Commission Regulation (EC) No 449/2000 of 28 February 2000 imposing a provisional anti-dumping duty on imports of malleable cast iron tube or pipe fittings originating in Brazil, the Czech Republic, Japan, the People's Republic of China, the Republic of Korea and Thailand and accepting an undertaking offered by an exporting producer in the Czech Republic
Date: 2000-02-28
Institutions: European Commission
Subjects: anti-dumping duty, dumping, import, originating product, piping, third country

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COMMISSION REGULATION (EC) No 449/2000

of 28 February 2000

imposing a provisional anti-dumping duty on imports of malleable cast iron tube or pipe fittings
originating in Brazil, the Czech Republic, Japan, the People's Republic of China, the Republic of
Korea and Thailand and accepting an undertaking offered by an exporting producer in the Czech
Republic

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

views known in writing. All parties who so requested
within the above time limit and indicated that there
were particular reasons why they should be heard were
granted the opportunity to be heard.

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), as last
amended by Regulation (EC) No 905/98 (2), and in particular
Article 7 thereof,

(5)

After consulting the Advisory Committee,

Whereas:

1. PROCEDURE

1.1. Initiation

(1)

(2)

(3)

(4)

On 29 May 1999, the Commission announced by a
notice (hereinafter referred to as ‘Notice of Initiation’)
published in the Official Journal of the European Communi-
ties (3) the initiation of an anti-dumping proceeding with
regard to imports into the Community of malleable cast
iron tube or pipe fittings originating in Brazil, Croatia,
the Czech Republic, the Federal Republic of Yugoslavia
(hereinafter
the
People's Republic of China (hereinafter referred to as
‘China’), the Republic of Korea (hereinafter referred to as
‘Korea’) and Thailand.

referred to as

‘Yugoslavia’),

Japan,

The proceeding was initiated as a result of a complaint
lodged in April 1999 by the Defence Committee of
Malleable Cast Iron Tube or Pipe Fittings Industry of the
European Union (hereinafter referred to as ‘complainant’)
on behalf of producers representing 100 % of
the
Community production of malleable cast iron tube or
pipe fittings. The complaint contained evidence of
dumping of the said product and of material
injury
resulting therefrom, which was considered sufficient to
justify the initiation of a proceeding.

The Commission officially advised the exporting produ-
cers and importers/traders known to be concerned as
well as their associations,
the
exporting countries concerned and the complainant,
about the initiation of the proceeding. Interested parties
were given the opportunity to make their views known
in writing and to request a hearing within the time limit
set in the Notice of Initiation.

the representatives of

A number of exporting producers in the countries
producers,
as
concerned,
Community users and importers/traders made their

Community

as well

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 128, 30.4.1998, p. 18.
(3) OJ C 151, 29.5.1999, p. 21.

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 Notice of Initiation. Replies were received from six
Community producers, 11 exporting producers in the
countries concerned, as well as from their related impor-
ters in the Community. The Commission also received
replies
in the
from 17 unrelated importers/traders
Community as well as from two users.

Verification visits were carried out at the premises of the
following companies:

(a) Community producers

— Georg Fischer GmbH, Austria

— R. Woeste Co GmbH & Co. KG, Germany

— Ferriere a Fonderie Di Dongo S.P.A., Italy

— Raccordi Pozzi Spoleto SpA, Italy

— Accesorios de Tuberia, SA, Spain

— Crane Fluid System, United Kingdom

(b) Unrelated importers in the Community

— SIRE SA, France

— Sofreco, France

— Hage Fittings GmbH & Co KG, Germany

— Hermann Schmidt, Germany

— Intersantherm, Warenhandelsgesellschaft mbH,

Germany

— ‘Invest’ Import und Export GmbH, Germany

— Euraccordi, Italy

— GT Comis SpA, Italy

— Jannone Arm SpA, Italy

— Jannone SpA, Italy

— OML SRL, Italy

— Gill & Russell Ltd, United Kingdom

— T. Hackett & Sons Ltd, United Kingdom

(c) Users

— Società Italiana per il Gas, Italy

— Transco BG plc, United Kingdom

(d) Exporting producers

— Brazil

— Indústria de Fundição Tupy Ltda,

Joinville

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— The Czech Republic

— Moravské Zelezárny as, Olomouc and its
related domestic sales company Moze Prodej
sro, Olomouc

— Japan

— Hitachi Metals Ltd, Tokyo

— Korea

— Yeong Hwa Metal Co. Ltd, Kyongnam

— Thailand

— BIS Pipe Fitting Industry Company Ltd,

Samutsakorn

— Siam Fittings Co. Ltd, Samutsakorn

— Thai Malleable Iron & Steel Co. Ltd, Bangkok

— China (Market Economy Status verifications)

— Jianzhong Malleable Iron Factory, Hebei

— Jinan Meide Casting Co. Ltd, Jinan

The investigation of dumping and injury covered the
period from 1 April 1998 to 31 March 1999 (herein-
after referred to as ‘the investigation period’ or ‘IP’). The
examination of
the injury
analysis covered the period from 1 January 1995 up to
the end of the investigation period (hereinafter referred
to as ‘the injury investigation period’ or ‘IIP’).

trends in the context of

1.2. Submissions received regarding the complaint

A number of parties questioned why Bulgaria was not
included in the investigation as one of the exporting
countries. According to them, it was discriminatory to
initiate a proceeding only with regard to the eight coun-
tries concerned and not against Bulgaria.

The situation regarding Bulgaria was examined in the
framework of the analysis of the complaint prior to the
initiation of the proceeding. The complainant provided
evidence of normal value and export price for Bulgarian
products in the same fashion as for other countries in
the complaint (price lists, Eurostat figures). On the basis
of this evidence, no dumping appeared to exist, with the
consequence that no investigation concerning Bulgaria
could be initiated.

found that threaded fittings, on the one hand, and other
fittings, on the other, have different basic physical and
technical characteristics, in particular in terms of their
joining system.
the former are joined by
screwing, while the latter can only be joined by using
different technologies, such as welding or coupling.

Indeed,

(11) On the basis of the result of the investigation, it has also
been found that the producers in the exporting countries
in the Community market exclusively
concerned sell
threaded fittings, while the other types of fittings are
either not produced or not
sold by the parties
concerned. Given the difference between threaded and
non-threaded malleable fittings and the fact that only
to the
threaded malleable
Community by the countries concerned, it is concluded
that the product concerned by this proceeding covers
threaded malleable cast iron tube or pipe fittings only
(hereinafter ‘malleable fittings’ or ‘product concerned’).
These fittings meet the requirements specified in the
international standards referred in the complaint (i.e. EN
10242, ISO — 49 and ANSI) (1) and are currently classi-
fiable within CN code ex 7307 19 10.

exported

fittings

are

(12)

(13)

is produced in many different

This product
types
according to, inter alia, their size, shape, surface finishing
and grade of cast iron used. Despite these differences, all
these types have the same basic physical and technical
characteristics as well as the same uses. They are, there-
fore, considered as a single product.

2.2. Like product

countries

The Commission found that malleable fittings produced
by the Community producers
and sold on the
Community market are like products to the malleable
concerned and
fittings produced in the
exported to the Community, since there are no differ-
ences in the basic characteristics and uses of the different
types of malleable fittings. The same is true with regard
to the malleable fittings sold on the domestic market of
the exporting countries and the types exported to the
Community. Therefore,
they were also like products
within the meaning of Article 1(4) of Regulation (EC) No
384/96 (hereinafter referred to as the ‘basic Regulation’).
It was also found that malleable fittings exported from
China to the Community and those sold on the
domestic market of Thailand, which served as an
analogue country, were alike.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.2.1. Black heart and white heart fittings

2.1. Product concerned

The product concerned as described in the Notice of
Initiation is malleable cast iron tube or pipe fittings.

The investigation has shown that there are a number of
different types of malleable cast iron tube or pipe fittings
such as threaded, grooved, plain end and flanged/weld
fittings. All of
them fall under the same CN code
7307 19 10. With respect to these different types, it was

(14)

In this respect, some parties claimed that the malleable
fittings manufactured and sold by the Community
producers could not be considered comparable to those
produced and exported to the Community by some of
the exporting countries concerned on the grounds that
the grade of
the material used for the Community-
in general, white heart, while the
produced ones is,
grade of the material used for the exported ones is black
heart.

(1) It should be noted that these standards only apply to threaded cast

iron tube or pipe fittings.

(6)

(7)

(8)

(9)

(10)

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(15)

in general,

The investigation has provisionally shown that white
heart fittings and black heart fittings have closely resem-
bling physical characteristics, the same end uses and are
thus,
interchangeable. This has been
confirmed by the fact that the users of the product
under investigation, such as gas distributors and instal-
lers, indeed do not differentiate between white heart or
black heart fittings. Furthermore, both white heart and
black heart
fittings are included in the European
Standard EN 10242 and in the international standard
ISO 49, which specify the requirements for the design
and performance of the malleable fittings under invest-
igation. As concerns,
the
material to be used, both white heart and black heart are
permitted.

the grade of

in particular,

(16) Given the above, it is provisionally concluded that the
white heart malleable fittings manufactured and sold by
part of the Community producers should be considered
as like product
to the black heart malleable fittings
produced and exported to the Community by the
exporting countries concerned.

2.2.2. Particularities of Korean exports

(17)

Korean exporting producers have claimed that
their
products should not be part of the product concerned
since they had certain technical peculiarities. These
malleable fittings have taper external threads and taper
internal threads, contrary to the other imported malle-
able fittings, which have taper external
threads and
parallel

internal threads.

(18) However, the investigation has shown that, apart from
the Korean malleable
these technical
specifications,
fittings have the same physical and technical characteris-
tics of the other imported malleable fittings. Further-
more, as concerns the use, the investigation has shown
that the Korean malleable fittings are used in a similar
way to the malleable fittings imported from the other
countries concerned. Indeed, in one Member State where
both types are used, they have been found to be inter-
changeable. In fact, users can and do switch from one
type to the other and it is mainly by reason of a tradi-
tional and historical preference that the taper/taper type
is still being preferred in the said Member State. Further-
more, both types are included in the abovementioned
European Standard EN 10242, which specifies
the
requirements for the design and performance of malle-
able fittings intended for the connection of elements
threaded in accordance with ISO 7-1, size 1/8 to 6.

(19) On that basis, it is, therefore, provisionally concluded
that
the malleable fittings produced by the Korean
exporting producers and exported to the Community are
similar or comparable to other
imported malleable
fittings.

3. DUMPING

A. MARKET ECONOMY COUNTRIES

3.1. General methodology

3.1.1. Normal value

(20) As

far as

the determination of normal value

is
concerned, the Commission first established, for each
exporting producer, whether its total domestic sales of
malleable fittings were representative in comparison
with its total export sales of the product concerned to
the Community. In accordance with Article 2(2) of the
basic Regulation, domestic
an exporting
producer were considered representative when the total
domestic sales volume was at least 5 % of its total export
sales volume to the Community.

sales of

(21)

(22)

The Commission subsequently identified those types of
malleable fittings sold domestically by the companies
having representative domestic sales that were identical
or directly comparable to the types sold for export to
the Community. In general, types with the same size,
shape, surface finishing and grade of cast iron used were
considered to be comparable.

For each of the types sold by the exporting producers 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 malleable fittings of that
type during the IP represented 5 % or more of the total
sales volume of malleable fittings of the comparable type
exported to the Community.

(23) 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 malleable fittings sold at a net sales price
equal to or above the calculated cost of production
(hereinafter also referred to as ‘profitable sales’) repre-
sented 80 % or more of the total sales volume and
where the weighted average price of that type was equal
to or above cost of production, 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 all these sales were profit-
able or not. In cases where the volume of profitable sales
of malleable fittings 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.

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(24)

In cases where the volume of profitable sales of any type
of malleable fittings 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 establish-
ment of the normal value.

made for all costs incurred between importation and
resale and for profits accruing, in order to establish a
reliable export price. On the basis of the information
available from cooperating unrelated importers,
this
profit was set at around 7 %.

(25) Wherever domestic prices of a particular type sold by an
exporting producer could not be used, constructed
normal value had to be used in preference to domestic
prices of other similar types or to domestic prices of
other exporting producers. Due to the number of
different types and the variety of factors (such as quality
control, quality of material used, weight, etc.) affecting
them, using domestic prices of other exporting produ-
cers would have meant in this case making numerous
adjustments, most of which would have had to be based
on
that
constructed value of each exporting producer formed a
more appropriate basis to establish normal value.

considered

estimates.

therefore

It was

(26)

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
Commission examined whether the SG & A incurred and
the profit realised by each of the exporting producers
concerned on the domestic market constituted reliable
data.

sales

(27) Actual domestic SG & A expenses were considered reli-
able when the domestic sales volume of the company
concerned could be regarded as representative when
to the
compared to the volume of export
Community. The domestic profit margin was deter-
mined on the basis of domestic sales made in the or-
dinary course of trade, i.e. when these sales to indepen-
dent customers at prices equal to or above the cost of
production represented at least 10 % of the total of
domestic sales volume of the product concerned made
by the company concerned. Where this criterion was not
met, a weighted average profit margin of
the other
companies with sufficient sales in the ordinary course of
trade in the country concerned was used.

3.1.3. Comparison

(30)

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.

3.1.4. Dumping margin for the companies investigated

(31) According to Article 2(11) of the basic Regulation, for
each exporting producer the weighted average normal
value by type was compared with the weighted average
export price.

3.1.5. Residual dumping margin

(32) A ‘residual’ dumping margin was determined in accord-
ance with Article 18 of the basic Regulation, on the
basis of the facts available.

(33)

(34)

For those countries with a level of cooperation close to
the information provided by Eurostat, i.e. where there
was no reason to believe that any exporting producer
abstained from cooperating with the investigation, it was
decided to set the residual dumping margin at the level
of the cooperating company with the highest dumping
margin in order to ensure the effectiveness of any meas-
ures.

For those countries where the level of cooperation was
low, information from the cooperating company with
the highest dumping margin was used. The residual
dumping margin was determined on the basis of the
weighted average margin of the dumped types exported
in representative quantities. This approach was also
considered necessary in order to avoid giving a bonus
for non-cooperation and in view of the fact that there
were no indications that a non-cooperating party had
dumped at a lower level.

3.1.2. Export price

3.2. Brazil

(28)

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

(35) One company replied to the questionnaire for exporting
producers. A company in the Community related to this
exporting producer also replied to the questionnaire
intended for related importers.

(29) 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
In such cases, adjustments were
independent buyer.

(36)

The procedures and methodologies followed by the
Commission in order to determine the normal value of
products originating in Brazil were the same as those
explained under 3.1.1.

3.2.1. Normal value

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(37)

(38)

(39)

(40)

(41)

In its reply to the questionnaire, the company used the
cost of manufacturing of the units sold as a basis for the
allocation of the SG & A to each type of the product
concerned in the domestic market, while no such a
system was internally used for the allocation of costs.
it was considered necessary to change the
Therefore,
allocation method to the effect that the above costs were
allocated on the basis of
the turnover according to
Article 2(5) of the basic Regulation.

the types sold for export

For about half of
to the
Community, normal values were established on the basis
of
the domestic sales price of comparable types in
accordance with Article 2(2) of the basic Regulation.

For all other types of the product concerned sold for
export to the Community normal value was calculated
in accordance with Article 2(3) of the basic Regulation.
The SG & A expenses and profit used were those deter-
mined for the exporting producer in question.

3.2.2. Export price

The procedures and methodologies followed by the
Commission to assess the export price of products
originating in Brazil were the same as those explained
under point 3.1.2.

Exports were made to both unrelated and related
companies. The Commission excluded the sales for
export to the Community made via the related company
in the Community from the dumping calculations, as
they represented a negligible part of
the quantity
exported by the Brazilian exporting producer and thus
could not have had any material impact on the findings.

(42) All other sales for export were to independent importers
in the Community. Consequently, the export price was
established according to Article 2(8) of the basic Regula-
tion by reference to the prices actually paid or payable.

3.2.3. Comparison

(43) Allowances for differences in indirect

level of
trade, transport, insurance, handling, loading and ancil-
lary costs, credit, commissions and after-sales costs have
been granted where applicable and justified.

taxes,

(45)

(46)

The exporting producer claimed adjustments to the
normal value and export price for promotion and
advertising costs. It was not possible during the verifica-
tion to establish with a reasonable degree of accuracy
the correctness of the amounts of the expenses incurred.
Moreover, the company did not demonstrate that these
expenses affected price comparability. The Commission
decided therefore to make no adjustment for promotion
and advertising.

it was found that stocks kept

The company also claimed an adjustment to the normal
value for differences in financing costs for keeping
stocks. However,
for
domestic and export sales were either not separately
identifiable or that the periods during which products
destined for the domestic and the Community market
were kept in stock, were by and large the same or even
identical. Moreover, the exporting producer could not
this affected price comparability.
demonstrate that
Consequently, the adjustment could not be granted.

(47) An adjustment to the domestic sales prices for refund of
certain indirect taxes was claimed. The claim made was
calculated on a wrong basis and largely exaggerated. The
adjustment claimed has therefore been reduced provi-
sionally to 50 % of the claimed amount. The Commis-
sion will further investigate this issue in order to estab-
lish the amount of indirect taxes which was actually
refunded on export sales made to the Community and at
the same time borne by the product concerned when
consumed in Brazil.

(48) As the exporting producer had used exchange rates
which were not
the
Commission has recalculated the export price by using
exchange rates at the date of the invoice, in accordance
with Article 2(10)(j) of the basic Regulation.

linked to the date of

the sale,

(49)

The same adjustments made to the normal value based
on domestic sales were also made on the normal value
calculated in accordance to Article 2(3) of the basic
Regulation.

3.2.4. Dumping margin

(50) As provided under Article 2(11) of the basic Regulation,
the weighted average normal values of each type of the
product concerned exported to the Community were
compared to the weighted average export price of each
corresponding type of the product concerned.

(44)

The exporting producer claimed an adjustment to the
normal value and to the export price for differences in
packing costs. However, the company could not submit
any evidence showing such a difference and the
Commission could therefore not grant the adjustment
claimed.

(51)

The comparison showed the existence of dumping in
respect of
the cooperating exporting producer. The
provisional dumping margin expressed as a percentage
of the cif import price at the Community border is:

Indústria de Fundição Tupy Ltda: 26,1 %

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(52)

Since the level of cooperation was high, the residual
provisional dumping margin was set at the same level as
for the cooperating company,

i.e. 26,1 %.

different cost of manufacturing. The cost of manufac-
turing of those different product types was consequently
used to calculate the normal value as explained above.

3.3. The Czech Republic

3.3.2. Export price

(53) One company replied to the questionnaire for exporting
producers. This reply included data on domestic sales
made by a related sales company on the domestic
market. A company in the Community related to this
exporting producer also replied to the questionnaire
intended for related importers.

3.3.1. Normal value

(54)

(55)

(56)

The procedures and methodologies followed by the
Commission in order to determine the normal value of
products originating in the Czech Republic were the
same as those explained under point 3.1.1.

The domestic SG & A expenses
the
exporting producer contained amounts which were
either not related to the product concerned or not refer-
ring to the investigation period. The reported SG & A
expenses were accordingly corrected.

reported by

The domestic SG & A expenses reported for the related
domestic sales company were allocated in such a way
that the result did not reasonably reflect the costs asso-
ciated with the sale of
the product concerned. The
Commission therefore reallocated the SG & A expenses
taking into consideration the expenses incurred for the
different product categories sold.

(61)

(62)

The procedures and methodologies followed by the
Commission to assess the export price of products
originating in the Czech Republic were the same as
those explained under point 3.1.2.

Exports were made to both unrelated and related
companies. The Commission excluded the sales for
export to the Community made by the related importer
from the dumping calculations, as they represented a
negligible pan of the quantities exported by the Czech
exporting producer and thus could not have had any
material

impact on the calculations.

(63) All other sales for export were to independent importers
in the Community. Consequently, the export price was
established according to Article 2(8) of the basic Regula-
tion by reference to the prices actually paid or payable.

3.3.3. Comparison

(64) Allowances for differences in level of trade, transport,
credit and commissions have been granted where applic-
able and justified.

(57) When calculating the cost of production of each type
sold domestically,
amount of SG & A
the global
expenses, corrected as explained above were allocated, in
the absence of any historically applied system, to each
product
turnover according to
Article 2(5) of the basic Regulation.

type on the basis of

(65)

the types sold for export

For about half of
to the
Community, normal values were established on the basis
the domestic sales price of comparable types in
of
accordance with Article 2(2) of the basic Regulation.

For all other types of the product concerned sold for
export to the Community normal value was calculated
in accordance with Article 2(3) of the basic Regulation.
The SG & A expenses and the profit used were those
determined for the exporting producer in question.

(58)

(59)

(60)

The exporting producer and the related domestic sales
company claimed an allowance on the normal value for
an additional hypothetical quantity discount which
would be granted on the domestic market if quantities
similar
to quantities exported to customers in the
Community were sold to customers on the domestic
market. It should be noted that the Commission has
already taken into account differences in quantities sold
by deducting from the sales prices those discounts and
rebates given for any such differences which were prop-
erly quantified and directly linked to the sales under
consideration.

(66) As the exporting producer had used exchange rates that
were not linked to the date of the sale, the Commission
has recalculated the turnover of each export sale by
using exchange rates at
in
accordance with Article 2(10)(j) of the basic Regulation.

the date of

the invoice,

The cooperating company had classified a number of
exported product types as being identical and reported
one single cost of manufacturing for those types. The
Commission's investigation revealed that
the product
types in question were in fact different and had a

(67)

The same adjustments made to the normal values based
on domestic sales were also made to the normal values
calculated in accordance with Article 2(3) of the basic
Regulation.

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3.3.4. Dumping margin

(68) As provided under Article 2(11) of the basic Regulation,
the weighted average normal values of each type of the
product concerned exported to the Community were
compared to the weighted average export price of each
corresponding type of the product concerned.

(77) A major part of the sales for export to the Community
were made to a related importer in the Community. In
this case the Commission had to construct the export
price according to Article 2(9) of the basic Regulation.
Prices for the remaining export transactions were deter-
mined according to Article 2(8).

(69)

The comparison showed the existence of dumping in
the cooperating exporting producer. The
respect of
provisional dumping margin expressed as a percentage
of the cif import price at the Community border is:

(78)

Moravské Zelezárny as: 28,4 %

(70)

Since the level of cooperation was high, the residual
provisional dumping margin was set at the same level as
for the cooperating company,

i.e. 28,4 %.

3.4.3. Comparison

The company claimed allowances for transport and for
costs relating to differences in level of trade. However, as
no explanation or reliable evidence was provided by the
company during the on-the-spot verification and no
justification for these allowances was found in the reply
to the questionnaire, the Commission services could not
accept them.

3.4. Japan

3.4.4. Dumping margin

(71) One company replied to the questionnaire for exporting
producers. A company in the Community related to this
exporting producer also replied to the questionnaire
intended for related importers.

(79) As provided by Article 2(11) of the basic Regulation, the
comparison was made on the basis of a weighted
average normal value to a weighted average export price.

3.4.1. Normal value

(72)

(73)

(74)

(75)

The procedures and methodologies followed by the
Commission in order to determine the normal value of
products originating in Japan were the same as those
explained under point 3.1.1, except where, according to
Article 18 of the basic Regulation, information available
was used.

Since the company did not provide the cost of produc-
tion of certain types and in order not to grant a bonus
for non-cooperation pursuant to Article 18 of the basic
Regulation, the Commission applied to these types the
dumping margin of the most dumped types for which
there were representative sales.

For some of the remaining types, normal value was
the domestic price of
established on the basis of
comparable types in accordance with Article 2(2) of the
basic Regulation.

For all other types of the product concerned, sold for
export to the Community normal value was calculated
in accordance with Article 2(3) of the basic Regulation.
This was done by adding to the manufacturing cost of
the exported types the company's own SG & A expenses
in accordance with
and its domestic profit margin,
Article 2(6) of the basic Regulation.

3.4.2. Export price

(76)

The procedures and methodologies followed by the
Commission to assess the export price of products
originating in Japan were the same as those explained
under point 3.1.2.

(80)

(81)

The comparison showed the existence of dumping in
the cooperating exporting producer. The
respect of
provisional dumping margin expressed as a percentage
of the cif import price at the Community border is:

Hitachi Metals Ltd: 17,6 %

The methodology followed to determine a provisional
residual dumping margin for
the one
explained under point 3.1.5, for countries where the
level of cooperation was low. On this basis, the residual
dumping margin is 28,3 %.

Japan was

3.5. Korea

(82) One company replied to the questionnaire for exporting

producers.

3.5.1. Normal value

(83)

(84)

(85)

The procedures and methodologies followed by the
Commission to assess the normal value of products
originating in Korea were the same as those explained
under point 3.1.1.

In line with the methodology referred to above, it was
possible, for about a quarter of the types, to establish
normal value on the basis of the domestic price of
comparable types.

For all other types of the product concerned sold for
export to the Community by the cooperating company,
normal value was calculated in accordance with Article
2(3) of the basic Regulation.

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(86)

This was done by adding the company's own domestic
SG & A expenses and domestic profit margin to the
manufacturing cost of the exported types, in accordance
with Article 2(6) of the basic Regulation.

3.5.2. Export price

(87)

The procedures and methodologies followed by the
Commission to assess the export price of products
originating in Korea were the same as those explained
under point 3.1.2.

(88) All sales of the product concerned made by the cooper-
ating company on the Community market were to inde-
pendent customers in the Community. Consequently,
the export price was established by reference to the
prices actually paid or payable.

3.5.3. Comparison

3.6. Thailand

(95)

(96)

Three companies
exporting producers.

replied to the questionnaire for

For one of the Thai companies it was found that the
information provided regarding sales volume and cost of
production for malleable fittings sold in the domestic
market contained serious deficiencies, which made it
impossible to obtain reasonably accurate findings and to
calculate a provisional dumping margin on the basis on
the reported data. It was therefore decided to partially
use facts available in accordance with Article 18 of the
basic Regulation. In the absence of any more appro-
priate alternative, the normal values of the other two
exporting producers were used where possible. For those
export sales for which no normal value was available the
margin of the highest dumped transaction was applied
in order not to reward this deficient cooperation.

(89) Allowances

for differences

insurance,
handling charges, packing costs, and credit have been
granted where applicable and justified.

in transport,

The company also claimed an allowance for credit costs
relating to sales on the domestic market. However, these
sales were made on an open account basis.
In the
absence of evidence that credit costs constituted a factor
taken into account in the determination of prices no
adjustment for credit costs could be granted, in accord-
ance with Article 2(10)(g) of the basic Regulation.

In addition,
the company claimed an allowance for
alleged differences in the level of trade to take account
of sales expenses on the domestic market that were not
incurred on the export market. However, as sales on
both markets were in fact made at the same level, i.e. to
distributors, the claim is rejected. Moreover, no evidence
was provided showing that such difference in sales
expenses would have affected price comparability.

3.5.4. Dumping margin

In line with the provisions of Article 2(11) of the basic
Regulation,
the comparison was made between a
weighted average normal value and a weighted average
export price.

This comparison shows the existence of dumping for the
cooperating company. The provisional dumping margin
expressed as a percentage of the cif import price at the
Community border is:

(90)

(91)

(92)

(93)

(94)

3.6.1. Normal value

(97)

The procedures and methodologies followed by the
Commission to assess the normal value of products
originating in Thailand were the same as those explained
under point 3.1.1, except where, according to Article
18, information available was used for determining the
dumping margin.

(98) On the basis of the method referred to above, it was
partially possible to establish normal value on the basis
of the domestic price of comparable types in accordance
with Article 2(2) of the basic Regulation.

(99)

For all other types of the product concerned sold for
export
to the Community by the two cooperating
companies for which a dumping calculation was made,
normal value was calculated, in accordance with Article
2(3) of the basic Regulation, on the basis of constructed
value.

(100) This was done by adding the companies' own domestic
SG & A expenses and domestic profit margin to the
manufacturing cost of the exported types, in accordance
with Article 2(6) of the basic Regulation.

Yeong Hwa Metal Co. Ltd: 11,8 %

3.6.2. Export price

The methodology followed to determine a provisional
residual dumping margin for Korea was
the one
explained under point 3.1.5, for countries where the
level of cooperation was low. On this basis, the residual
dumping margin is 24,6 %.

(101) The procedures and methodologies followed by the
Commission to assess the export price of products
originating in Thailand were the same as those explained
under point 3.1.2.

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(102) All sales of malleable fittings by the two 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.

3.6.3. Comparison

(103) Allowances for differences in transport, packing, credit
costs and commissions have been granted where applic-
able and justified.

and the sales order did not conclude the sales agreement
and had no binding effect.

3.6.4. Dumping margin

(108) As provided by Article 2(11) of the basic Regulation, the
comparison was made on the basis of a weighted
average normal value to a weighted average export price
for all companies.

(109) The comparison shows the existence of dumping in
fully cooperated with the
respect of all producers
dumping margins
provisional
Commission.
expressed as a percentage of the cif import price at the
Community border are the following:

The

(104) One of the cooperating companies claimed an allowance
for import charges. The company did not demonstrate
the relation between the import duty paid and the so-
called tax compensation measures to help exporters.
Consequently, the claim for the adjustment was rejected.

(110) BIS Pipe Fitting Industry Company Ltd, Samutsakorn:

25,8 %

Siam Fittings Co. Ltd, Samutsakorn: 12,4 %

Thai Malleable Iron & Steel Co. Ltd, Bangkok: 25,8 %

(105) One of the cooperating companies claimed an adjust-
ment for physical differences. This claim included in fact
three different requests: (i) a claim for an adjustment for
level of trade on the basis that price comparability was
affected by the differences which arise in OEM (original
equipment manufacturer) sales; (ii) a claim for physical
differences of the sockets (plain, beaded, or banded); (iii)
in quantities.
finally, an adjustment of differences
However, none of
the three claims was sufficiently
demonstrated. During the on-the-spot investigation it
was
found that no distinction was made between
different types of customers and sockets, or quantities
when deciding on prices. Price comparability was clearly
not affected by any of the three alleged differences.
Consequently, given that there was no evidence of the
claimed differences, no adjustment was granted in this
respect.

(106) The same company claimed an allowance for the credit
cost of sales on the domestic market. The allowance
claimed was made on the basis of an open account
without evidence of an agreement between supplier and
buyer of the product at the time of sale. This claim was
rejected on the ground that, in accordance with Article
2(10)(g) of the basic Regulation, an adjustment can only
be given for the number of days agreed at the time of
the sale, as only such an expense related to that number
of days agreed at the date of sale can be considered to
affect price comparability.

(107) One of the cooperating companies claimed an allowance
for currency conversion based on an alleged difference
in exchange rates between the sales order and the actual
invoice date. This claim was rejected on the grounds
that,
in accordance with Article 2(10)(j) of the basic
Regulation, the alleged difference in exchange rates was
not confirmed by the information received during the
on-the-spot
in
exchange rates existed during the investigation period

investigation, no sustained movement

(111) For any non-cooperating companies,

the provisional
residual dumping margin was assessed on the basis of
the margin of the company with the highest dumping
margin. Expressed as a percentage of the cif import price
at the Community border, the margin is 25,8 %

3.7. Croatia and Yugoslavia

(112)

In view of the provisional finding of de minimis market
shares for the imports of the product concerned origin-
ating in both Croatia and Yugoslavia, it was provision-
to calculate a dumping margin for
ally decided not
imports of the product concerned from these countries.

B. NON-MARKET ECONOMY COUNTRIES

3.8. China

3.8.1. Analysis of market economy status

(113) Three Chinese companies requested market economy
status (hereinafter ‘MES’), pursuant to Article 2(7)(c) of
the basic Regulation.

(114) The claim made by one company had to be rejected on
the grounds that it submitted in its application that its
accounts were not audited. Consequently, the company
did not comply with the conditions set out
in the
second indent of Article 2(7)(c) of the basic Regulation.
Therefore, an on-the-spot verification was also deemed
unnecessary.

(115) The Commission sought all information deemed neces-
sary and verified all information submitted in the MES
applications, on-the-spot,
the
remaining two companies.

the premises of

at

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(116) For one of these companies it was established that there
was significant State interference in the form of tax
rebates and in the setting of the salaries for workers.
Furthermore, it was found that there was no clear set of
basic accounting records and that the production costs
and the financial situation of the company were subject
to significant distortion.

(117) For the other company, the Commission found that its
accounts were not independently audited and that the
methods used were not in accordance with international
accounting standards.

(118) Consequently, the conditions set out in Article 2(7)(c) of
the basic Regulation were not met by any of the other
two companies requesting MES. All three companies
were informed that their MES applications had to be
rejected.

3.8.2. Choice of analogue country

(119)

In the absence of any companies qualifying for MES, it
was necessary to compare the export prices of
the
Chinese exporting producers with a normal value estab-
lished for an appropriate market economy country,
pursuant to Article 2(7)(a) of the basic Regulation.

did

subsequently

(120) Poland was suggested by the complainant and proposed
Initiation. One
by the Commission in the Notice of
Polish producer
and
cooperate
submitted a reply to the questionnaire. However, this
response was found to be deficient in a number of
crucial respects, particularly regarding domestic sales
and production costs. Consequently, the Commission
did not consider it appropriate to use Poland as an
analogue country in this investigation.

(121)

In spite of the effort made by the Commission, no other
producer in a country not concerned by the present
investigation was ready to cooperate. In the absence of
cooperation, the Commission had no other option than
to select a country included in the complaint.

(122) The Commission finally decided that Thailand was the
most appropriate market economy third country for the
purpose of establishing normal value,
in accordance
with Article 2(7) of the basic Regulation, in view of the
volume of domestic sales made by Thai producers as
compared to imports into the Community from China
and the existence of several domestic producers, which
allowed for reasonable profits for this type of product.

3.8.3. Individual treatment

(123) All three cooperating companies requested individual

treatment.

(124)

In accordance with Article 9(5) of the basic Regulation,
it is the Community institution's policy to calculate a
single country-wide duty for non-market economy
countries, except in those cases where companies can
demonstrate a degree of legal and factual independence
so that the risk of circumvention of the country-wide
duty is removed. To this end, detailed questions were
included in the MES claim form sent to the parties
concerned upon the initiation of the proceeding.

(125) For one of the companies, an examination of the infor-
mation provided with regard to the application for indi-
vidual treatment appeared to indicate that the company
was eligible for such individual treatment. However, the
questionnaire reply submitted by this company was
substantially incomplete, notably regarding the reporting
of export sales. Consequently, it has been provisionally
decided not
to this
company. This issue will nevertheless be further exam-
ined until the definitive stage of the investigation.

individual

treatment

to grant

(126) With regard to the remaining two cooperating compa-
nies, there was clear interference from the State authori-
ties regarding the determination of export prices and
quantities.

(127) Consequently, no individual treatment could be granted

to any of the three companies.

3.8.4. Normal value

(128) Normal value for the Chinese exporting producers was
calculated on the basis of the normal values established
for the cooperating Thai companies by using the meth-
odology described in point 3.1.1. In this context, the
types sold on the Thai domestic market which were
found to be comparable to the Chinese types exported
to the Community were used.

3.8.5. Export price

(129) The procedures and methodologies followed by the
Commission in assessing the export price of products
originating in China were those described in point 3.1.2.
For the cooperating exporting producers,
the export
price was established by reference to the prices paid or
payable. Information available from Eurostat was used to
account for exports made by non-cooperating parties.

3.8.6. Comparison

(130) Where applicable, adjustments were made to the export
price to take account of differences relating to transport,
insurance, handling charges and packing.

(131) As regards normal value, all allowances granted to the
Thai exporting producers and relevant in light of the
exports made by the exporting producers were also
deducted in the case of China.

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3.8.7. Dumping margin

tion. In this respect, the investigation has shown the
following:

(132) The provisional dumping margin for China, expressed as
a percentage of the cif import price at the Community
border is 49,4 %.

4. INJURY

4.1. Community industry

(133) The complainant Community producers account

for
the Community production of malleable
100 % of
fittings
the Community
industry within the meaning of Article 4(1) and Article
5(4) of the basic Regulation.

constitute

therefore,

and,

(134) One interested party claimed that one producer should
not be considered as belonging to the Community
industry on the grounds that it imported the product
concerned from one of the countries concerned, namely
from China. However,
this allegation was neither
substantiated nor has it been confirmed by the invest-
igation. Furthermore, it was claimed by some interested
parties that certain Community producers imported the
product concerned from other
third countries. The
investigation has shown, as regards one producer, that
they indeed made such imports. However, these imports
were minimal by comparison with the Community
produced sales on the Community market. Therefore,
this company in its core activity clearly remained a
producer in the Community. With respect to the others,
the allegations have not been confirmed.

(135) Therefore, these claims have been rejected.

4.2. Community consumption

the sales volume of

(136) The apparent Community consumption has been estab-
the
lished on the basis of
Community industry on the Community market plus the
import volume into the Community of malleable fittings
from the countries concerned and from all other third
countries known to produce and export the product
concerned into the Community. On this basis, consump-
tion decreased by around 6 % between 1995 and the IP,
from around 65 000 tonnes to around 61 000 tonnes,
reaching the lowest level in 1996, a year in which the
whole sector suffered from difficult market conditions.

(138) As regards Croatia and Yugoslavia, it was provisionally
found that the volume of imports originating in those
countries represented in the IP 0,4 % and 0,3 % of the
total Community consumption, respectively. In accord-
ance with Article 3(4) of the basic Regulation, they are
provisionally considered not to have contributed to any
injury suffered by the Community industry and are,
accordingly, excluded from the injury assessment.

(139) Furthermore, the Brazilian exporting producer argued
that exports of malleable fittings from Brazil should not
be cumulated with the rest of the countries concerned,
in view of the different market behaviour and their
difference
the Czech
in export prices. Similarly,
exporting producer argued that exports from the Czech
Republic should not be cumulated with those from the
other countries concerned, on the grounds that the trade
pattern was different to that of these other countries.
Thai exporting producers also argued that exports from
Thailand should not be assessed cumulatively with those
from the other countries concerned,
in view of their
decreasing export volumes and of their comparatively
higher export prices. Finally, Korean exporting produ-
cers claimed that exports from Korea should not be
cumulated with those
countries
concemed on the grounds of the specific technical char-
acteristics of their products which they export only to
the British market. In this respect, the following provi-
sional conclusions have been reached.

from the other

4.3.1. Brazil

(140) The import volume from Brazil did not follow a stable
trend. In this respect, however, imports from some of
the other countries concerned followed a similar pattern.
As to Brazilian import volumes, in absolute terrrts they
were always significant, whereas their market share
remained fairly stable at around 7 to 8 % during the
whole IIP. In terms of prices, they followed an unsteady
trend during the IIP. However, between 1996 and the IP,
they almost continually decreased. Finally, a substantial
undercutting of the Community industry's prices has
been established as regards Brazilian imports. For these
is provisionally considered appropriate to
reasons,
cumulatively assess imports from Brazil with those
originating in the other countries concerned.

it

4.3. Cumulative assessment of the effects of the

imports concerned

4.3.2. The Czech Republic

(137) With respect to some of the countries concerned, it has
been argued that the imports should not be assessed
cumulatively with the other imports, taking into account
the conditions set out in Article 3(4) of the basic Regula-

(141) Czech imports increased both in absolute and in relative
terms during the IIP.
import volumes
increased by 123 %, while their market share rose by
around 4 percentage points from around 3 % to around
they were rather stable
7 %. Concerning the prices,

In particular,

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Official Journal of the European Communities

29. 2. 2000

during the IIP and significantly undercut the Community
industry's prices in the IP. For these reasons, it is provi-
sionally considered appropriate to cumulatively assess
imports from the Czech Republic with those originating
in the other countries concerned.

and Yugoslavia on the grounds of
imports.

their negligible

4.4. Volume and market shares of

the imports

concerned

4.3.3. Thailand

4.4.1. Volume of the imports concerned

(142) As regards Thailand, the overall development of the
import volumes is not different from those of some
other countries concerned, whose evolution similarly
followed a unsteady trend. As regards prices,
they
increased between 1995 and the IP. Nevertheless, a
significant undercutting of
the Community industry
prices has been established. For these reasons it is provi-
sionally considered appropriate to cumulatively assess
imports from Thailand with those originating in the
other countries concerned.

(145) According to Eurostat and the replies to the question-
naires obtained from the cooperating exporting produ-
cers, the import volume of malleable fittings originating
in the countries concerned increased by around 32 %
between 1995 and the IP,
from around 13 100 to
around 17 500 tonnes. More specifically, after a decline
between 1995 and 1996, which occurred in line with
the decline of the Community consumption in that year,
imports from the countries concerned increased steadily.
Between 1996 and the IP, the import volume increased
by around 45 %, from around 12 000 to around 17 500
tonnes.

4.3.4. The Republic of Korea

4.4.2. Market share

(143) With respect to the request of decumulation put forward
by the Korean exporting producer on the grounds of the
specific technical characteristics of the product manufac-
tured by them and exported to the Community market,
namely to one Member State, reference is made to the
conclusions set out above concerning the like-product
issue. Consequently, on the basis of the fact that the
malleable fittings manufactured by the Korean exporting
producers and sold in the said Member State have been
found to be alike to the malleable fittings produced in
that Member State and in the rest of the Community, it
is provisionally considered appropriate to cumulatively
assess imports from Korea with those originating in the
other countries concerned.

(144)

shown that a
the investigation has
In conclusion,
number of differences exist between the level and evolu-
tion of imports and their respective prices. However, the
conditions of cumulation as set out in Article 3(4) of the
basic Regulation are met since the dumping margin are
above the de minimis level and volume of imports under
consideration are not negligible. As concerns the condi-
tions of competition between the imported products and
the imported products and the like Community product,
imports
these were found to be comparable since all
concerned have been made, during the IP, in significant
quantities resulting in significant market shares and have
been made at prices, during the same period, signifi-
cantly undercutting the prices of
the Community
industry. Moreover, both the Community product and
the product
imported from the countries concerned
have been found to have common or similar channels of
distribution. As a consequence, it is provisionally consid-
ered appropriate to cumulatively assess the imports from
the countries concerned, with the exception of Croatia

(146) The market share of the imports from the countries
concerned increased continuously between 1995 and
the IP, from around 20 % to around 29 %.

4.5. Prices of the imports concerned

4.5.1. Price evolution

(147) The weighted average import price of

the countries
concerned decreased by around 5 % between 1995 and
the IP, from ECU 1,88 to ECU 1,78 per kilogram. More
specifically, prices went up significantly between 1995
and 1996, in line with the general price increase on the
market, followed also by the Communisy industry and
the other third countries. Between 1996 and the IP the
price decrease was then very marked and amounted to
10 %, from ECU 1,96 to ECU 1,78 per kilogram.

4.5.2. Price undercutting

(148)

It was further examined whether the exporting produ-
cers of the countries concerned undercut the prices of
the Community industry during the IP. For this purpose,
the exporting producers' prices of malleable fittings have
been duly adjusted to a cif and duty paid level, whereas
the Community producers' prices have been adjusted to
an ex-works level. In this respect, it was found that both
the Community industry and the exporting producers
from the countries concerned generally sold to the same
categories of customers, e.g. traders and distributors,
sometimes even to the same companies concerned.
These categories of customers also acted as importers.

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(149) For each type of malleable fittings, as defined in recital
10,
the
the weighted average ex-works prices of
Community producers have been compared to the
weighted average export prices of each exporting
producer concerned. On this basis,
the undercutting
margins found per country, expressed as a percentage of
the Community industry prices, are all significantly
above 20 %.

4.6. Situation of the Community industry

4.6.1. Production

i.e.

(150) The Community industry's production of malleable
fittings decreased by around 10 % between 1995 and
the IP,
from around 54 600 to around 49 300
tonnes. The decrease of the production was particularly
strong from 1995 to 1996 for two main reasons: firstly,
a plant manufacturing malleable fittings in Germany had
to be closed and, secondly, a contraction of consump-
tion had taken place on the Community market.
Furthermore, while the Community industry increased
its production between 1996 and the IP by around 6 %,
in an attempt to reduce its fixed costs,
it should be
noted that this resulted in increased stocks and not in
increased sales, and this even though Community
consumption expanded again as from 1996.

4.6.2. Production capacity

(151) The production capacity of the Community industry
decreased by 14 % between 1995 and the IP,
from
85 000 to 73 000 tonnes. This development should be
seen in the light of the fact that in 1996 a production
plant
in Germany ceased its activity, as mentioned
above.

4.6.3. Capacity utilisation

(152) Capacity utilisation increased from 64 % in 1995 to

67 % in the IP.

4.6.4. Sales volume

(153) The sales volume of the Community industry decreased
from around 45 500 tonnes in 1995 to around 37 700
It should be
tonnes in the IP,
pointed out
sales
that
decreased in a time period during which the market
contracted, while the countries concerned were able to
expand their sales volume by around 32 %.

the Community industry's

i.e. by around 17 %.

Community industry's market shares had reached a peak
of around 71 %.

4.6.6. Sales prices

(155) The investigation has

shown that

the Community
producers' average sales price rose from ECU 3,60 per
kilogram in 1995 to ECU 3,88 per kilogram in the IP,
i.e. a rise of around 8 %. This rise occurred in two
phases, one between 1995 and 1996 and the second
one between 1997 and 1998. While the prices of all the
the
economic operators on the market
Community industry, the countries concerned and other
third countries), increased in the first phase, the second
price increase was undertaken only by the Community
industry and the other third countries. As regards the
countries concerned, they followed the opposite trend,
decreasing their sales prices by around 5 % in the
mentioned period between 1997 and 1998.

(namely

4.6.7. Stocks

(156) The closing stocks of the Community industry increased
from around 16 300 tonnes a in 1995 to around
17 400 tonnes in the IP, i.e. by around 6 %. The rise of
the stock volume has been particularly strong as from
1996, in line with the increase of the Community indus-
try's production and decreasing sales volume.

4.6.8. Profitability

(157) The profitability of the Community industry, expressed
as a percentage of net sales, decreased by 2,3 percentage
points between 1996 and the IP, from 1,4 % to – 0,9 %.
When taking 1995 as a starting point, it developed from
– 2,2 % to – 0,9 %. However, the year 1995 and the
negative profitability level
found on average for the
Community industry reflect costs associated with the
plant closure which occurred in 1995, as mentioned
above. Moreover, the year 1995 was marked by restruc-
turing efforts of two producers in particular, with the
aim of production rationalisation and of investments
required to implement the Community's environmental
legislation.

4.6.9. Employment

4.6.5. Market share

(154) The Community industry's share on the Community
market decreased from 70 % in 1995 to around 62 % in
the IP, i.e. by around 8 percentage points. This down-
the
ward trend started after 1996,

in which year

(158) Employment in the Community industry decreased from
2 532 employees in 1995 to 2 370 employees in the IP,
a decrease of around 6 %. This decline should be seen in
the light of the attempts undertaken by the Community
industry to restructure and reduce its costs. In fact, the
investigation has shown that the production process of
malleable fittings is highly labour intensive.

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4.6.10. Investments

(159) The Community industry decreased its investment from
around ECU 20,4 million in 1995 to around ECU 17
i.e. by around 16 %. Within this
million in the IP,
period,
there are important differences. For instance,
between 1998 and the IP, investments increased, from
ECU 12,7 million to ECU 17 million. It is worth noting
that the level of investments is rather significant during
the whole IIP, in particular in 1995, coinciding with the
restructuring efforts realised that year, as mentioned
above. This shows that the Community industry is still
viable and is not ready to abandon this segment of
in particular as these investments were
production,
mostly destined to rationalise the production process.

4.7. Conclusion on injury

(160) The examination of the above mentioned injury factors
shows that the situation of the Community industry
In particular,
the Community industry
deteriorated.
in production, production
decline
a
experienced
capacity,
the
share. Moreover,
and market
sales
loss of
Community industry suffered a significant
employment and a decline in investments, as well as an
increase of stocks. As to the capacity utilisation,
its
increase depended on the reduced production capacity.

(161)

is

therefore provisionally

It
the
Community industry suffered material injury within the
meaning of Article 4(1) of the basic Regulation.

concluded

that

5. CAUSATION

it was examined whether

(162) According to Article 3(6) and (7) of the basic Regula-
tion,
injury
suffered by the Community industry has been caused by
the dumped imports and whether other factors might
have caused or contributed to that injury, in order not to
attribute possible injury caused by other factors to the
dumped imports.

the material

5.1. Effect of the dumped imports

(163) The Commission found that the trend of imports from
the exporting countries concerned and their increasing
market share coincided with the deterioration of the
Community industry's
time when
Community consumption decreased by around 6 %, the
market share of the imports concerned increased by
around 9 percentage points, from around 20 % in 1995
to around 29 % in the IP, while the market share of the

situation. At

a

Community industry decreased from 70 % to around
62 %. The decrease of the Community industry's market
share is almost symmetrical
the
market
from the countries
shares of
concerned,

the imports
in particular as from 1996.

to the increase of

(164) Moreover, as regards the prices of the dumped imports,
significant margins of undercutting were found. The
market for malleable fittings is highly price sensitive, the
price level being the crucial element of choice consid-
ered by the users, as has been confirmed by the co-
operating importers and users.

(165)

In these circumstances, the price pressure exerted by the
imports concerned had a major impact on the sales
volume and market share of the Community industry.
Since the Community industry could not follow the
downward trend of the prices of the imports concerned,
its sales volume significantly decreased and it suffered
financial losses. The significantly smaller sales volumes
also had repercussions on the production level as well as
leading to an increase of fixed
on the stock volume,
costs. This in turn had a negative impact on the overall
profitability of the Community industry.

5.2. Effect of other factors

(166)

It was also considered whether factors other than the
dumped imports from the countries concerned might
have caused, or contributed to, the injury suffered by the
Community industry.

5.2.1. Third countries'

imports

(167) Some interested parties, based on Eurostat information,
alleged that any injury suffered by the Community
industry had been caused by imports from third coun-
tries not covered by the proceeding, in particular Turkey,
Bulgaria and Poland.

(168) According to this information, import volumes of malle-
able fittings from all other third countries decreased
from around 6 200 tonnes in 1995 to around 5 300 in
the IP, i.e. by around 14 %, while market shares were
relatively stable throughout the period with a slightly
decreasing trend, representing around 10 % in 1995 and
around 9 % in the IP. As regards the weighted average
prices of imports from other third countries, as reported
by Eurostat, they increased from ECU 1,93 per kilogram
to ECU 2,22 per kilogram. It is to be noted that they
were significantly higher than the weighted average
prices of the countries concerned during the whole IIP.

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Official Journal of the European Communities

L 55/17

(169) When analysing the imports from individual countries, it
appears, firstly, that imports from Turkey were stable at
almost negligible levels during the entire IIP. As regards
import volumes, they were 553 tonnes in 1995 and 632
tonnes in the IP, while market shares were stable at
around 1 % during the whole IIP. Concerning the unit
price, according to Eurostat
it was higher than the
imports concerned throughout the whole IIP.

(170) As concerns Bulgaria, imports increased both in absolute
and in relative terms: between 1995 and the IP, the
import volume rose from 43 tonnes to 1 109 tonnes
and market shares increased from 0,1 % to 1,8 %. thus
it
remaining relatively small. As to the unit price,
increased during the IIP being higher, in the IP, than the
weighted average prices of exports from the countries
concerned

(171) Concerning imports from Poland, their market share
remained relatively stable during the IIP at around 4 to
5 %, although increasing in absolute terms from around
2 500 tonnes in 1995 to around 3 000 tonnes in the IP.
the unit price was significantly
However,
higher than the weighted average prices of the countries
concerned

in the IP,

(172)

In addition, some interested parties claimed on the basis
of Eurostat information that any injury suffered by the
Community industry had been caused in particular by
imports of malleable fittings from the United States of
America However, since the investigation has shown
that the American imports consist of products other
than those concerned, it is concluded that imports from
the United States of America could not have caused any
injury to the Community industry.
material

(173) Furthermore, there was no indication that the imports
from third countries not subject to the proceeding have
been dumped.

the
the Community industry was the slowdown of
construction sector and the ensuing diminution of the
Community consumption of the product concerned. In
this respect, the investigation has shown that a signifi-
cant substitution of cast iron by different materials, such
as copper and plastic, took place in the 1980s. After-
wards, the substitution effect slowed down and the utili-
sation of malleable fittings remained stable, in particular
for those uses where the physical durability, resistance as
well as a specific tensile strength and elongation are
requirements.

(176) These general findings are supported by the develop-
ment of Community consumption established in the
investigation. Indeed, even if consumption decreased by
6 % during the IIP, this decline is not such as to have
contributed in any significant way to the material injury
suffered by the Community industry. On the contrary, in
this situation, even taking into account a slowdown of
the construction industry, the countries concerned were
able to significantly increase their import volumes into
the Community by around 32 %, further penalising the
Community industry, whose sales in turn decreased by
around 17 %.

5.3. Conclusion on causation

(177)

It is therefore provisionally concluded that the dumped
imports originating in Brazil, the Czech Republic, Japan,
China, Korea and Thailand have caused material injury
to the Community industry. Any other factors that may
have contributed to the injurious
the
Community industry, in particular imports from third
countries, are such that they cannot be considered to
link between the dumping and the
break the causal
material injury found in light of the strong increase in
the imports poncerned made at particularly low prices.

situation of

5.2.2. Other points raised

(174) Some interested parties claimed that the injury suffered
by the Community industry was the result of its own
imports from one country concerned and from other
third countries, for resale on the Community market. As
mentioned in recital 127, the investigation has shown
that one Community producer did import the product
concerned from one third country. However, since these
volumes were very low and represented only a negligible
pan of its sales in the Community, no significant influ-
ence on the situation of that Community producer could
have resulted from these imports.

(175)

In addition, certain interested parties alleged that the
main cause of any injury suffered by the Community
industry was the substitution of fittings made of mate-
rials such as copper and plastic for those made of malle-
able cast iron. Certain interested parties further claimed
that one of the factors that could have caused injury to

(178)

(179)

6. COMMUNITY INTEREST

6.1. General considerations

In accordance with Article 21 of the basic Regulation,
the Community
the Commission examined whether
interest calls for the imposition of anti-dumping meas-
ures, giving special consideration to the need to elimi-
nate the trade-distorting effects of injurious dumping
and to restore effective competition. The determination
of the Community interest was based on an appreciation
of all the various interests involved,
i.e. those of the
Community industry, the importers and traders as well
as the users of the product concerned.

In order to assess the impact of the imposition or non-
imposition of the anti-dumping measures, the Commis-
interested parties
sion requested information from all
to 52
mentioned above. Questionnaires were sent
data
Seventeen importers
importers.

replied

and

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Official Journal of the European Communities

29. 2. 2000

provided by 13 of them were verified. Moreover, 11
associations of users deemed to be concerned by the
proceeding were advised of the opening of the invest-
igation. No replies or submissions were received from
these associations. With respect to individual users of
malleable fittings, out of the 34 to which questionnaires
were sent, two replied and the data provided were veri-
fied.

6.2. Community industry

(180) The Community industry has been affected by the low-
priced imports of malleable fittings from the countries
concerned during the IIP. Not
to take anti-dumping
measures with respect to the dumped imports concerned
would aggravate the already difficult situation of the
Community industry,
in particular in consideration of
the downward sales trend. The production of malleable
fittings is, in fact, characterised by significant fixed costs
(e.g. warehousing, depreciation, etc.), which renders
reaching a certain level of production and, consequently
sales, indispensable. In view of the steady increase of the
imports concerned and the corresponding decrease of
the Community industry's sales, it appears that if anti-
dumping measures should not be imposed, it would be
difficult for the Community industry to recover its lost
sales and reach the level of profitability needed.

6.4. Users

(184) The most common users of the product concerned are
the gas and water distributors as well as plumbers,
installers of heating and installers of sanitary fittings.
Minor uses are in industrial services and engineering.
The low level of cooperation (only two replies) seems to
indicate that the impact of the imposition or non-impo-
sition of anti-dumping measures on the users of malle-
able fittings would be minimal. This minor impact has
been confirmed by the investigation, which has shown
that the product under consideration represents a negli-
gible part of the total costs sustained by the users. For
instance, in the gas distribution market, in particular in
domestic installations, the main cost item largely relates
to the service, whereas the fittings used for the installa-
tion represent approximately 1 % of
the total costs
sustained.

(185) Given the limited effect on the users described above, it
can be provisionally concluded that anti-dumping meas-
ures will not have any significant negative influence on
their situation. On the contrary, should the Community
industry disappear, users would be deprived of an
important source of supply, which ensures good service
and delivery time.

6.5. Conclusion on Community interest

(186) Given the above reasons, it is provisionally considered
that there are no compelling reasons against the imposi-
tion of anti-dumping duties.

6.3. Unrelated importers/traders

7. PROVISIONAL ANTI-DUMPING MEASURES

(181) With regard to the unrelated importers/traders of the
product concerned, given the good cooperation in
certain cases it was possible to isolate the profitability
for malleable fittings, this being on average around 7 %
during the IP. Moreover, it was found that the mark-up
charged on the sales price varies significantly depending
on the purchase price, the mark-up being higher when
the latter is low and vice versa.

(182)

It appears, therefore, that the unrelated importers/traders
of the product concerned might pass on to their clients
a part of any duties paid. In addition, it has to be borne
in mind that some traders importing from the countries
concerned also purchase malleable fittings from the
Community producers and other third countries, thus
having available alternative sources of supply. Moreover,
the investigation has shown that although some traders/
importers deal exclusively with malleable fittings, these
are in many cases supplied from a variety of origins,
among which the countries concerned are only a part. It
has been found, furthermore, that other traders/impor-
ters deal with a far larger product range.

(183) Given the above, it is provisionally concluded that the
likely impact of anti-dumping measures on the impor-
ters/traders of the product concerned would not be such
as to put their economic activity at serious risk.

7.1. Injury elimination level

(187)

the conclusions reached with regard to
In view of
injury, causation and Community interest,
dumping,
provisional measures
to
prevent further injury being caused to the Community
industry by the dumped imports.

should be taken in order

(188) For establishing the level of duty, account has been
taken of the dumping margins found and of the amount
of the duty necessary to eliminate the injury suffered by
the Community industry. In order to establish the level
of duty required to remove injury caused by dumping,
the price underselling has been calculated. The necessary
price increase was determined on the basis of a compar-
ison of the weighted average export price per type, as
established for the undercutting calculations, with the
non-injurious price of the different types sold by the
Community industry on the Community market. The
non-injurious price has been obtained by adding to the
sales price of the Community industry its average actual
profit shortfall and by further adding a profit margin of
7 %. This profit margin seems appropriate in order to
allow the Community industry to reach a level of profit
which it would be likely to obtain in the absence of
dumping. Any difference resulting from this comparison
was then expressed as a percentage of
the total cif
import value resulting in the injury threshold.

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Official Journal of the European Communities

L 55/19

7.2. Provisional measures

(189)

In the light of the foregoing, it is considered that a provisional anti-dumping duty should be imposed
at the level of the dumping margins found, which were in all cases lower than the injury threshold,
in accordance with Article 7(2) of the basic Regulation.

(190) As regards the residual duty to be applied to the non-cooperating exporting producers, in those cases
where the level of cooperation for specific exporting countries has been high, the residual duty was
fixed at the highest anti-dumping duty found for the cooperating exporting producers. In those cases
where the level of cooperation has been low for specific exporting countries, the residual duty was
fixed on the basis of the highest dumping margin or injury threshold found for a representative
range of exported types of the cooperating exporting producers, whichever is the lower.

(191) On the basis of the above, the provisional duty rates, expressed as a percentage of the cif Community

border price, customs duty unpaid, are as follows:

7.2.1. Countries concerned

Country

Company

Provisional duty
(%)

Brazil

Indústria de Fundição Tupy Ltda

Others

The Czech Republic

Moravské Zelezárny as

Japan

Korea

Others

Hitachi Metals Ltd

Others

Yeong Hwa Metal Co. Ltd

Others

Thailand

BIS Pipe Fitting Industry Company Ltd

Siam Fittings Co. Ltd

Thai Malleable Iron & Steel Co. Ltd

Others

China

All companies

7.2.2. Croatia and Yugoslavia

26,1

26,1

28,4

28,4

17,6

28,3

11,8

24,6

25,8

12,4

6,3

25,8

49,4

(192) As the market shares found were de minimis it is provisionally not considered appropriate to impose
any anti-dumping duty on imports of malleable fittings originating in Croatia and Yugoslavia at this
stage of the proceeding. However, the Commission will continue to investigate the matter in order to
arrive at a definitive determination.

7.2.3. Individual duty rates

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

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29. 2. 2000

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

7.3. Undertaking

(195) The exporting producer in the Czech Republic has offered a price undertaking in accordance with
Article 8(1) of the basic Regulation. The Commission considers that the undertaking offered by the
exporting producer concerned can be accepted since it eliminates the injurious effect of the dumping.
Furthermore, the regular and detailed reports which the company undertook to provide to the
Commission will allow an effective monitoring.

(196)

In order to ensure the effective respect and monitoring of the undertaking, when the request for
release for free circulation pursuant to the undertaking is presented, exemption from the duty is
conditional upon presentation to the relevant Member States' customs services of a valid undertaking
invoice issued by the exporting producer from whom the undertaking is accepted and containing the
information listed in the Annex. Where no such invoice is presented or when it does correspond to
the product presented to the customs services, the appropriate rate of antidumping duty will be
payable in order to avoid circumvention of the undertaking.

(197)

In the event of a breach or withdrawal of the undertaking an anti-dumping duty may be imposed,
pursuant to Articles 8(9) and 10 of the basic Regulation.

(198) The investigation of dumping, injury and Community interest will be completed, notwithstanding
the acceptance of undertakings in the course of the investigation, in accordance with Article 8(6) of
the basic Regulation.

8. FINAL PROVISION

(199)

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

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed on imports of threaded malleable cast iron tube
or pipe fittings, falling within CN code ex 7307 19 10 (TARIC code 7307 19 10*10) and originating in
Brazil, the Czech Republic, Japan, the People's Republic of China, the Republic of Korea and Thailand.

The rate of the provisional anti-dumping duty applicable to the net, free-at-Community-frontier price,

2.
before duty, shall be as follows for products originating in:

Country

Provisional duty
(%)

Taric additional code

Brazil

The Czech Republic

Japan

The People's Republic of China

The Republic of Korea

Thailand

(1) European Commission

Directorate-General Trade
Directorage C
DM 24 — 8/38
Rue de la Loi/Wetstraat 200
B-1049 Brussels

26,1

28,4

28,3

49,4

24,6

25,8

—

A999

A999

—

A999

A999

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The above rates shall not apply to the products manufactured by the companies listed below, which shall
be subject to the following anti-dumping duty rates:

Country

Company

Japan

The Republic of
Korea

Thailand

Hitachi Metals Ltd
Seavans North
2-1, Shibaura 1 — Chome
Minato-Ku
Tokyo 105-8614
Japan

Yeong Hwa Metal Co. Ltd
363-6 Namyang-Dong
Chinhae
Kyongnam
Korea.

BIS Pipe Fitting Industry Company Ltd
107 Moo 4, Petchkasem Rd
Omnoi, Krathumban
Samutsakorn 74130, Thailand

Siam Fittings Co., Ltd
100/1-100/2, Moo 2, Settakit 1 Road
Omnoi, Krathumban
Samutsakorn 74130
Thailand

Thai Malleable Iron & Steel Co., Ltd
469/19 Rama III Road, Yannawa
Bangkok 10120, Thailand

Provisional duty
(%)

Taric additional code

17,6

A092

11,8

A093

25,8

A094

12,4

A095

6,3

A096

3.
Notwithstanding paragraph 1, the provisional duty shall not apply to imports of the product
concerned manufactured and directly exported (i.e. shipped and invoiced) to the first independent customer
in the Community acting as an importer by the company named in Article 2(1) when such imports are in
conformity with Article 2(2).

4.

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

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

5.
subject to the provision of a security, equivalent to the amount of the provisional duty.

Article 2

1.
The undertaking offered by the following company in connection with the anti-dumping proceeding
concerning threaded malleable cast iron tube or pipe fittings, falling within CN code ex 7307 19 10 and
originating in Brazil, the Czech Republic, Japan, the People's Republic of China, the Republic of Korea and
Thailand is hereby accepted:

Country

Company

Taric additional code

The Czech Republic

Moravské Zelezárny as
Repcinska 86
77900 Olomouc 9
Czech Republic

A097

2. When the request for release for free circulation pursuant to an undertaking is presented, exemption
from the duty shall be conditional upon presentation to the relevant Member States' customs services of a
valid undertaking invoice issued by the company mentioned in Article 2(1). The essential elements of the
undertaking invoice are listed in the Annex to this Regulation. Imports accompanied by such an invoice
shall be declared under the Taric additional code provided for in Article 2(1).

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29. 2. 2000

Exemption from the duty shall further be conditional on the goods declared and presented to customs
corresponding precisely to the description on the undertaking invoice.

Article 3

The Parties referred to in Article 20(1) of Regulation (EC) No 384/96 may make their views known in
1.
writing and apply to be heard orally by the Commission within 30 days of the date of entry into force of
this Regulation.

The parties referred to in Article 21(4) of Regulation (EC) No 384/96 may comment on the

2.
application of this Regulation within one month of the date of its entry into force.

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

This Regulation shall apply for a period of six months.

Article 4

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

Done at Brussels, 28 February 2000.

For the Commission

Pascal LAMY

Member of the Commission

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ANNEX

Elements to be indicated in the undertaking invoice referred to in Article 2(2):

1. The TARIC additional code under which the goods on the invoice may be customs-cleared at Community borders (as

specified in the Regulation).

2. The exact description of the goods,

including:

— the product reporting code number (PRC) (as established in the undertaking offered by the producing exporter in

question),

including type number, diameter, and surface,

— CN code,

— quantity (to be given in units).

3. The description of the terms of the sale,

including:

— price per unit,

— the applicable payment terms,

— the applicable delivery terms,

— total discounts and rebates.

4. Name of the unrelated importer to which the invoice is issued directly by the company.

5. The name of the official of the company that has issued the undertaking invoice and the following signed declaration:

‘I, the undersigned, certify that the sale for direct export to the European Community of the goods covered by this
invoice is being made within the scope and under the terms of the undertaking offered by ... [company], and accepted
by the European Commission through Regulation (EC) No 449/2000. I declare that the information provided in this
invoice is complete and correct.’