Proposal for a Council Regulation amending Council Regulation (EC) No 964/2003 imposing a definitive anti-dumping duty on imports of certain tube or pipe fittings originating, inter alia, in Thailand
Date: 2004-07-27
Institutions: European Commission
Subjects: China, Thailand, anti-dumping duty, anti-dumping legislation, import (EU), metal product, piping

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.7.2004 
COM(2004) 525 final 

Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 964/2003 imposing a definitive anti-dumping 
duty on imports of certain tube or pipe fittings originating, inter alia, in Thailand  

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

By Regulation (EC) No 584/96, last confirmed by Regulation (EC) No 964/2003, the Council 
imposed  a  definitive  anti-dumping  duty  on  imports  of  certain  tube  and  pipe  fittings 
originating, inter  alia,  in  Thailand.  The  measures  consist  of  an ad  valorem  duty,  except  for 
two  Thai  exporting  producers  from  which  undertakings  had  been  accepted  by  Commission 
Decision 96/252/EC, as amended by Commission Decision 2000/453/EC. 

In April 2001, the Commission initiated an ex officio interim review pursuant to Article 11(3) 
of  Council  Regulation  (EC)  No 384/96  (‘basic  Regulation’),  in  order  to  examine  the 
appropriateness  of  the  form  of  the  measures  concerning  the  two  exporters  from  which 
undertakings had been accepted. It was concluded that it is appropriate to change the form of 
the measures to an ad valorem duty. 

Subsequently,  in  January  2003  the  Commission  initiated  a  partial  interim  review,  limited  to 
the  dumping  aspects,  pursuant  to  Article  11(3)  of  the  basic  Regulation,  following  a  request 
lodged by one Thai exporting producer, Awaji Sangyo (Thailand) Co., Ltd. This investigation 
showed  the  existence  of  less  dumping  than  the  original  investigation.  In  addition,  evidence 
was  found  that  it  is  unlikely  that  there  will  be  in  the  foreseeable  future  a  recurrence  of 
dumping  at  previous  levels.  It  was  consequently  concluded  that  the  changed  circumstances 
are  of  a  lasting  nature.  Under  these  circumstances,  it  is  therefore  considered  appropriate  to 
amend the measures insofar as they concern this company.  

The Member States have been consulted and are in favour of the amendments of the measure. 

In  the  light  of  the  foregoing,  the  Commission  proposes  that  the  Council  adopt  the  attached 
proposal for a Regulation amending the definitive anti-dumping duty imposed by Regulation 
(EC)  No  964/2003  on  imports  of  certain  tube  and  pipe  fittings  originating,  inter  alia,  in 
Thailand.  

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Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 964/2003 imposing a definitive anti-dumping 
duty on imports of certain tube or pipe fittings 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 384/961 on protection against dumped imports 
from  countries  not  members  of  the  European  Community  (‘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: 

A. PROCEDURE 

1. Previous investigations and existing measures 

The measures currently in force on imports of certain tube or pipe-fittings, of iron or 
steel originating in Thailand are a definitive anti-dumping duty imposed originally by 
Council  Regulation  (EC)  No  584/962,  as  amended  by  Council  Regulation  (EC) 
No 1592/20003  and  confirmed,  following  an  expiry  review  investigation,  by  Council 
Regulation (EC) No 964/20034

.  

The  measures  applicable  to  these  imports  consist  of  an  ad  valorem  duty,  except  for 
two Thai exporting producers from which undertakings were accepted by Commission 
Decision 96/252/EC5, as amended by Commission Decision 2000/453/EC6.  

the  Commission  simultaneously 

initiated  an  expiry  review 
In  April  2001, 
investigation7  pursuant  to  Article  11(2)  of  the  basic  Regulation  and  an  ex  officio 
interim review pursuant to Article 11(3) of the basic Regulation. The review pursuant 
to  Article  11(2)  of  the  basic  Regulation  was  concluded  by  Council  Regulation  (EC) 

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.) 
OJ L 84, 3.4.1996, p. 1. 
OJ L 182, 21.7.2000, p. 1. 
OJ L 139, 6.6.2003, p. 1. 
OJ L 84, 3.4.1996, p. 46. 
OJ L 182, 21.7.2000, p. 25. 
OJ C 103, 3.4.2001, p. 5. 

(1) 

(2) 

(3) 

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No  964/2003  maintaining  the  existing  measures.  However,  the  interim  review, 
pursuant to Article 11(3) of the basic Regulation, remained open at the conclusion of 
the expiry review.  

2. Grounds for the review 

In  April  2001,  the  Commission  initiated,  on  its  own  initiative,  an  ex  officio  interim 
review,  pursuant  to  Article  11(3)  of  the  basic  Regulation,  in  order  to  examine  the 
appropriateness  of  the  form  of  the  measures  concerning  the  imports  originating  in 
Thailand.  In  this  respect,  it  should  be  noted  that  enforcement  problems  have  been 
encountered  in  the  monitoring  of  the  undertakings  accepted  from  two  exporters  in 
Thailand, i.e. Awaji Sangyo (Thailand) Co., Ltd. and TTU Industrial Corp. Ltd. (‘the 
exporters  concerned’),  with  consequences  on  the  remedial  effect  of  the  measures. 
After  consulting  the  Advisory  Committee,  the  Commission  initiated  an  investigation 
limited  to  the  form  of  the  measures.  The  initiation  of  the  review  was  announced 
simultaneously  to  the  initiation  of  the  expiry  review  by  which  the  existing  measures 
were confirmed.  

The Commission officially advised the applicant Community producers, the exporting 
producers  in  Thailand,  importers/traders,  user  industries,  and  associations  of  users 
known to be concerned, as well as the representatives of the Thai Government of the 
initiation of the review. The Commission also gave the parties directly concerned the 
opportunity to make their views known in writing and to request a hearing. 

Following disclosure of the results of the investigation pursuant to Article 11(2) of the 
basic Regulation, a Thai exporting producer, Awaji Sangyo (Thailand) Co., Ltd. (the 
‘applicant’), lodged a request in April 2002 for an interim review of the anti-dumping 
measures applicable to it, limited to its situation of dumping, pursuant to Article 11(3) 
of  the  basic  Regulation.  The  request  alleged  that  changed  circumstances  of  a  lasting 
nature had led to a considerably reduced normal value, which in turn has reduced or 
eliminated  dumping  so  that  the  continued  imposition  of  the  measures  at  the  existing 
level in respect of its imports was no longer necessary to offset dumping. 

Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed for the initiation of an interim review, the Commission published a notice of 
initiation8 and commenced an investigation.  

The  Commission  officially  advised  the  representatives  of  the  exporting  country  and 
the  applicant  of  the  initiation  of  the  interim  review  limited  to  dumping  and  gave  all 
parties directly concerned the opportunity to make their views known in writing and to 
request a hearing. The Commission also sent a questionnaire to the applicant. 

The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the 
purpose  of  the  determination  of  dumping  and  carried  out  a  verification  visit  at  the 
premises of the applicant.  

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

(10)  The investigation limited to dumping covered the period from 1 January 2001 until 31 

December 2002 (the ‘investigation period’ or ‘IP’). 

8 

OJ C 17, 24.1.2003, p. 2. 

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B. PRODUCT CONCERNED AND LIKE PRODUCT 

Product concerned 

(11)  The  product  concerned  subject  to  the  interim  reviews  is  the  same  as  the  product 
concerned  in  the  previous  investigations,  i.e.  certain  tube  or  pipe  fittings  (other  than 
cast  fittings,  flanges  and  threaded  fittings),  of  iron  or  steel  (not  including  stainless 
steel),  with a greatest  external  diameter  not  exceeding  609.6  mm,  of  a  kind  used  for 
butt-welding  or  other  purposes  (‘product  concerned’  or  ‘tube  or  pipe  fittings’), 
originating  in  Thailand.  It  is  currently  classifiable  within  CN  codes  ex  7307  93  11 
(Taric code 7307 93 11 99), ex 7307 93 19 (Taric code 7307 93 19 99) ex 7307 99 30 
(Taric code 7307 99 30 98) and ex 7307 99 90 (Taric code 7307 99 90 98). 

Like product 

(12)  As in the previous investigations, these investigations have shown that the tube or pipe 
fittings of iron or steel, produced in Thailand and sold domestically and/or exported to 
the Community have the same basic physical and chemical characteristics as the tube 
or pipe fittings sold in the Community by the Community producers and, therefore, are 
considered  to  be  like  products  within  the  meaning  of  Article  1(4)  of  the  basic 
Regulation. 

C. DUMPING WITH REGARD TO THE APPLICANT 

1.1. 

Normal value 

(13)  As  far  as  the  determination  of  normal  value  is  concerned,  it  was  first  established 
whether the applicant's total domestic sales of the like product were representative in 
comparison  with  its  total  export  sales  to  the  Community.  In  accordance  with  Article 
2(2)  of  the  basic  Regulation,  this  was  found  to  be  the  case  since  the  applicant’s 
domestic  sales  volume  constituted  at  least  5%  of  its  total  export  sales  volume  to  the 
Community. 

(14) 

It  was  then  examined  whether  the  applicant’s  domestic  sales  were  sufficiently 
representative  for  each  of  the  product  types  exported  to  the  Community.  This  was 
considered  to  be  the  case  when,  during  the  IP,  the  total  domestic  sales  volume  of  a 
product  type  represented  5%  or  more  of  the  total  sales  volume  of  the  same  type 
exported to the Community. On this basis, it was found that domestic sales of all but 
one product type exported to the Community were representative.  

(15)  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, by establishing 
the proportion of profitable sales to independent customers of the type in question. In 
cases  where  the  sales  volume  of  a  product  type,  sold  at  a  net  sales  price  equal  to  or 
above  the  calculated  unit  cost  of  production,  represented  80%  or  more  of  the  total 
sales volume of that type, and 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 of that type 
made 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 at 

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least  10%  of  the  total  sales  volume,  normal  value  was  based  on  the  actual  domestic 
price, calculated as a weighted average of profitable domestic sales of that type only. 

(16) 

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

(17)  Wherever domestic prices of a particular type sold by the applicant could not be used 
in order to establish normal value, another method had to be applied. In this regard, in 
the  absence  of  other  exporting  producers  and  of  any  other  reasonable  method, 
constructed normal value was used.  

(18) 

In  all  cases  where  constructed  normal  value  was  used  and  in  accordance  with 
Article 2(3)  of  the  basic  Regulation,  normal  value  was  constructed  by  adding  to  the 
manufacturing  costs  of  the  exported  types,  adjusted  where  necessary,  a  reasonable 
amount  for  selling,  general  and  administrative  expenses  (‘SG&A’)  and  a  reasonable 
margin of profit. To this end, the Commission examined whether the SG&A incurred 
and  the  profit  realised  by  the  exporting  producer  concerned  on  the  domestic  market 
constituted  reliable  data.  Actual  domestic  SG&A  expenses  were  considered  reliable 
since  the  domestic  sales  volume  of  the  company  concerned  could  be  regarded  as 
representative.  The  domestic  profit  margin  was  determined  on  the  basis  of  domestic 
sales made in the ordinary course of trade. 

1.2. 

Export price 

(19)  Since all export sales of the product concerned were made directly to an independent 
customer  in  the  Community,  the  export  price  was  established  in  accordance  with 
Article 2(8) of the basic Regulation on the basis of the prices actually paid or payable 
when sold for export to the Community. 

1.3. 

Comparison 

(20)  For the purposes of a fair comparison by type on an ex-factory basis and at the same 
level  of  trade,  due  allowance  was  made  for  differences  which  were  claimed  and 
demonstrated  to  affect  price  comparability  between  the  export  price  and  the  normal 
value. These adjustments were made in respect of import charges, discounts, transport, 
insurance, handling costs, packing, credit and commissions in accordance with Article 
2(10) of the basic Regulation.  

1.4. 

Dumping margin 

(21) 

In  order  to  calculate  the  dumping  margin,  the  Commission  compared  the  weighted 
average normal value to the weighted average export price to the Community.  

(22)  The  comparison,  as  described  above,  showed  the  existence  of  dumping  for  the 
applicant. The dumping margin established, expressed as a percentage of the total CIF 
value at Community frontier level, duty unpaid, was 7.4%. 

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1.5. 

Lasting nature of changed circumstances and likelihood of recurrence of dumping 

(23) 

(24) 

In  accordance  with  the  Commission's  normal  practice,  it  was  examined  whether  the 
changed circumstances could reasonably be said to be of a lasting nature.  

It  was  found  that  there  were  no  reasons  to  expect  that  the  domestic  sales  prices  and 
normal value would not remain stable for the foreseeable future.  

(25)  The  Commission  examined  the  possible  development  of  export  prices  as  a 
consequence of the application of a lower duty rate. In this regard, it was considered 
that  the  undertaking  which  had  been  accepted  in  the  framework  of  the  original 
proceeding  had  the  effect  of  limiting  the  applicant's  sales  to  the  Community  market. 
As mentioned below in recital (35), it was found that this type of undertaking was no 
longer  appropriate.  Consequently,  it  was  examined  whether  export  sales  subject  to a 
lower  duty  could  cause  a  significant  increase  of  imports  of  the  product  concerned 
produced by the applicant to the Community.  

(26)  The  investigation  revealed  that  the  applicant's  production  capacity  increased 
considerably since the original investigation period and to a lesser extent over the last 
three years, whilst its capacity utilisation rate remained close to 100%.  

(27)  However,  the  investigation  also  showed  that  the  company  exports  most  of  its 
production  to  well-established  other  third  country  markets.  In  fact,  the  applicant 
exported  more  than  90%  of  its  production  of  the  product  concerned  during  the  IP, 
almost entirely to other third countries. The exports to the other third countries tripled 
since  the  original  investigation  period  and  continued  to  go  up  during  the  last  three 
years.  It  was  also  established  that  the  exports  to  other  third  countries  were  sold  at 
prices around 25% higher than those to the EC. 

(28)  Since  the  applicant  does  not  have  much  spare  capacity,  which  could  be  used  to 
increase  sales  to  the  Community  if  the  anti-dumping  measures  were  lowered,  the 
above findings, including those concerning exports to third countries, and in particular 
export  prices  to  these  countries,  are  viewed  as  evidence  that  it  is  unlikely  that  there 
will  be  in  the  foreseeable  future  a  recurrence  of  dumped  imports  at  levels  similar  to 
those established in the previous investigation.  

(29) 

It  is  consequently  concluded  that  the  changed  circumstances,  in  particular  the 
considerably  reduced  normal  value,  are  of  a  lasting  nature.  In  view  of  the  reduced 
level of dumping, it is therefore considered appropriate to amend the measures insofar 
as they concern the applicant.  

1.6. 

Conclusions 

(30)  According  to  Article  9(4)  of  the  basic  Regulation,  the  amount  of  the  anti-dumping 
duty should not exceed the margin of dumping established, but it should be less than 
that  margin  if  such  a  lesser  duty  would  be  adequate  to  remove  the  injury  of  the 
Community industry. As the duty for the applicant had been calculated on the basis of 
the dumping margin, the duty should be adjusted to the lower dumping margin found 
in this investigation, namely 7.4%. 

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(31) 

It  follows  from  the  above  that  with  regard  to  the  applicant,  the  anti-dumping  duty 
originally imposed by Council Regulation (EC) No 584/96 and confirmed by Council 
Regulation (EC) No 964/2003 should be amended.  

(32)  The  interested  parties  were  informed  of  the  essential  facts  and  considerations  on  the 
basis of which it was intended to recommend that the anti-dumping duty imposed by 
Council Regulation (EC) No 964/2003 be amended with regard to the applicant.  

D. Interim review limited to the form of the measures 

(33)  The  undertakings  originally  accepted  from  the  two  exporters  concerned,  were  in 
essence  quantitative  undertakings  according  to  which  the  companies  undertook  to 
ensure  that  their  exports  to  the  Community  were  made  within  an  overall  volume 
ceiling.  

(34) 

In accordance with Article 8(1) of the basic Regulation, the aim of undertakings is to 
eliminate  the  injurious  effect  of  dumped  imports,  which  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  in  the  present  case  in 
1996 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, the undertakings in their present form are not considered as an 
appropriate  and  effective  means  of  eliminating  the  injurious  effect  of  dumping.  In 
addition,  the  Commission  is  not  in  a  position  to  control  effectively  whether  the 
quantities  of  the  product  concerned  exported  are  limited  to  those  specified  in  the 
undertakings. 

(35) 

It  was  therefore  concluded  that  the  undertakings  in  force  are  not  appropriate  any 
longer.  

(36)  The  interested  parties  were  informed  of  all  the  essential  facts  and  considerations 

leading to this conclusion. 

E. PROPOSED MEASURES 

(37)  The anti-dumping measure applicable to imports of certain tube or pipe fittings, of iron 
or steel, originating, inter alia, in Thailand as confirmed by Council Regulation (EC) 
No 964/2003, should be amended with regard to (i) the applicant in view of the lower 
dumping margin found in the investigation and (ii) the exporters concerned in view of 
the findings of the interim review limited to the form of the measures.  

HAS ADOPTED THIS REGULATION: 

1. Article 1, paragraph 2 of Council Regulation (EC) No  964/2003 shall be replaced by the 
following: 

Article 1 

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"2.  The  rate  of  the  definitive  anti-dumping  duty  applicable  to  the  net,  free-at-Community-
frontier price, before duty, shall be as follows for the products manufactured by:" 

Country 

Rate of 
duty 

TARIC 
additional 
code 

People’s Republic of China 

58.6% 

- 

Thailand 

58.9% 

A 999 

Except: 
Awaji Sangyo (Thailand) Co., Ltd., 
Samutprakarn 

Thai Benkan Co. Ltd, 
Prapadaeng-Samutprakarn 

7.4% 

8 850  

0% 

A 118 

2.  Article  1,  paragraph  3  and  Article  2  of  Council  Regulation  (EC)  No  964/2003  shall  be 
repealed.  

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 Brussels,  

For the Council 
The President 

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