Proposal for a Council Regulation extending the definitive anti-dumping duty imposed by Regulation (EC) No 1784/2000 on imports of certain malleable cast iron tube or pipe fittings originating in Brazil to imports of certain malleable cast iron tube or pipe fittings consigned from Argentina, whether declared as originating in Argentina or not, and terminating the investigation in respect of imports from one Argentinian exporter
Date: 2003-05-23
Institutions: European Commission
Subjects: Argentina, Brazil, anti-dumping duty, common tariff policy, import (EU), piping

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 23.05.2003
COM(2003) 295 final

Proposal for a

COUNCIL REGULATION

extending the definitive anti-dumping duty imposed by Regulation (EC) No 1784/2000
on imports of certain malleable cast iron tube or pipe fittings originating in Brazil to
imports of certain malleable cast iron tube or pipe fittings consigned from Argentina,
whether declared as originating in Argentina or not, and terminating the investigation
in respect of imports from one Argentinian exporter

(presented by the Commission)

1. 

2. 

3. 

4. 

5. 

6. 

EXPLANATORY MEMORANDUM

By  Regulation  (EC)  No  1784/2000,  the  Council  imposed  in  August  2000  an  anti-
dumping  duty  of  34,8  %  on  imports  of  threaded  malleable  cast  iron  tube  or  pipe
fittings (malleable fittings) originating in Brazil.

Following  a  request  lodged  by  the  Defence  Committee  of  the  Malleable  Cast  Iron
Pipe Fittings Industry of the European Union, the Commission initiated in September
2002 an investigation into the alleged circumvention of the measures on imports of
malleable  fittings  originating  in  Brazil  by  imports  of  malleable  fittings  consigned
from Argentina.

The investigation showed  a  significant  increase  in  the  imports  of  malleable  fittings
into the Community from Argentina,  a parallel decrease in  the  imports from  Brazil
and  an  increase  of  the  exports  from  Brazil  to  Argentina  in  roughly  equivalent
proportions. This change in the pattern of trade coincided in time with the imposition
of  the  duty  on  imports  of  malleable  fittings  originating  in  Brazil.  No  economic
justification or sufficient due cause could be established for these practices other than
the existence of the anti-dumping duty on malleable fittings.

It was also found that the sole co-operating Argentinian exporting producer (DEMA
S.A.)  did  not  change  its  pattern  of  trade  and  in  addition  only  exported  its  own
production to the Community during the investigation period.

It  is  therefore  proposed  that  the  34,8  %  anti-dumping  duty  imposed  on  imports  of
malleable fittings originating in Brazil by Council Regulation (EC) No 1784/2000 be
extended to imports of malleable fitting consigned from Argentina, whether declared
as originating in Argentina or not, with the exception of the exports made by DEMA
S.A..

It should also be noted that the application of the extended duty will be suspended by
Commission Decision xxx/2003, for the reasons indicated therein.

2

Proposal for a

COUNCIL REGULATION

extending the definitive anti-dumping duty imposed by Regulation (EC) No 1784/2000
on imports of certain malleable cast iron tube or pipe fittings originating in Brazil to
imports of certain malleable cast iron tube or pipe fittings consigned from Argentina,
whether declared as originating in Argentina or not, and terminating the investigation
in respect of imports from one Argentinian exporter

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 Article 13 thereof,

Having  regard  to  the  proposal  submitted  by  the  Commission  after  consulting  the  Advisory
Committee3,

Whereas:

A.

PROCEDURE

1.

Existing measures

(1) 

(2) 

(3) 

By  Regulation  (EC)  No  1784/20004,  the  Council  imposed  in  August  2000  an  anti-
dumping  duty  of  34,8  %  on  imports  of  threaded  malleable  cast  iron  tube  or  pipe
fittings (malleable fittings) originating in Brazil.

2.

Request

On 12 August 2002, the Commission received a request, pursuant to Article 13(3) of
Regulation  (EC)  No  384/96  (the  basic  Regulation),  from  the  Defence  Committee  of
the  Malleable  Cast  Iron  Pipe  Fittings  Industry  of  the  European  Union.  This  request
was  submitted  on  behalf  of  producers  representing  a  major  proportion  of  the
Community production of malleable fittings.

The request alleged that following the imposition of measures on imports of malleable
fittings originating in Brazil, there had been a significant change in the pattern of trade
involving  exports  from  Brazil  and  Argentina  to  the  Community.  This  change  in  the
pattern  of  trade was  alleged to stem  from  a  transhipment via  Argentina  of  malleable

1

2

3

4

OJ L 56, 6.3.1996, p. 1.
OJ L 305, 7.11.2002, p. 1.
OJ C […] […], p. […]
OJ L 208, 18.8.2000, p. 8.

3

                                                
(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

fittings  originating  in  Brazil.  There  had  been  a  significant  increase  in  imports  from
Argentina while imports from Brazil had decreased in roughly equivalent proportions
in the meantime.

The request concluded, that there was insufficient due cause or economic justification
for the aforementioned changes other than the existence of the anti-dumping duty on
malleable fittings originating in Brazil.

Finally, the Community industry also submitted sufficient evidence to initiate the anti-
circumvention  investigation,  that  the  remedial  effects  of  this  duty  were  being
undermined  both  in  terms  of  quantities  and  prices  and  that  the  prices  of  malleable
fittings  from  Argentina  were  dumped  in  relation  to  the  normal  values  previously
established for the malleable fittings originating in Brazil.

3.

Initiation

By  Regulation  (EC)  No  1693/20025  (the  initiating  Regulation),  the  Commission
initiated an investigation and directed, pursuant to Articles 13(3) and 14(5) of the basic
Regulation, the customs authorities to register imports of malleable fittings consigned
from  Argentina,  whether  declared  as  originating  in  Argentina  or  not,  as  of
26 September 2002. The Commission advised the authorities of Brazil and Argentina
of the initiation of the investigation.

4.

Investigation

Questionnaires  were  sent  to  Community  importers  as  well  as  exporters  of  malleable
fittings  located  in  Brazil  and  Argentina  which  were  mentioned  in  the  request,
exporters known from the original investigation and other interested parties who came
forward  within  the  prescribed  time  limits.  It  was  made  clear  to  the  importers  and
exporters that non-cooperation may lead to the  application of  Article  18 of the basic
Regulation.

A number of Community importers made their views known in writing declaring that
they had not imported any malleable fittings from Argentina.

Replies to the questionnaires were received from one Argentinian exporting producer,
DEMA S.A., San Justo, Buenos Aires. The Commission carried out a verification visit
at the premises of this company.

5.

Investigation period

(10)  The investigation period covered the period from 1 July 2001 to 30 June 2002 (the IP).
Data were collected from 1998 up to the end of the IP to investigate the alleged change
in the pattern of trade.

B.

RESULTS OF THE INVESTIGATION

1.

General considerations/degree of cooperation

5

OJ L 258, 26.9.2002, p. 27.

4

                                                
(11)  No  co-operation  was  received  from  producers  or  exporters  of  malleable  fittings  in
Brazil. However, information was obtained from one co-operating exporting producer
in Argentina, DEMA S.A., which produced malleable fittings and exported them to the
Community during the IP. This Argentinian company accounted for a negligible part
both in volume and in value of the total imports of malleable fittings from Argentina
to the Community during the IP, as reported by Eurostat.

(12)  Furthermore,  in  the  course  of  the  investigation  the  Argentinian  authorities  requested
within  the  time  limits  set  in  the  initiating  Regulation  to  be  treated  as  an  interested
party.  Information  and  statistical  data  concerning  Argentinian  imports  and  exports
were obtained from the Argentinian authorities.

(13) 

In December 2002, one month after the expiry of the deadline for receipt of replies to
the  questionnaire,  the  Commission  received  a  submission  on  behalf  of  Industrias
Aguila Blanca S.A. (Argentina), who alleged to be a producer of malleable fittings in
Argentina. The submission contained a request by this company to be considered as an
interested  party  in  the  investigation  and  a  request  to  be  exempted  from  extension  of
measures.  Given  that  the  submission  was  received  at  such  an  advanced  stage  of  the
investigation  and  well  beyond  the  deadlines  laid  down  in  Article  3  of  the  initiating
Regulation and, in addition, would have required further explanations and verification,
the  company  was  informed  that  it  could  not  be  considered  as  cooperating  in  the
investigation.  Accordingly,  the  company  was  informed  that  findings  in  respect  of  it
had to be made on the basis of the facts available in accordance with Article 18(1) of
the basic Regulation.

2.

Product concerned and like product

(14)  The product concerned, as defined in the original investigation, is threaded malleable

cast iron tube or pipe fittings currently classifiable within CN code ex 7307 19 10.

(15)  The investigation showed that the malleable fittings exported to the Community from
Brazil  and  those  consigned  from  Argentina  to  the  Community  have  the  same  basic
characteristics  and  have  the  same  uses,  and  are  therefore  to  be  considered  as  like
products within the meaning of Article 1(4) of the basic Regulation.

3.

Change in the pattern of trade

Cooperating Argentinian exporter

(16)  During the IP, DEMA S.A., the co-operating exporter exported only one container to
the Community. No other exports to the Community took place during the IP or in the
period for which data were collected. In fact, the only export preceding the one during
the  IP  took  place  in  1992.  Consequently  there  was  no  clear  pattern  of  trade  prior  or
after the imposition of the measures concerning Brazilian exports to the Community,
and consequently no change of it. Moreover it has also been established that  DEMA
S.A.  is  both  a  manufacturer  and  exporter  of  malleable  fittings  operating  production
facilities for the complete production process of the product concerned. It only sells its
own production and never purchased any malleable fittings from Brazil during the IP.

(17)  Given  the  above,  DEMA  S.A.  has  shown  that  there  was  no  change  in  the  pattern  of
trade regarding their exports to the Community. Consequently, the investigation with
regard to malleable fittings exported by DEMA S.A. should be terminated.

5

Non-cooperating Argentinian exporters

(18)  As  far  as  the  non-cooperating  exporters  are  concerned  the  Commission  had  to
establish  the  exports  to  the  Community  on  the  basis  of  facts  available  pursuant  to
Article  18  of  the  Basic  Regulation.  It  was  considered  that  Eurostat  data  at  CN  level
were the best information available to establish the findings in respect of exports to the
Community  following  the  imposition  of  the  anti-dumping  duty  on  imports  of
malleable fittings originating in Brazil. The export price from Argentina to the EU was
established on the basis  of total export value  and tonnes  reported  by EUROSTAT at
CN  level  from  which  the  quantities  and  values  exported  by  the  co-operating
Argentinian  company  were  deducted.  In  addition,  for  the  data  collected  before  the
imposition of the measures, it was considered that Eurostat data at CN level were the
best information available.

(19)  The marked switch from imports from Brazil to the EU to those from Argentina to the
EU  coincided  with  the  entry  into  force  of  Community  anti-dumping  measures  on
malleable fittings originating in Brazil in August 2000. Imports into the Community of
malleable fittings from Brazil, following the imposition of anti-dumping measures by
the Community, have decreased substantially from 3 737 tonnes in 2000 to 181 tonnes
in  2001.  At  the  same  time,  imports  into  the  Community  of  malleable  fittings  from
Argentina  increased  from  15  tonnes  in  2000  to  3 087  in  2001.  This  pattern  of  trade
was confirmed during the first six months of the IP. However, during the second half
of the IP this change of pattern of trade was reversed due to the ongoing Argentinian
anti-dumping  investigation  concerning  imports  of  malleable  fittings  originating  in
Brazil.  As  a  result,  exports  from  Argentina  decreased  from  3 087  tonnes  in  2001  to
202 tonnes in 2002. However, pending the outcome of this Argentinian anti-dumping
investigation, it cannot be ruled out that  the aforementioned  change  in the pattern of
trade will be on a temporary basis only.

(20)  A clear change in pattern of trade was nevertheless established in respect of the non-
cooperating  companies  which  manifestly  coincided  with  the  entry  into  force,  in
August 2000, of Community anti-dumping measures on malleable fittings originating
in Brazil.

4.

Insufficient  due  cause  or  economic 
Argentinian exporters)

justification 

(non-cooperating

(21)  Data  provided  by  the  Argentinian  authorities  show  that  imports  of  malleable  fittings
originating in Brazil into Argentina have increased substantially in the year 2001, at a
pace similar to that of the increase of exports from Argentina to the Community in the
same  period.  In  the  absence  of  co-operation,  it  can  therefore  be  inferred  from  the
parallelism of the trends, that the imports from Brazil to Argentina were not meant for
the  Argentinian  market,  but  were  meant  to  be  exported  to  the  Community,  a
conclusion which is reinforced by the Argentinian export statistics made available by
the Argentinian authorities.

(22) 

In  the  absence  of  co-operation,  and  given  that  the  above  mentioned  substitution  of
imports from Brazil for imports from Argentina took place immediately following the
imposition of anti-dumping duties, it has to be concluded, in the absence of any other
explanation, that the change in the pattern of trade stemmed from the imposition of the
duty rather than from any other sufficient due cause or economic justification within
the meaning of Article 13(1), second sentence, of the basic Regulation.

6

(23)  Due to the above, it may reasonably be concluded that the vast majority of exports of
malleable fittings from Brazil to Argentina were merely transhipped via Argentina to
the Community.

5.

Undermining  of  the  remedial  effects  of  the  duty  in  terms  of  the  prices
and/or  quantities  of  the  like  products  (non-cooperating  Argentinian
exporters)

(24) 

It  is  evident  from  the  figures  in  recital  (19)  that  a  clear  quantitative  change  in  the
pattern of Community imports occurred since  the  imposition of measures.  Indeed, in
1999  prior  to  the  imposition  of  the  measures,  the  exports  to  the  Community  of
malleable  fittings  originating  in  Brazil  were  4  518  tonnes  according  to  EUROSTAT
figures at CN level. These exports have fallen to a level of 3 737 tonnes in 2000 and
15  tonnes  in  2001.  In  2001  these  exports  were  replaced  by  exports  of  the  non-
cooperating Argentinian exporters (accounting for 3 087 tonnes). This marked change
in  trade  flows  undermined  the  remedial  effects  of  the  measures  in  terms  of  the
quantities imported into the Community market.

(25)  With  regard  to  prices,  and  given  the  low  degree  of  co-operation,  recourse  had  to  be
made  to  the  best  evidence  available,  i.e.  EUROSTAT  figures  at  CN  level.  This  data
revealed  that  the  adjusted  export  prices  from  Argentina  were  around  5  %  below  the
export prices of Brazilian exports in the original investigation. Consequently, it must
be  assumed  that  the  export  prices  of  Argentinian  exports  are  below  the  injury
elimination level of Community prices as established in the original investigation.

(26) 

It is therefore concluded that the imports concerned  undermined  the  remedial  effects
of the duty both in terms of quantities and prices.

6.

Evidence  of  dumping  in  relation  to  the  normal  values  previously
established  for  like  or  similar  products  (non-cooperating  Argentinian
exporters)

(27) 

In order to determine whether evidence of dumping could be found with respect to the
malleable fittings exported to the Community from Argentina by the non-cooperating
exporters during the IP, export data according to EUROSTAT at CN level were used
pursuant to Article 18 of the basic Regulation.

Approach based on export data reported by EUROSTAT

(28) 

(29) 

In accordance with Article 13(1) of the basic Regulation, the normal value to be used
in  an  anti-circumvention  investigation  is  the  normal  value  established  during  the
original investigation.

In  the  original  investigation,  normal  value  for  Brazil  was  determined  per  type  of
malleable  fitting.  In  the  current  anti-circumvention  investigation  the  export  prices
were determined on the basis of EUROSTAT data, which do not provide export price
data per type of malleable fitting but only per tonne and per CN code. In the absence
of co-operation, for comparison purposes of these export prices with the normal value
established  in  the  original  investigation,  the  product  mix  of  the  non-cooperating
Argentinian  producers/exporters  was  assessed  on  the  basis  of  the  product  mix  of
export  sales  to  the  Community  in  the  original  investigation.  This  comparison  was
considered  reasonable  since  it  was  established  that  the  Argentinian  exports  were

7

supplied by the same Brazilian exporter responsible for the majority of exports in the
original investigation. Consequently, a weighted average normal value per tonne based
on  a  product  mix  equal  to  the  product  mix  in  the  original  investigation  was
established.

(30)  For the purpose of a fair comparison between the normal value and the export price,
due allowance in the form of adjustments was made for differences which affect prices
and  price  comparability.  These  adjustments  were  made 
in  accordance  with
Article 2(10) of the basic Regulation in respect  of  transport  and  insurance  and  based
on the exports of DEMA S.A..

(31) 

In accordance with Article 2(11) and (12) of the basic Regulation, the comparison of
weighted  average  normal  values  with  weighted  average  export  prices  expressed  as  a
percentage of the CIF Community frontier price, revealed a level of dumping of more
than 40 %.

C.

REQUESTS FOR EXEMPTION FROM REGISTRATION OR EXTENSION

OF THE DUTY

(32)  The Commission received requests for exemption from the registration and measures
from  two Argentinian  producers,  Industrias  Aguila  Blanca  S.A  and  DEMA  S.A..  As
stated in recital (11) the former was not considered as a co-operating producer and the
request for exemption was not taken into account in this investigation.

(33)  By Regulation (EC) No xxx/20036, the Commission amended the initiating Regulation
in  order  to  cease  registration  of  imports  of  malleable  fittings  by  the  Argentinian
company found not to be circumventing the anti-dumping duties, namely DEMA S.A..

(34) 

In  accordance  with  the  above  findings  that  the  company  was  found  not  to  have
circumvented  the  anti-dumping  measures  in  force,  the  company  should  also  be
exempted from the extension of the measures envisaged.

D.

MEASURES

(35) 

(36) 

In  view  of  the  above  finding  of  circumvention  within  the  meaning  of  Article  13(1),
second  sentence  of  the  basic  Regulation,  the  existing  anti-dumping  measures  on
malleable  fittings  originating  in  Brazil  should  be  extended  to  the  same  product
consigned  from  Argentina,  whether  declared  as  originating  in  Argentina  or  not,
pursuant to Article 13(1), first sentence, of the basic Regulation, with the exception of
products manufactured by the co-operating producer DEMA S.A..

In  accordance  with  Article  14(5)  of  the  basic  Regulation,  which  provides  that  any
extended  measures  should  apply  against  registered  imports  from  the  date  of
registration,  the  anti-dumping  duty  on  imports  of  malleable  fittings  consigned  from
Argentina which entered the Community under  registration imposed by the  initiating
Regulation,  with  the  exception  of  those  malleable  fittings  produced  by  DEMA  S.A.,
should be collected.

(37)  The  non-extension  of  the  duties  to  the  imports  of  the  malleable  fittings  exported  by
DEMA S.A. was established on the basis of the findings of the present investigation.

6

xxx

8

                                                
This  non-extension  is  thus  exclusively  applicable  to  imports  of  malleable  fittings
consigned  from  Argentina  and  produced  by  this  specific  legal  entity.  Imported
malleable  fittings  produced  or  consigned  by  any  other  company  not  specifically
mentioned in the operative part of this Regulation with its name and address including
entities related to those specifically mentioned, cannot benefit from the exemption and
should be subject the same duty rate as imposed by Regulation (EC) No 1784/2000.

(38)  Any claim requesting the application of an exemption from the extension of the duties
will  have  to  be  addressed  to  the  Commission  with  all  relevant  information,  in
particular any modification in the company's activities linked to production and export
sales.

(39)  Argentinian exporters requesting an exemption pursuant to Article 13(4) of the basic
Regulation  will  normally  be  required  to  complete  a  questionnaire  in  order  to  enable
the  Commission  to  determine  whether  an  exemption  may  be  warranted  and  the
Commission would normally also carry out an on-the-spot verification visit.

(40)  Where  exemption  would  be  considered  appropriate,  the  Commission  will,  after
consultation  of  the  Advisory  Committee,  amend  the  Regulation  accordingly  by
updating the list of companies benefiting from the exception.

E.

PROCEDURE

(41) 

Interested parties were informed of the essential facts and considerations on the basis
of  which  the  Commission  intended  to  propose  the  extension  of  the  definitive  anti-
dumping  duty  in  force  and  were  given  the  opportunity  to  comment.  No  objections
were received,

HAS ADOPTED THIS REGULATION:

Article 1

1.

2.

The  definitive  anti-dumping  duty  imposed  by  Regulation  (EC)  No  1784/2000  on
imports of threaded malleable cast iron tube and pipe fittings falling within CN code
ex  7307  19  10,  originating  in  Brazil,  is  hereby  extended  to  imports  of  the  same
threaded  malleable  cast  iron  tube  and  pipe  fittings  consigned  from  Argentina
(whether declared as originating in Argentina or not) (TARIC codes 7307 19 10*11
and  7307  19  10*19  respectively),  with  the  exception  of  those  produced  by  DEMA
S.A.,  Av.  Pte.  Perón  3750,  San  Justo,  Buenos  Aires,  Argentina  (TARIC  additional
code A438).

The  duty  extended  by  paragraph  1  of  this  Article  shall  be  collected  on  imports
registered  in  accordance  with  Article  2  of  Regulation  (EC)  No  1693/2002  and
Articles 13(3) and 14(5) of Regulation (EC) No 384/96, with the exception of those
produced by DEMA S.A., Av. Pte. Perón 3750, San Justo, Buenos Aires, Argentina.

3.

The provisions in force concerning customs duties shall apply.

9

1.

2.

Article 2

Requests for exemption from the duty extended by Article 1 shall be made in writing
in one of the official languages of the  Community  and must be  signed by a  person
authorised  to  represent  the  applicant.  The  request  must  be  sent  to  the  following
address:

European Commission
Directorate-General for Trade
Directorate B
Office: J-79 05/17
B - 1049 Brussels
Fax (32 2) 295 65 05
Telex COMEU B 21877.

The  Commission,  after  consulting  the  Advisory  Committee,  may  authorise  by
decision,  the  exemption  of  imports  which  are  shown  not  to  circumvent  the  anti-
dumping duty imposed by Regulation (EC) No 1784/2000 from the duty extended by
Article 1 of the present Regulation.

Customs authorities are hereby directed to discontinue the registration of imports, established
in accordance with Article 2 of Regulation (EC) No 1693/2002.

Article 3

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

Article 4

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

Done at Brussels,

For the Council
The President

10