Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of synthetic fibres of polyester originating in Australia, Indonesia and Thailand and collecting definitively the provisional duty imposed
Date: 2000-06-26
Institutions: European Commission
Subjects: Australia, Indonesia, Thailand, anti-dumping duty, plastics

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 26.06.2000
COM(2000) 389 final

Proposal for a

COUNCIL REGULATION

imposing a definitive anti-dumping duty on imports of synthetic fibres of polyester
originating in Australia, Indonesia and Thailand and collecting definitively the
provisional duty imposed

.

(presented by the Commission)

EXPLANATORY MEMORANDUM

In April 1999, the Commission initiated an anti-dumping investigation in respect of imports
of polyester staple fibres originating in Australia, Indonesia, and Thailand.

On 21 January 2000, having established that injurious dumping existed, the Commission, by
Regulation (EC) No 124/2000, imposed a provisional anti-dumping duty on imports of the
above mentioned product from all the above mentioned countries. Following the publication
of the provisional duty Regulation the Commission disclosed to the interested parties the
essential facts that led to the imposition of the provisional measures. All interested parties
were given the opportunity to make their views known in writing and to request a hearing.

The comments received by the exporting producers regarding the dumping calculations were
given due consideration and where justified,
the dumping calculations were revised
accordingly.

The Governments of the exporting countries, certain exporting producers and Community
users of the product concerned commented also upon the injury, causality and Community
interest provisional findings of the Commission. These comments were analysed and apart
from certain modifications to the undercutting calculations, that did not have any material
impact to the proposed measures, did not present new facts or evidence such as to change the
provisional findings of the investigation.

Consequently, since all the provisional findings were confirmed it is hereby proposed that the
Council adopt the attached proposal for Regulation.

2

Proposal for a

COUNCIL REGULATION

imposing a definitive anti-dumping duty on imports of synthetic fibres of polyester
originating in Australia, Indonesia and Thailand and collecting definitively the
provisional duty imposed

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 9 thereof,

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

Whereas:

1.

1.1.

(1)

(2)

(3)

PROCEDURE

Provisional measures and definitive countervailing duties

By Commission Regulation (EC) No 124/20002 (the "provisional duty Regulation")
provisional anti-dumping duties were imposed on imports into the Community of
polyester staple fibres ("PSF") falling within CN code 5503 20 00 and originating in
Australia, Indonesia and Thailand.

As a result of a parallel anti-subsidy investigation, provisional countervailing duties
were imposed under Commission Regulation (EC) No 123/20003 on imports into the
Community of PSF originating in Australia, and Taiwan.

Regarding the above-mentioned anti-subsidy investigation, by Council Regulation
(EC) No 978/20004 definitive countervailing duties on imports originating in
Australia, Taiwan and Indonesia were adopted.

1.2.

Subsequent procedure

(4)

Following the imposition of provisional anti-dumping duties, several parties submitted
comments in writing. In accordance with the provisions of Article 6(5) of Council
Regulation (EC) 384/96 (the "Basic Regulation"), the parties which so requested were

1 OJ L 56, 6.3.1996, p.1, as last amended by Council Regulation (EC) No 905/98 OJ L 128, 30.4.1998, p.18
2 OJ L 16, 21.1.2000, p.3
3 OJ L 16, 21.1.2000, p.30
4 OJ L 113, 12.5.2000, p.1

3

(5)

1.3.

(6)

(7)

2.

(8)

(9)

(10)

granted an opportunity to be heard. Parties were informed of the essential facts and
considerations on the basis of which it was intended to recommend the imposition of a
definitive anti-dumping duty and the definitive collection, at the level of this duty, of
amounts secured by way of provisional duty. They were also granted a period within
which to make representations subsequent to this disclosure.

The oral and written comments submitted within the deadlines set for that purpose by
the interested parties were considered and, where deemed appropriate, taken into
account for the definitive findings.

Non-cooperation

Following the imposition of provisional measures, one non-cooperating Indonesian
exporting producer
as
non-cooperator. The claim was that despite the difficulties caused by the deadlines this
company replied to the Commission questionnaire and that this was an indication of its
intention to cooperate.

requested the Commission to reconsider

status

its

As explained in recital 18 of the provisional duty Regulation, this exporting producer
failed to provide a completed response to the questionnaire within the deadline which
was extended several times in order to enable the company to submit a meaningful
reply. The provisional determination of non-cooperation should therefore be
confirmed.

PRODUCT CONCERNED AND LIKE PRODUCT

The product concerned is synthetic staple fibres of polyesters, not carded, combed or
otherwise processed for spinning, which is currently classifiable under CN code 5503
20 00. It is commonly referred to as polyester staple fibres or PSF.

The Royal Thai Government ("RTG"), the Government of Indonesia ("GOI"), certain
exporting producers and a users association ("Eurofibrefill") claimed that the Notice of
Initiation of the present proceeding did not cover PSF types for non-spinning
applications, and consequently these PSF types should have been excluded from the
proceeding.

It was also argued that, in any event, a differentiation should be made between PSF
types used for spinning applications (also called woven, or "PSFS") and PSF used for
non-spinning applications (also called non-woven, fibrefill or "PSFNS") because of
different physical,
technical and chemical characteristics and different use.
Furthermore, it was alleged that inter-changeability, if any, between PSFS and PSFNS
was very limited and only concerned certain types of fibres originally intended for
PSFS which may be used as PSFNS. Actually, some interested parties indicated that
the differentiation between PSFS and PSFNS types would be reflected in the thickness
expressed in "denier". In their opinion, PSF types below 3 denier are used by the
spinning industry, whereas types above 3 denier are used in non-spinning applications.

(11) Moreover, they argued that the Community industry mainly produces PSFS and that

consequently most PSFNS types have to be sourced outside the Community.

(12)

Similarly, one exporting producer in Indonesia claimed that PSF produced from
recycled raw materials ("recycled PSF") should not be included in the same category
as PSF produced from regular raw materials ("regular PSF"), because both have a

4

(13)

(14)

distinct production process, they are produced with different raw material and they
have different end-uses. They therefore argued that recycled PSF should not be
covered by the present proceeding.

In this respect it should be noted that the Notice of Initiation, as well as the complaint,
clearly reproduce the description of the relevant CN Code which covers all types of
PSF. Notwithstanding this, after the initiation of the present investigation, the wording
of the description of the relevant CN Code was wrongly interpreted by certain
exporting producers. Subsequently, it was clarified that both the complaint and the
Notice of Initiation covered all types of PSF exported by the countries concerned and
produced by the Community industry irrespective of their use.

In fact the Community industry produces all types of PSF and in particular PSFNS.
Indeed, contrary to allegations suggesting very limited activity of the Community
industry in PSFNS production, the investigation showed that during the investigation
period (1 April 1998 to 31 March 1999, or "IP"), the sales of PSFS types represented
around 25% of sales of the Community industry whereas PSFNS types represented
around 75%.

(15)

It was also found that about 50% of the imports of PSF originating in Australia,
Indonesia and Thailand were PSFS types whereas the other 50% were PSFNS types.

(16) As far as the alleged differences in physical, technical and chemical characteristics are
concerned, it should be recalled that PSF comes in a wide range of different types, of
generally the same chemical composition. They are also produced with the same
production facilities and even on the same production lines. The investigation has
shown that depending on the operator, between 15 and 80 types of PSF are produced
by both exporting producers and the Community industry. The main characteristics by
which different types of PSF can be distinguished are thickness (denier), length,
tenacity, grimp and shrinkage. It is clear that between the "bottom end" and the "top
end" of the range, there are differences, in terms of the above technical characteristics.
It must however be noted that differences in physical characteristics exist for types of
even the same thickness, since production is normally made according to customers
specifications.

(17)

The alleged almost complete differentiation of PSF types using the 3 denier threshold
reflecting differences in the use of the product, was not confirmed by the present
investigation,
in particular by the analysis of the actual data received from the
exporting producers and the Community industry. In fact, significant overlapping
between different types of PSF was actually established. This examination showed that
sales of PSF below 3 denier to non-spinning industries and above 3 denier to the
spinning industry covers about 20% of the imports from the three countries concerned
and of the Community industry's sales. Moreover, 7% of the fibres are exactly at the
threshold point of 3 denier, which are sold either for spinning or non-spinning uses.
The investigation has therefore shown that there is no clear dividing line between the
various types, as there is overlapping and consequently competition between
"adjacent" types within this range of types.

(18) Apart from the overlap mentioned above, the fact that the same PSF is used for both
spinning and non-spinning applications has also been confirmed by the existence of a
clear one-way inter-changeability found for certain PSF types. Indeed, PSFS can be
sold for non-spinning uses if the quality of the fibres is not suitable for spinning uses.

5

Consequently, following the practice of the Community in such cases, the various
types of PSF involved should be considered as forming one single product.

(19) As regards the alleged difference in cost of production of PSFS and PSFNS, it should
be noted that such difference is negligible. This is also reflected in the fact that there
are no big differences in the sales prices of the PSFS and PSFNS, e.g. the regular types
of PSF for spinning and non-spinning purposes.

(20) As mentioned above, all PSF types are produced using the same production
equipment. Furthermore, switching from one PSF type to another, apart from certain
adjustment and calibration costs, does not
investments.
Although, as such this is not relevant for the determination of the product concerned
and like product, it follows that the Community industry can produce any type of PSF.
Consequently, even if, as alleged, certain PSF types were not readily available from
the Community industry, this is not due to technical reasons but to the depressed price
level caused by dumped imports which customers have used in their requests for price
quotes. Therefore, the argument that certain types of PSF are not available from the
Community industry has not been confirmed.

involve any additional

(21)

Finally, it should be recalled that the existence of different types of PSF, variation in
quality of raw material used, production processes and uses does not entail any
significant differences in the basic physical, chemical and technical characteristics of
PSF. Therefore, recycled and regular PSF should be considered as being part of the
product concerned for the purpose of this proceeding.

(22) Based on the foregoing, it is considered that the comments received regarding the
definition of the product concerned and the like product, are not such as to invalidate
the conclusions of recitals 10 to 12 of the provisional duty Regulation. Consequently,
these conclusions, which are in line with the conclusions reached for the same product
in previous investigations, are hereby confirmed.

3.

DUMPING

3.1.

Australia

3.1.1. Normal value

(23)

(24)

Following the adoption of provisional measures,
the sole Australian exporting
producer claimed that the Commission had wrongly considered one domestic user as a
related company and should therefore not have excluded the transactions to this
company in determining normal value. According to the exporting producer this user
was an independent customer.

This claim was rejected because according to the information received on the spot, the
user in question and the Australian exporting producer were each owned by a trust.
Both trusts were controlled by the same family. Moreover, the company itself admitted
that some directors and shareholders in both companies were common. The conclusion
drawn was that both companies were associated parties in the meaning of Article 2(1)
of the Basic Regulation. In addition, the company did not show that the relationship
the
had not affected the price levels between the two parties. Furthermore,
Commission established that these transactions were not made in the ordinary course
of trade, as they were made at a loss.

6

(25)

The Australian exporting producer also claimed that in determining the cost of the raw
materials the amounts actually paid instead of the prices invoiced for raw materials
should have been used.

(26)

This claim was accepted and the cost of production used in the ordinary course of
trade test and in constructing normal value was revised accordingly.

3.1.2.

Export price

(27) No claims were made concerning the determination of the export price. The

conclusions set out in the provisional duty Regulation are hereby confirmed.

3.1.3. Comparison

(28)

Following the adoption of provisional measures the Australian exporting producer
reiterated its request for an allowance for technical services in the domestic market.

(29) As laid out in recital 40 of the provisional duty Regulation, the company did not give a
satisfactory explanation with regard to the nature of its claims and also did not provide
satisfactory explanations or documentary evidence to support the amounts of the
adjustment claimed. Moreover, the company was not able to demonstrate that the
factor concerned led to different prices being charged to customers on the domestic
and export markets.

(30)

The claim was consequently rejected and the conclusions set out in the provisional
duty Regulation are confirmed.

3.1.4. Dumping margin

(31)

The comparison of the revised weighted average normal value with the weighted
average export price by product type on an ex factory basis showed the existence of
dumping. The definitive dumping margin as a percentage of the CIF import price duty
unpaid is 18%.

3.2.

Indonesia

3.2.1.

Sampling

(32) As explained in the provisional duty Regulation, sampling has been used for
Indonesia. Following the adoption of provisional measures, the Indonesian authorities
argued that they had not agreed to the sample proposed by the Commission at the time
of the selection of the sample. However, it should be recalled that the companies
finally selected in the sample were those which had been suggested in writing for this
purpose by the Indonesian authorities themselves. No further comments concerning
sampling were received and,
the conclusions of the provisional duty
Regulation are hereby confirmed.

therefore,

3.2.2. Normal Value

(33)

Following the adoption of provisional measures, the Commission reviewed the extent
of the cooperation it had received from one Indonesian exporting producer. In this
respect,
it was concluded that problems which were encountered both with the
information provided in the response to the questionnaire and with the subsequent

7

(34)

(35)

on-the-spot verification meant that certain information supplied by the company could
not be adequately verified in particular in relation to the cost of production. The
information as presented was misleading and as such impeded the investigation.
Moreover, explanations submitted following the adoption of provisional measures
raised further doubts about the original information submitted. The company was
therefore informed that certain information submitted will not be taken into account
and was granted an opportunity to provide further explanations. The explanations
provided were not considered satisfactory. In these circumstances, the findings were
made on the basis of the facts available in accordance with Article 18 of the Basic
Regulation. However, information supplied by this company was still used to the
extent possible for the purpose of this investigation.

the Commission should have
This Indonesian exporting producer claimed that
calculated separate normal values and separate dumping margins for second and third
quality grades of the product concerned. The company claimed that by reporting data
the
for different sub-qualities separately,
questionnaire, since it considered that the technical specifications of second and third
qualities were different and that, furthermore, these qualities were differentiated in the
company's records. The company also reported different costs of production for the
different qualities, allegedly based on a costing system which allocated costs in order
to allow cost recovery for the sub-qualities. In addition, the company claimed that the
comparison of grouped sub-qualities was not appropriate.

it had followed the instructions of

It was found that the company neither followed the reporting instructions set out in the
questionnaire, nor its own records, as made available to the Commission, with regard
to the classification of sub-standard qualities. Notwithstanding the above, the cost of
production of the different qualities as reported by the company in the response to the
questionnaire was further examined. In this respect, it was established that these costs
of production of the second and third qualities did not reasonably reflect the costs
associated with the production and sale of the product under consideration, as
provided in Article 2(5) of the Basic Regulation. In fact, the costs of production
reported for the sub-qualities did not contain labour cost, depreciation, overheads and
selling, general & administrative ("S G & A") expenses. Furthermore, it was found
that the company's allegation that they priced just to cover cost conflicted with the
information submitted which showed high profits for the sub-qualities. Moreover, it
was not contested that the aim of the company was to produce the first quality PSF.
This implied that the actual cost of production of all PSF, irrespective of quality, was
the same. Therefore, the cost of production was recalculated on the basis of the total
actual cost incurred during the investigation period which was then divided by the
total volume produced in order to establish an average cost of production.

(36) According to the methodology described in the provisional duty Regulation,

the
revised cost of production was then applied to verify whether domestic prices were
made in the ordinary course of trade. Where this was found to be the case, domestic
prices were used to establish normal value. Otherwise, normal value was constructed.
On this basis, the grouping or otherwise of the allegedly different sub-qualities did not
affect the outcome. However, it was accepted that the company had some sub-standard
output of the product concerned and this was treated the matter as a comparison issue.

(37)

The same Indonesian exporting producer claimed that the general and administrative
expenses used in calculating normal value should have been allocated over the entire
sales of the division producing the product concerned, including the internal sales.

8

(38)

(39)

(40)

(41)

(42)

(43)

(44)

(45)

This claim was rejected, as expenses were incurred by sales to independent customers
and not by internal transfers to other divisions that further process the product
concerned.

The same Indonesian exporting producer claimed that the Commission should have
used the product specific S G & A expenses in calculating normal value and not the
total S G & A expenses of the division producing the product concerned.

This claim was rejected, as the company failed to provide the necessary supporting
documentation which would have allowed a proper verification of the product specific
S G & A expenses during the on-spot investigation. Therefore, the overall allocation
of the S G & A expenses of the division was maintained.

The same Indonesian exporting producer claimed that the Commission had included
certain identifiable export expenses in the cost of the product sold on the domestic
market in calculating normal value.

The claim was accepted and the allocation of the S G & A expenses was revised on the
basis of the chart of accounts submitted with the questionnaire response and used in
the verification, provided that it clearly indicated the accounts concerned as related to
exports.

The same Indonesian exporting producer claimed that the Commission should not
have allocated to the product concerned the S G & A of one organisational unit of the
company allegedly involved in financial market activities as this unit was a separate
profit centre and did not act as a central service provider to other divisions.

This claim was rejected. The company provided no evidence that the organisational
unit in question was a division independent from the operational divisions nor that it
acted as a profit centre. In particular, the audited financial statements of the company
made no reference to financial market activities carried out by an independent profit
centre. In fact, the documents provided by the company showed that the organisational
unit in question was centrally involved in the operations of the company as defined in
the audited accounts. Its activities were those normally carried out by a head office.
Therefore, the allocation of the S G & A expenses of this unit to the product concerned
was maintained in the calculation of normal value.

The same Indonesian exporting producer claimed that the Commission should not
have allocated the interest expenses of the organisational unit mentioned above to the
product concerned. The company argued that the loans declared for this unit funded
activities on financial markets and investments in subsidiary companies. These loans
were therefore, according to the company, unrelated to the production and sales of the
product concerned and an attribution to the different operational divisions would be
incorrect. It was further argued that the funding requirements of the division involved
in the production and sales of the product concerned were met by the division itself.

(46)

This claim was rejected because, as indicated in recital 44 above, the activities of this
organisational unit were those normally carried out by a head office. In addition, the
company did not provide any satisfactory evidence why the loans would not have been
used to finance the activities of the different operational divisions. Moreover, the
explanation provided with regard to the funding of the manufacturing and the financial

9

market activities were not confirmed by the audited financial statements of the
company.

(47) When examining the claim concerning these financial expenses, it was established that
the company entered into hedging arrangements in order to limit exchange rate risks
related to the above mentioned loans. These hedging transactions bore an annual cost
in the form of a premium. Although the company claimed that this cost should not be
allocated to the product concerned for the reasons mentioned in recital 45 above, it
was considered that these costs had to be included in the S G & A expenses and
allocated to all products on the basis of the total turnover of the company. In addition,
a claim to consider foreign exchange gains on hedging transactions was rejected, since
such exchange rate gains are not taken into account in anti-dumping investigations,
whether realised or not.

(48)

(49)

The same Indonesian exporting producer claimed that
if interest expenses were
allocated to the different operational divisions, these should be offset by corresponding
income.

This claim was accepted insofar as it concerned income from short term deposits of
funds. The S G & A expenses were therefore revised before being used in the ordinary
course of trade test and in constructing normal value.

3.2.3.

Export price

(50) No claims were made concerning the determination of the export price. The

conclusions set out in the provisional duty Regulation are hereby confirmed.

3.2.4. Comparison

(51) As indicated in recital 36 above, one exporting producer claimed that quality
differences of
In these
circumstances, it was considered appropriate to grant a special adjustment on the
normal value for sub-standard quality.

the production output should be taken into account.

(52)

(53)

Following the adoption of provisional measures, one Indonesian exporting producer
claimed that the Commission should have calculated the amount for credit costs on
export sales on the basis of the actual expenses incurred by the company when
discounting L/C Bills. The company further claimed that the interest rates charged in
the framework of export sales were lower than the interest rates for domestic sales in
the same currency.

This claim was rejected because in accordance with Article 2(10)(g) of the Basic
Regulation, an adjustment shall only be made for differences in the cost of any credit
granted for the sale under consideration, "provided that it was a factor taken into
account in the determination of the prices charged". In its questionnaire response, the
company did not supply any information with regard to the interest rates charged for
credit in the framework of export sales, although this was explicitly requested in the
questionnaire. The claim that the rate of interest for export sales credit was lower than
that for domestic sales, which were both made in the same currency, could therefore
not be verified because this factor was unknown at the time of the verification.

10

3.2.5. Dumping Margin

(54)

(55)

The comparison of the weighted average normal value, revised as appropriate, with the
weighted average export price by product type on an ex factory basis, showed the
existence of dumping for both investigated exporting producers included in the
sample.

The dumping margin of one investigated company was revised. Accordingly, the
weighted average dumping margin calculated for the cooperating companies not
included in the sample pursuant to Article 9(6) of the Basic Regulation was also
revised. However, the revised calculations have not affected the dumping margin
established for the non-cooperating companies which is hereby confirmed. The
definitive dumping margins as a percentage of the CIF import price duty unpaid are as
follows:

–

Sampled exporting producers investigated:

–

–

PT. Indorama Synthetics Tbk.:

PT. Panasia Indosyntec:

8,4%

14,8%

–

Cooperating exporting producers not included in the sample:

–

–

–

PT. GT Petrochem Industries Tbk.

14,0%

PT. Susilia Indah Synthetic Fiber Industries: 14,0%

PT. Teijin Indonesia Fiber Corporation Tbk.

14,0%

–

Non-cooperating exporting producers:

20,8%

3.3.

Thailand

3.3.1. Normal Value

(56)

(57)

(58)

Following the adoption of provisional measures, one exporting producer, which did
not keep separate cost of sales accounts by finished product, argued that
the
Commission should have accepted the detailed model-specific cost of production
calculations which they had made expressly for the purpose of replying to the
questionnaire.

further argued, after provisional measures,

This exporting producer
their
investigation period-end closing stock value from their monthly internal management
results had been calculated on an expected market value basis rather than on a cost
basis and therefore it was not appropriate for that figure to be used for the cost of
production.

that

It also argued that it would have been more appropriate to establish the cost of
production on the closing stock figure at the end of the financial year than on the
closing stock figure at the end of the investigation period, as the year end closing stock
figure was audited, covered nine months of the investigation period rather than three
months and was similar to the cost of production specifically calculated by the
company for the first nine months of the investigation period.

11

(59)

In addition, they claimed that monthly costs of production should have been used due
to fluctuations in raw material costs and exchange rates and the fact that there were no
exports to the Community during certain months.

(60) However, it was found that the specifically calculated costs were inconsistent with
certain closing stock values reported by this exporting producer in its questionnaire
response, given the stock valuation method reported therein, i.e. the lower of average
cost or net realisable value.

(61)

The exporting producer had denied the existence of management accounts for the
product concerned in its questionnaire response and no internal management results
containing closing stock values were obtained or verified during the on-the-spot
verification.

(62) With regard to allegedly audited stock figures, no financial year end closing stock
valuation schedules were obtained during the verification visit, despite being
requested, and therefore, it was not possible to determine the historically utilised stock
valuation method or to verify the unit stock values on a product type or total basis at
the year end.

(63)

In these circumstances, it was considered that the specifically calculated monthly and
annual costs of production were not reliable. Therefore, the investigation period-end
closing stock value, which according to all information received by the Commission
up to the end of the verification visit, was based on the lower of cost or net realisable
value, should be maintained as the cost of production for the determination of normal
value.

(64) Claims made by another exporting producer for adjustments to its S G & A expenses
were rejected where the items had already been taken into account or with regard to
financial expenses and income and certain fees and taxes, because the claims were
inconsistent with the company's questionnaire response.

(65)

(66)

The same exporting producer claimed that certain goods returns and sales discounts
should have been deducted from the domestic sales transaction listing. The claim with
regard to goods returns was rejected as the returns did not relate to sales in the
investigation period and the related quantities had not been included in the listing. The
claim relating to sales discounts was rejected as for certain discounts, no direct link to
the sales under consideration was demonstrated before completion of the verification
visit while for other discounts, no claim was made in the exporting producer's
questionnaire response. However, the net sales figure used in determining the S G & A
percentage for the investigation period was increased to be consistent.

Two exporting producers argued that for the purposes of the ordinary course of trade
test, the comparison of prices with the cost of production should be done on a
quarterly basis. They indicated that both raw material prices and sales prices decreased
significantly throughout the investigation period and therefore, it was necessary to
perform the test on a quarterly basis to ensure a fair comparison. This aspect was
examined and the calculation was adjusted to a quarterly basis.

(67)

Two exporting producers claimed that technical assistance costs should be allocated
on a turnover basis for the purpose of calculating the domestic S G & A expenses to be
included in the cost of production. This argument was accepted.

12

(68)

Three exporting producers argued that the exclusion of foreign exchange gains and
losses from their S G & A expenses at the provisional stage was unjustified. In general
exchange rate gains and losses were not taken into account as the exchange rates used
by the Commission were those applicable on the invoice date. However, in so far as
they arose from purchases of raw materials, the Commission adjusted the normal value
calculations in order to take the relevant exchange gains and losses into account. One
of these exporting producers then claimed that the calculation of the foreign exchange
gain included within the S G & A expenses should have been based on audited figures.
However, this was not accepted as no allegedly audited figures were received until late
in the investigation when they were no longer verifiable.

3.3.2.

Export Price

(69) No claims were made concerning the determination of the export price. The

conclusions set out in the provisional duty Regulation are hereby confirmed.

3.3.3. Comparison

(70)

Two exporting producers requested a comparison of export price with normal value on
a quarterly basis and one on a monthly basis. The request was granted for the
exporting producers requesting on a quarterly basis and rejected for the third exporting
producer
for which no reliable normal value could be determined on a
monthly/quarterly basis.

(71) One exporting producer argued that an allowance should be granted for freight paid on
returned goods. However, this claim was rejected as it was not considered appropriate
to include an inland freight cost allowance for return freight costs where the sales were
partially or totally cancelled.

(72)

(73)

(74)

The same exporting producer requested that an allowance should be granted for
technical assistance, but the allowance was rejected as the technical assistance was not
carried out on the basis of a contractual or legal obligation.

Two exporting producers claimed that different levels of trade existed for export and
domestic sales of the product concerned. This was accepted, but given that the existing
difference in the levels of trade could not be quantified because of the absence of the
relevant levels on the domestic market, a special adjustment was granted under Article
2 (10)(d)(ii) of the Basic Regulation.

Two exporting producers claimed that they should be granted a currency conversion
adjustment as they argued that the currency movement had been significant (over
10%) and took place over a period of five months. This adjustment was not accepted
as it was considered that the currency movement was fluctuating rather than reflecting
a sustained movement.

3.3.4. Dumping Margin

(75)

The comparison of the revised, where appropriate, weighted average normal value
with the weighted average export price by product type on an ex factory basis showed
the existence of dumping for all investigated exporting producers.

(76)

Following changes to the calculations in accordance with the findings noted above, the
dumping margins of one company and one group of companies were revised. In

13

consequence, the dumping margin for any non-cooperating companies, which is set at
the level of the highest dumping margin established for a cooperating company, was
also revised. The definitive dumping margins as a percentage of the CIF import price
duty unpaid are as follows:

–

–

–

–

–

Indo Poly (Thailand) Ltd

15,5%

Teijin Polyester (Thailand) Ltd.

26,9%

Teijin (Thailand) Ltd

26,9%

Tuntex (Thailand) Public Co.Ltd

27,7%

Non-cooperating exporting producers27,7%.

4.

INJURY

4.1.

(77)

Procedural issues

The RTG and one exporting producer in Indonesia, claimed that the non-confidential
summaries of submissions made by some Community producers included in the
definition of the Community industry were not complete or sufficiently detailed, in
order to allow them to effectively exercise their right of defence. They therefore
argued that the Commission’s failure to take this into account constituted a violation
of the WTO Anti-Dumping Agreement (hereinafter WTO ADA) and Article 19 of the
Basic Regulation.

(78) Regarding this claim, it must be noted that these parties received full disclosure in
accordance with Article 19(4) of the Basic Regulation. The disclosure included the
general information and the detailed evidence relied on by the Commission for its
findings. In addition, the Commission requested the Community producers in question
to submit additional non-confidential information. This non-confidential information
was submitted by the Community producers concerned, following the Commission's
definitive disclosure to the interested parties, which had full access to it, consequently
allowing them to exercise their right of defence. In any event, even if one of the
Community producers concerned were excluded from the definition of the Community
industry, as argued by the abovementioned parties, such a development would have
not affected the overall conclusions on the situation of the Community industry.
Indeed, it was established that such an exclusion would have neither any impact on the
trends of the economic indicators pertaining to the Community industry, nor on the
standing of the Community industry, since the production of this Community producer
was small in comparison to the total production of the other Community industry
producers.

4.2.

(79)

Definition of the Community industry

The RTG and one Indonesian exporting producer argued that the production volume of
the Community industry as indicated in recital 64 of the provisional duty Regulation
had been overstated. More specifically, they underlined that it was determined that the
seven cooperating Community producers included in the definition of the Community
industry represented about 85% of the total Community production, whereas the
complaint stated that the nine complaining producers represented the same share of the
total Community production.

14

(80)

Furthermore, it was argued that two complaining Community producers included in
the definition of the Community industry were related to an exporting producer in a
country concerned. According to the Commission's consistent practice these two
producers should be excluded from the Community industry.

(81) As far as the representativity of the Community industry is concerned, it should be
noted that, on the one hand, the data contained in the complaint covered 10 months of
1998. These data in the complaint were thus extrapolated to cover a 12-month period.
On this basis, the nine complaining companies represented in fact around 89% of total
Community production in 1998. On the other hand, based on the data received in the
course of the present investigation and verified at the level of the seven cooperating
Community producers constituting the Community industry, the investigation revealed
total Community production in 1998.
that
Consequently,
total Community production represented by the
Community industry mentioned in recital 64 of the provisional duty Regulation is
hereby confirmed.

these represented around 85% of
the share of

(82)

(83)

4.3.

(84)

(85)

It should be underlined that the provisions of Article 4(1)(a) of the Basic Regulation
do not call for an automatic exclusion of Community producers from the Community
industry when they are related to exporting producers concerned. This Article states
that the term "Community industry" may be interpreted as referring to the rest of the
producers, when it is found that certain producers are related to the exporters. The
situation should therefore be examined on a case-by-case basis in the light of Article
4(2) of the Basic Regulation. In fact, Community producers related to exporters are to
be excluded from the definition of the Community production, if, this relationship
leads the producer concerned to behave differently from other producers.

the investigation showed that

In the light of the above considerations,
the two
Community producers in question did not behave differently to other producers which
were not related to the exporting producers concerned. They fully supported the
the present proceeding and actively
complaint which led to the initiation of
participated in the investigation. Furthermore, during the on-the-spot verification and
based on the evidence available, no statutory or organisational restrictions imposed by
the shareholders in the country concerned were found to exist
in relation to the
operation and business decisions of the two companies in question. Finally, the RTG
and the above exporting producer did not provide any proof of such restraining
control. Consequently, it was confirmed that the two Community producers should not
be excluded from the definition of the Community production and therefore from the
Community industry. Since no other comments were received regarding the definition
of the Community industry, the conclusions of recital 64 of the provisional duty
Regulation are hereby confirmed.

Injury analysis period

The GOI claimed that in order to obtain a meaningful assessment of the trends upon
which the injury determinations are based, the information relating to the indicators
examined should be established on the basis of 12-monthly periods from 1996
onwards in line with the IP.

It must be noted that the IP covers the last nine months of 1998 and the first three of
1999. The examination of indicators for the calendar years 1996 to 1998 covers also
three quarters of the IP. The comparison of 1998 and IP figures therefore, simply

15

(86)

(87)

shows the impact of the first quarter of 1999 to these indicators and cannot be
considered as invalidating the examination of the trends established on the basis of
these indicators. This claim was therefore rejected.

The GOI furthermore argued that the period of injury assessment, which covered 1996
to the IP, was different from the period where dumping was assessed, i.e. the IP. As
these two periods did not coincide, the conclusions on injury were considered by the
if the basis for the injury
GOI as legally flawed. It was moreover argued that
indicators would be significantly
assessment was set at 1998, the trends of all
different.

The purpose of the injury investigation is to evaluate the effect of the dumped imports
on the economic situation of the Community industry during the IP. This entails a
finding of injury during the IP. In order to make such analysis, trends are established
for a number of indicators on the basis of information relating to a number of years
preceding the IP. Therefore, a comparison of indicators between the IP and one
specific previous year, as suggested by the GOI, does not affect the results of the
analysis derived therefrom. Indeed,
is the trends of the indicators which are
examined over a number of years up to the IP and not the absolute comparison of
figures of the IP with any particular year that precedes it, which are relevant to reach a
conclusion on injury.

it

4.4.

Consumption in the Community

(88)

Two exporting producers argued that the consumption in the Community set out in
recital 65 of the provisional duty Regulation was significantly incorrect. In particular,
they argued that the production, sales and stocks figures of the Community industry
could not be reconciled. In addition, they claimed that the Commission did not reveal
the basis upon which the determinations concerning the sales of the non-cooperating
Community producers was estimated.

(89) As regards the reconciliation of the consumption figures, it should be noted that one
Community producer related to a company belonging to the Community industry
closed down before the IP. Therefore, no reliable information on its production and
production capacity could be obtained from this company. As far as sales and stocks
information is concerned, this company made its sales exclusively through the related
company belonging to the Community industry. Therefore, reliable information
relating to sales and stocks was obtained from the latter company covering the whole
period considered and the data were reconciled appropriately.

(90)

the Commission estimated the sales volume of

Finally,
the non-cooperating
Community producers in the provisional duty Regulation on the basis of facts
available. For one non-cooperating producer the figures included in its partial reply to
the Commission's questionnaire had been used, whereas for the others the figures
indicated in the complaint were used.

(91)

In the light of the above explanations, the consumption figures indicated in recital 65
of the provisional duty Regulation are confirmed.

16

4.5.

Imports of PSF into the Community from the countries concerned

4.5.1. Cumulative assessment of imports

(92)

(93)

Some exporting producers argued that the imports of PSF from Thailand should not be
assessed cumulatively with the imports from Australia and Indonesia because they
represented less than 1% of consumption in 1996 and 1997.

In the context of cumulation, it is considered that the assessment of whether imports
from a country concerned by an anti-dumping investigation are negligible should
exclusively be made during the IP. Indeed, dumping margins, as well as the existence
of injury are established during the IP. Since the imports from Thailand were above
negligible levels during this period, the above claim was rejected.

4.5.2.

Price undercutting

(94)

(95)

results.

Some exporting producers claimed that the Commission did not take into account
differences in quality of types of PSF in determining price undercutting leading to
incorrect
the price comparison should be performed
separately for the first and lower quality products, as well as for the recycled PSF
types. They also claimed that an adjustment for level of trade should have been
granted, given that that their sales were mainly destined to wholesalers and distributors
whereas the Community industry mainly sold PSF to end-users.

In their opinion,

Following these claims, prices were compared separately for lower quality and
recycled PSF and it was considered that an adjustment for level of trade differences
should be granted to all the exporting producers including those which were only
selling to wholesalers and distributors. The results of this price comparison showed
slightly higher undercutting margins than those established at the provisional stage for
Australia and slightly lower for Indonesia and Thailand. The results of the revised
undercutting calculations expressed on the Community industry's turnover, taking into
account both of the above claims, ranged between 24,9% and 46,8% for the countries
concerned and between 17,7% and 61% for individual companies.

4.6.

Economic situation of the Community industry

4.6.1. General

(96)

(97)

The RTG and one exporting producer claimed that, based on an interpretation of the
WTO ADA, the examination of the economic situation of the Community industry
requires an evaluation of all relevant economic factors and indices having a bearing on
the state of that industry, including factors such as productivity, return on investments,
the magnitude of the actual margin of dumping, negative effects on cash flow, wages
and growth.

Furthermore, they contested the accuracy of the data provided in the provisional duty
Regulation for certain injury factors. In their opinion, although the seven Community
producers constituting the Community industry in the present investigation were the
same as in a previous proceeding, the data provided for some injury factors were
different. They therefore requested disclosure of the names of the companies which
participated in the previous proceeding.

17

(98)

(99)

It should be recalled in this regard that Article 3(5) of the Basic Regulation lists a
number of factors and economic indicators and the Commission collected information
which enabled it
to consider all factors and indices which were decisive for a
meaningful analysis of the state of the Community industry . It follows that the claim
that the Commission's analysis was not complete is not valid.

It is confirmed that the seven Community producers which constituted the Community
industry in the previous proceeding were not the same as in the current proceeding.
However, the request for disclosure could not be accepted given that the RTG and the
exporting producer in question were not interested parties in that previous proceeding.

4.6.2.

Production, capacity and capacity utilisation

(100) The Government of Australia (hereafter "GOA") contested the method used by the
Commission to assess the production capacity of the Community industry for the
product concerned. In its opinion, the decrease in production capacity by 7% was
determined with regard to capacity used for the production of other products and was
therefore incorrect. The GOA considered that production capacity for PSF should have
been assessed exclusively on the actual production of the PSF covered by the
investigation.

(101)

In any event, the GOA considered that the reduction in the Community industry's
production capacity was not compatible with a finding of material injury: firstly
because this reduction did not allow the Community industry to participate in the
considerable growth of the market (+27%) during the period considered; and secondly,
because the reduction in capacity was motivated by the fact that production was
oriented to more profitable products than PSF.

(102) With respect to the assessment of production capacity, it should be underlined that the
product concerned is produced on the same production lines as other products of the
same family. It is therefore impossible and meaningless to directly identify the actual
capacity exclusively installed for one product as compared to all
the products
produced on the same production lines. In actual fact, the assessment of production
capacity for PSF was based on a ratio comparing the actual production of PSF to the
total production of all products produced on the same production lines. Consequently,
contrary to the claim made by the GOA, the assessment of production capacity for
PSF takes into account the actual production of PSF.

(103) Furthermore, it should be noted that the switch from the production of PSF to the
production of other products was motivated mainly by the long-term losses incurred
by the Community industry on production and sales of PSF facing continued unfair
competition from dumped and subsidised imports from third countries. The reduction
in capacity is therefore particularly relevant for the determination of injury but more
specifically for the analysis of the causal link between the dumped imports and the
injury suffered by the Community industry discussed below.

(104) On this basis, it is considered that the claims of the GOA are unfounded. Accordingly,
the data provided, the method described for assessing production capacity for PSF and
the conclusions contained in recitals 72 to 74 of the provisional duty Regulation are
hereby confirmed.

18

4.6.3.

Sales prices of the Community industry

(105) Following a more detailed analysis of the Community industry's sales prices, the
the figures indicated in the table of recital 76 of the

Commission found that
provisional duty Regulation should be slightly revised as follows:

Average sales price

1996

1997

1998

Community industry - Index (1996 - 100)

100

92

92

IP

88

(106) Some exporting producers argued that the above decrease in the Community industry's
sales prices should be seen in the light of the significant decrease in raw material
purchase price in particular during the IP. Accordingly, the decrease in sales price
does not constitute a valid indicator of injury in the present case.

(107)

In his respect, it should be clarified that in recital 79 of the provisional duty Regulation
the 31% decrease in cost of manufacturing should in fact read 31% decrease on cost of
raw materials. The Commission made an analysis on the impact of the decrease of raw
material costs on sale prices. The analysis showed that for the overall Community
industry the above decrease in raw material costs represented around 23% of total cost
of production, or 21% of sales price between 1996 and the IP. On this basis, the
statement made in recital 79 of the provisional duty Regulation that the cost of
production was reduced faster than sales prices is hereby confirmed. This situation in
fact allowed profitability to be increased by 10,7 percentage points in absolute terms
during the period considered (from -4% in 1996 to 6,7% in the IP).

(108) However, it is considered that the evolution of the Community industry's sales price
should be seen in the light of the price evolution of the countries concerned. Indeed, as
stated in recital 69 of the provisional duty Regulation it is recalled that PSF imported
from the countries concerned followed a continuous decreasing tendency throughout
the period considered. The decrease was as high as 22% during that period. If the
Community industry would have followed this trend it would still have incurred losses
at the same level as in 1996.

(109) Finally, when analysing the Community industry's prices on the Community market,
one should bear in mind that the Community industry did not reach the minimum level
of profit of 10% during the IP. Under these circumstances, it is considered that the
Community industry's sales prices constitute a relevant injury indicator given it had a
bearing on the state of the industry.

4.6.4.

Profitability of the Community industry

(110) The GOA claimed that in the absence of data relating to the profitability of the
Community industry prior to the appearance of dumped imports, no proper assessment
could be made as to whether the injury suffered by the Community industry was
material.

(111) Some exporting producers claimed that the improvement in the Community industry's
profitability did not indicate injury. Indeed, profitability significantly improved over
the period considered, namely from a loss of around 4% to a profit of over 6%. They
further argued that the overall profit achieved by the Community industry within the
IP could not be further increased with the current product mix of commodities and

19

specialities, unless more speciality PSF types would be produced and sold by the
Community industry.

(112) The present investigation showed that its improvement in profitability was mainly the
result of both the restructuring process undertaken by the Community industry and the
resulting reduction in sales, general and administrative costs and the decrease of the
raw materials purchase prices. Production costs were reduced faster than sales prices
decreased, allowing thus the Community industry to return to profit
in 1998.
Nevertheless, it was emphasised that this improvement in profitability may only be
temporary and any adverse factors, particularly possible unfavourable developments in
raw material prices, could have negative implications on the current profitability. This
statement was reinforced by the fact that the main raw materials used in the PSF
industry are largely influenced by the price of crude oil.

(113)

It should also be noted that an improvement
in profitability during the period
considered does not automatically lead to the conclusion that the Community industry
did not suffer material injury. The assessment as to whether the injury suffered by the
Community industry was material cannot only be based on the profitability nor can it
be based on a comparison of profitability between 1996 and the IP. Indeed, the
provisions of the Basic Regulation enumerate a number of factors among which the
volume of dumped imports and the effect of dumped imports on prices on the
Community market for like products and specifies no one or more of these factors can
necessarily give decisive guidance for a negative finding on injury.

(114) As indicated in recitals 82 to 85 of the provisional duty Regulation regarding the
conclusions on the economic situation of the Community industry, profitability
achieved by the industry was not considered to be a major indicator of the injury
suffered by the Community industry. Indeed, negative developments were observed
for most of the economic indicators pertaining to that
industry: market share,
production capacity, sales volume, sales prices, stocks, investments, employment and
significant price undercutting by dumped imports from the countries concerned.

(115) Based on the foregoing, since no further comments were received regarding the
profitability of the Community industry, the conclusion that profitability during the IP
is inadequate is hereby confirmed.

4.6.5. Market share

(116)

It has to be recalled that as mentioned in recital 77 of the provisional duty regulation,
the market share held by the Community industry decreased significantly from 68% to
50.3% of the total Community market from 1996 to the IP.

(117) Some exporting producers argued that the Community industry's loss in market share
has to be seen in the light of the cost disadvantage it suffers as compared to the
countries concerned. In their opinion, it cannot be expected that the industry could
maintain its market share given that its production costs are significantly higher than
those of the exporting producers concerned.

(118) This argument was considered not relevant

in the context of an anti-dumping
investigation. In such an investigation, it has to be established whether imports are
dumped and cause injury to the Community industry, as this was established in the
present case. This being said, exporting producers can fully reflect cost advantages

20

they may have in their sales prices, as long as this is done both on the domestic and
export markets.

4.6.6. Conclusion

(119) Based on the foregoing, it is considered that the above arguments and claims are not
such as to change the findings made in the provisional duty Regulation. Consequently,
the contents of recitals 82 to 85 of the provisional duty Regulation and the conclusion
injury during the IP is hereby
that
confirmed.

the Community industry suffered material

5.

CAUSATION

5.1.

Effect of dumped imports

(120) The GOA claimed that there is no evidence that the injury suffered by the Community
industry was caused by the limited volumes imported from Australia. The GOA
claimed that
the market share of Australian imports was too limited (2% of
consumption) to have any influence on prices on the Community market. Rather, they
had to follow the price trends imposed by the large operators on the Community
market. Accordingly, the GOA suggested that injury, if any, was caused by large
imports from other third countries.

(121) Similarly, the RTG claimed that since the imports from Thailand were negligible in
1996 and 1997, they could not cause injury to the Community industry and therefore
the analysis of the impact of these imports should begin from 1998.

(122) The RTG and one Indonesian exporting producer argued that in view of the data
published in the provisional duty Regulation the conclusion reached by the
Commission that the Community industry has been weakened was wrong. Their
statement was based particularly on the improvement in the Community industry's
profitability during the IP. It was furthermore based on an analysis of market share and
sales indicators pertaining to both the current investigation and the corresponding
1996 indicators from the expiry review concerning PSF from Taiwan and Korea5.

(123) The same parties further claimed that some producers included in the definition of the
Community industry concentrated on the production of high-profit speciality products.
Accordingly, it could not be concluded that the Community industry was vulnerable
particularly to Indonesian imports which are largely made of regular PSF. In their
opinion,
the
Community industry is largely shielded from the effects of imports.

the very high profits obtained on speciality fibres indicated that

(124) Regarding the arguments raised by the GOA on its market share, it is recalled that
imports from Australia were found to be clearly above the de minimis level during the
IP. In addition, it was found that all conditions required for a cumulated analysis were
met. In these circumstances, comments concerning individual market shares held by
individual countries during the IP and in previous to the IP years were not considered
relevant. The same remark applied to the similar argument raised by the RTG.

5 Council Regulation (EC) No 1728/1999, OJ L 204, 4.8.1999, p.3

21

(125)

In addition, it should be recalled that prices of dumped imported PSF from all the
countries concerned were undercutting the Community industry's prices on the
Community market having a significant negative impact on the economic situation of
the Community industry. This finding is reinforced by the fact that the PSF market is
transparent and that, therefore, price differentials or low priced offers can have a price
depressing effect.

(126)

It is furthermore considered that the GOA did not provide any evidence which would
contradict the provisional finding that the Community industry suffered material injury
as a result of low-priced dumped imports. Accordingly, the conclusion that dumped
imports, taken in isolation, had caused material injury to the Community industry is
hereby confirmed.

(127) The development of the Community industry's profitability was extensively analysed
in recital 79 of the provisional duty Regulation and further information has been given
in section 4.6.4 above. In this respect, it should be noted that the statement that the
Community industry is concentrating in high-value PSF types is not correct. Indeed,
during the IP, the Community industry's sales of the so-called commodity PSF types,
which are mainly imported from the countries concerned, represented over 72% of its
total sales. This finding therefore leads to confirm the conclusion that the Community
industry as a whole is affected by low-priced dumped imports.

(128) Regarding the validity of the data for 1996 extracted from the expiry review
concerning PSF from Taiwan and Korea, as explained in recital (99) above, the
Community producers which constituted the Community industry in this expiry review
were not the same as those constituting the Community industry in the present
proceeding. Consequently, it is impossible to establish a coherent and reliable trend on
the basis of the economic indicators reported for 1996 in this expiry review and on
figures for subsequent years reported in the present proceeding. Such an approach
would lead to erroneous and meaningless results.

5.2.

Other factors

5.2.1. Currency fluctuations

(129) The GOA argued that the Commission failed to look at the effect that exchange rate
fluctuations have had on import prices from Australia, specifying that during the
investigation period PSF imported from Australia had benefited from a favourable
exchange rate appreciation.

(130)

(131)

In this respect it should be noted that imports from this country were invoiced in USD,
in DEM and in GBP and not in AUD on the Community market. The parity of the
Australian currency was therefore not relevant in the determinations made.

In any event, it should be pointed out that the Australian currency depreciated during
the first seven months of the IP and subsequently appreciated during the next five
months of the IP, as compared to its parity to the ECU/EUR of the first month of the
IP. Consequently, there was no constant decreasing trend of the Australian currency
during the investigation period.

22

5.2.2.

Raw material prices in the exporting countries

(132) The RTG further argued that for the determination of the impact of the prices of the
Thai imports on the Community industry the Commission should have considered the
sharp decrease of the raw material prices in Thailand.

(133)

It is considered that the above argument is irrelevant for the analysis of the cause of
injury to the Community industry. Indeed, the cost of production factors in any
exporting country is relevant only to the dumping determinations. The important
parameter for injury and causation considerations is the price that the imported product
concerned is sold in the Community market.

5.3.

Conclusion

(134) Given that no other new arguments were received regarding the cause of the injury
suffered by the Community industry, the conclusion that dumped imports, taken in
isolation, had caused injury to the Community industry, as stated in recital 99 of the
provisional duty Regulation, is hereby confirmed.

6.

COMMUNITY INTEREST

6.1.

Interest of the Community industry

(135) Since no comments were received regarding the above issues, the findings on the
interest of the Community industry cited in recital 101 of the provisional duty
Regulation are hereby confirmed.

6.2.

Impact on users

(136) Following the publication of the Provisional duty Regulation, a number of Community
users claimed that the imposition of anti-dumping duties would have negative effects
on their competitiveness on the downstream products and would ultimately threaten
their survival. In their opinion, the imposition of anti-dumping duties would trigger
price increases which users would need to reflect
in downstream products. This
development would in turn trigger an increase in imports of lower-priced downstream
products from other third countries and from the countries concerned by this
investigation.

(137)

In addition, Eurofibrefill reacted to the provisional duty Regulation and argued that
specific PSFNS were either not produced at all by the Community industry, or not in
sufficient quantities to cover the Community demand. In their opinion this situation
was due to the fact that the Community industry mainly focused on the production of
PSFS. Therefore it would have to continue to source PSFNS from abroad, despite the
proposed imposition of anti-dumping duties.

(138) Eurofibrefill further argued that the impact of the proposed measures on users should
the existing anti-dumping and anti-subsidy
be also assessed taking into account
measures on imports from other countries (e.g. from Taiwan). In their opinion, the
Community industry continuously asked for protection and that in the near future all
sources of supply would be subject to anti-dumping or countervailing measures.

23

(139)

(140)

(141)

In support of the claim of Eurofibrefill, two of its members provided the Commission
with letters addressed to producers included in the Community industry showing that
these producers were not able to provide the requested types of PSF in the short term.

It should be note that certain of the above users who came forward after the imposition
of provisional duties either did not make themselves known within the time limit set
out in the Notice of Initiation of the proceeding, or did not reply to the questionnaire
sent by the Commission at that stage. Consequently, most of them could not be
considered as interested parties under Article 21(2) of the Basic Regulation and their
views could not, normally, be taken into account at
the definitive stage of the
proceeding.

In addition, as stated in recital 102 of the provisional duty Regulation, the overall level
of cooperation in the Community interest
investigation was very low. The user
companies who participated in the investigation only represented around 4% of total
consumption in the Community market. It was therefore considered that at a broader
level no real concern about the impact of the imposition of anti-dumping measures on
PSF on their activities existed. In any event, it was considered that no meaningful
conclusions could be drawn from such limited information.

(142) Regarding the claim by Eurofibrefill, that the Community industry mainly focused on
PSFS, it should be noted that, as already explained above, the Community industry
production and sales of PSFNS types represented about 75% of its total production
during the IP. The claim therefore that the Community industry focused on PSFS has
not been confirmed by the investigation.

(143) As regards the availability of specific PSF types, it is recalled that there are no or only
minor technical difficulties in producing any type of fibre. As far as the Community
industry is concerned and as already stated in recital (20) above, it was found that it
could produce all types of PSF without any significant additional investment. The
important parameter influencing the decision to produce certain types was whether the
price the user was ready to pay covered the costs of production and allow a profit to be
earned. As long as exporting producers practising dumping were taking advantage of
unfair trade practices and offered PSF at low prices on the Community market, the
Community industry was not able and willing to compete and therefore did not
produce these types in the prevailing market circumstances. However, for the future it
could be expected that once a situation were reestablished in which the exporting
producers carried out their exports at fair market conditions, the Community industry
would resume production of such product types.

(144)

In any event, the information available on the cost structure of the user industry, the
level of the proposed measures and the share between dumped imports and the other
sources of supply indicate that:

–

–

–

PSF represents between 25% and 45% of the users total cost of production of
downstream products;

the average anti-dumping duty is about 22% for the countries concerned;

the share of dumped imports is 9% of total consumption of PSF.

24

The proposed measures may thus have the impact of increasing the cost of production
of users by between 0,5% to a maximum of 0,9%. This likely maximum increase is
considered to be relatively low when compared to the positive impact of the proposed
measures in restoring effective competition on the Community market.

(145) This analysis on the impact of the proposed measures on users therefore indicated that
the imposition of anti-dumping measures was not likely to trigger an increase in the
import of cheap downstream products into the Community. This conclusion was also
reached in the absence of any evidence from the users concerned substantiating their
claim, e.g. that past measures on this product had led to such effects.

(146) Furthermore, regarding the impact of the existing measures on the cost of production
of the user industries, it should be noted that the anti-dumping measures in force on
PSF against third countries are already reflected in the cost information, used by the
Commission in the current Community interest investigation.

(147) As far as the countervailing measures imposed in the framework of the parallel
anti-subsidy proceeding are concerned, it has been established that their impact may
cause an increase of between 0,1 and 0,16% on the cost of production of the user
the proposed anti-dumping and
companies. Consequently the total
countervailing measures would lead to a possible increase between 0,6 and 1,06% of
the cost of production of the overall users industries.

impact of

(148)

In this context, it should be recalled that the share of the imports from countries
concerned by all anti-dumping proceedings, including the present proceeding and the
parallel anti-subsidy proceeding, represented about 37% of the total imports to the
Community market during the IP. It therefore follows that there are other significant
sources of supply, to which no anti-dumping or countervailing duties apply.

(149) As the examination of the above arguments submitted by the user companies does not
lead to new conclusions, the considerations of recital 105 of the provisional duty
Regulation on the impact of the proposed measures to the users is hereby confirmed.

6.3.

Conclusion

(150) The new arguments received regarding the determination of the Community interest,
are not considered to be such as to reverse the conclusion that no compelling reasons
exist against the imposition of anti-dumping measures. The provisional findings are
therefore confirmed.

7.

DEFINITIVE DUTY

(151)

injury, causation and
In view of the conclusions reached regarding dumping,
Community interest, it is considered that definitive anti-dumping measures should be
taken in order to prevent further injury being caused to the Community industry by
dumped imports from Australia, Indonesia and Thailand.

7.1.

Injury elimination level

(152) As explained in recital 108 of the provisional duty Regulation, a non-injurious level of
prices was determined which would cover
the Community industry's cost of
production and a reasonable profit which would be obtained in the absence of dumped
imports from the countries concerned.

25

(153) The RTG and some exporting producers argued that while it was mentioned in the
provisional duty Regulation that the 6,7% profitability achieved by the Community
industry during the IP was still inadequate in the present proceeding, it was considered
reasonable in previous proceedings6 involving PSF and PTY (polyester textured
filament yarn). On this basis they questioned the level of the required profit margin of
10% in the present proceeding which in their opinion the Commission did not justify.

(154) Other exporting producers argued that

justification in the
provisional duty Regulation that the required profit should ensure the Community
industry's long-term viability was not valid according to the latest jurisprudence from
the Court of First Instance on this issue.

the Commission's

(155) As far as the required profit is concerned, it should be noted that the Commission
indicated in recital 79 of the provisional duty Regulation that a margin of 10% should
be considered as a minimum that would ensure the viability of the industry. This
statement should be seen in the light of the contents of recital 101 of the provisional
duty Regulation which indicates that the Community industry suffered from low-
priced dumped imports from various countries and incurred losses for a decade. In this
context, the profit achieved by the Community industry before the appearance of
dumped imports from Australia, Indonesia and Thailand is not a reliable basis on
which to determine such profit.

(156)

In addition,
it must be noted that, as acknowledged by the exporting producers
from the PSF industry.
themselves,
the PTY industry is completely different
Therefore, it was considered that the profit for PTY is not relevant for establishing the
profit for PSF.

(157) Furthermore, it

is considered that

the level of profit deemed reasonable for the
Community industry in 1994 should not necessarily determine the margin to be used
more than four years later. Firstly, because the Community industry continued to incur
in 1994 was
financial losses after 1994. Secondly because the reasonable profit
determined having regard to the long term needs in investments at that time whereas in
the present case, due account was taken of the long term losses incurred by the
Community industry and, as pointed out by some exporting producers, the level of
profit that could be achieved in the absence of dumped imports. In any event however,
even by employing the suggested profit margin of 6%, the level of the proposed
measures would not change as these measures would still be based on the dumping
margins.

(158) Finally, it should be underlined that the above exporting producers did not provide any
evidence showing that the approach of the Commission on the reasonable level of
profit was not correct and they did not make any relevant analysis demonstrating what
such margin should be.

(159) Consequently, based on the foregoing, the contents of recital 108 of the provisional

duty Regulation are hereby confirmed.

6 PSF from Belarus, PTY (polyester textured filament yarn) from Indonesia and Thailand.

26

7.2.

Form and level of the duty

(160)

In accordance with Article 9(4) of the Basic Regulation the anti-dumping duty rates
correspond to the dumping margins, as the injury margins are found to be higher for
all exporters in the countries concerned.

(161) However, with regard to the parallel anti-subsidy proceeding, in accordance with
Article 24(1) of Regulation (EC) No 2026/97 (hereinafter "the Basic anti-subsidy
Regulation") and Article 14(1) of the Basic Regulation, no product shall be subject to
both anti-dumping and countervailing duties for the purposes of dealing with one and
the same situation arising from dumping and from export subsidization. In the present
investigation, it was found that a definitive anti-dumping duty should be imposed on
imports of the product concerned originating in Australia, Indonesia and Thailand and
therefore, it is necessary to determine whether, and to what extent, the subsidy and the
dumping margins arise from the same situation.

(162)

In the parallel anti-subsidy proceeding it was found that in, inter alia, Thailand (all
companies) and Indonesia (only cooperating companies), the level of subsidisation
was below the de minimis level and therefore, no countervailing duty was imposed.

(163) With regard to Australia, a definitive countervailing duty corresponding to the amount
of subsidy, which was found to be lower than the injury margin, was proposed in
accordance with Article 15(1) of the Basic anti-subsidy Regulation. All of the subsidy
schemes investigated in Australia constituted export subsidies within the meaning of
Article 3(4)(a) of the Basic anti-subsidy Regulation. As such, the subsidies could only
the export price of the Australian exporting producer, thus leading to an
affect
increased margin of dumping.
the definitive dumping margin
In other words,
established for the sole cooperating Australian producer is partly due to the existence
of export subsidies. In these circumstances, it is not considered appropriate to impose
both countervailing and anti-dumping duties to the full extent of the relevant subsidy
and dumping margins definitively established. Therefore, the definitive anti-dumping
duty should be adjusted to reflect the actual dumping margin remaining after the
imposition of the definitive countervailing duty offsetting the effect of the export
subsidies.

(164) For the non-cooperating Indonesian exporting producers, a definitive countervailing
duty corresponding to the amount of subsidy, which was found to be lower than the
injury margin, was proposed in accordance with Article 15(1) of the Basic anti-
subsidy Regulation. It was determined that half of the subsidy schemes in Indonesia
constituted export subsidies within the meaning of Article 3(4)(a) of the Basic anti-
subsidy Regulation. As such, the subsidies could only affect the export price of the
Indonesian non-cooperating exporting producers, thus leading to an increased margin
of dumping. In other words, the definitive dumping margin established for these non-
cooperating Indonesian exporting producers is partly due to the existence of export
subsidies. In these circumstances, it is not considered appropriate to impose both
countervailing and anti-dumping duties to the full extent of the relevant subsidy and
dumping margins definitively established. Therefore, the definitive anti-dumping duty
for the non-cooperating Indonesian exporting producers should be adjusted to reflect
the actual dumping margin remaining after
the definitive
countervailing duty offsetting the effect of the export subsidies.

the imposition of

27

(165) On the basis of the above, the definitive duty rates, expressed as a percentage of the
CIF Community border price, customs duty unpaid, taking into account the results of
the anti-subsidy proceeding, are as follows:

Country

Company

Rate of anti-dumping duty

Australia

All companies

Indonesia

P.T. Indorama Synthetics Tbk,
P.T. Panasia Indosyntec,
P.T. GT Petrochem Industries Tbk,
P.T.Susilia Indah Synthetic Fiber Industries,
P.T. Teijin Indonesia Fiber Corporation Tbk,
All other companies

Thailand

Indo Poly (Thailand) Ltd.,
Teijin Polyester (Thailand), Ltd.,
Teijin (Thailand) Ltd.,
All other companies

12,0%

8,4%
14,8%
14,0%
14,0%
14,0%
15,8%

15,5%
26,9%
26,9%
27,7%

(166) 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'.

(167) 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 Commission7 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 Regulation accordingly
by updating the list of companies benefiting from individual duty rates.

(168) Since sampling has been used in the investigation of dumping in Indonesia, a new
exporters’ review pursuant to Article 11(4) of the Basic Regulation with the objective
of determining individual dumping margins cannot be initiated in this proceeding as
far as it concerns Indonesia. However, in order to ensure equal treatment for any
genuine new Indonesian exporting producer and the cooperating companies not
included in the sample for this country, it is considered that provision should be made
for the weighted average duty imposed on the latter companies to be applied to any
new Indonesian exporting producer who would otherwise be entitled to a review
pursuant to Article 11(4) of the Basic Regulation.

7

European Commission, Directorate-General Trade, Directorate C, DM 24 - 8/38, Rue de la
Loi/Wetstraat 200, B-1049 Brussels / Belgium

28

8.

COLLECTION OF THE PROVISIONAL DUTY

(169)

In view of the magnitude of the dumping margins found for the exporting producers,
and in light of the seriousness of the injury caused to the Community industry, it is
considered necessary that the amounts secured by way of provisional anti-dumping
duty under Regulation (EC) No 124/2000 be definitively collected to the extent of the
amount of definitive duties imposed if this amount is equal or lower than the amount
of the provisional duty. Otherwise, only the amount of the provisional duty should be
definitively collected.

HAS ADOPTED THIS REGULATION:

Article 1

1.

2.

A definitive anti-dumping duty is hereby imposed on imports of synthetic staple
fibres of polyesters, not carded, combed or otherwise processed for spinning, falling
within CN code 5503 20 00 and originating in Australia, Indonesia and Thailand.

The rate of the definitive duty applicable to the net free-at-Community-frontier price,
before duty, for products produced by the companies indicated shall be as follows:

Country

Company

Rate of duty TARIC additional
code

Australia

All companies

Indonesia

P.T. Indorama Synthetics Tbk,
Graha Irama, 17th floor,
Jl. H.R. Rasuna Said Blok X-1,
Kav. 1-2, P.O. Box 3375,
Jakarta 12950, Indonesia

P.T. Panasia Indosyntec,
Jl. Garuda 153/74,
Bandung 40184, Indonesia

P.T. GT Petrochem Industries Tbk,
Exim Melati Building - 9th floor,
Jl. M.H. Thamrin Kav. 8-9,
Jakarta 10230, Indonesia

P.T.Susilia Indah Synthetic Fiber Industries,
Jl. Kh. Zainul Arifin Kompleks
Ketapang Indah
Blok B 1 No. : 23,
Jakarta 11140, Indonesia

P.T. Teijin Indonesia Fiber Corporation Tbk,
5th floor Mid Plaza 1,
Jl Jend. Sudirman Kav. 10-11,
Jakarta 10220, Indonesia

12,0%

-

8,4%

A051

14,8%

A052

14,0%

A053

14,0%

A054

14,0%

A055

All other companies

15,8%

A999

29

Thailand

Indo Poly (Thailand) Ltd.,
35/8 MOO 4, Tambol Khunkaew
Amphur Nakhornchaisri, Nakhornprathom 73120
Thailand

Teijin Polyester (Thailand) Ltd.,
19th floor, Ploenchit Tower
898 Ploenchit road, Lumpinee, Patumwan
Bangkok 10330, Thailand

Teijin (Thailand) Ltd.,
19th floor, Ploenchit Tower
898 Ploenchit road, Lumpinee, Patumwan
Bangkok 10330, Thailand

15,5%

A056

26,9%

A155

26,9%

A155

All other companies

27,7%

A999

3.

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

Where any new exporting producer in Indonesia provides sufficient evidence to the
Commission that

Article 2

–

–

–

it did not export to the Community the products described in Article 1(1)
during the investigation period (1 April 1998 to 31 March 1999),

it is not related to any of the exporters or producers in Indonesia which are
subject to the anti-dumping measures imposed by this Regulation,

it has actually exported to the Community the products concerned after the
investigation period on which the measures are based, or it has entered into an
irrevocable contractual obligation to export a significant quantity to the
Community,

the Council, acting by simple majority on a proposal submitted by the Commission after
consulting the Advisory Committee, may amend Article 1(2) of this Regulation by adding the
new exporting producer to the companies subject to the weighted average duty rate listed in
that Article.

Article 3

The amounts secured by way of the provisional anti-dumping duty on imports originating in
Australia, Indonesia and Thailand under Regulation (EC) No 124/2000 shall be collected at
the rate of the duty definitively imposed by this Regulation. Amounts secured in excess of the
rate of definitive anti-dumping duty shall be released. In cases where the rate of the definitive
duty imposed is higher than the rate of the provisional duty, only the amounts secured at the
level of the provisional duty should be definitively collected.

30

This Regulation shall enter into force on the day following 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

31