2001/724/EC: Commission Decision of 11 October 2001 terminating the review of Council Regulation (EC) No 1599/1999 imposing a definitive countervailing duty on imports of stainless steel wires with a diameter of 1 mm or more originating in India (notified under document number C(2001) 3041)
Date: 2001-10-11
Institutions: European Commission
Subjects: India, import, monetary compensatory amount, originating product, steel, wire

L 271/42

EN

Official Journal of the European Communities

12.10.2001

COMMISSION DECISION

of 11 October 2001

terminating the review of Council Regulation (EC) No 1599/1999 imposing a definitive counter-
vailing duty on imports of stainless steel wires with a diameter of 1 mm or more originating in
India

(notified under document number C(2001) 3041)

(2001/724/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 2026/97 of 6
October 1997 on protection against subsidised imports from
countries not members of the European Community (1), and in
particular Article 20 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

A. PREVIOUS PROCEDURE

By Regulation (EC) No 1599/1999 (2),
the Council
imposed a definitive countervailing duty on imports of
stainless steel wires with a diameter of 1 mm and more
(‘the product
falling within CN code
ex 7223 00 19, originating in India. The measures took
the form of ad valorem duties of between 0 and 48,8 %
on individual exporters, with a residual duty of 48,8 %.

concerned’)

B. CURRENT PROCEDURE

1. Request for review

Subsequent to the imposition of definitive measures, the
Commission received a request for the initiation of an
accelerated review of Regulation (EC) No 1599/1999,
pursuant to Article 20 of Regulation (EC) No 2026/97
(‘the basic Regulation’), from two Indian producers based
in Bombay, Capico Trading Private Limited and Atlas
Stainless Corporation Limited. The companies concerned
claimed that they were not related to any other expor-
ters of the product concerned in India and that they had
not exported the product concerned during the original
investigation (1 April 1997 to 31 March
period of
1998). They have further
they began
exporting the product concerned to the Community
after the end of the investigation period, or intended to
do so.

stated that

of

accordance with the provisions of Article 20 of the basic
the Advisory
consultation
Regulation. After
Committee and after the Community industry concerned
had been given the opportunity to comment,
the
Commission initiated, by a notice in the Official Journal
of the European Communities (3), an accelerated review of
Regulation (EC) No 1599/1999 with regard to the
companies concerned and commenced its investigation.

(4)

(5)

3. Product concerned

The product covered by the current review is the same
product as that under consideration in Regulation (EC)
No 1599/1999.

4. Parties concerned

The Commission officially advised the
companies
concerned and the Government of India of the initiation
of
it gave other parties
directly concerned the opportunity to make their views
known in writing and to request a hearing.

the procedure. Furthermore,

The Commission sent a questionnaire to the companies
concerned and received a full reply within the required
deadline. The Commission sought and verified all infor-
mation it deemed necessary for the purpose of
the
investigation and carried out verification visits at the
premises of the companies concerned.

5. Investigation period

(6)

The investigation of subsidisation covered the period
from 1 January to 31 December 1999 (‘the investigation
period’).

6. Methodology

(7)

The same methodology as that used in the original
investigation was applied in the current investigation.

2. Initiation of an accelerated review

(3)

The Commission examined the evidence submitted by
the Indian exporting producers concerned and consid-
ered it sufficient to justify the initiation of a review in

C. RESULTS OF THE INVESTIGATION

(8)

The Commission first examined the status of the compa-
nies under investigation in terms of Article 20 of the
basic Regulation.

(1) OJ L 288, 21.10.1997, p. 1.
(2) OJ L 189, 22.7.1999, p. 1.

(3) OJ C 61, 3.3.2000, p. 2.

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1. Capico Trading Private Ltd

(9)

On 20 July 2000, Capico Trading Private Ltd reported to
the Commission that it was withdrawing its request for
review. The company based this on the fact, which was
verified in the investigation, that it had not exported the
product concerned to the Community and that its inten-
tion to export to the Community had not been realised.
The Commission therefore considers it appropriate to
terminate this review in relation to Capico Trading
Private Ltd.

2. Atlas Stainless Corporation

(10) Atlas Stainless Corporation was established around the
time of the imposition of definitive measures and regis-
tered for sales tax at around the same time. The invest-
igation revealed that the company itself did not produce
the product concerned. In fact, its involvement with this
product was via a company called Venus Wire Industries
Ltd, which produced small quantities on behalf of Atlas
Stainless Corporation. Atlas Stainless Corporation has a
‘job worker’ contract with Venus Wire Industries Ltd,
whereby Venus Wire Industries Ltd processes
raw
material into the product concerned on behalf of Atlas
Stainless Corporation for receiving a fee. This contract
was agreed on 25 July 1999, i.e. three days after the
imposition of definitive measures. Venus Wire Industries
Ltd.
invest-
igation and is subject to an individual countervailing
duty rate of 35,4 %.

itself was investigated during the original

(11)

(12)

(13)

The agreement between Venus Wire Industries Ltd and
Atlas Stainless Corporation stipulates a fixed price per
kilogram of finished product for processing raw material
into the product concerned. As regards payment of
excise duty on goods domestically sold, Venus Wire
Industries Ltd is, unlike Atlas Stainless Corporation,
registered as a manufacturer and can claim an indirect
tax ‘Modvat’ back on its purchases of for example raw
materials. There is an agreement between the two
companies, whereby Venus Wire Industries Ltd claims
back the Madvat on the domestically bought raw mate-
rials on behalf of Atlas Stainless Corporation. Moreover,
the founder of Atlas Stainless Corporation previously
worked as the President of Venus Wire Industries Ltd
looking into production at the plant.

In addition, Atlas Stainless Corporation only exported
one shipment, of around 1 500 kg, to the EU during the
investigation period. The shipment concerned was made
solely for trial purposes for an importer in the EU, who
stated that he only intended to try out the product
its quality. The importer was a
concerned to test
previous customer of Venus Wire Industries Ltd.

Based on the facts verified during the investigation, it
was considered that Atlas Stainless Corporation cannot
be granted newcomer status since it is not an ‘exporter’
in the meaning of Article 20 of the basic Regulation.
While Atlas Stainless Corporation was the owner of the
product exported to the EU,
its one and only export
transaction during the investigation period does not

constitute true ‘export’ in the meaning of Article 20 of
the basic Regulation.
In addition, Atlas Stainless
Corporation made the job worker agreement with Venus
Wire Industries Ltd just after the imposition of definitive
measures, and the fact that this arrangement was set up
at this time by the former President of Venus Wire
Industries Ltd gives rise to serious doubts about the true
motives of the operation; in fact, the investigation estab-
lished that Atlas Stainless Corporation has no produc-
tion facilities and, even more importantly, no significant
commercial activities on either the domestic or any
other export markets. On the basis of all the evidence,
the Commission considered that Atlas Stainless Corpora-
tion has not demonstrated that it is an ‘exporter’ eligible
for an individual duty under Article 20 of the basic
Regulation.

Comments from interested parties and Commission's response

(14) Having been informed of the facts and considerations on
the basis of which it is intended to terminate this review,
Atlas Stainless Corporation and the Government of India
gave the following arguments:

(15) Atlas Stainless Corporation argued that although it does
not own a manufacturing plant, it owns the raw mate-
rials and has a job worker contract with Venus Wire,
where it paid the conversion charges to job workers as
it claimed it should be
per contract. For this reason,
considered as manufacturer of the exported product.
Moreover, Atlas Stainless Corporation argued that
it
used the plant facilities of Venus Wire Industries Ltd for
specific purposes, and that it had a normal commercial
business relationship with Venus Wire Industries Ltd.

(16) As explained above, the Commission does not contest
that Atlas was the owner of one shipment of
the
product exported to the EU. However, it has concluded
that the nature of Atlas' operation during the invest-
igation period does not lend itself to a conclusion that it
is a genuine producer/exporter which should have an
individual duty. Additionally, countervailing measures
it were
would be rendered completely ineffective if
possible for companies (such as Atlas Stainless Corpora-
tion), which operate through job worker contracts, to
have an individual duty, without reference to the orig-
inal producer of the product, which may itself be subject
to an individual duty. Atlas Stainless Corporation's rela-
tionship with Venus Wire Industries Ltd, which includes
certain operational links between the companies, and the
timing of the establishment of Atlas Stainless Corpora-
tion, merely strengthen this conclusion.

(17)

The Government of India (GOI) referred to a review
request in an anti-dumping proceeding carried out by
the US Department of Commerce (DOC) in favour of
Atlas Stainless Corporation as regards imports of stain-
less steel bars. In this regard, the Commission notes that
actions of
in non-member
countries have, by themselves, no bearing on this
proceeding.

investigating authorities

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(18) Moreover,

the GOI claimed that

the company had
offered a price undertaking and that,
in the light of
Article 15 of the WTO Agreement on the Implementa-
tion of Article VI of GATT 1994, special regard must be
given to developing country members. In this respect, it
is noted that the WTO Agreement on subsidies and
countervailing measures does not contain a provision
corresponding to Article 15 of the WTO Agreement on
the implementation of Article VI of GATT 1994. In any
case, no such undertaking has been offered by Atlas
Stainless Corporation.

(19)

Therefore it is considered fitting to reject the application
for newcomer
review
without amending the measures in force,

status and to terminate this

HAS ADOPTED THIS DECISION:

Sole Article

The accelerated review of Regulation (EC) No 1599/1999
concerning imports of stainless steel wires with a diameter of
1 mm or more originating in India is hereby terminated.

Done at Brussels, 11 October 2001.

For the Commission

Pascal LAMY

Member of the Commission