Council Regulation (EC) No 1644/2001 of 7 August 2001 amending Regulation (EC) No 2398/97 imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Egypt, India and Pakistan and suspending its application with regard to imports originating in India
Date: 2001-08-08
Institutions: Council of the European Union
Subjects: Egypt, India, Pakistan, anti-dumping duty, import, textile product

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1644/2001

of 7 August 2001

amending Regulation (EC) No 2398/97 imposing a definitive anti-dumping duty on imports of
cotton-type bed linen originating in Egypt, India and Pakistan and suspending its application with
regard to imports originating in India

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 133 thereof,

Having regard to Council Regulation (EC) No 1515/2001 of 23
July 2001 on the measures
that may be taken by the
Community following a report adopted by the WTO Dispute
Settlement Body concerning anti-dumping and anti-subsidy
measures (1),

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 (2) (‘the
basic Regulation’),

Having regard to the proposal made by the Commission after
consultation of the Advisory Committee,

Whereas:

A. EXISTING MEASURES

(1)

The Council, by Regulation (EC) No 2398/97 (3),
imposed a definitive anti-dumping duty on imports of
cotton-type bed linen originating in Egypt, India and
Pakistan (‘definitive Regulation’). The definitive Regula-
tion was preceded by Commission Regulation (EC) No
1069/97 of 12 June 1997 imposing a provisional anti-
dumping duty on imports of cotton-type bed linen
originating in Egypt, India and Pakistan (4) (‘provisional
Regulation’).

B. REPORTS ADOPTED BY THE DISPUTE SETTLEMENT

BODY OF THE WTO

(2)

On 12 March 2001, the Dispute Settlement Body of the
World Trade Organisation (‘WTO’) adopted an Appellate
Body report and a panel report as modified by the

(1) OJ L 201, 26.7.2001, p. 10.
(2) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 2238/2000 (OJ L 257, 11.10.2000, p. 2).

(3) OJ L 332, 4.12.1997 p. 1. Regulation as last amended by Regula-

tion (EC) No 554/2000 (OJ L 68, 16.3.2000, p. 1).

(4) OJ L 156, 13.6.1997, p. 11.

Appellate Body report on the case ‘European Communi-
ties — anti-dumping duties on imports of cotton-type
bed linen from India’ (Reports).

C. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

(3)

codes

ex 6302 21 00

The product concerned is certain bed linen of cotton
fibres, pure or mixed with man-made fibres or flax (flax
not being the dominant fibre), bleached, dyed or printed
originating in India, Pakistan and Egypt, falling within
CN
codes
6302 21 00*81,
ex 6302 22 90
6302 21 00*89),
(TARIC code 6302 22 90*19), ex 6302 31 10 (TARIC
code 6302 31 10*90), ex 6302 31 90 (TARIC code
code
ex 6302 32 90
6302 31 90*90),
6302 32 90*19). The Reports do not affect the findings
set out
in the definitive Regulation concerning the
product under consideration and the like product.

(TARIC

(TARIC

D. REVISED FINDINGS BASED ON THE REPORTS

1. Preliminary remark

(4)

The Commission reassessed findings by taking account
of the recommendations set out in the Reports on the
basis of information which was collected in the original
investigation which took place in 1996/97. The reassess-
ment shows that injurious dumping still exists although
at lower levels.

It is recalled that the investigation of dumping covered
the period from 1 July 1995 to 30 June 1996 (‘IP’). The
investigation relating to the parameters relevant in the
context of
the injury assessment covered the period
from 1 January 1992 up to the end of the IP (30 June
1996). This period will be referred to as ‘the period
considered’.

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2. Dumping

applied in calculating the overall dumping margin for
each company.

2.1. Introduction

(5)

This part sets out the reassessed findings based on the
recommendations of the Reports concerning:

(6)

(7)

(8)

(9)

(a) determination of

sales, general & administrative
expenses (‘SG&A’) and profit when applying Article
2(6)(a) of the basic Regulation for the purpose of
constructed normal values and

(b) the practice of

‘zeroing’ when establishing the

weighted average margin of dumping.

All other calculation methods applied are those used in
the original investigation. For further details, reference is
made to the abovementioned provisional Regulation and
definitive Regulation.

2.2. Sampling

It is recalled that in view of the large number of expor-
ters in the countries concerned, it was decided during
the original investigation to apply sampling in accord-
ance with Article 17 of the basic Regulation.

2.3. India

Since only one out of the five companies in the main
sample for India had representative global domestic sales
and the profitable domestic types represented less than
80 % but more than 10 % of total domestic sales, the
amounts for SG&A and profit used to construct normal
value were those actually made in the ordinary course of
trade by this company,
in accordance with the first
sentence of Article 2(6) of the basic Regulation.

For the other four companies, in order to comply with
the recommendations of the Reports and in accordance
with Article 2(6)(a) of the basic Regulation, the amounts
for SG&A and profits used to construct normal value
were the weighted average of
the actual amounts
incurred and realised by the company with repres-
entative global domestic sales mentioned above and a
reserve company which had also representative global
domestic sales. It should be noted that sales not made in
the ordinary course of trade have not been eliminated
when determining the profit margin attributable to the
other four companies.

(12)

The revised dumping margins expressed as a percentage
of the cif import price at the Community frontier for
India are the following:

(13)

(14)

Anglo French Textiles

Bombay Dyeing & Manufacturing Co. Ltd
and Nowrosjee Wadia & Sons Ltd

9,8 %

5,5 %

Madhu Industries Ltd and Madhu International

3,0 %

Omkar Exports

Prakash Cotton Mills Ltd

0,0 %

0,0 %

Cooperating companies not selected in the sample for
India were attributed the average dumping margin of the
companies in the sample, weighted on the basis of their
export turnover to the Community. In accordance with
Article 9(6) of the basic Regulation, when calculating
this average dumping margin any zero and de minimis
margins established have been disregarded. Expressed as
a percentage of the cif import price at the Community
frontier, this revised dumping margin for India is 5,7 %.

For non cooperating companies in India a revised
dumping margin was determined on the basis of the
facts available in accordance with Article 18 of the basic
Regulation. The level of cooperation during the original
investigation was high. Therefore, it is considered appro-
priate to set the dumping margin for non cooperating
companies in India at the level of the highest dumping
margin established for a company in the sample. Indeed,
it would constitute a bonus for non cooperation to
assume that the dumping margin attributable to expor-
ters/producers which did not cooperate is lower than the
highest found for a cooperating exporter/producer. This
revised residual dumping margin for India, expressed as
a percentage of the cif import price at the Community
frontier,

is 9,8 %.

2.4. Egypt and Pakistan

(15)

The findings on dumping with regard to imports origin-
ating in Egypt and Pakistan have not been revised. The
relevant dumping margins are set out in recitals 29 to
31 of the definitive Regulation.

(10) No changes have been necessary as far as the original
findings concerning the export price and adjustments
pursuant to Article 2(10) of the basic Regulation are
concerned.

(16)

(11)

The weighted average constructed normal value by type
was compared with weighted average export price by
In compliance with the
type, as determined above.
the Report, no ‘zeroing’ was
recommendations of

3. Community industry and sampling

the

findings

definition

concerning

the
The
Community industry and standing remain unaffected by
the conclusions set out in the Reports (see recital 34 of
the definitive Regulation). The same is true with regard
to sampling of the Community industry (see recitals 58
to 61 of the provisional Regulation).

of

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4. Injury

4.1. Preliminary remark

(17)

The Reports conclude that the Community acted incon-
sistently with the WTO Agreement on Implementation
of Article VI of the General Agreement on Tariffs and
Trade (‘ADA’)

(i) by considering information for producers not part of
the Community industry as defined by the Council
in analysing the state of the industry;

(ii) by failing to evaluate all relevant factors having a
bearing on the state of the Community industry, and
specifically all the factors set forth in Article 3.4
ADA. In this respect, it is recalled that the determi-
nations concerning productivity, stocks, utilisation
of capacity, ability to raise capital or investments,
cash flow, wages and the magnitude of dumping
margins were not fully described in the provisional
and definitive Regulation.

The Panel also expressed the opinion that imports
attributable to a producer/exporter found not to be
dumping could not be considered as falling within
‘dumped imports’
the notion of
for purposes of
India had not
since
injury analysis. However,
contested the injury finding on this ground and
there were no Indian producers who had been found
not to be dumping, the Panel reached no conclu-
sions in this regard. The claim that India had made
— that non-dumped transactions should be excluded
from the injury analysis — was rejected by the Panel
as unfounded.

invest-
The injury findings established in the original
igation were reexamined in the light of
the Panel's
conclusions. It was also examined whether the exclusion
of Indian exporters found not to have dumped would
have led to any change in the injury findings. The results
of this re-examination are set out below.

The approach described in recital 62 of the provisional
Regulation was revised by eliminating data relating to
the Community
producers which were not part of
industry.
the data were
In the present Regulation,
analysed as follows:

(18)

(19)

(i) at the level of the Community industry, for trends
concerning production, sales by volume, market
share, employment and growth. The relevant data
were obtained from the verified questionnaire
responses in the case of the 17 sampled producers,
and from the information collected with regard to
the further 18 producers
the
Community industry;

forming part of

(ii) at the level of the sampled Community producers,
for the trends concerning prices and profitability,
cash flow, ability to raise capital and investments,
stocks, utilisation of capacity, wages and produc-
tivity, on the basis of the aforementioned question-
naire responses.

In addition,
dumping was examined.

the magnitude of

the margin of

4.2. Consumption in the Community

(20)

The findings set out in recital 63 of the provisional
Regulation remain unaffected by the recommendations
in the Reports. It is recalled that Community consump-
tion of the product concerned (as measured by produc-
tion plus imports minus exports) decreased from around
200 000 tonnes in 1992 to around 186 000 tonnes in
the IP, a decrease of approximately 7 %.

(21)

(22)

4.3. Cumulation, volume, market share and prices of
imports from the three countries concerned

the

In the original investigation it was found that dumped
imports from the three countries concerned increased
from 33 825 tonnes in 1992 to 46 656 tonnes during
the IP, i.e. an increase by 38 % during the period consid-
ered. During the same period,
the market share of
dumped imports increased from 16,9 % to 25,1 % (see
recital 67 of the provisional Regulation).

If the imports from exporters found not to have dumped
are excluded, the increase in volume of dumped imports
would remain significant, as shown in the table below,
namely an increase of 30 %. The market share of the
remaining imports increased by 40 % during the period
considered. It still represented more than 21 % of the
Community market during the IP.

Dumped imports

1992

1993

1994

1995

IP

Volume — tonnes

30 593

33 484

29 500

39 036

39 825

Index

100

109

96

128

130

Market share

15,3 %

17,2 %

15,2 %

20,6 %

21,4 %

Index

100

112

99

135

140

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(23)

Furthermore, it is recalled that during the period considered, the prices of imports from India and
Egypt had actually fallen by up to 18 % (see recital 80 of the provisional Regulation). This decrease is
not significantly changed if the imports from the Indian exporters found not to have dumped are
excluded.

(24) During the IP, the level of undercutting of the dumped imports originating in India ranged from
13,8 % to 40,7 %, expressed as percentages of the adjusted average prices of the Community
industry, and this is also unaffected if imports from the exporters found not to have dumped are
excluded. It is recalled that, with respect to Pakistan the level of undercutting ranged from 27,9 % to
34,4 % and with respect to Egypt from 23,8 % to 53,7 %.

4.4. Situation of the Community industry

4.4.1. G e n e r a l

r e m a r k s

(25)

(26)

It should be recalled that during the original investigation, not all injury factors listed in Article 3.4
of the ADA (Article 3(5) of the basic Regulation) were found to have a bearing on the state of the
Community industry. This was the case for stocks and capacity of production.

In addition, it was also found that some factors were in fact closely linked to a number of injury
factors set out in detail in the regulations. This was the case in particular for productivity with
production and employment, and cash flow and return on investments with profitability. Accord-
ingly, only the developments of the main injury factors were fully addressed in the provisional and
definitive Regulations.

(27)

The findings below only relate to the Community industry as defined in recital 34 of the definitive
Regulation. Obviously, the indicators listed in subparagraph (ii) of recital 17 have been established at
the level of sample.

4.4.2. S t o c k s a n d c a p a c i t y o f p r o d u c t i o n

(28)

These indicators were found not to have a bearing on the state of the Community industry.

(29) As to stocks, this is the case for two reasons. Firstly, production (e.g. of printed patterns) often takes
place in response to or in anticipation of orders placed by particular clients, thus reducing the
possibility to produce purely for stocks. Secondly, stock valuation often takes place at 31 December,
which is towards the end of a peak period of activity for the bed linen sector. Large stock variations
can take place between one year and another simply because of large orders leaving the warehouse
on 30 December in one season and 2 January the next. While some increase in stocks was observed
in some companies, neither the complainant nor any sampled Community producer adduced
increase in stocks as evidence of injury. An increase in stocks in this sector can thus indicate
increased actual or anticipated orders rather than unsold production.

(30) As to production capacity, the Community industry is characterised by a large number of highly
flexible small and medium-sized companies. Machinery can, relatively easily, be bought, sold or used
for other products. Under these circumstances, reliable capacity of production figures were extremely
difficult to establish throughout the period considered in the present case. However, the investigation
showed that many producers were able to maintain a high rate of capacity utilisation and even had
to subcontract surplus production, to allow them to run at high utilisation even in depressed periods.

4.4.3. P r o d u c t i o n , e m p l o y m e n t a n d p r o d u c t i v i t y

(31)

The findings of recitals 81 and 91 of the provisional Regulation concerning production and
employment of the Community industry are confirmed. The Community industry was able to
increase its total production of bed linen from 39 370 tonnes in 1992 to 42 781 tonnes during the
IP, namely an increase by 8,7 %. In the meantime, employment declined by 5,3 %. This trend was
also replicated at the level of the sampled producers.

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(32)

The combination of these two factors explains the improvement in productivity of the sampled
Community producers during the period considered.

Community industry

Productivity index

1992

100

1993

99

1994

110

1995

111

IP

111

4.4.4. W a g e s

(33)

Community industry

Wages (Index)

1992

100

1993

102

1994

98

1995

107

IP

107

Despite the fall in personnel employed the overall amount of wages paid to the employees directly
working in the bed linen sector increased by 7 % during the period considered. Average wages per
employee increased by 6 % from 1993 up to the end of the IP but should be compared with the
5,5 % increase in consumer price in the Community during the same period (see recital 86 of the
provisional Regulation).

4.4.5. S a l e s v o l u m e , m a r k e t s h a r e a n d p r i c e d e v e l o p m e n t

(34)

The figures on sales volume, value, market share and price developments as set out in recitals 82 to
88 of the provisional Regulation refer, unless otherwise indicated, to the sampled Community
producers. They are herewith confirmed.

(35) During the period considered, sales by the Community industry slightly increased from 36 205
tonnes to 36 553 tonnes, an increase of 1 %. In that period, their market share also increased
slightly, from 18,1 % to 19,7 % because of more sales of higher value niche products.

Community industry

1992

1993

1994

1995

IP

Sales volume — tonnes

36 205

34 505

37 726

37 555

36 553

Index

100

95

104

104

101

4.4.6. P r o f i t a b i l i t y , c a s h f l o w a n d r e t u r n o n i n v e s t m e n t s

(36)

The findings made in recital 89 of the provisional Regulation concerning profitability are confirmed.
Profitability of the Community industry decreased from 3,6 % to 1,6 % of turnover during the period
considered, namely a fall by over 50 %. In other words Community industry's profits shrunk from
ECU 10 million in 1992 to ECU 4,6 million during the IP, namely a reduction by around ECU 5,4
million during the period considered.

(37)

The cash flow generated by the Community industry developed as follows:

Community industry

1992

1993

1994

1995

IP

Cash flow (1 000 ECU)

25 566

16 663

20 446

17 475

18 432

Index

100

65

80

68

72

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(38)

Between 1992 and the IP cash flow remained positive but declined by 28 % or by around ECU 7
million. Thus, cash flow and profitability of the Community industry followed a similar decreasing
trend during the period considered.

(39) As to return on investment, the investigation showed that the maintenance of the production tools
was the main purpose of the Community industry's investments during the period considered:

Community industry

Profit/investments

Index

1992

16 %

100

1993

7 %

45

1994

14 %

87

1995

8 %

50

IP

7 %

45

(40)

The overall trend followed by the return on investments is similar to that of profitability.

4.4.7. A b i l i t y t o r a i s e c a p i t a l

(41) During the period considered, the capital raised via bank credits by the Community industry

increased by 3 %.

Community industry

1992

1993

1994

1995

IP

Credits raised (1 000 ECU)

141 400

118 700

117 000

133 800

145 100

Index

100

84

83

95

103

(42) During the investigation there was no claim from the Community industry nor any indication that
the Community industry encountered problems to raise the capital needed for its activity. Given that
no major investments were made by the Community industry it can reasonably be assumed that
most of the credits were used to finance the daily activity in the bed linen sector. This additional
need in credits during the IP is likely to be justified by the decrease in cash flow.

4.4.8. G r o w t h a n d f a c t o r s a f f e c t i n g d o m e s t i c p r i c e s

(43)

It is noted that the growth of the Community industry was particularly negative between 1994 and
the IP in term of sales volume (– 1 173 tonnes). The growth in market share was very limited in the
same period (+ 0,2 %) and was even negative between 1995 and the IP. At the same time, the growth
of market share of low-priced dumped imports remained always positive and was significant.
Between 1994 and the IP, dumped imports increased by 35 % (+ 10 315 tonnes) and the growth in
market share was as high as 6,2 percentage points.

(44) When evaluating factors affecting domestic prices the analysis focussed primarily on the contraction

of demand and raw cotton prices.

The investigation clearly showed that the gap left by Community factory closures and the fall in
imports from certain other third countries during the period considered was filled by imports from
the countries concerned, of which most of them were found to be dumped. Given that the prices of
the dumped imports were the lowest of all the operators selling bed linen on the Community market
it is concluded that the contraction of demand in itself did not have an overriding impact on prices,
notably those of the Community industry.

(45)

The price of raw cotton, which can represent up to 15 % of the total cost of bed linen, increased
significantly during the period considered. Normally, in fair market conditions, producers should
have been able to pass on this cost increase to customers. The investigation has shown that the
Community industry was not able to do so in this case.

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(46)

It is also noted that there was significant price undercutting as described in recital 24.

4.4.9. M a g n i t u d e o f

t h e d u m p i n g m a r g i n

(47) 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.

4.5. Conclusion on injury

(48)

(49)

The investigation clearly established that
imports from the countries concerned significantly
increased during the period considered. In terms of volume, the increase was as high as 38 % or
12 800 tonnes and their market share increased by 8,2 percentage points.

The investigation also established that prices of the imports concerned decreased considerably and
that there was significant price undercutting by all three countries. Prices declined by up to 18 % and
undercutting margins ranging from 11,9 % to 53,7 % were found to exist.

(50) While the Community industry, as defined above, managed to increase production and to slightly
increase its sales volume and market share by concentrating on more sales of higher value niche
products, it nevertheless suffered declining and inadequate profitability, which is basically the result
of prices which had not been able to reflect the increases in the costs of raw cotton or to keep pace
with inflation in prices of consumer goods. The injury indicators related to profitability such as cash
flow and return on investments also showed declining trends. The same holds true for employment.

(51) On this basis, and in particular because of the declining and inadequate profitability and price
suppression suffered by the Community industry, the finding of the definitive Regulation that the
Community industry had suffered material

injury is confirmed.

5. Causation

(52)

(53)

(54)

5.1. Introduction

Based on the above findings on dumping and injury, the causal
provisional and the definitive Regulation was likewise re-examined.

link analysis set out in the

In compliance with the Panel's and the Appellate Body's recommendations, a causal link had to be
demonstrated between the dumped imports and the situation of the Community industry, i.e. the
abovementioned 35 producers. Thus, the references found for existing producers which were not
part of the Community industry or producers which previously closed down their bed linen
operations (see recitals 105, 109 and 110 of the provisional Regulation) were not considered
relevant for the causal

link analysis.

5.2. Effect of the dumped imports

It is recalled that dumped imports from the three countries concerned increased by 12 800 tonnes in
absolute terms and by 38 % in percentage terms (9 200 tonnes or 30 % if the imports from
exporters found not to have dumped are excluded). The market share held by the dumped imports
increased during the period considered from 16,9 % to 25,1 %, namely by 8,2 percentage points
(15,3 % to 21,4 %, namely 6,1 percentage points if the imports from the Indian exporters found not
to have dumped are excluded). During the IP, their weighted average undercutting margin was at
around 29 %.

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(55)

(56)

Sales by the Community industry increased by 348 tonnes and its market share increased from
18,1 % to 19,7 %, namely by 1,6 percentage point. The Community industry's weighted average sales
price remained by and large stable.

It is also recalled (recital 97 of the provisional Regulation) that the market for bed linen is
characterised by product substitutability and transparency. Large Community purchasers of bed
linen, which can ensure a high level of production capacity and therefore some economy of scale, are
very sensitive to prices. On this basis,
it can be concluded that the low prices offered by the
exporting producers concerned, coupled with their substantial and increasing market share, have
exercised continuous downward pressure on prices on the Community market.

(57)

Indeed, despite the fact that the Community industry managed to shift production and sales to
higher value products in order to maintain production and sales' levels, average sales prices did not
increase.

(58) As stated in recital 99 of the provisional Regulation, price suppression and consequent decreasing
profitability were the main indicators to conclude that the Community industry suffered material
injury. In view of the coincidence in time between the deterioration of the state of the Community
industry and the significant increase of the low-priced dumped imports, it is confirmed that there
was a direct link between these imports and the material injury found. Thus, the conclusions set out
in recitals 96 to 99 of the provisional Regulation can be confirmed.

5.3. Effects of other factors

(59)

The effect of other factors on the situation of the Community industry was likewise examined.

5.3.1. I n c r e a s e i n r a w c o t t o n p r i c e s

(60)

The findings set out in recitals 102 and 103 of the provisional Regulation can be confirmed.

5.3.2. D e v e l o p m e n t o f C o m m u n i t y c o n s u m p t i o n

(61)

It is recalled that certain exporters suggested that any injury being suffered by the Community
industry should be ascribed to the steady decrease in total consumption of the product concerned, by
7 % between 1992 and the IP.

The investigation showed that sales by the Community industry increased slightly by 348 tonnes,
imports from other third countries undercutting the prices of the Community industry increased by
over 5 000 tonnes, and dumped imports from the three countries concerned increased by around
12 800 tonnes. The impact of the decrease in consumption was felt notably by Community
producers not forming part of the Community industry.

(62)

In addition, it should be recalled that the Community industry managed to increase its sales of niche
products by adapting and expanding its existing range of products to certain segments of the market.
Thus, it is clear that the Community industry was hardly affected, if at all, by the developments in
Community consumption.

5.3.3. I m p o r t s f r o m o t h e r

t h i r d c o u n t r i e s

(63)

The findings in recitals 100 and 101 of the provisional Regulation remain unaffected.

5.3.4. C o m p e t i t i o n f r o m n o n - c o m p l a i n a n t p r o d u c e r s i n t h e C o m m u n i t y

(64)

The findings in recitals 107 and 108 of the provisional Regulation remain unaffected.

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5.4. Conclusion on causation

(65)

The above analysis shows that there is a clear and direct link between the increase in volume and the
price effect of dumped imports, and the material

injury suffered by the Community industry.

(66)

The investigation has shown that the countries concerned increased their exports by 38 % or by
12 800 tonnes. This corresponds to an increase in market share of 8,2 percentage points. It is clear
that the presence of increasing volumes of low-priced imports had a considerable impact on the
market overall.

(67) Although the Community industry managed to slightly increase its sales volume because of higher
sales of niche products, it is clear that the imports from the countries concerned prevented that
industry of taking any significant share of the market left by other third country and Community
operators during the period considered.

(68)

The direct link between the effect of the dumped imports and the injury suffered by the Community
industry is further demonstrated by the existence of high undercutting margins which can explain
the gain in market share of the countries concerned. It is also evidenced by the impact which the fall
in import price had on the Community industry. Prices were suppressed and profitability fell from
3,6 % in 1992 to 1,6 % during the IP.

(69)

The analysis of the effects of other factors than dumped imports on the state of the Community
industry has likewise confirmed the above direct causal

link.

(70)

Consequently, the conclusion reached in recital 43 of the definitive Regulation that the dumped
imports from Egypt, India and Pakistan have caused the material injury suffered by the Community
industry is confirmed.

6. Community interest

(71)

The contents and conclusions reached in recitals 44 to 46 of the definitive Regulation remain
unaffected by the Reports.

E. GROUNDS FOR THE SUSPENSION OF THE MEASURES

(72) As shown above, a full examination of the facts established in the original investigation taking
account of the recommendations set out in the Reports demonstrates that imports from Egypt, India
and Pakistan were still injuriously dumped. Notwithstanding this, the Council does not consider it
appropriate to continue to collect duties for exports from India for the reasons given below.

(73)

It is recalled that the findings are based on information which was collected in 1996/97.

(74) A wider examination of the impact of the recommendations set out in the Reports would have
necessitated consideration being given to the application of the various other alternatives (e.g. other
methods of calculating SG&A and profit provided for in Article 2(6)(b)(c) of the basic Regulation)
excluding those found inconsistent in the Reports. However, this has not proved possible in this case
since the necessary information was not collected in the original investigation. Indeed, prior to the
Reports it was not considered relevant either to collect such information or to program it into the
verification process. The determination of the profit margin when constructing normal value for
exporters without sufficient sales in the ordinary course of trade is based on a methodology which
the Appellate Body report advocated. However, the Council considers that the methodology as
specified by the Appellate Body is not appropriate in this particular case, not least because it implies
a discriminatory treatment between exporters, whose own profit margin is used, and exporters which
fall under Article 2(6)(a) of the basic Regulation (i.e. for which the weighted average SG&A and profit
margins of other exporters are used). It is also in contradiction with the principle to base in general
the normal value on data relating to sales made in the ordinary course of trade.

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(75)

(76)

In these exceptional circumstances it was considered that the best course of action is to amend the
definitive Regulation on the basis of the dumping margins established in recitals 12 to 14 which are
in all cases lower than the injury margins and to suspend the collection of duties at the rates
established above while providing all interested parties concerned with an opportunity to submit
information/observations and,

if appropriate, a review request.

in particular the Community industry,

interested parties in the
The Indian authorities, the Indian exporters and their association, all
Community,
importers, users' and traders' associations,
received disclosure of the reassessed findings and were given an opportunity to comment and to be
heard. The oral and written comments submitted by these parties were considered but have not
altered the conclusions reached in this Regulation.

(77) Any requests for a review and any observation/submission of information must be made in writing

and be sent to the following address:

European Commission
Directorate General for Trade
Directorates B and C
TERV — 0/13
Rue de la Loi/Wetstraat 200
B-1049 Brussels
Fax (32-2) 295 65 05
Telex COMEU B 21877.

(78)

If no review is initiated within six months from the entry into force of this Regulation on the basis of
a review request by any interested parties, the anti-dumping measure should automatically expire
with regard to imports originating in India. If such review is initiated within the aforementioned six
months period, suspension should continue during the review investigation,

HAS ADOPTED THIS REGULATION:

Article 1

Article 1 of Regulation (EC) No 2398/97,

is hereby amended as follows:

1. In paragraph 2 the rate of duty for India shall be 9,8 % (TARIC additional code 8900).

2. In paragraph 3 the rate of duty for India shall be 5,7 % (TARIC additional code 8042).

3. In paragraph 4 the rates of duty for the Indian companies listed shall be as follows:

Country

Manufacturer

Rate of duty

TARIC additional
code

India

Anglo French Textiles

The Bombay Dyeing & Manufacturing Co. Ltd

Nowrosjee Wadia & Sons Ltd

Madhu Industries Ltd

Madhu International

Omkar Exports

Prakash Cotton Mills Ltd

Article 2

9,8 %

5,5 %

5,5 %

3,0 %

3,0 %

0,0 %

0,0 %

8044

8045

8045

8046

8046

8047

8048

The application of the anti-dumping duties specified in Article 1 is hereby suspended with regard to

1.
imports originating in India.

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L 219/11

The anti-dumping duties specified in Article 1 shall expire six months after the entry into force of this
2.
Regulation with regard to India unless a review has been initiated before that date. During such a review, if
any, the application of the anti-dumping duty shall remain suspended pursuant to paragraph 1.

This Regulation shall enter into force on the day 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, 7 August 2001.

For the Council

The President

L. MICHEL