Council Regulation (EC) No 822/2004 of 26 April 2004 amending Regulation (EC) No 2603/2000 imposing a definitive countervailing duty on imports of certain polyethylene terephtalate originating, inter alia, in Thailand
Date: 2004-04-26
Institutions: Council of the European Union
Subjects: Thailand, customs duties, import, originating product, plastics

29.4.2004

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Official Journal of the European Union

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COUNCIL REGULATION (EC) No 822/2004

of 26 April 2004

amending Regulation (EC) No 2603/2000 imposing a definitive countervailing duty on imports of
certain polyethylene terephtalate originating, inter alia, in Thailand

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 2026/97 of 6
October 1997 on protection against subsidised imports from
countries not members of the European Community (1)
(the
basic Regulation), and in particular Article 20 thereof,

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

Whereas:

(1)

(2)

(3)

A. MEASURES IN FORCE

The measures currently in force are definitive counter-
vailing duty imposed by Regulation (EC) No 2603/
2000 (2), under which imports into the Community of
certain polyethylene terephtalate (the product concerned)
originating in Thailand are subject to a duty, in the form
of a specific amount per tonne, i.e. EUR 49,1 per tonne.

It should be noted that the same imports are also subject
to a definitive anti-dumping duty of EUR 83,2 per
tonne, imposed by Regulation (EC) No 2604/2000 (3).

B. CURRENT INVESTIGATION

1. Request for a review

The Commission subsequently received a request
to
initiate an accelerated review of Regulation (EC) No
2603/2000, pursuant to Article 20 of the basic Regu-
lation, from the Thai producer Indo Pet (Thailand) Ltd
(Indo Pet). This company claimed that it was not indivi-
dually investigated during the original period of investi-
gation (i.e.
from 1 October 1998 to 30 September
1999) for reasons other than the refusal to cooperate
with the Commission.

(1) OJ L 288, 21.10.1997, p. 1. Regulation as last amended by Regu-

lation (EC) No 461/2004
(2) OJ L 301, 30.11.2000, p. 1.
(3) OJ L 301, 30.11.2000, p. 21. Regulation as last amended by Regu-

lation (EC) No 823/2004 (see page 7 of this Official Journal).

(4)

(5)

(6)

(7)

(8)

It should be noted that the Commission simultaneously
received,
from the same Thai producer, a request to
initiate a ‘new exporter’ review of Regulation (EC) No
2604/2000. This parallel proceeding is subject to a sepa-
rate Council Regulation.

2. Initiation of an accelerated review

The Commission examined the evidence submitted by
the Thai exporting producer concerned and considered it
sufficient to justify the initiation of an accelerated review
in accordance with Article 20 of the basic Regulation.
After consultation of the Advisory Committee and after
the Community industry concerned had been given the
opportunity to comment, the Commission initiated, by a
notice published in the Official Journal of the European
Union (4), a review of Regulation (EC) No 2603/2000
with regard to the company concerned and commenced
its investigation.

3. Product concerned

investigation,

in the original

The product covered by the current review is the same
as
i.e. polyethylene
terephthalate (PET) with a coefficient of viscosity of
78 ml/g or higher, according to DIN (Deutsche Indus-
trienorm) 53728. It is currently classifiable within CN
code 3907 60 20.

4. Parties concerned

the
company
The Commission officially
advised
the exporting
concerned and the representatives of
country of the initiation of the review. Furthermore, it
gave other parties directly concerned the opportunity to
make their views known in writing and to request a
hearing. No such request was however received.

The Commission also sent out a questionnaire to the
Government of Thailand and to the company concerned
and received a reply within the deadline. The Commis-
the information deemed
sion sought and verified all
necessary for the determination of subsidisation, and a
verification visit was carried out at the premises of the
company concerned.

(4) OJ C 170, 19.7.2003, p. 2.

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5. Investigation period

(9)

The investigation of subsidisation covered the period
from 1 January 2002 to 31 March 2003 (investigation
period or IP).

6. Methodology

(10)

The same methodology as that used in the original
investigation was applied in the current investigation.

C. SCOPE OF THE REVIEW

(11) As no request for a review of the findings on injury was
made in the request for the investigation, the review was
limited to subsidies granted to Indo Pet.

The Commission examined the same subsidy schemes
that were analysed in the original investigation. It also
examined whether
the new exporter had used any
subsidy schemes that were alleged to be granted in the
original complaint but not found to have been used
during the original investigation period.

It was finally examined whether the new exporters had
made use of any subsidy schemes that were established
after the end of the original investigation period, or had
received ad hoc subsidies after this date.

(18)

(19)

D. RESULTS OF THE INVESTIGATION

1. New exporter qualification

(12)

(13)

(14)

— additional

incentives under the form of a double
deduction of certain expenses for enterprises located
in special investment promotion zones,

— exemption of import duties on raw and essential

materials.

(17)

The current investigation revealed that, since the end of
the original period of investigation, no change occurred
that would alter the conclusions that the above schemes
are still countervailable. Additionally, the investigation
did not reveal that the company benefited from any
other than the above subsidy schemes.

Exemption or reduction on duties on imports of machinery

Section 28 of the IPA is the legal basis to grant the
exemption of import duties on machinery, provided that
such machinery is not being produced or assembled in
it will be used in the
Thailand, and provided that
promoted activity, as defined by the IPA. Section 29 of
the IPA provides the legal basis for the 50 % reduction
on import duties on imported machinery.

The benefit to the exporter should be calculated on the
basis of the amount of unpaid customs duty due on
imported capital goods, by spreading this amount across
a period which reflects the normal depreciation of such
capital goods in the industry of the product concerned,
pursuant to Article 7(3) of the basic Regulation.

confirmed

investigation

The
company
concerned was not individually investigated during the
original investigation for reasons other than a refusal to
cooperate with the Commission.

that

the

(20) On this basis, the benefit received by Indo Pet is of less

than 0,1 % which is considered immaterial.

(15) Accordingly, it is confirmed that the company concerned
should be considered a new exporter in accordance with
Article 20 of the basic Regulation, and thus an individual
amount of subsidy could be determined for it.

2. Subsidisation

(16)

The original
the following
investigation showed that
schemes — under the Investment Promotion Act (IPA)
— from which the applicant may potentially benefit,
were specific within the meaning of Article 3(2)(a) and
the basic Regulation and thus countervail-
(2)(b) of
able (1):

— exemption or reduction on duties on imports of

machinery,

— exemption from corporate income tax,

(1) Commission Regulation (EC) No 1741/2000 of 3 August 2000
imposing a provisional countervailing duty on imports of polyethy-
lene terephthalate (PET) originating in India, Malaysia, Taiwan and
Thailand (OJ L 199, 5.8.2000, p. 6), recitals 181 to 201.

Exemption from corporate income tax and additional incen-
investment promotion
tives for enterprises located in special
zones

(21)

These two countervailable schemes are defined by
Sections 31 and 35(3) of the IPA.

(22)

By virtue of Section 31 of the IPA, exemptions from the
corporate income tax are authorised for a period
ranging between three to eight years, depending on the
location of the investments. Different eligibility criteria
are applied to different geographical zones (zones 1 to
3, as defined by the IPA). Indo Pet, being located in the
so-called zone 3, has been granted an eight-year corpo-
rate income tax exemption pursuant to Section 31 of
the IPA. Indo Pet was further granted additional incen-
tives under the form of a double deduction of transpor-
tation, electricity and water supply costs, as provided by
Section 35(3) of the IPA.

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(23)

The benefit obtained by a company in the case of tax
exemptions and tax reductions is calculated by reference
to the amount of tax that would have been payable by
the recipient company during the investigation period,
had it not been able to benefit from a subsidy scheme.
In the current case, the amount of tax normally payable
during the IP is the tax payable during the tax year 2002
(no data regarding any tax payable amount concerning
the first three months of the tax year 2003 being avail-
able during the on-spot investigation), and these taxes
due are incurred in respect of revenue earned in 2001.
On this basis, it was established that further to the provi-
sions of Sections 35(3) of
the company
concerned offset a significant part of its relevant taxable
profit, the remaining part of which was totally exempted
from corporate income tax pursuant to Section 31 of
the IPA. The benefit granted to the company therefore
consists of the amount of corporate income tax that the
company did not have to pay during the IP by making
use of the two countervailable schemes concerned.

the IPA,

(24)

The subsidy obtained through the two above schemes
was not granted by reference to quantities manufactured,
produced, exported or transported. Therefore, pursuant
to Article 7(2) of the basic Regulation, the amount of
countervailable subsidy was determined by allocating the
value of the total benefit, as described under recital 23,
over the level of total sales of the company during the IP
(annualised in this case).

(25) On this basis,

it was found that Indo Pet received a

benefit of 2,6 %.

(28)

(29)

(30)

E. AMOUNTS OF COUNTERVAILABLE SUBSIDIES

Taking account of the definitive findings relating to the
various schemes as set out above, the amount of coun-
exporting
the
tervailable
producer is as follows:

investigating

subsidy

for

Company

Income tax exemp-
tion and additional
incentives

Indo Pet

2,6 %

Total

2,6 %

F. AMENDMENT OF THE MEASURES BEING REVIEWED

In the light of the foregoing, it is considered that a defi-
nitive countervailing duty should be imposed at the level
of the subsidy margin found. In accordance with Article
15(1) of the basic Regulation, the countervailing duty
should however not be higher than the countrywide
injury margin established for Thailand by Regulation
(EC) No 2603/2000 during the original anti-dumping
investigation.

It was considered appropriate during the original investi-
gation to impose duties in the form of a specific amount
per tonne, since PET prices can fluctuate in line with
fluctuations
significantly
affecting the level of the duty. The same methodology
investigation. This
should be applied in the current
specific amount should result from the application of
the countervailing duty rate to the cif export prices.

in crude oil prices,

thus

Exemption of import duties on raw and essential materials

(31)

This leads to a countervailing duty rate for the exporting
producer concerned of EUR 23,9 per tonne.

(26)

(27)

Section 36(1) of the IPA provides the legal basis for
exemption of import duties on the raw and essential
materials imported for use specifically in producing,
mixing, or assembling products or commodities for
export.

G. DISCLOSURE AND DURATION OF THE MEASURES

(32)

The company concerned and all other interested parties
were informed of the facts and considerations on the
basis of which it was intended to impose the amended
the
definitive countervailing duty on the imports of
company concerned.

In the present case, it was established that the import
duty exemption did not result in an excess remission of
import duties for the exporter concerned. Therefore,
there is no subsidy according to Article 2 of the basic
Regulation and it is not necessary to further evaluate this
scheme since no benefit was conferred on the exporting
producer.

(33)

This review does not affect the date on which Regulation
to Article
(EC) No 2603/2000 shall expire pursuant
18(1) of the basic Regulation.

(34)

Regulation (EC) No 2603/2000 should therefore be
amended accordingly,

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HAS ADOPTED THIS REGULATION:

Article 1

The table in Article 1(3) of Regulation (EC) No 2603/2000 shall be amended by adding the following:

Country

Company

Definitive duty
(EUR per tonne)

TARIC additional code

‘Thailand

Indo Pet (Thailand) Ltd

23,9

A468’

This Regulation shall enter into force on the day following that of 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 Luxembourg, 26 April 2004.

For the Council

The President

B. COWEN