Proposal for a Council Regulation amending Council Regulation (EC) No 1784/2000 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain malleable cast iron tube or pipe fittings originating in Brazil, the Czech Republic, Japan, the People 's Republic of China, the Republic of Korea and Thailand
Date: 2004-02-19
Institutions: European Commission
Subjects: anti-dumping duty, cast-iron, import, originating product, piping, third country

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 19.02.2004 
COM(2004)119 final 

2004/0037(ACC) 

Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 1784/2000 imposing a definitive anti-dumping 
duty and collecting definitively the provisional duty imposed on imports of certain 
malleable cast iron tube or pipe fittings originating in Brazil, the Czech Republic, Japan, 
the People 's Republic of China, the Republic of Korea and Thailand  

. 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM  

In  August  2000  the  Council  imposed  by  Regulation  (EC)  No  1784/2000  definitive  anti-
dumping duties on imports of certain malleable cast iron tube or pipe fittings originating, inter 
alia in Brazil. 

On 18 August 2003 the WTO Dispute Settlement Body (‘DSB’) adopted an Appellate Body 
report and a Panel report on the case "European Communities ("EC") - anti-dumping duties 
on  malleable  cast  iron  tube  or  pipe  fittings  from  Brazil"  (hereinafter  "the  reports").  The 
reports  requested  the  European  Communities  to  bring  the  definitive  Regulation  into 
conformity  with  the  WTO  Agreement  on  Implementation  of  Article  VI  of  the  General 
Agreement on Tariffs and Trade with regard to certain aspects of the dumping (zeroing) and 
injury  findings  (failure  to  make  public  in  a  Regulation  the  analysis  as  regards  six  injury 
factors considered to be insignificant in the original investigation and failure to disclose to the 
parties this analysis). 

The attached proposal for a Council Regulation is presented with a view to implementing the 
recommendations  contained  in  the  reports  and  reflects  the  revised  findings  following  these 
recommendations,  on  the  basis  of  the  information  collected  at  the  time  of  the  original 
investigation, i.e. collected in 1999/2000. 

The  reassessment  of  the  findings  in  the  light  of  the  recommendations  of  the  reports 
demonstrated  that  imports  from  Brazil  were  still  injuriously  dumped.  A  revised  dumping 
margin for Brazil was calculated leading to a reduced margin from 34,8% to 32%. 

It is, therefore, proposed that the Council adopt the present proposal for a Council Regulation 
amending Council Regulation (EC) No 1784/2000.  

2 

 
 
  
 
2004/0037 (ACC) 

Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 1784/2000 imposing a definitive anti-dumping 
duty and collecting definitively the provisional duty imposed on imports of certain 
malleable cast iron tube or pipe fittings originating in Brazil, the Czech Republic, Japan, 
the People 's Republic of China, the Republic of Korea and Thailand  

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular Article 
133 thereof, 

Having regard to Council Regulation (EC) No 1515/20011, on the measures that may be taken 
by  the  Community  following  a  report  adopted  by  the  WTO  Dispute  Settlement  Body 
concerning anti-dumping and anti-subsidy matters; 

Having regard to Council Regulation (EC) No 384/96 on protection against dumped imports 
from countries not members of the European Community (‘the Basic Regulation’)2; 

Having  regard  to  the  proposal  made  by  the  Commission  after  consultation  of  the  Advisory 
Committee, 

Whereas: 

A. 

EXISTING MEASURES 

(1) 

The  Council,  by  Regulation  (EC)  No  1784/2000  of  11  August  20003  imposed  a 
definitive  anti-dumping  duty  on  imports  of  certain  malleable  cast  iron  tube  or  pipe 
fittings  originating  in  Brazil,  the  Czech  Republic,  Japan,  the  People  's  Republic  of 
China,  the  Republic  of  Korea  and  Thailand  (the  "Definitive  Regulation").  The 
Definitive  Regulation  was  preceded  by  Commission  Regulation  (EC)  No  449/20004 
imposing  a  provisional  anti-dumping  duty  on  imports  of  certain  malleable  cast  iron 
tube  or  pipe  fittings  originating  in  Brazil,  the  Czech  Republic,  Japan,  the  People’s 
Republic of China, the Republic of Korea and Thailand (the "Provisional Regulation").  

1 
2 

3 
4 

OJ L 201, 26.7.2001, p. 10. 
OJ  L  56,  6.3.1996,  p.  1,  as  last  amended  by  Council  Regulation  (EC)  No  1972/2002,  OJ  L  305, 
7.11.2002, p. 1. 
OJ L 208, 18.8.2000, p. 8. 
OJ L 55, 29.2.2000, p. 3. 

3 

 
 
  
 
                                                 
B. 

REPORTS ADOPTED BY THE DISPUTE SETTLEMENT BODY OF THE 

WTO  

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

On  18  August  2003,  the  Dispute  Settlement  Body  ("DSB")  of  the  World  Trade 
Organisation ("WTO") adopted an Appellate Body report ("ABR") and a Panel report 
("PR")  as  modified  by  the  ABR  on  the  case  'European  Communities  ("EC")  -  anti-
dumping duties on malleable cast iron tube or pipe fittings from Brazil'5 (the ABR and 
PR are hereinafter referred to as the "Reports").  

The  Reports  requested  the  European  Communities  to  bring  the  measure  into 
conformity with the WTO Agreement on Implementation of Article VI of the General 
Agreement on Tariffs and Trade 1994 ("ADA") as regards the following aspects:  

(i) Article 2.4.2 of the ADA: in "zeroing" negative dumping margins in its dumping 
determination. 

(ii) Articles 12. 2 and 12.2.2 of the ADA: failure to make directly discernible, from 
the  published  provisional  or  definitive  determinations, 
the  European 
Communities addressed, or explained the lack of significance, of the following injury 
factors listed in Article 3.4 of the ADA: wages, productivity, return on investments, 
cash flow, ability to raise capital and magnitude of the actual margin of dumping.  

that 

(iii) Article 6.2 and 6.4 of the ADA: failure to disclose to the interested parties during 
the  anti-dumping  investigation  the  information  on  injury  factors  listed  above  under 
point (ii).  

The Commission reassessed the findings by taking into account the recommendations 
set out in the Reports on the basis of information which was collected in the original 
investigation which took place in 1999/2000. Unless otherwise stated, the assessment 
made  in  the  Definitive  Regulation  remains  valid.  The  reassessment  shows  that 
injurious dumping still exists although at a slightly lower level.  

C. 

PROCEDURE 

Following  the  adoption  of  the  ABR  by  the  DSB  the  interested  parties  in  this 
proceeding, i.e. the Brazilian exporting producer and the Community industry ("CI"), 
received disclosure of the facts and considerations on the dumping calculation and the 
injury  factors  mentioned  under  recital  (3)  (ii).  All  parties  were  informed  of  the 
essential facts and considerations on the basis of which it was intended to amend and 
confirm  the  Definitive  Regulation.  They  were  also  granted  a  period  within  which  to 
make representations subsequent to this disclosure. All interested parties were granted 
an  opportunity  to  be  heard  by  the  Commission.  However,  no  such  hearing  was 
requested by any interested party. 

All  comments  submitted  by  the  interested  parties  were  considered  and,  where 
appropriate, reflected in the amended findings. 

It is recalled that the investigation of dumping covered the period from 1 April 1998 to 
31  March  1999  (investigation  period  "IP").  The  investigation  relating  to  the  trends 

5 

Document WT/DS219/10 of 27 August 2003. 

4 

 
 
  
 
                                                 
relevant  in  the  context  of  the  injury  assessment  covered  the  period  from  1  January 
1995 up to the end of the IP (i.e. 31 March 1999). This period will be referred to as 
"the period considered". 

D. 

AMENDED AND CONFIRMED FINDINGS  

1. 

Product under consideration and like product 

(8) 

The product concerned is threaded malleable cast iron tube or pipe fittings which are 
joined  by  a  screwing  joining  system,  falling  within  CN-code  ex  7307  19  10  (Taric 
code 7307 19 10 11 and 7307 19 10 19). The Reports do not affect the findings set out 
in  the  Definitive  Regulation  as  regards  the  product  under  consideration  and  like 
product. 

2.  Dumping 

2.1.  Introduction 

(9) 

The following will detail the reassessed findings based on the recommendations in the 
Reports concerning the practice of “zeroing” when establishing the weighted average 
dumping margin.  

(10)  All other calculation methods applied are those used in the original investigation. For 
further details, reference is made to the Provisional and Definitive Regulation.  

2.2.  Brazil 

(11) 

It  is  recalled  that  during  the  original  investigation  Indústria  de  Fundição  Tupy  Ltda 
was the only known exporting producer of the product concerned in Brazil.  

(12)  As to the findings concerning normal value, the export price and adjustments made in 
accordance  with  Article  2(10)  of  the  Basic  Regulation,  no  changes  have  been 
necessary. For further details, reference is made to recitals (20) to (31) and (35) to (49) 
of the above mentioned Provisional and to recitals (24) to (27), (30), (31), (38) to (43), 
(46) to (48) and (51) to (54) of the Definitive Regulation. 

(13)  As in the Provisional and Definitive Regulations, the weighted average normal values 
of  each  type  of  the  product  concerned  exported  to  the  European  Community  were 
compared  to  the  weighted  average  export  price  of  each  corresponding  type  of  the 
product  concerned.  In  compliance  with  the  recommendations  of  the  Report,  no 
“zeroing” was applied in calculating the overall dumping margin.  

(14)  The revised dumping margin expressed as a percentage of the CIF import price at the 

Community frontier is: 

Indústria de Fundição Tupy Ltda 

32% 

(15)  The  level  of  co-operation  was  high.  Consequently,  the  revised  residual  dumping 
margin is set at the same level as for Indústria de Fundição Tupy Ltda, i.e. 32%.  

5 

 
 
  
 
2.3.  Disclosure 

(16)  The above revised findings on dumping were disclosed to all interested parties subject 
to the present investigation which were granted the possibility to present their views 
and comments and to be heard by the Commission. 

(17)  None of the parties concerned objected to the Commission findings on dumping.  

3.  Definition of the Community Industry 

(18)  The findings concerning the definition of the CI, summarised in recitals (65) to (68) of 
the Definitive Regulation remain unaffected by the recommendations and conclusions 
set out in the Reports.  

4. 

Injury 

4.1.  Imports from the countries concerned and price undercutting 

(19)  The  findings  set  out  in  recitals  (69)  to  (94)  of  the  Definitive  Regulation  remain 

unaffected by the recommendations in the Reports. 

4.2.  Situation of the Community industry 

4.2.1. Preliminary remark 

(20)  This part sets out the reassessed findings based on the recommendations in the Reports 
concerning  the  injury  analysis.  The  Reports  conclude  that  the  Community  acted 
inconsistently  with  Articles  12.2  and  12.2.2  of  the  ADA  by  failing  to  make  directly 
discernible  from  the  published  provisional  or  definitive  determinations  that  the 
European Community addressed or explained the lack of significance of the following 
injury  factors  listed  in  Article  3.4  of  the  ADA:  wages,  productivity,  return  on 
investments, cash flow, ability to raise capital and magnitude of the actual margin of 
dumping. It is recalled that these injury factors have been examined during the original 
investigation. However, as they were at the time considered not to be significant, and 
were  therefore  not  included  in  the  analysis  made  available  to  the  public,  they  were 
only laid down in an internal note to the file. 

4.2.2. Situation  of  the  Community  industry  as  set  out  in  the  Provisional 

and Definitive Regulations 

(21) 

It  is  recalled  that  in  recitals  (160)  and  (161)  of  the  Provisional  Regulation  it  was 
concluded that the CI suffered material injury within the meaning of Article 4(1) of the 
Basic Regulation. It was found that the situation of the CI deteriorated during the IP, 
in particular because of a decline in production, production capacity, sales and market 
share.  Moreover,  the  CI  suffered  a  significant  loss  of  employment  and  a  decline  in 
investments, as well as an increase of stocks. As to the capacity utilisation, its increase 
is explained by the reduced production capacity.  

4.2.3. Re-examination  of 

the 

injury 

findings 

in 

the 

light  of 

the 

recommendations and ruling of the DSB 

(22) 

In addition to the injury factors as set out in recitals (150) to (159) of the Provisional 
Regulation,  i.e.  production,  production  capacity,  capacity  utilisation,  sales  volume, 

6 

 
 
  
 
market  share,  sales  prices,  stocks,  profitability,  employment  and  investments,  the 
following injury factors were analysed, and, following the Reports recommendations, 
are now set out in detail below:  

4.2.3.1. Wages 

(23)  Wages,  expressed  as  the  total  annual  labour  cost  for  the  production  of  the  product 

concerned developed as follows: 

Table 1 - Wages  

1995 

1996 

1997 

1998 

IP 

44.730

48.479

48.375

46.995 

47.132

Total  annual 
labour  costs 
(€000) 

Index 

100 

108 

108 

105 

105 

Source: Annual accounts of the CI 

(24)  Wages  increased  by  around  5%  between  1995  and  the  IP.  When  taking  1996  as  a 

starting point, the wages decreased by around 3%.  

(25)  This  factor  follows  roughly  the  general  development  of  wages  in  the  sector  and  the 
movements in employment observed for the CI. Between 1996 and the IP this factor 
declined by 3%, which was in line with the developments of employment mentioned at 
recital  (158)  of  the  Provisional  Regulation  (decrease  of  6%  between  1995  and  IP, 
slight decline of around 1% between 1996 and IP). 

4.2.3.2. 

Productivity 

(26)  Productivity, measured as the output of persons employed, developed as follows: 

Table 2 - Productivity  

1995 

1996 

1997 

1998 

IP 

21,58 

19,47 

19,76 

20,84 

20,82 

Production in 
tonnes per 
employee 

Index 

100 

90 

92 

97 

96 

Source: Verified questionnaire replies of the CI 

(27)  Productivity  fluctuated  over  the  period  examined  but  an  overall  fall  of  4%  was 
experienced  over  the  period  1995  to  the  IP.  Productivity  increased  by  around  7% 
between  1996  and  the  IP.  This  factor  is  in  line  with  employment  and  production 
figures  which  were  already  mentioned  at  recitals  (150)  and  (158)  of  the  Provisional 
Regulation. 

7 

 
 
  
 
 
 
 
4.2.3.3.  Return on investments ("ROI") 

(28)  ROI,  which  is  calculated  by  dividing  the  CI  financial  result  (profit  or  loss)  by  the 

amount of investments, developed as follows: 

Table 3 - ROI 

ROI 

1995 

1996 

1997 

1998 

IP 

-6,55% 

3,72% 

-2,78% 

-0,70% 

-2,72% 

Source: Verified questionnaire replies of the CI and their annual accounts 

(29)  ROI  developed  from  -6,55%  to  -2,72%  between  1995  and  the  IP.  However  it  is 
recalled, that, as explained at recital (157) of the Provisional Regulation, the financial 
result  of  the  CI  was  negatively  affected,  in  an  exceptional  way,  by  costs  associated 
with  a  plant  closure  in  1995.  Moreover,  that  year  was  also  marked  by  restructuring 
efforts of two producers included in the definition of the CI, in particular with the aim 
of  production  rationalisation  and  of 
the 
Community's  environmental  legislation.  This  also  had  a  negative  impact  on  the 
financial  result  of  the  CI.  On  this  basis,  it  is  considered  that  the  year  1995  was 
unrepresentative of the situation of the CI and cannot be considered as a meaningful 
basis for analysing trends on ROI. 

investments  required 

implement 

to 

(30)  This remark also applies to other injury factors which include the financial results of 

the CI, e.g. cash flow as explained at recital (33) below. 

(31)  When  comparing  the  year  1996  to  the  IP,  ROI  decreased  by  6,4  percentage  points, 
from 3,72% to -2,72%. The negative development of ROI was broadly in line with the 
negative  development  of  profitability,  which  decreased  by  2,3  percentage  points 
during the same period.  

4.2.3.4.  Cash flow 

(32)  Cash flow developed as follows: 

Table 4 - Cash flow 

Cash flow 
(000€) 

Index 

Index 

1995 

1996 

1997 

1998 

IP 

10.522 

12.799

19.339

12.236 

12.205

100 

122 

100 

184 

151 

116 

96 

116 

96 

Source: Annual Accounts of the CI 

(33) 

It should be noted that the turnover of the product concerned has always represented 
over 50% of the total turnover of all the activities of the CI, as reported in the audited 
accounts. The above table shows the cash flow for the product concerned calculated on 
the basis of a turnover allocation for the years from 1995 to 1998. Given that audited 

8 

 
 
  
 
 
 
 
accounts  were  not  available  for  the  IP,  cash  flow  was  calculated  on  the  basis  of  the 
total  turnover  and  the  turnover  for  the  product  concerned  verified  during  the 
investigation. As explained in recital (29) above, the financial result achieved by the 
CI in 1995 was negatively affected in an exceptional way by costs associated with a 
plant  closure  and  restructuring  and  therefore  that  year  cannot  be  considered  as  a 
meaningful representative basis for analysing trends on cash flow. Between 1995 and 
1998  cash  flow  increased  by  around  16%  and  remained  stable  during  the  IP.  When 
taking 1996 as a starting point cash flow decreased by around 4% up to the end of the 
IP. It was found, that the negative development of cash flow was broadly in line with 
the negative development of profitability. 

4.2.3.5.  Ability to raise capital 

(34)  During the original investigation there was no claim from the CI (nor any indication), 
that it encountered problems to raise the capital needed for its activity. However, it is 
clear  that  the  significant  deterioration  in  the  financial  situation  of  the  CI  (see  in 
particular profitability, cash flow and ROI), may negatively affect the ability to raise 
capital in the near future.  

4.2.3.6.  Magnitude of the actual margin of dumping  

(35)  As concerns the impact on the CI of the magnitude of the actual margin of dumping, 
given  the  volume  and  the  prices  of  the  imports  from  the  countries  concerned,  this 
impact  cannot  be  considered  negligible.  This  finding  remains  valid  notwithstanding 
the  reduction  of  the  dumping  margin  for  one  of  the  exporters  as  explained  in  recital 
(14) above. 

(36)  The Brazilian exporting producer objected to the Commission's finding that the impact 
of  the  magnitude  of  the  actual  dumping  margin  on  the  Community  industry  was  not 
negligible. According to the Brazilian producer, the difference of almost 50% between 
the  dumping  margin  and  the  underselling  margin  was  evidence  of  a  very  large 
difference in the cost of production of the Community producers on the one hand and 
the  Brazilian  exporter  on  the  other  hand.  Therefore,  it  was  claimed  that  even  if 
dumping  were  totally  eliminated  the  imports  from  Brazil  would  still  substantially 
undercut the non-injurious price of the Community industry. The Brazilian exporting 
producer  argued  finally  that  in  the  context  of  a  highly  sensitive  price  market,  the 
impact of the actual margin of dumping would thus clearly be negligible, contrary to 
the Commission's findings. 

(37) 

It has to be recalled that according to Article 3(5) of the Basic Regulation, the factor 
"magnitude  of  the  actual  margin  of  dumping"  is  examined  in  the  framework  of  the 
analysis  of  the  state  of  the  domestic  industry.  In  this  context,  it  is  the  Community's 
consistent  practice  to  set  the  actual  dumping  margin  in  relation  to  the  state  of  the 
domestic industry taking into account the volume and the prices of the imports from 
the country concerned. An analysis as the one proposed by the Brazilian exporter, i.e. 
a  comparison  of  the  dumping  margin  with  the  underselling  margin  leading  to 
conclusions  with  respect  to  a  difference  in  cost  of  production  between  exporting 
producers  and  the  Community  industry  would  by  far  exceed  the  framework  set  by 
Article 3(5) of the Basic Regulation and would bring in an element of causal link into 
such an analysis. This is clearly not required by Article 3(5) of the Basic Regulation 
and would wipe out the distinction between the analysis of the state of the Community 
industry on the one hand and the causal link between dumping and injury on the other 

9 

 
 
  
 
hand,  which  is  in  any  event  considered  separately.  In  this  context  it  should  be  also 
noted that the underselling margin is calculated for the purpose of applying the "lesser 
duty  rule"  according  to  which  the  anti-dumping  duty  is  set  at  the  level  of  either  the 
dumping  or  the  injury  margin  whichever  is  lower.  It  has  to  be  underlined  that  the 
application of the “lesser duty rule” and thus the calculation of the underselling margin 
is  not  a  WTO  obligation.  Even  assuming  -  for  the  sake  of  argument  and  without 
recognising  the  substance  of  the  Brazilian  exporter's  claim  -  that  a  comparison 
between  the  cost  of  production  of  the  exporting  producer  and  Community  producers 
were warranted in this context, such an analysis could only be based on a comparison 
of the dumping margin with the undercutting (not the underselling) margin. The levels 
of  both  margins  are  however  comparable.  Therefore,  without  dumping,  the  price 
difference  between  imports  from  Brazil  and  the  sales  of  the  Community  industry 
would be minimal. 

(38)  Therefore, the argument had to be rejected. 

4.2.4. Comments of the exporting producer on certain injury factors  

(39)  The Brazilian exporting producer claimed that for certain injury factors (profitability, 
ROI, cash flow, ability to raise capital) the year 1995 had not been considered for the 
trend’s  analysis.  It  was  claimed  that  1995  was  disregarded  for  those  factors  which 
otherwise  would  have  demonstrated  a  positive  development.  According  to  the 
Brazilian  exporting  producer  this  constitutes  an  inconsistent  and  discriminatory 
approach and does not fulfil the requirement of an objective and unbiased examination 
contrary to Article 3.1 and 17.6 (i) of the ADA. 

(40)  Firstly it should be noted, that with regard to profitability, no new determination has 
been made for the purpose of implementing the Reports. It has to be recalled that in 
the  framework  of  the  dispute  settlement  proceedings,  Brazil  put  forward  exactly  the 
same arguments as the ones referred to above concerning profitability. The arguments 
were turned down by the Panel and no recommendation at all was made with regard to 
this factor. The factor "profitability" has therefore not been reassessed.  

(41)  Secondly, it should be noted that - in line with the original investigation - the trends 
with regard to the injury indicators which had been analysed but which had not been 
made public during the original investigation, have been analysed as from 1995. This 
also relates to the factor "ability to raise capital". In particular for two injury factors 
(ROI and cash flow) it has been considered that the year 1995 was an exceptional year 
and could thus not be considered meaningful for the reasons set out in detail at recitals 
(29) and (33) above. In fact it is recognised by several Panel and AB reports that the 
assessment of the injury factors is not limited to a rigid comparison of the beginning 
and  the  end  of  the  years  of  the  period  considered.  It  should  also  be  noted  that  the 
Brazilian exporting producer has not contested the substance of the reasoning set out 
in recital (29). 

(42)  As  to  the  alleged  inconsistency  of  the  approach,  the  following  has  to  be  noted.  It  is 
precisely for reasons of consistency with the analysis of the original investigation, that 
it is necessary – for the purpose of implementing the Reports - to analyse cash flow 
and  ROI,  which  are  directly  derived  from  profitability,  on  the  same  basis  as 
profitability in the original investigation for which 1995 could reasonably be excluded 
from  the  trend  analysis  according  to  the  conclusions  of  the  Reports.  The  approach 
chosen by the EC authorities was therefore consistent and objective. 

10 

 
 
  
 
(43)  Therefore, the arguments had to be rejected. 

4.2.5. Conclusion on injury 

(44)  Based  on  the  above  analysis,  it  is  concluded  that  the  findings  in  respect  of  wages, 
productivity,  return  on  investments  and  cash  flow  were  in  line  with  certain  other 
factors  analysed  and  made  public  during  the  original  investigation.  As  regards  the 
ability  to  raise  capital,  there  was  no  claim  that  the  CI  encountered  any  difficulty  to 
raise  the  capital  needed  for  its  activity.  This  factor,  however,  should  be  seen  in  the 
light of the continuous degradation of the financial situation of the CI. As regards the 
margin  of  dumping,  it  is  concluded  that,  given  the  volume  and  the  prices  of  the 
imports from the countries concerned, its impact cannot be considered negligible. 

(45)  Based  on  the  above,  it  is  confirmed  that  the  Community  industry  suffered  material 

injury during the period considered. 

5.  Causation 

(46)  The  contents  and  conclusions  reached  in  recitals  (101)  to  (114)  of  the  Definitive 
Regulation remain unaffected by the Reports and the re-examined injury analysis. 

(47)  The Brazilian exporter contended that the injury of the Community industry was not 
caused by dumped imports, but by the lack of productivity of the Community industry 
as  evidenced  by  the  almost  50%  difference  between  the  dumping  margin  and  the 
underselling  margin  and  by  the  fact  that  the  Community  industry  had  undergone 
restructuring efforts in 1995 with the aim of rationalising production. The similarity of 
this argument with the one made with regard to the magnitude of the dumping margin 
referred to above at recital (36) is evident. The Brazilian exporter claimed in addition 
that  while  the  Commission  had  analysed  the  difference  in  cost  of  production,  it  had 
however  limited  this  analysis  to  differences  regarding  energy  consumption  linked  to 
the difference of quality and production processes between black heart and white heart 
fittings. 

(48) 

It has to be recalled that in the framework of the dispute settlement proceedings, Brazil 
put forward exactly the same arguments as the ones referred to above. The arguments 
were turned down by the Panel and the Appellate Body and no recommendation at all 
was made with regard to the causal link analysis.  

(49)  Therefore, the arguments mentioned in recital (47) had to be rejected. 

6.  Community Interest 

(50)  The  contents  and  conclusions  reached  in  recitals  (178)  to  (186)  of  the  Provisional 
Regulation and (115) to (117) of the Definitive Regulation remain unaffected by the 
Reports and the re-examined injury analysis. 

7.  Amended measures 

(51)  As  shown  above,  a  full  examination  of  the  facts  established  and  the  conclusions 
reached  in  the  original  investigation,  taking  account  of  the  recommendations  and 
rulings  set  out  in  the  Reports,  demonstrates  that  imports  from  Brazil  were  still 
injuriously dumped, although at a slightly lower level, 

11 

 
 
  
 
HAS ADOPTED THIS REGULATION: 

Article 1 

Article  1  (2)  of  Council  Regulation  (EC)  1784/2000  is  hereby  amended  as  follows  for 
products originating in Brazil:  

Country 

Definitive duty (%) 

TARIC additional 
code 

Brazil 

32,0 

- 

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

Article 2 

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

Done at Brussels, 

For the Council 
The President 

12