Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of recordable compact disks originating in Taiwan
Date: 2002-06-03
Institutions: European Commission
Subjects: CCT duties, Taiwan, anti-dumping duty, import, originating product, record, recording

C 227 E/362

EN

Official Journal of the European Communities

24.9.2002

for a Council Regulation imposing a definitive anti-dumping duty and collecting
Proposal
definitively the provisional duty imposed on imports of recordable compact disks originating in
Taiwan

(2002/C 227 E/11)

COM(2002) 282 final

(Submitted by the Commission on 3 June 2002)

THE COUNCIL OF THE EUROPEAN UNION,

(4) The Commission continued to seek and verify all
information it deemed necessary for the establishment
of definitive findings.

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
from countries not members of the European Community (1),
(the ‘basic Regulation’), and in particular Article 9 thereof,

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

Whereas:

A. PROVISIONAL MEASURES

(1) The Commission, by Regulation (EC) No 2479/2001 (2),
(the ‘provisional Regulation’), imposed a provisional anti-
dumping duty on imports of recordable compact disks
(‘CD-Rs’) falling within CN code ex 8523 90 00 (TARIC
code 8523 90 00 10) and originating in Taiwan.

(2) It is recalled that the investigation of dumping and injury
covered the period from 1 January 2000 to 31 December
2000 (‘investigation period’ or ‘IP’). The examination of
trends relevant for the injury analysis covered the period
from 1 January 1997 to the end of
the IP (‘period
considered’).

B. SUBSEQUENT PROCEDURE

provisional

(3) Subsequent to the disclosure of the essential facts and
considerations on the basis of which it was decided to
several
anti-dumping measures,
impose
In
interested parties
submitted comments in writing.
accordance with the provisions of Article 6(5) of
the
basic Regulation,
the parties who so requested were
granted an opportunity to be heard orally.

(1) OJ L 56, 6.3.1996, p. 1 (‘basic Regulation’), as last amended by
Regulation (EC) No 2238/2000 (OJ L 257, 11.10.2000, p. 2).

(2) OJ L 334, 18.12.2001, p. 8.

(5) All parties were informed of

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.

the essential

(6) 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
interested parties were considered and, where appropriate,
the provisional findings have been modified accordingly.

(8) Following the adoption of provisional measures,

two
companies, Nan Ya Plastics Corporation, Taipei and
Rimma International Inc., Taipei
in Taiwan, applied for
new exporting producer status and requested not to be
treated differently from the companies that cooperated in
the investigation. However, since sampling has been used
in the investigation of dumping, a new exporters' review
pursuant to Article 11(4) of the basic Regulation with the
objective of determining individual dumping margins
cannot be initiated in this proceeding. The examination
of these requests together with the additional evidence
provided by these companies showed that only one of
fulfilled all
them, Nan Ya Plastics Corporation,
the
the basic Regulation,
requirements of Article 11(4) of
which would otherwise apply, i.e.

— that it did not export the product concerned to the

Community during the IP;

— that

it
producers
provisional anti-dumping measures and

is not related to any of
in Taiwan which are

the exporters or
to the

subject

— that it has actually exported the product concerned to
the Community after the IP on which the measures
are based, or
it has entered into an irrevocable
contractual obligation to export a significant quantity
to the Community.

24.9.2002

EN

Official Journal of the European Communities

C 227 E/363

In these circumstances, in order to ensure equal treatment
for this new exporting producer and the cooperating
companies not included in the sample, Nan Ya Plastics
Corporation was added to the list of companies subject
to the weighted average duty rate listed in Article 1(2) of
the provisional Regulation.

C. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(9) Given the similar appearance of recordable compact disks
(‘CD-Rs’) and re-writable compact disks (‘CD-RWs’) which
are not covered by the investigation, the complainant, the
Committee of European CD-R Manufacturers (‘CECMA’),
requested that the product under consideration (CD-Rs)
should be distinguished from CD-RWs
to
in order
ensure the proper application of the duties imposed.

(10) The nature of the disk is normally mentioned on the disk
itself or on the packaging. Therefore, no particular
additional specification appears to be necessary.
In the
unlikely event that such identification would be absent,
the colour of the non-printed side of the disc gives an
indication of the nature of the product. CD-Rs show on
their non-printed sides either bright colours (such as
cyanine light blue, phtalocyanine green, yellow, or green/
yellow combined, silver and gold) or azo dark blue.
CD-RWs show a dark grey colour with a low reflectivity
compared to CD-Rs.

fall under the description of

(11) CD-Rs, which have a size that is smaller than the standard
diameter of 12 cm,
the
product concerned. The 8 cm CD-R holds a lower
capacity or play duration than the standard 12 cm
CD-R. Some 8 cm CD-Rs have been further adapted to
match the size of a business card, but the characteristics
of such a CD-R remain the same as of a 12 cm CD-R,
the disc. All
despite the difference in the form of
mentioned types of smaller CD-R can be used by any
personal computer in the same way as a 12 cm CD-R.
Therefore, the 8 cm CD-R and the business card type
CD-R are both covered by the investigation and by the
measures adopted.

(12) The so-called minidisc, however, should be distinguished
from CD-Rs. Although the minidisc is a recordable optical
product, using the same laser technology as the CD-R, it
is at the same time erasable and always encased in a fixed
housing, comparable to that of 3,5 inch diskettes. To
write/read on the minidisc requires specific equipment
(minidisc recorder or player), which does not form part
In view of the differences in
of a personal computer.
physical characteristics and as the targeted market
is
entirely different,
the minidisc is not covered by the
measures adopted.

(13) Some parties claimed that the definition of the product
take
concerned in the provisional Regulation did not

account of the fact that various types of packaging for
CD-Rs are encountered on the market. The issue of
the related costs of production and the
packaging,
comparison of
the Community industry's production
with Taiwanese imports are dealt with under point (b)
of the section on ‘Imports concerned’ and under point
(a) of
the
Community industry’. It should be noted that packaging
is only relevant in the context of the analysis of price
comparison and not for the definition of the product
concerned.

the section concerning the ‘Situation of

(14) In view of the above, the provisional findings as described
in recitals (9) and (10) of the provisional Regulation are
confirmed.

2. Like product

(15) In the absence of any further comments, the definition of
the

the like product as described in recital
provisional Regulation is confirmed.

(11) of

D. SAMPLING

(16) No comments concerning the sampling of Taiwanese
the
the

exporting producers were received and,
conclusions
provisional Regulation are hereby confirmed.

therefore,
to (18) of

in recitals

set out

(12)

E. DUMPING

1. Normal value

exclusion of

(17) Following the adoption of provisional measures, one
the
requested the
exporting producer
selling, general and administrative expenses (‘SG & A’) of
its related company in the domestic market from the total
SG & A expenses used in the ordinary course of trade test
and in constructing normal value. The exporting producer
argued that its related company was set up to conduct
internet business, which incurs high SG & A costs and
merely became involved, temporarily, with sales of the
product concerned to help it
financial
situation. The exporting producer claimed that almost
related company were
its
all SG & A expenses of
unrelated to the sales of the product concerned. It also
requested the Commission to disregard completely for the
dumping calculations the domestic sales of the related
company for the same reasons.

improve its

(18) In this respect,

the claim to disregard completely the
domestic sales and the SG & A expenses of the related
company was rejected as it could not be supported by
any verified information. However, in determining normal
value
certain
the Commission accepted to exclude
amounts of SG & A expenses which were shown not to
relate to domestic sales of the product concerned.

C 227 E/364

EN

Official Journal of the European Communities

24.9.2002

(19) Two exporting producers claimed that the Commission
should not have allocated all
interest expenses to the
product concerned but only those related to the oper-
long-term and
ational
argued that
total assets and
short-term investments form part of
require financing and hence, incur interest expenses that
are not related to the production and sales of the product
concerned.

activities. They

(20) This claim was accepted because it was shown that certain
financing expenses did not concern operational activities
the product
related to the production and sales of
concerned. The SG & A expenses were therefore revised
before being used in the ordinary course of trade test and
in constructing normal value.

2. Export price

(21) No claims were made concerning the determination of the
export price. The conclusions set out in recital (26) of the
provisional duty Regulation are hereby confirmed.

normal value and export price. In fact in this case, the
constructed normal value was based on the cost of
production of the exported type including its packing
cost and,
therefore, no difference in packing costs
existed between export price and normal value.

(25) However, the claim concerning the comparison of indi-
vidual export prices including individual packing costs
with a constructed normal value including a weighted
average export packing cost per product
type was
accepted. Therefore,
for the four exporting producers
that had exported product types for which normal value
had to be constructed, the construction of normal value
was revised in order to take account of an export packing
cost per product type and packing type.

(26) One exporting producer claimed that the Commission had
in the dumping calculations
its export sales

not
certain changes in packing types of
which were made during the verification visit.

taken into account

3. Comparison

(27) This claim was accepted and the packing types concerned

were modified.

(22) Three exporting producers claimed that the Commission
proceeded to a comparison between normal value and
export price without treating packing costs consistently
between constructed normal value and normal value
based on actual prices. They argued that it was inappro-
priate for the Commission to consider packing costs to be
an allowance in case of normal value based on prices but
not to consider it as an allowance in case of constructed
normal value.

(23) The three exporting producers also argued that packing
cost was a mandatory allowance under Article 2(10)(f) of
the basic Regulation, when differences exist between the
directly related packing costs of the normal value and
export price. They argued that in case of a comparison
of the weighted average normal value with the prices of
individual export transactions, the Commission compared
individual export prices including individual packing costs
per transaction with a constructed normal value including
a weighted average export packing cost
for the same
product
type. The three exporting producers therefore
requested the deduction of packing costs from all export
prices and constructed normal value on the same basis.

(24) With regard to the alleged mandatory nature of

the
allowance for packing costs,
is considered that an
allowance under Article 2(10) of the basic Regulation is
granted only when there are differences in factors, such as
packing, which do not allow a fair comparison between

it

4. Dumping margin

as

type of

transactions

insufficient. Although the

(28) Two exporting producers claimed that the Commission
should not have established the dumping margins on
the basis of a comparison by product
the
weighted average normal value with the prices of all indi-
considered the
export
vidual
they
reasoning for having recourse to this
Commission's
method
two companies
admitted that
the export prices differed significantly
among time periods during the investigation period,
they argued that there was a parallel declining trend for
world prices, including the normal values, and for export
prices and that therefore the differences in export prices
should not be taken into account. They also suggested
that a transaction to transaction comparison of normal
value and export price should have been used instead.

(29) These arguments were not accepted. Concerning the
transaction to transaction comparison,
it is noted that
the Community does not use this methodology because
the process of selecting individual transactions in order to
make such a comparison is considered too impracticable
and arbitrary, at least in cases such as this one, where
thousands of export and domestic transactions existed. It
was therefore concluded that a transaction to transaction
comparison could not be an appropriate alternative
comparison method.

24.9.2002

EN

Official Journal of the European Communities

C 227 E/365

(30) In order to use a comparison of a weighted average
normal value to prices of all individual export transactions
as opposed to a comparison of a weighted average normal
value with a weighted average of export prices there must
be a finding that export prices differ significantly among
different purchasers, regions or time periods and that the
use of the other two comparison methods, specified in
Article 2(11) of the basic Regulation, would not reflect the
full degree of dumping. As to the first requirement, it has
been found that export prices were significantly lower
during the second half of
the investigation period as
compared to the first half and this finding was not
disputed by the exporting producers concerned. They
have contested however, whether the difference in prices
constituted a pattern, which they alleged was the result of
a world-wide fall in prices including normal values. It was
considered that the decline in export prices constituted a
pattern for
firstly, because the decline
prevailed throughout the second half of the investigation
period; and secondly, because of its extent, which was
found to be very substantial and in some cases reached
50 %. As to the claim that the differences in export prices
were because of world-wide trends in prices including
this was considered irrelevant as the
normal values,
appropriate analysis has to be made on export prices to
the Community. It is also noted that Article 2(11) of the
basic Regulation requires a demonstration of a pattern of
export prices and not an explanation of why such a
pattern existed.

two reasons:

comparison of

(31) In relation to the requirement to demonstrate that only a
comparison of a weighted average normal value to prices
individual export transactions will reflect the full
of all
it is appropriate to note that the
degree of dumping,
this methodology gave a significantly
application of
higher dumping margin than a
a
weighted average normal value with a weighted average
of export prices, which would not take into account the
effect of the significant decline of export prices into the
Community during the second half of
the IP. Hence,
unless a comparison of a weighted average normal
value to prices of all individual export transactions had
been used, the significantly higher or targeted dumping
which took place during the second half of the investi-
gation period would have been inappropriately disguised
by the use of a comparison of a weighted average normal
value with a weighted average of export prices. It was also
appropriate to reflect in the calculation of dumping via a
comparison of a weighted average normal value to prices
of all individual export transactions the fact that export
prices in the second half of the investigation period were
below cost of production and thus constituted a very
predatory form of dumping.

(32) The same two exporting producers referred to the Panel
and the Appellate Body reports in the Indian bed linen
case before the WTO's Dispute Settlement Body (‘DSB’)

the so called ‘zeroing of negative
and claimed that
dumping margins’
is not allowed when calculating
dumping margins based on a comparison of a weighted
average normal value to all individual export transactions.

of

concerning

comparison

(33) In respect to the DSB case quoted, it is noted that the
methodology considered by the Panel and the Appellate
Body was different from the methodology used in the
investigation. The DSB has not adopted any
present
a
a
recommendation
weighted average normal value to all
individual export
transactions. In any event, as far as ‘zeroing’ is concerned,
it is noted that if this practice was not used, a comparison
of a weighted average normal value to all
individual
export transactions by product type and a comparison
of a weighted average normal value with a weighted
average of export prices by product type would give the
same dumping margin. In such a case, the methodology
set out in the last sentence of Article 2(11) of the basic
Regulation to compare a weighted average normal value
transactions would become
to all
individual
redundant. Furthermore,
in a case of targeted dumping,
zeroing allows to avoid that positive dumping margins on
dumped sales are disguised by negative dumping margins.
Therefore, the claim that ‘zeroing’
is not allowed when
comparing a weighted average normal value to all indi-
vidual export transactions cannot be accepted.

export

to (33) of

(34) Dumping margins were established as set out in recitals
(28)
the provisional Regulation. The
comparison of the weighted average normal value per
product type, revised as appropriate, with the weighted
average export price per product type on an ex factory
basis for two companies in the sample, and with the ex
factory export prices of all individual export transactions
for the three other companies in the sample, showed the
existence of dumping for all
investigated exporting
producers included in the sample.

revised

companies were

(35) Following changes to the calculations in accordance with
the findings noted above, the dumping margins of the
investigated
slightly. This
revision has not affected the choice of methodology set
out in recitals (28) and (29) of the provisional Regulation
which is hereby confirmed. Consequently, the weighted
average dumping margin calculated for the cooperating
to
companies not
included in the sample pursuant
Article 9(6) of
the basic Regulation was also revised.
The revised calculations have also affected the dumping
margin established for the non-cooperating companies.
The definitive dumping margins as a percentage of the
cif import price duty unpaid are as follows:

C 227 E/366

EN

Official Journal of the European Communities

24.9.2002

— Auvistar Industry Co.

— Princo Corporation

— Prodisc Technology Inc.

— Ritek Corporation

— Unidisc Technology Co.

— Cooperating exporting producers not in

the sample

17,7 %

29,9 %

17,7 %

17,7 %

17,7 %

19,2 %

— Non-cooperating exporting producers

38,5 %

F. COMMUNITY INDUSTRY

(36) In the absence of any new information on the Community
industry, the provisional findings as described in recitals
(35) to (38) of the provisional Regulation are confirmed.

G. INJURY

1. Community consumption

(37) In the absence of any new information, the provisional
findings concerning the Community consumption as
the provisional Regulation
described in recital
are confirmed.

(40) of

2. Imports concerned

(a) Volume, price and market share of imports originating in

Taiwan

(38) In the absence of any new information on the volume,
price and market share of imports of CD-Rs originating in
Taiwan, the findings as described in recitals (41) to (43) of
the provisional Regulation are confirmed.

(b) Price undercutting

calculations. One

(39) A number of parties questioned whether packaging had
been properly taken into account for the price under-
cutting
the
Taiwanese exporting producers offer a wider choice of
packaging than the Community industry is addressed
under item (a) of point 3 ‘Situation of the Community
industry’.

claim that

specific

(40) In terms of price undercutting, it should be noted that the
comparison between sales prices on the Community
market of CD-Rs produced by the Community industry
and those produced and imported from Taiwan was only
made for CD-Rs having both the same basic charac-
teristics
storage
capacity,
the CD-R was
printed or not) as well as having identical packaging.

(in terms of
reflective layer and whether

type of data stored,

(41) It was claimed that CD-Rs imported into the Community
originating in Taiwan and the CD-Rs produced by the
Community industry could not be compared because of
differences in branding. Under that claim a product of the
Community industry, which was said to be typically
branded, would attract a price premium compared to an
unbranded Taiwanese product.

(42) The investigation showed that branding only influences
consumers when the sales price is similar, so that whilst
consumers are not willing to pay a premium for a
they may be inclined to choose it
branded product
when prices are the same.

(43) Community producers sell both branded and ‘unbranded’
products, although even the latter are usually branded
according to the specifications and with the name of
the client retailer. The investigation did not reveal any
price differential between branded and ‘unbranded’ sales
to retailers. Moreover, the Taiwanese exporting producers
acted in exactly the same way, selling under their own
brand or to the client's specification. Products marketed
under a brand-name, which the consumer would consider
as Community-based, were frequently found to be manu-
factured in Taiwan.

(44) In view of the above, the provisional findings on price
undercutting and the average undercutting margin of
29 %, as described in recitals
the
(44)
provisional Regulation, are confirmed.

to (47) of

3. Situation of the Community industry

(a) Cost of production and profitability

(45) It was claimed that the Taiwanese exporting producers
offer a wider choice of packaging than the Community
industry and that
the provisonal Regulation did not
provide sufficient explanation on the effect of packaging
on the cost of production.

could be distinguished. They are

(46) Although the investigation has shown that there was a
wide variety of packaging types which were updated
regularly following marketing efforts, the following main
categories
ranked
cost of production
according to increasing average
during the IP with the figure between brackets indicating
the cost differences in an indexed form. Contrary to the
the Taiwanese exporting producers offer a
claim that
than the Community
wider
industry,
types of
packaging are offered by both above categories of
suppliers on the Community market, the choice being
determined by the same category of unrelated customers,
i.e. client retailers.

choice of packaging

confirmed that

same

the

is

it

24.9.2002

EN

Official Journal of the European Communities

C 227 E/367

(47) CD-Rs sold in bulk (100) (1) are typically shipped on
spindles, which are plastic devices on which a number
of CD-Rs are stacked. The complete spindle with CD-Rs
is in most cases cellophane wrapped. The bulk product
can however also merely be a cellophane wrapped stack
of CD-Rs, without the spindle.

(48) CD-Rs may also be sold in so-called cake-boxes (144),
which can be described as spindles onto which a plastic
lid is screwed so that a closed container-like product is
obtained.

sales of

(49) The jewelbox, accompanied by a booklet (200), was the
most widely spread means of packaging during the IP.
This form was also most frequently encountered in case
recent
of
phenomenon is the slim case (174) which differs from
the jewelbox in that the black inlay, where the CD-R is
fixed, at the same time serves as the back of the case. The
result is a box which is approximately half as thick as the
original jewelbox.

registered music-CDs. A more

(b) Employment, productivity and wages

(50) The average employment cost per employee and the
productivity were recalculated in order to take account
of the correction of the employment figures for 1997
the Community industry. That
for one producer of
including
producer had submitted year-end figures
trainees for upcoming production capacity instead of a
yearly average full-time equivalent.

Employment

Index

Average employment
cost per employee
(in 1 000 ECU/EUR)

Index

Productivity
CDs per employee

1997

1998

1999

427

100

25,0

100

623

146

27,7

111

877

205

31,5

126

2000
(= IP)

1 037

243

30,7

123

45 300

137 500 240 000 311 200

Index

100

304

530

687

(51) The average wage cost per employee increased by 23 %
over the period considered, in line with normal indexation
of wages to the cost of living as well as the cost of
training and employing specialised new personnel
to
operate additional machinery. The decrease between
1999 and 2000 can be attributed to the fact that new
personnel were mainly employed in the packaging
departments, where lower average wages and temporary
labour prevail, since this activity requires less technically
qualified personnel.

(1) Basic index = 100

(52) The definitive determination of the increase of average
employment cost per employee at 23 % replaces the
figure of 39 % mentioned in recital (64) of the provisional
Regulation.

4. Conclusion on injury

(53) Referring to the provisional Regulation, it is recalled that
the volume of low-priced imports from Taiwan increased
significantly during the period considered. Their market
share increased from 6,3 % to 60,1 % and their import
price was reduced by 73 % on average. The Community
market was dominated by Taiwanese imports, which
benefited
favourable
evolution of Community demand for CD-Rs than the
Community industry in terms of volume of sales and
market share.

considerably more

from the

(54) The increase of import volumes and the decline of the
sales price were particularly pronounced between 1999
and the IP. These imports undercut
the Community
industry's sales prices by 29 % on average during the IP
and exercised a downward pressure on the sales prices on
the Community market. The magnitude of dumping by
the Taiwanese exporting producers was found to be
significant. No other
found to affect
domestic prices.

factors were

(55) Some economic indicators pertaining to the situation of
the Community industry, such as production of CD-Rs,
production capacity installed, sales volume, cash flow,
employment and productivity, showed positive devel-
opments over
these
developments in relative terms, i.e. with reference to the
rapidly expanding market, were less pronounced than
could be expected. The rate of capacity utilisation
increased until 1999, but decreased during the IP to
86 %. Over
the average sales
prices of the Community industry dropped considerably.

the period considered. However,

the period considered,

(56) The Community industry originally built up a market
share of 16,8 % in 1998, but subsequently lost part of
that market share to the Taiwanese importers, achieving
12,6 % during the IP. Difficulties encountered by the
Community industry to obtain projected sales in an
expanding market
led to considerable stock building
during the IP. Negative return on investments during
the IP led the Community industry to postpone or
cancel new investment decisions to a large extent.

(57) Notwithstanding the increase of the average wage cost per
employee, the Community industry achieved profitability
in 1999 as a consequence of the reduction of the full cost
of production. However,
further cost reductions were
insufficient to compensate for the significant decrease of
the sales prices, leading to financial losses during the IP.

C 227 E/368

EN

Official Journal of the European Communities

24.9.2002

(58) The investigation revealed that the Community industry
was prevented from participating in the growth of the
Community market, that its investment programmes for
CD-Rs were significantly reduced due to declining sales
prices, that its sales prices were undercut by Taiwanese
exporting producers by 29 % on average, that it suffered
financial losses during the IP and encountered difficulties
in raising additional funding.

(59) In view of the above, the conclusions as stated in recitals
(66) to (71) of the provisional Regulation are confirmed.

H. CAUSATION

1. Effect of the dumped imports

(60) It was alleged that the absence of sufficient growth in
terms of production, sales and market share of
the
Community
attributed to
Taiwanese imports, but to its high capacity utilisation
during 1999 and the IP, which did not allow the
Community industry to make extra sales or to obtain
additional market share.

should not be

industry

(61) It should be recalled that

stocks

the provisional Regulation,

the Community industry's
capacity utilisation declined from 91,8 % in 1999 to
86,3 % in the IP. Furthermore, as mentioned in recital
increased
(55) of
significantly towards the end of 1999 and to an even
greater extent towards the end of the IP. During the IP
production of CD-Rs exceeded sales by approximately 40
million units,
leading to stocks at the end of the year
which represented more than 20 % of yearly production
of CD-Rs. This clearly indicates that the capacity utili-
sation rate cannot have caused the lack of growth of
the Community industry.

concerning the mix of product types of CD-Rs per desti-
nation market, no meaningful price analysis can be made
world-wide. Moreover,
setting by
Taiwanese
exporting producers on the Community
market at a level below their own cost of production
caused a downward pressure on the Community price
level which the Community industry could only follow
by selling at a loss during the IP.

import price

the

(64) As mentioned in recital

(58) above,

the Community
industry significantly reduced its investments due to the
deterioration of sales prices on the Community market. In
contrast, Taiwanese exporting producers which operated
on a world-wide basis
continued to expand their
production facilities notwithstanding the unfavourable
market price outlook. Based on information available,
Taiwanese owned production capacity in the IP more
than covered estimated total world market demand, that
increased by 84 % compared to 1999. This increase in
capacity by Taiwanese producers
if
anything they have themselves contributed to any over-
capacity. Furthermore, the increase in Taiwanese capacity
implies
absence of
investments in CD-Rs production capacity is not founded.

claim concerning the

suggests,

that,

that

the

(65) Based on these facts and considerations, the above claims

are rejected.

2. Imports of CD-Rs from other countries

(66) The market

share of

imports

decreased from 78,8 % to 21,3 % over
considered.
are
exporters
9,5 % and 2,7 % respectively during the IP.

to the Community with market

Singapore

Japan

and

from other countries
the period
largest
the
shares of

(62) It was further claimed that any injury suffered by the
Community industry was a consequence of its failure to
adapt to world market prices. It was also argued that the
the
downward pressure on prices was the result of
existing world-wide production over-capacity.
In this
context it was claimed that virtually no recent additional
investments in CD-R production capacity were made,
given the extremely low price levels

(67) It was observed that the Japanese import price into the
the period
Community decreased more sharply over
Japanese
considered than the Taiwanese price. The
import price, which was up to 53 % above
the
Taiwanese import price in the period 1997-1999, was
only 26 % higher during the IP. It was thus alleged that
the sharper decrease of Japanese import prices into the
Community over the period considered had contributed
to the downward pressure on prices in the Community
market.

it should also be noted that

(63) Interested parties did not provide any evidence supporting
there were one or more reference
the allegation that
world-wide sales prices for CD-Rs. In assessing this alle-
gation,
the investigation
showed that depending on the export market CD-Rs
could be sold under one form of packaging rather than
another. As stated under recitals (39) to (44) above, such
packaging has a serious impact on the cost of production
and may thus explain why overall price levels can vary
significantly depending on the type of packaging and on
follows that without details
the destination market.

It

(68) It

is recalled that

Japanese prices have always been
significantly higher than those of Taiwanese exporting
producers over
the period considered. Although the
imported from Japan increased from 53
quantities
million CD-Rs to 192 million CD-Rs over the period
considered,
the
Japanese market
Community market dropped from 33 % to 9,5 %. Their
impact on the market was therefore much more limited
than that of low-proceed dumped Taiwanese CD-Rs.

share

the

on

24.9.2002

EN

Official Journal of the European Communities

C 227 E/369

(69) Exports from Taiwan to Japan reached 87 million CD-Rs
during the IP and were made at an average price of
0,42 euro per CD-R, which is 26 % above the average
Taiwanese export price to the Community. This price
corresponds exactly to the average import price of
CD-Rs of Japanese origin into the Community. It seems
therefore that the level of the Taiwanese price on the
Community market is particularly low.

average have simply installed more production lines than
Community producers. It is therefore considered that no
economy of scale could have been achieved on these fixed
costs.

considered. The

information available

(70) CD-Rs imported from Singapore entered the Community
at prices lower than the Taiwanese imports, however their
market share dropped from 14,2 % to 2,7 % over the
period
also
indicates that one CD-R producer dominates the Singa-
porean market in terms of domestic output and exports to
this company is related to
the Community and that
another CD-R producer
located in the Community.
During the period considered, they both sold CD-Rs to
a third sister sales company in the Community, which
marketed the CD-Rs under a brand name. On this basis,
it cannot be considered that the sales transactions made
by the main Singaporean exporting producer
to the
Community were made at arm's length conditions.

(71) It is recalled that low-priced dumped Taiwanese imports
held 60 % of the Community market during the IP. In the
light of both the reduction of Japanese market share and
the price level of Japanese imports on the Community
market,
Japanese imports
cannot have contributed more than insignificantly to the
downward pressure on the Community market.

is considered that

that

it

3. Economies of scale

(72) Further clarification was asked concerning the economies
of scale, mentioned in recital (56) of the provisional Regu-
lation, and more specifically it was alleged that
the
Taiwanese exporting producers could obtain a lower
cost of production per CD-R than the Community
their
industry because of
by
companies.
to
Taiwanese exporting producers were thus relevant
explain the price differential between Taiwanese and
Community produced CD-Rs.

the larger average size of
realised

economies

scale

The

of

(73) It was indeed established that the average factory size of
the sampled Taiwanese exporting producers during the IP
was 530 million CD-Rs per year, compared to an average
of 40 million CD-Rs per year
the Community
industry. However, the production lines installed in all
companies are manufactured by the same companies in
Japan and are of a
either Germany, Switzerland or
exporting producers on
comparable

size. Taiwanese

for

for

(74) It is, however, worth mentioning that the determining
the cost of production is the number of
factor
CD-Rs that can be produced by a given production line
within a certain time period. The acquisition cost of the
machinery
the period
stable over
the performance increased on average
considered, but
from 10 CD-Rs per minute in 1997 to 25 CD-Rs per
minute in 2000. This gain in efficiency allowed the
Community industry to reduce costs of production.

remained fairly

(75) Within a given company it was typical

to encounter
generations of machinery with the new
different
investments representing the best performance whereas
older investments had already been partially or completely
scrapped. The theoretical maximum economic lifetime of
the machinery is five years, although this is probably even
shorter in practice. This pattern is not different for the
Taiwanese exporting producers than for the Community
industry. A production line purchased in the year 2000
would on average allow an output of approximately
1 million CD-Rs per month, compared to 400 000
CD-Rs per month for a production line installed in 1997.

(76) No evidence was provided by the Taiwanese exporting
producers which would demonstrate and quantify any
alleged economies of scale, i.e. that a larger factory size
with more lines installed would deliver a lower manufac-
turing cost per CD-R. The Taiwanese exporting producers
were not found for instance to benefit from any specific
advantages regarding the purchase costs of raw materials,
nor did they claim the existence of such advantages.

(77) In any case, it should be underlined that even if such a
this
lower manufacturing cost per CD-R would exist,
could not
the
the dumping behaviour of
Taiwanese exporters The alleged economies of scales
therefore do not alter the causal
link between dumped
imported Taiwanese CD-Rs and the injury suffered by
the Community industry.

justify

4. Conclusion on causation

(78) In conclusion, it is confirmed that the material injury of
the Community industry was caused by the dumped
injury is characterised
imports concerned. The material

C 227 E/370

EN

Official Journal of the European Communities

24.9.2002

by the fact that the Community industry was prevented
from participating in the market growth,
the
investment programmes for CD-Rs had to be significantly
reduced due to the declining trend of sales prices, that the
Community industry's sales prices were undercut on
low-priced dumped
average by 29 % by Taiwanese
imports,
losses during the IP
it suffered financial
and had difficulties in raising additional funding.

that

that

of

the

effect

it
development

(79) No further claims were made with respect to the impact
of the factors discussed in recitals (77) to (94) of the
is concluded that
provisional Regulation. Therefore,
of
the
Community
the imports from other third countries,
consumption,
the
the export activity of
the
purchases of CD-Rs
Community industry and the adaptation of high speed
technology, on the Community industry's negative devel-
opments in terms of capacity utilisation, stock building,
sales prices, market
investments,
return on investment and the ability to raise capital was
practically non-existent.

the Community industry,
from third countries by

share, profitability,

Given the analysis, which has properly distinguished and
separated the effects of all
the known factors on the
situation of the Community industry from the injurious
effects of the dumped imports, it is hereby confirmed that
these other factors as such do not reverse the fact that the
injury assessed must be attributed to the dumped imports.
It is also considered that imports of CD-Rs originating in
Taiwan had a significant negative impact on the situation
of the Community industry and that the effect of other
factors, notably imports from third countries including
Japan was not such as to alter the finding of a genuine
and substantial relationship of cause of and effect between
the dumped imports from Taiwan and the material injury
suffered by the Community industry.

I. COMMUNITY INTEREST

1. Interest of the Community industry

(80) In the absence of any new information on the interest of
the Community industry,
findings as
described in recitals (98) to (100) of the provisional Regu-
lation are confirmed.

the provisional

responsible for

the downward pressure on
are not
prices. This also indicates that the imposition of anti-
dumping duties will not be in the interest of importers.

(82) However, no evidence substantiating this claim was
provided and the re-examination of the data available
confirmed that
the increasing volumes and decreasing
prices of imports of CD-Rs originating in Taiwan caused
a downward effect on the Community market prices. The
investigation showed that
trading margin
made by the cooperating importers based on lower
prices of CD-Rs did not yield sufficient coverage of
costs,
overhead
IP.
Moreover,
the decrease of market prices occurred at
such a pace that importers were faced with rapid value
deterioration of goods in transit, creating a situation in
which the purchase price occasionally exceeded the
eventual sales price.

to losses during

the normal

leading

the

(83) It should also be noted that no importers came forward to
is
the Commission's provisional
findings.
contradict
considered
conditions on the
Community market will serve the interest of importers
level on the
by restoring an adequate
Community market.

sales price

effective

trade

that

It

(84) In view of the above, the provisional findings as described
in recitals (101) and (102) of the provisional Regulation
are confirmed.

3. Interest of users and consumers

(85) In the absence of any new information on the interest of
users and consumers, the provisional findings as described
in recitals (103) to (105) of the provisional Regulation are
confirmed.

4. Conclusion on Community interest

(86) In view of

the above,

the provisional conclusion as
(107) of the provisional Regulation
described in recital
is confirmed,
i.e. that there are no compelling reasons
on the grounds of Community interest not to impose
definitive anti-dumping measures.

2. Interest of importers

(81) It has been claimed that the fact that the cooperating
importers of Taiwanese CD-Rs were unable to cover
their overhead costs on the basis of a normal trading
contribution margin applied to the low market prices
during the IP is an indication that Taiwanese imports

J. DEFINITIVE ANTI-DUMPING MEASURES

1. Injury elimination level

(87) It was claimed that

the pre-tax profit margin of 8 %
mentioned in recital (110) of the provisional Regulation
and used in the determination of the non-injurious price
was unreasonably high.

24.9.2002

EN

Official Journal of the European Communities

C 227 E/371

(88) This margin that could reasonably be achieved under
normal conditions of competition was based on an
assessment of the impact on the Community industry's
sales prices of
the degree to which the Taiwanese
exporters dumped CD-Rs on the Community market,
the import price levels of
the non-dumped imports
from third countries and the profitability required to
cover the financial costs of the investments made by the
Community industry. The analysis allowed to conclude
that 8 % was a reasonable level of pre-tax profit margin.

(89) In any event, it should be noted that the definitive anti-
dumping measures are based on the dumping margins in
application of the lesser duty rule.

2. Definitive anti-dumping measures

Country

Company

Rate of duty

Taiwan

Acer Media Technology Inc.

19,2 %

Auvistar Industry Co., Ltd.

17,7 %

Digital Storage Technology Co.

19,2 %

Gigastore Corporation

Lead Data Inc.

Megamedia Corporation

19,2 %

19,2 %

19,2 %

Nan Ya Plastics Corporation

19,2 %

Postech Corporation

Princo Corporation

Prodisc Technology Inc.

Ritek Corporation

Unidisc Technology Inc.

All other companies

19,2 %

29,9 %

17,7 %

17,7 %

17,7 %

38,5 %

(90) The individual company anti-dumping rates specified in
this Regulation were established on the basis of findings
of the present investigation. Therefore, they reflect the
situation found during that investigation with respect to
these companies. These duty rates (as opposed to the
country-wide duty applicable to all other companies) are
thus exclusively applicable to imports of product orig-
inating in the country concerned and produced by the
and thus by the
companies
entities
Imported product produced by any other
mentioned.
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’.

specific

legal

Commission (1)

forthwith with

(91) 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
relevant
the
information,
any modification in the
company's activities linked to production, domestic and
export sales associated with e.g. that name change or that
change
entities. The
if appropriate, will, after consultation of
Commission,
the Advisory Committee,
the Regulation
amend
accordingly by updating the list of companies benefiting
from individual duty rates.

in the production and sales

in particular

all

(92) Since sampling has been used in the investigation of
dumping, a new exporters' review pursuant
to Article
11(4) of the basic Regulation with the objective of deter-
mining individual dumping margins cannot be initiated in
this proceeding. However,
to ensure equal
in order
treatment
for any genuine new Taiwanese exporting
producer and the cooperating companies not included
in the sample, it is considered that provision should be
made for the weighted average duty imposed on the latter
companies to be applied to any new Taiwanese exporting
producer to whom Article 11(4) of the basic Regulation
would otherwise apply.

3. Collection of provisional duties

(93) In view of the magnitude of the dumping margins found
for the exporting producers, and in the light of the seri-
ousness of the injury caused to the Community industry,
it is considered necessary that the amounts secured by
way of provisional
the
provisional Regulation be definitively collected to the
extent of the amount of definitive duties imposed if this
the
amount
than the amount of
lower
provisional duty. Otherwise, only the amount of
the
provisional duty should be definitively collected,

anti-dumping

duty under

is equal or

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on
1.
imports of recordable compact disks (CD-Rs), currently clas-
sifiable within CN code
ex 8523 90 00 (TARIC code
8523 90 00 10), originating in Taiwan

The rate of the definitive duty applicable to the net free-
for products

2.
at-Community-frontier price,
produced by the following companies shall be as follows:

before

duty,

(1) European Commission

Directorate-General Trade
Directorate B
NEW OFFICIAL ADDRESS
B-1049 Brussels/Belgium.

C 227 E/372

EN

Official Journal of the European Communities

24.9.2002

Country

Company

Taiwan

Acer Media Technology Inc.,
29 Jianguo E. Road, Gueishan,
Taoyuan 333, Taiwan, R.O.C.

Rate of duty

TARIC
additional code

19,2 %

A298

Auvistar Industry Co., Ltd.,
21, Tung-Yuan Road, Chung-Li Industrial Park, Taiwan R.O.C.

17,7 %

A299

Digital Storage Technology Co., Ltd.,
No 42, Kung 4 Rd., Linkou 2nd Industrial Park,
Taipei Hsien, Taiwan R.O.C.

Gigastorage Corporation,
2, Kuang Fu South Rd., Hsinchu Industrial Park,
Hsinchu, Taiwan R.O.C.

19,2 %

A300

19,2 %

A301

Lead Data Inc.,
No 23, Kon Yeh 5th Rd., Hsinchu Industrial Park Fu Kou Hsiang,
Hsinchu Hsien, Taiwan R.O.C.

19,2 %

A302

Megamedia Corporation,
No 13, Kung Chien Rd., Chi-Tu District,
Keelung, Taiwan R.O.C.

Nan Ya Plastics Corporation,
201, Tung Hwa N. Road,
Taipei, Taiwan R.O.C.

Postech Corporation,
No 42, Kuang Fu South Rd., Hsinchu Industrial Park,
Hsinchu Hsien, Taiwan R.O.C.

Princo Corporation,
No 6, Creation 4th Rd., Science-based Industrial Park,
Hsinchu, Taiwan R.O.C.

Prodisc Technology Inc.,
No 13, Wu-Chuan 7th Rd., Wu-Ku Industrial District,
Wu-Ku County, Taipei, Taiwan R.O.C.

Ritek Corporation,
No 42, Kuanfu N. Road, Hsinchu Industrial Park,
Taiwan 30316 R.O.C.

Unidisc Technology Co., Ltd.,
4F, No 543, Chung-Cheng Rd.,
Hsin-Tien, Taipei, Taiwan, R.O.C.

All other companies

19,2 %

A303

19,2 %

A361

19,2 %

A304

29,9 %

A305

17,7 %

A306

17,7 %

A307

17,7 %

A308

38,5 %

A999

3.

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

Article 2

Where any new exporting producer
sufficient evidence to the Commission that:

in Taiwan provides

— it has actually exported to the Community the products
concerned after the investigation period on which the
measures are based, or it has entered into an irrevocable
contractual obligation to export a significant quantity to the
Community,

— it did not export to the Community the products described
in Article 1(1) during the investigation period (1 January
2000 to 31 December 2000),

— it is not related to any of the exporters or producers in
Taiwan which are subject to the anti-dumping measures
imposed by this Regulation,

the Council, acting by simple majority on a proposal submitted
by the Commission after consulting the Advisory Committee,
may amend Article 1(2) by adding the new exporting producer
to the companies subject to the weighted average duty rate
listed in that Article.

24.9.2002

EN

Official Journal of the European Communities

C 227 E/373

Article 3

Article 4

The amounts secured by way of the provisional anti-dumping
duty on imports originating in Taiwan under the provisional
Regulation shall be collected at the rate of the duty definitively
imposed by this Regulation. Amounts secured in excess of the
rate of definitive anti-dumping duty shall be released.

This Regulation shall enter into force on the day of its publi-
cation in the Official Journal of the European Communities.

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