Proposal for a Council Regulation amending Regulation (EC) No 2604/2000 imposing definitive anti-dumping duties on imports of certain polyethylene terephthalate (PET) originating, inter alia, in India
Date: 2005-09-09
Institutions: European Commission
Subjects: India, anti-dumping duty, anti-dumping legislation, import, originating product, plastics

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 09.09.2005 
COM(2005) 418 final 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 2604/2000 imposing definitive anti-dumping duties on 
imports of certain polyethylene terephthalate (PET) originating, inter alia, in India 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

110 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of  22 
December 1995 on protection against dumped imports from countries not members of 
the European Community, as last amended by Council Regulation (EC) No 461/2004 
of 8 March 2004 ("the basic Regulation") in the proceeding concerning the definitive 
anti-dumping measures imposed by Council Regulation (EC) No 2604/2000 on imports 
of certain polyethylene terephthalate (PET) originating, inter alia, in India 

120 

•  General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is the result of an investigation which was carried out in line with the substantive and 
procedural requirements laid out in the basic Regulation. 

139 

141 

219 

229 

230 

•  Existing provisions in the area of the proposal 

There are no existing provisions in the area of the proposal. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  already  had  the  possibility  to 
defend their interests during the investigation, in line with the provisions of the basic 
Regulation. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

The  basic  Regulation  does  not  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

3)  LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

In November 2000, the Council, by Regulation, imposed definitive anti-dumping duties 

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of EUR 181,7 per tonne on imports into the Community of PET originating, inter alia, 
in India.  

The Commission received an application for a ‘new exporter’ review by South Asian 
Petrochem Limited, a new exporting producer in India. 

The Commission initiated on 12 January 2005 a ‘new exporter’ review with a view to 
determine  if  and  to  what  extent  the  imports  of  PET  produced  and  exported  to  the 
Community by South Asian Petrochem Limited should be subject to the anti-dumping 
duties currently in force. 

The investigation revealed the existence of dumping. Taking into account the findings 
of  a  parallel  anti-subsidy  review  investigation,  a  specific  anti-dumping  duty  rate  of 
EUR 88,9 per tonne was established for South Asian Petrochem Limited. 

Consequently,  it  is  proposed  to  amend  Council  regulation  imposing  anti-dumping 
measures  on  imports  of  PET  originating,  inter  alia,  in  India  by  including  the  specific 
duty  rate  established  for  South  Asian  Petrochem  Limited  and  by  accepting  the  price 
undertaking offered . 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which should be published in the Official Journal of the European Union no later than 
11 October 2005. 

310 

•  Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 461/2004 of 8 March 2004. 

329 

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

331 

332 

The form of action is described in the above-mentioned basic Regulation and leaves no 
scope for national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Community, 
national governments, regional and local authorities, economic operators and citizens is 
minimized and proportionate to the objective of the proposal is not applicable. 

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341 

342 

•  Choice of instruments 

Proposed instruments: regulation. 

Other means would not be adequate for the following reason(s). 

The above-mentioned basic Regulation does not foresee alternative options. 

4)  BUDGETARY IMPLICATION 

409 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 2604/2000 imposing definitive anti-dumping duties on 
imports of certain polyethylene terephthalate (PET) originating, inter alia, in India 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against dumped imports from countries not members of the European Community1 (‘the basic 
Regulation’), and in particular Article 11(4) thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission2  after  consulting  the  Advisory 
Committee, 

Whereas:  

A. MEASURES IN FORCE 

The Council, by Regulation (EC) No 2604/20003, imposed a definitive anti-dumping 
duty  on  imports  of  certain  polyethylene  terephthalate  (‘PET’)  with  a  coefficient  of 
viscosity of 78 ml/g or higher, according to DIN (Deutsche Industrienorm) 53728 (‘the 
product concerned’) normally declared within CN code 3907 60 20 originating, inter 
alia,  in  India.  The  measures  take  the  form  of  a  specific  duty  rate  of  EUR  181,7  per 
tonne  with  the  exception  of  imports  from  several  companies  expressly  mentioned 
which are subject to individual duty rates. 

The  Council,  by  Regulation  (EC)  No  2603/20004,  imposed  at  the  same  time  a 
definitive countervailing duty of EUR 41,3 per tonne on imports into the Community 
of  the  same  product  originating  in  India,  with  the  exception  of  imports  from  several 
companies expressly mentioned which are subject to individual duty rates. 

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). 
OJ C […] […], p. […] 
OJ L 301, 30.11.2000, p. 21. Regulation as last amended by Regulation (EC) No 823/2004 (OJ L 127 
29.4.2004, p. 7). 
OJ L 301, 30.11.2000, p. 1. Regulation as last amended by Regulation (EC) No 822/2004 (OJ L 127 
29.4.2004, p. 3).  

(1) 

(2) 

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B. CURRENT PROCEDURE 

1. 

Request for a review 

(3) 

Subsequent  to  the  imposition  of  definitive  measures,  the  Commission  received  an 
application  to  initiate  a  ‘new  exporter’  review  of  Regulation  (EC)  No  2604/2000, 
pursuant to Article 11(4) of the basic Regulation, from an Indian exporting producer, 
i.e. South Asian Petrochem Limited (‘the company’). The company claimed that it was 
not  related  to  any  of  the  exporting  producers  in  India  subject  to  the  anti-dumping 
measures in force with regard to the product concerned. Furthermore, it claimed that it 
had not exported the product concerned during the original period of investigation (1 
October 1998 to 30 September 1999), but had exported the product concerned to the 
Community after that period. 

2. 

Initiation of a ‘new exporter’ review 

(4) 

(5) 

(6) 

The Commission examined the evidence submitted by the company and considered it 
sufficient to justify the initiation of a review in accordance with Article 11(4) of the 
basic  Regulation.  After  the  consultation  of  the  Advisory  Committee  and  after  the 
Community  industry  concerned  had  been  given  the  opportunity  to  comment,  the 
Commission initiated, by Regulation (EC) No 33/20055, a review of Regulation (EC) 
No 2604/2000 with regard to the company and commenced its investigation. 

Pursuant  to  the  Commission  Regulation  initiating  the  review,  the  anti-dumping  duty 
imposed by Regulation (EC) No 2604/2000 was repealed with regard to imports of the 
product  concerned  produced  and  exported  to  the  Community  by  the  company. 
Simultaneously,  customs  authorities  were  directed,  pursuant  to  Article  14(5)  of  the 
basic Regulation, to take appropriate steps to register such imports. 

At the same time and on the same grounds, following a request from the company, the 
Commission  initiated  an  accelerated  review  of  Council  Regulation  (EC)  No 
2603/20006 pursuant to Article 20 of Council Regulation (EC) No 2026/977. 

3. 

Parties concerned 

(7) 

(8) 

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The  Commission  officially  informed  the  company  and  representatives  of  India  (‘the 
exporting country’) of the initiation of the ‘new exporter’ review. Furthermore, it gave 
other parties directly concerned the opportunity to make their views known in writing 
and to request a hearing. However, no such request was received by the Commission.  

The Commission sent a questionnaire to the company and received a reply within the 
deadline.  The  Commission  also  sought  and  verified  all  the  information  deemed 
necessary for the determination of dumping. A verification visit was carried out at the 
premises of the company. 

OJ L 8, 12.1.2005, p. 9. 
OJ C 8, 12.1.2005, p. 2. 
OJ L 288, 21.10.1997, p. 1. Regulation as last amended by Council Regulation (EC) No 461/2004 (OJ L 
77, 13.3.2004, p. 12). 

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4. 

Investigation period 

(9) 

The  investigation  of  dumping  covered  the  period  from  1  October  2003  to  30 
September 2004 (‘the investigation period’). 

C. RESULT OF THE INVESTIGATION 

1. 

New exporter qualification 

(10)  The investigation confirmed that the company had not exported the product concerned 
during  the  original  period  of  investigation  and  that  it  had  begun  exporting  to  the 
Community after this period. 

(11)  Furthermore, the company was able to satisfactorily demonstrate that it did not have 
any links, direct or indirect, with any of the Indian exporting producers subject to the 
anti-dumping measures in force with regard to the product concerned. 

(12)  Accordingly, it is confirmed that the company should be considered a ‘new exporter’ 
in  accordance  with  Article  11(4)  of  the  basic  Regulation,  and  thus  an  individual 
margin should be determined for it. 

2. 

Dumping  

Normal value 

(13) 

In  accordance  with  Article  2(2)  of  the  basic  Regulation,  the  Commission  first 
examined whether the company’s total domestic sales of PET were representative in 
comparison with its total export sales to the Community. Since these sales amounted 
to  more  than  5%  of  its  total  export  sales  volume  to  the  Community,  they  were 
considered representative. 

(14)  The Commission subsequently identified those types of PET sold domestically by the 
company that were identical or directly comparable to the types sold for export to the 
Community.  

(15)  The investigation revealed that only two product types exported to the Community are 
identical or directly comparable to the products sold on the domestic market. For each 
of  these  two  product  types  it  was  then  examined  whether  domestic  sales  were 
sufficiently  representative  with  respect  to  the  corresponding  export  sales.  Since  the 
domestic sales of each of these types were significantly above the 5% threshold, both 
product types were considered representative. 

(16)  An examination was also made as to whether the domestic sales of each product type 
could be regarded as having been made in the ordinary course of trade, by establishing 
the proportion of the sales volume of the like product sold at a net sales price equal to 
or above the cost of production (profitable sales) to independent customers of the type 
in question. Since the volume of profitable sales of the product concerned represented 
less than 80% but 10% or more of the total sales volume, normal value was based on 
the actual domestic price, calculated as a weighted average of profitable sales of each 
type only. 

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Export price 

(17)  Since all export sales of the product concerned to the Community were made directly 
to  independent  customers  in  the  Community,  the  export  price  was  established  in 
accordance  with  Article  2(8)  of  the  basic  Regulation,  namely  on  the  basis  of  export 
prices actually paid or payable.  

Comparison 

(18)  For the purpose of ensuring a fair comparison between normal value and export price, 
due  allowance  in  the  form  of  adjustments  was  made  for  differences  affecting  price 
comparability in accordance with Article 2(10) of the basic Regulation. 

(19)  All the allowances claimed by the company on export sales have been accepted. These 
allowances  are  related  to  commissions,  inland  freight,  ocean  freight,  insurance, 
handling charges, packaging expenses and bank charges. 

(20)  On  domestic  sales,  allowances  claimed  for  commissions,  inland  freight,  insurance, 
packaging  expenses  and  bank  charges  were  accepted.  However,  allowances  claimed 
by the company for indirect tax and import charges on the basis of Article 2(10)(b) of 
the basic Regulation and branch office expenses on the basis of Article 2(10)(k) of the 
basic Regulation were rejected for the reasons set out below.  

(21)  The claimed allowance for indirect taxes is based on the argument that the company’s 
domestic  customers  paid  a  non-recoverable  amount  of  excise  duty  when  purchasing 
the  product  concerned  on  the  domestic  market,  whereas  the  company’s  export 
customers  were  not  subject  to  such  duty.  This  non-recoverable  excise  duty  amount 
was claimed as an adjustment to normal value. However, the normal value which was 
compared  to  the  export  price  was  established  on  the  basis  of  the  net  domestic  sales 
price  excluding  all  taxes.  Therefore,  normal  value  did  not  include  any  excise  duty 
having an impact on price and price comparability within the meaning of Article 2(10) 
of  the  basic  Regulation.  Furthermore,  it  was  considered  that  the  tax  liability  of  the 
exporting  producer’s  domestic  customers  does  not  qualify  for  an  adjustment  under 
Article  2(10)(b)  of  the  basic  Regulation  since  such  duty  is  not  ‘borne  by  the  like 
product and by materials physically incorporated therein’. The excise duty paid by the 
company’s  domestic  customers  is  charged  upon  the  company’s  net  sales  price  and 
does not have any impact on the company’s production cost and price setting. As any 
difference in indirect duties  on the  domestic and the export market has already  been 
taken fully into consideration by comparing the company’s net domestic sales prices 
with its net export sales prices, the company’s claim for allowance was rejected. 

(22)  Upon  disclosure,  the  company  argued  that  it  would  be  irrelevant  whether  the 
comparison  between  normal  value  and  export  price  was  made  on  the  basis  of  net 
prices, i.e. excluding all indirect taxes. It further argued that the excise duty would be 
borne by the like product and that it affected price comparability, insofar that domestic 
clients would not be fully reimbursed and had ultimately to pay a portion of the excise 
duty.  Therefore,  its  clients  would  pay  a  higher  price  on  the  domestic  market  than 
customers  on  the  export  market.  However,  as  mentioned  above,  the  domestic  price 
used  as  a  normal  value  already  excluded  the  excise  duty  and  therefore,  price 
comparability could not have been affected. Furthermore, the company did not submit 
any information or evidence showing that the comparability of the normal value and 

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the  export  price  was  otherwise  affected.  These  arguments  had  consequently  to  be 
rejected. 

(23)  The  claimed  allowance  for  import  duty  exemption  was  based  on  the  argument  that 
whenever  the  company  sells  the  product  concerned  on  the  domestic  market,  import 
duties  on  raw  materials  would  become  payable  in  the  form  of  an  “increased”  excise 
duty. The term “increased” excise duty refers to a different tax scheme applicable for 
the  company  as  it  is  set  up  as  an  Export  Oriented  Unit  (‘EOU’),  compared  to  other 
Indian  (non-Export  Oriented  Unit)  companies.  Under  this  scheme,  EOU  companies 
were exempted from all import duties on raw materials, but subject to a higher excise 
duty  rate  in  case  goods  produced  by  these  companies  were  sold  on  the  domestic 
market. Since no such excise duty is payable on export sales, the company requested 
the normal value to be adjusted accordingly. The claim was rejected as the company 
purchased  raw  materials  duty  free,  regardless  of  whether  the  final  product  is  sold 
domestically or is being exported. Therefore, no import duties were borne by the like 
product  and  by  materials  physically  incorporated  therein  when  intended  for 
consumption on the domestic market, and not collected or refunded in respect of the 
product  exported  to  the  Community  as  required  by  Article  2(10)(b)  of  the  basic 
Regulation.  Thus,  price  comparability  between  the  domestic  and  export  market  was 
not affected. It is also noted that the company was unable to prove the payment of any 
additional  duty  or  indirect  tax  other  than  the  excise  duty  on  sales  of  the  finished 
product which has been described above in recital (21). It was finally not possible in 
any  event  to  clearly  identify  whether  and  how  much  of  the  imported  or  locally 
purchased raw material was used in the production of the final product. 

(24)  The company also claimed an allowance for the expenses of their local branch offices 
in  charge  of  sales  on  the  domestic  market.  The  claim  was  rejected  as  these  branch 
office expenses also included selling, general and administrative expenses for the sales 
of  products  other  than  the  product  concerned  and  could  furthermore  not  be  directly 
linked  to  the  sales  of  the  product  concerned  on  the  domestic  market.  The  company 
consequently did not show whether the expenses of the branch offices had an impact 
on  price  or  price  comparability.  Upon  disclosure  the  company  argued  that  it  is 
producing  only  one  product  which  is  the  product  concerned.  However,  this 
contradicted the findings. Moreover and in accordance with Article 2(1) of the basic 
Regulation, what is relevant for the purpose of determining normal value is the sales 
price from the branch offices to the first independent customer. As the branch offices 
are  part  of  the  same  legal  entity  and  company  structure,  the  company’s  arguments 
were rejected and the claim for this allowance not warranted. 

Dumping margin 

(25) 

In accordance with Article 2(11) of the basic Regulation, the weighted average normal 
value of each type of the product concerned exported to the Community was compared 
to  the  weighted  average  export  price  of  each  corresponding  type  of  the  product 
concerned.  

(26)  The  comparison  showed  the  existence  of  dumping.  The  weighted  average  dumping 
margin  established  for  the  company,  expressed  as  a  percentage  of  the  CIF 
Community-frontier price amounts to 25,5 %. 

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D. AMENDMENT OF THE MEASURES BEING REVIEWED 

(27) 

In  the  light  of  the  results  of  the  investigation,  it  is  considered  that  a  definitive  anti-
dumping  duty  should  be  imposed  at  the  level  of  the  dumping  margin  found,  but,  in 
accordance  with  Article  9(4)  of  the  basic  Regulation  should  not  be  higher  than  the 
county-wide injury margin established for India in the investigation which lead to the 
imposition of the existing measures. 

(28)  No  individual  injury  margin  can  be  established  in  a  new  exporter  review  since  the 
investigation,  pursuant  to  Article  11(4)  of  the  basic  Regulation,  is  limited  to  the 
examination  of  the  individual  dumping  margin.  Therefore,  the  dumping  margin  was 
compared to the country-wide injury margin as established for India by the definitive 
Regulation.  Since  the  latter  was  higher  than  the  dumping  margin,  the  level  of  the 
measures should be based on the dumping margin.  

(29) 

In accordance with Article 14(1) of the basic Regulation and Article 24(1) of Council 
Regulation  (EC)  No  2026/97,  no  product  shall  be  subject  to  both  anti-dumping  and 
countervailing  duties  for  the  purpose  of  dealing  with  one  and  the  same  situation 
arising from dumping or from export subsidisation.  

(30) 

In  the  parallel  accelerated  review  of  Council  Regulation  (EC)  No  2603/2000,  an 
individual  countervailing  duty  rate  of  EUR  106,5  per  tonne  corresponding  to  an  ad 
valorem countervailing duty rate of 13,9 % was established for the company. 

(31)  As  all  of  the  subsidies  in  the  parallel  accelerated  review  were  found  to  be  export 
subsidies,  the  anti-dumping  duty  needs  to  be  adjusted  to  reflect  the  actual  dumping 
margin remaining after the imposition of the countervailing duties offsetting the effect 
of these subsidies. 

(32)  Accordingly,  the  anti-dumping  duty  applicable  to  the  CIF  Community-frontier  price 

and taking into account the results of the parallel anti-subsidy proceeding, shall be: 

Injury 
Margin 

Dumping 
Margin 

Counter-
vailing 

duty rate 

Anti-
dumping 

duty rate 

Proposed 
anti-dumping 
duty 
(euro/tonne) 

44,3 % 

25,5 % 

13,9 % 

11,6% 

88,9 

Company 

South Asian 
Petrochem 
Limited 

E. RETROACTIVE LEVYING OF THE ANTI-DUMPING DUTY 

(33)  As the review has resulted in a determination of dumping in respect of the company, 
the  anti-dumping  duty  applicable  to  the  company  should  be  levied  retroactively  on 
imports  of  the  product  concerned  which  have  been  made  subject  to  registration 
pursuant to Article 3 of Commission Regulation (EC) No 33/2005. 

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F. UNDERTAKING  

(34)  The  company  offered  a  price  undertaking  concerning  its  exports  of  the  product 
concerned to the Community, in accordance with Article 8(1) of the basic Regulation. 

(35)  After  examination  of  the  offer,  the  Commission  considered  the  undertaking  as 
acceptable since it would eliminated the injurious effects of dumping. Moreover, the 
regular  and  detailed  reports  which  the  company  undertook  to  provide  to  the 
Commission  will  allow  effective  monitoring.  Furthermore,  the  nature  of  the  product 
and the sales structure of the company is such that the Commission considers that the 
risk of circumvention of the undertaking is limited.  

(36) 

In  order  to  ensure  the  effective  respect  and  monitoring  of  the  undertaking,  when  the 
request  for  release  for  free  circulation  pursuant  to  the  undertaking  is  presented, 
exemption  from  the  duty  is  conditional,  upon  presentation  to  the  customs  service  of 
the Members State concerned, of a valid ‘Commercial Invoice’ issued by the company 
and  containing  information  listed  in  the  Annex  to  Council  Regulation  (EC)  No 
2604/2000. Where no such invoice is presented, or when it does not correspond to the 
product  presented  to  customs,  the  appropriate  rate  of  anti-dumping  duty  should  be 
payable in order to ensure the effective application of the undertaking.  

(37) 

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

G. DISCLOSURE AND DURATION OF THE MEASURES 

(38)  The  company  was  informed  of  the  facts  and  considerations  on  the  basis  of  which  it 
was  intended  to  impose  a  definitive  anti-dumping  duty  on  its  imports  into  the 
Community and was given the opportunity to comment. 

(39)  This review does not affect the date on which Council Regulation (EC) No 2604/2000 

will expire pursuant to Article 11(2) of the basic Regulation. 

H. PROPOSED OPERATIVE PART 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

Article 1(3) of Council Regulation (EC) No 2604/2000 is hereby amended by adding 
the following to the section headed ‘India’: 

Country 

India 

Company 

Definitive duty 
(euro/tonne) 

TARIC additional 
code 

South Asian 
Petrochem Limited 

88,9 

A585 

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2. 

3. 

4. 

The duty hereby imposed shall also be levied retroactively on imports of the product 
concerned  which  have  been  registered  pursuant  to  Article  3  of  Commission 
Regulation (EC) No 33/2005. 

Notwithstanding  paragraph  1,  the  definitive  anti-dumping  duty  shall  not  apply  to 
imports released for free circulation in accordance with Article 2. 

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

Article  2(3)  of  Council  Regulation  (EC)  No  2604/2000  is  hereby  amended  by  adding  the 
following in the table: 

Article 2 

Company 

Country 

TARIC additional 
code 

South Asian 
Petrochem Limited 

India 

A585 

Article 3 

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

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

Done at Brussels,  

For the Council 
The President 

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