Council Regulation (EC) No 1050/2002 of 13 June 2002 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of recordable compact disks originating in Taiwan
Date: 2002-06-13
Institutions: Council of the European Union
Subjects: CCT duties, Taiwan, anti-dumping duty, import, originating product, record, recording

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Official Journal of the European Communities

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1050/2002

of 13 June 2002

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

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

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

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

Whereas:

(1)

(2)

(3)

A. PROVISIONAL MEASURES

The Commission, by Regulation (EC) No 2479/2001 (2),
(hereinafter referred to as 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.

is recalled that

It
the investigation of dumping and
injury covered the period from 1 January 2000 to 31
December 2000 (hereinafter referred to as the invest-
igation 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 (hereinafter referred to as the
period considered).

B. SUBSEQUENT PROCEDURE

Subsequent to the disclosure of the essential facts and
considerations on the basis of which it was decided to
several
impose provisional
interested parties submitted comments in writing.
In
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.

anti-dumping measures,

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regula-

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

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

(4)

(5)

(6)

(7)

(8)

The Commission continued to seek and verify all infor-
mation it deemed necessary for the establishment of
definitive findings.

the essential

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.

They were also granted a period within which they
could make representations subsequent to this disclo-
sure.

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

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 addi-
tional evidence provided by these companies showed
that only one of them, Nan Ya Plastics Corporation,
fulfilled all the requirements of Article 11(4) of the basic
Regulation, which would otherwise apply,

i.e.:

— that it did not export the product concerned to the

Community during the IP,

— that it is not related to any of the exporters or
producers in Taiwan which are subject to the provi-
sional anti-dumping measures, and

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

a

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In these circumstances, in order to ensure equal treat-
ment for this new exporting producer and the cooper-
ating 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

(13)

(14)

Some parties claimed that the definition of the product
concerned in the provisional Regulation did not take
account of the fact that various types of packaging for
CD-Rs are encountered on the market. The issue of
packaging,
the related costs of production and the
the Community industry's production
comparison of
with Taiwanese imports are dealt with under point 2(b)
‘Price undercutting’ and under point 3(a)
‘Cost of
production and profitability’ of Section ‘G. Injury’ of this
Regulation. It should be noted that packaging is only
relevant in the context of the analysis of price compar-
ison and not for the definition of the product concerned.

the above,

In view of
findings as
described in recitals 9 and 10 of the provisional Regula-
tion are confirmed.

the provisional

(9)

(10)

(11)

(12)

1. Product concerned

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 complai-
nant, the Committee of European CD-R Manufacturers
(CECMA), requested that the product under considera-
tion (CD-Rs) should be distinguished from CD-RWs in
order to ensure the proper application of the duties
imposed.

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.

CD-Rs, which have a size that
is smaller than the
standard diameter of 12 cm, fall under the description
of 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, despite the difference in the form of the
disc. All 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.

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 of a personal computer. In view of the differ-
ences in physical characteristics and as the targeted
market is entirely different, the minidisc is not covered
by the measures adopted.

2. Like product

(15)

In the absence of any further comments, the definition
of the like product as described in recital 11 of the
provisional Regulation is confirmed.

D. SAMPLING

(16) No comments concerning the sampling of Taiwanese
exporting producers were received and, therefore, the
conclusions set out in recitals (12) to (18) of the provi-
sional Regulation are hereby confirmed.

E. DUMPING

1. Normal value

(17)

requested the exclusion of

Following the adoption of provisional measures, one
the
exporting producer
selling, general and administrative expenses (SG and A)
of its related company in the domestic market from the
total SG and 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 and A costs and merely became involved, tempor-
arily, with sales of the product concerned to help it
improve its financial situation. The exporting producer
claimed that almost all SG and A expenses of its related
company were unrelated to the sales of the product
concerned. It also requested the Commission to disre-
gard completely,
the
domestic sales of the related company for the same
reasons.

the dumping calculations,

for

(18)

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

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(19)

(20)

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

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

between 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.

2. Export price

(26) One exporting producer claimed that the Commission
had not taken into account in the dumping calculations
certain changes in packing types of
its export sales
which were made during the verification visit.

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

3. Comparison

(22)

(23)

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 inap-
propriate 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.

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 compar-
ison 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 produ-
cers 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,
it 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

(27)

(28)

(29)

claim was

This
concerned were modified.

accepted and the packing types

4. Dumping margins

Two exporting producers claimed that the Commission
should not have established the dumping margins on the
basis of a comparison by product type of the weighted
average normal value with the prices of all individual
export transactions as they considered the Commission's
reasoning for having recourse to this method insuffi-
cient. Although the 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 there-
fore 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.

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 impractic-
able 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.

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(32)

(33)

(30)

regions or

In order to use a comparison of a weighted average
normal value to prices of all individual export transac-
tions 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 signifi-
time
cantly among different purchasers,
periods and that the use of the other two comparison
methods, specified in Article 2(11) of the basic Regula-
tion, 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
in prices
alleged was the result of a worldwide fall
including normal values.
the
decline in export prices constituted a pattern for two
reasons: 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 worldwide trends in prices including normal values,
this was considered irrelevant as the 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.

It was considered that

The same two exporting producers referred to the Panel
and the Appellate Body reports in the Indian bedlinen
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 transac-
tions.

a

far as

‘zeroing’

comparison of

In any event, as

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
present investigation. The DSB has not adopted any
recommendation concerning
a
weighted average normal value to all individual export
is
transactions.
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
type
weighted average of export prices by product
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 to all
individual export transac-
tions would become redundant. Furthermore, in a case
of targeted dumping, ‘zeroing’ allows to avoid that posi-
tive dumping margins on dumped sales are disguised by
negative dumping margins. Therefore, the claim that
is not allowed when comparing a weighted
‘zeroing’
individual export transac-
average normal value to all
tions cannot be accepted.

(31)

In relation to the requirement to demonstrate that only a
comparison of a weighted average normal value to
prices of all individual export transactions will reflect the
full degree of dumping, it is appropriate to note that the
application of
this methodology gave a significantly
higher dumping margin than a comparison of 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 investigation
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 consti-
tuted a very predatory form of dumping.

(34) Dumping margins were established as set out in recitals
28 to 33 of 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
investigated exporting producers
included in the sample.

all

(35)

Following changes to the calculations in accordance with
the findings noted above, the dumping margins of the
investigated companies were revised slightly. This revi-
sion 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
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:

included in the sample pursuant

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— Auvistar Industry Co.

— Princo Corporation

— Prodisc Technology Inc.

— Ritek Corporation

— Unidisc Technology Co.

— Cooperating exporting producers
not in the sample

— Non-cooperating exporting producers

17,7 %

29,9 %

17,7 %

17,7 %

17,7 %

19,2 %

38,5 %.

F. COMMUNITY INDUSTRY

(36)

In the absence of any new information on the
Community
as
described in recitals 35 to 38 of the provisional Regula-
tion are confirmed.

the provisional

industry,

findings

G. INJURY

1. Community consumption

(37)

In the absence of any new information, the provisional
findings concerning the Community consumption as
described in recital 40 of the provisional Regulation are
confirmed.

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

(39) A number of parties questioned whether packaging had
been properly taken into account for the price undercut-
ting calculations. One specific claim, that the Taiwanese
exporting producers offer a wider choice of packaging
than the Community industry, is addressed under point
3(a) ‘Cost of production and profitability’ of the Section
‘G. Injury’ of this Regulation.

(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 char-
acteristics (in terms of
type of data stored, storage
capacity, reflective layer and whether the CD-R was
printed or not) as well as having identical packaging.

(41)

(42)

(43)

claimed

imported

that CD-Rs

into the
It was
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.

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
branded product they may be inclined to choose it when
prices are the same.

Community producers sell both branded and 'unbran-
ded' 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 specifica-
tion. Products marketed under a brand name, which the
consumer would consider as Community-based, were
frequently found to be manufactured 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 44 to 47 of the provisional
Regulation, are confirmed.

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 provisional Regulation did not
provide sufficient explanation on the effect of packaging
on the cost of production.

(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 could be distinguished. They are ranked
according to increasing average cost of production
during the IP with the figure between brackets indicating
the cost differences in an indexed form. Contrary to the
claim that the Taiwanese exporting producers offer a
choice of packaging than the Community
wider
industry, it is confirmed that the same types of pack-
aging 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.

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(47)

(48)

(49)

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.

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.

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
of
registered music-CD's. A more recent
phenomenon is the slim case (174) which differs from

sales of

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.

(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
for one producer of
the Community industry. That
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 EUR '000

Index

Productivity
CD's per employee

Index

1997

427

100

25,0

100

1998

1999

2000 (= IP)

623

146

27,7

111

877

205

31,5

126

1 037

243

30,7

123

45 300

137 500

240 000

311 200

100

304

530

687

(51)

The average wage cost per employee increased by 23 %
over the period considered, in line with normal indexa-
tion 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.

(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)

volume of

low-priced imports

Referring to the provisional Regulation, it is recalled that
from Taiwan
the
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 considerably more from the
favourable evolution of Community demand for CD-Rs
than the Community industry in terms of volume of
sales and market share.

(1) Basic index = 100

(54)

(55)

(56)

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
factors were found to affect
domestic prices.

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 develop-
ments over the period considered. However, these devel-
opments 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 period considered,
the average sales
prices of the Community industry dropped considerably.

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.

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

(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

(60)

(61)

(62)

1. Effect of the dumped imports

It was alleged that the absence of sufficient growth in
terms of production, sales and market share of
the
Community industry should not be attributed to Taiwa-
nese 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.

It should be recalled that
the Community industry's
capacity utilisation declined from 91,8 % in 1999 to
86,3 % in the IP. Furthermore, as mentioned in recital
55 of the provisional Regulation, stocks increased signif-
icantly towards the end of 1999 and to an even greater
extent towards the end of the IP. During the IP, produc-
tion 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 utilisa-
tion rate cannot have caused the lack of growth of the
Community industry.

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
downward pressure on prices was the result of
the
In this
existing world-wide production over-capacity.
context it was claimed that virtually no recent additional
investments in CD-R production capacity were made,
given the extremely low price levels.

(63)

Interested parties did not provide
evidence
supporting the allegation that there were one or more
reference worldwide sales prices for CD-Rs. In assessing
this allegation, it should also be noted that the invest-
igation showed that depending on the export market

any

CD-Rs could be sold under one form of packaging rather
than another. As stated under recitals 39 to 44 of this
Regulation, 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 the destination market. It follows
that without details concerning the mix of product types
of CD-Rs per destination market, no meaningful price
analysis can be made worldwide. Moreover, the import
price 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.

(64) As mentioned in recital 58 of

this Regulation,

the
Community industry significantly reduced its invest-
ments due to the deterioration of sales prices on the
Community market.
In contrast, Taiwanese exporting
producers which operated on a worldwide basis
continued to expand their production facilities notwith-
standing 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 produ-
if anything they have themselves
cers suggests, that,
contributed to any over-capacity. Furthermore,
the
increase in Taiwanese capacity implies that the claim
concerning the absence of investments in CD-Rs produc-
tion capacity is not founded.

(65)

Based on these facts and considerations,
claims are rejected.

the above

2. Imports of CD-Rs from other countries

(66)

(67)

imports from other countries
The market share of
decreased from 78,8 % to 21,3 % over
the period
considered. Japan and Singapore are the largest expor-
ters to the Community with market shares of 9,5 % and
2,7 % respectively during the IP.

It was observed that the Japanese import price into the
Community decreased more sharply over the period
considered than the Taiwanese price. The Japanese
import price, which was up to 53 % above the Taiwa-
nese import price in the period 1997 to 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.

18.6.2002

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Official Journal of the European Communities

L 160/9

(68)

(69)

(70)

(71)

(72)

is recalled that

Japanese prices have always been
It
significantly higher than those of Taiwanese exporting
producers over the period considered. Although the
quantities
imported from Japan increased from 53
million CD-Rs to 192 million CD-Rs over the period
the
Japanese market
considered,
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

Exports from Taiwan to Japan reached 87 million CD-Rs
during the IP and were made at an average price of
EUR 0,42 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.

entered

imported

from Singapore

CD-R's
the
Community at prices lower than the Taiwanese imports,
however their market share dropped from 14,2 % to
2,7 % over the period considered. The information avail-
able also indicates that one CD-R producer dominates
the Singaporean market in terms of domestic output and
exports to the Community and that this company is
related to 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.

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
imports on the
and the price
Community market,
Japanese
imports cannot have contributed more than insignifi-
cantly to the downward pressure on the Community
market.

is considered that

level of

Japanese

it

3. Economies of scale

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

the larger average size of

(73)

(74)

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 either Germany, Switzerland or Japan and
are of a comparable size. Taiwanese exporting producers
on 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.

for

It is, however, worth mentioning that the determining
factor for the cost of production is the number of CD-Rs
that can be produced by a given production line within
a certain time period. The acquisition cost of the machi-
nery remained fairly stable over the period considered,
but the performance increased on average 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.

(75) Within a given company it was typical to encounter
different generations of machinery with the new invest-
ments 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
the
exporting producers
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.

than for

(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 manu-
facturing 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
lower manufacturing cost per CD-R would exist, this
could not justify the dumping behaviour of the Taiwa-
nese exporters. The alleged economies of scales therefore
do not alter the causal link between dumped imported
Taiwanese CD-R's and the injury suffered by the
Community industry.

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Official Journal of the European Communities

18.6.2002

4. Conclusion on causation

(78)

In conclusion, it is confirmed that the material injury of
the Community industry was caused by the dumped
imports concerned. The material injury is characterised
by the fact that the Community industry was prevented
from participating in the market growth, that the invest-
ment 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
average by 29 % by Taiwanese low-priced dumped
imports, that it suffered financial
losses during the IP
and had difficulties in raising additional funding.

(79) No further claims were made with respect to the impact
of the factors discussed in recitals 77 to 94 of the
provisional Regulation. Therefore,
it is concluded that
the effect of the development of Community consump-
tion, the imports from other third countries, the export
activity of the Community industry, the purchases of
CD-Rs from third countries by the Community industry
and the adaptation of high speed technology, on the
Community industry's negative developments in terms
sales prices,
of capacity utilisation,
market share, profitability, investments, return on invest-
ment and the ability to raise capital was practically
non-existent.

stock building,

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
injury suffered by the
Taiwan and the material
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

not responsible for the downward pressure on 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 volume and decreasing
prices of imports of CD-Rs originating in Taiwan caused
a downward effect on the Community market prices.
trading
The investigation showed that
margin made by the cooperating importers based on
lower prices of CD-Rs did not yield sufficient coverage
of overhead costs, leading to losses during the IP. More-
over, the decrease of market prices occurred at such a
pace that importers were faced with rapid value deteri-
oration of goods in transit, creating a situation in which
the purchase price occasionally exceeded the eventual
sales price.

the normal

(83)

(84)

(85)

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

effective

trade

the above,

findings as
In view of
described in recitals 101 and 102 of the provisional
Regulation are confirmed.

the provisional

3. Interest of users and consumers

and consumers,

In the absence of any new information on the interest of
users
as
described in recitals 103 to 105 of the provisional Regu-
lation are confirmed.

the provisional

findings

4. Conclusion on Community interest

(86)

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

J. DEFINITIVE ANTI-DUMPING MEASURES

2. Interest of importers

1. Injury elimination level

(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 are

(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.

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Official Journal of the European Communities

L 160/11

(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.

Auvistar Industry Co. Ltd

Digital Storage Technology Co.

Gigastore Corporation

Lead Data Inc.

Megamedia Corporation

Nan Ya Plastics Corporation

Postech Corporation

Princo Corporation

Prodisc Technology Inc.

Ritek Corporation

Unidisc Technology Inc.

All other companies

19,2 %

17,7 %

19,2 %

19,2 %

19,2 %

19,2 %

19,2 %

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 originating in
the country concerned and produced by the companies and thus by the specific legal entities
mentioned. The imported product produced by any other company not specifically mentioned in the
operative part of this Regulation with its name and address,
including entities related to those
specifically mentioned, cannot benefit from these rates and shall be subject to the duty rate
applicable to ‘all other companies’.

(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 the Commission (1) forthwith with all relevant information,
in
particular any modification in the company's activities linked to production, domestic and export
sales associated with e.g. that name change or that change in the production and sales entities. The
Commission, if appropriate, will, after consulting the Advisory Committee, amend this Regulation
accordingly by updating the list of companies benefiting from individual duty rates.

(1) European Commission

Directorate-General Trade
Directorate B
B-1049 Brussels.

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Official Journal of the European Communities

18.6.2002

(92)

(93)

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. However, in order to ensure equal 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

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

HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed on imports of recordable compact disks (CD-Rs),
currently classifiable 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-at-Community-frontier price, before duty, for

2.
products produced by the following companies shall be as follows:

Country

Company

Rate of duty

TARIC additional code

Taiwan

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

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

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

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

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

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
Road, 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 %

17,7 %

19,2 %

19,2 %

19,2 %

19,2 %

19,2 %

19,2 %

A298

A299

A300

A301

A302

A303

A361

A304

29,9 %

A305

17,7 %

A306

17,7 %

17,7 %

38,5 %

A307

A308

A999

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Official Journal of the European Communities

L 160/13

3.

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

Article 2

Where any new exporting producer in Taiwan provides sufficient evidence to the Commission that:
— 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,

— 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,

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.

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.

Article 3

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

Article 4

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

Done at Luxembourg, 13 June 2002.

For the Council

The President

M. RAJOY BREY