Commission Regulation (EC) No 799/2000 of 17 April 2000 terminating the investigation concerning the alleged circumvention of anti-dumping measures imposed by Council Regulation (EEC) No 2861/93 on imports of certain magnetic disks (3,5&quot; microdisks) originating in Taiwan and the People's Republic of China by assembly operations in the Community, and discontinuing the registration of imports of microdisk parts introduced by Regulation (EC) No 1646/1999
Date: 2000-04-17
Institutions: European Commission
Subjects: China, Taiwan, anti-dumping duty, import, magnetic medium, originating product

L 96/30

EN

Official Journal of the European Communities

18.4.2000

COMMISSION REGULATION (EC) No 799/2000

of 17 April 2000

terminating the investigation concerning the alleged circumvention of anti-dumping measures
imposed by Council Regulation (EEC) No 2861/93 on imports of certain magnetic disks (3,5(cid:1)
microdisks) originating in Taiwan and the People's Republic of China by assembly operations in the
Community, and discontinuing the registration of imports of microdisk parts introduced by
Regulation (EC) No 1646/1999

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), as last
amended by Regulation (EC) No 905/98 (2), and in particular
Articles 9, 13 and 14 thereof,

After consulting the Advisory Committee,

Whereas:

A. PROCEDURE

(1)

(2)

(3)

the

On 29 July 1999, by Regulation (EC) No 1646/1999 (3),
the Commission initiated an investigation pursuant to
Article 13 of Regulation (EC) No 384/96 (hereinafter
referred to as ‘the basic Regulation’) to investigate the
anti-dumping duties
alleged circumvention of
imposed by Council Regulation (EEC) No 2861/93 (4), as
amended by Regulation (EC) No 2537/1999 (5), on
imports of certain magnetic disks (3,5(cid:1) microdisks)
originating in Taiwan and the People's Republic of China
and
by assembly operations
instructed customs authorities, pursuant to Article 14(5)
of the basic Regulation, to register the imports of the
main microdisk parts covered by this investigation.

in the Community,

The investigation was
initiated following a request
lodged on 14 June 1999 by the Committee of European
Diskette Manufacturers (Diskma). The request contained
sufficient prima facie evidence,
in accordance with
Article 13(3) of the basic Regulation, that anti-dumping
duties on imports of 3,5(cid:1) microdisks originating in
Taiwan and the People's Republic of China were being
circumvented by imports of microdisk parts from these
countries
the
assembly
Community. This evidence was considered suficient to
justify the initiation of an investigation.

operations

used

in

in

The Commission officially advised the authorities of
Taiwan and the People's Republic of China of the initia-
tion of the investigation and sent questionnaires to the
microdisk assembler named in the request and to its
related exporter in Taiwan. Questionnaires were also
sent to exporting producers in the People's Republic of
China and Taiwan which cooperated in the original

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 128, 30.4.1998, p. 18.
(3) OJ L 195, 28.7.1999, p. 9.
(4) OJ L 262, 21.10.1993, p. 4.
(5) OJ L 307, 2.12.1999, p. 1.

(4)

(5)

(6)

(7)

(8)

investigation. The companies concerned made their
views known in writing.

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

The Commission received complete replies from the
following companies:

(i) Exporters of microdisk parts:

— CMC Magnetics Corporation, Taipei, Taiwan

(‘CMC’)*,

— Vigobyte International Corporation, California,

United States of America,

(ii) Assembler in the Community:

— Europa Magnetics Corporation, Cramlington,

United Kingdom (‘EMC’)*.

The Commission verified all the information it deemed
necessary and carried out verification visits at the prem-
ises of the companies indicated above by an asterisk.

B. SCOPE OF THE INVESTIGATION

Articles 13(1) and (2) of the basic Regulation provide for
anti-dumping measures in force to be extended to
imports of parts from the country subject to the meas-
the measures is taking
ures when circumvention of
place. The present investigation focussed on whether the
criteria set out in Article 13(2) of the basic Regulation
were met.

C. FINDINGS

1. Condition of Article 13(2)(a): Start or substantial

increase of operations

EMC started operations
in 1993 and its activities
increased constantly and substantially over the following
years. Sales of microdisks assembled at EMC started
immediately after the imposition of anti-dumping meas-
ures on Japan, the Republic of China and Taiwan in
October 1993. These sales increased by around 270 %
between 1994 and the IP. During the same period,
EMC's share of the Community market increased by
around 420 %. This substantial
increase in sales was
matched by a similar increase in assembly capacity.
EMC's present capacity is estimated at a substantial
total Community demand, although
proportion of

18.4.2000

EN

Official Journal of the European Communities

L 96/31

(9)

(10)

(11)

capacity utilisation has declined over the last few years
in line with the relative decline in Community consump-
tion. It was therefore concluded that the condition set
out in Article 13(2)(a) of the basic Regulation was met.

2. Conditions of Article 13(2)(b): criteria of 60 %

and 25 %

In accordance with Article 13(2)(b) of the basic Regula-
tion, in order to establish circumvention, the Commis-
sion had to verify that the parts from the countries
subject to the measures constituted 60 % or more of the
total value of the parts of the assembled product and
that the value added to the parts brought in was no
more than 25 % of the manufacturing cost.

The investigation established that EMC did not buy any
microdisk parts shipped from the People's Republic of
China. Most of the microdisk parts used by EMC in the
assembly operations were supplied by the assembler's
parent company in Taiwan (CMC). Large quantities of an
important component were supplied by a company
indirectly related to EMC, which was neither located in
the Community nor in the People's Republic of China or
Taiwan. The remaining parts were sourced from within
the Community.

i) First criterion: 60 % of the total value of the parts consti-

tuting the assembled product

considered.

For carrying out the 60 % test, all parts under invest-
igation were
Packing materials were
excluded from the calculations since in themselves they
cannot be considered one of the technical and physical
characteristics which define the product, and are added
at a later stage of the production process, when all
assembly activities have been concluded. The value of
the components was established on the basis of the
purchase prices of the goods when delivered to the
assembler's premises (i. e. including transport costs, and,
where applicable, import duties). Prices which had not
been considred as being arms', length prices, and had
therefore been constructed, were also considered at the
level

‘delivered to the assembler's premises’.

(12)

The value of the Taiwanese parts was then compared to
the total value of the parts of the assembled product. It
the percentage of Taiwanese parts
was found that
accounted for well over 60 % of the total value of the
parts. It was therefore concluded that the first criterion
set out in Article 13(2)(b) of the basic Regulation was
met.

were not considered for the purpose of this calculation.
Labour costs and factory overheads relating to packing
were also excluded, for the reasons mentioned above
(see recital 11). The value added thus established was
then expressed as a percentage of the manufacturing
cost which consists of the value of all parts, based on
the factory-delivered, arm's length purchase prices of
these parts plus the value added to the parts during the
assembly or completion operation.

The value added was reduced by those amounts of State
grants which related to the manufacturing costs of the
assembled product.

(14)

The average value added thus established during the
investigation period was found to be above the 25 %,
threshold set by Article 13(2)(b) of the basic Regulation.
Consequently, the second criterion mentioned in that
Article is not met and the assembly operation cannot be
considered as circumvention within the meaning of
Article 13(2) of the basic Regulation.

3. Conditions of Article 13(2)(c): undermining of
the remedial effects of the duty and evidence of
dumping

(15) As the investigation showed that the 25 % criterion was
not met, and that the proceeding should consequently
be terminated,
it was not considered necessary to
examine these aspects.

D. TERMINATION OF THE INVESTIGATION

(16)

(17)

(18)

In the light of the above findings and considerations, the
present circumvention investigation should be termi-
the anti-dumping duties
nated without extension of
imposed. The registration of microdisk parts introduced
by Regulation (EC) No 1646/1999 should therefore be
discontinued and that Regulation be repealed.

The Advisory Committee was consulted and raised no
objections to termination.

Interested parties were informed of the essential facts
and considerations on the basis of which the Commis-
sion intended to terminate the investigation and were
given the opportunity to comment. The only substantive
comment was receiveed from EMC, which considered
the exclusion of packing costs to be incorrect, but
agreed with the conclusions reached by the Commission,

HAS ADOPTED THIS REGULATION:

ii) Second criterion: 25 % of the value added to the parts

brought in

Article 1

(13)

For carrying out the 25 % test, the value added to the
parts brought in was generally determined to be the sum
of labour and depreciation costs and other manufac-
turing overheads incurred by the assembler in respect of
those parts. Selling, general and administrative expenses

The investigation concerning the alleged circumvention of anti-
dumping measures imposed by Council Regulation (EEC) No
2861/93 on imports of certain magnetic disks (3,5(cid:1) micro-
disks) originating in Taiwan and the People's Republic of China
by assembly operations in the Community initiated by Regula-
tion (EC) No 1646/1999 is hereby terminated.

L 96/32

EN

Official Journal of the European Communities

18.4.2000

Regulation (EC) No 1646/1999 is hereby repealed.

Article 2

Article 3

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

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

Done at Brussels, 17 April 2000.

For the Commission

Pascal LAMY

Member of the Commission