Proposal for a Council Regulation extending the definitive countervailing duty imposed by Council Regulation (EC) No 2597/1999 on imports of polyethylene terephthalate (PET) film originating in India to imports of polyethylene terephthalate (PET) film consigned from Brazil and from Israel, whether declared as originating in Brazil or Israel or not
Date: 2004-10-20
Institutions: European Commission
Subjects: Brazil, Israel, anti-dumping duty, common tariff policy, plastics

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.10.2004 
COM(2004) 704 final 

Proposal for a 

COUNCIL REGULATION 

extending the definitive countervailing duty imposed by Council Regulation (EC) No 
2597/1999 on imports of polyethylene terephthalate (PET) film originating in India to 
imports of polyethylene terephthalate (PET) film consigned from Brazil and from Israel, 
whether declared as originating in Brazil or Israel or not 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 
By  Council  Regulation  (EC)  No  2597/1999,  the  Council  imposed  definitive 
countervailing duties in 1999 on imports of polyethylene terephthalate (PET) film originating 
in  India.  Imports  of  PET  film  originating  in  India  are  also  subject  to  anti-dumping  duties 
imposed in 2001 by Regulation (EC) No 1676/2001. 

2. 
Following a request lodged by a number of large Community producers of PET film, 
the Commission initiated in February 2004 an investigation into the alleged circumvention of 
the anti-subsidy measures on imports of PET film originating in India by imports of PET film 
consigned from Brazil and from Israel. 

The investigation showed a significant increase in the imports into the Community of 
3. 
PET film exported from Brazil and from Israel. The increase in imports from these countries 
coincided  in  time  with  the  imposition  of  the  countervailing  duty  on  imports  of  PET  film 
originating  in  India.  With  the  exception  of  two  companies  (Terphane  Ltda.  in  Brazil  and 
Jolybar  Filmtechnic  Converting  Ltd.  in  Israel),  no  economic  justification  or  sufficient  due 
cause could  be established  for  these  practices other than the existence of the measures. The 
remedial effects of the duty are being undermined in terms of the prices and quantities of the 
goods imported, and there is evidence that the product concerned is still being subsidised.  

4. 
It is therefore proposed that the countervailing duty of 19,1%, imposed on imports of 
PET  film  originating  in  India  by  Council  Regulation  (EC)  No  2597/1999,  be  extended  to 
imports of PET film consigned from Brazil and from Israel, whether declared as originating in 
Brazil  or  Israel  or  not,  with  the  exception  of  PET  film  consigned  from  the  two  above-
mentioned companies. 

The issue of circumvention in the context of the WTO was fully explained when the 

5. 
most recent modification of the basic Regulation was proposed.1 

1 

COM(2003) 799 final, paragraph 5. 

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Proposal for a 

COUNCIL REGULATION 

extending the definitive countervailing duty imposed by Council Regulation (EC) No 
2597/1999 on imports of polyethylene terephthalate (PET) film originating in India to 
imports of polyethylene terephthalate (PET) film consigned from Brazil and from Israel, 
whether declared as originating in Brazil or Israel or not 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community,  

Having  regard  to  Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection 
against  subsidized  imports  from  countries  not  members  of  the  European  Community2  (‘the 
basic Regulation’), and in particular Article 23 thereof, 

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

Whereas: 

A. 

PROCEDURE 

1. 

Existing measures 

(1) 

By  Council  Regulation  (EC)  No  2597/19993  (‘the  original  Regulation’),  the  Council 
imposed  countervailing  duties  on  imports  of  polyethylene  terephthalate  (PET)  film 
(‘PET  film’)  originating  in  India.  The  rates  of  the  countervailing  duties  ranged 
between 3,8% and 19,1%.  

(2) 

Imports  of  PET  film  originating  in  India  are  also  subject  to  anti-dumping  duties, 
ranging between 0% and 62,6%, imposed by Council Regulation (EC) No 1676/20014.  

2.  Ongoing investigations 

On 28 June 2002, the Commission announced by a notice of initiation published in the 
Official  Journal  of  the  European  Communities5,  the  initiation  of  a  partial  interim 
review pursuant to Article 19 of the basic Regulation. The request is limited in scope 
to the form of the measure and, in particular, to the examination of the acceptability of 
an undertaking offered by the applicant. This review is still ongoing. 

OJ L 288, 21.10.1997, p. 1. Regulation as last amended by Council Regulation (EC) No 461/2004 (OJ L 
77, 13.3.2004, p.12.) 
OJ L 316, 10.12.1999 p. 1. 
OJ L 227, 23.8.2001 p. 1. 
OJ C 154, 28.6.2002, p. 2. 

(3) 

2 

3 
4 
5 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

On 22 November 2003, the Commission announced by a notice of initiation published 
in  the  Official  Journal  of  the  European  Union6,  the  initiation  of  a  partial  interim 
review  pursuant  to  Article  11(3)  of  Council  Regulation  (EC)  No  384/967,  limited  in 
scope to the form of the anti-dumping measures. This review is still ongoing. 

On 19 February 2004, the Commission announced by a notice of initiation published 
in  the  Official  Journal  of  the  European  Union8,  the  initiation  of  a  partial  interim 
review  pursuant  to  Article  11(3)  of  Council  Regulation  (EC)  No  384/96  limited  to 
dumping  for  the  Indian  exporting  producer  Jindal  Polyester  Limited.  This  review  is 
still ongoing. 

3.  Request 

On 6 January 2004, the Commission received a request pursuant to Article 23(2) of the 
basic Regulation (‘the request’) from the Community producers DuPont Teijin Films, 
Mitsubishi Polyester Film GmbH and Nuroll SpA (‘the applicants’) to investigate the 
alleged circumvention of the countervailing measures imposed on imports of PET film 
originating  in  India.  The  applicants  represent  a  major  proportion  of  the  Community 
production of PET film. 

The applicants alleged and submitted sufficient evidence showing that, following the 
imposition  of  measures  on  imports  of  PET  film  originating  in  India,  there  had  been 
significant changes in the patterns of trade involving exports of PET film from India, 
Brazil  and  Israel  to  the  Community.  These  changes  in  the  patterns  of  trade  were 
alleged to stem from the transhipment via Brazil and via Israel of PET film originating 
in India. It was alleged that there was insufficient due cause or economic justification 
for the aforementioned changes other than the imposition of duties on imports of PET 
film from India.  

Finally,  the  applicant  alleged  and  submitted  prima  facie  evidence  that  the  remedial 
effects  of  this  duty  were  being  undermined  both  in  terms  of  quantities  and  prices.  It 
was  claimed  that  significant  volumes  of  imports  of  PET  film  from  Brazil  and  Israel 
appear  to  have  replaced  imports  of  PET  film  originating  in  India.  In  addition,  the 
applicant submitted prima facie evidence that PET film originating in India continues 
to benefit from subsidies found to be countervailable in the original investigation. 

4. 

Initiation 

By  Regulation  (EC)  No  283/20049  (‘the  initiating  Regulation’),  the  Commission 
initiated  an  investigation  concerning  the  possible  circumvention  of  countervailing 
measures  on  imports  of  PET  film  originating  in  India  by  imports  of  PET  film 
consigned  from  Brazil  and  from  Israel,  whether  declared  as  originating  in  Brazil  or 
Israel or not and, pursuant to Articles 23(2) and 24(5) of the basic Regulation, directed 
the  customs  authorities  to  register  imports  of  PET  film  consigned  from  Brazil  and 
from  Israel,  whether  declared  as  originating  in  Brazil  or  Israel  or  not,  as  of  20 

6 
7 

8 
9 

OJ C 281, 22.11.2003, p. 4. 
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 C 43, 19.2.2004 p. 14. 
OJ L 49, 19.2.2004, p. 25. 

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February 2004. The Commission advised the authorities of India, Brazil and Israel of 
the initiation of the investigation. At the same time, by Commission Regulation (EC) 
No 284/200410, the Commission also initiated an investigation concerning the possible 
circumvention of anti-dumping measures on imports of PET film originating in India 
by  imports  of  PET  film  consigned  from  Brazil  and  from  Israel,  whether  declared  as 
originating in Brazil or Israel or not. The findings of that investigation are presented in 
Council Regulation (EC) No ---/2004. 

(10)  The  Indian  authorities  indicated  that  they  considered  that  anti-circumvention 
investigations were not permissible under either the Agreement on Implementation of 
Article VI of the General Agreement on Tariffs and Trade 1994 or the Agreement on 
Subsidies and Countervailing  Measures.  This claim was  rejected on the grounds that 
the  anti-circumvention  provisions  of  the  basic  Regulation  are  not  incompatible  with 
the Agreement on Implementation of Article VI of the General Agreement on Tariffs 
and  Trade  1994  and  the  Agreement  on  Subsidies  and  Countervailing  Measures. 
Indeed,  the  Final  Act  Embodying  the  Results  of  the  Uruguay  Round  of  Multilateral 
Trade Negotiations contains a Decision on Anti-Circumvention11 referring the matter 
to  the  Committee  on  Anti-Dumping  Practices  in  the  absence  of  an  agreement  on  a 
specific text. As this Decision was made knowing that several WTO Members already 
had their own anti-circumvention legislation, the European Community interprets it as 
permitting individual Members to adopt or maintain provisions in this respect, pending 
the adoption of multilaterally agreed rules. The same principles should logically apply 
to anti-subsidy investigations. 

5. 

Investigation 

(11)  Questionnaires  were  sent  to  exporters/producers  in  India,  Brazil  and  Israel  which 
cooperated  in  the  original  investigation,  were  named  in  the  request  or  subsequently 
became  known  to  the  Commission.  Questionnaires  were  sent  to  importers  in  the 
Community  which  were  named  in  the  request  or  co-operated  in  the  original 
investigation  that  led  to  the  existing  measures.  All  parties  were  informed  that  non-
cooperation might lead to the application of Article 28 of the basic Regulation and to 
findings which, being made on the basis of the facts available, can be less favourable 
than if the party had cooperated.  

(12)  Replies to the questionnaire were received from six exporters/producers in India from 
one exporter/producer in Brazil and from one processing company involved in slitting, 
sheeting and converting PET film in Israel and exporting PET film to the Community. 
Another company in Israel came forward and explained that it processed PET film but 
that  the  resulting  products  were  not  exported  under  the  CN  codes  under  which  PET 
film was classified. On that basis, the company did not submit a questionnaire reply.  

(13)  Five  importers  in  the  Community  came  forward  following  receipt  of  questionnaires. 
Three of these reported that they had never imported PET film from either Brazil or 
Israel. The other two importers stated that they had not imported Indian PET film from 
Brazil  or  from  Israel  during  the  investigation  period.  Therefore,  none  of  these 
companies submitted questionnaire replies. 

10 
11 

OJ L 49, 19.2.2004, p. 28. 
Decision on Anti-circumvention adopted by the Trade Negotiations Committee on 15 December 1993. 

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(14)  The  Commission  carried  out  verification  visits  at  the  premises  of  the  following 

companies:  

Brazilian exporting producer: 

– 

Terphane  Ltda.  BR  101,  km  101,  City  of  Cabo  de  Santo  Agostinho,  State  of 
Pernambuco, Brazil (‘Terphane’) 

Israeli processor: 

– 

Jolybar Filmtechnic Converting Ltd (1987), Hacharutsim str. 7, Ind. Park Siim 
2000, Natania South, 42504. POB 8380, Israel (‘Jolybar’) 

Indian exporting producers: 

– 

– 

– 

– 

Ester Industries Limited, 75-76, Amrit Nagar, Behind South Extension Part – I, 
New Delhi – 110 003, India; 

Flex Industries Limited, A-1, Sector 60, Noida 201 301 (U.P.), India; 

Jindal Polyester Limited, 56 Hanuman Road, New Delhi 110 001, India; 

Polyplex  Corporation  Limited,  B-37,  Sector-1,  Noida  201  301,  Dist.  Gautam 
Budh Nagar, Uttar Pradesh, India. 

6. 

Investigation Period 

(15)  The  investigation  period  covered  the  period  from  1  January  2003  to  31  December 
2003 (‘the IP’). Data was collected from 1998 up to the end of the IP to investigate the 
alleged changes in the pattern of trade. 

B. 

RESULTS OF THE INVESTIGATION 

1.  Degree of cooperation 

(16)  As  stated  in  recital  (12)  above,  six  exporters/producers  of  PET  film  in  India  co-
operated  with  the  investigation  by  submitting  questionnaire  replies.  Information  was 
also  obtained  from  one  exporting  producer  of  PET  film  in  Brazil  and  from  one 
processing  company  slitting,  sheeting  and  converting  PET  film  in  Israel.  These 
Brazilian and Israeli companies accounted for a minor part (less than 1% and around 
5%, respectively) both in volume and in value, of the total imports of PET film from 
those countries to the Community during the IP as reported by Eurostat. 

(17)  The  Indian  authorities  made  a  written  submission  further  to  the  initiation  of  the 
investigation and provided statistical information concerning exports of PET film from 
India  to,  inter  alia,  the  Community.  Statistical  data  concerning  exports  of  PET  film 
from  Brazil  to  the  European  Community  were  also  obtained  from  the  Brazilian 
national database. The Indian Government also submitted information identifying the 
schemes used by the companies subject to measures which were still extant.  

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2. 

Product concerned and like product  

(18)  The  product  concerned  is,  as  defined  in  the  original  investigation,  polyethylene 
terephthalate  (PET)  film  originating  in  India,  normally  declared  under  CN  codes  ex 
3920 62 19 and ex 3920 62 90 (‘the product concerned’).  

(19) 

It  is  considered  that  PET  film  exported  to  the  Community  from  India  and  PET  film 
consigned  from  Brazil  and  from  Israel  to  the  Community  has  the  same  basic 
characteristics  and  the  same  uses.  Therefore,  they  are  considered  as  like  products 
within the meaning of Article 1(5) of the basic Regulation. 

3.  Change in the pattern of trade  

India 

(20)  Over  the  period  1999-2003,  imports  of  the  product  concerned  represented  96,5%  of 
total imports from India under the relevant CN codes. Market analysis was therefore 
carried out using Eurostat data at CN code level. In 1999 countervailing duties were 
imposed on imports to the Community of PET film originating in India, prompting a 
decrease in volumes of such imports from 11.700 tonnes in 1998 to 10.600 tonnes in 
1999.  In  2000  imports  recovered  to  11.600  tonnes  but  this  was  followed  by  the 
imposition  of  anti-dumping  measures  in  2001  which  led  to  a  decrease  of  imports  to 
6.100 tonnes. Since then imports have gradually recovered and stood at 11.500 tonnes 
during the IP. 

(21) 

In respect of the above pattern it is noted that one company had a significantly lower 
cumulative  duty12  rate  than  the  other  producers.  This  company’s  trading  pattern 
followed a markedly different trend to that of the other producers, increasing its share 
of all Indian exports of the product concerned to the Community hugely between the 
imposition  of  countervailing  measures  and  the  IP.  Notably,  between  2000  and  2001, 
when  anti-dumping  measures  were  introduced,  this  company  massively  increased  its 
share of all Indian exports to the Community. Discounting this irregular trend, the total 
volume of the product concerned imported into the Community remained well below 
that prior to the imposition of countervailing measures. 

(22)  The  Indian  authorities  submitted  statistical  data  on  exports  to,  inter  alia,  the 
Community. They indicated that they considered that the official Indian statistics did 
not suggest any circumvention of the existing  countervailing  measures by the Indian 
PET film producers. However, the data referred to is inconsistent with the export data 
provided  by  the  co-operating  Indian  exporters, at  least  as  far  as  exports  to  Israel  are 
concerned; these data show increasing volumes of trade from India to Israel from 2000 
through to 2003. As far as Brazil is concerned, Indian export data for direct exports to 
Brazil shows an increase from around 460 tonnes in 1998 to over 1.500 tonnes in 2000 
and then relative stability at this level. This shows a very significant increase and the 
stability  of  exports  thereafter  does  not  prove  the  non-existence  of  circumvention  as 
these figures do not include indirect sales via other intermediary countries. Indeed, the 
only  known  Brazilian  producer  of  PET  film  cooperated  in  the  investigation  and  its 

12 

The company in question was subject to countervailing duty at 7%. 

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exports  to  the  Community  only  represent  a  negligible  part  (0,5%)  of  all  sales  to  the 
Community from Brazil during the IP. 

Brazil 

(23) 

Imports into  the Community of  PET film from Brazil as reported by Eurostat at CN 
level, less the imports of goods produced by the co-operating company, increased from 
115 tonnes in 1998 (0,2% of all imports), to over 650 tonnes in 2000 (0,6%) the year 
following  the  imposition  of  the  countervailing  measures.  Over  1.200  tonnes  (1,4%) 
were  imported  in  2001  increasing  to  just  over  2.500  tonnes  (3,2  %)  in  2002  and 
remaining at just over 2.000 tonnes during the IP (2,4% of total PET film imports). 

(24)  The  sole  co-operating  company  in  Brazil,  Terphane,  is,  as  noted  above  (see  recital 
(22)), the only known producer of PET film in Brazil. This company only exported a 
single consignment of 10,6 tonnes of PET film to the Community during the IP. Apart 
from  a  sample  sold  in  2002,  this  was  the  company’s  first  export  of  PET  film  to  the 
Community. The company does not therefore appear to be responsible for the volumes 
of PET film entering the Community from Brazil in the period 1998 to 2003 (recital 
(23) above). The film supplied to the Community is manufactured by the company in 
facilities established before the entry into force of the measures on Indian PET film. 
Thus, no change in the pattern of trade was found for this company. 

Israel  

(25) 

Imports  into  the  Community  of  PET  film  from  Israel  as  reported  by  Eurostat  at  CN 
level,  less  the  imports  of  goods  produced  by  the  co-operating  company,  declined 
between 1998 and 1999 from 1.100 tonnes to just under 1.000 tonnes in 1999 (1,3% of 
total  PET  film  imports)  but  then  increased  to  3.000  tonnes  in  2000  (3,7%  of  total 
imports)  and  to  3.400  tonnes  in  2001  (4,1%  of  total  PET  film  imports).  Volumes 
continued to rise to just over 4.200 tonnes in 2002 (5,1% of imports) and to over 4.400 
tonnes  in  2003  (5,3%  of  imports).  A  small  number  of  converters  of  PET  film  are 
located  in  Israel  but  the  information  received  within  the  time-limits  indicated  that, 
even  cumulatively,  it  is  unlikely  that  they  would  have  had  sufficient  capacity  to  be 
responsible for the volumes of film entering the Community from Israel in the period 
2000 to 2003. 

(26)  Official  Indian  export  data  shows  an  initial  decrease  in  exports  to  Israel  from  53 
tonnes in 1998 to 44 tonnes in 1999. 81 tonnes were exported in 2000, 395 tonnes in 
2001, 1.032 tonnes in 2002 and 2.453 tonnes in the IP.  

(27)  The sole co-operating company in Israel, Jolybar, slits, sheets and converts purchased 
PET film and sells it as products which fall under the same CN codes as the product 
concerned, but is generally not of Indian origin and therefore it can not be considered 
to  be  the  product  concerned.  The  company  has  been  supplying  PET  film  to  the 
Community  since  the  1990’s.  The  quantities  of  PET  film  exported  by  Jolybar  to  the 
Community  doubled  between  1999  and  2003  (the  IP).  The  film  supplied  to  the 
Community is manufactured by the company in facilities established before the entry 
into  force  of  the  measures  on  Indian  PET  film.  Irrespective  as  to  whether  this 
development of exports indicates a change in the company’s pattern of trade this issue 
was  not  considered  further  as  there  was,  in  any  event,  a  clear  economic  justification 
for this behaviour as set out below in recital (31). 

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(28) 

In  view  of  the  above,  and  in  particular  given  the  coincidence  between  the  rise  of 
imports from Brazil and Israel and the entry into force in 1999, of the countervailing 
measures  on  PET  film  originating  in  India,  a  change  in  the  pattern  of  trade  is 
established in respect of exports of PET film from India, Israel and Brazil.  

4. 

Insufficient due cause or economic justification  

Brazil 

Non-cooperating exporting producers 

(29) 

In the absence of any other co-operation and given that the above-mentioned change in 
the  pattern  of  trade  for  Brazil  took  place  following  the  imposition  of  countervailing 
duties,  it  has  to  be  concluded,  on  the  basis  of  the  information  available  and  in  the 
absence of any other explanation, that the change in the pattern of trade stemmed from 
the imposition of the duty rather than from any other sufficient due cause or economic 
justification within the meaning of Article 23(1) of the basic Regulation.  

Israel  

Non-cooperating exporting producers 

(30) 

In  the  absence  of  cooperation  and  given  that  the  above-mentioned  change  in  the 
pattern of trade took place following the imposition of countervailing duties it has to 
be concluded, on the basis of the information available and in the absence of any other 
explanation, that the change in the pattern of trade stemmed from the imposition of the 
duty rather than from any other sufficient due cause or economic justification within 
the meaning of Article 23(1) of the basic Regulation.  

Co-operating exporting producer 

(31)  The  investigation  established  that  Jolybar’s  export  trade  to  the  Community  is  long 
established and the film supplied to the Community is manufactured by the company 
in facilities established before the entry into force of the measures on Indian PET film. 
The  company  explained  that  as  a  general  rule  it  does  not  supply  Indian  film  to 
Community customers since the latter prefer the qualities of European film as a base 
material  for  treatment  by  Jolybar.  Exceptionally,  during  the  IP,  a  quantity  of 
approximately one tonne  of  Indian film was  shipped to  one  Community customer as 
part  of  a  larger  consignment  which  the  customer  required  urgently.  It  is  therefore 
concluded  that  there  is  sufficient  economic  justification  for  the  development  of 
Jolybar’s  exports,  which  is  in  line  with  its  activities  in  the  Community  market  in 
respect of PET film manufactured by them. 

5.  Undermining  of  the  remedial  effects  of  the  duty  in  terms  of  the  prices 

and/or the quantities of the like product 

Non-cooperating exporting producers 

(32)  The figures in recitals (20) to (28) above indicate that a clear quantitative change in the 
pattern of Community imports of the product concerned occurred since the imposition 
of measures in 1999. There was a decrease in Indian imports to the Community at the 
time of the imposition of the measures, from 11.700 tonnes in 1998 to 10.600 tonnes 

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in 1999 (9%). Increases in exports of the product concerned to the Community from 
Brazil and Israel surged from 1999 to 2000, from cumulatively less than 1.000 tonnes 
to over 3.500 tonnes. Eurostat data indicates that, from 1998 until the end of IP, the 
increases  in  imports  to  the  Community  amounted  to  1.900  tonnes  from  Brazil  and 
3.500  tonnes  from  Israel.  Exports  from  India,  which  fell  after  the  imposition  of 
countervailing measures and fell again after the imposition of anti-dumping measures, 
have since recovered to the levels before countervailing measures were imposed. It is 
therefore  considered  that  part  of  the  export  trade  flows  from  India  have  been  first 
compensated, and later supplemented, by export flows through Brazil and Israel thus 
undermining the remedial effects of the measures in terms of the quantities imported 
into the Community market.  

(33)  With regard to prices of the product concerned consigned from Brazil and from Israel, 
in view of the low cooperation, it was necessary to refer to Eurostat data, which was 
the best evidence available. 

(34)  The average price of imports of PET film from Brazil during the IP, adjusted for post-
import  costs,  was  around  67%  of  the  injury  elimination  level  established  in  the 
investigation  which  led  to  the  imposition  of  countervailing  measures.  On  this  basis, 
there is evidence that PET films consigned from Brazil also undermined the remedial 
effects of the duty imposed in terms of prices. 

(35)  The average price of imports of PET film from Israel during the IP, adjusted for post-
import costs, was around 75% of the injury elimination level established in the original 
anti-subsidy investigation. On this basis, there is evidence that the Israeli imports also 
undermined the remedial effects of the duty imposed in terms of prices.  

(36) 

It  is  therefore  concluded  that  the  imports  of  PET  film  from  Brazil  and  from  Israel 
undermined  the  remedial  effects  of  the  countervailing  measures  both  in  terms  of 
quantities and prices. 

6. 

Evidence of continued subsidisation of the product concerned  

(37)  The  original  investigation  identified  that  Indian  companies  benefited  from  the 
following  subsidies:  Duty  Entitlement  Passbook  (pre–export),  Duty  Entitlement 
Passbook (post-export) (‘DEPB’), Export Promotion Capital Goods Scheme (‘EPCG’) 
and Export Promotion Zones / Export Oriented Units (‘EPZ/EOU’) schemes as well as 
certain  regional  schemes.  The  Indian  Government  submitted  information  indicating 
that  the  DEPB  (post-export)  and  EPCG  schemes  continued  to  be  used,  but  that  the 
companies  concerned  were  not  located  in  areas  where  they  could  benefit  from 
SEZ/EPZ, the successor scheme to EPZ/EOU. No information was received in respect 
of  the  regional  schemes.  Five  of  the  six  co-operating  companies  confirmed  having 
received funds through one or both of the DEPB and EPCG schemes The remaining 
company refused to provide information unless the Commission agreed to re-calculate 
the  level  of  subsidy.  One  of  the  companies  considered  that  the  subsidies  were  not 
countervailable. It should be noted that Article 23(1) of the basic Regulation does not 
require that it is shown that the subsidies received continue to be countervailable, nor 
that the level of the subsidies should be recalculated. It was found that at least some of 
the  subsidy  schemes  identified  during  the  original  investigation  as  countervailable 
were still in place and that most cooperating Indian exporters benefited from them. In 
the  absence  of  co-operation,  it  must  be  assumed  that  any  other  exporting  producer 

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would  equally  benefit  from  such  subsidies.  Accordingly,  it  is  concluded  that  the 
exported like product still benefits from the subsidy as required by Article 23(1) of the 
basic Regulation for the purpose of extending the countervailing duties to imports of 
the like product from third countries. 

C. 

REQUESTS FOR EXEMPTION FROM REGISTRATION OR EXTENSION 

OF THE DUTY 

(38)  The Commission received a request for exemption from the registration and measures 
from  Terphane  and  Jolybar.  As  stated  in  recitals  (24)  and  (27),  these  companies 
cooperated  in  the  investigation,  by  submitting  a  questionnaire  reply  and  accepting  a 
verification visit. 

(39)  By  Regulation  (EC)  No  xxx/200413,  the  Commission  amended  the  initiating 
Regulation  in  order  to  cease  registration  of  imports  of  PET  film  from  Terphane  and 
Jolybar which were found not to be circumventing the countervailing duties. 

(40) 

In  accordance  with  the  above  findings  that  Terphane  and  Jolybar  were  found  not  to 
have circumvented the countervailing measures in force, these companies should also 
be exempted from the extension of the measures envisaged. 

D.  MEASURES 

(41) 

(42) 

In view of the findings above, it is found that circumvention has taken place within the 
meaning of Article 23(1) of the basic Regulation. In accordance with Article 23(1) of 
the  basic  Regulation,  the  existing  countervailing  measures  on  imports  of  the  product 
concerned (i.e. PET film originating in India) should be extended to imports of PET 
film consigned from Brazil or Israel, whether declared as originating in Brazil or Israel 
or not with the exception of those manufactured by Terphane and by Jolybar. 

In  accordance  with  Article  24(5)  of  the  basic  Regulation,  which  provides  that 
measures shall be applied against registered imports from the date of registration, the 
countervailing duty should be collected on imports of PET film consigned from Brazil 
and  consigned  from  Israel  which  entered  the  Community  under  registration  imposed 
by the initiating Regulation with the exception of imports of PET film consigned from 
Brazil  and  produced  by  Terphane  and  those  consigned  from  Israel  and  produced  by 
Jolybar. 

(43)  The exemptions from the extended measures granted to PET film produced by Jolybar 
and  to  Terphane  shall,  in  accordance  with  Article  23(3)  of  the  basic  Regulation, 
remain  valid  under  the  requirement  that  it  is  not  established  that  the  exemption  was 
granted  on  the  basis  of  false  or  misleading  information  submitted  by  the  companies 
concerned.  Should  prima  facie  evidence  indicate  otherwise,  an  investigation  may  be 
initiated by the Commission to establish if withdrawal of the exemption is warranted. 

(44)  The non-extension of the duties to the imports of PET film from Terphane and Jolybar 
was  established  on  the  basis  of  the  findings  of  the  present  investigation.  This  non-
extension is thus exclusively applicable to imports of PET film consigned from Brazil 
or  Israel,  respectively,  and  produced  by  these  specific  legal  entities.  Imported  PET 

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film  produced  or  consigned  by  any  other  company  not  specifically  mentioned  in  the 
operative part of this Regulation with its name and address, including entities related 
to  those  specifically  mentioned,  cannot  benefit  from  the  exemption  and  should  be 
subject  to  the  residual  duty  rate  as  imposed  by  Council  Regulation  (EC)  No 
2597/1999. 

E. 

PROCEDURE 

(45) 

Interested parties were informed of the essential facts and considerations on the basis 
of which the Council intended to extend the definitive countervailing duty in force and 
were  given  the  opportunity  to  comment  and  to  be  heard.  The  Israeli  authorities 
reiterated those comments made by the Indian Government indicated at recital (10). A 
list of Israeli converters of PET film which had exported to the European Community 
during 2003 and 2004 was also submitted. However, as these companies had not co-
operated within the time-limits, they could not be exempted from the extension of the 
measures to Israel, 

HAS ADOPTED THIS REGULATION: 

1. 

2. 

Article 1 

The definitive countervailing duty of 19,1% imposed by Council Regulation (EC) No 
2597/1999 on imports of polyethylene terephthalate film originating in India, falling 
within CN codes ex 3920 62 19 and ex 3920 62 90, is hereby extended to imports of 
the same polyethylene terephthalate film consigned from Brazil and consigned from 
Israel (whether declared as originating in Brazil or Israel or not) (TARIC codes 3920 
62 19 01, 3920 62 19 04, 3920 62 19 07, 3920 62 19 11, 3920 62 19 14, 3920 62 19 
17, 3920 62 19 21, 3920 62 19 24, 3920 62 19 27, 3920 62 19 31, 3920 62 19 34, 
3920 62 19 37, 3920 62 19 41, 3920 62 19 44, 3920 62 19 47, 3920 62 19 51, 3920 
62 19 54, 3920 62 19 57, 3920 62 19 61, 3920 62 19 67, 3920 62 19 74, 3920 62 19 
92, 3920 62 90 31, 3920 62 90 92) with the exception of those produced by Terphane 
Ltda  BR  101,  km  101,  City  of  Cabo  de  Santo  Agostinho,  State  of  Pernambuco, 
Brazil  (TARIC  additional  code  A569)  and  by  Jolybar  Filmtechnic  Converting  Ltd. 
(1987), Hacharutsim str. 7, Ind. Park Siim 2000, Natania South, 42504, POB 8380, 
Israel (TARIC additional code A570). 

The  duty  extended  by  paragraph  1  of  this  Article  shall  be  collected  on  imports 
registered in accordance with Article 2 of Commission Regulation (EC) No 283/2004 
and  Articles  23(2)  and  24(5)  of  Council  Regulation  (EC)  No  2026/97  with  the 
exception  of  those  produced  by  Terphane  Ltda,  BR  101,  km  101,  City  of  Cabo  de 
Santo  Agostinho,  State  of  Pernambuco,  Brazil  and  by  Jolybar  Filmtechnic 
Converting  Ltd.  (1987),  Hacharutsim  str.  7,  Ind.  Park  Siim  2000,  Natania  South, 
42504, POB 8380, Israel. 

3. 

The provisions in force concerning customs duties shall apply. 

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

Article2 

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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