Council Regulation (EC) No 1623/2003 of 11 September 2003 extending the definitive anti-dumping duty imposed by Regulation (EC) No 408/2002 on imports of certain zinc oxides originating in the People's Republic of China to imports of certain zinc oxides consigned from Vietnam, whether declared as originating in Vietnam or not, and to imports of certain zinc oxides originating in the People's Republic of China and mixed with silica
Date: 2003-09-11
Institutions: Council of the European Union
Subjects: China, Viet Nam, anti-dumping duty, import, originating product, oxide, zinc

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1623/2003

of 11 September 2003

extending the definitive anti-dumping duty imposed by Regulation (EC) No 408/2002 on imports
of certain zinc oxides originating in the People's Republic of China to imports of certain zinc
oxides consigned from Vietnam, whether declared as originating in Vietnam or not, and to imports
of certain zinc oxides originating in the People's Republic of China and mixed with silica

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1), and in
particular Article 13 thereof,

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

Whereas:

(1)

(2)

A. PROCEDURE

1. Existing measures

the Council

By Regulation (EC) No 408/2002 (2) (the original Regula-
tion),
imposed definitive anti-dumping
duties ranging from 6,9 % to 28 % on imports of zinc
oxide with a purity of not less than 93 % zinc oxide
(zinc oxides) originating in the People's Republic of
China (the PRC).

2. Request

On 18 November 2002, the Commission received a
request pursuant to Article 13(3) of Regulation (EC) No
384/96 (the basic Regulation) to investigate the alleged
circumvention of the anti-dumping measures imposed
on imports of zinc oxides originating in the PRC. The
request was submitted by Eurometaux on behalf of
producers
the
Community production of zinc oxides.

representing a major proportion of

(3)

The request alleged that there had been a change in the
pattern of trade following the imposition of the anti-
dumping measures on imports of zinc oxides originating

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 1972/2002 (OJ L 305, 7.11.2002, p. 1).

(2) OJ L 62, 5.3.2002, p. 7.

(4)

(5)

(6)

in the PRC, as shown by a significant increase in imports
of the same product from Vietnam while imports from
the PRC had decreased substantially during the same
time span.

This change in the pattern of trade was alleged to stem
both from the transhipment of zinc oxides originating in
the PRC via Vietnam. In addition, it was further alleged
that zinc oxides originating in the PRC are being mixed
with other substances, such as silica,
thereby falling
outside the relevant TARIC code. It was further alleged
that as the basic characteristics and uses of the product
remain unchanged, there was insufficient due cause or
economic justification for these practices other than the
existence of
the anti-dumping duties on zinc oxides
originating in the PRC.

Finally, the applicant alleged that the remedial effects of
the existing anti-dumping duties on zinc oxides origi-
nating in the PRC were being undermined both in terms
of quantities and prices and that dumping was taking
place in relation to the normal values previously estab-
lished.

3. Initiation

The Commission initiated an investigation by Regulation
(EC) No 2261/2002 (3) (the initiating Regulation) and,
pursuant to Article 13(3) and Article 14(5) of the basic
Regulation, directed the customs authorities to register
imports of zinc oxides consigned from Vietnam, whether
declared as originating in Vietnam or not, under TARIC
code 2817 00 00 11, and imports of the zinc oxides
mixed with other substances originating in the PRC
under TARIC code 2817 00 00 19,
from 20
December 2002.

as

(3) OJ L 344, 19.12.2002, p. 12.

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4. Investigation

(b) PRC

The Commission advised the authorities of the PRC and
Vietnam of the initiation of the investigation. Question-
naires were sent to the producers/exporters in the PRC
and Vietnam as well as to importers in the Community
named in the request or known to the Commission from
the original investigation. Interested parties were given
the opportunity to make their views known in writing
and to request a hearing within the time limit set in the
initiating Regulation.

(11)

(12)

(7)

(8)

in

the

producers/exporters

received from producers/exporters

Five
PRC submitted
completed replies to the questionnaires whilst no reply
was
in Vietnam.
Replies to the questionnaire were also submitted by four
importers in the Community. The Commission carried
out verification visits at the premises of the following
companies:

Unrelated importers:

— Norkem Ltd, Knutsford, United Kingdom,

— Norkem BV, Enkhuizen, The Netherlands,

— Almiberia, SA, San Antonio de Benagéber, Spain,

— Explorer, srl, Sassuolo, Italy.

Chinese producers/exporters:

— Liuzhou Fuxin Chemical Industry Co. Ltd, Liuzhou,

China,

— Liuzhou Nonferrous Metals

Smelting Co. Ltd,

Liuzhou, China, and its related exporter,

— Liuzhou Nonferrous Metals Smelting Import &

Export Co. Ltd, Liuzhou, China.

5. Investigation period

(9)

The investigation period covered the period from 1
October 2001 to 30 September 2002 (the IP). Data was
collected from 2000 up to the IP to investigate the
change in the pattern of trade.

B. RESULTS OF THE INVESTIGATION

(a) Vietnam

(10) No producers/exporters of zinc oxides in Vietnam coop-
erated in the investigation.
It was made clear to the
companies involved that non-cooperation may lead to
the application of Article 18 of the basic Regulation.
The Vietnamese Government (the Ministry of Trade), in
reaction to the initiation of the investigation, made it
clear that no exports of zinc oxides of Vietnamese origin
to the Community have taken place throughout the year
2002, and that
the Vietnamese authorities have not
granted any certificates of Vietnamese origin for exports
of zinc oxides.

1. General considerations/degree of cooperation

(15)

The five Chinese producers/exporters that cooperated in
the investigation accounted for close to 100 % in volume
of the total imports of zinc oxides declared under CN
code 2817 00 00 from the PRC during the IP, as
reported by Eurostat.

It should be noted that during the IP of the original
investigation the cooperating companies in the current
investigation represented only 22 % of the total exports
to the Community. This means that the major part of
the exported quantities in the original investigation were
exported by companies that are non-cooperating in the
current investigation. It was made clear to these non-
cooperating companies that non-cooperation may lead
to the application of Article 18 of the basic Regulation.

(13) One Chinese Company, for which an individual duty
had been established in the original
investigation and
which was subject to a periodical monitoring by the
Commission (1) on a six-monthly basis, argued that it
was not necessary for it to fill in the questionnaire since
the Commission had previously visited the company in
the context of the periodical monitoring and all the data
requested in the present investigation were already avail-
able. It was informed that it should nevertheless reply to
the questionnaire, since data collected for other purposes
and for a different period were not sufficient for the
purpose of the present investigation. The export data
requested in the present investigation were not comple-
tely covered by the previously submitted monitoring
reports. As the company did not submit any question-
naire response, they were informed that it would be
treated as a non-cooperating party and that therefore, in
their respect, findings would be made on the basis of the
facts available in accordance with Article 18 of the basic
Regulation.

2. Product concerned and like product

(14)

The product concerned is, as defined in the original
investigation, zinc oxide (chemical formula ZnO) with a
purity of not less than 93 % zinc oxide, currently classifi-
able within CN code ex 2817 00 00 (TARIC code
2817 00 00 12).

The investigation has shown that the product concerned,
zinc oxides, are imported into the Community presented
in two different forms: either as zinc oxides or as zinc
oxides mixed with silica. The investigation has also
shown that the mixing of zinc oxides with silica does
not alter the basic physical and chemical characteristics
of the product concerned, as the zinc oxides maintain
their molecular structure and their chemical properties
intact. Furthermore, the investigation has shown that for
instance in the case of the ceramic tile industry, which is
the product
one of
concerned must in any event be mixed with several
other substances, including silica, in order to be used in
the production of tiles.

the major users of zinc oxides,

(1) Recital 59 of the original Regulation.

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(16)

In the absence of cooperation and considering the
change in the pattern of trade as described in recitals 20
and 21 it must be inferred that the zinc oxides exported
to the Community from the PRC and those consigned
from Vietnam have the same basic physical and chemical
characteristics and have the same uses. They are there-
fore to be considered as
like products within the
meaning of Article 1(4) of the basic Regulation.

September 2002, the exports amounted to 8 482 tonnes.
As indicated above,
in the same time period, 6 523
tonnes have been exported to the Community from
Vietnam. This shows that imports of zinc oxides origi-
nating in the PRC into Vietnam have increased substan-
tially in the year 2002, at a pace very similar to the
increase of exports from Vietnam to the Community in
the same period.

(17) On the basis of the information available, it is considered
that zinc oxides presented mixed with silica still main-
tain their individual characteristics and should therefore
be considered the same product as zinc oxides which are
not presented in a mixed form. Consequently, zinc oxide
mixed with silica and zinc oxide originating in the PRC
are considered as like products within the meaning of
Article 1(4) of the basic Regulation.

(22)

From the figures above it can be concluded that a clear
change in the pattern of trade is established and coin-
cided, in the case of both exporting countries, with the
entry into force of the anti-dumping measures on the
product concerned originating in the PRC in March
2002.

3. Change in the pattern of trade

(b) Zinc oxides mixed with silica

(18) As stated in recital 4 the change in the pattern of the
trade was alleged to stem from two practices, either
transhipment via Vietnam or by mixing of zinc oxides
with other substances, such as silica.

(23)

(a) Zinc oxides consigned from Vietnam

(19) As no Vietnamese company cooperated in the investiga-
tion, exports from Vietnam to the Community had to be
established on the basis of the facts available pursuant to
Article 18 of the basic Regulation. Eurostat data at CN
level, which were the most appropriate information
available in such a situation, were therefore used to
establish the export prices and quantities from Vietnam
to the Community.

(20)

Imports of zinc oxides from Vietnam increased from 0
tonnes both in 2000 and 2001 to 6 523 tonnes at the
end of the IP (September 2002). These imports from
Vietnam commenced in fact in March 2002, thus at the
same time as the imposition of
the definitive duty.
Imports into the Community of zinc oxides from the
from 47 326 tonnes in
PRC decreased substantially,
2000 (the IP of the original
investigation) to 35 732
tonnes in 2001, and to 16 873 tonnes during the IP.
This shows that a strong decrease of exports from the
PRC has occurred after the initiation of the original anti-
dumping investigation.

(21) According to data collected from Chinese trade statistics,
before the imposition of the measures the exports of the
product concerned from the PRC to Vietnam have been
relatively stable, amounting to 1 643 tonnes in the year
2000 and to 2 029 tonnes in the year 2001. However,
in the year 2002 these exports increased dramatically to
12 609 tonnes. In the period between the imposition of
the duties in March 2002 and the end of the IP in

(24)

(25)

In the request it was alleged that zinc oxides originating
in the PRC were presented mixed with other substances
and declared under another customs heading when
imported into the Community. The verification of the
data of one cooperating importer has confirmed the fact
that zinc oxides have been imported mixed with silica.
These imports were purchased from a Chinese producer/
exporter which did not cooperate in the investigation
and they were declared, on the basis of binding tariff
information (BTI) from the customs authorities of one
Member State, under CN code 3824 90 99, which makes
to anti-dumping
the imports concerned not subject
duties.

this importer,

it has been established that

the
For
imports of zinc oxides presented mixed with silica
started after the imposition of the measures in March
in consideration of the fact that the
2002. However,
cooperating importers only cover 65 % of
the total
imports to the Community it cannot be excluded that
other non-cooperating importers have used the same
practice. Indeed the request contained evidence that this
practice may have been applied by at
least another
importer which did not cooperate in the investigation.

investigation only represented 22 % of

Considering that the exporting companies cooperating
in this
the
exports during the IP of the original, but close to 100 %
in the current investigation and that the total exports
from the PRC into the Community have dropped from
47 367 tonnes to 16 873 tonnes,
it is reasonable to
conclude that part of this decrease could be explained by
the imports of zinc oxides presented mixed with silica.
Given the high percentage of non-cooperation,
it was
considered that significant quantities of zinc oxides
presented mixed with silica may have been exported
from China to the Community, declared under CN codes
not subject to the duties.

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(26)

Based on best evidence available pursuant to Article 18
of the basic Regulation, a change in the pattern of trade
is established, which coincided with the entry into force
of the anti-dumping measures on the product concerned
originating in the PRC in March 2002.

Vietnam were even lower than the export prices estab-
lished for the PRC in the original investigation. Conse-
quently, the prices of Vietnamese exports of the product
concerned to the Community are below the injury elimi-
nation level of Community prices as established in the
original investigation.

4. Insufficient due cause or economic justification

(27)

(28)

In the absence of cooperation, and given the coincidence
in time with the imposition of
the anti-dumping
measures on the product concerned originating in the
PRC,
it has to be concluded that the change in the
pattern of trade stemmed from the imposition of the
anti-dumping 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.

This conclusion is reinforced by the fact that no zinc
oxides of Vietnamese origin have been exported to the
Community, as declared by the Vietnamese authorities.
Moreover, it can be inferred from the parallelism of the
trends that the imports from the PRC to Vietnam were
not meant for the Vietnamese market, but were meant
to be re-exported. (See recitals 20 and 21).

(29) As far as zinc oxides presented mixed with silica are
concerned, no due cause or economic justification has
been provided to explain the change in the pattern of
trade. In fact, silica is a cheap material and in abundant
supply in the Community in general and therefore there
is no economical justification to transport the silica from
China since this is unnecessarily increasing the total
transport cost. Imports of zinc oxides presented mixed
with silica coincided with the entry into force of the
measures. The exporter of the mixture did not cooperate
and in addition the importer did not bring forward any
reasonable ground, other than avoiding the payment of
anti-dumping duties, for carrying out the mixture in the
country from which the goods were exported.

(30)

It is, therefore, concluded that no reasonable grounds,
other than avoiding the existing anti-dumping duties on
imports of zinc oxides originating in the PRC, could be
trade
established for
observed.

the change in the pattern of

5. Undermining of the remedial effects of the duty
in terms of the prices and/or the quantities of the
like products

(31)

It is evident from the trade flow analysis made in recitals
20 and 21 that a change in the pattern of Community
imports occurred since the imposition of the measures,
and that this marked change in trade flows undermined
the remedial effects of the anti-dumping measures in
imported into the Community
terms of quantities
market.

(32) With regard to prices of the products consigned from
Vietnam and in the absence of cooperation from expor-
ters, Eurostat data revealed that export prices from

(33) With regard to prices of

i.e.

the imported zinc oxides
presented in a mixed form and given the non-coopera-
tion, recourse had to be made to the best evidence avail-
able,
the figures of the cooperating importer for
which this practice had been observed. These data
revealed that
submitted by this
company are below the injury elimination level of
Community prices as established in the original investi-
gation.

the import prices

(34)

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

(35)

(36)

(37)

6. Evidence of dumping in relation to the normal
values previously established for like or similar
products

In order to determine whether evidence of dumping
could be found with respect to the product concerned
exported to the Community from Vietnam during the IP
and the imports of zinc oxides presented mixed with
silica, export prices established on the basis of Eurostat
data and the figures of the cooperating importer were
used. As concerns imports from Vietnam it has been
established that prices from Vietnam are more than
15 % lower
than the Chinese export prices in the
original investigation. As concerns the export prices for
the zinc oxides presented mixed with silica, taking into
it has been
account the quantity of silica in the mix,
established that these export prices are more than 22 %
lower than the Chinese export prices in the original
investigation.

It has to be recalled that Article 13(1) of the basic Regu-
lation requires evidence of dumping in relation to the
normal values previously established for the like or
similar products but does not require the establishment
of a new dumping margin. In accordance with Article
13(1) of
the normal value
previously established was the normal value used in the
original investigation. At that time, the United States of
America were found to be the appropriate market
economy analogue country for the PRC.

the basic Regulation,

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, insurance and hand-
ling.

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(38)

In accordance with Articles 2(11) and (12) of the basic
Regulation,
the comparison of a weighted average
normal value as established in the original investigation
and the weighted average of export prices during this
investigation's IP expressed as a percentage of the cif
price at the Community frontier duty unpaid, showed
dumping for both the imports of
the zinc oxides
consigned from Vietnam and the imports of the zinc
oxides presented mixed with silica.

(39)

(40)

(41)

(42)

(43)

C. MEASURES

In view of the above finding of circumvention within
the meaning of Article 13(1), second sentence, of the
basic Regulation and in accordance with Article 13(1),
first sentence, of the basic Regulation, the existing anti-
dumping measures on the product concerned originating
in the PRC should be extended to the same product
consigned from Vietnam, whether declared as origi-
nating in Vietnam or not.

Considering that it was found that in some cases zinc
oxides are presented mixed with silica with the only
purpose of obtaining a different customs classification
and avoiding payment of the duties, it is necessary to
the duties imposed on zinc oxides are
ensure that
the product
cases where
collected also in those
concerned is imported as zinc oxides presented mixed
with silica. In these cases, the duties should be collected
in proportion to the content of zinc oxides in the
presented mixed form.

The duty extended should be the one applicable to all
other companies as established in Article 1(2) of the
original Regulation.

In accordance with Article 14(5) of the basic Regulation,
which provides that measures may be applied against
registered imports from the date of registration, the anti-
dumping duty should be collected on imports of zinc
oxides consigned from Vietnam and of zinc oxides
presented mixed with silica originating in the PRC which
entered the Community under registration imposed by
the initiating Regulation.

The circumvention takes place outside the Community.
Article 13 of the basic Regulation is aiming at coun-
tering circumvention practices without affecting opera-
tors which can prove that they are not involved in such
practices, but it does not contain a specific provision
providing for the treatment of exporters which could
establish that they are not involved in circumvention
practices. Therefore, it appears necessary to introduce a
possibility for exporters which have not exported the
product concerned during the IP and are not related to
any exporters or producers subject to the extended anti-
dumping duty to request an exemption from the

the market

situation of

measures on these imports. Exporters concerned which
would consider to lodge a request for an exemption
from the extended anti-dumping duty would be required
to complete a questionnaire in order to enable the
Commission to determine whether an exemption may
be warranted. An exemption may be granted after the
assessment of
the product
concerned, production capacity and capacity utilisation,
procurement and sales and taking into account the likeli-
hood of practices for which there is insufficient due
cause or economic justification and the evidence of
dumping. The Commission would normally also carry
out an on-spot verification visit. The request would have
to be addressed to the Commission forthwith, with all
relevant information, in particular any modification in
the company's activities linked to production and export
sales. Importers could still benefit from exemption from
the measures to the extent that their imports are from
exporters which are granted such an exemption, and in
accordance with Article 13(4).

(44) Where

exemption is

the
Commission would, after consultation of the Advisory
Committee, propose the amendment of the Regulation
accordingly.

appropriate,

considered

D. PROCEDURE

(45)

Interested parties were informed of the essential facts
and considerations on the basis of which the Council
intended to extend the definitive anti-dumping duty in
force and were given the opportunity to comment. No
comments which were of a nature to change the above
conclusions were received,

HAS ADOPTED THIS REGULATION:

Article 1

The definitive anti-dumping duty of 28 % imposed by
1.
Regulation (EC) No 408/2002 on imports of zinc oxide
(chemical formula: ZnO) with a purity of not less than 93 %
zinc oxide, normally declared under CN code ex 2817 00 00
(TARIC codes 2817 00 00 12 and 2817 00 00 18) originating
is hereby extended to
in the People's Republic of China,
imports of zinc oxide (chemical formula: ZnO) with a purity of
not
less than 93 % zinc oxide, consigned from Vietnam
(whether declared as originating in Vietnam or not) (TARIC
code 2817 00 00 12) and to imports of zinc oxide presented
mixed with silica, but where the purity of the zinc oxide itself
is not less than 93 % zinc oxide. In the latter case, the duty
should be collected in proportion to the content of zinc oxide
with a purity of not less than 93 % zinc oxide in the mixture
originating in the People's Republic of China (TARIC code
3824 90 99 87).

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The duty extended by paragraph 1 of this Article shall be
2.
collected on imports registered in accordance with Article 2 of
Regulation (EC) No 2261/2002 and Article 13(3) and Article
14(5) of Regulation (EC) No 384/96.

The provisions in force concerning customs duties shall

3.
apply.

Article 2

Requests for exemption from the duty extended by Article
1.
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
to the
the applicant. The request must be sent
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

after

consulting

Commission,

the Advisory
2.
Committee, may authorise, by decision,
the exemption of
imports from companies which do not circumvent the anti-
dumping duty imposed by Regulation (EC) No 408/2002 from
the duty extended by Article 1, and propose the amendment of
the Regulation accordingly.

Article 3

Customs authorities are hereby directed to discontinue the
registration of imports, established in accordance with Article 2
of Regulation (EC) No 2261/2002.

Article 4

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, 11 September 2003.

For the Council

The President

F. FRATTINI