Council Regulation (EC) No 1905/2003 of 27 October 2003 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of furfuryl alcohol originating in the People's Republic of China
Date: 2003-10-27
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, chemical alcohol, import, originating product

31.10.2003

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Official Journal of the European Union

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1905/2003

of 27 October 2003

imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed
on imports of furfuryl alcohol 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:

(3)

(4)

The oral and written comments submitted by the inter-
ested parties were considered and, where appropriate,
taken into account for the definitive findings.

The Commission continued to seek all
information it
deemed necessary for the purpose of its definitive find-
ings. In addition to the verification visits undertaken at
the premises of the companies mentioned in recitals 10
and 11 of the provisional Regulation, it should be noted
that after the imposition of provisional measures, an on-
the-spot visit was carried out at the premises of the
following Community user:

— Bakelite AG, Iserlohn-Lethmate, Germany.

A. PROCEDURE

B. PRODUCT UNDER CONSIDERATION AND LIKE

PRODUCT

(1)

(2)

1. Provisional measures

The Commission, pursuant to Regulation (EC) No 781/
2003 (2)
imposed provi-
(the provisional Regulation)
sional anti-dumping duties on imports of
furfuryl
(FA) originating in the People's Republic of
alcohol
China (China), expressed as a specific duty amount
ranging between EUR 21 and 181 per tonne, corre-
sponding to the injury margins.

(5)

Since no comments were received regarding the product
under consideration and like product, the contents and
provisional conclusions of recitals 12 to 17 of the provi-
sional Regulation are hereby confirmed.

2. Subsequent procedure

Following the imposition of provisional anti-dumping
the facts and
duties, parties received a disclosure of
considerations on which the provisional Regulation was
based. Some parties submitted comments in writing. All
interested parties who so requested were granted an
opportunity to be heard by the Commission. All parties
were informed of the essential 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 by way of provi-
sional duties. They were also granted a period within
which to make representations subsequent to this disclo-
sure.

(6)

(7)

(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 114, 8.5.2003, p. 16.

C. DUMPING

1. Market economy treatment (MET)

No further evidence was provided regarding the decision
not to grant MET to the four cooperating Chinese expor-
ters. The findings set out in recital 20 of the provisional
Regulation are, therefore, confirmed.

2. Individual treatment (IT)

In the provisional Regulation, IT was granted to three
cooperating producers and refused to one. The reasons
for granting or not granting IT reflected the conditions
set out in Article 9(5) of the basic Regulation. It was
questioned by the Community industry (CI) whether the
Commission could rely on this Article as it came into
force only after the initiation of the current proceeding.

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The determination on the question of IT was based upon
the criteria applying when the current proceeding was
initiated. These criteria are identical to those set out in
Article 9(5) of the basic Regulation, and have been used
over a number of years. Therefore, the provisional Regu-
lation referred to Article 9(5) of the basic Regulation
substantiating a long-standing practice.

(15)

(8)

(9)

(10)

In its provisional determination, the Commission refused
IT to one cooperating Chinese exporting producer,
Henan Huilong Chemical
Industry Co. Ltd (Huilong),
which acted both as a producer and as a trader of FA,
on the basis that it was not possible to determine the
level of State interference in the business activities
performed by Huilong. Nevertheless, recital 29 of the
provisional Regulation provides for this issue to be
further considered at the definitive stage.

The exporter concerned contends that the provisional
determination was incorrect and that it should indeed be
granted IT. In support of its argument, the company
points out that there was no evidence found of any
direct State interference in the company itself, and that
the traded volume of FA represented less than 5 % of its
production during the investigation period (IP). More-
over, some of this traded product was purchased from
another cooperating exporter to which IT has already
been granted.

(11)

Following the imposition of provisional measures, no
further information has been found that would point to
State interference in the business activities carried out by
Huilong. Huilong has agreed to cease its trading activity
in FA were it to be granted IT.

(12) Accordingly, it is now concluded that the level of State
interference in the business dealings of Huilong, if any,
cannot be significant and would in any case not be such
as to permit circumvention of the measures. On this
basis, it was decided to revise the provisional determina-
tion, and to grant IT to Huilong.

3. Analogue country

(13)

The exporting producers have objected to the choice of
the United States of America as the analogue country
and repeated their assertion that Thailand would repre-
sent a better alternative. This claim is based on the argu-
ments that (i) the production costs are lower in Thailand;
(ii) Thailand is the principal source of FA imported into
the EU; and (iii) the complainants accept that there is no
evidence that imports from Thailand are being made at
dumped prices.

(14) As outlined in recital 33 of the provisional Regulation,
only one producer, in the United States of America, was
prepared to cooperate in the investigation. Furthermore,
it was provisionally established that the United States of
America fulfilled the necessary criteria to constitute an
appropriate analogue country.

There are no indications that Thailand, nor indeed South
Africa, would constitute a better alternative as analogue
country. No evidence was submitted by the exporting
producers as to the production costs of the FA producers
in Thailand or South Africa, other than by making an
extrapolation from the export prices reported in the
complaint and on Eurostat. Moreover, the Thai producer
refused to cooperate in the proceedings. Therefore,
it
was considered that these countries could not reasonably
be used to construct a normal value due to the lack of
any reliable and verifiable evidence upon which to base
any findings.

(16) Accordingly, and in the absence of any new evidence to
the provisional conclusion reached in

the contrary,
recital 33 of the provisional Regulation is confirmed.

4. Dumping

4.1. Norma l va lu e

The exporting producers asserted that the constructed
normal value is too high to be considered reasonable. In
support of this claim they point to the lower prices of
FA from Thailand, which are not alleged to be dumped,
as well as to the lower normal value presented by the
complainants prior to initiation of the proceeding.

In this respect it should be noted that the normal value
was established in accordance with Article 2(7)(a) of the
basic Regulation, namely on the basis of the information
obtained in the analogue country, i.e. the United States
of America.
the
constructed normal value was calculated on the basis of
actual prices and costs duly verified during an on-the-
spot investigation at the premises of the cooperating FA
producer in the United States of America.

furthermore confirmed that

is

It

Therefore, it is considered that, in the absence of verified
information in respect of either South Africa or Thai-
land, the data available from the FA producer in the
United States of America represent the best information
available for the construction of the normal value. The
findings of recital 34 of the provisional Regulation are
thus confirmed.

4 . 2 . E x p o r t p r i c e

The export prices have been adjusted slightly, following
comments, duly supported by evidence, on the freight
charges used.

The exporting producers also objected to the metho-
dology used to calculate the export price for non-coop-
erating companies as outlined in recital 36 of the provi-
sional Regulation.

(17)

(18)

(19)

(20)

(21)

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(22)

(23)

it should be recalled that the level of
In this regard,
cooperation in this case was low, and that the export
prices therefore had to be based on facts available in
accordance with Article 18(1) of the basic Regulation.
For the provisional Regulation, prices and volumes of
the cooperating producer to which IT was not granted,
i.e. Huilong, were used.

This producer has now been granted IT and has had its
own dumping margin calculated on the basis of its own
sales to the EU during the IP. In view of this, the value
of the exports for non-cooperating companies had to be
recalculated. This new calculation is based on a represen-
tative volume of the EU sales of the four cooperating
exporters. In order to ensure that the transactions used
could be considered reliable, a sample of 25 % by
volume was used. This sample comprised those invoices
of
the four cooperating producers with the lowest
average transaction prices. It was considered appropriate
to use the lowest transaction prices, as there was no
reason to believe that the sales made by non-cooperating
companies would have been at prices higher than those
made by the cooperating producers. The average price
so calculated was then used to determine the residual
dumping and injury margins.

(27)

(28)

(29)

5(4) and 4(1) of the basic Regulation, because these
companies are very small
in view of the number of
employees and are owned by a privately held company
in the Dominican Republic, Central Romana Corpora-
tion (CRC).

These arguments could not be accepted. First, small and
medium-sized companies are clearly entitled to lodge a
complaint and can constitute the CI within the meaning
of Articles 5(4) and 4(1) of the basic Regulation.

the provisional Regulation,

Second, the investigation has shown, as referred to in
that FA
recital 43 of
produced by TFC is of Community origin and that the
manufacturing operations, the technological and capital
investment for the manufacturing operations and the
sales operations take place in the Community. Further-
more, the fact that TFC, IFC and CRC are related through
common ownership, as established under recital 42 of
the provisional Regulation, does not exclude the applica-
tion of Articles 5(4) and 4(1) of the basic Regulation.

the

arguments

Therefore,
the Chinese
exporting producers were rejected and the findings set
out
the provisional Regulation are
confirmed.

in recital 44 of

raised by

4.3. Compari son

(24)

In the absence of any comments, the provisional conclu-
the provisional Regulation is
sion of
confirmed.

recital 37 of

4 . 4. D u m p i n g ma r g i n

(25)

the issues outlined above, are now as

The dumping margins, which were reviewed in the light
of
follows
(expressed as a percentage on the cif import price at the
Community border):

Company

Gaoping

Huilong

Linzi

Zhucheng

All others

Margin

93 %

90 %

78 %

80 %

112 %

D. COMMUNITY INDUSTRY

(26)

The four cooperating exporters claimed that Transfurans
Chemicals BVBA (TFC), Belgium and International Furan
Chemicals BV, the Netherlands (IFC) do not constitute
the ‘Community industry’ within the meaning of Articles

E. INJURY

1. Consumption of FA in the Community

(30)

In the absence of any new information on consumption,
the provisional findings as described in recitals 46 to 48
of the provisional Regulation are confirmed.

2. Imports of FA into the Community

(31)

(32)

In the absence of any new information on imports of FA
into the Community,
as
described in recitals 49 to 63 of the provisional Regula-
tion are confirmed.

the provisional

findings

3. Economic situation of the Community industry

The four Chinese exporting producers claimed that the
CI did not suffer injury, as most of the injury indicators
(in particular sales volume, sales prices, stocks, profit-
ability, cash flow and investments) established by the
Commission could not be reconciled with the published
audited accounts of IFC and/or TFC. They argued that
some indicators, such as profitability, stocks and cash
flow, contained in the audited accounts of IFC and/or
TFC showed either increasing or stable trends.

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(33)

(34)

(35)

(36)

(37)

the product concerned. Moreover,

It should be noted that the published audited accounts
of IFC and TFC also include activities other than the
production of
the
published audited accounts of IFC and TFC cover the
period from October 2001 to September 2002 while the
IP referred to in recital 4 of the provisional Regulation
covered the period from 1 July 2001 to 30 June 2002.
Furthermore, as mentioned in recitals 41 and 44 of the
provisional Regulation, it was found that TFC is part of
a single economic entity consisting of TFC, IFC and CRC.
Therefore, in order to make a meaningful assessment of
it was necessary also to take
certain injury indicators,
into account some data from CRC.
it is
recalled that IFC's own trading activity in the Commu-
nity mentioned in recitals 105 and 106 of the provi-
sional Regulation falls outside the scope of the investiga-
tion, but forms part of the audited accounts of IFC.
Furthermore, the export sales of IFC mentioned in reci-
tals 101 to 104 of
the provisional Regulation are
included in the audited accounts, whilst the investigation
exclusively covered the economic situation of the CI as
regards the Community market.

In addition,

These facts prevent
the injury indicators from being
adduced from the published accounts of IFC and TFC as
the four Chinese exporting producers have proposed. It
is also recalled that the Commission findings are in line
with the information contained in the files for the
inspection by interested parties.

the

arguments

the Chinese
Therefore,
exporting producers were rejected and the findings and
the conclusion set out in recitals 86 to 91 of the provi-
sional Regulation are confirmed.

raised by

F. CAUSATION

The four Chinese exporting producers argued that
because there was no injury there was no causation. If
there is injury,
it is not the Chinese imports but the
imports from Thailand that contributed to the economic
situation of the CI.

The Chinese exporting producers did not provide any
new evidence in support of this claim. It is recalled that
in recitals 107 to 111 of the provisional Regulation, and
in accordance with Article 3(7) of the basic Regulation,
the Commission analysed the total imports of FA into
the Community from other third countries as a known
factor other than the dumped imports. This analysis also
covered imports from Thailand in respect of volumes
and prices.

with the developments described in recital 109 of the
provisional Regulation. Furthermore, it was found that
import prices from Thailand were far above the level of
those of Chinese exporting producers (over 24 % during
the IP) and even above those of the CI (over 6 % during
the IP).

the

arguments

Therefore,
the Chinese
exporting producers were rejected and the findings and
conclusions set out in recitals 92 to 113 of the provi-
sional Regulation are confirmed.

raised by

G. COMMUNITY INTEREST

The Chinese exporting producers and one association
claimed that
the provisional measures have a larger
impact on users and the foundry industry than the
Commission findings suggested.
it was
argued that the interest of the users should prevail given
the low employment in the CI compared to the high
employment in the foundry industry.

In particular

(39)

(40)

it should be noted that

(41) With regard to the claim submitted by the Chinese
exporting producers,
these
producers did not provide any new evidence which
could have been relevant for the examination of the
Community interest. In any event, the Chinese exporting
producers may not qualify as an interested party for the
purpose of the determination of the Community interest.

(42) As regards the claim of the association,

it should be
noted that this was examined, although the association
did not cooperate during the investigation and did not
provide new evidence in support of its arguments. To
this end, the Commission carried out an additional on-
the-spot verification visit at the premises of a German
user. This more thorough investigation confirmed the
result of the analysis made at provisional stage, as set
out in recital 126 of the provisional Regulation, and that
the overall impact of the proposed definitive measures
will be negligible.

(43)

the

arguments

Therefore,
the Chinese
exporting producers and the association were rejected
and the findings and conclusions set out in recitals 114
to 133 of the provisional Regulation are confirmed.

raised by

H. DEFINITIVE MEASURES

(38)

The Thai imports represent around 96 % of the imports
of FA from third countries. The import volumes of FA
into the Community from Thailand increased in line

(44)

In view of the conclusions reached regarding dumping,
injury, causation and Community interest, it is consid-
ered that definitive anti-dumping measures should be
imposed in order to prevent further injury being caused
to the CI by dumped imports from China.

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(45)

(46)

(47)

1. Injury elimination level

It is recalled that it was provisionally found that a profit
margin of 10 % on total
turnover of FA could be
regarded as an appropriate minimum which the CI could
reasonably expect to obtain in the absence of injurious
dumping. This profit margin would also allow the CI to
make the necessary long-term investments.

The CI claimed that the profit margin of 10 % as set out
in recital 136 of the provisional Regulation did not
reflect a return that it could reasonably expect to achieve
in the absence of injurious dumping, and asked for a
profit margin of at least 23,15 % on turnover, based on
its performance in the previous years.

(52)

In order
in-depth
to examine this claim, a further
analysis was made of all the information available on the
profit margin which could be regarded as an appropriate
minimum which the CI could reasonably expect
to
obtain in the absence of injurious dumping. The profits
realised in the years preceding the IP were re-analysed. It
was found that in the previous years the profit rates
were indeed much higher than 10 %. It was therefore
concluded that a profit margin of 15,17 % based on the
average
three years
preceding the IP could be reasonably expected in view of
the development of profitability of
the CI and the
presence of dumped imports on the Community market.
This approach is fully in line with existing jurisprudence,
in particular the ruling in the case of EFMA v Council (1).

actual profit achieved in the

difference between the import price and a predetermined
minimum price) or as a variable duty in the form of a
minimum import price. Furthermore, the CI argued that
the difference between the amounts of duty imposed on
the exporters was so high that additional risks of circum-
vention, such as compensatory arrangements or absorp-
tion, could exist.

In order to examine this claim, the different possible
forms of measures were analysed in depth. In view of
it was
the need to ensure the efficiency of measures,
considered that neither a combined application of a
specific duty (fixed amount EUR/tonne) with a variable
duty nor a variable duty alone would be sufficient to
remove the injury caused by dumping. The former is
only exceptionally used when the particular circum-
stances of a case, e.g. clear indications of price manipula-
tion, so require, whilst
the latter results in inherent
problems of enforcement. As laid down in the provi-
sional Regulation, the duty to be imposed should be in
the form of a specific amount of EUR/tonne in order to
ensure the efficiency of the measures and to minimise
the existing risk of substituting the product concerned
for products within the same general category of goods
(e.g. furfural), especially as price manipulation has been
observed in some previous proceedings
involving
furfural (2).

(48)

Consequently, the claim of the Community industry for
a profit margin of 23,15 % has been rejected. In the light
of the above, the Commission's calculations have been
reviewed on the basis of the revised profit margin.

(49) Apart from this change in the profit margin, the injury
elimination level was calculated using the same metho-
dology as explained in recital 137 of the provisional
Regulation. On this basis, a non-injurious level of prices
was determined which would cover the CI's cost of
production and allow a reasonable profit to be obtained
in the absence of dumped imports from the country
concerned. As a result of the revised calculations, injury
margins of 8,9 % to 32,1 % were found.

2. Form and level of the definitive duty

(50)

In accordance with Article 9(4) of the basic Regulation,
as the injury margins were lower than the dumping
margins
producers
concerned, the definitive duty should be set at the level
of the injury margins.

exporting

found

the

for

all

(53) However,

invoice, which is

in order further to minimise the risks of
circumvention due to the substantial level of non-coop-
eration (40 %) and the high difference in the amounts of
duty, it is considered that special provisions are needed
in this case to ensure the proper application of the anti-
dumping duties. These special provisions include the
presentation to the customs authorities of the Member
to
States of a valid commercial
conform to the requirements set out in the Annex. Only
imports accompanied by such an invoice may be
declared under the applicable TARIC additional codes of
the producer in question. Imports not accompanied by
such an invoice shall be made subject to the residual
anti-dumping duty applicable to all other exporters. The
companies concerned have also been invited to submit
regular reports to the Commission in order to ensure a
proper follow-up of their sales of FA to the Community.
In cases where reports are not submitted, or where the
reports disclose that the measures are not adequate to
eliminate the effects of injurious dumping,
it may be
necessary to initiate an interim review in accordance
with Article 11(3) of the basic Regulation.

(51)

The CI requested that the definitive measures take the
form of a combined application of a specific duty (fixed
amount EUR/tonne) and a variable duty (equal to the

(54)

The calculation of the injury threshold related to cif
import price results in duties ranging between EUR 84
and 250 per tonne.

(1) Judgement of the Court of First Instance of 28 October 1999 in

Case T-210/95.

(2) OJ L 328, 22.12.1999, p. 1.

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(55)

The correction made to the dumping and injury margins had no effect on the application of the
lesser duty rule. Therefore, the methodology used for establishing the anti-dumping duty rates as
described in recital 138 of the provisional Regulation is hereby confirmed. The definitive duties will
therefore be:

Company

Ad valorem

Specific duty

Gaoping

Huilong

Linzi

Zhucheng

All others

18,3 %

17,9 %

8,9 %

10,3 %

32,1 %

160 EUR/tonne

156 EUR/tonne

84 EUR/tonne

97 EUR/tonne

250 EUR/tonne

I. DEFINITIVE COLLECTION OF THE PROVISIONAL DUTY

(56)

In view of the magnitude of the dumping margins found for the exporting producers in China and
given the level of the injury caused to the Community industry, it is considered necessary that the
amounts secured by way of provisional anti-dumping duty imposed by the provisional Regulation
should be definitively collected to the extent of the amount of definitive duties imposed. As the defi-
nitive duties are higher than the provisional duties, only the amounts secured at the level of the
provisional duties should be definitively collected.

(57) Any claim requesting the application of these individual company anti-dumping duty rates (e.g.
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 forthwith with all relevant information, in parti-
cular any modification in the company's activities linked to production, domestic sales and export
sales associated with e.g. that name change or that change in the production and sales entities. If
appropriate, the Regulation will accordingly be amended by updating the list of companies bene-
fiting from individual duties,

HAS ADOPTED THIS REGULATION:

Article 1

A definitive anti-dumping duty is hereby imposed on imports of FA currently classifiable within CN

1.
code ex 2932 13 00 (TARIC code 2932 13 00 90), originating in the People's Republic of China.

The rate of the definitive anti-dumping duty applicable for the product originating in the People's

2.
Republic of China shall be as follows:

Companies

Rate of anti-dumping duty
(EUR/tonne)

TARIC additional code

Gaoping Chemical Industry Co. Ltd

Linzi Organic Chemical Inc.

Zhucheng Huaxiang Chemical Co. Ltd

Henan Huilong Chemical Industry Co. Ltd

All other companies

160

84

97

156

250

A442

A440

A441

A484

A999

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The application of the individual duty rates specified for the four companies mentioned in paragraph
3.
2 shall be conditional upon presentation to the customs authorities of the Member States of a valid
commercial invoice, which shall conform to the requirements set out in the Annex. If no such invoice is
presented, the duty rate applicable to all other companies shall apply.

In cases where goods have been damaged before entry into free circulation and, therefore, the price
4.
actually paid or payable is apportioned for the determination of the customs value pursuant to Article 145
of Commission Regulation (EEC) No 2454/93 of 2 July 1993 laying down provisions for the implementa-
tion of Council Regulation (EEC) No 2913/92 establishing the Common Customs Code (1) the amount of
anti-dumping duty, calculated on the basis of paragraph 2 above, shall be reduced by a percentage which
corresponds to the apportioning of the price actually paid or payable.

5.

Unless otherwise specified, the provisions in force concerning customs duties shall apply.

Article 2

The amounts secured by way of provisional anti-dumping duties pursuant to the provisional Regulation on
imports of FA currently classifiable within CN code ex 2932 13 00 (TARIC code 2932 13 00 90), origi-
nating in the People's Republic of China shall be definitively collected as follows.

The amounts secured in excess of the definitive rate of anti-dumping duties shall be released. Where the
definitive duties are higher than the provisional duties, only the amounts secured at the level of the provi-
sional duties shall be definitively collected.

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

Article 3

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

Done at Luxembourg, 27 October 2003.

For the Council

The President

A. MATTEOLI

ANNEX

The valid commercial invoice referred to in Article 1(3) of this Regulation must include a declaration signed by an officer
of the company, in the following format:

1. The name and function of the official of the company which has issued the commercial invoice.

2. The following declaration:

‘I, the undersigned, certify that the [volume] of furfuryl alcohol currently classifiable within CN code ex 2932 13 00
(TARIC code 2932 13 00 90) sold for export to the European Community covered by this invoice was manufactured
by [company name and address] in the People's Republic of China; I declare that the information provided in this
invoice is complete and correct.’

3. Date and signature

(1) OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Commission Regulation (EC) No 1335/2003 (OJ L 187,

26.7.2003, p. 16).