Proposal for a Council Regulation terminating the anti-dumping and anti-subsidy proceedings concerning imports of farmed Atlantic salmon originating in Norway and the anti-dumping proceeding concerning imports of farmed Atlantic salmon originating in Chile and the Faeroe Islands
Date: 2003-04-30
Institutions: European Commission
Subjects: Chile, Faroes, Norway, anti-dumping legislation, fish farming, import (EU), international competition

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 30.4.2003
COM(2003) 224 final

Proposal for a

COUNCIL REGULATION

terminating the anti-dumping and anti-subsidy proceedings concerning imports of
farmed Atlantic salmon originating in Norway and the anti-dumping proceeding
concerning imports of farmed Atlantic salmon originating in Chile and the Faeroe
Islands

(presented by the Commission)

1.

2.

3.

4.

5.

EXPLANATORY MEMORANDUM

By  Regulations  (EC)  No  1890/97  and  No  1891/97,  the  Council  imposed  definitive
anti-dumping  and  countervailing  duties  on  imports  of  farmed  Atlantic  salmon
originating  in  Norway.  Subsequently,  the  Council  repealed  and  replaced  these
Regulations by a single Council Regulation (EC) No 772/1999, as last amended by
Council Regulation (EC) No 321/2003. A large number of exporters/producers of the
product concerned in Norway are exempt from duties on condition that they adhere
to  certain  minimum  prices  as  set  out  in  Commission  Decision  97/634/EC  as  last
amended by Decision 2003/119/EC.

In  February  2002,  the  Commission  announced  by  way  of  a  notice  published  in  the
Official Journal of the European Communities the initiation of an ex officio interim
review  pursuant  to  Article  11(3)  of  Regulation  (EC)  No  384/96  (the  basic  anti-
dumping  Regulation)  and  Article 19(1)  of  Regulation  (EC)  No  2026/97  (the  basic
anti-subsidy  Regulation)  covering  both  the  form  and  the  level  of  the  anti-dumping
and countervailing measures.

According to Article 11(7) of the basic anti-dumping Regulation and Article 22(3) of
the basic anti-subsidy Regulation, when an interim review of measures is in progress
at  the  time  when  measures  are  due  to  expire,  the  interim  review  must  also  cover
those aspects, which under other circumstances, would be dealt with within the scope
of an expiry review opened under Article 11(2) of the basic anti-dumping Regulation
and  Article  18(1)  of  the  basic  anti-subsidy  Regulation.  The  Commission  therefore
had to investigate whether the expiry of the measures would be likely to result in a
continuation or recurrence of dumping, subsidisation and injury.

In  addition  to  the  review  investigation  concerning  Norway  and  subsequent  to  the
lodging  of  a  complaint  by  the  Community  industry,  the  Commission  announced  in
July  2002  by  a  notice  published  in  the  Official  Journal  of  the  European
Communities,  the  initiation  of  anti-dumping  proceeding  concerning  imports  of
farmed Atlantic salmon originating in Chile and the Faeroe Islands.

The conclusion of the review investigation is that the measures currently in place on
imports of farmed  Atlantic salmon originating in Norway should not be prolonged.
The  investigation  concerning  imports  of  the  same  product  originating  in  Chile  and
the  Faeroe  Islands  has  reached  the  conclusion  that  the  proceeding  should  be
terminated without the imposition of measures. The findings of the investigations are
set out jointly in the attached proposal for a Council Regulation.

2

Proposal for a

COUNCIL REGULATION

terminating the anti-dumping and anti-subsidy proceedings concerning imports of
farmed Atlantic salmon originating in Norway and the anti-dumping proceeding
concerning imports of farmed Atlantic salmon originating in Chile and the Faeroe
Islands

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  Community1,  as  last
amended by Regulation (EC) No 1972/20022, and in particular Articles 5, 9, 11(3) and 11(7)
thereof,

Having  regard  to  Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection
against  subsidized  imports  from  countries  not  members  of  the  European  Community3,  as
amended  by  Regulation  (EC)  No  1973/20024,  and  in  particular  Articles  14,  19  and  22(3)
thereof,

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

Whereas:

1

2

3

4

OJ L 56, 6.3.1996, p. 1.
OJ L 305, 7.11.2002, p. 1.
OJ L 288, 21.10.1997, p. 1.
OJ L 305, 7.11.2002, p. 4.

3

                                                
(1)

(2)

(3)

A.

PROCEDURE

1.

Previous investigations and existing measures concerning Norway

In September 1997 the Council, by Regulations (EC) No 1890/975 and No 1891/976,
imposed  definitive  anti-dumping  and  countervailing  duties  on  imports  of  farmed
Atlantic salmon originating in Norway. By Decision 97/634/EC7, as last amended by
Decision 2003/119/EC8, the Commission accepted undertakings from a large number
of  exporters/producers  from  Norway  to  respect,  inter  alia,  certain  minimum  import
prices. In December 1998, the Commission announced by way of a notice published in
the  Official  Journal  of  the  European  Communities  9  the  initiation  of  an  ex officio
investigation pursuant to Article 11(3) of Regulation (EC) No 384/96 (the basic anti-
dumping Regulation) and Article 19(1) of Regulation (EC) No 2026/97 (the basic anti-
subsidy Regulation) in order to review the possibility of a  change  in the  form  of the
duties so that imports of salmon at injurious prices would be prevented. Subsequently,
the  Council  repealed  and  replaced  Council  Regulations  (EC)  No 1890/97  and
No 1891/97 by a single Council Regulation (EC) No 772/199910, as last amended by
Council Regulation (EC) No 321/200311.

In  parallel  to  the  above-mentioned  anti-dumping  and  countervailing  duties  and
undertakings,  an  agreement  known  as  the  ‘Agreement  on  a  solution  to  the  salmon
case’  (Salmon  Agreement)  was  signed  between  the  Commission  and  the  Norwegian
government providing  for supporting measures to be managed within  the  framework
of regular contacts between the signatories.

2.

Interim and expiry review investigations concerning Norway

On the basis of the information received by the Commission within the framework of
the Salmon Agreement and information obtained from various other sources in 2001,
the Commission considered there to be sufficient grounds to warrant the initiation of a
further interim review of the existing measures. In particular, it appeared that the form
of the measures (including the undertakings) was no longer appropriate to remove the
injurious  effects  of  dumping  and  subsidisation  given  the  disturbances  present  in  the
Community market. It also appeared, given the evidence provided by the  Norwegian
authorities concerning normal value and the available information on export prices to
the  Community, 
the  dumping  margins  established  may  have  changed
significantly.  Furthermore,  in  the  light  of  information  received  from  the  Norwegian
authorities concerning changes to the export tax and certain information received from
Community  producers  of  farmed  Atlantic  salmon,  it  was  considered  appropriate  to
review  in  parallel  the  effectiveness  of  the  form  and  level  of  the  countervailing
measures. Finally, given other information concerning developments in the ownership
structure of salmon producing companies in the Community and production costs and
the  resale  prices  of  Norwegian  imports,  whose  volume  was  substantial,  it  was

that 

5

6

7

8

9

10

11

OJ L 267, 30.9.1997, p. 1.
OJ L 267, 30.9.1997, p. 19.
OJ L 267, 30.9.1997, p. 81.
OJ L 47, 21.2.2003, p. 46.
OJ C 400, 22.12.1998, p. 4.
OJ L 101, 16.4.1999, p. 1.
OJ L 47, 21.2.2003, p. 3.

4

                                                
(4)

(5)

(6)

(7)

(8)

considered  necessary  to  review  the  findings  relating  to  injury  in  respect  of  the  anti-
dumping and countervailing measures.

Therefore,  having  determined,  after  consultation  of  the  Advisory  Committee,  that
sufficient  evidence  existed  to  justify  the  initiation  of  an  interim  review,  the
Commission  announced  by  way  of  a  notice  (notice  of  initiation)  published  in  the
Official  Journal  of  the  European  Communities12,  the  initiation  of  an  investigation
pursuant to Article 11(3) of the basic anti-dumping Regulation and Article 19(1) of the
basic  anti-subsidy  Regulation  with  regard  to  imports  into  the  Community  of  farmed
Atlantic  salmon  originating  in  Norway,  covering  both  the  form  and  the  level  of  the
anti-dumping and countervailing measures.

According to Article 11(7) of the basic anti-dumping Regulation and Article 22(3) of
the basic anti-subsidy Regulation, when an interim review of measures is in progress
at the time when measures are due to expire, the interim review must also cover those
aspects, which under other circumstances, would be dealt with within the scope of an
expiry  review  opened  under  Article  11(2)  of  the  basic  anti-dumping  Regulation  and
Article 18(1) of the  basic  anti-subsidy  Regulation. The Commission therefore had to
investigate  whether  the  expiry  of  the  measures  would  be  likely  to  result  in  a
continuation  or  recurrence  of  dumping,  subsidisation  and  injury.  In  this  context,  the
Commission informed all interested parties of the extension in the scope of the review
and  sought  opinions  as  to  whether  the  expiry  of  the  measures  would  be  likely  or
unlikely  to  lead  to  the  continuation  or  recurrence  of  dumping  and  injury,  and/or  the
continuation or recurrence of subsidisation and injury.

3.

Initiation of an anti-dumping proceeding concerning Chile and the Faeroe
Islands

On  18  July  2002,  the  Commission  announced  by  a  notice  published  in  the  Official
Journal of the European Communities13, the initiation of an anti-dumping proceeding
concerning  imports  of  farmed  Atlantic  salmon  originating  in  Chile  and  the  Faeroe
Islands.

The proceeding was initiated as a result of a complaint lodged on 3 June 2002 by the
EU Salmon Producers’ Group (the complainant) on behalf of producers representing a
major proportion of the Community production of farmed Atlantic salmon within the
meaning of Article 4 of the basic anti-dumping Regulation. The complaint contained
sufficient prima facie evidence of dumping and material injury resulting therefrom to
justify the initiation of an anti-dumping proceeding.

4.

Parties concerned by the investigations

The  Commission  officially  advised  the  exporting  producers  and  importers/traders
known  to  be  concerned  as  well  as  their  associations,  the  authorities  of  Norway  and
Chile,  and  the  Home  Government  of  the  Faeroe  Islands,  users,  suppliers  and
Community  producers  of  the  initiation  of  the  investigations.  Interested  parties  were
given  an  opportunity to make their  views known  in  writing  and  to  request  a  hearing
within the time limit set in the notices of initiation.

12

13

OJ C 53, 28.2.2002, p. 10.
OJ C 172, 18.7.2002, p. 11.

5

                                                
(9)

(10)

(11)

A number of exporting producers and traders in Norway, Chile and the Faeroe Islands,
producers  and  suppliers  located  in  the  Community  as  well  as  representative
associations of fish importers,  processors and  consumers made their  views known in
writing.  All  parties  who  so  requested  within  the  above  time  limit  and  showed  that
there were particular reasons why they should be heard were granted the opportunity
to be heard.

In view of the apparent large number of exporting producers of the product concerned
in  Norway,  Chile  and  the  Faeroe  Islands  and  the  large  number  of  producers  of  the
product in the Community, the application of sampling techniques for the investigation
of  injurious  dumping  and  subsidisation  in  the  review  and  injurious  dumping  in  the
investigation concerning Chile and the Faeroe Islands was envisaged in the notices of
initiation.

The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the
purposes  of  the  investigations.  With  regard  to  the  investigation  concerning  imports
originating  in  Chile  and  the  Faeroe  Islands,  this  included  all  information  deemed
relevant  for  the  determination  of  dumping,  injury  and  Community  interest.  With
regard to the investigation concerning imports originating in Norway, this included all
information  deemed  relevant  for  the  determination  of  dumping,  subsidisation  and
injury  and  also  the  determination  as  to  whether  there  was  a  likelihood  of  a
continuation  and/or  recurrence  of  injurious  dumping  and  subsidisation  and  the
assessment  of  Community  interest.  Verification  visits  were  carried  out  at  the
following:

(a) The Government of Norway and other entities in Norway

–  Ministry of Fisheries, Oslo,

–  Ministry of Local Government and Regional Development, Oslo,

–  Ministry of Trade and Industry, Oslo,

– 

– 

Norwegian Industrial and Regional Development Fund (SND), Oslo,

The Research Council of Norway, Oslo.

(b) Community producers

– 

Orkney Sea Farms Ltd. Glasgow, United Kingdom,

–  Muirachmhainní Teo, Co. Galway, Ireland,

– 

– 

– 

– 

Ardvar Salmon Ltd, Saffron Walden, United Kingdom,

Hoganess  Salmon  Ltd,  Wester  Sound  Salmon  Ltd,  Shetland,  United
Kingdom,

Cro Lax Ltd, Shetland, United Kingdom,

Bressay Salmon Ltd, Shetland, United Kingdom,

6

–  West  Minch  Salmon  Ltd,  Atlantic  West  Salmon  Ltd,  Sidinish  Salmon

Ltd, South Uist, United Kingdom,

– 

– 

– 

– 

Loch Duart Ltd, Edinburgh, United Kingdom,

Hoove Salmon Ltd, Shetland, United Kingdom,

North Atlantic Salmon Ltd, Shetland, United Kingdom,

Ayre Salmon Ltd, Shetland, United Kingdom.

(c) Exporters/producers and related sales companies

Norway

–  Midt-Norsk Havbruk AS, Rørvik,

– 

– 

– 

Lofoten Sjøprodukter AS, Leknes,

Follalaks AS, Nordfold,

Terra Seafood AS, Trondheim,

–  Marine Harvest Norway AS, Bergen,

Aqua Farms AS, Bergen,

Naco Trading AS, Bergen,

Aalesundfisk AS, Aalesund,

Alsaker Fjordbruk AS, Onarheim,

Labeyrie Norge AS, Oslo.

– 

– 

– 

– 

– 

Chile

–  Marine Harvest Chile S.A., Puerto Montt,

– 

– 

– 

– 

Salmones Multiexport Ltda, Puerto Montt,

Pesca Chile S.A., Santiago,

Invertec Pesquera Mar de Chiloé S.A., Santiago,

Cultivos Yadran S.A., and Yadran Quellón S.A., Quellón, Chiloé Island.

The Faeroe Islands

– 

– 

– 

P/F Vestlax, and P/F Vestsalmon, Kollafjørður,

P/F East Salmon, Klaksvík,

P/F Faeroe Seafood, Tórshavn,

7

– 

P/F Bakkafrost, Glyvrar.

(d) Related importers in the Community

– 

– 

– 

– 

– 

– 

– 

Armoric S.A., Quimper, France,

Vensy España S.A., Málaga, Spain,

Narvik S.A., Landivisiau, France,

Benfumat S.A., St. Feliu de Llobregat, Spain,

H. Van Wijnen, Krimpen a/d Ijssel, Netherlands,

A-fish Skagen AS, Skagen, Denmark,

Labeyrie S.A., Saint Geours de Maremne, France.

(e) Unrelated importers in the Community

–  Moulin de la Marche, Brittany, France.

(f) Suppliers

– 

Landcatch Ltd, Argyll, United Kingdom.

(12)

(13)

The investigation of dumping and subsidisation in the review investigation concerning
Norway covered the period 1 January to 31 December 2001 (‘IP’). This same period
was  exceptionally  taken  for  the  investigation  of  dumping  in  the  anti-dumping
proceeding concerning Chile and the Faeroe Islands in order to allow for a combined
analysis of injury and causation for all the proceedings. The examination of trends in
the  context  of  the  analysis  of  injury  for  both  investigations  covered  the  period  from
January 1998 to the end of the IP (analysis period).

In accordance with Article 20 of the basic anti-dumping Regulation and Article 30 of
the basic anti-subsidy Regulation, all parties concerned were informed of the essential
facts  and  considerations  on  the  basis  of  which  it  was  intended  to  propose  the
termination  of  the  investigations.  They  were  also  granted  a  period  within  which  to
make representations subsequent to this disclosure.

(14)

The Commission continued to seek and verify all information it deemed necessary for
its investigations. The written comments submitted by the parties were considered, and
where appropriate, the findings have been modified accordingly.

B.

PRODUCT CONCERNED AND LIKE PRODUCT

1.

Product concerned

(15)

The  product  under  consideration  is  farmed  Atlantic  salmon,  whether  or  not  filleted,
fresh,  chilled  or  frozen.  The  definition  excludes  other  similar  farmed  fish  products
such  as large  (salmon)  trout, other salmon  species such  as  Pacific  salmon  as  well  as
wild salmon and further processed types such as smoked salmon.

8

(16)

(17)

The  product  is  currently  classifiable  within  CN  codes  0302  12  00,  0303  22  00,
0304 10  13  and  0304  20  13,  corresponding  to  different  presentations  of  the  product
(fresh  or  chilled  whole  fish,  fresh  or  chilled  fillets,  frozen  whole  fish  and  frozen
fillets).  All  these  presentations  were  found  to  be  sufficiently  similar  for  them  to
constitute a single product for the purpose of the proceeding.

2.

Like product

It  was  considered  whether  the  product  produced  in  Norway,  Chile  and  the  Faeroe
Islands and sold for export to the Community was identical, that is to say alike in all
respects  to  the  farmed  Atlantic  salmon  produced  in  the  Community  and  sold  on  the
Community  market  within  the  meaning  of  Articles  1(4)  and  1(5)  of  the  basic  anti-
dumping and anti-subsidy Regulations respectively.

(18) One  party  contended  that  fresh  and  frozen  salmon  should  be  distinguished  for  the
purpose of the investigation on the basis that frozen salmon, which is not produced in
large  quantities  in  the  Community,  had  distinct  customers  and  markets  from  fresh
salmon. It was noted that in a previous Commission investigation of farmed Atlantic
salmon initiated in 1990, which was subsequently terminated without the imposition of
measures,  frozen  salmon  had  been  excluded  from  the  scope  of  the  investigation.
Similarly,  attention  was  drawn  to  the  fact  that  authorities  in  the  United  States  of
America  (USA)  have  consistently  made  the  distinction  between  fresh  and  frozen
salmon  in  the  context  of  anti-dumping  and  countervailing  investigations  relating  to
salmon.  This  party  suggested  that  the  freezing  of  salmon  added  significant  value-
added  to  the  final  product  which  was  appreciated  by  certain  users  in  the  processing
industry. Frozen salmon, it was argued, was a further processed product that used fresh
salmon as its raw material. It was claimed that consumers in the Community showed a
clear preference for fresh salmon and that this was reflected in the price premium that
they were prepared to pay. In view of these considerations, it was argued that frozen
Atlantic  salmon  could not be considered to be  a like product to that produced in the
Community and should therefore be excluded from the investigation.

(19)

In  assessing  whether  the  product  concerned  should  be  deemed  to  be  alike  to  farmed
Atlantic  salmon  produced  in  the  Community,  it  was  initially  considered  whether  the
various  types  and  presentations  of  farmed  Atlantic  salmon,  i.e.  fillets  or  whole  fish,
fresh  or  frozen,  shared  the  same  basic  physical,  technical  and/or  chemical
characteristics.  Arguments  concerning  practice  in  the  USA  and  in  the  prior
investigation, which was terminated without measures, were not considered relevant in
this context. Indeed, it is recalled that in  the  most  recent  investigations  which  led  to
the  imposition  of  measures  against  imports  into  the  Community  of  farmed  Atlantic
salmon originating in Norway, it was determined that the product concerned included
whole fish, gutted fish and various types of portion and fillets, whether fresh, chilled
or  frozen  and  that  such  presentations  of  salmon  constituted  a  single  product  which
itself was deemed to be alike in  all respects to that  produced  in  the  Community  and
sold on the Community market. It was not considered that the freezing of salmon was
sufficient to alter the basic characteristics of the product. Rather than adding value to
the  product  that  was  appreciated  by  certain  users,  it  was  considered  that  one  of  the
main reasons for freezing the product was to facilitate its transport to the Community.
Consequently, references to frozen salmon as a further processed product derived from
fresh salmon in the same way that wine is produced from grapes were not found to be
reasonable in the context of the present investigations.

9

(20)

(21)

(22)

(23)

The present investigations established  fresh  and frozen salmon  to  be  interchangeable
to a certain degree. Indeed, given the increased share of total consumption accounted
for  by  frozen  salmon  in  the  IP,  it  has  to  be  assumed  that  there  are  certain  users  not
having  cooperated  in  the  proceeding  that  are  able  to  replace  fresh  salmon  in  their
production  processes  with  frozen  salmon.  At  the  same  time,  it  is  noted  that  the
Community  market  shows  a  clear  preference  for  farmed  Atlantic  salmon  over  other
types  of  salmon  such  as  Pacific  salmon  and  wild  salmon.  This  is  evidenced  by  the
volume of farmed Atlantic salmon consumed in the Community as described below in
recital  (164).  Species  of  salmon  other  than  the  product  concerned  are  therefore  not
considered to have a significant influence on the market for farmed Atlantic salmon.

C.

SAMPLING FOR DUMPING ASSESSMENT PURPOSES

In order to enable the Commission to select a sample, pursuant to Article 17(2) of the
basic  anti-dumping  Regulation,  exporters,  producers  and  exporting  producers  were
requested to make themselves known within three weeks of the initiation of the review
investigation and of the anti-dumping proceeding and to provide basic information on
their export and domestic sales, their precise activities with regard to the production of
the product concerned and the names and activities of all their related companies in the
production and/or selling of farmed Atlantic salmon. The Commission also contacted
known associations of exporters/producers, the  authorities of Norway and Chile, and
the  Home  Government  of  the  Faeroe  Islands.  No  objections  to  the  use  of  sampling
were raised by these parties.

1.

Pre-selection of cooperating companies

Chile

59  entities  in  Chile,  composing  42  individual  companies  or  groups  of  related
companies (companies), came forward and provided the requested information within
the time limit set for this purpose. They represented almost 100 % of total exports of
the  product  concerned  from  Chile  to  the  Community.  However,  only  28  were
producers reporting exports to the Community during the IP which could be taken into
account in the selection of the sample. As to the remaining fourteen companies, eight
were traders that could not be taken into account in the selection of the sample, three
were  producers  with  no  exports  to  the  Community  during  the  IP  and  the  remaining
three companies were transformers with no production of the product concerned.

The Faeroe Islands

26 companies in the Faeroe Islands, grouped in thirteen groups of related companies,
came forward and provided the requested information within the time limit set for this
purpose.  All  of  these  companies  expressed  a  wish  to  cooperate  in  the  investigation.
They  represented  100  %  of  total  exports  of  the  product  concerned  from  the  Faeroe
Islands to the Community. Out of the thirteen groups, seven indicated both production
and  exports  to  the  Community  during  the  IP.  These  seven  groups  were  taken  into
account in the selection of the sample.

10

Norway

(24)

228 companies in Norway replied to the sampling mini-questionnaire within the time
limit set for this purpose. They represented close to 100 % of total Norwegian exports
of the product concerned to the Community.

2.

Selection of the sample

Chile

(25)

In Chile, as a general rule, the production and sales of the product concerned is made
by  integrated  companies  which  carry  out  both  functions.  Thus,  in  the  case  of  Chile
only  one  sample  of  integrated  exporting  producers  was  selected.  According  to
Article 17(1)  of  the  basic  anti-dumping  Regulation,  the  selection  of  the  sample  was
based  on  the  largest  representative  volume  of  exports  which  could  reasonably  be
investigated within the time available. Criteria that were also found to be important in
the selection of the Chilean sample were representative domestic sales and significant
production.

(26) On  this  basis  four  exporting  producers  were  chosen  to  constitute  the  sample  in
consultation  with  the  Chilean  Salmon  and  Trout  Producers’  Association  (‘CSTPA’)
and the Chilean  authorities, both  of which  raised no objection to  the  proposal  of  the
Commission. The four companies selected in the sample represented, according to the
replies  to  the  mini-questionnaire,  around  45  %  of  Chilean  export  sales  to  the
Community, 53 % of Chilean  domestic  sales and 36  %  of Chilean production of the
product concerned.

(27)

The  cooperating  exporting  producers,  who  were  not  finally  retained  in  the  sample,
were  informed  that  any  anti-dumping  duty  on  their  exports  would  be  calculated  in
accordance with the provisions of Article 9(6) of the basic  anti-dumping  Regulation.
Some  of  these  companies  initially  indicated  their  intention  to  claim  an  individual
treatment  in  accordance  with  Article  17(3)  of  the  basic  anti-dumping  Regulation  in
case  they  were  not  selected  in  the  sample.  However,  only  two  substantiated  claims
were received within the deadline specified in the notice of initiation.

(28) One  of  the  two  companies  that  submitted  a  claim  for  individual  treatment,
subsequently  informed  the  Commission  that  it  wished  to  withdraw  its  request  for
individual  treatment  because  its  submission  (questionnaire  response)  had  serious
errors  and  it  did  not  have  the  human  resources  either  to  correct  these  errors  or  to
continue with the investigation.

(29)

The companies which finally constituted the sample and which fully cooperated with
the  investigation  as  well  as  the  sole  company  that  claimed  individual  examination
were attributed their own dumping margin.

(30) Questionnaires were sent for completion  to all  four sampled  companies  and  to  those
companies that initially expressed their intention to claim an individual margin.

11

The Faeroe Islands

(31) As was the case with Chile, the production and sales of the product concerned in the
Faeroe Islands is carried out by integrated companies. Therefore, only one sample of
integrated  exporting  producers  was  selected.  According  to  Article  17(1)  of  the  basic
anti-dumping  Regulation,  the  selection  of  the  sample  was  based  on  the  largest
representative  volume  of  exports,  which  could  reasonably  be  investigated  within  the
time  available.  Three  exporting  producers  were  chosen  to  constitute  the  sample  in
consultation  with  and  with  the  consent  of  the  Faeroe  Fish  Farmers’  Association  and
the  Home  Government  of  the  Faeroe  Islands.  The  three  companies  selected  in  the
sample represented, according to the replies to the mini-questionnaire, around 54 % of
both Faeroese production and exports to the Community of the product concerned.

(32) None  of  the  remaining  exporting  producers  requested  an  individual  treatment  in
accordance with Article 17(3) of the basic anti-dumping Regulation. The cooperating
exporting  producers,  who  were  not  finally  retained  in  the  sample,  were  therefore
informed  that  any  anti-dumping  duty  on  their  exports  would  be  calculated  in
accordance with the provisions of Article 9(6) of the basic anti-dumping Regulation.

(33)

The companies which finally constituted the sample and which fully cooperated with
the investigation were attributed their own dumping margin. Questionnaires were sent
for completion to all sampled companies.

Norway

(34)

The samples for Norway were selected in consultation with and with the consent of the
Norwegian  authorities  and  the  Norwegian  Federation  of  Fish  and  Aquaculture
Industries.

(35) As  was  the  case  at  the  time  of  the  investigation  which  led  to  the  imposition  of  the
original  measures  (original  investigation),  it  was  found  that  a  strict  distinction  in
functions  is  maintained  between  the  farmers  who  grow  the  salmon  and  the  traders
(exporters)  who  sell  it  domestically  and  for  export.  It  was  therefore  decided  to  have
two samples, one for farmers and one for exporters.

(36) As  it  was  found  impossible  to  impose  a  company  specific  duty  which  could  be
enforced  by  customs  authorities,  since  the  identity  of  the  grower  could  never  be
checked,  it  was  decided  that  the  purpose  of  the  samples  would  be  to  establish  a
country-wide  duty.  Moreover,  as  Council  Regulation  (EC)  No  772/1999  established
only  one  duty  rate  for  Norway  as  a  whole,  the  present  investigation  envisaged  the
review of that single duty.

(37) As  a  consequence,  one  company  which  had  specifically  requested  to  be  part  of  the

sample with a view to having an individual margin, withdrew its request.

(38)

The companies were selected on the basis of the following criteria:

For the farmers:

(i)

the significance of their production volumes, and

(ii)

their location, so as to ensure a good geographical spread.

12

For the exporters (traders):

(i)

the significance of volume of exports, and

(ii)

their  involvement  in  activities  which  are  representative  of  the  various  roles
played by Norwegian exporters.

The  samples  that  were  established  along  these  lines  comprised  ten  companies.
Altogether the sampling  questionnaire  replies  of  these  companies  indicated  that  they
represented 17 % of Norwegian export sales to  the  Community,  20 % of Norwegian
domestic  sales  and  15  %  of  Norwegian  production  of  the  product  concerned.
Questionnaires were sent for completion to all sampled companies.

Subsequent  to  the  disclosure,  one  party  claimed  that  the  Norwegian  sample  of
exporters  was  unrepresentative  and  had  led  to  unreliable  results  mainly  because  it
included  a  company  which  was  part  of  a  multinational  group  with  world-wide
interests.  It  should  be  noted  that  the  selection  of  the  sample  was  made  at  the  early
stages  of  the  review  investigation  and  that  interested  parties  had  the  opportunity  to
comment on its appropriateness at that time and chose not to do so. More importantly,
no reason was advanced as to why the fact that the Norwegian exporter belonged to a
multinational  group  made  the  data  of  that  company  unusable  for  dumping  purposes.
The claim of this party was therefore rejected.

D.

DUMPING

1.

Chile

(a) Normal Value

In accordance with Article 2(2) of the basic anti-dumping Regulation, the Commission
first examined whether the domestic  sales  of  farmed  Atlantic  salmon  to  independent
customers  by  each  exporting  producer  were  representative,  i.e.  whether  the  total
volume  of  such  sales  was  equal  to  or  greater  than  5  %  of  the  total  volume  of  the
corresponding export sales to the Community.

This assessment revealed that all investigated exporting producers had representative
sales of farmed salmon on the domestic market during the IP.

The  Commission  subsequently  considered  whether  domestically  sold  and  exported
product  types  had  similar  quality,  form  (fresh/chilled  or  frozen)  and  presentation
(gutted fish head-on, gutted fish head-off, whole fillets, portions, etc.) and concluded
that they were identical or directly comparable.

(39)

(40)

(41)

(42)

(43)

(44) Additionally and for each product type sold by the exporting producer on the domestic
market, which was found to be directly comparable with the type sold for export to the
Community, it was established whether domestic sales were sufficiently representative
for the purposes of Article 2(2) of the basic anti-dumping Regulation. Domestic sales
of  a  particular  product  type  were  considered  as  sufficiently  representative  when  the
total domestic sales volume of that type during the IP represented 5 % or more of the
total sales volume of the comparable product type exported to the Community.

13

(45)

The Commission subsequently examined whether the domestic sales of each company
could  be  considered  as  being  made  in  the  ordinary  course  of  trade  pursuant  to
Article 2(4) of the basic anti-dumping Regulation.

This  was  done  by  establishing  the  proportion  of  domestic  sales  to  independent
customers,  of  each  exported  product  type,  sold  at  a  loss  on  the  domestic  market
during the IP:

– 

– 

– 

For  those  product  types  where  more  than  80  %  by  volume  of  sales  on  the
domestic  market  were  not  below  unit  costs,  and  where  the  weighted  average
sales price was equal to or higher than the  weighted average  production  cost,
normal  value,  by  product  type,  was  calculated  as  the  weighted  average  of  all
domestic sales prices of the type in question.

For those product types where at least 10 %, but no more than 80 %, by volume
of  sales  on  the  domestic  market  were  not  below  unit  costs,  normal  value,  by
product type, was calculated as the weighted average of domestic sales prices
which were found equal to or above unit costs only, of the type in question.

For  those  product  types  where  less  than  10  %,  by  volume  of  sales,  on  the
domestic market, were not below unit costs, it was considered that the product
type  concerned  was  not  sold  in  the  ordinary  course  of  trade  and  therefore,
normal value was constructed.

(46)

(47)

(48)

For certain types sold for export to the Community, domestic sales were found to have
been made in the ordinary course of trade in the case of three investigated companies.
Normal value was based for the corresponding product type on the actual prices paid
or payable, by independent customers in the domestic market of Chile, during the IP,
as set out in Article 2(1) of the basic anti-dumping Regulation.

For  sales  of  product  types  not  made  in  the  ordinary  course  of  trade,  as  well  as  for
product types which were not sold in representative quantities on the domestic market,
normal value had to be  constructed.  All five investigated  companies  had sales to  the
Community of such product types.

To  construct  normal  value  pursuant  to  Article  2(6)  of  the  basic  anti-dumping
Regulation,  the  selling,  general  and  administrative  (SG&A)  costs  incurred  and  the
weighted average profit realised by the cooperating exporting producers concerned on
domestic sales of the like product, in the ordinary course of trade, during the IP, was
added to their own average cost of manufacturing during the IP. Where necessary, the
manufacturing  costs  and  SG&A  costs  reported  were  corrected,  before  being  used  in
the ordinary course of trade test and in constructing normal values.

(b) Export Price

(49)

The investigation showed that the exports of certain Chilean exporting producers were
made both to unrelated  and to  related  customers  in  the  Community.  Two  companies
exported  via  unrelated  traders  in  Uruguay  and  in  the  USA.  In  these  cases  it  could
however  be  established  that  the  product  under  consideration  was  shipped  to  the
Community.

14

(50)

(51)

(52)

Therefore, for exports of the product under consideration by  the exporting producers
which  were  made  directly  to  independent  customers  in  the  Community,  the  export
price  was  established  in  accordance  with  Article  2(8)  of  the  basic  anti-dumping
Regulation, on the basis of export prices actually paid or payable by the independent
customers  in  the  Community  or  by  the  independent  traders  located  in  the  third
countries.

For  sales  made  via  their  related  importers,  the  export  price  was  constructed  on  the
basis  of  the  resale  prices  to  independent  customers.  Adjustments  were  made  for  all
costs  incurred  between  importation  and  resale  by  those  importers,  including  SG&A
costs, and assuming a reasonable profit margin, in accordance with Article 2(9) of the
basic anti-dumping Regulation.

(c) Comparison

The  comparison  between  normal  value  and  export  price  was  made  on  an  ex-factory
basis. 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  anti-
dumping  Regulation.  For  all  investigated  exporting  producers  allowances  for
differences in transport costs, ocean freight and insurance costs, handling, loading and
ancillary costs, import charges, credit costs, after-sales costs, commissions, discounts,
rebates,  currency  conversions  have  been  claimed  and  granted  where  applicable  and
justified.

(d) Dumping margins

(53) Dumping margins, for the companies investigated, were established on the basis of a
comparison  of  a  weighted  average  normal  value  by  product  type  with  a  weighted
average export price by product type.

(54)

Since  zero  dumping  margins  were  established  for  three  out  of  the  four  sampled
exporting  producers  in  Chile,  the  dumping  margin  for  exporting  producers,  which
made  themselves  known  in  accordance  with  Article  17  of  the  basic  anti-dumping
Regulation  but  were  not  examined  individually,  has  been  established,  pursuant  to
Article 9(6) of the basic anti-dumping Regulation, on the basis of the dumping margin
of  the  company  in  the  sample  for  which  the  existence  of  dumping  was  established.
Moreover,  due  to  the  high  overall  cooperation  level  established,  it  was  considered
appropriate to set the residual dumping margin for non-cooperating companies at the
same level.

15

(55)

The  dumping  margins,  expressed  as  a  percentage  of  the  CIF  import  price  at  the
Community border, duty unpaid, are the following:

Companies in the sample

- Marine Harvest Chile SA

- Salmones Multiexport Ltda

- Invertec Pesquara Mar de Chiloé SA

- Pesca Chile SA

Company for which individual treatment is granted

- Cultivos Yadran S.A. and its related exporter Yadran Quellón S.A

All other companies

2.

The Faeroe Islands

(a) Normal value

29,4 %

0 %

0 %

0 %

10,3 %

29,4 %

(56)

In accordance with Article 2(2) of the basic anti-dumping Regulation, the Commission
first  examined  whether  the  domestic  sales  of  the  product  concerned  to  independent
customers  by  each  exporting  producer  were  representative,  i.e.  whether  the  total
volume  of  such  sales  was  equal  to  or  greater  than  5  %  of  the  total  volume  of  the
corresponding export sales to the Community.

(57)

This  examination  revealed  that  none  of  the  investigated  exporting  producers  had
representative sales of farmed Atlantic salmon to the domestic market during the IP.

(58) As stipulated in Article 2(3) of the basic anti-dumping Regulation, normal value was
therefore  to  be  based  either  on  the  cost  of  manufacturing  of  the  companies  in  the
sample, plus a reasonable amount for SG&A and for profits or on the basis of export
prices,  in the ordinary  course  of trade,  to  an  appropriate  third  country,  provided  that
such sales were representative.

(59)

In  this  respect,  it  was  found  that  none  of  the  exporting  producers  had  representative
exports sales to an individual third country. Therefore, the Commission had no other
option than to base normal value on the cost of manufacturing of the companies in the
sample, plus a reasonable amount for SG&A and for profits.

(60) Given  the  overall  absence  of  representative  domestic  sales  of  the  product  concerned
but  also  the  absence  of  domestic  sales  of  other  products  falling  within  the  same
general  category  as  the  product,  a  reasonable  method  was  sought  for  calculating  the
amounts for SG&A costs and profits to be added to the cost of manufacturing of the
sampled exporting producers.

16

(61)

(62)

(63)

(64)

(65)

Therefore, it was decided, pursuant to Article 2(6)(c), to determine normal values for
the  exporting  producers  in  the  sample  by  adding  to  their  own  cost  of  manufacturing
the  weighted  average  SG&A  costs  and  profits  incurred  by  the  sampled  Chilean
exporting  producers  on  their  domestic  sales.  This  method  was  considered  to  be  the
most  reasonable  in  this  situation  since  Chile  is  party  to  the  same  proceeding  as  the
Faeroe  Islands  and  the  production  and  sales  structure  of  the  salmon  industry  in  this
country is similar to that of the Faeroe Islands, in the sense that both in Chile and the
Faeroes the salmon industry is run by large integrated companies.

Subsequent to the disclosure,  one  party  contested this methodology  and claimed that
the  Commission  should  not  have  used  the  SG&A  costs  and  profits  from  Chile  in
constructing the normal value for the Faeroes as the Chilean market is not comparable
to the Faeroese market, neither in terms of size nor in development. It further claimed
that a profit margin of 15 % should have been used as the Commission had considered
this  to  be  a  proper  level  of  profitability  for  the  Community  industry  in  the  original
investigation concerning Norway.

In addressing this argument, it should be noted that since there is no domestic market
in the Faeroes Islands for the product concerned, the issue of comparability of a non-
existing  domestic  market  with  another  domestic  market  is  irrelevant.  Therefore,  the
Commission  maintains  that,  due  to  the  absence  of  a  domestic  market  in  the  Faeroe
Islands  for the product concerned or for  other similar products,  the  most  appropriate
method  for  determining  normal  values  for  this  territory  was  to  use  the  weighted
average SG&A costs and profits incurred by the sampled Chilean exporting producers.
As explained  in  recital  (61),  this  was  considered  the  most  reasonable  method  due  to
the similar structure of the salmon industry in both territories. Regarding the claim for
the level of profit used, it should be noted that the profit margin used in the original
Norwegian investigation for calculating the injury margin (15 %) is not to be confused
with  the  profit  margin  that  should  be  used  in  constructing  normal  values  for  the
dumping  calculations  in  the  current  investigations.  On  the  basis  of  the  above  the
claims made by the party cannot justify an amendment to the methodology used by the
Commission.

(b) Export Price

It was established that the exports of Faeroese exporting producers were made directly
to  independent  customers  in  the  Community.  As  a  consequence,  and  in  accordance
with  Article  2(8)  of  the  basic  anti-dumping  Regulation,  the  export  price  was
established on the basis of export prices actually paid or payable.

(c) Comparison

The  comparison  between  normal  value  and  export  price  was  made  on  an  ex-factory
basis. 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  anti-
dumping Regulation.

(66)

For all investigated exporting producers allowances for differences in transport costs,
ocean  freight  and  insurance  costs,  credit  costs,  discounts  and  rebates  have  been
granted where applicable and justified.

17

(d) Dumping margins

(67) Dumping  margins  were  established  on  the  basis  of  a  comparison  of  a  weighted
average normal value by product type with a weighted average export price by product
type. On the basis of this comparison, zero dumping margins were found in respect of
all three companies forming the  sample.  Moreover,  due  the  overall  high  cooperation
level  achieved  from  exporting  producers  in  the  Faeroe  Islands  it  was  considered
appropriate  to  attribute  a  zero  dumping  margin  to  all  other  Faeroese  exporting
producers.

3.

Norway

(a) General

(68)

(69)

In the original investigation the assessment of dumping was made at exporters’ level
because the farmers, at that time, sold all their output to Norwegian exporters and were
generally  unaware  of  the  final  destination  of  the  product.  As  there  has  been  no
fundamental  change  in  this  situation  since  the  original  investigation,  the  same
approach has been followed in the present investigation.

It should also be noted that, at the time of the original investigation, it was considered
reasonable  to  select  a  representative  sample  of  Norwegian  farmers  and  to  base  the
“cost of acquisition”, used in determining  whether,  for each  exporter, domestic sales
were profitable or not and for constructing normal value, on a weighted average of the
domestic selling prices charged by the sampled farmers. The same approach has been
followed in this investigation, for the reasons explained in recital (68) above.

(70) Moreover,  in  the  original  investigation,  the  investigation  of  dumping  was  limited  to
two  specific  product  types  (namely  fresh/chilled  salmon  gutted  head-on  of  superior
quality and fresh/chilled salmon gutted head-on of ordinary quality), which accounted
for more than 72 % of the total exports to the Community by each of the six exporters
which  composed  the  sample.  The  same  approach  was  followed  in  the  present
investigation, as these two product types were found to represent not less than 85 % of
the  total  exports  to  the  Community  by  each  of  the  five  exporters  comprising  the
present sample.

(71)

(72)

In  view  of  the  fact  that  the  present  investigation  envisaged  the  establishment  of  one
single  country-wide  duty  for  Norway,  a  weighted  average  normal  value  and  a
weighted average export price for Norway as a whole was calculated, on the basis of
the information submitted by the companies included in the samples.

(b) Normal value

It  was  first  examined  whether  the  domestic  sales  of  each  exporter  –  in  total  and  for
each of the two product types considered – had been made in representative quantities
or  not.  In  this  respect,  it  should  be  recalled  that,  in  the  original  investigation,  the
quantities  sold  to  other  exporters,  the  final  destination  of  which  could  not  be
determined  by 
the  specific
characteristics of the Norwegian domestic market, a percentage of at least 4 % of the
volume  of  exports  of  the  product  concerned  to  the  Community  (instead  of  the  usual
5 %)  was  held  as  sufficient  to  consider  domestic  sales  to  be  representative.  As  the

the  seller,  were  disregarded.  Moreover,  given 

18

situation  has  not  fundamentally  changed  in  this  respect,  both  approaches  have  also
been applied in the present investigation.

(73) One  party  claimed  that  the  Commission  should  not  have  used  domestic  sales
representing less than 5 % of the  exports to the  Community, and  hinted  that sales to
domestic customers could have been further redirected to the Community. In relation
to the  first  claim, it  is noted  that the  basic  anti-dumping  Regulation  clearly  provides
for the possibility to use domestic sales when they represent a percentage lower than
5 %,  if  the  prices  charged  are  considered  representative  of  the  market  concerned,  in
accordance with Article 2(2). Thus, as the circumstances between the original and the
current  investigation  regarding  the  domestic  consumption  in  Norway  had  not
fundamentally changed this claim had to be rejected. As regards the second claim, the
Commission  checked  the  domestic  nature  of  the  sales  taken  into  consideration  and
only used those which were made to final domestic customers.

(74)

(75)

(76)

(77)

It was found that, in the case of one exporter only, domestic sales – in total, and for
each of the two product types considered – represented at least 4 % of the export sales
to  the  Community.  The  other  sampled  exporters  had  either  no  domestic  sales  or
domestic sales accounting for significantly less than the above-mentioned percentage.

For the sole exporter for which domestic sales were found to be representative, it was
then examined whether they could be considered as being made in the ordinary course
of trade pursuant to Article 2(4) of the basic anti-dumping Regulation. In this respect,
it was found that for both product types the proportion of domestic sales, by volume,
sold  above  unit  costs  on  the  domestic  market,  during  the  IP  was  less  than  80  %  but
more than 10 %.

In view of the above, normal value, by product type, was calculated as the  weighted
average of domestic sales prices which were equal to or above unit costs only, of the
product type in question.

The  unit  cost  used  in  determining  whether  the  domestic  sales  were  made  in  the
ordinary course of trade was calculated by adding to the unit “cost of acquisition” the
unit SG&A costs incurred by the exporter in question for the domestic sales of the like
product. The unit “cost of acquisition”, by product type, was obtained as the weighted
average of the prices made by the companies included in the sample of farmers, when
selling to independent domestic customers, and in the ordinary course of trade.

(78) As  the  remaining  four  exporters  in  the  sample  had  no  representative  sales,  normal
value in their case was constructed on the basis of the “cost of acquisition” as defined
above plus  a reasonable  amount  for SG&A  costs and  for  profits,  in  accordance  with
Article 2(3) and 2(6)(c) of the basic anti-dumping Regulation. The amount for SG&A
costs and the profit margin used were based on the respective amounts calculated for
the sole exporter whose normal value was based on its domestic sales.

(79) One  party claimed that to use  the  SG&A  costs  and  profits  of  only  one  exporter  was
incorrect, and complained that such amounts had not been disclosed. In its opinion, the
amounts  used  were  lower  in  percentage  than  those  applied  in  the  original
investigation. With regard to these claims, it is firstly noted that the party in question
had not suggested any possible alternative, and that the use of the  amounts observed
during the investigation concerning Chile would have not given any more favourable
result  to  that  party.  Moreover,  there  was  no  reason  why  the  percentages  observed

19

during  the  original  investigation  should  be  applied  as  Article  11(9)  refers  to  the
application of the same methodology of the original investigation (when circumstances
have not changed) and not to the application of the same factual data for the dumping
calculations. This claim was therefore rejected. As for the disclosure of the amounts of
SG&A costs and profits relating to only one exporter, these could not be disclosed for
reasons of confidentiality.

(80)

Finally,  the  normal  values  established  as  indicated  above  for  each  exporter  in  the
sample, were weighted on the basis of the quantities sold to their respective customers
in the Community, so as to arrive at an average normal value for Norway.

(c) Export Price

(81)

(82)

In  those  cases,  where  export  sales  had  been  made  to  independent  customers  in  the
Community, the export  price  was  established, in  accordance  with  Article  2(8)  of  the
basic anti-dumping Regulation, on the basis of export prices actually paid or payable.

In certain cases, the product was imported into the Community by a related company
(transformer) in order to further process it, and sell it as smoked or marinated salmon.
In  these  cases,  reliable  export  prices  would  normally  be  obtained  by  deducting  all
costs  incurred  between  importation  and  resale  from  the  prices  charged  to  the  first
independent  customer,  in  accordance  with  Article  2(9)  of  the  basic  anti-dumping
Regulation. However, it was found that the sales of all but  one of these exporters to
their related transformers were made at prices which were fully in line with the prices
made by the sampled exporters to independent customers in the Community. In these
cases,  it  was  established  that  both  the  exporters  and  the  related  transformers  were
operating  with  reasonable  profits  and  that  the  transformers  did  not  appear  to  benefit
from  financial  support  of  their  related  Norwegian  exporters.  It  was,  therefore,
considered that the prices paid by these related transformers were reliable and could be
used to establish the export price on the basis of prices actually paid or payable.

(83)

For  the  sole  exporter  which  was  found  to  sell  to  its  related  transformers  at  prices
which  were  not  in  line  with  the  average  prices  made  by  the  sampled  exporters  to
independent  customers  in  the  Community,  the  export  price  was  constructed  in
accordance with Article 2(9) of the basic anti-dumping Regulation.

(84) One  party  claimed  that  export  prices  should  have  been  constructed  for  all  the
exporters.  This  claim  was  rejected  because  Article  2(9)  of  the  basic  anti-dumping
Regulation  is  to  be  applied  only  when  export  prices  are  deemed  to  be  unreliable,
which was the case for one exporter only.

(85)

Finally,  the  export  prices  established,  as  indicated  above,  for  each  exporter  of  the
sample, were weighted on the basis of the quantities sold to the respective customers
in the Community, so as to arrive at an average export price for Norway.

(d) Comparison

(86)

The average normal value and average export price obtained as indicated above were
compared  on  an  ex-works  basis.  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  anti-dumping  Regulation.  Accordingly,  in  relation  to  the

20

export  price,  allowances  for  differences  in  discounts,  rebates,  transport,  insurance,
handling,  loading  and  ancillary  costs,  credit  and  after-sales  costs  as  well  as  for  the
export tax applicable to exports of Norwegian salmon to the Community were granted,
where  applicable  and  supported  by  verified  evidence.  Similarly,  in  relation  to  the
normal value, allowances for differences in transport, insurance, handling, loading and
ancillary costs and credit costs were granted.

(87) One party queried that the actual level of allowances granted had not been disclosed.

However, the actual amounts could not be disclosed for reasons of confidentiality.

(e) Dumping Margin

(88)

The  dumping  margin  was  established  on  the  basis  of  a  comparison  of  a  weighted
average  normal  value  with  a  weighted  average  export  price,  in  accordance  with
Articles 2(11) and 2(12) of the basic anti-dumping Regulation.

(89)

This comparison showed a zero country-wide dumping margin.

(90) One party claimed that if the weighted average normal value had been compared with
individual  export  transactions,  as  should  have  been  done  in  its  opinion,  this  would
have shown the existence of dumping. For the sake of certainty, the Commission had
also  assessed  the  dumping  margin  of  Norway  by  comparing  the  weighted  average
normal  value  with  the  prices  of  individual  export  transactions.  The  results  of  this
exercise only showed a de minimis dumping margin for Norway, which meant that the
weighted  average  normal  value  to  weighted  export  price  method  reflected  the  full
degree of dumping being practised. The claim was therefore rejected.

(91) One party alleged that the calculations should have arrived at a positive determination
of  dumping  by  highlighting  the  fact  that  certain  important  Norwegian  operators  had
reported  losses  during  the  IP.  This  party  also  claimed  that  the  system  of  price
undertakings was being circumvented by a large number of Norwegian exporters and
that this  was  indicative of dumping. However, first of  all it should  be  noted  that  the
selective highlighting of the economic performance of individual companies does not
reflect the general situation of the Norwegian salmon industry seen as a whole. In fact
the situation of the Norwegian salmon industry during the IP showed a mixed picture,
which  is  commonly  the  case  with  most  other  industries,  where  certain  companies
report  losses  whilst  others  report  profits.  Moreover,  as  the  reasons  for  companies
reporting  losses  may  vary  (e.g.  extraordinary  restructuring  costs,  losses  from
investments in other products or countries), the fact alone that they were loss making
during  the  IP  does  not  necessarily  imply  that  they  were  dumping  the  product
concerned. With regard to the issue of the price undertakings, it is to be noted that this
party did not bring any substantive evidence in support of its claim. Moreover, whilst
it is acknowledged that certain undertakings were withdrawn following violations, the
vast majority of such undertakings remained in place and no evidence was found in the
investigation  to  suggest  that  the  companies  involved  were  not  respecting  them.
Therefore, these claims were rejected.

21

(f) Likelihood of recurrence of dumping

(i) Production capacity

(92) All but one  of the  sampled  Norwegian  farmers  were  working  at  full  capacity  during

the IP.

(93)

The production capacity of Norway depends on the granting of additional licences by
the Norwegian government, and also on the feeding quota policies established by the
authorities.  The  Norwegian  parties  have  stated  that  any  increase  in  the  number  of
licenses granted and any expansion of the feed quota policy will be made according to
sustainable market growth.

(94) One party claimed that Norway would shortly increase its production capacity by over
10 %,  following  the  issue  of  90  additional  production  licenses  by  the  Norwegian
government  in  November  2002  and  that  this  fact  alone  is  sufficient  to  indicate  the
likelihood of further injurious dumping by Norwegian exports to the Community.

(95)

(96)

(97)

It  was,  however,  considered  that  an  increase  in  the  number  of  production  licenses
alone  would  not  necessarily  lead  to  an  increase  in  actual  production,  since  the  latter
also depends on the level of feed quota. It was also considered that, because the length
of the production cycle of the product concerned is of at least two years, any potential
increase would only be felt on the Community market from the end of 2004 onwards.
In the short term, therefore, such a potential increase of production capacity would not
have any effect on the level of sales volumes including exports to the Community. In
any  event,  an  increase  in  production  capacity  does  not  imply  of  itself  that  any
additional Norwegian exports would be directed to the Community at injurious prices.
The claim was therefore rejected.

(ii) Export sales to other countries (prices, volumes, dumping)

The analysis of trends in prices and volumes to other countries was carried out both on
the  basis  of  statistical  data  and  on  the  basis  of  data  collected  from  the  sampled
companies.

The analysis on the basis of statistical data was made difficult by the fact that exports
of  salmon  were  recorded  under  statistical  codes  which  do  not  distinguish  between
product  types  and  by  the  fact  that  prices  may  vary  significantly  depending  on  the
product  type.  The  examination  of  exported  quantities  has  shown  that  (between  the
period before the imposition of measures and the IP) exports of the product concerned
from  Norway  to  “emerging  markets”,  such  as  Russia  and  Poland  increased  very
significantly. Exports to other more “traditional markets”, such as Japan, Hong Kong
and Taiwan, increased in a way more comparable to exports to the Community, which
is also considered a traditional market. It should therefore be expected that most of the
additional  exports  deriving  from  any  increased  capacity  would  be  directed  towards
“emerging  markets”,  which  are  in  constant  expansion,  rather  than  to  “traditional”
markets  such  as  the  Community,  which  have  already  reached  a  certain  degree  of
stability.

22

(98) Over  the  same  period,  prices  have  remained  substantially  stable  in  respect  of  the
“traditional  markets”,  and  prices  of  exports  to  non-EU  countries  overall  were,  on
average,  higher  than  those  to  the  Community  market.  Prices  to  “emerging  markets”
have somewhat decreased, as it could be expected from markets in strong expansion.

(99)

(100)

The  examination  of  data  received  from  the  sampled  companies  has  confirmed  that
exports of salmon from Norway to non-EU countries were made at prices higher, on
average, than those to the Community.

In consideration of the fact that the Community has long been the major export market
of  salmon  from  Norway,  it  can  be  assumed  that,  should  measures  be  repealed,  the
evolution  in  quantities  exported  and  price  behaviour  would  be  similar  to  that  in  the
case of other “traditional markets”  rather  than  in  the case of markets  such  as Poland
and  Russia.  Accordingly,  should  measures  be  repealed,  prices  are  likely  to  remain
stable  and  quantities  to  increase  only  to  the  same  degree  as  they  have  been  doing
during  the  period  following  the  imposition  of  the  measures.  It  should  also  be  noted
that exports to the other traditional markets Japan, Hong Kong and Taiwan appear to
have been made at non-dumped prices during the IP.

(101) Subsequent to the disclosure, a number of parties claimed that the analysis carried out
on  the  likelihood  of  recurrence  of  dumping  was  based  on  optimistic  assumptions
which could well not take place. Notably it was claimed that Poland and Russia were
not  genuine  markets  of  final  destination,  but  only  markets  of  “convenience”  from
which the salmon would be transhipped to the Community. However, the examination
of trade statistics showed only insignificant shipments of the product concerned from
these  countries  to  the  Community.  Moreover,  the  parties  in  question  have  never
submitted  any  evidence  to  support  their  allegations  in  this  respect.  Accordingly,  this
claim had to be rejected.

(iii) Conclusions

(102)

In  the  light  of  the  market  situation  as  explained  above,  it  is  considered  unlikely,  at
least in the short run, that important quantities would flow into the Community should
measures  be  repealed.  Although  it  cannot  be  excluded  that  the  situation  could  start
changing from late 2004, due to the newly granted production licenses, it is considered
that most of any increase in Norwegian exports would be directed towards expanding
“emerging  markets”  rather  than  to  the  Community.  As  the  investigation  has  shown
that  exports  of  the  product  concerned  to  traditional  markets,  among  which  the
Community, were made at a non-dumped level during the IP, prices can reasonably be
expected  to  remain  stable  and  at  a  non-dumped  level,  even  in  the  case  of  increased
Norwegian production, as indicated in recital (100) above.

(103)

It  is  therefore  concluded  that,  should  measures  in  respect  of  Norway  be  repealed,  it
would be unlikely that exports of the product concerned to the Community at dumped
prices would recur.

23

E.

SUBSIDIES

1.

Preliminary remarks

(104)

It was established in the original investigation that the Government of Norway granted
a number of subsidies which were found countervailable in accordance with Article 3
of the basic anti-subsidy Regulation. The programmes found to be countervailable in
the  original  investigation  were  investigated  in  the  framework  of  this  review.  In
addition, it was investigated whether any other subsidy schemes conferred a benefit to
producers/exporters of the product concerned.

(105)

In  this  respect,  the  Commission  investigated  whether  Government  institutions,
including any public or private entity under the control of the Government of Norway,
provided any financial contribution, as defined in Article 2(1) of the basic anti-subsidy
Regulation,  to  salmon  growers  in  Norway.  It  was  further  investigated  whether  the
financial contributions found to exist conferred a benefit to their recipients.

(106) As  in  the  original  investigation,  although  a  limited  number  of  representative
companies  was  investigated  in  agreement  with  the  Norwegian  authorities,  it  was
considered appropriate to establish a single country-wide subsidy amount.

(107) The investigation also examined whether the expiry of the measures would be likely,

or unlikely, to lead to the continuation or recurrence of subsidisation.

2.

Agreement on the European Economic Area (EEA Agreement)

(108) The Norwegian government repeated its argument, made in the original investigation,
that the application of countervailing measures in the field of fisheries should only be
considered  and  assessed  in  relation  to  the  obligations  under  Protocol  9  to  the  EEA
Agreement  and  in  relation  to  the  Joint  Declarations  on  the  Agreed  Interpretation  of
Article 4(1) and (2) of the Protocol.

(109) The  Norwegian  government  made  reference  to  Article  4(1)  of  Protocol  9  which
stipulates that aid granted through State resources to the fisheries sector which distorts
competition  shall  be  abolished.  In  addition,  reference  was  made  to  the  Joint
Declaration which states the following: “While the EFTA States will not take over the
‘acquis  communautaire’  concerning  the  fishery  policy,  it  is  understood  that,  where
reference is made to aid granted through State resources, any distortion on competition
is to be assessed by the Contracting Parties in the context of Articles 92 and 93 of the
EEC  Treaty  and  in  relation  to  relevant  provisions  of  the  ‘acquis  communautaire’
concerning  the  fishery  policy  and  the  content  of  the  Joint  Declaration  regarding
Article 61(3)(c)  of  the  Agreement”.  In  other  words,  the  Norwegian  Government
argues that the assessment of a possible distortion of competition should be based on a
comparison between the aid granted by the EFTA/EEA States concerned  and the aid
granted  by  the  Community,  and  in  case  where  any  distortion  of  competition  is
established the state aid shall be abolished.

(110) As  in  the  original  investigation,  it  should  be  recalled  that  Article  26  of  the  EEA
Agreement  prohibits  the  use  of  countervailing  measures,  unless  specified  in  the
Agreement.  In  this  respect,  Article  20  of  the  EEA  Agreement  explicitly  states  that
provisions and arrangements that apply to fish are set out in Protocol 9. Article 4(3) of
Protocol 9 expressly permits the use of countervailing measures in order to remedy the

24

injurious  effects  of  subsidies  in  the  fisheries  sector.  Protocol  13  to  this  Agreement
limits the use of countervailing measures to areas where the Community acquis is not
fully integrated. This is the case as regards the fisheries sector.

3.

Programmes found to be countervailable in the original investigation

(a) Differentiated social security contributions

(111)

In  Norway,  employers’  social  security  contributions  vary  according  to  the  zone  of
residence  of  the  employee.  As  in  the  original  investigation,  the  prevailing  system
consists  of  five  geographical  zones  with  differentiated  rates.  The  rates  vary  from
14,1 %  in  zone  1  to  0  %  of  the  employee’s  gross  wage  for  employees  resident  in
zone 5:

Zone 1

Zone 2

Zone 3

Zone 4

Zone 5

14,1 %

10,6 %

6,4 %

5,1 %

0 %

(112) According  to  the  Government  of  Norway  the  zones  were  revised  in  1999,  but  only
minor  adjustments  took  place.  Some  sectors  have  been  taken  out  of  the  system  of
differentiated 
and
contributions, 
telecommunications. These sectors have to pay 14,1 % irrespective of the location of
their employees. The different rates have not changed since the original investigation.

example  mining 

security 

social 

for 

(113) The  differentiated  employers’  social  security  contribution  constitutes  a  subsidy  as
defined  in  Article  2  of  the  basic  anti-subsidy  Regulation.  The  conclusions  on  this
scheme are the same as in the original investigation.

(114) The  reduction  in  or  exemption  from  employers’  social  security  contributions
constitutes  a  financial  contribution  by  the  Government  of  Norway.  The  system
constitutes  Government  revenue  that  is  foregone  or  not  collected.  In  exempting  or
reducing the employers’ social security contributions, in all zones except zone 1, the
Government revenue is reduced. Therefore, the scheme falls within the definition of a
financial  contribution  in  accordance  with  Article  2(1)(a)(ii)  of  the  basic  anti-subsidy
Regulation.

(115) The scheme clearly confers a benefit to the employers in accordance with Article 2(2)
of  the  basic  anti-subsidy  Regulation.  In  employing  employees  who  are  resident  in
zones 2 to 5, employers obtain a benefit compared to the situation that would exist if
all employees were resident in zone 1 and were subject to the basic rate of 14,1 %. The
scheme  confers  a  de  facto  benefit  to  employers  on  the  basis  of  their  location,  since
most  employees  live  in  the  same  zone  as  the  employer.  The  benefit  to  employers
employing employees in zones 2 to 5 is the difference between the  actual amount of
social  security  contributions  paid  and  the  amount  of  such  contributions  that  would
have been paid if  the basic rate of  14,1 % had been  applied. The  amount of  subsidy
should  therefore,  as  in  the  original  investigation,  be  measured  by  reference  to  the
above basic rate of contribution.

25

(116) Employers located in zones 2-5 pay less than the basic rate in zone 1, and therefore the
benefit conferred is limited to firms located in those zones only. Hence, this subsidy is
specific within the meaning of Article 3(2)(a) of the basic anti-subsidy Regulation.

(117) As in the original  investigation,  the  Government of Norway  was  not  able  to  provide
global  figures  for  social  security  contributions  by  the  salmon  farming  industry.
Therefore  the  basis  for  the  calculation  of  the  benefit  was  the  social  security
contributions  of  the  investigated  growers  located  in  various  zones.  The  subsidy  was
calculated by  comparing  the  actual payment of  social  security  contributions  with the
amount, which would have been paid if the basic rate of 14,1 % had been applied.

(118) The difference thus obtained was considered to be the benefit to the salmon growers.
The total subsidy, when expressed as a percentage of the turnover of the investigated
growers (including zone 1), amounts to 0,84 %.

(b) The Norwegian Industrial and Regional Development Fund (SND)

(119) The  SND  was  established  by  Act  No  97  of  3  July  1992  and  started  to  operate  on
1 January  1993.  The  SND  is  owned  by  the  Ministry  of  Trade  and  Industry  and  is
responsible  for  carrying  out  public  policy.  The  objective  of  the  SND  is  to  promote
profitable  business  and  economic  development  all  over  Norway,  by  contributing
towards development, modernisation and re-structuring of – and product development
and new establishments in – Norwegian trade and industry, and promote activities that
will  provide  stable  and  profitable  employment  and  opportunities  in  areas  with
particular employment problems or traditionally weak economic basis.

(120) SND provides incentives to firms in the form of grants, loans and loan guarantees.

(i) Grants

(121) The grants programmes available to  salmon growers,  are  funded over the budgets of
the  Ministry  of  Trade  and  Industry  and  the  Ministry  of  Local  Government  and
Regional  Developments.  The  programmes  funded  by  these  Ministries  have  been  in
function  since  1996.  Two  new  programmes  funded  by  the  Ministry  of  Fishery,
NUMARIO and Grant for Developing the Marine Sector, were introduced respectively
in  1997  and  2001.  However,  they  have  not  been  used  by  the  salmon  fish  farming
sector and, therefore, were not considered further.

(122) The following programmes have been available to salmon growers:

1.

2.

Development grants.

Regional development grants.

(123) Programme 2 is limited to assist certain areas while programme 1 has no geographical
limitations,  but  is  mainly  operative  in  areas  outside  the  assisted  areas.  Both
programmes  have  been  in  operation  since  the  original  IP,  and  only  some  minor
changes have taken place.

(124) The  SND  operates  several  other  grant  programmes.  However,  these  have  not  been

used by the salmon fish farming sector.

26

(125)

It  was  established  that  the  total  amount  of  grants  provided  to  salmon  growers  have
decreased since the original IP.

Existence of a subsidy

from 

(126) The grant  scheme provides  a  financial  contribution  since  there  is  a  direct  transfer  of
funds 
the  meaning  of
Article 2(1)(a)(i) of the basic anti-subsidy Regulation. The scheme confers a benefit to
salmon producers, since investment costs are reduced by the amount of the grant. The
SND grants therefore constitute subsidies.

the  beneficiaries  within 

the  Government 

to 

Specificity

(127) As  regards  SND  grants,  specificity  was  established  twofold  in  the  original

investigation:

– 

– 

regional specificity and,

lack of objective criteria and of automatic eligibility for non-regional schemes.

(128) With  regard  to  the  grants  which  are  available  nationwide  (programme  1),  no  grants
have been given to the salmon farming sector during the IP. Therefore the question of
specificity does not arise.

(129) With regard to programme 2, access to the subsidy is limited to enterprises, albeit not
exclusively  salmon  producers,  in  certain  regions  and  specificity  therefore  exists  in
accordance with Articles 3(2)(a) and 3(3) of the basic anti-subsidy Regulation.

Calculation of the benefit

(130) Although SND grants were in general used for the acquisition of fixed assets, they are
recurring subsidies obtained by the beneficiaries on a regular basis.  In addition,  they
were not granted in large, concentrated amounts, as was the case in the original IP, and
the amounts of grants were relatively small. Therefore, the value of the grants can be
expensed in the IP.

(131) The benefit of the grants in the IP, expressed as a percentage of the total sales value of
Norwegian salmon growers, is 0,26 %. However, as further discussed in recital (153)
below,  it  could  not  be  established  with  certainty  whether  the  whole  amount  of  this
subsidy was actually conferring a benefit on salmon production.

(ii) Loans

(132)

In  the  original  investigation  the  SND  loan  programme  was  found  countervailable.
There was a financial contribution from the Government and a benefit was conferred
by providing loans at an interest rate lower than the interest rates available for similar
loans in the commercial market. In addition, the SND incurred heavy losses on loans
to the fish farming sector.

27

(133)

In  order  to  establish  whether  a  benefit  still  exists  for  the  investigated  growers,  the
interest  rate  of  the  SND  loans  which  was  actually  paid  during  the  IP  was  compared
with the normal commercial interest rate. The comparable commercial loan is a loan of
a similar amount  with a similar repayment period obtainable by the  recipient  from  a
representative  private  bank  operating  in  the  domestic  market.  The  analysis  revealed
that  the  SND  loan  programme,  including  its  rates,  was  comparable  to  that  of  the
private market. Consequently, there is no benefit for the investigated growers.

(134) As to  the losses  incurred  by the SND  on  loans  due  to  non-repayments,  it  was  found
that the amount of losses was small. Moreover, the interest rate charged included a risk
element for loans other than low risk loans.

(135) Consequently, no subsidy was found to be conferred under the loan programme.

(iii) Loan Guarantees

(136)

In the original investigation the SND loan guarantee programme constituted a subsidy.
It  should  be  recalled  that  there  was  a  financial  contribution  from  the  SND  and  a
benefit  for  the  salmon  growers  whose  loan  was  guaranteed  to  the  extent  that  the
guarantee was not made on a commercial basis.

(137) The overall losses incurred by the SND on this programme were very small since the
original  IP,  and  even nil for  the entire  fish  farming  sector  (including  salmon) during
the  IP.  Moreover,  it  could  not  be  established  that  the  fees  were  set  at  a  level  which
would not cover the amount of defaulted loans.

(138)

In these circumstances, no subsidy is now conferred under this programme.

(c) Transport subsidies

(139)

In the original investigation, the transport aid scheme was found specific and therefore
countervailable. However, the subsidy found for this scheme was only 0,01 %.

(140)

In the present review, it was found that only 4 out of 19 counties operated a transport
aid  scheme,  and  that  the  total  grants  to  companies  transporting,  among  other  fish
products,  salmon,  was  around  600  000  NOK  compared  to  1  420  000  NOK  in  the
previous investigation.

(141) The  benefit  of  the  grant  was  calculated  as  a  percentage  of  the  total  sales  value  of
salmon in the IP and the amount of subsidy was found to be negligible. Therefore, this
scheme was not considered further in the context of this review.

(d) Regional Commission for northern Norway and North Trondelag

(142) The investigation revealed that no new grants have been allocated to the salmon sector
after  1998.  Therefore,  this  scheme  was  not  considered  further  in  the  context  of  this
review.

28

(e) FOS/Rødfisk

(143)

In November 1991, Rødfisk, a consortium of banks set up to conduct the liquidation of
FOS,  the  former  export  monopoly  organisation  for  salmon  in  Norway,  received  a
NOK  400  million  loan  from  the  Government;  this  was  subsequently  written  off  and
therefore became a grant. The original investigation established that the benefit of the
written-off loan was passed on to salmon growers in order to settle their claims against
FOS. The grant was found to be countervailable, and the benefit was allocated over a
period of time reflecting the normal depreciation period for fixed assets in the industry
concerned. This period ended in 1998 and therefore no subsidy is now conferred.

(144)

In  addition,  it  was  established  that  no  aid  programmes  as  FOS/Rødfisk  involving
benefits  for  the  salmon  growers  have  been  granted  after  the  original  investigation.
Therefore, this scheme was not considered further in the context of this review.

4.

Other programmes

(145) Programmes  under  the  Research  Council  of  Norway  (RCN)  were  investigated.  The
objective  of  the  RCN  is  to  support  Research  and  Development  (R&D)  in  various
sectors in Norway. The purpose of the support scheme is to develop new knowledge
through  R&D.  Eligible  receivers  of  support  are  universities,  research  institutes  and
companies. The grants are open for proposals from all participants and are not limited
to  certain  regions  in  Norway.  It  was  established  that  some  salmon  growers  received
R&D support under this programme.

(146) The  Government  of  Norway  made  a  claim  for  green-light  treatment  for  aid  to
companies, i.e. R&D  support  to  user–controlled  projects  to  producers  of  the  product
concerned,  on  the  basis  that  it  is  granted  in  accordance  with  the  criteria  set  out  in
Article 4(2) of the basic anti-subsidy Regulation. However, the support for R&D was
considered not to be specific, since the programme is generally available to all sectors
of the economy.

(147) Consequently, it has been concluded that R&D aid from the RCN cannot be subject to
countervailing measures, since it is not specific; hence it is not considered necessary to
assess the claim for green-light treatment.

(148) No other programmes were found to be countervailable. Finally, it was established that
no other institutions granted  financial supports which  constitute a subsidy  within the
meaning of the basic anti-subsidy Regulation.

5.

Conclusion on subsidies

(149) The  following  schemes  were  found  to  be  countervailable  in  accordance  with  the
provisions  of  the  basic  anti-subsidy  Regulation,  with  amount  of  subsidy,  expressed
ad valorem, as follows:

- Differentiated social security contributions

- Regional Development Fund (SND) - Grants

0,84 %

0,26 %

29

The  total  ad  valorem  amount  of  subsidy  is  1,1  %,  thus  a  mere  0,1  %  above
de minimis. In this context, it has also to be borne in mind that this 1,1 % ad valorem
is only arrived at assuming that all the subsidies established for the SND grants are to
the exclusive benefit of salmon production, which is, as further explained in  recital
(153), almost certainly not an accurate reflection of the real situation.

6.

Continuation or recurrence of subsidisation

(150)

(151)

In accordance with the provisions of Article 18 of the basic anti-subsidy  Regulation,
the  Commission  investigated  whether  the  expiry  of  the  measures  would  be  likely  to
lead  to  a  continuation  or  recurrence  of  subsidisation.  This  provision  requires  a
prospective assessment of the rate of subsidisation likely to prevail in the reasonably
foreseeable future, taking account of the findings for IP.

It was established that the total amount of governmental support to salmon growers in
Norway  has  decreased  significantly  since  the  original  investigation.  In  the  original
investigation the total ad valorem amount of subsidy was 3,8 %. Several programmes
found to be countervailable in the original investigation are either no longer applicable
(grants under  FOS/Rødfisk referred to above) or no benefit to salmon growers  could
be  established  (transport  subsidies  and  loans/loan  guarantees  under  the  SND).
Furthermore, it was established that the Government of Norway did not introduce any
new programmes which conferred a benefit to salmon growers.

(152) Only two programmes found to be countervailable in the original investigation and in
the  course  of  this  review  continued  to  confer  benefits.  In  this  context,  however,  the
following two observations have to be borne in mind:

(153) Firstly,  as  far  as  the  level  of  subsidisation  found  for  differentiated  social  security
contributions  (0,84  %  of  benefit  established  to  salmon  growers),  which  is  a  general
regional  programme  not  particularly  destined  for  salmon  growers,  has  slightly
decreased since the original investigation. Secondly, as regards the grants provided to
salmon growers from the SND, it was confirmed that the level has also decreased from
0,48 % to 0,26 % since the original investigation. In respect of the SND, it should be
pointed  out  that  the  level  of  grants  found  is  almost  certainly  inflated,  since  the
Government  of  Norway  was  only  able  to  provide  total  amounts  of  support  to
companies involved in, amongst other activities, the production or sales of salmon. In
the  absence  of  more  precise  figures,  these  amounts  were  taken  as  the  basis  for  the
present  investigation  irrespective  of  whether  the  grants  de  facto  benefited  salmon
production  in  particular.  However,  the  verification  visits  at  the  premises  of  the
investigated  growers  confirmed  that  most  of  the  grants  were  in  fact  used  for  capital
investments  not  related  to  salmon;  e.g.  warehousing  for  other  species  and  packing
stations  not  solely  used  for  salmon.  It  was  not  possible  to  quantify  the  level  of
investments for products other than salmon. In any event, it is clear that a number of
the  grants  reported  do  in  all  likelihood  not  directly  relate  to  the  product  concerned.
Therefore,  even  if  it  were  assumed  that  all  grants  were  related  to  the  product
concerned,  the  resulting  subsidy  found  for  this  scheme,  i.e.  0,26  %  is  the  absolute
maximum  conceivable.  However,  bearing  in  mind  that  in  reality  the  actual  figure
benefiting  salmon  is  lower,  the  overall  actual  level  of  subsidisation  will  be  below
de minimis level.

30

(154) The amount of subsidy for the SND scheme is based on the amounts actually paid out
to the salmon farming sector during the IP. However, the sum of the grants committed
by  the  Government  of  Norway  to  salmon  growers  during  the  IP  was  significantly
lower than the amount paid which led to the 0,26 % figure referred to above. Using the
total amounts of grants  committed  to (as opposed to paid  to) salmon  growers  during
the IP, will bring the overall level of subsidisation below de minimis. For this reason
and given that there is no indication to believe that the subsidy amount will increase, it
is  unlikely  that  there  will  be  a  continuation  or  recurrence  of  subsidisation  at  a  level
above  de  minimis.  Moreover,  official  figures  on  amounts  committed  to  and  amounts
paid to salmon growers in 2002 confirm that the level of subsidisation is de minimis.

(155)

In  conclusion,  it  is  unlikely  that  there  will  be  a  continuation  or  recurrence  of
subsidisation,  since  the  current  level  of  subsidy  is  very  close  to  de  minimis,  and  the
rate  of  subsidisation  likely  to  prevail  in  the  reasonably  foreseeable  future  will  be
below de minimis. The anti-subsidy proceeding should therefore be terminated.

F.

COMMUNITY INDUSTRY

(156) According to Article 11(9) of the basic anti-dumping Regulation and Article 22(4) of
the  basic  anti-subsidy  Regulation,  review  investigations  should  normally  follow  the
same methodology as that used in the investigation which led to the duty. However, in
view of certain changes in the ownership structure of the Community salmon farming
industry in recent years and other factors, it is noted that the companies considered to
constitute  the  Community  industry  for  the  purposes  of  the  present  investigations
within the meaning of Article 4 of the basic anti-dumping Regulation and Article 9 of
the basic anti-subsidy Regulation are not necessarily the same as those considered in
the  previous  investigation  concerning  Norway  which  led  to  the  imposition  of  the
measures currently under review.

(157)

It  is  also  noted  that  it  was  decided  to  exclude  from  the  determination  of  the
Community  industry  any  producer  related  to  exporters  in  Norway,  Chile  and  the
Faeroe Islands in accordance with Articles 4(2) and 9(2) of the basic anti-dumping and
anti-subsidy  Regulations  respectively.  Two  producers  located  in  the  Community
expressed  their  disappointment  at  this  interpretation.  They  noted  that  although  they
formed part of a multinational group which had salmon farming activities in Norway,
Chile and other third countries, the ultimate parent company of the group was a Dutch
based  publicly  quoted  company.  Consequently,  they  considered  that  they  should  be
taken into account as part of the Community industry. However, for the reasons noted
in the aforementioned Articles, this claim could not be accepted.

(158)

In the light of the above, it was determined that the companies which were not related
to exporters in the countries under investigation represented a major proportion (over
80 %)  of  the  Community  production  of  farmed  Atlantic  salmon  and  therefore
constituted the ‘Community industry’ within the meaning of Articles 4(1) and 5(4) of
the  basic  anti-dumping  Regulation  and  Articles  9(1)  and  10(8)  of  the  basic  anti-
subsidy Regulation.

31

G.

INJURY

1.

Preliminary remarks

(159)

In  view  of  the  large  number  of  producers  of  farmed  Atlantic  salmon  in  the
Community,  the  application  of  sampling  techniques  was  foreseen  in  the  notice  of
initiation for the assessment of injury in the review investigation. The selection of the
sample  of  Community  producers  was  based  on  the  largest  representative  volume  of
production and sales that could be reasonably investigated within the time available, in
accordance with Article 17 of the basic anti-dumping Regulation and Article 27 of the
basic  anti-subsidy  Regulation.  All  Community  producers  of  farmed  Atlantic  salmon
were  therefore  requested  in  the  notice  of  initiation  to  provide  certain  information
concerning their activities during the period 1 July to 31 December 2001.

(160) On the basis of the information provided to the Commission, the 17 companies listed

below were initially selected for the sample:

– 

– 

– 

Gaelic Seafoods (Ireland) Ltd, Co. Galway, Ireland,

Johnson Seawell Ltd, Johnson Seafarms Ltd, Shetland, United Kingdom,

Orkney Sea Farms Ltd. Glasgow, United Kingdom,

–  Muirachmhainní Teo, Co. Galway, Ireland,

– 

– 

– 

– 

Ardvar Salmon Ltd, Saffron Walden, United Kingdom,

Hoganess Salmon Ltd, Wester Sound Salmon Ltd, Shetland, United Kingdom,

Cro Lax Ltd, Shetland, United Kingdom,

Bressay Salmon Ltd, Shetland, United Kingdom,

–  West  Minch  Salmon  Ltd,  Atlantic  West  Salmon  Ltd,  Sidinish  Salmon  Ltd,

South Uist, United Kingdom,

– 

– 

– 

– 

Loch Duart Ltd, Edinburgh, United Kingdom,

Hoove Salmon Ltd, Shetland, United Kingdom,

North Atlantic Salmon Ltd, Shetland, United Kingdom,

Ayre Salmon Ltd, Shetland, United Kingdom.

(161) All interested parties to the review concerning imports from Norway were informed of
the  sample  chosen  and  given  an  opportunity  to  make  comments.  Gaelic  Seafoods
(Ireland)  Ltd  ceased  trading  on  21  March  2002  because  of  financial  difficulties  and
took  no  further  part  in  the  review.  Johnson  Seawell  Ltd  and  Johnson  Seafarms  Ltd
subsequently  withdrew  their  cooperation  and  also  took  no  further  part  in  the
proceeding.  It  was  subsequently  established  that  Muirachmhainní  Teoranta  had
entered  into  a  joint  venture  arrangement  with  a  company  related  to  exporters  in
Norway and therefore could not be considered to be part of the Community industry.
Consequently, the injury indicators discussed below have been established on the basis

32

(162)

of the verified information provided by the remaining companies listed above in recital
(160).

In  view  of  the  fact  that  the  period  considered  for  the  assessment  of  injury  in  the
investigation concerning Chile and the  Faeroe  Islands is the same as that used in the
review investigation, interested parties to the new investigation were informed of the
intention  to  make  use  of  the  same  sample  of  independent  Community  producers,
subject  to  the  developments  noted  in  the  preceding  recital.  Interested  parties  were
given the opportunity to comment on this proposed course of action. It is recalled that
in accordance with Articles 19(6) and 29(6) of the basic anti-dumping and anti-subsidy
Regulations respectively, information received pursuant to either Regulation may only
be  used  for  the  purposes  for  which  it  was  requested.  As  a  result,  the  Commission
approached  those  sampled  producers  which  had  cooperated  in  the  review  for  their
written permission to use information submitted in the framework of the review to be
taken  into  account  for  the  purposes  of  the  new  investigation.  All  parties  concerned
gave  their  consent  with  the  result  that  the  sample  established  for  the  investigation
concerning Chile and the Faeroe Islands is the same as that in the review.

2.

Community consumption

(163) Large  scale  farming  of  Atlantic  salmon  in  the  Community  is  confined  to  the  United
Kingdom (Scotland) and Ireland. Therefore, apparent consumption in the Community
of farmed  Atlantic salmon was established on the basis of the production figures for
producers  located  in  those  two  countries  obtained  from  the  Fisheries  Research
Services  of  the  Scottish  Executive  and  the  Irish  Sea  Fisheries  Board  and,  as  far  as
imports and exports are concerned, on data derived from Eurostat. As was the case in
the  original  investigations  concerning  Norway,  certain  adjustments  were  made  to
convert  net  weights  as  reported  by  Eurostat  to  round  weights  or  ‘whole  fish
equivalents’ as it is common for comparisons in the industry to be made on this basis.
Therefore the import figures for fresh, chilled and frozen salmon excluding fillets and
for fresh, chilled and frozen salmon fillets were divided respectively by the conversion
factors of 0,90 and 0,65. It should be noted that CN codes 0302 12 00, 0304 10 13 and
0304 20 13 may also cover other types of fish not included in the scope of this review,
such as Pacific salmon and Danube salmon. However, given the origins reported, such
quantities can be considered to be negligible.

(164) On  the  above  basis,  Community  consumption  of  farmed  Atlantic  salmon  in  the  IP
reached  a  level  of  almost  500  000  tonnes.  This  figure  was  almost  25  %  higher  than
that recorded at the start of the analysis period.

Consumption

1998

1999

2000

2001 (IP)

Tonnes

Index

396 829

457 569

470 705

487 307

100

115

119

123

3.

Cumulative assessment of the effects of the imports concerned

(165) The  question  of  cumulation  did  not  arise  in  this  case  since  imports  from  the  Faeroe
Islands  and  Norway  were  not  dumped  and,  in  the  case  of  Norway,  there  was  no
likelihood  of  a  recurrence  of  dumping  or  subsidisation.  Therefore,  the  term  ‘imports
concerned’ is taken to refer to imports originating in Chile only.

33

4.

Volume of the imports concerned and market share

(166) The  volume  of  imports  originating  in  Chile  derived  from  Eurostat  data  using  the
methodology  described  in  recital  (163)  above  increased  from  approximately  9  000
tonnes  in  1998  to  over  26  000  tonnes  in  the  IP.  Over  the  same  period,  the  imports
concerned  increased  their  share  of  the  Community  market  from  2,4  %  in  1998  to
5,4 % in the IP.

Tonnes

Index

1998

9 336

100

1999

8 173

88

2000

2001 (IP)

12 323

26 360

132

282

Market share

2,4 %

1,8 %

2,6 %

5,4 %

5.

Prices of the imports concerned

(a) Evolution of prices

(167) Price information for the imports concerned was derived from Eurostat data based on
the import volumes established using the methodology detailed above in recital (163).
This  information  showed  that  the  average  price  of  the  imports  concerned  increased
from €3 per kilogram in 1998 to €3,75 per kilogram in 2000 before declining in the IP
to €2,93 per kilogram.

Price per kg

Index

(b) Price undercutting

1998

3,00

100

1999

3,14

105

2000

2001 (IP)

3,75

125

2,93

98

(168) For the purposes of calculating the level of price undercutting in the IP, the prices of
the  sampled  Community  industry  producers  were  compared  to  the  prices  of  the
imports  from  Chile.  The  prices  of  the  sampled  Community  industry  producers  were
taken  at  an  ex-works  (post  processing)  level  and  at  levels  of  trade  considered  to  be
comparable to those of the imports concerned. For those sampled Community industry
producers selling their fish ‘in the bin’ (i.e. at the farm gate without any processing) an
upward adjustment of 29 pence (47 cent) per kilo was made to reflect processing and
packing costs. This adjustment  was made on  the  basis  of the costs incurred by  other
producers in the sample for these activities.

(169) The  investigation  demonstrated  that  imports  from  Chile  in  the  IP  consisted  almost
entirely of frozen fillets. As this presentation of salmon was not produced and sold by
the  sampled  Community  industry  producers,  an  adjustment  was  made  to  reflect
differences  between  this  presentation  and  the  fresh  fillets  produced  and  sold  by  the
sampled  Community  industry  producers.  It  should  be  noted  that  all  presentations  of
fillet  accounted  for  only  1  %  of  the  sales  of  the  sampled  Community  industry
producers by volume in the IP.

34

(170) According  to  the  complainant,  fresh  salmon  should  command  a  premium  of  some
10 %  over  frozen salmon. However, information  collected  in  the  investigations  from
both  Norwegian  and  Faeroese  cooperating  exporters  selling  both  fresh  and  frozen
salmon  of  the  same  presentation,  indicated  frozen  salmon  to  be  systematically  more
expensive than its equivalent fresh salmon presentation. Therefore, a weighted average
premium for frozen salmon was calculated on the basis of the figures collected from
the  Norwegian  and  Faeroese  cooperating  exporters  and  applied  to  the  prices  of  the
Chilean imports on  a Community frontier  customs duty  paid  basis.  The  result  of  the
comparison showed the level of price undercutting to range between 20 % and 30 %.

6.

Economic situation of the Community industry

(a) Preliminary remarks

The application of sampling techniques

(171)

In  view  of  the  time  limits  established  by  Articles  5(9)  and  11(5)  of  the  basic  anti-
dumping Regulation with regard to the conduct of investigations and the large number
of producers of farmed Atlantic salmon in the Community, sampling techniques were
applied  for  the  assessment  of  the  economic  situation  of  the  Community  industry.
Consequently, the injury indicators presented below have been established on the basis
of  information  obtained  from  a  representative  sample  of  Community  industry
producers  as  described  above  in  recital  (160).  At  the  same  time,  information
concerning  the  sales  on  the  Community  market  of  cooperating  Community  industry
producers  not  included  in  the  sample  was  obtained  in  order  to  calculate  the  overall
sales and market share of the Community industry.

(172)

It  should  noted  that  one  of  the  sampled  companies,  namely  Loch  Duart  Ltd,  began
operations in 1999 when it purchased certain salmon farming operations from another
company.  Although  the  latter  is  not  included  in  the  sample,  it  is  not  considered  that
this has a material effect on the trends observed during the analysis period.

(b) Production, production capacity and capacity utilisation

(173) The  sampled  Community  industry  producers  increased  their  production  during  the
analysis period from approximately 7 000 tonnes in 1998 to more than 15 000 tonnes
in  the  IP.  With  regard  to  production  capacity,  it  is  recalled  that  in  the  original
investigations  which  led  to  the  current  measures,  figures  for  capacity  were  based  on
environmental  consents  issued  by  the  Scottish  Environment  Protection  Agency
(SEPA). SEPA is a public body responsible for environmental protection in Scotland.
It regulates salmon farming in Scotland by the granting of consents or licences for the
discharge  of  waste  to  tidal  waters.  These  consents  normally  set  limits  for  cage  sizes
and biomass  levels  (the weight  of live  fish)  per  site  at  any  one  time.  As  fish  from  a
particular cage  can be harvested over  an extended  period of  time,  it  could be  argued
that the total production of that cage may be greater than the biomass limit without the
latter ever being exceeded. However, as no other reasonable basis for capacity  could
be found which  could be applied across the sample  and as  there were no  changes in
circumstances  in  this  regard,  SEPA  consents  were  again  taken  in  accordance  with
Article 11(9) of the basic anti-dumping Regulation as the basis for calculating capacity
in the present investigations. However, it is to be noted that in correspondence, SEPA
confirmed  that  it  was  unable  to  provide  information  in  precise  tonnage  terms  for
certain sites as this was either not available centrally or the consent was expressed in

35

terms of cage numbers rather than fish biomass. These limitations should be borne in
mind  when  considering  the  information  presented  below  regarding  capacity  and
capacity utilisation.

Production (tonnes)

Index

Production capacity
(tonnes)

Index

Capacity utilisation

(c) Stocks

1998

7 067

100

7 231

100

98 %

1999

8 962

127

2000

2001 (IP)

11 645

15 251

165

216

8 199

13 025

29 632

113

109 %

180

89 %

410

51 %

(174)

It is noted  that farmed Atlantic  salmon  is  a  perishable  product,  which  unless  frozen,
has a shelf life of less than two weeks. As the sampled Community industry producers
do  not  keep  stocks  of  fresh  salmon  after  harvest  and  do  not  freeze  their  production,
stock  levels  are  not  considered  to  be  a  meaningful  indicator  of  injury  in  these
investigations.

(d) Sales volume, market share and growth

(175) The  volume  of  the  Community  industry’s  sales  on  the  Community  market  increased
during  the  analysis  period  from  approximately  10  500  tonnes  in  1998  to  more  than
21 000  tonnes in the  IP. Over the same period it progressively increased its share  of
the Community market from 2,7 % in 1998 to 4,3 % in the  IP. This rate of increase
was  in  excess  of  the  growth  in  apparent  Community  consumption  recorded  over  the
same period. The volume of the sampled Community industry producers’ sales on the
Community  market  increased  during  the  analysis  period  from  approximately
6 000 tonnes in 1998 to more than 15 000 tonnes in the IP. The sampled Community
industry producers’ share of the Community market grew from 1,6 % in 1998 to 3,1 %
in the IP.

Community industry sales
(tonnes)

Of which sampled
Community industry
producers

Index

Community industry
market share

Sampled Community
industry producers

1998

1999

2000

2001 (IP)

10 686

13 543

16 263

21 129

6 245

8 372

10 911

15 143

100

2,7 %

134

3,0 %

175

3,5 %

242

4,3 %

1,6 %

1,8 %

2,3 %

3,1 %

36

(e) Sales prices and costs

(176) The  sampled  Community  industry  producers’  average  sales  price  increased  from  a
figure of €3,31 per kilo in 1998 to reach  a peak of €3,93 in 2000. A dramatic fall in
price was then observed in the IP as the average price fell back to €3,13 per kilo. Over
the same period, the sampled Community industry producers were able to reduce their
average cost of production by some 10 % to a figure of €3,11 per kilo.

Sales price (€ per
kilogram)

Index

Cost of production (€ per
kilogram)

Index

(f) Profitability

1998

3,31

100

3,47

100

1999

3,27

99

3,14

90

2000

3,93

119

3,53

102

2001 (IP)

3,13

95

3,11

90

(177) Following  the  imposition  of  measures  in  1997,  the  sampled  Community  industry
producers’  return  on  net  sales  in  the  Community  market,  before  taxes,  improved  to
reach  a  level  of  over  10  %  in  2000.  However,  in  spite  of  their  continued  efforts  to
improve  efficiency,  the  sampled  Community  industry  producers  taken  as  a  whole
suffered  a  marked  deterioration  in  profitability  in  the  IP  due  to  the  low  prices
prevailing  on  the  market.  It  is  to  be  noted  that  the  sampled  Community  industry
producers never achieved the minimum profit level of 15 % during the analysis period
that was considered necessary  at the time of the original investigations. It  is  recalled
that  the  profit  margin  in  the  original  investigations  was  established  at  this  level  in
order  to  take  into  account  the  high  risk  nature  of  the  industry,  subject  as  it  is  to
uncertain factors such as the weather, disease and escapes. It cannot be excluded that
the combination of factors such as these and the restructuring and consolidation seen
in  the  industry  during  recent  years  may  in  part  explain  the  sharp  movements  in
profitability shown below. However, in the absence of conclusive evidence to suggest
that  circumstances  in  the  intervening  period  had  changed  and  considering  the
submissions  of  producer  associations  in  the  Community  in  support  of  this  level,  the
profit margin of 15 % was again used in accordance with Article 11(9) of  the basic-
anti dumping Regulation.

Profitability

1998

-5,1 %

1999

3,9 %

2000

2001 (IP)

10,2 %

0,6 %

37

(g) Investments and return on investments

(178) The level of investments  made by sampled Community  industry  producers increased
during  the  analysis  period  from  approximately  €2,5  million  in  1998  to  more  than
€4,5 million  in  the  IP.  Apart  from  the  replacement  of  existing  assets  and  the
acquisition of additional equipment to handle increased levels of production, the most
significant  items  of  expenditure  related  to  the  purchase  of  automated  feed  barges.
These vessels are designed to supply feed on a controlled basis to salmon in cages at
sea and require fewer people to oversee the feeding of the fish.

(179) The  sampled  Community  industry  producers’  return  on  investment,  which  expresses
their pre tax result as a percentage of the average opening and closing net book value
of  assets  employed  in  salmon  farming,  was  negative  in  1998  reflecting  their  loss
making situation. The return on investment was positive in the other years considered
as the sampled Community industry producers were profitable.

Investments (€ ’000)

Index

1998

2 448

100

1999

2 207

282

2000

2001 (IP)

3 312

423

4 659

595

Return on investment

-18,3 %

16,1 %

51,4 %

2,1 %

(h) Cash flow and ability to raise capital

(180) The  sampled  Community  industry  producers  recorded  a  net  cash  inflow  from
operating  activities  during  the  analysis  period.  However,  when  expressed  as  a
percentage  of  turnover,  the  net  cash  inflow  showed  a  marked  decline  in  percentage
terms.

(181) The  sampled  producers  have  experienced  difficulties  in  raising  capital  from  external
sources such as banks and in certain cases have had to have recourse to shareholders
for additional funds. Given the risks involved in the industry, traditional lenders have
been reluctant to extend finance without substantial security being provided. Pressure
from finance providers, coupled with short-term cash flow difficulties have meant that
producers  have  not  always  been  able  to  adhere  to  their  optimum  harvest  schedules.
Extended credit terms from feed producers are playing an increasingly important role
in  the  operational  financing  of  the  industry.  In  some  cases,  feed  companies  are  also
providing  funding  for  the  purchase  of  feed  barges.  In  all  cases  however,  there  are
additional costs associated with such arrangements.

Cash flow (€ 000)

Index

Cash flow expressed as
percentage of turnover

1998

783

100

1999

1 233

158

2000

2001 (IP)

2 022

258

403

52

3,8 %

4,5 %

4,7 %

0,9 %

38

(i) Employment, productivity and wages

(182) The number  of  people  employed by  the  sampled  producers  increased  throughout  the
analysis period to reach a figure of 175 in the IP. This should be viewed in the context
of the substantial increase in production that occurred over the same period as  noted
above in recital (173). It is estimated that in the region of 250 people are employed by
the Community industry as a whole.

(183) As  the  rate  at  which  employment  grew  was  less  than  that  at  which  production
increased, the productivity of the sampled Community industry producers as measured
by tonnes produced annually per employee increased from approximately 70 tonnes in
1998 to more than 85 tonnes in the IP.

(184) The  total  wage  bill  of  the  sampled  Community  industry  producers  increased  in
absolute terms throughout the analysis period. The average wage level per employee
also increased over the analysis period.

Number of employees

Index

Wages per employee
(€’000)

Index

1998

1999

2000

2001 (IP)

98

100

27

100

126

129

27

100

161

164

31

113

175

179

32

118

(j) Magnitude of dumping and recovery from past dumping and subsidisation

(185)

In  view  of  the  volume  and  the  prices  of  the  imports  from  Chile,  the  impact  on  the
Community  industry  of  the  magnitude  of  the  actual  dumping  margin  cannot  be
considered to be negligible.

(186) The economic situation of the sampled Community industry producers improved after
the  imposition  of  anti-dumping  and  countervailing  measures  against  imports
originating  in  Norway.  They  increased  their  production,  sales  and  market  share  and
returned to profitability in 1999. However, significant disturbances on the Community
market in the IP reduced the returns of many producers and the economic situation of
the sampled Community industry producers deteriorated. It is therefore considered that
the sampled producers did not fully recover from past dumping and subsidisation and
their economic situation continues to be weak.

7.

Conclusion on injury

(187)

In  spite  of  the  Community  industry’s  continued  efforts  to  improve  its  efficiency,  as
evidenced by its investment in new feeding technologies and improved productivity, it
was  not  able  to  make  the  level  of  return  deemed  necessary  for  an  industry  of  this
nature  in  the  analysis  period.  Although  it  was  able  to  return  to  profits  from  1999
onwards, it could not in that time build up sufficient reserves to allow it to withstand
an extended period of adverse price developments such as that which occurred in the
IP when imports from Chile were present on the Community market at dumped prices
in  large  volumes.  As  a  result  of  the  disturbances  on  the  Community  market  in  the

39

second half of the  IP, a number of producers have been forced out of the market.  In
particular, it is noted that one of the companies initially selected for sampling, Gaelic
Seafoods (Ireland) Ltd. went into administration, and two companies remaining in the
sample,  Hoganess  Salmon  Ltd  and  Wester  Sound  Salmon  Ltd,  were  taken  over  by
Norwegian interests after the IP. In view of their financial position, other  companies
have had to reconsider their production plans for future years with the result that fewer
smolts were put to sea in the autumn of 2001.

(188)

It is noted that the Community industry was able to take advantage of the increase in
consumption observed  during the analysis  period  to  increase  its  production,  capacity
and  sales.  This  growth  was  accompanied  by  an  increase  in  the  level  of  employment
and investments. However, in spite of the Community industry’s efforts to improve its
productivity, it was not able to counter the severe price depression in the IP. Its level
of  profitability  declined  dramatically  as  did  its  return  on  investment.  It  is  therefore
concluded that the Community industry has suffered material injury, characterised by
price  depression,  falling  profitability  and  insufficient  returns  on  investments,  within
the meaning of Article 3 of the basic anti-dumping Regulation.

H.

CAUSATION OF INJURY

1.

Introduction

(189)

In accordance with Article 3(6) and (7) of the basic anti-dumping Regulation,  it  was
examined whether the dumped imports originating in Chile have caused injury to the
Community  industry  to  a  degree  that  enables  it  be  classified  as  material.  Known
factors other than the dumped imports, which  could at  the  same  time be  injuring  the
Community  industry,  were  examined  to  ensure  that  any  possible  injury  caused  by
these other factors was not incorrectly attributed to the dumped imports.

2.

Effect of the dumped imports

(190) The volume of the dumped imports originating in Chile increased almost threefold in
the  analysis  period.  In  absolute  terms,  they  increased  their  share  of  the  Community
market during the same period from 2,4 % in 1998 to 5,4 % during the IP. Their rate
of growth was most marked between 2000 and the IP when they more than doubled in
volume. The dumped imports undercut the prices of the sampled Community industry
producers by more than 20 %.

(191) During the same period, the Community industry had to lower their prices on average
by 5 %. Although profitability developed positively until 2000, it went then down to
merely  break  even  during  the  IP  while  the  rate  of  return  on  investment  was  2,1  %.
However,  there  were  also  a  significant  number  of  positive  developments:  the
Community industry was able to double its sales and expand its market share, invest in
increased capacity and also reduce its cost of production by 10 %.

(192) A more focused analysis of the developments in 2000 and the IP shows an even more
complex and more ambiguous picture.  The market share held by imports  from Chile
went  from  2,6  %  to  5,4  %  and  Chilean  prices  dropped  from  a  fairly  high  level  by
27 percentage points to slightly below their 1998 level. At the same time however, the
Community industry’s market share increased from 3,5 % to 4,3 %, its prices dropped
by  24  percentage  points,  its  profitability  went  from  10,2  %  to  0,6  %  and  the  rate  of
return on investment went from 51,4 % to 2,1 %.

40

(193)

It is recalled that imports from three Chilean companies were found not to have been
dumped. If the analysis of a direct causal link were to be limited to the imports which
had  been  found  to  be  dumping  the  volume,  market  share  and  the  prices  of  these
imports  on  the  basis  of  data  from  Eurostat  and  the  sampling  exercise  would  be  as
shown below. It should be noted that net weights have been converted to  whole  fish
equivalents using a conversion factor of 0,65 and average prices per kg are also based
on the whole fish basis and that the situation of the IP has been extrapolated for earlier
years of the analysis period.

Volume (tonnes)

Market share

Unit price

1998

7 965

2,0 %

2,98

1999

7 038

1,5 %

3,09

2000

2001 (IP)

10 675

22 784

2,3 %

3,66

4,7 %

2,62

(194)

It can be seen that the volume of these imports doubled between 2000 and the IP and
that  their  market  share  also  increased  by  the  same  factor.  The  prices  of  the  imports
were  below  those  of  the  Community  industry  throughout  the  period.  The  level  of
undercutting  in  the  IP  for  those  sampled  companies  found  to  have  been  dumping
exceeded 30 %. The increase in the volume of dumped imports during the IP and their
significant level of price undercutting coincided with a deterioration in the situation of
the Community industry in terms of its average sales price and profitability. However,
in  the  light  of  certain  positive  developments  in  the  situation  of  the  Community
industry  as  noted  above  in  recital  (191)  and  other  factors,  including  the  limited
competition between fresh and frozen salmon on the Community market, it could not
be concluded with absolute certainty that the dumped imports, considered in isolation,
were responsible for the material injury suffered by the Community industry.

(195) Subsequent to the  disclosure, one party  argued  that  the  Commission’s  understanding
of the interaction between fresh and frozen salmon in the market was wrong. Although
the investigation confirmed that imports of the product concerned originating in Chile
were almost exclusively of frozen salmon whereas the Community industry only sold
fresh salmon, this party claimed that many processors saw no difference between the
two and would prefer to buy frozen salmon where its price was much lower than fresh
salmon. It claimed that this was evidenced by the fact that Chilean imports had taken
market share from both Norwegian and Scottish producers  and would continue to do
so.

(196)

In addressing these arguments, it should be recalled that it was established that there
was limited competition between fresh and frozen salmon in the market during the IP.
This competition was restricted to certain users which were able to use both types of
salmon in their production. However, the  market continued to demonstrate  a marked
preference  for  fresh  salmon  rather  than  frozen  salmon.  As  regards  the  claim  that
Chilean imports have taken market share from both Norwegian and Scottish suppliers,
it  is  acknowledged  that  Norwegian  imports  did  lose  some  market  share  in  the  IP.
However, the production of salmon by producers in Scotland reached record levels in
the  IP.  During  the  same  period,  the  market  share  of  all  producers  in  the  Community
and of the Community industry considered separately also increased. It was therefore
evident that the party was mistaken in its claim regarding a decline in the market share
of Scottish producers. In considering future developments in Chilean import volumes

41

and market share, it should be recalled that it is normally  not within the  scope of  an
investigation  according  to  Article  6(1)  of  the  basic  anti-dumping  Regulation  to
consider events occurring after the IP. Therefore, the arguments of this party could not
be accepted.

3.

Effects of other factors

(a) Imports originating in other third countries

(197) Norway  is  the  most  important  player  on  the  Community  salmon  market.  Imports
originating in Norway increased in volume terms from 1998 to 2000 before declining
in the IP. As the imports grew at a slower rate between 1998 and 2000 than apparent
Community  consumption,  their  market  share  declined  from  approximately  64  %  in
1998  to  60  %  in  2000.  In  the  IP,  as  Community  consumption  continued  to  increase
whilst  the  volume  of  imports  from  Norway  declined,  their  share  of  the  Community
market  fell  to  approximately  53  %.  On  the  basis  of  information  obtained  from
Eurostat, the average price of imports from Norway remained stable in 1998 and 1999
at €3,18 per kilogram before increasing in 2000 to reach €3,71 per kilogram. In the IP,
their average price declined to €3,16 per kilogram and was close to the price level of
the Community industry. Imports from Norway were found not to have undercut the
prices of the Community industry.

(198)

Imports originating in the Faeroe Islands increased in volume between 1998 and 1999
before falling back in 2000. They then recorded a sharp increase in volume in the IP to
reach  a  level  of  over  40  000  tonnes.  It  was  also  at  this  time  that  they  gained  their
highest  market  share  during  the  analysis  period  of  just  over  8  %.  On  the  basis  of
information  obtained  from  Eurostat,  the  average  price  of  imports  from  the  Faeroe
Islands increased from €3,21 per kilogram in 1998 to €3,84 per kilogram in 2000. In
the  IP,  their  average  price  fell  to  below  €3  per  kilogram.  It  should  be  recalled  that
imports  originating  in  the  Faeroe  Islands  were  found  not  to  have  been  dumped.
However, they undercut the prices of the Community industry by some 10 %. It should
finally  be  noted  that  the  market  share  of  imports  from  the  Faeroe  Islands  (8,3  %)  is
well  above  that  held  by  the  Community  industry  and  Chile  (4,3  %  and  5,4 %
respectively).

(199) Subsequent to the disclosure, one party questioned the way in which the Commission
had considered the role played by imports from Norway and the Faeroe Islands in the
assessment  of  injury  to  the  Community  industry.  In  particular,  the  party  argued  that
the calculation on which the level of price undercutting for imports from Norway was
based was incorrect in that the Community industry’s prices did not include delivery
costs  to  the  first  customer.  The  party  also  claimed  that  the  Commission  had  not
ascribed to imports from the Faeroe Islands the importance they deserved in assessing
injury in view of their market share and level of price undercutting.

(200) The  argument  concerning  the  calculation  of  price  undercutting  for  imports  from
Norway  had  to  be  rejected  for  two  reasons.  Firstly,  the  comparison  was  made  at
similar  levels  of  trade  and  for  similar  presentations  of  salmon.  This  was  after  an
upward adjustment of €0,47 per kg had been made to the prices of those Community
industry  producers  selling  ‘in  the  bin’  (i.e.  ex-farm)  to  reflect  ancillary  transport,
processing  and  packing  costs  to  the  first  customer.  Secondly,  this  methodology  was
consistent with that used in the original investigation.

42

(201) The level of price undercutting for imports from the Faeroe Islands was calculated in
the  same  manner  as  that  for  imports  from  Norway  as  described  above.  It  is  recalled
that  imports  from  the  Faeroe  Islands  were  found  not  to  have  been  made  at  dumped
prices. Their level of price undercutting therefore does not derive from dumping. The
Commission  has  acknowledged  the  impact  that  these  imports  may  have  had  on  the
situation  of  the  Community  industry.  Ascribing  even  more  importance  in  the  injury
assessment  to  imports  from  the  Faeroe  Islands  would  further  weaken  causal  link
between imports from Chile and the injury suffered by the Community industry.

(202)

Imports originating in remaining third countries (i.e. excluding Norway, Chile and the
Faeroe  Islands)  increased  in  volume  over  the  analysis  period  from  approximately
9 000 tonnes in  1998  to  15  000  tonnes  in  the  IP.  Over  the  same  period  their  market
share increased from 2,3 % in 1998 to 3,1 % in the IP. Over 85 % of these imports by
weight  (on  a  whole  fish  equivalent  basis)  were  of  frozen  fillets  (CN  code
ex 0304 20 13) with the most significant origins being the People’s Republic of China
(“China”) and the USA. The average price of all types of the product concerned from
these remaining third countries increased from €2,36 per kilogram in 1998 to €2,57 in
the  IP.  The  prices  of  such  imports  were  therefore  always  below  the  prices  of  the
sampled  Community  industry  producers  and  imports  from  Norway,  Chile  and  the
Faeroe  Islands  during  the  analysis  period  but  this  may  be  because  of  the  nature  and
quality  of  such  imports.  The  current  investigations  found  no  evidence  of  farmed
Atlantic salmon being produced in China. It may therefore be the case that the salmon
declared under the CN codes subject to investigation is of another species of salmon
(Pacific  or  Danube)  or  processed  Atlantic  salmon  originally  farmed  in  another  third
country.

1998

1999

2000

2001 (IP)

Norway (Tonnes)

252 267

273 375

281 376

258 389

Index

100

108

112

102

Market share

63,6 %

59,7 %

59,8 %

53,0 %

Average price (€ per kg)

3,18

3,18

3,71

3,16

Faeroe Islands (Tonnes)

15 187

28 236

23 962

40 414

Index

100

186

158

266

Market share

3,8 %

6,2 %

5,1 %

8,3 %

Average price (€ per kg)

3,21

3,24

3,84

2,94

Other third countries
(Tonnes)

9 057

11 009

14 763

15 126

Index

100

122

163

167

Market share

2,3 %

2,4 %

3,1 %

3,1 %

Average price (€ per kg)

2,36

2,24

2,50

2,57

43

(203) The  above  shows  that  both  the  Community  industry  and  the  imports  from  Chile  are
peripheral players on the Community market. It cannot be excluded that imports from
the countries indicated in recital (202) may have at least been partly responsible for the
decrease in price and the injury suffered by the Community industry.

(b) Changes in the pattern of consumption

(204) The  consumption  of  farmed  Atlantic  salmon  in  the  Community  increased  by  25  %
during  the  analysis  period  to  reach  a  level  of  almost  500  000  tonnes  in  the  IP.  The
Community  industry  benefited  from  this  growth  in  consumption  to  increase  its
production  and  sales.  The  Community  industry  was  also  able  to  increase  its  market
share  especially  in  the  IP  as  imports  from  Norway  declined  in  volume.  The
development  of  consumption  is  therefore  not  considered  to  have  contributed  to  the
injury suffered by the Community industry.

(c) The nature of the salmon market

(205)

It was also considered whether other factors having a bearing on the salmon market in
the  Community  could  have  contributed  to  the  injury  suffered  by  the  Community
industry.

(206) The Faeroe Fish Farming Association argued that the existence of a number of factors
demonstrated that there was no causal link between imports of farmed Atlantic salmon
from the Faeroe Islands and the alleged injury suffered by the Community industry. It
was  suggested  that  short-term  prices  were  governed  by  factors  such  as  weather,
disease  and  smolt  supply  while  long-term  price  trends  depended  upon  production
costs.  It  was  argued  that  in  view  of  the  length  of  the  production  cycle  for  farmed
Atlantic salmon (2 to 3 years), prices should be examined over a similar period rather
than 6 months to one year. It was also argued that other types of salmon such as wild
salmon and farmed Pacific salmon should be taken into account in the investigations
as  their  supply  could  have  an  impact  on  the  price  of  farmed  Atlantic  salmon  in  the
Community.

(207) Short-term factors such as disease can have an impact on supply in the salmon market.
Outbreaks  of  diseases  such  as  Infectious  Salmon  Anaemia  (ISA)  in  the  Community
require  the  removal  of  fish  from  affected  areas  and  an  enforced  fallow  period  of
six months thereafter. ISA was detected at a number of farms in Scotland in 1998 and
has  also  been  recorded  in  Norway,  Canada  and  more  recently  in  the  Faeroe  Islands.
The  removal  of  fish  from  infected  sites  means  that  they  may  be  harvested  ahead  of
expectations and at weights which do not meet the requirements of certain customers.
In addition, this enforced harvest reduces the total biomass of fish to be harvested in
later periods. A small number of companies forming part of the Community industry
were affected by suspected ISA outbreaks in 1998. This may have reduced the number
of fish available to harvest in subsequent years. However, it is not considered that this
situation explains the deterioration in the overall situation of the Community industry
observed in the IP.

(208) With  regard  to  this  party’s  second  point,  it  is  not  accepted  that  it  is  incorrect  to
examine prices in a restricted period such as the IP. Whilst acknowledging that the life
cycle of the farmed Atlantic salmon is between 2 and 3 years, product cycles cannot be
seen as an excuse to engage in dumping.

44

(209) With  regard  to  the  final  argument  raised  by  this  interested  party  concerning  the
influence  of  other  types  of  salmon  on  the  Community  market  for  farmed  Atlantic
salmon, it is  to be noted that no evidence was provided  in  support  of  this  argument.
This  argument  would appear to suggest that farmed Pacific  salmon  and  wild  salmon
are homogeneous in nature to farmed Atlantic salmon and substitutes for one another,
a  claim  for  which  no  evidence  was  found  in  the  investigations.  In  any  event,  taking
into account the volume of farmed salmon sold in the Community, it is believed that
the quantities of the other types of salmon sold on  the  Community  market  could not
have  been  such  as  to  have  significantly  affected  the  Community  market  price  for
farmed Atlantic salmon.

(d) The structure of the salmon farming industry in the Community

(210) The  Faeroe  Fish  Farming  Association  drew  attention  to  the  possible  effects  on  the
Community industry of the increase in production recorded during the analysis period
by other producers in the Community not forming part of the Community industry. It
was suggested that the process of consolidation amongst producers in the Community
meant  that  the  Community  industry,  much  reduced  in  size,  now  faced  increased
competition  from  larger  and  more  numerous  producers  in  the  Community  which  are
not part of the Community industry as defined pursuant to Article 4 of the basic anti-
dumping Regulation.

(211) The investigations confirmed  that the  category of producer referred to  by the Faeroe
Fish  Farming  Association  accounted  for  the  majority  of  farmed  Atlantic  salmon
produced in the Community during the analysis period. These companies are generally
larger in size  than those companies  deemed to  constitute  the  Community  industry  in
the  present  investigations  and  show  a  greater  degree  of  vertical  integration  with
interests  in  smolt  rearing  (the  freshwater  stage  of  the  salmon  life  cycle),  feed
production and control of their own processing facilities. Taken together, they have a
market share in the region of 25 %. As part of large multinational groups, often quoted
on  stock  exchanges,  they  also  benefit  from  better  access  to  capital  markets  and
financial support. They are better suited to plan their production to meet  the  specific
requirements  of  major  customers  such  as  supermarket  chains  with  seven  day
harvesting programs. They often negotiate short to medium term  contracts with their
major  customers  which  normally  provide  some  degree  of  protection  against  extreme
price  fluctuations  on  the  uncontracted  or  spot  market  to  which  other  operators  are
exposed.

(212)

Information  gathered  from  transformers/smokers  of  the  product  concerned  in  the
framework  of  the  review  investigation  concerning  imports  from  Norway  further
demonstrated that certain producers in the Community were influenced by the way in
which  the  processing  industry  operated.  The  prices  at  which  processing  companies
purchased  the product  concerned  in  the  IP  and  the  prices  at  which  they  sold  salmon
after transformation were examined. It was established that these companies purchased
Community  produced  salmon  in  the  IP  at  prices  similar  to  or  even  below  salmon
originating in Norway. However, after transformation/smoking when the salmon was
sold on, products derived from salmon produced in the Community were sold at much
higher prices than products derived from salmon originating in Norway. The premium
for these products derived from salmon produced in the Community was found to be
in the region of 10 % over similar products derived from Norwegian produced salmon.
It  would  therefore  appear  that  certain  transformers/smokers  are  able  to  obtain  a
premium  for  their  products  which  is  not  always  passed  onto  their  suppliers.  It  is

45

therefore considered that some of the injury suffered by the Community industry may
be due to its lack of leverage vis-à-vis certain larger customers.

(e) Conclusion on causation

(213)

In  the  light  of  the  above,  it  is  concluded  that  a  causal  link  between  the  imports
originating in Chile and  the material  injury  of  the  Community  industry  could  not  be
established with the necessary degree of certainty.

(214) The concurrence of the increase in imports from Chile and the price undercutting on
the one hand, and the negative developments of the Community industry in terms of
its sales prices and financial performance on the other, are not sufficient to establish a
causal  link  in  this  case.  Indeed,  there  are  a  number  of  other  factors  which  had  an
impact on the Community industry and which are, when compared to the impact of the
imports  from  Chile,  of  greater  importance.  Imports  from  all  countries  not  concerned
have been made at prices which were in the case of Norway at the level of those of the
Community  industry  or,  with  regard  to  other  third  countries,  below  that  level.  The
prices of other producers in the Community were also at this level. Thus, not only the
imports  from  Chile,  but  also  sales  representing  a  further  30  %  of  the  Community
market (i.e.  sales of other producers in the  Community  and  imports  from  the  Faeroe
Islands)  were  made  at  a  price  level,  which  was  clearly  unsatisfactory  for  the
Community industry. In these circumstances, it is difficult to see how the imports from
Chile  when  taken  in  isolation  could  have  had  a  material  impact  on  the  Community
industry.

(215) Subsequent  to  the  disclosure,  one  party  criticised  the  manner  in  which  the  issue  of
causation  had  been  examined.  The  party  argued  that  the  Commission  should  have
made a cumulative assessment of the  effects of  imports  from Chile,  Norway and the
Faeroe Islands in accordance with Article 3(4) of the basic anti-dumping Regulation.
Article 3(4)  specifies  a  number of  criteria,  all  of  which  must  be  satisfied,  before  the
effects of imports from different origins can be assessed cumulatively. In the present
investigations,  as  no  dumping  was  found  for  imports  from  Norway  and  the  Faeroe
Islands,  there  was  no  legal  basis  for  assessing  the  combined  effects  of  imports  from
these origins with the dumped imports from Chile. Accordingly, this claim had to be
rejected  on  the  grounds  that  it  is  an  incorrect  interpretation  of  the  provisions  of  the
Article concerned.

(216) However,  in  view  of  the  fact  that  a  causal  link  could  not  be  excluded  with  absolute
certainty, it was considered prudent to  nevertheless examine  the question whether or
not the imposition of measures against imports from Chile would be in the Community
interest,  should  one  decide  that  such  a  causal  link  existed  despite  of  the  above
evidence to the contrary.

I.

COMMUNITY INTEREST

1.

Preliminary remarks

(217)

It  was  examined  whether,  despite  the  findings  on  injurious  dumping,  compelling
reasons existed which would lead to the conclusion that it was not in the Community
interest to impose measures against imports originating in Chile. For this purpose and
in accordance with Article 21(1) of the basic anti-dumping Regulation, the impact of
possible  measures  for  all  parties  involved  in  the  investigations  and  also  the

46

consequences  for  those  same  parties  of  not  taking  measures  were  considered  on  the
basis of all evidence submitted.

(218)

In  order  to  consider  the  Community  interest,  information  was  requested  from  all
interested  parties,  which  were  either  known  to  be  concerned  or  which  made
themselves known within the time limit set in the notice of initiation.

(219)

In  addition  to  the  replies  received  from  the  sampled  Community  industry  producers,
questionnaire replies were also received from the following companies:

– 

– 

– 

two  other  producers  of  farmed  Atlantic  salmon  in  the  Community  -  Marine
Harvest (Scotland) Ltd and Marine Harvest Ireland,

five suppliers of inputs to  the  Community  salmon  farming  industry  including
four feed companies - Trouw (UK) Ltd, Trouw Aquaculture Ltd, Ewos Ltd and
Biomar Ltd and one supplier of smolts - Landcatch Ltd in the framework of the
review concerning Norway,

two importers/users in the framework of the review concerning Norway which
are unrelated to exporters in Norway - Moulin de la Marche S.A. and Le Borvo
SA  and  two  unrelated  importers/users  in  the  framework  of  the  investigation
concerning Chile and the Faeroe Islands - Cogesal Miko and Royal Greenland
Seafood A/S.

(220) Comments were also received from the following organisations and bodies:

– 

– 

– 

– 

– 

– 

– 

– 

– 

The Scottish Salmon Producers’ Organisation,

The Shetland Salmon Farmers’ Association,

The Irish Salmon Growers’ Association,

BEUC - The European Consumers’ Organisation,

AIPCE/CEP  -  The  Federation  of  National  Organisations  of  Importers  and
Exporters of Fish,

The Danish Association of Fish Processing Industries and Exporters,

The French Syndicat National de l’Industrie du Saumon Fumé,

Nutreco Aquaculture,

SA Direct Ocean.

(221)

Information  was  also  received  from  a  feed  supplier  located  outside  the  Community,
namely  Havsbrun  pf  of  the  Faeroe  Islands.  It  was  therefore  considered  that  this
information  should  not  be  taken  into  account  for  the  assessment  of  the  Community
interest in the current investigation.

47

(222) The  complainant  in  the  investigation  concerning  Chile  and  the  Faeroe  Islands
submitted that the views of the Nutreco group and the Syndicat National de l’Industrie
du Saumon Fumé should be discounted. It was argued that the interests of the Nutreco
group  were  predominantly  outside  the  EU  and  that  the  membership  of  the  Syndicat
National de  l’Industrie  du Saumon  Fumé  included a  number of  companies  related to
Norwegian  concerns. It is recalled  that the assessment  of  the  Community interest, in
accordance  with  the  provisions  of  Article  21  of  the  basic  anti-dumping  Regulation,
shall  be  based  on  an  appreciation  of  the  various  interests  of  all  parties  including,
inter alia,  the  domestic  industry  and  users.  Therefore,  the  submissions  of  these
interested parties should be taken into account.

2.

Interest of the Community industry

(223) The main areas for the production of salmon in the Community are located in Scotland
and Ireland where suitable conditions exist. There have been significant changes in the
structure  of  the  salmon  farming  industry  in  the  Community  since  the  original
investigations  with  a  trend  towards  fewer,  larger  companies.  A  number  of  smaller
producers have either gone out of business or sold out to other operators, often large
multinational  groups  with  salmon  farming  interests  around  the  world.  Many  of  the
companies  constituting  the  Community  industry  have  taken  steps  to  improve  their
efficiency  and  reduce  costs  in  the  face  of  increased  competition  by  entering  into
collaborative  arrangements  for  feed  buying.  This  has  enabled  the  companies  to
increase  their  buying  power  vis-à-vis  suppliers.  At  the  same  time,  a  number  of  the
companies constituting  the  Community industry have  also  entered  into  arrangements
for  the  joint  marketing  and  sale  of  their  production  through  which  it  is  hoped  their
products will be differentiated on the market.

(224)

It  is  recalled  that  information  gathered  in  the  course  of  the  review  investigation
concerning  Norway  (see  recital  (212)  above)  showed  that  Community  salmon
producers did not  derive  the full benefit of the premium that consumers  paid for  the
finished product. It is also recalled that Chilean exports of frozen salmon only compete
with Community industry fresh salmon to a limited extent. The Community industry’s
market  share  in  the  IP  was  less  than  5  %  whereas  imports  originating  in  countries
other  than  Chile  (Norway,  the  Faeroe  Islands,  etc.)  accounted  for  over  60  %  of
Community consumption. If the imposition of measures against imports originating in
Chile were to lead to a positive effect on the situation of the Community industry, this
would necessitate that prices of imports of the product concerned from other sources
would have to increase as well as those of producers in the Community not part of the
Community industry. As a consequence, considering the relatively small market share
of  the  Community  industry  vis-à-vis  other  suppliers  on  the  Community  market,  the
imposition of measures against Chile would lead to a substantial net transfer of wealth
out  of  the  Community  as  the  market  adjusts  to  higher  prices.  Whether  higher  prices
would be borne by the consumer or shared by other intermediaries in the sales chain,
the transfer of wealth to third country suppliers would greatly exceed any benefit from
measures  that  the  Community  industry  would  derive.  However,  it  is  already  highly
doubtful  whether  any  anti-dumping  measures  on  imports  from  Chile  would  lead  to
such  a  price  increase  for  salmon  from  all  sources  and  that  the  Community  industry
would benefit at all considering the small market share of Chilean salmon.

48

3.

Interest of other Community producers

(225) The  two  other  producers  in  the  Community  which  cooperated  in  the  proceedings
employed nearly 800 people in salmon related activities in the IP and had a combined
turnover in excess of €120 million. These companies suffered a marked deterioration
in  their  economic  situation  in  the  IP  as  a  result  of  the  marked  disturbances  on  the
Community market. They highlighted the important role played by salmon farming in
many outlying and relatively disadvantaged areas of the Community. They noted that
many problems in the market had arisen because of the imbalance between supply and
demand.  It  was  suggested  that  2000  had  been  a  good  year  for  prices  because  of  the
combined effect of a number of factors, including disease problems in Scotland, that
had restricted supply. Thereafter, over supply by many producing countries, including
Scotland, had led to a sharp fall in prices. It was claimed that Community producers of
salmon  and  their  suppliers  would  be  best  served  when  a  proper  balance  was
established  between  supply  and  demand.  This,  it  was  argued,  could  be  achieved  by
further  stimulating  demand  and  managing  supply  in  line  with  that  demand  and  by
investing  funds  in  Community  producers  to  address  competitive  and  regulatory
differences vis-à-vis other producer countries.

(226) Nutreco Aquaculture (the division of the Nutreco group to which both Marine Harvest
companies belong) did not consider measures to be the optimal solution for the salmon
industry  as  a  whole,  both  for  producers  in  the  Community  and  for  those  in  third
countries exporting to the Community.  It was  noted  that  measures,  inter  alia,  would
not address the oversupply of salmon or promote the efficiency or competitiveness of
EU producers.

4.

Interest of importers, users and consumers

(227) The two importers cooperating in the framework of the investigation concerning Chile
and  the  Faeroes  had  no  opinions  regarding  the  Community  interest  aspects  of  the
investigation  as  sales  of  farmed  Atlantic  salmon  represented  an  insignificant  part  of
their overall turnover.

(228) Representations  were  also  received  on  behalf  of  SA  Direct  Ocean.  This  company
noted that it used imported frozen salmon from Chile in its production of ready meals
which were aimed at low and middle income consumers.  It was suggested that these
products were not in competition with fresh salmon from Scotland. Moreover, it was
claimed  that  measures  against  Chile  would  not  benefit  the  Community  as  Scottish
salmon  farmers  could  not  supply  frozen  salmon.  It  was  further  claimed  that  several
thousand jobs in the food processing industry would be put at risk if measures against
imports from Chile were imposed.

(229) The  Federation  of  National  Organisations  of  Importers  and  Exporters  of  Fish
(AIPCE/CEP)  expressed  its  opposition  to  any  system  that  impacted  supply  and
demand  if  it  resulted  in  increased  prices  and  made  the  obtaining  of  supplies  more
difficult. It considered that if prices were to rise above the natural level of the market,
this would be negative in terms of competition for both EU industry and the consumer.
The Federation provided data which showed that its members processed in excess of
60  000  tonnes  of  salmon  per  year  and  produced  nearly  50  000  tonnes  of  smoked
salmon.  It  estimated  the  number  of  people  to  be  directly  employed  in  the  sector  to
exceed 10 000.

49

(230) The  Danish  Association  of  Fish  Processing  Industries  and  Exporters  made  clear  its
opposition to any regulation of the market which disturbed prices and the normal rules
of  competition.  It  was  suggested  that  the  existing  measures  had  distorted  the  market
for salmon in the Community and led to excess profits being made in Norway. These
high  profits,  it  was  claimed,  had  in  turn  encouraged  over  investment  in  the  salmon
farming industry  and created  an imbalance  between  supply  and  demand  world-wide.
The  association  highlighted  the  importance  of  the  processing  industry  in  the
Community both in terms of employment and the added value it created.

(231) The Syndicat National de l’Industrie du Saumon Fumé represents fifteen companies in
France  involved  in  the  production  of  smoked  salmon.  These  companies  employ
2 800 people  and  processed  approximately  36  000  tonnes  of  fresh  salmon  in  the  IP.
The association considered that the anti-dumping Regulation was not the appropriate
mechanism  for  regulating  trade  in  agricultural  products  which  were  subject  to
significant price movements  and that the salmon  farming industry  had  to  manage  its
growth on a global basis.

(232) The European Consumers’ Organisation (BEUC) noted that the market for salmon in
the Community had increased markedly, largely in its opinion as a result of increased
competition  from  producers  in  Norway  and  more  recently  Chile  and  the  Faeroe
Islands. It was suggested that this competition had led to a decline in prices which had
allowed  European  consumers  to  increase  their  intake  of  salmon.  This  fact  was  to  be
welcomed because of the perceived nutritional benefits of salmon. At the same time, it
was argued that the economic interests of importers, processors and retailers of salmon
in  the  Community  far  outweighed  any  potential  short-term  benefits  that  measures
would bring to the relatively small number of independent producers remaining in the
Community.  As  a  result,  BEUC  expressed  its  opposition  to  measures  of  any  kind
against imports into the Community of farmed Atlantic salmon.

(233)

In the light of the comments received from the three representative associations, it was
also considered whether the imposition of measures could lead certain users to relocate
their  production  facilities  to  countries  outside  the  Community.  In  this  context  it  is
noted  that  the  conventional  tariff  applicable  to  imports  of  fresh  and  frozen  Atlantic
salmon  into  the  Community  in  the  IP  and  2002  is  2  %  whereas  that  for  imports  of
smoked salmon is normally 13 %. Eurostat data for the analysis period shown in the
table below indicates that almost half of all imports declared in the IP under heading
CN 0305 41 00 (Pacific, Atlantic, Danube salmon, smoked including fillets) originated
in Poland with the next most important origins being Norway and the Faeroe Islands.
Imports  from  other  origins  were  not  significant.  The  data  would  at  first  appear  to
suggest  that  the  measures  currently  in  place  against  Norway  have  not  had  an
appreciable  impact  on  the  trade  flows  of  smoked  salmon.  However,  it  should  be
recalled that the measures against Norway were imposed in 1997. Imports of smoked
salmon  in  this  year  and  1996  should  therefore  also  be  considered  in  order  to  have  a
more  meaningful  picture.  These  figures  show  a  much  lower  level  of  imports
originating in Poland with 302 tonnes recorded in 1996 and 229 tonnes in 1997. The
figures for imports originating in Norway for the same years were 771 and 900 tonnes
respectively  and  for  the  Faeroe  Islands,  566  and  493  tonnes.  It  is  therefore  apparent
that the imposition of measures led to a significant increase in the volume of imports
of  smoked  salmon  from  Poland  which  may  have  replaced  certain  production
originating  in  Denmark  as  volumes  from  this  country  to  the  rest  of  the  Community
declined from approximately 15 500 tonnes in 1997 to 13 500 tonnes in 1998.

50

Poland (tonnes)

Index

Norway (tonnes)

Index

Faeroe Islands (tonnes)

Index

Total from three origins
(tonnes)

1998

1 931

100

1 084

100

594

100

1999

1 664

86

975

90

370

62

2000

2001 (IP)

1 677

1 637

87

951

88

453

76

85

920

85

686

116

3 608

3 009

3 080

3 243

(234)

(235)

Index

100

83

85

90

It  is  also  noted  that  the  European  Community  and  its  Member  States  have  recently
concluded  a  Free  Trade  Agreement  with  Chile.  According  to  the  Agreement,  the
conventional duty of 2 % on imports of the product concerned will be eliminated from
the date on which the Agreement enters into force. As regards trade in salmon related
products  such  as  smoked  salmon,  it  is  noted  that  the  Agreement  foresees  a  gradual
elimination  of  the  existing  tariff  over  a  10  year  period  in  tandem  with  a  system  of
aggregated  quotas  of  40  tonnes  for  products  classified  under  headings  0305  41  00
(smoked) and 0305 30 30 (salted or in brine). In view of the quantities involved in this
quota system, the future accession of Poland to the European Union and the proposal
to  discontinue  measures  against  Norway,  it  is  not  considered  that  the  imposition  of
measures against Chile will lead to a delocalisation of the salmon processing industry
to third countries.

In  considering  the  possible  impact  of  measures  on  the  final  consumer,  information
submitted  by  the  Norwegian  Seafood  Federation  concerning  retail  prices  in
150 supermarkets  in  France  for  Atlantic  salmon  fillets  was  taken  into  account.  This
demonstrated that, on average, prices fluctuated within a narrow band as shown in the
table below. It was therefore argued that the EU consumer had not benefited from the
reduction in production costs achieved by producers. This fact was echoed by the EU
Salmon Producers’ Group which also made the point that the Salmon Agreement and
the existing measures had had no recognisable effect on consumer prices and that the
primary  beneficiaries  of  falling  producer  prices  appeared  to  be  retailers  and
wholesalers.  It  would  appear  from  these  submissions  that  consumers  of  farmed
Atlantic salmon are to a certain extent insulated from the extremes of price volatility
on the market. It is therefore unclear as to precisely what extent consumers would be
impacted  by  the  imposition  of  measures  against  Chile  as  this  depends  partly  on  the
pricing policy of retailers which did not co-operate in the proceedings.

€ per kilogram

Index

1999

10,81

98

2000

2001 (IP)

11,64

106

11,30

102

1998

11,03

100

51

(236)

In  conclusion,  whilst  recognising  the  importance  of  the  salmon  processing  sector  in
terms of employment and value creation, it is not considered on the basis of evidence
available that the impact of measures would be such  as to lead to a delocalisation of
processing  activities  to  locations  outside  the  Community.  Nevertheless,  it  is
considered  that  importers/users  will  be  disadvantaged  by  measures  in  that  they  will
have to pay additional duties on their imports of salmon from Chile.

5.

Interests of suppliers

(237) The  five  cooperating  suppliers  made  themselves  known  in  the  review  concerning
Norway and therefore did not comment in detail on the impact of potential measures
on Chilean imports on their activities. However, two suppliers did express the opinion
that  measures  were  not  the  most  appropriate  means  of  addressing  the  situation  of
Community salmon producers.

6.

Conclusion on Community interest

(238)

It  is  acknowledged  that  the  existing  measures  against  imports  from  Norway  initially
enabled the Community industry to improve its economic situation with regard to its
level of production, sales, profitability and market share. However, in the absence of a
likelihood  of  a  continuation  or  recurrence  of  dumping  and  subsidisation  for  imports
from  this country, measures against imports  from Norway  cannot  be  continued.  Any
measures  limited  to  Chilean  exports,  even  assuming  that  these  were  considered  to
cause  injury,  would  in  all  probability  be  inefficient  due  to  the  limited  price
competition between fresh and frozen salmon and considering recital (212) above, the
difficulties the Community industry is likely  to experience in reaping  the  benefits of
any price increase. Even if measures on Chilean exports alone were to trigger a price
increase in the price of fresh salmon on the Community market to the supposed benefit
of 
those
producers/exporters  in  countries  not  subject  to  measures  would  outweigh  the  benefit
accruing to the Community industry and  certain other interested parties. At the same
time,  it  is  recalled  that  any  such  increase  in  prices  would  be  to  the  detriment  of
importers, users and consumers.

transfer  of  wealth 

the  Community 

industry, 

resulting 

the 

to 

(239) Subsequent to the disclosure, one party criticised the manner in which the Commission
had  made  its  assessment  of  the  Community  interest.  According  to  this  party,  the
interests  of  the  Community  industry  had  not  been  properly  taken  into  account.  It
argued that although the Community industry was small, this should not be used as an
argument against its need for protective measures and that this approach contradicted
the stance that had been adopted in similar situations in the past, most notably at the
time when measures were originally imposed on imports from Norway.

(240) The  same  party  argued  that  the  appreciation  of  the  views  of  other  parties  to  the
investigations was mistaken. In particular, it suggested that the opinions expressed by
those  other  producers  in  the  Community  which  had  cooperated  in  the  investigations
but  which  were  not  part  of  the  complainant,  could  not  be  considered  to  be
representative of the views of all other  producers in the Community,  many of  which
had not made themselves known. It claimed that Norwegian-owned salmon producers
located in the Community had been instructed not to co-operate with the Commission.
It claimed that 8 000 jobs were at imminent risk of disappearing if such measures were
not imposed as a matter of urgency. It also expressed the view that the situation on the
Community market could be expected to deteriorate further as trade defence measures

52

(241)

in  the  USA  could  be  expected  to  lead  to  an  increased  trade  diversion  of  Chilean
exports from that market to the Community.

It is to be noted that the assessment of the Community interest was made on the basis
of  all  information  submitted.  The  views  of  all  interested  parties  were  addressed
including those which drew on the experiences of the existing measures applicable to
Norwegian imports. It is not accepted that the situation in the present case is similar to
that  prevailing  at  the  time  of  the  previous  investigation  concerning  Norway.  At  that
time, the market share of the Community industry was determined to be over 25 % and
that  of  Norwegian  imports  over  65  %.  Consequently,  the  imposition  of  measures  at
that  time  covered  the  majority  of  imports  of  the  product  concerned  into  the
Community and afforded protection to a Community industry with a significant share
of the market. In the present case, the assessment of the Community interest is limited
to  a  consideration  of  measures  against  dumped  imports  from  Chile  only.  These
imports  accounted  for  market  share  of  around  5  %  in  the  IP  and  under  7  %  of  total
imports.  In  addition,  the  market  share  of  the  Community  industry  has  been
significantly reduced to less than 5 % as the process of restructuring and consolidation
in the market has continued.

(242) Regarding  the  other  issues  raised  by  this  party  on  the  question  of  the  Community
interest, it has been clearly acknowledged that the Nutreco group companies were the
only producers other than those in the Community industry to have cooperated in the
investigations.  Whilst  it  was  not  the  intention  to  portray  the  views  of  Nutreco  as
representing  all  other  salmon  producers  in  the  Community,  it  is  to  be  noted  that  the
group is one of the largest producers of salmon in the Community. As the assessment
of the Community interest calls for an appreciation of all the various interests taken as
a whole, it would have been inappropriate not to have given due consideration to the
views expressed by Nutreco.

(243)

It is recognised that the salmon farming industry provides employment in remote areas
of the Community where other employment opportunities are often limited. However,
it  would  appear  that  the  figure  of  8  000  jobs,  for  which  no  supporting  evidence  has
been provided, could be overstated. Figures published by the Scottish Executive show
1 257 people to have been directly employed (either full-time or part-time) in salmon
production in Scotland in 2001. In view of the significantly lower production volume
of farmed Atlantic salmon in Ireland, the figure for direct employment in that country
is  expected  to  be  far  lower.  It  should  be  underlined  that  the  primary  purpose  of  the
anti-dumping  instrument  is  to  counter  unfair  trade  practices.  More  specifically,  the
purpose  of  the  Community  interest  test  is  to  determine  whether  there  are  any
overriding  interests  against  the  imposition  of  measures  despite  the  existence  of
injurious dumping. This calls for an appreciation of all economic interests involved in
the Community.

(244)

In considering the party’s final point relating to the trade defence measures in place in
the  USA  and  their  possible  repercussions  for  the  Community  salmon  market,  it  is
noted that such measures were first imposed by the authorities in 1998 and not in 2001
as has been suggested. The measures were only imposed on imports of fresh salmon
into the USA meaning that frozen salmon, which accounts for almost all exports from
Chile to the Community, was unaffected. Moreover, the administrative review process
undertaken by the authorities in the USA subsequent to the imposition of the original
measures has resulted in a lowering of the level of duties for most Chilean exporters.
Therefore,  it  is  not  considered  that  trade  defence  measures  in  the  USA  constitute

53

sufficient  justification  for  the  imposition  of  measures  in  the  Community  against
imports from Chile. In light of the foregoing, this claim and others made by the party
as detailed above in recitals (239) and (240) were rejected.

(245) Therefore, on the basis of all the information submitted, it is concluded that it is not in

the Community interest to apply such measures.

J.

TERMINATION OF THE PROCEEDINGS

(246)

In view of the above findings it is therefore concluded that the proceedings concerning
imports  originating  in  Norway  should  be  terminated  and  that  the  anti-dumping  and
countervailing  measures  initially  adopted  by  Regulation  (EC)  No  1890/97  and
Regulation (EC) No 1891/97 should be allowed to expire.

(247)

It  is  also  concluded  on  the  basis  of  the  above  findings  that  the  anti-dumping
proceeding concerning imports originating in Chile and the  Faeroe Islands should be
terminated,

HAS ADOPTED THIS REGULATION:

Article 1

The  anti-dumping  and  anti-subsidy  proceedings  concerning  imports  of  farmed  Atlantic
salmon  falling  within  CN  codes  ex  0302 12 00,  ex  0303 22 00,  ex  0304 10 13  and
ex 0304 20 13 originating in Norway are hereby terminated.

Article 2

The  anti-dumping  proceeding  concerning  imports  of  farmed  Atlantic  salmon  falling  within
CN  codes  ex  0302  12  00,  ex  0303  22  00,  ex  0304  10  13  and  ex  0304  20  13  originating  in
Chile and the Faeroe Islands is hereby terminated.

Article 3

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

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

Done at Brussels, […].

For the Council
The President

54