Council Regulation (EC) No 2537/1999 of 29 November 1999 amending Regulations (EEC) No 2861/93, (EC) No 2199/94, (EC) No 663/96 and (EC) No 1821/98 concerning the imposition of definitive anti-dumping duties on imports of certain magnetic disks (3,5" microdisks) originating in Japan, Taiwan, the People's Republic of China, Hong Kong, the Republic of Korea, Malaysia, Mexico, the United States of America and Indonesia and Regulation (EC) No 1335/1999 reimposing a definitive anti-dumping duty on imports of certain magnetic disks (3,5" microdisks) originating in Indonesia and produced and sold for export to the Community by PT Betadiskindo Binatama
Date: 1999-11-29
Institutions: Council of the European Union
Subjects: Asia, Mexico, United States, anti-dumping duty, import, magnetic medium

2. 12. 1999

EN

Official Journal of the European Communities

L 307/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 2537/1999

of 29 November 1999

amending Regulations (EEC) No 2861/93, (EC) No 2199/94, (EC) No 663/96 and (EC) No 1821/98
concerning the imposition of definitive anti-dumping duties on imports of certain magnetic disks
(3,5(cid:1) microdisks) originating in Japan, Taiwan, the People's Republic of China, Hong Kong, the
Republic of Korea, Malaysia, Mexico, the United States of America and Indonesia and Regulation
(EC) No 1335/1999 reimposing a definitive anti-dumping duty on imports of certain magnetic disks
(3,5(cid:1) microdisks) originating in Indonesia and produced and sold for export to the Community by
PT Betadiskindo Binatama

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

(3)

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), and in
particular Article 11(3) thereof,

Having regard to the proposal submitted by the Commission
after consulting the Advisory Committee,

Whereas:

(A) REQUEST FOR A REVIEW

(1)

(2)

A request for an interim review of Regulation (EEC) No
2861/93 (2) by which the Council
imposed definitive
anti-dumping duties on imports of certain magnetic
disks (3,5(cid:1) microdisks) originating,
in Japan
was received from Sony Corporation and Fuji Photo
Film Co. Ltd, both located in Japan and hereinafter
referred to as ‘Sony’ and ‘Fuji Film’ respectively.

inter alia,

This request pursuant to Article 11(3) of Regulation (EC)
No 384/96 claimed a change in circumstances regarding
the definition of
concerned by the
the product
proceeding in question to justify the initiation of a
review. According to the request, conventional 3,5(cid:1)
microdisks with a storage capacity of 1,44 megabytes
and new generation 3,5(cid:1) microdisks with a storage
capacity of 200 megabytes could not be considered to

(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 262, 21.10.1993, p. 4.

form a single product and should therefore be excluded
from the scope of the existing anti-dumping measures.

As the request contained sufficient prima facie evidence,
the Commission decided to initiate an interim review (3)
of Regulation (EEC) No 2861/93. At the same time, the
its examination should
Commission considered that
encompass all other existing measures imposed on the
same product, and accordingly decided to extend the
review to also cover the measures applicable to imports
originating in Hong Kong,
the Republic of Korea,
the United States of America and
Malaysia, Mexico,
Indonesia.

(4)

This interim review was limited to clarification of the
product scope of the regulations imposing the measures.

(B) EXISTING MEASURES

(5)

The measures currently in force are definitive anti-
dumping duties in the form of ad valorem duties imposed
on certain magnetic disks (3,5(cid:1) microdisks) by the
following regulations:

— Regulation (EEC) No 2861/93 imposing a definitive
anti-dumping duty on imports of certain magnetic
disks (3,5(cid:1) microdisks) originating in Japan, Taiwan
and the People's Republic of China,

— Regulation (EC) No 2199/94 (4) imposing a definitive
anti-dumping duty on imports of certain magnetic
disks (3,5(cid:1) microdisks) originating in Hong Kong and
the Republic of Korea,

— Regulation (EC) No 663/96 (5) imposing a definitive
anti-dumping duty on imports of certain magnetic
(3,5(cid:1) microdisks) originating in Malaysia,
disks
Mexico and the United States of America,

— Regulation (EC) No 1821/98 (6) imposing a definitive
anti-dumping duty on imports of certain magnetic
disks (3,5(cid:1) microdisks) originating in Indonesia,

(3) OJ C 394, 17.12.1998, p. 21.
(4) OJ L 236, 10.9.1994, p. 2.
(5) OJ L 92, 13.4.1996, p. 1.
(6) OJ L 236, 22.8.1998, p. 1. Regulation as amended by Commission

Regulation (EC) No 2152/98 (OJ L 271, 8.10.1998, p. 9).

L 307/2

EN

Official Journal of the European Communities

2. 12. 1999

— Regulation (EC) No 1335/1999 reimposing a defin-
itive anti-dumping duty on imports of certain
magnetic disks (3,5(cid:1) microdisks) originating in Indo-
nesia and produced and sold for export
to the
Community by BT Betadiskindo Binatama (1) (which
resulted from a newcomer review relating to that
company).

(C) PROCEDURE

(6)

(7)

(8)

(9)

The Commission gave
the parties known to be
concerned the opportunity to make their views known
in writing and to request a hearing.

The Community industry, represented by the Committee
of European Diskette Manufacturers (Diskma) on behalf
of producers whose collective output of 3,5(cid:1) microdisks
represented a major proportion of Community produc-
tion of
these microdisks, made its views known in
writing.

The applicants for the review (Sony and Fuji Film)
requested and were granted hearings. Another exporting
producer of high capacity microdisks in Japan, Hitachi
Maxell Ltd (hereinafter referred to as ‘Hitachi Maxell’),
also made an application to have a product manufac-
tured by it excluded from the scope of the measures.

One American exporting producer, Imation Europe BV
(hereinafter referred to as ‘Imation’, which opposed the
exclusion of products from the scope of
the anti-
dumping measures,
requested and was granted a
hearing.

(10)

Submissions were also received from the Hong Kong
Economic and Trade Office (an exporting country
authority) and Memtek Europe Ltd which is part of the
Hanny Group of companies, a company based in Hong
Kong with production in the People's Republic of China,
(hereinafter referred to as ‘Hanny’).

(D) PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

four megabytes and above should be
capacity of
excluded from the scope of the proceeding, but this
request was rejected on the grounds that, at the time of
the adoption of Regulation (EEC) No 920/93:

— despite some alleged differences in the technology
used for the manufacture of both four megabyte and
higher capacity 3,5(cid:1) microdisks and other 3,5(cid:1)
microdisks, their basic physical characteristics and
end uses were the same, and

— all 3,5(cid:1) microdisks were to a large extent,

inter-

changeable.

irrespective of their
As a result, all 3,5(cid:1) microdisks,
storage capacity, were considered to be a single product
and to be covered by the duties in force.

These findings were confirmed by the Council in Regula-
tion (EEC) No 2861/93.

(E) ARGUMENTS PRESENTED FOR EXCLUDING PROD-
UCTS FROM THE SCOPE OF THE EXISTING MEAS-
URES

1. Submission from Sony, Fuji Film and Hitachi

Maxell

(12)

(13)

Sony and Fuji Film presented evidence that 3,5(cid:1) micro-
disks with a storage capacity of 200 megabytes, known
as ‘HiFDs’, have been developed in a joint venture.
According to the two companies, HiFDs should be
excluded from the scope of the measures on the grounds
that their physical characteristics and end uses are so
markedly different from the 3,5(cid:1) microdisks covered by
the investigation that they cannot be considered a single
product together with other 3,5(cid:1) microdisks.

Similarly, Hitachi Maxell presented evidence that 3,5(cid:1)
microdisks with a storage capacity of 120 megabytes,
known as the ‘Superdisk LS-120’, have also been devel-
oped. According to the company, the Superdisk LS-120
should also be excluded from the scope of the measures
on the same grounds as for HiFDs.

(11)

The product concerned by all of
the Regulations is
certain magnetic disks (3,5(cid:1) microdisks) used to record
and store encoded digital information falling within CN
code ex 8523 20 90.

Physical characteristics

the investigation which led to the
In the course of
adoption of the measures against Japan, Taiwan and the
People's Republic of China, the question of whether the
anti-dumping measures should also apply to higher
storage capacity 3,5(cid:1) microdisks was examined. As
stated in recital 9 of Commission Regulation (EEC) No
920/93 (2) imposing provisional measures, one Japanese
producer requested that 3,5(cid:1) microdisks with a storage

(1) OJ L 159, 25.6.1999, p. 14.
(2) OJ L 95, 21.4.1993, p. 5.

(14) According to these companies, the HiFD and Superdisks
LS-120 microdisks, while sharing the convention 3,5(cid:1)
microdisks form, have the following characteristics.

(i) Track densities and coding schemes: They have 200 MB
or 120 MB storage capacity respectively, giving 130
or 83 times the capacity of a convention 3,5(cid:1)
microdisk. This greater capacity is achieved through
enhancing the track density and linear recording
density together with more effective data coding
schemes.

2. 12. 1999

EN

Official Journal of the European Communities

L 307/3

(ii) Tracking technology: They have 3 450 or 2 490 tracks
per inch (TPI) respectively, compared to 135 TPI
for
conventional 3,5(cid:1) microdisks. This higher
density is achieved through the use of ‘magnetic
sector servo tracking’ technology (in the case of
HiFDs), or ‘optically continuous servo tracking’ tech-
nology (in the case of Superdisks LS-120s) to read
from and write to the microdisks, which respec-
tively automatically lead the reader head, either
magnetically or optically, to the targeted track. In
the case of conventional 3,5(cid:1) microdisks, the posi-
tion of the head of the drive is set mechanically.
Consequently, the HiFD and Superdisk LS-120 drive
units also utilise an entirely new type of magnetic
head to that used in conventional 3,5(cid:1) microdisks.

(iii) Particle media: They have greated magnetic coercivity
and a thinner magnetic layer than that of conven-
tional 3,5(cid:1) microdisks.

(iv) Compatibility: They cannot be read by a conventional
3,5(cid:1) microdisk drive. They have identification and
recognition holes that are absent from conventional
microdisks and can only be used to full capacity
when inserted into a HiFD or Superdisk LS-120
drive unit respectively. However, both HiFD and
Superdisk LS-120 drive units
are backwardly
compatible with conventional 3,5(cid:1) microdisks since
they can read from and write to conventional
microdisks. Such conventional 3,5(cid:1) microdisks do
not, however, gain the storage capacity of HiFD
microdisks or Superdisk LS-120s when written to
by a HiFD or Superdisk LS-120 drive unit respec-
tively.

(v) Data transfer: They can be rotated at speeds of
3 600 rpm or 720 rpm, respectively, in their drives
whereas a conventional 3,5(cid:1) microdisk is rotated at
300 rpm. This allows a data transfer rate of 3 600
or 680 kilobytes per second, respectively, compared
to a performance of 60 kilobytes per second for
conventional 3,5(cid:1) microdisks.

capability of conventional 3,5(cid:1) microdisks, which are
typically used for smaller working files and are therefore
not interchangeable with the HiFD or Superdisk LS-120.

Pricing

(16) According to the applicant companies, the differences in
physical characteristics between HiFDs and Superdisk
LS-120s, on the one hand, and conventional 3,5(cid:1) micro-
disks on the other, are reflected in their respective
manufacturing costs and retail prices. The differences
between 3,5(cid:1) microdisks and HiFDs or Superdisk LS-
120s are underlined by the price differential that exists
between them.
is such that
competition between 3,5(cid:1) microdisks and HiFDs or
Superdisk LS-120s does not exist at any practical level.

this differential

Indeed,

2. Other submissions

(17)

Submissions were
received from the Hong Kong
Economic and Trade Office and from Hanny, which,
although a producer of 3,5(cid:1) microdisks,
is not a
producer of higher-capacity 3,5(cid:1) microdisks. Both
submissions argued that the higher-capacity 3,5(cid:1) micro-
disks are not a like product with conventional 3,5(cid:1)
microdisks, and should therefore be excluded.

(F) ARGUMENTS FOR NOT EXCLUDING PRODUCTS
FROM THE SCOPE OF THE EXISTING MEASURES —
SUBMISSION BY IMATION

(18) A submission was also presented by Imation which is a
subsidiary of an American-based company producing
the Superdisks LS-120 in the United States of America
for sale on the Community market. Imation cooperated
with the previous investigation which led to the imposi-
tion of anti-dumping duties on imports from the United
States of America, and has a company-specific zero anti-
dumping duty rate.

1. Physical characteristics

(19) According to Imation,

the differences

in memory
capacity, design and reading/writing process technology
do not prevent products from belonging to the same
single category of product concerned, as long as the
basic characteristics and technology do not show signifi-
cant differences. Both the HiFD and Superdisk LS-120, it
is claimed, share the same basic physical, technical and/
or chemical characteristics as conventional 3,5(cid:1) micro-
disks.

End uses

(15)

The companies concerned claimed that the end uses of
the HiFDs and Superdisk LS-120s are fundamentally
different from those of conventional 3,5(cid:1) microdisks.
Typically, they are used for the larger storage files such
as those created by audio, video, graphics and multi-
media programs which require the higher capacities and
faster
rate provided by both high storage
capacity 3,5(cid:1) microdisks. These uses are far beyond the

transfer

(20)

This submission cited the DRAM regulations extensively
(Commission Regulation (EEC) No 165/90 of 23 January
1990 imposing a provisional anti-dumping duty on
imports of DRAMs originating in Japan (1) and Council
Regulation (EEC) No 2112/90 of 23 July 1990 imposing
a definitive anti-dumping duty on imports of DRAMs
originating in Japan (2)). In that case, the Community
took the view that the similarities of DRAMs of different
densities and processes outweighted their differences in
memory capacity, design and process technology.

(1) OJ L 20, 25.1.1990, p. 5.
(2) OJ L 193, 25.7.1990, p. 1. Regulation as last amended by Regula-

tion (EEC) No 2967/92 (OJ L 299, 15.10.1992, p. 4).

L 307/4

EN

Official Journal of the European Communities

2. 12. 1999

(21)

the three basic technologies of
Imation argued that
memory enhancement (particle media, track densities
and coding schemes) for 3,5(cid:1) microdisks have remained
the same for the last 25 years.

Imation, the retail price per megabyte is almost in a
one-to-one relation between HiFDs and 3,5(cid:1) microdisks.

In relation to the particle media, it is argued that the
many and continuing improvements which have been
made to the microdisk in terms of memory and speed
are all based on continuing refinements of the two key
elements of the size and shape of the magnetic particles
in the magnetic layer, and on the thickness of
the
magnetic layer.

Track densities have been improved through the use of
servo tracking technologies.

(G) POSITION OF THE COMMUNITY INDUSTRY

(23)

The Community industry, represented by Diskma, does
not produce either the HiFD or the Superdisk LS-120
and has indicated that it has no objection to the exclu-
sion of these products from the scope of the definitive
anti-dumping Regulations mentioned in recital 5, as
long as both are distinguishable from conventional 3,5(cid:1)
microdisks by the Community customs authorities and
as long as their exclusion does not allow evasion of the
duties in force.

Methods of coding data have improved through the use
of better coding schemes.

(H) FINDINGS OF THE INVESTIGATION

The development of high-capacity microdisks was stated
to be an old phenomenon, with previous attempts to
produce such 3,5(cid:1) microdisks. The basic technology
used, namely to store data on a magnetic medium, has
remained the same for both conventional 3,5(cid:1) micro-
disks and high-capacity microdisks. The size, dimen-
sions, design, architecture and function of conventional
3,5(cid:1) microdisks and high-capacity microdisks were iden-
tical. It was also argued that the servo tracking tech-
nology used in HiFDs has been available to the industry
for several years.

It was further argued that differences in construction and
appearance were not important; and that the different
recognition holes in the higher-capacity 3,5(cid:1) microdisks
were purely a functional aspect of their construction.
The fact that the HiFD and Superdisk LS-120 drives are
backwardly compatible and can be used to read from
and write to conventional 3,5(cid:1) microdisks is taken to be
a strong indication that the products, despite improve-
ments in technology, are not substantially different in
basic technology and use.

2. End uses

(22) As regards end use, Imation stated that the basic use of
high-capacity 3,5(cid:1) microdisks is to store data in a port-
able medium as is that of conventional 3,5(cid:1) microdisks.
Imation contested the view that the end uses differ. The
Sony and Fuji Film claim that the differences in physical
characteristics between HiFDs and conventional 3,5(cid:1)
microdisks are reflected in their respective manufac-
turing and retail prices was also rejected. According to

1. Dissimilarity of products

Physical characteristics

(24) As explained above, the storage capacities and track
densities of the HiFD and the Superdisk LS-120 are
many times those of a conventional 3,5(cid:1) microdisks.
The magnetic layers are thinner, with higher coercivity
than that of conventional 3,5(cid:1) microdisks. New coding
schemes, as well as technological developments in the
drive units for the HiFD and the Superdisk LS-120 allow
for data transfer rates between 11 and 60 times those of
conventional 3,5(cid:1) microdisks.

(25)

In addition, the drive units needed to read from and
write to these higher-capacity 3,5(cid:1) microdisks are quite
different from those of conventional 3,5(cid:1) microdisks
drives. The drive units for conventional 3,5(cid:1) microdisks
are not compatible with the new higher-capacity micro-
disks. It is true, that the higher-capacity drives have been
designed to be backwardly compatible with conventional
3,5(cid:1) microdisks. However, this backwards compatibility
relies wholly on the technology of the drive and not on
the physical characteristics of the microdisks themselves.
This backwards compatibility is achieved by having dual
heads, one intended for reading from and writing to
higher-capacity microdisks of the relevant type, and the
other for reading from and writing to conventional 3,5(cid:1)
microdisks. Imation's claim that the backward compati-
bility of the higher-capacity microdisk drives is further
evidence of the two types of microdisk being a single
product is therefore refuted; the higher-capacity micro-
disk component of the drive head is not backwardly
compatible on its own.

2. 12. 1999

EN

Official Journal of the European Communities

L 307/5

(26)

the investigation has shown that

there are
Finally,
currently no 3,5(cid:1) microdisks available which would fall
between the conventional 3,5(cid:1) microdisks and the HiFD
and Superdisk LS-120.

(27)

(28)

(29)

(30)

End uses

It is acknowledged that, at the most basic level, all types
of 3,5(cid:1) microdisk are used for the recording of elec-
tronic data, even though the HiFD and the Superdisk
LS-120 can be used to store electronic files far beyond
the capacity of conventional 3,5(cid:1) microdisks. Therefore,
it is considered that the issue of end uses for conven-
tional 3,5(cid:1) microdisks and the HiFD and the Superdisk
LS-120 is not sufficient on its own to conclude that
conventional 3,5(cid:1) microdisks and HiFDs and Superdisk
LS-120s are a single product.

2. Conclusion

The investigation has shown that a clear dividing line in
terms of physical and technical characteristics exists
between conventional 3,5(cid:1) microdisks and high-capacity
microdisks. The product at issue in the review request
represents a leap in technology from the microdisks
subject to the previous investigations. The physical char-
acteristics of the higher-capacity microdisks, as well as
the technology needed to use them, are such as to
distinguish them as separate products form conventional
3,5(cid:1) microdisks. The fact that the new higher-capacity
microdisks look similar to conventional 3,5(cid:1) microdisks
is not considered to be sufficient reason for maintaining
the higher-capacity microdisks within the scope of the
Regulations subject to review.

In the light of the foregoing, the Council considers that
the exclusion of the HiFD and the Superdisk LS-120
from the scope of the measures imposed by the Regula-
tions subject to review is justified.

The Council therefore concludes that all 3,5(cid:1) microdisks
with capacities of 120 MB or more and which incor-
porate either the magnetic sector servo tracking tech-
nology of the HiFD, or the optically continuous servo
tracking technology of the Superdisk LS-120, should be
excluded from the scope of the anti-dumping measures
imposed by the Regulations mentioned with effect from
the date of publication of the notice of initiation of this
review,
Interested parties,
including the Community industry, were informed of
these findings. After being informed of the above facts
and conclusions, representatives of Imation made further
representations in writing, concerning the exclusion of
the HiFD and the Superdisk LS-120 from the scope of
the measures imposed by the Regulations subject to
review. However, no information or argument was

i.e. 17 December 1998.

provided which could, on examination, cause the
Council to reverse the above conclusions.

(31)

Importers of
the 3,5(cid:1) microdisks which have been
excluded from the scope of the anti-dumping measures
in question may submit applications to the relevant
customs authority for
the anti-
dumping duties paid from 17 December 1998 to the
date of entry into force of this Regulation,

reimbursement of

HAS ADOPTED THIS REGULATION:

Article 1

Article 1(1) of Regulation (EEC) No 2861/93 shall be replaced
by the following:

A definitive anti-dumping duty is hereby imposed on
‘1.
imports of 3,5(cid:1) microdisks used to record and store
encoded digital computer information falling within CN
code ex 8523 20 90 (Taric code 8523 20 90*40) and
originating in Japan, Taiwan and the People's Republic of
China, with the exception of 3,5(cid:1) microdisks based on
optically continuous servo tracking technology or magnetic
sector servo tracking technology with a storage capacity of
120 MB or more.’

Article 2

Article 1(1) of Regulation (EC) No 2199/94 shall be replaced
by the following:

‘1.
A definitive anti-dumping duty is hereby imposed on
imports of 3,5(cid:1) microdisks used to record and store
encoded digital computer information falling within CN
code ex 8523 20 90 (Taric code 8523 20 90*40) and
originating in Hong Kong and the Republic of Korea with
the exception of 3,5(cid:1) microdisks based on optically contin-
uous servo tracking technology or magnetic sector servo
tracking technology with a storage capacity of 120 MB or
more).’

Article 3

Article 1(1) of Regulation (EC) No 663/96 shall be replaced by
the following:

‘1.
A definitive anti-dumping duty is hereby imposed on
imports of 3,5(cid:1) microdisks used to record and store
encoded digital computer information falling within CN
code ex 8523 20 90 (Taric code 8523 20 90*40) and
originating in Malaysia, Mexico and the United States of
America, with the exception of 3,5(cid:1) microdisks based on
optically continuous servo tracking technology or magnetic
sector servo tracking technology with a storage capacity of
120 MB or more.’

L 307/6

EN

Official Journal of the European Communities

2. 12. 1999

Article 4

Article 1(1) of Regulation (EC) No 1821/98 shall be replaced
by the following:

‘1.
A definitive anti-dumping duty is hereby imposed on
imports of 3,5(cid:1) microdisks used to record and store
encoded digital computer information falling within CN
code ex 8523 20 90 (Taric code 8523 20 90*40) and
originating in Indonesia, with the exception of 3,5(cid:1) micro-
disks based on optically continuous servo tracking tech-
nology or magnetic sector servo tracking technology with a
storage capacity of 120 MB or more.’

A definitive anti-dumping duty is hereby imposed on
‘1.
imports of 3,5(cid:1) microdisks used to record and store
encoded digital computer information falling within CN
code ex 8523 20 90 (Taric code 8523 20 90*40) origin-
ating in Indonesia and produced and sold for export to the
Community by PT Betadiskindo Binatama, with the excep-
tion of 3,5(cid:1) microdisks based on optically continuous servo
tracking technology or magnetic sector servo tracking tech-
nology with a storage capacity of 120 MB or more.’

Article 6

Article 5

This Regulation shall enter into force on the day of its publica-
tion in the Official Journal of the European Communities.

Article 1(1) of Regulation (EC) No 1335/1999 shall be replaced
by the following:

It shall apply as from 17 December 1998.

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

Done at Brussels, 29 November 1999.

For the Council

The President

S. NIINISTÖ