Commission Regulation (EC) No 255/2001 of 7 February 2001 imposing a provisional anti-dumping duty on imports of integrated electronic compact fluorescent lamps (CFL-i) originating in the People's Republic of China
Date: 2001-02-07
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, import, lighting equipment, originating product

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COMMISSION REGULATION (EC) No 255/2001

of 7 February 2001

imposing a provisional anti-dumping duty on imports of integrated electronic compact fluorescent
lamps (CFL-i) originating in the People's Republic of China

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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), as last
amended by Regulation (EC) No 2238/2000 (2), and in partic-
ular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

(3)

A. PROCEDURE

1. Initiation

On 17 May 2000, the Commission announced by a
notice (‘notice of
initiation’) published in the Official
Journal of the European Communities (3), the initiation of an
anti-dumping proceeding with regard to imports into
the Community of integrated electronic compact fluores-
cent lamps originating in the People's Republic of China
(‘PRC’).

The proceeding was initiated following a complaint
lodged on 4 April 2000 by the European Lighting
Companies Federation (‘the complainant’) on behalf of
Community producers representing a major proportion
of Community production of compact fluorescent lamps
contained evidence of
(integrated). The
complaint
dumping of the said product and of material
injury
resulting therefrom, which was considered sufficient,
a
after
proceeding.

initiation of

consultation,

to justify

the

the representatives of

The Commission officially advised the exporting produ-
cers and importers/traders known to be concerned as
well as their associations,
the
exporting countries concerned, users, suppliers and the
complainant Community producers, of the initiation of
the proceeding. Interested parties were given the oppor-
tunity to make their views known in writing and to
request a hearing within the time limit set in the notice
of initiation.

(5)

(6)

(7)

(8)

should be heard were granted the opportunity to be
heard orally.

In view of the large number of Chinese exporting produ-
cers and Community importers listed in the complaint,
the Commission decided to apply sampling in accord-
ance with Article 17 of Regulation (EC) No 384/96 (‘the
basic Regulation’). In order to enable the Commission to
decide whether sampling would be necessary and, if so,
to select a sample, all exporting producers, as well as
related and unrelated importers were requested to make
themselves known to the Commission and to provide, as
specified in the notice of initiation, basic information on
their activities related to the product concerned during
the investigation period.

After examination of
the information submitted by
exporting producers and by unrelated importers in the
Community, and due to the low level of cooperation
from the Chinese exporting producers and the unrelated
importers
it was decided that
sampling was not necessary.

in the Community,

treatment

In order to allow exporting producers in the PRC to
submit a claim for market economy treatment (‘MET’) or
individual
the
Commission services sent claim forms to the Chinese
exporting producers known to be concerned. Claims for
MET and IT were received from 10 exporting producers
and two others claimed only IT.

they so wished,

(‘IT’),

if

The Commission sent questionnaires to parties known
to be concerned and to all the other companies that
made themselves known within the deadlines set out in
the notice of initiation. Replies were received from the
three complaining Community producers, five unrelated
importers in the Community, 12 exporting producers
with manufacturing facilities in the PRC, one related
importer in the Community and one producer in the
analogue country. The Commission sought and verified
all the information it deemed necessary for the purposes
of a preliminary determination of dumping, injury and
Community interest. Verification visits were carried out
at the premises of the following companies:

(4)

A number of parties made their views known in writing.
All parties who so requested within the above time limit
and showed that there were particular reasons why they

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

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 257, 11.10.2000, p. 2.
(3) OJ C 138, 17.5.2000, p. 8.

— Changzhou Hailong Electronics & Light Fixtures

Co. Ltd, Changzhou

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— City Bright Lighting (Shenzhen) Ltd, Shenzhen

with the related exporter

concerned’). The product concerned is currently classifi-
able within CN code ex 8539 31 90.

Everbright Lighting (HK) Ltd, Hong Kong

— Deluxe Well Enterprises Ltd, Shenzhen

(11)

with the related exporter

Full Lam Development Ltd, Hong Kong

— Firefly Lighting Corporation Ltd, Xiamen

— Lisheng Electronic & Lighting (Xiamen) Co. Ltd,

Xiamen

with the related exporter

Neonlite Electronic & Lighting (HK) Ltd, Hong
Kong

— Ningbo Super Trend Electron Co. Ltd, Ningbo

lamps

The industry usually refers to this product as ‘compact
‘CFL-i’. They are
(integrated)’ or
fluorescent
designed to replace normal incandescent lamps and fit
into the same lamp sockets as the incandescent lamps.
The product concerned is produced in different types,
depending on, inter alia, the lifetime, the wattage and the
cover of the lamp. Despite these differences, all the types
have the same basic physical and technical characteris-
tics as well as the same uses. They are, therefore, consid-
ered as a single product
this
proceeding.

the purpose of

for

— Philips & Yaming Lighting Co. Ltd, Shanghai

(b) Like product

with the related importer in the Community

Philips Lighting BV, the Netherlands

(12)

— Sanex Electronics Co. Ltd, Suzhou

— Shenzhen Zuoming Electronic Co. Ltd, Shenzhen

with the related exporter

Super Trend Lighting Ltd, Hong Kong

— Zhejiang Sunlight Group Co. Ltd, Shangyu

B. A n a l o g u e c o u n t r y p r o d u c e r

— Philips Mexicana SA de CV

(13)

C. C o m m u n i t y p r o d u c e r s

— Osram GmbH, München, Germany

— Philips Lighting BV, Eindhoven, Netherlands

— SLI Lighting Ltd, Shipley, United Kingdom

D. U n r e l a t e d i m p o r t e r s / t r a d e r s

— IDV GmbH, Langenselbold, Germany

— IKEA, Werne, Germany

— Omicron Lamps Ltd, Arlesey, United Kingdom

— Panda Trade SA, Gonesse, France

— SML Europa-Contact, Buchholz, Germany.

(9)

The investigation of dumping and injury covered the
period from 1 January 1999 to 31 March 2000 (‘invest-
igation period’ or ‘IP’). The examination of trends in the
context of the injury analysis covered the period from 1
January 1996 to the end of the IP (‘period under consid-
eration’).

2. Product concerned and like product

(a) Product concerned

(10)

The product concerned is electronic compact fluorescent
discharge lamps with one or more glass tubes, with all
lighting elements and electronic components fixed to the
lamp foot or integrated in the lamp foot (‘the product

The Commission found that CFL-i manufactured in the
PRC and sold domestically as well as those exported to
the Community and the product sold on the domestic
market of the analogue country (Mexico), and the one
manufactured and sold in the Community by the
Community industry have basically the same physical
and technical characteristics as well as the same uses.
Therefore, these products are alike within the meaning
of Article 1(4) of the basic Regulation.

exporting producers

Several
submitted that CFL-i
produced in the Community could not be considered
comparable to that produced and exported to the
Community from the PRC on the grounds of the differ-
ence in the lifetime between these two products. It was
alleged that the Community industry produce ‘longlife’
products with a lifetime above 8 000 hours while
exports to the Community from China concerned only
products with lifetimes up to 6 000 hours. However, the
investigation has shown that all CFL-i are alike, as they
have the same basic physical and technical characteris-
tics and essentially the same uses. The detailed calcula-
tions of injury and undercutting margins were based on
lamps with comparable lifetimes.

B. DUMPING

1. Normal value

(a) Market economy treatment

(14)

Pursuant to Article 2(7)(b) of the basic Regulation, in
anti-dumping investigations concerning imports origin-
ating in the PRC, normal, value shall be determined in
accordance with paragraphs 1 to 6 of the said article for
those exporting producers, which can show that they
meet the criteria laid down in Article 2(7)(c) of that
Regulation, i.e. that market economy conditions prevail
in respect of the manufacture and sale of the product
concerned.

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(15)

Claims for MET were received from 10 exporting produ-
cers. One of these companies later failed to submit its
reply to the Commission's questionnaire and was
considered as non-cooperating. The remaining nine MET
claims were analysed on the basis of the five criteria
required by Article 2(7)(c) of the basic Regulation. Two
exporting producers fulfilled the required criteria:

comments were

The Advisory
further
Committee was consulted and did not object to the
Commission's conclusions.

received.

— Lisheng Electronic & Lighting (Xiamen) Co. Ltd,

Xiamen, a wholly foreign owned company,

— Philips & Yaming Lighting Co. Ltd, Shanghai, a joint
venture between Philips Lighting BV (60 %) and a
Chinese state-owned company (40 %). Despite the
40 % share holding by the state-owned company, it
was found that sufficient safeguards existed which
ensured that this company could not unduly influ-
ence the operation of the joint venture.

It was found that five exporting producers were oper-
ating under significant state influence either through
direct management by state representatives or through
constraints on business decisions such as limitations in
selling on the domestic market. These companies were
consequently unable to demonstrate that decisions
regarding sales were made in response to market signals
reflecting supply and demand and without significant
State interference in this regard. The criterion set out in
the first indent of Article 2(7)(c) of the basic Regulation
was therefore not met and these exporters could not be
granted market economy treatment.

(b) Determination of normal value for cooperating exporting

producers granted MET

For one exporting producer that was granted MET,
which did have domestic sales, the Commission first
determined whether the total volume of the domestic
sales of the product concerned was representative in
accordance with Article 2(2) of the basic Regulation, i.e.
whether these sales represented 5 % or more of the sales
volume of
the product concerned exported to the
Community.

The Commission then examined for
this exporting
producer whether total domestic sales of each product
type constituted 5 % or more of the sales volume of the
same type exported to the Community.

For those product types meeting the 5 % test,
it was
established whether sufficient sales had been made in the
ordinary course of trade in accordance with Article 2(4)
of the basic Regulation.

(20)

(21)

(22)

Two other exporting producers did not have a clear set
of basic accounting records, neither did they comply
with international accounting standards and rules. These
companies did not meet
the criterion of accounting
standards set out in the second indent of Article 2(7)(c)
of
the basic Regulation and therefore could not be
granted market economy treatment.

(23) Where, per product type, the volume of domestic sales
above unit cost represented at least 80 % of sales and
where the weighted average price was equal to or higher
than the weighted average cost, normal value was estab-
the weighted average prices
lished on the basis of
actually paid for all domestic sales. All product types
sold on the domestic market by this exporting producer
were found to fall within this category.

In addition, the financial situation and production costs
of two of these exporting producers, were significantly
distorted due to the arbitrary valuation of assets. These
companies did not
the criterion of
absence of distortions from the former market economy
system set out in the third indent of Article 2(7)(c) of the
basic Regulation.

therefore meet

(19)

The exporting producers concerned and the Community
industry were given an opportunity to comment on the
above findings. Some exporting producers requested
more details on the basis of which they were not
granted MET. This information was provided and no

(24) As a result, normal value for this cooperating exporting
producer was established on the basis of the domestic
sales prices in accordance with Article 2(1) of the basic
Regulation.

(25)

For the second exporting producer that was granted
MET it was established that it did not have repres-
entative domestic sales of the product concerned. In the
absence of domestic sales prices of the same product
type by the other producer also granted MET, normal
value was constructed. Constructed normal value was
calculated in accordance with Article 2(3) of the basic
Regulation by adding to this producer's cost of manufac-
turing a reasonable amount
for selling, general and
administration expenses (‘SG & A’) and for profit. The
SG & A and profit were calculated on the basis of the

(16)

(17)

(18)

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figures of the other exporting producer that was granted
MET and had domestic sales in the ordinary course of
trade, pursuant to Article 2(6)(a) of the basic Regulation.
The SG & A figure was based on this producer's
domestic sales made in representative quantities, while
the profit figure was based on its domestic sales in the
ordinary course of trade.

(c) Determination of normal value for exporting producers not

granted MET

to Article 2(7)(a) of

the basic Regulation,
Pursuant
normal value for the exporting producers that were not
granted market economy treatment was established on
the basis of
the analogue country for
products comparable to those sold by the Chinese
exporting producers to the Community, per product
type.

the prices of

initiation of

In the notice of
the
Commission proposed Mexico as an appropriate market
economy third country for the purpose of establishing
normal value for the PRC.

this proceeding,

(26)

(27)

(28) Objections to this proposal were raised by some of the
exporting producers. The alternatives proposed were
Brazil, China, Indonesia, Korea, Poland, Thailand, and
the United Arab Emirates. The Commission contacted
producers and their associations in Brazil,
Indonesia,
Korea and Thailand. The United Arab Emirates did not
have domestic production of
the product concerned
during the IP. Only one producer in Korea initially
agreed to cooperate, but
then failed to provide the
necessary information requested by the Commission.

(29) One objection to the choice of Mexico, concerned the
different voltage of operation of the products sold on
the Mexican market when compared to those exported
by the Chinese producers to the Community. In this
respect the Commission's investigation confirmed that
the voltage of
the lamps sold on the Mexican and
Community markets was different. Although the
production process is the same, the electronic circuit
and components of
the CFL-i were
designed according to the voltage at which they need to
operate. Moreover,
the CFL-i sold on the Mexican
it
market were more expensive to produce. However,
was possible for the Commission to quantify the impact
of these differences in costs of production and sales
prices because most of the exporting producers investi-
gated produce the same product type of CFL-i to operate
at different voltage levels. Therefore, it was provisionally

the ballast of

this difference could adequately be
concluded that
accounted for by adjusting the Mexican domestic sales
prices downwards.

(30) Another objection raised against the choice of Mexico,
concerned the alleged lack of competition on the local
market. However, the Commission found that Mexico
had a strong competitive environment with almost 70 %
of sales quantities being imported from various origins
including from the PRC. Although the cooperating
company is the sole local producer, other major world
producers of the product concerned also sell directly on
the Mexican market. Mexico's membership of NAFTA
also contributes to create a competitive environment,
which allows
to achieve
reasonable but not excessive profits.

the cooperating producer

(31)

The cooperating Mexican producer was found to be
related to a Community producer.
In this respect it
should be noted that this relationship does not, per se,
information provided by the Mexican
render
the
the Mexican
producer unreliable.
It was found that
the product
producer sold substantial quantities of
concerned on the domestic market and that these sales
were made in the ordinary' course of trade. It was care-
fully checked whether the relationship in question had
any distorting impact on costs of production and, conse-
the Mexican producer
quently, on profitability of
concerned. No indication was found that this was the
case.

(32)

In the light of the above, the Commission confirmed the
choice of Mexico as an appropriate analogue country.

(33)

trade,

In order to establish whether sales in the Mexican
market of the products comparable to those sold by the
Chinese exporting producers to the Community were
made in the ordinary course of
the domestic
selling price was compared to the full cost of production
(i.e. the cost of manufacturing plus SG & A expenses).
Where the weighted average sales price was equal to or
higher than the weighted average unit cost, and where
80 % or more of the volume of sales for a particular
product type were at or above unit cost, normal value
was established as the weighted average price of all the
transactions. All types sold on the domestic market in
the analogue country were found to fall within this
category.

(34) As a result, normal value was established as

the
weighted average domestic sales price to unrelated
customers by the cooperating Mexican producer.

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2. Export price

3. Comparison

(a) Individual treatment

(39)

(35)

It is recalled that the abovementioned seven companies
not fulfilling the MET criteria alternatively requested IT.
Two other exporting producers claimed only IT. One of
these companies later withdrew its claim for IT. The
Commission sought and verified all the information they
deemed necessary for the purposes of a determination of
IT with regard to the eight companies in question. Six
out of
these eight exporting producers fulfilled the
criteria on IT:

— Changzhou Hailong Electronics & Light Fixtures Co.

Ltd, Changzhou

— City Bright Lighting (Shenzhen) Ltd,

in Shenzhen

— Deluxe Well Enterprises Ltd, Shenzhen

— Sanex Electronics Co. Ltd, Suzhou

— Shenzhen Zuoming Electronic Co. Ltd, Shenzhen

— Zhejiang Sunlight Group Co. Ltd, Shangyu.

(36)

The remaining two exporting producers did not fulfil the
IT criteria. One was subject to constraints on its business
decisions due to limitations on direct export sales, while
the other faced excessive state intervention due to the
exclusive management of the business by state represen-
tatives, thus presenting a high risk of circumvention. The
exporting producers in this situation were:

— Firefly Lighting Corporation Ltd, Xiamen

— Ningbo Super Trend Electron Co. Ltd, Ningbo.

(b) Determination of the export price

(37)

The export prices for the cooperating exporting produ-
cers were established on the basis of the prices paid or
payable for the product concerned when sold to the first
independent customer in the Community in accordance
with Article 2(8) of the basic Regulation.

(38) However, one exporting producer made all Community
sales through a related company in the Community. For
this company the export prices were constructed on the
basis of the prices at which the imported products were
first resold to independent customers in the Community,
in accordance with Article 2(9) of the basic Regulation.
Adjustments were made for all costs incurred between
importation and resale, including a reasonable margin
for SG & A plus profit. A profit level of 5 % was deter-
mined on the basis of information on profits identified
for the cooperating unrelated importers of the product
concerned in the Community,

For the purposes of a fair comparison between the
normal value and the export price at an ex-works level
due allowance in the form of adjustments was made for
differences that were claimed and demonstrated to affect
prices and price comparability. These adjustments were
made, where appropriate, in respect of physical charac-
teristics, level of trade, discounts and rebates, transport,
insurance, handling,
costs,
loading
commissions and credit costs in accordance with Article
2(10) of the basic Regulation.

ancillary

and

(40) With regard to adjustments for differences in physical
characteristics, it should be noted that Mexican produc-
tion covered 17 product types, all of which were sold in
the ordinary course of trade. For those product types
exported by the Chinese exporting producers to the
Community but not sold on the Mexican domestic
market, normal values were determined by applying
adjustments to the normal value of the closest-resem-
bling product type sold on the Mexican market. Adjust-
ments were made for differences in voltage,
lifetime
wattage and type of cover. To quantify these adjust-
ments the Commission took into account information
supplied not only by the producer in the analogue
country but also by the exporting producers in the PRC.
Cooperating exporting producers were invited to assess
and comment on the impact of these differences both in
terms of prices and costs.

(41) One exporting producer

that was granted market
economy treatment claimed an adjustment for expenses
incurred on domestic sales, such as provisions for bad
debts and selling expenses. The exporting producer
claimed that these expenses were not incurred when
exporting to the Community. The claim was rejected
because no evidence was found of how this alleged
difference affected price comparability, as required by
the basic Regulation.

4. Dumping margin

(a) General

(42)

In accordance with Article 2(11) and (12) of the basic
Regulation, the dumping margin was established on the
basis of a comparison of the weighted average normal
values with the weighted average export prices, at the
same level of trade. The provisional dumping margin
was expressed as a percentage of the cif Community
frontier price for the exporting producers concerned.

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(b) Dumping margins for the cooperating exporting producers

(46)

granted MET/IT

(43)

The individual dumping margins are:

In this respect it should be noted that the country-wide
dumping margin was positively affected by the weighted
average dumping margin established for the cooperating
exporting producers that were not granted MET or IT
but nevertheless replied to the Commission's question-
naire.

Changzhou Hailong Electronics & Light
Fixtures Co. Ltd, Changzhou

59,6 %

Bright

City
Shenzhen

Lighting

(Shenzhen)

Ltd,

17,2 %

(47)

The country-wide dumping margin for the PRC estab-
lished on this basis is 74,4 %.

Deluxe Well Enterprises Ltd, Shenzhen

37,3 %

C. INJURY

(44)

(45)

Lisheng Electronic & Lighting (Xiamen) Co.
Ltd, Xiamen

de minimis

Philips & Yaming Lighting Co. Ltd, Shanghai

61,8 %

Sanex Electronics Co. Ltd, Suzhou

21,2 %

Shenzhen Zuoming
Shenzhen

Electronic Co.

Ltd,

6,0 %

Zhejiang Sunlight Group Co. Ltd, Shangyu

35,4 %

(c) Country-wide
producers

dumping margin for

other

exporting

The investigation showed that the product concerned
accounted for approximately 98 % of imports from the
PRC into the Community under CN code 8539 31 90.
This calculation was based on information supplied by
the complainant and data collected during the on-spot
verifications at the premises of the exporting producers
in the PRC. It was thus estimated that the cooperation
level was only about 30 %.

sales

the export

The Commission calculated the country-wide dumping
to the
margin, on the basis of
Community, made by the cooperating exporting produ-
cers not granted MET or IT. The Commission first estab-
lished the weighted average of the dumping margins
these cooperating companies. With
determined for
regard to the exporting producers that failed to reply to
the Commission's questionnaire,
that did not make
themselves known or otherwise did not cooperate with
the investigation, the determinations had to be based on
facts available, in accordance with Article 18 of the basic
Regulation. In view of the low level of cooperation and
in order not to give a bonus for non-cooperation, it was
concluded that the most appropriate information would
be to use data relating to the most
representative
product types exported by the co-operating exporting
producers not granted MET or IT. It was considered that
none of
the non-cooperating exporting producers
dumped at a lower level. The country-wide dumping
margin was established as the weighted average of the
margins determined for these two groups of companies.

(48)

For the assessment of injury trends, the IP has been
annualised (i.e. the data related to the 15-month period
between January 1999 and March 2000 have been
divided by 15 and multiplied by 12) where appropriate,
in order
to allow for comparisons with preceding
calendar years.

(49)

(50)

(51)

1. Definition of the Community industry

In the course of the proceeding Philips Lighting BV
informed the Commission that it no longer wished to be
treated as a member of the group of complainants.
Therefore, data relating to Philips Lighting BV were not
taken into account for the purpose of determining the
Community industry and injury to the Community
industry. It should be noted that the provisional conclu-
sions concerning injury and causal link would not have
been different had the data relating to Philips Lighting
BV been taken into consideration.

The two remaining cooperating Community producers
account for more than 85 % of the Community produc-
tion of CFL-i during the IP.

Several exporting producers submitted that the complai-
nants are themselves importing the product concerned
from the PRC. In this respect, it emerged that the two
remaining
cooperating Community producers had
indeed imported CFL-i from the country concerned and
resold those imports. According to Article 4(1)(a) of the
basic Regulation ‘[...] when producers are related to the
exporters or importers or are themselves importers of
the allegedly dumped product, the term “the Community
industry” may be interpreted as referring to the rest of
the producers’. During the IP, on average 14,6 % of the
in the
total
country concerned.
Community originated in the
However, despite these sales of
the
imported CFL-i,
primary activity of these companies remained in the
Community. Furthermore, the sales are explained by the
need for the complainants to complete their product
range so as to be able to satisfy demand, as well as by
the attempt to defend themselves against low priced
imports due to dumping. Consequently, the described
trading activity of these producers did not affect their
status as Community producers.

sales of CFL-i by these producers

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(52)

The two remaining Community producers are therefore
deemed to constitute the Community industry within
the meaning of Article 4(1) and Article 5(4) of the basic
Regulation.

(60)

(53) As the Community industry is thus constituted of only
two producers, all figures relating to the latter had to be
indexed for confidentiality reasons.

(54)

(55)

2. Community consumption

Community consumption was established on the basis
of the sales volumes of the Community industry and of
Philips Lighting BV on the Community market, Eurostat
import figures concerning the volume of imports from
the country concerned and from other third countries,
duly adjusted where appropriate.

In this respect it was found that, as mentioned above,
not only CFL-i are imported into the Community under
CN code 8539 31 90, but other products as well. As a
consequence, an estimate of the percentage of CFL-i in
all products imported under this code was made for
each country exporting CFL-i to the Community. These
estimates were based on the questionnaire replies by
cooperating importers that were found to trade the
totality of the imports of CFL-i from certain countries,
information provided by the complainant as well as by
the Chinese exporting producers as verified by the
Commission.

(56) On this basis, Community consumption increased by
117 % between 1996 and the IP from 56,9 million units
to 123,3 million units. Steep increases occurred in
particular between 1997 and 1998 and between 1998
and 1999/IP.

(ii) Undercutting

The Commission has examined whether the exporting
producers of the country concerned undercut the prices
of
the Community industry during the IP. For this
purpose, the exporting producers' prices have been duly
adjusted to a cif level, whereas the Community produ-
cers' prices have been adjusted to an ex-works level. For
the analysis of the price undercutting, the exported CFL-i
as well as those manufactured in the Community by the
Community industry, were grouped according to the
lifetime, wattage and the type of cover of the lamp.
Within each group,
the weighted average ex-works
prices charged by the Community producers were
compared, at the same level of trade, to the weighted
average export prices. Adjustments for differences in
physical characteristics were made where appropriate.

(61) One interested party claimed that

the
product concerned has widened recently and that this
fact would render a price comparison impossible.

the range of

(62)

In this respect it should be noted that, on the basis of
the information gathered and verified, for most types
exported to the Community from the country concerned
comparable types produced in the Community were
found.

(63)

The undercutting margins found on this basis expressed
as a percentage of the Community producers' prices, are
as follows:

Country: PRC

Price
undercutting

Average undercutting margin

40,1 %

3. Imports from the country concerned

Undercutting margins of
exporting producers only

cooperating

Between 18,4 %
and 49,6 %

(a) Volume and market share

The import volume of CFL-i originating in the country
concerned increased by 261 % between 1996 and the IP,
from 22,4 million units to 81,1 million units.

4. Situation of the Community industry

The market share of
the imports originating in the
country concerned increased from 39,5 % in 1996 to
65,8 % in the IP, an increase of 26,3 percentage points.

(a) Production

(57)

(58)

(b) Prices

(i) Price evolution

(64)

The Community industry's production increased by
49 % between 1996 and the IP. The increase occurred
steadily over the period under consideration.

(b) Capacity and capacity utilisation rates

imports originating in the

(59) According to Eurostat data, the weighted average prices
of
country concerned
decreased by 40 % between 1996 and the IP. More
specifically, prices remained stable at EUR 1,5 in 1996
and 1997, but then fell sharply in 1998 and stayed at
just below EUR 1 until the IP.

(65)

total production capacity of

the Community
The
industry also increased between 1996 and the IP, by
40 %. This was due to the installation of new production
lines. The capacity utilisation increased by only 6 %
during the same period and was at a low in 1998. At all
times it remained below 70 %.

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(c) Inventories

(66)

The stocks increased considerably between 1996 and the
IP, by 52 %. Most of this increase was seen in 1999/IP.
In the IP, stocks represented around 25 % of all sales.

(73)

The Community industry was not found to be experi-
encing difficulties in their ability to raise capital on the
basis of bank loans and financing from a mother
company.

(67)

(68)

(d) Sales

Between 1996 and the IP, the sales volume on the
Community market of the product concerned produced
in the Community increased by 16 %. It should be noted
that in the same period the Community consumption
increased by 117 %.

(e) Market share

Between 1996 and the IP, the Community industry lost
almost half of
its market share on the Community
market (it was about 20 % in the IP), while in the same
period overall consumption rose by 117 % and the
market share of the imports originating in the country
concerned increased by more than about 67 %, which
represented a gain in market share of around 26
percentage points.

(f) Growth

(69) While Community consumption increased by 117 %
between 1996 and the investigation period, the sales
volume of the Community industry increased by around
16 % and the volume of imports concerned by 261 %.
The growing trend of the market was not followed by an
increase of
the
market. On the contrary, its market share decreased by
almost 50 % between 1996 and the investigation period,
whereas
concerned
share of
increased by 67 % during the same period.

the Community industry's share of

the market

imports

(g) Prices

The Community producers' average net sales price of the
product
the
produced
Community decreased by 30 % between 1996 and the
IP. The fall was particularly marked as from in 1998.

concerned

sold

and

in

(70)

(71)

(h) Profitability, return on investment, cash flow and ability

(79)

to raise capital

The weighted average profitability, expressed as profits/
losses in relation to the net sales value of the products
produced and sold in the Community deteriorated
between 1996 and the IP. Profitability was highest in
1997 and decreased sharply to almost zero in the IP.
The same deterioration occurred in the return on invest-
ment, expressed as profits/losses in relation to the net
book value of investments.

(80)

(72)

The cash flow generated by the product produced and
sold in the Community decreased sharply between 1997
and 1999. During the IP, it was still below a third of the
1996 level.

(74)

(75)

(i) Employment, productivity and wages

Employment of
the Community industry increased
between 1996 and 1998, however returned thereafter to
the 1996 level (around 900), in an effort to reduce costs.
Wages also increased in 1997 and then decreased in
1999/IP. Average productivity increased steadily over
the period under consideration.

(j) Investment

investments
The Community industry increased its
between 1996 and the 1998, but reduced them subse-
quently. This development mainly relates to investments
in new machinery and equipment carried out in order to
increase capacity and to improve the efficiency and the
productivity.

(k) Magnitude of dumping margin

(76) As concerns the impact on the Community industry of
the magnitude of the actual margin of dumping, given
the volume and the prices of the imports from the
countries concerned, this impact is substantial.

5. Conclusion on injury

(77) A deterioration of

the situation of

the Community
industry during the period 1996-IP has been found, in
particular in terms of reduced market shares, significant
price undercutting, price depression and deterioration of
profitability.

(78) While

the Community consumption expanded by
117 %, the Community industry could not benefit from
this development. While its sales increased by only 16 %
imports originating in the
between 1996 and the IP,
country concerned increased by 261 % during the same
period.

the price development,

In terms of
the Community
industry had to lower its sales prices continuously and
significantly between 1996 and the IP. In addition, the
investigation has shown that during the IP the imports
concerned were made at prices clearly undercutting
those of the Community industry. This development had
a negative impact on the profitability of the Community
industry, which substantially deteriorated as from 1997
to reach a very low level during the IP.

exporting

producers

submitted

the
Several
Community industry did not suffer injury. This argu-
ment was based on the situation shown by annual
accounts and on the increase in production, sales and
capacity utilisation experienced by the Community
industry.

that

L 38/16

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Official Journal of the European Communities

8.2.2001

(81)

In respect of the first point, it should be noted that the
annual accounts refer to all the activities of the compa-
nies concerned which includes products other than the
product
investigation is
focused on the activity related to CFL-i only, which
represents less than 5 % of the total activity, and, as
shown above, the Community industry suffered material
injury as far as CFL-i are concerned.

concerned. However,

the

(82) As far as the second point is concerned, following the
sharp increase in demand of the product concerned,
between 1996 and the IP the Community industry
indeed increased its production and the capacity utilisa-
tion. Although sales have risen, they did not increase to
the extent that was expected given the growth in the
market with the result of increasing inventories. More-
over other injury indicators such as prices, profitability,
return on investment and cash flow have clearly deteri-
orated

(83)

The situation of the Community industry is thus found
to have deteriorated to such an extent that it is provi-
sionally concluded that the Community industry has
suffered material

injury in the IP.

D. CAUSATION

1. Introduction

examined whether

the Commission has

(84) According to Article 3(6) and (7) of the basic Regula-
tion,
the
dumped imports of CFL-i originating in the country
concerned have caused injury to the Community
industry to a degree that enables it to be classified as
material. Known factors other than the dumped imports,
which could at
injuring the
same
Community industry, were also examined to ensure that
possible injury caused by these other factors was not
attributed to the dumped imports.

time be

the

3. Effect of other factors

(a) Imports from other third countries

(87)

The investigation showed that Poland and Hungary were
the only other third countries from which the product
concerned was imported at a level exceeding de minimis
into the Community. The import volume of CFL-i from
these third countries, as well as their market share,
indeed increased substantially, by 291 % and by around
6 percentage points, to around 15 % in the IP, respec-
tively.

that

(88) However, these imports were wholly undertaken by two
companies
formerly manufactured the product
concerned in the Community, but recently decided to
relocate their production activities to other third coun-
tries. The investigation showed that, at least for one of
the
fully cooperated in the
proceeding this decision was partly due to the aggressive
price policy of the Chinese exporting producers.

two companies

that

(89) One exporting producer claimed that one cause of the
material injury suffered by the Community industry is
imports originating in Poland and Hungary
that
undercut the prices of the Community industry.

(90) However, on the basis of Eurostat data, the average
prices of those imports were significantly higher than
the prices of CFL-i originating in the PRC. Moreover, it
emerged from the investigation that since the prices
reported by Eurostat relate to all products imported
under the relevant CN code, some of which are signifi-
cantly cheaper than CFL-i (for instance, magnetic CFL),
the actual prices for CFL-i would be even higher. For
instance, during the IP, non-CFL-i items under the rele-
vant CN code represented between 56 % and 79 % in
volume.

(91) Given the above,

these imports did not break the causal
dumping and injury.

it was provisionally concluded that
link between

2. Effect of the dumped imports

(85)

Between 1996 and the IP, dumped imports from the
country concerned significantly increased in terms of
volume (261 %) and market share (from 39,5 % to
65,8 %). As regards the export prices, they decreased
substantially between 1997 and 1998 and continued to
remain at these low levels. The increase of the imports
from the PRC coincided with this significant price drop.
Moreover, the prices of the Community industry were,
during the IP, significantly undercut by those of the
dumped imports. All this coincided with the deteriora-
tion of the situation of the Community industry in terms
of price reductions, reduced market shares as well as a
deteriorating profitability.

(86)

The above should be seen in the light of the fact that
price is one of the main criteria for customers when
purchasing CFL-i.

(b) Further factors

(92)

The Commission also examined whether any other
factors might have contributed to the injury suffered by
the Community industry, having regard to, in particular,
a possible contraction in demand, developments in tech-
nology and productivity of the Community industry, its
export performance and its imports of
the product
concerned.

(93) As to the development of demand given that

the
apparent consumption of CFL-i increased considerably
during the period under consideration,
the material
injury suffered by the Community industry cannot be
attributed to a
contraction of demand on the
Community market.

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(94)

(95)

(96)

(97)

(98)

of

the

industry,

Community

In relation to the developments in technology and the
productivity
the
Community industry has maintained and even increased
sales levels between 1996 and the IP. It also carried out
considerable investments and installed new production
lines, thereby increasing its productivity in order to limit
its losses in market shares and competitiveness. It was
therefore provisionally concluded that
these develop-
ments did not represent a cause of material

injury.

Concerning the export performance,
the Community
industry has increased its sales in export markets, where
it was likewise in competition with the exporting produ-
cers concerned, by 136 % between 1996 and the IP. It
should be noted that export sales accounted for between
30 % to 40 % of
the Community
the total sales of
industry during the IP. On this basis, the Community
industry has shown itself to be competitive. The export
activity cannot therefore have contributed to the injury
suffered by the Community industry.

Several exporting producers submitted that the complai-
nants are themselves importing the product concerned
from the PRC thereby contributing to the injury
suffered.

In this respect, these imports are explained by the need
for the complainants to complete their product range so
as to be able to satisfy demand. In addition, the volume
of
imports carried out by the Community industry
represents only 4 % of the total volume of imports of
the product concerned originating in the country
concerned. It was therefore provisionally concluded that
the imports of the product concerned originating in the
country concerned and carried out by the Community
industry are unlikely to have caused the injury and in
any event were not such as to break the causal
link
between dumping and injury.

4. Conclusion on causation

The substantial increase in volume and market share of
the imports originating in the country concerned as well
as the considerable decrease in their sales prices and the
level of price undercutting found during the IP coincided
in time with the material
injury suffered by the
Community industry. In addition, no other factors were
found which were such to break the causal link between
the dumped imports from the country concerned and
the material injury suffered by the Community industry.

(99)

In view of the above, it is provisionally concluded that
the dumped imports caused the material injury suffered
by the Community industry.

E. COMMUNITY INTEREST

1. Preliminary remark

(100)

In accordance with Article 21 of the basic Regulation,
the Commission examined the issue of Community
interest. The determination of the Community interest
was based on an appreciation of all the various interests
the
involved,

the Community industry,

those of

i.e.

the
importers/traders
product concerned to the extent that the relevant parties
submitted the information requested in this respect.

and the users/consumers of

(101)

In order to assess the likely impact of the imposition or
non-imposition of measures, the Commission requested
information from all interested parties. The Commission
sent questionnaires to the Community industry, 38
importers/traders, one association of consumers of the
product concerned (Bureau Européen des Unions de
Consommateurs (BEUC)), two associations of traders and
one association of producers. The Community producers
and six importers/traders replied. BEUC did not reply to
the questionnaires nor did it submit any other informa-
tion.

(102) On this basis it was examined whether, despite the
conclusions on dumping, on the situation of
the
Community industry and on causation, compelling
reasons exist which would lead to the conclusion that it
is not
to impose anti-
in the Community interest
dumping measures in this particular case.

2. Community industry

(103)

If measures are taken, the Community industry will be
able to regain at least part of its lost market share with a
consequent positive impact on profitability.

(104) The Community industry has proven to be a structurally
viable industry, able to adapt to the changing conditions
of the market. It obtained profit margins around 5 % to
8 % in 1996 and 1997, when the impact of dumped
imports was less felt on the market, it made considerable
investments and it had a good export performance.

in the

(105) The Community industry suffered material injury caused
by dumped imports originating
country
concerned. If measures are not imposed, a further deteri-
oration of the situation of the Community industry is
probable. It is also likely that the remaining Community
producers may decide to relocate the production outside
the Community or to shut dowm plants in order to
react to competition from dumped imports. This would
including highly
entail a further loss of employment,
staff.
qualified research and development
Indeed, CFL-i are high-tech products which necessitate
important R & D efforts. The price-depressive effect of
the dumped imports would continue to frustrate all
efforts of the Community industry to regain market
shares and to reach a satisfactory margin of profitability.
Not taking measures would jeopardise the new invest-
ments carried out, including in R & D, which are neces-
sary in order to fully benefit from the expansion of the
market and ensure the long-term presence of
the
industry.

(‘R & D’)

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Official Journal of the European Communities

8.2.2001

3. Importers/traders

Therefore it is unlikely that importers would pass on the
duties or any significant part thereof to their customers.

(106) Questionnaire replies were received from six importers.
After having sent its questionnaire reply, one importer
decided not to cooperate further. Therefore five verifica-
tion visits were carried out. The five co-operating unre-
lated importers represented 14,1 % of total imports of
CFL-i from the country concerned during the IP. The
number of effective staff in these companies related to
the CFL-i business was less than one hundred.

(107)

two of

these importers,

In respect of
representing
together less than 1 % of total imports from the PRC
and having around 25 employees, their business is very
much dominated by CFL-i and therefore negative effects
of the imposition of duties on these importers cannot be
excluded. However, two other of these five importers
also deal with a wide range of other products, while the
fifth exclusively trades with an exporting producer for
which no duties are imposed and they will therefore not
be significantly affected by the duties.

(108)

importers also purchase CFL-i

In addition, it should be noted that, as mentioned, one
Chinese exporting producer did not sell at dumped
prices. Some
from
Community producers and there are additional sources
of supply from other third countries. Importers thus will
be able to purchase from sources not dumping the
product concerned.

(109) On the basis of the above and given the large number of
importers not cooperating in the proceeding, it is provi-
sionally concluded that anti-dumping measures will not
have such a negative impact on importers as a whole as
to outweigh the need to eliminate the trade distorting
effects of
injurious dumping and to restore effective
competition.

4. Users/consumers

(110) Users of the product concerned are private households,
industry and a large number of commercial establish-
ments such as shops, restaurants etc. On average, users
tend to buy from the cheapest source available and have
therefore benefited from low prices for CFL-i in recent
years.

(111) With respect to possible consequences for users it has to
be noted that BEUC did not reply to the questionnaire
nor did it submit any other information.

(113) Rather, the imposition of anti-dumping measures does
not rule out the possibility of a general price decrease in
the medium term, as the market is expanding and as all
producers will benefit from growing economies of scale,
the benefits of which they can pass on to consumers.

(114) On the basis of

the above,

it was provisionally
concluded that the effect of the anti-dumping measures,
if any, will most likely not have a decisive impact on
users.

(115) Several

interested parties submitted that anti-dumping
duties would run counter to the principles of the Euro-
pean energy policy, as they would increase the price and
thus reduce the sales of energy saving lamps and incite
users to buy more incandescent lamps that consume
more energy.

(116)

In this respect, the Community interest analysis focuses
on the economic impact on the economic operators
concerned.
It should be noted that, as pointed out
above, it is unlikely that the price for CFL-i will increase
significantly. Even if it would increase (in the unlikely
the duties are fully passed on to the
event
that
consumers),
is unlikely that consumers would be
it
discouraged from buying CFL-i, as, given the economic
benefits due to the energy saving effect, it would still be
economically viable to buy CFL-i.

5. Competition and trade distorting effects

(117) With respect to the effects of possible measures on
competition in the Community, most of the exporting
producers concerned, given their strong market posi-
tions, will probably continue to sell their products albeit
at non-injurious prices. Indeed, the fact that for some of
them no or very low duties are imposed shows that
Chinese exporting producers are able to operate under
fair market conditions. The imposition of anti-dumping
duties on those exporting producers for which higher
dumping and injury margins were established, is indeed
likely to lead to a decrease in their sales volume and
market share. However, given the overall range of duties
imposed, it is likely that there will still be a significant
number of major competitors on the Community
market,
including producers in Poland and Hungary.
Users and consumers will continue to have the choice of
different suppliers of the product concerned.

(112) Any significant price increase appears indeed unlikely as
some Chinese
low duties are imposed for
no or
exporting producers.
Importers have so far practised
considerable mark-ups, and alternative sources of supply
from other third countries with no duties are available.

6. Conclusion on Community interest

(118) Given the above reasons, it is provisionally concluded
that there are no compelling reasons against the imposi-
tion of anti-dumping duties.

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F. PROVISIONAL ANTI-DUMPING MEASURES

rule. The duty should accordingly be set at the level of
the injury margins found for Philips & Yaming, and the
dumping margins found for the remaining exporting
producers.

1. Injury elimination level

(125) As regards the country-wide duty to be applied to the
remaining exporting producers, it was determined at the
level of the country-wide dumping margin because that
was lower than the residual

injury margin.

(119)

the conclusions reached with regard to
In view of
dumping,
injury, causation and Community interest,
provisional anti-dumping measures should be taken in
order to prevent
further injury being caused to the
Community industry by the dumped imports.

(120)

In order to establish the level of duty, account has been
taken of the level of the dumping margins found and of
the amount of duty necessary to eliminate the injury
suffered by the Community industry.

(121)

In order to establish the level of duty needed to remove
the injury caused by dumping, injury margins have been
calculated. The necessary price increase was determined
on the basis of comparisons, per product type, at the
same level of trade, of the weighted average export price,
with the corresponding non-injurious price of CFL-i sold
by the Community industry on the Community market.

(122) The non-injurious price has been obtained by deducting
from the sales price of
the Community industry its
average actual profit and by adding a profit margin that
may reasonably be reached in the absence of injurious
dumping.
the
Community industry in previous years (1996/97) and
taking into account the need for long-term investments,
a profit margin of 8 % has been found appropriate.

the financial situation of

In view of

(123) The difference resulting from the comparison between
the weighted average export price, as established for the
undercutting calculations, and the non-injurious price of
then expressed as a
the Community industry was
percentage of the total cif
import value. As for the
calculation of the undercutting margins, this comparison
was carried out by appropriate groups of types.

2. Provisional measures

(126) The individual company anti-dumping duty rates speci-
fied in this Regulation were established on the basis of
the findings of the present investigation. Therefore, they
reflect the situation found during that investigation with
respect to these companies. These duty rates (as opposed
to the country-wide duty applicable to ‘all other compa-
nies’) are thus exclusively applicable to imports of prod-
ucts originating in the country concerned and produced
by the companies and thus by the specific legal entities
mentioned. Imported products produced by any other
company not specifically mentioned in the operative
this Regulation with its name and address,
part of
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’.

(127) Any claim requesting the application of these individual
company anti-dumping duty rates (e.g.
following a
change in the name of the entity or following the setting
up of new production or sales entities) should be
addressed to the Commission (1) forthwith with all rele-
vant information, in particular any modification in the
company's activities linked to production, domestic and
export sales associated with e.g. that name change or
that change in the production and sales entities. The
Commission,
if appropriate, will, after consultation of
the Advisory Committee, amend the Regulation accord-
ingly by updating the list of companies benefiting from
individual duty rates.

G. FINAL PROVISION

(128)

In the interest of sound administration, a period should
be fixed within which the interested parties which made
themselves known within the time limit specified in the
notice of initiation may make their views known in
writing and request a hearing. Furthermore, it should be
stated that the findings concerning the imposition of
duties made for the purposes of this Regulation are
provisional and may have to be reconsidered for the
purposes of any definitive measures,

(124)

In the light of the foregoing, it is considered that, in
accordance with Article 7(2) of the basic Regulation,
provisional anti-dumping duties should be imposed in
respect of imports originating in the PRC at the level of
the lowest margins in accordance with the lesser duty

(1) European Commission

Directorate-General Trade
Directorates B and C
TERV 00/13
Rue de la Loi/Wetstraat 200
B-1049 Brussels

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Official Journal of the European Communities

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HAS ADOPTED THIS REGULATION:

Article 1

A provisional anti-dumping duty is hereby imposed on imports of electronic compact fluorescent
1.
discharge lamps with one or more glass tubes, with all lighting elements and electronic components fixed
to the lamp foot or integrated in the lamp foot falling within CN code ex 8539 31 90 (TARIC code
8539 31 90 91), and originating in the People's Republic of China.

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

2.
produced by the following manufacturers shall be as follows:

Manufacturer

Changzhou Hailong Electronics & Light Fixtures Co., Ltd
Luoyang, Changzhou, Jiangsu
Changzhou 213104
People's Republic of China

City Bright Lighting (Shenzhen) Ltd
Shenzhen
People's Republic of China

Deluxe Well Enterprises Ltd
Block 17-18, Hong Qiao Tao Industrial Zone
Bao An Yuan,
Shenzhen
People's Republic of China

Lisheng Electronic & Lighting (Xiamen) Co., Ltd,
Xiamen
People's Republic of China

Philips & Yaming Lighting Co., Ltd
1805 Hu Yi Highway
Malu Jia Ding District
Shanghai 201801
People's Republic of China

Sanex Electronics Co., Ltd
Xin Su Industrial Area, Jiangsu
Suzhou 215001
People's Republic of China

Shenzhen Zuoming Electronic Co. Ltd
Shenzhen, Guangdong
People's Republic of China

Zhejiang Sunlight Group Co., Ltd
129 Fengshan Road, Zhejiang
Shangyu 213104
People's Republic of China

Rate of duty
(%)

TARIC
additional code

59,6

A234

17,2

37,3

0,0

39,2

A235

A236

A237

A238

21,2

A239

6,0

35,4

A240

A241

All other companies

74,4

A999

3.

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

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

4.
subject to the provisions of a security, equivalent to the amount of the provisional duty.

1. Without prejudice to Article 20 of Regulation (EC) No 384/96, the interested parties may make their
views known in writing and apply to be heard orally by the Commission within one month of the date of
entry into force of this Regulation.

Article 2

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Official Journal of the European Communities

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Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties concerned may comment on the

2.
application of this Regulation within one month of its entry into force.

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

Article 1 of this Regulation shall apply for a period of six months.

Article 3

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

Done at Brussels, 7 February 2001.

For the Commission

Pascal LAMY

Member of the Commission