Council Regulation (EC) No 1371/2005 of 19 August 2005 imposing a definitive anti-dumping duty on imports of grain oriented flat-rolled products of silicon-electrical steel originating in the United States of America and Russia and repealing Regulation (EC) No 151/2003 imposing a definitive anti-dumping duty on imports of certain grain oriented electrical sheets originating in Russia
Date: 2005-08-19
Institutions: Council of the European Union
Subjects: Russia, United States, anti-dumping duty, anti-dumping legislation, import, originating product, plate, steel

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I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1371/2005

of 19 August 2005

imposing a definitive anti-dumping duty on imports of grain oriented flat-rolled products of
silicon-electrical steel originating in the United States of America and Russia and repealing
Regulation (EC) No 151/2003 imposing a definitive anti-dumping duty on imports of certain grain
oriented electrical sheets originating in Russia

THE COUNCIL OF THE EUROPEAN UNION, (1)

Having regard to the Treaty establishing the European
Community,

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
countries not members of the European Community (‘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:

A.

PROCEDURE

1.

Initiation

(1) On 28 May 2004, the Commission announced by a
notice (‘notice of initiation’), published in the Official
Journal of the European Union (2), the initiation of an anti-
dumping proceeding concerning imports
into the
Community of grain oriented flat-rolled products of
silicon-electrical steel originating in the United States of

America (‘USA’) and Russia and the initiation of an
interim review of the anti-dumping duty on imports of
certain grain oriented electrical sheets with a width of
more than 500 mm originating in Russia.

(2) The anti-dumping proceeding was initiated following a
complaint lodged on 13 April 2004 by the European
Confederation of Iron and Steel Industries (‘Eurofer’ or
‘the complainant’) on behalf of producers representing a
major proportion, in this case more than 90 %, of the
total Community production of grain oriented flat-rolled
products of silicon-electrical steel. The complaint con-
tained evidence of dumping of the said product and of
material
injury resulting there from, which was con-
sidered sufficient to justify the initiation of a proceeding.

in order

to allow for

(3) The interim review was initiated by the Commission on
its own initiative, pursuant to Article 11(3) of the basic
Regulation,
any necessary
amendment or repeal of
the definitive anti-dumping
measures imposed by Council Regulation (EC) No 151/
2003 (3) on imports from Russia of grain oriented
electrical sheets with a width of more than 500 mm. The
necessary amendment or repeal may arise due to the fact
the products upon which measures have been
that
imposed by Regulation (EC) No 151/2003 fall within the
scope of
to the proceeding
concerning imports
into the Community of grain
oriented flat-rolled products of silicon-electrical steel
originating in the USA and Russia.

the products

subject

(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 C 144, 28.5.2004, p. 2.

(3) OJ L 25, 30.1.2003, p. 7. Regulation as last amended by
Regulation (EC) No 990/2004 (OJ L 182, 19.5.2004, p. 5).

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2.

Parties concerned by the proceeding

— ThyssenKrupp Electrical Steel GmbH, Gelsen-

kirchen, Germany

(4) The Commission officially advised the exporting produ-
cers in Russia and the USA and the importers/traders and
users known to be concerned, the representatives of the
exporting countries concerned and the complainant
Community producers of the initiation of the proceed-
ing. The 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 notice of
initiation.

(5) The exporting producers in Russia and the USA, as well
as Community producers,
importers/traders and users
made their views known in writing. All parties who so
requested within the above time limit and indicated that
there were particular reasons why they should be heard
were granted an opportunity to be heard.

3. Questionnaires

(6) The Commission sent questionnaires to all parties known
to be concerned and to all other companies that made
themselves known within the deadlines set out in the
notice of initiation.

(7) Replies were received from one US exporting producer
and its related subsidiaries in the Community and from
two Russian exporting producers and their
related
subsidiaries
in the Community. Replies were also
received from four Community producers, 16 users and
one importer not related to an exporting producer in the
countries concerned.

(8) 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:

Community producers

— Orb Electrical Steels Limited, Newport, United

Kingdom

Users in the Community

— Areva S.A., Paris, France

— Specialacciai srl, Novi Ligure, Italy

Exporting producers in Russia

— Novolipetsky Iron & Steel Corporation (‘NLMK’),

Lipetsk

— VIZ Stal, Ekaterinburg

Exporting producers in the USA

— AK Steel Corporation, Butler, Pennsylvania

Related importers in the Community

— AK Steel BV, Oosterhout, The Netherlands

— AK Steel GmbH, Köln, Germany

— AK Steel Ltd., Baldock, United Kingdom

— AK Steel s.r.l., Genova, Italy

— Duferco Commerciale SpA, Genova, Italy

— Duferco GmbH, Mülheim, Germany

Related importers outside the Community

— Duferco SA, Lugano, Switzerland

— Stinol AG, Lugano, Switzerland

— ThyssenKrupp Electrical Steel UGO,

Isbergues,

France

— ThyssenKrupp Electrical Steel AST, Terni, Italy

(9) The investigation of dumping and injury covered the
period from 1 April 2003 to 31 March 2004 (the
‘investigation period’ or ‘IP’). The examination of trends
relevant for the assessment of injury covered the period
from 1 January 2000 to the end of the IP (‘the period
under examination’).

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4. Measures in force

B.

PRODUCT CONCERNED AND LIKE PRODUCT

(10) By Council Regulation (EC) No 151/2003, definitive anti-
dumping duties were imposed on imports from Russia of
grain oriented electrical sheets with a width of more than
500 mm (‘large GOES’), following an investigation that
was initiated pursuant
the basic
Regulation. By that Regulation, anti-dumping duty rates
were set for imports from VIZ-Stal at 14,7 % and for
imports from NLMK at 40,1 %, the latter rate at the same
time being the residual duty rate for imports of these
products from other companies in Russia.

to Article 11(2) of

(11) By Commission Regulation (EC) No 1000/2004 (1),
undertakings,
in connection with the anti-dumping
proceeding concerning imports of large GOES originat-
ing in Russia, were accepted from NLMK and Viz Stal and
their related sales companies for a period of six months
until 20 November 2004. These undertakings were
intended to provide a temporary way of adapting the
anti-dumping measures which were extended to imports
into the 10 new Member States following the enlarge-
ment of the European Union on 1 May 2004. The
purpose was to avoid a sudden and excessively negative
effect for importers and users caused by the sudden full
application of
in those 10
the extended measures
countries. Undertakings were accepted for a further
period of six months until 20 May 2005, by Commission
Regulation (EC) No 1995/2004 (2), because the condi-
tions for their acceptance were considered to be still in
existence.

5.

Provisional measures

1.

Product concerned

(14) The product concerned is grain oriented flat-rolled
products of silicon electrical steel (‘GOES’) of all widths,
declared under CN codes 7225 11 00 (of a width of
600 mm or more) and 7226 11 00 (of a width of less
than 600 mm). These CN codes are only given for
information.

(15) GOES are produced from hot-rolled coils of silicon
alloyed steel of different thicknesses of which the grain
structure is uniformly directed in order to allow for
magnetic conductivity with a high degree of efficiency.
Inefficiencies with regard to this conductivity are called
‘core loss’, which is the prime indicator of the quality of
the product. The market is typically divided into ‘high-
permeability’, or high conductivity grades, and regular
grades. The high-permeability grades allow achieving
lower core losses for any given thickness of the sheets.
The grain oriented steel sheets are then, if needed, cut to
certain widths according to customer specifications. This
process is called slitting. The product concerned is used
by manufacturers of electromagnetic appliances and
transformers for use by power generators and distribu-
tors.

(12) Given the need to further examine certain aspects of the
investigation and also because of the interrelation with
it was
the interim review mentioned in recital
decided to continue the investigation without
the
imposition of provisional measures.

(3),

(16)

In spite of the differences in permeability, thickness and
width, all types of GOES share the same basic physical
and technical characteristics and have essentially the
same basic use.

(13) All interested parties were nevertheless informed of the
preliminary findings of
the investigation and were
granted a period within which they could comment on
those findings. The comments submitted by the parties
were considered and, where appropriate, any relevant
claim was addressed and the findings were modified
where necessary.

(17)

(1) OJ L 183, 20.5.2004, p. 10.
(2) OJ L 344, 20.11.2004, p. 21.

In reference to the review investigation on large GOES,
mentioned in paragraph (3) above, it should be noted
that on a number of occasions it was observed that the
anti-dumping measures in force, mentioned in paragraph
(10), were avoided by cutting the coils of grain-oriented
exported to the
electrical
Community.
Indeed, often Community users bought
large GOES and then slit them to the required measure.
After the imposition of measures, GOES were cut by the
producers or exporters in parts not exceeding 500 mm
before being exported, so that the product fell outside the
scope of the measures.

steel before

they were

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(18) One exporting producer claimed that narrow GOES
(defined by this company as less than 500 mm width)
should be distinguished from large GOES (of a width of
500 mm or more), because large GOES cannot be
substituted by narrow ones and narrow and large GOES
to different competitive conditions. The
are subject
argument regarding different competitive conditions is
based on the observation that end-users order and
purchase directly GOES with a width that meets their
exact requirements in order to avoid the cost of slitting,
as opposed to purchasing coils of a larger width than
used in their own production processes and having to
take care of slitting themselves, moreover in most cases
by having recourse to specialised subcontractors.

producers in dimensions specifically required by the end-
user. Consequently, the claims made by this exporting
producer were rejected.

(22)

It is therefore concluded that, for the purpose of the
present anti-dumping proceeding, all
the
product concerned are regarded as one product.

types of

2.

Like product

(19) The argument of the lack of interchangeability is based
on the fact
that, although narrow GOES can be
substituted by large GOES which are subsequently slit,
the reverse situation is of course impossible. Reference
has been made by the exporter concerned to the anti
dumping proceeding concerning Certain footwear with
textile uppers from China and Indonesia (1) where it was
considered that indoor shoes cannot be used outside, and
therefore should form a separate product.

(20) With reference to the above mentioned anti-dumping
proceeding, it was concluded that indoor and outdoor
shoes should form a separate product because indoor
shoes have different basic physical characteristics, which
make them not suitable for outdoor uses. The situation is
the
therefore different
investigation concluded that, irrespective of their width,
GOES are made from the same basic material, have the
same basic characteristics and have comparable end-uses.
inter-
Moreover,
to
changeability between products suffices in order
consider them as a single product for the purpose of an
anti-dumping investigation and, in the case of GOES, as
explained under recital (17), interchangeability occurs.

it should be noted that even partial

in the present

since

case

(21) The second argument raised by this exporting producer
end-users will
is based on the observation that
preferentially make use of GOES with widths that meet
their technical requirements for production purposes.
However, it has been found that certain end-users, as a
standard way of working, slit the material themselves or
acquire roughly-cut narrow GOES from Russia free of
any anti-dumping duties and subsequently slit
the
imported material to their exact specifications. Moreover,
the widespread existence of slitting companies and steel
service centres in the Community illustrates the fact that
the
the GOES do not always leave the factories of

(1)

Council Regulation (EC) No 2155/97 (OJ L 298, 1.11.1997, p. 1).

(23) The product exported to the Community from Russia
and the USA, the product produced and sold domes-
tically in Russia and the USA, as well as the one
manufactured and sold in the Community by the
Community producers were found to have the same
basic physical and technical characteristics as well as the
same basic uses and are therefore considered as like
products within the meaning of Article 1(4) of the basic
Regulation.

C.

DUMPING

1. General Methodology

(24)

In order to determine the normal value, the Commission
first established, for each exporting producer, whether its
the product concerned were
total domestic sales of
representative in comparison with its total export sales to
the Community. In accordance with Article 2(2) of the
basic Regulation, domestic sales were considered repre-
sentative when the total domestic sales volume of each
exporting producer was at least 5 % of its total export
sales volume to the Community.

(25) For each type sold by the exporting producers on their
domestic markets and found to be directly comparable
with the type of the product concerned sold for export to
the Community,
it was established whether domestic
sales were sufficiently representative for the purposes of
Article 2(2) of the basic Regulation. Domestic sales of a
particular type of GOES 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 GOES
exported to the Community.

(26) Subsequently it was examined whether the domestic
sales of each type of the product of each exporting
producer could be considered as being made in the
ordinary course of trade pursuant to Article 2(4) of the
basic Regulation, by establishing the proportion of
profitable sales to independent customers of the type
in question.

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(27)

In cases where the sales volume of the GOES type, sold at
a net sales price equal to or above the calculated cost of
production, 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, calculated as a weighted average of the
prices of all domestic sales made during the IP,
irrespective of whether these sales were profitable or
not. In cases where the volume of profitable sales of a
GOES 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 type of GOES represented less
than 10 % of the total sales volume of that type, it was
sold in
considered that
insufficient quantities for the domestic price to provide
an appropriate basis for the establishment of the normal
value.

this particular

type was

(28) Wherever domestic prices of a particular product type
sold by an exporting producer could not be used in order
to establish normal value, another method had to be
applied. In this regard, the Commission used constructed
normal value. In accordance with Article 2(3) of the
basic Regulation, normal value was constructed by
the
adding to the exporter's manufacturing costs of
exported types, adjusted where necessary, a reasonable
percentage
and administrative
selling, general
expenses (‘SG&A’) and a reasonable margin of profit.

for

2. United States of America

(31) Normal value was constructed on the basis of

the
exporting producer's costs of manufacturing plus an
amount
for SG&A costs and profit. The amounts
established for SG&A costs and profit were those
applicable to production and sales,
in the ordinary
course of trade, of the same general category of steel
products for the exporting producer in question in the
domestic market, in accordance with Article 2(6)(b) of
the basic Regulation.

(32) The full cost of production was determined for each
relevant product type, according to steel grade, thickness
and the fact whether the product concerned was sold as a
full coil or as a slit coil. In the latter case slitting costs had
to be taken into account.

Export price

(33) The export prices were determined on the basis of the
prices paid or payable for the product concerned when
sold for consumption in the Community in accordance
with Article 2(8) of the basic Regulation.

(34) The exporting producer did not sell any quantity of the
product concerned directly to independent customers in
the Community. All sales were made through related
subsidiaries in the Community. Consequently, a con-
structed export price has been established pursuant to
Article 2(9) of the basic Regulation on the basis of the
resale prices to independent customers in the Commu-
nity. Adjustments were made for all costs incurred
between importation and resale by the related importers,
including SG&A expenses and a reasonable profit
margin.

Normal value

Comparison

(29) For the one cooperating exporting producer it was found
that domestic sales of the product concerned could not
be considered as being made in the ordinary course of
trade since such sales were made in substantial quantities
below per unit cost, in this case more than 90 % of the
volume sold on the domestic market. Moreover, it was
established that the weighted average selling price of the
domestic transactions was below the weighted average
per unit cost of production during the IP.

(35) For the purpose of ensuring a fair comparison between
the normal value and the export price at an ex-works
level and at the same level of trade, due allowance in the
form of adjustments was made for differences that were
claimed and demonstrated to affect prices and price
comparability in accordance with Article 2(10) of the
basic Regulation. Adjustments were made in respect of
transport costs, insurance, credit costs and related bank
charges, import charges and slitting costs where applic-
able and justified.

(30) As a consequence, domestic prices of

the product
concerned sold by the exporting producer could not be
used in order to establish normal value. Normal value
had to be constructed, in accordance with Article 2(3) of
the basic Regulation.

(36) The adjustment for slitting costs was necessary in order
to allow for the proper comparison of GOES according
to whether they were imported as full width coils and
subsequently sold as such in the Community or imported
slitting in the
as
Community or imported as slit material and sold as

full width coils and sold after

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in
such or after further slitting in the Community,
accordance with Article 2(10)(k) of the basic Regulation.

of the like product, by the exporting producer under
investigation in accordance with the first sentence of
Article 2(6) of the basic Regulation.

Dumping margin

(37)

In accordance with Article 2(11) of the basic Regulation,
the dumping margin was established on the basis of a
comparison of the weighted average normal value with
the weighted average export prices per product type, as
determined above.

(38) On that basis, a dumping margin expressed as a
percentage of the CIF Community frontier price duty
unpaid was established as follows:

Export price

(43) Export sales to the Community were made both directly
to independent customers and via a related company in
Switzerland. For the latter, the export price has been
established on the basis of the resale prices to the first
independent buyer in the Community.

AK Steel Corporation, Middletown: 47,6 %

Comparison

(39) For USA, since there was evidence of a known exporter
that deliberately did not cooperate to the investigation,
the residual dumping margin for this non-cooperating
exporting producer should be set at the level of the
highest margin measured for sales of representative
product
in the
types by the cooperating producer
Community i.e. 60,6 %.

3. Russia

NLMK

Normal value

(40) Normal value was established in line with the general
methodology as explained under paragraphs (24) to (28).

(41) For the sole type of GOES where 80 % or less but at least
10 % of the domestic sales made in sufficient quantities,
were in the ordinary course of trade, normal value was
based on the actual domestic price, calculated as a
weighted average of the prices of the domestic sales of
that type made in the ordinary course of trade during the
IP.

(42) For the remaining product types, where domestic sales
were not representative, normal value was constructed in
accordance with Article 2(3) of the basic Regulation.
Normal value was constructed by adding to the
manufacturing costs of the exported types, adjusted with
a reasonable percentage for selling, general and admin-
istrative expenses (‘SG&A’) and a reasonable margin of
profit, on the basis of actual data pertaining to
production and sales, in the ordinary course of trade,

(44) The exporting producer claimed that products imported
into the Community originating in Russia cannot be
compared to products produced in the Community
because of quality differences: the exporting producer's
GOES are claimed to have higher surface defects and
higher core losses and are to a certain extent of different
grades. This exporting producer therefore requested an
adjustment for quality differences.

(45) For the calculation of the dumping margins, comparison
is made at the level of product types corresponding to
steel grades with specific ranges for core losses. American
and Russian standards have been compared to European
ones taking into account all relevant product character-
istics. Moreover, comparisons were made at the level of
production and sales of prime grade material. The claim
for an adjustment for quality differences made by one
exporting producer was therefore rejected. The same
methodological approach was followed for the calcula-
tion of undercutting commented upon in recitals (78) to
(83).

(46) The normal value and export prices were compared on
an ex-works basis and at the same level of trade. For the
purpose of ensuring a fair comparison between the
normal value and the export price, account was taken, in
accordance with Article 2(10) of the basic Regulation, of
differences in factors which were claimed and demon-
strated to affect prices and price comparability. On this
basis, allowances for differences in freight,
insurance,
package, credit costs and related bank charges and
indirect taxes have been granted. Adjustments were also
made where the export sales were made via a related
company located in a country other than the Commu-
nity, pursuant to Article 2(10)(i) of the basic Regulation.

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(47) The exporting producer claimed that clerical errors
occurred in the calculations and, after verification, the
claims were accepted and the calculations duly corrected.

Dumping margin

(48) As provided by Article 2(11) of the basic Regulation, the
the
weighted average normal value of each type of
product concerned exported to the Community was
compared to the weighted average export price of each
corresponding type of the product concerned.

(49) The comparison showed the existence of dumping in
respect of
the cooperating exporting producer. A
dumping margin expressed as a percentage of the CIF
import price at the Community border, duty unpaid is
the following:

particularly close, and that the purchase prices from that
supplier could not be considered reliable. In this respect,
the establishment of the cost of manufacturing, and
more specifically the cost of the main raw materials, was
exclusively based on the price of coils purchased from
the unrelated Slovak producer/supplier US Steel Kosice.
To the DAF price Slovak border was added the transport
cost to Ekaterinburg, the insurance costs and the credit
costs based on the payment conditions. Calculated in this
way, hot-rolled coils represented 61,4 % of the total cost
of production of GOES for this exporting producer.

(54) The full cost of production was determined for each
relevant product type, according to steel grade, thickness
and the fact whether the product concerned was sold as a
full coil or as a slit coil, in which latter case slitting costs
had to be taken into account.

NLMK, Lipetsk: 11,5 %

Export price

VIZ STAL

Normal value

(50)

found that domestic sales of

the product
It was
concerned were overall representative, but not made in
the ordinary course of trade since such sales were made
in substantial quantities below per unit cost, in this case
more than 90 % of the volume sold in the transactions
under consideration. Moreover, it was established that
the weighted average selling price of
the domestic
transactions was below the weighted average per unit
cost of production during the IP.

(51) Because domestic prices of the product concerned sold
by the exporting producer could not be used in order to
establish normal value, normal value had to be
constructed, in accordance with Article 2(3) of the basic
Regulation.

the
(52) Normal value was constructed on the basis of
exporting producer's own full cost of production,
i.e.
manufacturing cost plus selling, general and adminis-
trative costs (‘SG&A’ costs) and a reasonable margin for
profit, on the basis of the actual data pertaining to
production and sales by the exporting producer under
investigation,
in accordance with the first sentence of
Article 2(6) of the basic Regulation.

(53)

It should be noted that during the IP, Viz Stal purchased
its main raw materials, i.e. hot-rolled coils or hot-rolled
band,
from two suppliers: US Steel Kosice and the
Russian company Magnitogorsk. In the investigation on
large GOES, referred to in recital (10), it was found that
the relation between the latter company and Viz Stal was

(55) Viz Stal did not sell the product concerned directly to
independent customers in the Community. All sales were
made to related subsidiaries in the Community. Conse-
quently, a constructed export price has been established
pursuant to Article 2(9) of the basic Regulation i.e. based
upon the resale prices
to independent customers.
Adjustments were made for all costs incurred between
importation and resale by those related importers,
including selling, general and administrative expenses
and a reasonable profit margin,
in accordance with
Article 2(9) of the basic Regulation,

Comparison

(56) For the purpose of ensuring a fair comparison between
the normal value and the export price at an ex-works
level and at the same level of trade, due allowance in the
form of adjustments was made for differences that were
claimed and demonstrated to affect prices and price
comparability in accordance with Article 2(10) of the
basic Regulation. Adjustments were made in respect of
transport costs, insurance, handling costs, bank charges,
credit costs and related bank charges, import costs and
slitting costs where applicable and justified.

(57) The adjustment for slitting costs was necessary in order
to allow for the proper comparison of GOES according
to whether they were imported as full width coils and
subsequently sold as such in the Community or imported
as
slitting in the
Community or imported as slit material and sold as
in
such or after further slitting in the Community,
accordance with Article 2(10)(k) of the basic Regulation.

full width coils and sold after

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Dumping margin

90 % of the total Community production of the product
concerned.

(58)

In accordance with Article 2(11) of the basic Regulation,
the dumping margin was established on the basis of a
comparison of the weighted average normal value with
the weighted average export prices per product type, as
determined above.

(65)

It is therefore considered that these four Community
producers constitute the Community industry within the
meaning of Article 4(1) and Article 5(4) of the basic
Regulation and will hereafter be referred to as the
‘Community industry’.

(59) Regarding the exports made by this exporting producer
to the Community, the investigation did not lead to a
finding of dumping.

(66) As to the two remaining Community producers, one
remained silent and the other one, although supporting
the proceeding, could not be considered part of the
Community industry since it only provided some basic
information on its production and sales volume.

(60) The conclusion of non-dumped imports

into the
Community was reached for both full coils and slit coils
of all different product types and consequently covered
both large and narrow GOES.

E.

INJURY

1.

Community consumption

CONCLUSION ON DUMPING REGARDING RUSSIAN
IMPORTS

(61) Cooperation by the exporting producers was high since
they covered the entirety of known imports into the
Community. For one Russian exporting producer dump-
ing of 11,5 % was found during the IP, whereas for the
other cooperating exporting producer the investigation
did not lead to any finding of dumped imports into the
Community. The residual dumping margin was set at the
level of the margin for the exporting producer for whom
dumping was found.

D.

COMMUNITY INDUSTRY

1.

Community production

(62) Within the Community,

six producers manufacture
GOES. The three complainant Community producers
are located in Germany, France and Italy. It should be
noted that these three producers belong to the same
group. The other producers are located in Poland, the
Czech Republic and the United Kingdom.

(67) Community consumption was established on the basis of
the
the
sales on the Community market of
Community industry, (b) the other Community produ-
cers, which also provided some general information, and
(c) the imports into the Community market from all
third countries as
reported by Eurostat and also
considering the data submitted by the cooperating
exporting producers in the countries concerned.

(a)

(68) On this basis, the Community consumption developed as

follows:

2000

2001

2002

2003

IP

Community
Consumption
(metric tonnes)

[...]

[...]

[...]

[...]

[...]

Index: 2000 =
100

100

108

96

92

92

(63) The investigation concluded that these six producers
constitute the total Community production within the
meaning of Article 4(1) of the Basic Regulation.

Source: verified questionnaire replies, information provided by one other
Community producer,
information contained in the complaint and
Eurostat

2. Definition of the Community industry

(64)

In addition to the three (related) complaining Commu-
nity producers, another Community producer also fully
cooperated with the investigation. The total production
of these four companies was found to represent around

(69) The Community consumption firstly increased by 8 %
between 2000 and 2001, but then significantly and
continuously dropped by 15 %. During the overall period
under examination, the decrease in consumption was
8 %. The continuous drop in consumption is explained
by a decreasing demand from the downstream industry, i.
e. the transformer producers, namely due to reduction of
new industrial projects for which electrical transformers
are needed.

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2.

Imports from the countries concerned

(74)

is therefore concluded that

the dumped imports
It
originating in the countries concerned should be assessed
cumulatively.

Volume and market share of the dumped imports concerned

Cumulative assessment of the effects of the dumped imports
concerned

Dumped Import volume

(70) The Commission considered whether

the effects of
dumped imports from the countries concerned should
be assessed cumulatively, on the basis of the criteria set
out in Article 3(4) of the basic Regulation. This Article
provides that
imports shall be cumulatively assessed
when 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, the
volume of imports from each country is not negligible
and the conditions of competition between the imported
products and the conditions of competition between the
imported products and the like Community product
make such an assessment appropriate.

(71)

It should be noted that one Russian exporting producer
was found not to be dumping. Accordingly,
imports
from that exporting producer have not been taken into
consideration in the examination as to whether or not a
cumulative assessment of imports is appropriate.

(72)

It was found that the dumping margins established for
each of the countries concerned were more than de
minimis. In addition, the volume of the dumped imports
from each of those countries was not negligible, i.e. they
represented for the USA and Russia respectively around
10 % and 3 % of the Community consumption during
the IP.

(73)

In regard to the conditions of competition both between
the dumped imports and between the dumped imports
and the like Community product,
it was found that
GOES sold by the countries concerned and those sold by
the Community industry were alike in all respects and
distributed via the same trade channels. The investigation
showed that
the import prices in the case of both
countries followed a similar decreasing trend, especially
during the second part of the period under examination,
and those prices were found to undercut the Community
industry's prices. This led to an overall price depression
of GOES sold by the Community industry.

2000

2001

2002

2003

IP

[...]

[...]

[...]

[...]

[...]

100

161

191

323

357

Import volume
(metric tonnes)

Index: 2000 =
100

Source: Eurostat and cooperating exporting producer

(75) The above table shows that the imports of GOES from
the countries concerned into the Community more than
tripled during the period under examination.

Market share of dumped imports

2000

2001

2002

2003

IP

Market share

3,3 %

5,0 %

6,6 %

11,8 %

13,0 %

Source: Eurostat and cooperating exporting producer

(76) The constant increase in market share took place in the
context of an overall decreasing Community consump-
tion. This was especially the case as from 2002, a period
when, in spite of a significant decline of the Community
consumption, the market share increased from 6,6 % to
13 %. The most significant increase in the market share
took place in the period 2002/2003, when dumped
imports gained more than 5 percentage points. This
corresponded to an increase in absolute import volume
of 65 %.

Price evolution of the dumped imports

2000

2001

2002

2003

IP

[...]

[...]

[...]

[...]

[...]

100

124

121

99

98

EUR/metric
tonne

Index: 2000 =
100

Source: Eurostat and cooperating exporting producer

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(77) The price of the dumped imports firstly rose by 24 %
between 2000 and 2001. This was especially due to an
increasing demand for GOES at that time. Thereafter
prices continuously decreased from [...] EUR/tonne in
2001 to [...] EUR/tonne during the investigation period, i.
e. a decrease of 20 %. The average price decrease was
especially marked between 2002 and 2003 (–20 %).
During the overall period under examination the
decrease of the average unit price of the dumped imports
was 2 %.

Undercutting

(78) The Commission has examined whether the exporting
producers in the countries concerned undercut the prices
the Community industry during the IP. For the
of
purposes of this analysis, the CIF prices of the exporting
producers have been adjusted to a Community frontier,
duty paid, level. These prices have then been compared to
the Community industry's ex-works prices at the same
level of trade, and at the level of comparable product
types.

(79) One Russian exporting producer claimed that when
assessing price undercutting (and injury elimination
margin), adjustments should be made with respect to
quality differences between GOES produced and sold by
this exporting producer and those produced by the
Community industry. This claim is based on the fact that,
for the same types, the quality of GOES produced by this
exporting producer would be considerably lower than
the quality of GOES produced by the Community
industry.

(80)

In this respect, it should firstly be noted that such an
adjustment was indeed granted in the original investiga-
tion, i.e. in 1996, but the investigation concerning the
review and prolongation of those measures following an
expiry review in 2003 already concluded that any quality
adjustment was no longer warranted in view of the
improved Russian facilities (1).

(81) Furthermore, the users were asked to comment on the
comparability of GOES imported from Russia, with that
purchased from the Community industry, and none of
the cooperating users mentioned any significant quality
difference. Only one user mentioned that the quality of
the
Russian products is slightly inferior
to that of
this user did not
Community made products, but
substantiate its claim. Moreover,
further
this user
mentioned that both products are completely substitu-
table and that they have switched to Russian products
due to the significant price difference. The claim was
therefore rejected.

(1) OJ L 25, 30.1.2003, p. 12, recital (50).

(82) On the basis of the cooperating exporting producers'
prices, the undercutting margins found, by country, and
expressed as a percentage of the Community industry's
prices, are as follows:

Country

USA

Price Undercutting

14,4 %

Russia

Between 6,1 % and 26,6 %

(83) As far as Russia is concerned, the undercutting margin of
6,1 % was established for the exporting producer for
which no dumping margin was
found. The other
percentage refers to the other cooperating exporting
producer.

3.

Situation of the Community industry

(84) Pursuant to Article 3(5) of the basic Regulation, the
Commission examined all economic factors and indices
having a bearing on the state of the Community industry.

(85)

In view of the limited number of Community producers
belonging to two groups and exporting producers
concerned,
figures concerning them have only been
given in indexed form and ranges.

Production, production capacity and capacity utilisation

2000

2001

2002

2003

IP

[...]

[...]

[...]

[...]

[...]

100

104

101

99

98

[...]

[...]

[...]

[...]

[...]

100

104

107

104

104

86 %

86 %

81 %

82 %

81 %

Production
(metric tonnes)

Index: 2000 =
100

Capacity (metric
tonnes)

Index: 2000 =
100

Capacity utilisa-
tion

Source: verified questionnaire replies

(86) During the overall period under examination,

the
Community industry's production volume decreased by
2 %. More specifically, the production firstly increased by
4 %, between 2000 and 2001, and then continuously
i.e. a decrease of
declined between 2001 and the IP,
around 5 %.

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(87) The reported capacity figures refer to technical capacity,
as opposed to theoretical capacity, which implies that
adjustments, considered as standards by the industry, for
normal holidays, set-up time, maintenance and other
normal stoppages have been taken into consideration.
The increase in production capacity in the years 2001/
2002 was designed to match the surge in demand in
2001. Capacity fell back in 2003 and the IP because one
producer slightly modified its production process, which
had the effect of reducing the technical capacity. On this
basis, the production capacity increased by 4 % over the
period under examination. As showed below in recital
(102), such an increase is related to investments made in
order to modernise the existing production tool, thus
improving its efficiency, and therefore mainly consists of
purchases of replacement equipment. It should also be
noted that the increase in capacity occurred at a time
when the Community industry was still profitable.
Moreover,
these investments have to be seen as a
response to the increased demand in 2001 and in the
light of the cash flow available to the Community at that
time.

(88) The decrease of the capacity utilisation rate resulted from
a slight increase in the production capacity combined
with a fall in the production volume. This decrease was 5
percentage points during the period under examination.

Stocks

2000

2001

2002

2003

IP

metric tonnes

[...]

[...]

[...]

[...]

[...]

(90) The decrease of the stocks (23,5 %) between 2003 and
the IP is explained by an overall increase of sales during
that period. It should however be kept in mind that the IP
does not correspond to a calendar year, which may affect
the comparability of the stocks level as compared to the
other years. At the end of the period under examination,
the level of stocks was 22 % higher than in 2000.

Sales volume

2000

2001

2002

2003

IP

metric tonnes

[...]

[...]

[...]

[...]

[...]

Index: 2000 =
100

100

109

90

76

81

Source: verified questionnaire replies

(91) The Community industry's sales volume on the Com-
munity market decreased by 19 % during the period
under examination, from around [...] tonnes in 2000 to
around [...] tonnes in the IP. The sales volume first
increased by [...] tonnes between 2000 and 2001 i.e. by
9 %, but thereafter declined by [...] tonnes (or by 26 %) in
the subsequent period up to the end of the IP. The
increase between 2003 and the IP can be explained by
the fact that the Community industry decreased its sales
prices (see below) in order regain market share.

Market share

2000

2001

2002

2003

IP

Index: 2000 =
100

100

109

160

182

122

In % Community
consumption

68,6 %

69,1 %

63,8 %

56,5 %

60,4 %

Source: verified questionnaire replies

Source: verified questionnaire replies and Eurostat

(89) Certain types of

the like product are specifically
produced by the Community industry to order and are
therefore not destined for stocks. Other, more standar-
dised, types of GOES are however produced on a regular
basis and their sale depends on the evolution of the
market in terms of demand and prices. It is therefore
clear that the overall increase of stocks during the period
under
the Community
industry faced difficulties to sell the more standardised
types of the like product especially during 2002, when
stocks increased by 46 % compared to 2001, and in
2003 when they further increased by 3,5 % as compared
to the previous year.

examination indicates

that

(92) During the overall period under examination,

the
Community industry faced a drop of market share of
8,2 percentage points. More specifically, in spite of a 9 %
increase in sales volume between 2000 and 2001, the
Community industry could barely maintain its level of
market share which only increased by 0,5 percentage
point during those years. In the period from 2001 to the
IP, the Community industry's market share dropped by
8,7 percentage points. This loss of market share occurred
at a time when consumption decreased by 15 %, thus
indicating that the Community industry's sales decreased
more than consumption. At the same time, the market
continuously
shares of
increased.

concerned

countries

the

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Sales prices

(97)

2000

2001

2002

2003

IP

EUR/metric
tonne

[...]

[...]

[...]

[...]

[...]

In the period 2001/2002, sales prices have on average
increased more than their corresponding costs. During
that period prices were in line with costs and this resulted
in a profitable situation, as shown below. In 2003, prices
significantly dropped, and profitability became negative,
in spite of a decrease of the average cost during that year.
During the IP, the slight increase in production cost,
mainly raw material, could not be passed on to the prices
that dramatically further decreased, thus causing sig-
nificant
therefore
losses. The price depression was
i.e. the incapacity of
coupled with price suppression,
the Community industry to increase its prices in order to
reflect the increase in costs.

Index: 2000 =
100

100

109

111

106

99

Profitability and return on investments

Source: verified questionnaire replies

2000

2001

2002

2003

IP

then rose by 2,6 % in 2002. Thereafter,

(93) The average unit sales price first increased by 8,6 % in
2001,
the
Community industry faced a significant and continuous
drop in prices, which was especially marked between
2003 and the IP when prices fell by 6,3 %. This price
decrease was necessary in order to allow the Community
industry to maintain its market share.

(94) The trend which emerges from the above table clearly
the Community
shows an important depression of
industry sales prices as from the year 2002. This
coincided with a period when dumped import prices
significantly decreased, which allowed them to benefit
from a major increase in market share.

(95) The pressure on the Community industry's sales prices
was such that they were not profitable in 2003 and
during the IP, as explained below.

(96) The table below shows the evolution of the Community
unit sales price as compared to the corresponding cost of
production, which mainly consists of raw material, i.e.
hot rolled coils representing on average around 70 % of
the total cost of production of the product concerned:

Index: 2000 = 100

2000

2001

2002

2003

IP

unit price

100

109

111

106

99

unit full cost of
production

100

103

107

105

106

Source: verified questionnaire replies

% Profit on net
turnover

Around
0 %

Around
5 %

Around
3 %

Around
0 %

Around
–5 %

Return on
investments

Around
0 %

Around
25 %

Around
20 %

Around
–5 %

Around
–30 %

Source: verified questionnaire replies

(98) The financial results of certain Community producers in
2000 were significantly affected by start-up costs and
also technical problems related to a significant invest-
ment in 1999, concerning the production tool. The
overall Community industry's profitability was affected
accordingly. Since the year 2000 was untypical, it can
thus not be considered as a representative starting point
for examining a trend. The Community industry's sales
on the Community market became profitable during the
years 2001 and 2002, also in view of a higher demand
from the downstream industry and a satisfactory price
level. Thereafter, the significant drop in prices had a
direct negative effect on the profitability. Indeed, sales on
the Community market became loss making as from the
year 2003 and losses even reached around –5 % of
turnover during the IP.

(99) For the purpose of this investigation, the return on
investments (‘ROI’) is expressed as the profit in percent of
the net book value of investments. Since the companies
constituting the Community industry are mainly, if not
exclusively, active in the production and sales of the like
product, the ROI has been established with respect to
their overall situation. On that basis, the ROI broadly
followed the above profitability trend over the whole
period under examination. It went up from around 0 %
in 2000 to around 20 % in 2002 and then decreased
continuously to around –30 % in the IP.

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Cash flow and ability to raise capital

Growth

2000

2001

2002

2003

IP

‘000 EUR

[...]

[...]

[...]

[...]

[...]

(103) Between 2000 and the IP, Community consumption
decreased by 8 %, while the sales volume of
the
Community industry decreased by 20 %. The Commu-
nity industry thus
share,
whereas the market share of the imports concerned
increased by 12,8 percentage points during the same
period.

significantly lost market

Index: 2000 =
100

100

181

141

7

–83

Employment

Source: verified questionnaire replies

2000

2001

2002

2003

IP

(100) The net cash in(out)

flow from operating activities,
developed from around XX million EUR in 2000 to
around -XX million EUR in the IP. It peaked in 2001 and
2002, but subsequently dropped sharply in 2003 and
reached a low during the IP. As a consequence, the
Community industry is, on average, increasingly resort-
ing to debt in order to help finance its current activity
and investment.

(101) The investigation has shown that capital requirements of
several Community producers have been adversely
affected by their difficult financial situation. Although
most of
large steel
these companies are part of
companies, capital requirements are not always met to
the desired level, as financial resources are generally
allocated within these groups to the most profitable
entities.

Total employees

[...]

[...]

[...]

[...]

[...]

Index: 2000 =
100

100

100

99

97

95

Source: verified questionnaire replies

(104) The level of employment of the Community industry
remained stable between 2000 and the 2001. It was
reduced in the following years resulting in a total
reduction of 5 % compared to the beginning of the
period under examination.

Wages

Investments

2000

2001

2002

2003

IP

2000

2001

2002

2003

IP

Wages (000 EUR)

[...]

[...]

[...]

[...]

[...]

‘000 EUR

[...]

[...]

[...]

[...]

[...]

Index: 2000 =
100

100

137

105

76

49

Source: verified questionnaire replies

(102) The Community industry's total investments related to
the like product decreased by around 50 % between
2000 and the IP. The investigation showed that it is vital
for this industry to maintain a certain level of investment
in order to stay competitive. Most of the investments
were made for modernisation purposes, and little for
increasing capacity. However,
it should be noted that
modernisation of investments normally tends to raise
slightly the technical capacity,
simply because an
improved equipment is more efficient and productive
than the previous one.

Index: 2000 =
100

Avg. Wages per
employee (EUR)

Index: 2000 =
100

100

99

102

97

94

[...]

[...]

[...]

[...]

[...]

100

100

103

100

99

Source: verified questionnaire replies

(105) During the period under examination the average wage
per employee remained stable and thus below the rate of
inflation. Given that employment was reduced during
that period, as shown in the previous table, the total cost
of wages also decreased.

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Productivity

2000

2001

2002

2003

IP

Production (m
tonnes) (a)

[...]

[...]

[...]

[...]

[...]

Employment (b)

[...]

[...]

[...]

[...]

[...]

Productivity (a)/
(b)

Index 2000 =
100

160,4

166,9

163,9

164,2

166

100

104

102

102

103

Source: verified questionnaire replies

(106) Productivity of the Community industry's workforce,
measured as output per person employed per year, first
increased by 4 % from 2000 to 2001, then dropped by
around 2 % between 2001 and 2002, and rose again in
2003 and the IP. At
the period under
examination, the productivity was 3 % higher than that
observed at the start of the period. The increase in
productivity may be partially explained by the invest-
ments aimed at improving efficiency of existing equip-
ments as stated in recital (102) above.

the end of

Magnitude of dumping margin

(107) 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
countries concerned, this impact cannot be considered
to be negligible, especially in transparent and thus highly
price sensitive markets like the one of
the product
concerned.

Recovery from the effects of past dumping or subsidisation

(108) As previously explained, measures on imports of GOES
with a width of more than 500 mm, originating in
Russia, have been in place during the whole period
under examination. However,
this
concerns only a portion of the product concerned by the
investigation since the present proceeding
current
concerns GOES of all widths from Russia, but also
those originating in the USA. Thus, the Community
industry only partially recovered since it subsequently
also faced the increased of dumped imports of all width
of GOES from Russia and the USA.

is recalled that

it

those developments should be taken into con-
that
sideration in the analysis since they would allegedly
make the imposition of measures manifestly inappropri-
ate. More specifically those claims relate to the increase
of the Community industry's sales prices of the like
product, as well as the plant closure of one of the
complainants after the end of the investigation period.

(110) It should firstly be noted that in accordance with Article
6(1) of the basic Regulation, information relating to a
period subsequent
to the investigation period shall,
normally, not be taken into account. The reason for this
is that the relevant facts need to be established, and
verified, during a limited and specified time period in
order to ensure that the results of the investigation are
representative and reliable, and also because otherwise
the investigation could be prolonged unnecessarily on
the grounds that
the facts gathered for a particular
period, i.e. the investigation period, are not reflecting the
situation prevailing at a later stage.

(111) It follows from the wording of the basic Regulation that
developments occurring after the investigation period
should be taken into consideration only if they are of an
exceptional nature, and would indeed make the imposi-
tion of measures manifestly
Such
approach was also confirmed by the European Court
of First Instance (1).

inappropriate.

Community industry price increase

(112) It was argued that the Community industry announced a
price increase after the investigation period, and that this
price increase was of an exceptional nature since it is
described in the press as unusually large.

(113) Actual data have been gathered by the Commission
services and the evolution of the average Community
sales price on the Community market are presented in
the table below:

Average sales
price

EUR/metric
tonne

2000

2001

2002

2003

IP

Apr-Dec
2004

[...]

[...]

[...]

[...]

[...]

[...]

Index: 2000 =
100

100

109

111

106

99

104

4. Developments after the investigation period

(109) Certain interested parties claimed that important devel-
opments took place after the investigation period and

(1)

Sinochem case (T-161/94).

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the investigation period,

(114) From the above table it can be seen that if prices indeed
increased after
this price
increase is far from being unusually large. Indeed, the
average price for the 3 last quarters of 2004 increased by
only 5 % as compared to their IP level, but prices did
certainly not recover as compared to the previous years'
level.

(115) In addition, even if it was considered that the price
increase was indeed of an exceptional nature — which it
is recalled is not the case here — consideration should
also be taken of the evolution, after the investigation
period, of the price level of the other operators on the
Community market, and especially that of the countries
concerned, as well as the fluctuation of the raw material
price, in order to verify whether the increase of prices
would indeed make the imposition of the anti-dumping
duties manifestly inappropriate. Any detailed analysis in
that respect is not warranted in view of the only partial
recovery of prices as shown above. Furthermore, it is
unknown whether any price increase would be of a
lasting nature.

(116) More importantly, it is recalled that the injury suffered by
the Community industry is not exclusively based on
price levels, but is characterised by a deterioration of a
combination of various
any
they were of an
possible price increases, even if
exceptional and lasting nature, would not,
taken in
isolation, make the imposition of measures inappropri-
ate, if they were not accompanied by similar develop-
ments of other injury indicators in such a way that the
complete injury picture were affected.

indicators. Therefore,

(117) For

the above reasons,

the
it
Community industry price increase that might have
occurred after the investigation period does not make
the imposition of measures inappropriate.

is considered that

Closure of one producer of the Community industry

(118) Certain interested parties claimed that the closure of one
of the producers that is part of the Community industry
calls for the non imposition of measures since it would
result in a significant decrease of the production capacity
in the Community, thus possibly generating a shortage of
GOES on the Community market.

(119) In that respect, it is noted that Article 6(1) of the basic
Regulation concerning events occurring after
the
investigation period does not apply to the determination
of the Community interest which is dealt with by Article
21 of the basic Regulation. Reference is therefore made
to recital (174) where the issue related to production

capacity is addressed in the framework of the Commu-
nity interest analysis.

(120) It should nevertheless be confirmed that
the producer

the plant
closure of
located in Italy has been
announced, and that production there will continue at
reduced level as from June 2005 and is expected to
completely cease in September of the same year.

(121) Moreover, even if the envisaged closure of a plant might
constitute an exceptional event, of a lasting nature, and
were therefore considered in the context of the analysis,
it would only reinforce the above findings that the
Community industry was suffering injury during the
investigation period, and that this precarious situation
continued after the investigation period.

5. Conclusion on injury

(122) In spite of the existing anti-dumping measures concern-
ing imports of large GOES from Russia, the economic
situation of
the Community industry significantly
deteriorated between 2000 and the IP. The positive
impact of the measures imposed on large GOES from
Russia has indeed been diluted by the emergence of the
dumped imports of all widths of GOES from Russia and
the USA. Those imports were significantly less impor-
tant at the beginning of the period under examination.
In addition, reference is also made to the recital (17),
where it is explained that the anti-dumping measures in
force against large GOES from Russia were avoided by
cutting the coils of grain-oriented electrical steel in two
halves not exceeding 500 mm.

(123) Over

this period under examination sales volume
decreased by 19 %, production decreased by 2 %, stocks
significantly increased by 18 %, and market shares
dropped by 8 percentage points. Community producers'
prices on the Community market were undercut by
dumped imports and could not be increased to reflect
the increased cost of production during the IP. As a
result, the industry made losses in 2003 and in the IP.
Employment and investments respectively decreased by
5 % and 50 % over the period under examination.

(124) More specifically, the economic situation of the Com-
munity industry developed as follows. During the year
2001, the Community market saw a higher demand and
increasing prices. During this period, the Community
industry could also raise its sales volumes to the same
extent as the increases in consumption and sales prices.
This resulted in a profitable situation and the industry
was therefore in a position to invest and slightly increase
its production capacity. Even if sales volume and market

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Official Journal of the European Union

27.8.2005

the Community industry
shares dropped in 2002,
managed to maintain its price level, and to remain
profitable, albeit at a level below that of 2001 in view
also of the increasing cost of production at that time.

thus also including those originating in the USA, and the
fact
that measures on large GOES were sometimes
avoided by cutting the sheets, as explained in recital (17).

(125) As from 2003, the Community industry could no longer
maintain its prices, which significantly dropped,
in
in sales volume and
conjunction with a strong fall
market shares. Prices further decreased during the IP,
while costs remained relatively stable. As a consequence,
profitability reached a dramatically low level. At this
level of losses, the further existence of the industry is at
risk. Indeed, after the investigation period, the produc-
tion plant of one of the Community producers will have
to close down.

(126) In the light of the foregoing it is concluded that the
Community industry has suffered material injury within
the meaning of Article 3 of the basic Regulation.

F.

CAUSATION

1.

Introduction

the Commission examined whether

(127) In accordance with Articles 3(6) and 3(7) of the basic
Regulation,
the
dumped imports of the product concerned originating
in the countries concerned have caused injury to the
Community industry to a degree that enables it to be
classified as material. Known factors other than the
dumped imports, which could at the same time be
injuring the Community industry, were also examined in
order to ensure that possible injury caused by these other
factors was not attributed to the dumped imports.

2.

Effects of the dumped imports

(128) The significant increase of the volume of the dumped
imports, which more than tripled during the period
under examination, coincided with the deterioration of
the economic situation of
the Community industry,
which materialised amongst others by a drop in sales
volume of around 20 % during the same period. Since
they only concern large GOES from Russia, the existing
measures could not sufficiently shield the Community
industry from the effect of the imports concerned. This
is especially true when considering the above mentioned
significant increase of imports of all widths of GOES,

(129) The negative effect of

year 2002, when Community

the continuously increasing
volume of dumped imports was even reinforced as from
consumption
the
decreased. As a matter of fact,
in the period 2002/
2003,
the dumped imports gained more than 5
percentage points of market shares, while the Commu-
nity industry's share dropped by around 7 points. This
sudden surge of dumped imports is explained by a
dramatic decrease of the corresponding prices during the
same period. Indeed, in only one year, prices decreased
from 1 282 to 1 049 EUR/tonne,
i.e. a decrease of
around 15 %. This resulted in an important drop in the
Community industry's sales volume during the corre-
sponding period. While the Community industry first
tried to maintain its average price level, prices never-
theless decreased from 1 254 EUR/t in 2002 to 1 189
EUR/t in 2003. Thereafter the industry had no choice
but to further decrease its prices in order to maintain
sales volume and market shares during the IP. This had
however a direct negative impact on its profitability
which became negative and reached –7,4 % of turnover
during the IP.

(130) In view of the clearly established coincidence in time
between, on the one hand, the surge of dumped imports
at continuously decreasing prices and, on the other
hand, the Community industry's loss of sales volume,
market shares and price depression resulting in a loss-
making situation,
the dumped
imports played a determining role in the injurious
situation of the Community industry.

is concluded that

it

3.

Effects of other factors

Exchange rate effect

(131) One interested party claimed that the injury suffered by
the Community industry was caused by the development
of the USD/EUR exchange rate, which had a decreasing
impact on the prices of imports from the USA. This
situation thus favoured the USA imports which were
able to increase their market shares.

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(132) The table below compares the development of the USD/
EUR exchange rate with the average import prices of the
product concerned originating in the US.

Export performance of the Community industry

2000

2001

2002

2003

IP

2000

2001

2002

2003

IP

1,082

1,116

1,068

0,894

0,860

Sales volume
export (tonnes)

[...]

[...]

[...]

[...]

[...]

100

103

99

83

79

1 945

1 741

1 543

1 171

1 133

Index: 2000 =
100

100

92

117

145

141

100

90

79

60

58

Source: verified questionnaire replies

USD/EUR
exchange rate

Index 2000 =
100

Import price US
(EUR)

Index 2000 =
100

(133) It appears from the above data that there is no clear
correlation between the development of the USD/EUR
exchange rate and the average import prices of the
Indeed,
product concerned originating in the USA.
during the period 2000-2002 import prices already
decreased by 21 %, while exchange rates remained stable.
Moreover, the above data clearly indicates that, over the
period under examination, the decrease of the relevant
average import prices (–42 %) was much stronger than
the negative development of the exchange rate (–21 %).
This was especially the case in the period 2002/2003
when the unit average import prices showed its strongest
It is therefore concluded that the effect of
decrease.
if any, cannot be considered as a
exchange rates,
substantial cause of
the
the injurious situation of
Community industry.

Performance of other Community producers

2000

2001

2002

2003

IP

Sales volume
(metric tonnes)

[...]

[...]

[...]

[...]

[...]

market shares

9,2 %

8,8 %

8,3 %

8,2 %

8,3 %

Source: questionnaire reply, complaint, Eurostat

(134) The above table shows that

the sales of

the other
Community producers on the Community market
decreased by almost 20 % during the period under
examination. The corresponding market shares have also
decreased from 9,2 % in 2000 to 8,3 % during the
investigation period. Based on the information available
it is therefore concluded that the other Community
producers were in a situation similar to that of the
Community industry and did not cause any injury to the
Community industry.

(135) One interested party claimed that part of the injury
suffered by the Community industry could be attributed
to the export performance of the Community industry.
It was argued that the Community industry deliberately
decreased its domestic sales in favour of profitable
exports to non EU-countries.

(136) The above table shows that indeed the Community
industry increased its exports during the period under
examination and especially from 2002 onwards. How-
ever, this increase should rather be seen in the light of
the surge of dumped imports on the Community
market, at a time when the consumption decreased
and Community prices were depressed to a significant
extent. Under
the Community
these circumstances
industry reacted, in order to limit the damage, by an
attempt to increase their exports.

(137) It is also recalled that the Community market remains
the Community industry's natural market. In fact, in the
year 2001, when the situation on the Community
market became favourable,
the Community industry
increased its domestic sales volume, and exports sales
were reduced.

(138) In addition, it should be noted that the injury suffered by
the Community industry did not only consist in a loss of
sales volume and market shares on the Community
It was also characterised by a strong price
market.
depression caused by the dumped imports,
and
significant undercutting of the Community industry's
prices, which resulted in considerable financial losses.
Such negative effect on prices can certainly not be
attributed to an increase of the export sales of the
product concerned. On the contrary, it is considered that
increased export sales volume may have allowed the
Community industry to benefit from economies of scale
and thus a leverage in the overall costs of the like
product. In the absence of such increasing exports, it is
losses would have been even more
expected that
significant.
the injury
is therefore concluded that
It
industry cannot be
suffered by the Community
attributed to its increasing exports.

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Non-dumped imports from the countries concerned

Decline in demand

2000

2001

2002

2003

IP

[...]

[...]

[...]

[...]

[...]

100

124

142

223

166

Import volume
(metric tonnes)

Index: 2000 =
100

Market shares

3,3 %

3,8 %

4,9 %

8,1 %

6,0 %

(139) Non-dumped imports from Russia increased by 66 %
during the period under examination, corresponding to
a market share gain of almost 3 percentage points.

(140) In that respect,

it should firstly be noted that

this
increase of imports was less marked than that of the
dumped imports, as stated in recital 75 above. Secondly,
it was also established that the price level of the non-
dumped imports was higher than that of the dumped
imports. Indeed, whilst an undercutting margin of 6,1 %
was established in the case of the non-dumped imports,
the undercutting margin for the dumped imports ranged
between 14,4 % and 26,6 %.

(141) For those reasons it is concluded that any impact of non-
dumped imports on the situation of the Community
industry was limited and could not be considered as a
determining reason for the injurious situation of the
Community industry.

Imports from other third countries

2000

2001

2002

2003

IP

Import volume
(metric tonnes)

[...]

[...]

[...]

[...]

[...]

Market shares

15,6 %

13,3 %

16,4 %

15,4 %

12,2 %

1 370

1 477

1 581

1 525

1 509

Average unit
price

Source: Eurostat

(143) In a market where demand is decreasing, it is expected
that all operators face a diminution of their sales. This
was the case of the Community industry. However those
sales decreased more than the consumption during the
period under examination. Whilst
the Community
industry, the other Community producers and the other
third countries lost sales volume and market share
during the period under examination, the volume of
dumped imports more than tripled and gained sig-
nificant market share during the same period. As shown
in the injury analysis, the demand declined by around
25 000 tonnes during the period under examination, the
Community industry's sales dropped by around 40 000
tonnes but the imports from the countries concerned
increased by around 30 000 tonnes.

(144) In this context, even if the decline in demand may have
contributed to the sales decrease of the Community
industry, it is concluded that the injury consisting mainly
in a loss of market shares, price depression and a loss-
making situation, can only be attributed, if at all, to a
minor extent to that factor.

4. Conclusion on causation

(145) In conclusion, it is confirmed that the material injury
suffered by the Community industry, which is char-
acterised especially by a decline in sales volume, market
shares and unit sales price resulting in a deterioration of
the profitability indicators, was caused by the dumped
imports concerned.

(146) Indeed, there is a clear coincidence in time between the
surge of dumped imports and the drop of
the
Community industry's sales volume and market share.
The price depression caused by the dumped imports was
especially remarkable as from 2002. The Community
industry tried to maintain its level of prices in 2003, but
had no other choice than to follow the price level set by
the dumped imports in order to maintain a certain level
of sales. This resulted in a loss-making situation.

(142) The table above indicates that imports from other third
countries decreased in absolute and relative terms. At the
same time,
the corresponding average sales price
increased.
It is therefore concluded that the imports
from other third countries did not contribute to the
injury suffered by the Community industry.

(147) The other identified factors were not found to break the
causal
link established above, even considering their
possible combined effect. The decrease in consumption
may have contributed to a decrease in the Community
industry's sales volume. It can however be reasonably
stated that in the absence of the surge of low-priced

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L 223/19

the Community
the situation of
dumped imports,
industry would certainly not have been affected to such
an extent, since there would not have been a decrease in
market share. It is also considered that the non-dumped
imports from Russia only had a limited negative impact.
Finally, the development of the USD/EUR exchange rate
did not explain the high level of dumping established for
the USA and the injury suffered by the Community
industry.

(153) It is therefore important that prices be restored to a non-
dumped or at least a non-injurious level
in order to
allow all various producers to operate on the Commu-
nity market under normal fair trade circumstances. This
will allow the Community industry to regain a
satisfactorily volume of profitable. In the absence of
the imposition of measures, it cannot be excluded that
the Community industry will face further plant closures.

(148) It

is therefore concluded that

the dumped imports
originating in the countries concerned have caused
material injury to the Community industry within the
meaning of Article 3(6) of the basic Regulation.

G.

COMMUNITY INTEREST

(149) It has been examined whether, despite the conclusions
on dumping, injury and causation, compelling reasons
existed which would lead to the conclusion that it is not
in the Community interest to adopt any measures in this
particular case. For this purpose, and pursuant to Article
21(1) of the basic Regulation, the likely impact of the
imposition and non-imposition of measures for all
parties concerned in the investigation was considered.

1.

Interest of the Community industry

(154) In conclusion, any imposition of anti-dumping measures
would allow the Community industry to recover from
the effects of injurious dumping found.

2.

Interest of users in the Community

(155) GOES are mainly used in the manufacture of power and
distribution transformers. The transformer manufac-
turers constitute a long-established industry which
energy producers. The
traditionally supplies
transformer
to large
industry,
industrial groups, which have a worldwide presence.
Some smaller
independent companies however also
operate on the market.

large
in general, belongs

(156) The product concerned is considered a significant cost
item for the users since GOES represents on average
between 10 % and 30 % of the total cost of production
of transformers.

(150) The injury analysis has demonstrated that under fair
trade circumstances the Community industry is viable
and profitable and the industry has also invested in order
to stay competitive. This was the case in the years 2001
and 2002, when the Community industry also benefited
from the anti-dumping measures in force against large
GOES from Russia, and the level of the dumped imports
concerned was not yet as significant as it was during the
IP.

(157) Substantiated questionnaire replies, i.e. including all the
requested financial information, were received from 16
users. Some other users also submitted comments in
writing, but without providing detailed information.
According to the financial information they submitted,
cooperating users would represent around 30 % of the
overall Community consumption.

(151) It is also recalled that this industry has undergone a
major restructuring programme in the Community in
1999. The merging of the three complainants at that
time was intended to create a larger entity which could
compete more effectively and increase investments.

(152) As from the year 2002, the continuous increase of low
priced dumped imports caused a general price depres-
sion on the Community market, which also faced a
industry
consumption. The Community
declining
became loss-making and therefore extremely vulnerable.
Losses became so heavy that
the Italian producer
announced the phased closure of its factory. The market
development
in Italy clearly shows to what extent
dumped imports negatively affected the economic
situation of the Community industry.

(158) Users generally expressed their opposition to the
imposition of measures. Firstly, they claimed that the
imposition of anti-dumping measures would result in
the cessation of imports from the countries concerned
and therefore make them dependent on the Community
industry, which would arguably also find itself
in a
monopolistic situation. They further claimed that the
imposition of measures would result in a significant
price increase, thus negatively affecting their competi-
tiveness vis-à-vis
the non-Community transformer
industry. Finally, they claimed that, should measures be
imposed,
the Community industry would not have
sufficient capacity to supply the user industry.

(159) Before specifically addressing the issues raised by the
user industry, certain background information should be
mentioned at this stage, in order to properly assess the
situation on the Community market.

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(160) It should be noted that the number of producers of the
product concerned worldwide is rather limited. Indeed,
only 13 producers worldwide operate in the GOES
business. There are two producers each in Japan, the
USA and Russia, one each in South Korea, China and
Brazil and six in the European Community (from which
three are related). The European Community is therefore
the market with the highest number of producers. The
distribution network of
the Japanese and the US
producers is particularly well organised on the Commu-
nity market since they have their own service-centres
and/or related importers in the EU. Furthermore,
it
appears that only three producers worldwide are able to
supply certain high permeable (laser treated) types of the
product concerned. Those producers are located in the
EU, the USA and Japan.

(161) It is recalled that in 1999, three Community producers
merged their activities under the same holding company
(ThyssenKrupp) in order to create a larger entity which
could compete more effectively with the other GOES
producers on the world market. At that time, this merger
was analysed in detail by the European Commission, and
was approved.

(162) Finally, the investigation revealed that cooperating users
purchased overall during the IP respectively 10 % and
15 % of their GOES from the Russian and American
producers for which dumping was established. In other
words, cooperating users overall relied mainly on other
sources of supply: 75 % of their purchases were from
non-dumped sources, from which around 60 % was
purchased from the Community industry. Only one user
exclusively purchased GOES from dumped sources, but
it recently switched to Community industry supply.

(163) Against this background, and considering the first claim
made by the users that they would become dependent
exclusively on the Community industry supplies,
it
should firstly be recalled that the objective of anti-
dumping duties is not to close off
the Community
market from any imports, but to restore a situation of
fair trade by removing the effect of injurious dumping.
Imports from the countries concerned are therefore not
expected to come to an end, but to continue, albeit at
non-dumped or non-injurious price levels.

other words, in the case of Russia, the overall weight of
the anti-dumping measures established by the present
investigation would be significantly less important than
the measures currently in force.

(165) In the case of the USA, imports are also expected to
continue in view of the continuous demand on the
Community market for specific types of the product
concerned, which are only produced by a limited
number of suppliers worldwide.

(166) Furthermore, reference is made to recitals (190) to (193)
concerning the price undertakings offered by the two
exporting producers concerned. By those undertakings,
the exporting producers undertake to sell their product
on the Community market above a certain price level
which will remove the injurious effect of dumping. It is
therefore expected that
imports from the countries
concerned will not cease.

(167) Because the imports from the countries concerned are
expected to continue, and since alternative sources of
supply still exist, the claim that the imposition of anti-
dumping duties would result in the Community industry
being in a monopolistic situation is unfounded. Indeed,
not only imports from the countries concerned are
expected to continue, but also those from other third
countries. In addition, the Community industry consists
of more than one producer, and other Community
producers (not part of the Community industry) are also
active on the market.

types of

to certain specific

(168) Certain parties claimed that the monopolistic situation
of the Community industry would specifically arise with
respect
the product
concerned, i.e. certain high permeable types, that can
only be produced by a very limited number of producers
worldwide. In that respect, it should firstly be noted that
the investigation concluded that for the purpose of the
present anti-dumping proceeding, all
the
product concerned should be regarded as one single
product. The investigation,
including the Community
interest analysis, should therefore be carried out with
to the product concerned overall, and not
respect
individually for certain specific types.

types of

(164) This is certainly the case for Russia since no dumping
margin was established for the major Russian exporting
producer, representing around 75 % of
the Russian
imports during the IP, and since only a relatively limited
margin of dumping, i.e. 11,5 % as established for the
other exporting producer. Reference is also made to
heading I. below, where it is suggested that the measures
based on the findings of the present investigation should
replace those currently in place concerning large GOES
from Russia, which range between 14,7 % and 40,1 %. In

(169) Notwithstanding the above, it is true that high perme-
able types of the product concerned are indeed only
produced by a limited number of producers worldwide,
i.e. one producer in the US, two in Japan and one in the
Community (see above). In that respect, it is recalled that
those sources of supply are expected to remain available
after the imposition of the measures, including those
imports from the USA, albeit at a non dumped or
injurious prices. Therefore, a sufficient level of competi-
tion can be expected to remain also with regard to these
specific product types.

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(170) In addition, the claim that

It

it would be against

the
Community interest to impose measures because only
few companies produce those specific types cannot be
considered a valid reason for accepting that one of those
producers, in this case the US producer, sells its products
at dumped and injurious prices on the Community
market.
is recalled that a substantial margin of
dumping of 47,6 % was established with respect to this
company. The investigation revealed that users pur-
chased a significant portion of their products, including
the high permeable types, from the Community industry
and that the continuous price pressure caused by the
dumped imports may lead to plant closures in the
Community. In the absence of anti-dumping measures
removing the negative impact of injurious dumping, it
could not be excluded that users would become
exclusively dependent on imports, which would certainly
also be detrimental to competition and to the user
industry.

(171) As concerns the claim that prices of

the product
increase on the Community market if
concerned will
anti-dumping measures are imposed,
should be
acknowledged that since the objective of the measures
is to remove injurious dumping, it can also be expected
that any imposition of measures would indeed have an
overall increasing effect on prices. This effect is however
expected to remain moderate.

it

the Community industry will shift back sales on its
domestic market by decreasing export sales.

(175) Some interested parties claimed that the closure of the
Italian plant would decrease the Community industry's
overall production capacity of the product concerned,
thus possibly resulting in shortages on the Community
market. This argument is however ambiguous since it
the Community
for protection of
would, rather call
industry against dumped imports, in order to prevent
further plant closures
thus maintaining production
capacity.

(176) Moreover,

closure,

it should be noted that even after

the
announced plant
the overall Community
industry's production capacity will still be larger than
the Community demand during the IP, and that it is the
intention of the remaining producers to invest in their
production capacities in order to further guarantee a
sufficient supply on the Community market. A situation
whereby fair competition and price level are restored on
the Community market, thus ensuring a satisfactory
return for the Community industry, would certainly
favour such investments and a shift back of sales on the
Community market.

in view of

the level of

(172) Indeed, there would remain various sources of supply
that will not be hit by measures and ensure competition.
Also, as already mentioned above, as far as Russia is
concerned,
the measures
established by the present investigation and since those
measures would replace the existing measures concern-
ing large GOES (see recital 194, 195), anti-dumping
measures based on the current findings would overall
have a lesser impact than the measures in force during
the IP. Indeed, when applying a level of measures as
established by the present
investigation on Russian
imports of the product concerned into the Community
during the IP, the anti-dumping duties would overall be
four times less that the actual duties paid.

(177) Finally, it should be noted that most of the above claims
were already made by the users in the framework of the
previous investigations that led to the imposition of anti-
dumping measures on large GOES from Russia. In spite
of those claims, which at that time were all rejected
because they were either considered unfounded or they
the
were not
Community as a whole, the users did not provide any
evidence, in framework of the current investigation, that
those measures indeed had the negative impact that was
claimed at the time. This gives an indication that any
measures based on the current findings are also expected
not to have a significant negative impact on the user
industry.

found to be against

the interest of

(173) As to the imports from the USA, in application of the
lesser duty rule, only the injurious part of the dumping
margin will be removed, which would on average bring
back the price of the US imports to a level that is still
below its 2002 level.

(174) The allegation that

the imposition of anti-dumping
measures would result in a shortage should also be
refuted. Indeed, as set out above, imports are in any event
expected to continue if anti-dumping measures are
imposed. Moreover, the Community industry's produc-
tion capacity is larger than the overall Community
consumption during the IP. In addition, if Community
prices are restored to a fair level, it can be expected that

imposition of measures, users of

(178) For all the above reasons it can be concluded that, in case
of
the product
concerned overall would not exclusively depend on the
Community industry, that in many circumstances the
purchase price of the users would not be directly affected
by the imposition of any measures, or only in a moderate
way, and that there would be no shortage of GOES
supply overall in the future on the Community market.

3.

Interest of the unrelated importers

(179) Only one unrelated importer cooperated with the
investigation and opposed the imposition of measures
on the grounds that measures would allegedly make an
to the
end to their trading operations with respect
product concerned. Since this company exclusively

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Official Journal of the European Union

27.8.2005

subject

to measures. Furthermore,

imported GOES from one of the countries concerned, it
can be expected that it will be directly affected by the
imposition of measures. This importer would never-
theless still have the possibility to also import from other
suppliers not
it
appears that around 75 % of this importer's turnover
does not relate to the product concerned. Considering
those elements, it is considered that the negative impact
of imposition of measures would be expected to remain
relatively limited.
In view of the fact that no other
importer claimed any adverse effect resulting from the
possible imposition of measures,
it can be concluded
that
importers would overall not be significantly
affected.

(180) It should be noted that the low level of cooperation of
importers is explained by the fact that users mostly
import GOES themselves, and reference is therefore also
made to the above conclusions.

4. Conclusion on Community interest

in view of

the deteriorated situation of

(181) The effects of the imposition of measures are expected to
give the Community industry the opportunity to regain
profitable sales volumes on the Community market and
a higher market share. It was established that dumped
imports highly contributed to the phased plant closure
of one company that is part of the Community industry
and,
the
Community industry overall, there is a risk that in the
absence of measures, other Community producers will
have to close down some production lines or even their
their
whole production facilities and lay-off part of
workforce. Whilst some negative effects are likely to
result in the form of price increases for the users, it is
considered that such effect will remain limited. It should
also be considered that it is also in the interest of the
users that viable and competitive Community producers
remain active on a market that is no longer distorted by
unfair trade practices.

(182) Indeed,

in view of

the limited sources of

supply
worldwide, it is also in the interest of the Community
users that sources of supply in the Community are not
further weakened by dumped imports which could result
in a further decrease of
the Community industry's
activity, thus make users of GOES progressively more
dependent on imported material.

H.

DEFINITIVE ANTI-DUMPING MEASURES

(183) In view of

the conclusions reached with regard to
dumping,
resulting injury and Community interest,
measures on imports of the product concerned from
the USA and Russia should be imposed.

1.

Injury Elimination Level

(184) The level of the definitive anti-dumping measures should
be sufficient to eliminate the injury to the Community
industry caused by the dumped imports, without
exceeding the dumping margins found. When calculat-
ing the amount of duty necessary to remove the effects
of the injurious dumping, it was considered that any
measures should allow the Community industry to cover
its costs and obtain a profit before tax that could be
reasonably achieved under normal conditions of com-
petition, i.e. in the absence of dumped imports.

(185) On the basis of

the information available,

it was
preliminarily found that a profit margin of 5 % of
turnover, which the Community industry achieved in
2001, could be regarded as an appropriate level that the
Community industry could be expected to obtain in the
absence of injurious dumping. It is to be noted that this
level of profit was also used for the determination of the
injury margin in the framework of the investigation that
led to the imposition of the measures currently in place
concerning GOES with a width of more than 500 mm.
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 of products sold by the Community industry on
the Community market. The non-injurious price has
been obtained by adjusting the sales price of each
company composing the Community industry to a
break-even point and by adding the above-mentioned
profit margin. Any difference resulting from this
comparison was then expressed as a percentage of the
total CIF import value.

2. Definitive duties

(186) In the light of the foregoing, and in accordance with
Article 9(4) of the basic Regulation, it is considered that
definitive anti-dumping measures should be imposed in
respect of imports originating in Russia and the USA at
the dumping and injury
the level of
margins, in accordance with the lesser duty rule.

the lowest of

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(187) On the basis of the above, the proposed definitive duties

are as follows:

Country

Company

Anti-dumping duty

United States of America

AK Steel
Corporation

31,5 %

All other companies

37,8 %

Russia

Novolipetsk Iron &
Steel Corporation
(NLMK)

11,5 %

Viz Stal

0 %

All other companies

11,5 %

(188) The

the

reflect

individual

company anti-dumping duty rates
specified in this Regulation were established on the
basis of the findings of the present investigation. They
situation found during that
therefore
investigation with respect to these companies. These
duty rates
(as opposed to the country-wide duty
applicable to ‘all other companies’) are thus exclusively
applicable to imports of products originating in the
countries concerned and produced by the companies
and thus by the specific legal entities mentioned in the
Imported products
operative part of this Regulation.
produced by any other
specifically
mentioned in the operative part of this Regulation with
its name and address, including entities related to those
specifically mentioned, cannot benefit from these rates
and shall be subject to the duty rate applicable to ‘all
other companies’.

company not

(189) Any claim requesting the application of these individual
company anti-dumping duty rates (e.g.
following a
change in the name of the entity or following the setting
up of new production or sales entities) should be
addressed to the Commission 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 Regulation will accordingly be
amended by updating the list of companies benefiting
from individual duty rates.

3. Undertakings

(190) One exporting producer in the USA and one in Russia
offered a price undertaking in accordance with Article 8
(1) of the basic Regulation.

(191) The Commission considers that the undertakings offered
by AK Steel Corporation and NMLK can be accepted
since they will eliminate the injurious effect of dumping.
Moreover, the regular and detailed reports which the

companies undertook to provide to the Commission will
allow effective monitoring and the structure of
the
companies is such that the Commission considers that
the risk of circumvention of
is
minimised.

the undertakings

(192) In order to ensure the effective respect and monitoring
of the undertakings, when the request for release for free
circulation pursuant to the undertakings is presented,
exemption from the duty is conditional upon presenta-
tion of a commercial invoice containing the information
listed in the Annex, which is necessary for customs to
ascertain that shipments correspond to the commercial
document at the required level of detail. Where no such
invoice is presented, or when it does not correspond to
the product presented to customs, the appropriate rate of
the anti-dumping duty should be payable.

(193) In the event of a suspected breach, breach or withdrawal
of
the undertaking, and anti-dumping duty may be
imposed, pursuant to Articles 8(9) and (10) of the basic
Regulation.

I.

CONCLUSION WITH RESPECT TO THE INTERIM

REVIEW INVESTIGATION CONCERNING RUSSIA

(194) It is recalled that, as mentioned in recital (3) of this
regulation, an interim review was initiated in order to
allow for any amendment or repeal necessary of the
definitive anti-dumping measures imposed on imports
from Russia of large GOES. This was due to the fact that
those products fall within the scope of the products
subject to the proceeding concerning imports into the
Community of grain oriented flat-rolled products of
silicon-electrical steel originating in the USA and Russia

(195) On the basis of the above findings and conclusions, the
investigation established that measures
should be
imposed on GOES of all widths, as described in recital
(3), originating,
is therefore
considered that because those measures also cover large
GOES,
those measures
imposed by Council Regulation (EC) No 151/2003, are
no longer appropriate and should accordingly be
repealed.

the continued imposition of

in Russia.

inter alia,

It

HAS ADOPTED THIS REGULATION:

Article 1

1. A definitive anti-dumping duty is hereby imposed on
imports of grain oriented flat-rolled products of silicon-
electrical steel originating in the United States of America
and Russia,
falling under CN codes 7225 11 00
(products of a width of 600 mm or more) and
7226 11 00 (products of a width of less than 600 mm).

L 223/24

EN

Official Journal of the European Union

27.8.2005

2.

The rate of the definitive anti-dumping duty applicable,
before duty, to the net free-at-Community-frontier price
of the products described in paragraph 1 and manu-
factured by the companies below shall be as follows:

Country

Company

Anti-dumping
duty

TARIC Additional
code

1, provided that they are manufactured, shipped and
invoiced by companies from which undertakings are
accepted by the Commission and whose names are listed
in the relevant Commission Decision, as from time to
time amended, and have been imported in conformity
with the provisions of the same Commission Decision or
Regulation.

United States of
America

Russia

AK Steel Cor-
poration – 703,
Curtis Street,
Middletown,
Ohio

All other com-
panies

Novolipetsk
Iron & Steel
Corporation
(NLMK) – 2,
Metallurgov sq.,
Lipetsk

Viz Stal – 28,
Kirov Street,
Ekaterinburg

All other com-
panies

31,5 %

A669

37,8 %

A999

11,5 %

A670

0 %

A516

2.

The imports mentioned in paragraph 1 shall be exempt
from the anti-dumping duty on condition that:

(a)

(b)

the goods declared and presented to customs
correspond precisely to the product described in
Article 1(1),

invoice containing at

the
a commercial
elements
listed in the Annex is presented to
Member States' customs authorities upon presenta-
release into free
tion of
circulation, and

the declaration for

least

(c)

the goods declared and presented to customs
correspond precisely to the description on the
commercial invoice.

11,5 %

A999

Article 3

3. Unless otherwise specified,

the provisions

in force

Council Regulation (EC) No 151/2003 is hereby repealed.

concerning customs duties shall apply.

Article 2

Article 4

1.

Imports declared for release into free circulation shall be
exempt from the anti-dumping duties imposed by Article

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, 19 August 2005.

For the Council

The President

J. STRAW

27.8.2005

EN

Official Journal of the European Union

L 223/25

ANNEX

The following elements shall be indicated in the Commercial Invoice accompanying the Company's sales to the
Community of goods which are subject to the Undertaking:

1.

The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING’

2.

The name of the Company issuing the Commercial Invoice

3.

The Commercial Invoice number

4.

The date of issue of the Commercial Invoice

5.

The TARIC additional code under which the goods on the invoice are to be customs-cleared at the Community
frontier (as specified in the Regulation imposing the definitive anti-dumping duty),

6.

The exact plain language description of the goods and:

— the product code number (PCN),

— technical specifications of the PCN as described in Annex I,

— the company product code number (CPC),

— CN code,

— quantity (to be given in kg/ton)

7.

The description of the terms of the sale, including:

— price per units (kg/ton)

— the applicable payment terms,

— the applicable delivery terms,

— Total discounts and rebates.

8.

Name of the Company acting as an importer to which the invoice is issued directly by the Company.

L 223/26

EN

Official Journal of the European Union

27.8.2005

9.

The name of the official of the Company that has issued the Commercial Invoice and the following signed
declaration:

‘I, the undersigned, certify that the sale for direct export to the European Community of the goods covered by
this invoice is being made within the scope and under the terms of the Undertaking offered by [COMPANY],
and accepted by the European Commission through Decision 2005/622/EC. I declare that the information
provided on this invoice is complete and correct.’