Council Regulation (EC) No 1523/2000 of 10 July 2000 imposing a definitive countervailing duty and definitively collecting the provisional countervailing duty imposed on imports of stainless steel fasteners originating in Malaysia and the Philippines and terminating the proceeding concerning imports of stainless steel fasteners originating in Singapore and Thailand
Date: 2000-07-10
Institutions: Council of the European Union
Subjects: Malaysia, Philippines, Thailand, bolt and screw industry, import, monetary compensatory amount

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COUNCIL REGULATION (EC) No 1523/2000

of 10 July 2000

imposing a definitive countervailing duty and definitively collecting the provisional countervailing
duty imposed on imports of stainless steel fasteners originating in Malaysia and the Philippines and
terminating the proceeding concerning imports of stainless steel fasteners originating in Singapore
and Thailand

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 2026/97 of 6
October 1997 on protection against subsidised imports from
countries not members of the European Community (1), and in
particular Articles 14 and 15 thereof,

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

Whereas:

A. PROVISIONAL MEASURES

(the ‘Provisional
By Regulation (EC) No 618/2000 (2)
Regulation’),
the Commission imposed a provisional
countervailing duty on imports into the Community of
stainless steel fasteners (‘SSF’) originating in Malaysia and
the Philippines and falling within CN codes 7318 12 10,
7318 14 10, 7318 15 30, 7318 15 51, 7318 15 61,
7318 15 70 and 7318 16 30.

B. SUBSEQUENT PROCEDURE

Subsequent to the disclosure of the essential facts and
considerations on the basis of which it was decided to
impose provisional countervailing measures on imports
of SSF originating in Malaysia and the Philippines,
interested parties made written submissions
several
making their views known on the provisional findings.
The parties who so requested were granted an oppor-
tunity to be heard.

(1)

(2)

(3)

(4)

(i) the imposition of a definitive countervailing duty on
imports of SSF originating in Malaysia and the Phil-
ippines and the definitive collection, at the level of
this duty, of the amounts secured by way of the

(1) OJ L 288, 21.10.1997, p. 1.
(2) OJ L 75, 24.3.2000, p. 18.

provisional countervailing duty imposed on these
imports, and

(ii) the

termination of

the proceeding concerning
imports of SSF originating in Singapore and Thai-
land without the imposition of measures.

(5)

(6)

(7)

(8)

(9)

They were also granted a period within which to make
representations subsequent to this disclosure.

The oral and written comments submitted by the inter-
ested parties were considered and, where appropriate,
the definitive findings have been modified accordingly.

Having reviewed the provisional findings on the basis of
the information gathered since then, it is concluded that
the main findings as set out in the provisional Regula-
tion should be hereby confirmed.

C. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

1. Product under consideration

The provisional Regulation described the product under
consideration as stainless steel fasteners, i.e. bolts, nuts
and screws of stainless steel which are used to join
mechanically two or more elements. The product under
consideration falls within CN codes 7318 12 10,
7318 14 10, 7318 15 30, 7318 15 51, 7318 15 61,
7318 15 70 and 7318 16 30.

In the absence of any comment raised by interested
parties to the definition of the product under considera-
tion provided in recitals 10 to 13 of the provisional
Regulation, this definition is hereby confirmed.

In the provisional Regulation, the Commission found
that SSF produced and sold on the respective domestic
markets of Malaysia and the Philippines, and those
exported to the Community
countries
concerned as well as those produced and sold by the
Community industry in the Community market have the
same physical characteristics and uses.

from the

(11)

In the absence of any new information on the like
product, the provisional findings as described in recital
16 of the provisional Regulation are hereby confirmed.

The Commission continued to seek and verify all infor-
mation deemed necessary for the definitive findings.

2. Like product

All parties were informed of
facts and
considerations on the basis of which it was intended to
recommend:

the essential

(10)

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D. SUBSIDIES

I. MALAYSIA

1. Double deduction of business expenses for the

promotion of exports

1999, the ‘IP’). In addition, pursuant to Section 14A of
the Promotion of Investment Act, the benefit under this
programme can be extended for another
five-year
period. Neither the GOM nor the company submitted
evidence that the benefit has effectively expired. Since
the company effectively benefited from a countervailable
subsidy during the IP, and since there is no evidence that
it has ceased to benefit from the scheme, this claim
cannot be accepted.

(12)

is not

it was found that

The Government of Malaysia (the ‘GOM’) alleges that
this programme
contingent upon export
performance, as the company is not required to export.
The GOM also states that expenses incurred in an inter-
national trade fair in Malaysia are eligible for this benefit.
However,
this programme cannot
reasonably confer any advantage to sales on the
domestic market, and, more specifically, that an inter-
national trade fair is focused on export activity. Conse-
quently, since the programme is targeted at fostering
export sales to be made in the future, the programme is
in fact tied to anticipated exports. Therefore, this claim
cannot be accepted and it
this
programme constitutes a de facto export subsidy in the
sense of Article 3(4)(a) of Council Regulation (EC) No
2026/97 (the ‘Basic Regulation’).

is concluded that

(13) One company claimed that in the calculation of the
benefit to the exporting producer under this scheme, the
Commission had used the wrong amount of tax savings.
However, after verification, it is hereby confirmed that
the subsidy amount for this programme is 0,01 %.

(14)

(15)

2. Pioneer status

The GOM claims that this programme does not consti-
tute a countervailable subsidy since the definition of a
promoted product
It
further alleges that the list of promoted products covers
a broad range and is available to all companies
producing promoted products.

is based on objective criteria.

It was found during the verification that the criteria to
determine whether a product qualifies as a promoted
product are vague and not objective. A number of
criteria used by the GOM (i.e. suitability to meet the
economic requirements or development of Malaysia and
the national or strategic requirements of Malaysia) can
cover any basic product. The verification revealed that
there were no objective criteria applied in the decision
which products should be promoted and that only
producers of certain products benefited from the
scheme. The fact that a broad range of products is
covered does not alter the situation that there are no
this claim cannot be
objective criteria. Therefore,
accepted and it is concluded that this programme consti-
tutes a specific subsidy in the sense of Article 3(2)(a) of
the Basic Regulation.

(16) One company stated that its pioneer status expired in
July 1999 and the company has ceased to benefit from
this programme. It was found that the company was still
claiming tax reductions under this programme during
the investigation period (1 April 1998 to 31 March

(17)

(18)

3. Sales tax and import duty exemptions

The GOM and one company claimed that the sales tax
and import duty exemption does not constitute a
subsidy since the programme is also available to compa-
nies located outside the export processing zones. During
the verification,
it was established that an exemption
from duties or taxes under the conditions for this
programme is not available outside the Free Zones,
therefore this claim is rejected.

The GOM and one company also assert that the sales tax
and import duty exemption falls within the criteria of
footnote 1 to the WTO Agreement on Subsidies and
Countervailing Measures (the ‘SCM Agreement’) because
it constitutes an exemption of an exported product from
duties or taxes borne by the like product when destined
for domestic consumption. The Commission is of the
view that a distinction should be made between the sales
tax/import duty exemption for raw materials and machi-
nery. It is clear that footnote 1 to Article 1.1(a)(1)(ii) of
the SCM Agreement does not apply to exemptions from
duties or taxes for machinery which cannot be consid-
ered as inputs consumed in the production process as
required by Annex II to the basic Regulation and the
SCM Agreement. Since no specific arguments were
raised pertaining to the countervailability of the sales tax
and import duty exemption for machinery, the findings
in recital 54 of
the provisional Regulation on this
programme are hereby confirmed.

fall within the criteria of

(19) As regards the sales tax and import duty exemption for
raw materials, it is considered that this programme does
not
footnote 1 to Article
the SCM Agreement. This provision
1.1(a)(1)(ii) of
provides that,
‘the exemption of an exported product
from duties or taxes borne by the like product when
destined for domestic consumption, or the remission of
such duties or taxes not in excess of those which have
accrued, shall not be deemed a subsidy’. Footnote 1
applies to the exemption of duties or taxes where no
excess remission occurs.
the
Malaysian authorities do not have a verification system
in place to determine what
inputs are used in the
production process and especially in what amounts. The
verification revealed that the company that is admitted
to start production in a free trade zone has to submit a
simple listing of possible inputs to produce the finished
product. The customs authorities do not verify what
specified
input/output

It was established that

applicable

ratio is

the

for

14.7.2000

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imported inputs. Therefore, there is no framework in
place to establish whether an excess remission occurred
and consequently,
footnote 1 and
the conditions of
Annex I to III are not met. It should also be noted that
the GOM did not carry out a further examination based
on the actual inputs involved in the context of deter-
mining whether an excess payment occurred in accord-
ance with Annex II(II)(5) to the basic Regulation. There-
fore, these programmes constitute subsidies pursuant to
Article 1.1 (a)(1)(ii) of
the SCM Agreement and the
exemption in footnote 1 to the abovementioned provi-
sion does not apply. Since footnote 1 does not apply,
these schemes constitute export subsidies in the sense of
Article 3(4)(a) (and item (h) and (I) of Annex I) of the
basic Regulation.

(24) One exporting producer asserts that the Commission did
not substantiate with positive evidence its determination
of specificity for this programme.

(25)

In recitals 50, 65, 66 and 67 of the provisional Regula-
tion,
the Commission listed the reasons why these
programmes constitute specific and, therefore, counter-
vailable subsidies. These findings are not based on asser-
tions but on positive evidence. This claim has therefore
been rejected.

(20) As regards the calculation of the benefit, there is no
system in place to verify the consumption of inputs in
the production of the exported product and the GOM
did not carry out a further examination based on actual
inputs in order to establish the excess remission of sales
tax and import duties. In accordance with Annex II to
the basic Regulation, the full amount of the import
duties not paid constitutes the benefit to the exporting
producer.

(21)

The GOM further claimed that the raw material used in
the production of the product concerned (steel wire rod)
is, even without the benefit of this programme, not
subject to sales taxes.

(22)

The Commission examined the evidence provided by the
GOM and concluded that the raw materials used in the
production of SSF are listed in Schedule B of the Sales
Tax Order. This schedule is a listing of goods that are
not subject
this claim is
to sales taxes. Therefore,
accepted and the countervailing duty rates for the sales
tax exemption for raw materials have been amended
accordingly since no sales
taxes would have been
payable without the benefit of this programme.

4. Interest rate

(26)

The GOM and one exporting producer claim that the
Commission should have used an average interest rate of
11,42 % instead of 11,5 %.

(27) On the basis of the information provided during the
verification, it was found that an average interest rate of
11,5 % during the IP was appropriate. The average
commercial interest rate was calculated on the basis of
the average monthly lending rate of commercial banks
in Malaysia during the IP which results in an average of
11,4975 % (attachment C2 of the GOM questionnaire
response). No additional evidence was provided which
may justify a downward adjustment of the interest rate.
Therefore, this claim cannot be accepted.

5. Amount of countervailable subsidy

(28) As regards the calculation of the amount of countervail-
able subsidies, an adjustment was made concerning the
amount of interest added to the subsidy amount calcu-
lated provisionally. This adjustment is reflected in the
following table showing the amount of countervailable
subsidy.

(23) However, as regards import duties on raw materials, it
was established that these imports are subject to import
duties. On the basis of the above arguments, the provi-
sional findings for the import duty exemption on raw
materials are hereby confirmed.

(29)

In view of the above, the following subsidy rates have
been found at
the definitive stage. The countrywide
weighted average subsidy margin is above the applicable
de minimis level.

Company

Double
Deductions

Pioneer Status

Sales Tax
Exemptions

Import duty
exemptions

Total

Tong Heer Fasteners Co.
Sdn. Bhd.

Tigges Stainless Steel
Fasteners (M) Sdn. Bhd.

0,01 %

1,87 %

0,40 %

2,43 %

4,71 %

0,34 %

0,00 %

0,03 %

1,94 %

2,31 %

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(30)

(31)

(32)

II. PHILIPPINES

1. Introduction

Comments on the disclosure document were submitted
jointly by the Government of the Philippines (the ‘GOP’)
and by the exporting producer Lu Chu Shin Yee Works
(Philippines) Co. Ltd. (‘Lu Chu’). The comments relate to
two subsidy schemes:
the gross income tax scheme
(Section 24 of the Special Economic Zones Act (SEZA)
and the import duty exemption on machinery, raw
materials, supplies and spare parts (Sections 4(c) and 23
(SEZA)). Comments were focused on the exemption on
imports of spare parts and supplies.

2. Gross Income Tax (GIT)

The GOP and Lu Chu submitted that in certain circum-
stances, depending on the respective levels of gross
income and net income, the application of the GIT (i.e.
5 % of the gross income) may result in a greater amount
of taxes to be paid compared to the application of the
ordinary income tax (34 % of the net income). In partic-
ular, a company could have a net loss but still pay the
GIT because it has taxable gross income.

(34)

(35)

result

It is firstly noted that the argument submitted by the
GOP and Lu Chu does not affect the Commission's
findings on specificity and countervailability of the GIT.
In this respect, it is considered that the argument relates
to a hypothetical situation that is wholly different from
the one actually examined in this case. Would the GIT
application in certain circumstances
in the
company paying more taxes as compared with the ordi-
nary income tax regime, the company could simply
resign this option. However, this was not the case for
the exporting producer in question. As calculated by the
Commission within its provisional findings, the applica-
tion of the GIT to the exporting producer allowed it a
certain tax saving in the IP vis-a-vis the application of
the ordinary income tax regime. Since the GOP and Lu
is hereby
Chu did not contest
confirmed that in this case the GIT involved a financial
contribution by the GOP and conferred a benefit to the
recipient. Hence, the claim of the GOP and Lu Chu
should be rejected.

this calculation,

it

sion, the producer in question exported the totality of its
finished products and in addition it can be expected to
continue doing so in the future, then it should be recog-
nised that all non-subject carbon steel nuts have been or
will be re-exported in the future.

its provisional

This claim cannot be accepted, since it has not been
supported by any verifiable evidence either during the
investigation or after disclosure of the provisional find-
ings. In particular, the Commission's view, in the context
of
finished products
findings, that all
were actually exported, refers only to the products
manufactured by the exporting producer in its facilities
in the Philippines, i.e. essentially stainless steel fasteners.
concerning these products have been
Only data
submitted in complete
form and verified by the
Commission. No data or other evidence have been
submitted by the GOP and/or by the exporting producer
showing that all
imported carbon steel nuts were or
would be actually re-exported. The data in possession of
the Commission in this respect only allow the exclusion
of imports of carbon steel nuts from the subsidy calcula-
tions in the way and to the extent done by the Commis-
sion in its provisional findings. Since no new evidence
has been submitted in this regard, the provisional find-
ings are hereby confirmed.

The GOP and Lu Chu also claim that imports of oil and
tools should be excluded from the calculation of the
subsidy amount since they are consumed in the produc-
tion of stainless steel fasteners. Again, this claim cannot
be accepted, as the GOP and Lu Chu failed to provide
any evidence thereof. Data in possession of the Commis-
sion does not allow consideration in isolation of the
respective import values of oil, other consumables, tools
and spare parts. These imports are only reported in
cumulative amounts, and some of these tools, compo-
nents and spare parts, based on the available evidence,
are not consumed in the course of their use to produce
lacking any further
the exported products. Therefore,
evidence, no assessment can be made as to whether
certain imports should be excluded from its calculation
of the subsidy amount. The provisional findings are thus
hereby confirmed.

4. Amount of countervailable subsidies

3. Import duty exemption on imports of spare parts

and supplies

(33)

The GOP and Lu Chu consider that the Commission
properly excluded imports of non-subject carbon steel
nuts from its subsidy calculation for the import duty
exemption on spare parts and supplies. However, they
argued that the Commission did not exclude all carbon
steel nuts, but only some, and urged the Commission to
make a full exclusion of imports of carbon steel nuts.
They argued that if, as acknowledged by the Commis-

(36) As regards the calculation of the amount of countervail-
able subsidies, an adjustment was made concerning the
amount of interest added to the subsidy amount calcu-
lated provisionally. This adjustment is reflected in the
following table showing the amount of countervailable
subsidy.

(37)

The following subsidy rates have been found at the
definitive stage. The countrywide weighted average level
of subsidisation is above the applicable de minimis level.

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Company

Gross Income
Tax

Import Duty
Exemption

Total

Lu Chu Shin Yee Works Co. Ltd/Philshin Works Corporation

0,50 %

3,09 %

3,59 %

(38)

(39)

(40)

III. SINGAPORE

(43)

In the Provisional Regulation it was concluded that none
of the alleged subsidies had been used by exporting
producers in Singapore.
In the absence of any new
information, the findings in recitals 81 to 83 of the
Provisional Regulation are hereby confirmed. The
proceeding should therefore be terminated as regards
imports of SSF originating in Singapore.

IV. THAILAND

In the provisional Regulation it was concluded that the
countrywide weighted average subsidy margin for Thai-
land was below the de minimis level of subsidisation
applicable to this country. In the absence of any new
information, the findings in recitals 84 to 91 of the
provisional Regulation are hereby confirmed. The
proceeding should therefore be terminated as regards
imports of SSF originating in Thailand.

E. COMMUNITY INDUSTRY

In the absence of any new information on the
as
Community
described in recitals 129 to 132 of the Provisional Regu-
lation are hereby confirmed.

the provisional

industry,

findings

In these respects, it was found that the amount of coun-
tervailable subsidies from each of these countries was
more than de minimis and the volume of imports from
each of
these countries increased during the period
considered, reaching levels that were not negligible.
Furthermore, the investigation did not show a different
price pattern between imports from Malaysia and the
Philippines. The prices of the imports from these two
countries have substantially undercut the Community
industry's prices in the IP and followed a similar down-
ward trend during the period considered. Finally, the SSF
imported from both countries are marketed in the
Community through the same sales channels and under
similar commercial conditions,
thus competing with
each other and with the SSF sold by the Community
industry.

(44)

In view of the above, the provisional findings in recitals
139 to 142 of the provisional Regulation regarding the
appropriateness of the cumulative assessment of imports
from Malaysia and the Philippines are hereby confirmed.

2. Prices of the subsidised imports

(45)

In the absence of any new information on the prices of
the subsidised imports,
findings as
described in recitals 145 to 148 of the Provisional Regu-
lation are hereby confirmed.

the provisional

F. INJURY

1. Cumulation

(41) One exporting producer in Malaysia argued that the
Commission should not cumulatively assess imports
originating in Malaysia with those originating in the
Philippines in view of the different behaviour of the
former.
imports
originating in Malaysia increased at a lower rate than
those originating in the Philippines and that the decrease
of average import prices of SSF originating in Malaysia
had been due to the decrease of prices of raw materials.

It was claimed that

the volume of

(42) One exporting producer in the Philippines argued that
the Commission should not cumulatively assess imports
originating in the Philippines with those originating in
Malaysia, as the price level of imports from the Philip-
pines has consistently been as high or higher than the
price level of the Community industry.

(46)

(47)

3. Situation of the Community industry

Interested parties argued that the Community industry
had not suffered material injury in view of the positive
development, during the period considered, of certain
indicators such as production, capacity, sales, market
investment, employment and productivity.
share,

In the Provisional Regulation the Commission concluded
that, as a result of the imposition of anti-dumping meas-
ures on imports originating in the People's Republic of
China, India, Malaysia, the Republic of Korea, Taiwan
and Thailand in 1997 (1),
the
Community industry had improved notably in terms of
production and sales. Indeed, the imposition of anti-
dumping measures in 1997, as expected and intended,
allowed the Community industry to increase production
and to recover lost market share by increasing its sales
in the Community market. This had a positive effect on
employment and productivity.

situation of

the

(1) Commission Regulation (EC) No 1732/97, OJ L 243, 5.9.1997, p.

17.

(49)

(50)

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Official Journal of the European Communities

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industry,

the
(48) However, despite an increase in the sales of
those
at
sales were made
Community
decreasing prices which,
in the IP, did not cover the
costs of the Community industry and resulted in losses.
Indeed, it was found that the prices of the Community
industry decreased over the period considered by 17 %,
from EUR 3,65/kg in 1996 to EUR 3,02/kg in the IP.
Although the raw material also decreased over the
period considered, the decrease in SSF prices was well
above the decrease in the cost of raw material. This price
depression had a severe impact on profitability which,
despite an improvement between 1996 and 1997,
decreased in 1998 and turned into losses in the IP
(–0,8 % of turnover). Therefore, the Community industry
could not fully benefit from the imposition of anti-
dumping measures.

the above,

the
it
In view of
Community industry has suffered injury in the form of
price depression and financial

is concluded that

losses.

lower than the number of employees mentioned in
recital 160 of
the provisional Regulation or in the
disclosure document, which refer to the total employees
of the company.

4. Conclusion on injury

(54) During the period considered, the Community industry
suffered significant price pressure from the subsidised
imports originating in the countries concerned, which
were found to considerably undercut the Community
industry's prices in the IP and which increased in terms
of import volume during the period considered. As a
consequence, the Community industry was unable to
reflect its costs on the level of its selling prices. This
resulted in the deterioration of the Community indus-
try's financial situation, reaching a weighted average loss
of 0,8 % of turnover in the IP.

(55)

the
Secondly, one exporting producer argued that
decrease in the prices of the Community industry was
due to a decrease in the costs of the raw material used to
produce SSF. This situation could therefore not be char-
acterised as one of price depression. In this respect it
was alleged that the raw material represented a higher
percentage than the 56,7 % of full cost in the IP quoted
in the provisional Regulation, reaching 80 to 85 % and
even 90 % of its total cost.

that certain indicators of

the Community
The fact
industry such as production, sales, employment and
productivity improved should be seen in the light of the
imposition of anti-dumping measures in 1997, which
afforded a certain relief to the Community industry. The
pressure exerted by the increasing imports at low prices
from the countries concerned frustrated a full recovery
by the Community industry which was found to have
suffered injury in the present investigation in the form
of depressed prices and financial

losses in the IP.

the price of

(51) According to the information provided by the cooper-
ating raw-material
the raw
suppliers,
material concerned decreased by 20,9 % over the period
considered, while the Community industry's prices of
the product concerned fell by 17 % over the same
period. As the cost of raw materials during this period
ranged, on a weighted average basis, between around
57 % and 68 % of the Community industry's full cost, it
has been found that the Community industry's prices of
SSF have decreased well above the decline in the costs of
raw material. In this respect it should be noted that the
allegation that the raw materials represent 80 to 85 % of
the costs appears to relate solely to manufacturing costs
and not to the full cost. In view of the above,
it is
concluded that
the Community industry suffered a
depression of its prices.

(52)

(53)

Finally, one exporting producer in Malaysia argued that
if production and employment of
the Community
industry as mentioned in the disclosure document are
compared, the productivity per employee appears to be
much lower than the figures in recital 161 of the provi-
sional Regulation suggest.

It should be noted that
the above productivity was
calculated as production divided by the number of
employees involved in the production of the product
concerned, which amounted to 287 in 1996, 320 in
1997, 321 in 1998 and 315 in the IP. This number is

(56)

In view of the above, it is hereby confirmed that the
Community industry has suffered material injury within
the meaning of Article 8(2) of the Basic Regulation.

G. CAUSATION OF INJURY

1. Effects of the subsidised imports

(57)

(58)

In the provisional Regulation the Commission found a
clear coincidence between the significant price undercut-
ting by the subsidised imports and the deterioration of
the prices of the Community industry and its profit-
ability in the IP. The significant price pressure from the
subsidised imports, especially between 1998 and the IP
coincided with a severe decrease in the prices of the
Community industry, leading to losses of 0,8 % of turn-
over during the IP.

The increase in the imports concerned (+16 %), which
reached a significant level of the Community market
during the IP (12,4 % of market share), the depressed
prices (–17 %) and the deterioration of
the financial
situation of the Community industry was attributed to
the continuously low prices of the imports originating in
the countries concerned.

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L 175/35

2. Effects of other factors

(64)

a) Increased capacity and investments by the Community

industry

It should firstly be noted that exports of SSF have repre-
sented a small share of the total sales made by the
Community industry throughout the period considered.
Furthermore,
the injury suffered by the Community
industry was mainly in the form of a deterioration of its
profitability due to a severe price depression caused by
the subsidised imports as explained in recitals 166 to
168 of the provisional Regulation. In turn, production
volumes increased in the period considered.

(59)

(60)

in production capacity at

It has been alleged that the poor financial performance
the Community industry has been caused by its
of
increase
time when
consumption contracted sharply. It was also argued that
the high level of investments and the financial costs
related to them, coupled with lower sales volume as
consumption contracted abruptly, were the cause of the
deterioration
the
Community industry.

situation

financial

the

of

of

a

It has been found that the biggest increase in production
capacity took place between 1996 and 1997 (+15 %),
when the Community industry expected to increase its
production and sales given the imposition of anti-
dumping measures. It should be noted that the increase
in capacity was accompanied by an increase in produc-
tion of 20 % and in sales (33 %) between 1996 and
1997. Therefore,
the increase in capacity by the
Community industry allowed it to benefit from expecta-
tions of restored, effective competition between the
Community industry and countries subject
to anti-
dumping measures. On the contrary, consumption only
contracted as from 1998, while capacity remained stable
between 1998 and the IP.

(61) As regards the investments made by the Community
industry, they remained relatively stable over the period
considered with the exception of 1997 when substantial
investments were made mainly by one company in the
purchase of buildings. It should be noted, however, that
this company showed one of the best profit margins of
the Community industry during the year 1997 and even
over the period considered. Furthermore, it should be
noted that, despite a contraction in consumption over
the period
industry
increased its sales and thus its share of the Community
market.

the Community

considered,

(62)

it is concluded that the poor
In view of the above,
financial performance of
the Community industry is
thus not linked to an increase in capacity or to its level
of investments, but mainly to a price depression caused
by the subsidised imports.

(65)

In view of the above, it cannot be considered that the
injury suffered by the Community industry is due to its
export performance.

(66)

(67)

3. Conclusion on causation

In view of the above, it is hereby confirmed that the
imports originating in the two countries concerned,
taken in isolation, have caused material
injury to the
Community industry. Indeed, imports from Malaysia and
the Philippines have impeded the full recovery of the
injurious situation of the Community industry found in
the context of the previous anti-dumping proceeding
concerning SSF and their low-priced increasing imports
have negatively
the
Community industry.

affected the profitability of

H. COMMUNITY INTEREST

In the Provisional Regulation the Commission found
that no compelling reasons existed for not imposing
measures in the present case. In the absence of further
comments regarding the impact of countervailing duties
on the situation of the Community industry, it is hereby
confirmed that the imposition of countervailing meas-
ures is likely to enable the Community industry to
regain a satisfactory profitability margin, allowing the
companies to continue trading and make the necessary
investments.

(68) One importer reiterated its claim that the imposition of
countervailing measures would significantly deteriorate
the situation of Community importers/traders. This was
based on the deterioration of the financial situation of
this particular trader between 1997 and 1998 after the
in
imposition of definitive anti-dumping measures
February 1998. Furthermore,
if
it was claimed that
countervailing measures were to be imposed importers/
traders would not be able to import from South-East
Asian suppliers thus causing shortages in supply.

b) Export performance by the Community industry

(69)

(63)

The export performance of the Community industry in
the period considered was also examined in order to
assess whether any decrease in the export volume could
have negatively influenced the production of
the
Community industry.

It should firstly be noted that the provisional Regulation
already stated that the imposition of measures could
result in a certain reduction of the margins of importers/
traders. The information provided by this importer/
trader and relating to the total company profitability,
including products not covered by the current invest-
igation, showed a certain reduction of its margins subse-
to the imposition of definitive anti-dumping
quent

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Official Journal of the European Communities

14.7.2000

still

in February 1998, albeit

reaching a
measures
reasonable level. In this respect it should be noted that
the level of the countervailing measures adopted in the
present proceeding and the fact that it only affects two
exporting countries is unlikely to significantly affect
importers/traders.

(70) As regards the impossibility for importers/traders to
import from South-East Asia in case of the imposition of
it should be noted that the
countervailing measures,
level of the countervailing measures proposed are not
expected to prevent
countries
imports
concerned but rather to ensure that these imports are
made at fair market conditions. Furthermore, a number
of other sources of supply exist,
including South-East
Asian suppliers not subject to measures. It is therefore
concluded that it is unlikely that the imposition of defin-
itive countervailing measures will result in shortages of
supply.

from the

(71)

In view of the above, the provisional findings in recitals
183 to 213 of the provisional Regulation regarding the
this case are hereby
Community interest aspects of
confirmed.

I. DEFINITIVE COURSE OF ACTION

2. Malaysia and the Philippines

(73)

The conclusions reached as to the subsidisation, injury,
for definitive
causation and Community interest call
measures. In view of the diversity of product types, the
measures should be in the form of ad valorem duties. In
the absence of any new information on the injury elimi-
nation level, the provisional
findings as described in
recitals 215 to 219 of the provisional Regulation are
hereby confirmed. In accordance with Article 15(1) of
the basic Regulation, the duty rate corresponds to the
subsidy margin, as the injury margin is higher.

(74) As regards Malaysia, for both exporting producers anti-
dumping duties are currently in force, ranging from
5,7 % to 7,0 %. The level of the duty imposed within the
present proceeding shall therefore take into account the
totality of the domestic subsidy plus the export subsidy
amount in excess of the existing anti-dumping duty in
accordance with Article 24(1) of the basic Regulation,
and for as long as the existing anti-dumping duty
remains in force. As shown in the table below, one
Malaysian exporting producer should be subject to a
definitive countervailing duty (in addition to the existing
anti-dumping duty) of 1,8 %. As
second
exporting producer, the countervailing duty should be
nil, since the existing anti-dumping duty exceeds the
export subsidy amount.

the

for

1. Singapore and Thailand

(72) On the basis of the above findings, this proceeding
should be terminated as regards imports of SSF origin-
ating in Singapore and Thailand in accordance with
Article 14 of the Basic Regulation.

imports from this country,

(75) Given that the companies cooperating in the proceeding
covered virtually all
the
residual duty should be set equal to the highest subsidy
margin level found for cooperating companies. Thus, the
residual countervailing duty should be set at 1,8 %, in
addition to the existing residual anti-dumping duty of
7,0 %.

Company

Total Subsidy

Export Subsidy

Existing AD duty

Proposed CVD

Tong Heer Fasteners Co. Sdn. Bhd.

4,71 %

Tigges Stainless Steel Fasteners (M) Sdn. Bhd.

2,31 %

Others

2,84 %

2,31 %

7,0 %

5,7 %

7,0 %

1,8 %

0,0 %

1,8 %

(76)

The following rates of duty should apply for the Malaysian cooperating producers:

Tong Heer Fasteners Co. Sdn. Bhd.: 1,8 %;

Tigges Stainless Steel Fasteners (M) Sdn. Bhd.: 0 %.

(77) As regards the Philippines, for which no anti-dumping measures are in force, the following rate of

duty should apply for the cooperating producer:

Lu Chu Shin Yee Works Co. Ltd/Philshin Works Corporation: 3,5 %

(78)

(79)

In order to avoid granting a bonus for non-cooperation, it was considered appropriate to establish
the duty rate for the non-cooperating companies as the highest rate established for any cooperating
i.e. 1,8 % for Malaysia and 3,5 % for the Philippines.
exporting producer,

The individual company countervailing duty rates specified in this Regulation were established on
the basis of the findings of the present investigation. Therefore, they reflect a situation found during

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Official Journal of the European Communities

L 175/37

that investigation with respect to the above companies. These duty rates (as opposed to the
countrywide duty applicable to ‘all other companies’) are thus exclusively applicable to imports of
SSF originating in the countries 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’.

(80) Any claim requesting the application of these individual company countervailing duty rates (e.g.
following a change in the name of the entity or following the setting up of new production or sales
entities), should be addressed to the Commission (1) forthwith with all relevant information,
in
particular any modification in the company's activities linked to production, domestic and export
sales associated with, for example 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.

(81)

Imports from Malaysia are already subject to anti-dumping duties which were taken into account in
the determination of the countervailing duty imposed in the present proceeding. Indeed, as explained
above, the export subsidy amount of the countervailing duty has been reduced up to the amount of
the existing anti-dumping duty. In view of the above, it is considered appropriate to align the period
of operation of the definitive countervailing duty concerning imports of SSF originating in Malaysia
and the Philippines, so that its expiry coincides with that of the anti-dumping duties imposed on
imports of SSF originating in the People's Republic of China, India, the Republic of Korea, Malaysia,
Taiwan and Thailand,
i.e. 17 February 2003, without prejudice to the applicable provisions on
reviews.

3. Collection of provisional duties

(82)

In view of the magnitude of the subsidy margins found and in the light of the level of the injury
caused to the Community industry, it is considered necessary that the amounts secured by way of
the provisional countervailing duty,
imposed by Commission Regulation (EC) No 618/2000 on
imports of SSF originating in Malaysia and the Philippines, should be definitively collected at the rate
of the duty definitively imposed,

HAS ADOPTED THIS REGULATION:

Article 1

A definitive countervailing duty is hereby imposed on imports of stainless steel fasteners and parts
falling within CN codes 7318 12 10, 7318 14 10, 7318 15 30, 7318 15 51, 7318 15 61,

1.
thereof
7318 15 70 and 7318 16 30 and originating in Malaysia and the Philippines.

The rate of the duty applicable to the net free-at-Community-frontier price, before duty, shall be as

2.
follows:

Malaysian companies

Rate of the duty

Taric additional code

Tong Heer Fasteners Co. Sdn. Bhd. (referred to as Tong Heer Fasteners in
Commission Regulation No 618/2000), No 2515, Tingkat Perusahaan 4A,
Perai Free Trade Zone, 13600 Perai Pulau Penang, Malaysia

1,8 %

A104

Tigges Stainless Steel Fasteners (M) Sdn. Bhd. (referred to as Tigges Stainless
Steel Fasteners in Commission Regulation No 618/2000), Plot 23 & 24, Kinta
Free Trade Zone, Jalan Kuala Kangsar, 31200 Chemor, GPO Box 24, 30700
Ipoh Perak Darul Ridzuan, Malaysia

0 %

A105

All other companies

1,8 %

A999

(1) European Commission, Directorate-

(General for Trade, Directorate E, DM 24-8/38 Rue de la Loi/Wetstraat 200 B-1049 Bruxelles/Brussel.

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Official Journal of the European Communities

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Philippine companies

Rate of the duty

Taric additional code

Lu Chu Shin Yee Works Co. Ltd (referred to as Lu Chu Shin Yee Works, Ltd in
Commission Regulation No 618/2000), Cavite Export Zone, Rosario, Philip-
pines/Philshin Works Corporation (referred to as Philshin Works Corporation
in Commission Regulation No 618/2000), Amaya 1, Tanza, Cavite, Philip-
pines

3,5 %

A106

All other companies

3,5 %

A999

3.

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

Article 2

The amounts secured by way of provisional countervailing duties pursuant to Commission Regulation (EC)
No 618/2000 on imports of the product described in Article 1(1) originating in Malaysia and the
Philippines shall be collected at the rate of the duty definitively imposed. Amounts secured in excess of the
definitive rate of countervailing duties shall be released.

The countervailing duty shall expire on 17 February 2003.

Article 3

Article 4

The anti-subsidy proceeding concerning imports of stainless steel fasteners and parts thereof originating in
Singapore and Thailand is hereby terminated.

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

Article 5

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

Done at Brussels, 10 July 2000.

For the Council

The President

H. VÉDRINE