Proposal for a Council Regulation amending Regulation (EC) No 368/98 imposing a definitive anti-dumping duty on imports of glyphosate originating in the People's Republic of China
Date: 2000-05-08
Institutions: European Commission
Subjects: China, anti-dumping duty, chemical product, import, originating product

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 08.05.2000
COM(2000) 269 final

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 368/98 imposing a definitive anti-dumping duty on
imports of glyphosate originating in the People's Republic of China

(presented by the Commission)

EXPLANATORY MEMORANDUM

The purpose of the proposal is to amend Regulation (EC) No 368/98 imposing a
definitive anti-dumping duty on imports of glyphosate originating in the People's
Republic of China.

1.

2.

3.

4.

5.

6.

The present proposal to amend the measures in force follows a finding that the
measures imposed have been absorbed in their entirety.

A comparison of resale prices in the Community charged prior to the imposition
of measures and those charged during the present investigation period, showed
that resale prices had actually fallen since measures were imposed.

Having established a lack of movement of resale prices, export prices have been
reassessed in accordance with the last sentence of Article 12 (2) of the Basic
Regulation. The reassessed export prices were established by taking the export
prices found in the original investigation and deducting the amount of the anti-
dumping duty in force. On this basis the recalculated dumping margin amounts
to 62% of the c.i.f. export price.

As the measures currently in force are based on the level of injury found in the
original investigation, the revised measures should also be based on the same
injury level. On this basis, the proposed level of duty expressed as a percentage
of the c.i.f value is 48%.

The consultation of the Member States in the Advisory Committee has shown
that only the Netherlands was opposed to the proposed amendment of
Regulation (EC) No 368/98.

It is therefore proposed that the Council adopts the attached Regulation.

2

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 368/98 imposing a definitive anti-dumping duty on
imports of glyphosate originating in the People's Republic of China

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, as amended by Regulation (EC) No 2331/962 and by Regulation (EC)
No 905/983, and in particular Article 12 thereof,

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

Whereas:

A. PROCEDURE

1. Measures in force

(1)

(2)

In February 1998, by Regulation (EC) No 368/984,
imposed a
definitive anti-dumping duty on imports of glyphosate originating in the People's
Republic of China. The rate of the definitive duty applicable to the net, free-at-
Community-frontier price, amounted to 24,0%.

the Council

2. Request for a review

On 19 June 1998, a request for a review of the above-mentioned measures was
lodged pursuant
to Article 12 of the Council Regulation (EC) No 384/96
(hereinafter referred to as the "Basic Regulation"). The lodging was made on
behalf of the Community producers whose collective output of glyphosate
constituted a major proportion of the total Community production of that product
within the meaning of Article 5 (4) of the Basic Regulation, namely Cheminova

1

2

3

4

OJ L 56, 6. 3. 1996, p. 1.
OJ L 317, 6. 12. 1996, p. 1.
OJ L 128, 30. 4. 1998, p. 18.
OJ L 47, 18. 2. 1998, p. 1.

3

Agro (Denmark), Monsanto Europe (Belgium) and Zeneca Agrochemicals
(United Kingdom).

(3)

In the request, it was alleged that the abovementioned anti-dumping measures had
led to no movement, or insufficient movement, in resale prices or subsequent
selling prices in the Community. To this effect, the complainants submitted
sufficient evidence showing that export prices had actually fallen following the
imposition of the said measures which had made no impact on resale and
subsequent selling prices in the Community.

B. REVIEW INVESTIGATION PURSUANT TO ARTICLE 12 OF THE BASIC
REGULATION

(4)

(5)

(6)

1. Initiation of the review pursuant to Article 12

On 6 August 1998, the Commission announced by a notice published in the
Official Journal of the European Communities5 the initiation of a review, pursuant
to Article 12 of the Basic Regulation, of the anti-dumping measures applicable to
imports of glyphosate originating in the People's Republic of China, and
commenced an investigation.

The Commission officially advised the producers/exporters known to be
concerned, the representatives of the exporting country and the complainant
Community producers, of the initiation of the review. Interested parties were
given the opportunity to make their views known in writing and to request a
hearing within the time limit set out in the notice of initiation.

The Commission services sent questionnaires to all exporters known to be
concerned, namely: Beixi City Chemical Plant, Beixi (Liaoning); Shanghai Union
Chemical, Shanghai; Panyu Chemical Factory, Panyu (Guangzhou); Samning
City Pesticide Factory, Sanming City (Fujian); Zhangjiagang No 2 Pesticide,
Jiangsu; Haiyan Pesticide Factory, Haiyan (Zhejiang); Guangzhou Pesticide
Factory, Guangzhou; Hainan Pesticide Factory, Haikou City (Hainan); Anyang
Pesticide Factory, Anyang (Henan); Taixin Huangqiao Chemical Factory, Sanliu
Bridge Village (Jiangsu); Nantong Chemical Plant, Nantong (Jiangsu); Suzhou
Chemical & Pesticide, Suzhou (Jiangsu); Taichung Pesticide Factory, Taichung
(Jiangsu); Wujin Pesticide Factory, Changzhou City (Jiangsu); Chuan Xi
Chemical Plant, Deyang City (Sichuan); Shifang Chemical Group Pesticide
Factory, Shuangsheng (Sichuan); Longyou Pesticide Factory, Longyou Town
(Zhejiang); Ningbo No 2 Chemical Plant, Ningbo (Zhejiang); CAC Chemical Co.
Ltd, Shanghai; Fujian Sannong Chemistry Co. Ltd, Xubi-Sanming (Fujian);
Zhangjiagang No 2 Pesticide Factory, Nansha Town (Jiangsu); Tide International
Co. Ltd, Hangzhou; Sinochem Ningbo Imp & Exp Corp., Ningbo; Sinochem
Jiangsu Imp & Exp Corp., Nanjing; Sinochem Heilongjiang Imp & Exp Corp.,
Harbin; Sinochem International Chemicals Co., Beijing; Sinochem Liaoning Imp

5

OJ C 246, 6. 8. 1998, p. 3.

4

& Exp Corp., Dalian; Sinochem Tianjin Imp & Exp Corp., Tianjin; Hubei
Sanonda Co. Ltd, Shashi (Hubei); Shenjen Jiangshan Commerce & Industrial
Group, Shenzhou; China International Trust Investment Corp. ('CITIC'), Beijing;
Quickett, Hong Kong; High Kite Ltd., Hong Kong; and Rotam, Hong Kong.

No replies to the questionnaire were received from the abovementioned exporters
and producers except for Fujian Sannong Chemistry Co. Ltd and Jiangsu Zhejiang
Jiangnan Chemical Factory, that reported no exports to the Community during the
new investigation period (as defined in recital 10), Hubei Sanonda Co. Ltd, that
reported having stopped producing glyphosate since the year 1997, and Zhenjiang
Xinan Chemical Industrial Group Co. Ltd which claimed that it was one of the
largest Chinese manufacturers and exporters of glyphosate to the Community of
glyphosate during the investigation period.

On 23 September 1999, the sole cooperating exporter, Zhenjiang Xinan Chemical
Industrial Group Co. Ltd. requested individual treatment and submitted some
information to support its claim. The Commission deemed such information
insufficient and sent a specific individual treatment questionnaire to the Chinese
company concerned. No reply was made to this questionnaire.

Questionnaires were also sent to independent importers known to have imported
glyphosate from the People's Republic of China so as to ascertain the resale prices
of the product concerned before and after the imposition of the anti-dumping
duties. Replies to the questionnaires were received from the following unrelated
importers:

(7)

(8)

(9)

–

–

–

–

Feinchemie Schwebda GmbH, Germany;

Herbex Produtos Quimicos S.A., Portugal;

Industrias Afrasa S.A., Spain and

Calliope S.A., France.

Verification visits were carried out at the premises of the abovementioned
unrelated importers.

(10)

(11)

The investigation period of this review runs from 1 January 1998 to 30 June 1998.
This investigation period was used to determine the current level of export prices
and resale and subsequent selling prices charged after the imposition of anti-
dumping measures to see whether the measures had achieved the intended effects
in terms of increased import prices for the product under consideration.

selling prices had moved
In establishing whether
sufficiently, the price levels charged in the investigation period were compared to
those charged during the original investigation period which had covered the
period from 1 September 1994 to 31 August 1995.

resale and subsequent

5

(12) Owing to the volume of data gathered and examined, in particular in view of the
complexity of the analysis of the movement of the resale and subsequent selling
prices, and the fact
the investigation
exceeded the normal period of six months provided for in Article 12 (4) of the
Basic Regulation.

that normal values were re-examined,

2. Product concerned

(13)

The product concerned by the request and for which the review was initiated is the
same as in the original investigation, i.e. glyphosate currently classifiable within
CN codes ex 2931 00 95 (2931 00 80 until 31 December 1997) and ex 3808 30
27, the latter when put up in forms or packing for retail use or as preparations or
articles.

(14) Glyphosate is a herbicide that can be produced in different grades or forms of
concentration: formulated (with 36% glyphosate content), salt (with 62%), cake
(with 84%) and acid (with 95%). In order to reduce the costs of transportation,
distributors normally purchase glyphosate in a concentrated form (usually acid,
but also salt) which they subsequently dilute to obtain the formulated glyphosate,
the only form that can be used as an end-product.

3. Movement of export prices from China and of resale prices in the

community

(a) Introduction

(15)

The purpose of this investigation is to establish whether measures have had the
intended remedial effects in removing injury and whether any such failure to
remove injury is as a result of increased dumping through a fall in export prices.
For the purpose of the present proceeding, such a fall in export prices may be
reflected in the direct export prices charged by exporters to the Community or it
may be reflected in a lack of movement in resale prices or subsequent selling
prices in the Community due to a compensatory arrangement. Therefore, the
investigation examined price movements of export prices from China as well as
prices at resale and other levels in the Community.

(b) Movement in export prices from China

(16)

The Commission sought information on the export prices of glyphosate from
China. Information was provided by the one cooperating Chinese exporter and
four cooperating unrelated importers in the Community. In fact, export prices
were found to have fallen by approximately 45% as compared to those that were
established during the original investigation.

6

(c) Movement in resale prices in the Community

(17)

The Commission sought
information on resale prices and subsequent selling
prices of glyphosate in the Community before and after the imposition of anti-
dumping measures. The four co-operating unrelated importers in the Community,
which imported the product concerned during the investigation period, provided
information on import and resale prices of Chinese glyphosate.

(18) A comparison of resale prices charged during the original investigation period and
those charged during the present investigation period showed that resale prices
had actually fallen since measures were imposed. On average this fall amounted
to approximately 12% as compared to the level previously established in the
original investigation. The unrelated importers did not provide evidence that this
fall was due to the increased efficiency of their
resale operations in the
Community.

4. Claims made by interested parties

(a) General

(19)

importers and exporters are provided with an
In Article 12 investigations,
opportunity to provide evidence that could justify a lack of movement in prices in
the Community following the imposition of measures. The reasons which can
justify such a lack of movement include a reduction in the costs and profit of the
importer or a fall in normal value. Several parties provided information in this
respect.

(b) Producers/exporters in the country of origin

(20) One Chinese producer/exporter of glyphosate argued that the fall in resale prices
since the imposition of anti-dumping measures was mainly caused by a worldwide
decline in the cost of production of glyphosate, which in its turn was reflected in
significant changes of normal values which ought to be taken into account.

(21)

Since the normal value established during the original
investigation was
established on the basis of an analogue country, i.e. Brazil, the Commission
requested information in respect of normal values from the two known Brazilian
producers which cooperated during the original investigation, i.e. Monsanto Brasil
and Nortox, which continue to be the sole producers of glyphosate in the analogue
the Brazilian
country.
producers.

Investigations were carried out at

the premises of

(22)

The Commission verified normal values and found that they had indeed fallen.
This fall, which was calculated in relation to the normal values of the original case
and those prevailing in the investigation period of this case, showed a fall of 17%.
However, as export prices had fallen by a far greater amount (45%) the movement

7

in normal values could not justify the lack of movement in resale prices in the
Community.

(c) Unrelated importers in the Community

(23)

The Commission also examined whether the lack of movement of resale prices
was due to a decrease in the costs and profits of the unrelated importers. In this
respect, the position of the four cooperating importers was examined and it was
found that the levels of their costs and profits had remained broadly the same as
those found in the original case. Therefore, these claims were rejected.

5. Reassessment of the export prices

(24) Normally, in Article 12 investigations where a lack of movement of resale prices
has been established, export prices would be reassessed on the basis of prices
charged to independent buyers in the Community by the importer from which all
costs and a normal profit of the said importer would be deducted to arrive at a
constructed export price. This would be done in accordance with Article 2 (9) of
Basic Regulation.

(25)

In this case, however, the reassessment of export prices was made by reference to
the fall in the direct export prices charged between the exporters and importers in
accordance with the last sentence of Article 12 (2) of the Basic Regulation. This
direct fall in export prices was considered to be the reason for the lack of
in resale prices and subsequent selling prices in the Community
movement
following the imposition of measures and therefore the absorption of measures is
reflected in the fall in export prices.

(26) As export prices were found to have fallen by 45% since the existing measures
were imposed, the reassessed export prices were established by taking the export
prices found in the original investigation and deducting the amount of the anti-
dumping duty in force.

6. Recalculation of the dumping margin taking account of reassessed export

prices

(27) As required under Article 12 of

the Basic Regulation,

the Commission
recalculated the dumping margin for the Chinese producers/exporters concerned.
This was done by comparing the reassessed export prices with the normal values
established during the original investigation. This gives a dumping margin which
when expressed as a percentage of the c.i.f value equates to 62%. Pursuant to
Article 12 (3) of the Basic Regulation, the measures in force shall therefore be
amended in accordance with the new findings.

8

7. New level of duties

(28)

The measures currently in force are based on the level of injury found in the
original investigation. Therefore, the reassessed export prices were compared with
the injury threshold established in the original investigation. Since the injury
margin calculated on this basis is lower than the dumping margin, the new level of
the duty should be based in the former. Accordingly, the proposed level of duty
expressed as a percentage of the c.i.f value is 48%.

HAS ADOPTED THIS REGULATION:

Article 1

Article 1 of Regulation (EC) No 368/98 is hereby replaced by the following:

”1.

2.

3.

A definitive anti-dumping duty is hereby imposed on imports of glyphosate
falling within CN codes ex 2931 00 95 (TARIC code 2931 00 95 *80) and ex
3808 30 27 (TARIC code 3808 30 27 *10) originating in the People's Republic
of China.

The new rate of duty applicable to the net, free-at-Community-frontier price
before duty shall be 48%.

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

Article 2

This Regulation shall enter into force on the day following 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,

For the Council
The President

9