Council Regulation (EC) No 990/2004 of 17 May 2004 amending Regulation (EC) No 151/2003 imposing a definitive anti-dumping duty on imports of certain grain oriented electrical sheets originating in Russia
Date: 2004-05-17
Institutions: Council of the European Union
Subjects: Russia, anti-dumping duty, import, originating product, sheet

19.5.2004

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COUNCIL REGULATION (EC) No 990/2004

of 17 May 2004

amending Regulation (EC) No 151/2003 imposing a definitive anti-dumping duty on imports of
certain grain oriented electrical sheets originating in Russia

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1)
(the
‘basic Regulation’), and in particular Article 11(3) thereof,

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

Whereas:

(1)

(2)

(3)

A. PROCEDURE

1. Previous investigations and measures in force

The Commission, by Decision No 303/96/ECSC (2),
imposed a definitive anti-dumping duty on imports of
sheets originating in
certain grain-oriented electrical
Russia (‘the original investigation’). The rate of the anti-
dumping duty imposed was 40,1 %. An undertaking
offered in connection with such imports was accepted
by the same Commission Decision.

Further to a request lodged by the European Confed-
eration of Iron and Steel Industries (Eurofer) on behalf
of the Community industry of grain oriented electrical
the Commission initiated an expiry review in
sheets,
accordance with Article 11(2) of Commission Decision
No 2277/96/ECSC (3) (the ‘basic Decision’). At the same
time, the Commission also initiated on its own initiative
an investigation in accordance with Article 11(3) of the
basic Decision in order to examine the appropriateness of
the form of the measures (4).

the expiry of

the Treaty establishing the
In view of
European Coal and Steel Community on 23 July 2002,
the Council, by Regulation (EC) No 963/2002 (5), decided
that anti-dumping proceedings initiated pursuant to the
basic Decision and still in force were to be continued and
be governed by the provisions of the basic Regulation
from 24 July 2002. Likewise, any anti-
with effect

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Council

Regulation (EC) No 461/2004 (OJ L 77, 13.3.2004, p. 12).

(2) OJ L 42, 20.2.1996, p. 7.
(3) OJ L 308, 29.11.1996, p. 11. Decision as last amended by Decision

No 1000/99/ECSC (OJ L 122, 12.5.1999, p. 35).

(4) OJ C 53, 20.2.2001, p. 13.
(5) OJ L 149, 7.6.2002, p. 3. Regulation as last amended by Regulation

(EC) No 1310/2002 (OJ L 192, 20.7.2002, p. 9).

(4)

(5)

(6)

(7)

(8)

dumping measures resulting from pending anti-dumping
investigations were to be governed by the provisions of
the basic Regulation from 24 July 2002.

As a result of the expiry review mentioned in recital (2),
in January 2003, by Regulation (EC) No
the Council,
151/2003 (6),
anti-dumping
confirmed the definitive
duty imposed by Commission Decision No 303/96/
ECSC. However, the interim review limited to the form
of the measures remained open at the conclusion of the
expiry review.

2. Grounds for the reviews

2.1. I n t e r i m r e v i e w s l i m i t e d t o d u m p i n g

The Commission received two requests for a partial
interim review pursuant to Article 11(3) of the basic
to Article 1(3) of Council
Decision which, pursuant
Regulation (EC) No 963/2002 were treated according
to Article 11(3) of the basic Regulation.

The requests were lodged by OOO VIZ — STAL (VIZ
STAL), and Novolipetsk Iron and Steel Corporation
(‘NLMK’) (VIZ STAL and NLMK are hereinafter referred
to as ‘the applicants’), both exporting producers from
Russia. Both requests were based on the grounds that
the applicants fulfilled the requirements to be granted
market economy status and that their dumping margins
they alleged
had decreased substantially. Accordingly,
that
its
the continued imposition of
current level was no longer necessary to offset dumping.

the measure at

after

initiated,

determined,
that

consulting
sufficient evidence existed for

the Advisory
Having
the
Committee,
the Commission, by
initiation of an interim review,
notice,
an investigation
in August 2002,
pursuant to Article 11(3) of the basic Regulation, with
respect to VIZ STAL (7)
in October
2002, an investigation pursuant to Article 11(3) of the
basic Regulation with respect to NLMK (8). Both reviews
were limited to the examination of dumping.

(and subsequently,

The Commission officially advised the applicants as well
as the representatives of the exporting country of the
initiation of the interim reviews, and gave all interested
parties the opportunity to make their views known in
writing and to request hearings within the time limits set
out in the notices of initiation.

(6) OJ L 25, 30.1.2003, p. 7.
(7) OJ C 186, 6.8.2002, p. 15.
(8) OJ C 242, 8.10.2002, p. 16.

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(9)

(10)

(11)

(12)

The applicants made their views known in writing. All
parties who so requested were granted the opportunity to
be heard.

The Commission sent a questionnaire to the applicants
and to one related importer in the Community, to which
they replied within the time limits set in the notices of
initiation.

Furthermore,
the Commission sent a claim form for
market economy status pursuant to Article 2(7) of the
basic Regulation to both applicants.

The Commission sought and verified all the information
it deemed necessary for the determination of dumping.
Verification visits were carried out at the premises of the
following companies:

Exporting producers in Russia:

— VIZ STAL, Yekaterinburg

— NLMK, Lipetsk

Related importer (of VIZ STAL)

— Duferco Commerciale S.p.A., Genoa

The investigation of dumping covered the period of 1
July 2001 to 30 June 2002 (‘investigation period’ or ‘IP’).

2.2. I n t e r i m r e v i e w l i m i t e d t o t h e f o r m o f
t h e m e a s u r e s

(17)

(13) As mentioned above in recital

(2),

the Commission
decided on its own initiative to initiate an interim
review in order to examine the appropriateness of the
form of the measures in force (the ‘ex-officio review’). In
this respect, it was considered that enforcement problems
have been encountered in the monitoring of the under-
taking, with consequences on the remedial effect of the
measures. The initiation of this proceeding and part of
the investigation concerning this review was carried out
simultaneously to the expiry review which concluded
with the
existing measures by
Council Regulation (EC) No 151/2003. The Commission
officially advised the Community industry, the importers,
the suppliers and the users known to be concerned, as
well as the representatives of the exporting country, of
the initiation of both investigations and gave interested
parties the opportunity to make their views known in
writing and to request a hearing within the time limits
set out in the notice of initiation.

imposition of

the

(14) As mentioned in recital (6) of Regulation (EC) No 151/
2003, during the course of the abovementioned investi-
gations, the Commission received two requests from the
exporting producers concerned, namely VIZ STAL and
NLMK, for the initiation of the interim reviews limited
to the aspects of dumping, as explained in recital (6) of
this Regulation. Since in both reviews, the aspects of
dumping had to be investigated, which could eventually
affect the level of the measures subject to the ex-officio
it was considered appropriate to conclude this
review,
review together with the interim reviews limited to
dumping in order to be able to take into account the
eventually changed economic
the
exporting producers concerned.

circumstances of

2.3. J o i n t c o n c l u s i o n s

(15) Due to the fact that the three reviews concerned the
same anti-dumping measure,
it was considered appro-
priate, for reasons of sound administration, to conclude
them simultaneously.

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(16)

The product concerned is the same as in the original
investigation,
i.e. grain oriented cold-rolled sheets and
strips of silicon-electrical steel with a width of more
‘the
than 500 mm originating in Russia (‘GOES’ or
product
codes
7225 11 00 and ex 7226 11 00 (new CN-code since
1.1.2004). This product
is used for electromagnetic
appliances and in installations such as power and distri-
bution transformers.

falling within

concerned’),

CN

In the rather complex manufacturing process of GOES,
grain structures are oriented uniformly in the direction of
the rolling of the sheet or of the strip in order to allow it
to conduct a magnetic field with a high degree of effi-
in question has to comply with
ciency. The product
specifications concerning the magnetic induction,
the
pile factor, as well as the highest admissible level of re-
magnetisation losses.
the
product are covered with a thin isolating coating.

In general, both sides of

2. Like product

(18)

It was established that GOES produced and sold in Russia
had the same basic physical and technical characteristics
as GOES produced in Russia and exported to the
Community. Therefore, they were considered to be like
products within the meaning of Article 1(4) of the basic
Regulation.

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C. INTERIM REVIEWS LIMITED TO DUMPING

(23)

1. Preliminary remarks

(19)

The Council, by Regulation (EC) No 1972/2002 (1),
recognised that it is appropriate to allow normal value
for Russian exporters and producers to be established in
accordance with the provisions of Article 2(1) to (6) of
the basic Regulation and amended the basic Regulation
in accordance with Article 2 of
accordingly. However,
Regulation (EC) 1972/2002,
should
this amendment
only apply to investigations initiated after its entry into
force, i.e. from 8 November 2002. Consequently, since
both interim reviews requested by the applicants were
initiated prior to this date, the said amendment is not
applicable to the present investigations. In this regard, all
further references to the basic Regulation are to the
version
abovementioned
in
amendment.

force

prior

the

to

(20)

to Article 2(7)(b) of

Pursuant
the basic Regulation,
normal value can be determined in accordance with para-
graphs 1 to 6 of the said Article only if the applicants
show that they meet the criteria laid down in Article 2(7)
i.e. that market economy
(c) of the basic Regulation,
conditions prevail for them in respect of the manufacture
and sale of the like product concerned.

applicants

and the
The Commission informed the
Community industry of the above determinations and
granted them a possibility to comment. No comments
were received from the interested parties. In view of the
it was concluded that market economy status
above,
should be granted to both applicants.

3. NLMK

and access

to essential

(24) Although this applicant requested the initiation of the
current interim review, it did not subsequently provide
the Commission with the information essential for the
calculation of the dumping margin. In particular, during
the on-spot investigation, costs of production could not
be verified. Moreover, the information provided in the
supported by sufficient
questionnaire reply was not
evidence
information was
denied. In some instances, misleading information was
provided. For example, as admitted by NLMK, the costs
of production had been understated by some 50 % in the
questionnaire reply for the financial year 2001 which
overlapped with the investigation period by six months.
The company actually failed to substantiate and demon-
strate the veracity of its cost of production, as reported in
the questionnaire reply. Under these circumstances, a
proper verification of the questionnaire reply could not
be carried out and the figures reported were considered
unreliable.

2. Market economy status (‘MES’)

(21)

Claim forms for market economy status were submitted
within the deadline set out in the notices of initiation by
both applicants.

(25) NLMK was informed that the information submitted was
not verifiable and could therefore not be used. The
applicant was granted the opportunity to provide
further explanations. Furthermore, it was given the possi-
bility to be heard in this matter. NLMK did, however, not
come forward with any satisfactory explanation within
the specified time limit.

(22)

costs

for both applicants the decisions
It was found that
regarding prices,
in
and inputs were made
response to market signals without significant state inter-
ference and the costs of major inputs reflected market
set of basic
values. The companies had one clear
accounting records which were independently audited
in line with international accounting standards and
applied for all purposes. The production costs and the
financial situation of the applicants were not subject to
significant distortions carried over from the former non-
market-economy system. Both companies were subject to
bankruptcy and property laws which guaranteed legal
certainty and stability for the operation of the firms.
Finally, exchange-rate conversions were carried out at
the market rate. On the basis of the foregoing,
it was
concluded that the criteria set forth in Article 2(7)(c) of
the basic Regulation were met.

(26) NLMK thus

regarding,

in
admitted the problems
particular, the verification of costs, but claimed that in
order to determine its cost of production, data collected
during another investigation concerning a similar product
should be used. NLMK referred to the anti-dumping
investigation initiated in May 2002 (2) against imports
of certain grain oriented electrical sheets and strips
(flat-rolled products) of a width not exceeding 500 mm
inter alia, Russia (‘small GOES’). NLMK
originating in,
was subject to this investigation and had submitted a
questionnaire reply. Therefore,
it argued that the infor-
mation on the cost of production submitted in the
framework of
that proceeding should be used to
determine costs in the present review. NLMK claimed
that due to the similarity of both products,
i.e. small
GOES and the product concerned, costs would be prac-
tically identical.

(1) OJ L 305, 7.11.2002, p. 1.

(2) OJ C 111, 8.5.2002, p. 5.

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(27) However, the investigation concerning small GOES and
the present interim review covered different products and
were subject to different IPs. Nevertheless, even if the
costs of production of
these two products would be
practically identical in both investigations — which has
not been established — it should be underlined that costs
and prices related to different periods are not necessarily
comparable. Moreover,
investigation concerning
the
small GOES was terminated in February 2003 due to
the complaint by the Community
the withdrawal of
industry (1). Therefore, no final conclusions or findings
have been made which could have been used in the
present review. Therefore,
the
information collected during the investigation related to
small GOES would not be an appropriate basis to
determine normal value in the present proceeding.
NLMK's claim had therefore to be rejected.

it was concluded that

(28)

Subsequent to the disclosure, NLMK claimed that it had
been discriminated against vis-à-vis VIZ STAL and that its
costs should have been established on the basis of alter-
native sources rather than rejecting its request
for a
review as a whole. NLMK suggested that costs of VIZ
STAL or the Community industry should have been used.

(29)

(30)

This argument was unfounded. Unlike NLMK's case, VIZ
STAL's questionnaire reply could be fully verified and
corrections were done on the basis of VIZ STAL's own
verified figures (see recitals (40) and (56)). Where VIZ
STAL's figures were replaced by other sources of infor-
mation, this was not a consequence of unverified figures,
but of the reasons set out in recitals (41) to (49) and (57)
to (60).

it

is contradictory to first claim that

It should also be noted that the purpose of the present
interim review was to determine whether the individual
circumstances of the exporting producer concerned had
significantly changed. The interim review was initiated
upon NLMK's request. In this context, it must be noted
that
individual
circumstances have changed and subsequently, when
this cannot be shown, to claim that such determination
should be made on the basis of data of other companies.
The determination of costs and normal value is an
essential element in determining a company's individual
situation with regard to dumping and fully replacing
these data would lead to meaningless results under
these circumstances.

(1) OJ L 33, 8.2.2003, p. 41.

(31) As a result of the above, the company could not provide
evidence that circumstances with regard to the dumping
investigation have
margin established in the original
changed in the way it was alleged. Therefore,
the
interim review with regard to NLMK had to be
terminated and the anti-dumping margin found during
the original
i.e. 40,1 % should be main-
tained.

investigation,

(32) On this basis,

the dumping margin, expressed as a
percentage of the CIF import price at the Community
border, is:

NLMK, Lipetsk:

40,1 %

4. VIZ STAL

4.1. D u m p i n g

(a) Normal value

(33) With regard to VIZ STAL, it was first established whether
its total domestic sales of the like product were repre-
sentative in comparison with its total export sales of the
product concerned to the Community.
In accordance
with Article 2(2) of the basic Regulation, and since the
total domestic sales volume of VIZ STAL exceeded 5 % of
the
its total export sales volume to the Community,
domestic sales of the like product were found to be
representative.

(34)

Subsequently, those types of GOES sold domestically by
the applicant that were identical or directly comparable
with the types sold for export to the Community were
identified.

(35)

For each type sold by the applicant on its domestic
market and found to be directly comparable with the
type sold for export to the Community,
it was estab-
lished whether domestic sales were sufficiently represen-
tative for the purposes of Article 2(2) of the basic Regu-
lation. Domestic sales of a particular type of GOES were
considered sufficiently representative when the total
domestic sales volume of that type during the IP repre-
sented 5 % or more of the total sales volume of the
comparable type of GOES exported to the Community.

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(36) An examination was also made as

to whether

the
domestic sales of each product type could be regarded
as having been made in the ordinary course of trade, in
accordance with Article 2(3) and 2(4) of the basic Regu-
lation, by establishing a proportion of the profitable sales
to independent customers of
the type in question.
Domestic sales were considered profitable when the net
sales value was equal to or above the calculated cost of
production of each type concerned (‘profitable sales’). In
cases where the sales volume of a product type, sold at a
net sales price equal to or above the calculated cost of
production, represented more than 80 % of the total sales
volume of that type and in cases where the weighted
average price of that type was equal to or above the
unit cost of production, normal value was based on
the actual domestic price, calculated as a weighted
average of the prices of all domestic sales made of that
type during the IP,
irrespective of whether these sales
were profitable or not. In cases where the volume of
profitable sales of a product type represented 80 % or
less, but 10 % or more of the total sales volume of
that
type, normal value was based on the actual
domestic price, calculated as a weighted average of prof-
itable sales only.

(37)

In cases where the volume of profitable sales of a type
represented less than 10 % of the total sales volume of
that type in the domestic market, it was considered that
this type was sold in insufficient quantities for
the
domestic price to provide an appropriate basis for the
establishment of the normal value.

(38) On this basis, it was found that overall domestic sales of
the product concerned were not made in the ordinary
course of trade within the meaning of Article 2(1) of the
basic Regulation.

(39) Whenever domestic prices of a particular type could not
be used in order to establish normal value, a normal
value had to be constructed. It was therefore examined
whether the cost of production in the country of origin,
or the domestic prices of other producers in the country
of origin could be used as a basis for the construction of
a normal value in accordance with Articles 2(1) and 2(3)
of the basic Regulation.

(40) As

far as

the product
the costs of production of
concerned reported by VIZ STAL are concerned, they
had to be corrected taking into account different costs
of manufacturing for different
the product
concerned.
It was found that certain product features
had indeed an impact on costs and prices of a certain
product type. Therefore, data submitted by VIZ STAL on
cost of production could not be used as such and

types of

findings on the basis of facts available had to be made. In
the absence of any other more reasonable method, it was
considered that the difference in the cost of production
of the various types of GOES should bear the same ratio
as the difference in sales prices of these types. Therefore,
costs for each type of GOES produced were assessed on
the basis of the difference between average domestic sales
prices of a specific type of GOES in comparison to the
overall average domestic sales price of all types.

(41)

Furthermore, it is noted that VIZ STAL concluded a long
term agreement with its raw material supplier, which was
in force during the IP. The raw material purchased from
this supplier was hot rolled band (‘HRB’). In accordance
with this agreement, the supplier had an exclusive right
to supply raw material for this exporting producer during
the IP. The supplier produced tailor-made HRB according
to the exporting producer's specifications. The exporting
producer was bound to purchase the entire production of
HRB of its supplier, even if the required standards were
not met. Purchase prices were fixed in advance at a
certain level and guaranteed regardless the quality of
the raw material delivered.
It was furthermore found
technicians employed by the exporting producer
that
concerned carried out
the
premises of the supplier.

regular quality checks at

the

between

exporting

relationship

(42) Although the investigation did not bring into light any
direct shareholding or controlling rights between these
two companies, it had to be concluded, on the basis of
the information collected during the investigation that
producer
the
concerned and its
supplier was particularly strong.
Thus, the link between VIZ STAL and its supplier was
not limited to the sale as such, but extended beyond a
In particular, VIZ STAL had
simple sales transaction.
its supplier's
control over the production of HRB at
production site, which showed that
these companies
were also linked at the stage of the production process
of HRB. Therefore, the relationship between VIZ STAL
and its supplier was both, a sales relationship and a
manufacturing relationship, i.e. it went largely beyond a
mere buyer/seller relationship.

(43) On the basis of the abovementioned agreement, it was
furthermore concluded that VIZ STAL was not free to
source raw material from other suppliers during the IP,
but was dependent on only one supplier. Thus, VIZ STAL
also had to purchase HRB of a lower quality even if the
raw material did not meet the required standards for the
production of the product concerned. On the other hand,
HRB prices could not be adapted in line with the quality
of the product delivered, due to the fact that they were
fixed in advance. Moreover, VIZ STAL's supplier was not
free to provide other customers with HRB because it was
bound to produce exclusively for VIZ STAL at a specific
quality set by VIZ STAL.

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(44)

(45)

(46)

the IP,

respect,

the prices
subsequently examined whether
It was
In
between these parties could be considered reliable.
this
it was considered that purchase prices
between VIZ STAL and its supplier, as a consequence
of the long term agreement concluded between them,
were set at an artificial level during the IP. The investi-
gation revealed moreover that HRB prices followed an
unusual development and remained at the same level
throughout
the
regardless of
product purchased or other market conditions, such as
fluctuations of energy prices, one of the most important
components used for the production of HRB. It was also
considered that as set out in recitals (42) and (43), VIZ
STAL and its supplier had a relationship which went
beyond a mere buyer/seller relationship. Therefore, the
Commission considered that the costs associated with
the purchase price of HRB were not
reasonably
reflected in VIZ STAL's accounts within the meaning of
Article 2(5) of the basic Regulation and had therefore to
be adjusted.

the quality of

Subsequent to the disclosure, VIZ STAL claimed that it
was completely independent from its HRB supplier and
free to choose their
that both parties were in fact
business partners with regard to HRB. However,
this
statement contradicted the information provided during
the investigation and had therefore to be rejected. VIZ
STAL also argued that similar contractual arrangements
were common in this type of industry. This argument
was not supported by any evidence and could not be
confirmed by the findings of the present investigation.
In any case,
the existence of such arrangements was
considered irrelevant in this context. Furthermore, such
arrangements and their
impact on costs and prices
related to the product concerned would have to be
examined on a case by case basis.

and

quality

VIZ STAL objected to the Commission's conclusion that
HRB purchase prices did not follow market typical fluc-
tuations, by claiming that the product purchased was of a
to particular market
subject
specific
conditions as compared to other HRB types.
It was
also argued that the price development of HRB used
for the production of GOES in the Community would
show a similar pattern than in Russia. VIZ STAL claimed
further that a comparison of HRB prices with energy
prices, in particular natural gas, would be inappropriate
because the main raw material used by the VIZ STAL's
supplier would be coal. On a general basis, VIZ STAL
contested any link between the evolution of energy prices
and prices of steel products.

i.e.

in the notice of

the on-spot verification,

purchased during the IP was specifically requested prior
to the on-spot verification. The information submitted by
largely
VIZ STAL after
outside the deadline set
initiation,
could not be verified anymore and had therefore to be
rejected. In any case, it is noted that HRB prices in the
Community were
fluctuations
during the IP and that there were also significant price
fluctuations of other HRB types on the world market.
These developments indicated that the fixed price for
HRB on the Russian domestic market did not follow
market typical fluctuations, but was influenced by the
relationship between VIZ STAL and its supplier.

to significant

subject

(48) With regard to energy prices, it should be noted that VIZ
STAL's supplier did not submit a questionnaire reply and
was as such not investigated during this investigation.
Neither did VIZ STAL provide any evidence supporting
its claim. Therefore, the current investigation could not
confirm that VIZ STAL's supplier indeed used coal as a
major input for the production of HRB. Likewise, VIZ
STAL did not provide any evidence that fluctuations in
energy and steel prices would not be linked to each
other. Therefore, it can be reasonably expected that fluc-
tuations
under normal
conditions in a free market, have an impact on HRB
prices.

in energy

should,

prices

(49) Given the above,

had

the Commission

the reported HRB prices were not
considered reliable. HRB costs had therefore to be
adjusted. Consequently,
to
establish HRB prices with regard to this applicant on
the basis of the costs of other producers or exporters
in the same country or, where such information was
not available or could not be used, on any other
reasonable basis. As mentioned in recitals (24) to (31),
costs, including HRB costs of the other known producer
of HRB in Russia could not be determined. Since no
other producer of
any
the product
producers of HRB in Russia were known to the
Commission, HRB costs with regard to VIZ STAL had
to be established on the basis of any other reasonable
information. In the absence of any other more reliable
information, the cost of manufacturing for the applicant
could only be established on the basis of the prices of
HRB in the Community.

concerned or

(50)

Subsequent to the disclosure, VIZ STAL claimed further
that
in the Community should be
the HRB prices
characteristics,
adjusted for differences
production process, transport cost and conditions of sale.

in physical

(47)

The information provided regarding the differences in
quality and market conditions between various HRB
types was neither submitted in the reply to the ques-
tionnaire, nor during the on-spot verification, although
a detailed product description concerning the HRB type

(51) As

far as differences

in physical characteristics are
concerned, they were taken into account by excluding
high quality HRB types not produced in Russia when
establishing the average HRB price in the Community.
No further adjustment was therefore warranted.

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(52) With regard to the different production processes used in
Russia and in the Community, VIZ STAL argued that the
technology used in the Community required a higher
energy input, generated more waste and had a higher
production yield. However, although the production
process mainly used in the Community indeed required
a higher energy input,
it was found that it generated
significantly lower waste rates. Therefore, the overall effi-
ciency of the different processes was considered to be
equal and invoked similar production costs. Conse-
quently, no adjustment was warranted.

(53) As for differences in sales conditions, VIZ STAL argued
that prices in the Community would be at a ‘monopo-
listic’ level, while it did not explain to what extent this
It was
had an effect on price or price comparison.
furthermore established that the conditions of sale were
similar on both markets,
i.e. there was only one HRB
producer selling the product on both domestic markets.
In Russia, however, the prices were moreover influenced
by the relationship between the exporting producer
concerned and its supplier. Consequently, no adjustment
was warranted.

(54) As to transport costs for HRB purchases, no adjustment
was warranted because the Community industry prices
i.e. excluding
were calculated on an ex-works basis,
transport costs.

(55)

free market

In this context,

Subsequent to the disclosure, the Community industry
claimed that energy prices (in particular gas) on the
Russian domestic market would not be the result of
forces, which should be
the interplay of
taken into consideration when establishing costs of
production of VIZ STAL.
it is noted
that the Commission provided the Community industry
with the possibility to submit comments on granting
MES to the two Russian exporting producers. The
Community industry did not draw attention to the
need to,
in particular, examine the effects of Russian
gas prices when subsequently determining normal value
(see recital (23)). While gas prices in Russia may not be
it was not
uniform across
possible at this late stage of the proceeding to investigate
the matter of energy prices in more detail. In any case,
the investigation revealed that VIZ STAL's direct energy
input for the production of GOES was not significant
and had therefore only a minor impact on its cost of
production. As for its supplier of HRB, and as mentioned
in recital (48), this company was not directly investigated
in the present interim review and no conclusions were
made with regard to the reliability of the supplier's main
input cost. In any case, since prices between VIZ STAL
and its supplier were found to be unreliable and replaced
by prices charged on the Community market, any
possible price distortion regarding energy input was
already eliminated.

regions and customers,

(56)

(57)

(58)

(59)

In order to establish the full cost of production of GOES,
selling, general and administrative expenses (‘SG&A’) had
to be determined. VIZ STAL claimed that
certain
expenses occurring prior to the IP, but booked during
the IP should be considered as mere accounting costs and
deducted from the SG&A. However, no evidence has
been provided whether or not such costs occurred de
facto prior to the IP. Indeed, the expenses under consid-
eration were considerably higher as compared to the
these
previous years, so that an actual
costs during the IP cannot be excluded.

incurrence of

In this context,

the product concerned,

Furthermore, in accordance with Article 2(5) of the basic
Regulation, financial expenses had to be added to the
it was found that a
reported SG&A.
related party granted VIZ STAL non-interest bearing
loans on US-Dollar basis. Since SG&A did therefore
not fully reflect all costs associated with the production
and sale of
the amount of
financial expenses under normal market conditions was
added. In this regard, the interest rate for similar loans
under market conditions during the IP was applied to the
loans received. In the absence of any more appropriate
method,
for interest expenses was
allocated to the product concerned on the basis of the
turnover in accordance with Article 2(5) of the basic
Regulation.

the total amount

VIZ STAL objected to the adjustment made to the SG&A
with regard to financing costs. VIZ STAL argued that the
party providing the loan under question was a majority
shareholder of VIZ STAL and could also have chosen to
increase the share capital instead, where no financial cost
would have been incurred. Alternatively, VIZ STAL
claimed that reimbursements have occurred during the
IP and that the interest rate applied should be the rate
which could be obtained on the domestic market of the
provider of the loan. Finally, VIZ STAL claimed that part
of the interest expenses (the nominal interest rate) was
already included in the SG&A and should not be double
counted. The amount of the additional financial costs
should therefore be reduced accordingly.

The first claim had to be rejected because costs should
reflect all costs associated with the production and sale of
the product concerned, which has not been the case as
explained above in recital
(57). Under normal market
conditions VIZ STAL would have had to seek finance
on the open market and would have been subject to
finance expenses which should be reflected
additional
in its costs.
loans and equity
is also noted that
shares are not simple substitutes because they have
completely different consequences. Thus, while a loan is
paid back, this is not the case with share capital.

It

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(60)

any

submit

It was also considered that the most appropriate interest
rate would be the one in the domestic market of the
borrower, because such rate would most appropriately
reflect the costs associated with the production and sale
the product concerned on the Russian domestic
of
market, for which normal value is established. In any
case, VIZ STAL did not
supporting
evidence with regard to the alleged applicable interest
rate on the domestic market of
the
loan. VIZ STAL submitted some additional information
to the disclosure regarding the reimbur-
subsequent
sement of
the working capital which could not be
verified anymore due to the late stage of the proceeding
and had therefore to be disregarded. Furthermore, no
interest
submitted that part of
evidence was
expenses would already be included in the SG&A or
that
interests were in fact paid by VIZ STAL. This
claim had therefore to be rejected.

the provider of

the

(61)

The Community industry claimed that distortions with
regard to the evaluation and depreciation of assets
should be taken into consideration when calculating
SG&A It was also claimed that SG&A expenses would
be significantly higher than in the Community due to, in
particular, higher aftersales costs, higher R&D costs and
higher costs for indispensable communication tools and
IT systems.

(62)

The Community industry did not submit any supporting
evidence with regard to the above claims. These claims
were furthermore made at very late stage of
the
proceeding and could not, therefore, be investigated in
full detail. The above claims had therefore to be rejected.

(63)

it was examined whether normal value
Furthermore,
could be established on the basis of domestic prices of
other producers in accordance with Article 2(1) of the
basic Regulation. Since for the other applicant, NLMK, no
reliable information regarding domestic sales prices of
the product concerned was available (as explained in
recitals (24) and (31) above) and given that there were
no other cooperating sellers or producers on the Russian
domestic market than the applicants, no information was
available to the Commission regarding the domestic sales
prices of another producer.

where necessary, a reasonable amount for SG&A and a
reasonable margin of profit in accordance with Article 2
(3) of the basic Regulation.

(65)

(66)

subject

To this end, it was examined whether the SG&A incurred
and the profit realised by the applicant on the domestic
market, corrected as described above, constituted reliable
data. Actual domestic SG&A expenses were considered
reliable since domestic sales volume of the like product
could be regarded as representative. However with regard
to the fact that the overall domestic sales of the product
concerned were not made in the ordinary course of trade
within the meaning of the basic Regulation (see recital
(38)),
the domestic profit margin could not be
determined in accordance with the first sentence of
Article 2(6) of the basic Regulation. Since no information
on SG&A and profit margin of other exporters or
producers
to this investigation was available
and since VIZ STAL did not produce and sell other
products falling within the same general category of
products than GOES, the domestic profit margin was
established in accordance with Article 2(6)(c) of
the
basic Regulation, i.e. on the basis of any other reasonable
method. In the absence of any other more reliable infor-
mation, the profit margin on the domestic market was
estimated at 10 % of the cost of production. Given that
investments
still considered an
emerging market economy with more dynamic growth
than in more
prospects and higher
developed economies and subsequently higher yield
expectations on any capital
the profit
margin of 10 % as used for the purposes of the present
conservative
investigation was
estimate.

in Russia, which is

considered to be

inflation rates

investment,

a

(b) Export price

VIZ STAL was largely owned and controlled by a related
holding/trading company in Switzerland. All export sales
during the investigation period were made via the Swiss
company to a related importer in the Community, which
resold the product concerned to the final customers in
prices were
the
constructed on the basis of resale prices to the first inde-
pendent customer in the Community in accordance with
Article 2(9) of the basic Regulation.

Community.

Therefore,

export

(64)

Therefore,
in all cases where constructed normal value
was used, normal value was constructed by adding to the
manufacturing costs of the exported models, adjusted

(67) Adjustments were made for all costs incurred between
importation and resale by the related importer in the
including SG&A costs, and a reasonable
Community,
profit margin,
in accordance with Article 2(9) of the
basic Regulation.

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(68)

(69)

In this context, it should be noted that as mentioned in
recital (75), an adjustment was made to the export price
for the credit cost (i.e. financial cost) for payment terms
granted by the related importer to the first independent
buyer in the Community under Article 2(10)(g) of the
basic Regulation as claimed by VIZ STAL in its reply to
the questionnaire. On the other hand, when constructing
export prices in line with Article 2(9) of the basic Regu-
lation, adjustments are also to be made for all costs
incurred between importation and resale of the product
concerned. The items for which adjustment is to be made
include, amongst others, a reasonable margin for SG&A
in some cases, these
of the related importer. However,
expenses,
SG&A expenses might
include
terms.
abovementioned payment
deriving from the
in order to avoid a double deduction of
Therefore,
(i) the financial costs deriving
financial costs, namely,
from the payment
and
referred to above
deducted under Article 2(10)(g) of the basic Regulation,
and (ii) the financial costs that are part of the SG&A of
the related importer, the related importer was given an
opportunity to submit confirming evidence that a part of
its financial costs was incurred to finance the payment
in the
terms granted to its
Community. The related importer did not, however,
submit any substantiated evidence that
this was the
case and therefore the related importer's full SG&A
costs are to be deducted from the constructed export
price in line with Article 2(9) of the basic Regulation.

independent customers

financial

terms

be

therefore

the calculation of

Subsequent to the disclosure, VIZ STAL claimed that part
of the financial costs incurred and deducted from the
export price under Article 2(10)(g) of the basic Regu-
lation was included in the related importer's SG&A and
the constructed export price
that
should
double
revised
deduction of these costs. It is noted that this claim was
made for the first time after disclosure and that even at
this point no confirming evidence was provided which
could support VIZ STAL's view. Moreover,
the verifi-
cation at
the related importer could
not confirm that credit costs granted by VIZ STAL to
the independent customer
in the Community were
indeed borne by the related importer and thus included
in its SG&A. Consequently, this claim had to be rejected.

the premises of

to avoid

a

(70) As far as the related importer in the Community is
concerned, the investigation revealed that amortisation
and depreciation costs incurred by the related importer
were not reported. These costs were therefore added to
the total SG&A expenses accordingly. SG&A were then
deducted from the resale price to the first independent
customer in the Community in accordance with Article 2
the
(9) of
Commission rejected the methodology applied by VIZ
STAL in order to calculate allocation ratios used to
allocate total SG&A expenses to the product concerned
on the one hand, and to ‘other products’ on the other
hand. VIZ STAL argued that its related importer acted as

the basic Regulation.

context,

In this

instead of

an agent with regard to transactions of certain other
products, on commission basis. The related importer's
revenue with regard to these transactions consisted
only of the commissions received for ‘other products’.
Therefore, the exporting producer argued that, in order
to calculate allocation ratios on the basis of the turnover,
a hypothetical higher turnover should be used for sales of
‘other products’
revenue
booked in the accounts of its related importer. It was
argued that the hypothetical turnover should correspond
to the sales price of
in the
Community. As a result, allocated SG&A expenses
would increase for ‘other products’, while they would
decrease for the product concerned. VIZ STAL claimed
that this methodology would reflect more appropriately
the administration costs linked to operations concerning
the product concerned on the one hand and ‘other
products’ on the other hand.

these ‘other products’

the lower actual

(71) However,

the

it was

found that

related importer
performed the functions of an agent with regard to
‘other products’. The functions of an agent involve, by
nature, a lower administrative burden as compared to the
functions performed by an importer. Thus, an importer
buys and resells the products under its own name, which
involves not only a higher administrative burden, but
also a higher risk. Moreover, an importer has typically
to raise capital
for purchasing goods. These factors
should normally also be reflected in different SG&A
expenses between an importer and an agent. This
difference was, however, not reflected in the allocation
method used by VIZ STAL, which led to unreasonable
results.

(72)

Considering the above,
it was therefore concluded that
the allocation of SG&A expenses on the basis of actual
turnover would be the most appropriate method in order
to calculate SG&A for the different products involved.

(73)

In the absence of any other more reliable information,
the reasonable profit margin was estimated at 5 %. This
was considered appropriate for this type of business. The
same profit margin was also used in the previous inves-
i.e. the expiry review mentioned in recital (2).
tigation,

(c) Comparison

(74)

In order to allow a fair comparison between normal
value and export price as established above, account
was taken of differences in factors, which were found
to affect prices and price comparability in accordance
with Article 2(10) of the basic Regulation.

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(75) Adjustments to the export price were reported by VIZ
STAL for inland transport and freight cost, export duty,
insurance costs, miscellaneous charges, credit cost, bank
charges, import and other charges, stamp fees and slitting
charges and granted because they were found to be
reasonable, accurate and supported by verified evidence.

cantly in the near future, as well as to the limited number
of producers and users. Therefore,
it is expected that
domestic sales prices of GOES will not vary significantly
in future.

(d) Dumping margin

(76) As far as VIZ STAL is concerned, the weighted average
normal value by product
type was compared to the
weighted average export price of that type in accordance
with Article 2(11) of the basic Regulation.

(77)

The comparison showed the existence of dumping. The
dumping margin expressed as a percentage of the CIF
import price at the Community border is:

VIZ STAL, Yekaterinburg:

14,7 %

4.2. L a s t i n g

n a t u r e
c i r c u m s t a n c e s

o f

t h e

c h a n g e d

(78) With regard to VIZ STAL, it was also examined whether
the changed circumstances with respect to the original
investigation could reasonably be considered to be of a
lasting nature. In this respect, the possible development
of the normal value as well as the export price of the
company was analysed. Specific consideration was given
to its price levels of GOES on the domestic and the
export market,
cost of production of GOES,
production capacity and utilisation, as well as its export
volume to the Community.

its

(82)

(79)

It was first considered that during the original
investi-
gation the applicant did not operate under market
economy conditions. However, as illustrated in recital
the current
(22), during the investigation period of
interim review the applicant was able
to provide
evidence that it fulfilled the criteria set out in Article 2
(7)(c) of the basic Regulation, i.e. it was granted MES. As
a consequence, normal value of
this applicant was
determined on the basis of the verified data submitted
by this company, instead of the information submitted
by producers from an analogue country.

(80) Normal value for VIZ STAL was based on both domestic
sales prices and constructed normal value. As to the
domestic sales prices of GOES,
it could be established
that during the investigation period these were relatively
stable. This was due to a stable domestic demand and
consumption which is not expected to change signifi-

(81) As far as the cost of production is concerned,

it

is
recalled that costs had to be adjusted due to unreliable
input prices (HRB) (see recitals (41) to (49)). VIZ STAL
claimed that the nature of the relationship to its supplier
has changed after the investigation period, i.e. VIZ STAL
plans to source HRB increasingly from other suppliers,
including suppliers in the Community. It was considered
whether this fact could have an impact on VIZ STAL's
input costs and consequently on the cost of manufac-
turing. However,
it was found that any possible price
increase of HRB is not very likely to have an effect on
the normal value established in this investigation. This is
due to the fact that normal value was determined on the
basis of adjusted cost of manufacturing, not taking into
consideration the unreliable input price. Any real increase
in purchase prices of HRB up to a market value is
therefore already included in the normal value used for
the purpose of the determination of the dumping margin.
Consequently,
it is reasonable to assume that normal
value of this applicant will not change significantly in
the near future.

(96),

in the past, export sales of

The Commission also examined the possible devel-
opment of export sales by VIZ STAL as a consequence
of the application of a lower duty rate. In this regard, it
was considered that
this
company were limited in quantity due to the undertaking
investigation. As
in force accepted during the original
mentioned in recital
it was found that this type
of undertaking is not appropriate anymore. Conse-
quently,
it was examined whether a lower duty rate
without quantitative import restrictions would result in
a significant increase in exports of GOES by the applicant
to the Community at lower export prices than those
prevailing in the IP.
it was considered
In this regard,
that
the applicant's capacity utilisation rate was over
90 % during the investigation period. Furthermore, the
investigation did not reveal any foreseen investments in
order to increase the applicant's capacity. Therefore,
it
could be reasonably assumed that production volume
would remain stable and not significantly increase in
the near future. Moreover, no reason was found why
the applicant should shift more of its current production
to the Community market. It was therefore concluded
that the export volume of GOES by this company to
the Community would not change significantly.

(83) As far as export prices are concerned, it is recalled that
the undertaking in force was mainly of a quantitative
character which allowed the applicant to set its export
relatively freely within a determined export
prices
volume.
the undertaking in
question were only deemed to follow ‘price levels
prevailing in the Community market’. The definitive

the co-signers of

Indeed,

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Official Journal of the European Union

L 182/15

ceiling was

the export volume of

reached. Notwithstanding

anti-dumping duty was only applicable once the quanti-
tative
the
Commission findings as outlined in recitals (94) and
(95),
large GOES from Russia
during the IP was considered to fall within the quanti-
tative ceiling of the undertaking. Therefore, the export
price during the current
investigation period did not
contain the anti-dumping duty established during the
original
be
this company a lower dumping
concluded that
margin would not have an effect such as to lower signif-
icantly the current export prices.

Consequently,

investigation.

can

for

it

5. Conclusions

(84) According to Article 9(4) of the basic Regulation, the
duties should not exceed the margin of dumping estab-
lished but should be less than the margin if such lesser
duty would be adequate to remove the injury of the
Community industry. Given the fact
the present
interim reviews are limited to the examination of the
the level of duties imposed should
dumping aspects,
not be higher
found in the
than the injury levels
original investigation as confirmed by the expiry review
mentioned in recital (2).

that

(85) As mentioned in recital

(29) of Decision No 303/96/
the original definitive dumping margin was
ECSC,
greater
than the injury elimination level definitively
determined and therefore the definitive anti-dumping
duty was based on the lower injury margin, namely
40,1 %. Since the dumping margin found for VIZ STAL
in this interim review is lower
the
amended anti-dumping duty should be based on this
lower dumping margin, namely 14,7 %.

than that

level,

(86)

It follows from the above that with regard to VIZ STAL
and as provided for by Article 11(3) of the basic Regu-
lation, the anti-dumping duty imposed by Decision No
303/96/ECSC and confirmed by Regulation (EC) No 151/
2003 on imports of GOES originating in Russia, should
be amended.

(87) As far as NLMK is concerned, the present interim review
should be terminated and the definitive anti-dumping
duty
imposed by Decision No 303/96/ECSC and
confirmed by Regulation (EC) No 151/2003 should be
maintained.

(88) All parties concerned were informed of the essential facts
on the basis of which it was intended to recommend the

amendment of the existing measures with regard to VIZ
STAL and to terminate the interim review with regard to
NLMK and were given the opportunity to comment.
Comments were received and taken into consideration
where appropriate. All parties concerned were also
granted a period to make representations subsequent to
disclosure.

D. INTERIM REVIEW LIMITED TO THE FORM OF THE
MEASURES

(89) As stated in recital (2), the interim review regarding the
form of the measure for imports of GOES originating in
Russia was initiated by the Commission on its own
initiative in order to examine the appropriateness and
effectiveness of
the undertaking accepted by Decision
No 303/96/ECSC. The investigation was carried out in
conjunction with the expiry review concluded by Regu-
lation (EC) No 151/2003 and the interim reviews limited
to dumping with regard to the applicants.

(90)

(91)

(92)

In this regard, it is noted that the undertaking originally
accepted, was in essence, a quantitative undertaking
according to which the companies undertook to ensure
that their exports to the Community were made within
an overall volume ceiling.

In accordance with Article 8(1) of the basic Regulation,
the aim of undertakings is to eliminate the injurious
effect of dumped imports. This is achieved through the
exporter raising its prices or ceasing exports at dumped
price levels. The investigations have shown that the type
of undertakings originally accepted, which simply limited
the quantity of imports into the Community failed to
raise prices to non-injurious levels and thus restore fair
trade on the Community market. Therefore, in this case,
form were not
in their present
the undertakings
considered as
to
appropriate
eliminate the injurious effect of the dumping.

and effective means

The original undertakings were not only signed by the
applicants of the current interim reviews, but also by a
Russian trader exporting the product concerned during
the investigation period of the original investigation and
by the Russian authorities in order to guarantee a proper
monitoring of
the undertaking in question. As was
already established during the expiry review mentioned
in recital (2), the co-signing trader, namely VO ‘Promsyr-
ioimport’ (Moscow) ceased its export activities of GOES
to the Community after the imposition of the definitive
anti-dumping duties, prior to January 2000. This trader
was therefore not considered as an interested party in the
expiry review which lead to the maintenance of the defi-
nitive anti-dumping duties in January 2003. Neither did
the said trader come forward and affirm its interest to re-
export GOES to the Community or requested to be
treated as a potential
interested party in the ongoing
anti-dumping proceeding.

(93)

(94)

(95)

(96)

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19.5.2004

it was considered that given the changed
Furthermore,
circumstances in Russia, meanwhile fully recognised as a
market economy country, any guarantees of the Russian
authorities with regard to a proper monitoring of under-
takings offered by Russian exporting producers in the
framework of an anti-dumping investigation are neither
necessary nor compatible anymore with this new status.

(97) One applicant, NLMK, objected to the Commission's
findings with regard to the appropriateness of the under-
taking. This applicant claimed, in particular, that (i) the
licence system in place would exclude any possible
circumvention; (ii) the imports under the ceiling set out
in the undertaking would be below the injury de minimis
level and therefore ensure the elimination of the injurious
effects of dumping, and (iii) the change in the number of
co-signing parties would not be a sufficient reason to
withdraw the acceptance of the undertaking.

Finally, as mentioned in the notice initiating the interim
review limited to the form of the measures, enforcement
problems have been encountered with regard to the
monitoring of the undertaking, with consequences on
the remedial effect of the measures. This was confirmed
by the current investigation. Thus, it was found that the
sales structure of both exporting producers, as well as the
sales channels used did not allow them to identify the
final destination of the product concerned. As a conse-
quence,
it could not be established whether products
were indeed re-exported or released for free circulation
in the Community (see also recital (95)). Therefore, it was
not possible to determine whether the reports provided
by the exporting producers concerned, as required by the
undertaking, were complete and correct.

(98)

(99)

it

for

into

destined

circulation

two different

the undertaking,

should be noted that

In this context,
since the
types of
acceptance of
export licenses were introduced, namely type A licences
(exports
the
free
Community) and type B licences (exports destined for
import
customs
in the Community under other
regimes). While for goods exported under a type A
licence an annual quota ceiling had to be respected,
goods exported under a type B licence were not subject
to such quantitative limits. The related importers, being
unable to identify the final destination of the imported
products,
conclusive
provide
evidence on the subsequent re-export of goods which
have left Russia with an export licence B. Moreover, it
was found in cooperation with the relevant custom's
authorities that a number of these imports have been
declared for free circulation, therefore jeopardising the
effectiveness of
the undertaking. The procedures used
by the companies proved to be insufficient to correctly
apply all conditions which are set out in the undertaking.
Thus, the risk of a possible circumvention of the under-
taking cannot be excluded.

could not

sufficient

In the light of the above considerations, it was concluded
that the undertaking in its current form was not appro-
priate anymore, in particular as far as the effective moni-
toring of this undertaking was concerned. The applicants,
as well as the remaining co-signers of the undertaking,
namely VO ‘Promsyrioimport’ (Moscow) and the Russian
authorities were
the Commission's
conclusions and given the opportunity to comment.

informed

of

The arguments advanced with regard to the enforcement
the current undertaking contradicted the Commis-
of
sion's findings (see recitals (94) and (95)) and were not
supported by any evidence. The conclusion that there is a
the undertaking
risk of a possible circumvention of
It follows that the current
cannot be excluded either.
undertaking does not
the
injurious effect of dumping would indeed be eliminated
and is
considered inappropriate. The
change in the number of the co-signing parties should
not be singled out, but has to be seen in the context of
the overall significantly changed circumstances in Russia
since the acceptance of the undertaking. These claims had
therefore to be rejected.

sufficiently guarantee that

consequently

the partial

concluded together with other

this applicant also claimed that

the European Union on 1 May 2004.

the present
Finally,
the measures
interim review limited to the form of
should be
interim
reviews eventually to be initiated further to the enlar-
gement of
It
should be noted that
interim review of
measures on imports of GOES from Russia which was
initiated on 20 March 2004 (1) will assess, in the light of
the Community interest, whether there is a need to adapt
the existing measures to avoid a sudden and excessively
negative effect of the enlargement of the European Union
on interested parties,
including users, distributors and
consumers. Accordingly, there is no direct link between
the present interim review limited to the form of the
interim
current measures
review in
This
the
argument was therefore rejected.

and the ongoing partial
of
framework

enlargement.

(100)

It follows from the above that the undertaking in its
current form is not appropriate anymore.

E. NEW UNDERTAKING OFFERS

(101) Subsequent to the disclosure of the essential facts and
considerations, on the basis of which it was concluded
that the level of the existing anti-dumping margin should
be amended, where appropriate, and that the quantitative
undertaking in its current
form is not appropriate
anymore, NLMK offered an undertaking in accordance
with Article 8(1) of the basic Regulation.

(1) OJ C 70, 20.3.2004, p. 15.

19.5.2004

EN

Official Journal of the European Union

L 182/17

(102) However,

the level of cooperation of

this company
throughout the investigation, and the accuracy and relia-
bility of the data it had provided was unsatisfactory (see
recital (24)). Therefore, it is highly unlikely that a price
undertaking from this company could be effectively
monitored. For this reason, the acceptance of the under-
taking offered by NLMK was considered impractical
within the meaning of Article 8(3) of the basic Regu-

lation. It was therefore concluded that the undertaking
offered subsequent to disclosure should not be accepted.

(103) The interested parties were informed accordingly and the
reasons why the undertaking offered could not be
accepted disclosed in detail to the applicant concerned.
The Advisory Committee was consulted,

HAS ADOPTED THIS REGULATION:

Article 1

The review of anti-dumping measures concerning imports of grain oriented cold-rolled sheets and strips of
silicon-electrical steel with a width of more than 500 mm originating in Russia and falling within CN codes
7225 11 00 (sheets of a width of 600 mm or more) and 7226 11 00 (sheets of a width of more than 500
mm but less than 600 mm) with regard to Novolipetsk Iron & Steel Corporation (‘NLMK’)
is hereby
terminated.

In Council Regulation No (EC) 151/2003, Article 1 shall be replaced by the following:

Article 2

‘Article 1

A definitive anti-dumping duty is hereby imposed on imports of grain oriented cold-rolled sheets
1.
and strips of silicon-electrical steel with a width of more than 500 mm originating in Russia and falling
within CN codes 7225 11 00 (sheets of a width of 600 mm or more) and ex 7226 11 00 (TARIC code
7226 11 00 10) (sheets of a width of more than 500 mm but less than 600 mm).

The rate of the definitive anti-dumping duty, applicable to the net, free-at-Community frontier

2.
price, before duty, for the product manufactured by the following companies shall be:

Company

Duty rate

TARIC additional code

OOO Viz-Stal, 28, Kirov St.,
620028 Yekaterinburg GSP-715

All other companies

14,7 %

40,1 %

A516

A999

3.

Unless otherwise specified, the provisions in force concerning customs duty shall apply.’

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

Article 3

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

Done at Brussels, 17 May 2004.

For the Council
The President

B. COWEN