Council Regulation (EC) No 1799/2002 of 8 October 2002 imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in Belarus
Date: 2002-10-08
Institutions: Council of the European Union
Subjects: Belarus, anti-dumping duty, import, man-made fibre, originating product

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(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1799/2002

of 8 October 2002

imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in Belarus

THE COUNCIL OF THE EUROPEAN UNION,

2000 (5)) as well as South Korea and India (Council
Regulation (EC) No 2852/2000 (6)).

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) (herein-
after referred to as ‘the basic Regulation’), and in particular
Article 11(2) and (3) and Article 13 thereof,

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

Whereas:

A. PROCEDURE

1. Previous investigations

(1)

In July 1996, by Regulation (EC) No 1490/96 (2), a
definitive anti-dumping duty was imposed on imports of
polyester staple fibre (PSF) originating in Belarus.
In
1997, by Regulation (EC) No 2513/97 (3), the measures
were extended to cover imports of polyester filament
tow (PFT), originating in Belarus, which were made in
circumvention of the original measures.

2. Investigations concerning other countries

(2)

There are definitive anti-dumping measures currently in
force on imports of PSF originating in Taiwan (Council
Regulation (EC) No 1728/1999 (4)), Australia, Indonesia
and Thailand (Council Regulation (EC) No 1522/

(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 189, 30.7.1996, p. 13.
(3) OJ L 346, 17.12.1997, p. 1.
(4) OJ L 204, 4.8.1999, p. 3.

(3)

By Council Regulation (EC) No 902/2001 (7) definitive
countervailing duties were imposed on imports of PSF
originating in Australia and Indonesia.

3. Present investigation

3.1. Requests for an interim and an expiry review

(4)

(5)

(6)

In October 1999, the Commission received a request to
open an interim review of the definitive anti-dumping
duties in force (Regulation (EC) No 1490/96) with
regard to imports into the Community of PSF origin-
ating in Belarus. This request was followed by a request
to open an expiry review on 27 April 2001.

The request for an interim review was lodged by the sole
exporter in Belarus, Khimvolokno Industrial Group VSV
Trading Co. (‘Khimvolokno’). The request for the interim
review was based on the prima facie evidence, provided
by the applicant,
inter alia the
domestic prices in the analogue country, on the basis of
which the measures were established, have changed and
that these changes are of lasting nature.

that circumstances,

The request for expiry review was lodged by the Inter-
national Rayon and Synthetic Fibres Committee (‘CIRFS’)
acting on behalf of Community producers representing a
major proportion of the total Community production of
PSF. The request for the expiry review was based on the
grounds that the expiry of measures would be likely to
result in a recurrence of dumping and injury to the
Community industry.

(5) OJ L 175, 14.7.2000, p. 10.
(6) OJ L 332, 28.12.2000, p. 17.
(7) OJ L 127, 9.5.2001, p. 20.

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(7)

(8)

(9)

(10)

(12)

(13)

3.2. Notices of initiation

The Commission, having determined that
sufficient
evidence existed for the initiation of an interim review,
the Advisory Committee,
and after consultation of
announced by a notice (‘notice of initiation’) published
in the Official Journal of the European Communities (1) the
initiation of an investigation pursuant to Article 11(3) of
the basic Regulation with regard to imports into the
limited in
Community of PSF originating in Belarus,
scope to the examination of dumping.

announced by a notice of

The Commission, after consultation of
the Advisory
initiation
Committee,
published in the Official Journal of the European Communi-
ties (2) the initiation of an investigation with regard to
imports into the Community of PSF originating in
Belarus in accordance with Article 11(2) of the basic
Regulation.

3.3. Period of investigation

The investigation period for dumping for the interim
review is 1 October 1999 to 30 September 2000
(‘interim IP’). The investigation period for dumping for
the expiry review is 1 July 2000 to 30 June 2001
(‘expiry IP’). The period considered for the assessment of
the situation of the Community industry, as applied in
the expiry review, covered the period from 1 January
1997 to the end of the expiry IP (‘the period consid-
ered’).

Given the partial overlap of the interim IP and the expiry
IP, it was considered appropriate for reasons of adminis-
trative efficiency to merge the two investigations into
one investigation.

4. Parties concerned by the investigation

the

advised

The Commission officially
applicant
exporting producer in Belarus, CIRFS and the applicant
Community producers, exporting producers and impor-
ters known to be concerned,
the
exporting country and their representatives, Community
users and associations known to be concerned of the
initiation of the reviews. The parties directly concerned
were given the opportunity to make their views known
in writing and to request a hearing within the time limit
set in the applicable notice of initiation.

the authorities of

(11)

The Commission sent questionnaires
to all parties
known to be concerned and received replies from four
the sole exporting
applicant Community producers,
producer in Belarus, one producer in the analogue
country, Poland, and two importers.

(1) OJ C 352, 8.12.2000, p. 6.
(2) OJ C 211, 28.7.2001, p. 51.

in Belarus,

exporting producer

the applicant
The
Community producers, Community users and importers
made their views known in writing. All parties, who so
requested within the applicable time limit and which
indicated that there were particular reasons why they
should be heard, were granted a hearing.

The Commission sought and verified all the information
it deemed necessary for the purpose of a determination
of the continuation or recurrence of dumping and injury
and of the Community interest and carried out verifica-
tions at the premises of the following companies:

(a) Community producers:

— Wellman International Ltd, Co. Meath, Ireland,

— Trevira GmbH & Co., Frankfurt am Main,

Germany,

— Trevira Fibras, SA, Portalegre, Portugal,

— Montefibre SpA, Milano, Italy;

(b) Unrelated importer in the Community:

— Barnett Europe, Aachen, Germany;

(c) Producer in the analogue country:

— Elan SA, Torun, Poland.

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(14)

(15)

(16)

The product under consideration is synthetic staple
fibres of polyester, not carded, combed or otherwise
processed for spinning, which is currently classifiable
under CN code 5503 20 00. It is commonly referred to
as polyester staple fibres or PSF.
is recalled that
because of circumvention the measures were extended to
polyester filament tow, abbreviated as PFT, falling under
CN code 5501 20 00, used for conversion in the
Community into PSF.

It

The product is a basic material used at various stages of
textile products. The
the manufacturing process of
Community consumption of PSF is either used for spin-
ning, i.e. manufacturing filaments for the production of
textiles, mixed or not with other fibres such as cotton
and wool or for non-woven applications such as filling
(fibrefill), i.e. stuffing or padding of certain textile goods
such as cushions, car seats and jackets.

The product is sold in different product types which can
be identified through different specifications such as
thickness, length, tenacity, shrinkage, lustre and silicon
treatment or through their classification into product
families such as regular, hollow, spiral and bi-compo-
nent fibres and specialities such as coloured, branded
and trilobal fibres.

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(17)

The different types are considered as one product family
for the purpose of the investigation because the basic
physical characteristics of
types do not
entail any significant differences, even though the uses
and the quality of PSF sold might differ. There exist no
clear dividing lines between the various types as there is
overlapping and consequently competition between
adjacent types.

the different

(18) As was the case in previous anti-dumping investigations
concerning PSF, some parties,
in particular the user
industry, argued that a differentiation should be made
according to the use of PSF for spinning or non-spin-
ning purposes because the price setting for the two
applications is completely different. They suggested that
the CN code for PSF should be divided into three or four
different subcodes by denier (thickness) distinction and
that
the PSF produced in the
Community with the PSF imported into the Community
should be carried out separately within each subcode.

the comparison of

(19)

(20)

(21)

(22)

In recital 9 of Regulation (EC) No 2852/2000 it was
indicated that a significant overlap between different
types of PSF concerning their
substitutability and
competition between these types was found to exist. The
present
It also
investigation confirmed this finding.
confirmed the fact that there is no clear dividing line
between the various PSF types which would establish a
unique link between the physical product characteristics
and the use of the product. Consequently, based on the
facts available to date a product differentiation is not
possible. In addition, it should be recalled that a labora-
tory analysis cannot possibly determine definitely the
ultimate use of the PSF.

In the present case, it should also be pointed out that no
party put
forward convincing arguments or criteria
which would allow reclassification of PSF into subcodes.
Indeed, as stated above the physical characteristics do
not necessarily determine the ultimate use of
the
product, and the thickness (denier) is only one of the
characteristics of the product.

Based on the above facts and considerations,
is
confirmed that the various types of PSF involved consti-
tute one single product
this
proceeding.

the purpose of

for

it

2. Like product

It was concluded in the original investigation, recital 6
that both the PSF
of Regulation (EC) No 1490/96,
produced and sold by the Community industry on the
Community market and the PSF produced and sold on
the market of the analogue country were, within the
meaning of Article 1(4) of the basic Regulation, alike to
the PSF imported into the Community from Belarus.

Indeed, there are no differences in the basic physical
characteristics and uses of the PSF imported into the
Community from Belarus and the PSF produced by the
applicant Community producers and sold on the
Community market. PSF originating in Belarus also has
to the PSF
basic
produced and sold in the analogue country. No new
arguments were put forward to deviate from these find-
ings which are therefore confirmed.

characteristics and uses

similar

C. CONTINUATION AND LIKELIHOOD OF A CONTINU-

ATION OR RECURRENCE OF DUMPING

1. Interim review

1.1. Analogue country

(23)

Since Belarus is a non-market economy within the
meaning of Article 2(7) of the basic Regulation, normal
value had to be based on information obtained in an
appropriate market economy third-country in which the
product was produced and marketed. In the notice of
initiation of
the Commission
interim review,
suggested Taiwan as an appropriate analogue country,
due to the fact that the request for the interim review
was based, inter alia, on the fact that the domestic prices
in the analogue country Taiwan which were used to
determine the normal value in the previous investiga-
tions had decreased significantly.

the

(24) Questionnaires were sent to known producers of the
product in Taiwan but, despite considerable efforts by
the Commission, no cooperation was obtained. The
Commission sought the cooperation of other known
producers of the product concerned in six other market
economy countries. Only one producer in Poland was
prepared to cooperate fully and provided the necessary
information which was subsequently verified.

(25)

The information provided by the Polish cooperating
company has shown that Poland is an appropriate
analogue country, for the following reasons:

— the manufacturing process and access to raw mate-
rials were, to a large extent, similar in Poland and in
Belarus,

— the Polish producer was producing and selling the

product in substantial quantities,

— despite the fact that there was only one producer of
the product in Poland and despite the existence of
import duties on the product in respect of its import
from a number of countries, the Polish domestic
market for the product was subject to normal condi-
tions of competition, and large quantities of
the
product to which no import duties were applied,
were imported from different originating countries.

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1.2. Normal value

(26) As stated above, normal value was calculated on the
basis of the data verified at the premises of the Polish
producer which cooperated fully in the investigation.

and for profit. In line with Article 2(6) of the basic
Regulation, the amounts for SG & A expenses and for
profit were based on sales made in the ordinary course
of trade, of the like product, by the Polish producer.

(27)

(28)

(29)

(30)

(31)

(32)

(33)

(34)

(35)

It was examined first whether the Polish producer's total
sales of PSF and PFT were sufficiently large to constitute
a reliable basis in order to determine normal value. As it
sold large quantities on its domestic market,
it was
concluded that this was the case.

Subsequently it was examined whether the PSF and PFT
produced and sold in Poland could be considered iden-
tical or directly comparable to the PSF and PFT sold for
export to the Community by the Belarusian exporter.
As, within each type, they have the same chemical prop-
erties and physical characteristics, the Polish and Belaru-
sian products were considered to be comparable prod-
ucts.

For each type of the product sold by the Polish producer
on the Polish market, it was established whether its sales
on the Polish market were sufficiently large to constitute
a reliable basis to determine normal value. This was
found to be the case.

It was finally examined whether the Polish producer's
sales of the product on the Polish market could be
considered as having been made in the ordinary course
of trade, by looking at the proportion of profitable sales
of the type in question.

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 respective IP (either interim
IP or expiry IP), irrespective of whether all these sales
were profitable or not. In cases where profitable sales
represented less than 80 % but more than 10 % of the
total sales volume per type, normal value was based on
the actual domestic price, calculated as a weighted
average of profitable sales only.

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.

For those types where normal value could not be based
on domestic prices, normal value was constructed in
accordance with Article 2(3) of the basic Regulation.
This was done by adding to the manufacturing cost for
each type of the Polish producer, a reasonable amount
for selling, general and administrative expenses (SG & A)

(36)

1.3. Export price

Khimvolokno, the sole Belarusian exporting producer
claimed to have exported a substantial volume of the
product
to the Community during the interim IP.
However, these ‘exports’ were in reality sold on barter
trade conditions to one unrelated company in the
Community via a trading company,
taking a small
margin, in Switzerland. The rest was sold to three other
unrelated traders in the Community. Prices made under
barter trade arrangements are normally considered to be
unreliable. In such cases, the export price has to be
constructed, in line with Article 2(9) of the basic Regula-
tion, on the basis of the first sale made at reliable prices.
In this case, the export price could effectively be recon-
structed by examining the transactions from Khimvo-
lokno to the Swiss trading company and further to the
unrelated Community company. Indeed it was possible
to establish the export price to the Community by
deducting the Swiss intermediary's margin from the
they charged to the unrelated Community
price
company. This price then corresponded to the price
charged by Khimvolokno to the Swiss company, and
could be considered as the export price as described in
Article 2(8) of the basic Regulation.

in the Community

Both the Swiss intermediate company and the unrelated
cooperated in the
company
proceeding and replied to a questionnaire sent by the
Commission. The verification at the premises of the
unrelated company in the Community has shown that
the whole quantity purchased by that company during
the interim IP was destined for markets outside the
Community, mainly the United States of America, and
effectively not imported into the Community. According
to Eurostat data, no PSF or PFT originating in Belarus
was imported into the Community during the interim IP.
the remaining quantities
Hence,
reported by Khimvolokno as being sold to the
Community have also not effectively been imported into
the Community. It should however be noted that Khim-
volokno had apparently reported these sales as exports
to the Community in good faith, and was not aware of
the
effectively
imported into the Community.

these products were not

is deducted that

that

fact

it

Following the above, since there were effectively no
exports to the Community, an export price could not be
established
from Khimvolokno to the
Community for the interim IP.

sales

for

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(37)

It nevertheless appears that if the Belarusian exporting
producer was actually exporting the product concerned
to the Community, this would have been at prices which
would lead to a lesser dumping margin than the duty of
43,5 % actually in force. Indeed the prices of the quant-
ities reported by Khimvolokno as allegedly exported to
the Community during the interim IP indicate a consid-
erably lower dumping margin than the actual duty in
force. Furthermore, applications for
refund of anti-
dumping duties paid by a German importer on imports
before the interim IP, namely between April 1997 and
October 1997, have also shown that
the dumping
actually practised during that period was less than half
of the actual duties applied.

(38)

It was therefore decided to use the prices of the product
allegedly exported to the Community during the interim
IP as a basis for determining the export price to the
Community, since these prices represent in this specific
case the most reliable information, and show that the
circumstances concerning dumping have changed signif-
icantly, as required by Article 11(3) of the basic Regula-
tion.

(39) Given that Belarus is considered to be a non-market-
economy country, a single export price for the country
as a whole has normally to be established.
In this
respect, as Khimvolokno is the only known exporting
producer of the Belarusian product, the exports of this
company have been considered representative of all
exports of Belarus to the Community and thus the infor-
mation submitted by this company was used in order to
determine the export price of the product from Belarus.

1.4. Comparison

(40)

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
affecting price comparability in accordance with Article
2(10) of the basic Regulation. Appropriate adjustments
were made in all cases where they were found to be
reasonable, accurate and supported by evidence as was
the case for transport and credit cost.

1.5. Dumping margin

(41)

The dumping margin was established on the basis of a
comparison of the weighted average normal value per
product type with a weighted average export price by
product type. In this case, this method reflects the full
degree of dumping being practised. The dumping
margin, established during the interim IP expressed as a

percentage of
price before duty,

is 21,0 %.

the cif net

free-at-Community-frontier

1.6. Amendment of the measures under review

(42) 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 margins found during the original investigation.

(43)

Since the injury level found in the original investigation
is higher than the dumping margin found in the present
review, the level of the duties should be set at that of the
dumping margin found, namely at 21,0 %.

2. Expiry review

2.1. Analogue country

(44)

For the reasons set out in recitals 23 to 25, Poland was
also used as an appropriate market-economy third
country to determine the normal value for the expiry
review.

2.2. Normal value

(45)

For the expiry review, normal value was established on
the same basis as for the interim review, as explained in
recitals 26 to 33.

2.3. Export price

(46)

(47)

(48)

Khimvolokno, the sole Belarusian exporting producer,
claimed to have exported a substantial volume of the
product to the Community during the expiry IP.

the premises of

The verification at
the unrelated
company in the EC who allegedly imported the bulk of
the Belarusian product has confirmed that none of the
quantity purchased by that company was effectively
imported into the Community during the expiry IP.
However, according to Eurostat data less than 10 tonnes
of PFT, i.e. less than 1 % of the quantity reported by the
exporting producer, was imported into the Community
during the expiry IP.

The less than 10 tonnes could be identified as one
transaction of the applicant to one of the unrelated
importers in the Community. The export price of this
transaction has been used as the export price to the
Community, in line with Article 2(8) of the basic Regu-
lation.

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(49) Given that Belarus is considered to be a non-market-
economy country, a single export price for the country
as a whole is normally established. In this respect, as
Khimvolokno is the only known exporting producer of
the Belarusian product, the exports of this company
have been considered representative for all exports of
Belarus to the Community and thus the information
submitted in order to determine the export price of the
product from Belarus was used.

2.4. Comparison

(50)

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
affecting price comparability in accordance with Article
2(10) of the basic Regulation. Appropriate adjustments
were made in all cases where they were found to be
reasonable, accurate and supported by evidence. That
was the case for transport and credit costs.

2.5. Dumping margin

(51)

The dumping margin was established on the basis of a
comparison of the weighted average normal value per
product type with a weighted average export price by
product type. This method reflects the full degree of
dumping being practised. The dumping margin estab-
lished during the expiry IP, expressed as a percentage of
the cif net free-at-Community-frontier price, before duty,
is 6,2 %.

2.6. Likelihood of recurrence of dumping

(52)

The likelihood of recurrence of dumping in significant
quantities, should the measures in question be removed,
was examined. In this respect, the request for the expiry
review was mainly based on the grounds that the Belar-
ussian exports to third countries were made at dumped
prices and that the exporting producer has significant
spare capacity.

(53)

The investigation confirmed the above allegations.
particular it was found that:

In

(54)

The sales of the applicant exporting producer to third
countries consist of:

— the sales to the Community, which were found not
to have been actually imported into the Community.
The dumping margin found for these exports, by
applying the methodology as described under recitals
substantial, namely around 20 %,
40 to 46,
expressed as a percentage of
free-at-
Community-frontier price before duty,

the cif net

is

— export sales reported as being made to third coun-
tries, with a specification of the five main export
markets outside the Community. These sales are
made at levels which are not significantly different
from the alleged export prices to the Community,
and are also made at dumped prices, except for the
sales to Turkey where anti-dumping measures are in
force for PSF originating in Belarus.

(55) As far as production capacity and capacity utilisation is
concerned, the investigation showed that the cooper-
ating exporting producer used less than 60 % of
its
production capacity during the expiry IP.

(56)

(57)

It can thus be concluded that, should the measures
expire, there is a likelihood of recurrence of dumping in
the
substantial
Community.

exports made

quantities

for

to

D. DEFINITION OF THE COMMUNITY INDUSTRY

The request for the expiry review was made on behalf of
seven of
the 13 Community producers known to
produce PSF in the Community. Two of the applicant
producers did not provide a reply to the Commission
questionnaire, and were, therefore, not regarded as being
part of
the Community industry. A third applicant
producer did not provide the information requested
within the given extended deadline and is therefore also
not considered as forming part of
the Community
industry.

— export prices to third countries were below the
normal values in the analogue country leading to
substantial dumping,

(58)

— the sole exporting producer has significant spare

capacity.

The remaining four applicant Community producers
replied to the Commission questionnaire and cooperated
in the investigation. They represent more than 52 % of
the Community production of PSF and therefore consti-
tute the Community industry within the meaning of
Article 4(1) and Article 5(4) of the basic Regulation.

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E. THE COMMUNITY PSF MARKET

1. Community consumption

(59)

Community consumption of PSF was established on the actual sales volume of the Community
industry and the of applicant producers not included in the definition of Community industry, an
estimate of the sales of the remaining Community producers and Eurostat information on import
volumes from all third countries. It should be noted that during the present investigation, consump-
tion figures for 1997 and 1998 as published in Regulation (EC) No 2852/2000 were slightly
amended because some figures were updated. These minor corrections do not affect the findings of
that Regulation.

(60) On the above basis, Community consumption developed as follows during the period considered:

Consumption of PSF

1997

1998

1999

2000

Expiry IP

Tonnes

Index

523 832

598 882

649 129

646 656

607 286

100

114

124

123

116

(61) Overall consumption volume increased by 16 % over the period considered. The main increase
occurred between 1997 and 1998 when consumption grew from around 524 000 tonnes to
599 000 tonnes. The consumption reached its peak in 1999 with around 649 000 tonnes after
which it declined to 607 000 tonnes during the expiry IP.

2. Imports of PSF from Belarus

Preliminary remark

(62) As pointed out in recital 47, the export volumes of Belarus into the Community during the expiry IP

were found to be negligible.

Volume and market share

(63)

Further to the imposition of the anti-dumping measures in 1996, the volume of imports during the
period considered was limited. Circumvention allowed the exporting producer in Belarus to export
over 9 000 tonnes of PFT to the Community in 1997, but after the anti-circumvention investigation
mentioned in recital 1 and the extension of the duties quantities dropped and only insignificant
volumes of PSF were imported into the Community from Belarus during the expiry IP.

Price behaviour of the exporting producer

(64) Due to the insignificant export volumes from Belarus during the expiry IP no undercutting margins
were calculated in the present case. Nevertheless,
it was noted that the average price for PSF
originating in Belarus was by far below the average price charged by the Community industry.
Similarly the export prices of PSF from Belarus to other third countries were also below Community
industry's prices.

(65)

It is thus clear that if the exporting producer in Belarus had exported its PSF to the Community
market during the expiry IP, this would have been done with high undercutting levels.

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3. Imports from other third countries

(66) During the expiry IP, the main sources of imports of PSF into the Community were, in the order of
importance, the Republic of Korea, Taiwan and the United States of America covering approximately
70 % of total imports or 25,4 % of total Community consumption. Total imports from other third
countries covered during the expiry IP around 36,3 % of Community consumption and developed as
follows:

Total imports of PSF

1997

1998

1999

2000

Expiry IP

Tonnes

Index

152 878

234 266

263 780

260 785

220 511

100

153

173

171

144

(67)

(68)

Imports of PSF from all other third countries increased from around 153 000 tonnes in 1997 to
220 000 tonnes during the IP, or by 44 %. The above table shows that the imports dramatically
increased by 72 % between 1997 and 1999 and then followed a downwards trend until the expiry IP
decreasing by 16 %. This decrease coincides with the imposition of anti-dumping measures against
certain third countries in 2000 mentioned in recitals 2 and 3.

Prices of PSF imported from other third countries went up between 1997 and the expiry IP despite a
decline in 1998 and 1999. The average price for the PSF originating in other third countries was
12 % higher during the expiry IP than in 1997. Taking due account of customs and anti-dumping
duties, average import price however remained slightly below Community industry's price.

Import prices

EUR/tonne

Index

1997

1 112

100

1998

985

89

1999

917

82

2000

1 178

106

Expiry IP

1 246

112

4. Situation of the Community industry

Preliminary remark

(69)

It is recalled that the examination of the development of the economic situation of the Community
industry covered the period from 1997 until the end of the expiry IP, namely June 2001. As
mentioned in recitals 2 and 3 definitive anti-dumping measures were imposed against Australia,
India, Indonesia, South Korea, Taiwan and Thailand in 2000 and were therefore in force during the
expiry IP. This situation is highly relevant for understanding the developments described hereafter.

Production, capacity and capacity utilisation

(70)

Community industry production developed as follows:

1997

1998

1999

2000

Expiry IP

Production in tonnes

212 543

210 153

211 255

211 208

214 103

Index

100

99

99

99

101

Capacity in tonnes

264 439

246 939

253 939

254 939

256 034

Index

100

93

96

96

97

Capacity utilisation

80 %

85 %

83 %

83 %

84 %

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(71) Overall, Community industry production slightly increased by 1 % over the period considered. In
1997 the Community industry produced 213 000 tonnes of PSF, after which the production
declined slightly over the following years. During the expiry IP the production volume slightly rose
to 214 000 tonnes. This is to be compared with the 16 % increase in Community consumption over
the same period.

(72)

In parallel, the investigation showed that production capacity decreased between 1997 and 1998.
The overall decrease in capacity mainly occurred in 1998 when it dropped from 264 000 tonnes in
1997 to 247 000 tonnes. This explains why a higher rate of capacity utilisation was achieved after
1997. In 1999 the Community industry regained some of its capacity (254 000 tonnes) reaching a
total of 256 000 tonnes during the expiry IP. The investigation showed that when it was possible the
tendency of most of the producers included in the definition of the Community industry was rather
to close down certain PSF production lines or plants or to convert them into other lines to produce
other products not covered by the present investigation which are more profitable. One Community
producer however decided to build new production capacity. This decision was made in order to
better satisfy Community customers' requirements in terms of quantity and types of PSF and explains
the rise in capacity between 1998 and the expiry IP.

Stocks

(73)

The investigation showed that at the end of the expiry IP (namely in June 2001) stocks of PSF
reached 25 000 tonnes and were 24 % higher than those in December 1997 (20 000 tonnes).
However, the investigation indicated that stock levels at the end of June are traditionally higher than
at fiscal year-end, namely in December. This is due to the fact that before the July/August period,
where a shut-down for servicing and maintaining the machines occurs, the Community industry has
to produce for stock in order to serve its customers. The comparable figure at the end of 2000
showed a 4 % increase in stocks compared to 1997.

Sales volume, market share and growth

1997

1998

1999

2000

Expiry IP

Sales in tonnes

190 308

186 601

192 546

192 865

197 077

Index

100

98

101

101

104

Market share

37,8 %

32,2 %

30,6 %

30,6 %

33,4 %

(74)

(75)

(76)

The Community industry managed to increase its sales volume in its domestic market by 4 % while
losing similar sales volumes on its export markets during the period considered. This is line in with
the finding of steady production volumes and stocks in the same period.

Sales of the Community industry were by and large stable up to 2000 and then increased by 3 %
between 2000 and the expiry IP. This increase coincided with the imposition of anti-dumping duties
on imports from certain third countries in 2000. It is worth noting that the trend in sales volume
deviated from that followed by Community consumption as indicated in recitals 59 and 61. This
contrasts with the dynamics of consumption mostly which increased between 1997 and 1999
(+ 24 %) and decreased (– 7,0 %) between 2000 and the expiry IP.

The Community industry's market share, however, decreased from 37,8 % in 1997 to 33,4 % during
the expiry IP. It decreased steadily between 1997 and 1999, leading to a loss of over 7 percentage
points. With the imposition of anti-dumping measures in 2000, a recovery of 2,8 percentage points
of market share occurred during the expiry IP. Nevertheless, the overall loss in market share suffered
by the Community industry was as high as 4,4 percentage points during the period considered. This
decrease in market share is in line with the findings made in recitals 59, 61, 74 and 75.

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(77)

The investigation showed that the Community industry did not benefit from the market growth
during the period considered. Despite a 16 % increase in consumption between 1997 and 1999, the
Community industry lost over 7 percentage points market share. Whilst consumption dropped by
6 % between 2000 and the expiry IP, namely after the imposition of the anti-dumping measures
mentioned in recitals 2 and 3, the Community industry increased its sales volume by 3 % increase
leading to a gain of 2,8 percentage points market share. Notwithstanding this recovery the growth
experienced by the Community industry during the period considered was extremely negative
compared to the growth in consumption.

Prices development and cost of manufacturing

EUR/tonne

Index

of manufacturing

Cost
EUR/tonne

Index

1997

1 306

100

1 014

100

1998

1 279

98

1 017

100

1999

1 147

88

962

95

2000

1 392

107

1 176

116

Expiry IP

1 439

110

1 214

120

(78)

The above table shows that during the period considered the Community industry average sales
prices per tonne to unrelated customers on the Community market rose on average by 10 %. In the
period from 1997 to 1999, average prices decreased by 12 %. Subsequently, in 2000 and during the
expiry IP, prices recovered significantly. The investigation however indicated that the increase in the
sales price was linked to the increase in the costs which is explained below. The Community industry
claimed that the unsatisfactory development of prices compared to costs was due to a strong price
competition on the Community market in particular before the imposition of the anti-dumping
measures in the year 2000.

(79)

The investigation showed that the Community market for PSF is price sensitive and that as indicated
in recital 68 prices of imported PSF remained at a lower level than that of the Community industry
despite an equivalent proportional price increase.

(80) During the period considered,

the average cost of sales per tonne of PSF produced by the
Community industry increased by 23 %. Between 1997 and 1999 the cost of production remained
by and large stable. However, it increased significantly, by 23 %, between 1999 and the expiry IP.
The investigation showed that the significant increase in cost of production is linked to the
fluctuation of the price of certain raw materials, such as paraxylene and ethylene glycol, which were
directly influenced by the price of oil.

Profitability and cash flow

Profitability

Profit on net turnover

1998

9,1 %

1999

4,8 %

2000

4,6 %

Expiry IP

5,0 %

(81)

It should be noted that one producer included in the definition of the Community industry was
newly founded in 1998 and that no profitability data were available for 1997. For this reason the
analysis of profitability and cash flow covers the period from 1998 up to the expiry IP. However, it
should be noted that the trends observed on the basis of the data available for the period considered
are in line with those resulting from the above table.

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(82)

The Community industry's profitability was very good in 1998. This level of profit was notably
achieved because of the exceptionally low crude oil price that year. Subsequently profitability
deteriorated because the increase in the price of oil and thus of cost of production could not be
compensated by proportional sale price increases. Notwithstanding this, the profitability achieved in
2000 and during the expiry IP was remarkable given the significant increase in cost of manufacturing
(up to 20 %). This indicates that the Community industry was able to control its costs in order to
stabilise the profits at around 5 %.

(83)

Cash flow followed a similar trend as profitability from 1998 up to the expiry IP. The cash generated
by the PSF operations fell by 44 % over the period considered or from EUR 44,5 million in 1998 to
EUR 24,8 million during the expiry IP. This is mainly linked to the decrease in profitability observed
in the same period.

Ability to raise capital

(84) Given the difficult situation of the Community market for PSF described in the present analysis and
in particular under recital 89, most of the companies included in the definition of the Community
industry encountered difficulties in raising the necessary capital to finance their investments and
restructuring. The decrease in profits which occurred in 1999 and 2000 prevented most of these
companies to pursue their investment programme which for most started in 1998. As mentioned
below under recital 88, only one Community producer could raise the capital and took the risk to
complete its planned investments during the period considered.

Employment and productivity

Employment

1997

Number of employees

1 205

Index

100

1998

1 119

93

1999

1 197

99

2000

1 184

98

Expiry IP

1 173

97

(85) Overall, the number of employees working for the production of PSF fell by 3 % reflecting the
downsizing and restructuring operated by the Community industry. Employment was significantly
reduced by 7 % in 1998 but the Community industry started to recruit again in 1999.

(86)

In view of the development of production volume of PSF as indicated in recital 70, productivity of
the Community industry improved during the period considered.

Investments and return on investment

(87) As the table below shows investment in the product concerned significantly increased during the

period considered:

Investment

(EUR 1 000)

Index

1997

4 738

100

1998

1999

14 796

14 229

312

300

2000

8 009

169

Expiry IP

17 954

379

(88)

The level of investment which was extremely low in 1997 rose significantly in 1998, which was a
good year for the industry and prompted some producers to invest in the product concerned.
However, as mentioned in recitals 82 and 89 the Community industry's profitability and the market
situation for the product concerned both deteriorated in the following years. This explains why
investments did not increase in 1999 and were again dramatically reduced in 2000. Investment
significantly recovered during the expiry IP notably because one of the Community producer
included in the definition of the Community industry took the risk to complete its investment
programme. It should be underlined however that the level of investment during the expiry IP
represented 6 % of total turnover of the Community industry.

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(89)

In this respect it should be noted that for a number of
years there has been the presence and the threat of the
presence of dumped imports from certain third coun-
tries on the Community market. The fluctuation in the
price of oil during the period considered added to the
difficulties encountered by operators producing, buying
and using PSF, and in particular
the Community
industry which did not know whether in the presence of
low-priced dumped imports they could reflect the raw
material price increase in their sales prices to a reason-
able extent. The behaviour of the Community industry
in terms of investments may also have been influenced
by the uncertainty which characterises the market for a
number of years.

(90)

The return on investment followed a similar trend as
that observed for profitability.

Magnitude of dumping margin, recovery from past dumping,
circumvention

(91)

The situation of the Community industry has improved
to a certain extent after the imposition of anti-dumping
measures during the period considered, but the industry
has not completely recovered from past dumping from
certain third countries, including Belarus, and from the
circumvention found with respect to PFT from Belarus
in 1997. This is mainly evidenced by the unsatisfactory
economic situation of the Community industry in partic-
ular in 1998 and 1999. Despite a significant increase in
consumption these
years, production, production
capacity,
investments, market share, sales prices and
profits followed a decreasing trend.

(92) As concerns

the impact on the situation of

the
Community industry of the magnitude of the actual
margin of dumping during the IP, this is not considered
a relevant factor in the present review examinations as
the imposition of anti-dumping duties in 1997 and the
subsequent anti-circumvention measures have practically
stopped imports from Belarus.

(94) During the period considered the Community industry's
production slightly increased by 1 %. Capacity utilisation
and productivity improved because of reduced levels of
production capacity and employment.

(95)

(96)

The investigation also showed that during the period
considered the Community market developed positively
in terms of volume, in particular until 2000. Consump-
tion dropped during the expiry IP compared to 2000
but overall it rose by 16 % during the period considered.
The Community industry however could not
fully
participate in this market growth. On the contrary it lost
3 percentage points of market share despite increased
sales volumes.

The exports from Belarus practically disappeared during
the period considered but as evidenced in the attempt to
circumvent the measures, the Community market is very
attractive for these imports. It is clear from recital 54
that the export prices from Belarus to third countries are
much lower than the Community industry's average
price. It should also be recalled that up to 2000 the
Community PSF market was characterised by the pres-
ence of low-priced dumped imports which dragged sales
prices down by 12 %,

in spite of increasing costs.

(97) During 2000 and the expiry IP, the Community indus-
try's sales price and cost of production for PSF both
increased. The fact that prices increased at a much lower
pace than costs led to a situation of decreasing profits.
As a consequence the ability to raise capital by the
Community industry was seriously affected. This added
to the difficulties of the Community industry which
operated in difficult market conditions during the period
considered. Profitability and cash flow accumulated
during the IP were not sufficient to sustain their mid
term investments.

(98)

Based on the foregoing,
in particular the decrease in
market share and the unsatisfactory level of sales prices
the Community
is considered that
it
and profits,
in a vulnerable state.
industry is still

5. Conclusion on the situation of the Community

industry

F. LIKELIHOOD OF RECURRENCE OF INJURY

(99)

It is recalled that it is concluded in recital 56 that a
likelihood of
recurrence of dumping in significant
volumes of PSF originating in Belarus exists.

(93) As already mentioned in recital 69, the economic situa-
tion of the Community industry should be seen in the
light of ongoing anti-dumping investigations during the
period considered and the imposition of anti-dumping
measures in 2000.

(100)

It was also concluded in recital 98 that the Community
industry was still
in a vulnerable situation during the
expiry IP.

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(101) Furthermore, it is recalled that during the expiry IP there
were practically no imports
from Belarus on the
Community. This contrasts with the situation during the
investigation period of
the original case, when over
32 000 tonnes of
low-priced dumped imported PSF
originating in Belarus entered the Community market.
At the same time the Community industry lost 4 % of
sales volume and 5,6 percentage points of market share
and its cost of production significantly increased. As a
result profitability was very negative and 25 % of the
personnel employed in the PSF sector was laid off.

(102) The Community market for PSF is very attractive to
exporting producers and it was found that many of
them practised dumping to gain market share. The
present investigation has shown that after the imposi-
tion of anti-dumping measures in 2000 the situation in
the Community market has improved. It is considered
that should the measures in force against imports of PSF
from Belarus be allowed to expire, these imports are
likely to break the positive developments observed on
the
the Community market and take over more of
already endangered market share of
the Community
industry.

(103)

Indeed, as suggested in recitals 64 and 65 it appears that
although the Belarusian exporting producer will in all
likelihood raise the export prices and thus reduce the
level of dumping, the prices charged will still be dumped
and will undercut the prices of the Community industry.
It is clear that in order to regain market share the
exporting
the
Community industry's prices.

producer will

undercut

have

to

(104) Under such circumstances, and given that as indicated in
recital 78 the Community market is price sensitive, the
Community industry would not be able to compete with
low-priced dumped PSF imported from Belarus. The
amount of available capacities in Belarus and the price
undercutting which is likely to be practised by the
exporting producer are very likely to materially injure
the Community industry. Indeed, it is considered that
when faced with the low-priced dumped imports from
Belarus, the Community industry will have no other
choice than either of lowering its prices and thus keep
market share or of maintaining prices and losing market
share. Both courses of action will have a serious impact
on the financial situation of the Community industry
and in particular its profitability, return on investment
cash flow and ability to raise capital.

oil. The Community industry is completing its restruc-
turing, has modernised its production lines and closed
down the unprofitable ones. It is thus clear that the
Community
room for
manoeuvre to deal with a sudden renewed surge of
injury
low-priced dumped imports and that material
would recur.

industry has

further

little

(106)

In the light of the above findings it is concluded that the
expiry of the measures against imports from Belarus
would be likely to lead to a recurrence of material injury
for the Community industry from imports originating in
Belarus.

G. COMMUNITY INTEREST

1. General considerations

(107)

(108)

It was also examined whether the maintenance of the
anti-dumping measures on PSF imported from Belarus
would be against the Community interest. As it has been
found that there is a likelihood of recurrence of injurious
dumping, the investigation also considered whether or
not
there are any overriding interests against main-
taining the measures and also took account of the past
effects of anti-dumping measures on all
the various
interests involved,
those of users and
importers/traders.

in particular

In order to consider the Community interest in this
particular case, information was requested from all inter-
ested parties, which were either known to be concerned
or which made themselves known. The Commission
sent questionnaires to the Community industry, nine
other producers in the Community, 10 importers/traders
(one of which is situated outside of the Community but
supplies to a trader located in the Community) unrelated
to the Belarusian exporting producer, three users of the
product concerned and three users' associations.

(109)

In addition to the replies received by the Community
industry, the importer located outside the Community
mentioned above, one trader, and one producer not
included in the definition of the Community industry
provided a reply to the Commission questionnaire. None
of the users or users' associations provided a reply to the
questionnaire although two associations made a general
submission.

(105) This would be particularly damaging for the Community
industry which managed to survive and restructure
despite the presence of some dumped imports, albeit
fewer
than would be the case should the present
measure expire, and the high fluctuation in the price of

(110)

It should be recalled that, in the previous investigations,
the adoption of measures was considered not to be
against the interest of the Community.

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2. Interest of the Community industry

(111) During a number of years, the Community industry has
been suffering from low priced, dumped, imported PSF,
causing a situation in which the sales of regular fibres
were not profitable. Although the Community industry
has further developed the segment of higher added value
PSF fibres, such as bicomponent or trilobal fibres, dyed
fibres, fibres with specific characteristics such as fire-
retardant fibres, and by branding fibres, the share of
those fibres in overall sales volume is rather limited. The
core business for PSF thus remains in the regular fibres
for both woven and non-woven applications. These
segments are facing the direct competition from dumped
imports.

(112)

It is therefore clear that the Community industry also
has to produce the whole range of PSF fibres in order to
remain in business. The customers themselves require a
complete range of fibres to be available in order to
secure delivery. For this reason, the Community industry
is not ready or in a position to abandon regular PSF
production.

(113) As indicated in recital 85 the Community industry, by
downsizing, has been able to improve its capacity utili-
sation and productivity. At the same time, by restruc-
turing and specialising, profitability has remained posi-
tive in the recent years, although at unsatisfactory levels.
the Community
It
should also be mentioned that
industry supplies around 33 % of
the Community
market.

(114)

In view of the situation set out above, it is considered
that, in the absence of measures against PSF originating
in Belarus, material injury to the Community industry is
likely to recur. It is thus likely to experience a significant
worsening of its financial situation with a realistic poss-
ibility of a further reduction of employment and closure
of production facilities.

3. Interests of importers/traders

(115) As mentioned in recital 64, the imports of PSF origin-
ating in Belarus were almost non-existent during the
expiry IP. The investigation has shown that only one
Community-based trader has bought via a third country
importer large quantities of PSF originating in Belarus,
but these were re-exported immediately outside of the
Community. The
the
investigation
Community based trader found alternative markets for
its PSF of Belarusian origin and had also found altern-
ative sources of imports.

showed

that

(116) Considering the above together with the lack of
cooperation from the eight other importers/traders who
received the questionnaire indicates that the measures in
force on imports originating in Belarus did probably not
have any significant impact on the situation of impor-
ters/traders in the Community.

4. Interests of users

(117) No user or user association provided a reply to the
questionnaire intended to assess the Community interest.
submissions, one
Two associations however
covering the views of users operating in the spinning
industry, and the other on behalf of users in the non-
woven industry, mainly for the fillings applications.

sent

(118) Both associations pronounced themselves against

In addition,

in practice, closed one source of

the
maintenance of the anti-dumping duty against Belarus as
they claimed that the punitive nature of these measures
has,
supply to
Community users.
it was claimed that
because not all the PSF types are available or are not
available in sufficient quantities from the Community
industry, Community users suffered injury because of an
increased competition for their final product from third
countries. At the same time, users became less competi-
tive due to high raw material costs. This argument was
particular emphasised by the yarn producing spinning
industry.

(119) As regards the availability of all PSF fibres, the invest-
igation has confirmed that changing the production
installations to produce one type of PSF to another
requires only some limited adjustments, such as a
different type of spinneret. This observation was also put
forward by users'
themselves during
associations
previous investigations. The investigation showed that
the
the producers
Community industry have the technical means
to
the Community
types of PSF. Rather,
produce all
industry claimed that it was unable to deliver PSF at the
low prices quoted by potential buyers.

included in the definition of

(120) The investigation has shown further that the discontinu-
ation of the anti-dumping duties in force against Belarus
would be likely to lead to a major market disturbance
and might indeed lead to a closure of production facili-
ties within the Community. This would not be in the
long-term interest of the user industry which is, never-
its PSF from the
theless, purchasing over 33 % of
Community industry, with some of
its requirements
being special types not available from third countries.

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(121) Due to lack of cooperation from users, it has not been
possible to precisely calculate the possible impact of the
proposed measures for the current
investigation, or
indeed the impact of the current measures. However, as
mentioned in recital 63 only insignificant volume of PSF
imports from Belarus were sold on the Community
during the expiry IP.

(122)

It is also considered that the duty originally imposed on
PSF from Belarus was set at
the level necessary to
remove the injurious dumping it had caused. The
Community market was not closed to these exports but
it is very likely that the exporting producer in Belarus
found more attractive markets notably the United States
of America and Russia. In view of the reduced level of
the anti-dumping duty proposed, it is very likely that
imports from Belarus would become more attractive to
some Community users as compared to other sources of
supply. This would therefore lead to a reduction of their
costs.

(123) Based on the above,

it

is considered that while
preventing serious disturbance caused by the recurrence
of high volumes of dumped imports originating in
Belarus, the proposed measures are likely to increase
competition on the Community market.

5. Conclusion

(124) Based on the foregoing it is concluded that there are no
compelling reasons of Community interest against the
continuation of measures.

(127) All parties were informed of

the essential

facts and
considerations on the basis of which it is intended to
change the level of the existing measures. They were also
granted a period to make representations subsequent to
this disclosure. No comments which were of a nature to
change the above conclusions were received.

(128)

It follows from the above that, based on the findings of
the interim review (see recitals 42 and 43) and as
provided for by Article 113(3) of the basic Regulation,
the anti-dumping duties imposed by Regulation (EC) No
1490/96 as extended by Regulation (EC) No 2513/97,
should be lowered to 21,0 % expressed as a percentage
of the net free-at-Community frontier price before duty
established in the interim review during the interim IP.
This level of duty should apply to both imports of PSF
and of PFT originating in Belarus,

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on
1.
imports of synthetic staple fibres of polyesters, not carded,
combed or otherwise processed for spinning, falling within CN
code 5503 20 00 originating in Belarus.

The definitive anti-dumping duty is hereby extended to
2.
imports of polyester filament
tow falling within CN code
5501 20 00 originating in Belarus, at the rate set in paragraph
3 of this Article.

The rate of the definitive anti-dumping duty applicable to
3.
the net
the products
described in paragraphs 1 and 2, before duty, shall be 21,0 %.

free-at-Community-frontier price of

H. DUTIES

Article 2

(125) Based on the findings for the expiry review and as
provided for by Article 11(2) of the basic Regulation, the
anti-dumping measures applicable to imports of poly-
ester stable fibres, originating in Belarus should be main-
tained.

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

(126) As the anti-dumping duty in force in respect of PSF has
been extended by Regulation (EC) No 2513/97 to cover
in addition imports of PFT, originating in Belarus, these
measures shall also be maintained.

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

Article 3

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

Done at Luxembourg, 8 October 2002.

For the Council

The President

T. PEDERSEN