Council Regulation (EC) No 175/2000 of 24 January 2000 reimposing a definitive anti-dumping duty on imports of leather handbags originating in the People's Republic of China and sold for export to the Community by certain exporting producers and amending Regulation (EC) No 1567/97
Date: 2000-01-24
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, fancy leather goods and glove-making industry, import, originating product

27. 1. 2000

EN

Official Journal of the European Communities

L 22/25

COUNCIL REGULATION (EC) No 175/2000

of 24 January 2000

reimposing a definitive anti-dumping duty on imports of leather handbags originating in the
People's Republic of China and sold for export to the Community by certain exporting producers
and amending Regulation (EC) No 1567/97

THE COUNCIL OF THE EUROPEAN UNION,

(3)

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 11 (4) thereof,

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

Whereas:

(1)

(2)

A. PREVIOUS PROCEDURE

By Regulation (EC) No 1567/97 (2) (hereinafter referred
to as ‘the definitive Regulation’), the Council imposed a
definitive anti-dumping duty of 38 % on imports of
leather handbags originating in the People's Republic of
China (hereinafter referred to as ‘the PRC’) with the
exception of imports from several exporting producers
imposed individual duty rates.
for which the Council

B. PRESENT PROCEDURE

The Commission subsequently received five applications
to initiate a ‘new exporter’ review of the definitive Regu-
lation, pursuant to Article 11 (4) of Regulation (EC) No
384/96 (hereinafter referred to as ‘the Basic Regulation’).
These applications were lodged by Gainth Industrial Ltd,
Macia Company Ltd, Yen Sheng Factory Ltd, Dongguan
All Be Right Leathern Products Co. Ltd and Panyu
Simone Handbag Ltd (hereinafter referred to as ‘the
applicants’). The applicants claimed that they met the
conditions for individual treatment, that they were not
related to any of the exporting producers subject to the
existing measures with regard to the product concerned,
that they had not exported the product concerned to the
Community during the period of investigation on which
the anti-dumping measures were based, i.e. the period
from 1 April 1995 to 31 March 1996 (hereinafter
referred to as ‘the original investigation period’), but that
they had exported the product concerned to the
Community subsequently.

(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 208, 2.8.1997, p. 31. Regulation as amended by Regulation

(EC) No 2380/98 (OJ L 296, 5.11.1998, p. 1).

The Commission examined the evidence submitted by
the applicants, and considered it sufficient to justify the
initiation of a review pursuant to Article 11(4) of the
Basic Regulation. After consultation of
the Advisory
Committee and after the Community industry concerned
the
had been given the opportunity to comment,
Commission initiated, by Regulation (EC) No 152/
1999 (3), a review of
the definitive Regulation with
regard to the five applicants and commenced its invest-
igation.

The Regulation initiating the review also repealed the
anti-dumping duty imposed by the definitive Regulation
with regard to imports of
the product concerned,
produced and exported to the Community by the appli-
cants, and directed customs authorities, pursuant
to
Article 14(5) of the Basic Regulation, to take appropriate
steps to register such imports.

The product concerned by the review was the same
product as that described in Article 1 (2) of the definitive
Regulation, namely, bags, whether or not with shoulder
strap, including those without handle, with outer surface
of
leather,
designed primarily to contain small objects for personal
use, such as keys, purses, make-up and cigarettes,
regardless of their size and form.

leather, of composition leather or patent

The Commission officially advised the authorities of the
exporting country. Furthermore,
it gave the parties
directly concerned the opportunity to make their views
known in writing and to request a hearing.

The Commission sent questionnaires to the applicants.
All five applicants submitted replies to the questionnaire
and two of them also requested market economy status.

In the course of the investigation, Dongguan All Be
Right Leathern Products Co. Ltd abandoned its applica-
tion for a ‘new exporter’ review. Consequently, subse-
quent
to on-the-spot verifications relating to market
economy status, no on-the-spot verification relating to
‘new exporter’ status and export prices was carried out at
its premises.

The Commission sought and verified all information it
deemed necessary for the purposes of its investigation
and carried out on-the-spot verifications at the premises
of the following companies:

(4)

(5)

(6)

(7)

(8)

(3) OJ L 18, 23.1.1999, p. 10.

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Official Journal of the European Communities

27. 1. 2000

— Dongguan All Be Right Leathern Products Co. Ltd,

Dongguan and Beijing, PRC,

— York Star Co. Ltd., Hong Kong (in respect of Dong-
guan All Be Right Leathern Products Co. Ltd),

— Dongguan Hsin Wan Foreign Trade Development
Co., Dongguan, PRC (in respect of Dongguan All Be
Right Leathern Products Co. Ltd),

— Panyu Simone Handbag Ltd, Guangzhou, PRC,

— Simone Accessories Collection Ltd., Kyungki-do,
Republic of Korea (in respect of Panyu Simone
Handbag Limited),

— Gainth Industrial Ltd, Hong Kong,

— Macia Company Ltd, Hong Kong, and Yen Sheng
Factory Ltd, Hong Kong (as these two applicants are
related, their applications were treated jointly).

(9)

The investigation period for the current investigation
was 1 April 1996 to 31 December 1998 (hereinafter
referred to as ‘the current investigation period’).

concerned as a consequence does not relate to a
briefcase anymore.

In this respect,
it should be pointed out that the
applicant has submitted different versions of design
specifications of the model concerned and failed to
bring any indisputable evidence as to the exact phys-
ical appearance of
the model actually exported.
However, these design specifications do not in all
cases not significantly differ from those of the other
document bags or briefcases contained in the collec-
tion. Furthermore,
the explanation given by the
importer confirms that the model concerned is not a
leather handbag, as his designer conceived the new
collection as multifunctional bags to meet the need
of the executive woman for a bag able to contain
documents as well as small objects. Consequently,
the model concerned does not meet the definition of
the product concerned as set out in the definitive
Regulation.

(10)

(11)

(12)

C.

‘NEW EXPORTER’ STATUS

It was examined whether the applicants met the criteria
for individual treatment, were not related to any of the
exporting producers subject to the existing measures
with regard to the product concerned, had not exported
the product concerned to the Community during the
original
investigation period and had exported the
product concerned to the Community subsequent to the
original investigation period. The findings regarding the
various applicants are as follows:

1. Gainth Industrial Ltd

to

the

This company originally claimed that it had exported
6 400 units of the product concerned to the Community
period.
original
subsequent
However, upon verification, this figure was found to be
incorrect. The applicant admitted the inaccuracy of its
first submission and eventually claimed that 86 units of
the
the
Community. These 86 units concern one single model.

concerned were

investigation

exported

product

to

The information submitted by the applicant and verified
on the spot revealed that the model concerned was a
document bag or briefcase and not a handbag. Indeed, it
is part of a collection composed of leather briefcases
exclusively. The relevant invoice indicated ‘leather docu-
ment bag’ and the
importer declared the model
concerned in the Single Administrative Document under
trunks, suitcases,
the CN code 4202 11 90 namely,
vanity cases, executivecases, briefcases, school satchels
and similar containers.

(14)

(15)

(13)

The applicant contested the classification of document
bag for the model concerned and put forward two argu-
ments:

— According to the applicant, the products actually
exported corresponded to a redesigned version of the
original leather briefcase collection, and the model

— The applicant

further

claimed that

the model
concerned falls under the definition of handbags set
out in the definitive Regulation, as this definition
refers to handbags ‘regardless of their size and form’.
The company put forward the argument that Regula-
tion (EC) No 2380/98, which amended the definitive
Regulation, expressly brought backpacks and shop-
ping bags within the
the product
concerned.

scope of

In this respect, it should be pointed out that Regula-
tion (EC) No 2380/98 did not bring backpacks and
shopping bags within the scope of
the product
concerned, but only clarified the scope of the defin-
itive measures (see Recital 9 of that Regulation). This
clarification specifies that backpacks and shopping
bags have to fall under the definition of handbags
(see Recital 4 above) given in the definitive Regula-
tion in order to be covered by the definitive meas-
ures. This clarification was added in order to avoid
circumvention by declaration of imports under CN
codes other than the one corresponding to leather
handbags.

In the light of these findings, it was concluded that the
applicant failed to prove that it had actually exported
leather handbags to the Community subsequent to the
original

investigation period.

It should also be noted that the applicant requested to
take into account sales made to a German company
after the current investigation period and the initiation
of the present review. It should be pointed out that this
information was submitted far beyond the deadline
established in Regulation (EC) No 152/1999 pursuant to
Article 6(2) of the Basic Regulation and after the on-the-
spot verification took place, making it impossible to
verify its accuracy as required by Article 6(8) of the Basic
Regulation. This seems particularly important consid-
ering the large number of material errors in the informa-
tion submitted by the applicant.

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Moreover, it should be noted that the consistent applica-
tion of Article 6(1) of
the Basic Regulation by the
Community institutions has been to limit findings to the
investigation period unless the effects of new circum-
stances are manifest, undisputed, lasting, and not open
to manipulation or do not stem from deliberate action
of interested parties. These conditions are not met in this
case. These sales are sporadic exports to the Community.

(16) On the basis of the foregoing, the application had to be

rejected as inadmissible.

2. Macia Company Ltd and Yen Sheng Factory Ltd

(17) As mentioned above, these two applicants are related
companies and their applications were therefore exam-
ined jointly.

(18)

In its response to a deficiency letter, Macia Company Ltd
claimed that one of the manufacturing units it operated
identity. However,
in the PRC did not have a legal
during the on-the-spot verification,
it was discovered
that this manufacturing unit was a Sino-foreign cooper-
ative joint venture and consequently a separate legal
entity. Consequently, misleading information on the
corporate structure of the applicants has been submitted
and thus, all information regarding their corporate struc-
ture is to be disregarded in accordance with Article 18
of the Basic Regulation. This resulted in the applicants'
inability to prove that they complied with the conditions
as laid down in Article 11(4) of the Basic Regulation.

this

Even though the applicants submitted subsequent to this
the questionnaire
finding a response to the part of
relating to individual treatment in respect of this related
company,
submission constituted a substantial
quantity of new information which was received by the
Commission far beyond the deadlines set in Regulation
(EC) No 152/1999 pursuant to Article 6(2) of the Basic
Regulation, rendering impossible a proper verification of
it.

(19) Moreover, even in the event this newly submitted infor-
mation having been provided within a reasonable
period, the Commission would not have been able to
verify that the conditions for ‘new exporter’ status are
met, as important information was missing. Particularly,
the applicants were unable to prove whether the above-
mentioned related joint venture had not exported the
product concerned to the Community during the orig-
inal
investigation period. As a matter of fact, neither
proper audited accounts nor documents showing the
destinations of sales have been provided. In this respect,
it should be noted that the related company sold the
product concerned to customers located in the PRC in
1995. However, the company was subject to a restric-
tion to sell on the domestic market. This restriction
implies that a part of the production must have been
exported in 1995, which is largely covered by the orig-
inal investigation period, the Community being amongst
possible destinations. Consequently, the final destination
of these sales is unknown.

(20) On the basis of the foregoing, the applications had to be

rejected as inadmissible.

3. Panyu Simone Handbag Ltd

(21)

(22)

(23)

This applicant was unable to demonstrate that it had
actually produced the leather handbags it sold for export
to the Community during the current
investigation
it could not be established that
period. Consequently,
Panyu Simone Handbag Ltd was the exporting producer
of the goods in question.

Furthermore, the applicant was unable to demonstrate to
the satisfaction of the Commission that it did not sell
leather handbags for export to the Community during
the original

investigation period.

Finally, as various products were classified under ‘leather
handbags’ for internal purposes, the description of the
product on the invoices did not coincide with the
the transaction-by-
product sold. The verification of
transaction listing of export
the product
concerned revealed that products such as PVC handbags
and cosmetic bags had wrongly been included.

sales of

(24)

Consequently, as this applicant was unable to prove it
complied with the criteria laid down in Article 11(4) of
the Basic Regulation, its application had to be rejected as
inadmissible.

4. Dongguan All Be Right Leathern Products Co.

Ltd

(25) As this applicant abandoned its application for a ‘new
exporter’ review in the course of the investigation and
consequently cooperated insufficiently, the Commission
was unable to establish whether the company was
indeed a ‘new exporter’.

(26)

D. CHANGE IN THE STRUCTURE OF OPERATIONS OF
TWO EXPORTING PRODUCERS, BENEFITING FROM
AN INDIVIDUAL DUTY RATE ESTABLISHED IN
COUNCIL REGULATION (EC) No 1567/97

Two exporting producers, benefiting from individual
duty rates established in Regulation (EC) No 1567/97, in
the version as amended by Regulation (EC) No 2380/97,
informed the Commission that after the original invest-
igation period, they set up new factories involved in the
manufacture and export
the
product concerned. These companies also provided
appropriate evidence requested by the Commission in
this respect. The situation was examined and it was
concluded that this development did not result in a
significant change.

to the Community of

E. RESULTS OF THE INVESTIGATION

(27)

In view of the inadmissibility of the five ‘new exporter’
applications,
it was not necessary to establish export
prices, normal values and dumping margins in respect of
the applicants.

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(28)

(29)

As the calculation of normal value was not necessary, no
determination on market economy status pursuant to
Article 2(7) of the Basic Regulation was carried out in
respect of the applicants that requested such status.

Consequently, it was concluded that the country-wide ad
valorem anti-dumping duty of 38 % imposed by the
definitive Regulation should be reimposed in respect of
the five applicants.

In respect of
the two exporting producers having
changed the structure of their operations as explained at
it was concluded that the individual anti-
Recital 26,
dumping duty rates set
for these companies should
apply to the newly established factories.

F. RETROACTIVE LEVYING OF THE ANTI-DUMPING

DUTY

leather falling within CN code 4202 21 00 originating in the
People's Republic of China and produced by Gainth Industrial
Ltd, Macia Company Ltd, Yen Sheng Factory Ltd (including its
related manufacturer Dongguan Dalang Huqiu Leathers Co.
Ltd), Dongguan All Be Right Leathern Products Co. Ltd and
Panyu Simone Handbag Ltd.

2.
For the purpose of this Regulation, leather handbags shall
be understood to mean bags, whether or not with shoulder
strap,
including those without handle, with outer surface of
leather, designed
leather, of composition leather or patent
primarily to contain small objects for personal use, such as
keys, purses, make-up and cigarettes, regardless of their size
and form.

The

3.
Community-frontier price before duty shall be 38 %.

rate of duty applicable

to the net,

free-at-

(30)

The country-wide anti-dumping duty of 38 % applicable
to the five applicants should be levied retroactively on
the imports which have been subject to registration.

4.
The duty hereby imposed shall be levied on imports of
the product concerned which have been registered in accord-
ance with Article 3 of Regulation (EC) No 152/1999.

G. DISCLOSURE AND DURATION OF THE MEASURES

(31)

The applicants were informed of the facts and considera-
tions on the basis of which it was intended to recom-
mend the reimposition of the country-wide duty rate
imposed by the definitive Regulation on their exports to
the Community.

(32)

This review does not affect the date on which the defin-
itive Regulation will expire pursuant to Article 11(2) of
the Basic Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

5.
Unless otherwise specified,
concerning customs duties shall apply.

the provisions

in force

Article 2

Article 1 (2) of Regulation (EC) No 1567/97 is hereby amended
as follows: The words ‘Lucci Creations Ltd’ shall be replaced by
‘Lucci Creations Ltd including its related company Wiemer
Leathergoods Manufacturing Co. Ltd.’ and the words ‘Ever Trust
Leather Products Shenzen Co. Ltd.’ shall be replaced by ‘Ever
Trust Leather Products Shenzen Co. Ltd. including its related
company Superior Leather Ltd.’.

Article 3

1.
The definitive anti-dumping duty imposed by Regulation
(EC) No 1567/97 is hereby reimposed on imports of handbags
with outer surface of leather, of composition leather or patent

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

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