Council Regulation (EC) No 1763/2002 of 30 September 2002 amending Regulation (EC) No 1950/97 imposing definitive anti-dumping measures on imports of sacks and bags made of polyethylene or polypropylene originating, inter alia, in India
Date: 2002-09-30
Institutions: Council of the European Union
Subjects: India, anti-dumping measure, import, import policy, originating product, packaging product, plastics

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Official Journal of the European Communities

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1763/2002

of 30 September 2002

amending Regulation (EC) No 1950/97 imposing definitive anti-dumping measures on imports of
sacks and bags made of polyethylene or polypropylene originating, inter alia, in India

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) (the
basic Regulation), and in particular Article 11(3) thereof,

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

Whereas:

A. PROCEDURE

1. Previous investigations

(1)

(2)

(3)

By Regulation (EC) No 1950/97 (2), the Council imposed
definitive anti-dumping measures on certain imports of
sacks and bags made of polyethylene and polypropylene
(hereinafter referred to as the product concerned) origin-
ating,

inter alia,

in India.

This Regulation was subsequently amended by Regula-
tions (EC) No 96/1999 (3) and (EC) No 2744/2000 (4)
with the purpose of determining dumping margins for
new exporters as foreseen in Article 11(4) of the basic
Regulation.

2. Present investigation

(i) Initiation

The European Association for Textile Polyolefins (herein-
after referred to as the applicant) lodged a request for an
interim review, limited to the aspects of dumping for the
product concerned originating in India, pursuant
to
Article 11(3) of the basic Regulation, on behalf of Euro-

(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 276, 9.10.1997, p. 1.
(3) OJ L 11, 16.1.1999, p. 1.
(4) OJ L 316, 15.12.2000, p. 67.

(4)

(5)

(6)

(7)

(8)

pean producers representing a major proportion, in this
case 65 %, of the total Community production of the
product concerned.

Having determined, after consultation of the Advisory
Committee, that sufficient evidence existed for the initia-
tion of an interim review, the Commission published a
notice of initiation in the Official Journal of the European
Communities (5) and commenced the investigation.

(ii) Investigation and sampling

The Commission officially advised the exporting produ-
cers known to be concerned, the representatives of the
originating country, and the applicant, of the initiation
of the review investigation, and gave all parties directly
concerned the opportunity to make their views known
in writing and to request a hearing.

A number of exporting producers in the countries
concerned, as well as Community importers made their
views known in writing. All parties who so requested
were granted the opportunity to be heard.

The Commission has determined that the number of
exporting producers of the product concerned in India
has increased significantly since the original
invest-
igation. It has therefore been decided to apply sampling
techniques in accordance with Article 17 of the basic
Regulation.

In order to enable the Commission to select a sample,
exporting producers and representatives acting on their
behalf were requested to make themselves known within
15 days of the date of publication of the notice of
initiation and to provide basic information on their
production, domestic and export sales. The authorities
of the country concerned were also contacted by the
Commission with a request to assist it in the selection of
the sample.

(5) OJ C 26, 26.1.2001, p. 2.

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(9)

(10)

A total of 45 companies replied to the sampling ques-
tionnaire within the time limits. Of
those, 22 had
production and sales to the Community of the product
concerned during the period between 1 December 1999
and 30 November 2000 (hereinafter referred to as the
investigation period or IP).

(17)

The choice of the sample was made in consultation with
the representatives of the companies and the authorities
of the country concerned. An agreement was reached on
a sample of eight companies covering more than 80 %
of the total exports of the product concerned to the
Community during the IP.

The product concerned is woven sacks and bags of a
kind used for the packaging of goods, not knitted or
crocheted, obtained from a polyethylene or polypropy-
lene strip or the like of woven fabrics, weighing 120 g/
m² or less and originating in India. This product is
currently classifiable within CN codes 6305 32 81,
6305 33 91,
and
ex 3923 29 90.

ex 3923 21 00,

ex 3923 29 10

2. Like product

(11) Nine companies not

selected in the sample have
requested individual examination. In view of the large
number of requests which was even exceeding the
number of companies selected in the sample,
it was
considered that such individual examinations would be
unduly burdensome in the sense of Article 17(3) of the
basic Regulation. Therefore, no such requests could be
granted.

(12)

(13)

The Commission sent questionnaires to the companies
selected in the sample, and carried out verifications at
the premises of the following selected companies in
India:
— Gilt Pack Ltd, Indore,
— Hyderabad Polymers Private Ltd, Hyderabad,
— Kanpur Plastipack Ltd, Kanpur,
— Neo Sack Ltd, Indore,
— Polyspin Private Ltd, Rajapalayam and its related
company Polyspin Exports Ltd, Rajapalayam,

— Pithampur Poly Products Ltd, Indore,
— Shankar Packaging Ltd, Vadodara.

Subsequent to the verification carried out in India, the
Commission collected information from importers of
the product concerned in the Community. The following
importers were also visited:
— Cojubel NV, Lendelede, Belgium,
— Eurea BVBA, Antwerp, Belgium,
— Rova NV, Oudenaarde, Belgium,
— Texbern SARL, Lyon, France,
— Markopulos SA, Athens Greece,
— Alex Pak SA, Athens, Greece.

(18)

It was established that the sacks and bags sold on the
Indian market and the sacks and bags exported from
India to the Community were identical, or closely resem-
bling, in terms of physical characteristics and end-uses.
Therefore, these sacks and bags were considered alike
within the meaning of Article 1(4) of
the basic
Regulation.

C. DUMPING

1. Non-cooperation

(19)

investigation revealed that

The Commission's
four
exporters representing the majority of exports from
India supplied false and misleading information, and in a
number of cases even deliberately forged and manipu-
lated documents. A number of irregularities has been
established including the incorrect reporting of product
types, specifications, export destination, quantities and/
or values on invoices and shipping documents in order
to increase the average export price to non-dumped
levels, the deliberate omission of transactions, or the
presentation of unreliable
information.
Product descriptions, quantities and weights found on
the official documents provided by unrelated importers
and custom authorities were often different from the
ones submitted during the on-the-spot verification and
from the information that had been reported to the
Commission in the questionnaire reply. Evidence was
also received of at least two attempts to persuade impor-
ters to submit manipulated documents to the Commis-
sion.

accounting

(14)

The Commission also collected information from and
visited customs' authorities in the Member States.

(20)

(15) Owing to the complexity of the case and the difficulties
found, the duration of the investigation has taken more
than 12 months.

The non-cooperating exporters have been informed indi-
vidually in detail of the Commissions findings in this
respect. Some of them nevertheless argued that the veri-
fied data for domestic sales and cost of production
should not be disregarded because those irregularities
would relate only to the export data.

B. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

1. Product under consideration

(16)

The product covered by the current review is the same
product as the one under consideration in Regulation
(EC) No 1950/97.

(21) However,

the nature and extent of

the false and
misleading information cast doubt on the integrity of all
the data submitted by the companies, be it
for the
export or domestic market. It has therefore been decided
to entirely disregard all the information provided and
use other information available in respect of these four
companies, in accordance with Article 18 of the basic
Regulation. No individual dumping margin was calcu-
lated for these companies.

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(22)

For another company, whose information on the costs
of production could not be considered entirely reliable,
it was necessary to disregard some of the information
provided and make partial use of
in
accordance with Article 18(1) of the basic Regulation.
Findings were nevertheless mostly based on the informa-
tion provided by the company.

facts available,

(28)

(23)

For the remaining three companies, it was considered
that reasonably accurate findings could be established on
the basis of the information provided, adjusted wherever
necessary in view of the results of the on-the-spot verifi-
cations, in order to arrive at a dumping determination.

The cost of production of each product type sold on the
domestic market, corrected as explained above, was
compared to its net domestic sales price. In cases where
profitable sales of each type represented 80 % or more
of the total sales volume, the normal value was based on
the actual domestic price, calculated as a weighted
average of the prices of all domestic sales of that type
made during the IP,
irrespective of whether all these
sales were profitable or not. In cases where the propor-
tion of profitable sales amounted to less than 80 %, but
at least 10 % of total domestic sales, normal value was
established as a weighted average of the domestic prices
of profitable sales.

2. Normal value

(24) Normal value was established according to Article 2 of
the basic Regulation. Therefore, it was first established
whether the companies' total domestic sales of the like
product were representative in comparison with their
total export sales of
the product concerned to the
Community. In accordance with Article 2(2) of the basic
Regulation, and since the total domestic sales volume
exceeded 5 % of the total export sales volume to the
Community, the domestic sales of the like product were
found to be representative for three of the four compa-
nies for which an individual dumping margin was
calculated.

(25) A similar test was subsequently performed for each of
the product types sold domestically that were identical
or directly comparable to the types sold for export to
the Community. For each product type,
it was estab-
lished that the domestic sales were sufficiently repres-
entative in accordance with Article 2(2) of the basic
Regulation, when the sales volume of that type exceeded
5 % of the sales volume of the identical or comparable
types exported to the Community.

(26) An examination was also made as to whether the
domestic sales of each product type could be regarded as
having been made in the ordinary course of trade, by
establishing the proportion of the profitable sales to
in question.
independent
Domestic sales were considered profitable when the net
sales value was equal or above the calculated cost of
production of each type concerned (hereinafter referred
to as profitable sales).

customers of

type

the

(27) As far as the costs of production are concerned, none of
the companies had an established cost accounting
system. A number of corrections had to be introduced
to the cost allocation methods, which the companies
had elaborated exclusively for the purpose of the present
investigation,
in particular regarding the allocation of
raw material costs, on the basis of the findings of the
on-the-spot verification.

(29)

In cases where the volume of profitable sales of any
product type represented less than 10 % of the total
sales volume, it was considered that this particular type
was sold in insufficient quantities for the domestic price
to provide an appropriate basis for the establishment of
the normal value. This was the case for all but one
product type of one company.

(30)

In the absence of domestic sales made by other produ-
cers in the ordinary course of trade, normal value could
not be established on the basis of prices of other sellers
or producers.

(31) Normal value was therefore constructed in accordance
with Article 2(3) of the basic Regulation, by adding to
the manufacturing cost of the exported types, adjusted
where necessary, a reasonable percentage for selling,
general and administrative costs (hereinafter referred to
as ‘SG&A’) and a reasonable margin of profit.

(32)

For the companies with a representative volume of
domestic sales their own SG&A expenses were used.
One company did not have a representative volume of
domestic sales. For this company the weighted average
of the actual amounts determined for the other three
companies subject to investigation in respect of produc-
tion and sales of the like product in the domestic Indian
market was used, in accordance with Article 2(6)(a) of
the basic Regulation.

(33) None of the cooperating companies had profitable sales
representing 10 % or more of
total domestic sales
volume of the product concerned. In the absence of sales
of the same general category of products from which a
profit rate could have been derived, the Commission
decided to use a profit rate of 5 % according to Article
2(6)(c) of the basic Regulation. This is considered a
conservative estimate and is in line with the findings of
the previous investigations.

3. Export price

(34) All

their

companies made

to the
export
Community directly to independent
In
accordance with Article 2(8) of the basic Regulation,
their export prices were therefore established on the
basis of the prices actually paid or payable by these
independent importers.

sales
importers.

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4. Comparison

(41)

(35)

For the purpose of ensuring a fair comparison between
the normal value and the export price, due allowance in
the form of adjustments was made for differences in
transportation,
loading and ancil-
lary costs, credit cost, commissions and level of trade,
affecting price comparability in accordance with Article
2(10) of the basic Regulation.

insurance, handling,

(42)

(36) All companies claimed adjustments for differences in the
level of trade on the basis that they sell to end-users on
the domestic market and to traders on the export
market.

(37)

(38)

(39)

The investigation showed export prices which were at a
different level of trade than the normal value, and that
there were distinct differences in functions for these
levels of trade as required by Article 2(10)(d) of the basic
Regulation. However, as the existing difference in level
of trade could not be quantified because of the absence
of the relevant levels of trade on the Indian domestic
market, a special adjustment was granted under Article
2(10)(d)(ii). This allowance was 10 % of the gross margin
as used for the construction of the normal values, in the
absence of any other information.

Some companies claimed an adjustment for duty draw-
back under Article (2)(10)(b) of the basic Regulation.
However, none of the companies could demonstrate that
any import charges or indirect taxes were borne by the
like product or by materials physically incorporated
therein, when intended for
consumption in the
exporting country, as required by Article (2)(10)(b) of
the basic Regulation. Therefore, no such adjustment
could be granted.

Some companies claimed an adjustment to the normal
value for alleged differences
in raw material costs
between those used for the production of exported
products and those used for domestic products. The
claimed differences arise, in the case where raw materials
are purchased domestically, either because a producer
can still claim an amount equivalent to drawback when
the products are exported, or because he can obtain an
import licence, endorse it to a domestic supplier and in
exchange for a discount in the raw material price.

(40) However, this kind of mechanism falls under Article
(2)(10)(b) of the basic Regulation and therefore any such
claims should be discussed in the scope of that Article.
Consequently, there is no justification to make an adjust-
ment under Article 2(10)(k). As explained under recital
38 an adjustment under Article 2(10)(b)
is also not
justified.

Several companies claimed that in this review invest-
igation a different methodology was
applied as
compared to the one applied in the investigation which
led to the duty. Their allegation was that the Commis-
sion had requested a more detailed product classi-
in order to compare normal value to export
fication,
price, than in the original

investigation.

This claim cannot be accepted. It is not considered that a
request for a clear, precise and realistic identification of
the different types of product concerned, produced and
sold, constitutes a change in methodology. The invest-
igation has confirmed that the request of the Commis-
sion was relevant, justified and would not constitute an
unduly burdensome requirement for the companies in
question. The number of specifications having an impact
on the cost and market value of the product concerned
required a more detailed product specification than the
investigation. This more
one provided in the original
detailed product description would allow a more precise
comparison between normal value and export price of
clearly defined and identical product types. In fact, when
confronted with the striking discrepancies in terms of
prices and costs within what the companies claimed to
be a same product type, one of these companies has
reconsidered its refusal to report the product types as
requested, and within 24 hours has provided such infor-
mation.

5. Dumping margins

(43)

(44)

(i) Companies with an individual dumping margin

For the companies within the sample for which no use
was made of the provisions of Article 18 of the basic
Regulation (see recital 23) dumping margins were estab-
lished individually on the basis of a comparison of the
weighted average normal value by product type with a
weighted average export price by product type.

Polyspin Exports was found to be related to Polyspin
Private during the investigation period. Both companies
have two directors in common. In view of the close
there
relationship found between these companies,
would be a high risk that the anti-dumping measures
could be circumvented by channelling exports to the
Community through the company with the lower
dumping if two different dumping margins were estab-
lished. It was therefore concluded that only one margin,
based on the weighted average of the dumping margins
found in each company, should be established for the
two companies as was also the case in the original
investigation. The dumping margins are, expressed as a
free-at-Community-frontier
percentage of
price, before duty:

the cif net

— Hyderabad Polymers Pvt Ltd

24,3 %

— Polyspin Export Ltd and Polyspin Private Ltd 17,2 %.

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(45)

For the company in respect of which partial use was
made of the provisions of Article 18 of the basic Regula-
tion (see recital 22), a pattern of export prices which
differ significantly between purchasers and regions was
established. The export prices varied significantly by
the full degree of
region, and by purchaser. Hence,
dumping being practised was not
reflected in the
comparison of a weighted average normal value by
product type with a weighted average export price by
product type. The company argued that the variation
among customers and regions could actually be attrib-
uted to different product types. However, a breakdown
by product type shows a similar range of variation for
the types which are sold in sufficient quantity to allow
for such an analysis. This argument was therefore
rejected. A comparison of individual export prices and
individual normal values for individual transactions, on
the other hand, would have not have been feasible and
consequently would not have reflected the full degree of
dumping due in particular to the lack of a sufficient
number of comparable domestic transactions. Since it
was found that there was a pattern of export prices
which differed significantly between purchasers and
regions, and as neither the weighted average to weighted
the transaction by transaction method
average nor
would have reflected the full degree of dumping, the
dumping margin was established on the basis of a
comparison by product type of the weighted average
individual export
normal value with the prices of all
transactions in accordance with Article 2(11) of
the
basic Regulation. The dumping margin, expressed as a
percentage of
free-at-Community-frontier
price, before duty is:

the cif net

— Pithampur Poly Products Ltd

6,7 %.

(ii) Companies for which no individual margin was calculated

(46)

The dumping margin for companies which submitted
the necessary information requested in Article 17 of the
basic Regulation in due time, which expressed their will-
ingness to cooperate in the sample, and which produced
and exported the product concerned to the Community
during the investigation period, but which were not
selected in the sample and were not examined individ-
ually, has been established on the basis of the weighted
average dumping margin of the companies in the sample
pursuant to Article 9(6) of the basic Regulation. Since,
according to this Article, the margins established in the
circumstances referred to in Article 18 of
the basic
Regulation must be disregarded, the sample now repre-
sents only 20 % of the exports of the product concerned
to the Community during the investigation period by
the companies willing to cooperate. Given the circum-
stances, namely the impossibility of re-constituting a
new and more representative sample, this is still consid-
ered sufficiently representative of the total exports to the

Community. It should also be noted that the companies
which were not chosen for the sample also account for
only 20 % of total Indian exports to the Community (see
recital 10). This weighted average dumping margin was,
expressed as a percentage of
free-at-
the cif net
Community-frontier price before duty, 20,6 %.

(47)

the four companies

the dumping margin established for

For
for which an individual
dumping margin could not be calculated for the reasons
given in recital 20 the Commission made use of the
information available pursuant to Article 18 of the basic
Regulation. The Commission also considered that the
level of
these
companies, relative to that found for the cooperating
companies, should not provide an incentive to non-
cooperation. Accordingly it was decided to apply the
weighted average of the highest dumping margins found
for a number of product types sold in representative
quantities by the companies for which an individual
calculation could be made, that is, 33,5 %. This duty
should also apply to Naviska Packaging, a company
related to Gilt Pack Ltd which changed its name to
Giltpac International
the
investigation period.

India Private Limited after

(48)

The dumping margin for all other non-cooperating
companies was set according to the information avail-
able, at the same level as that for companies under
recital 47. This approach was considered necessary in
view of the high degree of non-cooperation and in order
to avoid the risk of circumvention.

D. PROPOSED AMENDMENT OF THE MEASURES

UNDER REVIEW

(49) According to Article 9(4) of the basic Regulation, the
duties should not exceed the margin of dumping estab-
lished but should be less than the margin if such lesser
duty would be adequate to remove the injury of the
Community industry. Given the fact that this review is
limited to the examination of the dumping aspects, the
level of duties imposed should not be higher than the
injury levels found in the original

investigation.

(50)

Since the injury levels found in the original investigation
are in every case higher than the dumping margins
found in the present review, the level of the duties
should be set at that of the dumping margins found:

— Aditya Bags Ltd

— Big Bags India Pvt Ltd

— Big Bags International Pvt Ltd

— Buildmet Fibres Private Ltd

— Cigfil Limited

— Gilt Pack Ltd and Giltpac International

India Private Ltd

20,6 %

20,6 %

20,6 %

20,6 %

20,6 %

33,5 %

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24,3 %
— Hyderabad Polymers Pvt Ltd
20,6 %
— Innova Polypak Private Ltd
33,5 %
— Kanpur Plastipack Ltd
20,6 %
— M/S Polyweave
20,6 %
— M/S TPI India Limited
33,5 %
— Neo Sack Ltd
— Olive Commercial Co. Ltd
20,6 %
— Polyspin Export Ltd and Polyspin Private Ltd 17,2 %
6,7 %
— Pithampur Poly Products Ltd
20,6 %
— Sangam Cirfab Pvt Ltd
33,5 %
— Shankar Packaging Ltd
20,6 %
— Subham Polymers Ltd
20,6 %
— Superpack Ltd
20,6 %
— Synthetic Fibres (Mysore) Pvt Ltd
20,6 %
— Tulsyan Nec Ltd
20,6 %
— Vijay Chemicals & Plastics Pvt Ltd
20,6 %
— Virgo Polymer Ltd
33,5 %.
— All other companies

E. UNDERTAKINGS

In the light of the provisions of Article 15 of the Agree-
ment on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994 concerning Devel-
oping Country Members, the Commission informed the
cooperating exporting producers that it was ready to
remedies,
constructive
explore
including any offer of price undertakings.

the possibilities of

Fourteen Indian exporting-producers offered price
undertakings in accordance with Article 8(1) of the basic
Regulation.

larly complex and difficult to enforce, in particular given
the poor record of cooperation shown in the sampling
exercise.

(54) Moreover,

in a number of cases the product classi-
fication proposed was not sufficiently detailed to allow a
proper monitoring, or the price level proposed did not
allow for the removal of the injurious dumping.

(55)

In addition, most of the exporters which offered under-
takings also sell similar products not covered by the
present investigation (such as jumbo bags) to by and
large the same customers
in the Community and
perform different types of job work for other Indian
companies. The potential for circumvention of the meas-
ures through price compensation and export channelling
is therefore considered high.

(56)

In view of the above, it was concluded that any under-
takings would present both considerable monitoring and
enforcement difficulties and unacceptable risks. There-
fore, it was not considered appropriate to accept any of
the undertakings offered.

F. DISCLOSURE AND DURATION OF THE MEASURES

(57)

The companies concerned were informed of the facts
and considerations on the basis of which it is intended
to propose the amendment of the Regulation (EC) No
1950/97 and were given the opportunity to comment.
Comments were received and taken into consideration
where appropriate.

(58)

The review carried out does not affect the date on which
Regulation (EC) No 1950/97 will expire pursuant to
Article 11(2) of the basic Regulation,

numerous

The investigation has shown that the product concerned
comprises
differentiating
and
features, which can substantially affect sales prices.
These features would make any system of undertaking
prices (in the form of minimum import prices) particu-

evolving

HAS ADOPTED THIS REGULATION:

(51)

(52)

(53)

Article 1

In Regulation (EC) No 1950/97, Article 1(2)(a) is replaced by the following:

‘(a) 33,5 % for sacks and bags originating in India (TARIC additional code 8900) with the exception of
imports manufactured by the following companies, which shall be subject to the following rates of
duty:

Company

Rate of duty
(%)

TARIC additional code

Aditya Bags Ltd

Big Bags India Pvt Ltd

Big Bags International Pvt Ltd

Buildmet Fibres Private Ltd

Cigfil Limited

Gilt Pack Ltd and Giltpac International India Private Ltd

Hyderabad Polymers Pvt Ltd

Innova Polypak Private Ltd

20,6

20,6

20,6

20,6

20,6

33,5

24,3

20,6

8424

8424

8424

8944

8424

8945

8106

8424

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Company

Rate of duty
(%)

TARIC additional code

Kanpur Plastipack Ltd

M/S Polyweave

M/S TPI India Limited

Neo Sack Ltd

Olive Commercial Co. Ltd

Polyspin Export Ltd and Polyspin Private Ltd

Pithampur Poly Products Ltd

Sangam Cirfab Pvt Ltd

Shankar Packaging Ltd

Subham Polymers Ltd

Superpack Ltd

Synthetic Fibres (Mysore) Pvt Ltd

Tulsyan Nec Ltd

Vijay Chemicals & Plastics Pvt Ltd

Virgo Polymer Ltd

33,5

20,6

20,6

33,5

20,6

17,2

6,7

20,6

33,5

20,6

20,6

20,6

20,6

20,6

20,6

8946

8424

8424

8947

8424

8948

8155

8156

8949

8424

8424

8157

8424

8424

8424’

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

Article 2

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

Done at Brussels, 30 September 2002.

For the Council

The President

P. S. MØLLER