Council Regulation (EC) No 603/1999 of 15 March 1999 imposing a definitive anti-dumping duty on imports of polypropylene binder or baler twine originating in Poland, the Czech Republic and Hungary, and collecting definitively the provisional duty imposed
Date: 1999-03-15
Institutions: Council of the European Union
Subjects: Central and Eastern Europe, anti-dumping duty, import, manufactured goods, originating product, plastics

20. 3. 1999

EN

Official Journal of the European Communities

L 75/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 603/1999

of 15 March 1999

imposing a definitive anti-dumping duty on imports of polypropylene binder or
baler twine originating in Poland, the Czech Republic and Hungary, and
collecting definitively the provisional duty imposed

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

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

of

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

Whereas:

A. PROVISIONAL MEASURES

(1)

(2)

(3)

in Poland,

By Commission Regulation (EC) No 2107/98 (2)
(hereinafter referred to as ‘the provisional duty
Regulation') provisional duties were imposed on
imports of polypropylene binder or baler twine
the Czech Republic,
originating
Hungary
cooperating
co-
Hungarian exporting producers
operating Czech exporting producer offered price
undertakings, which were accepted by the provi-
sional duty Regulation and by Commission Regula-
tion (EC) No 2649/98.

and Saudi Arabia. All

and one

B. SUBSEQUENT PROCEDURE

Following the imposition of the provisional meas-
ures, certain exporting producers and importers of
the product concerned submitted comments in
writing. Those parties who so requested were
granted an opportunity to be heard.

Since the publication of the provisional duty Regu-
the Commission continued to seek and
lation,
information deemed necessary for its
verify all

(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) JO L 267, 2. 10. 1998, p. 7. Regulation as amended by
Commission Regulation (CE) No 2649/98 (JO L 335, 10. 12.
1998, p. 41).

definitive findings and carried out investigations of
the following companies:

(a) Complainant Community producers

— Pippo Tuote Oy, Outokumpu, Finland,
— Irish Ropes, Kildare, Ireland;

(b) Exporting producer

Isoliertechnik Spolska

WKI
Poland.

z.o.o., Weltyn,

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

The oral and written comments submitted by the
interested parties were considered and, where
deemed appropriate,
in the
definitive findings.

taken into account

C. PRODUCT

CONCERNED
PRODUCT

AND

LIKE

In the absence of any new information, the provi-
sional findings, as set out in recitals 6 to 8 of the
provisional duty Regulation, are confirmed.

D. DUMPING

1. Poland

(a) Cooperation

As described in recital 9 of the provisional duty
Regulation, two companies’ replies to the question-
naire had been considered inadequate for
the
purposes of the investigation, as the information
provided did not permit an accurate determination
either of normal values or of export prices. Subse-
to the adoption of provisional measures,
quent

(4)

(5)

(6)

(7)

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Official Journal of the European Communities

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(8)

(9)

these two companies requested to be allowed to
rectify the deficiencies contained in their previous
submissions, and to be granted the opportunity of a
late verification.

the

One of the two companies claimed that it was a
small company, with only limited export activity
during
investigation period and limited
resources for dealing with the requirements of the
investigation. This request for a late verification
could not, however, be accepted since, as had
already been made clear when informing the
company of its insufficient cooperation, it would
companies
mean discriminating against other
which had made the effort to cooperate properly.
Moreover, the company had been duly informed of
the consequences of its non-cooperation and had
previously been granted more than one opportunity
to rectify the deficiencies contained in its reply to
the questionnaire.

The other company justified its request on the
grounds that it had wrongly considered itself to be
operating on a different level to all the other Polish
firms concerned by the investigation, because it
primarily produced baler twine under an outward
processing regime, whereby raw materials acquired
in the Community market were processed into
finished products in Poland, before being returned
to the Community for sale. This particular situation
had caused the company to believe — erroneously
it would not be affected by the anti-
— that
dumping investigation as such and consequently it
had originally not submitted a complete reply to
the questionnaire. The Commission considered
the
the special
that, because of
company compared to the other Polish producers,
the fact of allowing it to submit additional informa-
tion would not constitute discrimination against
other cooperating companies. The company was
therefore given a further opportunity to submit the
necessary information, which was duly verified. The
results of the verification are set out in recitals 13
and 15 hereto.

situation of

provisional

(10) A third company, which came forward only after
the
been
published, asked to be allowed to cooperate in the
proceeding. This request was rejected as the dead-
line for a reply to the questionnaire had long since
expired.

duty Regulation

had

(b) Normal value

(11)

Two companies questioned the profit margin
which had been used by the Commission in
constructing normal values and proposed that a
lower rate of profit be used. One company claimed

company

fluctuations. The

that the profit margin used in constructing the
normal value did not reflect the fact that profit
margins in the baler twine business are rather low
and tend to be strongly influenced by seasonal and
alternative margin
climatic
suggested by this company was that achieved from
all
products
different from those under investigation. The other
its position
company claimed that, because of
it
as a relatively new producer of baler twine,
actually had no means of influencing the existing
level of selling prices in the market, and thus of
obtaining the higher margin relied upon by the
Commission.

operations,

including

The Commission considers that the profit margin
used in constructing the normal value was correctly
determined in accordance with Article 2(6) of the
Basic Regulation, i.e. the weighted average profit
realised on domestic sales by the sole cooperating
Polish exporting producer which had sufficient
quantities of domestic sales of the like product in
the ordinary course of trade. These claims could
not, therefore, be accepted.

(12)

In the course of reviewing the calculations, it was
decided that an adjustment for technical character-
istics made when constructing the normal value for
three Polish exporting producers was not required
(see recital 8 below).

(13) As far as the company WKI Isoliertechnik Spolska
z.o.o. (hereinafter ‘WKI') is concerned, its sales of
baler twine on the Polish domestic market were,
overall, made in representative quantities, i.e. they
constituted 5 % or more of the quantity exported
to the Community. However, the individual types
of baler twine sold for export to the Community
did not correspond to those sold on the domestic
market. Normal value was therefore constructed, in
accordance with Article 2(3) of the Basic Regula-
tion. As for all other cooperating Polish producers,
constructed normal value was calculated on the
basis of the cost of production in Poland (including
(SG&A)
selling,
expenses) plus a reasonable amount of profit. The
company’s own SG&A expenses were used. The
rate of profit was calculated, in accordance with
Article 2(6)(a) of the Basic Regulation, using the
actual rate of profit established for the sole co-
operating producer located in Poland which had
sufficient quantities of domestic sales of the like
product in the ordinary course of trade.

administrative

general

and

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(c) Export price, comparison and dumping margin

(14)

Following the disclosure of
the Commission’s
definitive findings, one company pointed out a
its dumping
clerical error in the calculation of
margin. The calculation has been rechecked and
the error
rectified. No other comments were
received in this respect from the Polish exporting
producers. After revision of the calculations, the
dumping margins are as follows:

— BZLP Bezalin:

— CZWC Chemitex:

— PAT Defalin SA:

— Industrial Chemistry Research

Institute:

— Terplast sp z.o.o.:

17,2 %

20,3 %

16,3 %

28,4 %

23,0 %.

In the case of WKI, all sales of
the product
concerned on the Community market were made
to related customers in the Community. Export
prices were therefore constructed in accordance
with Article 2(9) of the Basic Regulation, on the
basis of the price at which the imported products
were first resold to an independent buyer within
the Community. For this company, the weighted
average normal value per
the product
concerned was compared with the weighted average
export price, in accordance with Article 2(11) of the
Basic Regulation. The weighted average dumping
margin determined, expressed as a percentage of
the cif import price at the Community frontier
duty unpaid, is as follows:

type of

— WKI Isoliertechnik Spolska z.o.o.,

Weltyn:

46 %.

In view of the fact that the import volume repres-
ented by cooperating Polish exporting producers,
after the inclusion of WKI, has increased from less
than 70 % to more than 90 %,
the residual
dumping margin for Poland has been revised. The
revised residual dumping margin, now set at the
level of the highest dumping margin found for a
cooperating company located in Poland,
and
expressed as a percentage of the cif import price at
the Community border, duty unpaid, is 46 %.

(15)

(16)

2. Czech Republic

(a) Normal value

(18)

(19)

therefore have been based on the corresponding
domestic sales prices. However, this request could
not be accepted since the products sold on the
domestic market
largely did not correspond to
those sold on the export market and, in the very
small number of cases where they allegedly did,
such sales were not in the ordinary course of trade.

The same company questioned a small adjustment
for technical characteristics made by the Commis-
sion in the provisional duty Regulation when
constructing the normal value. After careful consid-
eration of
it was
concluded that the adjustment could not in the
final analysis be justified, and the calculations were
corrected accordingly.

arguments presented,

the

Finally, the same company also claimed that the
rate of profit used by the Commission in con-
structing the normal value was too high and did
not correspond to the actual profitability of the
baler twine business, which was in reality lower. In
this connection it should be pointed out that the
profit margin was calculated in accordance with
Article 2(6) of the Basic Regulation on the basis of
the profits obtained on domestic sales of the like
product by the producer concerned. The claim was
therefore rejected, and the provisional findings are
confirmed in this respect.

(b) Export price

(20) No comments were received in this respect.

(c) Comparison

(21)

Both Czech companies asked for a level of trade
adjustment, arguing that while domestic sales were
to end-users, export sales were to dealers. However,
no reliable evidence was produced in support of
this assertion. Indeed, in the case of one company
it was established that export sales as well as
domestic sales had been made to end-users; in the
case of the other company, a significant proportion
of domestic sales were found to have been made to
dealers and the company failed to demonstrate that
there were consistent and distinct differences in
functions and prices of the seller for different levels
of trade in that market. Consequently, these claims
could not be accepted.

(17) One of the two Czech exporting producers claimed
that normal value had been constructed for several
types of baler twine, for which there had been sales
on the domestic market. According to the
these types should
company, normal value for

(22) One company claimed that export transactions had
been compared with domestic transactions of a
substantially lower volume,
for which a higher
selling price would therefore be normal. However,
the domestic sales were found to be sufficiently

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Official Journal of the European Communities

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representative and in the ordinary course of trade
and they therefore allowed a fair comparison,
which has been made in accordance with Article
2(10) of the Basic Regulation. In any event, the
simple fact that the quantity sold on average per
transaction on the domestic market was smaller
than the average quantity sold per transaction on
the export market is not considered sufficient for
an adjustment to normal value.

dumping margins are therefore confirmed at the
following rates:

— Elso Magyar Kenderfono Rt:

— Partium ’70 Rt:

— Tiszai Vegyi Kombinat Rt:

33,3 %

12,1 %

26,4 %

The residual dumping margin remains at 33,3 %.

(d) Dumping margin

4. Saudi Arabia

(23) After revision of

the calculations,

the dumping

(27)

margins are as follows:

— Lanex a.s.:

— Juta a.s.:

24,8 %

21,8 %

In view of the findings on the injury threshold (see
recital 71 hereto) no definitive determination of
dumping has been made in respect of the sole
cooperating exporting producer.

The residual dumping margin is set at 24,8 %.

E. COMMUNITY INDUSTRY

3. Hungary

(a) Normal value

the

different

(24) One company objected to the method used by the
Commission in determining
constructed
normal value. It claimed that the SG&A expenses
relating to the company’s wholly owned subsidiary
should not have been included in the constructed
normal value due to the fact that the subsidiary was
concerned with a
activity.
However, the verification established that the vast
majority of sales of baler twine on the domestic
market had been made via this subsidiary. As the
SG&A expenses had evidently been incurred in the
sale of baler twine on the domestic market, they
should consequently have been accounted for in
the subsidiary. These
the cost calculation of
expenses have therefore to be taken into account in
the parent
establishing the SG&A expenses of
company. Therefore,
findings in
the provisional
this respect are confirmed.

selling

(28)

In the absence of any new information, the provi-
sional findings as stated in recital 35 of the provi-
sional duty Regulation, are hereby confirmed.

F. INJURY

1. General

(29)

In view of the findings on the injury threshold (see
recital 71 hereto) the Saudi Arabian imports have
been excluded from the injury analysis.

2. Community consumption

(30)

In determining total apparent consumption on the
the
Community market,
the
Community
the
remaining non-cooperating Community producers
on the Community market, were added to the
imports into the same market.

sales
of
sales by

industry plus

total
the

(25) Another company claimed that the cost of produc-
tion it had submitted for one specific type of baler
twine for one month was higher than in other
months and should therefore be disregarded. The
company, however failed to provide any satisfactory
explanation as to why this anomaly had occurred
and the claim was therefore rejected.

(b) Export price, comparison and dumping margin

(26) No comments were received with regard to the
determination of export price, the comparison and
the dumping margin as set out in the provisional
duty Regulation. The provisional findings on the

The volume of imports was, for the purposes of the
definitive findings, determined on the basis of
adjusted Eurostat figures as stated in recital 36 of
the provisional duty Regulation. The Commission
continued to investigate after the imposition of the
provisional duty and obtained and verified new
data. This resulted in a change in the apparent
the
consumption for the period considered (i.e.
period between 1994 and the investigation period)
due to adjusted import figures concerning mainly
Poland. On this basis, Community consumption
increased from 40 231 tonnes in 1994 to 51 788
tonnes in 1996 and remained relatively stable
thereafter, reaching 51 288 tonnes in the invest-
igation period, which represents an overall increase
of 27 % over the period considered.

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3. Allegation of anti-competitive behaviour

during the investigation period in volume terms —
an increase of 111 %.

(31)

(32)

(33)

In their comments following the disclosure, the
Polish exporting producers continued to argue that
the calculation of price-undercutting margins as
well as the findings on other injury factors, causa-
tion and Community interest were vitiated on
account of two investigations, allegedly initiated by
the Commission against anti-competitive practices
by the Community producers of polypropylene
granulates and the Community producers of baler
twine.

The Polish exporting producers were unable to
substantiate their allegation that a concerted prac-
tice existed for the raw material and for baler twine.
Although investigation into olefins and polyolefins,
such as polypropylene, was started in 1995 (Case
No IV/E-2/35.765) the findings were negative and
the case was closed. As
the
Commission established that no official complaint
had been lodged and that none was pending.

for baler

twine,

Some interested parties argued that discussions had
taken place between the Community producers
and the Polish exporting producers which is, per se,
anti-competitive behaviour. It should, however, be
noted that those consultations were held in the
framework of the textile agreement as provided for
by that agreement.

(c) Prices of the dumped imports

(38)

The results of the comparison showed that price-
undercutting margins (calculated on a weighted-
average to weighted-average basis), expressed as a
percentage of the Community industry’s average
selling prices, ranged as follows: for Poland from
4,7 to 16,3 % with an overall weighted average of
11,9 %; for the Czech Republic from 16,1 % to
19,2 % with an overall weighted average of 16,1 %
and for Hungary from 16,9 % to 21,4 % with an
overall weighted average of 18,2 %.

(39) A Hungarian exporting producer claimed that the
Commission in its calculation of undercutting
should take into consideration the price at which
this company purchased polypropylene granulates
in Hungary. This argument has to be rejected as in
a price-undercutting analysis actual import prices
to the Community from the countries concerned
are compared with actual prices of the Community
industry.

(34)

In the light of the above it was concluded that the
abovementioned allegations were groundless.

5. Situation of the Community industry

4. Volume and market share of the dumped

imports

(a) Cumulation

(35)

Since for the remaining three countries, i.e. the
Czech Republic, Hungary and Poland, no new
information was received, the conclusions reached
in recital 37 of the provisional duty Regulation are
confirmed.

(40) As mentioned in recital 3 hereto, following the
publication of the provisional duty Regulation the
Commission continued to seek and verify all in-
formation deemed necessary for their definitive
findings and carried out investigations at the prem-
ises of Community producers of
the product
concerned. This led to the findings on injury indic-
ators for the Community industry, which varied
insignificantly from those, stated in the provisional
duty Regulation. For the sake of completeness the
injury indicators are set out below.

(b) Volume, value and market share of imports

from the exporting countries concerned

(41)

(36)

(37)

The volume of imports from the three remaining
countries concerned increased from 5 264 tonnes
in 1994 to 14 147 tonnes during the investigation
period, representing an increase of 169 %.

of market

share based on total
In terms
Community consumption, the market penetration
of the dumped imports from the three countries
concerned rose from 13 % in 1994 to 27,6 %

(a) Production, capacity and capacity utilisation

Production of the Community industry increased
during the period considered, rising from 28 877
tonnes in 1994 to 33 557 tonnes in the invest-
igation period. This represents an overall increase
of 16 %. Production increased at a lower rate than
Community consumption, which increased by
27 % during the period considered.

(42) On the basis of

the methodology described in
recital 43 of
the provisional duty Regulation,
capacity increased from 42 232 tonnes in 1994 to

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46 484 tonnes during the investigation period,
which represents
an increase of 10 %. This
increase was in line with expectations of market
growth. The rate of capacity utilisation increased
slightly during the period considered, rising from
68,4 % in 1994 to 72,2 % in the investigation
period.

(b) Sales volume

The volume of sales of the Community industry on
the Community market
increased during the
period considered, from 24 840 tonnes in 1994 to
26 796 tonnes in the investigation period. This
represents an overall increase of 8 %.

(c) Market share

The Community industry’s market share decreased
from 61,7 % in 1994 to 58,3 % in 1995, 57,7 % in
1996 and 52,2 % during the investigation period.
The overall loss of market share was 9,5 percentage
points between 1994 and the investigation period.

(43)

(44)

(d) Stocks

(45)

Stocks significantly increased between 1994 and
the investigation period by 42 %.

(e) Average sales price and price evolution

(46)

the product
The weighted average prices of
concerned sold by the Community industry on the
Community market
the period
considered, increasing by 11 % overall.

fluctuated over

(f) Profitability

(47)

The profitability of
the Community industry,
expressed as a percentage of net sales, decreased
from a weighted average profit of 3,5 % in 1994 to
1,3 % in the investigation period. It should be
noted, however, that the financial situation deteri-
orated particularly from 1995 onwards, falling from
a profit of 13,4 % to a profit of 1,3 % in the
investigation period.

(51)

(g) Investment

(48)

Yearly investments made by the Community
industry increased overall, rising from ECU 1,17
million in 1994 to ECU 1,29 million in the invest-
igation period, with a peak in 1996 of ECU 3,26
million. This represents an overall increase of 11 %
over the period considered.

(h) Employment

(49)

Employment rose from 590 in 1994 to 722 in
1995. Since 1995 employment in the Community
industry decreased to 669, i.e. by 7,3 %.

(i) Comments on injury

(50)

Interested parties argued that the situation of the
Community industry can be considered as stable or
good. The decline in market share and profitability
observed during the period considered could not be
an indicator of injury because it was compensated
for by an improvement in other injury indicators.

In this respect, it should be recalled that, in accord-
ance with Article 3(5) of the Basic Regulation, no
single injury factor can necessarily give decisive
guidance as to the situation of the Community
industry. In the present case, it is accepted that the
following of the injury indicators as Community
production, capacity utilisation, sales, sales price,
investment, employment were not in a negative
trend during the period under investigation.

It should be noted that the above situation has to
be seen in the light of a long expansion of
Community consumption.
Indeed, during the
period under investigation production increased at
a lower rate than Community consumption. More-
over, in spite of the increase in productivity over
the same period, the Community industry suffered
a significant loss in market share at a time when
Community consumption had increased by 27 %.
Furthermore, the Community industry showed a
significant deterioration in its financial results from
1995 onwards, profits falling from 13,4 % to 1,3 %
of net sales in the investigation period, and suffered
significant price pressure from the dumped imports
throughout
the period considered, with price
undercutting of up to 21,4 % during the invest-
igation period.

The exporting producers argued that employment
increased during the period under investigation.
it should also be noted that after an
However,
increase in 1996, employment levels were again on
the decline in the investigation period. As regards
investment,
one
Community producer suffered from a factory fire
and had to replace its production machinery in
1996. This is one of the reasons for the increased
investment noted during the period under invest-
igation.

should

noted

that

be

it

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Official Journal of the European Communities

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(52)

(53)

6. Conclusion on injury

the above,

In the absence of any other arguments concerning
the situation of the Community industry and in the
light of
the
Community industry has suffered material injury
within the meaning of Article 3(1) of the Basic
Regulation, as stated in recitals 36 to 51 of the
provisional duty Regulation, is hereby confirmed.

the conclusion that

G. CAUSATION OF INJURY

1. Effects of the dumped imports

In view of conclusions on cumulation as set out in
recital 35 hereto, the findings on the volume and
market share of
the dumped imports from the
countries concerned were changed accordingly. It
was found that the volume of dumped imports
from Poland, the Czech Republic and Hungary
increased substantially between 1994 and the in-
vestigation period (169 %). It should be noted that,
between 1994 and 1995, the volume of the dumped
imports into the Community increased by 62 %
and a further significant increase occurred between
1996 and the investigation period. This had the
the cumulated total market share of
effect
imports
countries
three
concerned increased from 13,1 % in 1994 to
i.e. by 14,5
27,6 % in the investigation period,
percentage points. In contrast,
the Community
industry’s market share decreased by 9,5 percentage
points between 1994 and the investigation period.
Moreover, it should be noted that the Community
industry lost 5,4 percentage points in market share
between 1996 and 1997 alone, which is the period
during which the increase in imports from the
exporting countries concerned became particularly
relevant.

from the

exporting

that

(54) Moreover,

the prices of

it was found that

the
dumped imports undercut the Community indus-
try’s prices
the whole
significantly throughout
period considered, including the period from 1995
onwards, thus exerting downward pressure on the
sales prices of the Community industry.

(55) One exporting producer claimed that its volume of
exports to the Community had been so small in
comparison with Community consumption of the
product concerned during the investigation period
that it could hardly have caused any injury to the
Community industry. This argument has to be
dismissed because the export volume of an indi-
vidual company is not relevant in determining the
extent of
the injury caused to the Community
industry, injury being assessed for countries as a
whole, and not in relation to single companies.

2. Effects of other factors

(a) General

(56)

The cooperating exporting producers argued that
any material
injury suffered by the Community
industry could not be attributable to imports
originating in the three countries concerned.

They argued that the Community industry’s profit-
ability between 1995 and the investigation period
had fallen due to the inflated prices of raw material
paid by the Community industry. Furthermore,
they claimed that any decline in profitability in
this period was also due to increased overheads, in
interest
particular
expenses, as a result of the substantial investment
made by the Community industry.

depreciation

charges

and

The Commission, in recital 58 of the provisional
duty Regulation, has already addressed the argu-
ment concerning the price of raw material, estab-
lishing that the Community industry could not
raise its prices sufficiently due to the significant
price undercutting found for imports from the
exporting countries concerned.

(57)

Furthermore, as regards the impact of the invest-
ments made by the Community industry on profit-
ability,
it was found that these had a marginal
impact on the Community industry’s costs of
production during the period considered, mainly
because any costs related to these new investments
were compensated for by gains in productivity and
by an overall
reduction in other general and
administrative expenses.

The decline in profitability experienced by the
Community industry between 1995 and the invest-
igation period was therefore clearly linked to the
depressed sales prices over that period, which in
turn occurred at a time of significant price under-
cutting by the dumped imports.

(b) Other imports

(58) No new comments were received relating to the
effect of imports from other countries. Therefore,
the findings and conclusions on the effect of

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Official Journal of the European Communities

20. 3. 1999

the
imports from countries other than Poland,
Czech Republic and Hungary on the injurious
situation of the Community industry, as stated in
recital 54 of the provisional duty Regulation, are
hereby confirmed.

(c) Europe Agreements

(59)

The Hungarian exporting producers argued that in
its preliminary findings the Commission had not
distinguished between the growth of
imports
caused by dumping and the growth of imports
foreseeable due to the implementation of
the
Europe Agreement resulting in improved access to
the Community market.

The Europe Agreement, although clearly aimed at
establishing preferential
trade relationships with
Hungary, by phasing out the duty on imports of
baler twine from 9 % to 0 %, does not prevent the
Community from taking action if unfair trade prac-
tices have been established. Furthermore, the levels
of undercutting and dumping found for the three
countries concerned by this investigation cannot be
explained by the reduction of the duty previously
in force. In these circumstances the phasing out of
the duty is not considered sufficient to break the
causal link between the dumped imports and the
material
the Community
suffered by
industry.

injury

This argument has therefore to be rejected.

(d) Effects of the dismantling of the MFA

(60)

The Polish exporting producers argued that in its
preliminary findings the Commission did not take
into consideration the fact that the dismantling of
the MFA would result in loss of market share and
account, to a certain extent, for the price suppres-
sion experienced by the Community industry.

It should be noted that during the investigated
period imports from Poland were under a quota
system in accordance with the textile agreement
between the Community and Poland. The relevant
quotas for 1995, 1996 and 1997 were 5 281, 5 545
and 5 823 tonnes respectively. Polish exporting
producers did not fully use the quota allocated to
them in 1995 and 1996. Only during the invest-
igation period did the exporting producers from
Poland fully use their quota. The increasing trend
of the imports originating in Poland coincided with
the presence of dumping.

In this respect it was concluded that the increase in
exports to the Community as such did not cause
injury to the Community industry, but the fact that

those exports were made, as established in the
investigation, at dumped injurious prices. Further-
more,
system,
provided for by the MFA, happened in 1998 which
is after the period under investigation.

the dismantling of

the quota

Thus, the dismantling of the MFA in this case
appears to be irrelevant.

(e) Effects of bad weather conditions

(61)

Some exporting producers argued that the injury
suffered by the Community industry was not due to
the dumped imports from the countries concerned,
but to the increased costs resulting from allegedly
reduced consumption, due to the adverse weather
conditions.

It was found that consumption in the Community
market increased during the period under invest-
igation, when dumped imports from the countries
concerned increased by 169 % despite the weather
conditions. It is clear that the Community industry
mainly lost market share due to the increased pres-
ence of dumped imports, rather than the adverse
weather conditions.

(f) Overcapacity of the Community industry

(62)

Some interested parties argued that
the injury
suffered by the Community industry was not due to
the dumped imports, but to overcapacity.

It was established during the investigation that
Community production was not
to
supply the Community baler twine market. Thus,
the argument concerning the alleged overcapacity
has to be rejected.

sufficient

(g) Structural changes in the baler twine market

(63)

Furthermore,
the same interested parties argued
that the Community industry failed to recognise
the gradual market trends from fine baler twine to
nets and from medium to heavy baler twine. More-
over, they argued that the shift from medium baler
twine to heavy baler twine had had a direct impact
on the total tonnage sold, as less heavy baler twine
than medium baler twine is needed to produce the
same weight of bales.

these

is indeed true that during the period under
It
the
shifts
investigation
Community baler twine market. Nevertheless,
it
was found that the Community industry, especially
with the investment on replacing old machinery,

occurred

in

20. 3. 1999

EN

Official Journal of the European Communities

L 75/9

kept up with these changes by increasing its pres-
ence in the heavy baler twine market. Moreover, it
should be noted that consumption increased
during the investigated period, thus the argument
concerning the impact on the tonnage from the
shift from medium baler twine to heavy baler twine
has to be rejected.

I. DEFINITIVE MEASURES

1. Definitive measures

(a) Injury elimination level

3. Conclusion on causation

In the light of the above, although it cannot be
excluded that some other factors may have had a
negative impact on the situation of the Community
industry, this impact was not such as to break the
causal
link between the injury suffered by the
Community industry and the dumped imports
originating in the countries concerned. Therefore
and in the absence of any new information, the
conclusion that the combined effect of the imports
of baler twine originating in Poland, the Czech
Republic and Hungary, taken in isolation, have
caused material injury to the Community industry
is confirmed.

(68) A Hungarian exporting producer argued that its
export prices had to be adjusted for the purposes of
the injury elimination level assessment,
to take
account of the difference in raw material prices
between the Hungarian and the Community
industry.

However, as stated in recital 70 of the provisional
duty Regulation, the injury elimination level was
determined on the basis of the costs of production
the Community industry plus a reasonable
of
amount of profit. Any considerations of differences
in costs of production between the Hungarian and
the Community industry are therefore irrelevant in
this respect.

This conclusion is drawn in particular given the
loss in market share of the Community industry,
combined with a deterioration in profitability,
which coincided with an increase in the volume
and market share of the dumped imports, at prices
which
the
Community industry.

constantly

undercut

those

of

H. COMMUNITY INTEREST

claimed that

conclusion on the
the
It was
Community interest in the provisional duty Regu-
lation was not supported by factual evidence. In
particular, it was argued that the Commission had
not taken into consideration the impact of anti-
dumping measures on the importers, in order to
support its conclusions concerning the Community
interest.

It should be noted that the Commission contacted
all known importers. Only limited and general
replies were received. Moreover, no additional
substantiated comments were submitted from the
abovementioned parties after the adoption of provi-
sional measures.

In the absence of a reaction from users, it has been
assumed that the impact of any expected price
increase would be limited, taking into account the
level of the duty proposed. It is also thought that
the imposition of measures will lead to a reinstate-
ment of effective competition that will enable the
Community industry to regain the lost market
share and improve its profitability.

(67)

It was therefore concluded that the findings set out
in recitals 66 to 67 of the provisional duty Regula-
tion could be confirmed.

(69)

For the purpose of establishing the level of the
measures definitively to be imposed, it was consid-
ered that the prices of the dumped imports should
be increased to a non-injurious level. The necessary
price increase or injury margin was determined on
the basis of a comparison of the weighted-average
export prices for those types of baler twine used in
the determination of price undercutting at a cif
actual
Community
weighted-average
the
Community industry plus a profit margin of 5 %.
This profit margin was considered to be the profit-
ability likely to be achieved in the absence of in-
jurious dumping and takes account of the fact that
the product concerned is considered by the inter-
ested parties as a commodity.

level, with the
of production of

frontier
cost

(70) An injury margin was established for each of the
cooperating exporting producers concerned and
expressed as a percentage of the cif value of their
exports to the Community.

(71)

Following the disclosure of the provisional find-
ings, comments were submitted with regard to the
method used in the determination of the injury
margin for the Saudi Arabian exporting producer.

It was argued that the Commission should include
in its calculations one specific type of baler twine,
which represented the majority of Saudi Arabian
sales to the UK market. The Commission consid-
ered this argument and found that the inclusion of
these
the Saudi Arabian exporting
producer to the UK market would make the calcu-
representative. The Commission
lations more
revised its calculations accordingly, using the same
methodology as explained in recital 70 of
the
provisional duty Regulation.

sales by

(64)

(65)

(66)

L 75/10

EN

Official Journal of the European Communities

20. 3. 1999

On the basis of this methodology the revised injury
margin for
the sole Saudi exporting producer
(Synthec) was found to be at a ‘de minimus' level
and for
two Polish exporting producers PAT
Defalin s.a. and Terplast sp z.o.o. 27 % and 6,1 %
accordingly. The injury elimination level for WKI
Isoliertechnik Spolska z.o.o., Weltyn is 15,7 %. The
injury margins concerning the other exporting
producers remain unchanged.

In view of the findings set out above, it is proposed
that definitive anti-dumping duties be imposed on
imports of binder or baler twine originating in the
to
Czech Republic, Hungary, and Poland. As
imports from Saudi Arabia,
in
is proposed,
application by analogy of Article 9(3) of the Basic
Regulation, to terminate the proceeding without
measures.

it

In accordance with Article 9(4) of the Basic Regula-
tion, for all exporting producers the proposed duty
is based on the lower of the injury or the dumping
margin. The same applies for the residual duties. It
should be noted that for the definitive findings
Polish cooperating producers now account
for
more than 90 % of total Polish exports. Therefore,
a residual duty was calculated using the highest
duty found for an individual cooperating exporting
producer located in Poland.

(72)

(73)

(b) Form and level of the definitive measures

(74)

Based on the above conclusions on dumping,
injury, causation and Community interest, it was
the form and level of anti-
considered what
dumping measures should be to remove the trade-
distorting effects of
injurious dumping and to
restore effective competitive conditions on the
Community market.

(75) Definitive measures should take the form of ad-
valorem duties, the rates of which have been fixed
individually for cooperating companies. However,
those companies which have offered price
for
undertakings, this form of measure is acceptable.
These undertakings reflect the definitive findings
of the investigation with respect to the minimum
prices provided therein and have been accepted by
Commission Decision 1999/215/EC (1).

one

cooperating Czech

(77) After the adoption of the provisional anti-dumping
measures,
exporting
producer (Juta a.s.) offered a price undertaking to
the Commission, in accordance with Article 8(1) of
the Basic Regulation. The Commission considered
that
the undertaking offered by the exporting
producer concerned was acceptable, and, after
consulting the Advisory Committee, an amend-
ment
to the provisional duty Regulation was
accordingly made by Commission Regulation (EC)
the Commission’s
No
disclosure of its definitive findings, the other co-
operating Czech company and a Polish company
also offered undertakings which were judged
acceptable. The Commission’s acceptance of the
undertakings
is now consolidated in Decision
1999/215/EC.

2649/98 (2). Following

2. Collection of the provisional duties

(78)

Five other Polish producers also offered an under-
taking which, in contrast to those accepted from
other producers in the present proceedings, would
have given the companies concerned a free choice
in deciding whether to export under the under-
taking or not. The Commission rejected these
offers on the grounds that the companies would
have had the option of exporting higher-priced
products under the undertaking, while lower-priced
products bore the duty. It should be noted that the
minimum price which has to be respected for each
product group on a quarterly weighted average
basis is intended to ensure that all sales are made at
a non-injurious price. Allowing some sales to be
made
undertaking would have
prevented this aim from being achieved.

outside

the

(79)

In the light of the seriousness of the injury suffered
by the Community industry, it is considered neces-
sary that the amounts securd by way of the provi-
sional anti-dumping duties imposed by Regulation
(EC) No 2107/98 should be definitively collected at
the rate of the definitive duties imposed.

J. TERMINATION OF THE PROCEEDING IN

RESPECT OF SAUDI ARABIA

(c) Undertakings

(76)

It will be recalled from recital 72 et seq. of the
provisional duty Regulation that undertakings had
been offered by the cooperating exporting produ-
cers in Hungary, and accepted by the Commission.

(80)

In view of the conclusions of the definitive invest-
igation, the proceeding concerning imports origin-
ating in Saudi Arabia is terminated by Commission
Decision 1999/215/EC without the imposition of
measures. The amounts secured by way of a provi-
sional anti-dumping duty should therefore be
released.

(1) See page 34 of this Official Journal.

(2) OJ L 335, 10. 12. 1998, p. 41.

20. 3. 1999

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Official Journal of the European Communities

L 75/11

HAS ADOPTED THIS REGULATION:

Article 1

1. As definitive anti-dumping duty is hereby imposed on imports of polypropylene
binder or baler twine, currently classifiable within CN code ex 5607 41 00 (TARIC code
5607 41 00*10), originating in Poland, the Czech Republic and Hungary.

2.
The rate of the definitve anti-dumping duty applicable to the net free-at-Community-
frontier prices before duty of the products manufactured by the companies listed below
shall be as follows:

Country

Company

Poland

BZLP Bezalin
PAT Defalin s.a.
Industrial Chemistry Research Institute
Terplast sp z.o.o.
All other companies

Czech Republic

All companies

Hungary

All companies

Rate of duty
(%)

TARIC
additional
code

17,2
16,3
12,8
6,1
20,3

24,8

32,9

8450
8569
8578
8579
8900

8900

8900

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

Article 2

1. Notwithstanding Article 1, the definitive duty shall not apply to imports of polypro-
pylene binder or baler twine produced and directly exported and invoiced to an importing
company in the Community by the companies listed in paragraph 2, which have offered
price undertakings accepted by the Commission.

Imports made within the context of the undertakings offered and accepted shall be

2.
declared under the following TARIC additional codes:

Country

Company

Poland

WKI Isoliertechnik Spolka z.o.o.

Czech Republic

Juta a.s.
Lanex a.s.

Hungary

Partium ’70 Rt
Tiszai Vegyi Kombinat Rt
Elso Magyar Kenderfono Rt

TARIC
additional
code

8620

8596
8580

8581
8582
8583

Article 3

1.
The amounts provisionally secured by Regulation (EC) No 2107/98 with respect to
imports originating in the countries mentioned in Article 1 shall be collected at the duty
rate definitively imposed.

L 75/12

EN

Official Journal of the European Communities

20. 3. 1999

The amounts provisionally secured by Regulation (EC) No 2107/98 with respect to

2.
imports originating in Saudi Arabia shall be released.

3. Article 2(2) of Regulation (EC) No 2107/98 shall be repealed.

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, 15 March 1999.

For the Council

The President

W. M(cid:154)LLER