Council Regulation (EC) No 950/2001 of 14 May 2001 imposing a definitive anti-dumping duty on imports of certain aluminium foil originating in the People's Republic of China and Russia
Date: 2001-05-14
Institutions: Council of the European Union
Subjects: China, aluminium, anti-dumping duty, import, originating product, thin sheet

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Official Journal of the European Communities

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(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 950/2001

of 14 May 2001

imposing a definitive anti-dumping duty on imports of certain aluminium foil originating in the
People's Republic of China and Russia

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 Article 9 thereof,

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

Whereas:

A. PROCEDURE

(1)

(2)

1. Initiation

On 18 February 2000, the Commission announced by a
notice (‘Notice of Initiation’) published in the Official
Journal of the European Communities (2) the initiation of an
anti-dumping proceeding with regard to imports into
the Community of certain aluminium foil originating in
the People's Republic of China (hereafter referred to as
‘the PRC’) and Russia.

The proceeding was initiated as a result of a complaint
lodged in January 2000 by the European Association of
Metals (‘Eurometaux’) on behalf of Alcan Europe, Elval,
Eurofoil, Lawson Mardon Star Ltd, Pechiney Rhenalu
and VAW Aluminium Business Unit Foil, together repre-
senting a major proportion, i.e. 71 %, of the Community
production of certain aluminium foil. The complaint
contained evidence of dumping of the said product and
of material injury resulting therefrom, which was consid-
ered sufficient
to justify the initiation of an anti-
dumping proceeding.

2. Investigation

(3)

The Commission officially advised the exporting produ-
cers, importers and users known to be concerned, the
representatives of the exporting countries concerned, the

(1) L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation No

2238/2000, (OJ L 257, 11.10.2000, p. 2).

(2) OJ C 45, 18.2.2000, p. 2.

(4)

(5)

(6)

(7)

complainants and other Community producers about
the initiation of the proceeding. Interested parties were
given the opportunity to make their views known in
writing and to request a hearing within the time limit set
out in the Notice of Initiation.

A number of parties made their views known in writing.
All parties who so requested within the above time limit
there were particular
and who demonstrated that
reasons why they should be heard were granted the
opportunity to be heard.

Questionnaires were sent to all parties known to be
concerned and to all other companies which made
themselves known within the deadlines set out in the
Notice of Initiation. In order to allow exporting produ-
cers from China and Russia to submit a claim for market
economy treatment (‘MET’) or individual treatment if
they so wished, the Commission sent a market economy
treatment and an individual treatment claim form to the
Chinese and Russian companies known to be concerned.
One Chinese company and one Russian company
submitted a reply to the claim form.

received from the

six complaining
Replies were
Community producers, two unrelated importers in the
Community, six users, one exporting producer in China,
one exporting producer in Russia and one producer in
the analogue country.
Information was also received
from another Community producer and from three
suppliers of raw material.

The Commission sought and verified all the information
it deemed necessary for the purposes of a determination
of dumping, injury and Community interest including
the carrying out of verification visits at the following
companies:

(a) Exporting producer in the PRC

— Bohai Aluminium Industries Ltd, Qinhuangdao

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(b) Exporting producer in Russia

— Joint Stock Company United Company ‘Siberian
Aluminium’, Moscow (including the
related
companies Metcare Management SA, registered
in Panama City and Eximal Ltd, registered in
Belize and the related selling company Sibirsky
Aluminiun Foil Corp.
(ex Hover Commercial
Corp.) registered in the British Virgin Islands).

(c) Unrelated importer in the Community

— Countinho Caro + Co

International Trading

GmbH, Hamburg, Germany

(d) Analogue producer

— Alcan, Cleveland, Ohio, United States of America

(e) Complainant Community producers

— Alcan Europe, Rogerstone, United Kingdom
— Elval, Inofita Viotia, Greece
— Eurofoil, Dudelange, Luxembourg
— Lawson Mardon Star Ltd, Bridgnorth, United

Kingdom

— Pechiney Rhenalu, France
— VAW Aluminium Business Unit Foil, Bonn (D),
on behalf of VAW Grevenbroich, Grevenbroich,
Germany, VAW SLIM SpA, Cisterna di Latina,
Italy and VAW INASA SA, Irurzun, Spain

(f) Community users

0,018 mm, not backed, not further worked than rolled,
presented in reels of a width not exceeding 650 mm,
currently classifiable within CN code ex 7607 11 10.
The product
commonly known as
aluminium household foil (‘AHF’).

concerned is

(11) AHF is manufactured by rolling aluminium ingots or
foil-stock up to the desired thickness. Once rolled, the
foil is annealed by a thermal process to make it pliable.
Once rolled and annealed the AHF is presented on reels
of a width not exceeding 650 mm. The dimension of
the reel is determinant for its use, since the users of this
product (‘spoolers’ or ‘rewinders’) will mount the AHF
onto small end-rolls destined for retail sale. The AHF
rewound onto smaller rolls,
is then used for multi-
purpose short-life wrapping (mostly in households,
catering and food and floristry retail businesses).

(12)

The investigation has shown that a clear dividing line
exists between AHF and aluminium converter
foil
(‘ACF’), given the differences in the basic physical charac-
teristics and basic use of the products.

— Fora Folienfabrik GmbH, Radolfzell, Germany
— ITS Foil and Film Rewinding bv, Apeldoorn, The

(13)

Netherlands.

(8)

(9)

The investigation of dumping and injury covered the
period from 1 January 1999 to 31 December 1999 (‘the
investigation period’ or IP). With respect to the trends
relevant for the injury assessment, data covering the
period from 1 January 1996 up to the end of the IP (‘the
period considered’) was analysed.

3. Provisional measures

Given the need to further examine certain aspects of
dumping as well as the impact on the Community
industry of the imports concerned, no provisional anti-
dumping measures were imposed, additional
informa-
tion was requested and the investigation was continued.
the
An on-the-spot
premises of an unrelated importer of
the Russian
exporting producer in Hamburg and a supplementary
questionnaire on the same general category of products
was sent to the same Russian exporting producer.

investigation was carried out at

B. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

(14)

1. Product under consideration

(10)

The product under consideration is aluminium foil of a
thickness of 0,009 mm or more up to not more than

its

and

convertibility.

the thickness of

Furthermore, AHF

Regarding the basic physical characteristics, it should be
noted that AHF is generally produced in a thickness
between 0,009 mm to 0,018 mm, whereas ACF is
generally produced in thickness below 0,009 (standard
0,018 mm (standard
above
0,0065 mm)
0,020 mm to 0,040 mm),
the foil
being a crucial element in the use of the product in
terms of
is
presented in reels of a width not exceeding 650 mm
whereas ACF is presented in reels of 700-1200 mm.
The information provided by the interested parties
shows that the width of the reels cannot be altered once
the foil has been annealed. In both cases it should be
noted that the width of the reels is also a determinant
element in the use of the product: AHF will be rewound
onto smaller end-rolls of the same width as the reels,
whereas ACF will be subsequently converted (i.e. printed,
laminated, folded, etc.) and cut to the required size, in
which case a larger size of the reel will allow a more
efficient use of the product.

The aforementioned differences in thickness and width
determine to a large extent the basic use of the product.
Indeed, AHF is used in multi-purpose short-term wrap-
ping, mostly in households, catering and food and flor-
istry retail businesses. ACF will be further transformed
(converted) and then cut
into the desired sizes and
shapes for use in long term conservation of liquid (milk,
UHT,
(food,
cosmetics, chocolate, cigarettes, pharmaceuticals, etc.).

and long-term packing

juices)

fruit

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(15)

(16)

(17)

(18)

(19)

(20)

(21)

In conclusion, AHF and ACF are considered as two
different products for the purpose of this investigation.

Furthermore, it was also found that all AHF share essen-
tially the same basic physical, technical and chemical
characteristics and is used for the same purpose. AHF
therefore constitutes a single product.

(23)

2. Like product

The investigation has shown that the AHF produced in
the PRC and in Russia and exported to the Community
and that produced and sold in the Community by the
Community industry share the same basic physical and
chemical characteristics, i.e. a foil made of aluminium of
a thickness between 0,009 mm and 0,018 mm and
presented in reels of up to 650 mm in width. Further-
more, the end use is the same, i.e. it is used for multi-
purpose short-life wrapping.

The same was found for the AHF produced and sold in
the United States of America (USA), which served as
analogue country. It should be noted that there were no
domestic sales of AHF in Russia.

(24)

In view of the above, it is concluded that the aforemen-
tioned AHFs are alike within the meaning of Article 1(4)
of Council Regulation (EC) No 384/96 (hereafter referred
to as the ‘basic Regulation’).

C. DUMPING

1. Preliminary remarks

It was established that there was only one producer
exporting to the Community in each of the countries
concerned during the IP. They accounted for practically
all exports
to the Community from the countries
concerned.

2. Market economy treatment (‘MET’)

to Article 2(7)(b) of

Pursuant
the basic Regulation,
normal value in the PRC and Russia is determined on
the basis of the prices or constructed value of those
producers which can demonstrate that they meet the
criteria laid down in the said Article 2(7)(c), i.e. that they
operate under market economy conditions. The sole
exporting producers in the PRC and in Russia requested
MET and were required to complete a claim form
detailing all
information required. The
these investigations were conveyed to the
results of
Advisory Committee and, after consultation,
it was
decided to grant MET to the exporting producer in
Russia only.

the relevant

(a) The PRC

(22)

The information submitted showed that the sole Chinese
exporting producer was majority state-owned and that
the chairman of the board of directors was appointed by
a state-owned entity. It was therefore concluded that the
absence of significant state interference in this case could

not be guaranteed and thus that the criteria of the first
indent of Article 2(7)(c) of the basic Regulation were not
met. For this reason, it was concluded that this company
could not be granted market economy treatment.

The company concerned objected to the conclusion not
to grant it market economy treatment mainly on the
grounds that it was the USA partner in the joint venture
that was solely responsible for the management of
operations and, therefore, independence from state inter-
ference was guaranteed. However, in particular in view
of the fact that the chairman of the board of directors
was appointed by a state-owned entity this argument
was not considered sufficient to invalidate the above
findings.

(b) Russia

The investigation showed that the decisions regarding
costs and inputs were made in response to market
signals without significant state interference and the
costs of major
inputs reflected market values. The
company had one clear set of basic accounting records
which were independently audited in line with inter-
national accounting standards. The production costs and
the financial situation of the company were not subject
to significant distortions carried over from the former
non-market-economy system and the company was
subject to bankruptcy and property laws which guaran-
teed stability. Finally exchange-rate conversions were
carried out at the market rate. On the basis of the
foregoing it was concluded that the criteria in Article
2(7)(c) of the basic Regulation were met and that this
company should therefore be granted market economy
treatment.

3. Individual treatment

(25)

(26)

(27)

The sole Chinese exporting producer also claimed indi-
vidual treatment, i.e. the determination of an individual
dumping margin on the basis of the individual export
prices of the company.

The company concerned was unable to demonstrate that
it was sufficiently independent from the Chinese authori-
ties and that it fulfilled all the criteria required. In partic-
ular, since the company was majority state-owned it
could not guarantee the absence of interference by the
State on its export prices, quantities and terms and
conditions of sale. Consequently, it was decided not to
grant individual treatment to that company.

In any case, since the investigation revealed that the
export sales to the Community carried out by the coop-
erating Chinese exporting producer accounted for the
totality of exports from the PRC to the Community
during the IP, the question of individual treatment was
of little relevance for this investigation since the country-
wide duty was established on the basis of data relating to
this sole exporting producer.

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4. Analogue country

(28)

In accordance with Article 2(7) of the basic Regulation,
in order to establish normal value for the Chinese
company not fulfilling the requirements of MET, an
analogue market economy country had to be selected
for the establishment of normal value. An analogue
country had also to be selected for the investigation
carried out with regard to imports originating in Russia.
This was necessary in order to have data available in
case the Russian exporting producer would not furnish
the relevant data.

Given that, in addition, the USA domestic market is the
largest in the world, that it is open to imports due to a
relatively low import duty and that there were several
competing local producers, the USA was considered to
be not an unreasonable choice of analogue country.

5. The PRC

(a) Normal value

(29)

this purpose,

For
the complainants had suggested
Turkey. Turkey was also envisaged by the Commission
as analogue country in the notice of initiation and inter-
ested parties were asked to provide comments.

(35) Normal value was established on the basis of

the
domestic prices of the USA analogue producer, which
were considered representative. Indeed it was found that
the volume of its sales was greater than the volume
exported from the PRC to the Community.

(30) Within the time limit specified in the notice of initiation,
the Chinese and Russian exporting producers objected to
this choice on a number of grounds. The Chinese
company submitted that Turkey was not appropriate as
the analogue country in terms of access to raw materials,
energy resources, technology used, scale of production,
representativity of domestic sales and competitive situa-
tion. It argued that only Russia would meet these criteria
on comparability with the PRC as regards the product
concerned. Alternatively, the Chinese exporting producer
considered that Venezuela was a more appropriate
choice of analogue country than Turkey in terms of
energy cost, production equipment and capacity. The
Russian company itself
there were
substantial differences between Turkey and Russia in
terms of
level of
competition and energy costs.

the production process,

submitted that

the

(31) As far as Turkey is concerned, it was established that the
cooperating producer did not have any domestic sales to
unrelated customers. Therefore, in order to find a more
appropriate
Commission
contacted certain known producers in a number of
alternative analogue countries.

analogue

country,

the

(32)

The request by the Chinese exporting producer to use
Russia as the analogue country could not be granted on
a number of grounds. There were no domestic sales of
the product concerned and there was only one producer
active in Russia. In addition and as explained below, to a
considerable extent information available as well as data
from an analogue country had to be used for Russia as
well.

(33)

Producers in Venezuela and also in India were contacted,
but they both failed to cooperate.

(36)

It was further established that USA sales of the like
product had been made in the ordinary course of trade,
in accordance with Article 2(4) of the basic Regulation.
Normal value was, therefore, established on the basis of
the weighted average prices actually paid for all domestic
sales to unrelated customers.

(b) Export price

(37)

The investigation showed that all export sales of the
product concerned by the sole Chinese exporting
producer were made to unrelated customers in the
Community. The export prices were therefore calculated
in accordance with Article 2(8) of the basic Regulation,
i.e. on the basis of the prices actually paid or payable by
these independent customers.

(c) Comparison

(38)

For the purposes of a fair comparison due allowance, in
the form of adjustments, was made for differences under
Article 2(10) of the basic Regulation which were demon-
strated to affect price comparability. On this basis,
adjustments were made with regard to transport, insur-
ance, packing and credit.

(d) Dumping margin

(39)

In accordance with Article 2(10) and (11) of the basic
Regulation the dumping margins was established on
basis of a comparison between the weighted average
normal value and the weighted average export price at
ex-factory level and at the same level of trade.

(34)

Two producers in the USA were also contacted. One
refused to cooperate but the other agreed to cooperate.
the prices charged by this
It was established that
company were in the ordinary course of
trade and
reasonably reflected the market price level in the USA.

(40)

The dumping margin, expressed as a percentage of the
cif price at Community frontier level,

is:

People's Republic of China: 26,8 %

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6. Russia

(a) Normal value

(41)

(42)

(43)

Pursuant to Article 2(3) and (4) of the basic Regulation,
in the absence of any domestic sales of the like product,
normal value had to be established on the basis of a
constructed value. Normal value was constructed on the
basis of the costs of manufacturing incurred by the
exporting producer concerned for the exported product
in question plus a reasonable amount for selling, general
and administrative costs (‘SG&A’) and profits in accord-
ance with Article 2(3) and (6) of the basic Regulation.

In the absence of domestic sales by the exporting
Russian producer in question or any other producer in
Russia, the Commission envisaged establishing SG&A
costs and profit on the basis of the production and sales
of the same general category of products, i.e. plain foil
and more specifically, ACF, for the company concerned
in the domestic market, as required by Article 2(6)(b) of
the basic Regulation.

The company was requested to provide this information,
first during the on-spot investigation and subsequently
through a supplementary questionnaire. The company,
however, refused to provide this information on the
grounds of the allegedly large amount of work involved
in preparing the information. Moreover,
the invest-
igation revealed a number of irregularities (as explained
in more detail below)
including difficulties in estab-
lishing the price level of energy costs, one of the major
costs elements and the valuation of assets of
the
company. In view of the outstanding deficiencies and
the refusal to provide any information on the same
general category of products, normal value was estab-
lished on the basis of Article 18 of the basic Regulation,
as set out below.

(44)

The constructed normal value was established using as
much of the company's own information as possible.
However, the following adjustments had to be made to
the company's data for the reasons given below:

(45) With regard to energy costs,

it was found that

the
company was charged an unusually low price by the
majority-state-owned electricity company and it could
not be established that this price reasonably reflected the
costs associated with the production of electricity. The
company was not able to demonstrate that the electricity
bills had been paid in full, owing to the use of an
open-account
therefore
concluded that the energy cost was not reliable and thus
it was decided to use the average power tariff used by
aluminium producers world-wide as published in the
industrial press.

payment

It was

system.

(46) With respect

to depreciation,

it was found that

the
majority of the assets was acquired at very low prices at
auction following the bankruptcy of a previous legal
entity in 1998. For the purposes of bringing the compa-
accepted
ny's

into line with generally

accounts

the company's auditor
accounting practice (‘GAAP’),
requested an independent valuation of property, plant
and equipment. This appraisal
led to a revised value
which is now in line with the actual situation of the
company. The company's amount for depreciation was
adjusted accordingly in order to bring it into line with
GAAP.

(47)

Concerning SG&A costs and profit, it was decided, in
the absence of any other Russian exporting producer or
producer subject to investigation and of any reliable data
concerning production and sales of the same general
category of products in the domestic market, to establish
them in accordance with Article 2(6)(c) of the basic
Regulation. SG&A costs and profit were thus based on
the representative domestic sales made in the ordinary
course of trade by the analogue USA producer. The
profit margin was based on data relating to the opera-
tions of the smelter and the foil mill in order to reflect
the full profit realised on the production and sale of the
product concerned.

(b) Export price

(48) All sales of

the product concerned by the Russian
company on the Community market were made via a
related trading company registered in the British Virgin
Islands, which in turn resold the AHF to an unrelated
importer in the Community. The export price was there-
the prices paid or
fore established on the basis of
payable by an independent customer in the Community
to the British Virgin Islands company.

(c) Comparison

(49)

For the purposes of a fair comparison due allowance, in
the form of adjustments, was made for differences under
Article 2(10) of the basic Regulation which were demon-
strated to affect price comparability.
In this respect
adjustments were made for transport, insurance, ancil-
lary costs, credit, after-sales costs and commissions.

(d) Dumping margin

(50)

(51)

In accordance with Article 2(10) and (11) of the basic
Regulation, the dumping margins were established on
the basis of a comparison between the weighted average
normal value and the weighted average export price at
ex-factory level and at the same level of trade.

the
Since there was only one known producer of
product concerned in Russia, the Commission consid-
ered it appropriate to set the residual dumping margin at
the level of the individual dumping margin established
for the cooperating exporting producer in the country
concerned.

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(52)

The dumping margins, expressed as a percentage of the
cif price at Community frontier level, are:

— Joint Stock Company United Company ‘Siberian

Aluminium’ 14,9 %

— All other companies 14,9 %.

meaning of Article 4(1) and Article 5(4) of the basic
referred to as the
Regulation. They are hereinafter
‘Community industry’.
the
complainant Community producers would also account
for a major proportion of
the entire Community
production, i.e. including AHF destined for captive use.

It should be noted that

D. COMMUNITY INDUSTRY

E. INJURY

1. Definition of the Community production

1. Community consumption

(53)

(54)

For the purpose of establishing whether the Community
in this context, for
industry had suffered injury and,
determining consumption and the various economic
indicators related to the situation of the Community
industry,
it had to be examined whether injury and
consumption should be assessed in relation to the total
Community production or whether this analysis should
focus on the production in the Community destined for
the open market.

Part of the production in the Community is not offered
for sale on the market but rather internally transformed
by companies
in their downstream facilities. This
production is therefore considered to take place in a
captive market. It was therefore examined whether a
clear separation existed between the free and the captive
market. It was found that the AHF that is transferred
internally to the downstream integrated rewinders did
not compete with AHF imported from the PRC and
Russia or with that sold by the Community producers
on the free market. On the basis of the above it was
concluded that the examination of the impact of the
dumped imports on the situation of the Community
industry should focus on the free market. It should be
noted that none of the complaining Community produ-
cers was found to be active in the captive market.

(55)

In the Community free market, AHF is manufactured by
the following companies:

— The six Community producers on whose behalf the
complaint was lodged and which cooperated in the
investigation;

— Two other producers who were not complainants,
information in
one of whom provided general
support of
the complaint and neither of whom
opposed the proceeding (ILA Group (I) and Lamina-
zione Sottile (I)).

(60)

(61)

(56) All

these producers

total
constitute
Community production within the meaning of Article
4(1) of the basic Regulation.

therefore

the

2. Definition of the Community industry

(57)

the total Community production of

It was examined whether the cooperating complaining
Community producers represented a major proportion
of
the product
concerned. Since the complainant Community producers
accounted for 82 % of
the non-captive Community
production of AHF during the IP it was concluded that
they constituted the Community industry within the

(58)

Community consumption was determined on the basis
of the information provided by the Community industry
on the volume of its sales in the Community market, the
information provided by another cooperating producer
and estimates given in the complaint for the sales of a
another Community producer on the Community
market; the information provided by the cooperating
exporting producers relating to their volume of exports
to the Community, Eurostat information and informa-
tion provided by importers and users of AHF in the
Community.

(59)

Consumption increased from 71 300 tonnes in 1996 to
80 742 in 1997 and to 88 032 tonnes
in 1998.
Consumption then decreased to 86 117 tonnes in the IP.
Over the period considered consumption increased by
21 %.

2. Imports into the Community from the countries

concerned

(a) Cumulative assessment of

the

effects of

the

imports

concerned

It was examined whether the effects of the imports
taking
concerned should be cumulatively assessed,
account of the conditions set out in Article 3(4) of the
basic Regulation.

It was found that the dumping margins for both coun-
tries were more than de minimis as defined in Article 9(3)
of the basic Regulation and the volume of imports from
each of these two countries was not negligible. Further-
more a cumulative assessment was also found to be
appropriate in light of the conditions of competition
between the imports concerned and the conditions of
competition between the imports concerned and the like
Community product. Indeed, the investigation showed
that AHF imported from the two countries concerned
was found to be alike in all respects, and also to AHF
manufactured and sold in the Community. The volume
of
imports from the two countries concerned were
substantial and increased, for both countries, between
1996 and the IP. During the same period, their corre-
sponding market shares also increased. Moreover, the
prices of both Chinese and Russian imports were found
to be below those of the Community industry during the
period considered, while being sold via the same or
similar channels of trade and under similar commercial
conditions.

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(62)

For these reasons, it is concluded that the effects of the
imports concerned should be cumulatively assessed.

(b) Volume and market share of the dumped imports

The volume of
imports of AHF from the countries
concerned rose continuously from 622 tonnes in 1996
to 9 149 tonnes in 1997, 16 922 tonnes in 1998 and
16 387 tonnes in the IP.

The share of the Community market held by the imports
from the countries concerned increased from 0,9 in
1996,
to 19,2 % in 1998 and
decreasing slightly to 19,0 % in the IP.

to 11,3 % in 1997,

found that the type of alloy does not determine the
choice of AHF for users. Furthermore, it could not be
ascertained that a difference in quality existed between
AHF produced using
alloys which
commanded a price differential. In view of the above the
adjustment could not be granted.

the different

(69) On this basis, the price undercutting margins found per
country, expressed as a percentage of the Community
industry's prices amount to 1 % for the PRC and to 6 %
for Russia. The aforementioned undercutting margins
should, however, be seen in the light of the significant
price depression suffered by the Community industry in
the IP, as evidenced by the losses incurred by the
Community industry.

(c) Prices of dumped imports

3. Situation of the Community industry

(i) P r i c e e v o l u t i o n

(a) Production, capacity and utilisation of capacity

level,

increased

from EUR 1,83/kg

Between 1996 and 1997 the average unit prices of AHF
imported from the countries concerned, at a customer-
to
delivered
EUR 2,02/kg, i.e. an increase of 10 %. Between 1997
and 1998, prices
increased by 31 % to
EUR 2,57/kg. Between 1998 and the IP prices decreased
by 17 % to EUR 2,14/kg. It should be noted that the
prices of the imports concerned have remained below
those of the Community industry throughout the period.

further

(ii) P r i c e u n d e r c u t t i n g

For the purpose of analysing price undercutting, the
prices of AHF sold by the Community industry were
compared to the prices of Chinese and Russian imports
on the Community market in the IP.

The prices of Chinese and Russian imports are those
reported by the cooperating exporting producers in their
response to the questionnaire duly adjusted, were appro-
priate, for customs duties and post-importation costs, at
the level of the first unrelated customer, on a delivered
basis. The prices of the Community industry are those
reported in the responses to the questionnaires on their
sales in the Community to their first unrelated customer
on a delivered basis.

The Russian exporting producer argued that an adjust-
ment should be made to Russian prices to take account
of the lower quality of the Russian AHF exported to the
Community.
It was alleged that Russian AHF was
produced with a lower quality alloy (alloy 8011)
whereas the Community produced AHF would be of a
higher quality alloy (alloy 8006). The investigation
showed that all except one Community producer used
alloy 8011 in the production of AHF. However, on the
the information received from users it was
basis of

(70)

(71)

Between 1996 and 1997 production remained at around
59 000 tonnes, despite the increase in consumption of
13 %. Between 1997 and 1998 production decreased by
9 % to around 54 000 tonnes, while consumption
increased by a further 9 % over
the same period.
Between 1998 and the IP production remained stable.

Between 1996 and the IP production capacity of the
Community industry remained relatively stable
at
around 70 500 tonnes, with the exception of 1997
when production capacity amounted to 72 000. Produc-
tion capacity has been calculated by taking account of
the dedicated equipment for use in the production of
AHF. Even though the same production facilities can
technically be used to produce both AHF and ACF, due
to the costs incurred when switching from one product
to another, in practice Community producers dedicate
equipment
the other
to the production of one or
product.

(72)

The capacity utilisation decreased as from 1997 as the
result of a decrease in production. It should be noted
that given the fixed costs involved in the production of
AHF, a decrease in the rate of capacity utilisation has a
significant impact on the production costs.

(b) Inventories

(73) When analysing inventories, it should be noted that AHF
is produced to order. Any inventories are in fact dedi-
cated quantities awaiting delivery to the customer. In
this context, therefore, the evaluation of stocks does not
appear
the
for
economic situation of the Community industry.

the examination of

to be relevant

(63)

(64)

(65)

(66)

(67)

(68)

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(c) Volume of sales, market share and growth

(74)

Between 1996 and 1997, despite an increase in
consumption of 13 %, sales decreased from 49 386
tonnes to 48 700 tonnes. Between 1997 and 1998 sales
decreased by 7 % to 45 402 tonnes, against a further
increase of consumption of 9 %. Between 1998 and the
IP sales decreased slightly to 45 241 tonnes, whereas
consumption decreased by 2 %.

(75)

The market share of the Community industry decreased
from 69,3 % in 1996, to 60,3 % in 1997 then decreased
further to 51,6 % in 1998 and increased slightly to
52,5 % in the IP.

(76)

(77)

(78)

(79)

(d) Prices and factors affecting prices

From 1996 to 1997 prices increased by 8 % from
EUR 2,25/kg to EUR 2,44/kg while the Community
industry's unit full costs increased by 7 %. Between 1997
and 1998 prices
increased by a further 8 % to
EUR 2,64/kg whereas the unit full costs only increased
by 4 %. Between 1998 and the IP prices decreased by
14 % to EUR 2,28/kg whereas unit
full costs only
decreased by 5 %.

In particular, between 1996 and 1997 the increase in
the full cost of production is mostly due to an increase
in the costs of raw materials, which represents around
55 % of the full costs of production. Since the increase
in sales prices was greater than the increase in the full
cost of production, the Community industry reduced its
losses.

(84)

Between 1997 and 1998, however, despite a decrease in
the cost of raw materials (– 2 %),
the full costs of
production increased by 4 %, due to an increase in fixed
unit production costs resulting from a decrease in
production (– 9 %). However,
the
therefore the
Community industry increased by 8 %,
Community industry improved its profitability.

sales prices of

Between 1998 and the IP, the full unit cost of produc-
the Community industry decreased by 5 %,
tion of
mainly due to a decrease in the raw material costs
(– 9 %).
In the same period the Community industry
suffered a significant price depression, since its prices
decreased well above the decrease in its full costs.

(80)

It should be noted that the costs of the raw materials is
in line with the prices of raw aluminium as quoted in
the London Metal Exchange (‘LME’).

(e) Profitability, cash flow, return on investment and ability to

(86)

raise capital

(81)

Between 1996 and 1997 the profitability of
the
Community industry in terms of return on net sales in
the Community market, improved slightly from – 2,2 %
to – 1,3 % expressed on turnover. This slight improve-
ment was due to an increase in the sales prices by the

full
Community industry above the increase in unit
costs. Between 1997 and 1998 the Community industry
further improved profitability to 3 % by raising its prices
above its full costs. Between 1998 and the IP the
Community industry suffered losses of – 7,3 % due to a
severe price depression.

(82)

Regarding cash flow and return on investments, these
indicators could only be provided for the total of each of
the companies concerned. Since the product concerned
represents only one part of the overall activities of the
companies, these indicators could not provide decisive
guidance as to the situation prevailing in the AHF sector.

(83) None of the Community producers indicated that they
had experienced any difficulties in their ability to raise
capital. This appears to be related to the fact that most
Community producers belong to globally organised
groups of companies. However, it should be noted that
the biggest Community producer of AHF has announced
the planned closure of its manufacturing facility in the
Community due,
inter alia, to the deterioration of its
financial situation.

(f) Investments

Investments made throughout
the period considered
increased from around EUR 3 million in 1996 and in
1997 to around EUR 17 million in 1998 and around
Investments represented
EUR 10 million in the IP.
around 2,5 % of the Community industry's turnover in
1996, 14,5 % in 1998 and 9,9 % in the IP. This shows
the continuous efforts of the Community industry to
modernise
their
their
equipment and to improve
Investments were made mostly in
competitiveness.
replacement of machinery in order to optimise produc-
tivity. Since the investments in this sector are depre-
ciated over a long period of time (over 20 years), the
level of the investments made in 1998 and the IP cannot
be considered to have had the effect of depressing the
profitability in the same period.

(g) Employment, productivity and wages

(85)

The number of employees remained stable between
1996 and 1997 at 435, but dropped to 388 in 1998
and remained at that level in the IP. It should be noted
that since employees work both in the production of
AHF and other foil products, employment has been
allocated on the basis of production volume.

Productivity of the Community industry measures in
terms of tons produced per employee increased by 3 %
over the period considered. The figures on productivity
largely reflect the allocations made to determine the
level of employment.

(87)

Regarding wages, between 1996 and the IP the total
amount of wages increased by 7 %.

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(h) Magnitude of dumping margin

(88) 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 cannot be considered
to be negligible.

factors other than the dumped imports, which could at
the same time be injuring the Community industry, were
also examined to ensure that possible injury caused by
these other factors was not attributed to the dumped
imports.

(89)

(90)

(91)

4. Conclusion on injury

Between 1996 and the IP, the volume of imports of AHF
originating in the countries concerned increased by
2,600 % from around 600 tonnes to over 16 000
tonnes. This resulted in an overall increase of market
share by the imports concerned of 18 percentage points
in a period where the consumption increased by 21 %.
The prices of the imports concerned remained below
those of the Community industry throughout the period
considered.

IP the

situation of

Between 1996 and the
the
Community industry deteriorated in terms of production
(– 8 %) and sales volume (– 8 %), despite an increase in
i.e. by 21 %. As a conse-
Community consumption,
quence,
share
the Community
decreased sharply,
i.e. by 17
percentage points.

from 69 % to 52 %,

industry's market

In particular, between 1996 and 1997 the Community
industry improved its profitability since its sales prices
increased above the increase in full unit costs. During
the same period the Community industry lost sales
volume and market share. Between 1997 and 1998 the
Community industry further improved its profitability
by raising its prices above the increase in its full unit
costs. This resulted in an improved profitability but at
the expense of a further loss of volume of sales and
market share. Between 1998 and the IP the Community
industry decreased its
sales prices well above the
decrease in its full unit costs. This price suppression
resulted in severe losses to the Community industry
which reached – 7 % during the IP.

(92) After the IP one of the biggest Community producers
announced the planned closure of its AHF production
facilities in the Community since it could not sustain the
losses it was suffering in this sector.

(93)

In view of the above, as evidenced by the decrease in
production and sales,
loss of market share and price
suppression leading to severe losses, it is concluded that
in the IP the Community industry suffered material
injury within the meaning of Article 3(1) of the basic
Regulation.

F. CAUSATION

(95)

(96)

(97)

1. Effect of the dumped imports from the countries

concerned

The substantial increase in the volume of imports origin-
ating in the countries concerned and their gain of
market share over the period considered, at prices which
remained below those of the Community industry coin-
the
cided with a deterioration of
Community industry in terms of production,
sales
volume, market share and price depression leading to
significant losses during the IP.

the situation of

In particular, the volume of imports increased signifi-
cantly from around 600 tonnes in 1996 to around
16 000 tonnes during the IP. The largest increase took
place between 1997 and 1998, coinciding with the
decrease in production and sales by the Community
industry. The share of the Community market gained by
the imports was matched by the loss of market share by
the Community industry, whose sales volume decreased
by 8 % over the period.

Between 1996 and 1998 the Community industry
increased sales prices, to match the increase in costs,
with the resulting loss of volume of production, sales
and market share but with a certain improvement in
profitability. This improvement in profitability was more
marked in 1998, the year when the average price differ-
ential between the prices of the imports concerned and
those of the Community industry was at its lowest level.

(98) However, between 1998 and the IP the Community
industry had to reduce its prices to match those of the
imports concerned, in order to maintain volume of sales,
with the resulting deterioration of profitability. It should
be noted that the market for AHF is mature and price
sensitive and that
import prices from the countries
concerned had decreased substantially between 1998
and the IP and undercut
the Community
industry during the IP.

those of

(99)

It is, therefore, considered that the pressure exerted by
the imports concerned, which significantly increased
their volume and market share at low prices caused a
price depression for the Community industry resulting
in a deterioration of its financial situation.

(94)

In accordance with Article 3(6) and (7) of the basic
Regulation,
the dumped
it was examined whether
imports of AHF originating in the countries concerned
have caused injury to the Community industry to a
degree that enables it to be classified as material. Known

(100)

In view of the above it is concluded that the dumped
imports of AHF originating in the countries concerned
have had a material impact on the injury suffered by the
Community industry during the IP, within the meaning
of Article 3(6) of the basic Regulation.

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2. Effect of other factors

(101)

In accordance with Article 3(7) of the basic Regulation,
it was examined whether factors other than the dumped
from the countries concerned might have
imports
contributed to the material
injury suffered by the
Community industry to an extent, that this injury could
not be attributed to the dumped imports from the coun-
tries concerned. In this context, the following factors
were examined: the volume and prices of imports origin-
ating in other third countries, the evolution of prices of
raw materials and whether the Community industry
might have suffered self-inflicted injury through a switch
to ACF production.

Information provided by cooperating users representing
over 80 % of total imports of AHF originating in Turkey
in the IP shows that between 1997 and the IP prices of
Turkish imports were well above those of the countries
concerned and in line with those of the Community
industry.

(107)

In view of the decrease in the volume and market share
of the Turkish imports in the IP and the level of its
prices it can be concluded that imports originating in
Turkey did not break the causal
link between the
dumped imports and the material injury suffered by the
Community industry.

(a) Imports originating in other third countries

(iii) V e n e z u e l a

(102) The volume of imports of AHF originating in other third
countries remained stable at around 11 000 tonnes over
the period concerned, with the exception of 1998 when
imports from such countries amounted to 14 000 tons.
These imports did not,
from the
increase in consumption over the period considered and
lost 3 percentage points of
the
Community market.

therefore, benefit

share of

their

(103)

In particular, during the investigation period,
imports
originating in only three countries other than the coun-
tries concerned, i.e. Croatia, Turkey and Venezuela, had
a share of the Community market above 2 %.

(104)

(105)

(i) C r o a t i a

Imports of AHF originating in Croatia on the basis of
the information reported by Eurostat imports statistics,
went from 1 758 tonnes in 1996 to 737 tonnes in
1997, to 1 478 tonnes in 1998 and to 1 778 tons in the
IP. Their share of the Community market decreased by
0,4 percentage points over the period considered. The
those imports, at customer-delivered level,
prices of
the PRC, Russia and the
remained above those of
Community industry throughout the period, although it
cannot be excluded that products other than AHF (i.e.
ACF) are also included.

the decreasing share of

In view of
the Community
market and the level of its prices it is concluded that
imports originating in Croatia did not contribute to the
material

injury suffered by the Community industry.

(ii) T u r k e y

(106)

Imports originating in Turkey increased from 4 935
tonnes in 1996 to 7 777 tonnes in 1998 and then
decreased to 2 446 tonnes in the IP. Their share of the
Community market increased from 6,9 % in 1996 to
8,8 % in 1998 and then decreased to 2,8 % in the IP.

(108)

Imports originating in Venezuela went
from 2 210
tonnes in 1996 to 1 533 tonnes in 1997, to 2 779
tonnes in 1998 and to 3 843 tonnes in the IP. Their
share of the Community market increased from 3,1 % to
4,5 % over the same period. The prices of these imports
as reported by Eurostat remained above those of the
the Community
countries concerned and those of
industry, with the exception of 1998. It should be noted
that the information reported by Eurostat was in line
with that provided by a cooperating unrelated importer
representing around 15 % of the total volume of imports
into the Community from Venezuela in the IP.

(109)

In view of
the level of
imports from
the prices of
imports of AHF from Venezuela did not
Venezuela,
break the causal link between the dumped imports and
the material injury suffered by the Community industry
in the IP.

(b) Evolution of raw material prices

(110)

It has also been considered whether the injury suffered
by the Community industry could be attributed to the
evolution in the prices of primary aluminium, main raw
material representing around 55 % of the full cost of
production of the Community industry.

(111) Between 1996 and 1998 the prices of the Community
industry could reflect the evolution in the prices of raw
materials. However, between 1998 and the IP the
Community industry's prices decreased by more than
the decrease in its full costs, including the decrease in
the prices of raw materials, thus incurring losses of
7,3 %. Consequently, it is considered that the evolution
in the prices of the raw materials did not contribute to
the material injury suffered by the Community industry
in the IP.

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(c) Self-inflicted injury through a preference to produce ACF

G. COMMUNITY INTEREST

(112)

It has been argued that the decrease in the production
and sales volume of AHF has been self inflicted by the
Community industry's preference to produce ACF which
was alleged to generate higher profits than AHF. It was
alleged that since equipment can be used to produce
either AHF or ACF, the Community industry preferred
to produce the higher value added ACF.

(118)

In order to determine whether the Community interest
called for intervention, an investigation was carried out
into the likely effects of the imposition/non-imposition
of anti-dumping measures on the economic operators
concerned. For this purpose, information was requested
from all
including the Community
producers, raw material suppliers, importers/traders and
users concerned.

interested parties,

(113) The production of AHF by the Community industry
decreased by 8 % between 1996 and the IP. In the same
period,
the production of ACF increased by 18 %.
Between 1996 and the IP the share of the production of
AHF in the total production of foils decreased from
25 % to 21 %.

1. The Community industry

(114) Firstly, although generally both AHF and ACF can tech-
nically be manufactured on the same equipment,
in
practice producers dedicate equipment to one or another
foil product in order to gain efficiency and minimise the
costs of changing set-up of the equipment. Secondly, the
production of ACF has not
increased in the same
proportion as the decrease in the production of AHF but
has followed the increase in consumption of ACF.
Thirdly,
investments made by the
Community industry in 1998 and in the IP indicate a
commitment on the part of the Community industry to
continue producing AHF. Finally,
the Community
industry had sufficient spare capacity to increase its
production of AHF but it was prevented from using its
spare capacity due to the significant increase in dumped
imports.

significant

the

(115)

In view of the above it was concluded that the injury
suffered by the Community industry was not self-
inflicted by a switch to ACF products.

(a) Nature and structure of the Community industry

(119) The Community industry is composed of six companies
producing aluminium foils, of which AHF represented
around 21 % of their total output in the IP. The produc-
tion of the different types of foils is interdependent in
that it broadens the basis for allocation of fixed costs
and overheads of the total foil sector. Four out of the six
Community producers are backwards integrated,
i.e.
they source aluminium foil stock from companies which
belong to the same group.

(120) Production of AHF is capital intensive and highly auto-
mated. It was found that the Community industry dedi-
cates equipment to the production of AHF in order to
increase
incurred in
changes of set-up of machinery. The Community indus-
try's workforce directly related to AHF amounted to
around 388 employees during the IP. The total employ-
ment by these companies amounted to around 4 400
employees.

efficiency and minimise

cost

(d) Conclusion on causation

(b) Viability of the Community industry

imports from the countries concerned,

(116) The substantial increase in terms of volume and market
the
share of
considerable decrease in their prices and the level of
price undercutting and price depression found in the IP
had material negative consequences on the volumes and
prices of the Community industry's sales which in turn
adversely affected a number of economic indicators,
notably profitability. In addition, no other factors were
found which could have contributed to the injury
suffered by the Community industry.

(121) The Community industry appears to be viable and
competitive. This is apparent, firstly, from its position in
the Community market where it is a firmly established
player and partner of the user industry; secondly, from
the degree of investments and machinery replacement;
thirdly, from its recent restructuring and efficiency gains
through rationalisation of its production and modernisa-
tion of
its machinery, and finally from its export
performance, given that its exports of AHF accounted
for between 13 % and 15 % of the total sales made by
the Community industry over the period considered.

(117)

It is therefore concluded that the material injury suffered
by the Community industry has been caused by imports
of AHF originating in the PRC and Russia within the
meaning of Article 3(6) of the basic Regulation.

(122)

In conclusion, the Community industry has proven to be
a structurally viable industry, having restructured its
manufacturing activities for the product concerned in
order to retain productivity and efficiency.

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(c) Possible effects of

taking measures or of not

taking

measures

(123) Should anti-dumping measures not be imposed,

the
Community industry would continue to face price pres-
sure of the dumped imports and the consequent price
depression which led to the deterioration of its profit-
ability.
such a situation would
continue, the Community producers could be forced to
close down certain production lines or even entire plants
devoted to the production of AHF.

In the event

that

(124) As already mentioned above, given the importance of
AHF production to spread fixed costs and overheads of
the entire aluminium foil production, the closure of AHF
production lines could even lead to the closure of the
total aluminium foil activity of the companies. This is
illustrated
by one
Community producers in December 2000 of its plans to
close down its manufacturing facilities in the UK.

announcement made

the

by

two effects could be expected. Firstly,

(125) On the other hand, should anti-dumping measures be
the
imposed,
Community industry could increase its volume of sales,
leading to a better utilisation of the capacity and an
increase in market share. Secondly, prices might also
increase moderately, although most likely not by the
level of the anti-dumping duty since competition would
still remain amongst Community producers,
imports
originating in the countries concerned and imports
originating in other third countries.

(126)

It is therefore expected that the decrease in unit costs as
a result of the increased utilisation rate, combined with a
modest price increase, will allow the Community
industry to regain profitability and market share.

2. Suppliers of raw material to the Community

industry

(127) As already mentioned above,

the six
Community producers are backwards integrated,
i.e.
they source the raw materials (aluminium foil stock)
from companies belonging to the same group.

four out of

2 % between 1997 and the IP, whereas profits decreased
by 5 %. The employment attributable to the production
of foil-stock concerned amounted to around 380 in the
IP.

(130) The raw material suppliers indicated that, should the
Community producers cease producing AHF, it would
be unlikely that they could find alternative customers.
One of the raw material supplier also indicated that the
closure of the Community industry could endanger its
recycling line, since this line is dependent on the scraps
generated in the production of AHF.

(131) Given the share of the suppliers overall activities repre-
sented by foil-stock intended for the Community AHF
producers, it is likely that the decrease in the volume of
sales or even closure of the latter would have a non-
negligible impact on the economic activities of suppliers.
On the other hand, the improvement in the situation of
Community AHF producers is likely to be beneficial to
Community suppliers in terms of increased sales of foil-
stock, thus contributing to their overall employment.

3. Unrelated importers/traders in the Community

(132)

In this respect, two out of three unrelated importers/
traders responded to the questionnaire. Only one of
them provided information relevant for the assessment
of likely effects of imposing/non-imposing anti-dumping
measures. However, this company did not import AHF
from the countries concerned but only from another
third country. Furthermore, imports of AHF represented
a negligible proportion of its overall activities, i.e. less
than 3 % of its total turnover. In view of the above it is
concluded the imposition of anti-dumping measures
would not affect the situation of Community importers/
traders.

4. Users of AHF in the Community

(128) Three raw material suppliers provided information on
the effects from the imposition/non-imposition of anti-
dumping measures:

— Alcan Rolled
Kingdom,

Products UK, Newport, United

— Lawson Mardon Star

Ltd, Bridgnorth, United

Kingdom,

— Pechiney Rhenalu Neuf Brisach, Biesheim, France.

(a) Nature and structure of the user industry

(133) Community users (‘rewinders’ or ‘spoolers’) purchase
AHF in reels and rewind them into rolls in finished
format
for domestic consumption. The rewinding of
AHF is an unsophisticated operation, where the value
added to the AHF is low. No significant barriers to entry
were found to exist in this sector.

the information provided by these
(129) On the basis of
companies,
foil-stock to
it was found that sales of
Community producers of AHF represented around 20 %
of their total sales in the Community. Total sales of
foil-stock to Community AHF producers decreased by

(134) Seven out of 15 Community known users responded to
the questionnaire. Two more users made themselves
known but did not provide the necessary information.
They were therefore not considered in the context of the
analysis of the impact of any anti-dumping measure on
users.

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(135) The users responding to the questionnaire were:

(c) Effect of imposition/non-imposition of measures

— CeDo Household Products Ltd. Telford, United
Kingdom, also on behalf on Poly-lina and Paclan,

(141)

— Childwood
Kingdom,

Ltd,

Ashton-in-Makerfield,

United

— Comital Cofresco SpA, Volpiano, Italy,

— Ecopla France, Saint Vincent de Mercuze, France,

— Fora Folienfabrik GmbH, Radolfzell, Germany,

— ITS Foil and Film Rewinding bv, Apeldoorn, The

Netherlands,

— Vita Emballage A/S, Rødovre, Denmark.

(136)

In terms of size, one of the cooperating rewinders is a
large company which produces all types of disposable
household products, such as aluminium foil, plastic foil,
oven paper, freezer bags and bin liners. Another cooper-
ating rewinder is backwards integrated with a AHF
downstream
captively
producer
rewinding operation. The other five users are small and
medium rewinders active in different wrapping products
for domestic use.

supplying

to its

(b) Data gathered from the cooperating users

(137) AHF was found to represent around 33 % on average of
the total turnover of the cooperating users. The turnover
reported by the cooperating users on the aluminium foil
sector increased by 8 % between 1997 and 1998 and
further increased by 3 % between 1998 and the IP.
These users employed a total of around 2 300 in the IP
out of which around 470 were directly or indirectly
employed in the sector of aluminium foil.

(138) Cooperating users increased their purchases of AHF by
57 % between 1997 and the IP, from 23 000 tons in
1997 to 35 500 tons in the IP. In the IP their purchases
represented 40 % of total sales made by Community
producers, 64 % of total imports originating in the PRC
and 72 % of total

imports originating in Russia.

(139) As regards profitability on the sales of products incor-
porating AHF in the Community,
it ranged between
0,1 % and 6 %, with a weighted average profit of around
3 % in the IP. Average profitability of rewinders went
from 3,5 % in 1997 to 3,3 % in 1998 to 2,9 % in the IP.
It should be noted that this weighted average profit
reflects the situation of some users in a market where a
certain over-capacity has been reported to exist.

(140) The investigation showed that AHF represented between
72 % and 85 % of the total cost of production of the
end-products, representing on average 80 % of the total
costs.

If anti-dumping measures were imposed, since AHF was
found to represent 80 % of rewinders'
total cost of
production, the proposed anti-dumping duties would be
likely to result in a moderate increase in the costs of
users.

(142)

it should be noted that even if

In this respect,
the
exporting producers concerned increased their prices by
the full amount of the duty, prices of these imports
would still remain below those practised by these coun-
tries in 1998, when prices of these imports were at their
highest level.

(143) Should measures not be imposed, the eventual disap-
pearance of the Community industry's manufacturing
activities for AHF could create supply constraints which
would have negative effects for users.

(d) Arguments raised by cooperating users on the effects of the

imposition of anti-dumping measures

(i) I m p o s s i b i l i t y t o p a s s o n t o c u s t o m e r s a n y

i n c r e a s e i n c o s t s

(144) Some users argued that increases in costs resulting from
the imposition of anti-dumping measures could not be
passed on to customers, mostly large retail stores which
dictate prices given their large purchasing power.

evolution of

(145) On the basis of the information provided by cooperating
users it was found that sales prices of users fluctuate,
largely following the
the prices of
aluminium as quoted on the LME and the prices of AHF.
In this respect the prices of aluminium as quoted on the
LME have fluctuated considerably in the period consid-
ered, with a maximum annual increase of 11 % and a
maximum annual decrease of 9 %. Whilst the prices of
users evolved from an index 100 in 1997 to an index
107 in 1999 and then to an index 96 in the IP. Fluctu-
ations in the costs of users could therefore be reflected
in their sales prices.

(146) Thus, it cannot be excluded that users can pass on to
their customers the moderate price increases resulting
from the imposition of anti-dumping measures.

(ii) S h o r t a g e o f s u p p l y

(147)

It was alleged that the Community industry is unwilling
to supply AHF to users and prefers to concentrate its
production on higher value-added products such as ACF.
It was also argued that the Community industry's high
utilisation of capacity prevents it from increasing its
production as a result of the imposition of any anti-
dumping measure. It was argued that this, together with
the imposition of anti-dumping measures would lead to
a shortage of supply of AHF in the Community market.

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(148) As already mentioned in recital 114, the Community
industry is committed to the production of AHF.
Furthermore, the information provided by the cooper-
ating users showed that their purchases of AHF from the
Community industry increased by 62 % between 1997
and the IP. Furthermore, the Community industry was
found to have sufficient spare capacity in its equipment
dedicated to the production of AHF so as to increase its
output of this product.

(149) Moreover, even if anti-dumping measures were imposed,
it is likely that the exporting producers concerned would
continue to export AHF to the Community, albeit at
non-dumped or non-injurious prices respectively.
In
addition, a number of alternative sources of supply were
found to exist, not subject to anti-dumping measures
representing a share of around 13 % of the Community
market in the IP.

(150)

In view of the above, it is unlikely that the imposition of
anti-dumping measures would lead to a shortage of
supply in the Community market.

(iii) P r o d u c t s u b s t i t u t i o n

(151)

It was argued that the imposition of anti-dumping meas-
ures would result in an increase in the price of the
end-product, which in its turn would lead consumers to
switch to other domestic wrapping products such as
plastic foil and/or paper foil.

(152) The investigation showed that demand for AHF is largely
inelastic to price variations, in view of the specific prop-
erties of AHF for packaging and wrapping. Indeed, AHF
retains its characteristics at all temperatures; it acts as an
impermeable barrier preventing food from absorbing or
losing moisture, odour and flavour; it is highly hygienic
and does not support micro-organisms; it is easily form-
able and it is particularly suited for food use given its
general properties of lightness and strength.

(153) This was also illustrated by the fact

that prices of
aluminium, the raw material for the production of AHF
fluctuated widely over
the period but nevertheless
consumption of AHF has increased by 21 % over the
period considered.

(154)

In conclusion, it is unlikely that the imposition of anti-
dumping measures would lead to a significant switch
from aluminium foil to other household wrapping prod-
ucts.

(156) However,

the exporting producers concerned would
most likely continue to export AHF to the Community,
albeit at non-injurious prices, as they have acquired a
strong market position in the Community and since the
Community industry does not have the necessary
the Community
capacity to supply the entirety of
market. On the other hand, should anti-dumping meas-
ures not be imposed,
it cannot be excluded that the
Community industry would considerably reduce or cease
its AHF manufacturing activities in the Community, thus
reinforcing the position of exporting producers of AHF
and considerably weakening
competition on the
Community market.

(157) Furthermore, a number of alternative sources of supply
of AHF were found to exist to non-integrated rewinders,
other than the countries concerned. In the IP, imports
from these other third countries represented around
13 % of total consumption.

(158) Finally, as concerns the argument on the potential domi-
nant position of the integrated Community rewinders,
the investigation showed a limited consumer brand
fidelity as well as the absence of significant barriers to
entry specially of a technological nature. Therefore, it is
unlikely that any rewinder will be allowed to behave in a
manner
significantly independent of customers and
competitors.

(159) Given that the Community industry was not found to
have the capacity to supply the entire Community
market and that, as mentioned above, imports origin-
ating in the countries concerned would most
likely
continue to take place, competition would still remain
strong after the imposition of any anti-dumping-meas-
ures. Thus, the imposition of anti-dumping duties,
if
any, would not limit the choice of the user industries or
weaken competition.

6. Conclusion on Community interest

(160) Given the above reasons, it is concluded that no compel-
ling reasons exist on grounds of Community interest not
to adopt anti-dumping measures in the present case.

H. DEFINITIVE ANTI-DUMPING MEASURES

1. Injury elimination level

(161) For the purpose of establishing the level of duty to be
definitively imposed, account was taken of the dumping
margins found and of the amount of the duty necessary
to eliminate the injury sustained by the Community
industry.

5. Competition and trade distorting effects

(162)

(155) With respect to the effects of possible measures on
competition in the Community, some interested parties
argued that duties would lead to the disappearance of
concerned
the
from the
exporting
Community market,
considerably weakening
competition and increasing the already dominant posi-
tion of Community rewinders backwards integrated with
Community AHF suppliers.

producers
thus

In order to establish the level of duty adequate to
remove injury caused by dumping, it was first necessary
to establish a reasonable minimum pre-tax profit margin
that the Community industry could have achieved in the
absence of dumped imports. It was been found that a
an appropriate
profit margin of 5 % constitutes
minimum, account being taken of
the profitability
achieved in ACF, a neighbouring product not subject to
injurious dumping, and the need for long-term invest-
ments by the Community industry.

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L 134/15

(163) The necessary price increase was then determined on the
basis of a comparison of the weighted average import
price, as established for the undercutting calculations,
with the non-injurious price of the AHF sold by the
Community industry on the Community market in the
IP. The non-injurious price has been obtained by adding
to the sales price of the Community industry an amount
equivalent to its average actual loss in the IP as well as
the abovementioned profit margin of 5 %. The difference
resulting from this comparison was then expressed as a
injury
percentage of
margin.

import value,

the total cif

i.e.

2. Definitive duties

(164)

In the light of the foregoing and in accordance with
Article 9(4) of the basic Regulation, it is considered that
definitive anti-dumping duties should be imposed at the
level of the dumping margins found, unless the injury
margins were found to be lower, in which case the latter
will be applied.

(165)

In the case of imports of the product concerned from
Russia, the residual duty should be fixed on the basis of
duty rate established for the sole cooperating exporting
producer.

(166) On the basis of the above, the proposed definitive duties

are as follows:

Country

Company

Rate of the AD
duty

The PRC

All exporting producers

15,0 %

Russia

Stock

Company
Joint
‘United Company Siberian
Aluminium’

14,9 %

All other exporting produ-
cers

14,9 %

(167) 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
part of
this Regulation with its name and address,
including entities related to those specifically mentioned,
cannot benefit from these rates and shall be subject to
the duty rate applicable to ‘all other companies’.

(168) 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 will, if appropriate, and after consultation
of
the Advisory Committee, amend the Regulation
accordingly by updating the list of companies benefiting
from individual duty rates.

3. Undertakings

(169) The exporting producer in both China and in Russia
offered an undertaking within the meaning of Article
8(1) of
the basic Regulation. Regarding the Chinese
exporting producer, given that MES was not granted,
this undertaking could not be accepted as it did not
contain the necessary guarantees on the part of the
Chinese authorities to allow for adequate monitoring. In
these circumstances, an anti-dumping duty should be
imposed at the level of the definitive dumping margin
established.

(170) The Russian exporting producer agreed to sell

the
product concerned at or above price levels which elimi-
nate the injurious effects of dumping. Moreover, the
regular and detailed reports which the company under-
took to provide to the Commission will allow effective
monitoring. Furthermore, the nature of the product and
the sales structure of this company is such that the
Commission considers that the risk of circumvention is
limited.

(171) To further enable the Commission to effectively monitor
the compliance of the company with an undertaking,
for release into free circulation is
when the request
presented to the relevant customs authority, exemption
from the anti-dumping duty shall be conditional on the
presentation of a commercial invoice containing at least
the elements in the Annex. This level of information is
also necessary to enable customs authorities to deter-
mine with sufficient precision that shipments corre-
spond to the commercial documents, and that they are
covered by the undertaking. Where no such invoice is
presented, or where it does not correspond to the
product concerned as presented to customs, the appro-
priate rate of anti-dumping duty will instead be payable.

(172)

It should be noted that in the event of breach or with-
drawal of the undertaking or a suspected breach, an
anti-dumping duty may be imposed pursuant to Article
8(9) and (10) of the basic Regulation,

(1) European Commission, Directorate-General Trade, Directorate C,

Terv 0/13, Rue de la Loi/Wetstraat 200, B-1049 Brussels

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HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed on imports of aluminium foil of a thickness of not
less than 0,009 mm and not more than 0,018 mm, not backed, not further worked than rolled, in reels of
a width not exceeding 650 mm, falling under CN code ex 7607 11 10 (TARIC code 7607 11 10 10) and
originating in the People's Republic of China and Russia.

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

2.
duty, shall be as follows for the products manufactured by:

Country

Company

The PRC

All exporting producers

Russia

Joint Stock Company ‘United Company Siberian Aluminium’,
Studencheskaya Street, 33/4, Moscow, Russia

All other exporting producers

Rate of the AD
duty %

TARIC additional
code

15,0 %

14,9 %

14,9 %

—

A255

A999

Notwithstanding Article 1(1), the definitive anti-dumping duty shall not apply to imports released into

3.
free circulation in accordance with Article 2.

4.

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

Article 2

Imports declared for release into free circulation under TARIC additional code A256 shall be exempt
1.
from the anti-dumping duties imposed by Article 1 if they are produced and shipped by Siberian
Aluminium (Sayan Foil, Sayanagorsk), and invoiced directly by Rual Trade Limited, Suites 7B & 8B, 50
Town Range, Gibraltar to Sibirsky Aluminium GmbH, Graf-Adolf-Platz 1-2, D-40213, Düsseldorf, and
provided that such imports are accompanied by a commercial invoice containing at least the elements listed
in the Annex.

Exemption from the duty shall be conditional on the goods declared and presented to customs

2.
corresponding precisely to the description on the commercial

invoice.

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

Article 3

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

Done at Brussels, 14 May 2001.

For the Council

The President

A. LINDH

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ANNEX

Necessary information for commercial invoices accompanying sales made subject to an undertaking

1. The invoice number

2. The TARIC additional code under which the goods on the invoice may be customs-cleared at the Community frontier

3. The exact description of the goods,

including:

— the product code number (PCN) (as established in the undertaking offered by the producing exporter in question),

— CN code,

— quantity (to be given in kg).

4. The description of the terms of the sale,

including:

— price per kg,

— the applicable payment terms,

— the applicable delivery terms,

— total discounts and rebates.

5. Name of the company acting as an importer to which the invoice is issued directly by the company.

6. The name of the official of the company that has issued the invoice and the following signed declaration:

‘I, the undersigned, certify that the sale for direct export to the European Community of the goods covered by this
invoice is being made within the scope and under the terms of the undertaking offered by [COMPANY], and accepted
by the European Commission through Decision 2001/381/EC. I declare that the information provided in this invoice is
complete and correct.’