Council Regulation (EC) No 397/2004 of 2 March 2004 imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Pakistan
Date: 2004-03-02
Institutions: Council of the European Union
Subjects: Pakistan, anti-dumping duty, cotton, import, originating product, textile product

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 397/2004

of 2 March 2004

imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in
Pakistan

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) (‘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)

(5)

A. PROCEDURE

1. Initiation

(1)

(2)

On 18 December 2002 the Commission announced by
a notice (‘notice of initiation’) published in the Official
Journal of the European Communities the initiation of an
anti-dumping proceeding with regard to imports into
the Community of bed linen of cotton fibres, pure or
mixed with man-made fibres or flax (flax not being the
dominant fibre), bleached, dyed or printed (‘cotton-type
bed linen’ or ‘bed linen’) originating in Pakistan (2).

(‘Eurocoton’ or

The proceeding was initiated following a complaint
lodged in November 2002 by the Committee of the
Cotton and Allied Textile Industries of the European
Communities
‘the complainant’) on
behalf of producers representing a major proportion of
the total Community production of cotton-type bed
linen. The complaint contained prima facie evidence of
injury
dumping of the said product and of material
resulting therefrom, which was considered sufficient to
justify the initiation of an anti-dumping proceeding.

(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 C 316, 18.12.2002, p. 6.

The Commission officially advised the exporting produ-
cers and importers known to be concerned as well as
their associations, the representatives of the exporting
country concerned, the complainant Community produ-
cers, known associations of producers, as well as known
users, of
Interested
parties were given the opportunity to make their views
known in writing and to request a hearing within the
time limits set in the notice of initiation.

the initiation of

the proceeding.

A number of exporting producers
in the country
concerned, as well as Community producers, Com-
munity users and importers made their views known in
writing. All parties who so requested within the above
time limits and showed that
there were particular
reasons why they should be heard were granted the
opportunity to be heard.

It was submitted that more than 45 days have lapsed
between the lodging date and the initiation date.
Pursuant to the Article 5(1) of the basic Regulation, a
complaint shall be deemed to have been lodged on the
first working day following its delivery to the Commis-
sion by registered mail or the issuing of an acknowledge-
ment of receipt by the Commission. The issuing of the
acknowledgement of receipt took place on Thursday, 31
October 2002. Considering that Friday, 1 November was
a public holiday, the first working day following the
issuing of
receipt by the
Commission was Monday, 4 November 2002. Therefore,
4 November 2002 must be considered as the lodging
date of the complaint.

the acknowledgement of

(6)

The notice of
initiation has been published on 18
December 2002, which is clearly within 45 days of the
lodging of the complaint. Consequently, the notice of
initiation was published within the deadline specified in
Article 5(9) of the basic Regulation.

2. Sampling

E x p or te r s / p r odu c e r s

(7)

In view of the large number of exporting producers
involved in this proceeding,
the Commission decided
that it could be necessary to apply sampling techniques
in accordance with Article 17 of the basic Regulation.

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(8)

(9)

In order to allow for the selection of a sample, exporting
producers were requested to make themselves known
within 15 days of the initiation of the proceeding and to
provide basic information for
the
sample.

the selection of

(13)

A total of 178 companies provided the requested infor-
mation, but only 156 companies reported production
and sales of the product concerned to the Community
during the period between 1 October 2001 and 30
September 2002 (‘investigation period’ or
‘IP’) and
expressed a wish to participate in the sample. These
were initially considered as cooperating companies.

types),

Requests for individual examination have been submitted
by three companies not selected in the sample. In view
of the size of the sample and the complexity of the case
(such as
the
the large number of product
Commission informed the companies concerned that a
final decision on individual examination would only be
taken after
the companies
selected in the sample had taken place and due regard
being given to the time available. For
the reasons
explained in recital 35 below, the necessary conditions
to carry-out on-spot investigations in Pakistan were not
met and, therefore,
it was not possible to accept any
request for individual examination.

the verification visits of

(10) As none of

these companies reported representative
domestic sales of the like product, which could be used
to determine normal value in accordance with Article
2(1), (3) or (6) of the basic Regulation, the Commission
invited the Pakistani authorities to contact any known
producers of bed linen with domestic sales to grant
them an additional opportunity to submit information
on those sales within a new time limit. However, no
replies showing companies with representative domestic
sales were received.

(11) According to Article 17(1) of the basic Regulation, the
Commission has selected a sample based on the largest
representative volume of exports, which could reason-
ably be investigated within the time available, in consul-
tation with the exporting producers, the national autho-
rities and known associations of producers/exporters.
The Commission initially proposed to select a sample of
five companies representing 29,5 % of Pakistan's exports
to the Community and informed the Pakistani authori-
ties and the associations of producers/exporters accord-
ingly. The national authorities of Pakistan,
the legal
representative of some of the companies and one asso-
ciation of exporters proposed to replace certain of the
companies proposed by others, arguing that this would
ensure a larger coverage, a better geographical spread
and include companies selected for the sample in a
previous anti-dumping proceeding. The concerns of
these parties were met to the extent that they were in
line with the criteria of Article 17(1) of the basic Regu-
lation, i.e. the provision that a sample should cover the
largest representative volume of production, sales or
exports which can reasonably be investigated within the
time available.
the sample was
sixth biggest Pakistani
extended by including the
exporter.

In the light of

this,

Communi t y pr odu ce r s

(14)

the basic Regulation,

In view of the large number of Community producers
supporting the complaint, and in conformity with
the Commission
Article 17 of
announced in the notice of initiation of the proceeding
its intention to select a sample of Community producers
based on the largest representative volume of production
and sales of the Community industry which could be
reasonably investigated within the time available. For
these purposes, the Commission requested companies to
provide information concerning production and sales for
the product concerned.

(15) On the basis of the replies received, the Commission
selected five companies in three Member States. In the
selection, the production and sales volume were consid-
ered aiming at covering the most representative market
size.

(16)

The Commission sent questionnaires to the sampled
companies. Two out of these five companies were not
able to submit a complete list of all transactions to unre-
lated customers during the investigation period and were
therefore considered to be only partially cooperating.

3. Investigation

(17) Questionnaire

replies were

received from the

five
sampled complainant Community producers, from the
six sampled exporting producers
three
exporting producers requesting individual examination
and two unrelated importers in the Community.

in Pakistan,

(12)

The six selected companies, which represented more
than 32 % of Pakistan's volume of exports of bed linen
to the Community during the IP, were requested to
submit a reply to the anti-dumping questionnaire as
determined by the notice of initiation.

(18)

The Commission sought and verified all the information
it deemed necessary for the purpose of a determination
of dumping,
injury, causality and Community interest.
Verification visits were carried out at the premises of the
following companies:

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Community producers:

— Bierbaum Unternehmensgruppe GmbH & Co.KG,

Germany,

— Descamps S.A., France,

— Gabel Industria Tessile S.p.A., Italy,

— Vanderschooten S.A., France,

— Vincenzo Zucchi S.p.A., Italy;

Unrelated importers in the Community:

— Blanche Porte S.A., France,

— Richard Haworth, United Kingdom;

Exporters/producers in Pakistan:

— Gul Ahmed Textile Mills Ltd, Karachi,

— Al-Abid Silk Mills, Karachi (partial verification).

(19)

The investigation period for dumping and injury covered
the period from 1 October 2001 to 30 September 2002.
The examination of trends relevant for the assessment of
injury covered the period from 1999 to the end of the
IP (‘period considered’).

(20) Given the need to further examine certain aspects of
dumping, injury, causality and Community interest, no
provisional anti-dumping measures were imposed.

(24)

(25)

It was claimed that bleached bed linen sold to institu-
tions should be excluded from the scope of the investiga-
tion on the grounds that it should not be treated as a
product concerned. It was submitted that bleached bed
linen (i) is technically different from printed and/or dyed
bed linen; (ii) is not substitutable by Community produc-
tion which is based on printed and/or dyed bed linen;
and (iii) has different end users (hospitals and hotels).

The investigation revealed that although there are
different processes for finishing the fabrics (bleaching,
dyeing, printing), products of all finishes are substitu-
table and compete on the Community market. Further-
more, it was found that there is production of bleached
bed linen in the Community and that this type of the
product concerned is not used exclusively by any par-
ticular category of users.

(26) Notwithstanding the different possible product types due
to different weaving construction, finish of the fabric,
presentation and size, packing, etc., all of them consti-
tute one product for the purpose of this proceeding
because they have the same physical characteristics and
essentially the same use.

B. PRODUCT CONCERNED AND LIKE PRODUCT

2. Like product

1. Product concerned

(21)

The product concerned is bed linen of cotton fibres,
pure or mixed with man-made fibres or flax (flax not
being the dominant fibre), bleached, dyed or printed
originating in Pakistan, currently classifiable within CN
codes ex 6302 21 00 (TARIC codes 6302 21 00*81,
code
ex 6302 22 90
6302 21 00*89),
code
ex 6302 31 10
6302 22 90*19),
6302 31 10*90),
code
ex 6302 31 90
6302 31 90*90)
and ex 6302 32 90 (TARIC code
6302 32 90*19). Bed linen includes bed sheets (fitted or
flat), duvet covers and pillow covers, packaged for sale
either separately or in sets.

(TARIC
(TARIC
(TARIC

(27)

It was examined whether cotton-type bed linen produced
by the Community industry and sold on the Community
market, as well as cotton-type bed linen produced in
Pakistan and sold on the Community market and on the
domestic market were alike to the product concerned.

(28)

The investigation revealed that although there are
different processes in finishing the fabrics (bleaching,
dying, printing), products of all finishes share the same
physical characteristics and essentially the same use.

(22)

The fabrics made of cotton-type fibres used to produce
bed linen are identified by two pairs of numbers. The
first one indicates
(or weight) of yarns
employed respectively for the warp and for the weft.
The second one indicates the number of threads per
centimetre or per inch respectively of the warp and of
the weft.

the count

(29)

(23)

The fabrics are bleached, dyed or printed. Then they are
cut and stitched into different size flat sheets,
fitted
sheets, duvet covers and pillow cases. The final product
is packed for sale either separately or in sets.

It was therefore concluded that although there were in
types
instances differences between product
some
produced in the Community and those sold for export
to the Community, there were no differences in the
basic characteristics and uses of the different product
types and qualities of bed linen of cotton-type fibres.
Therefore, the product manufactured and sold in the
domestic market of Pakistan and the one exported to the
Community from Pakistan as well as the product manu-
factured and sold in the Community by the Community
producers are considered as like products within the
meaning of Article 1(4) of the basic Regulation.

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C. DUMPING

numerous players and the open market, profit margins
reported by the Pakistani exporting producers could not
be regarded as credible.

Pre-verification analysis of the information submitted by the
sampled exporters

(30) All six companies selected to be part of the sample have
replied to the questionnaire. The pre-verification analysis
of the replies submitted by these exporting producers
showed that all of
the selected exporting producers
reported underestimated costs which resulted in unrea-
listic and abnormally high profits for sales of
the
product concerned to the Community. By comparing
the export prices with the costs of production reported
by each company, profits on sales of
the product
concerned to the Community ranged from more than
20 % to almost 40 % per company, expressed as a
percentage of turnover, on average more than 30 %.
These margins were furthermore in sharp contrast with
the average negative profit margins (-9,4 % on turnover)
reported by the same companies for sales of the product
concerned to other countries, and they were also in
contrast to the 1,6 % profit margin on turnover reported
on average
textile products
exports of other
including very similar products (processed fabric, table
linen, curtains) with similar cost structures, sold also to
the same type of clients, or even to the same clients. It
should also be noted that the audited accounts, for the
IP or for a period covering most of the IP, of the compa-
nies concerned which are producers and sellers of
almost exclusively textile products, showed on average
an overall profit margin on turnover of approximately
5 %.

for

(31)

(32)

Besides their conspicuous commercial unreasonableness,
the product
the reported profit rates for exports of
concerned to the Community were furthermore strongly
contradicted by all other information available on profit
rates for the product concerned exported from Pakistan
to the Community, including information made available
by the sampled exporting producers themselves.

injury submission,

In their
the exporting producers
stated that the low profitability of bed linen is inherent
to this industry, which is characterised by large volumes
of production and very high competition. It was also
specified that a profit margin of 2 % to 3 % should be
considered as reasonable. Another exporting producer
not selected in the sample submitted that a normal
profit margin would be 2 % to 5 %. After disclosure, all
exporting producers contested that such statements were
made with regard to the profitability of their export
sales of bed linen to the Community. They stated that
these statements related to profit margins considered
acceptable for sales by the Community industry. In this
respect, it is noted that these statements (i) were made
during a hearing; (ii) referred to the bed linen industry in
general; and (iii) were furthermore confirmed by answers
to specific questions on profitability of bed linen exports
by Pakistani producers to the Community. Moreover,
similar information was submitted by an independent
agent acting for importers. It is furthermore a commonly
known fact that the Community market of bed linen is
indeed highly competitive and that as a result of the

(33) All

information available indicated that

the reported
profit figures were overestimated and given the fact that
export prices were in line with Eurostat, there was a
reasonable presumption that this was a consequence of
an underestimation of the reported costs of production
for the product concerned. This is all the more impor-
tant in view of the fact that in the absence of representa-
tive sales on the domestic market,
it was clear that
normal value had to be constructed on the basis of costs
of production.

Disruption of on-spot verifications

(34)

The Commission has sought to verify the highly implau-
sible figures reported in the replies to the anti-dumping
questionnaire submitted by the six companies selected in
the sample, in line with Article 16 of the basic Regu-
lation.

(35) During the verification of

the second company,

the
Commission has received an anonymous life threatening
letter addressed personally to the officials carrying out
the verifications. With regard to the specific, personal
nature of
the life threatening letter received by the
Commission officials, the Commission considered that
the necessary conditions to carry out the verifications
were not met and that these circumstances significantly
impeded the investigation. Consequently, the verification
visits had to be interrupted.

(36)

(37)

For these reasons, it was only possible to carry out a full
verification at the premises of one exporting producer,
while a partial verification was carried out at
the
premises of another exporting producer. The exports of
these two companies represent more than 50 % of the
total cif export value to the Community of the sampled
exporting producers.

Results of the partial on-spot verifications

The verification of the first company confirmed that
misleading information was submitted regarding the
company's costs and pricing policy. Despite submission
by the company that detailed cost accounts for the
product concerned were kept, it was alleged on spot that
no such accounts or supporting documentation were
available. Thus, no substantiating evidence, as normally
in the companies' records, was provided which
kept
could have shown that the reported costs of the product
concerned were indeed accurate and that such costs
costs associated with the
reasonably reflected the
the product concerned. Even
production and sale of
when it was shown to the company that, on the basis of
the information provided by the company itself, such
to this evidence was
evidence should exist, access
denied. Moreover,
the like
product exported to other countries was requested but
not provided.

information on costs of

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(38)

inventory

valuation.

Evidence was also found that the company's accounting
records were not in line with the Generally Accepted
Accounting Principles (GAAP) of Pakistan, in particular
regarding
the
company acknowledged on spot, and in line with other
there was
information available (see recital 32),
considerable competition on the Community market
amongst different exporting countries, which further
indicated that the high profit figures reported for sales of
the product concerned by this company were indeed
unreasonable.

Furthermore,

that

(39) With regard to the partial verification visit carried out at
the premises of the second company, it was found that
the pricing policy for sales of bed linen to the Com-
munity and to other markets did not differ significantly,
and could not result in such strongly different profit
reported by the company. The profit
margins, as
margins reported for sales of the product concerned to
the Community were by far exceeding the margins used
in internal price settings and negotiations with custo-
mers. No evidence was provided which could have
shown that sales of bed linen to the Community would
generate profits
from the
profits generated by sales to third countries. Moreover,
information concerning the cost of production and stock
valuation of the product concerned, which should have
been available, could not be verified.

so substantially different

(40)

the events described in recital 35,

the
In light of
Commission was forced to conclude that the informa-
tion provided by the remaining sampled exporting
producers could not be verified, as the verification visits
had to be interrupted.

(41) Article 18(1) of

lifted the

the basic Regulation stipulates that
where it is found that an interested party has supplied
false or misleading information, the information shall be
disregarded and use may be made of facts available. The
verification visits have not
reasonable
presumption that the information submitted by each of
the other companies selected in the sample was false.
Information regarding costs and profits of the product
concerned could therefore not be accepted as reported,
in so far as it could not be verified and the information
available clearly indicated that these data were false. It
had therefore to be concluded that there was non-coop-
eration in the sense of Article 18(1) of the basic Regu-
lation by all companies selected in the sample.

(42) According to Article 17(4) of the basic Regulation,

if
there is a degree of non-cooperation by some or all of
the parties selected which is likely to materially affect
the outcome of the investigation, a new sample may be
selected. However,
it should be noted that the threat
received by the Commission officials has not been
removed and that nothing indicated that this threat was
restricted to the verification visits of the Commission
It was therefore
officials to the sampled companies.

impossible for the Commission to select a new sample
and to carry out verification visits. Consequently, a
determination had to be made on the basis of facts avail-
able, in accordance with Article 18 of the basic Regu-
lation.

(43)

The exporting producers were informed of the finding
that they had supplied false or misleading information,
the reason for rejecting such false or misleading informa-
tion and that best
facts available would be used in
accordance with Article 18 of the basic Regulation. They
were granted an opportunity to provide further explana-
tions within the time limit specified, as determined by
Article 18(4) of the basic Regulation.

(44) According to Article 18(1) of the basic Regulation, false
or misleading information shall be disregarded and use
may be made of facts available. The Commission exam-
ined the information available that would allow to calcu-
late the margin of dumping, i.e. the complaint, the ques-
tionnaire replies by the sampled exporting producers
and three other exporting producers that had requested
individual examination in line with Article 17(3) of the
basic Regulation, information submitted by several inter-
ested parties and official import statistics from Eurostat.

(45) With regard the complaint lodged by the Community
industry, which contained prima-facie evidence of a
dumping margin of 45,1 %, it was found that the data
used to calculate this dumping margin was less represen-
tative than the information supplied by the exporting
producers, in particular regarding the multiple types of
the product concerned exported from Pakistan.

(46)

(47)

(48)

The replies to the anti-dumping questionnaire by the
three companies requesting individual examination were
also examined and it was found that they were signifi-
cantly deficient and incorrect to such an extent that this
would cause undue difficulty in arriving at a reasonably
accurate finding.

Consequently, it was considered that, on balance, despite
containing some false information, the replies of the
exporting producers initially collected in order to consti-
tute a sample could, to a certain extent, be used as the
best facts available. Obviously, this had to be corrected
where contradicted by the findings of the on-spot verifi-
cations and the information provided by these parties in
their further submissions.

It should be noted that Article 18 of the basic Regulation
provides that the result of the application of facts avail-
able may be less favourable to the party than if it had
cooperated. However, given the fact that the dumping
to all Pakistani
margin determined would apply
exporting producers of
the
Commission has taken utmost care to eliminate the
punitive element for non-cooperation.

the product concerned,

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Need to calculate a global dumping margin

(49)

The information submitted by interested parties, and
used to correct the reported costs for each of the six
initially sampled companies, contained references to an
average profit margin on exports of
the product
concerned of 2 % to 5 %. This range was also confirmed
by the exporting producers themselves, and was consid-
ered reasonable as described in recital 32. It was consid-
ered, however, that this profit margin, although valid on
average for all
the exporting producers, would not
the
necessarily reflect
companies individually. In the light of the fact that the
information available allowed the Commission only to
calculate an average profit margin on exports of the
product concerned it was considered appropriate to
calculate one overall dumping margin applicable to all
the exporting producers.

the profit margin of each of

dumping margins for some other exporting producers as
compared to a situation where the real individual profit
figures, i.e. those established in the case of full coopera-
tion, had been used. Thus, the fact that an average profit
figure for export sales of the product concerned had to
be used linked intrinsically the determinations of each
separate producer.

(52)

The exporting producers claimed that the fact that they
have received disclosure with individual calculations and
individual dumping amounts shows that the Institutions
could also have specified individual duty rates for them.
However, the issue that an individual duty rate is not
appropriate for the reasons outlined above should not
be confused with the information which was provided
to each individual exporting producer in the framework
of disclosure. Indeed,
in order to ensure transparency
and to enable each individual exporting producer to
cross-check the calculations of the Commission, they all
received the full calculation which reflected the above-
mentioned profit margin of 3,5 %. But this does not put
into question the reasons for a country wide dumping
margin/duty rate as outlined in the preceding paragraph.

(50)

The exporting producers claimed that an individual
dumping margin should have been established for each
company individually. It was stated that the calculations
showed that the Commission was able to calculate an
individual dumping margin.

Normal value

(51)

the

The need to calculate a global dumping margin is the
result of
following considerations: The profit
margins on export sales submitted by the exporting
producers in their replies to the questionnaires could not
be used and had therefore to be corrected. This correc-
tion was done by using for all exporting producers a
profit margin on export sales of 3,5 % (the issue is
explained in full in recital 56). This also meant that the
allocations of cost of manufacturing of
the product
concerned as presented in the questionnaire replies were
not correct and therefore had to be adjusted accordingly
pursuant to Article 18 of the basic Regulation. Thus, the
wrong reporting of the profit on export sales had impor-
tant knock on effects on the cost allocations for each
exporting producer. More importantly, the fact that an
average profit margin had to be used as facts available
for all exporting producers was a major reason for
arriving at the conclusion that it would be inappropriate
to specify individual duty rates for each individual
the very nature of an
exporting producer.
average profit margin entails that
the corresponding
individual profit margins will to some degree vary. In
this case, the variation was important as the range of
possible profit margins quoted differed from 2 % to 5 %.
In other words, while the Institutions are reasonably
satisfied that the average profit margin used is appro-
priate, this average profit margin is — given the impor-
tant knock-on effects for the other elements of
the
constructed normal value and thus for the dumping
calculations in general — clearly not a basis in order to
specify an individual duty rate. This is so because it
would lead to unjustifiably high dumping margins for
some exporting producers and to unjustifiably low

Indeed,

(53) As

the companies

selected in the sample had no
domestic sales of the like product representing at least
5 % of export sales of the product concerned to the
Community, as required by Article 2(2) of the basic
Regulation, the domestic sales of the like product by the
companies concerned could not be used as a valid basis
to determine normal value.

(54)

In the absence of representative domestic sales made by
other producers, normal value had to be constructed in
accordance with Article 2(3) of the basic Regulation, by
adding to the manufacturing cost of the exported types
of
for
the product concerned a reasonable amount
selling, general and administrative costs (‘SG&A’) and for
profit, determined according to Article 2(6) of the basic
Regulation.

(55) As concluded in recital 41,

the
reported costs of production and, as a consequence, the
reported profit margins for exports of
the product
concerned were false.

it was found that

(56) Of the reported costs of production, only the costs of
manufacturing were corrected, as the reported SG&A
expenses were found to be in line with the companies'
audited accounts. The profit on exports of the product
concerned for each company initially selected for the
sample was corrected to 3,5 % of turnover, an average
of the profit margins submitted to be the normal profit
margin for these sales. The amount of profit reduction
on exports of the product concerned was allocated on
the basis of turnover to export sales of other products

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and to domestic sales, in order to keep the overall profit
in line with the companies' audited accounts.

Export price

(57)

It was argued by the exporting producers and by two
associations that it was unreasonable to consider such
profit as a reasonable profit for Pakistani exports to the
Community market, while at the same time considering
a profit margin of 6,5 % as an appropriate minimum for
the Community industry.

(58) As stated in recital 105, the investigation revealed that
exports from Pakistan were strong on the low price
segment, while Community industry sales
covered
mainly branded products.
It was therefore considered
that on the basis of these factors such difference in prof-
itability was not unreasonable.

(59) A number of corrections had to be introduced to the
cost allocation methods which the companies had elabo-
rated exclusively for the purpose of the present investi-
gation,
including the allocation of duty drawback and
packing expenses, on the basis of the findings of the on
spot verifications and the analysis of the replies.

(63)

The appropriateness of the export prices as reported by
the exporting producers was examined. All the informa-
tion available,
including the partial verification carried
out in Pakistan, verifications of importers and Eurostat
statistics indicated that these were accurately reported.

(64) All companies made their export sales to the Com-
munity directly to independent importers. In accordance
with Article 2(8) of the basic Regulation, their export
prices were therefore established on the basis of the
prices actually paid or payable by these independent
importers.

(65) As requested by the companies concerned, export sales
made from outdated stocks and sales delivered by air
mail were excluded from the dumping calculations, as
these sales were allegedly not made in the ordinary
course of
trade. These sales represented a negligible
proportion of all export sales reported.

(60)

(61)

(62)

For the company which was fully verified, a correction
to the reported profit on domestic sales was also neces-
sary in order to bring it into line with GAAP applied in
Pakistan.

(66)

Since no actual data for SG&A and profit pertaining to
production and sales of the like product were available
for any of the exporting producers under investigation
or for any other known exporters or producers, and
since no such information was available for the same
general category of products, there was no other option
but to use any other reasonable method according to
Article 2(6)(c) of the basic Regulation to establish an
amount for SG&A and for profits.

to unrelated customers of

In order to determine an amount for SG&A expenses
and for profit, the average of the amounts reported by
all six companies originally selected in the sample for
SG&A expenses and for profit on domestic sales to unre-
lated customers, after the corrections as explained in
recitals 56 and 60, were used. These data were consid-
ered an appropriate basis since they related to domestic
sales
textile products
(including yarn, grey fabric, processed fabrics and
apparel) and they were the only data available for
domestic sales in Pakistan. No information is available
which would allow to conclude that the profit so deter-
mined exceeds the profit normally realised by other
exporters or producers on sales of products of the same
general category in the domestic market of Pakistan, as
required by Article 2(6)(c) of the basic Regulation.

Comparison

For the purpose of ensuring a fair comparison between
the normal value and the export price, due allowance in
the form of adjustments was made for import charges
and indirect
transport,
insurance, handling, loading and ancillary costs, packing,
credit, commissions and currency conversions, affecting
price comparability in accordance with Article 2(10) of
the basic Regulation.

taxes, discounts and rebates,

(67) All companies have claimed an adjustment

for duty
drawback under Article 2(10)(b) of the basic Regulation.
However, the amounts refunded by the Pakistani govern-
ment exceeded by far the amounts of import charges or
taxes paid on materials incorporated in the
indirect
product
the Commission
concerned. Consequently,
in so far as the amounts
accepted the adjustment
claimed were actually borne by the like product and by
materials physically incorporated therein, when intended
for consumption in the exporting country, and refunded
in respect of the product exported to the Community.

(68)

The exporting producers argued that the duty drawback
the full amount
allowance should be granted for
refunded by the Government of Pakistan independently
of whether duties had been paid by the exporting produ-
cers or by their local suppliers of materials. However, no
evidence was available that the materials bought from
local suppliers did bear any import charges or indirect
taxes. The argument was therefore rejected.

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Dumping margin

(69) According to Article 2(11) of the basic Regulation, the
amount of dumping was established on the basis of the
comparison of the weighted average normal value of
each product type with the weighted average export
price of the same product type.

(70) On this basis,

the overall average dumping margin
applicable to all Pakistani exporting producers is 13,1 %,
expressed as a percentage of the cif net free-at-Com-
munity-frontier price, before duty.

D. COMMUNITY INDUSTRY

(71) Within the Community, the product concerned is manu-

factured by:

(72)

(73)

(74)

— producers on behalf of which the complaint was
lodged; all producers which were selected in the
sample (‘the sampled Community producers’) were
also complainants,

— other Community producers which were not

complainants and did not cooperate.

The Commission has assessed whether all the above
companies could be considered as Community producers
within the meaning of Article 4(1) of the basic Regu-
lation. The output of all the above companies constitutes
the Community production.

The Community industry is composed of 29 Community
producers which cooperated with the Commission,
among which are also the five sampled Community
for 45 % of the
producers. These producers account
Community production of cotton-type bed linen. They
are therefore deemed to constitute ‘the Community
industry’ within the meaning of Articles 4(1) and 5(4) of
the basic Regulation.

E. INJURY

1. Preliminary remarks

In view of the fact that sampling had been used with
regard to the Community industry,
injury has been
assessed on the one hand on the basis of information
collected at the level of the entire Community industry,
for trends concerning production, productivity, sales,
market share, employment and growth. On the other
hand, information collected at the level of the sampled
Community producers was analysed, as regards trends
concerning prices and profitability, cash flow, ability to
raise capital and investments, stocks, capacity and utilisa-
tion of capacity, return on investment and wages.

data, plus imports from Pakistan and the other third
countries, also based on Eurostat. Between 1999 and the
IP,
the apparent Community consumption increased
steadily from 173 651 tonnes to 199 881 tonnes, i.e. by
15 %.

3. Imports from the country concerned

(a) Volume and market share

(76)

Imports of cotton-type bed linen from Pakistan into the
Community increased in volume from 36 000 tonnes in
1999 to 49 300 tonnes in the IP, i.e. by 37 % over the
period considered. After a drop to 31 800 tonnes in
2000 imports bounced back to 35 500 tonnes in 2001.
Between 2001 and the investigation period they rose
sharply by almost 14 000 tonnes; i.e. by more than one
third.

(77)

The corresponding market share decreased from 20,7 %
it rose to
in 1999 to 17,2 % in 2000. Subsequently,
18,9 % in 2001 and 24,7 % during the IP.

(b) Prices

(78) Average prices from Pakistan increased from 5,95 EUR/
kg in 1999 to 6,81 EUR/kg in 2000. In the following
years they were reduced gradually to 6,34 EUR/kg in
2001 and to 5,93 EUR/kg during the IP.

(c) Price undercutting

(79)

compared to the

For the purposes of analysing price undercutting, the
weighted average sales prices per product type of the
Community industry to unrelated customers on the
Community market were
corre-
sponding weighted average export prices of the imports
concerned. The comparison was made after deduction of
rebates and discounts. The prices of the Community
industry were adjusted to an ex-works basis. The prices
of the imports concerned were on a cif basis with an
appropriate adjustment for the customs duties and post
importation costs.

(80)

This comparison showed that during the IP the products
concerned originating in Pakistan were sold in the Com-
munity at prices which undercut the Community indus-
try's prices by more than 50 %, when expressed as a
percentage of the latter.

2. Community consumption

(75)

Community consumption was established on the basis
the Community producers
of production volumes of
according to Eurocoton minus exports based on Eurostat

(81)

In accordance with Article 3(5) of the basic Regulation,
the Commission examined all relevant economic factors
and indices having a bearing on the state of the Com-
munity industry.

4. Situation of the Community industry

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L 66/9

(82)

(83)

It was analysed whether the Community industry is still
in the process of recovering from the effects of past
subsidisation or dumping, but no evidence was found
that this should be the case.

It was submitted that the Community industry did not
suffer material injury as it was protected by the presence
of quotas. It is indeed true that during the IP there were
quotas in force. Under international
law, these quotas
have their legal basis in the WTO Agreement on Textiles
and Clothing. They will be phased out by 31 December
2004. The quantities which can be imported under the
quotas correspond to substantial shares of the Com-
Indeed, on the basis of consumption
munity market.
figures in the IP the annual 2002 quota corresponds in
the case of Pakistan to a market share of around 25 %. It
should also be noted that the determination of the level
of these textile quotas is the result of straightforward
negotiations which are outside the analytical framework
foreseen under the basic Regulation. Whilst it cannot be
excluded that quotas might have an effect on the situa-
tion of the Community industry, the mere presence of
quotas does not prevent
the Community industry to
suffer injury. The analysis of the figures in the present
case shows that the Community industry suffered mate-
rial
injury during the IP despite the presence of the
quotas. The submission is therefore rejected.

— Growth

(88) While Community consumption grew by 15 % between
1999 and the IP, the sales volume of the Community
the
industry rose by only 4 %. On the other hand,
volume of total
imports rose by 35 % over the same
period, with the most significant increase from 120 000
tonnes in 2001 to 139 000 tonnes during the IP. While
the market share of all imports increased by more than
10 percentage points, the market share of the Com-
munity industry dropped from 20,8 % to 18,9 %. This
means that the Community industry could not partici-
pate adequately in the growth of the market between
1999 and the IP.

(b) Data relating to the sampled Community producers

— Stocks, capacity and capacity utilisation

(89) As far as stocks are concerned, they fluctuate consider-
ably because most of the production is made in response
to orders thus reducing the possibility to produce purely
for stocks. Whilst an increase in stocks was observed at
the sampled Community producers, it is considered that
in this case stocks were not a relevant indicator of injury
due to the industry specific high fluctuations of stocks.

(a) Data relating to the Community industry as a whole

(90)

— Production, employment and productivity

(84)

(85)

The production volume of
increased slightly between 1999 and the IP,
37 700 tonnes to 39 500 tonnes, i.e. by 5 %.

the Community industry
from

Employment remained basically stable around 5 500
employees. Therefore, productivity increased from 6,8
tonnes/employee
in 1999 to 7,2 tonnes/employee
during the IP, i.e. by 6 % over the period considered.

— Sales volume and market share

(86) Over the period considered, the sales volume of the
Community industry rose by 4 %, from 36 200 tonnes
in 1999 to 37 800 tonnes during the IP. It had increased
to 38 300 tonnes in 2001, but decreased in the IP. The
turnover generated by these
increased from
EUR 410 Mio in 1999 to EUR 441 Mio in 2001, but
subsequently decreased by 5 percentage points
to
EUR 420 Mio during the IP.

sales

(87) Despite the fact that consumption in the Community
market increased by 15 % during the same period, the
Community industry's market
share declined from
20,8 % to 18,9 % during the IP. The market share fluctu-
ated around 20 % between 1999 and 2001 and
decreased by 1,5 percentage points between 2001 and
the IP.

The production capacity was difficult
to establish in
nearly all sampled Community producers because the
production process of the like product is individualised
requiring different combinations of machinery usage.
Therefore, it is impossible to draw an overall conclusion
from the capacity of individual machines concerning the
production capacity. In addition, part of the production
process is sub-contracted in some of the sampled Com-
munity producers.

(91) However, for those products that go through a printing
process, the printing department was considered to be
the factor determining the capacity relating to produc-
tion of the printed bed linen in all sampled Community
producers. It was found that the capacity utilisation in
the printing department decreased steadily from 90 % to
82 %.

— Prices

(92) Average prices per kg of

increased gradually

the sampled Community
producers
from EUR 13,3 to
EUR 14,2 over the period considered. This should be
seen in the light of the fact that this average price covers
both high value and low value items of the product
concerned and that the Community industry has been
to more sales of higher value niche
forced to shift
products as their sales in the high volume, mass market
were taken over by imports from low price countries.
On the other hand, average sales prices per kg of the
Community industry overall went up marginally from
EUR 11,3 in 1999 to EUR 11,5 in 2001, but dropped
subsequently to EUR 11,1 during the IP.

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— Investments and ability to raise capital

(93)

(94)

(95)

Between 1999 and 2001,
investments were reduced
significantly from EUR 7 Mio to EUR 2,5 Mio. Between
2001 and the IP, investments remained rather stable and
accounted during the IP for only 41 % of the amount
invested in 1999.

There was no claim from the Community industry nor
indication that
the Community industry encountered
problems to raise capital for its activity.

It was submitted that the decrease in investments does
not point to injury as the Community industry did not
claim to encounter problems in raising capital. This
argument had to be rejected as the decline in new invest-
ments is not linked to difficulties in raising capital, but it
was caused by the loss in market share of the Com-
munity industry and by the fierce price pressure in the
Community market.

— Profitability, return on investment and cash flow

(96) Over the period considered,

the profitability of

the
sampled Community producers dropped significantly
from 7,7 % in 1999 to 4,4 % in the IP, i.e. by 42 %. The
return on investment followed the same trend, falling
from 10,5 % in 1999 to 5,9 % during the IP, a reduction
by 44 %.

(97)

(98)

It was submitted by the Pakistani exporting producers
that
the decline in profitability in the five sampled
producers corresponds to the increase in wages. As
outlined below, the average labour costs of the sampled
companies have decreased in real
terms by around
3,6 %. In addition, wages are only one out of several
cost items in the manufacturing process and therefore,
an increase in wages does not constitute automatically a
decrease in the profitability of a company. Therefore,
this argument had to be rejected.

significant

The cash flow generated by the like product diminished
considerably from EUR 16,8 Mio in 1999 to EUR 11,3
Mio during the IP. The most
reduction
occurred in 2000, when the cash flow decreased by
27 %. Between 2000 and the IP, it fell by another 5 %.
As the cash flow was influenced by stock variations,
cash flow is an indicator with a limited relevance. Never-
theless, is should be noted that the negative development
of cash flow over the period considered is in line with
other economic indicators, confirming the negative
evolution of the Community industry, and should not be
qualified as insignificant.

— Wages

(99)

Labour costs increased by 3,3 % over the period consid-
ered, from EUR 35,2 Mio in 1999 to EUR 36,3 Mio
during the IP. As the number of employees remained

basically stable, average labour costs also increased from
EUR 29 100 (rounded figures) to EUR 30 300, i.e. by
4,2 %. These increases are nominal
increases and are
considerably below the increase in consumer prices of
more than 7,8 % over the period considered, which
means that real wages have decreased by 3,6 %.

— Magnitude of the amount of dumping

(100) Given the volume and the price of the dumped imports,
the impact of the actual margin of dumping, which is
also significant, cannot be considered negligible.

5. Conclusion on injury

(101) The examination of the abovementioned factors shows
that between 1999 and the IP, the situation of the Com-
munity industry deteriorated. The profitability fell signifi-
cantly over the period considered and the Community
industry's market share decreased by 9,1 %. For the
sampled Community producers, investments were signif-
icantly reduced, profitability, return on investment as
well as cash flow decreased considerably. Employment
remained basically stable. Some indicators showed a
positive trend: over the period considered, turnover and
the Community industry increased
sales volumes of
slightly. Productivity and wages increased marginally. As
regards average sales prices of the sampled producers,
they showed an upward trend over the period consid-
ered, which is, however, partly a result of a shift to more
sales of higher value niche products. However, it should
be noted that during the same period the Community
consumption grew by 15 % whilst
the Community
industry's market share declined by 9,1 %. Moreover, the
average
industry
sales prices of
decreased over the period considered.

the Community

(102)

In the light of the foregoing,
it is concluded that the
Community industry has suffered material injury within
the meaning of Article 3(6) of the basic Regulation.

F. CAUSATION

1. Introduction

(103)

In accordance with Article 3(6) and (7) of the basic
Regulation,
the dumped
it was examined whether
imports originating in Pakistan have caused injury to the
Community industry to a degree that enables it to be
classified as material. Known factors other than the
dumped imports, which could at the same time have
injured the Community industry, were also examined to
ensure that the possible injury caused by these other
factors was not attributed to the dumped imports.

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(104)

(105)

2. Effect of the dumped imports

Imports of cotton-type bed linen from Pakistan into the
Community increased in volume from 36 000 tonnes in
1999 to 49 300 tonnes in the IP, i.e. by 37 %. After a
slight decrease between 1999 and 2000, imports recov-
ered in 2001 and rose by 13 900 tonnes between 2001
and the IP. The corresponding market share fell initially
from 20,7 % in 1999 to 17,2 % in 2000. Subsequently,
it went up considerably amounting to 24,7 % during the
IP.

In the analysis of the effect of the dumped imports, it
was found that price is the main element of competition.
Indeed, it is the buyers who determine themselves the
quality and design of the product which they intend to
order. It appears from the analysis of the selling-buying
process in this case that
the importers and traders,
before passing an order to an exporting producer in
Pakistan, specify all the characteristics of the product
(design, colour, quality, sizes…) to be delivered, and thus
compare the different producers' offers mainly on the
basis of price as all other differentiating elements are
predetermined in the call
for offers, or subsequently
result
from the importer's own efforts in respect of
similar goods (e.g. branding). With respect to prices, it
was found that
the prices of dumped imports were
considerably below those of the Community industry as
well as below those of other third country exporters.
Moreover,
the Community
industry had to withdraw largely from the low priced
market segments, where imports from Pakistan are
strong, this also underlining the causal link between the
dumped imports and injury suffered by the Community
industry.

it was also found that

(106) Average prices of imports from Pakistan exerted a pres-
sure on the Community industry and forced it on the
one hand to decrease prices and on the other hand to
shift to more sales of higher value niche products.

(107) Given the impact of the imports from Pakistan in the
Community market, both in terms of volume and in
terms of prices,
these imports exerted a significant
downward pressure on the Community industry in
terms of its sales volumes and prices. The lack of sales
volume in the low priced market segments for the Com-
munity industry could not be compensated by sales of
high profit niche products, this resulting in reducing
notably market
investments, profitability and
return on investment of the Community industry. It was
also found that there was a coincidence in time between
these imports and the injury suffered by the Community
industry.

share,

subsidised imports originating in India are, therefore,
considered as having contributed to the injury suffered
by the Community industry,
it should be noted that,
given the substantial and increasing volumes and low
prices of imports originating in Pakistan, it cannot be
from Pakistan equally
denied that dumped imports
caused material injury by themselves.

(109)

(b) Imports originating in third countries other than India

and Pakistan

Imports originating in third countries other than India
and Pakistan increased from 51 400 tonnes in 1999 to
75 300 tonnes during the IP. Their market
share
increased from 29,6 % in 1999 to 37,7 %. The largest
part of imports in that group of countries originated in
Turkey. Given the corporate links between Turkish and
Community companies, there is a certain market integra-
tion in the form of
inter-company trade between
Turkish exporting producers and Community operators
that suggests that
from that
country is not only linked to the price. This is confirmed
by the average prices of imports of bed linen originating
in Turkey during the IP, which were higher by almost
45 % to those of India and by 34 % to those of Pakistan.
It is therefore unlikely that imports originating in Turkey
broke the causal link between the dumped imports from
Pakistan and the injury suffered by the Community
industry.

the decision to import

(110) The market shares of

the remaining countries (e.g.
Romania, Bangladesh and Egypt) individually are signifi-
cantly lower and do not exceed 3,9 %, and it is thus unli-
kely that any material injury is to be attributed to the
imports from those countries.

(111) The average price of imports originating in countries
other than India and Pakistan increased from 7,18 EUR/
kg in 1999 to 7,47 EUR/kg in 2001 and decreased
slightly to 7,40 EUR/kg during the IP. Nevertheless,
during the IP, these prices were around 25 % higher
than the prices of imports from Pakistan. Consequently,
imports from other third countries did not exert a price
pressure on the Community industry to the extent that
imports from Pakistan did. Also the market share of any
individual country in that group was below 4 %. It is
therefore concluded that imports from other third coun-
tries did not break the causal link between the dumped
imports from Pakistan and the injury suffered by the
Community industry.

3. Effects of other factors

(112)

(a) Subsidised imports originating in India

(108)

In the parallel anti-subsidy investigation,
it was estab-
lished that subsidised imports originating in India caused
injury to the Community industry. Although
material

(c) Contraction of demand

It was claimed that the demand for bed linen produced
by the Community industry has diminished in volume
terms as the Community industry focused on the upper
end of the market, where less sales volume is made.
However, as pointed out above, the total EU consump-
tion of bed linen did not decrease, but rather increased
over the period considered. Most of the Community
for different
producers have different product

lines

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Official Journal of the European Union

4.3.2004

market segments. The up-market brands generate high
margins but are only sold in very small quantities. In
order to maximise the capacity utilisation and to cover
the fixed costs of production, the Community industry
would need sales of lower priced market segment in big
volumes as well. There is no indication that demand has
decreased in that market segment. This segment is on
the other hand increasingly taken over by low priced
imports, which cause injury to the Community industry.
Given the overall increase in consumption, which is not
the demand
limited to a particular market segment,
situation in the Community can therefore not be seen to
break the causal link between the dumped imports from
Pakistan and the injury suffered by the Community
industry.

(d) Imports by the Community industry

(113)

It was submitted that the Community industry imported
cotton-type bed linen from Pakistan and thereby contrib-
uted to the injury suffered. However, only one of the
sampled Community producers actually imported bed
linen from Pakistan during the IP and the sales of these
imports generated only a small part of total turnover by
this producer (around 2 %). Therefore,
imports by the
the product concerned from
Community industry of
Pakistan cannot be seen to break the causal link between
the dumped imports from Pakistan and the material
injury suffered by the Community industry as a whole.

(117)

it was estab-
In the parallel anti-subsidy investigation,
lished that
subsidised imports originating in India
contributed to the injury suffered by the Community
industry. However, the effect of these imports was not
such as to reverse the conclusion of causation as regards
the dumped imports originating in Pakistan. The
remaining possible other injury causes, i.e. imports from
countries other than India and Pakistan, the demand
situation, imports made by the Community industry as
well as the export and productivity performance were
analysed, but found not to break the causal link between
the Pakistani
imports and the injury suffered by the
Community industry.

(118) Based on the above analysis which has properly distin-
guished and separated the effects of all known factors on
the situation of the Community industry from the injur-
ious effects of the dumped imports, it is concluded that
the imports from Pakistan have caused material injury to
the Community within the meaning of Article 3(6) of
the basic Regulation.

G. COMMUNITY INTEREST

1. General remarks

(e) Export performance by the Community industry

(114) Exports of the sampled Community producers repre-
sented only around 0,5 % of their total sales. Given the
negligible part of exports in total activity, this factor
cannot have contributed to the injury suffered.

(119)

In accordance with Article 21 of the basic Regulation, it
was examined whether, despite the conclusion on injur-
ious dumping, compelling reasons existed that could
lead to the conclusion that it is not in the Community
interest to adopt measures in this particular case. The
impact of possible measures on all parties involved in
this proceeding and also the consequences of not taking
measures were considered.

(f) Productivity of the Community industry

2. Community industry

(115) The development in productivity has been identified in
the injury part of
this document. Since productivity
increased from 6,8 tonnes/employee in 1999 to 7,2
tonnes/employee in the IP, i.e. by around 6 %, this factor
cannot have contributed to the injury suffered.

4. Conclusion

(120) The Community industry suffered material

injury.

It
proved to be a viable industry that was able to compete
at fair market conditions. The injurious situation of the
Community industry resulted from its difficulty to
compete with the low-priced, dumped imports. The
the dumped imports has also forced a
pressure of
number of Community producers to cease production of
cotton-type bed linen.

(116) The substantial increase in volume and market share of
the imports originating in Pakistan, especially between
2001 and the IP, as well as the considerable decrease in
their sales prices and the level of price undercutting
found during the IP coincided in time with the material
injury suffered by the Community industry.

(121)

It is considered that the imposition of measures will
restore fair competition on the market. The Community
industry should then be able to increase the volume and
prices of its sales, thereby generating the necessary profit
level to justify continued investment in its production
facilities.

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L 66/13

situation of

(122) Should measures not be imposed, the deterioration of
the
industry would
the Community
continue. It would not be able to invest in new produc-
tion capacity and to compete effectively with imports
from third countries. Some companies would have to
cease production and lay off their employees.

(123)

It is therefore concluded that the imposition of anti-
dumping measures is in the interest of the Community
industry.

3. Importers and users

(124) Questionnaires were sent to 17 importers and two asso-
ciations of
importers. Only two questionnaire replies
were received from unrelated importers in the Com-
munity.

(125) For both importers the sales of the product concerned
constituted less than 5 % of the total turnover. The total
profitability of
the importers was between 2 % and
10 %. Taking into account that only a small share of the
turnover of the two importers is generated by sales of
the product concerned imported from Pakistan and that
many countries are not concerned by either anti-
dumping duties or countervailing duties, the impact of
the imposition of anti-dumping duties on these impor-
ters can be considered as minor.

(126) Questionnaires were sent to six users and one users'
association. No information from users was received, but
some arguments were raised in a submission by Ikea and
by the Foreign Trade Association.

(127)

(128)

to ensure that

It was submitted that the Community industry is not in
a position to satisfy the whole demand for bed linen in
the Community. It has to be recalled that measures are
not intended to prevent imports into the Community
but
injurious
dumped prices.
from various origins will
continue to satisfy a significant part of the Community
demand. As many countries are not concerned by anti-
dumping duties or countervailing duties, no shortage of
supply is expected.

they are not made at

Imports

investigation showed that

It was claimed that cheap imports of bed linen are neces-
sary for the final consumer as well as ‘institutional’ users
such as hotels, hospitals etc. as products of the cheaper
end of the range are not produced by the Community
the five
producers. The
these
sampled Community producers
products. There was no technical
reason why the
production of these products in the Community could
not be increased. The fact that many other countries are
not concerned by anti-dumping duties or countervailing
duties means that alternative sources of supply will still
be available.

still produce

4. Conclusion on Community interest

(129) On the basis of the above, it is concluded that there are
no compelling reasons on the grounds of Community
interest why anti-dumping duties should not be imposed
in the present case.

H. ANTI-DUMPING MEASURES

1. Definitive measures

(130)

In order to prevent further injury being caused by the
dumped imports, it is considered appropriate to adopt
anti-dumping measures.

(131) For the purpose of determining the level of these duties,
account was taken of the dumping margins found and
the amount of duty necessary to eliminate the injury
sustained by the Community industry.

(132) Taking into account the level of profitability obtained by
the Community industry in the years 1999 and 2000, it
was found that a profit margin of 6,5 % of turnover
could be regarded as an appropriate minimum which
the Community industry could have expected to obtain
in the absence of injurious dumping. The necessary price
increase was then determined on the basis of a compar-
ison of the weighted average import price, as established
for the price undercutting calculations, with the non-
injurious price of products sold by the Community
industry on the Community market. The non-injurious
price has been obtained by adjusting the sales price of
the Community industry by the actual loss/profit made
during the IP and by adding the above mentioned profit
margin. Any difference resulting from this comparison
was then expressed as a percentage of
the total cif
import value.

(133)

It was submitted by the Pakistani exporting producers
that the profit margin of 6,5 % of turnover was higher
than appropriate minimum profit established in other
investigations concerning the same product. This argu-
ment had to be rejected as the appropriate minimum
profit which the Community industry could have
expected to obtain in the absence of injurious dumping
is established anew on the basis of the specific circum-
stances of each proceeding,
the
market conditions and the past performance of the Com-
munity industry in that proceeding. In this case, it was
found that a profit margin of 6,5 % could be regarded as
an appropriate minimum, calculated as an average of the
level of profitability obtained by the Community
industry in the years 1999 and 2000.

taking into account

(134) As the injury elimination level was higher than the
the definitive measures

dumping margin established,
should be based on the latter.

L 66/14

EN

Official Journal of the European Union

4.3.2004

2. Undertaking

HAS ADOPTED THIS REGULATION:

(135) The Pakistani exporting producers have presented a
proposal for a price undertaking. However, there were
more than 170 exporters involved in this proceeding
and bed linen is characterised by hundreds of different
product
types, with some characteristics not easily
discernible upon importation. This makes it virtually
impossible to establish meaningful minimum prices for
each product type which could be properly monitored
by the Commission. The large number of exporters
would also render the monitoring of a price undertaking
impracticable.

(136)

It was also found that the proposed categories of the
product concerned in respect of which an undertaking
was offered were inappropriate since there would be a
significant price variation within each of them. Further-
more, the proposed prices did not eliminate the injur-
ious dumping.

(137) Under these circumstances,

it was considered that a
price undertaking was impracticable and could not be
accepted,

Article 1

flax (flax not being the dominant

1.
A definitive anti-dumping duty is hereby imposed on
imports of bed linen of cotton fibres, pure or mixed with man-
made fibres or
fibre),
bleached, dyed or printed originating in Pakistan currently clas-
sifiable within CN codes
ex 6302 21 00 (TARIC codes
6302 21 00*81 and 6302 21 00*89), ex 6302 22 90 (TARIC
code
code
6302 31 10*90), ex 6302 31 90 (TARIC code 6302 31 90*90)
and ex 6302 32 90 (TARIC code 6302 32 90*19).

6302 22 90*19),

ex 6302 31 10

(TARIC

2.
The rate of duty applicable to the net free-at-Community-
frontier price, before duty, for products produced by all compa-
nies shall be 13,1 %.

Unless otherwise

3.
concerning customs duties shall apply.

specified,

the provisions

in force

Article 2

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

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

Done at Brussels, 2 March 2004.

For the Council

The President

M. CULLEN