Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of polyethylene terephthalate film originating in India and the Republic of Korea
Date: 2001-07-20
Institutions: European Commission
Subjects: India, South Korea, anti-dumping duty, anti-dumping legislation, import, originating product, plastics, thin sheet

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 20.7.2001
COM(2001) 413 final

Proposal for a

COUNCIL REGULATION

imposing a definitive anti-dumping duty and collecting definitively the
provisional duty imposed on imports of polyethylene terephthalate film
originating in India and the Republic of Korea

(presented by the Commission)

EXPLANATORY MEMORANDUM

On 27 May 2000, the Commission opened an anti-dumping investigation with regard
to imports into the Community of polyethylene terephthalate film originating in India
and the Republic of Korea.

The investigation revealed the existence of injurious dumping and consequently the
Commission, by Regulation (EC) No 367/20011, imposed provisional anti-dumping
duties on these imports.

The attached proposal for a Council Regulation is based on the definitive findings on
dumping, injury, causation and Community interest which confirmed the provisional
findings.

It is therefore proposed that the Council adopt the attached proposal for a Regulation
which should be published in the Official Journal no later than 23 August 2001.

1

OJ L 55, 24.2.2001, p. 16.

2

Proposal for a

COUNCIL REGULATION

imposing a definitive anti-dumping duty and collecting definitively the
provisional duty imposed on imports of polyethylene terephthalate film
originating in India and the Republic of Korea

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
Community2, and in particular Article 9 thereof,

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

WHEREAS :

A. PROVISIONAL MEASURES

The Commission, by Regulation (EC) No 367/20013
(the “provisional
Regulation”)
imposed a provisional anti-dumping duty on imports of
polyethylene terephthalate (“PET”) film falling within ex CN code 3920 62 19
and ex CN code 3920 62 90 and originating in India and the Republic of Korea
("Korea").

It is recalled that the investigation period of dumping and injury covered the
period from 1 April 1999 to 31 March 2000 (‘IP’). The examination of trends
relevant for the injury analysis covered the period from 1 January 1996 to
31 March 2000 (‘period under consideration’).

B. SUBSEQUENT PROCEDURE

Following the imposition of provisional measures on imports of PET film
originating in India and Korea, several interested parties submitted comments
in writing. The parties who so requested were also granted an opportunity to
be heard orally.

OJ L 56, 6.3.1996, p. 1, as last amended by Regulation (EC) No 2238/2000, OJ L 257,
11.10.2000, p. 2.
OJ L 55, 24.2.2001, p. 16.

(1)

(2)

(3)

2

3

3

(4)

(5)

(6)

The Commission continued to seek and verify all
necessary for its definitive findings.

information it deemed

Additional verification visits were carried out at the premises of the following
users:

–

–

–

–

Emtec Magnetics GmbH, Ludwigshafen, Germany

Rogers Induflex N.V.LEX N.V., Gent, Belgium

Leonhard Kurz GmbH & CO., Fürth, Germany

Eurofoil, Blaenavon, U.K.

All parties were informed of the essential facts and considerations on the basis
of which it was intended to recommend the imposition of definitive anti-
dumping duties and the definitive collection of amounts secured by way of
provisional duties. They were also granted a period within which they could
make representations subsequent to this disclosure.

(7)

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

C. PRODUCT CONCERNED AND LIKE PRODUCT

1.

Product concerned

(a) Arguments of the parties

(8)

(9)

Certain exporting producers re-iterated the argument that metallised PET film
should be excluded from the product scope of the current proceeding on the
grounds that metallised PET film cannot be considered alike to base PET film
since it had different basic physical and technical characteristics, required
different production equipment and processes, being consequently more
expensive to produce and thus sold at a higher price. These parties also argued
that the use of metallised PET film is different to that of base PET film and is
also classifiable under CN codes other than CN codes ex 3920 62 19 and
3920 62 90, namely within CN code 3921.

(b)

Findings of the investigation

The investigation showed that
the metallisation process consisting of the
addition of metal, such as aluminium, by a vapour deposition process , does
not alter the basic physical, technical and chemical characteristics of PET film.
Moreover, base and metallised PET film are in many applications
interchangeable and may have the same or similar uses. Therefore the
provisional findings set out in recital 19 of the provisional Regulation that
metallised PET film and base PET film constitute one single product and are
classifiable under the CN codes covered by the proceeding, i.e. ex 3920 62 19
and 3920 62 90, are confirmed.

4

(10)

(11)

It should be noted that the fact that an additional production step is required
for the production of metallised PET film, with resulting higher cost of
production and sales price, is not an element which could justify per se the
exclusion of a certain type of PET film from the product scope of the
proceeding.

Finally,
the investigation showed that metallised PET film has to be
distinguished from film which is reinforced, laminated, supported or similarly
combined with other materials. These processes modify the basic physical,
chemical and technical characteristics of PET film to such an extent that the
resulting product cannot be considered to be the product concerned. In
addition, it should be noted that only when PET film is combined with other
materials in such a way, the final product is classifiable under CN code 3921.

(12)

In the absence of further comments other than those mentioned above, the
product description as set out in recitals 9 to 22 of the provisional Regulation
is confirmed.

2. Like product

(13)

In the absence of any comments, the definition of the like product as described
in recital (23) of the provisional Regulation is confirmed.

D. DUMPING

1. General methodology

(a) Normal value, Export price and comparison

(14)

In the absence of any comments under these headings, the provisional findings
as set out in recitals 28 to 34 of the provisional Regulation are confirmed.

(b) Dumping margins

(15)

(16)

(17)

The general methodology for establishing the dumping margins for the
companies investigated, as described in recital 35 of
the provisional
Regulation, is confirmed.

The general methodology for establishing the dumping margins for the
cooperating companies not included in the sample, as described in recital 36 of
the provisional Regulation,
is confirmed. When establishing the dumping
margin for the cooperating companies not included in the sample, any zero and
de minimis margins were disregarded.

The general methodology for establishing the dumping margins for those
exporting producers which neither replied to the questionnaire nor otherwise
made themselves known, as described in recitals 37 and 38 of the provisional
Regulation, is confirmed. However, in the case of Korea, as only one out of
the three sampled exporting producers was found to have practised dumping,
the residual dumping margin was set at the weighted average dumping margin
of a representative number of models with the highest dumping margins
exported by that exporting producer.

5

(18)

It should be noted that in cases where an exporting producer exported more
than one product
the weighted average overall
dumping margin was determined by computing the dumping found on each
type without zeroing 'negative dumping' found on individual types.

type to the Community,

2. India

(a) Normal value and export price

(19)

In the absence of further comments, the findings of recitals 39 to 42 of the
provisional Regulation are confirmed.

(b) Comparison

(i)

Level of Trade

(20) One Indian exporting producer reiterated its claim for an adjustment for
differences in the level of trade between sales of the product concerned to
traders on the domestic and export markets (recital 47 of the provisional
Regulation).

(21)

It was also submitted,
facts and
following disclosure of
considerations on the basis of which provisional measures were adopted, that
two levels of trade (end-users and traders) existed in both (domestic and
export) markets and that a selective comparison should be made: that is, export
prices to traders should be compared with normal values based on sales to
traders and export prices to end-users compared with normal values based on
sales to end-users.

the essential

(22) However,

the

information submitted in the questionnaire

reply and
subsequently verified already indicated that there were no consistent and
distinct differences in functions and prices for the different levels of trade for
comparable models when sold in the domestic market of the exporting
country. Consequently the findings set out in recitals (46) and (47) of the
provisional Regulation are confirmed and the claim for a selective comparison
is rejected.

(ii) Other allowances

(23)

taxes’

the adjustment

(depending on the exporter) of

The Indian exporting producers claimed that
requested
pursuant to Article 2 (10) (k) ‘other factors’ and/or Article 2 (10) (b) ‘Import
the Basic
charges and indirect
Regulation on the export price for the benefits received under the Duty
Entitlement Passbook ("DEPB") scheme on a post-export basis should have
been granted. They claimed that the income received from the DEPB resulted
in a lower export price and that therefore, the Commission should have added
this income to the export price to ensure a fair comparison with the normal
value, as domestic sales do not benefit from such income. Moreover, the
Indian exporters claimed that the deduction, in accordance with Article 14(1)
of the Basic Regulation, of the export subsidies accounted for by the existing
countervailing duty from the anti-dumping duty was legally not justified as the

6

countervailing duties were determined on the basis of a different investigation
period.

(24) Article 2 (10) of the Basic Regulation only contemplates the possibility of
adjustments that affect price comparability. In the questionnaire replies and
during the on-spot verifications, the DEPB benefit was always accounted for
as “other income” and not as a “negative cost” attributed to the cost of raw
materials of the exported goods. Therefore, already on the basis of the
company’s accounting records, there is no explicit link between pricing of the
exported goods and the DEPB income received.

(25)

(26)

(27)

the product

is not subject

The provision of Article 14(1) of the Basic Regulation which reflects Article
VI of the GATT Agreement shows that such subsidisation can albeit indirectly
be addressed in an anti-dumping investigation and any regulation imposing an
anti-dumping duty provided that
to both anti-
dumping and countervailing duties for the purpose of dealing with one and the
same situation arising from dumping or from export subsidisation. The
rationale behind Article 14(1) of the Basic Regulation is indeed to avoid any
duplication of duties intended to counteract the same situation arising from
dumping or export subsidisation, and therefore, countervailing duties resulting
from export subsidies have to be deducted regardless of the investigation
period on the basis of which they were determined. It is noted, as explained
under recitals (78) and (79) below, that an adjustment under Article 14(1) of
the Basic Regulation has been made. For all these reasons, the above request
had to be rejected.

(c) Dumping margin

In the absence of any comments or new information, the methodology set out
in recitals 51 to 53 of the Provisional Regulation is confirmed.

The definitive dumping margins, expressed as a percentage of the cif import
price at the Community border, are:

Ester Industries Limited

Flex Industries Limited

Garware Polyester Limited

Jindal Polyester Limited

Dumping margin for cooperating companies
not part of the sample

64,5%

42,9%

65,3%

0%

57,70%

Residual
cooperating companies

dumping margin

for

non-

65,3%

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3. Korea

(a) Normal value

(28)

Two Korean cooperating exporting producers argued that so-called local
export sales (i.e. domestic sales foreseen for the export market after further
processing and/or packaging) had been excluded from the calculation of
normal value with no legal basis for doing so. However, it is evident that
Korean authorities permit such sales to be made without the addition of any
local sales tax (VAT); the vendor is also able to transfer to the purchaser the
right to claim duty drawback and the sales are usually made in a foreign
currency. It is therefore evident from the way that such sales are structured in
Korea that they are made for export and do not permit a proper comparison.
Thus the approach followed for provisional determinations is maintained.

(29)

In view of the above, the findings as described in recital 57 of the provisional
Regulation are confirmed.

(b)

Export price

(30)

Two of the exporting producers had related importers in the Community and
both indicated that they considered that the profit margin allocated to those
importers (5,5%) was unreasonably high given that the functions performed by
the importers was limited to the re-invoicing of sales, without playing an
active role in the sale itself. It was suggested that these related importers did
not generate profit per se, but merely received commission on sales made.
Nonetheless, the commission rate indicated cannot be taken as necessarily
being accurate as the parties are related. The fact that the related importers
may be remunerated on a fixed commission basis does not necessarily bear
any relation to the functions performed by those importers. Furthermore,
neither of the claimants submitted any specific data which indicated that the
margin used was not in line with prevailing market conditions.

(31)

In view of the above, the provisional findings as described in recital 58 of the
provisional Regulation are confirmed.

(c) Comparison

(i) Exchange rates fluctuation

(32)

Following a request by the Korean exporting producers the adjustment for a
in exchange rates was reexamined. Following this
sustained movement
reexamination, the average exchange rate was that of two months before the
actual invoice date.

8

(ii) Duty drawback

(33) All of the Korean cooperating exporting producers considered that

the
methodology used in allocating duty drawback to domestic sales was
unreasonable, in particular because the raw materials concerned are used for
manufacturing products other than PET film. The Commission therefore
reconsidered the issue and decided to adopt a revised two-step approach:

(34)

(35)

Firstly, the quantities of raw materials purchased and used solely for PET film
production, (whether intended for domestic or export sales) were calculated
using the nationally approved coefficients and expressed as percentages of the
totals of raw materials purchased. These percentages were then applied to each
of the individual supplies of raw materials. Thus each raw material was
allocated to both domestic and export sales in which the raw material was
used,
in the appropriate
proportion. The allocation started with supplies carrying the lowest duty rates,
as explained in the provisional Regulation. The result led to increased amounts
of duty drawback allowable for two exporting producers.

(both product concerned and other products),

With the above exceptions concerning duty drawback and exchange rate
conversion, the provisional findings as described in recitals 59 to 65 of the
provisional Regulation are confirmed.

(c) Dumping margin

The findings of recitals 66 and 67 of the provisional Regulation are confirmed
with the exception of one cooperating exporting producer who objected to the
use of the comparison of a weighted-average normal value to individual export
transactions to determine its dumping margin on the basis that
the mere
variation of export prices by customer, region or time period does not justify
the use of the weighted average to transaction method for the determination of
the dumping margin. The issue was re-examined and it was found that there
was a pattern of export prices which differs among customers, the effect of
which on the degree of dumping being practised by the exporter was not
significant. The methodology for establishing the dumping margins for the
companies investigated as described in recitals 66 and 67 of the provisional
Regulation was therefore revised in respect of this exporting producer from a
weighted average to transaction approach to a weighted average to weighted
average approach.

9

(36)

The definitive dumping margins, expressed as a % of the cif import price at
the Community border are;

Kolon Industries Limited

SKC Industries Limited

Toray Saehan Industries

Dumping margin for cooperating companies
not part of the sample

0,0%

7,5 %

0,0 %

7,5 %

Residual
cooperating companies

dumping margin

for

non-

13,4%

E. COMMUNITY INDUSTRY

(37) Certain Indian exporting producers argued that

the definition of

the
Community industry and, consequently, the injury analysis, should not have
been limited to the three cooperating complainant Community producers, but
should have been extended to all the Community producers, including Fapack,
who participated in lodging the complaint but only provided some basic
and three other Community producers, which are not
information,
complainants and are not related to any exporting producers and which, as
well, only submitted some basic information.

(38)

It is confirmed that, as mentioned in recital 73 of the provisional Regulation,
all these seven operators are indeed Community producers and thus constitute
the Community production within the meaning of Article 4(1) of the Basic
Regulation. However, as described in recital 70 of the provisional Regulation,
the latter four Community producers only submitted some basic information
but did not reply fully to the questionnaire intended for Community producers.
Therefore,
this information could not be used for the purposes of the
assessment of the situation of the Community industry. These Community
producers were accordingly not included in the definition of the Community
industry. The argument had therefore to be rejected.

(39) One interested party contested the finding that

the Community industry
accountsedfor more than 70% of the total Community production of PET film.
This element has been re-examined by the Commission, and a clerical error
was found. The Community industry actually accounts for 60% of the total
Community production.

(40) Certain interested parties claimed that if indeed metallised PET film remains
included in the definition of the product concerned, certain producers of
metallised PET film should also be regarded as Community producers forming
part of the Community industry.

10

(41)

The investigation showed that the companies in question do not produce base
PET film, but in fact purchase base PET film from different sources and then
perform the additional metallisation process. This additional processing step
undertaken by them is however not in itself sufficient to justify considering
they are simply
them as Community producers of PET film.
processors of a product without changing its basic physical, technical and
chemical characteristics.

Indeed,

F. INJURY

1. Community consumption

(42)

In the absence of any new information, the provisional findings concerning the
Community consumption as described in recitals 76 to 79 of the provisional
Regulation are confirmed.

2. Imports concerned

a) Preliminary remark

(43) Certain exporting producers raised the argument that the imports attributable
to exporting producers found not to have dumped should be excluded for the
analysis of the injury aspect. However, even if such imports were to be
excluded from the analysis, the conclusions as to the existence of material
injury caused by dumped imports would remain unchanged. Indeed, the price
undercutting would remain significant, as well as the increase in volume and
market shares and the remaining imports found to be dumped would still
represent more than 13% of the Community market. The decrease observed in
the sales prices would also remain significant.

b) Cumulative assessment of the effects of the imports concerned

(44) Certain Indian exporting producers argued that

imports of PET film
originating in India should not be cumulated with those originating in Korea in
view of the differences existing in the conditions of competition. The claim
was based on the grounds that the import volume, the market shares and prices
developed differently during the period 1997 to IP.

(45) As regards the conditions of competition between Korean and Indian imports,
when taking into account the totality of the period under consideration, i.e.
between 1996 and the IP, and not, as suggested, the period 1997 to the IP, the
volume of imports, market shares and import prices in fact developed in a
similar way. It is also confirmed that import volumes from both countries were
substantial during the investigation period. Moreover, significant price
undercutting was found for both imports originating in India and Korea, which
were sold via the same sales channels and with similar commercial conditions.
The argument has therefore to be rejected. Given the above, the findings of
recital 85 of
imports
originating the countries concerned should be assessed cumulatively, are
hereby confirmed.

the provisional Regulation, setting out

that

that

11

c) Volume, market shares and prices of the imports concerned

(46)

In the absence of any new information as regards the volume and prices of
imports from the countries concerned, the provisional findings are confirmed.

d) Price undercutting.

(47) As regards the price undercutting margins, certain Indian exporting producers
questioned the fact that the Commission services did not consider, in the
calculation of the weighted average export prices, the countervailing duties
imposed on imports of PET film originating in India in 1999. They also
reiterated their request for a level of trade adjustment, since Indian exporters
mostly sell to wholesalers while the Community industry nearly always sells
directly to users of PET film.

(48)

The calculations of price undercutting margins were revised by adding to the
export prices the countervailing duties, where applicable. As regards the level
of trade adjustment, the further analysis confirmed firstly, that, as described in
recital 93 of the provisional Regulation, the selling price to wholesalers or to
users does not depend on the type of customer but rather on the purchased
volumes, and secondly, that the two levels of trade are not clearly separated
and that there is no clear price difference between them. Moreover, it is
confirmed that the Community industry also sells the product concerned to
distributors and wholesalers and not only to users, contrary to what was
claimed by some interested parties. Several companies were indeed found to
be supplied by both exporting producers from the countries concerned and the
Community industry.

(49) Before the above background, price undercutting margins were reviewed on
the basis of the evidence submitted by interested parties and amended where
appropriate. The revised weighted average price undercutting margins found
per country, expressed as a percentage of the Community industry prices, are
as follows:

–

–

Korea: from 14,9% to 36,8%, on weighted average 20,6%

India: from 34,5% to 44,8%, on weighted average by 37,5%.

3. Situation of the Community industry

(50)

Several interested parties questioned the conclusion reached in the provisional
injury on the
the Community industry suffered material
Regulation that
grounds that some factors have developed positively between 1996 and the IP
(i.e. production capacity, production, sales volume, productivity, stocks and
wages).

12

(51)

In this respect, it should be noted that not all the factors enumerated in
Article 3(5) of the Basic Regulation have to indicate a negative development
in order to conclude that the Community industry is suffering material injury.
In the current case, the Community industry lost market shares and, due to the
price depressing effect of imports from the countries concerned, it had to
significantly lower its sales prices, leading to a severe deterioration of its
financial situation.

(52) A Korean exporting producer questioned that

the Community industry
suffered material injury on the grounds that it is viable and competitive, as set
in recital 159 of the provisional Regulation and that it still held an important
position on the Community market during the IP.

(53)

injury.

Indeed,

The fact that the Community industry is viable and competitive does not
preclude the finding of material
the
Community industry is viable and competitive had been made in the context of
the Community interest analysis which, inter alia, examined the effect of
taking or not-taking anti-dumping measures on the various operators in the
Community. All this does not invalidate the conclusion that the Community
industry suffered material
factors
including the significant
loss of market share during the period under
consideration. The argument has therefore to be rejected.

injury as evidenced by a number of

the finding,

that

(54) A Korean exporting producer alleged that the increase of the production
capacity by the Community industry, that took place between 1998 and 1999,
is in contradiction with the fact that its investments remained limited during
the same period. It should be noted in that respect that investments related to
the production capacity increase took place during the years 1997 and 1998, as
set out in recital 108 of the provisional Regulation. As however the new
capacity installed was only operational in 1998 and 1999, the increase in
production capacity and the investments did not take place in the same period.

(55) Certain Indian exporters claimed that limiting the analysis of the Community
industry's sales to the domestic sales, in terms of volumes and prices, does not
comply with the provision of Article 3(4) of the WTO Anti-dumping
Agreements on the grounds that the Agreement refers to total sales, thus
including exports.

(56)

it should be noted that

In this respect,
the injury assessment has been
undertaken in line with the relevant provisions of the Basic Regulation and
consistent practice of the Community institutions. In addition, it should be
noted that Article 3(4), in conjunction with Article 3(1) and 3(2), of the WTO
Anti-dumping Agreement, clearly refers to the evaluation of the impact of
dumped imports on prices in the domestic market and on the situation of the
this type of
domestic industry.
investigation where, inter alia, the effect of dumped imports from one or more
countries into the Community are at issue (and not the effect of dumped
imports into third country markets) that injury of the Community industry
must be found to exist on the domestic market only and that the situation with
respect to exports or on export markets is therefore irrelevant in the context of
the injury assessment. The argument has therefore to be rejected. However,

It also follows from the purpose of

13

the Community industry's export
and in line with consistent practice,
performance has been examined in the context of the question of causal link
between the dumped imports and the injurious situation, as set in recitals 144
of the provisional Regulation.

(57) On the basis of the above, the provisional findings as regards the material
injury suffered by the Community industry during the IP are confirmed.

G. CAUSATION

(58)

(59)

Some interested parties claimed that the assessment of the causal link was
flawed since the deterioration of certain injury factors, i.e. profitability, cash
flow, return on investments and ability to raise capital, should be considered as
being linked to autonomous cyclical developments and to the massive
investments made by the Community industry during the period considered
rather than to the impact of the imports concerned.

Firstly, there is no indication that the Community industry suffers from a
cyclical downturn. Secondly, the further analysis of the financial situation of
the Community industry confirmed that its deterioration was mainly due to the
decrease of its unit sales prices. Moreover, since during the whole period
under consideration the unit cost of production decreased, the deterioration
cannot be attributed to higher cost of production related to the new
investments.

(60)

In the light of the above and in the absence of any new information, the
provisional findings as described in recitals 119 to 123 of the provisional
Regulation are confirmed.

H. COMMUNITY INTEREST

1. Unrelated importers and traders

(61) One unrelated importer argued that, contrary to what was set out in recital 188
of the provisional Regulation, the imposition of countervailing duties reduced
the availability of Indian PET film on the Community market and that the
level of the anti-dumping duties as set out in this Regulation will make it
unable to source PET film from its traditional Indian suppliers. It further
argued that the PET film produced by the Community industry outside the
Community is imported by the Community industry itself, and that, due to this
relationship, this would eliminate any other real alternative sources of supply.

(62)

In this respect, Eurostat data showed that between the year 1999 (the
provisional countervailing duties were imposed in August 1999) and the
year 2000, imports from India increased by 11%. As to the level of the anti-
dumping duties proposed, it cannot be excluded that they will result in an
increase of the import prices. However, given the different levels of measures
proposed, it can be expected at the same time that some of the exporting
producers concerned will continue to sell on the Community market, albeit at
non-dumped prices. Regarding the existence of alternative sources of supply, it
appears that, during the year 1999, the Community industry's purchases of

14

(63)

(64)

(65)

PET film originating in the US and Japan, the two major exporting countries
which are not the countries concerned by this proceeding, represented around
35% of the total imports from these countries. It is therefore confirmed that
other alternative sources of supply are available.

2. Users of PET film in the Community

It should be noted that out of the 23 users that co-operated at the provisional
stage of the proceeding, and purchasing slightly over 40% of the total imports
from the countries concerned, only one expressed its concerns after the
imposition of the provisional duties. This low degree of reactions might
suggest that the measures would not have such an important impact on the
users concerned.

Four other users, which made themselves known after the imposition of the
provisional measures, argued that the imposition of duties could limit their
choice of suppliers and possibly create a shortage of PET film in the
Community market. Those users also claimed that a price increase of PET film
has occurred in the Community market since provisional duties were imposed,
with a negative effect on their competitiveness on the world market.

It should be recalled in this respect that, as found at the provisional stage,
investigated users purchased on average around 58% of their PET film
consumption from the Community industry, around 28% from the countries
concerned and around 14% in other third countries. Furthermore, a significant
number of actors will remain active on the Community market,
the
Community industry and other Community producers, an economic operator
in the Community, at least some of exporting producers in the countries
concerned and in other third countries. Therefore, even if it cannot be excluded
that some exporting producers in the countries concerned will decrease their
level of exports to the Community further to the anti-dumping measures
imposed, it is unlikely that a shortage on the Community market will occur.
On the other hand,
the possible
disappearance of the Community industry's manufacturing activities for PET
film would, as set out in recital 185 of the provisional Regulation, create
severe supply constraints.

should measures not be imposed,

i.e.

(66) As to the level of prices, it should be noted that users have until recently
benefited from artificially low prices due to unfair trade practices. Sales prices
in the Community market decreased by an average of 40% between 1996 and
the IP. Even if a price increase for PET film in the Community cannot be
excluded, it is expected that it will be moderate. This is reinforced in particular
by the level of duties imposed for certain exporting producers concerned and
the presence of a certain number of actors which will compete with each other
on the Community market.

15

(67) Moreover, the further analysis and verification visits to users confirmed that
PET film, as raw material for different finished products, is frequently not a
significant cost item, that products incorporating PET film only account for a
small proportion of their total production and, finally, that users also source
their products in the Community and other third countries not concerned by
the proceeding. It can however not be excluded that, for certain users for
which PET film represents a crucial raw material, the anti-dumping duties will
have an important impact on the total cost of production. Nevertheless, this
does not alter the average overall results of the investigation. The finding of
recital 183 of the provisional Regulation that the imposition of duties will
probably not have, on average, a significant impact on the users of PET film,
is therefore confirmed.

3. Conclusion on the Community interest

(68)

In the absence of any new information regarding the Community interest, the
findings as described in recitals 156 to 191 of the provisional Regulation are
confirmed.

I. DEFINITIVE ANTI-DUMPING MEASURES

1. Injury elimination level

(69) Based on the methodology explained in recitals 193 to 195 of the provisional
Regulation, and taking into account
the arguments and modifications
mentioned above in relation to price undercutting calculations, an injury
elimination level has been established for the purposes of establishing the level
of measures to be definitively imposed. However,
regarding the non
consideration of the countervailing duties, it should be noted that, as explained
in recital (198) of the provisional Regulation export subsidies are deducted
from the proposed anti-dumping duties pursuant to Article 14(1) of the Basic
Regulation after having applied the lesser duty rule, and there is accordingly
no need to consider them at the level of the injury margin calculation.

(70) Certain Indian exporting producers argued that the injury margins have been
incorrectly calculated. It has been claimed that the injury margin should be
expressed as a percentage of the total CIF turnover and not be limited to the
CIF turnover of the comparable models. They based their arguments on the
conclusions of the WTO Appellate body in the bed linen case4.

4

European Communities – Anti-dumping duties on imports of cotton-type bed linen from India,
WT/DS/AB/R, 1.3.2001.

16

(71)

(72)

(73)

Firstly, it should be noted that these conclusions have been drawn in the
context of dumping calculations and are not relevant in the context of injury
calculations. Secondly, it is consistent practice to express the injury amount as
a percentage of the CIF turnover of those models which were used in order to
establish the said injury amount. The approach proposed by the Indian
exporting producers in question would in fact result the use of figures which
are not comparable. For all these reasons, the claim had to be rejected.

The Community industry submitted that a profit margin of 13% on turnover
would be more appropriate than the 6% profit margin that was used for the
provisional injury margin calculation. It argued that a company’s own capital
resources should at least earn a return on net assets which equals bank loan
rates. It was further claimed that this level of profit was reached in 1996, when
conditions of fair competition prevailed.

In this respect, it should be noted that the profit margin that is to be used for
the determination of the non injurious price should be understood as the
profitability level that could reasonably be reached in the absence of injurious
dumping. However, it is not important in this case to define a conclusive
percentage given that the injury margins are already on the basis of a 6% profit
margin higher than the dumping margins. The argument has therefore no
practical impact.

(74) Given the above, and in the absence of new evidence, the methodology used
for establishing the injury elimination level as described in recitals 193 to 195
of the provisional Regulation is confirmed.

2. Form and level of the duties

(75)

(76)

The investigation showed that the imports of the product have also taken place
under CN codes other than those covered by this proceeding, i.e. CN codes
ex 3920 62 19 and 3920 62 90. The attention of the customs authorities is
accordingly drawn to this misclassification.

In the light of the foregoing and in accordance with Article 9(4) of the Basic
Regulation, a definitive anti-dumping duty should be imposed at the level of
the dumping margins found, since they were in all cases lower than the injury
margins.

(77) As regards the residual duty to be applied to the non cooperating exporting
producers of the respective countries, as the level of cooperation was
considered significant in both countries, for India the residual duty should be
fixed on the basis of the highest duty rate established for the sampled
cooperating producers. For Korea, as only one of the three sampled exporting
producers was found to have practised dumping the residual duty should be
set, in application of the lesser duty rule, at the weighted average dumping
margin of a representative number of models with the highest dumping
margins exported by that exporting producer.

17

(78) As recalled in recitals 50 and 198 of the provisional Regulation, Article 14(1)
of the Basic Regulation makes it mandatory that no product be subject to both
anti-dumping and countervailing duties for the purpose of dealing with the
same situation arising from dumping or export subsidization. In this context,
the fact that the countervailing duties were established on a different IP and
that the amount of export subsidy in the anti-subsidy IP and the anti-dumping
IP are different, is irrelevant. The rationale behind Article 14(1) of the Basic
Regulation is indeed to avoid any duplication of duties intended to counteract
the same situation arising from dumping or export subsidisation, and therefore,
countervailing duties resulting from export subsidies have to be deducted
regardless of the investigation period on the basis of which they were
determined. It is also noted that no request for a review of the countervailing
measures has been received. Therefore, the provisional findings as described
in recitals 50 and 198 of the provisional Regulation are confirmed.

(79) Consequently, as regards anti-dumping duties for India, the countervailing
duty in force that corresponds to export subsidies was deducted from the anti-
dumping duty to be applied. For any non-cooperating companies,
the
deduction corresponds to the export subsidy of the cooperating company on
the basis of which the residual dumping margin (and thus the residual duty)
was established.

(80) On the basis of the above, and taking into account the findings of the previous
anti-subsidy investigation, the proposed definitive duty rates, expressed on the
CIF Community border price, customs duty unpaid, are as follows:

India

Company

Ester Industries Ltd

Flex Industries Ltd

Garware Polyester
Ltd
Jindal Polyester Ltd

MTZ Polyesters Ltd

Polyplex Corp. Ltd

All other companies

Export
Subsidy
Margin

Total
Subsidy
Margin

Dumping
Margin

CVD duty

AD duty

Total duty
rate

12,0%

12,0%

64,5%

12,0%

52,5%

64,5%

12,5%

12,5%

42,9%

12,5%

30,4%

42,9%

2,7%

3,8%

65,3%

3,8%

62,6%

66,4%

7,0%

7,0%

0%

7,0%

0%

7,0%

8,7%

8,7%

19,1%

19,1%

12,0%5

19,1%

57,7%

57,7%

65,3%

8,7%

19,1%

19,1%

49,0%

38,6%

53,3%

57,7%

57,7%

72,4%

5

For the purpose of calculating the final anti-dumping duty, the export subsidy margin of the
company on the basis of which the dumping margin for the non-cooperating companies is
based was taken into consideration.

18

Korea

Company

HS Industries

Hyosung Corp

Kohap Corp.

Kolon Industries Limited

SKC Industries Limited

Toray Saehan Industries

AD duty

7,5 %

7,5 %

7,5 %

0,0%

7,5%

0,0%

All other companies

13,4 %

(81)

they reflect

the situation found during that

The individual company anti-dumping duty rates specified in this Regulation
were established on the basis of the findings of the present investigation.
Therefore,
investigation with
respect to these companies. These duty rates (as opposed to the country-wide
duty applicable to ‘all other companies’) are thus exclusively applicable to
imports of products 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’.

(82) 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 Commission6 forthwith with all relevant
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 accordingly by
updating the list of companies benefiting from individual duty rates.

information,

6

European Commission, DG Trade,
Directorate B, TERV 0/10
Rue de la Loi/Wetstraat 20, B-1049 Brussels / Belgium.

19

(83)

(84)

(85)

(86)

3. Collection of provisional duties

imposed by the provisional Regulation,

In view of the magnitude of the dumping margins found and in the light of the
level of the injury caused to the Community industry,
is considered
necessary that the amounts secured by way of the provisional anti-dumping
duty,
i.e. Regulation (EC) No
367/2001, should be definitively collected at the rate of the duty definitively
imposed. Where the definitive duties are higher than the provisional duties,
only the amounts secured at the level of the provisional duties should be
definitively collected.

it

4. Undertakings

Subsequent to the imposition of provisional anti-dumping measures, a number
of exporting producers in India offered price undertakings in accordance with
Article 8(1) of the Basic Regulation. By doing so, they have agreed to sell the
product concerned at or above price levels which eliminate the injurious
effects of dumping. The companies will also provide the Commission with
regular and detailed information concerning their exports to the Community,
meaning that
the undertakings can be monitored effectively by the
Commission. Furthermore, the sales structure of these exporting producers is
such that the Commission considers that the risk of circumventing the agreed
undertaking is limited.

In view of this, the offers of undertakings are therefore considered acceptable
and the companies concerned have been informed of the essential facts,
considerations and obligations upon which acceptance is based.

To further enable the Commission to effectively monitor the compliance of the
companies with their undertakings, when the request for release for free
circulation is 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 listed in the Annex. This level of
information is also necessary to enable customs authorities to ascertain with
sufficient precision that shipments correspond to the commercial documents.
Where no such invoice is presented, or when it does not correspond to the
product presented to customs, the appropriate rate of anti-dumping duty will
instead be payable.

(87)

It should be noted that
in the event of a breach or withdrawal of the
undertaking or a suspected breach, an anti-dumping duty may be imposed,
pursuant to Articles 8(9) and (10) of the Basic Regulation.

5. Duration of measures

(88)

The anti-dumping measures would be in force until 2006, whereas the existing
countervailing duties against India are bound to expire in 2004. In the event of
the expiry (or change) of the countervailing measures, the level of the anti-
dumping duties should be revised, since they currently take account of the fact
that countervailing duties are already in place.

20

HAS ADOPTED THIS REGULATION:

Article 1

1.

2.

A definitive anti-dumping duty is hereby imposed on imports of polyethylene
terephthalate ("PET") film falling within ex CN code 3920 62 19 and ex CN
code 3920 62 90 (TARIC codes: 3920 62 19 10, 3920 62 19 15, 3920 62 19
25, 3920 62 19 30, 3920 62 19 35, 3920 62 19 40, 3920 62 19 45, 3920 62 19
50, 3920 62 19 55, 3920 62 19 60, 3920 62 19 62, 3920 62 19 64, 3920 62 19
65, 3920 62 19 70, 3920 62 19 75, 3920 62 19 80, 3920 62 19 81, 3920 62 19
85, 3920 62 19 87, 3920 62 19 89, 3920 62 19 91, 3920 62 90 30 and 3920
62 90 91) and originating in India and the Republic of Korea.

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

Definitive
Duty
(%)

TARIC
Additional
Code

52,5

A026

30,4

A027

62,6

A028

0

A030

49,0

A031

38,6

A032

Country

Company

India

India

India

India

India

India

Ester Industries Limited,
75-76, Amrit Nagar, Behind South
Extension Part – I,
New Delhi – 110 003 INDIA

Flex Industries Limited,
A-1, Sector 60, NOIDA,
201 301 (U.P.) INDIA

Garware Polyester Limited,
Garware House,
50-A, Swami Nityanand Marg
Vile Parle (East)
Mumbai 400 057 – INDIA

Jindal Polyester Limited
115-117 Indra Prakash Building
21 Barakhamba Road
New Delhi 110 001 INDIA

MTZ Polyesters Limited
Saranath Centre, Upvan Area,
Upper Govind Nagar, Malad (E),
Mumbai 400 097 INDIA

Polyplex Corporation Limited,
B-37, Sector-1, Noida-201 301
Dist. Gautam Budh Nagar
Uttar Pradesh, INDIA

21

India

Korea

Korea

Korea

Korea

Korea

Korea

All other companies

53,3

A999

Kolon Industries Inc.
Kolon Tower,
1-23, Byulyang-dong,
Kwacheon-city, Kyunggi-do,Korea

SKC Co., Ltd.
SKC Bldg.,
23-10, Youido-Dong,
Yongdungpo-Gu, Seoul 150-010,
Korea

Toray Saehan Inc.
17F, LG Mapo B/D
275 Kongdug-Dong
Mapo-Gu
Seoul 121-721
Korea

HS Industries Co., Ltd
Kangnam Building, 8th floor
1321, Seocho-Dong
Seocho-Ku
Seoul
Korea

Hyosung Corporation
450, Kongduk-Dong
Mapo-Ku
Seoul
Korea

Kohap Corp.
No. 89-4, Kyungun-Dong
Chongro-Ku
Seoul
Korea

0,0

A244

7,5

A224

0,0

A222

7,5

A226

7,5

A225

7,5

A223

3.

4.

Korea

All other companies

13,4

A999

Notwithstanding Article 1(1), the definitive duty shall not apply to imports
released for free circulation in accordance with Article 2.

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

22

Article 2

1.

Imports under one of the following TARIC additional codes which are
produced and directly exported (i.e. shipped and invoiced) by a company
named below to a company in the Community acting as an importer shall be
exempt from the anti-dumping duties imposed by Article 1 provided that they
are imported in conformity with paragraph 2.

Country

Company

TARIC
Additional
Code

India

India

India

India

India

Ester Industries Limited,
75-76, Amrit Nagar, Behind South
Extension Part – I,
New Delhi – 110 003 INDIA

Flex Industries Limited,
A-1, Sector 60, NOIDA,
201 301 (U.P.) INDIA

Garware Polyester Limited,
Garware House,
50-A, Swami Nityanand Marg
Vile Parle (East)
Mumbai 400 057 – INDIA

MTZ Polyesters Limited,
Sarnath Centre, Upvan Area
Govind Nagar, Malad (E),
Mumbai 400 097 – INDIA

Polyplex Corporation Limited,
B-37, Sector-1
Noida-201 301
Dist. Gautam Budh Nagar
Uttar Pradesh – INDIA

A026

A027

A028

A031

A032

2.

Imports mentioned in paragraph 1 shall be exempt from the duty on
condition that

(a)

a commercial invoice containing at least the elements listed in the
Annex is presented to Member States customs authorities upon
presentation of the declaration for release into free circulation; and

(b)

the goods declared and presented to customs correspond precisely to
the description on the commercial invoice.

23

Article 3

The amounts secured by way of provisional anti-dumping duties pursuant
to
Regulation (EC)No 367/20017 on imports of certain polyethylene terephthalate film
originating in India and the Republic of Korea shall be collected at the rate of the duty
definitively imposed. Amounts secured in excess of the definitive rate of anti-
dumping duties shall be released. Where the definitive duties are higher than the
provisional duties, only the amounts secured at the level of the provisional duties shall
be definitively collected.

Article 4

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

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

Done at Brussels,

For the Council
The President

7

OJ L 55, 24.2.2001, p. 16.

24

ANNEX

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

1.

2.

3.

4.

5.

6.

The heading "COMMERCIAL INVOICE ACCOMPANYING GOODS
SUBJECT TO AN UNDERTAKING"

The name of the company mentioned in Article 2.1 issuing the commercial
invoice

The commercial invoice number

The date of issue of the commercial invoice

The TARIC additional code under which the goods on the invoice are to be
customs cleared at the Community frontier

The exact description of the goods, including:

–

–

–

–

–

the product code number (PCN)

the technical specification of the goods including the thickness (µm),
whether or not the goods have had coating/surface treatment after the
process (e.g. corona, chemical, metallisation or no coating or surface
treatment after the process) the mechanical properties (e.g. balanced or
tensilised), clarity/opacity (e.g. clear film with haze <2%, hazy film
with haze between 2 and 40%, white film with haze >40%, coloured)

the company product code number (CPC) (if applicable)

CN code,

quantity (to be given in kgs),

7.

The description of the terms of the sale, including:

–

–

–

–

price per kg,

the applicable payment terms,

the applicable delivery terms,

total discounts and rebates.

8.

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

25

9.

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 C(2001)[INSERT].
I declare that the information provided in this invoice is complete and
correct.”

26