Proposal for a Council Regulation amending Regulation (EC) No 1001/97 imposing a definitive anti-dumping duty on imports of polyester textured filament yarn originating in Malaysia
Date: 2000-09-07
Institutions: European Commission
Subjects: Malaysia, anti-dumping duty, import, originating product, textile fibre

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 07.09.2000
COM(2000) 531 final

Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1001/97 imposing a definitive anti-dumping duty on
imports of polyester textured filament yarn originating in Malaysia

(presented by the Commission)

EXPLANATORY MEMORANDUM

By Regulation (EC) No 1001/97 the Council imposed a definitive anti-dumping duty on
imports of polyester textured yarn originating in Malaysia.

The Commission services carried out an interim review investigation pursuant to Article 11(3)
of Council Regulation (EC) No 384/96 following a request
lodged by one Malaysian
exporting producer of polyester textured filament yarn (Hualon Corporation (M) Sdn. Bhd.)
which alleged that circumstances had changed to an extend that dumping had ceased. The
investigation was duly initiated in July 1999.

The investigation showed continuation of some dumping. However, the dumping margin
established in the present investigation (3,2%) was considerably lower than the one of the
original investigation (16,4%).

The investigation also showed that the lower dumping margin was not due to temporary
changes. Instead the changes should be considered as lasting developments due to structural
changes in the production and sales policies of the company concerned which are regarded to
preclude the recurrence of dumped imports at levels similar to those established in the
previous investigation.

In the light of the foregoing, the Commission proposes that the Council adopt the attached
proposal for a Regulation which amends Article 1 of Regulation (EC) No 1001/97 so as to
adjust the anti-dumping duty from 16,4% to 3,2% imposed on polyester textured yarn
produced and sold for export to the EU by Hualon Corporation (M) Sdn. Bhd.

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Proposal for a

COUNCIL REGULATION

amending Regulation (EC) No 1001/97 imposing a definitive anti-dumping duty on
imports of polyester textured filament yarn originating in Malaysia

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 11(3) thereof,

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

Whereas:

(1)

(2)

A. EXISTING MEASURES

By Regulation (EC) No 1001/972, the Council imposed a definitive anti-dumping duty
on imports of polyester textured filament yarn originating in Malaysia. The rate of the
duty applicable to the net free-at-Community-frontier price, before duty, is 32,5%
except for the company Hualon Corporation (M) Sdn. Bhd. (Hualon), for which a
16,4% rate applies.

B. REQUEST FOR A REVIEW

The Malaysian exporting producer, Hualon Corporation (M) Sdn. Bhd., lodged a
request for an interim review of the anti-dumping measures applicable to it limited to
the aspects of dumping pursuant to Article 11(3) of Council Regulation (EC) No
384/96 (the ‘basic Regulation’). The request alleged that changed circumstances of a
lasting nature have led to a stable or slightly reduced normal value and a considerable
increase of its export price so that the continued imposition of measures to it was no
longer necessary to counteract dumping. Having determined, after consulting the
Advisory Committee, that sufficient evidence existed for the initiation of an interim
review the Commission published a notice in the Official Journal of the European
Communities3 and commenced an investigation.

1

2

3

OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 905/98 (OJ L 128,
30.4.1998, p.18).
OJ L 145, 5.6.1997, p. 1.
OJ C 218, 30.7.1999, p. 5.

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C. PROCEDURE

(3)

(4)

(5)

(6)

(7)

The investigation of dumping covered the period from 1 July 1998 until 30 June 1999
(the ‘investigation period’).

The Commission officially advised the authorities of the exporting country of the
initiation of the interim review and gave all parties directly concerned the opportunity
to make their views known in writing and to request a hearing.

The Commission sent a questionnaire and received detailed information from the
exporting producer concerned.

The Commission sought and verified all information it deemed necessary for the
purpose of a determination of dumping and carried out a verification visit at the
premises of the exporting producer concerned.

The interested parties were informed of the facts and considerations on the basis of
which it was intended to recommend the amendment of Regulation (EC) No 1001/97,
and were given an opportunity to comment. Their comments were taken into account
and, where appropriate, the findings were modified accordingly.

D. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT

1. Product under consideration

(8)

(9)

The product under consideration is the same as in the previous investigation, i.e.
polyester textured filament yarn ('PTY'). PTY is directly derived from partially
oriented polyester yarn, and is used in both the weaving and the knitting sectors to
make polyester or polyester/cotton fabrics. The product is currently classifiable within
CN code 5402 33 00. It should be noted, however, that the Council Regulation
imposing definitive measures refers to CN codes 5402 33 10 and 5402 33 90 which
the time that Regulation was
were applicable for the product classification at
published.

There are different types of PTY, depending on the weight ('denier'), the number of
filaments and the lustre. There are also different qualities, depending on the efficiency
of the production process. However, no significant differences exist
in the basic
characteristics and uses of the different types and qualities of PTY. All types of PTY
have been and are considered as one product for the purposes of this investigation.

2. Like product

(10) As in the previous investigation, this investigation has shown that the PTY produced
in Malaysia by Hualon and sold on the Malaysian market or exported to the
Community has the same basic physical and chemical characteristics and the same
uses, and therefore, is to be considered a like product within the meaning of Article
1(4) of the basic Regulation.

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1. Normal value

E. DUMPING

(11) As far as the determination of normal value is concerned, it was first established
whether Hualon’s total domestic sales of the like product were representative in
comparison with its total export sales to the Community. In accordance with Article
2(2) of the basic Regulation, this was found to be the case since domestic sales volume
of Hualon was at least 5% of its total sales volume to the Community.

(12)

(13)

For each of the types sold by Hualon on its domestic market and found to be directly
comparable to the ten types sold for export to the Community, it was examined
whether domestic sales were sufficiently representative for the purposes of Article
2(2) of the basic Regulation. This was considered to be the case when, during the
investigation period, the total domestic sales volume of a type represented 5% or more
of the total sales volume of the same type exported to the Community.

For those product types meeting the 5% test, an examination was also made as to
whether the domestic sales of each of these types could be regarded as having been
made in the ordinary course of trade, by establishing the proportion of sales to
independent customers of the type in question not made at a loss. In cases where sales
of a type, not made at a loss, represented more than 80% of the total domestic sales
volume of that type, normal value was based on a weighted average price of all
domestic sales made during the investigation period. In cases where the volume of
sales, not made at a loss, of a type represented at least 10%, but less than 80% of the
total domestic sales volume of that type, normal value was based on a weighted
average price of the sales not made at a loss only.

(14) As a result of the methodology set out above, normal value for five types of PTY
exported to the Community during the investigation period could be based on the
domestic selling prices of comparable types of PTY.

(15)

the remaining five product

For
types exported to the Community during the
investigation period, it was found that the volume of domestic sales was lower than
5% of the volume exported to the Community. Thus, domestic sales of the five
product types were considered insufficient within the meaning of Article 2(2) of the
basic Regulation. For these types, normal value was constructed on the basis of the
costs of manufacturing incurred by Hualon for the exported product type in question
plus a reasonable amount for selling, general and administrative costs (‘SG&A’) and
profits in accordance with Article 2(3) and (6) of the basic Regulation. The SG&A
were based on Hualon’s domestic sales of the like product. The profit margin was
based on the Hualon’s domestic sales of the like product made in the ordinary course
of trade.

(16) Hualon claimed that in calculating constructed normal value the profit of profitable
domestic sales of certain types which were also exported to the Community should be
used only. The claim was rejected because Article 2(6) of the basic Regulation
provides that profits shall be based on actual data pertaining to production and sales in
the ordinary course of trade of the like product.

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2. Export price

(17)

Since all export sales of the product under consideration were made directly to
independent customers in the Community,
the export price was established in
accordance with Article 2(8) of the basic Regulation on the basis of the prices paid or
payable.

3. Comparison

(18)

For the purposes of a fair comparison by type on an ex-factory basis and at the same
level of trade, due allowance was made for differences which were claimed and
demonstrated to affect price comparability. These adjustments were made in respect of
transport, insurance, handling, loading and ancillary costs, credit and commissions in
accordance with Article 2 (10) of the basic Regulation.

4. Dumping margin

(19)

(20)

The comparison was made between the weighted average normal value per product
type and the weighted average export price for the same product type, in accordance
with Article 2(11) of the basic Regulation.

The comparison as described above showed the existence of dumping for the company
concerned. Due to the varying dumping margins of the different product types, an
overall weighted average dumping margin was established in accordance with Article
2(12) of the basic Regulation. The dumping margin established, expressed as a
percentage of the total CIF value at Community frontier level, duty unpaid, is 3,2%.

(21)

in
The dumping margin of this investigation, however,
comparison with the dumping margin established for the company concerned during
the previous investigation, which amounted to 16,4%.

is considerably lower

F. LASTING NATURE OF CHANGED CIRCUMSTANCES

(22)

In accordance with Article 11(3) of the basic Regulation, it was examined whether the
changed circumstances that have led to the decrease of the dumping margin could be
reasonably said to be of lasting nature. In this respect, it was found in particular that
the production of PTY over the period 1996 to the investigation period has decreased
considerably as raw materials were diverted to new production lines of other polyester
yarns. Also, internal consumption of PTY increased significantly over the same period
as it was directed to increase the production of products with higher added value.
These two changes have decreased the volume of sales (domestic and export) of the
product concerned significantly over the same period. These changes in the production
and sales policies of the company are viewed as evidence that it is unlikely that there
will be a recurrence of dumped exports at levels similar to those established in the
previous investigation.

G. AMENDMENT OF MEASURES

(23)

In view of the finding of a lower dumping margin for the company concerned and as
this situation is not considered to be of a short-term nature, measures imposed by
Regulation (EC) No 1001/97 on exports of this company should be amended by
amending that Regulation accordingly.

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(24)

This review does not affect the date on which the measures imposed by Regulation
(EC) 1001/97 will expire pursuant to Article 11(2) of the basic Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Article 1 of Regulation (EC) No 1001/97 is replaced by the following:

“1. A definitive anti-dumping duty is hereby imposed on imports of PTY falling within CN
Code 5402 33 00 and originating in Malaysia.

2. The rate of the definitive anti-dumping duty applicable to the net, free-at-Community-
frontier price, before duty, shall be as follows:

Malaysia

Duty

Taric additional code

Hualon Corporation (M) Sdn. Bhd.,
Level 9, Wisma Goldhill, 67, Jalan Raja
Chulan, 50200 Kuala Lumpur, Malaysia.

3,2%

8933

Others

32,5%

8900

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

This Regulation shall enter into force on the day following 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,

For the Council
The President

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