Council Regulation (EC) No 1603/2000 of 20 July 2000 imposing a definitive anti-dumping duty on imports of ethanolamines originating in the United States of America
Date: 2000-07-20
Institutions: Council of the European Union
Subjects: United States, anti-dumping duty, import, organic chemical

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1603/2000

of 20 July 2000

imposing a definitive anti-dumping duty on imports of ethanolamines originating in the United
States of America

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 Community (1), and in
particular Articles 11(2) and 11(3) thereof,

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

Whereas:

A. PROCEDURE

(1)

(2)

1. Measures in force

In February 1994, the Council imposed definitive anti-
dumping duties on imports of ethanolamines originating
in the United States (Regulation (EC) No 229/94 (2)). The
duties took the form of minimum-price-based variable
duties for the three types of ethanolamines, i.e. monoe-
thanolamine (MEA), diethanolamine (DEA) and trietha-
nolamine (TEA).

2. Request for a review

Following the publication on 23 July 1998 (3) of a notice
of impending expiry of the anti-dumping measures in
force with regard to imports of ethanolamines origin-
ating in the USA, the Commission received a request to
review these measures pursuant to Article 11(2) and
11(3) of Regulation (EC) No 384/96 (the ‘Basic Regula-
tion’), i.e. a request for an expiry and interim review.

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 905/98 (OJ L 128, 30.4.98, p.18).

(2) OJ L 28, 2.2.1994, p. 40.
(3) OJ C 231, 23.7.1998, p. 3.

(3)

(4)

(5)

(6)

The request was lodged on 30 October 1998 by the
Conseil européen des fédérations de l'industrie chimique
(CEFIC) on behalf of Community producers whose
collective output constituted a major proportion of the
total Community production of ethanolamines.

The CEFIC argued that expiry of the measures would be
likely to result
recurrence of
in a continuation or
increased dumping and injury to the Community
industry and that there were reasons to review the meas-
ures because they lacked effectiveness. Having deter-
mined, after consulting the Advisory Committee, that
the evidence was sufficient, the Commission initiated an
investigation (4) pursuant to Articles 11(2) and 11(3) of
the Basic Regulation. The investigation therefore covered
not only the question of what would happen if the
measures were allowed to lapse (see Article 11(2)), but
also whether a modification of the existing anti-dumping
measures
(minimum-price-based variable duties) was
warranted (see Article 11(3)).

3. Investigation

The Commission officially advised the Community
producers supporting the request for review (the ‘appli-
cant Community producers’), the exporting producers
and their related importers, as well as the users known
to be concerned, and gave them the opportunity to
make their views known in writing and/or to request a
hearing.

The Commission sent questionnaires to the parties
known to be concerned and received replies from the
four applicant Community producers, four US exporting
producers and five of their related importers. Question-
naires were also sent to a large number of users of the
product; two of their replies were considered complete.

(4) OJ C 27, 2.2.1999, p. 3.

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(7)

(8)

One US exporting producer declared its intention to
cooperate in the investigation, although it had not
exported to the Community during the investigation
period (IP). The interest of this producer in the invest-
igation stemmed from its involvement in the original
investigation.

The Commission sought and verified all
information
deemed necessary for the determination of the likely
continuation and recurrence of dumping and injury and
the analysis of
the Community interest. Verification
visits were carried out at the premises of the following
companies:

(a) exporting producers

Dow Chemical Company, Midland, Michigan (USA)

Huntsman Chemical Company, Houston, Texas
(USA)

Union Carbide Corporation, Danbury, Connecticut
(USA)

(b) importers in the Community related to the exporting

producers

Huntsman Co. Belgium CVBA, Brussels, Belgium

Union Carbide Benelux, Antwerp, Belgium

Union Carbide Europe SA, Geneva, Switzerland

(c) applicant Community producers

BASF AG, Ludwigshafen, Germany

BP Chemicals Ltd, London, UK and Lavera, France

(d) Community users

Krems Chemie AG, Krems a.d. Donau, Austria

Synthesia Española SA, Barcelona, Spain

(9)

The investigation of continuation and recurrence of
dumping covered the period from 1 January to 31
December 1998 (the ‘investigation period’ or ‘IP’). The
examination of continuation and recurrence of injury
covered the period from 1 January 1995 to the end of
the IP (the ‘IIP’).

product concerned is used as an intermediate for surfac-
tants (used in detergents and personal care products),
fertilisers, crop protection agents, corrosion inhibitors,
lubrication oils, photographic chemicals, cosmetics and
polyurethane, and as a gas scrubber absorption aid or
additive for the cement, metal-works and paper indus-
tries. Because of the combined production process (see
above), when DEA is produced, the other types of etha-
nolamine (MEA and TEA) are produced as well and in
larger quantities.

2. Like product

(11)

(12)

(13)

Production installations of the Community industry will
typically produce 30-33 % DEA. Either MEA or TEA can
account for as much as 54 % of total ethanolamines
production. Given the combined production process, the
claim of one exporting producer that the different types
of ethanolamine should be treated separately with
respect to the injury analysis cannot be justified.

the anti-dumping measures
Since the imposition of
under review,
the market has been characterised by
strong growth in the demand for DEA, especially in the
USA. This has been triggered by the use of DEA in the
production of glyphosate herbicides, which are suited to
crops genetically modified to be resistant to such herbi-
cides.

The product concerned imported from the country
under investigation is identical in terms of physical and
technical characteristics to the Community-produced
product. There is no difference in use between the
Community-produced products and the imported prod-
the product
further been found that
ucts.
concerned imported from the country under invest-
igation is identical to that sold on its domestic market.
Therefore, all these products must be considered as one
product.

It has

C. LIKELIHOOD OF CONTINUATION OF DUMPING

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Preliminary remarks

1. Product concerned

(10)

The product concerned here is the same as that covered
by the previous investigation. It is recalled that ethanola-
mines are obtained by making ethylene oxide react with
ammonia. As a result of this synthesis, three competing
reactions occur, resulting in three different types of etha-
nolamine: mono- (MEA), di- (DEA) and tri-ethanola-
mines (TEA). The proportions of the three types in the
total output are determined by the production installa-
tion design, but can, to a certain extent, be controlled by
the choice of the ammonia/ethylene oxide ratio. The

(14)

Following the allegation made in the complaint that
circumstances had changed since the original
invest-
igation, the level of dumping for the IP was examined.

(15) Of the four US exporting producers who replied to the
questionnaire,
to the
Community during the IP, while another two declared
no or only very few exports.

two had significant

exports

(16)

For the exporting producer which had a small quantity
of exports it was decided in the absence of any other
information that a dumping margin could reasonably be
based on this small volume of exports.

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2. Normal value

(17) Normal value was established for each type of

‘prices paid or payable,
trade, by independent customers

the
product concerned, based on the price of all actual
domestic sales in the USA (see Article 2(1) of the Basic
in the ordinary
Regulation:
course of
in the
exporting country’). For product types which were not
sold in representative quantities or not in the ordinary
course of trade on the domestic market, the normal
value was calculated in accordance with Article 2(3) of
the Basic Regulation.

(18) With regard to the three US exporting producers, the
domestic sales of the product under consideration were
found, in accordance with Article 2(2) of the Basic Regu-
lation, to represent more than 5 % of the sales volume
of exports of
from the USA to the
Community. It was also established that for the same
three exporting producers, sufficient domestic sales of
the product had been made in the ordinary course of
trade in accordance with Article 2(4) of the Basic Regu-
lation to permit the prices of such sales to be used to
determine normal value.

the product

3. Export price

(19)

In all cases, the imports of the product concerned were
made by companies which are related to the US
exporting producers. It was therefore considered that the
prices of the sales from the producing companies to the
importing companies were unreliable. For that reason,
and in accordance with the provisions of Article 2(9) of
the Basic Regulation, the export prices were constructed
on the basis of the price at which the imported product
was
in the
Community. Allowance was made for all costs incurred
between importation and resale, including commissions
and a profit margin of 5 %, which was considered
reasonable on the basis of information from interested
parties on imports of the product concerned.

resold to independent buyers

first

4. Comparison

(20)

the same level of

The normal value was compared with the export price
on a transaction-by-transaction basis at ex-works level
and at
trade. For the purpose of
ensuring a fair comparison between normal value and
export price, differences in factors which were claimed
and demonstrated to affect comparability (see Article
2(10) of the Basic Regulation) were taken into account.
Thus, adjustments were made for inland and ocean
freight, insurance, handling, loading and ancillary costs,
credit costs and commissions.

(21) A comparison of normal values with export prices was
made for all types covered by the present investigation.
For the cooperating exporting producers, this compar-
ison showed the existence of a weighted average
dumping margin, expressed as a percentage of cif value,
of 33 % for Dow Chemical, 38,2 % for Union Carbide
and 40,1 % for Huntsman.

(22)

(23)

(24)

(25)

5. Lasting nature of changed circumstances

The Commission examined whether the changes in
dumping margins were likely to prove lasting. It was
found that the lower dumping margins were largely due
to increased export prices, which have applied for at
least two years. For this reason, and as the export quant-
representative,
ities
the
the findings represent a
Commission concludes that
lasting change in the circumstances of these imports
from the USA. No evidence was submitted which
contradicted these findings.

involved were viewed as

6. Conclusion

The expiry review initiated under Article 11(2) of the
Basic Regulation indicated that,
if measures were
removed, there would be a likelihood of continuation of
dumping, mainly on the grounds
substantial
dumping was found to exist during the IP and that it
was reasonable to conclude that such dumping would
continue.

that

The Article 11(3) interim review, initiated on the basis of
a request to revise measures in order to take into due
account the current market conditions, concluded that
the circumstances which led to the existing measures
have changed significantly and that such changes are to
be considered sufficiently lasting to warrant a downward
revision of the dumping margins established during the
original

investigation.

D. DEFINITION OF THE COMMUNITY INDUSTRY

1. Total Community production

The complaint was lodged on behalf of four out of the
five EU ethanolamine manufacturers. One company,
Union Carbide Ltd.
(UK), did not participate in the
investigation, nor did it support the complaint. It should
be noted that this company is related to the US producer
Union Carbide Corp. USA. An assessment was made,
this company should be
therefore, as
excluded from the definition of Community production
in accordance with Article 4(1) of the Basic Regulation.
It was found that
the manufacturer concerned itself
imported the dumped product in significant quantities.
the
As there could therefore be no guarantee that

to whether

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this manufacturer was not
economic situation of
affected by its relationship to the US producer, it was
considered that it should be excluded from the deter-
mination of Community production. Total Community
production therefore is accounted for by the following
companies: BASF AG, Ludwigshafen, Germany; BP
Chemicals Ltd, London, United Kingdom; Condea
Chemie GmbH, Marl, Germany and Akzo Nobel Surface
Chemistry AB, Stenungsund, Sweden.

2. Community industry

The Commission sent questionnaires to the applicant
Community producers and received replies from three of
them. One reply that failed to provide cost of produc-
tion data for the period 1995 to 1997 was accepted on
the grounds that the company took over the ethanola-
mines business on 1 July 1998 from another company
and therefore did not have access to the data. The forth
producer sent only an incomplete questionnaire reply
and was consequently considered a non-cooperator. The
three applicant Community producers which co-oper-
ated in the investigation constitute the Community
industry within the meaning of Article 4(1) of the Basic
Regulation, as
the total
Community production. They are referred to below as
the ‘Community industry’.

they represent 77,5 % of

3. Determination of

the

relevant Community

market

Part of the Community industry's production (around
28 %) is for internal, i.e. captive, use. Of this amount,
the great majority (around 95 %)
is for use at one
Community producer's plant, earmarked and used for
that sole purpose. The investigation confirmed that the
applicant Community producers do not purchase the
product concerned from independent parties, either
inside or outside the Community, for their captive use.
Ethanolamines intended for captive use are therefore not
considered to be in competition with ethanolamines
otherwise available in the Community, the latter being
the
the product
concerned.

relevant Community market

for

(26)

(27)

E. ANALYSIS OF THE SITUATION ON THE COMMUNITY

MARKET

1. Community consumption

(28)

Community consumption was based on the volume of
sales of the Community industry, the sales volume of the
non-cooperating Community producer, Eurostat-infor-
mation on the import volume and an estimate of the
sales of the Community-based manufacturer related to

the US exporting producer Union Carbide (1) on this
market.

(29)

Consumption calculated on this basis increased by 14 %
during the IIP: from around 152 000 tonnes in 1995 to
around 172 000 tonnes in the IP. This increase is attrib-
uted to DEA and TEA sales, which rose by 19 % and
21 % respectively. The demand for MEA has remained
stable. MEA and DEA each represent around 29 % of
overall consumption in the IP and TEA around 42 %.

(30)

(31)

2. Imports from the country concerned

(a) V o l u m e , p r i c e t r e n d a n d m a r k e t s h a r e

Imports from the USA increased by 14 % over the IIP, in
line with the trend of overall Community consumption.
However, the figures contain an underlying downward
the IIP), which
trend in DEA-imports (–38 % over
accounted for only 12,6 % of total imports in the IP.
This should be seen in light of the high DEA demand on
the US domestic market. On the other hand, notwith-
standing the stable demand for MEA on the Community
market during the IIP, imports from the USA increased
by 86 % over the same period. Imports of TEA during
this period grew by 11 %.

their

related importers'

figures, were not deemed reliable for

Since imports are made by related importers, prices for
imports from the USA, whether established on the basis
of information submitted by the exporting producers or
Eurostat
the
purpose of establishing price trends. In order to establish
more reliably the pricing behaviour of the exporting
producers concerned,
resale
prices were analysed — more specifically prices to
industrial end-users
found to be representative for
overall sales. These prices declined 10 % on average
from 1995 to 1996 and were found to be substantially
lower than the Community industry sales prices during
both those years. This trend was most pronounced for
MEA, with a 14 % decrease of the resale price. Towards
the end of the IIP, the resale price of TEA was back at
the 1995 level, whereas DEA became 13 % more expen-
sive and MEA was still 4 % cheaper. In the IP, the price
the related importers and the Community
levels of
industry were comparable.

(1) Based on the complaint and information from the US exporting
the total sales of all

producer. The sales correspond to 10 % of
ethanolamines produced within the Community market.

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(32)

The overall market share for imports from the USA is
stable over the IIP at 29 %. However, the figures contain
an underlying increase in market share for MEA from
17 % to 32 % and a decrease of DEA market share from
25 % to 13 %. TEA decreased slightly from 42 % to
39 %.

(37)

(b) P r i c e b e h a v i o u r o f

e x p o r t i n g p r o d u c e r s

(33)

(34)

(35)

(36)

compared

customers were

In order to assess the price behaviour of US exporting
producers, their sales as well as those of the Community
industry were analysed. In a first step, sales prices to first
independent
the
Community market. Given that the Community industry
sells only to industrial end-users, and that
these
customers also cover a significant share (over 50 %) of
the sales of the US exporting producers, a comparison at
this level of trade was considered representative. For the
determination of dumping, this comparison was made
on the basis of data for the two main US exporting
producers.

on

Since all imports into the Community originating in the
USA were made via related importers,
the above
comparison used the prices charged to the first indepen-
dent buyers in the Community at an ex-related-importer
level,
in the
Community, discounts and rebates. The comparison
showed that during the IP, the overall average price
levels
from the USA and Community
imports
industry sales were comparable.

i.e. after deduction of

freight costs

for

In a second step, an analysis was made of the import
prices of ethanolamines originating in the USA, i. e. the
prices between the exporting producers and their related
importers, as compared to the minimum prices deter-
mining the variable duties. This showed that no signifi-
cant amounts of anti-dumping duties had been collected,
as
above
minimum prices for most of the IIP.

import prices were

significantly

these

In a third step, given the relation between exporting
producers and the importers, it was established for the
IP whether the resale prices received by these importers
from their first independent customers and the respec-
tive actual import prices reflected the related importers'
costs between importation and resale. All costs actually
incurred between importation and resale, such as freight
from the Community border, handling, insurance, pack-
aging, credit expenses, import duties, SGA costs and a
5 % profit margin were therefore deducted from the
resale prices. This resulted in import prices constructed

independently of the relationship between the exporting
producers and their related importers.

These constructed import prices for both exporting
producers were not only significantly lower than the
actual import prices declared by their related importers,
but were also significantly lower than the applicable
minimum prices for the various types of ethanolamine.
This finding is confirmed by the fact that the related
importers incurred significant financial losses during the
IP. Indeed, the margins they realised between purchase
price (actual
import price) and resale price on the
Community market were not sufficient to cover the
costs incurred between importation and resale. It should
be noted that the pattern established for the IP has also
been observed for the remainder of the period consid-
ered,

i.e. 1995 to 1997.

(38) On the basis of

it

the above three-step analysis,

is
concluded that the resale prices of US exporting produ-
cers on the Community market were in line with those
it has been
of the Community industry. Furthermore,
found that actual import price levels were situated above
the minimum prices. However,
import
prices have not, or at least not fully, reflected the anti-
dumping measures in force if account is taken of the
costs incurred between importation and resale. There-
fore, it can be concluded that the US exporting produ-
cers and their related importers absorbed the anti-
dumping measures, at least partially, by setting artifi-
cially high actual import prices which constitute transfer
prices.

these actual

3. Situation of the Community industry

(a) P r o d u c t i o n ,

p r o d u c t i o n

c a p a c i t y

a n d

c a p a c i t y u t i l i s a t i o n

(39)

Production increased by 38 % during the IIP, particularly
from 1996 to 1997, following an expansion of capacity
from roughly 117 000 to 139 000 tons. The increase in
production, combined with the more moderate increase
in capacity, improved the overall Community industry's
capacity utilisation from 81,8 % to 91,1 % over the IIP.

(40) As mentioned above,

the capacity installed at one
Community producer's plant
in 1997 accounts for
around 95 % of Community production for captive
purposes and was designed to serve only that purpose.
The above mentioned increase in production capacity,
however, is a result of this investment in captive use
production as this reduced the captive use at another
plant of
the same company. This in turn liberated
capacity for free market sales.

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(b) S a l e s v o l u m e

(41)

The sales volume of the Community industry on the
Community market increased by 27 % over the IIP to
approximately 96 000 tons, driven by the increase of
DEA and TEA sales (by 32 % and 28 % respectively) over
this period.

(c) M a r k e t s h a r e

(42)

The Community industry increased its market share
overall from 50 % to 56 % during the period 1995 to
1997, gaining 11 % for MEA, 5 % for DEA and 3 % for
TEA. Between 1997 and the IP market share overall and
for TEA remained stable,
increased further for DEA
(from 61 % to 63 %), but fell for MEA (from 53 % to
49 %).

(d) S t o c k s

that

It was

found, however,

claimed that purchase prices for ethylene oxide were
overstated causing a downward pressure on the ethano-
lamines business.
the
companies involved organise their ethylene oxide and
ethanolamines businesses as
separate profit centres,
making cross-subsidisation unlikely, and checks were
carried out as to whether the transfer price at which this
raw material was incorporated in the cost of production
of ethanolamines reflected market value. In all cases it
was found that the transfer prices used reflected the sales
ethylene oxide quoted to independent
prices of
customers purchasing similar quantities.

(f) P r o f i t a b i l i t y

(48)

Profitability has been affected by sales prices and manu-
from 3,94 % in 1995 to
facturing costs. Profits fell
loss-making levels of –8,64 % in 1996 and –8,49 % in
1997. The price recovery in the IP was insufficient to
generate a profit and profitability remained negative at
–1,37 %.

(43)

Stocks increased by 10 % over the IIP. This increase is
lower than the production increase of 38 %.

(g) I n v e s t m e n t s

(e) D e v e l o p m e n t o f s a l e s p r i c e a n d m a n u f a c -

t u r i n g c o s t

(49)

(44) Overall sales price dropped 17 % from 1995 to 1996.
This was followed by increases in 1997 and 1998
respectively of 3 % and 9 % over 1996 prices.
In
contrast to the minimum prices and the situation in
1995, DEA has become the most expensive product
over the IIP.

(45)

Resale prices of US imports in the Community were
substantially below the Community industry's
sales
prices in 1995 and 1996. The downward pressure of
17 % on the Community industry's sales prices from
1995 to 1996 occurred at the same time MEA imports
from the USA almost doubled and the resale price of US
imports of MEA dropped by 14 % to ECU 605 per
tonne, lowering the Community industry's sales price by
22 % to ECU 647 per tonne.

(46) Apart from market conditions, sales prices are essentially
driven by the cost of raw materials. The overall manu-
facturing cost dropped by 7 % from 1995 to 1996 and,
compared to 1996, increased slightly by between 1 %
and 2 % for the year 1997 and the IP. Over the whole
period, manufacturing costs fell by 6 % but prices
declined by 10 %. DEA is the only exception here: the
average price fell by only 1 % while manufacturing costs
decreased by 4 %.

(47)

the production of
It should also be underlined that
ethanolamines for the Community industry is important
since it allows to use own-produced upstream ethylene
oxide, providing economies of scale for this upstream
production process, and to use the ethanolamines as an
It was
intermediate for other products (captive use).

for

the

in ethanolamines

Investment
free market
remained fairly stable between 1995 and 1998 at
around ECU 4 million a year, except for 1996, when
the figure was twice that. In that year, major changes
the group's captive
were made to one plant after
production was taken over by another plant belonging
to the same Community producer.

(h) E m p l o y m e n t

(50)

The production of ethanolamines is not a labour inten-
sive process. Overall, employment rose by 23 % and
reached 166 persons in 1998.

4. Import volumes and prices from other third

countries

(51) On the basis of Eurostat information, Bulgarian export
prices are lower than actual US import prices from the
same source. As explained above, it should however be
noted that Eurostat prices for imports originating in the
US are not considered reliable. One Bulgarian producer,
Burgas, has had a stable 3 % share of the Community
information,
market since 1996. Based on Eurostat
approximately 70 % of its exports are MEA — a market
share of 6 % in this segment during the IP (compared to
49 % for the Community industry and 32 % for US
exporting producers).

(52)

The market share of all other countries declined to 2 %
across all types of ethanolamines and 6 % for MEA.
However,
these imports originate from a variety of
sources, none of which holds a significant market share.

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5. Conclusion on the situation of the Community

market

(53)

Production volume and capacity of
the Community
industry show a positive trend. Sales volumes increased,
especially for DEA and TEA. Market share increased
overall but dropped for MEA, when compared with
1997. Although better than in 1996 and 1997, profit-
ability remained insufficient
in 1998 because of
continued pressure on sales prices. Indeed, the initial fall
in sales prices from 1995 to 1996 has still not been
compensated and there is still price pressure from the
imports concerned.

(54)

The continuation of
the downward pressure on the
Community industry's sales prices and the consequent
negative profitability are directly linked to the pricing
behaviour of the US exporting producers, in particular
the absorption of the measures in force and the resulting
price pressure.

F. LIKELIHOOD OF CONTINUATION OF INJURIOUS

DUMPING

1. Analysis of demand for ethanolamines

(55)

the combined production process,

Because of
the
increased consumption of DEA and TEA in the
Community leads
supply of MEA.
to a significant
Upward price pressure has been most pronounced for
DEA, accentuated by the gradual withdrawal by the US
exporting producers from this market (illustrated by a
corresponding drop in US market share from 25 % to
13 % over the IIP).

is

further

(56) At the same time, worldwide ethanolamine production
in anticipation of
increasing
capacity
continued growth in demand for DEA, with major
producers both in the Community and in the USA
investing at similar rates. High demand for DEA has led
to corresponding upward price adjustments in this
segment, while DEA consumption — and thus prices —
during the previous investigation were low. The effect
on sales prices (and consequently on profitability) of
increasing capacity and increasing demand for DEA
remains unclear, but the (worldwide) excess production
of MEA, in particular, threatens to depress market condi-
tions.

(58)

(59)

(60)

(61)

IP, capacity installed rose 19,9 % to 524 000 tons for
the three US producers Union Carbide, Huntsman and
Dow Chemical and, although production increased by
9 %, the capacity utilisation rate fell from 90,4 % to
83 %. New capacity installed is generally aimed at DEA,
bringing excess production of MEA.

Furthermore, the investigation showed that US produ-
the product
cers exported significant quantities of
concerned to the Community throughout the period
examined, indicating that the Community market is an
important outlet for their production. From 1997 to the
to the Community
IP corresponding US exports
increased by 12,4 %, whereas domestic sales increased
only 4,9 % and exports
third countries
decreased by 2,7 %. During the IP, US domestic sales
represented 67,1 % of total sales by the three US produ-
to the Community
cers mentioned above, exports
13,6 % and exports to third countries 19,3 %.

to other

The investigation also demonstrated that US domestic
prices are at a higher level than sales prices in the
Community market. The higher price level in the USA
can be directly attributed to the high consumption of
DEA on the US market.

Finally, it should be noted that South Korea has imposed
measures against imports of ethanolamines from the
USA. While it
the quantities
is not considered that
involved, even if they were entirely deflected, are such as
to disrupt the Community market, the fact that anti-
dumping measures have been imposed shows that US
exporting producers are prepared to carry out exports at
dumped prices.

import prices

The prices of both the Community industry and the
exporting producers over the IIP have constantly been
above the minimum-price-based variable anti-dumping
measures. It has been shown that actual import prices
do not reflect the resale prices of the related importers
reflecting costs
concerned and that
incurred between importation and resale have systemati-
cally been below minimum prices, indicating that the US
exporting producers have partially absorbed the anti-
the
dumping measures imposed. At
Community industry has not been able to recover from
the negative situation it has experienced and still faces
an unsatisfactory situation in terms of profits during the
IP.

the same time,

2. Analysis of the situation of the US exporting

producers

(57)

especially of MEA, while

The world-wide capacity increase threatens to create
excess production,
the
Community market, with a price level higher than other
third countries, is attractive for US exporting producers.
US production capacity increased by more than one
third over the 1995 to 1998 period. From 1997 to the

(62)

The investigation confirmed that, as in the previous
investigation period (1991 to 1992) before imposition
of measures, US producers exported significant quant-
ities onto the Community market. From 48 000 tons in
the previous IP, these dropped to 44 000 tons at the
beginning of the IIP, before rising to 51 000 tons at the
end. They represent 40 % of total Community produc-
tion during the IP.

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(63)

It was found that in line with growing demand for DEA
in the USA which put upward pressure on US sales
prices for DEA and ethanolamines in general, a some-
what less pronounced price change was observed on the
Community market. This trend in consumption has at
the same time meant that MEA is produced in increasing
quantities, with the risk that due to a lack of commensu-
rate demand it will be sold at lower and lower prices.
The effect on the price of TEA is expected to be less, as
smaller production surpluses are predicted.

anti-dumping measures in force and preventing the
Community industry from improving its
situation;
capacity increases in the USA are likely to depress
market conditions in the Community, in particular due
to excess MEA;
as
compared to other markets, remains attractive to the US
exporting producers, who continue to export significant
quantities to the Community at dumped prices — it is
therefore concluded that there is a likelihood of contin-
uation of injurious dumping.

and the Community market,

(64) One US exporting producer

contended that

the
Community industry itself has an overcapacity of MEA
that creates a downward pressure on prices.
It was,
however, unable to substantiate this claim. It should also
be noted that one US producer alleged that
the
its prices for DEA in
Community industry undercut
the
1998. The investigation showed, however,
Community company quoted did not sell any DEA to
the client mentioned.

that

3. Conclusion on likelihood of continuation of

injurious dumping

(65)

(66)

sales

volumes,

consumption

The investigation showed that, despite the anti-dumping
measures in force and increased production, production
capacity,
the
and
Community industry is still in a fragile state, in partic-
ular as far as its sales prices and profitability are
concerned. The Community industry was allowed to fill
the gap left by the partial retreat by US exporting produ-
cers from the DEA Community market. However, due to
the partial absorption by US exporting producers of the
measures in force, their excess production of MEA and
the resulting growth in EU imports of MEA from the
USA at dumped prices, prices for all ethanolamines
remained too low to restore the profitability of
the
Community industry, even with anti-dumping measures.

The investigation established that the imports concerned
are still taking place at significantly dumped prices. It
has been found that domestic US prices have increased
since the previous investigation, although to a lesser
extent than the prices of US exports to the Community.
This has led to smaller dumping margins than those in
the initial investigation, not least because of the absorp-
It was further found that export quantities are
tion.
significant, being equivalent to 40 % of total Community
production during the IP.

G. COMMUNITY INTEREST

1. Introduction

(68)

In the previous investigation, the adoption of measures
was considered not to be against the interest of the
Community. The present
investigation is a review,
analysing a situation in which anti-dumping measures
were already in place and its remit is thus to assess any
undue negative impact of the measures on the parties
concerned. It was therefore examined whether, despite
the conclusions on the likelihood of continuation of
injurious dumping, there were compelling reasons to
conclude that it was not in the Community interest to
maintain measures. For this purpose, and pursuant to
Article 21(1) of the Basic Regulation, account was taken
of the impact on all parties involved in the proceedings
of maintaining the existing measures, imposing altern-
ative measures or dropping the measures.

2. Interest of the Community industry

(69)

that would

The existing measures have not led to a price level on
the Community market
allow the
Community producers to regain profitability. The invest-
igation showed that the measures have never become
fully effective — while actual import prices have been
above the minimum prices set, the latter have not been
reflected in related importers' resale prices. The outlook
is not
for the situation in the Community market
favourable given the distinct possibility of an inflow of
MEA, produced in recently installed production sites,
and continuing pressure on prices, which in 1999 in
some instances even went below set minimum prices.

(67)

The Community industry has been unable to recover
from the negative situation affecting it since the previous
investigation; prices of imports from the USA have been
below minimum prices,
(given actual costs between
importation and resale), thereby partially absorbing the

(70)

In view of the above, continuing measures to limit the
downward pressure on ethanolamine prices would be in
the interest of the Community industry.

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Official Journal of the European Communities

L 185/9

3. Interest of users

(71)

(72)

The Commission received four questionnaire replies
from ethanolamines users, two of which were consid-
ered complete and were followed up by an on-site
investigation. As those four users represent only 1,4 %
of Community consumption during the IP, the informa-
tion submitted could not be considered representative.
The users argued that any increase in their cost of
production should be avoided, since this affects their
profitability.

Information collected in the course of the investigation
indicated an incidence of the purchase price of ethanola-
mines in the cost of production of the finished product
during the IP ranging from 2,21 % to 18,82 % (the latter
figure relating to an extreme case, for a product for
which ethanolamine can be perfectly substituted by
another unrelated chemical). The overall weighted
average stands at 4,33 % of the cost of production. The
maximum impact of
the measures proposed is on
average less than one percent and can therefore be
considered limited.

(73) One additional user of the product concerned claimed
that it planned to produce a chemical product, glypho-
sate intermediate, in the Community using DEA. This
company claimed it was unable to do so because of the
artificially high import prices (due to anti-dumping
measures) and the absence of local (Community) supply
of DEA. It should be noted here that the minimum price
on which the variable duty is based was always lower
than the purchase prices established for the various
interested parties during the IP. This showed that this
user's first claim did not reflect reality. The investigation
further showed that DEA was not sufficiently available
to the Community
in the USA and that exports
decreased as a result.
the
Community producers to adapt
to the increase in
demand, but DEA supply has never been so short that
prices were affected significantly and the company's
second claim must be considered as ill-founded.

took some time for

It

4. Conclusion on Community interest

(74) Maintaining measures would be in the interest of the
Community industry in ensuring that prices, especially
for MEA, are raised to a non-injurious level. The users of
the product which came forward did not represent an
important share of Community consumption and/or
could not substantiate their claims. In any event, the

incidence of measures on their cost of production is
limited. On the basis of these considerations,
it was
concluded that there were no compelling reasons not to
continue measures,
to ensure competitive
conditions of fair pricing and avoid the continuation of
injury to the Community industry.

in order

H. ANTI-DUMPING MEASURES

(75)

Since it was determined that US exporting producers
absorbed the measures over an extended period and the
import volume remained significant, it was concluded
that the underlying trends were lasting. In these circum-
stances, it had to be decided on which basis the invest-
igation carried out pursuant to both Article 11(2) and
11 (3) of the Basic Regulation had to be concluded. As
the measures presently in force had not led to the antici-
pated positive effect for the Community industry, it was
decided that:

— the anti-dumping measures should be renewed,

— their form should be revised,

— their level should be adapted to the level of dumping

and injury found.

(76)

(77)

It should be noted here that actual
import prices are
used in anti-dumping proceedings to determine both
dumping and injury margins. The investigation demon-
strated that the actual import prices do not reflect the
related importers' resale prices. Using such data would
underestimate the actual dumping and injury margins
for the IP. Therefore, it was concluded that the dumping
and injury margins determined pursuant to Article 11(3)
the Basic Regulation needed to be based on the
of
constructed import price.

In order to calculate the injury threshold, a non-injur-
ious sales price for the Community industry was deter-
mined, allowing for an 8 % profit margin, and compared
with the US related importers' resale prices. Any differ-
ence was expressed as a percentage of the constructed
CIF import value. On the basis of this methodology the
underselling margins, which were lower than the corre-
sponding dumping margins, were 10,4 % for Union
Carbide Corporation, 13,9 % for Dow Chemical
20,5 % for Huntsman Chemical
Company
Company. In the previous investigation, by comparison,
the minimum-price-based variable duties were based on
overall underselling margins of 45,2 % for Union
Carbide, 53,5 % for Dow Chemical and 39,5 % for
Huntsman.

and

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Official Journal of the European Communities

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(78)

resale prices, amount

Specific fixed duties based on the difference between the non-injurious price and the US related
importers'
tonne for Union Carbide Corporation,
EUR 69,40 per tonne for Dow Chemical Company and EUR 111,25 per tonne for Huntsman
Chemical Company. This type of measure is considered appropriate, as imports from the USA take
place mainly through related sales companies. The residual specific fixed duty is set at EUR 111,25
per tonne.

to EUR 59,25 per

(79) All parties concerned were informed of the essential facts and considerations on which the continua-
tion of measures at an updated level and in an updated form is based. They were granted a period
within which to make representations subsequent to disclosures.

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on imports of ethanolamines currently classifiable
1.
within CN codes ex 2922 11 00 (monoethanolamine)
(TARIC code 2922 11 00 10), ex 2922 12 00
(diethanolamine) (TARIC code 2922 12 00 10) and 2922 13 10 (triethanolamine), originating in the United
States of America.

The rate of the definitive duty applicable to the net free-at-Community-frontier price, before duty, for

2.
the following companies' products shall be as follows:

Country

Company

Specific fixed duty

United States of America

Union Carbide Corporation
Old Ridgebury Road
Danbury
Connecticut 06817
(TARIC additional code: A115)

Huntsman Chemical Corporation
3040 Post Oak Boulevard
PO Box 27707
Houston
Texas 77056
(TARIC additional code: A116)

Dow Chemical Company
2040 Dow Center
Midland
Michigan 48674
(TARIC additional code: A145)

All other companies
(TARIC additional code: A999)

EUR 59,25 per ton

EUR 111,25 per ton

EUR 69,40 per ton

EUR 111,25 per ton

3.

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

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

Article 2

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

Done at Brussels, 20 July 2000.

For the Council

The President

F. PARLY