Proposal for a Council Regulation amending the anti-dumping measures imposed by Regulation (EC) No 348/2000 on imports of certain seamless pipes and tubes of iron or non-alloy steel originating in Croatia and Ukraine
Date: 2005-01-28
Institutions: European Commission
Subjects: Croatia, Ukraine, anti-dumping duty, import, originating product, piping, tube

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 28.01.2005 
COM(2005)21 final 

Proposal for a  

COUNCIL REGULATION 

amending the anti-dumping measures imposed by Regulation (EC) No 348/2000 on 
imports of certain seamless pipes and tubes of iron or non-alloy steel originating in 
Croatia and Ukraine 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

Procedure 

On  23  November  2002,  a  full  interim  review  of  the  anti-dumping  measures  applicable  to 
imports of certain seamless  pipes  and  tubes of iron or non-alloy steel originating in Croatia 
and  Ukraine  was  initiated  following  a  request  lodged  by  the  Defence  Committee  of  the 
Seamless Steel Tube Industry of the European Union. 

The measures currently in force on imports of certain seamless pipes and tubes originating in 
Croatia and Ukraine are definitive anti-dumping duties imposed by Council Regulation (EC) 
No  348/2000  and  one  undertaking  accepted  from  an  exporter  in  Croatia  by  Commission 
Decision 2000/137/EC. The rate of duty applicable to imports from Croatia is 23 %, while the 
duty rate applicable to imports from Ukraine is 38,5 %. 

The  investigation  of  dumping  and  injury  covered  the  period  from  1 October  2001  to 
30 September  2002  (‘IP’).  The  examination  of  trends  relevant  for  the  assessment  of  injury 
covered  the  period  from  1  January  1999  to  the  end  of  the  investigation  period  (‘the  period 
considered’). 

2. 

Dumping 

Concerning Croatia, one exporting producer, Mechel Željezara Ltd., accounted for all exports 
of the product concerned to the Community. During the original investigation, an undertaking 
had been accepted from this company. As the investigation was initiated to review the level 
and form of the measures, the undertaking was also subject to the review investigation. 

The  dumping  margin  found  for  this  company  expressed  as  a  percentage  to  the  CIF 
Community frontier price duty unpaid is 38,9 %, which is below the dumping margin found 
during the original investigation.  

As  regards  Ukraine,  two  groups  of  companies  cooperated  with  the  investigation.  Together, 
they accounted for more than 80% of the Ukrainian exports of the product concerned to the 
Community.  Both  groups 
/  Time  and 
Nizhnedneprovsky Tube Rolling Plant ‘NTRP’ / Nikopolsky seamless tubes plant ‘Nikotube’ 
/ Interpipe) applied for market economy treatment (MET). None of them were found to meet 
the MET-criteria. 

(Dnipropetrovsk  Tube  Works 

‘DTW’ 

However, individual treatment could be granted to both groups. In line with the methodology 
used  in  the  original  investigation,  Croatia  was  used  as  the  analogue  country  to  establish 
normal value for Ukraine. 

The dumping margins found expressed as a percentage to the CIF Community frontier price 
duty unpaid are 91,0 % for DTW and 97,3 % for all other companies. 

3. 

Injury 

Seamless  pipes  and  tubes  were  manufactured  by  six  complainant  Community  producers,  of 
which five fully co-operated with the Commission during the investigation. Their production 
was  at  797.456  tonnes  during  the  IP.  This  represents  over  70 %  of  total  Community 

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production. Six other producers in the Community neither supported the Community industry 
nor co-operated with the Commission. 

Imports from Croatia and Ukraine were assessed cumulatively. It was found that imports of 
the product concerned decreased in 2000 after the measures had been imposed but increased 
again up to the IP. They were sold in the Community at prices which undercut the Community 
industry’s prices as  follows:  Ukraine  34,1 % and Croatia:  23,3 %. Even if the  anti-dumping 
duties  are  taken  into  account,  undercutting  is  still  significant  with  10  %  for  imports  from 
Ukraine and 6,5 % for imports from Croatia. 

It was found that following the imposition of anti-dumping measures in 1999, the Community 
industry  could  initially  gain  confidence.  Average  prices  of  its  Community  sales  increased 
between 1999 and 2001 and sales volumes in the Community as well as production increased 
in the same period. 

However, the situation started to deteriorate substantially in the IP. Sales in the Community 
decreased  by  12 %  from  2001  to  the  IP  and  the  Community  industry  had  to  adjust 
significantly  by  reducing  production,  production  capacity  and  employment.  In  regard  to  the 
Community industry’s financial situation, it improved from a loss-making situation in 1999, 
but only to reach a more or less break-even situation in 2000 and 2001 and fell back into a 
loss making situation again in the IP. 

Lasting  nature  of  changed  circumstances  and  likelihood  of  continuation  of  dumping 

4. 
and injury 

Further  to  the  fact  that  the  product  concerned  was  still  dumped  on  the  Community  market 
during the IP and that the Community industry still suffered material injury it was also noted 
that there are still huge production capacities in the countries concerned, which were not used 
during  the  IP.  This  shows  a  clear  interest  by  Croatian  and  Ukrainian  exporters  in  the  EU 
market.  The  injury  margins  found  in  the  investigation  have  increased  as  compared  to  the 
original  investigation  because  the  dumped  imports  continued  to  substantially  undercut  the 
Community  industry’s  prices  and  this  despite  the  fact  that  costs  have  risen  worldwide. 
Therefore, it is considered that the level of dumping and injury found is of a lasting nature and 
that  a  continuation  of  dumping  and  injury  is  highly  likely  if  the  original  measures  were 
allowed to expire. 

5. 

Causation 

Despite the measures in force, which first led to a reduction of imports in 2000, the exporting 
producers  from  Croatia  and  Ukraine  subsequently  increased  their  market  share  in  the 
Community  from  4,2 %  up  to  5,5 %  during  the  period  considered.  Even  with  decreasing 
consumption from 2001 on they saw an increase of their market share. At the same time, the 
Community industry lost market share. It had to reduce production substantially in the IP and 
suffered from declining profitability.  

Other  known  factors,  which  could  at  the  same  time  have  injured  the  Community  industry, 
were  also  examined.  It  was  found  that  any  possible  effect  of  imports  from  other  third 
countries such as Russia and Romania or a decreasing consumption would not be such as to 
alter the finding that there is a genuine an substantial causal link between the dumped imports 
of seamless pipes and tubes from Croatia and Ukraine and the material injury suffered by the 
Community industry.  

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6. 

Community interest 

In  the  investigation  it  was  found  that  the  maintenance  of  measures  would  clearly  be  in  the 
interest  of  the  Community  industry.  As  regards  both  the  importers/traders  and  the  user 
industries, any impact on prices of seamless tubes is expected only to be marginal. No user, 
supplier or importer has opposed the imposition of measures. 

7. 

Competition aspects 

It is to be noted that in Commission Decision 2003/382/EC, published on 6 June 2003, it was 
found  that  some  Community  producers  were  involved  in  an  anti-competitive  agreement  on 
parts of the product concerned until 1995. However, neither the original investigation nor the 
current  review  investigation  fell  in  the  period  of  the  anti-competitive  practices  and  were 
therefore not affected. 

8. 

Anti-dumping measures 

It is considered that the anti-dumping duties in force against imports of the product concerned 
originating in Croatia and Ukraine should be amended. The new anti-dumping duties should 
be  set  at  a  level  reflecting  the  injury  margins  found,  as  the  dumping  margins  found  for  all 
companies  in  Croatia  and  Ukraine  were  higher  than  the  injury  margins  calculated.  The 
proposed  duties  are  higher  than  in  the  original  investigation  and  range  from  38,8  %  for 
Croatia to 51,9 % and 64,1 % for Ukraine. With the amended duties a new five year period 
will start to run. 

9. 

Developments after the IP concerning the Croatian exporter 

Subsequent to the disclosure the Croatian government informed the Commission that the sole 
producer in Croatia, Mechel Željezara Ltd., has been liquidated in autumn 2004. In its place, a 
new  company  named  Valjaonice  Cijevi  Sisak  d.o.o  (“Valjaonice”)  was  founded  by  the 
Croatian Privatisation Foundation to take over the assets and restart production. As it appears 
that  there  is  a  clear  intention  to  continue  the  production  of  the  product  concerned  it  is 
considered that the findings of the investigation are not affected. 

10. 

Undertaking 

The  Commission,  by  Decision  2000/137/EC  of  17  February  2000,  accepted  a  price 
undertaking,  inter  alia,  from  the  sole  Croatian  exporting  producer.  The  investigation  has 
shown that the undertaking failed to raise prices to non-injurious levels and thus restore fair 
trade  on  the  Community  market.  It  was  therefore  concluded  that  the  undertaking  is  not 
appropriate  any  longer.  In  addition,  as  Mechel  Željezara  Ltd.  has  been  liquidated  the 
undertaking is considered to be no longer valid. 

The  new  joint  undertaking  the  Ukrainian  companies  ‘Nikotube’,  ‘NTRP’  and  Interpipe  had 
offered  had  to  be  rejected  because  there  was  a  potential  risk  of  cross-compensation  and  the 
minimum  export  prices  were  at  levels  which  did  not  eliminate  the  injurious  effects  of 
dumping.  The  Ukrainian  company  DTW  declared  to  offer  an  undertaking  but  without 
indicating  neither  its  nature  nor  any  minimum  price  and  could  therefore  not  be  taken  into 
consideration. 

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Proposal for a  

COUNCIL REGULATION 

amending the anti-dumping measures imposed by Regulation (EC) No 348/2000 on 
imports of certain seamless pipes and tubes of iron or non-alloy steel originating in 
Croatia and Ukraine 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

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  Communities1  (the 
‘basic Regulation’) and in particular Articles 11(3) and 11(7) thereof, 

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

Whereas: 

A. PROCEDURE 

1. Previous investigation and existing measures 

(1) 

The measures currently in force on imports of certain seamless pipes and tubes of iron 
or  non-alloy  steel  originating  in  Croatia  and  Ukraine  are  definitive  anti-dumping 
duties imposed by Council Regulation (EC) No 348/20002 as last amended by Council 
Regulation  (EC)  No  1515/20023  and  one  undertaking  accepted  from  an  exporter  in 
Croatia by Commission Decision 2000/137/EC4. The rate of duty applicable to imports 
from  Croatia  is  23 %,  while  the  duty  rate  applicable  to  imports  from  Ukraine  is 
38,5 %. 

2. Initiation 

(2) 

On 23 November 2002, the Commission announced by a notice of initiation published 
in  the  Official  Journal  of  the  European  Communities5,  the  initiation  of  an  interim 
review of the anti-dumping measures applicable to imports of certain seamless pipes 

1 

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5 

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 45, 17.2.2000, p. 1. 
OJ L 228, 24.8.2002, p. 8. 
OJ L 46, 18.2.2000, p. 34, as amended by Commission Decision 2002/669/EC of 5 August 2002 (OJ L 
228, 24.8.2002, p. 20.) 
OJ C 288, 23.11.2002, p. 11. 

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and  tubes,  of  iron  or  non-alloy  steel  originating  in  Croatia  and  Ukraine  and 
commenced an investigation. 

The investigation was initiated at the request lodged by the Defence Committee of the 
Seamless  Steel  Tube  Industry  of  the  European  Union  on  behalf  of  producers 
representing more than 75 % of the total Community production. 

It  is  to  be  noted  that  on  the  same  date,  23  November  2002,  an  other  review  was 
initiated concerning the measures in force on imports of the same product, i.e. certain 
seamless pipes and tubes of iron or non-alloy steel, originating in Poland, Russia, the 
Czech Republic, Romania and the Slovak Republic6. The measures against Poland, the 
Czech Republic and the Slovak Republic have lapsed as a result of the enlargement of 
the  EU  on  1  May  2004.  Further  to  Regulation  (EC)  No  1322/20047,  the  existing 
measures  on  imports  of  certain  seamless  pipes  and  tubes  originating  in  Russia  and 
Romania  are  temporarily  not  applied  as  from  21  July  2004.  The  review  on  these 
measures is still ongoing. 

3. Parties concerned by the proceeding 

The  Commission  officially  advised  the  exporting  producers  in  Croatia  and  Ukraine, 
the  producers,  importers,  suppliers  and  users  in  the  Community  known  to  be 
concerned  and  the  authorities  of  Croatia  and  Ukraine  of  the  opening  of  the 
investigation. Interested parties were given an opportunity to make their views known 
in writing and to request a hearing within the time limit set in the notice of initiation.  

The  Commission  sent  questionnaires  to  all  parties  known  to  be  concerned  and  to  all 
the other  companies that  made  themselves  known within the deadlines set out in the 
notice  of  initiation.  Replies  were  received  from  five  Community  producers,  one 
importer, one exporting producer in Croatia, three exporting producers in Ukraine and 
three traders related to the Ukrainian producers.  

The  Commission  sought  and  verified  all  the  information  deemed  necessary  for  a 
determination  of  dumping  and  resulting  injury  and  carried  out  verifications  at  the 
premises of the following companies: 

(3) 

(4) 

(5) 

(6) 

(7) 

(a) 

Community producers 

- Dalmine Spa, Italy 

- Productos Tubulares S.A., Spain 

- Tubos Reunidos S.A., Spain 

- Vallourec & Mannesmann, Germany 

- Vallourec & Mannesmann, France 

(b) 

Unrelated importers in the Community 

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OJ C 288, 23.11.2002, p. 2. 
OJ L 246, 20.7.2004, p. 10. 

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- Comercial de Tubos S.A., Spain 

(c) 

Exporting producer in Croatia 

- Mechel Željezara Ltd., Sisak 

(d) 

Exporting producers in Ukraine 

- CJSC Nikopolsky seamless tubes plant Nikotube, Nikopol 

- Dnipropetrovsk Tube Works (DTW), Dnipropetrovsk 

- OJSC Nizhnedneprovsky Tube Rolling Plant (NTRP), Dnipropetrovsk 

(e) 

Related traders in Ukraine 

- Time Ltd, Dnipropetrovsk 

- SGIP Interpipe, Dnipropetrovsk 

(f) 

Related trader in Switzerland 

- SEPCO, Lugano 

4. Investigation period 

(8) 

The  investigation  of  dumping  and  injury  covered  the  period  from  1 October  2001  to 
30 September  2002  (‘the  investigation  period’  or  ‘IP’).  The  examination  of  trends 
relevant  for  the  assessment  of  injury  covered  the  period  from  1  January  1999  to  the 
end of the investigation period (‘the period considered’). 

5. Product concerned and like product 

5.1. Product concerned 

(9) 

The products under review are:  

(a) 

(b) 

(c) 

seamless pipes, of iron or non-alloy steel, of a kind used for oil and gas pipelines, of 
an external diameter not exceeding 406,4 mm, 

seamless tubes of circular cross-section, of iron or non-alloy steel, cold-drawn or cold-
rolled, other than precision tubes, 

other tubes of circular cross-section, of iron or non-alloy steel, other than threaded or 
threadable, of an external diameter not exceeding 406,4 mm, originating in Croatia and 
Ukraine ('the product concerned'), falling within CN codes ex 7304 10 10, ex 7304 10 
30, 7304 31 99, 7304 39 91 and 7304 39 93. 

(10)  The investigation has shown that all these categories were sufficiently similar for them 
to  constitute  a  single  product,  as  in  the  original  investigation.  Therefore,  and  for  the 
purpose of the present anti-dumping investigation, all types of the product concerned 
are regarded as one product. 

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5.2. Like product 

(11)  As  in  the  previous  investigation,  no  differences  were  found  between  the  product 
concerned and the seamless pipes and tubes produced and sold on the domestic market 
in Croatia.  

(12)  Likewise, no differences were found between the product concerned and the seamless 
pipes  and  tubes  produced  by  the  Community  producers  and  sold  on  the  Community 
market.  They  both  share  the  same  physical  and  chemical  characteristics  and  uses. 
Furthermore,  they  both  conform  to  industry  standards  such  as  DIN,  API  or  ASTM. 
Therefore, they are considered as like products within the meaning of Article 1(4) of 
the basic Regulation. 

B. DUMPING 

1. Croatia 

1.1. Co-operation 

(13)  As concerns Croatia, one exporting producer, Mechel Željezara Ltd., accounted for all 
exports of the product concerned to the Community. Mechel Željezara Ltd. is the new 
name  of  the  company  which  co-operated  with  the  original  investigation  under  the 
name  Željezara  Sisak  d.d.,  but  which  had  officially  changed  name  twice  since  the 
imposition of the existing measures, due to subsequent changes in ownership8. 

(14)  During  the  original  investigation,  an  undertaking  had  been  accepted  from  Mechel 
Željezara Ltd. under its original name9. As the investigation was initiated to review the 
level  and  form  of  the  measures,  the  undertaking  was  also  subject  to  this  review 
investigation (see recitals (135) to (137) below). 

1.2. Normal value 

(15) 

It was first established whether Mechel Željezara Ltd’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,  domestic  sales 
were considered representative as the total domestic sales volume represented at least 
5 % of its total export sales volume to the Community. 

(16)  Subsequently,  by  defining  the  product  types  in  accordance  with  the  CN-codes  under 
which  the  product  is  classified,  it  was  examined  whether  the  domestic  sales  of  each 
product  type  were  representative.  Domestic  sales  of  a  particular  product  type  were 
considered  sufficiently  representative  when  the  total  domestic  sales  volume  of  that 
type during the IP represented 5% or more of the total sales volume of the comparable 
product type exported to the Community. It was found that all product types sold by 
the company for export to the Community had representative domestic sales.  

(17)  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 

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Notice 246/02 (OJ C 246, 12.10.2002, p. 2.) and Notice 68/06 (OJ C 68, 18.3.2004, p. 8.) 
Commission Decision 2000/137/EC (OJ L 46, 18.2.2000, p. 34.) 

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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 unit cost, represented more than 80 % 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, 
normal value was based on the actual domestic price, calculated as a weighted average 
of the prices of all domestic sales of that product type made during the IP, irrespective 
of whether these sales were profitable or not. This was the case for two product types.  

(18) 

In the case where the volume of profitable sales of a product type represented 80 % or 
less  but  at  least  10%  of  the  total  sales  volume  of  that  type,  or  where  the  weighted 
average  price  of  such  sales  was  below  the  unit  cost,  normal  value  was  based  on  the 
actual  domestic  price,  calculated  as  a  weighted  average  of  profitable  sales  of  those 
types only. This was the case for one product type.  

(19)  For  the  fourth  product  type,  less  than  10 %  of  the  domestic  sales  volume  was 
profitable  during  the  IP.  It  was  therefore  considered  that  this  particular  product  type 
was  sold  in  insufficient  quantities  for  the  domestic  prices  to  provide  an  appropriate 
basis for the establishment of the normal value and another method had to be applied. 
In this case, constructed normal value was used, in accordance with Article 2(3) of the 
basic Regulation. Normal value was constructed by adding to the manufacturing cost 
of  the  exported  type,  adjusted  where  necessary,  a  reasonable  percentage  for  selling, 
general and administrative expenses (‘SG&A’) and a reasonable margin of profit, on 
the  basis  of  actual  data  pertaining  to  production  and  sales,  in  the  ordinary  course  of 
trade, of the like product, by the exporting producer under investigation in accordance 
with the first sentence of Article 2(6) of the basic Regulation. 

1.3. Export price 

(20)  The  investigation  showed  that  the  export sales  of  Mechel  Željezara  Ltd.  were  solely 

made directly to unrelated customers in the Community. 

(21)  Therefore, the export price was established on the basis of export prices actually paid 
or  payable  for  the  product  concerned  when  sold  to  the  first  independent  customer  in 
the Community, in accordance with Article 2(8) of the basic Regulation. 

1.4. Comparison 

(22)  The  normal  value  and  export  price  were  compared  on  an  ex-works  basis.  For  the 
purpose of ensuring a fair comparison between the normal value and the export price, 
due  allowance  in  the  form  of  adjustments  was  made  for  differences  affecting  price 
comparability in accordance with Article 2(10) of the basic Regulation. 

(23)  Accordingly, allowances claimed for differences in transport costs, handling, loading 
and ancillary costs, credit costs and commissions were granted where applicable and 
supported by verified evidence. 

1.5. Dumping margin 

(24)  According  to  Article  2(11)  of  the  basic  Regulation,  the  adjusted  weighted  average 
normal  value  by  product  type  was  compared  with  the  adjusted  weighted  average 
export price of each corresponding type of the product concerned. 

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(25)  This comparison showed the existence of dumping. The dumping margin expressed as 

a percentage to the CIF Community frontier price, duty unpaid, is as follows: 

Mechel Željezara Ltd. 

38,9% 

(26)  This  dumping  margin  is  below  the  dumping  margin  found  during  the  original 
investigation.  Since  the  level  of  co-operation  was  high  (all  exports  of  the  product 
concerned  from  Croatia  to  the  Community),  the  residual  dumping  margin  was  set  at 
the same level as the one established for Mechel Željezara Ltd, namely 38,9%. 

2.1. Market economy treatment (‘MET’) 

2. Ukraine 

(27)  Pursuant  to  Article  2(7)(b)  of  the  basic  Regulation,  in  anti-dumping  investigations 
concerning  imports  originating  in  Ukraine,  normal  value  shall  be  determined  in 
accordance  with  paragraphs  1  to  6  of  the  said  Article  for  those  exporting  producers 
which  can  show  that  they  meet  the  criteria  laid  down  in  Article  2(7)(c)  of  that 
Regulation, i.e. that market economy conditions prevail in respect of the manufacture 
and sale of the like product. 

(28)  Briefly, and for ease of reference only, the criteria for MET are set out in summarised 

form below: 

1. 

2. 

3. 

4. 

5. 

business  decisions  and  costs  are  made  in  response  to  market  signals,  and  without 
significant State interference; 

firms have one clear set of accounting records which are independently audited in line 
with international accounting standards (‘IAS’) and are applied for all purposes; 

there  are  no  significant  distortions  carried  over  from  former  non-market  economy 
system;  

legal certainty and stability is provided by bankruptcy and property laws; 

currency exchanges are carried out at market rate. 

(29)  Claims  for  MET  pursuant  to  Article  2(7)(b)  of  the  basic  Regulation  were  received 

from two groups of companies: 

(a) 

(b) 

the producing company Dnipropetrovsk Tube Works (DTW) and its related trader in 
Ukraine, Time Ltd. 

the related producing companies OJSC Nizhnedneprovsky Tube Rolling Plant (NTRP) 
and  CJSC  Nikopolsky  seamless  tubes  plant  ‘Nikotube’  and  their  related  trader  in 
Ukraine, SGIP Interpipe, 

(30)  The claims were analysed on the basis of the five criteria set out in Article 2(7)(c) of 

the basic Regulation. 

(31) 

In the case of the first group, the accounts of the producing company were found to be 
unreliable due to material inaccuracies and to the misapplication of accounting policies 

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referred  to  in  IAS  1.  It  was  also  found  that  the  same  company  was  in  an  insolvent 
situation  and  belonged  to  a  category  of  companies  which,  by  bankruptcy  law 
provision,  enjoyed  a  special  status  which  denied  legal  certainty  for  the  operation  of 
such companies. It was therefore determined that this group of companies did not meet 
the second and fourth criteria of Article 2(7)(c) of the basic Regulation. 

(32) 

In the case of the second group, it was found that both producing companies did not 
have  one  clear  set  of  basic  accounting  records  which  were  independently  audited  in 
line with international accounting standards and which were applied for all purposes as 
both  companies  had  several  sets  of  basic  accounting  records  used  for  different 
purposes.  Additionally,  significant  distortions  carried  over  from  the  former  non-
market  economy  system  in  the  form  of  interest  free  loans  not  pursued  by  the  State, 
debt  forgiveness  of  considerable  amounts  and  tax  indebtedness  were  found  to  affect 
the cost structure and the financial situation of the group. It was therefore determined 
that  this  group  of  companies  did  not  meet  the  second  and  third  criteria  of  Article 
2(7)(c) of the basic Regulation.  

(33)  As a company or a group of companies has to fulfil all of the five criteria of Article 
2(7)(c) of the basic Regulation in order to have Market Economy Treatment granted to 
them and this not being the case, both groups of companies were refused MET.  

(34)  Both  groups  of  companies  argued  that  the  Commission  had  made  a  determination 
regarding  its  application  for  MET  beyond  the  three  months  period  mentioned  under 
Article 2(7)(c) of the basic Regulation, and that this determination was therefore not 
valid. In this respect it is noted that the Commission granted several extensions to the 
deadline to the Ukrainian exporting producers concerned which had major difficulties 
to fill in the MET claim forms within the deadline set in the notice of initiation. It is 
also  noted  that  the  MET  claims  received  were  deficient  and  required  a  number  of 
substantial  clarifications  and  additional  information  which  delayed  the  investigation. 
Finally,  the  complexity  of  a  number  of  issues  such  as  the  companies’  structures  and 
sales channels as well as the serious problems with regard to the companies’ accounts 
prolonged  the  analysis.  In  view  of  this,  it  was  not  possible  to  make  a  determination 
regarding the MET claims received within three months from the initiation.  

(35) 

In  this  respect  it  is  noted  that  the  non-respect  of  such  deadline  does  not  entail  any 
apparent legal consequences as companies have equally been granted the opportunity 
to  comment.  Furthermore,  it  is  noted  that  the  above  mentioned  groups  of  companies 
did  not  claim  any  negative  impact  due  to  the  longer  period  needed  for  the  MET 
determination.  

(36)  Given the above, it is concluded that a valid determination with regard to MET can be 
made  even  after  the  three  months  period  and  the  claims  of  the  groups  of  companies 
concerned were therefore rejected.  

(37)  The  Commission  findings  were  further  contested  by  both  groups  of  companies, 
however, no arguments were brought forward to alter the MET determination. 

(38)  The  Community  industry  was  given  the opportunity  to  comment  and  did  not  oppose 

the above findings. 

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2.2. Individual Treatment 

(39)  Pursuant  to  Article  9(5)  of  the  basic  Regulation,  a  country-wide  duty,  if  any,  is 
established for countries falling under Article 2(7)(a) of the basic Regulation, except in 
those  cases  where  companies  are  able  to  demonstrate  that  their  export  prices  and 
quantities as well as the conditions and the terms of sales are freely determined, that 
exchange  rates  are  carried  out  at  market  rates,  and  that  any  State  interference  is  not 
such as to permit circumvention of measures if exporters are given different rates of 
duty. 

(40)  The  same  Ukrainian  exporting  producers,  which  did  not  fulfil  the  MET  criteria, 
alternatively  requested  individual  treatment  (‘IT’)  in  accordance  with  Article  9(5)  of 
the  basic  Regulation.  The  Commission  consequently  sought  and  verified  all 
information deemed necessary for the purposes of determining whether the two groups 
of companies qualified for IT. It was found that the conditions as set in Article 9(5) of 
the basic Regulation were fulfilled by both groups of companies and it was therefore 
considered justified to grant IT to both groups of companies. 

2.3. Analogue country 

(41)  Pursuant  to  Article  2(7)(a)  of  the  basic  Regulation,  normal  value  for  the  exporting 
producers that were not granted MET has to be established on the basis of the prices or 
constructed value in an appropriate analogue country for products comparable to those 
exported by the Ukrainian exporting producers to the Community. 

(42)  Croatia  was  the  analogue  country  used  in  the  original  investigation.  In  the  notice  of 
initiation,  Croatia  was  again  envisaged  as  the  analogue  country  for  the  purpose  of 
establishing  normal  value  for  Ukraine.  As  none  of  the  interested  parties  objected  to 
this choice, it was decided to use Croatia as an analogue country in the framework also 
of this investigation. 

2.4. Normal value 

(43)  Pursuant  to  Article  2(7)(a)  of  the  basic  Regulation,  normal  value  for  Ukraine  was 
established on the basis of verified information received from the sole producer in the 
analogue country, i.e. on the basis of all prices paid or payable on the domestic market 
of  Croatia  for  comparable  product  types  or  constructed  value  in  Croatia  for 
comparable  product  types.  In  determining  normal  value  for  Ukraine,  the  same 
methodology as that described at recitals (15) to (19) was applied. 

(44) 

It  was  established  that  for  the  product  type  corresponding  to  CN-code  7304  31  99 
(cold-drawn  or  cold-rolled  tubes),  there  was  no  domestic  production  in  Croatia. 
Overall,  these  exports  accounted  for  only  6,2 %  of  the  Ukrainian  exports  of  the 
product  concerned  to  the  Community.  However,  in  the  case  of  one  group  of 
companies, during the IP the exported quantity to the Community of this product type 
represented  around  40 %  of  its  total  exports  of  the  product  concerned  to  the 
Community.  

(45)  On the basis of data available, it was concluded that the other product types subject to 
the  investigation  were  not  comparable  to  this  product  type  and  that  constructing 
normal value for this particular product type on the basis of normal value for the other 

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product types would not lead to a reliable figure. It also appeared, because of a more 
complex  manufacturing  process,  that  normal  value  of  this  product  type  would  be 
considerably  higher  than  normal  value  of  the  other  product  types.  Although  export 
prices of cold-drawn or cold-rolled tubes were on average higher than export prices of 
the other product types, inclusion of this product type in the calculations would, in all 
likelihood,  lead  to  a  higher  dumping  margin.  Insofar  as  mentioned  in  recital  (127) 
below, the injury margin is significantly lower than the dumping margin found without 
including  this  product  type,  and  therefore  will  serve  as  a  basis  for  establishing  the 
level of the measures. In view of this, it was not considered necessary to pursue this 
matter further. The product type corresponding to CN-code 7304 31 99 was therefore 
excluded from the calculations. 

2.5. Export price 

(46)  Both groups of companies in Ukraine made all their exports sales to the Community 
via  a  related  trading  company  located  in  a  third  country.  The  export  price  was, 
therefore, in accordance with Article 2(9) of the basic Regulation, constructed on the 
basis of the related trading companies’ resale prices to the first independent customers 
in the Community. 

2.6. Comparison 

(47)  For the purpose of a fair comparison between the normal value and the export price, 
due  allowance  in  the  form  of  adjustments  was  made  for  differences  which  were 
claimed  and  demonstrated  to  affect  price  comparability.  These  adjustments  were 
made, where appropriate, in accordance with Article 2(10) of the basic Regulation in 
respect of transport, insurance, handling, loading and ancillary costs and commissions. 
The  adjustments  in  the  export  price  in  respect  of  inland  transport  in  the  exporting 
country,  insurance,  loading  and  ancillary  costs  were  made  on  the  basis  of  costs 
established in the analogue country. 

(48)  The  comparison  between  normal  value  and  export  price  was  made  on  an  ex-works 

basis. 

2.7. Dumping margin 

(49)  According  to  Article  2(11)  of  the  basic  Regulation,  the  adjusted  weighted  average 
normal  value  by  product  type,  taken  from  the  analogue  country  producer  Mechel 
Željezara  Ltd,  was  compared  with  the  companies’  adjusted  weighted  average  export 
price of each corresponding product type of the product concerned.  

(50)  This comparison showed the existence of dumping.  The dumping  margins  expressed 
as a percentage to the CIF Community frontier price, duty unpaid, are as follows: 

Dnipropetrovsk Tube Works, Dnipropetrovsk 

91,0 % 

OJSC Nizhnedneprovsky Tube Rolling Plant, 
Dnipropetrovsk and CJSC Nikopolsky seamless tubes plant 
‘Nikotube’, Nikopol 

97,3 % 

(51)  Since the level of co-operation was high (more than 80 % of the exports of the product 
concerned from Ukraine to the Community), the residual margin was set at the same 

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level  as  the  one  established  for  the  co-operating  exporting  producers  OJSC 
Nizhnedneprovsky Tube Rolling Plant (NTRP) and CJSC Nikopolsky seamless tubes 
plant ‘Nikotube’, namely 97,3 %. 

C. INJURY 

1. Preliminary remark 

(52)  As  in  the  case  of  dumping,  the  investigation  sought  to  establish  whether  the 
circumstances with regard to the situation of the Community industry had changed to 
such an extent that would warrant a conclusion different to that established during the 
original investigation. 

2. Community production 

(53)  During  the  original  investigation,  the  Community  industry  was  composed  of  ten 

producers. 

(54) 

In the course of the present review investigation it was found that seamless pipes and 
tubes were manufactured by 

-  six  complainant  Community  producers,  of  which  five  fully  co-operated  with  the 
Commission during the investigation, whereas the sixth, Pietra, Italy, supported the 
proceeding, but did not provide a detailed questionnaire reply. 

-  six  other  producers,  which  neither  supported  the  Community  industry  nor  co-
operated with the Commission. 

(55)  A questionnaire was sent to these other producers but no co-operation was obtained. 
No  further  producers  of  the  product  concerned  made  themselves  known  to  the 
European Commission. 

3. Definition of the Community industry 

(56)  The  production  of  the  five  Community  producers  that  fully  co-operated  in  the 
investigation  was  at  797.456  tonnes  during  the  investigation  period.  This  represents 
over 70 % of total Community production and these companies therefore constitute the 
Community  industry  within  the  meaning  of  Articles  4(1)  and  5(4)  of  the  basic 
Regulation. 

4. Community consumption 

(57)  Eurostat information, related to volumes and values for CN Codes ex 7304 10 10, ex 
7304 10 30, 7304 31 99, 7304 39 91 and 7304 39 93 were used as the source of the 
import data.  Community industry data were obtained from the verified questionnaire 
responses of the five co-operating Community producers. 

(58)  The  apparent  Community  consumption,  i.e.  sales  by  the  Community  industry  on  the 
Community  market  and  sales  of  other  Community  producers  in  the  Community,  as 
well  as  imports  from  all  third  countries,  shows  that  consumption  of  the  product 
concerned  in  the  Community  increased  from  1.104.619  tonnes  in  1999,  to  a  peak  of 

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1.233.357 tonnes in 2001. Consumption decreased to 1.103.805 tonnes during the IP, 
which is slightly less than the consumption in 1999. 

1999 

2000 

2001 

IP 

Community  Consumption 
(tonnes) 

1.104.619 

1.130.410 

1.233.357 

1.103.805 

Index 1999 = 100 

100 

102 

112 

100 

5. Imports into the Community from the countries concerned 

5.1. Cumulative assessment of the effects of the imports concerned 

(59) 

It  was  first  examined  whether  imports  from  Croatia  and  Ukraine  should  be  assessed 
cumulatively, in accordance with Article 3(4) of the basic Regulation. 

(60)  The evolution of imports from the countries concerned, in volume and market share, 

has been the following: 

Import volumes (tonnes) 

Ukraine 

Index 1999 = 100 

Croatia 

Index 1999 = 100 

1999 

103.477 

100 

30.072 

100 

2000 

22.996 

22 

2001 

37.353 

36 

IP 

37.683

36

24.646 

23.893 

23.001

82 

79 

76

Countries concerned Total 

133.549 

47.642 

61.246 

60.684

Index 1999 = 100 

100 

36 

46 

45

Market shares of the imports 

Ukraine 

Croatia 

Countries concerned Total 

Imports from other countries 

1999 

9,4% 

2,7% 

12,1% 

24,1% 

2000 

2,0% 

2,2% 

4,2% 

2001 

3,0% 

1,9% 

5,0% 

IP 

3,4%

2,1%

5,5%

27,5% 

31,2% 

29,9% 

(61) 

It was found that the dumping margins established (recitals (25) and (50)) in relation 
to  the  imports  from  each  of  the  countries  concerned  were  above  the  de  minimis 
threshold as defined in Article 9(3) of the basic Regulation. Additionally, despite the 
measures  in  force,  the  volumes  of  imports  from  each  of  these  countries  were  not 
negligible  during  the  investigation  period,  as  market  shares  for  these  countries  were 
2,1 % for Croatia and 3,4 % for Ukraine. The shares of all imports ranged from 5,9 % 
for Croatia to 9,6 % for Ukraine in the IP. 

(62)  The cumulative assessment was found to be appropriate in view of the conditions of 
competition  both  between  imports  originating  in  these  countries,  and  between  these 
imports  and  the  like  Community  product.  This  is  evidenced  by  the  fact  that,  again 
despite  the  measures  in  force,  prices  from  both  countries  have  continued  to 
significantly  undercut  the  prices  of  the  Community  industry  during  the  IP  and  that 

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seamless pipes and tubes from both countries are sold through similar sales channels. 
Moreover, the investigation has shown that the imports from both countries concerned 
share the same physical and chemical characteristics, as the like product. Finally, the 
imports of both countries concerned and the like product follow the same price trends 
(see recitals (67) and (74) below). 

(63)  One Croatian exporter claimed that no injury is caused by the Croatian imports since 
Croatian market share is minimal and therefore no cumulative assessment should take 
place.  As  stated  above,  the  Croatian  imports  were  clearly  above  de  minimis  and  not 
negligible during the IP. While it is true that there was a considerable drop of imports 
originating  in  Ukraine  at  the  beginning  of  the  period  considered,  it  should  be  noted 
that subsequently imports from both countries followed a broadly similar trend. 

(64)  For these reasons, it is concluded that all the criteria set out in Article 3(4) of the basic 
Regulation  are  met  and  that  imports  originating  in  Croatia  and  Ukraine  should  be 
assessed cumulatively. 

5.2. Market share of imports concerned 

(65)  As shown above, following the introduction of measures in 2000, the market share of 
imports from the countries concerned decreased significantly from 12,1 % in 1999 to 
4,2 % in 2000 and then started to increase continuously up to 5,5 % in the IP. 

5.3. Prices of imports and undercutting 

(66)  A  comparison  of  selling  prices  on  the  Community  market  during  the  IP  was  made 
between the prices of the Community industry and those of the exporting producers in 
the  countries  concerned.  This  comparison  was  made  after  deduction  of  rebates  and 
discounts.  The  prices  of  the  Community  industry  were  adjusted  to  ex-works  prices, 
and  the  prices  of  the  imports  were  CIF  Community  frontier,  import  duty  paid,  anti-
dumping duty unpaid, with adjustments made for the level of trade and handling costs, 
based  on  information  collected  during  the  investigation,  notably  from  co-operating 
unrelated importers. 

(67)  The  comparison  showed  that  during  the  IP,  imports  of  the  product  concerned  were 
sold  in  the  Community  at  prices  which  undercut  the  Community  industry’s  prices, 
when expressed as a percentage of the latter, as follows: Ukraine 34,1 % and Croatia: 
23,3 %.  Even  if  the  anti-dumping  duties  are  taken  into  account,  undercutting  is  still 
significant with 10 % for imports from Ukraine and 6,5 % for imports from Croatia. It 
has to be noted that average prices of the imports increased from 2000 up to the IP as 
shown below, which is in line with the overall price developments on the EU market. 
However,  as  shown  in  recital  (74)  below,  prices  of  imports  from  the  countries 
concerned did not increase as much as the prices of the Community industry. 

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Prices of imports, duty unpaid 
(Euro/tonne) 

1999 

2000 

2001 

Ukraine 

Index 1999 = 100 

Croatia 

Index 1999 = 100 

Ukraine&Croatia Average 

Index 1999 = 100 

332 

100 

461 

100 

361 

100 

341 

103 

465 

101 

405 

112 

433 

130 

516 

112 

466 

129 

IP 

449 

135 

523 

113 

477 

132 

6. Situation of the Community industry 

(68) 

In accordance with Article 3(5) of the basic Regulation, the examination of the impact 
of  the  dumped  imports  on  the  Community  industry  included  an  evaluation  of  all 
economic factors and indices having a bearing on the state of the industry from 1999 
(base year) to the IP. 

(69)  The Community industry data below represent the aggregated information of the five 

co-operating Community producers. 

6.1. Production, production capacity and capacity utilisation 

(70)  The  evolution  of  production,  production  capacity  and  capacity  utilisation  is  the 

following:  

1999 

2000 

2001 

IP 

Production (tonnes) 

710.029 

911.669 

928.231 

797.456 

Index 1999 = 100 

100 

128 

131 

112 

Production capacity (tonnes) 

1.117.881 

1.183.067 

1.140.304 

1.094.548 

Index 1999 = 100 

Capacity utilisation 

Index 1999 = 100 

100 

63,5% 

100 

106 

77,1% 

121 

102 

81,4% 

128 

98 

72,9% 

115 

(71)  As shown in the table above, production during the period 1999 to 2001 increased to a 
peak  in  2001  and  then  decreased  significantly  during  the  IP.  Although  export  sales 
increased and compensated to some extent for the decrease of sales in the Community, 
the reduction in the production and the decrease in the production capacity during the 
IP could not be avoided. 

6.2. Stocks 

(72)  The figures below represent the volume of stocks at the end of each period. 

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Stocks (tonnes) 

Index 1999 = 100 

1999 

38.753 

100 

2000 

2001 

IP 

49.620 

49.062 

59.287 

128 

127 

153 

industry  generally  produces 

(73)  Stocks  have  increased  during  the  period  considered.  It  is  to  be  noted  that  the 
Community 
to  order. 
Consequently, the level of stocks held by the Community industry is found not to be a 
very  significant  indicator  in  the  assessment  of  the  situation  of  the  Community 
industry. However, it was found that the increase in stocks is also a consequence of the 
decreasing sales and market share of the Community industry. 

the  product  concerned 

6.3. Sales volume, market shares, growth and average unit prices in the EC 

(74)  The figures below represent the Community industry’s sales to independent customers 

in the Community. 

1999 

2000 

2001 

IP 

Sales volume (tonnes) 

516.529 

573.136 

576.850 

504.317 

Index (1999=100) 

100 

111 

Market Share 

46,8% 

50,7% 

Index (1999=100) 

Average  sales  prices 
(EURO/tonne) 

Index (1999=100) 

100 

576 

100 

108 

589 

102 

112 

46,8% 

100 

659 

114 

98 

45,7% 

98 

696 

121 

(75)  The Community industry’s sales volumes increased by 12 % from 1999 to 2001 and 
then dropped down significantly during the IP to a level even below the one in 1999. 
The  development  in  sales  volumes  should  be  seen  in  the  light  of  the  level  of 
consumption during the same period, which increased by 12 % from 1999 to 2001 and 
then decreased during the IP. However, the demand did not decrease as much as the 
sales volume between 2001 and the IP. 

(76)  Following the introduction of measures in 2000, the Community industry was able to 
regain lost market share. Between 1999 and 2000, the market share of the Community 
industry  increased  from  46,8 %  to  50,7 %  of  Community  consumption.  However, 
following this period of relative strength, the market share of the Community industry 
decreased  again.  Between  2000  and  the  IP,  its  share  of  Community  consumption 
decreased  to  45,7 %  as  dumped  imports  started  again  to  penetrate  the  Community 
market. 

(77)  Facing  increasing  imports  as  from  2000  on  and  decreasing  Community  sales  from 
2001  on,  the  Community  industry  could  not  grow  in  the  production  of  the  product 
concerned. Rather were they forced to reduce production capacity and work force in 
the IP, as increasing exports of the Community industry could not compensate the loss 
of sales on the Community market. 

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(78)  The  Community  industry’s  average  sales  prices  increased  in  the  period  considered. 
However, the higher prices could not generate sufficient profitability, as described in 
detail below. 

6.4. Profitability 

(79)  The  profit  concept  used  below  is  profit  before  taxes,  which  represents  the  profit 

generated by sales of the product concerned on the Community market. 

1999 

Profitability on EC Sales 

-7,8% 

2000 

0,1% 

2001 

0,3% 

IP 

-0,1% 

(80)  Following the imposition of anti-dumping measures against imports of seamless pipes 
and tubes originating in Croatia and Ukraine, the Community industry could, as seen 
above, increase the prices to reach around break-even in 2000 and 2001. However, the 
Community industry could not reach the level of profit which it could be expected to 
achieve  in  the  absence  of  dumped  imports  (i.e.  5  %)  as  set  out  in  the  Regulation 
imposing  the  measures  currently  in  force.  Moreover,  the  level  of  profit  decreased 
during the IP below break-even. The reason for this decrease despite the higher sales 
prices were increasing raw material and labour costs per unit, which went up despite 
the reduction of employees during that time. The Community industry was not able to 
pass  on  those  costs  to  its  customers  as  would  have  been  necessary  due  to  the 
competition caused by the low priced dumped imports. 

(81)  Following  a  slightly  positive  trend  in  2000  and  2001,  the  financial  situation  of  the 
Community  industry  started  to  deteriorate  again  during  the  IP,  coinciding  with 
increases  of  dumped  imports  from  Croatia  and  Ukraine.  The  profit  level  reached  in 
2001 was just above break-even, and was far from the level that would allow financing 
sufficiently re-investments. 

6.5. Return on Investments, Cash Flow, Investments and ability to raise capital 

(82)  The  trends  for  the  Return  on  Investments,  the  Cash  flow  and  the  Investments  are 

shown in the following table. 

Return on Investments 

 Index 1999 = 100 

1999 

-13% 

100 

2000 

0% 

202 

2001 

1% 

204 

IP 

0% 

198 

Cash Flow 

-13.978.142

5.273.981 

5.910.373 

4.959.440 

Index 1999=100 

100 

238 

242 

235 

Investments 

19.320.730 

32.691.925 

33.056.929 

21.087.534 

Index 1999=100 

100 

169 

171 

109 

(83) 

It  is  noted  that  the  above  figures  for  Return  on  Investments  reflect  to  a  large  extent 
those  on  profitability.  The  Return  on  Investments  increased  from  1999  to  2000  but 
decreased again up to the IP. The Cash Flow shows approximately the same trend as 

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the  profitability,  namely  a  peak  in  2001  and  then  a  decrease  again.  Insofar  as  the 
product  concerned  accounts  for  less  than  1 %  of  total  turnover  of  the  Community 
producers  and  the  Community  producers  also  use  their  production  lines  for  the 
manufacturing  of  a  variety  of  other  steel  products,  it  is  considered  that  these  figures 
are not meaningful in themselves. However, they are illustrative, in that two of the co-
operating  Community  producers  which  produced  the  product  concerned  to  a  much 
higher  extent  than  other  Community  producers  show  trends  similar  to  the  ones 
indicated  in  the  table  above  regarding  Return  on  Investments,  Cash  Flow  and 
Investments.  

(84)  Following the imposition of anti-dumping measures in 2000, the Community industry 
made some investments. However, these investments were found to be in the majority 
aimed at the replacement of machinery. In the IP, investments decreased significantly 
compared to the preceding two years. 

(85)  The  Community  industry’s  ability  to  raise  capital,  either  from  external  providers  of 
finance or parent companies, was nevertheless not seriously affected during the period 
considered as the product concerned accounts for less than 1 % of total turnover of the 
Community  producers  and  the  Community  producers  also  use  their  production  lines 
for the manufacturing of a variety of other steel products. 

6.6. Employment, Productivity and wages 

1999 

Number of employees 

2.583 

Index 1999=100 

Productivity 
(tonne/employee) 

Index 1999 = 100 

Wages 
Index 1999=100 

100 

275 

100 

100 

2000 

2.776 

107 

328 

119 

104 

2001 

2.622 

102 

354 

129 

106 

IP 

2.472 

96 

323 

117 

105 

(86)  As seen above, the Community industry increased its productivity and the number of 
employees in 2000 and 2001 as production increased during that period. However, in 
the IP, the number of employees was reduced significantly to a level below the one in 
1999.  The  productivity  also  decreased  following  the  substantial  decrease  in 
production. 

(87)  Wages were relatively stable during the period considered, and merely moved in line 

with inflation. 

6.7. Recovery from past dumping 

(88)  Following the introduction of measures in 2000, the Community industry was able to 
regain lost market share and reach a more sustainable level in its average sale prices. 
Nevertheless, from 2001 on, the Community industry’s financial performance started 
to  deteriorate  again.  Therefore,  it  can  be  concluded  that  the  Community  has  not 
recovered from past dumping. 

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6.8. Magnitude of the actual margin of dumping 

(89)  The dumping margins are specified in the dumping part (recitals (25) and (50)). These 
margins established are clearly above de minimis. Furthermore, given the volume and 
the price of the dumped imports, the impact of the actual margin of dumping cannot be 
considered to be negligible. 

6.9. Conclusion on injury 

(90) 

It is recalled that, following the imposition of anti-dumping measures against imports 
of  the  product  concerned  from  Croatia  and  Ukraine,  the  Community  industry 
immediately gained confidence. Average prices of its Community sales increased by 
14 %  between  1999  and  2001  and  sales  volumes  in  the  Community  as  well  as 
production  increased  in  the  same  period.  In  consequence,  the  industry  could  make 
some necessary investments at that time and employed more work force.  

(91)  However,  the  situation  started  to  deteriorate  substantially  in  the  IP.  Sales  in  the 
Community decreased by 12 % from 2001 to the IP and the Community industry had 
to  adjust  significantly  by  reducing  production,  production  capacity  and  employment. 
The market share of the Community industry decreased further from 2001 to the IP to 
a  level  below  that  in  1999.  The  declining  trend  in  the  IP  is  also  confirmed  by  the 
reduced  capacity  utilisation,  the  stagnating  development  of  the  wages  and  the 
increased  level  of  stocks  leaving  the  industry  in  a  situation  similar  to  that  in  1999 
when  measures  had  not  yet  been  imposed  against  imports  from  the  countries 
concerned. 

(92)  The same trend is shown by the development of investments, Return on Investments 
and Cash Flow. The minor improvement in 2000 and 2001, which was far from being 
very satisfying as the Return on Investments reached only 1 % and the negative Cash 
Flow had just turned towards positive, is followed by a deterioration in the IP. The fact 
that  the  ability  of  the  companies  to  raise  capital  was  not  seriously  affected  is  due  to 
those  companies  being  part  of  larger  corporate  groups  and,  accordingly,  cannot  be 
considered as a viable indicator for the sector of the product concerned.  

(93) 

In  regard  to  the  Community  industry’s  financial  situation,  it  improved  from  a  loss-
making situation in 1999, but only to reach a more or less break-even situation in 2000 
and 2001 and fell back into a loss making situation again in the IP. 

(94)  As  can  be  seen  above,  the  indicators  improved  initially  after  1999  when  measures 
were imposed but all of them with the exception of the sales prices deteriorated again 
in the IP showing a clear injurious picture.  

(95)  The  continuous  increase  in  selling  prices  which  occurred  during  the  whole  period 
considered, could not lead to a satisfying profit situation as it was completely absorbed 
by  rising  production  costs,  notably  raw  material  costs  and  labour  costs  per  unit. 
Moreover, the Community industry was not able to pass on these cost increases to the 
customer as much as would have been necessary because low priced dumped imports 
penetrated the market. In consequence, the profit situation of the Community industry 
deteriorated and fell below break even in the IP. 

EN 

21 

   EN 

 
(96) 

In  view  of  the  above,  it  is  concluded  that  the  Community  industry  has  still  suffered 
material injury during the IP within the meaning of Article 3 of the basic Regulation. 

D. 

LASTING NATURE OF CHANGED CIRCUMSTANCES AND LIKELIHOOD 

OF CONTINUATION OF DUMPING AND INJURY 

(97)  The original measures would expire on 18 February 2005. In accordance with Article 
11(7)  of  the  basic  Regulation,  it  was  therefore  examined  whether  the  expiry  of  the 
existing measures would be likely to lead to a continuation of dumping and injury. In 
accordance  with  Article  11(3)  of  the  basic  Regulation,  it  was  also  analysed  whether 
the circumstances with regard to dumping and injury have changed significantly, and 
if this change could reasonably be said to be of a lasting nature. 

(98) 

It was found that the product concerned was still dumped on the Community market 
during  the  IP  (recitals  (25)  and  (50)).  In  this  regard,  the  dumping  margins  for  the 
product concerned originating in each of the countries subject to the proceeding were 
close to the dumping margins found in the original investigation. Moreover, there are 
still  huge  production  capacities  in  the  countries  concerned,  which  were  not  used 
during  the  IP.  It  was  also  noted  that  there  were  still  significant  quantities  of  imports 
from Croatia and Ukraine sold on the Community market and that their market share 
has continuously increased since 2000. This demonstrates a clear interest by Croatian 
and Ukrainian exporters in the EU market. Given all of the above, it is considered that 
there is no reason to doubt that the level of dumping found is of a lasting nature and a 
continuation  of  dumping  is  highly  likely  if  the  original  measures  were  allowed  to 
expire. 

(99)  Despite the fact that the Community industry recovered to a certain extent from past 
dumping of imports originating in, inter alia, Croatia and Ukraine, it was also found 
that  the  Community  industry  still  suffered  material  injury  within  the  meaning  of 
Article 3 of the basic Regulation. The injury margins found in the investigation have 
increased  as  compared  to  the  original  investigation  because  the  dumped  imports 
continued to substantially undercut the Community industry’s prices and this despite 
the  fact  that  costs  have  risen  worldwide.  Considering  the  effects  of  the  dumped 
imports  on  profitability  (recital  (79))  and  market  share  of  the  Community  industry 
(recital (74)), which were again decreasing from 2001 to the IP, it is concluded that the 
circumstances  leading  to  injury  are  of  a  lasting  nature  and  that  the  expiry  of  the 
original measures would be likely to lead to the continuation of injury. 

E. 

CAUSATION 

(100)  It  was  also  examined  whether  the  causal  link  between  the  dumped  imports  from 
Croatia  and  Ukraine  and  the  injury  suffered  by  the  Community  industry,  which  has 
been  established  in  the  previous  investigation  is  still  present  in  this  investigation. 
Known  factors  other  than  the  dumped  imports,  which  could  at  the  same  time  have 
injured the Community industry, were also examined to ensure that the possible injury 
caused by these other factors was not attributed to the dumped imports.  

(101)  Despite  the  measures  in  force,  which  first  led  to  a  reduction  of  imports  in  2000,  the 
exporting  producers  from  Croatia  and  Ukraine  subsequently  increased  their  market 
share in the Community from 4,2 % up to 5,5 % during the period considered. Even 
with decreasing consumption from 2001 to the IP they saw an increase of their market 

EN 

22 

   EN 

 
share.  At  the  same  time,  from  2000  to  the  IP,  the  Community  industry  lost  market 
share. It had to reduce production substantially in the IP and suffered from declining 
profitability. The increasing imports from the countries concerned, which significantly 
undercut  Community  industry’s  prices  and  the  deteriorating  situation  of  the 
Community industry coincide in time. Therefore, those imports could have continued 
to contribute to the injury suffered by the Community industry. 

(102)  Imports  originating  in  other  third  countries,  such  as  the  Czech  Republic,  Poland  and 
the Slovak Republic, which were during the investigation period not yet members of 
the  Community,  as  well  as  imports  from  Romania  or  Russia  could  also  have 
contributed to the injury suffered by the Community industry. 

(103)  It  has  to  be  noted  that  anti-dumping  duties  ranging  from  9,8 %  to  38,2 %  and 
undertakings  were  in  force  for  imports  from  the  above-mentioned  five  countries 
during  the  whole  period  considered.  There  is  a  review  currently  ongoing  on  the 
measures in force on imports from Russia and Romania (recital (4)). 

(104)  Imports  from  Russia  accounted  for  a  market  share  of  3,3 %  during  the  investigation 
period.  The  average  import  prices  of  these  imports  inclusive  of  anti-dumping  duties 
were  around  20 %  lower  than  the  prices  of  the  imports  from  Croatia  and  Ukraine. 
Given  the  level  of  prices  of  imports  from  Russia,  these  imports  seem  to  have 
contributed  to  the  injury.  However,  having  regard  to  the  size  of  the  market  share, 
which is lower than that of the countries concerned, Russian imports cannot have been 
the  only  cause  for  the  injury  suffered  by  the  Community  industry.  Imports  from 
Romania  accounted  for  a  market  share  of  3,5 %  in  the  IP.  Import  prices  from 
Romania,  inclusive  of  anti-dumping  duties  are  higher  than  the  prices  of  the  imports 
from Croatia and Ukraine, but still lower than the Community industry’s prices. From 
this, it can be concluded that they could also have contributed to injury suffered by the 
Community  industry.  However,  it  is  considered  that  any  possible  effect  of  imports 
from  Russia  and  Romania  would  not  be  such  as  to  alter  the  finding  that  there  is  a 
genuine and substantial causal link between the dumped imports of seamless pipes and 
tubes  from  Croatia  and  Ukraine  and  the  material  injury  suffered  by  the  Community 
industry. 

(105)  Prices  for  imports  from  the  former  accession  countries  Poland,  the  Czech  Republic 
and  Slovakia  were,  inclusive  of  anti-dumping  duties,  also  at  a  significantly  higher 
level  than  those  from  Croatia  and  Ukraine,  but  still  lower  than  the  Community 
industry’s prices. Their market share altogether in the IP was 14,2 %. Although those 
imports could also have contributed to the injury, it can be concluded from their price 
level that their contribution could have been only a minor one. 

(106)  Having regard to the fact that imports from Croatia and Ukraine undercut substantially 
the  Community  industry  prices,  there  is  no  indication  that  the  above  mentioned 
imports, which in the majority undercut the Community prices to a lesser extent, could 
break the causal link between the dumped imports from Croatia and Ukraine and the 
material injury suffered by the Community industry. 

(107)  Imports from several other third countries altogether accounted for 8,9 % market share 
in  the  IP.  With  regard  to  their  high  level  of  prices  which  are  in  the  majority 
sufficiently  above  the  Community  industry  prices,  there  is  no  indication  that  those 

EN 

23 

   EN 

 
imports  could  break  the  causal  link  between  the  dumped  imports  from  Croatia  and 
Ukraine and the material injury suffered by the Community industry. 

(108)  Other Community producers, which did not co-operate in the investigation were facing 
the same problems as regards the increasing raw material costs forcing them to raise 
prices as much as possible. No indication has been found that those competitors could 
have caused the injury suffered by the Community industry. 

(109)  There  is  a  decreasing  consumption  in  the  Community  as  from  2001  on.  However, 
Community  sales  decreased  to  a  higher  percentage  than  the  consumption  and 
Community  industry  lost  market  share  while  the  countries  concerned  increased  their 
market share on the Community market in that period. Therefore, it is concluded that 
this factor could not break the causal link between the dumped imports from Croatia 
and  Ukraine  and  the  material  injury  suffered  by  the  Community  industry.  No  other 
factors  have  been  found  in  the  course  of  the  investigation  that  could  have  caused 
injury. 

(110)  Based on the above analysis of the effects of all known factors on the situation of the 
Community industry, it is concluded that the causal link between the dumped imports 
from  Croatia  and  Ukraine  and  the  material  injury  to  the  Community  industry,  which 
has been established in the previous investigation, has not been broken. 

F. 

COMMUNITY INTEREST 

1. General considerations 

(111)  It  has  been  examined  whether  compelling  reasons  exist  that  could  lead  to  the 
conclusion  that  it  would  not  be  in  the  Community  interest  to  maintain  the  anti-
dumping  duties  against  imports  from  the  countries  concerned.  The  Commission  sent 
questionnaires  to  importers  and  industrial  users.  A  complete  questionnaire  reply  was 
received from one importer, Comercial de Tubos, S.A., Spain 

(112)  From the user industry, no questionnaire replies were received. No supplier has made 
himself known during the investigation. On the basis of the information received from 
the co-operating parties, the following conclusions are reached. 

(113)  It should be recalled that, in the previous investigation, the adoption of measures was 
considered not to be against the interest of the Community. Furthermore, the fact that 
the present investigation is a review, thus analysing a situation in which anti-dumping 
measures  have  already  been  in  place,  allows  the  assessment  of  any  undue  negative 
impact on the parties concerned by the current anti-dumping measures. 

2. Interest of the Community industry 

(114)  It is recalled that the Community industry consisted of five producers which employ 
approximately 2.470 staff for the production and sales of seamless pipes and tubes. It 
is also recalled that the economic indicators of the Community industry above showed 
deteriorating  financial  results  during  the  investigation  period.  Despite  the  growing 
consumption of seamless pipes and tubes in the Community in 2000 and 2001, which 
was,  however,  again  declining  in  the  IP,  the  Community  industry  could  not  gain 
financial stability.  

EN 

24 

   EN 

 
(115)  Indeed,  the  industry  recovered  partially  in  2000  to  2001.  However,  given  the 
prevailing financial situation for the Community industry, it is clear that anti-dumping 
measures would be in the interest of the Community industry. 

3. Interest of unrelated importers 

(116)  The co-operating importer did not generally oppose the continued imposition of anti-
dumping  measures.  No  other  comments  from  importers,  which  imported  the  product 
concerned from Croatia or Ukraine, were received. 

(117)  The  purpose  of  the  anti-dumping  measures  is  to  restore  fair  trade.  It  is  neither  to 
prohibit imports nor to hamper the activities of the importers in the EC. In fact, any 
measures to be proposed are to be set at a level which will enable the continuation of 
imports also in future, but at prices that are non dumped or non injurious, whichever is 
the lower. 

(118)  As fairly-priced imports will still be allowed to enter into the Community market, it is 
likely that the traditional business of the importers will continue even if anti-dumping 
measures against dumped imports are imposed. 

4. Interest of suppliers 

(119)  No supplier made himself known during the investigation. Therefore, it is concluded 
that no compelling reason exists that measures should not be imposed as regards the 
suppliers’ interests. 

5. Interest of users 

(120)  In  the  previous  investigation,  it  was  concluded  that  any  price  effect  resulting  from 
anti-dumping measures would not be significant with respect to downstream industrial 
users.  This  was  based  on  the  fact  that  seamless  pipes  and  tubes  represented  only  a 
small  element  in  the  overall  costs  of  the  user  industries  (including  the  chemical  and 
petrochemical industries, power stations, the automobile and construction industries). 
Given that no representation have been made contradicting the previous findings and 
in view of the lack of co-operation of users in the present investigation, it is expected 
that  any  price  effect  resulting  from  anti-dumping measures would be negligible with 
respect to downstream industrial users. 

6. Competition aspects 

(121)  It  should  be  noted  that  in  Commission  Decision  2003/382/EC,  published  on  6  June 
200310,  it  was  found  that  some  Community  producers  were  involved  in  an  anti-
competitive  agreement  on  parts  of  the  product  concerned  until  1995.  Accordingly, 
neither the original investigation with an IP from 1 November 1997 until 31 October 
1998 (and with a period considered from January 1997 until the end of the IP), nor the 
current review investigation were affected by any anti-competitive practices. 

10 

OJ L 140, 6.6.2003, p. 1. 

EN 

25 

   EN 

 
                                                 
7. Conclusion on Community interest 

(122)  The maintenance of measures against imports of seamless pipes and tubes originating 
in the countries concerned would clearly be in the interest of the Community industry. 
As regards both the importers/traders and the user industries, any impact on prices of 
seamless tubes is expected only to be marginal.  

(123)  In  view  of  the  above,  it  is  concluded  that  there  are  no  compelling  reasons  not  to 
impose anti-dumping duties against imports of seamless pipes and tubes originating in 
the countries concerned. 

G. ANTI-DUMPING MEASURES 

1. Injury elimination level 

(124)  In  view  of  the  conclusions  reached  with  regard  to  dumping,  injury  and  Community 
interest, measures should be imposed in order to prevent further injury being caused to 
the Community industry by the dumped imports. 

(125)  The measures should be imposed at a level sufficient to eliminate the injury caused by 
these  imports  without  exceeding  the  dumping  margin  found.  When  calculating  the 
amount  of  duty  necessary  to  remove  the  effects  of  the  injurious  dumping,  it  was 
considered that any measures should allow the Community industry to cover its costs 
of  production  and  to  obtain  overall  a  profit  before  tax  that  could  be  reasonably 
achieved  by  an  industry  of  this  type  in  the  sector  under  normal  conditions  of 
competition, i.e. in the absence of dumped imports, on the sales of the like product in 
the  Community.  The  pre-tax  profit  margin  used  for  this  calculation  was  5 %  of 
turnover.  It  is  the  same  as  in  the  original  proceeding  since  there  was  no  indication 
found and no intervention made that this rate should be changed. On this basis, a non-
injurious  price  was  calculated  for  the  Community  industry  of  the  like  product.  The 
non-injurious price has been obtained by adding the above mentioned profit margin of 
5 % to the cost of production.  

(126)  The necessary price increase was then determined on the basis of a comparison of the 
weighted  average  import  price,  as  established  for  the  undercutting  calculations,  with 
the  average  non-injurious  price.  Any  difference  resulting  from  this  comparison  was 
then expressed as a percentage of the average import CIF value. 

2. Amended measures 

(127)  In  the  light  of  the  foregoing,  it  is  considered  that  the  anti-dumping  duties  in  force 
against imports of the product concerned originating in Croatia and Ukraine should be 
amended.  The  new  anti-dumping  duties  should  be  set  at  a  level  reflecting  the  injury 
margins  found,  as  the  dumping  margins  found  for  all  companies  in  Croatia  and 
Ukraine were higher than the injury margins calculated. Since the level of co-operation 
was high (more than 80 % of the exports of the product concerned from Ukraine to the 
Community),  the  residual  margin  for  Ukraine  should  be  set  at  the  same  level  as  the 
one  established  for  the  co-operating  exporting  producers  OJSC  Nizhnedneprovsky 
Tube Rolling Plant (NTRP) and CJSC Nikopolsky seamless tubes plant ‘Nikotube’. 

EN 

26 

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(128)  The  individual  company  anti-dumping  duty  rates  specified  in  this  Regulation  were 
established  on  the  basis  of  the  findings  of  the  present  investigation.  Therefore,  they 
reflect  the  situation  found  during  that  investigation  with  respect  to  these  companies. 
These  duty  rates  (as  opposed  to  the  countrywide  duty  applicable  to  "all  other 
companies") 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 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  these  rates  and 
shall be subject to the duty rate applicable to "all other companies". 

(129)  Any claim requesting the application of these individual company anti-dumping duty 
rates (e.g. following a change in the name of the entity or following the setting-up of 
new  production  or  sales  entities)  should  be  addressed  to  the  Commission11forthwith 
with all relevant information, in particular any modification in the company's activities 
linked to production, domestic and export sales associated with e.g. that name change 
or that change in the production and sales entities. If appropriate, the Regulation will 
accordingly be amended by updating the list of companies benefiting from individual 
duty rates. 

(130)  The proposed anti-dumping duties are the following: 

Country 

Company 

Injury 
elimination 
margin 

Dumping margin  Proposed anti-
dumping duty 

Croatia 

Ukraine 

All companies 

38,8 % 

38,9 % 

38,8 % 

Dnipropetrovsk Tube Works (DTW), 
Dnipropetrovsk 

51,9 % 

91,0 % 

51,9 % 

OJSC Nizhnedneprovsky Tube Rolling Plant 
(NTRP), Dnipropetrovsk and CJSC Nikopolsky 
seamless tubes plant ‘Nikotube’, Nikopol 

64,1 % 

97,3 % 

64,1 % 

All other companies 

64,1 % 

97,3 % 

64,1 % 

(131)  On the basis of the measures proposed, a new five-year period for the measures will 
start to run. The measures, therefore, will not expire on 18 February 2005 as stated in 
the notice of impending expiry published on 27 August 200412. 

11 

12 

European Commission 
Directorate-General for Trade 
Direction B 
Office J-79 5/16 
B-1049 Brussels 
OJ C 215, 27.8.2004, p. 2. 

EN 

27 

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3. Developments after the IP concerning the Croatian exporter 

(132)  Subsequent to the disclosure of the essential  facts and considerations  on  the  basis  of 
which  it  was  concluded  that  the  level  of  the  anti-dumping  measures  should  be 
amended, the Croatian government informed the Commission that the sole producer in 
Croatia, Mechel Željezara Ltd., has been liquidated and ceased production in autumn 
2004.  In  its  place,  a  new  legal  entity  named  Valjaonice  Cijevi  Sisak  d.o.o 
(“Valjaonice”)  was  founded  by  the  Croatian  Privatisation  Foundation  (CPF),  a 
governmental  institution in  charge of the privatisation process in Croatia.  The  newly 
established company appears not to have started production yet and is in the process of 
obtaining the assets from Mechel Željezara Ltd. 

(133)  However,  from  the  information  submitted  it  appears  that  the  production  capacity  of 
Valjaonice will remain unchanged compared to that of Mechel Željezara Ltd. and that 
there  is  a  clear  intention  by  Valjaonice  to  continue  the  production  of  the  product 
concerned. On this basis, the fact that the production has stopped cannot be considered 
as of a lasting and undisputed nature and does not, therefore, affect the findings of the 
investigation. 

(134)  However, should there be changes in the situation of the company justifying a review 

of the measures, such a review will be initiated. 

4. Undertakings 

(135)  The  Commission,  by  Decision  2000/137/EC13  of  17  Febuary  2000,  accepted  a  price 
undertaking,  inter  alia,  from  the  sole  Croatian  exporting  producer.  This  undertaking 
with regard to Mechel Željezara Ltd. was also subject to the review. 

(136)  Through  the  undertaking,  Mechel  Željezara  Ltd.  undertook  to  sell  to  its  independent 
customers  up  to  a  certain  quantity  of  the  product  concerned  for  export  to  the 
Community  at  revised  prices.  In  addition,  Mechel  Željezara  Ltd.  undertook  that  its 
prices  per  product  group  would  fall  into  line  with  the  price  structure  in  use  in  the 
Community. 

(137)  In accordance with Article 8(1) of the basic Regulation, the aim of an undertaking is to 
eliminate  the  injurious  effect  of  dumped  imports,  which  is  achieved  through  the 
exporter raising its prices or ceasing exports at dumped levels. The investigation has 
shown  that  the  type  of  undertaking  originally  accepted  in  the  present  case  failed  to 
raise  prices  to  non-injurious  levels  and  thus  restore  fair  trade  on  the  Community 
market. Therefore, in this case, the undertaking accepted from Mechel Željezara Ltd. 
is  not  considered  as  an  appropriate  and  effective  means  of  eliminating  the  injurious 
effect  of  dumping.  As  stated  above,  Mechel  Željezara  Ltd.  has  been  liquidated 
recently. Therefore, the undertaking is considered as being no longer valid. 

(138)  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,  the  Ukrainian  companies  OJSC  Nizhnedneprovsky  Tube  Rolling  Plant 
(NTRP),  CJSC  Nikopolsky  seamless  tubes  plant  ‘Nikotube’  and  their  related 

13 

OJ L 46, 18.2.2000, p. 34. 

EN 

28 

   EN 

 
                                                 
trader/holding  company  ‘Interpipe’  offered  a  joint  undertaking  in  accordance  with 
Article 8(1) of the basic Regulation.  

(139)  These  Ukrainian  companies  are  producers  of  different  types  of  steel  products  which 
can be sold together with the product concerned. This raises a potential risk of cross-
compensation,  i.e.  that  any  undertaking  prices  would  be  formally  respected  but  that 
prices for products other than the one concerned would be lowered when sold together 
with  the  product  concerned.  In  addition,  in  view  of  the  volatility  in  prices,  the 
minimum export prices that the company was prepared to offer were at levels which 
did not eliminate the injurious effects of dumping. Accordingly, this offer could not be 
accepted. 

(140)  In  addition, 

the  Ukrainian  company  Dnipropetrovsk  Tube  Works 

(DTW), 
Dnipropetrovsk  declared  that  it  offers  an  undertaking  but  without  indicating  neither 
the nature nor  any  minimum price to be  respected. Therefore, the  offer could not be 
taken into consideration. 

H. FINAL PROVISION 

(141)  Interested  parties  were  informed  of  all  the  facts  and  considerations  on  the  basis  of 
which it was intended to propose an amendment to the Regulation in force. They were 
given the opportunity to comment and to request a hearing. Comments were received 
and taken into consideration where appropriate. 

HAS ADOPTED THIS REGULATION: 

Article 1 

Council Regulation (EC) No 348/2000, as last amended by Regulation (EC) No 1515/2002, is 
hereby amended as follows: 

1. The table in Article 1 paragraph 2 shall be replaced by the following: 

Country 

Company 

Rate of duty 

Croatia  All companies 

Ukraine 

Dnipropetrovsk Tube Works (DTW), Dnipropetrovsk 

OJSC Nizhnedneprovsky Tube Rolling Plant (NTRP), 
Dnipropetrovsk and CJSC Nikopolsky seamless tubes plant 
‘Nikotube’, Nikopol 

(%) 

38,8 

51,9 

64,1 

TARIC additional 
code 

- 

A614 

A615 

All other companies 

64,1  

A999 

2. Article 2 shall be deleted. 

EN 

29 

   EN 

 
 
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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30 

   EN