Council Regulation (EC) No 2239/2003 of 17 December 2003 terminating the partial interim review and the expiry review concerning the anti-dumping measures imposed by Regulation (EC) No 2398/97 on imports of cotton-type bedlinen originating, inter alia, in India
Date: 2003-12-17
Institutions: Council of the European Union
Subjects: India, anti-dumping duty, anti-dumping legislation, import, originating product, textile product

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Official Journal of the European Union

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COUNCIL REGULATION (EC) No 2239/2003

of 17 December 2003

terminating the partial
interim review and the expiry review concerning the anti-dumping
measures imposed by Regulation (EC) No 2398/97 on imports of cotton-type bedlinen originating,
inter alia, in India

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 and Article 11(2)
and (3) thereof,

(3)

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

Whereas:

and Allied Textile Industries of
the European Union
(‘Eurocoton’ or the ‘applicant’), on behalf of producers
representing a major proportion of the total Community
production of cotton-type bedlinen. The request was
based on the fact that the applicant claimed a significant
change in circumstances with regard to dumping.

the Commission received a request

In September 2002, following the publication of a notice
of impending expiry (5) of the anti-dumping measures in
for review
force,
pursuant to Article 11(2) of the basic Regulation from
Eurocoton, representing a major proportion of the total
Community production of cotton-type bedlinen. The
request was based on the grounds that the expiry of the
measures would most likely result in continuation or
recurrence of dumping and injury to the Community
industry.

A. MEASURES IN FORCE

(1)

In 1997, by Regulation (EC) No 2398/97 (2), the Council
imposed definitive anti-dumping duties ranging from
2,6 % to 24,7 % on imports of cotton-type bedlinen
originating, inter alia, in India. Following a Panel report
as modified by the Appellate Body report adopted in
March 2001 on the case ‘EC-anti-dumping duties on
imports of cotton-type bedlinen from India’ by the
Dispute Settlement Body of the World Trade Organisa-
tion (‘WTO’), the Council,
in August 2001, by Regu-
lation (EC) No 1644/2001 (3), amended Regulation (EC)
No 2398/97 by reducing the duty rate for India and
certain Indian companies to a level of between 0 and
9,8 % and suspending their application. In April 2002,
the Council, by Regulation (EC) No 696/2002 (4),
confirmed the definitive anti-dumping duty imposed on
imports of cotton-type bedlinen originating in India by
Regulation (EC) No 2398/97, as amended and suspended
by Regulation (EC) No 1644/2001.

B. REQUEST FOR REVIEWS

(2)

In January 2002, the Commission received a request for
an interim review of Regulation (EC) No 2398/97
pursuant to Article 11(3) of the basic Regulation. The
request was lodged by the Committee of the Cotton

(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 332, 4.12.1997, p. 1; Regulation as last amended by Regu-

lation (EC) No 160/2002 (OJ L 26, 30.1.2002, p. 1).

(3) OJ L 219, 14.8.2001, p. 1.
(4) OJ L 109, 25.4.2002, p. 3.

C. INVESTIGATION

1. PROCEDURE

(4)

(5)

(6)

The Commission examined the evidence submitted by
the applicant and considered it sufficient to justify the
initiation of an interim review and an expiry review in
accordance with the provisions of Article 11(2) and (3)
of the basic Regulation. After consultation of the Advi-
sory Committee, the Commission initiated two investiga-
tions by notices published in the Official Journal of the
European Communities (6). The interim review was limited
in scope to the examination of dumping.

The Commission officially advised the applicant,
the
producers in the exporting country and their representa-
tives of the initiation of the interim review and the
expiry review, and gave all parties directly concerned the
opportunity to make their views known in writing and
to request a hearing.

A number of exporting producers in India, as well as
Community producers, Community users and importers/
traders, made their views known in writing. All parties
who so requested within the time limits specified in the
notices of initiation referred to in recital 4 and showed
that there were particular reasons why they should be
heard were granted the opportunity to be heard.

(5) OJ C 65, 14.3.2002, p. 11.
(6) OJ C 39, 13.2.2002, p. 17 and OJ C 300, 4.12.2002, p. 10.

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1.1. Period of investigation

(10)

(7)

The period of investigation for dumping covered the
period from 1 January 2001 to 31 December 2001 (the
‘investigation period’ or ‘IP’).

the provisions set out

The applicant claimed that the non-cooperation of one
the companies with domestic sales should have
of
entailed the application of
in
Article 18 of the basic Regulation. In this connection it
should be noted that Article 18 of the basic Regulation
was indeed applied with respect to this company (see
recital 30). Moreover, the sample still remained represen-
tative as the non-cooperating company had a very
limited export share and, even without this company,
the sample still represented 43 % of the exports of the
product concerned to the Community during the IP.
Furthermore, the non-cooperation of this company did
not affect the dumping determination for those compa-
nies in the sample. The claim was therefore rejected.

(8)

(9)

1.2. Selection of the sample

In view of the large number of exporting producers in
the exporting country concerned, and in conformity
with Article 17 of the basic Regulation, it was consid-
ered appropriate to use sampling. In order to select a
sample, exporting producers in the country concerned
were requested, pursuant to Article 17(2) of the basic
Regulation, to make themselves known within 15 days
of the initiation of the proceeding and to provide infor-
mation on their exports to the Community during the
investigation period, domestic turnover and the names
and activities of all related companies in the sector of
the product concerned. The Indian authorities were also
contacted by the Commission in this regard.

the basic Regulation,

Ninety-four exporting producers agreed to be included
in the sample and provided the requested information
within the deadline. Eight of them were chosen for the
sample. The criteria taken into account in the selection
of the sample were: the size of the company with regard
to export sales to the Community and the fact that the
companies had domestic sales. The exporting producers
which were not finally included in the sample were
informed that any anti-dumping duty on their exports
would be calculated in accordance with the provisions of
Article 9(6) of
i.e. without
exceeding the weighted average margin of dumping
established for the companies in the sample. The selec-
tion of the sample was made in coordination with the
representatives of the exporting producers, and with the
Indian Government. The Appellate Body Report referred
to in recital 1 concluded that the method for calculating
amounts for administrative, selling and general costs (the
SG & A) and for profits, based on the weighted average
of the actual amounts incurred and realised by other
exporters or producers, can only be used if data relating
to more than one other exporter or producer are avail-
able. It was therefore considered paramount to have two
companies with domestic sales included in the sample. It
should also be noted that of the 94 producers who made
themselves known, only two had domestic
sales.
However, the second company, which at first had agreed
to cooperate in this investigation, withdrew its coopera-
tion. The sample had therefore to be modified accord-
ingly and was eventually composed of seven companies,
six of which had exclusively export sales and one of
which had both export and domestic sales of the like
product.

1.3. Individual

examination of

companies not

selected for the sample

(11) One cooperating company not selected for the sample
requested the calculation of an individual dumping
margin in accordance with Article 17(3) of the basic
Regulation and accompanied its request with a reply to
the questionnaire within the deadline set
this
purpose. This request was found to be acceptable in the
current investigation.

for

1.4. Interested parties and verification visits

(12)

The Commission sent a questionnaire to the sampled
companies and received full replies within the deadline.
The Commission sought and verified all information it
deemed necessary for the purpose of the determination
of dumping and carried out verification visits at the
premises of the following sampled companies:

— The Bombay Dyeing & Manufacturing Co. Ltd,

Mumbai

— Nowrosjee Wadia & Sons, Mumbai

— Prakash Cotton Mills Pvt. Ltd, Mumbai

— Texcellence Overseas, Mumbai

— Vigneshwara Exports Limited, Mumbai

In this respect

(13) Due to the political situation in India, the on-the-spot
verification at the premises of Jindal Worldwide Ltd,
Ahmedabad and Mahalaxmi Exports, Ahmedabad had to
the data provided by these
be cancelled. However,
companies have been used, despite the absence of verifi-
cation.
their
export prices were found to be in line with those of the
other Indian companies with the same company struc-
ture (i.e. mainly companies which only export) which
were investigated. In addition, certain checks were made
through a number of EU importers (by cross-checking
invoices), and no irregularities were found in relation to
the export price of Jindal Worldwide Ltd, Ahmedabad
and Mahalaxmi Exports, Ahmedabad.

it should be noted that

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(14)

The Commission has also carried out a verification visit
at
the premises of Divya Textiles, Mumbai, which
requested an individual examination, as mentioned in
recital 11 above.

2. PRODUCT UNDER CONSIDERATION

(15)

The product concerned is the same as in the original
investigation, i.e. certain bedlinen of cotton fibres, pure
or mixed with man-made fibres or flax (flax not being
the dominant fibre), bleached, dyed or printed, origin-
ating in India, falling within CN codes ex 6302 21 00
6302 21 00 89),
6302 21 00 81,
(TARIC
6302 22 90 19),
code
(TARIC
ex 6302 22 90
6302 31 10 90),
code
(TARIC
ex 6302 31 10
ex 6302 31 90
6302 31 90 90),
code
(TARIC
ex 6302 32 90 (TARIC code 6302 32 90 19).

codes

3. LIKE PRODUCT

(16)

It was established that the cotton-type bedlinen sold on
the Indian market and the cotton-type bedlinen exported
from India to the Community were identical, or closely
resembling in terms of physical characteristics and end
uses. Therefore,
these cotton-type bed linens were
considered to be like products within the meaning of
Article 1(4) of the basic Regulation.

D. RESULT OF THE INVESTIGATION CONCERNING THE

INTERIM REVIEW

1. NORMAL VALUE

1.1. Companies in the sample

It is first recalled that of the seven companies in the
sample, only one had domestic sales. Of the six other
companies in the sample, one had domestic sales of the
cotton-type
general
products).

products

category

(other

of

(17)

(18)

establish the normal value. However, no comparison
was possible between the product types sold on the
domestic market and those exported to the European
Union by the other companies. Therefore, for all the
other cooperating companies, in the absence of domestic
sales of the like product, normal value had also to be
constructed.

(20)

(21)

concerned were used to determine

In light of the above, the manufacturing costs of the
product
the
constructed normal value for each company included in
the sample, in accordance with Article 2(3) of the basic
Regulation. With regard to SG & A and profits, since
there was only one company with domestic sales of the
like product, the option provided for by Article 2(6)(a)
of the basic Regulation, based on the weighted average
of the actual amounts determined for other exporters or
producers in respect of production and sales of the like
product in the domestic market of the country of origin,
could not be used.

the other

For
including the
exporting producers,
company with domestic sales of the same general cate-
gory of products, the SG & A were established in accord-
ance with Article 2(6)(c) of the basic Regulation, taking
into account the conclusions of the reports adopted by
the Dispute Settlement Body of the WTO. Consequently,
the SG & A were determined on the basis of
the
weighted average of the SG & A of the sole company
with domestic sales of the like product and the SG & A
of the sole company having sales of the general category
of products (other cotton-type products) on the domestic
market.

(22) As far as the amounts for profit are concerned, for the
company with domestic sales of the same general cate-
gory of products several approaches were examined for
the
profit when
constructing the normal value. The first approach was to
use its own profits. However, this company was oper-
ating at a loss and therefore this method could not be
used.

establishment

reasonable

of

a

For the sole company with domestic sales, it was found
that none of its types of cotton-type bed linens sold on
the domestic market were directly comparable to those
exported to the Community, as a result of differences in
quality in respect of a multitude of different product
types. Furthermore, any adjustments needed in order to
ensure the comparability would have had to be based on
estimates. Consequently, the normal value had to be
constructed on the basis of the manufacturing costs of
the product concerned plus its own SG & A and profit
on sales made in the ordinary course of trade, in accord-
ance with Article 2(6) of the basic Regulation.

(23)

The Indian exporting producers claimed that, according
to Article 2(6)(c) of the basic Regulation, the profit cap
of the company with domestic sales and the company
selling the same general category of products on the
domestic market should have been used. Considering
that such companies were operating at a loss, the Indian
exporting producers argued that
the profit cap was
therefore a nil profit.

(19)

For the other companies,
in the absence of domestic
sales of the like product, it was first envisaged to use, in
accordance with Article 2(1) of the basic Regulation, the
domestic prices of the company with domestic sales to

(24) According to Article 2(3) of the basic Regulation, when
constructing normal value, a reasonable amount
for
profits should be added. Therefore, a nil profit cannot be
considered to be a cap.

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(25)

Finally, and in the absence of any other source of data as
regards profit, for all Indian exporting producers profit
was established at a level of 5 %, which was the profit
used in the original
investigation as the Community
industry's target profit. The applicant claimed that this
profit margin was too low.

(26) However, the applicant did not advance any reasons
why the 5 % profit figure was too low and why another
profit margin would be more reasonable or representa-
tive. Moreover, there was no usable information on the
profits of Indian domestic sales of the product concerned
or of the products belonging to the same general cate-
gory. Therefore, and pursuant to Article 2(6)(c) of the
basic Regulation, it was considered reasonable to use the
profit margin determined in the original
investigation,
the Community industry
representing the profit
could expect
in the
absence of any injurious dumping.

to achieve on its local market

that

1.2. Company with individual examination

(27)

For this company, normal value was established by using
the methodologies described in recitals 19, 20, 21 and
25.

2. EXPORT PRICE

(28)

Since all export sales of the product under consideration
were made directly to independent customers in the
Community, the export price was established in accord-
ance with Article 2(8) of the basic Regulation, namely
on the basis of the price paid or payable for the product
concerned when sold for export from India to the Com-
munity.

3. COMPARISON

(29)

For the purpose of a fair comparison, due allowance in
the form of adjustments was made for differences in
factors which were claimed and demonstrated to affect
prices and price comparability. These adjustments were
made in accordance with Article 2(10) of the basic Regu-
lation, in respect of freight, handling and loading, trans-
port, credit costs, insurance, commission and packing.

that the conditions underlying the use of this method,
and in particular the existence of a pattern of export
prices which differs significantly among different purcha-
sers, regions or time periods, were not met. Therefore, in
accordance with Article 2(11) of the basic Regulation,
the margin of dumping was established on the basis of a
comparison of a weighted average normal value with a
weighted average of prices of all export transactions to
the Community.

(a) Cooperating producers in the sample

The definitive dumping margins expressed as a
percentage of the cif import price at the Community
border are the following:

— The Bombay Dyeing & Manufacturing
Co. and Nowrosjee Wadia & Sons
(related company)

26,2 %

— Mahalaxmi Exports

— Prakash Cotton Mills Pvt. Ltd

— Texcellence Overseas

and

Jindal

Worldwide Ltd (related company)

— Vigneshwara Exports Limited

0 %

0 %

0 %

0 %

(b) Other cooperating producers not included in the sample

As explained in recital 34, for all other cooperating
producers not included in the sample the dumping
margin is 0 %.

(c) Cooperating company with individual examination

— Divya Textiles

0 %

(d) Non-cooperating companies

As set out in recital 9, one company did not coop-
erate. Since there are no indications
this
company did not dump, and in order not to give a
bonus for non-cooperation,
the dumping margin
was established on the basis of the most exported
amongst the most dumped product types exported
to the Community by Bombay Dyeing & Manufac-
turing Co., i.e. 31,4 %.

that

E. GROUNDS

INTERIM
FOR TERMINATING THE
REVIEW WITHOUT THE IMPOSITION OF MEASURES

4. DUMPING MARGIN

(30)

The applicant claimed that the exception provided for in
Article 2(11) of the basic Regulation, which allows the
comparison between a weighted average normal value
and the prices of all individual export transactions to the
Community, should have been used for some of the
it was established
companies in the sample. However,

(31)

The current interim review should be terminated without
the imposition of measures because only a small part of
imports of the product concerned originating in India
was dumped and this negligible volume of dumped
imports, which is not likely to change significantly in
follows from the
future, cannot cause injury. This
analysis set out below.

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1. THE VAST MAJORITY OF IMPORTS OF THE PRODUCT
CONCERNED ORIGINATING IN INDIA WERE NOT
DUMPED

total exports of

(32) With regard to the companies in the sample, the investi-
gation established the existence of dumping for only one
of these companies (Bombay Dyeing), accounting for less
than 8 % of
the product concerned
originating in India to the Community during the IP.
Moreover, and as stated above, one company did not
cooperate in the proceeding and its exports were consid-
ered to be dumped (see recital 30(d). However,
the
exports by this latter company of the product concerned
to the Community during the IP represented only 0,4 %
of total exports originating in India.

(33)

(34)

The findings for the aforementioned two companies are
in contrast to the situation of the remaining four compa-
nies in the sample as well as the exporting producer
granted individual treatment. None of these five compa-
nies was found to be dumping. Moreover, their situation
from that of Bombay
was
Dyeing and of the non-cooperating company because
they produced the product concerned exclusively for
export. The non-dumped imports in the sample repre-
sented around 30 % of total exports originating in India.

fundamentally different

Furthermore, the cooperating exporters not included in
individually examined produced
the sample and not
exclusively for export (based on the information received
in response to the sampling questions in the notice of
their company structure
initiation).
corresponds to that of
the companies mentioned in
recital 33. This strongly suggests that their exports were
not dumped either.

In other words,

(35)

It follows from the above that more than 90 % of Indian
exports of the product concerned to the Community
during the IP were not dumped.

2. THE SMALL VOLUME OF DUMPED IMPORTS IN THIS

CASE CANNOT CAUSE ANY INJURY

(36)

The significant difference between the dumping practices
found in the original investigation and that found in the
current one, prompts the question of whether the causal
link established in the original case could still be
assumed to be present on the basis of the present find-
ings.

(37)

First, it was found that less than 8 % of imports of the
product concerned originating in India during the IP was
dumped. These imports represented a market share of
less than 1 % during the IP or an import share of less

the investigation found that,

than 3 % of the total imports from all sources. In other
words,
the volume of dumped imports is negligible,
considering the normally applicable thresholds in the
basic Regulation and in the WTO Anti-dumping Agree-
ment. Second,
for the
reasons set out in recitals 32 to 34, more than 90 % of
the imports from India were non-dumped. Under these
circumstances, it is very unlikely that any material injury
resulted from these imports during the IP. Furthermore,
it cannot be reasonably assumed that
this situation
would change if measures were not imposed, bearing in
mind the fact that during a considerable part of the IP
no duties were in force and that the volume of non-
dumped imports from India was always significant.

(38)

this review,

Therefore, based on the findings of
the
causal link established between dumping and injury in
the original case can not be assumed to be present in
interim
this investigation, although the current partial
review did not expressly include a review of the causality
established in the original case.

(39) Additionally, the measures which would result from the
outcome of this investigation (see recital 30) would be
ineffective, as a major part of the imports from India
would not be covered.

3. CONCLUSION

(40)

it is necessary to terminate the
In view of the above,
cotton-type
interim review concerning imports of
bedlinen originating in India without the imposition of
anti-dumping duties.

F. CONSEQUENCES OF THE EXPIRY REVIEW

(41)

In the light of the results of the interim review leading
to the expiry of the anti-dumping measures imposed by
Regulation (EC) No 2398/97, the procedure concerning
the expiry review should be terminated accordingly.

G. DISCLOSURE

(42)

The interested parties were informed of the facts and
considerations on the basis of which it was intended to
recommend the termination of
the present partial
interim review and the expiry review without the impo-
sition of measures and were given an opportunity to
comment. Their comments were taken into account and,
where appropriate, the findings were modified accord-
ingly,

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HAS ADOPTED THIS REGULATION:

Article 1

The interim review pursuant to Article 11(3) and the expiry review pursuant to Article 11(2) of Council
Regulation (EC) No 384/96 concerning imports of cotton-type bedlinen originating in India are hereby
terminated without the imposition of measures.

This Regulation shall enter into force on the day following its publication in the Official Journal of the Euro-
pean Union.

Article 2

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

Done at Brussels, 17 December 2003.

For the Council

The President

G. ALEMANNO