Council Regulation (EC) No 2051/98 of 24 September 1998 imposing a definitive anti-dumping duty on imports of monosodium glutamate originating in Brazil and Vietnam, amending Regulation (EC) No 81/96 in respect of anti-dumping measures concerning imports of monosodium glutamate originating in the Republic of Korea and Taiwan and terminating the proceeding in respect of imports of monosodium glutamate originating in the United States of America and Indonesia
Date: 1998-09-24
Institutions: Council of the European Union
Subjects: anti-dumping duty, chemical product, import, originating product, third country

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Official Journal of the European Communities

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 2051/98

of 24 September 1998

imposing a definitive anti-dumping duty on imports of monosodium glutamate
originating in Brazil and Vietnam, amending Regulation (EC) No 81/96 in
respect of anti-dumping measures concerning imports of monosodium glu-
tamate originating in the Republic of Korea and Taiwan and terminating the
proceeding in respect of imports of monosodium glutamate originating in the
United States of America and Indonesia

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
the European
from countries
Community (1), and in particular Articles 9(2), 9(4) and
11(3) thereof,

not members

of

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

Whereas:

A. PROCEDURE

1. General

(1)

(2)

By Regulation (EEC) No 1798/90 (2), the Council
imposed definitive anti-dumping duties on imports
of monosodium glutamate (hereinafter referred to
as MSG) originating, inter alia, in Indonesia, the
Republic of Korea (hereinafter Korea) and Taiwan,
from certain
with the
exporting producers in these countries from which
the Commission accepted undertakings by Regula-
tion (EEC) No 547/90 (3), Decision 92/493/EEC (4)
and Decision 93/479/EEC (5).

exception of

imports

Subsequently in July 1994,
following a request
lodged by the Community industry, the Commis-
sion initiated an interim review of
the anti-
dumping measures in force with regard to imports
of MSG originating, inter alia, in Indonesia, Korea

(1) OJ L 56, 6. 3. 1996, p. 1. Regulation as last amended by
Regulation (EC) No 905/98 (OJ L 128, 30. 4. 1998, p. 18).
(2) OJ L 167, 30. 6. 1990, p. 1. Regulation as amended by Regu-
lation (EEC) No 2966/92 (OJ L 299, 15. 10. 1992, p. 1) and
by Regulation (EEC) No 2455/93 (OJ L 225, 4. 9. 1993, p. 1).

(3) OJ L 56, 3. 3. 1990, p. 23.
(4) OJ L 299, 15. 10. 1992, p. 40.
(5) OJ L 225, 4. 9. 1993, p. 35.

and Taiwan. As a result of this review the Commis-
sion, by Regulation (EC) No 1754/95 (6), withdrew
its acceptance of the existing undertakings, with
the exception of
imports from two Indonesian
companies, and imposed provisional anti-dumping
duties on all other imports originating, inter alia,
in Indonesia, Korea and Taiwan. The Council, by
Regulation (EC) No 81/96 (7) subsequently imposed
definitive anti-dumping duties on all MSG imports
from the countries concerned without any excep-
tion.

2. Present investigations

(3)

(4)

In July 1997, the Commission, after consulting the
Advisory Committee and in accordance with
Article 11(3) of Council Regulation (EC) No 384/
96, (hereinafter referred to as the Basic Regulation),
initiated, on its own initiative, an interim review of
the anti-dumping measures in force with regard to
imports of MSG originating in Indonesia, Korea
and Taiwan (hereinafter review investigation). This
was based on the significant changes in the pattern
of the volumes and prices of the imports concerned
which appeared to have occurred since the amend-
ment of the anti-dumping measures in 1996 (8).

In July 1997, following a complaint pursuant to
Article 5 of the Basic Regulation lodged by Orsan
SA, the sole MSG producer in the Community, the
Commission initiated an anti-dumping proceeding
in respect of imports of this product originating in
Brazil,
the USA and Vietnam (hereinafter new
investigation). The complaint contained evidence
of dumping with regard to MSG imports from

(6) OJ L 170, 20. 7. 1995, p. 4.
(7) OJ L 15, 20. 1. 1996, p. 20.
(8) OJ C 201, 1. 7. 1997, p. 4.

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(5)

(6)

(7)

(8)

(9)

these three countries and injury resulting therefrom
which was considered sufficient to initiate an anti-
dumping proceeding (1).

This Regulation concerns the findings made with
regard to both the review investigation and the new
investigation, as
these two investigations were
initiated almost simultaneously and used the same
periods for the examination and determination of
dumping, injury and Community interest. Owing
to the complexity of the data gathered and exam-
ined as well as of certain issues raised by interested
parties in the course of both investigations, the
review investigation exceeded the normal period of
12 months provided for in Article 11(5) of the
Basic Regulation.

The Commission officially advised the complain-
ant Community industry, the exporting producers
and the importers known to be concerned as well
as the representatives of the exporting countries,
and gave the parties directly concerned the oppor-
tunity to make their views known in writing and to
request a hearing.

The Commission sent questionnaires to the parties
known to be concerned and received replies from
from five Indonesian
the Community producer,
exporting producers and two Indonesian selling
companies
the Indonesian
exporting producers, from one Korean exporting
from two related Brazilian exporting
producer,
producers and their two related companies in the
Community and from one Vietnamese exporting
producer.

related to three of

No reply to the questionnaire was obtained from
ADM,
the sole exporting producer in the USA
known to exist. The company informed the
Commission that they would definitively discon-
tinue production of MSG by the end of 1997, and
hence
to the
Community.

also exports of

this product

The Commission also sent questionnaires to a large
number of economic operators understood to be or
to represent purchasers, users and importers of
MSG in the Community. Only a small number of
these operators
replied. The Commission also
addressed questions to certain important suppliers
to the Community industry.
of
Although they replied,
their answers were not
complete.

raw materials

The Commission sought and verified all informa-
tion deemed necessary for the purposes of a deter-
injury and Community
mination of dumping,
two related
interest. With the
for which deter-
Brazilian exporting producers,
minations were made without carrying out verifica-

exception of

(1) OJ C 205, 5. 7. 1997, p. 2.

tion visits, on-the-spot investigations were carried
out at the premises of the following companies:

(a) Indonesia

exporting producers:

— P. T. Indomiwon Citra Inti, Jakarta
— P. T. Sasa Inti, Surabaya
— P. T. Cheil Samsung, Jakarta
— P. T. Ajinomoto Indonesia, Jakarta
— P. T. Ajinex International, Jakarta

related domestic selling companies:

— P. T. Ajinomoto Sales, Jakarta (related to

P. T. Ajinomoto and P. T. Ajinex)

— P. T. Rodamas Co. Ltd., Jakarta (related to

P. T. Sasa Inti)

(b) Republic of Korea

exporting producers:

— Cheil Jedang Corporation, Seoul

(c) Brazil

exporting producers:

— Ajinomoto

Interamericana
Comercio Ltda, S(cid:209)o Paulo*

Industria

e

— Ajinomoto Biolatina Industria e Comercio

Ltda, S(cid:209)o Paulo*

related importer:

— Ajinomoto Europe Sales GmbH, Hamburg,

Germany*

related trader:

— Forum Products Ltd, London, United

Kingdom*

(d) United States of America

producer:

— Ajinomoto USA Inc., New York, USA*

(e) Community producer

— Orsan SA, Nesle, France

(f)

Importers and traders

— Helm AG, Hamburg, Germany,
— Burtell

Foods Ltd, Evesham, United

Kingdom

(g) Users

— IFF (Nederlands) NV, Tilburg, Netherlands

(10)

It should be noted that all companies marked with
an asterisk (*) are members of the Ajinomoto group
of companies, ultimately owned and controlled by

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Inc. of Tokyo, Japan. All

the
Ajinomoto Co.
companies were jointly represented in the invest-
igations and made joint submissions. The group is
referred to in this document as ‘Ajinomoto'.

3. Investigation period

(11)

the

For both investigations,
investigation of
dumping covered the period from 1 July 1996 to
30 June 1997 (hereinafter referred to as the invest-
igation period). The examination of injury covered
the period from 1994 up to the end of the invest-
igation period.

4. Withdrawal of the complaint in respect of Brazil

and the USA and subsequent procedure

(12) On 24 October 1997 the complainant Orsan
informed the Commission of its decision to with-
draw the complaint in respect of Brazil and the
the sole American
USA, on the grounds that
exporting producer had decided to discontinue
production of MSG, as a consequence Brazilian
producers would be likely to redirect exports from
the Community to the USA. The Commission
the partial with-
informed interested parties of
drawal of the complaint. Interested parties were
invited to make observations.

(13)

(14)

(15)

In response, three exporting producers and one
importer argued that if the proceeding was termi-
nated in respect of Brazil and the USA, the same
logic should apply also to Vietnam and to the three
countries concerned by the review investigation.

Based on the reactions of the interested parties, the
Commission assessed whether a partial termination
of the proceeding in respect of the two countries
and the maintenance or imposition of measures in
respect of
the others would be discriminatory
pursuant to Article 9(5) of the Basic Regulation.

The investigation showed that imports from five
out of the six countries were at dumped prices or
were likely to resume at dumped prices in the
absence of the existing measures. While the fact
that the American exporting producer closed its
production gave reason to distinguish the circum-
stances of that country from those of the others, no
such reason was established in the case of Brazil.
The allegation that Brazilian exporting producers
would
the
Community to the USA did not withstand serious
scrutiny.

probably

divert

their

sales

in

(16)

(17)

(18)

(19)

In these circumstances it was concluded that to
take measures against the other countries in the
absence of measures against Brazil would have been
discriminatory. At the end of February 1998 the
Commission disclosed this conclusion to the inter-
ested parties.

By letter of 4 March 1998, Orsan cancelled the
withdrawal of its complaint in respect of Brazil and
the USA because the disclosure of the results of the
Commission’s investigation had shown that
the
assumptions on which its withdrawal was originally
based were unfounded, and requested the Commis-
sion to continue its investigation with respect to all
six countries. The Commission considered that
Orsan’s cancellation of the withdrawal was admis-
sible as
for
comments on disclosure.

it came within the time limits

In view of
the time which had elapsed before
Orsan cancelled the withdrawal of its complaint,
the Commission could not
impose provisional
measures.

The parties were informed in writing of the essen-
tial facts and considerations on the basis of which it
was intended to recommend the imposition of
definitive anti-dumping duties and the termination
of the proceedings concerning the USA (see recital
96) and Indonesia (see recital 75). The parties were
also granted a reasonable period within which to
make representations subsequent to this disclosure.

The oral and written comments presented by the
parties were considered and, where appropriate, the
Commission’s
findings were modified to take
account of them.

B. PRODUCT UNDER CONSIDERATION AND

LIKE PRODUCT

1. Description of the product concerned

(20)

The product under consideration in both investiga-
tions is monosodium glutamate or MSG produced
in the form of crystals of various sizes and falling
within the CN code ex 2922 42 00. It is mainly
used as a flavour enhancer in soups, broths, fish
and meat dishes and ready-made foods.

MSG is available in various packing sizes, ranging
from consumer packs of 0,5 g to 1 000 kg bulk
bags. Smaller packing sizes are sold via retailers to
private consumers, while the larger sizes of 25 kg
and more are destined for industrial users. There
are no differences in the physical characteristics of
MSG packed in these various sizes.

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2. Like product

exports to the Community in the investigation
period.

(21)

It was found that MSG produced and sold by the
Community industry on the Community market is
alike within the meaning of Article 1(4) of the
Basic Regulation to that exported from all coun-
tries subject to the two investigations as both these
products are virtually identical in terms of physical
characteristics. Furthermore, MSG produced and
sold in Brazil, Indonesia, Korea, Taiwan and the
USA was also found to be alike to MSG exported
from these countries to the Community. The same
is true with regard to the product produced and
sold in Thailand, which served as the analogue
country in determining normal value for Vietnam.

C. DUMPING

1. Preliminary remarks

(22)

For all exporting countries concerned, the analysis
of dumping was carried out for the relevant product
types exported to the Community during the
investigation period, i.e. on the basis of packing
sizes of 25 kg bags and above.

(23) Of the five Indonesian exporting producers who
replied to the questionnaire four declared that they
had made no exports to the Community during the
investigation period. Sasi Inti, the only cooperating
exporting producer with export
to the
Community, had one export transaction of only 20
tonnes. This transaction, also represented virtually
the totality of the Indonesian exports of MSG to
the Community during the investigation period
according to Eurostat data. Given the low volume
of these imports and hence the lack of represent-
ativeness of the corresponding export price it has
not been considered appropriate to calculate the
dumping margin for Indonesia on this basis.

sales

(24)

In Korea of the two exporting producers which
were sent a questionnaire, only one cooperated,
Cheil Jedang Corporation. This company was
found to have exported MSG to the Community in
the investigation period. The exports reported by
this company appeared to cover nearly half of the
imports from Korea when this company’s
total
export
figures are compared with Eurostat data
relating to all imports from Korea.

(25) No cooperation has been obtained from Taiwanese
companies, though according to Eurostat, among
the countries concerned by the review invest-
igation, Taiwan had made the largest quantities of

(26) With regard to Brazil

two cooperating
exporting producers found to belong to Ajinomoto
represented almost the totality of Brazilian exports
of MSG to the Community.

the

(27) Of

the two American producers known to the
Commission only one (ADM) had exports to the
Community during the investigation period which
are estimated to cover the totality of the exports
recorded by Eurostat. This
from the USA as
exporting producer did not reply to the Commis-
sion’s questionnaire but, as already mentioned in
recital 7, stated that it would definitively discon-
tinue the production of MSG.

(28) With regard to Vietnam only one exporting
producer cooperated in the investigation and
declared to have exported only a small quantity in
comparison with total imports from Vietnam.

2. Normal value

(29)

For the reasons given in recital 23, no normal value
determination was made for the sole Indonesian
exporting producer to the Community, Sasa Inti.

(30) With regard to Korea, normal value was established
on the basis of prices paid by independent
customers in the exporting country with regard to
representative and profitable domestic sales,
in
accordance with Article 2(1) and (2) of the Basic
Regulation.

(31) Given the complete lack of cooperation of Taiwa-
nese companies, normal value had to be established
in accordance with Article 18 of the Basic Regula-
tion. For this purpose, it was considered appro-
priate to use the normal value established in Korea
for the sole cooperating exporting producer in this
country.

(32)

For the two cooperating Brazilian exporting produ-
cers, normal value was established, in accordance
with Article 2(1) of the Basic Regulation, on the
basis of the price actually paid in the ordinary
course of
the like
trade for domestic sales of
product by independent customers. As all domestic
sales of one of the two related exporting producers
were made to the other, only the domestic sales of
this latter were found to be made to independent
customers and therefore considered for establishing
normal value. The domestic sales of this exporting
producer were found to be made in sufficient

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to be

considered representative

in
quantities
accordance with Article 2(2) of the Basic Regula-
tion. As more than 80 % of its domestic sales were
profitable, all its domestic sales were used in the
calculation of the normal value.

(33) As far as the USA is concerned, since the only
American exporting producer (ADM) did not reply
to the Commission’s questionnaire, normal value
had to be based on facts available according to
Article 18 of the Basic Regulation. In this context,
it was considered that the verified information on
domestic sales prices which were provided by the
other American producer known to the Commis-
sion (Ajinomoto USA, Inc.) constituted an appro-
priate basis for establishing normal value. This
information was found to be in line with the
normal value alleged in the complaint.

economy

(34) As Vietnam is considered to be a non-market
economy country, normal value had to be estab-
lished by reference to a market economy non-
member country, pursuant to Article 2(7) of the
Basic Regulation. For this purpose Thailand was
envisaged in the notice of initiation as an appro-
priate market economy country. One Vietnamese
exporting producer argued that Thailand had a
highly protected market where only one producer
operated which had insufficient domestic sales to
be
considered representative. The Vietnamese
exporting producer, therefore, proposed Taiwan as
an alternative market
country. As
mentioned above, none of the Taiwanese exporting
producers agreed to cooperate. Furthermore, it was
found that five companies produced and sold MSG
in Thailand where the level of customs duties is
comparable to that in other competing countries in
the region and therefore, a sufficient degree of
competition appears to exist in Thailand. Moreover,
domestic sales in Thailand are made in repres-
entative quantities,
since they are considerably
higher than the Vietnamese export volume of MSG
to the Community. Finally, the raw material used
for the production of MSG, i.e. tapioca, is easily
available in Thailand and the production tech-
nology is similar to that used in Vietnam. One Thai
producer replied fully to the questionnaire and
accepted a verification visit. In the light of the
above, Thailand was selected as an appropriate
market economy country for the purpose of estab-
lishing normal value for Vietnam. Normal value
was therefore established on the basis of the prices
paid or payable, by independent customers in Thai-
land for sales of the like product which were found
to have been made in the ordinary course of trade

and in sufficient quantities to permit a proper
comparison.

3. Export price

(35) No export price has been established for Indonesia
its exports

given the lack of representativity of
during the investigation period.

(36)

(37)

For Korea,
the export price was established by
reference to the prices actually paid by inde-
pendent buyers in the Community in accordance
with Article 2(8) of the Basic Regulation.

the
For Taiwan, given the lack of cooperation,
export price had to be based on facts available in
accordance with Article 18 of the Basic Regulation.
Eurostat
figures which showed average export
prices for Taiwan within the range of those found
for the other countries involved in the proceedings
appeared to be an appropriate basis for establishing
export price.

(38) All exports to the Community by the two Brazilian
cooperating exporting producers were made to a
single related importer which partly resold the
product
to a related trader in the Community.
Therefore the export price had to be determined on
the basis of
the price at which the imported
product was first resold to an independent buyer in
the Community both in the case of the related
importer and in the case of the related trader. From
the resale price all costs between importation and
resale to independent parties, as well as a reason-
able amount for profit have been deducted, so as to
establish a reliable export price at the Community
border, in conformity with Article 2(9) of the Basic
Regulation. The amount for profit has been deter-
mined by reference to those realised by cooperating
independent importers.

(39) As far as the USA is concerned, as no cooperation
was obtained by the sole American exporting
producer, the export price had to be established on
the facts available according to Article 18 of the
Basic Regulation. The export price resulting from
Eurostat data could not be considered reliable as all
imports originating in the USA were made by an
importer
related to the American exporting
producer in question. The export price was there-
fore constructed on the basis of the price at which
a substantial quantity of MSG was resold by the
related importer
to an independent customer
which cooperated in the investigation. Since the
related importer, like the exporting producer, did
not cooperate in the investigation, it was consid-
ered appropriate to base the adjustments for all
costs incurred between importation and resale, and
for profits accruing, on those used for the related

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importer from Brazil, which cooperated in the
investigation.

provided indicating performance of different func-
tions in relation to the category of customers in
question. Therefore, no adjustment could be made
in this respect.

(40) As far as Vietnam is concerned, it was found that
the export volume of the cooperating Vietnamese
exporting producer was immaterial and hence not
an appropriate basis for the determination of the
weighted average export price. Therefore, also for
Vietnam the export price had to be established on
the facts available according to Article 18 of the
Basic Regulation. Eurostat data, which were found
to be in line with the export price alleged in the
complaint and with the prices of import transac-
tions verified at the premises of one cooperating
unrelated importer were considered an appropriate
basis to establish the export price.

4. Comparison

(41)

The weighted average normal value thus estab-
lished was compared to the weighted average
export price, in accordance with Article 2(11) of the
Basic Regulation. With regard to Korea, Taiwan,
Brazil and the USA, the comparison was made on
an ex-factory basis, while with regard to Vietnam,
the comparison was made on a fob exporting
country basis. In all cases,
the comparison was
made at the same level of trade. For the purpose of
ensuring a fair comparison, account was taken, in
accordance with Article 2(10) of the Basic Regula-
tion, of differences in factors which were claimed
and demonstrated to affect prices
and price
comparability. In this respect, adjustments were
made for transport,
loading
and ancillary costs and credit costs.

insurance, handling,

small

industrial users

(42) Ajinomoto submitted that about one third of
domestic sales in Brazil were made to a great
number of
and retail
customers, while export sales from this country to
the Community were made to large industrial users
only. Therefore, because of this market difference,
domestic sales to small industrial users and retail
customers should not be taken into account for the
calculation of normal value for the purpose of a fair
comparison with export prices. In this respect it
should be noted that only domestic sales to indus-
trial end users have been taken into account for
comparison purposes. Furthermore no consistent
price pattern was applied by Ajinomoto in relation
to the purchase volume of its customers: in many
cases medium-sized customers, and sometimes very
small customers paid lower prices than the two
main customers representing a major part of total
domestic sales. Finally no evidence has been

5. Dumping margin

(43)

The comparison showed the existence of dumping,
the dumping margin being equal to the amount by
which the normal value, as established, exceeded
the price for export to the Community. The exact
dumping margin for Taiwan and Vietnam is not
given, as its disclosure would allow third parties to
reconstruct confidential
information concerning
the cooperating exporting producers in Korea and
Thailand respectively. The dumping margins,
expressed as a percentage of the CIF Community-
frontier import price, are as follows.

Indonesia

As mentioned above, total imports from Indonesia
to the Community during the investigation period
amount to only 20 tonnes and, therefore, it was not
considered appropriate to calculate the dumping
margin for such a low volume. In these circum-
stances, the Commission considered that what was
especially relevant with regard to Indonesia was to
examine, as done below, whether, in case the meas-
ures were removed or varied, dumping would be
likely to recur.

Korea

— Cheil Jedang Corporation

42,5 %

In order not to provide a bonus for non-coopera-
for the Korean companies which did not
tion,
cooperate in the investigation or did not make
themselves known, it was considered appropriate to
establish the dumping margin on the basis of the
representative export
the Korean
cooperating company with the lowest export price,
and hence the most dumped. Thus the dumping
margin established for non-cooperating companies
in Korea is 44,2 %.

transaction of

Taiwan

— All companies

above 40 %.

Brazil

The two cooperating exporting producers in Brazil,
though legally two separate companies, were related
to each other. According to the past practice of the
Community institutions with regard to related
companies involved in anti-dumping proceedings,

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and in order to avoid any circumvention, only one
dumping margin has been established for these two
companies. The dumping margin amounts
to
19,9 %.

to

regard

non-cooperating

With
Brazilian
exporting producers or those who did not manifest
themselves, normal value and export price had to
be established pursuant to Article 18 of the Basic
Regulation on the basis of the facts available. In
it was considered that, given that
this respect
into the
almost
the imports
Community
cooperating
covered by
exporting producers the findings made with regard
to them provided the most appropriate basis. Thus,
the residual dumping margin established for any
non-cooperating exporting producer
in Brazil
amounts to 19,9 %.

the totality of
are

the

Unites States of America

— ADM

38,9 %

For the known American producer without exports
to the Community during the investigation period,
Ajinomoto USA Inc., as well as for any other
company which might start to produce and export
MSG in future to the Community,
it has been
found appropriate to apply the same dumping
margin as for ADM which covered the totality of
American exports to the Community during that
period.

Vietnam

Since Vietnam is considered to be a non-market
economy country, a single countrywide dumping
margin was established.

— All companies

above 40 %

D. DEFINITION

OF
THE
INDUSTRY

COMMUNITY

(44)

The complainant Community producer is the sole
producer of the like product in the Community
and constitutes the Community industry in the
meaning of Article 4(1) of the Basic Regulation.

E. INJURY WITH RESPECT TO THE COUN-
TRIES SUBJECT TO THE NEW INVEST-
IGATION

1. Preliminary remarks

(45)

The circumstances of imports from the countries
subject to the review investigation, in particular, the
withdrawal of
Indonesia from the Community
market and the sharp decrease in imports from

Korea and Taiwan, which are made under inward-
processing arrangements, has led the Commission
to consider it appropriate to focus on the likelihood
of the analysis of recurrence of injury in respect of
these imports, as well as unnecessary to decide
whether they should be cumulated with those from
the countries subject to the new investigation.

(46) As there is only one Community producer and
owing to the confidential nature of the information
relating to injury indicators, the data concerning
the development of production, capacity, capacity
utilisation, Community consumption, sales volume,
market shares, price evolution and profitability is
presented in the form of indices, starting from a
base of 100 for 1994 figures.

2. Consumption in the Community

(47) Consumption of MSG in the Community was
calculated on the basis of imports (Eurostat) plus
sales in the Community by Orsan. On this basis
consumption was overall on an increasing trend
over the period examined (1 January 1994 to 30
June 1997) despite a dip in 1995. It was on an
indexed basis, 100 in 1994 and decreased to 91 in
1995. In 1996, it increased to 101 with a further
increase to 106 during the investigation period.

3. Imports of MSG in the Community from the

countries subject to the new investigation

(a) Cumulation

(48)

In accordance with Article 3(4) of the Basic Regula-
tion, where imports of a product from more than
one country are simultaneously subject to an anti-
dumping investigation, the effects of such imports
shall be cumulatively assessed only if it is deter-
mined that (a) 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 (b) a cumulative assessment of
the effects of the imports is appropriate in light of
the conditions of competition between imported
products
competition
between the imported products and the like
Community product.

conditions of

and the

(49) As shown in the table below,

and corresponding market

the volume of
imports
are
share
considered significant during the investigation
period. Furthermore, the dumping margins for the
three countries were found to be substantially
above de minimis levels. On this basis it was
further considered whether
the conditions of
competition were such as to justify a cumulative

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assessment of the imports from the three countries.
In this respect it was found that the prices of these
imports were all in the same range.

Country

USA

Brazil

Vietnam

Import
volume in
tonnes

8 809

8 724

5 382

Market share
in %

Price level
in ecu

14 %

14 %

990

976

8,6 %

1 042

It should also be recalled that MSG imported from
the three countries and that produced and sold by
the Community industry is entirely interchange-
able, that the market is transparent and similar
sales channels are used. It was therefore considered
that a cumulative assessment of the effects of the
imports from the countries subject
to the new
the
investigation is also appropriate in light of
conditions of competition between imported prod-
ucts and the conditions of competition between the
imported products
like Community
and the
product.

Ajinomoto and the Community producer were
related to an extent that the price at which the
Community producer
sold MSG to Ajinomoto
could not reliably be accepted as an arm’s length
price and should be excluded from the price-
undercutting determination. However, it was not
considered necessary to decide on this issue as the
large majority of the Community producer’s sales
in the Community were directly made to other
unrelated clients. Thus, the latter prices were suffi-
ciently representative.

the

first

independent

For Brazil, Vietnam and the USA the weighted
average ex-works Community producer sales prices
to
in the
customer
Community were
compared to the weighted
average export prices used for the determination of
dumping, adjusted to Community frontier duty-
paid levels and an allowance in respect of post
importation costs.

The price comparison for exports from Brazil, the
USA and Vietnam showed that these prices had
undercut
the Community industry by
4,3 %, 3,4 % and 4 % respectively.

those of

(b) Volume, value and market share of dumped imports

4. Situation of the Community industry

(50)

(51)

The volume of imports from the three countries
concerned by the new investigation increased from
5 766 tonnes in 1994 to 22 915 tonnes during the
investigation period, an increase of almost 300 %.
During the same period, the value of these imports
increased from around ECU 6 million to ECU 22,8
— an increase of around 275 %.

the market penetration of

In terms of market shares based on total consump-
tion,
the dumped
imports in volume rose from 9,7 % in 1994 to
36,6 % during the investigation period — an
increase of 276 %.

(c) Prices of dumped imports

(52)

For
the determination of price undercutting
regarding the countries concerned, the Commis-
sion analysed data referring to the investigation
period.

(53)

(54)

The examination of the injury trends covered the
period from 1994 to the end of the investigation
period. It should be noted that during this period
anti-dumping measures as mentioned above in
recitals 1 and 2 were in force with a resulting effect
on the situation of the Community industry.

(a) Production, capacity and capacity utilisation

Production by the Community industry increased
from 1994 to 1995, in index terms, from 100 to
106, and decreased in 1996 to 99. During the
production
period, Community
investigation
further decreased to 86. The Community industry’s
the product concerned
production capacity for
remained by and large
capacity
increased in 1995 to 102 and thereafter decreased
in 1996 to 98 and during the investigation period
to 96. Between 1994 and the investigation period,
the capacity utilisation rate varied between 100 and
89.

stable. The

Price undercutting was established on the basis of a
comparison of the export price, conventional duty
paid, with the ex-works prices charged by the
Community industry at the same level of trade.
When determining the Community industry’s sales
the Commission had to decide whether
prices,

(b) Stocks

(55)

Stocks significantly increased between 1994 and
1996 (+ 97 %). During the investigation period
stock levels decreased substantially due to the
change in production process.

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L 264/9

(c) Sales and market share

(56)

The Community producer’s sales volume in tonnes
increased from 100 in 1994 to 104 in 1995. In
1996, the quantity sold was 107 and during the
investigation period it decreased slightly to 102.
The market share of
the Community producer
increased, also on an indexed basis, from 100 in
1994, to 114 in 1995, dropped to 107 in 1996 and
fell again to 97 during the investigation period. It
should be noted that its market share was at all
times very substantial.

(d) Average sales price and price evolution

(57)

The Community industry’s sales prices decreased
from 100 in 1994 to 95 in 1995, remained stable at
95 in 1996 and fell in the investigation period to
91.

(61)

(e) Profitability

a

at

satisfactory

(58) At the outset, it should be noted that, despite the
anti-dumping measures in force, the profitability of
sales by the Community industry of the product
concerned was at no time, during the period exam-
although the
ined,
Community industry had achieved a reduction in
costs of production. Indeed, the Community indus-
try’s actual level of profitability was not only far
below the level considered appropriate in the
Regulation under review, but remained so low over
an extended period of
the industry’s
viability remained precarious.

time that

level,

The already low profitability prevailing in 1994,
decreased in 1995, underwent a further
sharp
decrease in 1996, when the Community industry
moved into a loss-making situation. The downward
trend continued up to the end of the investigation
period.

(f) Investment

(59)

The Community producer substantially increased
its investments over the period examined by a
factor of 3. These investments reflected principally
the change in production process which the
producer decided to put into effect.

5. Conclusion on injury

(60)

The examination of the abovementioned indicators
shows that, notwithstanding certain positive effects
of
the existing measures on the Community
industry, its financial situation remains precarious
and worsened with financial losses being incurred
during the investigation period. Furthermore, the
development of sales prices was negative with the

level

that period. While material

reached during the investigation
lowest
period, and the market share decreased up to the
end of
injury was
already established by the Regulation subject to
review, the examination of the facts established in
the new investigation demonstrate that material
injury has persisted in the subsequent period.

F. CAUSATION

1. Introduction

The Commission examined whether the injury
suffered by the Community industry was caused by
the dumped imports from the countries concerned
by the new investigation or whether other known
factors, such as the evolution of other imports,
consumption in the Community market, the export
activity and price policy of
the Community
industry, had caused that injury or contributed to it,
in order to ensure that any injury caused by these
factors is not attributed to the dumped imports.

2. Effect of the dumped imports

(62) Cumulated imports from the countries concerned
by the new investigation increased their
total
market share from 9 % in 1994 to 36 % in the
investigation period, i.e. by 27 percentage points or
300 %.
the Community industry
increased its market share by 14 % between 1994
and 1995, but overall had a decrease in market
share of 3 % between 1994 and the investigation
period.

In contrast,

It should be noted that the temporary increase of
the market share of the Community industry coin-
cided with the imposition of amended anti-
dumping measures on four countries, i.e. Indonesia,
Korea, Thailand and Taiwan, in 1995. It is clear
from the above that this increase was not sustained
as the Community industry lost market share since
1995 in a period in which the imports from the
countries subject to the new investigation substan-
tially increased. This shows that the Community
industry could not actually benefit from the effect
of measures imposed against Indonesia, Korea,
Thailand and Taiwan in 1995, as the decreasing
imports from the above countries (– 10 554 tonnes
between 1994 and the investigation period) were
immediately more than compensated for by an
increase in dumped imports from the USA, Brazil
and Vietnam (+ 17 147 tonnes between 1994
and the investigation period).

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29. 9. 98

(63)

of

customers

In addition, price undercutting was found in the
countries concerned by the new investigation. In
view of the price sensitivity and transparency of the
market, these low priced imports, well known to
the Community
the potential
industry, could not have failed to have an effect on
the prices of the Community industry and thus
depressed its prices. As a result of the foregoing,
the Community industry had to adjust its prices to
the market situation in order to avoid losing its
market share. This defensive behaviour by the
Community industry was even more necessary as
from a technological point of view this industry has
to maintain a continuous cycle of production and
cannot reduce or easily adapt its production in
order to limit the negative effects of such a price
pressure
dumped
imports.

from low-priced

resulting

consequent

impact on the Community
The
industry of increasing and low-priced imports from
the countries concerned by the new investigation
culminated in the investigation period when the
volume of imports from the countries concerned to
the Community was most significant. It is in this
period that
the Community
industry was at its worst, in particular in terms of
profitability, prices and market share.

the situation of

(64)

they argued that

The cooperating Brazilian exporting producers
claimed that Brazilian imports did not cause
material injury to the Community industry. In this
respect
in the period under
consideration Brazilian import prices were above
the prices of the USA and Vietnam. Furthermore,
they claimed that their market share between 1992
and the investigation period was stable. In their
view, Brazilian imports did not thus dictate the
price evolution in the Community market.

In this respect it was established that the Brazilian
dumped imports increased their volume between
1994 and the end of the investigation period by
101 % and their resulting market share reached a
peak in the investigation period, almost doubling
as compared to 1996. Furthermore, it was found
that
imports from Brazil significantly undercut
prices of the Community industry. In any event, it
was established that already in 1996 and in the
investigation period Brazilian import prices were
below the average prices of MSG originating in the
USA and Vietnam,
and thus depressed the
Community industry’s sales prices. For the reasons

mentioned above, the arguments and claims put
forward on this point had to be rejected.

3. Effect of other factors

Other imports

(65)

The effects of imports other than those from Brazil,
the United States and Vietnam on the Community
industry were also examined on the basis of the
figures reported by Eurostat and those obtained in
the review investigation. Imports made from coun-
tries neither subject to the new nor the review
investigation amounted during the investigation
period to a volume of 1 400 tonnes representing a
total market share significantly below 2 %. These
imports were made mainly from Switzerland,
China, Peru, Thailand and Hong Kong and, with
the exception of Hong Kong, were usually made at
substantially higher prices than those from the
countries concerned by the new investigation. The
quantities imported from Hong Kong were, in any
event, very low.

(66)

Imports made from the countries subject to the
review investigation;
Indonesia, Korea and
i.e.
Taiwan amounted, during the investigation period,
to a volume of around 3 000 tonnes representing a
total market share of around 5 %. These imports
were usually made at prices which were broadly in
line with prices from the countries concerned by
the new investigation.

Development of consumption

(67) Although Community

consumption decreased
from 1994 to 1995, it increased overall during the
period examined by 6 %.

Export activity of the Community industry

(68) Ajinomoto argued that the injury suffered by the
Community industry is also due to its decision to
promote export rather than Community sales. It
should be recalled that exports were not a major
activity for the Community industry during the
period examined and, contrary to the claim of
Ajinomoto have decreased slightly in volume
during the period under examination.

impact on the state of

Any change in this respect could only have had a
small
the Community
industry, in particular as far as production, capacity
and cost of production are concerned. In any event
the injury has been established on data pertaining
to the Community market and not on the export
performances of the Community industry.

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Self-inflicted injury

G. LIKELIHOOD OF CONTINUATION AND
RECURRENCE OF INJURIOUS DUMPING
(WITH REGARD TO THE COUNTRIES
SUBJECT TO THE INTERIM REVIEW)

(69) According to Ajinomoto,

the injury suffered by
Orsan is not related to the dumped imports origin-
ating in the countries concerned by the new invest-
igation and in particular in Brazil, but is mainly
due to Orsan’s plan to expand capacity.

1. Indonesia

It was established that during the period under
review the Community producer has not expanded
its capacity, on the contrary it has slightly reduced
it. In addition, it was found that the Community
producer during the investigation period switched
its production process to one using a new raw
material. This was done in the framework of a
broader integrated new investment programme by
the major shareholder of the Community producer.
For the Community producer this investment was
meant to result in a more cost-efficient production
set-up. In this respect it should be noted that this
switch to a new production process affected only
part of the investigation period during which the
Community producer
incurred certain start-up
costs. The Commission has identified any such cost
element which could have inflated the cost of
production and resulting financial
and
adjusted the data shown under point E accordingly,
in order to eliminate any effect of this start-up
phase on the injury assessment.

losses

4. Conclusion

(70) Given the fact

that MSG is a commodity-type
product, offered in a transparent market through
similar sales channels in the Community, it was
considered that dumped imports of MSG origin-
ating in the three countries subject to the new
investigation,
caused
material injury to the Community industry.

taken in isolation, have

This conclusion has been confirmed by the analysis
carried out in respect of any other possible factors
causing injury, notably imports from the countries
concerned by the review investigation, which
decreased substantially up to the investigation
period, and the switch of the production process
carried out by the Community industry. None of
these factors was such as to break the causal link
injury suffered by the
between the material
Community industry and the dumped imports
from the countries concerned by the new invest-
igation.

(71) As far as Indonesia is concerned, practically no
exports of MSG were found to have been made by
this country to the Community during the invest-
igation period. This is why the examination of the
likelihood of the recurrence of dumping in respect
of Indonesia was especially relevant in this invest-
igation.

(72)

(73)

(74)

found that

It was
the cooperating Indonesian
exporting producers reached capacity utilisation
rates for MSG production of 93 % on average
during the investigation period and, therefore, the
disposable capacity for
to the
Community is limited. It was also found that the
Indonesian exporting producers have no plans to
increase their MSG production capacity in the near
future. In any event, any new investment with that
aim would only have medium-term effect since it
takes around two years for a new MSG production
line to become operational.

future exports

It was also established that nearly half of the Indo-
nesian production of MSG is sold domestically at
profitable prices. However, the other half of the
production was exported to non-Community coun-
than those
tries at prices which were lower
prevailing in the Indonesian and the Community
markets. Consequently, it cannot be excluded that
in the absence of measures, this price difference
would constitute an incentive to redirect exports at
dumped prices to the Community.

It should be noted, though, that unlike imports
imports of MSG from
from Taiwan and Korea,
Indonesia rapidly declined in 1995 and disappeared
from the Community market from 1996 onwards.
The investigation has shown that the rapid decline
in 1995 was not prompted by the provisional anti-
that year
dumping duties imposed in July of
because they did not concern all
Indonesian
exports, as some exports could still be made on the
basis of price undertakings. Furthermore, the provi-
sional duty level was similar to that of the duties
imposed on exporting producers in Korea and
Taiwan where none of
the exporting producers
benefited from undertakings.

While the definitive anti-dumping duties imposed
in January 1996 concerning the three above coun-
tries could be an explanation for a low level of

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Official Journal of the European Communities

29. 9. 98

they do not explain Indonesia’s total
imports,
absence from the Community market.
Indeed,
notwithstanding the imposition of definitive duties,
there were still significant imports from Korea and
the Indonesian exporting
Taiwan. In particular,
producers could, as was the case for Korean and
Taiwanese exporting producers, maintain their
presence
inward-
in the Community under
processing arrangements which are exempted from
the collection of duties.

(75) On balance, it was therefore concluded that any
likelihood of a resumption of Indonesian exports
and hence a recurrence of injurious dumping is
very remote.

2. Korea

(– 88 % until

(76) With respect to Korea it was found that the import
volume and the corresponding market share was
not at a negligible level during the investigation
period. These imports decreased continuously from
1994 onwards
the investigation
period) with a growing decrease between 1995 and
1996, period during which revised anti-dumping
measures at a higher level were imposed. Further-
more, these imports were dumped. As far as the
pricing behaviour during the investigation period is
concerned it has to be noted that practically all
imports were made for inward-processing purposes
and were therefore not subject to any conventional
or anti-dumping duty. On the basis of the analysis
of the actual imports, undercutting of the prices of
the Community industry of 11 % was established.
The prices of Korean imports in 1996 and the
investigation period were the highest of all coun-
tries subject to the investigations.

it was considered that

(77) As far as the recurrence of injurious dumping is
the prices
concerned,
obtained for
inward-processing sales were an
appropriate estimate of the price level at which
imports released for free circulation would be made
in the Community in the absence of anti-dumping
measures. On this basis and taking into account the
conventional duty level of 12,5 % such prices
would not undercut
the Community
industry.

those of

However, it should be noted that the prices of the
Community industry were depressed and made a
loss. Thus Korean export prices would undersell
Community prices by a significant amount, even
after the imposition of conventional duty, should
the duties lapse.

this

exporting producer

the free capacity available for

future
therefore,
exports by
the
Community is limited. It was also found that the
Korean exporting producer has no plans
to
increase its MSG production capacity in the near
future.

to

(79) As far as its domestic market is concerned, only
15 % of the Korean exporting producer’s produc-
tion of MSG is sold domestically at profitable
prices. The other
the production is
share of
exported to non-Community countries at prices
which were lower than those prevailing in Korea
and the Community. Consequently, it cannot be
excluded that, in the absence of measures, the re-
latively higher price in the Community market
would constitute an incentive to redirect exports
from non-member countries at dumped prices to
the Community. In any event it should be borne in
mind that the analysis of the recurrence of injuri-
ous dumping in the absence of anti-dumping
measures was considerably hampered by the non-
cooperation of a significant Korean exporting
producer.

3. Taiwan

(80) At the outset it should be noted that there was no
cooperation by any Taiwanese exporting producer.
Therefore it was not possible to make any detailed
company-data based analysis of the recurrence of
injurious dumping in the absence of anti-dumping
measures.

to Taiwan it was found that

With respect
the
import volume and the corresponding market share
was also above a negligible level during the invest-
igation period. Despite a significant decrease in
market share from 1994 onwards, this decrease was
substantially less pronounced than in the case of
Indonesia and Korea (– 46 % until the invest-
igation period). Furthermore, these imports were
dumped.

imports were made for

(81) As far as the pricing behaviour during the invest-
igation period is concerned it has to be noted that
practically all
inward-
processing purposes and were therefore not subject
to any conventional or anti-dumping duty. On the
basis of the analysis of the actual imports, under-
cutting of the prices of the Community industry of
16,7 % was established.

(78)

It was further found that the coopererating Korean
exporting producer
reached capacity utilisation
rates for MSG production of around 90 % on
average during the investigation period and, that

(82) As far as the recurrence of injurious dumping is
the prices
concerned,
obtained for
inward-processing sales were an
appropriate estimate of the price level at which

it was considered that

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L 264/13

imports released for free circulation would be made
in the Community in the absence of anti-dumping
measures. On this basis and taking into account the
conventional duty level of 12,5 % such prices
the Community
would still undercut
industry by an amount of 6 % broadly in line with
the undercutting margins found with respect to the
countries concerned by the new investigation. Only
by maintaining
imposed anti-
the presently
dumping duty would there be no undercutting.

those of

(86)

(87)

4. Conclusion

(83) As regards the situation of Korea and Taiwan the
substantial dumping established during the invest-
igation period constitutes a demonstration of the
likelihood of the continuation of dumping should
the measures in force be repealed. Furthermore, the
incentives to redirect exports to the Community
and the underselling level found for Korea as well
as the undercutting level found for Taiwan point to
a recurrence of injury where the measures would be
removed.

2. Interest of the Community industry

is

The purpose of anti-dumping measures
to
remedy an unfair trading practice that has an
injurious effect on a Community industry. Such a
remedy should result in the re-establishment of a
situation of effective competition which, as such, is
in the
in the
Community.

the operators

interest of

all

In the course of this investigation it has been estab-
lished that the Community industry is viable, but
continues to suffer injury, and that it is highly
probable that, without anti-dumping measures, the
precarious financial situation of the Community
industry will further deteriorate. Thus, the existence
of the Community industry and hundreds of jobs
may ultimately be at risk.

Furthermore,
the ongoing restructuring efforts
made by the Community industry show that it is
not ready to abandon this segment of production.
The imposition and maintenance of anti-dumping
measures would therefore be in the interest of the
Community industry.

(84) On the contrary, with regard to Indonesia, meas-
ures should be repealed since the likelihood of
recurrence of injurious dumping is too remote.

3. Impact on users

(88) No Community user submitted any substantiated
information during the
investigations
concerning the incidence in their cost of produc-
tion of the measures in force.

current

H. COMMUNITY INTEREST

1. Introduction

(85)

It should be recalled that in the previous investiga-
tions relating to the countries concerned by the
review, the adoption of measures was considered to
be in the interest of the Community. Furthermore,
it should be noted that one of the present invest-
igations is a review, thus analysing a situation in
which anti-dumping measures have already been in
place. Consequently, the timing and nature of the
present investigations would allow the assessment
of any negative undue impact on the parties
concerned by anti-dumping measures imposed.

On this basis it was examined, whether, despite the
conclusions on dumping, injury and recurrence of
injurious dumping respectively, compelling reasons
existed which would lead to the conclusion that it
is not in the Community interest to impose or
maintain measures in this particular case. For this
purpose, and pursuant to Article 21(1) of the Basic
Regulation, the Commission considered the impact
of measures for all parties involved in the proceed-
ings and also the consequences of not taking/main-
taining measures.

(89) However, some interested parties argued that the
international competitive position of products
incorporating MSG, produced in the Community,
would be jeopardised by the continuation or
imposition
anti-dumping measures.
However, it was established that MSG used for the
production in the Community of products for
export can enter the Community without any duty
under
the inward-processing arrangements and
thus it was concluded that this argument has to be
dismissed.

the

of

(90) Another interested party claimed that it is against
the Community interest to continue imposing anti-
dumping duties on imports of MSG owing to the
fact that the Community industry would not be
able to supply the Community market with suffi-
cient quantities. In this respect it was found that, in
view of the fact that the Community industry has a
significant market share, is viable and has invested
significant amounts in new production capacity,
and given the presence of other suppliers located
outside of the Community, the risk of a general
supply shortage is very low.

(91) As far as the competitive environment of

the
Community market is concerned, user industries
and other economic operators have always enjoyed
the presence of a number of competitors in the

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29. 9. 98

since the Community industry, even
market,
exploiting its entire production capacity, could not
satisfy the entire demand on the Community
market.

Imports from third countries will therefore always
be necessary. After the imposition of anti-dumping
measures, exporting producers located in the coun-
to continue
tries
exporting to the Community at fair prices.

concerned would be

able

(92)

Following the lack of substantiated information
submitted by the users concerning the impact of
the measures in force on the structure of the cost of
production of food processors using MSG, a sub-
sequent analysis was not performed. Nevertheless,
users of MSG pointed out that the incidence of the
actual measures on their cost of production was
insignificant. Furthermore, it should be noted that
MSG users have the possibility of switching to
substitute products, should the prices of MSG
increase substantially.

happened to two other Community producers. As a
consequence there would be less competition in
the market. Indeed, in such a situation Ajinomoto
would have a strong position in the Community
market. Industrial users would thus be deprived of
the benefit of genuine competition and among
other consequences prices may increase. It must,
furthermore, be noted that globally Orsan’s posi-
tion is much less important than the position of
Ajinomoto, the latter having a multitude of produc-
tion facilities worldwide.

5. Conclusion

by

(95) On the basis of the above facts and considerations
in particular, and having examined the arguments
submitted
industry,
Community users and importers of the product
concerned, it is considered that, on balance, there
are no compelling reasons which would indicate
that the imposition or maintenance of measures
would not be in the Community interest.

Community

the

4. Consequence for competition in the Community

market

I. TERMINATION OF THE PROCEEDING IN

RESPECT OF THE USA

(93) As far as the competitive environment

in the
Community market is concerned, two aspects have
to be highlighted. First,
the measures proposed
below are not such as to foreclose the Community
market to the exporting producers under invest-
igation and therefore it will allow the continued
in the
presence of
market.

these exporting producers

Secondly, as far as imports from Taiwan and Korea
to the Community are concerned, which were
found to have lost a considerable amount of the
market share during the period under investigation,
there are no indications that
these could not
increase their presence in the Community market
once fair competitive conditions are restored with
regard to dumped imports from other sources. This
is further reinforced by the fact that the level of the
measures proposed for Taiwan and Korea is lower
than those presently in force. Thus, the benefit of a
market driven by a number of suppliers would still
be available for users of the product concerned.

(94)

attention has been paid,
Furthermore special
during the present investigation, to the importance
of
the position of Ajinomoto not only in the
Community market, but worldwide. Ajinomoto is
the biggest player in the MSG business. On the
basis of available information, it is considered that
without the imposition of anti-dumping measures,
there is the danger that the Community producer
will be driven out of the market. This has already

(96) Concerning the USA, by the end of 1997, i.e. after
the end of the investigation period, ADM definit-
ively terminated its production of MSG. The one
remaining producer in the USA had never exported
MSG to the Community and indeed was itself an
its production
importer of MSG into the USA,
being less than that required to meet the domestic
demand. Moreover this producer, after the closure
of ADM, will face a domestic demand substantially
in excess of its production capacity. Therefore, it is
considered unlikely that this producer will change
its prior behaviour. In these circumstances no
protective measures are necessary.

J. DEFINITIVE DUTIES

1. Injury elimination level

(97)

For the purpose of establishing the level of the
it was considered that the
duty to be imposed,
prices of the dumped imports should be increased
to a non-injurious
level. The necessary price
increase was determined on the basis of a compar-
ison of the weighted average import price used to
establish price undercutting, as outlined above,
with the production costs of the sole Community
producer and a reasonable profit margin. The profit
level used which cannot be stated for reasons of

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EN

Official Journal of the European Communities

L 264/15

confidentiality and which is less than that made by
that producer prior to the impact of the imports
concerned, is considered to be obtainable in the
absence of dumped imports and is in line with that
considered reasonable in the measures under
review.

It should be noted that as the Community industry
was in a start-up period, being changed its produc-
tion process, the Commission duly adjusted down-
wards the cost of production of the Community
industry used for the purpose of determining the
above non-injurious level.

(98)

injury margins

The same methodology was applied to establish
residual
for non-cooperating
exporting producers in the countries concerned. In
this respect export prices established for the deter-
mination of residual dumping margins were used
as a basis.

The above comparison showed injury margins
which, on a weighted average basis expressed as a
percentage of the free-at-Community-frontier price,
ranged per country from 10,5 % to 20,4 %.

(99)

Since the injury margins found are lower than the
respective dumping margins, the definitive duties
to be imposed should correspond to the injury
margins established, in conformity with Article 9(4)
of the Basic Regulation.

2. Type of definitive duty

(100) The existing measures have the form of specific
duties as a result, inter alia, of the violation of
undertakings by producers in Taiwan and Korea.
Nevertheless, due to the fact that new measures
have to be imposed on Brazil and Vietnam, and
that pursuant to Article 9(5) of the Basic Regulation
the duties have to be imposed on a non-discrimina-
tory basis, it was considered appropriate to impose
ad valorem duties for all countries concerned,

HAS ADOPTED THIS REGULATION:

Article 1

1. Definitive anti-dumping duties are hereby imposed on imports of monosodium
glutamate, falling within CN code ex 2922 42 00 (TARIC code 2922 42 00 * 10), originating
in Brazil and Vietnam.

The rates of duty applicable of the net, free-at-Community-frontier price, before duty,

2.
shall be as follows:

Country

Product manufactured by

Duty

TARIC code

Brazil

All companies

Vietnam

All companies

17,8 %

16,8 %

—

—

Article 2

Article 1 of Regulation (EC) No 81/96 is hereby replaced by the following:

‘Article 1

1. Definitive anti-dumping duties are hereby imposed on imports of monosodium
glutamate, falling within CN code ex 2922 42 00 (TARIC code 2922 42 00 * 10), origin-
ating in the Republic of Korea and Taiwan.

The rates of duty applicable of the net, free-at-Community-frontier price, before

2.
duty, shall be as follows:

Country

Product manufactured by

Duty

TARIC code

Taiwan

Korea

All companies

— Cheil Jedang Corporation
— All other companies

20,4 %

10,5 %
12,3 %

—

8843
8900'

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Official Journal of the European Communities

29. 9. 98

Article 3

The proceeding in respect of imports of monosodium glutamate originating in the USA
and Indonesia is hereby terminated.

Article 4

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

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

Article 5

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

Done at Brussels, 24 September 1998.

For the Council

The President

N. MICHALEK