Council Regulation (EC) No 1656/2003 of 11 September 2003 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of para-cresol originating in the People's Republic of China
Date: 2003-09-11
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, chemical product, import, originating product

20.9.2003

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Official Journal of the European Union

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(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1656/2003

of 11 September 2003

imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed
on imports of para-cresol originating in the People's Republic of China

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) (‘the
basic Regulation’), and in particular Article 9 thereof,

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

Whereas:

(1)

(2)

(3)

(4)

(5)

A. PROVISIONAL MEASURES

The Commission, by Regulation (EC) No 510/2003 (2)
(the ‘provisional Regulation’) imposed a provisional anti-
dumping duty on imports of para-cresol falling within
CN code ex 2907 12 00, originating in the People's
Republic of China.

It is recalled that the investigation of dumping and injury
covered the period from 1 April 2001 to 31 March
2002 (‘investigation period’ or ‘IP’). The examination of
trends relevant for the injury analysis covered the period
from 1 January 1998 to 31 March 2002 (‘period under
consideration’).

B. SUBSEQUENT PROCEDURE

Following the imposition of a provisional anti-dumping
duty on imports of para-cresol originating in the
some interested parties
People's Republic of China,
submitted comments in writing. The parties who so
requested were also granted an opportunity to be heard
orally.

The Commission continued to seek and verify all infor-
mation it deemed necessary for its definitive findings.

All parties were informed of
facts and
considerations on the basis of which it was intended to
recommend the imposition of definitive anti-dumping
duties and the definitive collection of amounts secured

the essential

(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 75, 21.3.2003, p. 12.

by way of provisional duties. They were also granted a
period within which they could make representations
subsequent to this disclosure.

(6)

The oral and written comments submitted by the parties
were considered, and, where appropriate, the findings
have been modified accordingly.

C. PRODUCT CONCERNED AND LIKE PRODUCT

(7)

In the absence of any comments, the product description
and the definition of the like product as set out in reci-
tals 11 to 14 of
the provisional Regulation are
confirmed.

D. DUMPING

1. Normal value

(8)

(9)

(10)

In the absence of any comments, the provisional findings
concerning the market economy treatment and the
analogue country as described in recitals 15 to 22 of the
provisional Regulation are confirmed.

Further to the disclosure of provisional findings, one
exporting producer, Nanjing Jingmei Chemical Co., Ltd,
submitted that the cost of the raw material of the refined
product concerned was counted twice in their response.
This claim was considered justified and the cost of
production was reduced accordingly.

In fact,

In addition, it was claimed that the allocation of the cost
of production of an intermediate product should be
altered, as a proportion of this product was not used to
produce the product concerned.
the costs
reported were in accordance with the internal docu-
ments collected on the spot. However, there was no
evidence which suggested that this intermediate product
was used for the production of other products and there-
fore the whole cost of production of the intermediate
product was attributed to the cost of production of the
this claim had to be
product concerned. Therefore,
rejected.

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(11) Despite the reduction in the cost of production referred
to in recital 9, less than 10 % of the domestic sales of
the like product during the IP of this company were
profitable, as already indicated in the provisional Regula-
tion. Therefore, normal value had to be constructed in
accordance with Article 2(3) of the basic Regulation. The
exporting producer considered that the profit margin
established at the provisional stage was not appropriate
because it included export sales to countries outside the
Community. This argument was accepted as the profit
margin used in a constructed normal value under the
first sentence of Article 2(6) and Article 2(6)(a) and (b)
of the basic Regulation, has to be calculated on the basis
of domestic sales only. An adjustment has consequently
been made to rectify this. A further review revealed that
the general category of products was loss-making on the
domestic market. In accordance with Article 2(6)(c), a
reasonable profit margin was therefore established based
on the weighted average profit margin of the producer
in the analogue country and the other cooperating
exporting producer.
to be recalled that an
exporting producer in the analogue country (in the
United States of America) was
the
People's Republic of China is not considered a market-
economy country.

investigated as

It has

(12)

The other exporting producer, Shandong Reipu Chemi-
cals Co., Ltd, claimed that the cost of production of two
other products should be deducted from the total cost of
production as they result
from the same production
process and are sold separately. The exporting producer
could not
claim by documented
this
evidence. Indeed the documents collected on the spot
indicated that the direct costs were already allocated to
the different products which were in line with the initial
questionnaire response. Therefore, the claim had to be
rejected.

substantiate

(13)

In the absence of any comments, the provisional findings
concerning the determination of normal value in the
analogue country as described in recitals 26 and 27 of
the provisional Regulation are confirmed.

2. Export price

(14)

In the absence of any comments, the provisional findings
concerning the determination of
the export price as
described in recitals 28 and 29 of the provisional Regu-
lation are confirmed.

3. Comparison

for differences

provisional stage, following a further in-depth analysis,
an adjustment
taxes not
refunded in respect of exports was made in accordance
with Article 2(10)(b) of the basic Regulation. Further-
more, some smaller adjustments were made with respect
to payment terms and transport, insurance and handling
costs.

in indirect

4. Dumping margins

(16)

(17)

In the absence of any comments concerning the residual
dumping margin, the methodology described in recital
31 of the provisional Regulation is hereby confirmed.

The definitive dumping margins, expressed as a percen-
tage of the cif import price at the Community border,
are:

Nanjing Jingmei Chemical Co., Ltd, Nanjing:

10,8 %

Shandong Reipu Chemicals Co., Ltd, Qihe
County:

Country-wide dumping margin:

12,3 %

40,7 %

E. INJURY

1. Community industry

(18)

In the absence of any comments, the provisional findings
the Community
concerning
industry as described in recitals 34 to 37 of the provi-
sional Regulation are confirmed.

the determination of

2. Community market

(19) One exporting producer stated that in the provisional
Regulation there were no separate data nor any analysis
for captive sales, only for the free market activities and
for the entire activity including captive sales.

focused on the

(20) However, this issue was dealt with in recitals 40 to 43
of the provisional Regulation, where it was explained
that para-cresol destined for captive use was found not
to be directly affected by imports and that for this reason
attention was
free market. Some
economic indicators related to the Community industry
were indeed analysed and evaluated referring to the
situation prevailing on the free market, while others
could reasonably be examined by referring to the whole
activity.
In the absence of any new information, the
provisional findings concerning the relevant Community
market as described in recitals 38 to 43 of the provi-
sional Regulation are therefore confirmed.

(15)

For the purposes of ensuring a fair comparison between
the normal value and the export price at an ex-works
level, due allowance in the form of adjustments was
made for differences that were claimed and demon-
strated to affect prices and price comparability in accor-
dance with Article 2(10) of the basic Regulation. In addi-
tion to the adjustments already taken into account at

3. Community consumption

(21)

In the absence of any comments, the provisional findings
concerning the Community consumption as described in
the provisional Regulation are
recitals 44 to 46 of
confirmed.

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4. Imports from the country concerned

(22)

In the absence of any comments under these headings,
the provisional findings as described in recitals 47 to 51
of the provisional Regulation are confirmed.

under consideration. These investments can therefore
only have had a minor impact and cannot have broken
the causal link between the dumping and the material
injury suffered by the Community industry.

5. Situation of the Community industry

(28)

(23) One exporting producer, as well as a user, questioned
the fact that the cost of raw materials, in particular of
caustic soda, had increased in 2001. This element was
checked by the Commission and it was confirmed by
different sources of information that the cost of caustic
soda had indeed increased considerably from the year
2000 to the year 2001. Most of this increase took place
in the fourth quarter of 2000 and in the first half of
2001. The findings stated in recitals 60 and 61 of the
provisional Regulation can therefore be confirmed.

(24)

In the absence of any other comments, the facts and
figures as set out in recitals 52 to 65 of the provisional
Regulation are confirmed. Since there was no indication
of past dumping, this was not considered a relevant
factor in the analysis.

same

submitted that

exporting producer

The
the
decrease of captive sales might have contributed to the
injury suffered by the Community industry since the
sales prices to captive users had increased at a higher
degree than those for sales on the free market. This issue
has been further investigated. As already indicated in the
provisional Regulation, sales had been made at roughly
the same prices to captive users as those charged on the
free market and this has been confirmed by further
analysis. Therefore, only the negative development of the
volume of captive sales could have contributed to the
injury suffered by the Community industry.
material
the volume of captive sales went down by
Indeed,
around 10 % during the period under consideration.
However,
the relatively small amount of
production destined for captive sales, it was considered
that the development of captive use did not in any
significant way contribute to the material injury suffered
by the Community industry. The conclusion in the
provisional Regulation can therefore be maintained.

in view of

6. Conclusion on injury

(29)

In the absence of any other comments on causation, the
findings and the conclusion reached as set out in recitals
71 to 85 of the provisional Regulation are confirmed.

(25) A deterioration in the situation of

the Community
industry during the period 2001 and the IP has been
found,
in particular in terms of reduced production,
capacity utilisation, sales, market share, profitability,
return on investment and cash flow. In addition, signifi-
cant price undercutting as well as a serious deterioration
in profitability and return on investment occurred.

(26)

In the absence of any comments on the findings, the
conclusions reached as set out in recitals 66 to 70 of the
provisional Regulation are confirmed.

F. CAUSATION

in particular

(27) One exporting producer submitted that the Community
industry's activities could have been negatively affected
those
by the considerable investments,
made
to comply with environmental obligations.
However, it was found that this argument could not call
into question the causal link as established in the provi-
sional Regulation for the following reason. While it is
correct that significant investments took place during
the period under consideration to comply with new
safety, health and environment legislation requirements,
the major investments in the environment took place in
the first part of the period under consideration, when
the Community industry was still profitable, and even
then made up only a minor part of the total investments
in the production line for the product concerned.
It
should also be kept in mind that such investments are
depreciated over a number of years and that the alloca-
tion of investment costs remained stable over the period

G. COMMUNITY INTEREST

(30) One important user claimed that a shortage of supply of
para-cresol has become apparent in the market since the
imposition of the provisional anti-dumping measure and
that deliveries by the Community industry have become
irregular. This issue was investigated by the Commission.
the Community industry had
It was confirmed that
recently encountered some difficulties
to satisfy all
demand for the product concerned. However, it should
be recalled that in recent years the market had been
supplied by the Community producer, as well as imports
from China, Japan and the United States of America. The
imposition of a provisional anti-dumping duty could
have made Chinese imports more expensive, but should
not have excluded them from the market in view of the
fact that the individual duties were well below the level
therefore concluded,
of undercutting found.
supported by evidence to this effect, that the shortage of
supply has most likely been due to temporary circum-
stances, such as technical and management problems,
both in the Community and in China, and that there is
no reason to conclude that this shortage has been caused
by the anti-dumping duties or that this shortage is likely
to persist. This conclusion is supported by the fact that
the Community industry increased its production capa-
city in the year 2002 and should now be able to meet
almost the entire demand in the Community by itself.

It was

(32)

(33)

(34)

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(31)

In the absence of any other new information submitted
on the Community interest, the findings and the conclu-
sion reached as set out in recitals 86 to 102 of the
provisional Regulation are confirmed.

for example,

that name
export sales associated with,
change or that change in the production and sales enti-
ties. If appropriate, the Regulation will then be amended
accordingly by updating the list of companies benefiting
from individual duty rates.

H. DEFINITIVE ANTI-DUMPING MEASURES

1. Injury elimination level

Based on the methodology explained in recitals 103 to
107 of the provisional Regulation, an injury elimination
level has been calculated for the purposes of establishing
the level of measures to be definitively imposed.

(38)

In the absence of any comments, the methodology used
for establishing the injury elimination level as described
in recitals 103 to 107 of the provisional Regulation is
confirmed.

3. Collection of provisional duties

secured by way of

In view of the magnitude of the dumping margins found
and in the light of the level of the injury caused to the
Community industry, it is considered necessary that the
amounts
the provisional anti-
dumping duty, imposed by the provisional Regulation,
i.e. Regulation (EC) No 510/2003, should be definitively
collected at the rate of the duty definitively imposed.
Where the definitive duties are higher than the provi-
sional duties, only the amounts secured at the level of
the provisional duties should be definitively collected.

2. Form and level of the duties

In the light of the foregoing and in accordance with
Article 9(4) of the basic Regulation, a definitive anti-
dumping duty should be imposed in respect of
the
People's Republic of China. This duty should be imposed
at the level of the dumping margins found, since the
injury margin was found to be higher than the dumping
margin.

(35) On the basis of the above, the definitive duties are as

follows:

(36)

Nanjing Jingmei Chemical Co., Ltd, Nanjing:

10,8 %

Shandong Reipu Chemicals Co., Ltd, Qihe
County:

Country-wide dumping margin:

12,3 %

40,7 %

The individual company anti-dumping duty rates speci-
fied in this Regulation were established on the basis of
the findings of the present investigation. Therefore, they
reflect the situation found during that investigation with
respect to these companies. These duty rates (as opposed
to the country-wide duty applicable to ‘all other compa-
nies’) are thus exclusively applicable to imports of
products originating in the country concerned and
produced by the companies and thus by the specific
legal entities mentioned. Imported products produced 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 these rates and shall be
subject to the duty rate applicable to ‘all other compa-
nies’.

(37) Any claim requesting the application of these individual
company anti-dumping duty rates
following a
change in the name of the entity or following the setting
up of new production or sales entities) should be
addressed to the Commission (1) forthwith with all rele-
vant information, in particular any modification in the
company's activities linked to production, domestic and

(e.g.

(e.g.

(39) Any claim requesting the application of these individual
company anti-dumping duty rates
following a
change in the name of the entity or following the setting
up of new production or sales entities) should be
addressed to the Commission (1) forthwith with all rele-
vant information, in particular any modification in the
company's activities linked to production, domestic and
export sales associated with e.g. that name change or
that change in the production and sales entities.
If
appropriate,
then be amended
accordingly by updating the list of companies benefiting
from individual duty rates,

the Regulation will

HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed on
imports of para-cresol with a minimum para-isomer purity of
97 %, calculated on a net dry basis, falling within CN code
ex 2907 12 00 (TARIC code 2907 12 00 91), originating in
the People's Republic of China.

2.
The rate of the definitive anti-dumping duty applicable to
the net, free-at-Community-frontier price, before duty, shall be
as follows for the products manufactured by:

Manufacturer

Nanjing Jingmei Chemical Co., Ltd, Jingqiao
Town, Lishui County, Nanjing 211224,
People's Republic of China

Rate of
duty

TARIC
additional
code

10,8 %

A434

Shandong Reipu Chemicals Co.,
Ltd,
Chenming West Road, Qihe County, Shan-
dong, People's Republic of China

12,3 %

A435

(1) European Commission, Directorate-General for Trade, Direction B,

J-79 5/16, B-1049 Brussels.

All other companies

40,7 %

A999

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Unless otherwise

3.
concerning customs duties shall apply.

specified,

the provisions

Article 2

in force

shall be definitively collected. Where the definitive duties are
higher than the provisional duties, only the amounts secured at
the level of
should be definitively
collected.

the provisional duties

Amounts secured by way of provisional anti-dumping duties
pursuant to Regulation (EC) No 510/2003 on imports of para-
cresol
falling within CN code ex 2907 12 00 (TARIC code
2907 12 00 91), originating in the People's Republic of China

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, 11 September 2003.

For the Council

The President

F. FRATTINI