anti-dumping duty applicable to the net,

Country

Provisional duty

Taric additional code

United States of America

Thailand

24,6 %

39,4 %

8 900

(cid:190)

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EN

Official Journal of the European Communities

L 240/21

The above rates shall not apply to the products manufactured by the company listed below,
which shall be subject to the following rate of anti-dumping duty:

Country

Company

Provisional
duty

Taric
additional
code

United States of
America

Matsushita Electronic Components Corpora-
tion of America

19,9 %

8682

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

The release for free circulation in the Community of the product referred to in
4.
paragraph 1 shall be subject to the provision of a security, equivalent to the amount of the
provisional duty.

Article 2

Pursuant to Article 20(1) of Regulation (EC) No 384/96, the parties who made themselves
known within the time limit specified in the notice of initiation may make their views
known in writing and apply to be heard orally by the Commission within 15 days of the
date of entry into force of this Regulation.

Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties who made themselves
known within the time limit specified in the notice of initiation concerned may comment
on the application of this Regulation within one month of the date of its entry into force.

Article 1 of this Regulation shall apply for a period of six months.

Article 3

This Regulation shall enter into force on the day following its publication in the Official
Journal of the European Communities.

Article 4

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

Done at Brussels, 27 August 1998.

For the Commission

Leon BRITTAN

Vice-President