Commission Regulation (EC) No 1678/2003 of 26 August 2003 amending Commission Regulation (EC) No 362/1999 imposing a provisional anti-dumping duty on imports of steel ropes and cables and accepting undertakings offered by certain exporters, inter alia, in Poland and amending Decision 1999/572/EC accepting undertakings offered in connection with the anti-dumping proceedings concerning imports of steel wire ropes and cables originating, inter alia, in Ukraine
Date: 2003-08-26
Institutions: European Commission
Subjects: Poland, Ukraine, anti-dumping duty, anti-dumping legislation, import, originating product, steel

25.9.2003

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Official Journal of the European Union

L 238/13

COMMISSION REGULATION (EC) No 1678/2003

of 26 August 2003

amending Commission Regulation (EC) No 362/1999 imposing a provisional anti-dumping duty on
imports of steel ropes and cables and accepting undertakings offered by certain exporters, inter
alia, in Poland and amending Decision 1999/572/EC accepting undertakings offered in connection
with the anti-dumping proceedings concerning imports of steel wire ropes and cables originating,
inter alia, in Ukraine

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

2. Ukraine

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1)
(the
basic Regulation), as last amended by Regulation (EC) No
1972/2002 (2), and in particular Articles 8 and 9 thereof,

After consulting the Advisory Committee,

Whereas:

A. PREVIOUS PROCEDURE

1. Poland

(1)

(2)

(3)

On 30 July 1998, an anti-dumping proceeding was
initiated by the Commission on imports of steel ropes
and cables (SWR) originating, inter alia, in Poland (3).

Provisional measures were imposed by Commission
Regulation (EC) No 362/1999 (4).
the
In parallel,
Commission accepted a price undertaking from,
inter
alia, the Polish exporting producer Drumet SA (‘Drumet’)
pursuant to Article 2(1) of Regulation (EC) No 362/
1999. Imports of SWR produced and directly exported
to the Community by Drumet were exempted from the
anti-dumping duty by Article 1(3) of the same Regula-
tion. Exemption from the duty is, inter alia, conditional
on presentation of a valid undertaking invoice accompa-
nying goods subject to an undertaking, and no such
undertaking invoice should be issued for exports of
SWR not
the
undertaking (clause 4.2 of the undertaking).

in conformity with the obligations of

This proceeding ultimately resulted in a definitive anti-
dumping duty being imposed pursuant to Council Regu-
lation (EC) No 1796/1999 (5) in order to eliminate the
injurious effects of dumping. Drumet continued to be
exempted from the definitive duties by virtue of and
subject to its undertaking.

(1) OJ L 56, 6.3.1996, p. 1.
(2) OJ L 305, 7.11.2002, p. 1.
(3) OJ C 239, 30.7.1998, p. 3.
(4) OJ L 45, 19.2.1999, p. 8.
(5) OJ L 217, 17.8.1999, p. 1.

(4)

(5)

(6)

On 20 May 1998, an anti-dumping proceeding was
initiated by the Commission on imports of SWR origi-
nating, inter alia, in Ukraine (6).

considered

It was
this
appropriate
proceeding with the proceeding referred to in recital 1
imposed
and a definitive
pursuant to Regulation (EC) No 1796/1999 in order to
eliminate the injurious effects of dumping.

anti-dumping duty was

to combine

(‘Silur’) pursuant

The Commission accepted, inter alia, a price undertaking
from the Ukrainian exporting producer
Joint Stock
to Article 1(1) of
Company Silur
Commission Decision 1999/572/EC (7).
Imports of
certain types of SWR produced and directly exported to
the Community by Silur were exempted from the anti-
dumping duty pursuant to Article 2(1) of Regulation
(EC) No 1796/1999. Exemption from the duty is, inter
alia, conditional on presentation of a valid undertaking
invoice accompanying goods subject to an undertaking.
No such undertaking invoice should be issued for
exports of SWR not falling into the scope of the under-
taking (clause 4.2 of the undertaking).

B. FAILURE TO COMPLY WITH THE UNDERTAKING

1. Drumet (Poland)

(7)

to imports

into the
Drumet's undertaking applies
Community of SWR which have been produced and sold
directly (i.e. invoiced and shipped) by this company to
its first unrelated customers in the Community (clause 2
the undertaking). Any other exports than those
of
directly to its first unrelated customers in the Commu-
nity are thus not covered by the terms of the under-
taking and subject to the anti-dumping duty (27,9 %).

(6) OJ C 155, 20.5.1998, p. 11.
(7) OJ L 217, 17.8.1999, p. 63.

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Official Journal of the European Union

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(8)

(9)

(10)

Drumet also undertook not to circumvent the provisions
of
‘by any other means’,
according to clause 6 of the undertaking.

the undertaking,

inter alia,

During the course of 2002, the Commission gathered
information from various sources according to which it
had reason to believe that, since September 1999,
around 30 % of Drumet's sales into the Community were
not made directly, i.e. not invoiced and shipped directly
to first unrelated customers in the Community but made
to a related company in the Community instead (the
importer). As Drumet had issued undertaking invoices
accompanying SWR apparently in conformity with the
undertaking,
to the importer had been
exempted from the duty. Drumet was requested, on two
occasions, to inform the Commission about any related
importers in the Community. In both cases, namely in
May and in August 2002, Drumet replied that they ‘do
not have any shares in any customers of its SWRs in the
EC’, and that they ‘ …(have)… no direct or indirect rela-
tionships … with any Community importers…’ and that
the importer ‘…is an independent company’.

these sales

The Commission then sought
information from the
competent trade register of the Member State in which
the importer is located. According to this information, it
was established that Drumet's main shareholder also held
50 % of the shares of the importer in question from June
1999 until July 1999 and 95 % of the shares of the
importer from July 1999. Therefore, the two companies
had to be considered to be related, within the meaning
of Article 4(2) of the basic Regulation, as both of them
were controlled by the same person. As the undertaking
only applies to sales to unrelated customers in the
Community and Drumet had issued undertaking invoices
for sales to the importer, a breach of the undertaking
appeared to have occurred. Drumet was consequently
informed of the essential facts and considerations on the
basis of which the Commission's acceptance of
the
undertaking might be withdrawn (preliminary disclosure)
and a definitive anti-dumping duty imposed in its place.
A period was granted within which representations
could be made both in writing and orally.

(11) Drumet submitted comments and requested to be heard
orally. Contrary to what had been stated before (cf.
recital 9), Drumet actually admitted that both companies
had indeed been related for a certain period. However,
Drumet submitted a copy of a trusteeship agreement
following which Drumet's main shareholder had alleg-
edly sold his shares to the Managing Director of the
It was further alleged that
importer
Drumet's main shareholder had never acted or signed on
behalf of the importer. Drumet argued that in view of
these aspects, the two companies ceased to be related as
from July 1999.

in July 1999.

(12)

The Commission does not share this view. First, the trus-
teeship agreement stipulates that Drumet's main share-
holder continues to hold himself out as a shareholder of
the importer vis-à-vis all third parties. Second, he is not

in question. Therefore,

allowed to divulge either the existence of the agreement,
nor its content. Third, one of the provisions of the agree-
ment actually states that he is a shareholder of
the
importer
the Commission
concluded that
the trusteeship agreement had not
removed the existing relationship of the two companies.
Finally, the argument that Drumet's main shareholder
had never acted on behalf of the importer or signed any
documents was considered irrelevant. Indeed it is normal
commercial practice that companies are legally repre-
and their Managing
sented by their management
Director and not by their shareholders. In the case of the
importing company, there was no indication that its
Managing Director would not be managing and repre-
senting it.

(13) Drumet further submitted a contract on the transfer of
shares which was acknowledged by a notarial act.
However, according to this contract, Drumet's main
shareholder had sold his shares of the importer to the
importer's Managing Director only in October 2002
whilst Drumet was arguing that the two companies had
ceased to be related since July 1999 (cf. recital 11).

(14)

(15)

The Commission concluded that the two companies had
indeed been related from June 1999 until October 2002
and that sales to the importer had unduly benefited from
the exemption to the anti-dumping duty contrary to the
provisions of the undertaking as referred to in recital 7.

It was also concluded that the company had clearly
given misleading information concerning the relation-
ship, thus also committing a breach of the undertaking
within the meaning of clause 6 of the undertaking by
‘any other means’ as referred to in recital 8 above.

(16) As breaches of the undertaking had occurred, Drumet
was informed of the essential facts and considerations
on the basis of which the Commission's acceptance of
the undertaking would be withdrawn and of the recom-
mendation to impose a definitive anti-dumping duty in
its place (final disclosure). A period of 10 days was
granted within which representations could be made in
writing.

law of

(17) Drumet submitted comments and requested to be heard
orally. The company submitted a legal opinion emitted
by a professor of
the country in which the
importer is located which stated that under this type of
trusteeship agreement, the trustor is to be considered as
the economic owner of
It was therefore
submitted that
importer's Managing Director,
through the trusteeship agreement, had obtained the
the importer. During a
economic ownership over
hearing it was however not denied by Drumet's repre-
sentatives that the transfer of shares had not been offi-
cially transferred before October 2002 which implied
that Drumet's main shareholder continued to be the
formal owner of the importer until that date. The argu-
ment was therefore rejected.

the shares.

the

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(18)

(19)

the Commission considered reasonable and
Finally,
appropriate to examine additionally the material impact
of the relationship at stake, i.e. to establish whether the
importer's resale prices corresponded to prices which
could normally be expected from unrelated importers in
the Community to their final clients. The Commission
therefore proposed, on two occasions, a verification visit
at the importer's premises and informed Drumet of its
intention. The importer, however, on both occasions,
did not agree to such a verification visit.

In view of the findings referred to in recitals 14 (relation-
ship of the two companies) and 15 (misleading informa-
tion), the Commission concluded that breaches of the
undertaking had occurred. Moreover, it was established
that, by denying the relationship with the importer,
Drumet had breached the relationship of trust estab-
lished with the Commission which is the basis for accep-
tance of any undertaking (1). Therefore, acceptance of
the undertaking offered by Drumet should be withdrawn
and definitive anti-dumping duties imposed against it.

(20)

In view of the above, the table in Article 2 of Regulation
(EC) No 362/1999 should be amended accordingly.

2. Silur (Ukraine)

(21)

(22)

(23)

Silur's undertaking applies to imports into the Commu-
nity of SWR which have been produced and sold directly
(i.e. invoiced and shipped) by Silur to its first unrelated
customers in the Community. In addition, the scope of
the undertaking is limited to certain types of SWR (SWR
(covered)). Product types not falling into this scope are
subject to the payment of anti-dumping duties and no
undertaking invoice must be issued in this regard.

Silur undertook not to circumvent the provisions of the
undertaking, inter alia, by making misleading declarations
regarding the origin of the products or by any other
means, according to clause 6 of the undertaking.

The Commission services in charge of the monitoring of
the undertaking were informed that the European Anti-
Fraud Office (OLAF) had carried out an investigation
concerning the SWR (covered) produced by Silur and
subsequently exported into the Community. This investi-
the SWR (covered) and
gation had revealed that
produced by Silur had been imported into the European
Community in significant quantities with a declared false
origin of another third country. The Ukrainian authori-

(24)

(25)

ties, which fully cooperated with OLAF, submitted all
evidence that proved that
the goods entering the
Community with Bulgarian origin had been produced by
Silur and were indeed of Ukrainian origin. Moreover, the
investigation had shown that
the imports into the
Community with a declared false origin had been made
with Silur's knowledge.

in charge of

In addition, the monitoring activities carried out by the
Commission services
the monitoring
revealed that Silur had issued undertaking invoices for
product types not falling within the scope of the under-
taking (the SWR (covered)). By issuing undertaking
invoices, these product types benefited unduly from the
exemption of the payment of anti-dumping duties.

In view of the findings referred to in recitals 23 and 24,
a breach of the undertaking had occurred in two aspects,
namely by misleading declarations of origin and by
issuing undertaking invoices for product types not falling
within the scope of the undertaking. Silur was informed
of the essential facts and considerations on the basis of
which the Commission's acceptance of the undertaking
would be withdrawn and of the recommendation to
impose a definitive anti-dumping duty in its place (final
disclosure). A period was granted within which represen-
tations could be made both in writing and orally.

(26)

Silur submitted written comments. It did not comment
on the substance on the findings referred to in recitals
23 and 24. However,
it suggested to keep the under-
taking in force. In this respect, Silur proposed to under-
take additional reporting and monitoring obligations in
the future.

(27)

The Commission could not accept this approach as it
was established that the undertaking had been violated
in two aspects. Silur then informed the Commission that
it wished to withdraw from the undertaking.

(28)

In view of the above, the table in Article 1 of Decision
1999/572/EC should be amended accordingly,

HAS ADOPTED THIS REGULATION:

Article 1

(1) Court of First Instance judgment of 4 July 2002, case T-340/99 Arne

Mathisen AS v Council.

The undertakings accepted from the companies Drumet SA and
Joint Stock Company Silur are hereby withdrawn.

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1.

The table in Article 2(3) of Regulation (EC) No 362/1999 is replaced by the following table:

‘Country

Company

TARIC additional
code

Article 2

Hungary

Poland

Drótarú és Drótkötel Ipari és Kereskedelmi Rt Besenyöi utca 18, 3527
Miskolc, Hungary

8616

Slaskie Zaklady Lin i Drutu “Linodrut” Spólka Akeyjna Fabryka Lin i
Drutów “Linodrut” Zabrze Spólka z organiczona odpowiedzialnoscia PL-
41-800 Zabre, Sobieskiego Street No 1,

Fabryka Lin i Drutów Falind Spólka z organiczona odpowiedzialnoscia
PL-41-201 Sosnowiec, Niwecka Street 1

Górnoslaska Fabryka Lin i Drutu Linodrut Bytom Spólka organiczona
odpowiedzialnoscia, 41-906 Bytom, Ks. Jerzago Popieluszki Street 1

Dolnoslaska fabryka Lin i Drutu “Linodrut Linmet” Spólka z organiczona
odpowiedzialnoscia, 58-309 Walbrzych, Sluga Street 2

9

>>>>>>>>>>>>>>=
>>>>>>>>>>>>>>;

8619’

2.

The table in Article 1(1) of Decision 1999/572/EC is replaced by the following table:

‘Country

Manufacturer

Mexico

South Africa

Aceros Camesa SA de CV
Margarita Maza de Juárez No.154
Col. Nueva Ind. Vallejo
México D.F.C.P. 07700
Mexico

Haggie
Lower Germiston Road
Jupiter
PO Box 40072
Cleveland
South Africa

India

Usha Martin Industries & Usha Beltron Ltd
Shakespeare Sarani
Calcutta
700071 India

Article 3

TARIC additional
code

A022

A023

A024’

This Regulation shall enter into force on the day following that of 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, 26 August 2003.

For the Commission

Pascal LAMY

Member of the Commission