Council Regulation (EC) No 164/2002 of 28 January 2002 amending Regulation (EC) No 1599/1999 imposing a definitive countervailing duty on imports of stainless steel wire having a diameter of 1 mm or more, originating in India
Date: 2002-01-28
Institutions: Council of the European Union
Subjects: India, import, monetary compensatory amount, originating product, steel, wire

31.1.2002

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Official Journal of the European Communities

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COUNCIL REGULATION (EC) No 164/2002

of 28 January 2002

amending Regulation (EC) No 1599/1999 imposing a definitive countervailing duty on imports of
stainless steel wire having a diameter of 1 mm or more, originating in India

THE COUNCIL 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:

A. PREVIOUS PROCEDURE

By Regulation (EC) 1599/1999 (2), the Council imposed
a definitive countervailing duty on imports of stainless
steel wire having a diameter of 1 mm or more (herein-
after referred to as ‘the product concerned’)
falling
within CN code ex 7223 00 19 originating in India. The
measures took the form of ad valorem duties of between
0 and 35,4 % on individual exporters with a residual
duty of 48,8 %.

B. CURRENT PROCEDURE

(4)

(5)

Journal (3), an accelerated review of Regulation (EC) No
1599/1999 with regard to the companies concerned and
commenced its investigation.

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 two companies
concerned and the Government of India (GOI). Further-
more, it gave other parties directly concerned the oppor-
tunity to make their views known in writing and to
request a hearing. However, no such request was
received by the Commission.

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

1. Request for review

5. Investigation period

After the definitive measures had been imposed, 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
(hereinafter referred to as ‘the basic Regulation’), from
two Indian producers of the product concerned, Sindia
Steels Limited and Nevatia Steel & Alloys Private Limited
(‘Nevatia’), both located in Mumbai. The companies
concerned claimed that they were not related to any
other exporting producers of the product concerned in
India. Furthermore,
they had not
exported the product concerned during the original
period of
investigation (1 April 1997 to 31 March
1998), but had exported the product concerned to the
Community since then.

they claimed that

2. Initiation of an accelerated review

The Commission examined the evidence submitted by
the two Indian exporting producers concerned and
considered it sufficient
to justify the initiation of a
review in accordance with the provisions of Article 20
of
the
the basic Regulation. After consultation of
Advisory Committee and after the Community industry
concerned had been given the opportunity to comment,
the Commission initiated, by a notice in the Official

(6)

The investigation of subsidisation covered the period
from 1 April 1998 to 31 March 1999 (hereinafter
referred to as ‘the investigation period’).

6. Methodology

(7)

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

(8)

(9)

C. SCOPE OF THE REVIEW

As no request for a review of the findings on injury was
made in this investigation, this review was limited to
subsidisation.

The Commission examined the same subsidy schemes
which were analysed in the original investigation. It was
also examined whether the exporting producers had
used any subsidy schemes which were alleged in the
original complaint but not used during the original
investigation.

It was finally examined whether the exporting producers
had made use of any subsidy schemes which were estab-
lished after the end of the original investigation period,
or had received ad hoc subsidies after this date.

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

(3) OJ C 288, 9.10.1999, p. 45.

(1)

(2)

(3)

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D. RESULTS OF THE INVESTIGATION

1. Withdrawal of request for review

(10) During the investigation, one company, Nevatia, with-
drew its request for an accelerated review. Therefore, the
investigation regarding this company shall be termi-
nated. Consequently, the further analysis only refers to
the other request for an accelerated review, i.e. by Sindia
Steels Limited.

2. New exporter qualification

(11)

The investigation confirmed that Sindia Steels Limited
had not exported the product concerned during the
original period of investigation and that they had begun
exporting to the Community after this period.

Furthermore, Sindia Steels Limited was able to demon-
strate satisfactorily that it did not have any links, direct
or indirect, with any of the Indian exporting producers
subject to the countervailing measures in force with
regard to the product concerned.

Accordingly, it is confirmed that Sindia Steels Limited
should be considered as a new exporter in accordance
with Article 20 of the basic Regulation, since it was not
individually investigated during the original investigation
for reasons other than a refusal to cooperate with the
Commission, and thus an individual countervailing duty
rate should be determined for it.

Under this scheme, any eligible exporter can apply for
credits which are calculated as a percentage of the value
of exported finished products. Such DEPB rates have
been established by the Indian authorities for most prod-
ucts, including the products concerned, on the basis of
the Standard Input/Output Norms (SION). A licence
stating the amount of credit granted is issued automati-
cally.

DEPB on post-export basis allows for the use of such
credits for any subsequent imports (e.g. raw materials or
capital goods) except
for goods the importation of
which is restricted or prohibited. Such imported goods
can be sold on the domestic market (subject to sales tax)
or used otherwise.

DEPB credits are freely transferable. The DEPB licence is
valid for a period of 12 months from the date on which
the licence is granted.

(15)

The characteristics of the DEPB have not changed since
the original
investigation. The scheme is a subsidy
contingent upon export performance, and it was there-
fore determined during the original investigation that it
is deemed to be specific and countervailable under
Article 3(4)(a) of the Basic Regulation.

3. Subsidisation

(12) On the basis of the information contained in the replies
to the Commission's questionnaire, the following five
schemes were investigated:
— Passbook Scheme,
— Duty Entitlement Passbook Scheme,
— Export Promotion Capital Goods Scheme,
— Export Processing Zones/Export Oriented Units,
— Income Tax Scheme.

(16)

4. Passbook Scheme (PBS)

(13)

Sindia Steels Limited had not availed itself of the Pass-
book Scheme which, on 1 April 1997, i.e. during the
original investigation period, was abolished and replaced
by its successor, the Duty Entitlement Passbook Scheme
(DEPB).

Calculation of the subsidy amount

It was established that Sindia Steels Limited did not use
Instead this
the licences to make duty-free imports.
company sold some of its licences, and the benefit was
calculated on the basis of the amount of credit in the
licence regardless of the sale price of the licence. The
company claimed that the benefit should be limited to
the effective sale price of the licence, which is often less
than the face value of
in the licence.
However, in accordance with the findings in the initial
investigation (Commission Regulation (EC) No 618/
1999 (1), recital 34, as confirmed by Regulation (EC) No
1599/1999), this claim cannot be granted since the sale
of a licence at a price less than the face value is a purely
commercial decision which does not alter the counter-
vailable benefit from this scheme.

the credits

5. Duty Entitlement Passbook Scheme (DEPB)

General

(14)

It was established that Sindia Steels Limited had received
benefits under this scheme. This company made use of
the DEPB on a post-export basis.

As in the original investigation, the total value of the
subsidy has been allocated over total exports in the
investigation period. Where the company made duly
substantiated claims
linked to the
payment of fees for obtaining the DEPB Licence, these
were granted.

for deductions

(1) OJ L 79, 24.3.1999, p. 25.

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Sindia Steels Limited benefited from this scheme during
the investigation period and obtained subsidies of
15,5 %.

(20)

Sindia Steels Limited obtained a benefit under this
scheme of 0,3 %.

6. Export

Promotion Capital Goods
(EPCGS)

Scheme

General

(17)

It was established that Sindia Steels Limited had availed
itself of this scheme.

To benefit from the scheme, a company must provide to
the relevant authorities details of the type and value of
capital goods which are to be imported. Depending on
the level of export commitment which the company is
prepared to undertake, the company will be allowed to
import capital goods at either a zero rate of duty or a
reduced rate. A licence authorising the import at prefer-
ential rates is issued automatically.

In order to meet the export obligation, goods exported
must have been produced using the imported capital
goods.

An application fee is payable to obtain a licence.

(18)

The characteristics of the EPCGS have not changed since
the original investigation. It was determined during the
original investigation that the EPCGS is a countervailable
subsidy, as the payment by an exporter of a reduced or
zero rate of duty constitutes a financial contribution by
the GOI, government revenue otherwise due being fore-
gone, and a benefit is conferred on the recipient by
lowering the duties payable or fully exempting him from
paying the import duties.

7. Export Processing Zones (EPZ)/Export Oriented

Units (EOU)

(21)

It was established that Sindia Steels Limited was not
located in an EPZ and was not an EOU.

8. Income Tax Exemption Scheme (ITES)

(22)

It was established that Sindia Steels Limited had not
availed itself of the ITES.

9. Other schemes

(23)

It was established that Sindia Steels Limited had neither
made use of new subsidy schemes which were estab-
lished after the end of the original investigation period,
nor had it received any ad hoc subsidies after this date.

10. Amount of countervailable subsidies

(24)

Taking account of the definitive findings relating to the
various schemes as set out above, the amount of coun-
tervailable subsidies for Sindia Steels Limited is as
follows:

DEPB

EPCGS

Total

Sindia Steels Ltd

15,5 %

0,3 %

15,8 %

E. AMENDMENT OF THE MEASURES BEING REVIEWED

is

subsidy

contingent

The
in law upon export
performance within the meaning of Article 3(4)(a) of the
basic Regulation, since it cannot be obtained without a
commitment to export goods, and is therefore deemed
to be specific and countervailable.

(25)

Based on the findings made during the investigation, it is
considered that imports into the Community of stainless
steel wire having a diameter of 1 mm or more produced
and exported by Sindia Steels Limited should be subject
to a level of countervailing duty corresponding to indi-
vidual
this
subsidies
company.

established for

amounts of

Calculation of the subsidy amount

(19) Using the same calculation methodology as in the orig-
inal investigation, the benefit to the exporter has been
calculated on the basis of the amount of unpaid customs
duty due on imported capital goods by spreading this
amount across a period which reflects the normal depre-
ciation of such capital goods in the industry of the
product concerned. This period has been established by
using the weighted average (on the basis of production
the products concerned) of depreciation
volume of
periods for capital goods actually imported under the
EPCGS by Indian producers during the original invest-
igation period, resulting in a normal depreciation period
of 15,5 years. This amount has then been allocated over
total exports during the investigation period.

(26)

Regulation (EC) No 1599/1999 should therefore be
amended accordingly.

F. DISCLOSURE AND DURATION OF THE MEASURE

(27)

The company concerned has been informed on the facts
and considerations on the basis of which it is intended
to propose that Regulation (EC) No 1599/1999 be
amended, and was given the opportunity to comment.
No comments were received.

(28)

The review carried out does not affect the date on which
Regulation (EC) No 1599/1999 will expire pursuant to
Article 18(1) of the basic Regulation,

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HAS ADOPTED THIS REGULATION:

Article 2

Article 1

The following shall be inserted into the table in Article 1(2) of
Regulation (EC) No 1599/1999:

‘— Sindia Steels Limited

15,8

A285’

53/9 AB. Samitha complex,
Off Andheri Kurla Road
Safeed Pool, Andheri (East),
Mumbai 400 072, India

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

Article 3

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

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

Done at Brussels, 28 January 2002.

For the Council

The President

J. PIQUÉ I CAMPS