Council Regulation (EC) No 236/2004 of 10 February 2004 amending Regulation (EC) No 1339/2002 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of sulphanilic acid originating in the People's Republic of China and India
Date: 2004-02-10
Institutions: Council of the European Union
Subjects: China, India, anti-dumping duty, chemical product, import, originating product

12.2.2004

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Official Journal of the European Union

L 40/17

COUNCIL REGULATION (EC) No 236/2004

of 10 February 2004

amending Regulation (EC) No 1339/2002 imposing a definitive anti-dumping duty and collecting
definitively the provisional duty imposed on imports of sulphanilic acid originating in the People's
Republic of China and India

THE COUNCIL OF THE EUROPEAN UNION,

3. The anti-absorption reinvestigation

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 12(3) thereof,

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

Whereas:

A. PROCEDURE

1. Original measures

(1)

(2)

(3)

In July 2002, the Council
imposed a definitive anti-
dumping duty (the original measure) on imports of
sulphanilic acid originating,
in the People's
Republic of China by Regulation (EC) No 1339/2002 (2).
The country-wide duty rate applicable to the net, free-at-
Community frontier price, is 21 %.

inter alia,

2. Request for an anti-absorption reinvestigation

On 12 May 2003, a request for a reinvestigation of the
measure referred to in recital 1 was lodged pursuant to
the basic Regulation. The request was
Article 12 of
submitted by Sorochimie and Quimigal (the applicants),
two producers representing 100 % of the Community
production of sulphanilic acid.

The applicants submitted sufficient information showing
that the anti-dumping duty imposed on sulphanilic acid
originating in the People's Republic of China has not led
to sufficient movement in the prices in the Community.
In fact, the evidence contained in the request showed
that export prices and prices delivered (duty unpaid) to
final customers in the Community fell
significantly
following the imposition of the anti-dumping measures,
suggesting an increase in dumping which impeded the
intended remedial effects of the anti-dumping measures
in force.

(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 196, 25.7.2002, p. 11.

(4)

(5)

(6)

(7)

(8)

On 26 June 2003, the Commission announced by a
notice published in the Official Journal of the European
Union (3) the initiation of a reinvestigation, pursuant to
Article 12 of the basic Regulation, of the anti-dumping
measures applicable to imports of
sulphanilic acid
originating in the People's Republic of China.

The Commission officially advised the producers/expor-
ters known to be concerned, the representatives of the
exporting country, importers and users of the initiation
of the reinvestigation. Interested parties were given the
opportunity to make their views known in writing and
to request a hearing within the time limit set out in the
notice of initiation. The Commission sent questionnaires
to all parties known to be concerned.

Two complete questionnaire replies were received from
a Chinese exporter, Sinochem Hebei import and export
corporation (Sinochem), and from a user importing
directly the product
concerned from the People's
Republic of China, 3V Sigma, Italy (3V Sigma). It has to
be noted, that the investigation which led to the imposi-
tion of the original measures (the original investigation)
established that sulphanilic acid is imported into the
Community directly by the final users of this product.

Three other importers/users declared that they would
not reply to the questionnaire because they had only
imported very marginal quantities of
the product
concerned during the investigation period. A fourth
importer/user submitted some information but stopped
cooperating in the course of the investigation.

The investigation period of this reinvestigation (new IP)
ran from 1 April 2002 to 31 March 2003. The new IP
was used to determine the current level of export prices
and the level of the prices delivered to the final customer
in the Community. In establishing whether the prices in
the Community had moved sufficiently, the price levels
charged during the new IP were compared to those
charged during the original investigation period (original
IP) which had covered the period from 1 July 2000 to
30 June 2001.

(3) OJ C 149, 26.6.2003, p. 14.

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Official Journal of the European Union

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(9)

Because of duly justified exceptional circumstances (i.e.
the consequences of the SARS epidemic in the People's
Republic of China), the cooperating parties requested
and were granted extensions to submit their replies. For
this reason,
the reinvestigation slightly exceeded the
normal period of six months provided for in Article
12(4) of the basic Regulation.

B. PRODUCT UNDER CONSIDERATION

(10)

(11)

The product concerned by the request and for which the
reinvestigation was initiated is the same as in the original
i.e. sulphanilic acid, normally classified
investigation,
within
code
2921 42 10 60). Sulphanilic acid is a chemical product
used as raw material in the production of optical bright-
eners, concrete additives, food colorants and speciality
dyes.

ex 2921 42 10

CN code

(TARIC

C. THE REINVESTIGATION

there was a sufficient movement

The purpose of this reinvestigation is, first, to establish
whether or not
in
prices in the Community of sulphanilic acid originating
in China further to the imposition of the aforementioned
anti-dumping measures. As a second step, where it is
concluded that absorption took place,
the dumping
margin is recalculated. In accordance with Article 12 of
the basic Regulation, importers/users and exporters are
provided with an opportunity to submit evidence that
could justify a lack of movement in prices in the Com-
munity following the imposition of measures for reasons
other than absorption of the anti-dumping duty.

1. Movement of prices in the Community

1.1. G e ne r a l

(12) As mentioned above, the pattern of trade for sulphanilic
acid originating in the People's Republic of China is
characterised by the absence of intermediaries such as
traders importing the product in the Community for
resale. Users in the Community, which are generally
large chemical companies, directly import the product
concerned from the People's Republic of China, for their
own internal consumption.

(13)

Therefore,
in the absence of any resale price in the
market, the Community price level during the new IP of
the product concerned originating in the People's
Republic of China was determined by adding to the cif
price in euro at the Community border both the conven-
tional and the anti-dumping duties payable. The cif price
in euro at the Community border was established on the
basis of information submitted by the aforementioned
cooperating Chinese exporting producer and importer/

(14)

(15)

(16)

in the Community. Together,

these companies
user
reported data amounting to 1 430 tonnes of sulphanilic
acid during the new IP, a level exceeding slightly the
statistical information available from Eurostat.

for the same delivery conditions,

The movement of prices in the Community was assessed
by comparing,
the
average price, including duties, referred to in recital 13,
of the new IP with that determined in the original IP,
plus the duties. The comparison showed that the average
price in the Community of sulphanilic acid originating
in the People's Republic of China had decreased by
18,1 %.

It should be noted that the average conventional duty
rate applicable to imports of sulphanilic acid originating
in the People's Republic of China declined from 8,5 to
7,4 % between the two IPs. Taking this effect out, the
decrease in cif prices in euro between the two IPs was
17,4 %.

1.2. Cla i ms ma de by i nte r e st e d p a r ti e s

1.2.1. Exchange rate variation

Several
interested parties noted that sulphanilic acid
imported from the People's Republic of China is invoiced
in US dollars. They indicated that the decrease of export
prices and prices in the Community of sulphanilic acid
would largely be the result of the USD/EUR exchange
rate variation observed between the original IP and the
new IP. The claim was verified and it was indeed found
that the US dollar had depreciated against the euro by
11,4 % between the original IP and the new IP. There-
fore, the claim was accepted. However, even when the
comparison is carried out by taking into account the
effect of the abovementioned depreciation of the US
dollar against the euro, a decrease in the level of prices
in the Community by 9,3 % is still observed between the
original IP and the new IP.

1.2.2. Transportation costs

(17) A cooperating party alleged that the decrease in trans-
port costs between the People's Republic of China and
the Community could explain part of
the possible
decrease in prices of the product concerned. This claim
was verified on the basis of the actual transport costs
reported by the cooperating parties themselves. When
comparing these transport costs with the ones deter-
mined in the framework of the original investigation, it
appears that transport costs have marginally increased,
and not decreased, between the two IPs. Therefore, the
claim was rejected.

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(18)

(19)

(20)

(21)

1.2.3. Raw material price

Cooperating parties claimed that any possible decrease
in the prices of sulphanilic acid would be the conse-
quence of a corresponding decline between the original
IP and the new IP in the price of aniline, a key raw mate-
rial representing some 60 % of the cost of production of
sulphanilic acid. It was alleged that the price of aniline
would have decreased by some 5 % over the abovemen-
tioned period.

This type of claim refers to costs of production, and can
only be taken into account in the context of a re-exami-
nation of normal value. However, pursuant to Article
12(5) of the basic Regulation, alleged changes in normal
value shall only be taken into account where complete
information on revised normal values is made available
to the Commission. This was not the case. For this
the claim could already be rejected.
reason alone,
However, in order to establish a complete picture of all
the elements possibly at stake, the abovementioned alle-
gation was nevertheless examined. To this end, exhaus-
tive information on aniline prices during the new IP was
obtained from the same source that had been used in
order to determine the normal value in the original
investigation, i.e. a cooperating company in the analogue
country, namely India. On this basis, it was found that
aniline prices had increased, not decreased, by around
6 % between the two IPs. Therefore, even if the claim
had been correctly presented in the context of a request
for a revision of normal value pursuant to Article 12(5)
of the basic Regulation, it would have been considered
to be unfounded.

1.3. Conc lu si on

It was therefore concluded that absorption of the anti-
dumping duty had taken place, as the decrease observed
in the prices in the Community of sulphanilic acid
originating in the People's Republic of China could not
be fully justified even after taking into consideration the
above described claim concerning exchange rate fluctua-
tions.

2. Reassessment of the export prices

Since it was established that absorption had taken place
and that the lack of movement in the prices in the Com-
munity was due to a fall
in the export prices it was
considered appropriate to use the export prices of the
new IP, for the purpose of recalculating the appropriate
dumping margins in accordance with the last sentence
of Article 12(2) of the basic Regulation.

3. Normal value

under recital 19, no interested party formally requested a
revision of
the normal
the normal value. Therefore,
value as established in the original
investigation was
used in recalculating the dumping margins.

4. Recalculation of

the dumping margin taking
account of the export prices observed during the
new IP

(23) As required under Article 12 of the basic Regulation, the
country-wide dumping margin for the People's Republic
of China was recalculated by comparing the average fob
price established in the current investigation with the
average fob normal value as established in the original
investigation. The difference was then expressed as a
percentage of the cif value determined in the reinvestiga-
tion.

(24)

The recalculated dumping margin was found to have
increased to 33,7 %, in comparison with 21 % as estab-
lished in the course of the original investigation.

5. New level of the measure

(25)

The original measures were based on the dumping
margin. A new injury margin has been calculated as a
difference between the new export price determined as
explained under recital 21 and the non-injurious Com-
munity price computed in the original
investigation,
expressed as a percentage of the same denominator as
used in the above dumping determination. The lowest of
the two margins is still the dumping margin. In applica-
tion of the lesser duty rule, the revised, country-wide
duty applicable to imports in the Community of sulpha-
nilic acid originating in the People's Republic of China
should correspond to the level of the revised dumping
margin, i.e. 33,7 %,

HAS ADOPTED THIS REGULATION:

Article 1

Article 1(2) of Regulation (EC) No 1339/2002 shall be replaced
by the following:

The rate of definitive anti-dumping duty applicable,
‘2.
before duty, to the net free-at-Community frontier price of
the products described in paragraph 1, shall be as follows:

Country

The People's Republic of China

India

Definitive duty
(%)

33,7

18,3’

(22) Article 12(5) of the basic Regulation provides for the
possibility of taking alleged changes in normal value into
account, where complete information is made available
to the Commission within given time limits. As indicated

Article 2

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

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

Done at Brussels, 10 February 2004.

For the Council

The President

C. McCREEVY