Proposal for a Council Regulation amending Council Regulation (EC) No 74/2004 imposing a definitive countervailing duty on imports of cotton-type bed linen originating in India
Date: 2005-12-06
Institutions: European Commission
Subjects: India, anti-subsidy proceeding, import, originating product, textile product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 6.12.2005 
COM(2005) 616 final 

Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 74/2004 imposing a definitive countervailing duty 
on imports of cotton-type bed linen originating in India 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

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•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  2026/97  of  6 
October 1997 on protection against subsidised imports from countries not members of 
the  European  Community  ("the  basic  Regulation")1  in  the  proceeding  concerning 
imports of cotton-type bed linen originating in India.  

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•  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. 

•  Existing provisions in the area of the proposal 

Council  Regulation  (EC)  No  74/20042,  imposing  a  definitive  countervailing  duty  on 
imports into the Community of cotton-type bed linen originating in India. 

Proposal for granting newcomer status to new exporters to the Community. 

•  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. 

OJ L 288, 21.10.1997, p. 1, Regulation as last amended by Council Regulation (EC) No 461/2004 (OJ 
L 77, 13.3.2004, p. 12). 
OJ L 12, 17.1.2004, p. 1, Regulation as last amended by Council Regulation (EC) No 2143/2004 (OJ L 
370, 17.12.2004, p. 1). 

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3)  LEGAL ELEMENTS OF THE PROPOSAL 

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•  Summary of the proposed action 

By Regulation (EC) No 74/2004 the Council imposed a definitive countervailing duty 
on imports into the Community of cotton-type bed linen originating in India.  

During the original investigation, given the large number of exporters/producers of the 
product  concerned  in  India,  a  sample  of  exporting  producers  was  chosen.  Individual 
duty rates ranging from 4.4% to 10.4% were imposed on the companies selected in the 
sample, while other co-operating companies not included in the sample were attributed 
a duty rate of 7.6%. A duty rate of 10.4% was imposed on companies which either did 
not make themselves known or did not co-operate in the investigation.  

Article  2  of  Council  Regulation  (EC)  No  74/2004  gave  the  possibility  to  Indian 
exporters/producers which met the criteria set out in the same Article not to be treated 
differently  from  the  co-operating  companies  not  included  in  the  sample  (‘newcomer 
status’). 

By Article 1 of Council Regulation (EC) No 2143/2004, amending Regulation (EC) No 
74/2004, fifteen companies were added to the list of Indian exporters/producers listed 
in the Annex of Regulation (EC) No 74/2004. 

Thirteen  Indian  exporters/producers  have  requested  newcomer  status  having  their 
names added to the list of companies subject to the weighted average duty of 7.6%. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation, 
which should be published in the Official Journal as soon as possible. 

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•  Legal basis 

Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection  against 
subsidised  imports  from  countries  not  members  of  the  European  Community  as  last 
amended  by  Council  Regulation  (EC)  No  461/2004  of  8  March  2004  and  Council 
Regulation (EC) No 74/2004. 

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•  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). 

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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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•  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 

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The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 74/2004 imposing a definitive countervailing duty 
on imports of cotton-type bed linen originating in India 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community,  

Having  regard  to  Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection 
against  subsidised  imports  from  countries  not  members  of  the  European  Community  (the 
‘basic Regulation’)3,  

Having  regard  to  Article  2  of  Council  Regulation  (EC)  No  74/20044  of  13  January  2004 
imposing  a  definitive  countervailing  duty  on  imports  of  cotton-type  bedlinen  originating  in 
India, 

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

Whereas: 

A. PREVIOUS PROCEDURE 

By Regulation (EC) No 74/2004 the Council imposed a definitive countervailing duty 
on  imports  into  the  Community  of  cotton-type  bed  linen  falling  within  CN  codes  ex 
6302  21  00  (TARIC  codes  6302  21  00  81,  6302  21  00  89),  ex  6302  22  90  (TARIC 
code 6302 22 90 19), ex 6302 31 00 (TARIC code 6302 31 00 90) and ex 6302 32 90 
(TARIC  code  6302  32  90  19),  originating  in  India.  Given  the  large  number  of  co-
operating parties, a sample of Indian exporting producers was selected and individual 
duty rates ranging from 4,4 % to 10,4 % were imposed on the companies included in 
the  sample,  while  other  co-operating  companies  not  included  in  the  sample  were 
attributed  a  duty  rate  of  7,6  %.  A  duty  rate  of  10,4  %  was  imposed  on  companies 
which  either  did  not  make  themselves  known  or  did  not  cooperate  with  the 
investigation. 

Article  2  of  Council  Regulation  (EC)  No  74/2004  stipulates  that  where  any  new 
exporting producer in India provides sufficient evidence to the Commission that it did 
not  export  to  the  Community  the  products  described  in  Article  1(1)  during  the 
investigation period (1 October 2001 to 30 September 2002)(the ‘first criterion’); and 

OJ L 288, 21.10.1997, p. 1, Regulation as last amended by Council Regulation (EC) No 461/2004 (OJ 
L 77, 13.3.2004, p. 12). 
OJ L 12, 17.1.2004, p. 1, Regulation as last amended by Council Regulation (EC) No 2143/2004 (OJ L 
370, 17.12.2004, p. 1). 

(1) 

(2) 

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it is not related to any of the exporters or producers in India which are subject to the 
anti-subsidy measures imposed by that Regulation (the ‘second criterion’); and it has 
actually  exported  to  the  Community  the  products  concerned  after  the  investigation 
period  on  which  the  measures  are  based,  or  it  has  entered  into  an  irrevocable 
contractual  obligation  to  export  a  significant  quantity  to  the  Community  (the  ‘third 
criterion’); then Article 1(3) of that Regulation can be amended by granting the new 
exporting producer the duty rate applicable to the co-operating companies not included 
in the sample, i.e. 7.6%. 

By Council Regulation (EC) No 2143/2004, amending Regulation (EC) No 74/2004, 
fifteen  companies  were  added  to  the  list  of  Indian  exporters/producers  listed  in  the 
Annex of Regulation (EC) No 74/2004. 

B. NEW EXPORTERS/PRODUCERS’ REQUESTS 

Thirteen  Indian  companies  have  applied  to  be  granted  the  same  status  as  the 
companies  co-operating  in  the  original  investigation  not  included  in  the  sample 
(‘newcomer status’). 

Four  of  the  Indian  companies  requesting  newcomer  status  did  not  reply  to  a 
questionnaire  and  one  did  not  supply  additional  information  requested  after  it  had 
submitted  an  incomplete  reply  to  the  questionnaire.  It  was  therefore  not  possible  to 
verify  whether  these  companies  fulfilled  the  criteria  set  out  in  Article  2  of  Council 
Regulation (EC) No 74/2004, and their requests had to be rejected. 

The  remaining  eight  companies  replied  to  the  questionnaire  intended  to  verify  that 
they  complied  with  the  provisions  of  Article  2  of  Council  Regulation  (EC) 
No 74/2004. 

The evidence provided by five of the above-mentioned Indian exporters/producers is 
considered  sufficient  to  grant  them  the  duty  rate  applicable  to  the  co-operating 
companies not included in the sample (i.e. 7.6%) and consequently to add them to the 
list of exporters/producers in the Annex (the ‘Annex’) to Council Regulation (EC) No 
74/2004, as amended by Council Regulation (EC) No 2143/2004.  

As far as the remaining three Indian exporters/producers are concerned, two exported 
the product concerned to the Community during the original investigation period (i.e. 
from  1 October  2001  to  30  September  2002)  and  one  was  unable  to  provide  any 
evidence that it did not export to the Community during the investigation period.  

Under these circumstances, it was considered that for the three companies referred to 
above,  at  least  one  of  the  criteria  set  out  in  Article  2  of  Council  Regulation  (EC) 
No 74/2004, i.e. the first criterion, was not fulfilled. Therefore, their claims had to be 
rejected. 

(3) 

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(5) 

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(7) 

(8) 

(9) 

(10)  Companies for which newcomer status was not granted were informed of the reasons 
of this decision and given an opportunity to make their views known in writing. 

(11)  All  arguments  and  submissions  made  by  interested  parties  were  analysed  and  duly 

taken into account where warranted. 

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HAS ADOPTED THIS REGULATION: 

Article 1 

The following companies shall be added to the list of exporters/producers from India listed in 
the  Annex  of  Council  Regulation  (EC)  No  74/2004,  as  amended  by  Regulation  (EC) 
No 2143/2004: 

Company 

Alok Industries Limited 

Texel Industries 

City 

Mumbai 

Chennai 

Textrade International Private Limited 

Mumbai 

Welspun India Limited 

Mumbai 

Yellows Spun and Linens Private Limited  Mumbai 

Article 2 

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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