Council Regulation (EC) No 173/2000 of 24 January 2000 terminating the anti-dumping proceedings concerning imports of certain large aluminium electrolytic capacitors originating in Japan, the Republic of Korea and Taiwan
Date: 2000-01-24
Institutions: Council of the European Union
Subjects: Japan, South Korea, Taiwan, anti-dumping legislation, electronic component, import

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(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 173/2000

of 24 January 2000

terminating the anti-dumping proceedings concerning imports of certain large aluminium electro-
lytic capacitors originating in Japan, the Republic of Korea and Taiwan

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), and in
particular Article 9(5) thereof,

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

Whereas:

(1)

(2)

(3)

A. PROCEDURE

1. Existing measures

By Regulation (EEC) No 3482/92 (2),
the Council
imposed definitive anti-dumping measures on imports of
certain large electrolytic aluminium capacitors (herein-
after ‘LAECs’) originating in Japan. These measures took
the form of ad valorem duties, ranging between 4,2 %
and 75 %.

By Regulation (EC) No 1384/94 (3), the Council imposed
definitive anti-dumping measures on imports of LAECs
originating in the Republic of Korea and Taiwan. These
measures took the form of ad valorem duties, ranging
between 10,7 % and 75,8 %.

2. Grounds for the reviews

Japan

Following the publication of a notice of
impending
expiry (4) of the anti-dumping measures applicable on
imports originating in Japan, the Federation for Appro-
lodged a
priate Remedial Anti-Dumping (FARAD)
request for a review, on behalf of Nederlandse Philipsbe-
drijven BV (The Netherlands), now BC Components
International BV,
(United
Kingdom), pursuant to Article 11 (2) of Regulation (EC)

and BHC Aerovox Ltd.

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 905/98 (OJ L 128, 30.4.1998, p. 18).

(2) OJ L 353, 3.12.1992, p. 1. Regulation as amended by Regulation

(EC) No 2593/97 (OJ L 351, 23.12.1997, p. 6).

(3) OJ L 152, 18.6.1994, p. 1.
(4) OJ C 168, 3.6.1997, p. 4.

(4)

(5)

(6)

(7)

No 384/96 (hereinafter referred to as the ‘Basic Regula-
tion’).

Furthermore, the Commission decided, on its own initia-
tive, to initiate an interim review of the same anti-
dumping measures pursuant to Article 11(3) of the Basic
Regulation in order to consider the impact of changed
circumstances in relation to technical developments for
the product as well as market conditions on dumping
and injury.

Consequently, on 3 December 1997, the Commission
announced by a notice published in the Official Journal of
the European Communities (5) the initiation of a review of
the anti-dumping measures applicable to imports of
LAECs originating in Japan (hereinafter the ‘review on
Japan’).

Republic of Korea and Taiwan

to the

initiation of

Further to the initiation of the review on Japan and
further
a new investigation
concerning imports of LAECs originating in the United
States of America and Thailand (6), the Commission also
decided, on its own initiative, to initiate a review of the
anti-dumping measures applicable to imports originating
in the Republic of Korea and in Taiwan, pursuant to
Article 11(3) of the Basic Regulation.

This review was initiated on the grounds that available
information indicated an increased market penetration
in the Community market of the product concerned
originating in the Republic of Korea and in Taiwan,
despite the anti-dumping measures imposed. Moreover,
in view of the internationally interdependent character
of the market for this product and the interrelationship
of the companies involved in this field, it was considered
that
this review together with the abovementioned
review on Japan and the new proceeding concerning
Thailand and USA, would allow the Commission to
the impact on the
form a better overall view of
Community industry of the imports originating from the
main exporting countries.

(5) OJ C 365, 3.12.1997, p. 5.
(6) OJ C 363, 29.11.1997, p. 2.

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(8)

(9)

The review investigation (hereinafter the ‘review on
Korea and Taiwan’ was initiated in April 1998 by the
publication of an opening notice in the Official Journal of
the European Communities (1).

3. Investigations

The Commission officially advised the producers/expor-
ters and importers known to be concerned as well as
their associations, the representatives of the exporting
countries concerned, the Community producers which
requested the review on Japan, as well as known users,
about the initiation of the reviews.
Interested parties
were given the opportunity to submit their views in
writing and to request a hearing within the time limits
set out in the notices mentioned above.

(10) A number of producers/exporters

in the countries
concerned, as well as one Community producer, along
with a number of users
in the
Community, made their views known in writing. All
parties, who so requested within the above time limits
and showed that there were particular reasons why they
should be heard, were granted the opportunity to be
heard.

and importers

(11)

The Commission sent questionnaires to parties known
to be concerned and to all the other companies which
made themselves known within the deadlines set out in
the above notices. Replies were received from one
Community producer,
in
Taiwan, four producers/exporters in Japan, as well as
from their related importers in the Community. The
Commission also received a reply from one unrelated
importer
in the Community which was considered
meaningful and complete.

three producers/exporters

(12)

Verification visits with respect to the review investiga-
tions were carried out at the premises of the following
companies:

Community producer
— Nederlandse Philipsbedrijven BV (Zwolle, The Neth-
erlands) and its related company, Österreichische
Philips Industrie, GmbH (Klagenfurt, Austria).

On 1 January 1999, these two companies were sold to a
consortium of equity investors and formed,
together
with a number of other Philips entities, a new company,
called BC Components BV. This company took over
from the Philips Group all activities in the manufac-
turing and sales of LAECs. Consequently,
these two
companies will hereinafter jointly be referred to as ‘BC
Components’.

Producers/exporters in the countries concerned
— Nippon Chemi-con (Tokyo, Japan),
— Nichicon Corporation (Kyoto, Japan),
— Rubycon Corporation (Ina, Japan),
— Hitachi AIC Inc (Tokyo, Japan),
— Teapo Electronic Corp. (Taipei, Taiwan),

(1) OJ C 107, 7.4.1998, p. 4.

— Lelon Electronics Corp. (Taichung, Taiwan),

— Kaimei Electronic Corp. (Taipei, Taiwan).

Unrelated importer in the Community

— Beck Elektronik Bauelemente GmbH (Nuremberg,

Germany).

Related importers in the Community

— Nichicon UK (Europe) Ltd (Camberley, United

Kingdom),

— Rubycon Corporation UK branch (South Ruislip,

United Kingdom),

— HPC Distribution (Krefeld, Germany),

— Europe Chemi-con (Nuremberg, Germany),

(13)

The Commission sought and verified all
information
deemed necessary for the purposes of its conclusions in
both review investigations.

(14) All the parties concerned were informed of the essential
facts and considerations on the basis of which the
conclusions of these reviews were made. All parties were
granted a period within which to make representations.
The representations received were taken into considera-
tion and where appropriate,
the findings have been
changed accordingly.

(15)

(16)

The reviev on Japan could not be completed within the
normal period of twelve months provided for in Article
11(5) of the Basic Regulation, owing to the fact that, as a
result of the updated product definition, a full invest-
igation on dumping, injury and causation was necessary.
The timing of the review on Korea and Taiwan was
aligned on that of the review on Japan.

The investigation of dumping in the review on Japan
covered the period from 1 October 1996 to 30
September 1997 (hereinafter the ‘Investigation Period’,
or ‘IP’). The investigation of dumping in the review on
Korea and Taiwan covered the period from 1 January
1997 to 31 December 1997.

The examination of
injury for both investigations
covered the period from 1 January 1993 to 31
December 1997, to take account of the existence of two
differing investigation periods for dumping.

B. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

1. Product under consideration

(17)

(capacitance multiplied by

The product under consideration is certain electrical
capacitors, non-solid, aluminium electrolytic, with a CV
product
rated voltage)
between 8 000 and 550 000 micro-coulombs (µC), at a
voltage of 160 V or more, currently classifiable under
CN code ex 8532 22 00. As explained below, the term
‘large’ should no longer be used to describe these prod-
ucts. However, for practical reasons, they are referred to
as ‘LAECs’, as was done in the original
investigations
concerning Japan, the Republic of Korea and Taiwan.

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(18)

(19)

Capacitors are electronic components which can store
and subsequently release electric energy. These compo-
nents are used in the electric circuits of virtually all types
of electronic equipment, in the computer, telecommuni-
cations, instrumentation, industrial, military, automotive
and other consumer industries. Capacitors covered by
these reviews (i.e. LAECs) are particularly used in power
supply circuits in durable consumer electronics such as
television sets, video cassette recorders and personal
computers.

LAECs are produced in many different types depending,
inter alia, on their capacitance, the rated voltage, the
maximum operating temperature, the type of terminal
and their dimensions. Despite these differences, all these
types share the same basic physical and technical charac-
teristics and uses. They were, therefore, considered as a
single product.

covered by this definition (and hence by the anti-
dumping measures). In addition, since several can sizes
could be offered for the same CV product, and since the
CV product chiefly determines the types of applications
in which LAECs are used, it was considered that there
were no longer grounds for differentiating between
LAECs according to their size. The term ‘large’ should no
longer be used to identify these products.

(22)

For all these reasons, it was confirmed that the product
definition in the review on Japan should be adapted to
cover all LAECs as defined above, i.e. certain electrical
capacitors, non-solid, aluminium electrolytic, with a CV
rated voltage)
product
between 8 000 and 550 000 micro-coulombs (µC), at a
voltage of 160 V or more.

(capacitance multiplied by

3. Like product

2. Update of the product coverage in the review on

Japan

(20)

investigation
The product definition in the original
concerning Japan, as set out in Regulation (EEC) No
3482/92, was restricted to certain large electrical capaci-
tors, non-solid, aluminium electrolytic, with a CV
product between 18 000 and 310 000 µC at a voltage of
160 V or more, with a diameter of 19 mm or more
and a length of 20 mm or more.

However, in the opening notice concerning the review
it was outlined that this original definition
on Japan,
should be adapted to cover all LAECs,
i.e. the same
range of products as in the proceeding concerning the
Republic of Korea and Taiwan. This was necessary in
view of changed circumstances related to new technical
and market developments of the product under consid-
eration.

(21)

The review confirmed these changed circumstances.
Firstly, it was found that technological evolution has led
to the development of LAECs with increasingly higher
capacitance and hence CV product,
in increasingly
smaller can sizes. Secondly, reported improvement in
the electricity consumption of certain power supplies
have created a new demand for LAECs with lower CV
lower capacitance for a given voltage).
product
Thirdly,
for a given CV product,
LAECs of different sizes were offered on the Community
market.

(i.e.
it was found that,

(23) A number of Japanese producers/exporters claimed that,
terminal
because of differences in size,
configuration,
those
produced in the Community were not ‘like products’.

lifetime or

exported

products

and

the

(24) However,

it was established that, despite these differ-
ences, which are minor, the LAECs sold on the domestic
market of the countries concerned, those exported from
these countries into the Community and those produced
and sold in the Community by the Community industry
used the same basic technology and were all produced
according to world-wide applicable industry standards.
Therefore, all these products had the same basic physical
and technical characteristics. They also had the same
types of applications and were all used to perform the
same types of functions. Therefore, all these products
were interchangeable and in direct competition with
each other, on a type-by-type basis.

(25)

the claim was

Consequently,
rejected and it was
concluded that the LAECs sold on the domestic market
of the countries concerned, those exported from these
countries into the Community and those produced and
sold in the Community by the Community industry
were to be considered to be like products within the
meaning of Article 1(4) of the Basic Regulation.

C. DUMPING

1. Japan

As a result of these developments, it was found that a
whole range of imported LAECs originating in Japan fell
outside the original product definition concerning this
country. They were therefore exempt from anti-dumping
measures, even though they were alike in all basic phys-
ical and technical characteristics and uses to those

(26)

Since the circumstances regarding dumping had signifi-
cantly changed in view of the updating of the product
definition,
invest-
igation, which led to the calculation of a new dumping
margin for the IP.

the Commission conducted a full

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(27)

Four companies replied to the questionnaire for produ-
cers/exporters.

(32)

In cases where the volume of profitable sales of any type
of LAECs represented less than 10 % of the total sales
volume, it was considered that this particular type was
sold in insufficient quantities for the domestic price to
provide an appropriate basis for the establishment of the
normal value.

Normal value

(28) As

far as

the determination of normal value

is
concerned, the Commission first established, for each
producer/exporter, whether its total domestic sales of
LAECs were representative in comparison with its total
In accordance with
export sales to the Community.
Article 2(2) of the Basic Regulation, domestic sales were
considered representative when the total domestic sales
volume of each producing company was at least equal
to 5 % of
to the
export
Community.

sales volume

total

its

Subsequently,
those types of LAECs were identified
which were sold domestically by those companies
having representative domestic sales and which were
identical or directly comparable to the types sold for
export to the Community.

(29)

For each of the types sold by the producers/exporters on
their domestic markets and found to be directly compar-
able to types sold for export to the Community, it was
established whether domestic sales were sufficiently
representative for the purposes of Article 2(2) of the
Basic Regulation. Domestic sales of a particular type
were considered sufficiently representative when the
total domestic sales volume of LAECs of
type
during the IP represented 5 % or more of the total sales
volume of LAECs of the comparable type exported to
the Community.

that

(30) An examination was also made as to whether the
domestic sales of each type could be regarded as having
been made in the ordinary course of trade, by estab-
lishing the proportion of profitable sales to independent
customers of the type in question. In cases where the
sales volume of LAECs sold at a net sales price equal to
or above the calculated cost of production represented
80 % or more of the total sales volume, normal value
was based on the actual domestic price, calculated as a
weighted average of the prices of all domestic sales made
during the IP, irrespective of whether these sales were
profitable or not. In cases where the volume of profit-
able sales of LAECs represented less than 80 % but 10 %
or more of the total sales volume, normal value was
based on the actual domestic price, calculated as a
weighted average of profitable sales only.

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

(33) On the basis of the method referred to above, it was
possible, for approximately 60 % of the types sold for
export to the Community, to establish normal value on
the basis of the domestic price of comparable types in
accordance with Article 2(2) of the Basic Regulation.
Wherever domestic prices of a particular type sold by a
producer/exporter
constructed
normal value had to be used in preference to domestic
prices of other similar types or to domestic prices of
other producers/exporters, due
to the number of
different types and the variety of factors affecting them.
Using domestic prices of other types would have meant
in this case making numerous adjustments, most of
which would have had to he based on estimates. It was
therefore considered that constructed value formed a
more appropriate basis to establish normal value.

could not be used,

(34)

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

realised by each of

(35)

The domestic profit margin was determined on the basis
of domestic sales made in the ordinary course of trade.

For two of the Japanese companies it was found that the
information provided regarding the cost of production
of LAECs sold in the domestic market did not accurately
reflect costs incurred during the IP. Consequently, it was
necessary to use, in part, the facts available in order to
correct the inaccurate information, in accordance with
Article 18(1) of the Basic Regulation. For this purpose,
in one case the Commission collected and verified on
spot the information used by the company in its actual
cost system and established an adjustment
to take
account of the consistent underestimation of the costs
reported in the questionnaire reply. For
the other
company, some of the information provided in the ques-
tionnaire reply, concerning production costs in one
factory, was found not to relate to the investigation
period. It was therefore decided to exclude sales of prod-
ucts made in this factory from both the profitability and
dumping determinations,
in accordance with Article
18(1) of the Basic Regulation.

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For another company, it was found that the information
contained in the reply to the questionnaire regarding
domestic sales was unreliable, since it did not include
sales of certain types and it included numerous sales to
domestic traders destined for subsequent export and
sales to related companies for their own consumption. It
was therefore decided to use, in accordance with Article
18(1) of the Basic Regulation, such facts as were avail-
able in order to rectify the partial non cooperation.
Hence, the transactions destined for re-export and the
sales to related companies were excluded. For the unre-
ported types sold domestically a profit margin was
established by using the domestic types with a higher
profitability.

prices and the Commission consequently deducted the
anti-dumping duty from the resale prices.

Comparison

(40)

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

Export price

(36)

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

(37) Where the export sale was made to a related importer,
the export price was constructed pursuant to Article 2(9)
of the Basic Regulation, namely on the basis of the price
at which the imported products were first resold to an
independent buyer.

In such cases, adjustments were made for all costs
incurred between importation and resale and for profits
accruing, in order to establish a reliable export price at
the Community frontier level. On the basis of the infor-
mation available from a cooperating unrelated importer,
this profit was set at around 5 %. This was considered to
be a conservative estimate for the sector concerned.

(38)

(39)

the

cases where

Pursuant to Article 11(10) of the Basic Regulation, in
those
export price had to be
constructed,
it was examined whether the applicable
anti-dumping duty was duly reflected in the resale prices
and the subsequent selling prices in the Community, in
order to decide if the amount of duties paid should be
deducted from the price. For this purpose, the compa-
nies were requested to provide conclusive evidence
thereof.

the Japanese producers/exporters provided
Two of
conclusive evidence that
the applicable anti-dumping
duty was duly reflected in their resale prices and in
subsequent selling prices in the Community. Conse-
quently,
it was decided not to deduct the amount of
duties paid from the relevant export prices, pursuant to
Article 11(10) of the Basic Regulation. The remaining
companies failed to provide conclusive evidence that the
duty was reflected in resale prices and subsequent selling

allowances

for differences

in import
Accordingly,
charges, transport, insurance, handling charges, packing
costs, credit, commissions and discounts have been
granted where applicable and justified, and when the
party concerned could demonstrate the effect of any
alleged difference on prices and price comparability.

(41)

(42)

The request for a level of trade adjustment made by one
of
the producers/exporters to take into account an
alleged difference in advertisement costs was rejected in
the absence of any difference between domestic and
export levels of trade.

Requests for salesmen salaries' adjustments made by two
producers/exporters were also rejected since the compa-
nies failed to demonstrate any effect on price compar-
ability.

Dumping margins

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

(44)

The comparison, as described above, shows the existence
of dumping in respect of all producers/exporters that
cooperated with the Commission. The dumping margins
expressed as a percentage of the cif import price at the
Community border are the following:

— Hitachi AIC Inc: 25,5 %,

— Rubycon Corporation: 5,4 %,

— Nichicon Corporation: 20,5 %,

— Nippon-Chemicon: 23,1 %.

(45)

For non cooperating companies, a residual dumping
margin was determined in accordance with Article 18 of
the Basic Regulation, on the basis of the facts available.

Due to the high level of cooperation from Japanese
producers/exporters it was decided to establish the
residual dumping margin at the level of the highest
dumping margin established for a cooperating company.

Expressed as a percentage of the CIF import price at the
Community border, the residual margin is 25,5 %.

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2. Taiwan

Comparison

(46)

the

circumstances

regarding dumping have
Since
changed significantly,
the Commission conducted a
complete investigation, which led to the calculation of
new dumping margins.

Level of cooperation

(47)

Three companies replied to the questionnaire for produ-
cers/exporters.

One of the three companies was found to have only
traded the product concerned to the Community.
Considering that this company had not produced the
product sold to the Community, no individual assess-
ment of its situation with respect to dumping could be
made.

Normal value

(48)

(49)

The procedures and methodologies followed by the
Commission to assess the normal value of products
originating in Taiwan were the same as those used for
Japan and set out above, except where, in accordance
with Article 18 of the Basic Regulation, the facts avail-
able were used.

For both producers/exporters in Taiwan, it was found
the information provided in the questionnaire
that
response regarding domestic sales was unreliable, since
they failed to report a considerable number of sales of
LAECs subject
It was therefore
to the investigation.
decided for both companies to base normal value on
facts available in accordance with Article 18 of the Basic
Regulation. For this purpose,
it was decided to take
account of the amount of profit attributed to the non
reported domestic
sales by applying the method
described above for Japan.

(50) On the basis of the method referred to above, it was
possible for a certain number of LAEC types sold for
export to the Community, to establish normal value on
the basis of the domestic price of comparable types in
accordance with Article 2(2) of the Basic Regulation.

For all other LAEC types
Community, normal value had to be constructed.

sold for export

to the

Export price

(51)

The procedures and methodologies followed in assessing
the export price of products originating in Taiwan were
the same as those used in the review on Japan and set
out above.

(52) All sales of LAECs made by the Taiwanese companies on
the Community market were to independent importers
in the Community. Consequently, the export price was
established by reference to the prices actually paid or
payable.

(53)

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

(54) Accordingly, allowances for differences in transport,
handling, ancillary and credit costs, have been granted
where applicable and justified, namely when the party
concerned could demonstrate the effect of any alleged
difference on prices and price comparability.

Dumping margins

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

(56)

The comparison, as described above, shows the existence
of dumping in respect of all producers/exporters that
cooperated with the Commission. The dumping margins
expressed as a percentage of the cif import price at the
Community border are the following:

— Teapo Electronic Corporation: 8,1,

— Kaimei Electronic Corp.: 13,8 %.

(57)

In view of the high level of non cooperation, the residual
dumping margin was based on the highest dumped
product for the company with the highest dumping
margin, expressed as a percentage of the cif import price
at the Community border. It was considered that this
was the most appropriate method to avoid giving a
bonus for non cooperation.

Expressed as a percentage of the cif import price at the
Community border, the residual margin is 39,7 %.

3. Republic of Korea

In view of

this lack of cooperation,

(58) No company replied to the questionnaire for producers/
the
exporters.
dumping margin had to be established in accordance
with Article 18 of the Basic Regulation on the basis of
the facts available. In this respect it should be noted that
the information available was limited. As far as the
from the Republic of Korea were
export prices
concerned, statistical information was only available for
a wider product range. Moreover, since this product is
commonly sold by the domestic producers/exporters
directly to industrial users and not via traders it was not
possible to obtain reliable price information on the
Korean domestic market. It was therefore decided to take
the highest dumping margin found for a model sold in
representative quantities in one of the other countries
concerned,

i.e. Japan.

(59) As a result,

the residual dumping margin for

the
Republic of Korea, expressed as a percentage of the cif
import price at
the Community border, was set at
76,2 %.

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D. COMMUNITY INDUSTRY

1. Composition of the Community industry

(60)

(61)

The two reviews cover the same product and are based
on data largely pertaining to the same time periods.
Therefore,
is considered appropriate to investigate
them simultaneously. Consequently, the same producers
in the Community constitute the Community produc-
tion and the Community industry in both reviews.

it

Four large producers of LAECs,
i.e. BC Components,
BHC Aerovox Ltd (United Kingdom), Vishay Roederstein
GmbH (Germany) and Siemens-Matsushita Components
GmbH & Co. KG (Germany), as well as some small to
medium-sized producers, were
established in the
Community.

Three producers supported the request for review on
Japan: BC Components, BHC Aerovox Ltd and Vishay
Roederstein GmbH. However, the two latter producers
did not cooperate with the Commission and were, there-
fore, not considered part of the Community industry.

(62) As indicated above, BC Components is a new company,
incorporated after the end of the IP. It has, notably,
taken over the activities of Philips components BV in the
manufacturing and sales of LAECs. This takeover was
made on a going concern basis, in particular as regards
the manufacturing
in the
Community. Moreover, BC Components BV, expressed
its support for both reviews.

sales of

LAECs

and

(63)

Siemens-Matsushita Components GmbH & Co. KG
(hereinafter ‘Siemens-Matsushita’) and the other small
and medium-sized producers were not among the
producers which requested the review on Japan. More-
over, these companies did not make themselves known
after the publication of
the notices announcing the
initiation of the reviews. Therefore, in accordance with
Article 5(4) of the Basic Regulation, these producers
could not be considered part of
the Community
industry.

(64) One Japanese producer/exporter contested the fact that
Siemens-Matsushita was not contacted by the Commis-
sion and the fact that this company was excluded from
the Community industry. These claims could not be
accepted because, as stated above, further to the publica-
tion of the above notices, Siemens-Matsushita did not
make itself known as an interested party and did not
express any interest in cooperating. Also,
it did not
oppose its exclusion from the Community industry.

available

In addition,
that
Siemens-Matsushita is a joint venture owned in equal
parts by Siemens AG (Germany) and the Matsushita

information indicated

Electric Industrial Ltd Group (Japan), a non cooperating
Japanese producer/exporter. Siemens AG holds control
of the corporate management and holds the casting vote
in the event of a tied vote. Siemens-Matsushita was
reported not to have imported any LAECs originating in
the countries concerned and to sell its own production
of LAECs on the Community market under its own
brand. However,
the
Matsushita Electric Industrial Ltd Group is clearly in a
position to exert control or
restraint on Siemens-
Matsushita. Available information also indicated that
Siemens-Matsushita
shared
benefited
know-how of its two shareholders. These two compa-
nies are therefore related within the meaning of Article
4(2) of the Basic Regulation.

through its 50 % shareholding,

from the

(65)

The important shareholding of Matsushita Electric Indus-
trial Ltd in Siemens-Matsushita and the abovementioned
shared know-how lead to the conclusion that Siemens-
Matsushita is in a fundamentally different position as
compared to that of BC Components. Therefore,
in
accordance with Article 4( 1 )(a) of the Basic Regulation,
it was considered appropriate to exclude Siemens-
Matsushita from the definition of
the Community
industry.

(66)

It should finally be underlined that Siemens-Matsushita
the
was already excluded from the definition of
Community industry in the original
investigations
concerning imports from Japan and imports from the
Republic of Korea and Taiwan. This approach has not
been disputed in either of these two investigations.

(67) A number of Japanese producers/exporters claimed that
BC Components
from the
should
Community industry because, until the end of the IP,
in
companies which were related to it at that time,
particular Philips Consumer Electronics BV,
imported
significant quantities of LAECs from Japan.

excluded

be

(68)

The Commission examined whether the fact that Philips
Consumer Electronics BV imported LAECs from Japan
was a sufficient reason to exclude BC components, at
time the only LAECs manufacturer within the
that
Philips Group, from the Community industry.

It was found that almost all imports made by the Philips
Group were not destined for further resale, but were
incorporated by Philips Consumer Electronics BV in its
own production of electronic products. Moreover, the
investigation revealed that the majority of these imports
(more than 85 %) were of ‘radial’ products either not yet
produced by BC Components or still in a start-up phase
of production. In these circumstances, Philips Consumer
Electronics BV had no other choice but to be supplied
by producers/exporters in the countries concerned.

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It was also found that the remaining imports made by
Philips Consumer Electronics BV were products directly
competing with BC Components' production and repre-
sented an insignificant share of the total imports into the
Community. It was also noted that Philips Consumer
Electronics BV, despite the above imports, was the
biggest traditional customer of BC Components, since it
represented approximately 40 % of its total sales in the
IP. The choice of Philips Consumer Electronics BV to be
partly supplied by producers/exporters in the countries
concerned was made possible by the structuring of the
Philips Group into different profit centres which are all
independent and free to choose their suppliers, notably
when it is necessary to complete or supplement the
range of products offered within the Philips Group (as in
the case of the ‘radial’ LAECs).

(69)

For the above reasons, the imports made by Philips
Consumer Electronics BV were considered as normal
commercial behaviour until such time as fair conditions
of competition would be restored on the Community
market.

(74)

In estimating the volume of imports, account was taken
of the fact that the CN code within which LAECs fall
embraces other types of capacitors not covered by the
present reviews. Therefore, no precise figures concerning
total imports of LAECs could be obtained from Eurostat
statistics. Consequently, the volume of imports into the
Community was based on an estimate provided by the
Community industry. This estimate was adjusted, for the
countries concerned,
the verified
information submitted by the cooperating producers/
exporters concerned. This approach was consistent with
the one used in the original

to take account of

investigations.

(75) On the above basis, consumption increased between
1993 and 1995, from 78,8 million units to 91 million
units, then slightly declined to 87,9 million units in the
IP, but increased again to 90.8 million units in 1997.
Overall consumption increased by 12 % over the period
considered.

(70)

BC Components, represented a major proportion (41 %)
of the total estimated Community production.

2. Imports on the Community market from the

countries concerned

(71)

Based on Article 4(1)(a) of the Basic Regulation, the
estimated production of Siemens Matsushita was not
taken into account in the determination of the total
Community production, for the purposes of the assess-
ment of the representativity of the Community industry.
One cooperating Japanese producer/exporter claimed
that, had the
Siemens-
Matsushita been taken into account, BC Components
would not have had sufficient standing to be repres-
entative of the total Community production.

estimated production of

However, it was found that even if the production of
Siemens-Matsushita, as established on the basis of the
information submitted by the cooperating parties had
total
been included in the determination of
Community production, the Community industry would
still have represented a major proportion of this produc-
tion, pursuant to Article 5(4) of the Basic Regulation.

the

(72)

It was therefore confirmed that BC Components consti-
tuted the Community industry in both reviews, within
the meaning of Article 4(1) of the Basic Regulation.

E. INJURY

1. Community consumption

(73)

Consumption was computed as the sum of the verified
sales made by the Community industry, an estimate of
the sales made by the other producers located in the
Community and an estimate of the volume of imports
into the Community.

Cumulation of the dumped imports

(76)

In view of the updating of the product definition in the
review on Japan,
it was considered appropriate to
perform a full injury and causation analysis with respect
to the imports originanting in that country. In addition,
since the review on Korea and Taiwan is being consid-
ered simultancously with that on Japan, it was examined
whether the effects of the imports originating in all the
three countries concerned should be assessed cumula-
tively.

(77) As stated above, the dumping margins found in respect
of all these three countries were above the de minimis
level and the volume of imports originating in these
countries was significant during the IP.

the products imported from all

(78) As regards the conditions of competition, it was noted
that
the countries
concerned and the Community produced products were
alike in their basic physical and technical characteristics
and in their end uses and that they were sold through
comparable sales channels. The imported products and
the Community produced products were therefore
competing with each other. It was also found that the
average prices of such imported products were all under-
cutting the Community industry's prices and were there-
fore exerting on the Community produced products
similar conditions of competition. Moreover, the average
prices of the imports subject to anti-dumping measures
originating in all these countries also showed a similar
increasing trend over the period considered, as did the
average sales prices of the Community industry.

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Official Journal of the European Communities

L 22/9

(79)

in accordance with
It was therefore concluded that,
Article 3(4) of the Basic Regulation, the dumped imports
from all the countries concerned should be examined on
a cumulated basis.

(80)

(81)

(82)

(83)

Volume and market share of the cumulated dumped imports

The volume of the cumulated dumped imports into the
Community of LAEC originating in Japan, the Republic
of Korea and Taiwan increased by 11 % over the period
considered, i.e. from 33,3 million units in 1993 to 37,1
million units in the IP. At the end of 1997, the cumu-
lated imports peaked at 38,9 million units. The cumu-
lated market share of
these imports decreased from
42,5 % in 1993 to 36,6 % in 1995 and then increased
again to 42,2 % in the IP. At the end of 1997, this
market share was 42,8 %. Overall, the market share of
the cumulated imports remained stable.

Prices of the dumped imports

The investigation has shown that the average sales prices
of the dumped imports from the countries concerned
the
were
Community industry.

significantly below the

sales prices of

For the purposes of the determination of price undercut-
ting, a comparison was made, on a type-by-type basis,
between the prices charged by the producers/exporters
concerned to unrelated importers in the Community or,
where applicable, the prices of the producers/exporters'
related importers to the first independent customers in
the Community, on the one hand, and the prices of the
Community industry to independent buyers, on the
other. In the absence of any cooperation from interested
parties from the Republic of Korea, the undercutting
levels were established by applying the same methodo-
logy as for the dumping margin determination in respect
to that country, i.e. the highest undercutting level found
In the
for cooperating Japanese producers/exporters.
absence of
(see
below), this was considered to be the best information
available.

reliable information from Eurostat

Imported and Community produced LAECs were
compared on a type-by-type basis. Types were identified
on the basis of the following criteria which basically
influenced the sales prices and the customer's purchasing
decision: the capacitance, the rated voltage, the oper-
ating temperature, the type of terminal and the size.
Where, on the basis of all these criteria, no identical
exported and Community produced types were found,
closely resembling ones were used. In this way, 40 % to
70 % of exports by producers/exporters were covered.

(84)

The price comparison was made on the basis of a selec-
tion of transactions representing approximately 95 % of
all transactions made by the Community industry. The
sales prices of the Community industry were adjusted,
where necessary, to ex-works level. For the comparison
of sales prices of export transactions made directly to

unrelated customers, adjustments were also made to the
producers/exporters' selling prices (CIF Community fron-
tier) to take account of customs duty paid (including
anti-dumping duties, if any) and an allowance in respect
of post importation costs and profit. All prices were
compared on an average-to-average basis, after excluding
all discounts and rebates and at a comparable level of
trade

(85) As a result of this comparison, the following significant
weighted average price undercuting margins expressed
as a percentage of the Community industry's prices,
were found

— Japan betweenn 0 % a and 68,6 %, on average

32,2 %,

— Taiwan between 0 % and 60,0 %, on average 30,6 %,

— Republic of Korea: 68,6 %.

3. Situation of the Community industry

Sales volume and market share of the Community industry

(86)

The volume of sales of the Community industry on the
Community market increased between 1993 and 1995
from an indexed 100 to an indexed 121, and then
decreased to an indexed 95 in the IP,
i.e. an overall
decrease of 5 % over the period considered. At the end
of 1997, these sales increased to an indexed 97, showing
a decline of 3 % compared to 1993.

(87)

The market share held by the Community industry
decreased from an indexed 100 in 1993 to an indexed
85 in the IP, i.e. a decline of 15 %. This market share
remained stagnant at an indexed 84 at the end of 1997.

Production, capacity and capacity utilisation

(88)

(89)

Production by the Community industry increased
between 1993 and 1995 from an indexed 100 to an
indexed 123, then decreased to an indexed 98 in the IP,
and went up to an indexed 100 at the end of 1997.
Although the output decreased only slightly over the
period considered, it decreased by nearly 20 % towards
the end of it,

i.e. between 1995 and the IP.

Capacity increased by 25 % between 1993 and 1995,
remained stable through 1996 but then increased by a
further 16 % in the IP and remained stable at the end of
1997. The increase in capacity between 1993 and 1995
was in line with the development of consumption on
the Community market over that period of time. The
increase in capacity in the IP was partly due to the
development of a new range of so-called ‘radial’ LAECs.

(90) Assessed in the light of the development of production
and capacity, capacity utilisation increased between
1993 and 1994, from an indexed 100 to an indexed
109, but declined steadily thereafter to an indexed 70 in
the IP and an indexed 71 at the end of 1997.

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(91)

(92)

(93)

(94)

(95)

Stocks

trend. These

The evolution of the stocks held by the Community
industry showed an irregular
stocks
increased between 1993 and 1995 from an indexed 100
to an indexed 168, then declined in 1996 to an indexed
93 and increased again in the IP, to an indexed 252. The
number of days of sales represented by the stocks held
by the Community industry nearly tripled over the
period considered, from 13 days in 1993 to 37 days in
the IP. However. stocks decreased again at the end of
1997, to an indexed 113.

Evolution of sales prices of the Community industry

The average sale prices of the Community industry to
unrelated parties increased between 1993 and the IP by
16 %. However, these prices declined between 1995 and
the IP by nearly 8 %. During the same period,
the
average prices of the dumped imports originating in
Taiwan and the Republic of Korea increased as well, by
respectively 28 % and 23 %. The average prices of the
dumped imports originating in Japan remained overall
stable between 1993 and the IP. However, while the
prices of the products subject to anti-dumping measures
increased significantly, those of the products not subject
to such measures declined sharply, by approximately
40 %.

The above evolution of the average selling prices of the
Community industry and that of the dumped imports
has to be seen in the light of the substantial increase in
consumption during the period considered, the changes
in product mix between years, the wide diversity of
different types of LAECs and the corresponding diversity
of sales prices, the introduction of new products on the
Community market, which tend to have a higher sales
price than older ones, as well as the effect of the imposi-
tion of previous anti-dumping measures on Japan (1992)
and on Taiwan and South Korea (1994).

Profitability

financial

results of

The
the Community industry,
expressed as a percentage of net sales, showed a loss of
close to – 6 % in 1993. These results then improved and
in 1995 the Community industry recorded a profit of
close to 6 %. However, after 1995 the situation signifi-
cantly deteriorated and it was found that in the IP and at
the end of 1997 the Community industry was approxi-
mately at break-even point.

value, and on its production levels. On the other hand,
the decline in profitability after 1995 should be mainly
seen in the light of the Community industry's decline in
sales and relative decline in average sales prices. The
decline in sales triggered a significant drop in production
and a decline in the usage of capacity installed, with a
consequent increase of unit costs, due to the increased
share of fixed costs in the unit cost of production.

Investments, employment and productivity

(96)

(97)

(98)

Yearly investments made by the Community industry
increased between 1993 and 1996 from an indexed 100
to an indexed 576. Investments were stopped in the IP.
It should be noted that the investments made between
1993 and 1995 enabled the Community industry to
increase capacity for the production of new LAEC types
and to improve overall performance.

Employment declined during the period considered by
22 %, as a result of higher efficiency and of a general
restructuring, which was made necessary by declining
financial results after 1995. At the end of 1997, employ-
ment levels were approximately at the same level as at
the end of the IP.

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

Conclusion

(99)

Between 1993 and the end of the IP, at a time of
growing demand on the Community market (+ 12 %),
the Community industry has experienced a drop in sales
share (– 15 %), production
volume (– 5 %), market
(– 2 %),
and employment
(– 30 %)
capacity usage
(– 22 %).

Furthermore, at the end of the IP, the Community indus-
try's financial situation, despite a brief
improvement
between 1993 and 1995, was still unsatisfactory and
largely insufficient to maintain investments and research
and development (a break-even situation was found for
the IP).

It should be noted that
the increase in profitability
between 1993 and 1995 coincided with the period of
time immediately following the imposition of anti-
dumping measures on Japan and on the Republic of
Korea and Taiwan. It also coincided with a period of
growing consumption. All this had positive effects on
the Community industry's sales, both in volume and in

(100) The negative developments suffered by the Community
industry occurred primarily in the period between 1995
and the IP, when, in addition to a significant loss in sales
volume, market share and output, profitability declined
from a profit of approximately 6 % on turnover in 1995
to a break-even situation in the investigation period.

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(101) The analysis of injury until the end of 1997, which was
made to take account of the end date of the invest-
igation period for dumping in the review on Korea and
Taiwan, confirmed the above findings.

(102)

In the light of the foregoing analysis, the Commission
concluded that
suffered
the Community
material injury within the meaning of Article 3(1) of the
Basic Regulation.

industry

2. Other factors

(106) The Commission examined whether the material injury
suffered by the Community industry should not be
attributed to factors other than the dumped imports
originating in the countries concerned.

Other imports

F. CAUSATION OF INJURY

1. Effects of the cumulated dumped imports origin-
ating in Japan, the Republic of Korea and Taiwan.

(103) The decline in sales volume and market share suffered
by the Community industry during the period consid-
ered coincided with a very significant increase in the
the
imports.
cumulated
Community industry saw its sales and market share
declining by 5 % and 15 % respectively, the cumulated
dumped imports increased by 11 % and maintained their
market share.

Indeed, while

dumped

(104) This evolution is even more striking when looking at the
period during which the Community industry suffered
most strongly, i.e. between 1995 and the investigation
period. During that period, the Community industry's
sales declined by 22 %, while the volume of the dumped
imports increased by 11 %. The market share held by
the Community industry decreased by 19 %, while the
market share of the imports increased from 36,6 % to
42,2 %, i.e. by 15 %. In a context of slightly declining
consumption, the dumped imports not only did not
decrease, as could have been anticipated, but actually
rose, thereby taking sales volume and market share from
the Community industry.

In addition, significant dumping and price undercutting
was found in respect of all countries considered. In view
of the price sensitivity of the market and its relative
transparency, this undercutting caused the Community
industry's sales to decrease. This decline, coupled with a
decrease in sales prices, caused a drop in profitability.
Finally, as a result of the unsatisfactory financial results,
the Community industry had to suspend any investment
projects during the investigation period.

(105) The evolution of the dumped imports also prevented the
Community industry from fully recovering from the past
injury suffered at the time preceding the imposition of
anti-dumping measures on imports originating in Japan,
the Republic of Korea and Taiwan.

(107) The market share of imports from third countries not
concerned by these reviews increased by 5,7 % during
the period considered. In particular, the imports origin-
ating in the United States of America and Thailand
increased significantly over the period considered. More-
over, the prices of these imports were found to be, on
the Community
than the prices of
average,
industry. Therefore,
the
imports originating in the United States of America and
Thailand contributed to the injury sustained by the
Community industry.

it cannot be excluded that

lower

(108) One of the Japanese producers/exporters claimed that
imports originating in Brazil were the main source for
the injury suffered by the Community industry.
In
this claim, statistics based on CN code
support of
8532 22 00 were provided, which indicated a strong
increase of imports from Brazil
into the Community
over the period considered.

(109) However, as stated above, the CN code includes not only
LAECs but many other types of capacitors. No evidence
was given that the statistics provided related to LAECs
only, nor was any evidence presented that such imports
were made at dumped and injurious prices. Finally, the
available information concerning total imports of LAECs
into the Community appears to indicate that imports
from Brazil,
if any, would be likely to be below de
minimis levels. The claim was therefore rejected.

Evolution of Community consumption

(110) One of the Japanese producers/exporters claimed that
any injury suffered by the Community industry was due
to a general downturn in the economic cycle of the
LAEC market after 1995.

(111) Over the period considered, the Community consump-
tion increased by 12 %. Despite this increase, the sales of
the Community industry declined by 5 % and this
industry lost market share (– 15 %). Between 1995 and
the IP, the Community consumption declined by 4 %,
while the sales of the Community industry decreased by
a much greater proportion (– 25 %). At the same time,
the cumulated dumped imports increased by 11 %,
despite the decline in consumption, and, consequently,
these imports gained market share (+ 15 %). Therefore,
the injury suffered by the Community industry could
not be solely attributed to the decline in consumption
between 1995 and the IP.

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Performance of the Community industry

(112) One Japanese producer/exporter argued that the injury
suffered by the Community industry was not due to the
dumped imports, but resulted from the relative ineffi-
ciency of the Community industry.
In particular, the
following comments were raised:

(113)

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

from the

increased imports made

However, without examining the issue as to whether the
producers/exporters concerned actually enjoyed any
kind of cost advantage, the following must be stressed.
countries
The
concerned by the present reviews at dumped prices,
even with anti-dumping measures in force, prevented
the Community industry from making full use of its
production capacity and thereby caused it severe injury.
In these circumstances, it is considered that, irrespective
of any cost advantages, even if these were accepted, this
dumping of
caused injury to the
Community industry.

exporters

the

(114)

It was further claimed that the Community industry was
less advanced in product innovation and miniaturisation
than the producers/exporters in the countries concerned
and that, as a result of this, the Community industry's
product range was less attractive to customers.

The Commission compared the product ranges offered
by the cooperating parties. This comparison showed
that, during the investigation period, the Community
industry's product range was largely comparable in
extension and features to that of the exporting produ-
cers. This included any miniaturised types. The compari-
sons on a type by type basis which were made for the
purposes of the price undercutting calculations clearly
indicated a very large degree of overlap between the
Community produced and the
imported products.
Finally, it was also found that, as is the usual practice in
the Community industry was able to
this industry,
‘custom’ designs, according to
produce ‘special’ or
specific needs of specific customers. Therefore,
the
investigation did not identify any major differences in
product range between the Community industry and the
producers/exporters concerned, such as to justify any
difference in attractiveness to the final customers.

(115) Finally, it was claimed that the Community industry sold
over-specified LAECs in terms of lifespan. This over-
specification resulted in substantially higher
selling
prices than the exporting producers concerned.

The results of the investigation have shown that the
Community industry manufactured LAEC in accordance
with the specifications requested by their customers.
Moreover, it was found that the catalogue lifespan speci-
fications of the Community industry were not always
based on the same criteria as those of the producers/

(116)

exporters, since different ways existed to express the
lifetime of LAECs (e.g. ‘total load life’, ‘test life’, ‘endur-
ance’, etc.), depending on the measurement criteria used.
In this respect, no evidence was provided that
the
alleged overspecification of the Community industry's
products could not have resulted only from different
criteria used to measure the lifespan. Therefore, the argu-
ment cannot be considered as being substantiated and
the allegations of these exporters cannot be accepted.

Injury caused by the Community industry's increased capacity
and investments

It was noted that the Community industry increased
capacity and invested at a time, after 1995, when the
market entered a downturn. However, it was also estab-
lished that the investments made after 1995, and the
subsequent capacity increase, were essentially related to
the development of new state-of-the-art ‘radial’ capaci-
tors. These investments did not represent more than 1 %
of turnover. Their financial impact (i.e. additional depre-
ciation and additional interest charges) was almost insig-
nificant, compared to other costs. In addition, a small
profit was recorded on the sales of such new ‘radial’
products, which was, however, insufficient to compen-
sate for the losses incurred on other LAECs. Also, the
sales of these new ‘radial’ products between 1996 and
the IP avoided a further, even stronger decline in the
total sales of the Community industry.

Therefore, the investments made after 1995 and the
subsequent increase in capacity cannot be held respon-
sible for the strong decline in profitability which took
place after that date, especially when considering the
simultaneous decline in sales prices (– 8 %), due to the
strong downwards pressure exerted by the dumped
imports.

3. Conclusion

(117) Although it cannot be excluded that the imports from
other third countries, in particular the United States of
America and Thailand, and a slight
reduction in
Community consumption may have had an impact, the
cumulated dumped imports originating in Japan, the
Republic of Korea and Taiwan had, taken in isolation,
injury to the Community industry.
caused a material

in a period of

(118) This conclusion is drawn in particular in view of the
decline in sales and the loss in market share suffered by
increasing
the Community industry,
demand on the Community market, which coincided
with an increase in volume of
the abovementioned
dumped imports, at prices which significantly undercut
the Community industry's prices. The unfair competition
from LAECs originating in the above countries also
caused a decline in the Community industry's output
and, between 1995 and the IP, a relative decline in
prices. The combination of these two factors resulted in
a significant drop in profitability during this latter
period.

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G. LIKELY EFFECTS OF THE REMOVAL OF THE ANTI-

DUMPING MEASURES

(119) The possible effects of the removal of the anti-dumping
measures currently applicable to Japan, the Republic of
Korea and Taiwan were examined. Pursuant to Articles
11(2) and (3) of the Basic Regulation, the following
elements were given particular attention: the effective-
ness of
the existing measures and the likelihood of
continuation or recurrence of dumping and injury.

1. Effectiveness of the existing measures

(120) As explained above, the measures currently applicable
on Japan cover a narrower range of products than the
review investigation. Consequently, the analysis of the
impact of the existing anti-dumping measures applicable
on the Japanese imports can only be performed for this
narrower range of products.

On the basis of the available information, it was noted
that the volume of imports originating in Japan subject
to anti-dumping measures declined during the period
considered by approximately 40 % and that
import
prices showed a steady increase over the period consid-
ered. As a result of these trends, the market share of
these imports declined from approximately 18 % in
1993 to approximately 9 % in the investigation period.

the evolution of

the examination of

the
Similarly,
volume of imports originating in the Republic of Korea
and Taiwan indicates a relative decline over the period
considered, which resulted in a consequent reduction in
their market share. Average import prices increased as
well, although remaining at injurious levels.

(121)

It can therefore be concluded that the measures in place
where at least partially effective in restoring fair condi-
tions of competition on the Community market.

(122) However, despite the anti-dumping measures in place,
the Community industry continued to suffer material
injury. This should be attributed to the increasing
amount of dumped imports originating in Japan, not
subject
to anti-dumping measures and to changed
circumstances as regards dumping for the Republic of
Korea and Taiwan. Indeed, the dumping margin for the
invest-
Republic of Korea increased since the original
igation, from 70,6 % to 76,2 %. The dumping margin
for the sole Taiwanese producer/exporter which cooper-
ated in both the original and the review investigation
concerning Taiwan (Kaimei Electronic Corp.) increased
as well, from 10,7 % to 13,8 %.

Korea was established, despite the existing anti-dumping
measures. This provided sufficient evidence of a strong
likelihood of the continuation of injury should the anti-
dumping measures applicable to Japan, the Republic of
Korea and Taiwan lapse.

In addition, as regards Japan, available information indi-
cated that the cooperating Japanese producers/exporters
still had significant spare capacity to increase their
production and their exports into the Community,
should the existing measures lapse.

(124) The review investigation also pointed to the existence of
strong ties between certain Japanese producers/exporters
and certain producers/exporters located in countries not
subject to anti-dumping measures,
including the USA
and Thailand. It was considered that, as a result of these
relationships, the Japanese producers/exporters in ques-
tion could pursue a global strategy, especially since they
sometimes sold in the Community through the same
sales channels as the US and Thai producers/exporters.
The strong increase in imports originating in these two
latter countries during the period considered, reinforced
the likelihood of renewed increased imports originating
in Japan, should measures lapse and hence the likelihood
of the continuation of injurious dumping.

H. COMMUNITY INTEREST

1. Preliminary remarks

(125)

In both the original investigations concerning Japan, the
Republic of Korea and Taiwan the Council concluded
that no compelling reasons existed not to impose meas-
ures. This conclusion was drawn, essentially, in view of
the negligible share of LAECs in the total costs of the
end users (less than 1 %).

The Commission examined whether there were any
changed circumstances since the original
investigation
which could lead to a different conclusion concerning
the Community interest. To this end, information was
requested from all interested parties known, including
parties
the Community
producers, importers/distributors and the users. It should
be noted that no replies were received from the
upstream industries.

in the upstream industries,

2. Likely effects of the anti-dumping measures on

users

2. Likelihood of continuation or recurrence of

(126) Two categories of users were identified

injury

(123) Actual material injury, caused by the cumulated dumped
imports originating in Japan, Taiwan and the Republic of

— The manufacturers of power supply devices. These
power supplies are then incorporated in finished
consumer electronics goods,

— The manufacturers of finished electronics goods.

L 22/14

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Official Journal of the European Communities

27. 1. 2000

(127) As

regards

the manufacturers of power

supplies,
according to the information available,
this industry
employs some 12 000 people and represents a total
turnover of approximately EUR 1,5 billion. Submissions
were received from a number of companies accounting
for approximately 9 % of total industry's turnover and
employment and whose consumption of LAEC in the IP
accounted
total
Community consumption, according to available infor-
mation. These companies argued that the existing anti-
increase in
dumping duties resulted in a significant
purchase costs. In the longer run, this increase in costs
could force a significant number of companies to relo-
cate production outside the Community, with a conse-
quent significant loss of employment.

approximately

5 % of

the

for

However, the examination of the facts has shown that
the cost of a LAEC represents approximately 4 % of the
total cost of a power supply device. The measures
proposed would result in a negligible increase in costs
(less than 1 %).
It was also found that the weighted
average profitability of the companies which submitted
information, expressed as a percentage of net sales, was
more than 18 % in the IP. This profitability was attained
despite the anti-dumping measures in force and even
increased between 1993 and the IP.

(128) As regards the manufacturers of finished consumer elec-
tronics goods, the costs of LAECs represent even less
than 4 % of total costs of production (generally around
1 %). The same conclusion can be drawn should the
LAECs currently not covered by anti-dumping measures
also become subject to such measures.

(129) Finally, no information was submitted to the Commis-
sion which would indicate that users (power supply
manufacturers or finished electronic goods producers)
had relocated production outside the Community as a
result of the measures imposed on Japan, in the Republic
of Korea and Taiwan. Any risks of relocation resulting
from the continuation and/or the amendment of the
anti-dumping measures should be considered as being
unlikely.

3. Likely effects on importers and distributors

(130) On the basis of

the available information,

it was
concluded that the continuation and/or the amendments
of
the anti-dumping measures would only have a
impact on the importers and distributors of
minimal
LAECs in the Community, given that LAECs represented,
on a weighted average basis, a relatively small propor-
tion of their total activities, in terms of turnover and
profit contribution.

that no compelling reasons exist which would indicate
that it is not in the Community interest to renew anti-
dumping measures on imports of LAECs originating in
Japan, the Republic of Korea and Taiwan.

I. TERMINATION OF THE PROCEEDINGS

industry

to Article 5 of

(132) As mentioned above in recital (6), a further proceeding,
concerning LAECs originating in the United States of
America and Thailand was initiated in November 1997,
pursuant
the Basic Regulation. The
Commission's investigation definitively established the
existence of significant dumping and material injury on
the Community
resulting therefrom. No
compelling reasons were found indicating that new
definitive measures would be against the Community
interest. Consequently, the Commission proposed to the
Council the imposition of definitive anti-dumping meas-
ures on the imports of LAECs originating in the United
States of America and Thailand. However, the Council
did not adopt the proposal within the time limits laid
down in the Basic Regulation. As a result, definitive
measures were not imposed on imports from the United
States of America and Thailand and the provisional
measures, which entered into force in August 1998,
lapsed on 28 February 1999.

(133) The new investigation concerning the United States of
America and Thailand and the two present reviews were
conducted, to a large extent, simultaneously. As indi-
cated above, basically the same conclusions in the
reviews have been reached as in the new
present
proceeding concerning the United States of America and
Thailand, for the same product concerned. These conclu-
sions call in principle for amending the definitive meas-
ures on imports from Japan, the Republic of Korea and
Taiwan.

However, Article 9(5) of the Basic Regulation provides
that anti-dumping duties shall be imposed on a non-
discriminatory basis on imports of a product from all
sources found to be dumped and causing injury.

(134) Therefore, it is concluded that, in the absence of meas-
ures on the United States of America and Thailand, the
imposition of any measures on imports originating in
Japan, the Republic of Korea and Taiwan as a result of
the present
investigation would be discriminatory
towards these latter three countries.

4. Conclusion on Community interest

(131) On the basis of the above elements, no changed circum-
stances as
regards Community interest were found
which could lead to a different conclusion than the one
reached in the original
the
Republic of Korea and Taiwan. It is therefore confirmed

investigations on Japan,

(135)

In consideration of the above,
in order to ensure a
coherent approach and to respect the principle of non-
discrimination as set out in Article 9(5) of the Basic
Regulation, it is necessary to terminate the proceedings
concerning imports of LAECs originating in Japan, the
Republic of Korea and Taiwan, without the imposition
of anti-dumping measures.

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Official Journal of the European Communities

L 22/15

(136) One Japanese exporting producer claimed that

the
proceeding concerning Japan should be retroactively
terminated as from the date of initiation of the present
review,
i.e. 3 December 1997, on the grounds that,
while the review on Japan was pending, imports origin-
ating in that country were still subject to measures and
were therefore discriminated against compared to the
imports originating in the United States of America and
Thailand, for which no duties were collected.
(137) However, as noted above in recital (132) above, between
December 1997 and 28 February 1999 imports origin-
ating in the United States of America and Thailand were
subject to investigation, as were the imports originating
in Japan. The fact that measures were in force against
Japan but not against the United States of America and
Thailand over that period of time is merely a reflection
of the fact that the proceeding concerning the United
States of America and Thailand was at a different stage,
the investigation being the initial investigation, whereas
the measures in force were those
as regards Japan,
imposed by Regulation (EEC) No 3482/92.
In these
circumstances, no discrimination occurred because the
situation of each proceeding was different.

to (135) above,

(138) Nevertheless, it is accepted that, from 28 February 1999
onwards, given the considerations set out in recitals
(132)
imports originating in Japan
should be treated in the same way as those originating
in the United States of America and Thailand. The same
is true for the Republic of Korea and Taiwan. The invest-
igation concerning the United States of America and
Thailand had to be concluded by 28 February 1999,
either by the imposition of measures or the termination

of the proceeding. The present investigation has reached
similar conclusions to the investigation concerning the
United States of America and Thailand, and thus the
same
applied to the present
proceeding.

treatment must be

(139) Consequently, the proceedings concerning imports of
LAECs originating in Japan, the Republic of Korea and
Taiwan, should be terminated without the re-imposition
of anti-dumping measures, with a retroactive effect as of
28 February 1999,

HAS ADOPTED THIS REGULATION:

Article 1

The anti-dumping proceeding concerning imports of certain
large aluminium electrolytic capacitors originating in Japan is
hereby terminated.

Article 2

The anti-dumping proceeding concerning imports of certain
large aluminium electrolytic capacitors originating in the
Republic of Korea and Taiwan 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 Communi-
ties.

It shall apply from 28 February 1999.

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

Done at Brussels, 24 January 2000.

For the Council

The President

J. GAMA