Proposal for a Council Regulation extending the definitive anti-dumping duty, imposed by Regulation (EC) No 584/96 on imports of certain tube and pipe fittings, of iron or steel, originating in the People's Republic of China to imports of certain tube and pipe fittings, of iron or steel, consigned from Taiwan, whether declared as originating in Taiwan or not, and terminating the investigation in respect of imports from three Taiwanese exporters
Date: 2000-03-28
Institutions: European Commission
Subjects: China, Taiwan, anti-dumping duty, import, piping

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 28.03.2000
COM(2000) 171 final

Proposal for a

COUNCIL REGULATION

extending the definitive anti-dumping duty, imposed by Regulation (EC) No 584/96 on
imports of certain tube and pipe fittings, of iron or steel, originating in the People's
Republic of China to imports of certain tube and pipe fittings, of iron or steel, consigned
from Taiwan, whether declared as originating in Taiwan or not, and terminating the
investigation in respect of imports from three Taiwanese exporters

(presented by the Commission)

EXPLANATORY MEMORANDUM

Attached is a proposal for a Council Regulation extending the definitive anti-dumping duty,
imposed by Regulation (EC) No 584/96 on imports of certain tube and pipe fittings, of iron or
steel, originating in the People’s Republic of China to imports of certain tube and pipe
fittings, of iron or steel, consigned from Taiwan, whether declared as originating in Taiwan or
not, and terminating the investigation in respect of imports from three Taiwanese exporters.

in respect of the non-cooperating
The proposal contains detailed information showing,
exporters, the existence of a change in the pattern of trade for which no due cause other than
the circumvention of the duties could be established. Furthermore, undermining of the
remedial effects of the measures in terms of quantities and a significant dumping margin were
established.

The three cooperating exporters proved that the change in the pattern of trade in their respect
had a due cause other than the circumvention of the measures.

Consequently, it was concluded that the anti-dumping duty of 58.6% imposed by Regulation
(EC) No 584/96 should be extended to imports of the same product consigned from Taiwan,
whether the product is declared as originating in Taiwan or not, with the exception of
products manufactured and exported by the three cooperating exporters and that this duty
should be collected retroactively on the imports which have been subject to registration
pursuant to Article 2 of the Regulation initiating the investigation on circumvention.

2

Proposal for a

COUNCIL REGULATION

extending the definitive anti-dumping duty, imposed by Regulation (EC) No 584/96 on
imports of certain tube and pipe fittings, of iron or steel, originating in the People's
Republic of China to imports of certain tube and pipe fittings, of iron or steel, consigned
from Taiwan, whether declared as originating in Taiwan or not, and terminating the
investigation in respect of imports from three Taiwanese exporters

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community,

Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection
against dumped imports from countries not members of the European Community1, and in
particular Article 13 thereof,

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

Whereas:

A. PROCEDURE

1.

Existing measures

(1)

(2)

(3)

1

2

By Regulation (EC) No 584/962 (hereinafter referred to as “the definitive Regulation”)
the Council imposed an anti-dumping duty of 58,6% on imports of tube and pipe
fittings, of iron or steel, (hereinafter referred to as “fittings”) originating in the
People’s Republic of China (hereinafter referred to as “the PRC”).

2.

Request

On 10 June 1999, the Commission received a request, pursuant to Article 13 (3) of
Regulation (EC) No 384/96 (hereinafter referred to as “the Basic Regulation”), from
the Defence Committee of the EEC steel butt-welding fittings industry. This request
was submitted on behalf of Community producers of fittings, whose collective output
is known to represent about 90% of the total Community production of fittings.

The request alleged the existence of circumvention of the anti-dumping duties
imposed by the definitive Regulation on imports of fittings originating in the PRC.
According to the request, the circumvention practice consisted of transhipment of
fittings originating in the PRC via Taiwan to the Community.

OJ L 56, 6.3.1996, p. 1, as last amended by Council Regulation (EC) No 905/1998 (OJ No L 128,
30.4.1998, p.18).
OJ L 84, 3.4.1996, p. 1.

3

3.

Initiation

(4)

By Regulation (EC) No 1683/19993 the Commission initiated an investigation and
directed, pursuant to Articles 13 (3) and 14 (5) of the Basic Regulation, the customs
authorities to register imports of fittings consigned from Taiwan as of 31 July 1999.
The Commission advised the authorities of the PRC and Taiwan of the initiation of the
investigation.

4.

Investigation period

(5)

The investigation covered the period from 1 July 1998 to 30 June 1999 (hereinafter
referred to as the “IP”).

5.

Collection of data from interested parties

(6)

Questionnaires were sent to Community importers as well as exporters located in the
PRC and Taiwan which were mentioned in the request, exporters known from the
original
investigation and other interested parties who came forward within the
prescribed time limit. Replies to the questionnaires were received from six unrelated
importers and three Taiwanese exporters. The Commission carried out verification
visits at the premises of the following companies:

Unrelated importer:

–

Tubos y Calibrados de Cataluña S.A., Barcelona, Spain

Taiwanese Exporters:

–
–
–

Nian Hong Pipe Fittings Co., Ltd., Kaohsiung, Taiwan
Rigid Industries Co., Ltd., Kaohsiung, Taiwan
Chup Hsin Enterprise Co. Ltd., Kaohsiung, Taiwan

B. RESULTS OF THE INVESTIGATION

1.

General / Degree of cooperation

(7)

(8)

The request of the Community industry alleged that there has been a change in the
pattern of trade following the imposition of anti-dumping duties on imports of fittings
into the Community from the PRC through an increase of Taiwanese exports. The
Community industry also alleged that the remedial effects of the anti-dumping duty on
imports from the PRC have been undermined both in terms of quantities and prices
and that there is evidence of dumping in relation with the normal value established in
the previous investigation.

The purpose of the investigation was to examine whether anti-dumping measures on
imports of fittings originating in the PRC were being circumvented by imports of the
same product originating in this country and transhipped, without undergoing
substantial transformation, through Taiwan in accordance with Article 13 (1), second
sentence of the Basic Regulation.

3

OJ L 199, 30.7.1999, p. 26.

4

(9)

(10)

No cooperation was received from producers or exporters of fittings in the PRC.
However, information was obtained from three cooperating exporters in Taiwan,
which produced and purchased fittings and exported them to the Community during
the IP. Together, these three Taiwanese exporters accounted for 19,66 % in volume
and 16,42% in value of the total imports of fittings from Taiwan to the Community
during the IP as reported by Eurostat at TARIC level.

2.

Product under consideration and like product

The product under consideration is as defined in the original investigation, which is
tube and pipe fittings (other than cast fittings), of iron or steel, (not including stainless
steel), with a greatest external diameter not exceeding 609,6 mm, of a kind used for
butt-welding or other purposes, currently classifiable within CN codes ex 7307 93 11
(Taric code 7307 93 11*90), ex 7307 93 19 (Taric code 7307 93 19*90), ex 7307 99
30 (Taric code 7307 99 30*91) and ex 7307 99 90 (Taric code 7307 99 90*91).

(11)

The investigation showed that the fittings exported to the Community from the PRC
and those consigned from Taiwan to the Community have the same basic physical and
chemical characteristics and have the same uses, and are therefore to be considered as
like products within the meaning of Article 1 (4) of the Basic Regulation.

3.

a)

Change in the pattern of trade

Cooperating Taiwanese exporters

(12)

Exports to the Community made by cooperating exporters in Taiwan increased by
300% from 1994 to the IP at the same time as the imposition of measures on Chinese
fittings. The existence of a change in the pattern of trade was therefore established in
their respect.

b)

Non-cooperating Taiwanese exporters

(13) As far as the non-cooperating exporters are concerned the Commission had to
establish the exports to the Community on the basis of facts available pursuant to
Article 18 of the Basic Regulation. Findings in respect of exports to the Community
following the imposition of measures were based on Eurostat data at TARIC level; due
account being taken, in the case of Taiwan, of the exports of the cooperating exporters.
Findings in respect of the exports of the product concerned from the same countries in
1994 and 1995 were based on adjusted Eurostat data at CN level.

(14)

Imports into the Community of fittings from the PRC have decreased substantially
from 2.741 tonnes in 1994 to 95 tonnes in 1998, following the imposition of anti-
dumping measures. At the same time, imports of fittings from Taiwan increased from
221 tonnes in 1994 to 3.745 in 1998, reaching a peak of 4.918 tonnes in 1997.

(15)

The marked switch from imports from the PRC to those from Taiwan coincided with
the entry into force of anti-dumping measures on PRC fittings at the end of 1995.

5

4.

a)

Insufficient due cause or economic justification

Cooperating Taiwanese exporters

(16) Niang Hong Pipe Fittings Co. Ltd. is a manufacturer and exporter of fittings based in
Kaohsiung, operating production facilities for the complete production process of
some types of fittings. It only sells its own production a part of which is exported to
the Community by another company, Chup Hsin.

(17) Rigid Industries Co. Ltd. is like Niang Hong an integrated producer/exporter of fittings
and also based in Kaohsiung. It only exports its own production of the product
concerned to the Community and has exported limited quantities during the IP.

(18) Chup Hsin Enterprises Co. Ltd. is also an integrated producer/exporter of fittings and
also based in Kaohsiung. This company completes its range of manufactured products
for
local Taiwanese
the export market with fittings purchased from other
manufacturers, including Niang Hong, and from one Japanese producer.

(19) Given that none of the three companies purchased fittings from the PRC the change in
the pattern of trade can be considered as having a due cause. Consequently the
investigation with regard to these companies should be terminated.

b)

Non-cooperating Taiwanese exporters

(20)

(21)

(22)

In the absence of cooperation, and given the above-mentioned substitution of imports
from the PRC for imports from Taiwan took place immediately following the
imposition of anti-dumping duties, it has to be concluded that the change in the pattern
of trade stemmed from the imposition of the duty rather than from any other sufficient
due cause or economic justification within the meaning of Article 13 (1), second
sentence.

Furthermore, in the absence of any reasonable economic justification, other than the
imposition of the duty, for the change in the pattern of trade it may reasonably be
concluded that transhipment of PRC fittings via Taiwan to the Community has taken
place.

This conclusion is reinforced by the following: imports from the PRC into Taiwan of
one of the two categories of CN codes (7307 93) covering the product concerned are
subject to a Taiwanese import Regulation named MWO, which according to Taiwan’s
customs law means that imports are prohibited. However, Taiwanese custom statistics
recorded imports under that particular code amounting to 3.700 tonnes from the PRC
only for 1998.

(23)

The investigation has moreover established, on the basis of evidence provided by the
Taiwanese cooperating exporters, that it is possible to import goods from a third
country into Taiwan and re-export them under a Taiwanese certificate of origin
without undergoing any substantial transformation.

Undermining of the remedial effects of the duty in terms of the prices

5.
and/or quantities of the like products (non-cooperating Taiwanese exporters)

(24)

It is evident from the figures in recital 14 that a clear quantitative change in the pattern
this
of Community imports occurred since the imposition of measures, and that

6

marked change in trade flows undermined the remedial effects of these in terms of the
the exports of Chinese
quantities imported into the Community market. Indeed,
fittings, estimated at 2.741 tonnes in 1994 prior to the imposition of measures, were
replaced and even exceeded by exports of the non-cooperating Taiwanese exporters
(accounting for 3.745 tonnes during IP).

(25) Given the extremely low degree of cooperation, the large scale undermining of the
effects of the measures in terms of quantities and that the Basic Regulation requires
that undermining of the remedial effect of the duty be established in terms of either
quantities or prices, it was found unnecessary to further investigate undermining in
terms of prices.

(26)

(27)

(28)

(29)

Evidence of dumping in relation to the normal values previously
(non-cooperating Taiwanese

6.
established for the like or similar products
exporters)

In order to determine whether evidence of dumping could be found with respect to the
fittings exported to the Community from Taiwan by the non-cooperating exporters
during the IP, two approaches were followed, pursuant to Article 18 of the Basic
Regulation. It is recalled that the Basic Regulation requires the establishment of
evidence of dumping in relation to the normal values established in the original
investigation, but that it does not require a new dumping margin to be established.

a) Approach based on export data reported by Eurostat

In this first approach the export price was established on the basis of total export value
and tonnes reported by Eurostat at TARIC level from which the quantities and values
exported by the cooperating Taiwanese companies were deducted.

In accordance with Article 13 (1) of the Basic Regulation the normal value to be used
in an anti-circumvention investigation is the normal value established during the
original investigation. At that time, Thailand was found to be an appropriate analogue
market economy third country for the PRC, that was considered to be a non-market
economy country.

In the original investigation, normal value was determined per type of fitting. In the
current anti-circumvention investigation, for the comparison with the export prices
determined on the basis of Eurostat data, and given that Eurostat does not provide
export price data per type of fitting but only per tonne and per TARIC code, the
Commission estimated, pursuant to Article 18 of the Basic Regulation, that the product
mix of the non-cooperating Taiwanese producers could reasonably be assessed on the
basis of the product mix of export sales to the Community made by the three
type as
cooperating Taiwanese exporters. Consequently,
determined in the original
the
aforementioned product mix of these cooperating Taiwanese exporters. Thus, a
weighted average normal value per tonne was established.

investigation was weighted on the basis of

the normal value per

(30)

For the purpose of a fair comparison between the normal value and the export price
due allowance in the form of adjustments was made for differences which affect prices
and price comparability. These adjustments were made in accordance with Article
2(10) of the Basic Regulation in respect of transport, insurance and commissions. As
the functions of the companies that transhipped the product concerned through Taiwan
to the Community can be considered similar to those of a trader acting on a

7

commission basis, an adjustment of 6% considered as a reasonable estimate for selling
general and administrative expenses and profit was deducted from the export price as
determined above.

b) Approach based on cooperating importers’ data

(31) On this second approach the export price was established on the basis of the limited
information on import prices by type of fittings submitted by the cooperating
importers, representing around 14% of the imports of fittings from Taiwan in terms of
volume, in respect of their purchases from non-cooperating Taiwanese exporters.

(32) As explained in recital 28, the normal value to be used in an anti-circumvention
investigation is the normal value established during the original investigation. In the
original investigation, normal value was determined per type of fitting. These normal
values were thus directly compared with the individual export price per type of fitting
established on the basis of the information submitted by the cooperating importers.

(33)

For the purpose of a fair comparison between the normal value and the export price,
the methodology explained in recital 30 was used.

(34)

(35)

(36)

(37)

c) Conclusion

In accordance with Articles 2 (11) and (12) of the Basic Regulation, the comparison of
weighted average normal values with weighted average export prices expressed as a
percentage of the CIF Community frontier price, revealed, when following either
methodology explained in recitals 27 to 33, a significant level of dumping.

C. REQUESTS FOR EXEMPTION FROM THE EXTENSION OF THE DUTY

The Commission received requests for exemption from the extension of the duty from
eight importers. Given that the definitive anti-dumping duty on imports of fittings
originating in the PRC will not be extended to fittings produced and exported by the
Taiwanese exporters that did not circumvent these measures, it was considered that no
exemption should be granted at this stage.

D. MEASURES

In view of the above finding of circumvention within the meaning of Article 13 (1),
second sentence of the Basic Regulation, the existing anti-dumping measures on
fittings originating in PRC should be extended to the same product consigned from
Taiwan, whether the product is declared as originating in Taiwan or not, with the
exception of products manufactured by the three cooperating exporters, pursuant to
Article 13 (1), first sentence of the Basic Regulation.

In accordance with Article 14(5) of the Basic Regulation, which provides that
measures may be applied against registered imports from the date of registration, the
anti-dumping duty on imports of fittings consigned from Taiwan which entered the
Community under registration imposed by the Commission Regulation initiating this
investigation, with the exception of those fittings exported by the three cooperating
exporters, shall be collected.

8

(38) Companies requesting an exemption pursuant to Article 13(4) of the Basic Regulation
will normally be required to complete a questionnaire in order to enable the
Commission to determine whether an exemption may be warranted and the
Commission would normally also carry out an on-the-spot verification visit.

(39)

The non-extension of the duties to the three individual Taiwanese companies specified
in this Regulation was established on the basis of the findings of the present
investigation. Therefore, it reflects the situation found during that investigation with
to these companies. The non-extension is thus exclusively applicable to
respect
imports of products produced and consigned by these specific legal entities mentioned.
Imported products produced or consigned 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 the exception and
should be subject to the duty rate imposed by the definitive Regulation.

(40) Any claim requesting the application of this exception would have to be addressed to
the Commission forthwith with all relevant information, in particular any modification
in the company's activities linked to production and export sales. The Commission, if
appropriate, would, after consultation of
the Advisory Committee, amend the
Regulation accordingly by updating the list of companies benefiting from the
exception.

E. PROCEDURE

(41)

Interested parties were informed of the essential facts and considerations on the basis
of which the Commission intended to propose the extension of the definitive anti-
dumping duty in force and were given the opportunity to comment,

HAS ADOPTED THIS REGULATION:

Article 1

1.

2.

The definitive anti-dumping duty imposed by Regulation (EC) No 584/96 on imports
of certain tube and pipe fittings of iron and steel falling within CN codes ex 7307 93
11 (TARIC code 7307 93 11*90), ex 7307 93 19 (TARIC code 7307 93 19*90), ex
7307 99 30 (TARIC code 7307 99 30*91) and ex 7307 99 90 (TARIC code 7307 99
90*91) originating in the People's Republic of China, is hereby extended to imports
of the same fittings consigned from Taiwan (whether these fitting are declared as
originating in Taiwan or not) (TARIC additional code A999), with the exception of
those produced and exported by Chup Hsin Enterprise Co. Ltd., Kaohsiung (Taiwan)
(TARIC additional code A098), Rigid Industries Co., Ltd., Kaohsiung (Taiwan)
(TARIC additional code A099) and Niang Hong Pipe Fittings Co., Ltd., Kaohsiung
(Taiwan) (TARIC additional code A100).

The duty extended by paragraph 1 of this Article shall be collected on imports
registered in accordance with Article 2 of Regulation (EC) No 1683/1999 and
Articles 13(3) and 14(5) of Regulation (EC) No 384/96, with the exception of those
produced and exported by Chup Hsin Enterprise Co. Ltd., Rigid Industries Co., Ltd.
and Niang Hong Pipe Fittings Co., Ltd, Kaohsiung (Taiwan).

9

3.

4.

1.

2.

The TARIC codes to be declared for the products originating and/or consigned from
Taiwan are: 7307 93 11*91, 7307 93 19*91, 7307 99 30*92 and 7307 99 90*92.

The provisions in force concerning customs duties shall apply.

Article 2

Requests for exemption from the duty extended by Article 1 shall be made in writing
in one of the official languages of the Community and must be signed by a person
authorised to represent the applicant. The request must be sent to the following
address:

European Commission
Directorate-General for Trade
Unit C-3
Rue de la Loi/Wetstraat 200
B-1049 Brussels
Fax (32-2) 295 65 05

The Commission, after consulting the Advisory Committee, shall authorise, by
decision, the exemption of imports which do not circumvent the anti-dumping duty
imposed by Regulation (EC) No 584/96 from the duty extended by Article 1.

Customs authorities are hereby directed to discontinue the registration of imports, established
in accordance with Article 2 of Regulation (EC) No 1683/1999.

Article 3

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

Article 4

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

Done at Brussels,

For the Council
The President

10