Commission Regulation (EC) No 123/2000 of 20 January 2000 imposing a provisional countervailing duty on imports of polyester staple fibres (PSF) originating in Australia and Taiwan and terminating the anti-subsidy proceeding concerning imports of PSF originating in the Republic of Korea and Thailand
Date: 2000-01-20
Institutions: European Commission
Subjects: Asia, Australia, anti-subsidy proceeding, countervailing charge, import, plastics

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COMMISSION REGULATION (EC) No 123/2000

of 20 January 2000

imposing a provisional countervailing duty on imports of polyester staple fibres (PSF) originating
in Australia and Taiwan and terminating the anti-subsidy proceeding concerning imports of PSF
originating in the Republic of Korea and Thailand

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 2026/97 of 6
October 1997 on protection against subsidised imports from
countries not members of the European Community (1), and in
particular Article 12 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

A. PROCEDURE

In April 1999 the Commission announced by a notice
(hereinafter
initiation’)
referred to as a ‘notice of
published in the Official Journal of the Communities (2), the
initiation of an anti-subsidy proceeding with regard to
imports in to the Community of polyester staple fibres
(hereinafter referred to as ‘PSF’) originating in Australia,
Indonesia, the Republic of Korea (hereinafter referred to
as ‘Korea’), Taiwan and Thailand and commenced an
investigation.

The proceeding was initiated as a result of a complaint
lodged by the International Rayon and Synthetic Fibres
Committee on behalf of Community producers repre-
senting a major proportion of Community production
of PSF. The complaint contained evidence of subsidisa-
tion of the said product, and of material injury resulting
therefrom, which was considered sufficient to justify the
initiation of a proceeding.

Prior to the initiation of the proceeding and in accord-
ance with Article 10(9) of Regulation (EC) No 2026/97
(hereinafter referred to as the ‘basic Regulation’), the
Commission notified to the Governments of Australia,
Indonesia, Korea, Taiwan and Thailand that
it had
received a properly documented complaint alleging that
subsidised imports of PSF originating in Australia, Indo-
nesia, Korea, Taiwan and Thailand are causing material
injury to the Community industry. These Governments
were invited for consultations with the aim of clarifying
the situation as regards the contents of the complaint
and arriving at a mutually agreed solution. The Govern-
ments of Australia, Indonesia, Korea, Taiwan and Thai-
land accepted the offers of consultation which were held
with the Commission on 7 April, 29 March, 7 April, 25
March and 9 April 1999, respectively. Due note was

(1) OJ L 288, 21.10.1997, p. 1.
(2) OJ C 111, 22.4.1999, p. 3.

(4)

(5)

(6)

taken of the comments made in regard to the allegations
contained in the complaint regarding subsidised imports
and material injury being suffered by the Community
industry.

The Commission officially advised the Community
importers and users
producers, exporting producers,
known to be concerned,
the
exporting country and the complainant of the initiation
of the proceeding. The parties concerned had the oppor-
tunity to make their views known in writing and to
request a hearing.

the representatives of

The Governments of Australia, Indonesia, Korea, Taiwan
and Thailand, a number of exporting producers as well
as complainant Community producers, Community
users and importers made their views known in writing.
All parties so requested within the time limits set in the
notice of initiation were granted a hearing.

The Commission sent questionnaires
to all parties
known to be concerned and received replies from the
Governments of Australia, Indonesia, Korea, Taiwan and
Thailand from seven complaining Community produ-
cers,
three users in the Community and exporting
producers in all countries concerned.

The Commission sought and verified all the information
it deemed necessary for the purpose of a preliminary
determination of subsidisation and injury, and carried
out, as appropriate, investigations at the premises of the
following companies:

(a) Community producers

— Dupont De Nemours GmbH, Frankfurt, Germany

— Trevira GmbH & Co KG, Frankfurt, Germany

— Wellman International Ltd, Mullagh, Kells, Co.

Meath, Ireland

— Catalana de Polimers, Barcelona, Spain

— Montefibre SpA, Milano, Italy

(b) Government of Australia

— Department for Foreign Affairs and Trade

— Australian Taxation Office

— Department of Industry, Science and Resources

— Australian Trade Commission

— Department of State Development (State Govern-

ment of Victoria)

(c) Exporting producer in Australia

— Leading Synthetics Pty Ltd, Melbourne, Victoria

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(d) Government of Indonesia

— Ministry of Industry and Trade

— Ministry of Finance

— Anti-Dumping Committee of Indonesia (KADI)

— Office of Coordinating Minister for Economy,

Finance, and Industry

— Investment Coordinating Board (BKPM)

— Agency for Export Facility Services (BAPEKSTA)

— Sucofindo Masterlist Verification Division

— Bank Indonesia

(e) Producers/exporters in Indonesia

— PT. Indorama Synthetics TbK, Jakarta

— PT. Panasia Indosyntec TbK, Bandung

— PT. Susila Indah Synthetic Fiber

Industries,

Jakarta

(f) Government of Korea

— Ministry of Commerce, Industry and Energy

— Ministry of Finance and Economy

— Supply Administration of the Republic of Korea

— Korea Federation of Textile Industries

— The Korea Development Bank

— The Industrial Bank of Korea

— The Bank of Korea

(g) Exporting producers in Korea

(7)

(8)

(9)

— Customs Department
— Revenue Department

(k) Exporting producers in Thailand

— Indo-Poly (Thailand) Ltd, Nakornpathom
— Teijin Polyester (Thailand) Ltd, Bangkok
— Tuntex (Thailand) Public Company Ltd, Bangkok

The investigation of subsidisation covered the period
from 1 April 1998 to 31 March 1999 (hereinafter
referred to as the investigation period' or ‘IP’). The exam-
ination of injury covered the period from 1 January
1996 to 31 March 1999 (hereinafter referred to as ‘the
period considered’).

For the purposes of this investigation, and in accordance
with established policy and practice in this area, in case
a company received a benefit under a given scheme
below 0,01 %, it is considered that such company did
not benefit from such scheme. Furthermore, the benefit
received by the exporting companies is expressed as a
percentage of the denominator applicable to the subsidy
scheme in question, in accordance with Article 7 of the
basic Regulation.

In April 1999 the Commission initiated an anti-
dumping investigation concerning imports of the same
product originating in Australia,
Indonesia and Thai-
land (1). With regard to imports of PSF originating in
Korea, an anti-dumping proceeding was initiated in
October 1999 (2). Definitive anti-dumping measures are
currently in force concerning imports of PSF originating
in Taiwan by means of Council Regulation (EC) No
1728/1999 (3).

— Daehan Synthetic Fiber Co. Ltd, Seoul

B. PRODUCT UNDER CONSIDERATION AND LIKE

— Dobest Co. Ltd, Seoul

— Ein Textile Co. Ltd, Seoul

— Sung Lim Co. Ltd, Seoul

— Samyang Corporation, Seoul

— SK Chemicals Co. Ltd, Seoul

— SK Global Co. Ltd, Seoul

— Saehan Industries Inc, Seoul

— Estal Ind. Co, Yangsan City

(h) Government of Taiwan

— Ministry of Economic Affairs

— Ministry of Finance

— Development Fund of the Executive Yuan

— Chiao Tung Bank

— Business Bank of Taiwan

(i) Exporting producers in Taiwan

— Shinkong Synthetic Fibers Corporation, Taipei

— Tuntex Distinct Corp, Hsichih, Taipei County

— Far Eastern Textile Ltd, Taipei

— Nan Ya Plastics Corporation, Taipei

(j) Government of Thailand

— Department of Foreign Trade

— Board of Investment

(10)

(11)

PRODUCT

1. Product under consideration

The product under consideration is synthetic staple
fibres of polyesters, not carded, combed or otherwise
processed for spinning, which is currently classifiable
under CN code 5503 20 00.

This product is a basic material used at various stages of
the manufacturing process of textile products, depending
on the nature of textiles concerned. Around 60 % of the
Community consumption of PSF is used for spinning,
that is to say manufacturing filaments for the production
of textiles, after mixing or not with other fibres such as
cotton or wool. Approximately 25 % is used for filling,
that is to say the stuffing or padding of certain textile
goods (for example cushions, car seats, jackets) while the
remaining 15 % is used for other non-woven applica-
tions,
the production of carpets. The
product in question is sold with different specifications
(e.g. Denier or decitex, lustre, silicon treatment). It is also
sold as either first quality or as substandard qualities.
Although the potential specific uses and the quality of
the various types of PSF sold may differ, this does not
entail any significant differences in the basic physical
characteristics of the different types. They are therefore
considered as one product for the purpose of this Regu-
lation.

in particular

(1) OJ C 111, 22.4.1999, p. 7.
(2) OJ C 285, 7.10.1999, p. 3.
(3) OJ L 204, 4.8.1999, p. 3.

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2. Like product

2. Export Market Development Grant Scheme

(EMDGS)

(12)

The Commission services found that
there were no
differences in the basic characteristics and uses of the
PSF, originating in Australia, Indonesia, Korea, Thailand
and Taiwan, imported into the Community and the PSF
produced by the Community industry and sold on the
Community market. It was also found that there was no
difference between the PSF produced in Australia, Indo-
nesia, Korea, Thailand and Taiwan and exported to the
European Community and that sold on the domestic
markets of those countries. It was therefore concluded
that both the PSF produced and sold by the Community
industry on the Community market and the PSF
produced and sold on the domestic markets of Australia,
Indonesia, Korea, Thailand and Taiwan were, within the
meaning of Article 1(5) of the basic Regulation, alike to
the PSF imported into the Community from the five
countries subject to investigation.

(14)

The legal basis of this scheme as it was in operation
during the period of investigation, is the Export Market
Development Grants Act 1997 (hereinafter referred to as
EMDG Act 1997').

(a) Eligibility

(15) According to Parts 3 and 4 of the EMDG Act 1997, a
company is entitled to a grant in respect of a grant year
if:

— it

is conducting a business in Australia with an
income not exceeding AUD 50 million and export
earnings not exceeding AUD 25 million and

— has incurred certain eligible expenses related to
marketing and promotional activities such as the
cost of maintaining an overseas
representation,
market research, free samples and marketing visits.

C. SUBSIDIES

I. AUSTRALIA

1. Introduction

(13) On the basis of

the information contained in the
complaint and the replies to the Commission's question-
naire,
the
following four schemes, which allegedly involved the
granting of subsidies:

the Commission

investigated

services

— Export Market Development Grant Scheme

— Textiles, Clothing and Footwear Plan

— Incentives

for

International Competitiveness

Programme

— Infrastructure Support Programme

— National Industry Extension Programme

— Capitalisation Grants Programme

— Labour Adjustment Programme

— Import Credit Scheme

— Overseas Assembly Programme

— Quick Response Programme

— Regional Scheme (Government of Victoria): Invest-

ment Attraction Programme (IAP)

— Regional Scheme (Government of Victoria): Industry,
Regional and Trade Support Programme (IRTSP).

— in relation to eligible products, i.e. certain services,
intellectual property rights, know-how and goods
which are substantially of Australian origin (at least
50 % Australian content
in
for which the Australian Trade
Australia) or
Commission (Austrade) is satisfied that Australia will
derive a significant net benefit from their export.

goods made

for

(16) A company is eligible for eight grants only.

(17)

(18)

(b) Practical

implementation

In order to avail itself of the scheme, a company applies
In this
to Austrade which assesses the application.
assessment a so-called ‘grants entry test’
is applied.
According to Austrade's Determination 1/1997, this test
requires, inter alia, that a first-time applicant must have
planned export earnings which are not on their face
unachievable. According to Section 65 of the EMDG Act
1997, if grants have already been given during a period
of three grant years, the amount of the grant is calcu-
lated taking into account the actual export earnings for
the subsequent grant years.

(c) Conclusion on countervailability

This scheme involves a financial contribution by the
referred to as
Government of Australia (hereinafter
‘GOA’) in the form of a grant which confers a benefit on
the recipient. This subsidy is an export subsidy in the
meaning of Article 3(4)(a) of the basic Regulation since
the subsidy is in fact tied to anticipated export earnings
because the grant is not given unless the company has
planned export earnings. Additionally, for grants given
during the fourth grant year,
the subsidy is in law
contingent upon export performance since the grant
amount is calculated on the basis of actual export earn-
ings. Finally, the subsidy is contingent upon the use of

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domestic over imported goods within the meaning of
Article 3(4)(b) of the Basic Regulation, since it can only
be obtained for goods which are substantially of
Australian origin unless it is determined that Australia
will derive a significant net benefit from their export
(which would make the subsidy specific since in fact tied
to anticipated export earnings according to Article
3(4)(a) of the basic Regulation).

(d) Calculation of the subsidy amount

(19)

The amount of subsidy should be the equivalent of the
amount of
the grant paid during the investigation
period. Given the nature of this subsidy, which is equiva-
lent to a one-time grant, and in order to encompass the
full benefit to the recipient of not having to borrow this
the
amount on the open market,
amount of the subsidy has to be transformed into the
value prevailing during the investigation period through
the application of
rate on
comparable loans obtained by the company during the
investigation period.

the face value of

the commercial

interest

(20)

The total amount of subsidy so attributed to the invest-
igation period should be allocated over export sales
since this
sales. The
subsidy benefits only export
exporting producer availed itself of this scheme and
obtained a benefit of 0,03 %.

(a) Eligibility

(25)

The eligibility criteria were,

inter alia:

— the project must involve investment or development

costs,

— the project must involve a specific financial commit-
ment by the company (normally at least 70 % of
total project costs),

— the project must result in improvements to the firm's

international competitiveness.

(26) According to the guidelines issued by the TCFDA, the
last criterion means that companies will be asked to
demonstrate how the project will lead to improved inter-
national competitiveness through export growth, import
replacement, quality improvement, cost reduction or
similar measures. Additionally, the TCFDA places high
priority on export development projects, raw materials
processing projects, greenfield development projects and
investment projects. Only producers of TCF products
were
eligible. The Government had discretion in
selecting beneficiaries under the scheme.

(21)

(22)

3. Textiles, Clothing and Footwear Plan (TCFP)

(27)

the basis

The TCFP is a policy statement made by the GOA which
constitutes
for a series of programmes
providing assistance to the textile, clothing and footwear
(TCF) industry. These programmes are either based on
legislative acts, administrative arrangements or are made
on an ad hoc basis.

The TCF Development Authority (hereinafter ‘TCFDA’)
was created by the TCFDA Act of 1988 which is a key
the TCFP.
element of
to
Its purpose was,
implement
the TCFP. The TCFDA was abolished in
February 1996 and all remaining activities were trans-
ferred to the Department of
Industry, Science and
Resources.

inter alia,

(28)

(23)

The following two individual schemes, which are based
on the TCFP, were used by the exporting producer and
found to be countervailable.

3.1. Incentives

for

International Competitiveness

Programme (IICP)

(24)

The scheme is based on Section 7(d)(i) and Sections 36
through 40 of the TCFDA Act.

(b) Practical

implementation

The company must apply to the TCFDA with a standard
application form. This form requests, inter alia, informa-
tion on targets on export growth and import replace-
ment.

(c) Conclusion on countervailability

The grant constitutes a subsidy since it involves a finan-
cial contribution by the government which confers a
benefit on the recipient. The GOA stated during the
verification visit that the subsidy was specific to the
textiles, clothing and footwear industry but not contin-
gent upon export performance. However,
the GOA
refused to provide access to the contract between the
Government and the company which is the basis for the
grant, citing ‘business in confidence’ requirements. The
company was denied approval to release the contract to
the Commission services for verification. Hence, a deter-
mination on the issue whether this subsidy is contingent
upon export performance had to be made on the basis
of the facts available in accordance with Article 28 of
the basic Regulation. It was verified that the company
had to provide information on target figures for export
growth. Additionally, it was established that the granting
authority
development
programmes.

priority

export

gives

to

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(29)

(30)

(31)

In the absence of verified information on conditions for
the actual grant given to the exporting producer, it is
therefore considered that at least one of the criteria for
paying out the grant was the achievement of targets on
export earnings which makes the grant contingent upon
export performance. In this respect, Article 3(4)(a) basic
Regulation states that the existence of one of several
factors for eligibility can constitute contingency upon
export performance. Therefore, the subsidy is a specific
export subsidy and countervailable in accordance with
Article 3(4)(a) of the basic Regulation and a countervail-
able subsidy specific to certain enterprises,
the
textiles, clothing and footwear sector, in accordance with
Article 3(2)(a) of the basic Regulation.

i.e.

(d) Calculation of the subsidy amount

The subsidy at issue is a non-recurring subsidy, which
can be linked to the acquisition of fixed assets. Therefore
the amount of subsidy from a grant has to be allocated
over the normal period used in the industry involved for
the depreciation of assets in accordance with Article 7(3)
of the basic Regulation. Since the exporting producer is
the sole producer of the product concerned in Australia,
the depreciation period used in that company was
considered to be the appropriate allocation period.

the allocation period,

In order to reflect the full benefit to the recipient of
having a lump sum of money at its disposal from the
beginning of
the amount of
subsidy should be increased by the average amount of
interest which the recipient would expect to pay on the
non-depreciated amount of
the total grant over the
whole period of allocation if he had to borrow the
money on the open market.

(32)

The total amount of subsidy so attributed to the invest-
igation period should be allocated over export sales
since this
sales. The
subsidy benefits only export
exporting producer availed itself of this scheme in the
form of a grant and obtained a benefit of 1,92 %.

3.2. Import Credit Scheme (ICS)

(33)

The scheme commenced on 1 July 1991. Its legal basis
is an administrative arrangement.

(b) Practical

implementation

(35)

The Australian Customs Service (ACS) administers this
scheme. After conducting the export of an eligible
product and payment is made, a company applies for a
credit note to ACS. This credit note contains a code and
the import credit amount which is calculated on the
basis of a fixed percentage of fob value of the exported
product. This information is normally transferred to the
company's customs broker. Upon import of an eligible
product,
the customs broker uses the code to pay
import duty with the credit amount. Alternatively, the
company can advise the customs broker to transfer the
import credit to another company in exchange for a
cash payment.

(c) Conclusion on countervailability

(36)

This scheme is a subsidy since it involves a financial
contribution in the form of import duty foregone which
confers a benefit on the recipient. This scheme is a
specific export subsidy in the meaning of Article 3(4)(a)
of the basic Regulation since it is calculated on the basis
of export sales and therefore contingent in law upon
export performance. The GOA and the exporting
producer argued that the subsidy did not benefit the
product concerned since PSF was not an eligible product
under the scheme. It was established, however, that the
company did not use the credits to offset import duties
for imports of inputs of its own products but sold the
credits on the open market. In effect, the subsidy bene-
fited all exports of the company since the benefits were
finally received in cash, the use of which is not linked to
a particular product. Hence, it is considered, that since
the company obtained benefits under the scheme which
have also benefited exports of the products concerned,
the benefits should be countervailed.

(d) Calculation of the subsidy amount

(a) Eligibility

(34)

Companies exporting certain eligible products can
obtain an import credit for certain other eligible prod-
ucts. PSF is not one of the eligible products for export
but polyester textured yarn, which is also produced by
the exporting producer.

(37)

The amount of subsidies, which have to be allocated
over export sales, should be calculated on the basis of
the grants obtained during the investigation period. In
order to encompass the full benefit to the company, the
annual commercial interest rate was added to the face
amount of the grants. In this case, since the company

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obtained subsidies equivalent to a series of grants during
the investigation period, it is considered appropriate to
assume that an average grant would have been received
at the mid-point of the investigation period, and there-
fore the interest should cover a period of six months.
The company obtained a benefit of 3,48 %.

ment who recommend to the Cabinet Committee an
assistance package. Upon approval by this Committee, a
letter of offer is sent to the company which in case of an
agreement by the company, will form the basis for the
contract between the Government of Victoria and the
the conditions for
company. This contract sets out
obtaining the incentive.

4. Regional Scheme (Government of Victoria):

Investment Attraction Programme (IAP)

(c) Conclusion on countervailability

(38)

The scheme is based on Section 13(3) of the Victorian
Economic Development Act 1981.
It commenced in
1981 and ceased in 1994 through the repeal of the Act.
Guidelines were issued by the Government of Victoria.

(42)

(a) Eligibility

(39) Assistance under this programme is determined on a
case-by-case basis. Primarily, the programme provides
facilitation services for key investment programmes and
regional headquarters, and seeks to attract additional
investment for Victoria. Investment facilitation and assis-
tance includes sight identification, selection,
industrial
relations and employment advice and information on
cost in different locations. Where financial assistance is
provided, companies must demonstrate a certain level of
capital expenditure.

(40)

The Government of Victoria argued that the programme
is not contingent upon export performance or the use of
domestic over imported goods. It was explained that
there were no express eligibility criteria set down but
the Government of Victoria had discretion in
that
granting financial support. In exercising this discretion,
certain factors were considered such as the balanced
economic development of the state and capital invest-
ment, creation of employment and development of the
export capacity throughout Victoria. It was not possible
to verify the actual conditions for this scheme since the
Government of Victoria denied access to the grant
contract which sets forth the conditions of the grant, the
application material submitted and the letter of offer
sent by the Government of Victoria citing ‘commercial
in confidence’ requirements.

The grant is a subsidy since it involves a financial contri-
bution by the Government which confers a benefit on
the recipient. Since it was not possible to verify the
actual conditions of the grant, the facts available had to
be used in order to determine its countervailability in
accordance with Article 28 of the basic Regulation. The
Economic Development Act 1981 establishes as one of
the objectives of the programme ‘the development of the
export capacity’.
the
is considered,
therefore,
contingent upon export
grant was
performance or in fact tied to anticipated exportation or
export earnings the meaning of Article 3(4)(a) of the
basic Regulation as alleged by the complainant. In this
the
respect,
Victorian Auditor's Offices concerning the IAP which
contains a reference to expected export growth of the
company under investigation.

It
either made

the complainant cites

the Report of

that

(43)

In any event, the programme is considered to be specific
in accordance with Article 3(2)(a) of the basic Regulation
since it does not establish objective criteria for eligibility
under the IAP but allows the government of Victoria to
exercise full discretion in providing financial assistance.
Even though requested by Commission services, no
information was provided by the Government on how
this discretion was exercised, i.e. which sectors benefited
from the programme.

(d) Calculation of the subsidy amount

(44)

The company received a grant to assist in the construc-
tion of new plant and equipment. The amount of the
subsidy was calculated as explained above for the IICP
Scheme. The company obtained a benefit of 0,64 %.

(b) Practical

implementation

(41)

The Victorian Department of Business and Employment
(as of March 1996, the Victorian Department of State
in charge of administering this
Development) was
scheme. Companies
intending to obtain assistance
provided information to the case officers in the Depart-

(45)

5. Subsidy programmes not used by the exporting

producer

It was found that the exporting producer did not obtain
any
following
programmes:

countervailable benefits under

the

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— Infrastructure Support Programme
— National Industry Extension Programme
— Quick Response Programme
— Capitalisation Grants Programme
— Labour Adjustment Programme
— Overseas Assembly Programme
— Regional Scheme (Government of Victoria): Industry, Regional and Trade Support Programme.

6. Amount of countervailable subsidies

(46)

The amount of countervailable export subsidies in accordance with the provisions of the basic
Regulation, expressed ad valorem, for the investigated exporting producer, who is the sole exporting
producer in Australia,

is as follows.

EMDGS

IICP

Leading Synthetics Pty Ltd

0,03

1,92

(%)

ICS

3,48

IAP

0,64

Total

6,07

II. TAIWAN

(a) Eligibility

1. Introduction

(50)

Tax exemptions are granted to companies only for a
limited number of investments:

(47) On the basis of

the information contained in the
complaint and the replies to the Commission's question-
naires,
the
following schemes, which allegedly involve the granting
of subsidies:

the Commission services

investigated

— Tax credits and tax exemptions

— Loans at preferential

interest rates

— Accelerated depreciation

— Import duty exemption

— Matching funds and/or assistance funds

— Fund for

the Development and Management of

Industrial Zones

Further details of these schemes are set out below.

(48) All schemes are based on the Statute for Upgrading
Industries (hereinafter referred to as ‘SUI’) which entered
into force on 1 January 1991 and was last amended on
27 January 1995. These programmes are designed to
promote a general upgrading of the industry by creating
an advantageous tax environment backed by appropriate
financial measures. The
these
programmes is regulated by the Enforcement Rules of
the Statute for Upgrading Industries as last amended on
15 November 1995.

implementation of

2. Tax credits for automation equipment and pollu-

tion control equipment

(49)

These tax credits are covered by Article 6(1) of the SUI
and supplemented by Articles 13(1) and 14(1) of the
Enforcement Rules of the SUI.

— investment in equipment for automation of produc-

tion,

— investment in equipment for pollution control,

— investment in technology for automation of produc-

tion or for pollution control.

(51)

The SUI states that the investment should exceed TWD
600 000 new Taiwan dollars) in the same tax year. The
tax credits for the different types of investment can be
cumulated.

(b) Practical

implementation

(52) Any eligible company which invested in the above
mentioned equipment types or technology may credit
10 % to 20 % of
the
corporate income tax payable for the current year. In
case the amount of income tax payable is less than the
the credit may be carried over
deductible amount,
during the next four years.

the purchase amount against

(53)

The amount of tax credit is determined as follows:

— for the purchase of domestically manufactured auto-
mated equipment or pollution control equipment,
the credit rate is 20 %,

— for the purchase of

foreign made automated or
pollution control equipment, the credit rate is 10 %,

— for

the purchase of

technology for automation
production, the permissible credit is at the rate of
10 %.

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(54)

In order to obtain the tax credits, a company makes an
application for the issuance of a tax deduction certificate
to the Industrial Development Bureau of the Ministry of
Economic Affairs (IDB) within six months of the date of
delivery of the equipment or the date of completion of
the project. Once the certificate is issued, the tax credit
can be deducted in the tax declaration for the current
year.

(55)

(56)

(57)

(c) Conclusions on countervailability

The tax credits for automation equipment and pollution
control equipment constitute a financial contribution by
the Government of Taiwan (hereinafter referred to as
in the form of taxes foregone and a benefit
‘GOT’)
accrues to the recipient by not having to pay a certain
amount of taxes.

Tax credits for automation equipment and pollution
control equipment made in Taiwan constitute subsidies
which are contingent in law upon the use of domestic
over imported goods since domestically manufactured
equipment benefits from a higher tax credit rate than
imported equipment. In the light of the above, the subsi-
dies obtained under this scheme are considered to be
specific and therefore countervailable in accordance
With Article 3(4)(b) of the basic Regulation.

(d) Calculation of the subsidy amount

The amount of subsidy should be calculated on the basis
of the amount of taxes unpaid during the investigation
period. Given the nature of this subsidy, which is equiva-
lent to a one-time grant, and in order to encompass the
this amount has been
full benefit
adjusted by adding the average commercial
interest
i.e. 9,03 %. The total
during the investigation period,
amount of subsidy so attributed to the investigation
period should be allocated over total sales since this
subsidy benefits both domestic and export sales.

to the recipient,

(a) Eligibility

(60)

This tax credit is available to investors who buy regis-
tered stocks either issued by an ‘important technology-
based enterprise’ or an ‘important invested enterprise’
designated by the government or issued by a venture
capital investment enterprise. There is no clear definition
of ‘important technology-based enterprise’. An ‘impor-
tant invested enterprise’ may be any enterprise with a
capital of at least TWD 2 billion providing it has been
designated as such by the GOT.

(b) Practical

implementation

(61) Any eligible company which invested in the above
mentioned enterprises may credit 20 % of the price paid
for the acquisition of such stocks against the corporate
income tax payable. In case the amount of income tax
payable is less than the deductible amount, the benefit
may be carried over during the next four years.

(62)

In order to obtain the tax credits, the invested company
makes an application for the issuance of a tax deduction
certificate to the IDB. Once the certificate is issued to the
invested company, the investor may deduct the amount
of the tax credit in the tax declaration of the current tax
year.

(c) Conclusions on countervailability

(63) Under this scheme there is a financial contribution by
the GOT in the form of taxes foregone and a benefit
accrues to the recipient by not having to pay a certain
amount of taxes.

(58)

Two companies availed themselves of this scheme and
obtained a benefit of 0,42 % and 0,41 %, respectively.

(64)

3. Tax credit for investment in important enter-

prises

(59)

This tax credit is covered by Article 8 of the SUI and
Articles 15, 16, 17 and 18 of the Enforcement Rules of
the SUI.

constitutes

The GOT has limited the access to the subsidy to enter-
prises which make a specific investment in a technology-
based or important invested enterprise. In addition, the
GOT has large discretion in the designation of eligible
investments. There are no objective criteria to determine
what
important
a
invested enterprise. By the nature of
these eligibility
criteria, only a limited number of companies will benefit
from this tax credit. Since the eligibility is expressly
limited to certain enterprises and not based on neutral
criteria within the meaning of Article 3(2)(b) of the basic
Regulation, the scheme is considered specific in accord-
ance with Article 3(2)(a) of the basic Regulation.

technology-based or

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(d) Calculation of the subsidy amount

meaning of Article 3(2)(a) of the basic Regulation, and
thus not to be countervailable.

(65)

The amount of subsidy should be calculated as explained
above in recital 57.

(66) One company availed itself of this scheme and obtained

a benefit of 0,71 %.

4. Tax credits for R & D and personnel training

(67)

The tax credits for research and development (‘R & D’)
and personnel training are covered by Article 6(1) of the
SUI and Articles 13(2) and 14(2) of the Enforcement
Rules. Furthermore, the practical implementation of the
scheme is regulated by the Measures Governing the
Application of Tax Deduction for Company Investment
in R&D, Personnel Training and Establishing Image of
World-wide Brand (hereinafter referred to as the ‘Meas-
ures’) promulgated by the Executive Yuan, i.e. a board of
government officials established by the GOT.

(a) Eligibility and practical

implementation

(68)

The tax credits mentioned above are available to manu-
facturing industries as well as agriculture and services.

(69) A tax credit for R & D can be claimed at a rate of 15 %
if total expenditure for R & D exceeds a certain
or,
threshold, of 20 %, may be deducted from the corporate
income tax.

(70) Additionally, a company can claim a tax credit

for
expenditure for personnel training at a rate of 15 %.

(b) Conclusions on countervailability

(71)

These tax credits constitute a financial contribution by
the Government of Taiwan in the form of taxes foregone
and a benefit accrues to the recipient by not having to
pay a certain amount of taxes.

objective

(72) However, the tax credits are generally available for all
companies investing in R & D and personnel training.
Furthermore,
established
governing the eligibility and are described in detail in
Article 2 (R & D) and Article 3 (personnel training) of
the Measures whereby the eligibility to benefit from this
subsidy is automatic and the GOT has no discretion to
determine which enterprise is eligible or not. These tax
credits are therefore considered not to be specific in the

criteria were

5. Tax credit

for investments in scanty natural

resources areas

(73)

This tax credit is governed by Article 7 of the SUI and
Articles 2 and 3 of the Measures Governing Application
of Tax Deduction for Company's Investment in Areas
with Scanty Natural Resources or Slow Development
(hereinafter referred to as the ‘Guidelines’).

(a) Eligibility

(74) Any company that makes investments or employs a
certain number of employees in certain industries in a
designated area with scanty natural resources or with
slow development is eligible for this tax credit.

(b) Practical

implementation

(75) An eligible company may credit up to 20 % of the total
amount of
in purchasing machinery,
equipment and plant buildings against the amount of
corporate income tax payable for the year in which the
investment is completed.

its investment

(c) Conclusions on countervailability

(76)

(77)

(78)

This scheme constitutes a subsidy since there is a finan-
cial contribution in the form of taxes foregone by the
GOT. This confers a benefit to companies availing them-
selves of this tax credit since they are exempted from
paying a certain amount of taxes.

The GOT has limited the use of this scheme to certain
enterprises which make certain investments in desig-
nated geographical areas. In addition, the GOT has a
large discretion in pronouncing the eligible investments.

The subsidies obtained under this scheme are therefore
considered to be specific and countervailable in accord-
ance with the provisions of Articles 3(2)(a) and 3(3) of
the basic Regulation.

(d) Calculation of the subsidy amount

(79)

The amount of subsidy should be calculated as explained
above in recital 57.

(80) One company availed itself of this scheme and obtained

a benefit of 0,01 %.

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6. Tax credits for establishing international brands

(87)

(81)

The legal basis ors programme is Article 6(1) of the SUI
and Articles 13(2) and 14(2) of the Enforcement Rules.
It was established that one exporting producer availed
itself of this scheme but obtained no benefit. Therefore,
it is considered not to be necessary to make a finding on
the countervailability of this scheme.

loans are only available to companies
Low-interest
which purchase specific equipment under specific condi-
tions set by the Executive Yuan of the Development
Fund. These criteria are not considered to be objective
since only companies investing in certain equipment will
from this programme. Since the eligibility is
benefit
expressly limited to certain enterprises and not based on
neutral criteria within the meaning of Article 3(2)(b) of
the basic Regulation, the scheme is considered specific in
accordance with Article 3(2)(a) of the basic Regulation.

7. Loans at preferential rates: incentives for automa-
tion, anti-pollution incentives and energy conser-
vation incentives

(82)

These schemes are based on Article 21(1) of the SUI.

(a) Eligibility

(d) Calculation of the subsidy amount

(88)

The subsidy is the difference between the amount of
interest paid on the loan during the investigation period
and the interest normally payable on a comparable
commercial

loan during the investigation period.

(83)

The following eligibility criteria for loans under this
programmes have to be met:

(89)

— for automation: any public and/or private company
that intend to purchase automated machinery and/or
equipment,

— for anti-pollution: all private companies, environ-
mental protection businesses, medical
institutions
which are authorised by responsible government
agencies to purchase anti-pollution equipment,

— for energy conservation: all Taiwanese companies
purchasing certain energy conservation equipment.

The comparable loan should be a loan of a similar
amount with a similar
repayment period actually
obtained by the recipient from a private bank operating
on the domestic market. In this investigation there were
no such comparable commercial
loans granted to the
respective companies. Therefore it was considered that
the appropriate benchmark would be the average
commercial interest rate during the investigation period
representing the interest rate on comparable loans made
to companies
situation. The
resulting difference is the benefit to the company derived
from the loan with preferential interest rates which is
countervailed.

in a similar

financial

(b) Practical

implementation

(84)

Companies concerned have to file an application to the
Chiao Tung Bank. Based on the financial situation of the
applicant, this bank will decide on the amount of the
loan. 25 % of the Fund is financed through the Develop-
ment Fund; the remaining 75 % through commercial
banks.

(90) Given the nature of this subsidy, which is equivalent to a
one-time grant, and in order to encompass the full
benefit to the company, for any amount as calculated
above, interest was added at a rate which corresponds to
the above described average commercial
interest rate.
The full subsidy amount so obtained should be allocated
the company during the
over the total
investigation period.

turnover of

(c) Conclusions on countervailability

(91)

Four companies availed themselves of this scheme and
obtained benefits from 0,03 % to 0,36 %.

(85)

It has been established that there is a financial contribu-
tion by the GOT since the loans are in part funded by
the public Development Fund and the Executive Yuan of
the Development Fund, a government body, is respon-
sible
to this
the
programme.

establishing

relating

rules

for

8. Import duty exemption: purchases of new equip-

ment and anti-pollution equipment

(86)

In addition, a benefit is conferred to the recipient of the
loan since the interest rates of these loans are generally
lower than for comparable commercial

loans.

(92)

This scheme is governed by the provisions of
the
Customs Import Tariff and Classification of Import and
Export Commodities of the Republic of China (herein-
after referred to as ‘the Customs Code’).

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(a) Eligibility

(93) A manufacturing company is exempted from paying
import duties on those imports if it imports equipment
and machinery solely for research and development or
for examination and analysis for the development of
new products, quality upgrading, increase of production,
achievement of energy conservation, promotion of recy-
cling or improvement of production techniques, which
have not yet been manufactured locally.

amount has been adjusted by adding the average
commercial interest during the investigation period. The
total amount of subsidy so attributed to the invest-
igation period should be allocated over total sales since
this subsidy benefits both domestic and export sales.

(99)

Four companies availed themselves of this scheme and
obtained benefits from 0,12 % to 0,21 %.

(b) Practical

implementation

(94) A company which intends to import the abovemen-
tioned machinery or equipment files an application with
IDB prior to the importation of the machinery. If IDB
has established that the machinery to be purchased is
not produced in Taiwan and that the machinery will be
used for one or more of the abovementioned purposes,
it will issue a certificate which is sent to the applicant
and the customs department. This certificate enables the
company to import the specified machinery without
paying the import duties.

(c) Conclusions on countervailability

(95)

The scheme constitutes a subsidy since there is a finan-
cial contribution by the GOT in the form of import
duties foregone. Consequently this scheme confers a
direct benefit to the recipient in the form of unpaid
import duty.

(96) Due to its nature, the programme can only be used by
limited sectors of the Taiwanese industry investing in
specific equipment. The industry sectors whose machi-
nery and/or equipment are produced in Taiwan will not
be able to use this programme. Consequently, eligibility
for the import duty exemption on purchases of new
equipment and anti-pollution equipment is limited to
those companies who import the specific machinery not
available on the local market.

(97)

It is considered that the access to this programme is
limited to certain companies and that this scheme there-
fore is specific within the meaning of Article 3(2)(a) of
the basic Regulation. Consequently this subsidy is coun-
tervailable.

(d) Calculation of the subsidy amount

(98)

The benefit to the companies represents the amount of
import duties normally payable without the benefit of
the exemption. For the purchase of imported machinery,
this amount should be allocated over the normal service
life of the machinery in this industry, i.e. eight years. In
order to encompass the full benefit to the recipient, this

9. Import duty exemption: imports of raw material

(100) This programme is governed by Article 6 of Chapter 29

of the Customs Code.

(a) Eligibility

(101) Pursuant

to the abovementioned provisions of

the
Customs Code, manufacturing companies which import
certain raw materials exhaustively described in the
Customs Code which are not yet produced or suffi-
ciently available on the local market, are exempted from
paying import duties on the purchases of those raw
materials.

(b) Practical

implementation

(102) A company which intends to import the specified raw
material
to the
files an application to IDB prior
importation of the raw material. If IDB has established
that the raw material to be purchased is not produced in
Taiwan or is not supplied sufficiently in Taiwan, it will
issue a certificate which is sent to the applicant and the
customs
the
company to import the raw material without paying the
import duties.

department. This

certificate

enables

(c) Conclusions on countervailability

(103) There is a financial contribution by the GOT in the form
of import duties foregone. Consequently this scheme
confers a direct benefit to the recipient in the form of
unpaid import duties and constitutes a subsidy. Due to
its nature, the programme can only be used by limited
sectors of the Taiwanese industry importing specific raw
materials. The industry sectors whose raw material
is
produced in Taiwan will not be able to use this
programme. Consequently, eligibility for the import duty
exemption on purchases of raw material is limited to
those companies who import the specific raw materials
not available on the local market.

(104)

It is considered that the access to this scheme is limited
to certain companies and that therefore this scheme is
specific within the meaning of Article 3(2)(a) of the basic
Regulation. Consequently this subsidy is countervailable.

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(d) Calculation of the subsidy amount

submitted to the New Product Development Review
Committee.

(105) The benefit to the companies represents the amount of
import duties normally payable without the benefit of
the exemption. In order to encompass the full benefit to
the recipient, this amount has been adjusted by adding
the average commercial interest during the investigation
period. In this case, since the companies obtained subsi-
dies equivalent to a series of grants during the invest-
igation period,
it is considered appropriate to assume
that an average grant would have been received at the
mid-point of the investigation period, and therefore the
interest should cover a period of six months. The total
amount of subsidy so attributed to the investigation
period should be allocated over the total sales turnover
since this subsidy benefits both domestic and export
sales.

(106) Four companies availed themselves of this scheme and

obtained benefits from 0,17 % to 0,53 %.

10. Matching funds and assistance funds

(107) This scheme is governed by Article 21(1) of the SUI.

(a) Eligibility

(c) Conclusions on countervailability

(111) The exporting producers availed themselves of matching
funds only. Hence, the findings relate to this aspect of
the scheme and not to assistance funds. It has been
established that there is a financial contribution by the
GOT since the competent authority governing the above
programmes is the Ministry of Economic Affairs, while
the
Industrial Development Bureau, a government
organisation, acts as the implementing agency. This
scheme confers a direct benefit to the recipient in the
form of a grant and/or a interest-free loan and therefore
constitutes a subsidy.

(112) Due to its nature, the scheme can only be used by
companies which possess a research and development
department with sufficient R & D specialists in Taiwan
and which have actually made R & D achievements
relating to the development of products within the
scope of one of the 10 newly emerging industries. It is
considered that the GOT has limited the access to this
programme to certain companies and therefore this
scheme is specific within the meaning of Article 3(2)(a)
of the basic Regulation. Consequently this subsidy is to
be considered countervailable.

(108) Eligible are companies incorporated under the Company
Law with sound financial standing, possessing a research
and development department with sufficient R & D
specialists in Taiwan and which have actually made R &
D achievements. The R & D achievements should relate
to the development of products within the scope of ten
newly emerging industries. Those industries are selected
by the IDB based on specific selection criteria. Regularly
the IDB issues a notification of which industries will be
considered to be ‘newly emerging’.

(d) Calculation of the subsidy amount

(113) The subsidy amount was calculated as above in recitals

88 to 90.

(114) Two companies availed themselves from this scheme.
One company did not obtain benefits, the other received
a benefit of 0,01 %.

(b) Practical

implementation

11. Subsidy programmes not used by exporting

producers

(109) The programme provides for the assistance fund (grants)
and the matching fund (interestfree loans). The total
amount of assistance and matching funds to be allocated
to a leading product development plan is limited to
maximum 50 % of the total amount of the budgeted R
& D costs.

(115)

(110) Companies have to file an application relating to the
development of a product within the scope of one of the
10 newly emerging industries. This application is first
reviewed by the Technical Screening Board and then

It was found that the exporting producers did not obtain
any
following
programmes:

countervailable benefits under

the

— Tax credit: energy conservation incentives

— Tax credit: recycling incentives

— Accelerated depreciation

— Fund for

the Development and Management of

Industrial Zones.

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12. Amount of countervailable subsidies

(116) The amount of countervailable subsidies in accordance with the provisions of the Basic Regulation,

expressed ad valorem, for the investigated exporting producers is as follows.

Company

Nan Ya Plastics Corp.

Far Eastern Textile Ltd

Shinkong Synthetic Fibres Corp.

Tuntex Distinct Corp.

Tax
credits

1,14

0,41

0

0

Loans

0,06

0,36

0,03

0,29

Import duty
exemptions

Matching
funds

0,32

0,37

0,68

0,34

0

0

0,01

0

(in %)

Total

1,52

1,14

0,73

0,63

(117) The weighted average country-wide subsidy margin for all the exporting producers investigated
which represent the totality of exports of the product concerned to the Community originating in
Taiwan is above the applicable de minimis threshold for subsidisation of 1 %.

III. INDONESIA

(118) On the basis of the information contained in the complaint and the replies to the questionnaires, the
Commission services investigated the following schemes that allegedly involved the granting of
subsidies:

(119) BKPM Schemes: under these programmes, exporters received benefits in the form of exemptions on
import duty on capital goods and raw materials. Since the subsidy is limited to certain enterprises
operating in certain sectors and certain geographical areas, it provisionally is considered specific and
countervailable.

(120) BAPEKSTA Schemes: companies were granted subsidies in the form of exemption or restitution of
import duties. This scheme is not a proper duty drawback scheme since it was found that there is
not sufficient evidence for the existence of an effective verification system in accordance with point
(i) of Annex I to the basic anti-subsidy Regulation. Hence, the system is provisionally considered
contingent apon export performance and therefore a countervailable export subsidy.

(121) The amounts of subsidies for the individual exporters in the sample vary from 0,2 % to 1 % and are
therefore below the de minimis threshold for subsidisation for Indonesia, i.e. under 3 %. However, it
should be noted that two companies representing a substantial share of imports of the product
concerned into the Community did not cooperate in this proceeding. The treatment of these
companies and the effect on the establishment of the country-wide margin of subsidisation will be
further investigated and determined at the definitive stage of the proceeding.

IV. KOREA

1. Summary of subsidy programmes used by exporting producers

(122)

It was determined that the exporters in Korea received benefits in the shape of tax credits and tax
reserves which reduce their income tax liability. These tax incentives involve subsidies in the form of
government revenue foregone and are either contingent upon export performance, contingent upon
the use of domestic over imported goods or otherwise specific to certain enterprises.

(123)

In addition, the exporters benefited from cheap loans funded by the Korean Government. They
constitute countervailable subsidies since interest rates for these loans were below market rates and
eligibility is either contingent upon export performance or limited to certain enterprises.

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(124) Under the Fixed Amount Duty Drawback Scheme, certain Korea exporters received refunds on
import duties which were not calculated on the basis of actual inputs for the exported product. This
scheme does therefore not constitute a proper duty drawback scheme in the meaning of point (i) of
Annex I to the Regulation and is thus considered to be a countervailable export subsidy. Most of the
abovementioned schemes were already found to be countervailable in Council Regulations (EC) No
1599/1999 and (EC) No 1601/1999 (1).

(125) Under the Localisation Scheme for the Capital Goods Industry, exporters received Subsides in the
form of government loans at preferential and grants which are found to be available only to certain
sectors and therefore specific and are countervailable.

2. Subsidy programmes not used by exporting producers

(126)

It was found that the exporting producers did not obtain any countervailable benefits under the
following programmes:

— Tax incentives under Article 18-2 Corporation Tax Act (Entertainment Expenses)

— Tax incentives under Articles 10, 14, 15, 19, 20, 26, 88 of the Tax Exemption and Reduction

Control Law

— Modernisation Funds (Industrial Development Act)

— Export Industry Facility Loans

— Government purchases of PSF.

3. Amount of countervailable subsidies

(127) The amount of countervailable subsidies in accordance with the provisions of the basic Regulation,

expressed ad valorem, for the investigated exporting producers is as follows:

Company

Loans
(export)

Loans
(other)

Grants

Tax
(export)

Tax (other)

(in %)

Duty
drawback
(export)

Total
subsidy

Dae Han Synthetic Fiber Inc.

0

0

Sung Lim Corporation

0,07

0,12

Ein Textile Co. Ltd/Dobest Co.,
Ltd

0

0

0

0

0

0,12

0,28

0,04

0,06

0,78

0

0

0,32

1,03

SK Chemicals Co, Ltd/SK Global
Co., Ltd

0,01

0,03

0,02

0,01

Estal Ind. Co.

0,21

0

0

Saehan Industries Inc.

0,01

0,01

0,01

0

0

Sam Yang Corporation

0

0,01

0,04

0,11

0,15

0

0

0,08

0,20

0

0,07

0,05

1,01

1,27

0,25

0

0

0,28

0,31

(128) The weighted average country-wide subsidy margin for all the exporting producers investigated
which represent the totality of exports to the Community originating in Korea is de minimis, i.e.
under 1 %. Under these circumstances, the subsidy margin for Korea has to be considered negligible.

(1) OJ L 189, 22.7.1999, p. 1 and p. 26.

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V. THAILAND

1. Summary of subsidy programmes used by cooperating exporters

(129)

It was found that under Section 28 of the Investment Promotion Act (IPA), the exporters availed
themselves of exemptions or reduction of import duties on machinery which are granted only to
companies either located in certain geographical areas or operating in certain sectors. This was found
to be a countervailable subsidy since it involves a financial contribution by the government in the
form of import duties forgone which is specific to certain enterprises in the meaning of Article
3(2)(a) of the basic Regulation.

2. Subsidy programmes not used by cooperating exporters

(130)

It was found that the exporting producers did not obtain any countervailable benefits under the
following programmes:

— Income tax exemptions under Section 31 of the IPA

— Incentives pursuant to Sections 35(3) and (4) of the IPA

— Exemptions from import duties under Section 36(1) of the IPA.

3. Amount of countervailable subsidies

(131) The amount of countervailable subsidies in accordance with the provisions of the basic Regulation,

expressed ad valorem, for the investigated exporting producers is as follows.

(%)

Company

Section 28

Section 31

Sections
35(3) and (4)

Section 36(1)

Total

Indo-Poly (Thailand) Ltd

Teĳin Polyester (Thailand) Ltd

Tuntex (Thailand) Public Company Ltd

2,6

0,3

1,3

0

0

0

0

0

0

0

0

0

2,6

0,3

1,3

(132) The weighted average country-wide subsidy margin for all exporting producers investigated which
represent the totality of exports to the Community originating in Thailand is de minimis, i.e. under
2 %. Under these circumstances, the subsidy margin for Thailand has to be considered negligible.

D. INJURY

1. Definition of the Community industry

(133) Fourteen producers are known to produce PSF in the Community market. Nine of them are
complainants in the present case, but only eight initially replied to the questionnaire. In addition, one
producer of these eight did not reply to the deficiency letters sent by the Commission services.
Consequently it was considered that two complainant Community producers did not cooperate in
the investigation. On this basis, the investigation showed that the share of the total Community
production held by the seven cooperating complainant Community producers, during the IP repre-
sented around 85 % of total Community production of PSF.

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Therefore, seven producers constitute the Community industry within the meaning of Article 9 of
the basic Regulation. Hereinafter, the cooperating Community producers are referred to as ‘the
Community industry’.

2. Consumption in the Community

(134) Given that no cooperation could be obtained with respect to information on the sales volume of the
non-complaining Community producers, the Community consumption indicated in the table below,
was based on the combined volume of sales made by the Community industry, the import volume
from the countries concerned by the present investigation, the Eurostat information on imports from
other third countries and estimates of the volume of sales of the non cooperating Community
producers.

Consumption

1996

1997

1998

IP

454 470 t

518 328 t

585 164 t

578 967 t

Index (1996 — 100)

100

114

129

127

3. Imports of PSF on the Community from the countries concerned

(a) Cumulative assessment of imports

(135) The Commission considered whether imports of PSF originating in the countries concerned should
be assessed cumulatively in accordance with Article 8(4) of the basic Regulation. The examination
showed that:

(a) as it has been mentioned above, the margins of subsidy relating to Indonesia, the Republic of
Korea and Thailand were below the de minimis levels, whereas those for Australia and Taiwan,
were above de minimis;

(b) the volume of imports from each country was not negligible when compared to Community

consumption;

(c) the analysis of the conditions of competition between imported PSF and the Community product

and the conditions of competition between imported PSF indicated that,

— as indicated in recital 11,

imported PSF from all exporting countries and Community

produced PSF are like products,

— imported PSF from all exporting countries was sold through similar sales channels to the

same customers,

— imported PSF from all exporting countries was sold at similar prices;

(d) the investigation showed that the exporting countries concerned sold PSF directly to unrelated
customers, such as textile manufacturers, cushion and quilt manufacturers and to PSF merchants.
The investigation showed that the Community industry was selling the like product through the
same sales channels and to the same categories of customers, although most of their sales were
made to end-users.

Based on the above considerations, the Commission concluded that there were sufficient grounds
for cumulating the imports from Australia and Taiwan and exclude those from Indonesia, the
Republic of Korea and Thailand.

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(b) Volume of imports

(136) Between 1996 and the IP imports originating from the countries concerned developed as set out

below.

1997

1 248 t

2 007

26 811 t

133

28 059 t

138

1998

IP

11 254 t

18 093

35 524 t

176

46 778 t

231

11 799 t

18 969

34 878 t

173

46 677 t

230

Imports

Australia

Index (1996 — 100)

1996

62 t

100

Taiwan

20 213 t

Index (1996 — 100)

100

Total

20 275 t

Index (1996 — 100)

100

Source: Comext 2.

(c) Market share of imports concerned

(137) The market share by volume held by imports from Australia and Taiwan increased and developed as

shown below:

Market share

Australia

Index (1996 — 100)

Taiwan

Index (1996 — 100)

1996

0,01 %

100

4,45 %

100

Total

4,46 %

Index (1996 — 100)

100

1997

0,24 %

1 760

5,17 %

116

5,41 %

121

1998

1,92 %

14 052

6,07 %

136

7,99 %

179

IP

2,04 %

14 903

6,03 %

136

8,07 %

181

The trend showed in the tables above confirms the increase of the imports from the countries
concerned in the Community market, both in absolute terms and in terms of market share.

(d) Average price of imports

(138) From 1996 to the IP, sales prices in the Community market of PSF imported from Australia and
Taiwan followed a continuously decreasing tendency throughout the period considered as indicated
in the table below.

Average import price
evolution
Index (1996 — 100)

Australia

Taiwan

Total

1996

1997

1998

100

100

100

56

98

97

52

87

85

IP

50

81

79

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(e) Price undercutting

(139) For the determination of price undercutting, the Commission analysed data referring to the IP. Price
undercutting was established on the basis of a comparison of the export price with prices charged by
the Community industry.

The sales prices of the Community industry considered were those to independent customers,
adjusted where necessary to an ex-works level, i.e. excluding transport costs. As the Community
industry was selling mainly to endusers whereas the exporting producers were selling to both
endusers as well as distributors/wholesalers, adjustments were made to the exporting producers'
selling prices (cif Community frontier) to take account these differences in the level of trade as well
as of customs and eventual anti-dumping duties paid. All prices were compared after excluding
discounts and rebates.

Weighted average prices were compared for similar product
types of PSF, as defined in the
Commission's questionnaires. The weighted average price undercutting margins, expressed as a
percentage of the Community industry's average selling prices were 21 % for Australia and 6,1 % for
Taiwan.

4. Economic situation of the Community industry

(a) Preliminary remarks

(140) The examination of the injury trends covered the period from 1996 up to the end of the IP. It should
be noted that during this period anti-dumping measures were in force against the Republic of Korea,
Taiwan and Belarus with a resulting effect on the Community industry.

(b) Production, capacity and capacity utilisation

(141)

1996

1997

1998

IP

Production

312 917 t

330 577 t

322 403 t

315 917 t

Index (1996 - 100)

100

106

103

101

Capacity

384 500 t

376 800 t

358 300 t

359 400 t

Index (1996 - 100)

100

98

93

93

Capacity utilisation

81,38 %

87,73 %

89,98 %

87,90 %

Index (1996 - 100)

100

108

111

108

As illustrated in the table above, production of the Community industry was by and large stable.

(142) As regards capacity, it should be noted that the production facilities for PSF are also used in the
production of other products not concerned by the present proceedings, e.g. tow and tops. As a
consequence, the capacity attributed to the production of PSF was determined on the basis of the
actual production of the various products including PSF. On this basis, capacity decreased by 7 %.

The decrease in the capacity of production can be attributed to the fact that the Community industry
closed certain production lines and factories or converted them to the production of other products
not covered by this investigation with the aim of obtaining a more efficient capacity utilisation.

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(143) The rate of utilisation of the production capacity, as shown in the above table, increased by 8 %
during the period considered. This increase however is the direct result of the reduction of the
capacity of production.

(c) Sales volume of the Community industry

(144) The volume of PSF sold by the Community industry on the Community market decreased by 6 %

during the period considered, as shown in the table below.

Sales

1996

1997

1998

IP

308 851 t

319 235 t

294 718 t

291 013 t

Index (1996 — 100)

100

103

95

94

This trend indicates that the sales made by the Community industry did not follow the trend in
consumption, which increased by 27 % during that period, as mentioned in recital 134. In fact, sales
volume only roughly followed the trend of consumption between 1996 and 1997 when it increased
by 3 % whereas consumption rose by 14 %. Since then, the trend in sales volume fell continuously
up to the IP.

(d) Average sales price and price evolution

(145) The weighted average prices of the product concerned sold by the Community industry on the
Community market showed a considerable decrease over the period considered. As reported in the
table below, the average price fell by 11 % during that period.

Average Community
industry price evolution

Index (1996 — 100)

1996

100

1997

93

1998

93

IP

89

The investigation has shown that PSF prices are also influenced by the evolution of the prices of the
basic raw materials, e.g. pure terephthalic acid (PTA), dimethylterephthalate (DMT) and glycol which
represent between 60 % and 70 % of the cost of production of the finished PSF.

(e) Market share

(146) The development of sales volume compared to that of Community consumption shows that the
market share held by the Community industry decreased significantly during the period considered.
The table below indicates this development:

Market share

1996

1997

1998

IP

67,96 %

61,59 %

50,37 %

50,31 %

Index (1996 — 100)

100

91

74

74

The above table indicates that the decreasing trend was continuous during the period examined.
However, the loss in market share was relatively limited between 1996 and 1997, where 6.4
percentage points were lost. In contrast, the decline between 1997 and the IP was more spectacular
with 11.3 percentage points.

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(f) Stocks

(147)

Stocks

1996

1997

1998

IP

30 084 t

28 033 t

36 801 t

36 780 t

Index (1996 — 100)

100

93

122

122

As shown in the table above, stocks significantly increased by 22 % between 1996 and the IP.

(g) Profitability

(148)

In 1996, the Community industry incurred a weighted average loss of 4 %, expressed as a percentage
of net sales.

Profitability

1996

1997

1998

IP

– 4,04 %

– 0,41 %

6,34 %

6,73 %

Subsequently, as shown in the table above, its financial situation improved, especially during 1998
(profit of 6,34 %). This improvement was in fact the result of the restructuring processes undertaken
by the Community industry, aiming at more efficient production processes and using certain product
lines for more specialised products with higher profit margin.

Indeed, the profit achieved during the IP was mainly influenced by the performance of the specialities
sector (18,85 %). In the non-woven regular and hollow fibres the profit only reached 0,86 % and
1,37 % respectively.

Furthermore, the investigation showed that the restructuring of the Community industry resulted in
a decrease in SG & A costs by 15,3 % from 1996 to the IP. It is also important to note that the
prices of the raw materials decreased significantly: according to information made available during
the verification, PTA prices decreased by 35,6 % and glycol prices by 14,3 % over the period
considered. The combined effect of the price reductions of these raw materials was estimated to have
lead to a 31 % decrease of the cost of manufacturing of PSF.

Both of the above mentioned factors, i.e. the SG & A reduction and the decrease of the raw materials
prices, suggest that the cost of production was reduced faster than the decrease of the sales prices,
allowing thus the Community industry to return to profits from 1998 onwards. In fact,
it is
considered that the current profit is the maximum that can be achieved given the price pressure from
imports. The improved efficiency of the industry cannot be improved upon in the short term.

(h) Investments

(149)

Investments

1996

1997

1998

IP

(Thousand ECU)

17 652

10 177

Index (1996 — 100)

100

58

19 508

111

15 980

91

Yearly investments made by the Community industry were important during the period considered,
as indicated in the table above. It should be noted that this significant effort represents, for the most
investments in replacement machinery as part of an overall restructuring program.
part,

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(i) Employment

(150) Due to a certain degree of reduction in production capacity and restructuring, employment of the

sector of the product concerned decreased by 20 %, as shown in the table below.

Employment

Index (1996 — 100)

1996

3 111

100

1997

2 817

91

1998

2 475

80

IP

2 474

80

(j) Conclusion on the situation of the Community industry

(151) The above analysis has revealed that during the period considered some economic indicators such as
capacity (-7 %), sales volume (-6 %), sales prices (-11 %), market share (-26 %), stocks (+22 %),
investments (-9 %) and employment (-20 %) showed negative trends, in particular between 1997 and
the IP.

(152)

In the meantime, production increased marginally by 1 %. Following a reduction in the capacity of
production, capacity utilisation increased by 8 %. Profitability which was negative in 1996 and 1997
became positive in 1998 and in the IP without reaching a level that was considered satisfactory.

(153) The investigation has shown that the Community industry has also suffered significant price
pressure. Indeed, substantial price undercutting (10,1 % on average) has been established for imports
originating in the countries concerned.

(154)

In the light of the foregoing analysis, in particular the high loss in market share, the decrease in sales
price, the Commission has concluded that the Community industry has suffered injury which is
classified as material.

E. CAUSATION

1. Introduction

(155) The Commission examined whether the material injury suffered by the Community industry had
been caused by the subsidised imports from Australia and Taiwan. The Commission also examined
other factors in order to ensure that injury caused by other factors was not wrongly attributed to the
subsidised imports subject to investigation.

2. General

(156)

In the recent past, the Community Institutions have found that the Community industry suffered
injury and that this injury was caused by dumped imports from a number of countries among which
Taiwan and Belarus. This industry has therefore been weakened since the beginning of the present
investigation and was seen to be still vulnerable during the period under examination.

3. Effect of the subsidised imports

(157) The present

investigation has shown that

imports from the countries concerned onto the
Community market more than doubled during the period considered. In 1996, 20 275 tonnes of
PSF were imported from the countries concerned whereas the volume imported during the IP was
46 677 tonnes. As a consequence of the above import development the market share held by the
countries concerned increased from 4,46 % in 1996 up to 8,07 % during the IP. During the same
period, the average sales prices of these imports decreased by 21 %. They undercut those of the
Community industry by 10,1 %.

(158) These developments took place at a moment when the Community industry was particularly
vulnerable recovering after a long period of dumped imports from other third countries.

(159) This resulted in a situation in which the Community industry,

instead of benefiting from the
re-establishment of fair trading conditions following the imposition of anti-dumping measures with
respect to imports from other third countries, faced further deterioration. The injury investigation
concluded, as indicated above, that an overall worsening of the situation in that industry existed with
major decreases in market share (-26 %), sales volume (-6 %) and sales prices (-11 %).

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(160)

It should also be mentioned that the major losses suffered by the Community industry occurred for
those product types of PSF mainly imported from the said countries. Indeed, imports of non-woven
regular types represent about 18,5 % and imports of non-woven hollow types represent 29 %
respectively of all imports of PSF from the countries concerned. For these particular product types,
the profits realised by the Community industry were 0,86 % and 1,37 % respectively, whereas the
average profits for more specialised products, which are imported to a lesser degree, was about
18.85 %.

(161) The above appears to be particularly relevant as imported PSF and PSF produced in the Community
are like products, offered through similar sales channels in the Community market. Therefore the
increasing presence of high volumes of subsidised PSF imported from the countries concerned has
had a significant impact on that market overall. Furthermore, the market being transparent, the effect
of the low prices offered for PSF imported from the countries concerned and well known to all
potential customers in the Community market, had a major impact on the level of prices of the
Community industry.

(162) Based on the above,

it was concluded that the low-priced subsidised imports had a significant

negative impact on the situation of the Community industry.

4. Impact of other factors

(a) Development of consumption

(163) As mentioned in recital 134, from 1996 up to the IP, consumption in the Community market
increased by 27 % indicating a fast growing PSF market. Therefore, consumption cannot be held
responsible for the injurious situation suffered by the Community industry.

(b) Imports of PSF from other third countries

(164) Total

imports of PSF onto the Community from countries other than Taiwan (1) and Australia

developed as follows.

Imports

1996

1997

1998

IP

Indonesia, Thailand, South
Korea (1)

25 814 t

46 718 t

105 747 t

108 675 t

Index (1996-100)

100

181

Belarus (2)

Index (1996-100)

4 463 t

100

243 t

5

410

35 t

1

421

19 t

0

Other countries

64 547 t

78 344 t

81 144 t

76 174 t

Index (1996-100)

100

121

126

118

Total (other imports)

90 361 t

125 062 t

186 890 t

184 848 t

Index (1996-100)

100

y/y difference

138

+ 32 %

207

+ 49 %

205

– 1 %

(1) PSF imported from Korea is subject to a 4,8 % definitive anti-dumping duty until August 1999.

(2) PSF imported from Belarus is subject to a 43,5 % definitive anti-dumping duty since July 1996.

(1) PSF imported from Taiwan is subject to a 13 % definitive anti-dumping duty since September 1993.

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Average import price
evolution
Index (1996 — 100)

1995

1997

1998

Indonesia,
South Korea

Thailand,

100

Belarus

Other countries

100

100

Total (other imports)

100

90

84

90

89

79

75

89

79

IP

73

75

87

75

It should be underlined that the two major exporting countries, namely Indonesia and Thailand, are
subject to an anti-dumping investigation which was initiated in parallel to the present investigation.

(165) An analysis of the development of the indicative import prices of Indonesia, Thailand and South
Korea reveals that they also contributed to the pressure exerted on prices in the Community. The
information available shows that the average prices of imports from these countries fluctuated below
those practised by the countries concerned by this proceeding and those of the Community industry.

As far as the imports from other third countries, their limited volume and their prices which were at
the level of those of the Community industry, indicate that such imports did not contribute to the
price deterioration noticed in the market.

On the basis of the above, it cannot be excluded that imports from Indonesia, Thailand and South
Korea onto the Community market did have an impact on the economic situation of the Community
industry. However, taking into account the level and prices of these imports, these cannot break the
causal link between the imports from the countries concerned and the injurious situation suffered by
the Community industry.

(c) Export activity and other activities of the Community industry

(166) Exports to third countries have always represented a minor activity for the Community industry.
From a level of around 9 % of total sales in 1996, exports decreased to a level of 5 % during the IP.
The table below shows the volumes exported.

Exports

1996

1997

1998

IP

27 649 t

29 200 t

16 300 t

14 854 t

Index (1996 — 100)

100

106

59

54

Export sales made by the Community producers nearly halved during the period considered.
However,
it is considered that these sales are limited as compared to total production of the
Community industry. Consequently, any injury in terms of reduced production caused by a reduced
export sales volume is thus very limited.

(167)

It has been argued that imports have increased at a time when the Community industry has reduced
its production capacity by 7 %, which corresponds to a significant share of the import volume,
making an increase in imports inevitable in order to satisfy demand. In this respect, it should be
noted that the Community industry has still spare capacity. In addition, the decrease in capacity only
reflects roughly half of the increase of imports from the countries concerned.

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Furthermore, the investigation has shown that the capacity reduction was the result of the closure or
conversion to other products of certain production sites, which could not operate economically in
view of the low priced imports. Should measures in the present case not be imposed, furhter
production site closures could occur. On the contrary, if fair trading conditions are restored, the
Community industry would be able in the future to supply a bigger share of the Community market,
considering its past record and the fact that certain production lines can be converted back to PSF
products.

5. Conclusion on causation

(168)

It cannot be excluded that factors other than subsidised imports from the countries concerned, in
particular the imports from other third countries which are subject to a parallel anti-dumping
investigation, contributed to the difficult state of the Community industry. However, the substantial
increase in import volume from the countries concerned, the considerable degree of price decreases
and price undercutting had material negative consequences on the situation of the Community
industry. It was therefore concluded that these imports, taken in isolation, have caused material
injury to the Community industry.

F. COMMUNITY INTEREST

1. Introduction

(169)

In order to reach its final conclusions the Commission examined, whether, despite the conclusions
on subsidisation and injury, compelling reasons existed which would lead to the conclusion that it is
not in the Community interest to adopt measures in this particular case. For this purpose, and
pursuant to Article 31 of the basic Regulation, the Commission considered the impact of measures
for all parties involved in the proceedings.

2. Interest of the Community industry

(170) The Community industry has for almost a decade been suffering from lowpriced imports of PSF. The
objective of the eventual adoption of anti-subsidy measures is to re-establish fair competition in the
Community market between the Community producers and their exporting counterparts in third
countries.

The Community industry has been making considerable efforts to improve its productivity in recent
years, in an attempt to lower its cost of production and to enhance its competitiveness in this
pricesensitive market. It deployed particular efforts of rationalisation during the period considered.
By way of example, one Community producer shut down two of its production facilities in an effort
to reduce costs and to improve its productivity.

In view of the nature of the injury suffered by the Community industry, in particular the fact that it
was prevented from recovering from the injurious situation caused by other dumped imports, the
Commission consider that, in the absence of the imposition of anti-subsidy measures, the further
deterioration of the situation of the Community industry is quite probable. This could entail a further
reduction in numbers employed and may ultimately lead to a reduction of the number of producers
in the Community.

Furthermore, the ongoing restructuring efforts made by the Community industry show that it is not
ready to abandon this segment of production, particularly as the market is rapidly growing. The
adoption of anti-subsidy measures would therefore be in the interest of the Community industry.

3. Impact on users

(171) The Commission services sent questionnaires to 11 known importers unrelated to the exporting
producers in the countries concerned, as well as to 14 users of PSF in the Community. None of the
importers answered to the questionnaire sent by the Commission services during the current
investigation, whereas three users submitted their replies. Furthermore, two users' associations made
submissions concerning this proceeding.

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(172) The analysis of the data submitted by the three user companies revealed that two among them
imported PSF from the countries concerned by this proceeding. The main argument put forward by
these users was that an eventual adoption of measures would affect negatively their profitability and
threaten their survival in the market. We should note however that one user was served until the end
of 1997 almost exclusively by the Community industry and since 1998 turned exclusively to
imports from the countries concerned, only because of the lower prices. The activity related to PSF
products represented about 12 % in terms of turnover for this user. Regarding the other user, its
imports form the countries concerned traditionally covered about 30 % of its needs and PSF costs
represent about 24 % of its cost of production. The turnover of the finished product that incorpor-
ates PSF represent 46 % of its total turnover.

An evaluation of the situation described above, points out that the above users can be served by
alternative sources of supply and that the adoption of any anti-subsidy measure would thus have
limited impact on their overall profitability and survival

in the market.

(173) One Community user's association requested the exclusion of certain types of PSF allegedly not
produced by the Community industry. This allegation was however not further substantiated by
sufficient technical
It was therefore not possible for the Commission services to
conclude on the validity of this argument.

information.

(174) On the basis of the above it can be concluded that the eventual imposition of anti-subsidy measures
against imports of PSF from the countries concerned would not imply a significant deterioration, if
any, to the situation of the users.

4. Conclusion

(175) On the basis of the above facts and considerations in particular, and having examined the arguments
submitted by the Community industry and Community users of the product concerned,
it was
concluded, that there were no compelling reasons not to impose measures concerning imports from
Australia and Taiwan, in order to ensure competitive conditions of fair pricing and to revert the
continuation of injury in the Community industry.

G. TERMINATION

(176)

In the light of the above findings that the country-wide weighted average subsidy margins for
imports originating in Korea and Thailand are de minimis, the proceeding with regard to imports
from Korea and Thailand should be terminated in accordance with Article 14(3) of the basic
Regulation.

H. PROVISIONAL DUTY

(177) On the basis of the conclusions on subsidisation, injury, causal link and Community interest, the

Commission considers it necessary to adopt provisional countervailing measures.

(178) For the purpose of determining the level of these measures, the Commission took account of the
subsidy margins found and of the amount of duty necessary to eliminate the injury sustained by the
Community industry.

(179) To that effect, the Commission considered that the prices of subsidised imports should be increased
to a non-injurious level. The necessary price increase was determined on the basis of a comparison
of the weighted average import price used to establish price undercutting, as outlined in recital 139,
et seq. with the non-injurious price of different references or models by the Community industry.
The non-injurious price has been obtained by adding to the sales price of the Community industry
its average actual loss and by further adding a profit margin of 10 %. This profit margin corresponds
to what has been found as a minimum necessary in earlier cases for this type of industry. Any
difference resulting from this comparison was then expressed as a percentage of the total cif import
value.

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(180)

In accordance with Article 12(1) of the basic Regulation the duty rate should correspond to the
amount of subsidy, unless the injury margin is lower. The following rates of duty therefore apply for
the cooperating producers:

(a) Australia

— Leading Synthetics Pty Ltd.

(b) Taiwan

— Nan Ya Plastics Corp.

— Far Eastern Textile Ltd.

— Shinkong Synthetic Fibres Corp.

— Tuntex Distinct Corp.

6 %

1,5 %

1,1 %

0 %

0 %.

(181)

In order to avoid granting a bonus for non-cooperation, it was considered appropriate to establish
the duty rate for the non-cooperating companies as the sum of the highest rate established for any
cooperating exporting producers, i.e. 6 % for Australian producers and 1,5 % for Taiwanese produ-
cers.

(182) The individual company countervailing duty rates specified in this Regulation were established on
the basis of the findings of the present investigation. Therefore, they reflect the situation found
during that investigation with respect to these companies. These duty rates (as opposed to the
country-wide duty applicable to ‘all other companies’) are thus exclusively applicable to imports of
products originating in the country concerned and produced by the companies and thus by the
specific legal entities mentioned. Imported products produced by any other company not specifically
mentioned in the operative part of this Regulation with its name and address, including entities
related to those specifically mentioned, cannot benefit from these rates and shall be subject to the
duty rate applicable to ‘all other companies’.

(183) Any claim requesting the application of these individual company countervailing duty rates (e.g.
following a change in the name of the entity or following the setting up of new production or sales
entities) should be addressed to the Commission (1) forthwith with all relevant information,
in
particular any modification in the company's activities linked to production, domestic and export
sales associated with, for example, that name change or that change in the production and sales
entities. The Commission, if appropriate, will, after consultation of the Advisory Committee, amend
the Regulation accordingly by updating the list of companies benefiting from individual duty rates.

I. FINAL PROVISION

(184)

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

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional countervailing duty is hereby imposed on imports of synthetic staple fibres of
polyesters, not carded, combed or otherwise processed for spinning, falling within CN code 5503 20 00
and originating in Australia and Taiwan.

The rate of duty applicable to the net free-at-Community-frontier price, before duty, shall be as

2.
follows.

(1) European Commission

Trade Directorate-General
Directorate EDM 24 — 5/77
Rue de la Loi/Wetstraat 200
B-1049 Brussels.

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Australian producers

Rate of duty
(%)

TARIC additional code

Leading Synthetics Pty Ltd, Melbourne, Victoria

All other Australian companies

6

6

A059

A999

Taiwanese producers

Rate of duty
(%)

TARIC additional code

Nan Ya Plastics Corp., Taipei

Far Eastern Textile Ltd, Taipei

Shinkong Synthetics Fibres Corp., Taipei

Tuntex Distinct Corp., Hsichih, Taipei County

All other Taiwanese companies

1,5

1,1

0

0

1,5

A060

A061

A062

A063

A999

3.

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

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

4.
subject to the provision of a security, equivalent to the amount of the provisional duty.

Article 2

Without prejudice to Article 30 of Regulation (EC) No 2026/97, the parties concerned may make known
their views in writing and apply to be heard orally by the Commission within 15 days from the date of
entry into force of this Regulation.

Pursuant to Article 31(4) of Regulation (EC) No 2026/97, the parties concerned may comment on the
application of this Regulation within one month of the date of its entry into force.

The anti-subsidy proceeding concerning imports of polyester staple fibres originating in the Republic of
Korea and Thailand is hereby terminated.

Article 3

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

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

Article 4

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

Done at Brussels, 20 January 2000.

For the Commission

Pascal LAMY

Member of the Commission