Council Regulation (EC) No 428/2005 of 10 March 2005 imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the People's Republic of China and Saudi Arabia, amending Regulation (EC) No 2852/2000 imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the Republic of Korea and terminating the anti-dumping proceeding in respect of such imports originating in Taiwan
Date: 2005-03-10
Institutions: Council of the European Union
Subjects: South Korea, Taiwan, anti-dumping duty, anti-dumping legislation, import, man-made fibre, originating product

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Official Journal of the European Union

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 428/2005

of 10 March 2005

imposing a definitive anti-dumping duty on imports of polyester staple fibres originating in the
People's Republic of China and Saudi Arabia, amending Regulation (EC) No 2852/2000 imposing a
definitive anti-dumping duty on imports of polyester staple fibres originating in the Republic of
Korea and terminating the anti-dumping proceeding in respect of such imports originating in
Taiwan

THE COUNCIL OF THE EUROPEAN UNION,

— Shingkong Synthetic Fibres Co.

Having regard to the Treaty
Community,

establishing the European

— All other companies

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (1) (‘Basic
Regulation’), and in particular Articles 9 and 11(3) thereof,

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

Whereas:

Republic of Korea
— Daehan Synthetic Fibre Co. Ltd.

— Huvis Corporation

— SK Global Co. Ltd.

— Sung Lim Co. Ltd.

— All other companies

13,0 %

13,0 %

0 %

4,8 %

4,8 %

0 %

20,2 %

(1)

(2)

(3)

A. PROCEDURE

1. MEASURES IN FORCE

In July 1999, by Regulation (EC) No 1728/1999 (2), the
Council
anti-dumping duties on
imports of polyester staple fibres (‘PSF’) originating in
Taiwan.

imposed definitive

2000,

by
the Council

(EC) No
In December
2852/2000 (3),
imposed definitive anti-
dumping duties on imports of polyester staple fibres
originating, inter alia, in the Republic of Korea.

Regulation

The level of the definitive anti-dumping duties established
for the exporting producers in the Republic of Korea and
Taiwan subject to the above mentioned investigations,
expressed as a percentage of the CIF frontier value, was
as follows:

Taiwan

— Far Eastern Textile Ltd.

— Nan Ya Plastics Corporation

6,8 %

5,9 %

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

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

(2) OJ L 204, 4.8.1999, p. 3.
(3) OJ L 332, 28.12.2000, p. 17.

(4)

(5)

(6)

2. PRESENT INVESTIGATIONS

On 19 December 2003, the Commission announced by
a notice (‘notice of initiation’) published in the Official
Journal of the European Union (4), the initiation of an anti-
dumping proceeding with regard to imports into the
Community of polyester staple fibres originating in the
People's Republic of China (‘PRC’) and Saudi Arabia.

On the same day, pursuant to Article 11(3) of the Basic
Regulation,
the Commission announced by a notice
published in the Official Journal of the European Union (5)
the initiation of an interim review of the definitive anti-
dumping duties imposed by Council Regulations (EC) No
1728/1999 and (EC) No 2852/2000 on imports of PSF
originating in the Republic of Korea and Taiwan.

The anti-dumping investigations were initiated following
a complaint and a request lodged on 10 November 2003
by the Comité International de la Rayonne et des Fibres
Synthétiques (‘CIRFS’ or ‘the complainant’) on behalf of
producers representing a major proportion, in this case
more than 40 %, of the Community production of PSF.
The complaint contained evidence of dumping of the
said product and of material injury resulting therefrom,
which was considered sufficient to justify the initiation of
the proceedings.

(4) OJ C 309, 19.12.2003, p. 6.
(5) OJ C 309, 19.12.2003, p. 2.

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3.

INVESTIGATIONS CONCERNING OTHER COUNTRIES
AND MEASURES IN FORCE

There are definitive anti-dumping measures currently in
force on imports of PSF originating in (i) Australia,
Indonesia and Thailand imposed by Regulation (EC) No
1522/2000 (6); (ii) India imposed by Regulation (EC) No
2852/2000; as well as (iii) Belarus imposed by Regu-
lation (EC) No 1799/2002 (7).

(13)

4. PARTIES CONCERNED BY THE PROCEEDING

(7)

(8)

(9)

(10)

and

their

importers/traders

The Commission officially advised the known exporting
producers in the PRC, in Saudi Arabia, in Korea and in
Taiwan,
associations,
suppliers and users known to be concerned, the repre-
sentatives of the exporting countries concerned and the
complainant and other known Community producers of
the initiation of the proceeding. Interested parties were
given the opportunity to make their views known in
writing and to request a hearing within the time limit
set in the notices of initiation.

In view of the large number of Chinese, Taiwanese and
Korean exporting producers, listed in the complaint and
in the request, and the large number of Community
sampling was
the product concerned,
importers of
envisaged in both notices of initiation for the determi-
nation of dumping and injury, in accordance with Article
17 of the Basic Regulation.

if so,
in the

In order to enable the Commission to decide whether
to select a
sampling would be necessary and,
sample,
countries
exporting producers
all
mentioned in recital
(9), and Community importers
known to the
asked
were
Commission and to provide, as specified in the notices
of initiation, basic information on their activities related
to the product concerned during the period 1 January
2003 to 30 November 2003 (‘sampling period’).

themselves

to make

(11) After examination of

exporting producers

the information submitted by
low
Chinese
number of replies to the sampling questions,
it was
decided that sampling was not necessary in respect of
Chinese exporting producers.

and due

to the

(12)

In the case of Korea, nine exporting producers replied to
the sampling questions. The three largest exporting
producers in terms of export quantities were selected in
the companies selected
the sample. However, one of
withdrew its
and was
therefore replaced by the fourth largest company in
terms of export quantity. The final sample represented
more than 80 % of the reported exports of the product
concerned to the Community during the sampling period
and consisted of the following companies:

subsequently,

cooperation

— Huvis Corporation

(6) OJ L 175, 14.7.2000, p. 10.
(7) OJ L 274, 11.10.2002, p. 1.

— Sung Lim Co. Ltd.

— Saehan Industries Inc.

five companies replied to the
In the case of Taiwan,
the
sampling questions and reported export sales of
product
concerned to the Community during the
sampling period. The three largest companies in terms
of export quantities were included in the sample. Subse-
it appeared, however, that one of the selected
quently,
companies did not export
the product concerned for
consumption in the Community during the sampling
It had therefore to be excluded from the
period.
sample. The fourth largest company which was then
invited to fill
in the questionnaire appeared to be in
the same situation. Any further inclusion of another
company in the sample, which would have implied an
extended deadline to fill in the questionnaire, would have
jeopardized the timely completion of the investigation at
that stage of
the two
remaining companies counting for more than 95 % of
the
the
Community during the sampling period were considered
representative. The sample consisted therefore of
the
following companies:

the investigation.

In any case,

concerned

product

exports

the

to

of

— Far Eastern Textile Ltd.

— Nan Ya Plastics Corporation

volume of

(14) As far as importers into the European Community are
concerned,
five companies unrelated to the exporting
producers were initially selected for the sample, based
on their
countries
imports
concerned. One of
the three selected companies was
subsequently considered as non cooperating and then
disregarded as part of the sample. The remaining four
imports
sampled companies
concerned. The final sample consisted of the following
companies:

cover 14,6 % of

from the

total

— S.I.M.P., SpA, Italy

— Highams Group Ltd., United Kingdom

— Tob Herman Industries, N.V., Belgium

— Marubeni Europe plc Hamburg Branch, Germany

(15)

The Commission sent market economy treatment (‘MET’)
or individual treatment (‘IT’) claim forms to the Chinese
exporting producers known to be concerned. Claims for
MET, or for IT in case the investigation establishes that
the exporting producers do not meet the conditions for
MET, were received from five exporting producers plus
two related companies.

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(16)

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 notices of initiation. Replies were received from five
Chinese exporting producers, from two Saudi Arabian
exporting producers,
from three Korean exporting
producers included in the sample, from two Taiwanese
exporting producers
five
importers
related to a Saudi
exporter, one importer in the Community importing
two unrelated
the product
concerned from Korea,
importers
six Community
two non complainant producers,
industry producers,
two suppliers of
ten users and one
producer in the analogue country, the United States of
America (‘USA’).

in the Community

included in the

included in the

raw materials,

sample,

sample,

(17)

The Commission sought and verified all the information
it deemed necessary for the purpose of a determination
of dumping, resulting injury and Community interest.
Verification visits were carried out at the premises of
the following companies:

(a) Community industry producers

— Catalana de Polimers, S.A., Spain

— Dupont Sabanci Polyester GmbH, Germany

— Industrias Químicas Textiles, S.A., Spain

— Tergal Fibres, S.A., France

— Trevira GmbH, Germany

— Kunshan AnShun Pettechs Fibre Industry Co.,

Ltd.

— Cixi Jiangnan Chemical Fiber Co. Ltd.

— Far Eastern Industries (Shanghai) Ltd.

— Jiangyin Changlong Chemical Fibre Co. Ltd.

— Xiake Color Spinning Co., Ltd.

(d) Exporting producers in Saudi Arabia

— National Polyester Fibers Factory

— Saudi Basic Industries Corporation (Sabic), and
Fibres

producer Arabian

Industrial

related
Company (Ibn Rushd)

(e) Exporting producers in the Republic of Korea

— Huvis Corporation, Seoul

— Saehan Industries Inc., Seoul

— Sung Lim Co., Ltd., Kumi-si

(f) Exporting producers in Taiwan

— Nan Ya Plastics Corporation, Taipei

— Far Eastern Textile Ltd., Taipei

— Wellman International Limited, Ireland

(g) Related importers

(b) Non-complainant producers

— Sabic Global Ltd., The Netherlands

— Freudenberg Politex, S.r.l., Italy.

— Realplastic, S.r.l., Italy

(h) Importer
Korea

importing the product concerned from

— Saehan

Germany)

Industries

Deutschland

(Eschborn,

(c) Exporting producers

in the People's Republic of

China

— AnShun Pettechs Group:

(i) Unrelated importers

— S.I.M.P. SpA, Italy

— Hangzhou AnShun Pettechs Fibre Industry

Co., Ltd.

— Deqing AnShun Pettechs Fibre Industry Co.,

Ltd.

— Highams Group Ltd., United Kingdom

— Tob Herman Industries, N.V., Belgium

— Marubeni Europe plc Hamburg Branch, Germany

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(18)

In view of the need to establish a normal value for
exporting producers in the PRC to which MET might
not be granted, a verification visit to establish normal
value on the basis of data from an analogue country,
the USA, took place at the premises of the following
company:

Community consumption of PSF is either used for
spinning, i.e. manufacturing filaments for the production
of textiles, mixed with other fibres such as cotton and
wool or for non-woven applications such as filling, i.e.
stuffing or padding of certain textile goods such as
cushions, car seats and jackets.

— Wellman Inc., United States of America

5.

INVESTIGATION PERIOD

(19)

The investigation of dumping and injury covered the
period from 1 January 2003 to 31 December 2003
(‘investigation period’ or ‘IP’). The examination of trends
in the context of the injury analysis covered the period
from 1 January 2000 to the end of the IP (‘period under
consideration’).

6. DISCLOSURE

(20) All parties were informed of

facts and
considerations on the basis of which it was intended to
recommend:

the essential

(i)

the imposition of definitive anti-dumping duties on
imports of PSF originating in PRC and Saudi Arabia;

(ii)

the termination of the proceeding against imports of
PSF originating in Taiwan;

(iii) to amend Regulation (EC) No 2852/2000 imposing
definitive measures on imports of PSF originating,
inter alia, in the Republic of Korea.

In accordance with the provisions of the basic Regu-
lation, parties were granted a period in which they
could make representations subsequent to this disclosure.

(21)

The oral and written comments submitted by the parties
were considered and, where appropriate, the definitive
findings have been modified accordingly.

(22)

(23)

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. PRODUCT CONCERNED

The definition of the product concerned corresponds to
the one that was used in the investigations mentioned
under recitals (1) and (2).

The product concerned is
synthetic staple fibres of
polyester, not carded, combed or otherwise processed
for spinning and is currently classifiable within CN
commonly referred to as
It
code 5503 20 00.
polyester staple fibres.

is

(24)

The product is a basic material used at various stages of
textile products. The
the manufacturing process of

(25)

(26)

(27)

(28)

(29)

The product is sold in different product types which can
be identified through different specifications such as
weight, tenacity, lustre and silicon treatment or through
their classification into product families such as round,
hollow, bi-component
fibres and specialities such as
coloured and tri-lobal fibres. From a production point
of view, a distinction can be made between virgin PSF,
produced from virgin raw materials, and regenerated PSF,
produced from recycled polyester. Finally, quality may be
substandard or first grade.

The investigation has shown that all types of the product
concerned as defined in recital (23), despite differences in
a variety of factors as defined in the preceding recital,
have the same basic physical and chemical characteristics
and are used for the same purposes. Therefore, and for
the purpose of the present anti-dumping proceeding, all
types of
the product concerned are regarded as one
product.

2. LIKE PRODUCT

The PSF imported from the exporting countries under
consideration and sold domestically in these countries,
the product produced and sold on the domestic market
of the analogue country (USA) as well as the one manu-
factured and sold in the Community by the Community
industry were found to have the same basic physical and
chemical characteristics and the same uses. Therefore,
these products are considered to be alike within the
meaning of Article 1(4) of the Basic Regulation.

C. DUMPING

1. GENERAL METHODOLOGY

The general methodology set out hereinafter has been
applied to all exporting producers in the Republic of
Korea, Taiwan, Saudi Arabia and to the extent possible
for the PRC. The subsequent presentation of the findings
on dumping for the countries concerned therefore only
describes issues specific to each exporting country.

2. NORMAL VALUE

In accordance with Article 2(2) of the Basic Regulation, it
was
first examined for each cooperating exporting
producer whether its domestic sales of PSF were repre-
i.e. whether the total volume of such sales
sentative,
represented at
sales
volume of the producer to the Community.

the total export

least 5 % of

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(30)

(31)

(32)

(33)

sold for export

The Commission subsequently identified those types of
PSF sold domestically that were identical or directly
comparable with the types
to the
Community. With regard to the examination on a
product type basis, and as indicated in recital (27), the
Commission considered domestically sold and exported
product types, which had similar origin, denier, compo-
sition, cross-section,
silicon treatment,
quality and use, as being directly comparable.

lustre, colour,

For each type sold by the exporting producers on their
domestic markets and found to be directly comparable
with the type of PSF sold for export to the Community,
it was established whether domestic sales were suffi-
ciently representative for the purposes of Article 2(2) of
the Basic Regulation. Domestic sales of a particular type
of PSF 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 type of PSF exported to the Community.

sales

The Commission subsequently examined whether the
domestic sales of each type of PSF, sold domestically in
representative quantities could be regarded as having
been made in the ordinary course of trade in accordance
with Article 2(4) of the Basic Regulation, by establishing
the proportion of profitable
to independent
customers of the PSF type in question. In cases where
the sales volume of the PSF type, sold at a net sales price
to or above the calculated cost of production,
equal
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 cost of production,
normal value was based on the actual domestic price,
the prices of all
calculated as a weighted average of
domestic sales of that type made during the IP,
irre-
spective of whether these sales were profitable or not.
In cases where the volume of profitable sales of the PSF
type represented 80 % or less of the total sales volume of
that type, or where the weighted average price of that
type was below the cost of production, normal value was
based on the actual domestic price, calculated as a
weighted average of profitable sales of that type only,
provided that these sales represented 10 % or more of
the total sales volume of that type.

In cases where the volume of profitable sales of any
product
the total
type represented less than 10 % of
it was considered that this
sales volume of that type,
particular type was sold in insufficient quantities for
the domestic price to provide an appropriate basis for
the
value. Wherever
domestic prices of a particular product type sold by an
to
exporting producer could not be used in order

establishment of

the normal

establish normal value, another method had to be
applied.

(34)

It was examined whether normal value could be estab-
lished on the basis of
the domestic prices of other
producers in accordance with Article 2(1) of the Basic
Regulation. Since no reliable domestic prices of other
producers were available constructed normal value was
used, in accordance with Article 2(3) of the Basic Regu-
lation.

(35)

In accordance with Article 2(3) of the Basic Regulation,
normal value was constructed on the basis of each
exporting producer's own cost of manufacturing plus a
reasonable amount for selling, general and administrative
(‘SG&A’) expenses and for profit.

(36)

Therefore, the Commission examined whether the SG&A
incurred and the profit realised by each of the exporting
producers concerned on the domestic market constituted
reliable data.

(37) Actual domestic SG&A expenses were considered reliable
the company
where the domestic sales volume of
as
concerned could be
defined in Article 2(2) of
the Basic Regulation. The
domestic profit margin was determined on the basis of
domestic sales made in the ordinary course of trade.

representative

regarded as

(38)

In all cases where these conditions were not met, the
Commission examined whether data of other exporters
or producers in the domestic market of the country of
origin could be used in accordance with Article 2(6)(a) of
the Basic Regulation. Where reliable data were only
available for one exporting producer, no average as set
out in Article 2(6)(a) of the Basic Regulation could be
established and it was examined whether the conditions
of Article 2(6)(b) were fulfilled, i.e. the use of data with
regard to the production and sales of the same general
category of products for the exporter or producer in
question. Where these data were not available or were
not provided by the exporting producer, SG&A and
profits were established in accordance with Article
2(6)(c) of the Basic Regulation, i.e. on the basis of any
other reasonable method.

3. EXPORT PRICE

(39)

In all cases where the product concerned was exported to
independent customers in the Community, the export
price was established in accordance with Article 2(8) of
the Basic Regulation, namely on the basis of export
prices actually paid or payable.

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(40) Where the export sale was made via a related importer
and it was not deemed to be reliable, the export price
was constructed, pursuant to Article 2(9) of the Basic
Regulation, on the basis of
the price at which the
imported products were first resold to an independent
buyer, duly adjusted for all costs
incurred between
importation and resale, as well as a reasonable margin
for SG&A and profits.
the related
importer's own SG&A costs were used. It is the Commis-
sion's practice to establish the profit margin on the basis
of the information available from cooperating unrelated
importers.

In this

regard,

(41)

It should be noted that the investigation has revealed that
one unrelated importer deals with the product concerned
in an ancillary way. The profit margin of this importer
was therefore not taken into consideration.

4. COMPARISON

(42)

The normal value and export prices for comparable
product
types 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 prices and price comparability in accordance
with Article 2(10) of the Basic Regulation. Appropriate
adjustments were granted in all cases where they were
found to be reasonable, accurate and supported by
verified evidence.

5. DUMPING MARGIN FOR THE COMPANIES INVESTIGATED

(43) According to Article 2(11) of the Basic Regulation, and
except for the cases described in recital (45) below, the
dumping margin for each exporting producer was estab-
lished on the basis of a comparison between the
weighted average normal value with the weighted
average export price per product type.

(44)

(45)

In one case it had to be examined whether a transaction-
to-transaction method would be possible, because the
full
average-to-average method did not
reflect
degree of dumping practiced (see recitals
to
(135)). A transaction-to-transaction comparison was,
however, not possible, due to the fact that the number
of the domestic and the export transactions was signifi-
cantly different. Furthermore, no domestic transactions
coinciding in time with export
transactions could be
found.

the
(133)

In cases where the pattern of export prices differed signi-
ficantly among time periods, and the method described
in recitals (43) and (44) did not reflect the full degree of
dumping taking place, the weighted average normal value
was compared to prices of all
individual export trans-
actions,
in accordance with Article 2(11) of the Basic
Regulation.

(46)

(47)

(48)

those exporting producers

found to be related
For
companies, an average dumping margin was calculated
in accordance with the
the
Commission for related exporting producers.

standard practice of

6. RESIDUAL DUMPING MARGIN

For non-cooperating companies, a ‘residual’ dumping
margin was determined in accordance with Article 18
of
the facts
available.

the Basic Regulation, on the basis of

the

exports by

In order to determine the residual dumping margin, the
level of cooperation was first established. The level of
cooperation was considered to be high when the
volume of
exporting
producers was close to that provided by Eurostat for
the country concerned and there was no reason to
believe that any exporting producer abstained from co-
operating. In this case it was decided to set the residual
dumping margin at the level of the cooperating company
with the highest dumping margin, in order to ensure the
effectiveness of any measure.

cooperating

(49) Where the level of cooperation was low, the residual
dumping margin was determined on the basis of the
highest dumped and representative model for another
cooperating producer. This approach was also considered
necessary in order to avoid giving a bonus for non-co-
operation and in view of the fact that there were no
indications that a non-cooperating party had dumped
at a lower level.

(50)

(51)

7. PEOPLE'S REPUBLIC OF CHINA

7.1. Market Economy Treatment (MET)

In anti-dumping investigations concerning imports origi-
nating in the PRC, normal value shall be determined in
accordance with paragraphs 1 to 6 of Article 2 of the
Basic Regulation for those producers which were found
to meet the criteria laid down in Article 2(7)(c).

Briefly, and for ease of reference only, the criteria in
Article 2(7)(c) of
fulfilment of
which the applicant companies have to demonstrate,
are set out in summarised form below:

the Basic Regulation,

1. business decisions and costs are made in response to
market conditions, and without significant State inter-
ference;

2. accounting records are independently audited in line
with international accounting standards and applied
for all purposes;

3. there are no significant distortions carried over from

the former non-market economy system;

(52)

(55)

(56)

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4.

legal certainty and stability are provided by bank-
ruptcy and property laws;

(53)

5. currency exchanges are carried out at the market rate.

the five
The investigation showed that only one of
the criteria
companies mentioned above fulfilled all
required and it was
therefore granted MET. This
exporting producer in the PRC which was granted MET
is:

— Far Eastern Industries (Shanghai) Ltd.

Five exporting producers in the PRC requested MET
pursuant to Article 2(7)(b) of the Basic Regulation and
replied to the MET claim form for exporting producers.
the Commission sought and
For
verified at the premises of these companies all
infor-
mation submitted in the MET applications and deemed
necessary.

companies,

these

(54)

The remaining four claims had to be rejected. The
following table summarizes the determination for the
four companies for which MET was not granted against
each of the five criteria as set out in Article 2(7)(c) of the
Basic Regulation.

Company

Article 2(7)(c)
indent 1

Article 2(7)(c)
indent 2

Article 2(7)(c)
indent 3

Article 2(7)(c)
indent 4

Article 2(7)(c)
indent 5

Criteria

1

2

3

4

Not met

Not met

Not met

Met

Not met

Not met

Not met

Not met

Not met

Not met

Not met

Not met

Met

Met

Met

Met

Met

Met

Met

Met

Source: Verified questionnaire replies of cooperating Chinese exporters.

The companies concerned were given an opportunity to
comment on the above findings. All four companies to
which MET was not granted disagreed with the determi-
nations made and claimed that they should be granted
MET.

to market

in response

company was

Concerning the first criterion, i.e. that business decisions
are made
signals, without
significant State interference, and costs reflect market
values, one company objected to the Commission's
conclusion that it received a State subsidy and therefore
costs did not entirely reflect market values. In this case,
the collectively owned shareholder contributed assets
when the
established and was not
compensated for the increased value of the company
when subsequently selling its shares. During the on-
spot verification evidence was collected confirming that
the State owned shareholder was not compensated for
such increase in value. Due to this financial benefit, the
company did not have to pay the market value for the
assets necessary to produce the product concerned.
Consequently, decisions regarding costs and inputs were
not considered to be made in response to market signals.

(57)

In addition, the company tried to hide possible State
interference. Indeed, when reviewing the translation of
the Chinese version of the company's business licence,

blatantly omitted. Therefore,

it was found that information concerning the business
scope of its shareholder,
in particular the reference to
management and operation of the town-owned assets,
was
to be
concluded that the exporting producer did not provide
sufficient information that it was operating under market
the arguments brought
economy conditions. None of
forward by the company concerned subsequent to the
disclosure could reverse this conclusion and the claim
had to be rejected.

it had

(58)

submitted that

four companies

Regarding the second criterion, i.e. that firms have one
clear set of basic accounting records which are indepen-
dently audited in line with international accounting
they are
standards,
fulfilling the criterion because their accounting records
are independently audited. However,
it was found that
the auditor's reports of three of the companies did not
mention several serious problems (including non-respect
of basic international accounting rules) detected during
the on-spot verification, or explain changes
in the
accounting policy of the companies concerned. Another
company was found not to reflect in its accounts the
recommendations made by its auditor. Therefore, it had
to be concluded that the accounting records of all four
companies concerned were not audited in line with inter-
national accounting standards as required by Article
2(7)(c) second indent of the Basic Regulation and the
claims were rejected.

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(59)

Regarding the third criterion, three companies submitted
that contrary to the Commission's findings, there were
no significant distortions carried over from the former
non-market economy system. In one case, this claim had
to be rejected because it was found that the company
concerned received an interest-free
loan from the
government and several other subsidies. This means
that there are significant distortions carried over from
the former non-market economy system having an
impact on the production costs. As far as the second
company is concerned, no reconciliation could be estab-
lished between the amounts due and those actually paid
for the company's land use rights. Furthermore, and this
relates also to the second criterion, this company's depre-
ciation of intangible assets was not made according to
accounting standards. A third company argued that the
fact that it could not submit any evidence concerning the
payment of its capital contribution by the shareholders,
as determined by the Articles of Association, was
unrelated to any significant distortion from the former
non-market
interests
economy system, because
the
involved were private. The
investigation revealed,
however, that the rules regarding the company paid in
capital were not enforced by the Chinese authorities.
Therefore,
this company was
subject to a significant distortion carried over from the
non-market economy system and its costs, in particular
in relation to depreciation of assets, were significantly
the
distorted.
companies concerned did not fulfil the conditions set
out in Article 2(7)(c) third indent of the Basic Regulation
and their claims had therefore to be rejected.

consequently concluded that

it was concluded that

It was

(60) One company argued that the Commission had made a
determination regarding its application for MET beyond
the three month period mentioned under Article 2(7)(c)
of the Basic Regulation, and that this determination was
therefore not valid.

(61)

(62)

extensions

In this respect it is noted that the Commission granted
to the Chinese
to the deadline
several
exporting producers concerned,
including the above
mentioned company, which had major difficulties to fill
in the MET claim forms within the deadline set in the
notice of initiation.

such as

It is also noted that most MET claims received were
deficient and required a number of substantial clarifi-
information which delayed the
cations and additional
the complexity of a number of
investigation. Finally,
and sales
company structures
the
issues
channels as well as the serious problems found during
the on-spot verification with regard to the companies'
accounts prolonged the analysis and it was not possible
to make a determination regarding the MET claims
received within three months from the initiation.

(63)

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 company did not claim any negative impact
due to the longer period needed for the MET determi-
nation.
interested parties
claimed that it had suffered such prejudice.

Indeed, none of

the other

(64) Given the above,

it is concluded that a valid determi-
nation with regard to MET can be made even after the
the company
three months period and the claim of
concerned was therefore rejected.

(65)

The Advisory Committee was consulted and the parties
directly concerned were
informed accordingly. The
Community industry was given the opportunity to
comment, but no comments were received concerning
the MET determination.

7.2. Individual Treatment (IT)

(66)

(67)

if any,

the Basic Regulation, a
Further to Article 2(7)(a) of
is established for countries
country-wide duty,
the Basic Regulation,
falling under Article 2(7) of
in those cases where companies are able to
except
the
in accordance with Article 9(5) of
demonstrate,
Basic Regulation,
they are free to repatriate
capital and profits; (b) their export prices and quantities,
as well as the conditions and terms of the sales are freely
determined; (c) the majority of shares belong to private
persons; (d) exchange rate conversions are carried out at
market rates, and (e) any State interference is not such as
to permit circumvention of measures if exporters are
given different rates of duty.

that

(a)

The five exporting producers, as well as requesting MET,
also claimed individual treatment in the event of not
being granted MET. As specified above, the companies
have to demonstrate that they are complying with the
criteria set out in Article 9(5) of the Basic Regulation. As
described in recital
company provided
(57), one
misleading information concerning the business scope
of one of
its shareholders in order to hide possible
the company could not
State interference. Therefore,
demonstrate that it was completely free to determine
export prices and quantities, and conditions and terms
it was not able to demonstrate
of sale.
to
whether
permit circumvention of measures if this exporter were
to be granted an individual duty rate. As this company
did not meet all the criteria set out in Article 9(5) of the
Basic Regulation, it was decided not to grant IT to this
company.

In addition,
the State interference was not

such as

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(68) One of the other three companies which was not granted
MET, was partly foreign owned and was free to repatriate
its profits. The other two companies are owned by
Chinese individuals located in the PRC and therefore do
not fall under this criterion. On the basis of the verified
information provided by the three companies,
it was
found that the State had no influence on the ability of
the firms to freely set their export prices and quantities
and conditions and terms of sale. The degree of State
interference in these companies was also not considered
such as to permit circumvention of measures as the
majority of
the shares in these companies belong to
genuinely private companies. As they are competing
with each other both on the domestic as well as on
the export market, each company will take advantage
of its individual margin rather than allow any circum-
(54),
vention. As already mentioned in recital
all
companies met
in Article
the fifth criterion set out
2(7)(c) of the Basic Regulation that all exchange rate
conversions are carried out at market rates. Therefore,
it was concluded that three of the companies to which
MET was not granted, met the requirements for IT, set
forth in Article 9(5) of the Basic Regulation.

(69)

It was therefore concluded that IT should be granted to
the following three exporting producers in the PRC:

(72)

(73)

— AnShun Pettechs Group, comprising the following

related exporters:

(74)

— Hangzhou AnShun Pettechs Fibre Industry Co.,

Ltd.

— Deqing AnShun Pettechs Fibre Industry Co., Ltd.

— Kunshan AnShun Pettechs Fibre Industry Co., Ltd.

— Cixi Jiangnan Chemical Fiber Co. Ltd.

— Jiangyin Changlong Chemical Fibre Co. Ltd.

(75)

7.3. Normal value

7.3.1. Determination of normal value
producers granted MET

for

cooperating exporting

(70)

The Chinese exporting producer granted MET was
requested to submit a full questionnaire reply including
domestic sales information and information on costs of
production of the product concerned. This reply was
verified at the premises of the company concerned.

(71) As far as the determination of normal value is concerned,
the Commission followed the same methodology as the
one explained in recitals (29) to (38).

7.3.2. Determination of normal value for all exporting producers not

granted MET

(i) Analogue country

to Article 2(7)(a) of

Pursuant
the Basic Regulation,
normal value for the exporting producers not granted
market economy treatment has to be established on
the basis of the prices or constructed value in a market
economy third country (‘analogue country’).

In the notice of initiation, the USA was envisaged as an
appropriate market economy third country for
the
purpose of establishing normal value for the PRC and
interested parties were invited to comment on this.
Three exporting producers contested this choice within
the deadlines and one proposed the choice of an
exporting country involved in the current proceeding
with the
analogue
country. It was argued that the level of economic deve-
lopment of the USA is different from that of PRC and
that costs, including prices of raw materials, are relatively
higher in the USA.

lowest normal value

found as

India,

analogue

appropriate,

country was

Indonesia and Thailand. Replies

In order to establish whether the envisaged choice of the
USA as
the
Commission first requested information regarding sales
and market conditions from known producers of PSF
in other market economy countries, namely in the
USA,
to the
requested information were received from one producer
in the USA, a producer in India and two producers in
Indonesia. It was also examined whether Taiwan or the
to the parallel
Republic of Korea, which are subject
interim review mentioned in recital
(5) regarding the
same product, could be regarded as an appropriate
analogue country.

prices

exported

it was
at

found that
dumped

Regarding Taiwan, the information available from the
parallel
interim review investigation showed that only
virgin PSF was sold on the domestic market while
Chinese exporters not granted MES sold exclusively
recycled PSF, which would require important adjustments
when comparing normal value to the export price.
the exporting
Concerning Korea,
producers
the
to
Community (see recital (112) to (137)), which pointed
to the very likely distortion in the domestic market of
In addition, most sales in the Korean
this country.
market were of virgin PSF, while only one company
(out of three) produced recycled PSF. In contrast, in the
USA both virgin and recycled PSF was sold in significant
quantities. It was therefore concluded that there is no
apparent reason that Korea or Taiwan is more appro-
priate than the USA as an analogue country. The other
potential analogue countries are subject to anti-dumping
duties and/or countervailing duties which could indicate
distortions in their domestic markets of this product.

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(76)

The analysis of all of the information available to the
Commission showed that
the USA has a large and
highly competitive market for the product concerned,
with more than ten producers and significant imports
from third countries. Although anti-dumping duties
the product concerned
were imposed on imports of
from the Republic of Korea and Taiwan,
there were
still substantial imports of PSF from other countries.

(77) As mentioned in recital (27) the product produced and
sold in the US domestic market was a like product to the
product exported from China to the Community. In this
respect, only those product types produced in the USA
with the same production process were taken into
account for the comparison, i.e. PSF from recycled waste.

mation on domestic sales prices and cost of production
of
the producer was
verified on the spot.

the like product. The reply of

(83) After the expiry of the deadline to submit comments on
the disclosure, two Chinese exporting producers argued
that the USA did not constitute an appropriate analogue
country as since January 2001 there is an on-going
investigation for anti-competitive behaviours and price
fixing in the American PSF market,
involving the co-
operating as well as eight other companies in the US.
In the framework of this investigation two of the co-
defendants have pleaded guilty and one of them was
fined. It was argued that South Korea or Taiwan should
be used instead.

(78)

(79)

In China, the main raw material used, i.e. recycled waste,
was largely sourced on the domestic market, while some
was also imported from the USA and Europe. The
country purchased raw
producer
analogue
materials exclusively from domestic suppliers.
It was
therefore concluded that the access to raw materials in
the USA was easier or at least similar as compared to the
PRC.

in the

(84)

The choice of the analogue country on the basis of the
lowest normal value found was considered unreasonable
as it is not based on clear criteria but rather on the final
result. Equally, the fact that costs are allegedly higher in a
such cannot be
market economy third country as
considered as a reason not to consider such country as
an appropriate analogue country. One possible objective
of State interference may be to keep a low cost level in
and
order
maintain them competitive. In these cases,
lower costs
would simply be the consequence of this State inter-
ference and not be the result of market forces.
It is
precisely the aim of Article 2(7)(a) of the Basic Regu-
lation that an analogue country is selected in order for
normal value to be based on prices and costs unbiased
by non-market economy conditions.

certain domestic

to support

industries

(80) As far as the different level of economic development of
the USA and the PRC is concerned, this in itself is not a
factor when selecting an analogue country.
relevant
Indeed,
the selection of a modern and cost efficient
market characterised by intensive competition should
the analogue
result
country has a comparable economic development
to
the non market economy country.

in a lower normal value than if

(81)

Considering the above,
it was concluded that the USA
was the most appropriate analogue country and that
under
the USA
seemed reasonable and justified in accordance with
Article 2(7) of the Basic Regulation.

these circumstances the selection of

It should be noted that the above investigation relates to
practices occurring more than a year before the start of
the investigation period and no information was available
which would indicate that such practices, carried-out by
the two market actors which have pleaded guilty, would
have affected the prices during the IP which were used as
the basis for
the normal value calculation. On the
contrary, when comparing the profit margin made by
the producer in the analogue country on domestic sales
of the like product, with that made by producers in
Korea and Taiwan, such margin was found to be either
similar or lower. Furthermore, the investigation has not
resulted in any charges against
the cooperating US
producer (Wellman Inc.), which was informed by the
US authorities in September 2004 that no indictment
was sought for the company or its employees. In light
of
the information
is concluded that
provided by the cooperating US producer and used as
a basis for determining normal value has not been
distorted by any anti-competitive behaviour that may
have existed on the US market in the past.
In these
circumstances, the US is confirmed as a suitable choice
in any
of analogue country. However,
event, should an investigation find that such anti-compe-
titive practices would have taken place during the inves-
tigation period or would have distorted the findings of
this investigation, the current findings may be subject to
a review.

it is noted that,

the above,

it

(ii) Determination of normal value in the analogue country

(85)

Pursuant to Article 2(7) of the Basic Regulation, normal
value for the exporting producers not granted MET was
established on the basis of verified information received
from the producer in the analogue country, i.e. on the
basis of all prices paid or payable on the domestic
market of the USA for comparable product types, since
these were found to be made in the ordinary course of
trade and in representative quantities.

(82)

The Commission subsequently sent a more detailed ques-
tionnaire to the producer in the USA requesting infor-

(86) As far as the determination of normal value is concerned,
the Commission followed the same methodology as the
one explained in recitals (29) to (38).

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7.4. Export price

(87) All export sales to the Community by the exporting
producers granted MET or IT were made directly to inde-
pendent customers in the Community and therefore, the
export price was established in accordance with Article
2(8) of the basic Regulation on the basis of the prices
actually paid or payable.

(88)

(89)

(90)

7.5. Comparison

Claimed adjustments were made in respect of duty
insurance and handling, packing
drawback,
and credit costs, bank charges and commissions where
applicable and justified.

transport,

colour,

compared

characteristics when

Certain product types exported by the Chinese exporting
producers which were granted IT had some different
physical
the
comparable types sold in the analogue country, such as
lustre,
silicon treatment.
Therefore, an allowance in line with Article 2(10)(a) of
the Basic Regulation was made. In the absence of any
more reliable information, the adjustment was established
on the basis of
the price difference related to these
specific characteristics found in the analogue country.

section or

cross

to

The investigation revealed that sales in the analogue
country were made
exclusively to end-users while
Chinese exporting producers made also sales through
other sales channels. In the absence of the same sales
channels in the analogue country, a special adjustment
has been granted, in accordance with Article 2(10)(d)(ii)
of the Basic Regulation, by deducting from the end-users
normal value, an amount corresponding to 10 % of the
gross profit margin.

(91) On the basis of the above, normal value was established
for between around 70 % and around 90 % of
the
companies' granted IT exported quantity of the product
concerned to the Community. This was considered repre-
sentative of the degree of dumping being practiced.

(92) An adjustment was also made with regard to the Chinese
in VAT reimbur-

for differences

exporting producer
sement.

7.6. Dumping margin

(93)

For the company granted MET the dumping margin was
established on the basis of a comparison of
the
company's weighted average normal value with its
weighted average export prices per product
type, as
determined above.

(94)

For the three companies granted IT, the weighted average
normal value for the types exported to the Community
established for the analogue country was compared with

the weighted average export price of the corresponding
type exported to the Community, as provided for under
Article 2(11) of the Basic Regulation.

(95)

For the cooperating company neither granted MET nor
IT, and for all non-cooperating exporters, the country-
wide dumping margin was established as the weighted
average of
the dumping margin found for the non-
market economy producer without IT and the highest
dumped and representative model for one cooperating
non-market economy exporting producer, as explained
in recital (49) above.

(96)

The dumping margins expressed as a percentage of the
CIF net
free-at-Community-frontier price, before duty,
are:

Company

Cixi Jiangnan Chemical Fiber Co. Ltd.

Far Eastern Industries (Shanghai) Ltd.

Dumping
margin

26,3 %

4,9 %

Hangzhou AnShun Pettechs Fibre Industry Co., Ltd.

Deqing AnShun Pettechs Fibre Industry Co., Ltd.

49,0 %

Kunshan AnShun Pettechs Fibre Industry Co., Ltd.

Jiangyin Changlong Chemical Fibre Co. Ltd.

All other companies

8. SAUDI ARABIA

63,2 %

85,8 %

(97) Questionnaire replies were received from two exporting
producers and five importers related to one of
the
exporters.

(98)

(99)

8.1. Saudi Basic Industries Corporation (‘Sabic’)

8.1.1. Normal value

This exporting producer had representative sales of the
like product on the domestic market. Nevertheless, such
sales could not be regarded as being made in the
ordinary course of
trade by reason of price. Conse-
quently, and in the absence of reliable data from other
producers in the exporting country, normal value had to
be constructed, as determined by Article 2(3) of the Basic
Regulation.

by

the

actual SG&A expenses
To construct normal value
incurred
producer
cooperating
concerned on domestic sales of the like product, in the
ordinary course of trade, during the investigation period,
were added to its own average cost of manufacturing, of
each exported type, during the investigation period.

exporting

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(100) Since no reliable data was available for other exporting
producers in Saudi Arabia (see recitals (104) to (106))
and since no information pertaining to production and
sales of the same general category of products was made
available by the exporting producer concerned, the profit
margin had to be determined on the basis of any other
reasonable method, as determined by Article 2(6)(c) of
the Basic Regulation. In this respect it was considered
that a profit margin of 5 % was reasonable. No infor-
mation was available which would indicate that such
profit margin exceeds the profit normally realized by
other exporters or producers on sales of products of
the same general category in the domestic market of
Saudi Arabia, as required by Article 2(6)(c) of the Basic
Regulation.

half of its domestic sales of PSF in the IP. In addition, it
was not possible to reconcile the company's reported
including export sales to the Community,
total sales,
with its
therefore
accounting documents.
considered that the sales data submitted in the ques-
tionnaire reply could not be regarded as a reliable basis
to establish a dumping margin.

It was

(105) Furthermore, data pertaining to cost of production could
not be reconciled with the company's internal accounting
documents and no substantiating evidence was made
the reported data was indeed
available showing that
complete and correct.
It was therefore concluded that
the information submitted on the cost of production of
the like product was not reliable and could not be used
as a basis to determine the normal value.

8.1.2. Export price

(101) All sales were made to the Community via a related
importer, which resold the product to both related and
in turn,
unrelated customers. Those related customers,
independent
resold the product concerned to other
customers.
price was
export
Consequently,
constructed pursuant to Article 2(9) of the Basic Regu-
lation.

the

(106)

In view of the above, it was considered that the dumping
margin for this exporting producer could not be estab-
lished on the basis of its own data. The dumping margin
was therefore determined on the basis of facts available,
as foreseen by Article 18 of the Basic Regulation. In this
regard, and given the insufficient information submitted
by NPF, there were no reasons to conclude that NPF
than the other exporting
dumped at a different
producer in Saudi Arabia. Therefore,
it was considered
appropriate to set the dumping margin for NPF at the
same level as the one established for the other exporting
producer in Saudi Arabia.

level

(107) The company contested the approach arguing that it had
acted with total transparency and that any errors in the
information provided were unintentional and purely
clerical. Nevertheless, no further verifiable information
was provided which could allow the Commission to
revise its findings.

concerned

(108) The other Saudi exporting producer disagreed with the
above approach, arguing that it would constitute a bonus
for non-cooperation.
It was further argued that NPF
exported other product types, which are not comparable
to the types exported by Sabic. In this respect it should
be noted that the determination of the dumping margin
for NPF was made on the basis of the best information
the
available. The vast majority (81 %) of exports of
the
product
Community were made by Sabic. Therefore,
in the
this was
absence of any other
considered an appropriate basis for the setting of the
dumping margin for NPF. Furthermore, as stated above,
there were no reasons to conclude that NPF dumped at a
different level than the other exporting producer in Saudi
Arabia. Regarding the different product types exported by
the two companies it is noted that they all fall within the
In these circum-
definition of the product concerned.
stances,
is
the
considered reasonable.

from Saudi Arabia

reasonable method,

approach set out

in recital

(106)

to

8.1.3. Comparison

(102) Adjustments were made for differences in transportation,

insurance, packing, and credit costs.

(103) An allowance to the normal value was also claimed by
this exporting producer for after sales costs on the
domestic market. Besides the fact that no evidence was
available substantiating the amount claimed, it could not
be concluded, on the basis of
the information made
this factor affected price comparability.
available,
that
In particular,
it could not be shown that domestic
customers consistently paid different prices due to this
factor. In addition, it was established that these expenses
in the
related not only to sales of
domestic market but also to other markets,
including
sales of the product concerned to the Community. On
the basis of the above, the allowance claimed had to be
rejected, since it did not meet the requirements of Article
2(10).

the like product

8.2. National Polyester Fibers Factory (‘NPF’)

(104) The questionnaire reply submitted by this exporting
and contained
significantly deficient
producer was
contradictory information. Although the company was
requested to correct, complete and clarify its reply,
it
did not provide the missing information and did not
make appropriate corrections. Furthermore, the on-spot
verification revealed that NPF did not report more than

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8.2.1. Dumping margin

(109) The dumping margin was established on the basis of a
comparison of the company's weighted average normal
value with its weighted average export prices per product
type, as determined above. As explained in recital (106),
the dumping margin for the other exporting producer in
Saudi Arabia, namely NPF, was established at the same
level as the margin found for the cooperating producer in
Saudi Arabia (Sabic).

(110) The comparison between the normal value and the
export price showed the existence of dumping. The
dumping margins, expressed as a percentage of the CIF
net free-at-Community-frontier price, before duty, are:

National Polyester Fibers Factory 31,7 %

Saudi Basic Industries Corporation (Sabic) 31,7 %

(111) Since the aforementioned two companies represented all
export sales from Saudi Arabia to the Community, as
explained in recital (48), the residual duty was also set
at the level of the cooperating company with the highest
dumping margin. Thus, the residual duty expressed as a
percentage of
free-at-Community-frontier
the CIF net
price, before duty, is 31,7 %.

9. THE REPUBLIC OF KOREA

(112) Questionnaire replies were received from the three

exporting producers selected in the sample.

(113) One exporting producer initially submitted data for all
products containing polyester. However, since the present
review concerns only synthetic staple fibres of polyester,
not carded, combed or otherwise processed for spinning
which are
classifiable within CN code
5503 20 00 (i.e. with 50 % or more of polyester), all
products that were declared by the exporting producer
as containing less than 50 % of polyester were disre-
garded.

currently

9.1. Normal value

(114) For the three exporting producers selected in the sample,
sales of the like product were representative as defined in
recitals (29) to (31). To a large extent, normal value was
based on prices paid or payable, in the ordinary course of
trade, by independent customers in the Republic of
Korea, in accordance with Article 2(1) of the Basic Regu-
lation. However,
types where the
domestic sales were insufficient to be considered repre-
sentative or not made in the ordinary course of trade,
normal value was constructed in accordance with Article
2(3) of the basic Regulation, as explained in recital (34).

those product

for

(115) One exporting producer

sales made

these sales were subject

in the Republic of Korea
reported
Korean manufacturing
to
companies as domestic sales, although the product was
ultimately destined for export. The exporting producer
these sales were intended for domestic
argued that
consumption. However,
to
administrative arrangements specific to export sales as
they were not subject to domestic sales tax, they were
normally invoiced in US dollars and paid for by letters of
credit, they were subject to duty drawback arrangements
and normally classified as local export sales in the
companies' accounting records. Under
these circum-
stances, and in accordance with the approach taken in
(2) (the ‘original
the investigation mentioned in recital
investigation’),
the
sales were
these
purpose of calculating normal value for that company.

excluded for

this programme,

(116) The same exporting producer in the Republic of Korea
benefited from a national programme designed to help
Korean companies in financial difficulties, the so called
‘work out programme’. Under
the
company was able to transform debts
into equity,
accounting for a significant amount booked as an
income and offsetting thus artificially the company's
SG&A expenses
therefore
to a large extent.
considered that this amount should not be considered
as an ordinary income to be taken into account in the
calculation of the SG&A. The reported SG&A, including
the artificial
income, consequently did not reasonably
reflect the costs incurred in the production and sales of
the like product. Therefore, and in accordance with
Article 2(5) of the basic Regulation, this amount was
not taken into account in the calculation of the SG&A.

It was

(117) The company also claimed a gain resulting from reversal
of bad debts in the SG&A calculation. Since these debts
were not related to the product concerned and referred
to benefits under the work out programme, they do not
constitute an ordinary income to be taken into account
in the calculation of the SG&A. The company claimed
that reversal of bad debts occur every year and therefore
should not be excluded from the calculation. This is in
contradiction with the audited reports of the company,
which show that no such reversal took place over the
two last financial years and that it is specifically linked to
the work out programme. Therefore, the exclusion of this
gain from the SG&A calculation is maintained.

(118) The company claimed that the adjustments to the SG&A
resulted from its normal business operations and should
therefore not be disregarded.
It submitted new infor-
mation after the disclosure which indicated, however,
that the two gains referred to in the previous recitals
did not relate to the product concerned. Furthermore,
the new unverified information contradicted the infor-
mation collected during the on-spot investigation and
could therefore not be accepted. On these grounds, the
claims relating to the work out programme are rejected.

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the product

from the SG&A expenses

(119) The same exporting producer declared a high insurance
income during the IP due to a fire in one of
the
production lines of
concerned, which
occurred before the IP. The company deducted this
related to the
income
domestic sales of the product concerned. On the other
hand,
it did not take into account the costs incurred
during the IP as a result of that fire. SG&A expenses
were therefore largely understated. The income from
the insurance was used to install a new production line
not producing the product concerned anymore. It was
consequently considered that any costs and income
resulting from the fire were either outside the IP or not
related to the product concerned and should therefore be
disregarded when calculating the SG&A for the purpose
of the calculation of the normal value.

(120) After disclosure,

this company objected to the above
conclusions claiming that it had incurred costs because
of a loss of business. However, this claim was already
investigated during the on-spot verification visit where
the company failed to submit any supporting evidence
the insurance income
which could show the part of
which was allegedly destined for the loss of business.
This claim had therefore to be rejected.

9.2. Export price

(121) One exporting producer notified that

in the original
investigation,
the company had a related importer in
the Community. The exporting producer claimed that
this situation had changed, and that
the importer in
the Community, even if it was still existing, was not
the
anymore related to them.
is to be noted that
It
the
importer accounted for a significant amount of
sales of
the product concerned to the Community
made by the Korean exporting producer. This issue was
examined carefully in order to determine whether the
application of the provisions set out in Article 2(9) of
the basic Regulation was warranted in the present case.

(122) An analysis was carried out on the prices charged to the
related importer by the Korean exporting producer.
It
was found that these prices were consistently sold at
the same level as those charged to unrelated importers
during the investigation period. Under these circum-
it was considered that the prices between the
stances,
reliable.
related parties were
Therefore, since export prices were reliable, there was
no need to recur to the provisions set out in Article
2(9) of the Basic Regulation and to conclude on the
relationship between the companies.

arms-length and

at

9.3. Comparison

(125) To ensure a fair comparison, allowances were made for
differences in import charges and indirect taxes, duties,
transport,
loading and ancillary
costs, packing costs, bank charges, credit costs and
commissions where applicable and justified.

insurance, handling,

by

the

(126) All three exporting producers made a claim for duty
import charges were
drawback on the grounds that
for
product when intended
borne
like
consumption in the
country but were
exporting
refunded when the product was sold for export to the
Community. In each case the amount claimed was found
to be higher than the amount of duty borne by the like
product
the
allowances were adjusted accordingly.

in the domestic market and therefore,

(127) After disclosure two companies objected to the metho-
dology applied concerning the adjustment
for duty
drawback, partly on the grounds that it was different
to the one used in the original
investigation. They
claimed that the methodology used in their replies to
the questionnaire should be applied instead.

(128) The calculation method used by the companies, similar
to the one used in the original investigation, was found
to not reflect the actual import level of duties borne by
the like product. It was therefore not in line with the
requirements of Article 2(10)(b) of the basic Regulation
and had to be rejected. The methodology used in the
present investigation was compatible with the conditions
set out in Article 2(10)(b) insofar as it accurately reflected
the actual
level of duties borne by the like
product and was therefore considered as the most appro-
priate and thus maintained.

import

(129)

In addition, all three exporting producers claimed credit
costs on the basis of the actual credit period taken by
customers under the ‘open account’ payment system used
on the Korean domestic market. It was found that under
such a system, generally, the exporting producers did not
actually grant specific credit periods and furthermore, the
credit periods taken could not be accurately determined,
as receipts could not be linked to specific invoices. In
these allowances could not be
these circumstances,
granted.

(123) Therefore,

in the case of this exporting producer, the
export price was based on the prices paid or payable
by all customers in the Community.

(124) For the two other exporting producers, the export price
was based on the prices paid or payable by unrelated
customers in the Community.

(130) After disclosure, two companies claimed that the fact that
they use an open account system is not in itself a reason
to refuse the adjustment for credit costs. However, the
investigation has shown that there was no consistent
relation between prices and the credit terms reported.
The companies could not demonstrate that
specific
credit
terms were agreed with the customer prior to
the sale and that they had an effect on prices and price
comparability. The
claims had
therefore to be rejected.

exporting producers'

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(131) One exporting producer requested an adjustment

sales

Indeed,

(‘other

factors’)

for
trade either in accordance
differences in the level of
or Article
with Article 2(10)(k)
2(10)(d)(ii) of
it was
the Basic Regulation.
claimed that domestic sales were done mainly to end
users, while export
to the Community were
mainly done to distributors. Although there were sales
to different levels of trade on the domestic market (end
users and distributors), the company was not able to
company
quantify the
claimed later that the adjustment should be based on
the difference of prices
charged on the domestic
market to end users and to distributors. However, the
company was not
in a position to demonstrate the
existence of any such consistent and distinct difference
in prices. Therefore, it was not possible to conclude that
the difference in the level of trade affected price compa-
rability and consequently this claim had to be rejected.

adjustment. The

appropriate

(132) One exporting producer claimed that an adjustment for
differences in physical characteristics was warranted on
the basis of differences in the denier and lustre between
product
could not
substantiate that the difference in the denier and lustre
affected price or price comparability and this claim had
consequently to be rejected.

types. However,

company

the

9.4. Dumping margin

(133) The comparison of the weighted average normal value
with the weighted average export price by product type
on an ex-factory basis for two of the exporting producers
showed the existence of dumping. Moreover, with regard
to one exporting producer, it should be noted that export
prices on the last month of the IP (‘the second time
period’) were found to be in general and on average
higher than those charged in the period before that
month (‘the first
time period’). While export prices
during the second time period were high and mostly at
non-dumped levels, significant dumping was practised in
the first period as export prices were lower. Thus, there
was a pattern of export prices which differed significantly
between the first and the second time period of the IP.
Furthermore, it was found that a comparison made on an
average-to-average basis would not reflect the significant
dumping being practised in the first time period of the
IP,
significant
differences in the pattern of export prices between the
first and the second time period of the IP to be taken
appropriately into account. Therefore, and in view of the
findings referred to under recital (134), it was concluded
that
the weighted average normal value should be
compared to prices of all individual export transactions
in accordance with Article 2(11) of the basic Regulation,
in order to reflect
the full degree of dumping being
practised.

that method would not

enable

as

(134) For the reasons set out in recital (44) a comparison of
individual normal values and individual export prices on
a transaction-by-transaction basis was not possible.
Indeed, since the exporting producer concerned only

issued one invoice per month and per customer, it was
not possible to find a reasonable matching between indi-
vidual export transactions and individual domestic sales
transactions. Thus, the comparison would have required
making averages between prices for the same month
(which would then not constitute a transaction-to-trans-
action comparison), or to proceed to arbitrary choices of
the export price to be chosen for comparison.

(135) The exporting producer for which the weighted average
normal value was compared to prices of all
individual
export transactions challenged this methodology. Indeed,
the company claimed that there is an economic justifi-
cation for these limited number of transactions made at
non-dumped prices in the last month of the IP, and
therefore it is not justified to consider that a pattern of
export prices by time period existed. However, it is to be
noted that the economic justification of these invoices —
irrespective of whether or not such a justification is
relevant in this context — could not be verified with
the final customer which did not cooperate during the
investigation.
the claim by the exporting
producer that there is an economic justification for this
limited number of transactions is in contradiction with
information provided by the company itself, which
claimed during the investigation that price compensation
had taken place after the IP. Moreover,
the dumping
the company on a weighted average to
margin for
weighted average basis for the eleven months of the IP
(excluding December), and for the first semester of the IP,
resulted in similar levels to the one found when using the
weighted average to transaction methodology for the
the methodology of
above,
whole
comparing the weighted average normal value to the
prices of all individual export transactions is appropriate
in this case.

IP. Given the

In addition,

(136) For cooperating companies not included in the sample,
the dumping margin was established on the basis of a
weighted average dumping margin calculated for the
companies selected in the sample. For this purpose,
Sung Lim Co., Ltd., whose dumping margin is de
minimis, was not considered, in accordance with Article
9(6) of the Basic Regulation.

(137) The dumping margins

a
percentage of the CIF import price at the Community
frontier, duty unpaid, are the following:

expressed as

established,

— Huvis Corporation, Seoul 5,7 %,

— Saehan Industries Inc., Seoul 10,6 %,

— Sung Lim Co., Ltd., Kumi-si 0,9 % (de minimis),

— Cooperating companies not included in the sample

6,0 %,

— All other companies 10,6 %.

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10. TAIWAN

(138) Questionnaire

replies were
exporting producers selected in the sample.

received from the

normal value, so established, exceeded the price for
export to the Community.

two

(139) Both exporting producers initially submitted data for all
products containing polyester. However, since the present
review concerns only synthetic staple fibres of polyester,
not carded, combed or otherwise processed for spinning
which are
classifiable within CN code
5503 20 00 (i.e. with 50 % or more of polyester), all
products that were declared by the exporting producers
as containing less than 50 % of polyester were disre-
garded.

currently

10.1. Normal value

by

customers

independent

(140) For both exporting producers, sales of the like product
were representative. To a large extent, normal value was
based on prices paid or payable, in the ordinary course of
trade,
in
in Taiwan,
the Basic Regulation.
accordance with Article 2(1) of
However, for those product types where the domestic
sales were insufficient or not made in the ordinary
course of
trade, normal value was constructed in
accordance with Article 2(3) of the Basic Regulation, as
explained in recital (34). SG&A and profit were based on
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 chapeau of Article 2(6) of the Basic Regulation.

10.2. Export price

(141) For both exporting producers export prices were estab-
lished on the basis of
the prices actually paid by
unrelated customers in the Community in accordance
with Article 2(8) of the Basic Regulation.

10.3. Comparison

(142) To ensure a fair comparison, allowances were made for
differences in transport, insurance, handling, loading and
ancillary costs, packing costs, bank charges,
rebates,
discounts, credit costs and commissions where applicable
and justified.

(145) The dumping margins

a
percentage of the CIF import price at the Community
frontier duty unpaid are the following:

expressed as

established,

— Nan Ya Plastics Corporation, Taipei 1,7 %,

— Far Eastern Textile Ltd., Taipei 1,8 %.

(146) Since both dumping margins are de minimis, i.e. less than
2 %, and in accordance with the Commission's consistent
practice,
the proceeding against Taiwan should be
terminated without the imposition of measures, should
the circumstances that led to these results be considered
as lasting.

D. LASTING NATURE OF THE CHANGED CIRCUM-
STANCES AND LIKELIHOOD OF CONTINUATION/RE-
CURRENCE OF INJURIOUS DUMPING

1. GENERAL

(147)

In the framework of
the interim review concerning
Taiwan and the Republic of Korea,
also
examined whether
changed circumstances with
investigation regarding dumping
respect to the original
and injury could reasonably be considered to be of a
lasting nature in accordance with Article 11(3) of the
Basic Regulation.

it was

the

(148) Moreover, with regard to Taiwan and in accordance with
Article 11(7) of
it was also
examined whether it was likely that dumping would
continue or recur should measures be repealed.

the Basic Regulation,

2. THE REPUBLIC OF KOREA

existence of dumping for

(149) As mentioned above, the current investigation showed
the
three
exporting producers selected in the sample, albeit at a
lower level than in the original investigation. With regard
to the third exporting producer, as in the original inves-
tigation, dumping was found at a de minimis level.

two of

the

10.4. Dumping margin

(143) The weighted average normal value per type of PSF was
compared to the weighted average export price of the
corresponding type, in accordance with Article 2(11) of
the Basic Regulation, on an ex-work basis and at the
same level of trade.

(144) The comparison showed the existence of dumping for
the two Taiwanese exporting producers investigated, the
dumping margin being equal to the amount by which

(150) The analysis concerning the lasting nature of the changed
circumstances with regard to dumping took into account
the production capacity, the evolution of the volume of
sales on the domestic market, on the Community market
and on the export to other third countries market, as
well as the prices of the product concerned sold on
each of the mentioned markets of the three exporting
producers in the Republic of Korea selected in the
sample, which represented more than 80 % of
the
exports of the product concerned to the Community
during the IP.

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2.1. Production capacity

2.3. Sales prices

(155)

(151) The production volume of the product concerned has
increased slightly by 3,5 % since 2001 (measures were
imposed in December 2000), while production capacity
decreased by around 4 %. Therefore, the capacity utili-
sation reached high levels (89 % in 2001 and 95 %
during the IP) and spare capacities are low. Exporting
producers did not forecast any increase in production
for the next years and one of the largest exporters of
the product concerned to the Community during the IP
even stopped producing the product concerned after the
IP.

in higher dumping.

It was examined whether a decreased dumping margin
would likely lead to a decrease of export prices which
may result
In this regard, since
measures were in force and exports to the Community
were done at a stable and substantial level despite these
measures,
lower dumping
margins would entail
lower export prices. On the
contrary, it could be argued that lower dumping duties
to be paid by the importers would create a possibility for
the companies in Korea to increase their prices without
changing the final price paid by the unrelated customer.

there is no indication that

2.2. Sales volume

quite

technically

yarns, which is

(152) The domestic market remained relatively stable during
the last years. Although domestic consumption may
decrease due to a possible shift of certain PSF users'
production facilities outside Korea, no significant and
immediate change of the domestic market is foreseeable.
Even if PSF consumption in the domestic market would
decrease, production may either be shifted to other
polyester
easily
feasible, or the product concerned can be exported to
third countries without or with lower anti-
other
dumping duties in place than the Community market,
or both. Furthermore, Korean producers are rather
export oriented companies selling over 70 % of
their
PSF production to third country markets. Given the rela-
tively small dependency on the domestic market, a
decrease of domestic consumption would not signifi-
cantly affect
the companies' profitability. Therefore,
there would not necessarily be an urgent need to
to other customers outside Korea by
expand sales
offering PSF at lower prices. On the basis of the infor-
mation available, it can therefore not be concluded that a
change in the size of the domestic market would auto-
matically lead to an increase in exports of PSF to the
Community at increasingly dumped prices.

(153) As far as export sales to other

third countries are
concerned, these have been stable over the last three
financial years, representing around 68 % of the total
sales of the product concerned. There is no reason to
believe that third country markets cannot absorb further
in particular when PSF demand is
exports in future,
increasing world-wide due to a wider application of the
product concerned, not limited anymore to spinning or
woven, but also increasingly to non-woven applications.

2.4. Likely development of the normal value

(156) No indications could be found that the normal value
review could not be

established during the present
considered to be of a lasting nature.

(157)

It could be argued that the evolution of the prices of the
raw materials, highly correlated to the oil prices, could
have a significant influence on the normal value. It was
however considered that since the raw materials are
commodities
internationally
for which the price is
determined, the effect of the increase in prices of raw
materials would have the same effect on the export price
as on the normal value, since all actors on the market
would be affected in the same way.

2.5. Conclusions for the Republic of Korea

(158) Given the above and in accordance with Article 11(3) of
the basic Regulation, it was concluded that the changed
circumstances that have led to the decrease of
the
dumping margin could be reasonably said to be of a
lasting nature.

since

imposition of

(159) As far as the company is concerned for which a de
minimis dumping margin was found, it should be noted
that this company was already subject to a 0 % anti-
the definitive
dumping duty
measures in 2000. Nevertheless, despite the low priced
imports from in particular the PRC and Saudi Arabia,
which were in competition with the Korean imports,
no dumping could be found for this company in the
present interim review. There is therefore no reason to
believe
export
company will
behaviour significantly in the future.

change

that

this

its

(154) Given the high capacity utilisation rate of the Korean
producers, the low spare capacities as well as the rather
stable situation on the domestic and other export
markets,
it is also unlikely that a decrease of the level
of anti-dumping measures would lead to a significant
increase of
the product concerned in the
Community.

imports of

(160)

In view of the finding of lower dumping margins for all
companies concerned in Korea and that this situation is
not considered to be of a short term nature, measures
imposed by Regulation (EC) No 2852/2000 should be
amended accordingly.

(161) For the same reasons, the de minimis dumping margin for

Sung Lim Co., Ltd. should be confirmed.

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3. TAIWAN

3.3. Sales prices on export markets

(162) The analysis took into account the production capacity,
the evolution of the volume of sales on the domestic
market, on the Community market and on the export
to third countries (excluding the Community) market, as
well as the prices of the product concerned sold on each
of
two exporting
producers in Taiwan selected in the sample, which repre-
sented more than 90 % of the exports of the product
concerned to the Community during the IP.

the mentioned markets of

the

3.1. Production capacity

(163) During the last

four

financial years

the production
capacity of the two exporting producers in Taiwan has
decreased by around 6,5 %. Although the capacity utili-
sation is overall of only 73 %, this capacity utilisation has
remained stable over time. On the basis of the infor-
mation available,
it appears that production is shifting
to other countries (Vietnam, China) where productivity
is better. Therefore, even if spare capacity is available, an
increase of exports to the Community should measures
be repealed is not very likely, because spare capacities
will be rather transferred to other third countries.

3.2. Sales volume

(164) Over the three last financial years, the main market for
the product concerned for the exporting producers has
not been the Community, but other third countries. The
sales volumes
to the Community market were still
substantial as they accounted for 24 % of the total sales
quantity of the product concerned during the IP. Note,
however, that this ratio has decreased over time (29 % in
2001). Despite the measures in force by other third
countries (China and Japan), exports to third countries
have increased by 14 % over three years, representing in
the IP 62 % of the total sales quantity of the product
concerned.

(167) A price comparison was made between the prices of the
product concerned sold for export to the Community
and for export to third countries during the investigation
period.

(168)

the last

three financial years)

It was found that for the global figures (including all
types of the product concerned), the selling prices of
the product concerned were significantly higher (more
than 10 % for
in the
Community than in third countries. However, this price
difference noted between the Community market and
other export markets might be explained to a large
extent by the
existence of high price dispersions
between the product types exported by the exporting
producers. Moreover, since the quantities exported to
the Community despite the existence of anti-dumping
measures
the
measures could even give the exporters a margin to
increase their export price.

termination of

significant,

the

are

(169) On this basis, there is no indication that the possibility
for the companies to decrease prices to the Community
is shown by the price level practised on other export
markets.

3.4. Likely development of normal value

(170) No indication had been found that could point to a
change of normal value. The domestic market has
remained stable and the cost situation relating to the
domestic market has remained stable.

(171) As far as the influence of raw material prices on the
the conclusions of recital

normal value is concerned,
(157) apply also in the case of Taiwan.

(165) Sales on the domestic market during the last

three
financial years remained stable, representing 13,4 % of
total sales of the product concerned during the IP.

(172) The above analysis shows no indication that dumping

would recur should measures be repealed.

3.5. Conclusions for Taiwan

in several

to anti-dumping measures

(166) Considering that the exporting producers, although being
subject
third
countries have continued to increase their exports to
third countries other than the Community, and that
they continued to maintain a substantial presence on
the Community market,
there is no clear indication
that any spare capacity would be redirected towards
the Community market should the proceeding against
Taiwan be
is also
concluded that the transfer of production capacity to
third countries is unrelated to the existence of
trade
defence measures against imports originating in Taiwan.

terminated.

context,

In this

it

4. CONCLUSION ON THE LIKELIHOOD OF CONTINU-

ATION/RECURRENCE OF (INJURIOUS) DUMPING

imports. Considering

(173) The current measures in place regarding imports of PSF
originating in the Republic of Korea are above what is
necessary in order to remove the injurious effect of the
dumped
that
dumping would continue or recur if the measures were
terminated and referring to the findings of dumping
notwithstanding the measures currently in force against
the Republic of Korea, it is concluded that the measures
should be amended and set at the levels found in the
current review.

likelihood

the

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(174) The current measures in place regarding imports of PSF
originating
longer warranted.
in Taiwan are no
Considering that no element was found that there was
a likelihood that dumping would continue or recur if the
measures were repealed and referring to the findings on
dumping (de minimis) resulting from the current review, it
is concluded that the proceeding against Taiwan should
be terminated without the imposition of measures.

(178) Given the above, the conclusion as far as the likelihood
of recurrence of dumping for Taiwan is concerned is
maintained.

E. INJURY

1. DEFINITION OF THE COMMUNITY INDUSTRY

(179) The following European Community producers have

supported the complaint:

the

because

likely to resume

producers
are more

situation of
the

(175) The complainant Community industry objected to the
proposed termination of
the anti-dumping proceeding
against imports from Taiwan. It was claimed that the
Taiwanese market as a whole should be analysed
the
instead of merely
sampled
non-sampled
exporting
companies
at
exports
It was
dumped prices should measures be repealed.
argued that the non-sampled companies, due to their
bad financial
situation, would very likely seek to
maximise their cash-flow by increasing their export
(at dumped prices) which would also be
volume
confirmed by their price practices concerning exports
to the USA. It was additionally claimed that, since the
production capacity of these companies would represent
about 66 % of the Community consumption, the impact
of these exports would be significant.

(176)

It is noted that the selected sample represented not only
95 % of Taiwanese exports to the EU, but also 43 % of
the Taiwanese exports
to other countries, 71 % of
domestic sales and 57 % of the domestic production of
PSF
in
accordance with Article 17 of the basic Regulation. It
is also noted that the complainant Community industry
did not raise any objections to the sample at a prior stage
of the proceeding.

representative

and was

therefore

largely

— Catalana de Polimers, S.A., Spain

— Dupont Sabanci Polyester GmbH, Germany

— Industrias Químicas Textiles, S.A., Spain

— Tergal Fibres, S.A., France

— Trevira GmbH, Germany

— Wellman International Limited, Ireland

(180) As

these

six complainant

cooperating Community
producers represent 49 % of the Community production
of the product concerned, and since no non-complainant
Community producer has expressly manifested its oppo-
sition against the initiation of the present proceeding, it
is considered that the complainant producers constitute
the Community industry within the meaning of Articles
the Basic Regulation. Two non-
4(1) and 5(4) of
complainant producers provided general information to
the Commission, but did not support the complaint.

2. COMMUNITY CONSUMPTION

(177) As

far as

recurrence of

the likelihood of

in regard to the

injurious
the complainant Community
dumping is concerned,
industry based its arguments on mere allegations which
were not supported by sufficient supporting evidence.
Thus,
claim that non-sampled
companies, due to their bad financial situation, would
very likely seek to maximise their cash-flow by increasing
their export volume to the EU at dumped prices,
it is
noted that cash may be generated through several
than increased sales volumes,
different means, other
such as
selling unprofitable
business sectors and increasing the capital by issuing
shares. Likewise, no convincing evidence has been
submitted concerning the allegedly dumped prices of
exports
the
Finally,
complainant Community industry with regard to the
production capacity in Taiwan does not
take into
account any possible reduction of capacity in Taiwan
due to dislocation of Taiwanese production facilities
outside Taiwan and the bankruptcy of one of
the
Taiwanese producers.

additional borrowings,

to the USA.

analysis of

the

countries

concerned and from all other

(181) Community consumption was established on the basis of
the volume of imports of the product concerned from
third
the
countries known to produce and export
the product
concerned to the Community, plus the volume of sales
in the Community market of both the Community
industry and other Community producers. As only two
out of 10 non-complainant Community producers
submitted information on their sales, the sales of the
remaining
producers were
non-complainant
calculated further to data reported in the complaint
lodged by the Community industry. These data were
corroborated
independent
consultancy firm specialised in the fibres sector.

publications

eight

by

an

of

(182) For the sake of consistency, Eurostat was used in order to
determine the volume of imports on the relevant CN
codes in the present proceeding. Note that the volume
of
in the exporting
countries concerned was in line with the corresponding
Eurostat figures.

reported by producers

imports

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Official Journal of the European Union

17.3.2005

(183) On this basis, Community consumption has stagnated,
passing from 712 773 tonnes in 2000 to 709 828
tonnes in the IP.

(188)

Table 1

2000

2001

2002

IP

712 773

661 227

729 916

709 828

100

94

102

99

Community
consumption
(tonnes)

Index

3.

IMPORTS OF PSF FROM THE COUNTRIES CONCERNED

3.1. Cumulation

(184) As regards Taiwan, the dumping margin found amounted
to less than 2 % (see recitals (138) to (146)). Therefore,
the conditions set out in Article 3(4) of the Basic Regu-
the product
lation to assess cumulatively imports of
concerned from this country with imports of
the
product concerned from the remaining countries under
consideration were not fulfilled.

(185) The Commission considered further whether the effects
of imports of PSF originating in the PRC, Saudi Arabia
and South Korea (hereinafter: the ‘countries concerned’)
should be assessed cumulatively in accordance with
Article 3(4) of the Basic Regulation.

(186) This Article provides that the effects of imports from two
or more countries simultaneously subject to the same
investigation shall be cumulatively assessed when (i) the
margin of dumping established in relation to the imports
from each country is more than de minimis as defined in
Article 9(3) of the Basic Regulation, (ii) the volume of
imports of each country is not negligible and (iii) the
conditions
imported
products and the conditions of competition between
like Community
the
product make such an assessment appropriate.

competition between the

imported products

and the

of

3.1.1 Margin of dumping and volume of imports

(187) As indicated above, the present investigation has shown
that the dumping margins established for the PRC, Saudi
Arabia and South Korea are well above the de minimis
level, and the volume of imports from said countries is
not negligible in the sense of Article 5(7) of the Basic
Regulation (their market shares attaining respectively
4,7 %, 3,1 % and 10 % in the IP).

3.1.2. Conditions of competition

In order to determine the appropriateness of a cumu-
lative assessment in view of the conditions of compe-
tition
like
between
initially
Community product,
analysed the exporters' market behaviour in terms of
export prices and volumes.

the Commission has

imported

products

and

the

In fact,

(189) Similar market behaviour of PRC, Saudi Arabian and
South Korean producers in terms of export prices was
found.
said countries have decreased their
respective average unit selling prices of PSF by 27 %,
23 % and 15 %,
the period under consi-
deration. In addition, a very similar level of undercutting
has been determined for
the three
countries (see recital (200)).

imports of all

throughout

(190) Likewise, all

three countries hold significant market
shares in the Community market although South Korea
is by far the most important exporting country of the
three countries concerned (in the IP, 4,7 % in the case of
the PRC, 3,1 % in the case of Saudi Arabia and 10 % in
the case of South Korea).

(191) The investigation also determined that imports from the
PRC, Saudi Arabia and South Korea into the Community
used the same sales channels, as in the vast majority, said
imports are traded through distributors, rather than sold
to final customers.

it has

(192) Furthermore, as explained above (see recitals (22) and
following)
the product
been found
concerned imported from the PRC, Saudi Arabia and
South Korea and produced by the Community industry
share the same basic technical, physical and chemical
characteristics, and are to be considered alike in terms
of interchangeability and substitutability, thus competing
with each other on a type by type basis.

that

(193) One exporting producer from Saudi Arabia claimed that
PSF imported from said country is not in competition
with PSF as manufactured by other countries concerned,
in particular the PRC, and by the Community industry.
Pursuant to this producer's submissions, Saudi Arabian
production of PSF is exclusively concentrated in the basic
or regular PSF, namely those types of products which are
not suitable for specific applications, but
for
rather
PRC and
the
producers
general
Community producers have the capacity or actually
produce so called ‘speciality’ products. These speciality
products of PSF are normally branded and tailored for
particular applications or final uses, such as fire retardant,
anti-bacterial or non-pilling fibres and require normally
advanced R&D. Some users further alleged that the so-
called ‘hollow conjugate’ type, which the mentioned users
have considered as a ‘speciality product’, is only supplied
in the Community by South Korean producers.

use while

in

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Official Journal of the European Union

L 71/21

(194) These arguments were not borne out by the investi-
gation. First of all, it was found that exports from the
PRC consist of exclusively basic or regular PSF. Secondly,
exports of PSF from South Korea are not concentrated in
the ‘hollow conjugate’ type, as this latter represents only
a 24 % of total exports to the European Community for
In addition, according to the definition of
the IP.
‘speciality’
‘hollow conjugate’
PSF cannot be considered as a speciality type. Indeed,
technical evidence has been obtained showing that all
PSF producers are normally able to produce hollow
conjugate PSF but most of them refrain from doing so
because the production is no longer sustainable in view
of
the prevailing price levels. Finally, although the
Community industry produced and sold ‘speciality’
products, its PSF business is mainly concentrated in the
basic or regular PSF segment.

types laid down above,

(195) Thus,

it was established that exports of

the product
concerned from the countries concerned compete with
each other and with PSF manufactured or susceptible of
being produced by the Community industry.

(196) On the basis of the above,

it was concluded that all
conditions justifying the cumulation of imports of PSF
originating in the PRC, Saudi Arabia and South Korea
were met.

(200) For

to

customers,

independent

the
the determination of price undercutting,
Commission analysed data referring to the IP. The
relevant sales prices of the Community industry were
adjusted where
those
i.e. excluding freight
necessary to an ex-works level,
costs
and after deduction of
in the Community
discounts and rebates. Prices for the different product
types of PSF defined in the questionnaires were
compared with the
the
exporters, net of discounts, by applying the necessary
and warranted adjustments to bring the prices to CIF
Community frontier level.

sales prices

charged by

(201) During the IP, the weighted average undercutting margin
was 16 % for the PRC, 16,8 % for Saudi Arabia and 24 %
for South Korea.

4. SITUATION OF THE COMMUNITY INDUSTRY

4.1. Production

(202) Production in volume by the Community industry has
decreased by 5 % during the period under consideration.

3.2. Cumulated volume and market share

(197) Cumulated dumped imports from the PRC, Saudi Arabia
and South Korea have increased from 111 905 tonnes in
2000 to 125 633 tonnes in the IP, i.e. by 12 %.

Production
(tonnes)

Index

Table 4

2000

2001

2002

IP

236 902

229 598

225 290

224 649

100

97

95

95

(198) Cumulated market shares have increased from 15,6 % in

2000 to 17,6 % during the IP.

4.2. Capacity of production and capacity utilisation rates

Table 2

PRC, Saudi Arabia
& South Korea

2000

2001

2002

IP

Imports (tonnes)

111 905

89 457

120 847

125 633

Index

100

79

107

112

Market Share

15,6 %

13,5 %

16,5 %

17,6 %

3.3. Prices and Undercutting

(199) The weighted average price of the dumped imports origi-
nating in the PRC, Saudi Arabia and South Korea has
declined by 18 % between 2000 and the IP.

(203) Capacity of production of PSF has been kept stable
during the period under consideration. Indeed, capacity
of production has only increased from 271 466 tonnes
in 2000 to 277 561 tonnes in the period under consi-
deration. During the IP, capacity of production of the
Community
total
amounts
Community consumption.

to 36 % of

industry

(204) Capacity

have

utilisation rates

by 6
percentage points from 87 % to 81 %. As capacity of
production has not decreased itself, this decline in the
capacity utilisation is merely due to the decrease in
production volumes of the Community industry.

diminished

Table 3

PRC, Saudi Arabia
& South Korea

Weighted average
price (EUR/kg)

2000

2001

2002

IP

1,08

1,07

0,9689

0,89

Capacity of
production
(tonnes)

Index

Index

100

99

88

82

Capacity utilisation

Table 5

2000

2001

2002

IP

271 466

272 561

277 561

277 561

100

87 %

100

84 %

102

81 %

102

81 %

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Official Journal of the European Union

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4.3. Stocks

(205) Stocks have increased during the period under consi-
deration by 13 %. However, this is not considered as
an indication for injury as the stock levels reflect the
Community industry's policy to keep stocks at a level
basically equalling one month's production.

Table 6

2000

2001

2002

IP

Stocks (tonnes)

20 560

22 301

21 592

23 317

Index

100

108

105

113

4.4. Investments

(206)

Investments determination was based on information
provided by 5 of the companies. The sixth company

(207)

Table 7

the

five

consideration,

did not provide reliable information. During the period
companies providing
under
reliable investment data have carried out
investments
for a value of EUR 34,5 million. As can be seen in
investments have had an increasing
table 7 below,
trend except in 2002, when they declined with respect
to the previous year. However, it was found that these
investments almost exclusively consisted of replacements.
Major part of the investments was directly related to the
manufacture of the product concerned. Only one of the
Community
out
producers
in a
significant
recycling plant which
(polyethylene terephthalate —
provides
PET — flakes) to the PSF production process.

industry
investments
raw material

carried

has

is considered that

It
investments (mainly replacements)
intensive industry.

the level and nature of

the
is low for a capital

Investments (EUR) (5 out of 6 companies)

4 325 661

12 850 473

5 833 264

11 522 994

Index

100

297

132

238

2000

2001

2002

IP

4.5. Sales and market share

(208) PSF sales by the Community industry in the European
Community have declined by 6 % from 2000 to the IP.
As Community consumption increased by 11 % during
the period under consideration, such decrease of sales has
been translated in a loss of market shares. In particular,
market share of
the Community industry has passed
from 31 % to 29 % in the IP.

Table 8

2000

2001

2002

IP

220 695

213 322

211 609

206 926

100

31 %

97

96

94

32 %

29 %

29 %

Sales in the EC
(tonnes)

Index

Market share

4.6. Prices

Table 9

2000

2001

2002

IP

1,48

1,49

1,38

1,36

Weighted average price
(EUR/kg)

Index

100

101

93

92

4.7. Profitability

(210) The weighted average profitability on net turnover of the
Community industry decreased from 4,4 % in 2000 to
– 3,2 % in the IP.

Table 10

2000

2001

2002

IP

4,4 %

1,2 % – 2,9 % – 3,2 %

Weighted average profit-
ability on net turnover

(209) The Community

selling price has
industry's unit
decreased by 8 % during the period under consideration.
As shown in table 9 below, such decrease took place
after 2001, coinciding with the surge of imports from
the countries concerned and the considerable decrease of
prices of such imports.

4.8. Cash flow and return on net assets

(211) Cash flow has diminished during the period under
consideration from EUR 25 687 824 in 2000 to EUR
12 178 328 in the IP.

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(212) Return on net assets was based on information provided
by 5 of
the companies. The sixth company did not
provide reliable information. However its global return
on net assets data followed the same trend as the one
five
found for

the product concerned in the other

The

information

a
companies.
dramatic decrease in return on net assets during the
period under consideration.
it passed from
Indeed,
51,1 % in 2000 to – 8,5 % in the IP.

provided

showed

Table 11

2000

2001

2002

IP

25 687 824

17 843 711

14 511 142

12 178 328

100

70

56

47

– 8,5 %

Cash flow (EUR)

Index

Weighted return on net assets (5 out of 6 companies)

51,1 %

19,9 %

47,4 %

4.9. Ability to raise capital

4.11. Productivity

companies.

(213) Some companies finance their activities from within the
financial group to which they belong either through cash
pooling schemes or through intra-group loans granted by
cash flow
the mother
generated by the company is used as a source of
financing.
equity by
entering into capital venture structures with financial
financed
entities, which in certain instances
their participating companies by means of shareholder
loans.

increased their

Some others

In other

further

cases,

shown any major difficulties

(214) On this basis, most Community industry companies have
capital.
not
However, one of
found
severe problems to finance its activities, both in debt
and equity.

the verified companies has

to raise

(216) Productivity for the total market was stable during the
period under consideration, as it has only decreased by
2 % from 2000 until the IP. This stagnation in produc-
tivity mirrors the low level of investments carried out by
the Community industry (in quality and in quantity, see
recitals (206) and following).

Table 13

2000

2001

2002

IP

Productivity
(tonnes/employee)

Index

195

100

195

100

190

192

97

98

4.10. Employment and wages

4.12. Growth

for

(215) Employment in the Community industry decreased by
Indeed,
7 % during the period under consideration.
Community industry reduced staff by 84 workers.
Concerning wages,
the
companies did not provide reliable information. For the
rest of the years comprised in the period under consid-
eration, total wages increased 5 % far below the average
increase during the period under consideration of the
harmonised index of consumer prices
the four
countries where Community industry is located (i.e.
9,1 %).

year 2000, one

for

of

Table 12

2000

2001

2002

IP

Employees

Index

1 270

1 223

1 227

1 186

100

96

97

93

Weighted average
salary (EUR/year)
(5 out of 6
companies in
2000)

Index

31 993

40 340

41 054

42 430

100

102

105

(217) Overall, it has to be noted that the Community industry's
market shares fell by 2 percentage points, which shows
that its growth lagged behind the decreasing level of
consumption of the overall market (which decreased by
1 %).

4.13. Magnitude of the dumping margin and recovery from

past dumping

(218) As concerns the impact on the Community industry of
the magnitude of the actual margin of dumping, given
the volume and the prices of the imports from the PRC,
Saudi Arabia and South Korea, this impact cannot be
considered negligible.

(219) On the other hand, it is considered that the significant
increase of dumped imports from the PRC and Saudi
Arabia to the Community together with the unsatis-
factory evolution in terms of prices of
imports from
South Korea have prevented the Community industry's
expected recovery from the effects of past dumping.

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5. CONCLUSION ON INJURY

(220)

Imports volumes from the PRC, Saudi Arabia and South
Korea have increased considerably, both in absolute
terms and in terms of market share. Indeed, during the
they gained 2 percentage
period under consideration,
points in market share. Moreover, the weighted average
price of imports from these countries has decreased by
18 % over the period under consideration. This decrease
is mirrored in the significant price undercutting found.

(221) Most of the Community industry injury indicators have
shown a negative evolution during the period under
consideration, which points to a situation of material
injury: whereas total Community consumption of PSF
has stagnated, the Community industry's total sales in
volume have decreased by 6 %, with a corresponding
loss in market shares of 2 percentage points; production
in volume has decreased; capacity of production has
stagnated and capacity utilisation has diminished by
6 %; average unit selling price has decreased by 8 %;
profitability on net
yielded negative
results, being reduced by 7,6 percentage points during
the period under consideration; other profitability related
indicators as cash flow and return on net assets have also
deteriorated during the period under
consideration;
employment and productivity decreased by 7 % and 2 %
respectively. The positive developments in investments
into question the overall
and wages do not put
injurious picture of
the Community industry as the
investment levels were low for such a capital-intensive
essentially
increase
industry and as
compensated for the inflation during the period under
consideration.

turnover has

in wages

the

(222) Based on the foregoing, it follows that the Community
industry is in a difficult economic and financial situation
and has suffered material injury within the meaning of
Article 3 of the Basic Regulation.

F. CAUSATION

1.

INTRODUCTION

(223)

In accordance with Article 3(6) and (7) of
the Basic
Regulation, it was examined whether the material injury
suffered by the Community industry had been caused by
from the countries concerned.
the dumped imports
Furthermore,
the
basic Regulation known factors other than the dumped
imports, which might have injured the Community
industry, were examined to ensure that any injury
caused by those factors was not wrongly attributed to
the dumped imports.

in accordance with Article 3(7) of

terms of volume, and by 2 percentage points in terms
of market share. Prices of imports originating in the PRC,
Saudi Arabia and South Korea decreased by 18 % and
considerably undercut Community industry prices by
16 %, 16,8 % and 24 % respectively.

(225) The increase in the volume of imports originating in the
PRC, Saudi Arabia and South Korea and their gain in
market share, at prices which remained well below
the Community industry, coincided in time
those of
with
the
the
Community industry.

deterioration

situation

the

of

of

(226) The Community industry's sales in volume and market
shares have fallen. Sales in volume have decreased by 6 %
and market shares diminished by 2 percentage points.
The Community industry's loss of market share was
fully taken over by the dumped imports from the PRC,
Saudi Arabia and South Korea.

(227) The decrease of Community industry prices occurred in
parallel to the constantly decreasing trend of prices for
the product concerned imported from the PRC, Saudi
In particular, Community
Arabia and South Korea.
industry prices started to decline after 2001, at
the
same time when the average import prices from the
PRC, Saudi Arabia and South Korea declined (see
recitals (199) and (209), and tables 3 and 9 respectively).
The price suppressing effect of
the dumped imports
could therefore be clearly established.

(228) Profitability of the Community industry has dramatically
deteriorated as from the beginning of the period under
consideration and was negative in 2002 and during the
IP. The losses of the Community industry from 2002
onwards coincided with the increase of the PSF imports
from the countries concerned at particularly low prices. It
should also be noted that one of
the Community
industry producers showed that its profitability on net
turnover for so called basic or regular products,
i.e.
where the Community industry is exposed the most to
competition from the countries concerned, deteriorated
to a higher degree than the profitability including all
types of PSF products manufactured by this producer.

(229) The progressive increase of

import volumes from the
countries concerned at dumped prices also coincided
with the negative evolution of other indicators showing
the injurious situation of the Community industry, such
as
employment,
the unfavourable development of
capacity of production and capacity utilisation.

2. EFFECT OF THE DUMPED IMPORTS

(224)

Imports from the countries concerned have increased
during the period under consideration, by 12 % in

(230) Based on the above considerations, it is concluded that
that the dumped imports form the countries concerned
had a determining role in the deterioration of
the
situation of the Community industry.

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3. EFFECT OF OTHER FACTORS

3.1. Development of consumption

(231) As mentioned in recital

(183),

consumption in the Community market
stable. Thus, this cannot be a source of injury.

from 2000 to the IP,
remained

3.2. Lack of investments by the Community industry

(232) The downstream industry argued repeatedly that

the
Community industry failed to invest in a modernised
least
production process and would therefore be (at
partly) responsible for its injurious situation. Indeed, as
indicated in recital (207), it is considered that the level
and nature of the investments (mainly replacements and
maintenance) is low for a capital intensive industry.

(233) However, given the circumstances described,

in recitals
(202) and following, the Community industry was not
in a position to make substantial new investments. As
can be seen from the analysis made in this section, no
circumstances other
than the dumped imports were
found which had a significant negative impact on the
Community industry. In these circumstances, insufficient
levels of investment should not be seen as the cause of
the injury but rather as a further effect of the dumped
imports.

prices which would have contributed to the injurious
situation of the Community industry.

supplementing the product

(238) The vast majority of Turkish imports of PSF into the
Community are distributed by one of the complainant
companies, which is related to the Turkish exporting
producer. However, evidence has been obtained that
purchases of PSF by the complainant company from its
Turkish related company were made at arm's length and
aimed at
the
in question in periods of
Community producer
intensive market demand. Furthermore,
these imports
abandoned or delayed
any
were not
investment projects susceptible of having provoked a
reduction in the production capacity of the Community
related company. It was further verified that the resale of
PSF of Turkish origin by the related Community importer
was made at the same price level as products manu-
factured and sold by such related company and did not
undercut average prices of the other Community industry
companies.

caused by

range of

3.4. Non complainant Community producers

(239) Non-complainant Community producers of the product
concerned held a market share of 31,5 % during the IP.
sales
During the period under
their
volume decreased by 7 % and their market
share
declined by 2 percentage points.

consideration,

3.3. Imports from other third countries

(234) During the IP, PSF was also imported from the USA,
Turkey, Japan, the Czech Republic, Poland, Nigeria and
South Africa. In the analysis of whether imports from
other countries might have injured the Community
industry, the imports from Taiwan were also included.
As mentioned in recital (145), imports from Taiwan were
made at de minimis dumping levels during the IP.

(240)

In addition, pursuant to information available, there are
that average prices of non complainant
indications
producers are at
the same level as the complainant
producers' average prices. This suggests that they are in
a similar situation to the Community industry, i.e. that
they have suffered injury from the dumped imports.
other
concluded
be
cannot
Therefore,
Community producers caused material
injury to the
Community industry.

that

it

(235)

from other

third countries

Import volumes
slightly
increased from 133 798 tonnes in 2000 to 137 123
tonnes in the IP. This small increase, together with the
stable consumption of PSF has been translated into stag-
nating market shares for imports of third countries other
than the ones concerned (19 % in 2000 and in the IP).

(236) Furthermore, according to Eurostat data and to data
verified on spot, for the IP, weighted average prices of
the product concerned originating in the rest of the main
exporting countries (1,25 EUR/kg) were at a very similar
level to the weighted average prices of the Community
industry. Therefore,
it is concluded that these imports
cannot have caused any injury to the Community
industry.

(237) Some exporting producers have alleged that Turkish
into the Community are made at dumped

exports

3.5. Fluctuation of raw material prices

(241) The cost of raw materials is a substantial part of the total
cost of production of PSF (about 60 % of total cost of
production). As a result, PSF prices are highly dependant
on the influence of raw material costs.

(242) The production of so called virgin PSF is made out of
derivatives of petroleum (mainly mono ethylene glycol
— MEG — and purified terephthalic acid — PTA —).
the Community
increasing extent,
To a lesser, but
industry manufactures so called regenerated PSF out of
recycled materials (polyethylene terephthalate — PET —
bottles and other waste). Finally, PSF can be made out of
a combination of both kinds of raw materials, derivatives
of petroleum and recycled PET waste.

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(243) Prices of MEG and PTA, as derivatives of petroleum,
latter. As
depend on the price fluctuations of
found in the verification visits,
the
price of recycled materials is usually linked to the fluc-
tuation of MEG and PTA prices.

this
the evolution of

(244) Based on the above, some exporting producers have
the
claimed
Community industry has been caused by the fluctuations
of raw material costs,
in particular by the world-wide
price increase of petroleum.

allegedly

suffered

injury

that

by

(245)

In this respect, pursuant to information supplied by raw
material producers, it was found that prices of MEG and
PTA increased from 2002 until the end of the IP by 14 %
this increase in raw
and 13 % respectively. However,
materials prices was not reflected in an increase of the
average price of PSF sold by the Community industry (see
above recital (209)), despite the fact that fibres are price
sensitive products. On the contrary, EU producers' prices
fell slightly over the same period. While third country
producers of the product concerned can also be expected
the main
to have seen similar prices
petroleum-based inputs such as MEG and PTA,
it was
import prices of PSF from the countries
found that
same
concerned decreased significantly during
period.
the Community producers
were not able to pass on any increased raw material
costs to their customers due to the competition from
dumped imports.

It was found,

increases

that

the

for

(246)

In addition, any possible impact of the fluctuations of
raw material prices on PSF prices is susceptible to affect
both the Community industry and the exporters located
in the countries concerned, as petroleum is a commodity
with homogeneous pricing all
around the world.
Accordingly, the above claim was rejected.

3.6. Currency fluctuations

(247) Attention was paid to currency fluctuations between the
EURO and the USD. The vast majority of import tran-
sactions from the countries concerned into the European
Community are negotiated in USD. The EURO has been
appreciated in respect of the USD as from mid 2002, and
significantly during the IP, thus favouring exports into
the EURO area for that period. In view of this, some
interested parties have claimed that in a ‘dollar driven’
business, the depreciation of this currency in respect of
the EURO must have ‘inevitably’ favoured imports of PSF
into the European Community.

(248)

imports from countries
In the particular case of PSF,
other
than those found to be dumping have also
benefited from the appreciation of the Euro. However,
their volumes stagnated during the period under consi-
deration (even slightly decreasing from year 2002 to the
IP), while imports from the dumping countries have

throughout

imports of PSF

same period by 12 %.
the
increased
Although prima facie it cannot be excluded that
the
appreciation of the EURO vis-à-vis the USD might have
favoured the
countries
concerned, the fact that currency fluctuations did not
have
countries,
it can not be considered as a causal
indicates that
factor
from the
countries concerned.

the surge of dumped imports

an effect on imports

from other

from the

for

(249)

In addition, any allegation of EURO appreciation in
respect of USD as a cause of injury of the Community
industry should be valid only for the period where said
appreciation took place, i.e. from mid 2002 until the end
of
the IP, and in particular during this latter, when
differences among both currencies have been more
accentuated.

(250) Therefore,

it was concluded that, although the appre-
ciation of the EURO in respect of the USD might have
favoured exports of PSF into the European Community, it
does not explain the significant
import
volumes from the countries concerned as compared to
the rest of world importers.

increase of

4. CONCLUSION ON CAUSATION

dumped

from the

(251) The coincidence in time between, on the one hand, the
increase of
countries
imports
concerned, the increase in market shares and the under-
cutting found and, on the other hand, the deterioration
of the situation of the Community industry, lead to the
conclusion that the dumped imports are a cause of the
material injury suffered by the Community industry. In
particular,
of
chronological
imports and Community
decreasing average prices of
industry suppressed average prices has been found. This
has led to a diminishing profitability for the year 2002
and the IP,
from the countries
concerned grew the most and prices decreased most
dramatically, yielded negative results.

i.e. when imports

evolution

parallel

a

(252) After analysing some factors, such as development of
imports from countries other than the
consumption,
concerned,
the market behaviour of non-complainant
producers and the low level of investments carried out
by the Community industry,
it is concluded that they
injury to the Community
cannot have caused material
industry. On the other hand, although it cannot be
excluded that other factors, such as the fluctuation of
raw material prices and the currency fluctuations could
the
have contributed to the injurious
Community industry, the effect of said factors is not
such as to alter the finding that there is genuine and
link between the dumped imports
substantial causal
from the countries concerned and the material
injury
suffered by the Community industry.

situation of

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Official Journal of the European Union

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G. COMMUNITY INTEREST

1. PRELIMINARY REMARK

compelling
Community industry and on causation,
reasons existed which would lead to the conclusion
that it was not in the Community interest to impose
measures in this particular case.

(253)

(254)

In accordance with Article 21 of the Basic Regulation, it
was considered whether the imposition of anti-dumping
the
measures would be contrary to the interests of
Community as a whole. The determination of
the
Community interest was based on an examination of
the
those of
the various
all
Community industry,
traders and the
users of the product concerned.

involved,
the importers,

interests

i.e.

In order to assess the likely impact of the imposition or
non-imposition of measures it was requested information
from all interested parties which were either known to be
concerned or which made themselves known. On this
to the
the Commission sent questionnaires
basis,
Community industry, 10 other Community producers,
23 users and 3 suppliers of
raw materials. The 6
complainant Community industry producers, 2 non-
complainant producers, 5 related importers, 15 users
and 2 providers of raw materials replied to the ques-
tionnaire (8).

that

(255) 31 unrelated importers were known at the initiation of
large number of
the proceedings.
In view of
unrelated importers and in conformity with Article 17
of the Basic Regulation, the Commission decided to carry
out its investigation on the basis of a sample of said
unrelated importers. The sample was selected on the
basis of
imports
the largest representative volume of
concerned which could reasonably be
investigated
within the time available.

(256) To that purpose, five companies were initially selected for
the sample, based on their volume of imports from the
countries concerned. One of the five selected companies
was subsequently considered as non cooperating given
that it refrained to fill in the full questionnaire sent to
it and then disregarded as part of
the sample. The
remaining four sampled companies covered 14,6 % of
total
imports concerned. The final sample consisted of
the following companies:

— S.I.M.P., SpA., Italy

— Highams Group Ltd., United Kingdom

— Tob Herman Industries, N.V., Belgium

— Marubeni Europe plc, Hamburg Branch, Germany

(257) On this basis,

conclusions on dumping, on the

it was examined whether, despite the
the

situation of

(8) One of the cooperating non-complainant producers has manifested
that its total PSF production is not sold to the open market but to
related companies, as captive sales.

2. COMMUNITY INDUSTRY

(258) The Community industry has suffered material injury, as

set out in recitals (202) and following.

(259) The imposition of anti-dumping measures would allow
the Community industry to reach the levels of profi-
tability which it would have been able to achieve in
the absence of dumped imports, and to take advantage
of developments in the Community market. This would
guarantee the viability of the Community industry PSF
business.

(260)

speciality PSF,

In fact, although the Community industry has managed
to develop important niche markets in the segment of
it must be
higher added value or
underlined that the core business for the Community
industry remains in regular fibres for both woven and
non-woven applications, segments where imports from
the countries concerned are increasingly present and
Community industry production is exposed the most to
unfair competition.

(261) Speciality fibres generate high margins but are only sold
in limited quantities. In order to maximise the capacity
utilisation and to cover the fixed costs of production, the
Community industry needs sales of regular or basic fibres
in big volumes. For this reason, the imposition of duties
shall guarantee the viability of regular or basic PSF
production, as well as the continuation of the production
of higher added value PSF, which strongly depends on
the viability of basic PSF. It is to be noted that the main
supplier of specialities at a world level is the Community
industry itself, and such high added value material cannot
be sourced from the countries concerned in the present
It is considered, therefore, that the impo-
proceeding.
sition of measures would be in the interest of
the
Community industry.

3.

IMPACT ON USERS AND IMPORTERS

from unrelated importers selected for

(262) As indicated in recitals (254) and (256), the Commission
received 15 questionnaire replies from users, 4 full ques-
the
tionnaires
sample and 5 from related importers. In addition, three
users associations have submitted information and alle-
gations to the Commission requesting the termination of
the present proceeding without
imposition of
measures.

the

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17.3.2005

(263) Users of the product concerned belong to the textile
is divided into the spinning
sector. The PSF market
the manufacturing of
filaments for
consumption (i.e.
the production of
textiles, after mixing or not with
other fibres such as cotton or wool), the non-woven
consumption (i.e. the manufacturing of sheets and webs
that have not been converted into yarns and that are
bonded to each other by friction, and/or cohesion,
excluding paper),
and/or
filling
adhesion,
the stuffing or padding of certain
consumption (i.e.
textile goods, as for example cushions or car seats).
Most of the cooperating users in this proceeding are
producers of non-woven products. Said users
are
members of one of
the three users associations co-
operating in this proceeding, which represents the non-
woven industry at a European level (9). Further to infor-
mation on purchases reported in their responses to the
questionnaires, cooperating users during the IP represent
about 5 % of total Community consumption of PSF and
about 13 % of
countries
imports
concerned. Users
indicated a
number of arguments against the imposition of duties.

and importers have

from the

and the

total

(264) First,

substantially

PSF market

suppliers of

the product

the downstream industry has alleged that

the
Community
depends on
concerned (the
external
European producers can at maximum satisfy about
In this context,
60 % of the PSF market demand).
in
terms of capacity and market
shares held in the
Community, two of the countries under investigation,
i.e. Taiwan and South Korea, are the most important
suppliers of PSF worldwide. Therefore, the level of the
anti-dumping
essential
Community interest aspects.

necessarily

affects

duties

(267) Finally, the downstream industry is, as opposed to the
PSF industry, labour intensive. As put forward by some
interested parties, the number of employees in the down-
than in the capital
stream industry is much higher
the European
intensive PSF industry. As an example,
force of
a direct
non-woven industry has
16 000
persons
compared with
persons,
employed by the PSF industry. As reported by the non-
woven producers, PSF represents on average 40 % of the
total cost of production of the product manufactured by
them. It has been alleged that the imposition of duties
could lead to a loss of jobs or to moving manufacturing
facilities overseas.

labour
1 180

the duties

(268) Regarding the Community market's alleged dependence
on external suppliers, it is considered that, whereas duties
against imports from the PRC and Saudi Arabia would be
at an average level of 27 %, these countries only held 7 %
of the market share during the IP. On the other hand, it
is proposed to repeal the existing measures on imports
currently
from Taiwan and to reduce
applicable on imports from South Korea. It is underlined
that during the IP, with the current level of measures (see
recital (3)), Taiwan and South Korea held 19 % of the
market share. On the other hand, as reported by one
firm, major
prestigious
producers of PSF located in countries not subject
to
anti-dumping duties (mainly the USA, Mexico, Turkey
and South Africa) held during the IP an excess capacity
total
to
amounting
Community consumption.
imports from
these countries already hold an important share of the
Community market, reaching 5,3 % in the IP.

approximately

fibre market

In addition,

consultancy

50 % of

the

(265) PSF users have also claimed that they operate in a highly
price sensitive market and that even a small increase in
cost cannot be passed on to the final customer due to
the already fierce competition in the end-product market
(e.g. pillows, textiles, etc.), in particular from South East
Asian countries and China. These countries already sell at
very low prices and many European textile producers
were forced to at least partly dislocate their production
sites to third countries.

the

termination of

(269) Therefore, in spite of the proposed introduction of duties
against
the PRC and Saudi Arabia, and taking into
against
account
Taiwan and the reduction of those applicable on South
Korea, the Community users would still be able to rely
on (or to switch to) important suppliers of the product
concerned, such as South Korea or on other major
providers
to anti-
dumping duties, including Taiwan.

located in countries not

the measures

subject

(266)

and will not

In addition, a number of PSF users have claimed that
certain types of
the product concerned (the so-called
hollow conjugate products) are not produced in the
Community
the
Community producers in the near future because of the
lack of the necessary technical equipment. These types of
PSF have therefore to be imported (the so-called hollow
conjugated products, mainly manufactured in South
Korea).

produced

by

be

(9) It is estimated that Community non-woven consumption of PSF
represents about 25 % of total PSF market consumption for the IP.

(270) Regarding PSF users alleged inability to pass on any
increased costs arising from the imposition of anti-
dumping duties, for the particular case of the cooperating
users (who are almost exclusively producers of non-
woven products) sourcing the product concerned from
the PRC, Saudi Arabia, South Korea, and Taiwan, bearing
in mind (i) that the average anti-dumping duty rate for
the PRC and Saudi Arabia amounts to 34,6 %, whereas
said countries held during the IP a 7,8 % of the market;
(ii) that the average duty rate to be imposed on imports
from South Korea decreases
the average duty rate
introduced against
such country through Regulation
(EC) No 2852/2000 by 2 percentage points and that the

17.3.2005

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Official Journal of the European Union

L 71/29

measures against Taiwan are to be terminated; (iii) that
South Korea and Taiwan held together 19,3 % of the
Community market share in the IP and (iv) that the
importance of PSF in the cost of production of
the
the cooperating users (of non-
finished products of
woven products) has been established as, on average,
40 % of the costs, the increase on the cost of production
on the cooperating downstream industry as a conse-
quence of the measures to be introduced would be in
the region of 0,40 %.

(271)

(272)

(273)

If, as alleged by the users, they would not be able to pass
on such an increase in their cost of production to their
customers, the impact on their financial situation would
not be significant. It is also deemed that this low impact
on the financial situation of
the downwards industry
shall avoid any negative effect in the job force of such
an industry.

the product concerned from all

It has also been found that, despite the existence of anti-
dumping and/or countervailing measures on about 50 %
third
imports of
of
countries, market
consumption in the non-woven
segment of the market has increased during the period
considered. Pursuant to information supplied by the asso-
ciation representing the European non-woven producers,
this sector has increased its production by about 17 % for
the period from 2000 to 2002.

It has also been found that the hollow conjugate PSF can
in fact also be produced by the Community industry
the necessary technical know-how and
which has
machinery. As
is
already mentioned,
currently not supplied by the Community industry due
to the strong price pressures of the dumped imports.
Anyhow, the current measures against the Republic of
Korea, namely the main supplier of hollow conjugate
material, are, on average, reduced.

this product

(274) On the basis of the above, and taking into account the
level of measures adopted and the termination of the
this
proceeding against Taiwan,
the
would not
situation of
the product
concerned.

imply a deterioration,
the users and importers of

is concluded that
if at all, of

it

4.

IMPACT ON SUPPLIERS OF RAW MATERIALS

(275) Two providers of raw materials have cooperated in the
present proceeding by submitting a response to the ques-
tionnaire. They are petrochemical industries which supply
the PSF industry with PTA and MEG. Both companies
have expressly supported the imposition of duties.
from a Community interest point of view,
However,
these companies in this proceeding
the position of
must be put into perspective with the fact that their
sales of raw materials to the PSF industry represent a
minimal part of their turnover and hence, the imposition
or not of measures would not substantially alter their
financial or commercial situation.

5. ENVIRONMENTAL CONSIDERATIONS

(276) As indicated above, PSF can be of virgin type, made out
of derivatives of petrol (MEG and PTA), of a regenerated
type, made out of PET bottles and other waste, or of a
combination of both types, either derivatives of petrol or
recycled ones. The Commission has found that during
the IP, the Community industry employed about 60 %
of virgin raw materials and 40 % of
recycled raw
materials for the production of PSF. The Community
industry envisages to progressively increase the amount
of recycled raw materials used for the production of PSF.
In fact, two of the Community industry companies have
incorporated recycling lines in their production premises.
Another one envisages to incorporate such a recycling
line during 2004 and 2005.

(277) Article 6 of

the Treaty establishing the European
(‘the Treaty’)
environmental
considers
Community
protection as a common policy or activity to achieve
the objectives set
the Treaty,
among them the sustainable development of economic
activities.
the Community has
considered waste prevention and waste management as
one of its top priorities.

forth in Article 2 of

framework,

In this

(278)

In particular,
the Community has enacted legislation
concerning packaging and packaging waste (10). One of
the principles underlying this legislation is the principle
of recycling and reuse:
if packaging waste cannot be
prevented, as many of the materials as possible should
be recovered, preferably by recycling methods.
In this
context, the European Community has recently estab-
lished that not
than 31 December 2008, a
minimum recycling target of 22,5 % of plastic material
contained in packaging waste shall be attained (11).

later

(279)

It has been found that Community PSF industry
consumed 70 % of the recycling of PET bottles during
the IP, being by a long way, the main end-user of such
packaging waste (12). From this data, it appears that the
recycling of PET packaging waste in Europe significantly
depends on the PSF industry, as it is its most important
customer.

(280) The Commission considers that the imposition of duties
shall contribute to guarantee the viability of an industrial
sector which, as its main customer, holds a central
position in the recycling of PET packaging waste.

(281) The above conclusion is not modified by the fact that the
Community recycling industry also exports PET waste to
the PRC, as put
forward by some interested parties.
Indeed, it has been found that the vast majority of PET
consumed by Community PSF
packaging waste
producers.

is

(10) Directive 94/62/EC of the European Parliament and of the Council
of 20 December 1994 on packaging and packaging waste (OJ L
365, 31.12.1994, p. 10). Directive as last amended by Directive
2004/12/EC (OJ L 47, 18.2.2004, p. 26).

(11) See Article 6.1 of Directive 94/62/EC.
(12) Other end uses are bottle-to-bottle recycling, using 11 % of PET
bottles collected, polyester sheet, using 7,5 % and strapping, using
7,6 %.

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6. CONCLUSION ON COMMUNITY INTEREST

(282) Taking into account all of the above factors, it is provi-
sionally concluded that there are no compelling reasons
not to impose anti-dumping measures.

H. TERMINATION OF THE PROCEEDING IN RESPECT

OF TAIWAN

(283)

In view of the findings set out in recitals (143) and
following, the anti-dumping measures currently in force
against Taiwan are not longer warranted. In accordance
with Article 11 in conjunction with Article 9 of the Basic
Regulation, where, after consultation, protective measures
are unnecessary and there is no objection raised within
the advisory Committee, the investigation or proceeding
shall be terminated.

(284)

In the light of the above, the Commission has concluded
that the continuation of protective measures currently in
force
the
against Taiwan is unnecessary and that
proceeding should be terminated.

could be

reasonably
competition,

should allow the Community industry to
measures
cover its costs and obtain an overall profit before tax
achieved under normal
that
conditions of
absence of
i.e.
dumped imports. It is considered that in the absence of
dumped imports the Community industry should yield a
profitability before taxes of 5 %, a level deemed appro-
priate in the complaint
lodged by the Community
industry.
In the absence of any information to the
contrary, this level of profit was again considered to be
appropriate.

in the

(286) The necessary price increase was then determined on the
basis of a comparison, at the same level of trade, of the
weighted average import price, as established for the
price undercutting calculations, with the non-injurious
price for
the like product sold by the Community
industry in the Community market.

(287) The non-injurious price was obtained by adjusting the
sales price of
the
above mentioned profit margin of 5 %. Any difference
resulting from this comparison was then expressed as a
percentage of the total CIF import value.

the Community industry to reflect

I. ANTI-DUMPING MEASURES

1.

INJURY ELIMINATION LEVEL

2. DEFINITIVE MEASURES

to eliminate

the anti-dumping measures

should be
(285) The level of
sufficient
caused to the
the
Community industry by the dumped imports without
exceeding the dumping margin found. When calculating
the amount of duty necessary to remove the effects of
it was considered that any
the injurious dumping,

injury

(288)

it is considered that,

In the light of the foregoing,
in
accordance with Article 9(4) of the Basic Regulation, an
anti-dumping duty should be imposed on imports of the
product concerned from PRC, Saudi Arabia, and the
the
Republic of Korea at
injury or dumping margins found.

the lesser of

the level of

(289) On the basis of the above, the duty rates are as follows:

Country

Company

Basis for ad
duty (%)

People's Republic of China

Cixi Jiangnan Chemical Fiber Co. Ltd.
Sanbei Town Industry Area, Cixi City, Zhejiang Province

Far Eastern Industries (Shanghai) Ltd.
31-33F, Baoan Tower, No 800, Dongfang Road, Pudong New
District, 200122, Shanghai

Hangzhou An Shun Pettechs Fibre Industry Co. Ltd.
No.37, East Avenue, Fu-Yang Town, Hangzhou, Zhejiang Province

Deqing An Shun Pettechs Fibre Industry Co. Ltd.
No.9, Cangqian Road, Chengguan Town Deqing County

Kunshan An Shun Pettechs Fibre Industry Co. Ltd.
No.78, Huting Road, Bacheng Town, Kunshan, Jiangsu Province

Jiangyin Changlong Chemical Fiber Co. Ltd.
Houxiang Industrial Zone, Changjing, Jiangsu 214411

Xiake Color Spinning Co. Ltd.
No.39, East Street, Mazhen, Jiangyin, Jiangsu 214406

All other companies

26,3

4,9

18,6

18,6

18,6

24,6

49,7

49,7

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Official Journal of the European Union

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Country

Company

Basis for ad
duty (%)

Saudi Arabia

National Polyester Fibers Factory
P.O. Box 42185, Riyadh 11541

Saudi Basic Industries Corporation (Sabic)
P.O. Box 5101, Riyadh 11422

Arabian Industrial Fibres Company (Ibn Rushd)
P.O. Box 30701, Yanbu Al-Sinaiyah 21447

All other companies

Republic of Korea

Huvis Corporation
151-7, Samsung-dong, Gangnam-gu, Seoul

Saehan Industries Inc
254-8, Kongduk-dong, Mapo-ku, Seoul

Sung Lim Co., Ltd.
RM 911, Dae-Young Bldg, 44-1, Youido-Dong, Youngdungpo-ku,
Seoul

Dongwoo Industry Co. Ltd.
729, Geochon-Ri, Bongwha-up, Bongwha-Kun, Kyoungsangbuk-do

East Young Co. Ltd.
Bongwan #202, Gumi Techno Business Center, 267 Gongdan-
Dong, Gumi-si, Kyungbuk, Korea

Estal Industrial Co.
845 Hokye-dong, Yangsan-City, Kyungnam

Geum Poong Corporation
62-2, Gachun-Ri, Samnam-Myon, Ulju-Ku, Ulsan-shi

Keon Baek Co. Ltd.
1188-3, Shinsang-Ri, Jinryang-Eup, Kyungsan-si, Kyungbuk-do

Samheung Co. Ltd.
557-12, Dongkyu-Ri, Pochon-Eub Pochon-Kun, Kyungki-do

All other companies

20,9

20,9

20,9

20,9

5,7

10,6

0

6,0

6,0

6,0

6,0

6,0

6,0

10,6

(290) The

duty

company

individual

findings of

the present

investigation.

anti-dumping

rates
specified in this Regulation were established on the
basis of
It
therefore reflects the situation found during that investi-
gation with respect to said companies. These duty rates
(as opposed to the country-wide duty applicable to ‘all
other companies’) are thus applicable exclusively to
the product originating in the countries
imports of
corresponding
and
concerned
and thus by the
companies
entities
legal
mentioned.
Imported products produced by any other
company not specifically mentioned in the operative
this Regulation with its name and address,
part of
including
specifically
mentioned, cannot benefit from this rate and shall be
to ‘all other
subject
companies’.

to the duty rate

the
specific

to the one

applicable

produced

entities

related

by

(291) Any claim requesting the application of these individual
following a
company anti-dumping duty rates
change in the name of
the entity or following the
setting up of new production or sales entities) should

(e.g.

be addressed to the Commission (13) forthwith with all
relevant information,
in particular any modification in
the company's activities linked to production, domestic
and export sales associated with, for example, that name
change or
that change in the production and sales
entities. If appropriate, the Commission will, after consul-
tation of
the
amendment of the Regulation accordingly by updating
the list of companies benefiting from individual duty
rates.

the Advisory Committee, propose

3. UNDERTAKINGS

(292) One cooperating exporting producer in Saudi Arabia
offered a price undertaking in accordance with Article
8(1) of
the Basic Regulation. The minimum prices
exporting producer did,
originally offered by this
however, not eliminate the injurious effect of dumping.
The same is true for a revised offer received from that
company.
this
the
company in the Community is such that it would not
allow an effective monitoring of the undertaking. The
offer had therefore to be rejected.

structure of

Furthermore,

sales

(13) European Commission, Directorate-General Trade, J-79 05/16, Rue

de la Loi/Wetstraat 200, B-1049 Brussels.

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Official Journal of the European Union

17.3.2005

to

injury

caused

remove

(293) Two Chinese exporting producers offered an undertaking,
which was supported by a users' association. However,
this offer could not be accepted because it would have
meant exempting a certain volume of imports from defi-
therefore, have been
nitive measures and would not,
adequate
the
the
Community industry. Alternatively, these exporters also
offered a minimum price applicable to all imports into
the Community but at a level which did not eliminate
the injurious effect of dumping. The offers had therefore
to be rejected. Furthermore, it could not be accepted that
different minimum prices would be established for
types which are not easily distin-
different product
guishable upon importation. This would render
the
commitment to respect the minimum prices easily to
circumvent. In addition, the investigation revealed that
the exporters' accounting was not kept in line with inter-

to

national accounting standards, which would render
monitoring of an undertaking particularly difficult.

that

(294) Another Chinese exporting producer, which was granted
neither MES nor IT, proposed an undertaking whereby its
export prices to the Community would be increased.
the increase in price offered did
Beside the fact
not eliminate the injurious dumping established,
is
the Commission's practice not to accept undertakings
from companies which were neither granted MES nor
IT since no individual determination of dumping can
be established in such a case. On this basis, the under-
taking offer from this exporting producer had to be
rejected,

it

HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed on imports of synthetic staple fibres of polyesters,
not carded, combed or otherwise processed for spinning, falling within CN code 5503 20 00, originating in
the People's Republic of China and Saudi Arabia.

The rate of duty applicable to the net free-at-Community-frontier price, before duty, for products

2.
produced by the following manufacturers shall be as follows:

Country

Manufacturer

People's Republic
China

of

Cixi Jiangnan Chemical Fiber Co. Ltd.
Sanbei Town Industry Area, Cixi City, Zhejiang Province

Rate of duty
(%)

Taric additional
code

26,3

A590

Far Eastern Industries (Shanghai) Ltd.
31-33F, Baoan Tower, No800, Dongfang Road, Pudong New
District, 200122, Shanghai

4,9

A591

Hangzhou An Shun Pettechs Fibre Industry Co. Ltd.
No. 37, East Avenue, Fu-Yang Town, Hangzhou, Zhejiang
Province

18,6

A592

Deqing An Shun Pettechs Fibre Industry Co. Ltd.
No. 9, Cangqian Road, Chengguan Town Deqing County

Kunshan An Shun Pettechs Fibre Industry Co. Ltd.
No. 78, Huting Road, Bacheng Town, Kunshan, Jiangsu Province

Jiangyin Changlong Chemical Fiber Co. Ltd.
Houxiang Industrial Zone, Changjing, Jiangsu 214411

All other companies

Saudi Arabia

National Polyester Fibers Factory
P.O. Box 42185, Riyadh 11541

Saudi Basic Industries Corporation (Sabic)
P.O. Box 5101, Riyadh 11422

Arabian Industrial Fibres Company (Ibn Rushd)
P.O. Box 30701, Yanbu Al-Sinaiyah 21447

24,6

A595

49,7

20,9

A999

A597

20,9

A598

All other companies

20,9

A999

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Official Journal of the European Union

L 71/33

3.

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

Article 2

The part of the table in Article 1(2) of Regulation (EC) No 2852/2000 concerning the definitive anti-
dumping duty rates applicable on imports of synthetic staple fibres of polyesters, not carded, combed or
otherwise processed for spinning, falling within CN code 5503 20 00 originating in the Republic of Korea,
shall be replaced by the following:

Country

Manufacturer

Republic of Korea

Huvis Corporation
151-7, Samsung-dong, Gangnam-gu, Seoul

Rate of duty
(%)

Taric additional
code

5,7

A151

Saehan Industries Inc.
254-8, Kongduk-dong, Mapo-ku, Seoul

Sung Lim Co., Ltd.
RM 911, Dae-Young Bldg, 44-1; Youido-Dong,
Youngdungpo-ku; Seoul

Dongwoo Industry Co. Ltd.
729, Geochon-Ri, Bongwha-up, Bongwha-Kun,
Kyoungsangbuk-do

East Young Co. Ltd.
Bongwan #202, Gumi Techno Business Center, 267
Gongdan-Dong, Gumi-si, Kyungbuk

Estal Industrial Co.
845 Hokye-dong, Yangsan-City, Kyungnam

Geum Poong Corporation
62-2, Gachun-Ri, Samnam-Myon, Ulju-Ku, Ulsan-shi

Keon Baek Co. Ltd.
1188-3, Shinsang-Ri, Jinryang-Eup, Kyungsan-si, Kyungbuk-do

Samheung Co. Ltd.
557-12, Dongkyu-Ri, Pochon-Eub Pochon-Kun, Kyungki-do

10,6

A599

0

A154

6,0

A608

6,0

A609

6,0

6,0

6,0

6,0

A610

A611

A612

A613

All other companies

10,6

A999

Article 3

The anti-dumping proceeding concerning imports of synthetic fibres of polyesters originating in Taiwan is
hereby terminated.

Article 4

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

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

Done at Brussels, 10 March 2005.

For the Council
The President

L. LUX