Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain tube and pipe fittings, of iron or steel originating in the Czech Republic, Malaysia, Russia, the Republic of Korea and Slovakia
Date: 2002-08-02
Institutions: European Commission
Subjects: anti-dumping duty, dumping, import, originating product, piping, third country

31.12.2002

EN

Official Journal of the European Communities

C 331 E/115

for a Council Regulation imposing a definitive anti-dumping duty and collecting
Proposal
definitively the provisional duty imposed on imports of certain tube and pipe fittings, of iron
or steel originating in the Czech Republic, Malaysia, Russia, the Republic of Korea and Slovakia

(2002/C 331 E/24)

COM(2002) 447 final

(Submitted by the Commission on 2 August 2002)

EXPLANATORY MEMORANDUM

On 1 June 2001, the Commission opened an anti-dumping investigation with regard to imports into the
Community of certain tube and pipe fittings, of iron or steel originating in the Czech Republic, Malaysia,
Russia, the Republic of Korea and Slovakia.

The investigation revealed the existence of injurious dumping and consequently the Commission, by
It also
Regulation (EC) No 358/2002,
accepted an undertaking offered by an exporting producer in Slovakia.

imposed provisional anti-dumping duties on these imports.

The attached proposal for a Council Regulation is based on the definitive findings on dumping, injury,
causation and Community interest which confirmed the provisional findings.

It is therefore proposed that the Council adopt the attached proposal for a Regulation which should be
published in the Official Journal no later than 27 August 2002.

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), 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 358/2002 (2)
(the ‘provisional Regulation’) imposed a provisional anti-
dumping duty on imports of certain tube and pipe
falling within CN codes
fittings, of
ex 7307 93 11,
ex 7307 99 30 and
ex 7307 99 90, originating
in the Czech Republic,
Malaysia, Russia, the Republic of Korea and Slovakia.

steel
ex 7307 93 19,

iron or

(1) OJ L 56, 6.3.1996, p. 1. As last amended by Regulation (EC) No

2238/2000 (OJ L 257, 11.10.2000, p. 2).

(2) OJ L 56, 27.2.2002, p. 4.

(2) It is recalled that the investigation period of dumping and
injury covered the period from 1 April 2000 to 31 March
2001 (‘IP’). The examination of trends relevant for the
injury analysis covered the period from 1 January 1996
to 31 March 2001 (‘period under consideration’).

B. SUBSEQUENT PROCEDURE

(3) Following the imposition of provisional anti-dumping
duties on imports of certain tube and pipe fittings orig-
inating in the Czech Republic, Malaysia, Russia,
the
Republic of Korea and Slovakia, some interested parties
submitted comments in writing. The parties who so
requested were also granted an opportunity to be heard
orally.

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

(5) All parties were informed of

the essential

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 disclosure.

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(6) The oral and written comments submitted by the parties
were considered, and, where appropriate, the provisional
findings have been modified accordingly.

F. INJURY

1. Community consumption

C. PRODUCT CONCERNED AND LIKE PRODUCT

(7) In the absence of any comments, the product description
and the definition of the like product as set out in recitals
9 to 12 of the provisional Regulation are confirmed.

D. DUMPING

1. General methodology

(8) In

of

the

absence

general
methodology for establishing the dumping margins as
set out in recitals 15 to 28 of the provisional Regulation
is confirmed.

comments,

any

the

2. Dumping margins

(9) In the absence of any comments, the determination of the
normal value, the export price and the comparison for the
Czech Republic, Malaysia, Republic of Korea, Slovakia and
the determination of
the market economy status and
analogue country for Russia, as described in recitals 29
to 60 of the provisional Regulation are confirmed.

(10) The

definitive

a
dumping margins,
percentage of the CIF import price at the Community
border, are confirmed as follows:

expressed

as

Country

Company

Dumping margin

Czech Republic

Mavet a.s., Trebic

Bovex s.r.o.

Anggerik Laksana
Sdn Bhd

Malaysia

Republic of Korea

Slovakia

Bohus s.r.o.

Zeleziarne
Podbrezova a.s.

Russia

17,6 %

22,4 %

59,2 %

83,9 %

7,7 %

15,0 %

43,3 %

E. COMMUNITY INDUSTRY

(11) In the absence of any comments, the provisional findings
concerning the determination of the Community industry
as described in recitals 61 to 62 of the provisional Regu-
lation are confirmed.

(12) In the absence of any new information, the provisional
findings concerning the Community consumption as
described in recitals 63 to 64 of the provisional Regu-
lation are confirmed.

2. Imports from the countries concerned

Cumulative assessment of the effects of the imports concerned,
volume, market share and prices of the imports concerned

all

the

the

and

in the

found for

not negligible

(13) The provisional Regulation concluded that the imports
concerned should be
countries
originating
in the
assessed cumulatively since the criteria set out
Indeed,
Article 3(4) of the basic Regulation were met.
the dumping margins
countries
concerned were more than de minimis, the volume of
imports were
cumulative
assessment was considered appropriate in view of the
conditions of competition both between the imports
and between the imports and the like Community
product. These similar conditions of competition were
evidenced by the fact that the imported TPFs and those
of the Community industry were alike and distributed via
the
commercial
conditions. Moreover all import volumes were substantial
and resulting in significant market shares, which increased
between 1996 and the IP, and were made at prices
significantly undercutting the prices of the Community
industry thus
the
Community industry's prices.

leading to a price depression of

channels under

similar

same

trade

(14) In the absence of any comments under these headings, the
provisional findings as described in recitals 65 to 67 of
the provisional Regulation are confirmed.

Price undercutting

(15) One

Slovak

producer

exporting

questioned

the
methodology used by the Commission for the calculation
of
the price undercutting margins. This relates more
specifically to the method of the so called ‘zeroing’, by
which the positive margins for the models that are over-
cutting are disregarded. This argument is based on the
conclusions reached by the WTO Appellate Body in the
Bed Linen Case (1) by which, on the facts of the case
concerned, the practice of zeroing when establishing the
existence of margins of dumping, which in that case was
established by a comparison of
the weighted average
normal value with the weighted average export price as
established by the Commission, was found to be incon-
sistent with the Article 2.4.2 of the WTO Anti-Dumping
Agreement.

(1) European Communities — Anti-dumping duties on imports of

cotton-type bed linen from India,WT/DS/AB/R, 1.3.2001.

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(16) Accordingly, it should be noted that the WTO Appellate
Body in any event exclusively examined the practice of
‘zeroing’ when used to establish the existence of dumping
margins. In addition, the WTO Anti-dumping Agreement
does not set out any methodological requirements for the
calculation of price undercutting.

— Russia: 26 %

— Republic of Korea: 23 %

— Slovakia: from 15 to 36 %.

(17) In any event, in the current case, in view of the very few
the
for which no undercutting was
models
application of the ‘zeroing’ methodology does not lead
to significantly different results, the difference between
applying zeroing or not amounting to less than 1 %. In
other words the undercutting margins would remain
applied. The
significant
argument had therefore to be rejected.

even if no zeroing was

found,

(18) The Community industry argued that no adjustment for
level of trade should be made in order to establish the
price undercutting margin.
Indeed, both the exporting
producers and the Community industry supply the same
category of customers, and therefore act on the same level
of trade. It was further claimed that consequently only an
adjustment covering customs clearance cost was justified.

the

fact

(19) A further analysis of the information available established
that both the Community industry and the exporting
producers generally supply the same type of customers
i.e. wholesalers. This was also
in the Community,
supported by the
co-operating
three
that
unrelated importers, whose activity is the one of whol-
esalers, were supplied by both the Community industry
and
countries
concerned. The argument was therefore accepted and
the undercutting margins
revised accordingly. The
revised adjustment was limited to an amount covering
exclusively the customs clearance costs, on the basis of
the information provided by the cooperating unrelated
importers.

exporting producers

from the

the

(20) The Community industry further questioned the level of
the undercutting margin calculated for one of the Slovak
exporting producers.
this level of
undercutting was inconsistent with the average price
level as given by international trade statistics as well as
market information.

It was argued that

(21) The calculations of the price undercutting margins were
accordingly reviewed, and a clerical error was found in
the calculation of the export price used for the estab-
lishment of this exporting producer’s margin of under-
cutting. The margin was therefore revised.

(22) Taking the above into consideration, the definitive revised
weighted average price undercutting margins found per
country, expressed as a percentage of the Community
industry prices, are as follows:

— Czech Republic: from 19 % to 21 %

— Malaysia: from 52 % to 72 %

3. Situation of the Community industry

(23) It is recalled that the introduction of the measures against
China, Croatia and Thailand had a positive impact on the
economic situation of the Community industry. Most of
the injury indicators showed a positive development
between 1996 and 1998. Production, capacity utilisation
and sales volume went up, resulting in a gain in market
shares and increasing employment. The profitability
such as profits/losses as a percentage of
indicators
return on investments and cash flow also
turnover,
developed
the
economic situation of the Community industry generally
deteriorated: while production remained relatively stable
and capacity utilisation, employment and wages slightly
increased, crucial indicators such as the volume of sales
and market shares decreased as well as profitability, return
on investments cash flow and prices. On the basis of the
above
regarding productivity,
investments, growth and magnitude of dumping, it was
the
therefore concluded, at a provisional
Community industry suffered material injury.

favourably. However,

and of

findings

1998,

stage,

after

that

the

(24) In the absence of any comments, the facts and figures as
set out in recitals 72 to 87 of the provisional Regulation
are confirmed.

4. Conclusion on injury

(25) In the absence of any further comments on the findings
other than above, the conclusion reached as set out in
recital 88 of the provisional Regulation is confirmed.

G. CAUSATION

(26) In the absence of any new information submitted on
the findings and the conclusion reached as
causation,
set out in recitals 89 to 97 of the provisional Regulation
are confirmed.

H. COMMUNITY INTEREST

(27) In the absence of any new information submitted on the
Community interest,
the findings and the conclusion
reached as set out in recitals 98 to 111 of the provisional
Regulation are confirmed.

I. DEFINITIVE ANTI-DUMPING MEASURES

1. Injury elimination level

(28) Based on the methodology explained in recitals 112 to
115 of the provisional Regulation an injury elimination
level has been calculated for the purposes of establishing
the level of measures to be definitively imposed.

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(29) One exporting producer questioned the level of the profit
margin of 5 % that was used for the purpose of estab-
lishing the non-injurious price of
the Community
industry, claiming it was too high. It also claimed that
this level of profit margin was not sufficiently explained
in the disclosed document.

(30) As to the first claim,

this

since

to the actual

it is recalled that, in view of the
negative impact on the profitability of the Community
industry resulting from the price depressive
effect
caused by the dumped imports, as indicated in recital
71 of the provisional Regulation, the calculation of the
non-injurious price was based on a level of profit that the
Community industry may have reasonably achieved in the
absence of injurious dumping. As explained in the recital
114 of the provisional Regulation, a profit margin of 5 %
level of profit
was deemed reasonable,
corresponds
the
that
Community industry could achieve
in 1997, on a
Community market free of dumped imports. Indeed, at
that time, measures were in place against China, Croatia
and Thailand and the market share of imports from the
countries concerned was still relatively low. Moreover, it
was considered that this profit margin would allow the
Community industry to make the necessary investments.
As to the second claim,
the
Commission explained in sufficient detail in the disclosure
document on which basis it calculated the level of profit
margin used for the non-injurious price, as also explained
in recital (114) of the provisional Regulation. The claims
have therefore to be rejected.

it should be noted that

level of profit

(31) In addition, the same level of profit was also used for the
establishment of
the injury margin in the proceeding
concerning the above mentioned countries, and there is
no reason to believe that significant changes in circum-
stances have occurred since then.

(32) The use of a profit margin of 5 % of turnover for the
therefore

the non-injurious price

is

calculation of
confirmed.

(33) On the basis of the above, the methodology used for
establishing the injury elimination level as described in
recitals 112 to 115 of
the provisional Regulation is
confirmed.

2. Form and level of the duties

(35) In the light of the foregoing and in accordance with
Article 9(4) of the Basic Regulation, a definitive anti-
dumping duty should be imposed in respect of
the
Czech Republic, Malaysia, Russia, the Republic of Korea
and Slovakia. This duty should be imposed at the level of
the dumping margins found, except for the Republic of
Korea, where the injury margin was found to be lower
than the dumping margin.

(36) On the basis of the above, the definitive duties are as

follows:

Country

Company

Czech Republic

All companies

AD Duty

22,4 %

Malaysia

Anggerik Laksana Sdn Bhd

59,2 %

Others

Russia

All companies

Republic of Korea

All companies

Slovakia

All companies

75,0 %

43,3 %

44,0 %

15,0 %

3. Collection of provisional duties

(37) In view of the magnitude of the dumping margins found
and in the light of the level of the injury caused to the
Community industry, it is considered necessary that the
amounts secured by way of the provisional anti-dumping
i.e. Regu-
duty,
lation (EC) No 358/2002,
definitively
should
the rate of the duty definitively imposed.
collected at
Where
than the
provisional duties, only the amounts secured at the level
of the provisional duties should be definitively collected.

imposed by the provisional Regulation,

the definitive duties

are higher

be

Commission (1)

forthwith with

(38) 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

(34) As mentioned above in relation to price undercutting
margins, injury margins were reviewed and amended.

(1) European Commission, DG Trade,

Directorate B, J-79 — 3/35,
B-1049 Brussels.

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4. Undertakings

(39) It is recalled that one exporting producer in Slovakia has
offered a price undertaking in accordance with Article
8(1) of the Basic Regulation. This price undertaking was
accepted in the provisional Regulation.

(40) Subsequent to the imposition of provisional anti-dumping
measures, one exporting producer in the Czech Republic
offered a price undertaking in accordance with Article
8(1) of the Basic Regulation. By doing so, it has agreed
to sell the product concerned at or above price levels
which eliminate the injurious effects of dumping. The
company will also provide the Commission with regular
and detailed information concerning its exports to the
Community, meaning that
the undertaking can be
monitored effectively by the Commission. Furthermore,
the sales structure of
this exporting producer is such
that the Commission considers that the risk of circum-
venting the agreed undertaking is limited.

release for

(41) To further enable the Commission to effectively monitor
the company with its undertaking,
the compliance of
when the request
free circulation is
for
presented to the relevant customs authority, exemption
from the anti-dumping duty shall be conditional on the
presentation of a commercial invoice containing at least
the elements listed in the Annex. This level of information
is also necessary to enable customs authorities to ascertain
with sufficient precision that shipments correspond to the
commercial documents. Where no such invoice
is
presented, or when it does not correspond to the
product presented to customs, the appropriate rate of
anti-dumping duty will instead be payable.

(42) In view of this, the offer of undertaking are therefore
considered acceptable by the Commission and the
company concerned has been informed of the essential
facts,
upon which
acceptance is based.

considerations

obligations

and

and
ex 7307 99 90
7307 99 90*98) and originating in the Czech Republic,
Malaysia, Russia, the Republic of Korea and Slovakia.

7307 99 90*92

(TARIC

codes

2.
The rate of the definitive anti-dumping duty applicable to
the net, free-at-Community-frontier price, before duty, shall be
as follows for the products manufactured by:

Country

Company

Definitive anti-
dumping duty
(%)

TARIC additional
code

Czech Republic

Mavet
Trebic

a.s.,

17,6

Malaysia

All
companies

other

Anggerik
Laksana
Sdn
Bhd, Selangor
Darul Ehsan

All
companies

other

Russia

All companies

Republic of
Korea

All companies

22,4

59,2

75,0

43,3

44,0

A323

A999

A324

A999

Slovakia

All companies

15,0

A999

3.
Notwithstanding paragraph 1, the definitive anti-dumping
duty shall not apply to imports released into free circulation in
accordance with Article 2.

Unless otherwise

4.
concerning customs duties shall apply.

specified,

the provisions

in force

(43) It should be noted that in the event of a breach or with-
drawal of the undertaking or a suspected breach, an anti-
dumping duty may be imposed, pursuant to Articles 8(9)
and (10) of the Basic Regulation.

(44) The above undertaking is accepted by the Commission

Decision 2002/. . ./EC of . . . August 2002,

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on
1.
imports of
fittings,
tube and pipe fittings (other than cast
flanges and threaded fittings), of iron or steel (not including
stainless steel), with a greatest external diameter not exceeding
609,6 mm, of a kind used for butt-welding or other purposes,
falling within CN codes
ex 7307 93 11 (TARIC codes
7307 93 11*91 and 7307 93 11*99), ex 7307 93 19 (TARIC
codes 7307 93 19*91 and 7307 19 93*99), ex 7307 99 30
and
(TARIC codes 7307 99 30*92 and 7307 99 30*98)

Article 2

Imports declared for release into free circulation under
1.
the following TARIC additional code which are produced and
directly exported (i.e. shipped and invoiced) by the company
below to a company in the Community acting as an importer
from the anti-dumping duty imposed by
shall be exempt
imported in
Article 1 provided that
conformity with paragraph 2 of this article.

such imports are

Country

Company

TARIC additional
code

Czech
Republic

Slovakia

Bovex s.r.o., Hercikova 4, 612 00
Brno

A387

Bohus
976 45 Hronec

s.r.o., Nálepkova

310,

A329

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Imports mentioned in paragraph 1 shall be exempt from

2.
the anti-dumping duty on condition that:

(a) a commercial invoice containing at least the elements listed
in the Annex is presented to Member States' customs auth-
orities upon presentation of the declaration for release into
free circulation; and

CN codes ex 7307 93 11, ex 7307 93 19, ex 7307 99 30 and
ex 7307 99 90 and originating in the Czech Republic,
Malaysia, Russia, the Republic of Korea and Slovakia shall be
the duty definitively
definitively collected at
than the
imposed. Where the definitive duties are higher
provisional duties, only the amounts secured at the level of
the provisional duties should be definitively collected.

the rate of

(b) the goods declared and presented to customs correspond
precisely to the description on the commercial invoice.

Article 3

Article 4

This Regulation shall enter into force on the day following that
of
the European
Communities.

its publication in the Official

Journal of

1.
Amounts secured by way of provisional anti-dumping
duties pursuant to Regulation (EC) No 358/2002 on imports
of certain tube and pipe fittings, of iron or steel falling within

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

ANNEX

The following elements shall be indicated in the commercial invoice accompanying the company’s sales of tube and pipe
fittings to the Community which are subject to the undertaking.

1. The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING’

2. The name of the company mentioned in Article 2(1) issuing the commercial invoice

3. The commercial invoice number

4. The date of issue of the commercial invoice

5. The TARIC additional code under which the goods on the invoice are to be customs cleared at the Community

frontier

6. The exact description of the goods, including:

— Product Code Number (PCN),

— description of the goods corresponding to the PCN (i.e ‘PCN 1 . . .’, ‘PCN 2 . . .’),

— company product code number (CPC) (if applicable),

— CN-code,

— quantity (to be given in tonnes and pieces).

7. The description of the terms of sale, including:

— price per tonne and per piece,

— the applicable payment terms,

— the applicable delivery terms,

— total discounts and rebates.

8. Name of the company acting as an importer to which the invoice is issued directly by the company

9. The name of the official of the company that has issued the undertaking invoice and the following signed declaration:

‘I, the undersigned, certify that the sale for direct export by [company name] to the European Community of the
goods covered by this invoice is being made within the scope and under the terms of the undertaking offered by
[company name], and accepted by the European Commission through [Decision 2002/. . ./EC]. I declare that the
information provided in this invoice is complete and correct.’