Council Regulation (EC) No 1629/2004 of 13 September 2004 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of certain graphite electrode systems originating in India
Date: 2004-09-13
Institutions: Council of the European Union
Subjects: India, anti-dumping duty, electrical equipment, import, originating product

L 295/10

EN

Official Journal of the European Union

18.9.2004

COUNCIL REGULATION (EC) No 1629/2004

of 13 September 2004

imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on
imports of certain graphite electrode systems originating in India

THE COUNCIL OF THE EUROPEAN UNION,

(3)

The Commission continued to seek and verify all infor-
mation it deemed necessary for the definitive findings.

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 9 thereof,

(4)

the essential

All parties were informed of
facts and
considerations on the basis of which it was intended to
recommend the imposition of a definitive anti-dumping
duty on imports of certain graphite electrode systems
originating in India and the definitive collection of the
amounts secured by way of the provisional duty. They
were also granted a period within which to make repre-
sentations subsequent to the disclosure of the essential
facts and considerations.

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

(5)

The oral and written comments
submitted by the
interested parties were considered and, where appro-
priate, the findings have been modified accordingly.

Whereas:

(1)

(2)

A. PROVISIONAL MEASURES

On 19 May 2004, the Commission, by Regulation (EC)
No 1009/2004 (2) (the provisional Regulation), imposed
a provisional anti-dumping duty on imports into the
Community of certain graphite electrode systems origi-
nating in India.

C. PRODUCT CONCERNED AND LIKE PRODUCT

(6)

Since no new comments were received regarding the
product concerned and the like product, recitals 11 to
15 of the provisional Regulation are hereby confirmed.

B. SUBSEQUENT PROCEDURE

1. Claims made by the exporting producers

D. DUMPING

Subsequent to the disclosure of the essential facts and
considerations on the basis of which it was decided to
impose provisional
several
interested parties made written submissions making
their views known on the provisional
findings. The
parties who so requested were granted an opportunity
to be heard.

anti-dumping measures,

(7)

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

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

(2) OJ L 183, 20.5.2004, p. 61.

‘Import charges and indirect

The two cooperating exporting producers reiterated their
claim that a duty drawback adjustment on the normal
value should have been granted, pursuant
to Article
taxes’ or under
2(10)(b)
Article 2(10)(k) ‘Other factors’ of the basic Regulation,
for the benefits received under the Duty Entitlement
Passbook Scheme
(DEPB) on a post-export basis.
Pursuant to Article 2(10)(b), they claimed that at least
the amount of DEPB credits used against imports of raw
materials consumed in the production process of the
exported product should be granted as allowance.

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Official Journal of the European Union

L 295/11

(8)

(9)

(10)

(11)

graphite

link could be

granted and the

imports of
of

the provisional Regulation,

raw materials necessary for

it should be noted that no adjustment
In this regard,
could be granted because, as was explained in recital
the investigation
25 of
established
showed that no direct
raw
between the DEPB credits
materials purchased as the credits could be used against
duties payable on any goods to be imported, except for
capital goods and goods subject to import restrictions or
prohibitions. Moreover, even when the credits were used
the
against
exporting
production
the
raw
producers
these
that
the production of
materials had been used for
the
exported product.
the DEPB benefit was
In addition,
accounted for as an income and not as a negative item
in the
companies.
Therefore, on the basis of the companies' accounting
records, there was no link between the pricing of the
exported goods and the DEPB income received. Finally,
no new arguments justifying the application of Article
2(10)(k) of
submitted.
the basic Regulation were
Therefore, these claims could not be accepted and the
findings set out in recitals 25 and 26 of the provisional
Regulation are hereby confirmed.

could not demonstrate

accounting system of

electrodes,

cost

the

Both cooperating exporting producers also reiterated
their claims pursuant to Article 2(10)(d)(ii) of the basic
Regulation, with regard to differences in levels of trade.
However, no new arguments were brought
forward.
Therefore the findings set out in recitals 27 and 28 of
the provisional Regulation are hereby confirmed.

contested the
cooperating exporting producers
The
the export
exchange rates used in the calculation of
the exchange rates used
prices. They claimed that
should be those prevailing at
the date of payment
instead of the date of the invoice. Moreover, they also
claimed that instead of using the average exchange rates
of the month in which the invoice was issued, it would
have been more accurate to use the actual daily exchange
rates.

In this respect, it should be noted that it is the Commis-
sion's consistent practice to use exchange rates pertaining
to the date of the invoice, because the price determi-
nation takes into consideration the exchanges rates at
the moment of
the
invoicing. The
exchange rates prevailing at the date of payment was
it was agreed to use the
therefore rejected. However,
actual exchange rates prevailing at the date of invoice
instead of the average monthly exchange rates pertaining
to that date. In view of this, the dumping calculations
were amended accordingly.

claim to use

rates. As these exchange rates were replaced by the daily
exchange rates, as explained in recital 11, this error is
considered to be corrected.

2. Dumping calculations

(13)

Following the adjustments with regard to the exchange
rates used, as described in recitals 10 to 12, the amount
of dumping finally determined, expressed as a percentage
of
is as
follows:

the CIF net free-at-Community-frontier price,

Graphite India Limited (GIL)

Hindustan Electro Graphite (HEG) Limited

All others

31,1 %

22,4 %

31,1 %

E. COMMUNITY INDUSTRY

(14)

In the absence of any substantially new information or
argument in this particular respect, recitals 32 to 35 of
the provisional Regulation are hereby confirmed.

F. INJURY

(15)

(16)

type of

concerned,

the product

Following the provisional disclosure, the Indian exporters
pointed to the divergence in the undercutting margin of
as
one particular
compared with the undercutting margins of
similar
types. The claim was properly examined and it was
found that the discrepancy was due to a mistake in the
reporting of a number of credit notes and discounts of
one particular Community producer. The claim was
therefore accepted and the undercutting margin of this
particular type and, where applicable, of other types were
corrected accordingly.

It was further found that a number of sale transactions of
the Community industry used for the undercutting calcu-
lations were double counted. In view of this, the double
counted transactions had to be eliminated and the under-
cutting calculations had to be modified accordingly.
However,
taken place
when establishing the figures used for assessing the
injury indicators. Therefore,
there was no need to
modify the injury indicators.

this double-counting had not

(12) When the matter was examined, a clerical error was
discovered in the provided average monthly exchange

(17) As a result, the comparison showed that during the IP
the prices of the product concerned originating in India
and sold in the Community undercut the Community
industry's prices by between 3 % and 11 %.

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Official Journal of the European Union

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(18)

In the absence of any substantially new information or
argument in this particular respect, recitals 36 to 72 of
the provisional Regulation are hereby confirmed, with
the exception of recital 42 (see recitals 15 to 17 above).

(19)

(20)

G. CAUSATION

1. Return to normal competition conditions after the
dismantling of the cartel

The Indian exporters re-iterated their argument that the
link between the dumped
establishment of a causal
imports and the injury felt by the Community industry
is based on data which would be unreliable because of
the existence of a cartel up until the beginning of 1998.
However, the Indian exporters did not provide any new
submitting
information within the deadline set
comments in this particular respect.

for

2. Imports from other third countries

the like product

from Japan. At
the current proceeding,

Several interested parties submitted that the Commission
should have initiated this proceeding also against imports
the time of
of
the
initiation of
the Commission
did not have sufficient evidence regarding injurious
dumping that would have justified the initiation of a
proceeding against imports originating in Japan in line
with the requirements of Article 5 of the basic Regu-
lation. The information provided by certain parties after
the initiation does not constitute such sufficient evidence,
whether taken into account separately or together with
other information available to the Commission at the
time of the investigation, as no evidence of injurious
therefrom.
dumping
the
evidence provided by
abovementioned parties
the
contained only information on average domestic and
export prices for Japanese graphite electrodes, without
any indication as to whether these graphite electrodes
actually met
the parameters defining the product
concerned, as set in recital 13 of the provisional Regu-
lation. In any event, the fact that imports originating in
Japan are not subject to the proceeding does not in any
way alter the conclusions of the investigation regarding
the existence of a causal link.

emanates

example,

For

(21)

In the absence of any substantially new information or
argument, recitals 73 to 93 of the provisional Regulation
are hereby confirmed.

H. COMMUNITY INTEREST

(22) An association representing users and a user company
reiterated their main concern that, by excluding Indian

for

suppliers from the Community market, the imposition of
any measure would reduce overall competition on the
Community market
this particular product and
inevitably lead to an increase in prices. However, as
assessed under recital 103 of the provisional Regulation,
the impact of any increase in the price of
the like
product for final customers is likely to be minimal. It
is further recalled that the purpose of any anti-dumping
into the
measure is by no means
to
rather
Community of products
restore a level playing field that had been distorted by
unfair trade practices. Finally,
it is considered that the
level of
the measures is not such as to exclude the
Indian producers from the Community market.

to stop access
from India, but

(23)

In the absence of any substantially new information or
argument in this particular respect, recitals 94 to 107 of
the provisional Regulation are hereby confirmed.

I. INJURY ELIMINATION LEVEL

(24)

situation of

to disclosure of provisional

Further
findings, several
interested parties claimed that the profit level of 9,4 %
the
the financial
deemed to represent
injurious
in the
industry
Community
dumping from India was too high. It was alleged that
the normal practice was to set a 5 % profit ratio for
commodity goods sectors such as steel,
textiles and
base chemicals. The same parties further claimed that
the methodology used to arrive at this figure should be
fully disclosed.

absence of

that

(25) As explained under recital 110 of the provisional Regu-
lation, the profit of 9,4 % was the result of a reasoned
assessment established on the basis of a number of
elements, amongst which (i) the profit achieved by the
Community industry in 1999, when the market share of
the dumped imports was at its lowest; (ii) the market
conditions at
the output drawn
time; and (iii)
from a database on company accounts. As regards this
database, it consists of company accounts data, which are
first collected by national central banks of the largest
industrialised countries,
the member
countries of the European Union, the United States of
America and Japan, and then aggregated, by sectors, by
the European Committee of Central Balance Sheet Data
Offices and the European Commission. The database has
been updated between provisional and definitive determi-
nation. An analysis of the updated data referring to the
EU Member States, plus the United States of America and
Japan shows that the average profit before extraordinary
items for companies belonging to the nearest available
business sector was of 7,5 % in 2002, which is the last
year available in the database.

i.e. most of

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(26) However, it is further considered that, when setting the
profit that could have been achieved in the absence of
dumping, due consideration has to be paid to all quali-
tative and quantitative elements relevant for this purpose.
In particular, as this has been done under recital 110 of
the provisional Regulation, a proper examination was
made of Community industry's profit levels when the
market share of dumped imports was at its lowest (i.e.
1999), and of any other causes and circumstances that
the latter period.
might affect
Finally,
it is noted that the product concerned is used
in demanding applications and has to match strictly
certain parameters, notably
electrical
in terms of
resistance. This entails both a highly capital
intensive
manufacturing process and a not negligible amount of
Research and Development costs. The fact that only a
limited number of producers in the world master this
technology is a further indication that this product can
certainly not be considered as a basic commodity.

the representativity of

(27)

circumstances

and elements

into
these
Taking all
account,
the profit
is definitively concluded that
it
margin that can reasonably be deemed to represent the
the Community industry in the
financial situation of
absence of injurious dumping from India should be set
at 8 % for the purpose of the calculation of the injury
margin.

(28) As a result of the above, of the findings regarding under-
cutting (see recitals 15 to 17 above), and due account

being taken of the revision of the exchange rates (see
recital 11above), injury margins were revised as follows.

Graphite India Limited (GIL)

Hindustan Electro Graphite (HEG) Limited

15,7 %

7,0 %

J. DEFINITIVE MEASURES

In view of
the conclusions reached with regard to
injury, causation and Community interest,
dumping,
and in accordance with Article 9(4) of the basic Regu-
lation, a definitive anti-dumping duty should be imposed
at the level of the dumping margin found, but should not
be higher than the injury margin calculated above.

The correction made to the dumping and injury margins
had no effect on the application of the lesser duty rule.
the methodology used for establishing the
Therefore,
anti-dumping duty
the
parallel
imposition of countervailing duties on imports
of the same product from India, as described in recitals
114 and 115 of the provisional Regulation is hereby
confirmed. The definitive duties will
therefore be as
follows:

taking into account

rates,

(29)

(30)

Company

Injury elimination
margin

Dumping margin

Countervailing
duty

Proposed anti-
dumping duty

Graphite India Limited (GIL)

Hindustan Electro Graphite (HEG)
Limited

All others

15,7 %

7,0 %

15,7 %

31,1 %

22,4 %

15,7 %

7,0 %

31,1 %

15,7 %

0 %

0 %

0 %

K. DEFINITIVE COLLECTION OF THE PROVISIONAL
DUTY

In view of the magnitude of the dumping margins found
for the exporting producers in India and given the level
of the injury caused to the Community industry,
it is
considered necessary that the amounts secured by way
of provisional anti-dumping duty imposed by the provi-
sional Regulation should be definitively collected to the
extent of the amount of definitive duties imposed. As the
definitive duties are lower than the provisional duties,
amounts provisionally secured in excess of the definitive
rate of anti-dumping duties shall be released.

the

findings of

the present

(as opposed to the

basis of
investigation.
Therefore, they reflect the situation found during that
to these companies. These
investigation with respect
duty rates
country-wide duty
applicable to ‘all others’) are thus exclusively applicable
to imports of products originating in the country
concerned and produced by the companies and thus by
the specific legal entities mentioned. Imported products
produced by
specifically
mentioned in the operative part of this Regulation with
its name and address, including entities related to those
specifically mentioned, cannot benefit from these rates
and shall be subject to the duty rate applicable to ‘all
others’.

company not

any other

individual

The
rates
specified in this Regulation were established on the

anti-dumping

company

duty

(31)

(32)

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(e.g.

(33) Any claim requesting the application of these individual
following a
company anti-dumping duty rates
change in the name of
the entity or following the
setting up of new production or sales entities) should
be addressed to the Commission forthwith with all
relevant information,
in particular any modification in
the company's activities linked to production, domestic
sales and export sales associated with e.g. that name
that change in the production and sales
change or
If appropriate, the Regulation will accordingly
entities.
be amended by updating the list of companies benefiting
from individual duties,

HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed on
imports of graphite electrodes of a kind used for electric
furnaces, with an apparent density of 1,65 g/cm3 or more and
an electrical resistance of 6,0 μΩ.m or less, falling within CN
code ex 8545 11 00 (Taric code 8545 11 00 10) and nipples
used
CN code
ex 8545 90 90 (Taric code 8545 90 90 10) whether imported
together or separately originating in India.

falling within

electrodes,

such

for

Company

Graphite India Limited (GIL), 31 Chow-
ringhee Road, Kolkatta — 700016,
West Bengal

Electro Graphite
Towers,

(HEG)
Hindustan
Limited,
A-12,
Sector-1, Noida — 201301, Uttar
Pradesh

Bhilwara

Definitive
duty

0 %

0 %

Taric addi-
tional code

A530

A531

All others

0 %

A999

Unless otherwise

3.
concerning customs duties shall apply.

specified,

the provisions

in force

Article 2

The amounts secured by way of provisional anti-dumping duties
pursuant to the provisional Regulation on imports of graphite
electrodes of a kind used for electric furnaces, with an apparent
density of 1,65 g/cm3 or more and an electrical resistance of
6,0 μΩ.m or less, falling within CN code ex 8545 11 00 (Taric
code 8545 11 00 10) and nipples used for such electrodes,
falling within
code
8545 90 90 10) whether imported together or separately origi-
nating in India shall be definitively collected as follows.

ex 8545 90 90

CN code

(Taric

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

The amounts secured in excess of the definitive rate of anti-
dumping duties shall be released.

Article 3

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

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

Done at Brussels, 13 September 2004.

For the Council
The President

B. R. BOT