Council Regulation (EC) No 954/2006 of  27 June 2006  imposing definitive anti-dumping duty on imports of certain seamless pipes and tubes, of iron or steel originating in Croatia, Romania, Russia and Ukraine, repealing Council Regulations (EC) No 2320/97 and (EC) No 348/2000, terminating the interim and expiry reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating,  inter alia , in Russia and Romania and terminating the interim reviews of the anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating,  inter alia , in Russia and Romania and in Croatia and Ukraine
Date: 2006-06-27
Institutions: Council of the European Union
Subjects: Croatia, Romania, Russia, Ukraine, anti-dumping duty, import, originating product, piping, tube

L 175/4

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Official Journal of the European Union

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COUNCIL REGULATION (EC) No 954/2006

of 27 June 2006

imposing definitive anti-dumping duty on imports of certain seamless pipes and tubes, of iron or
steel originating in Croatia, Romania, Russia and Ukraine, repealing Council Regulations (EC) No
2320/97 and (EC) No 348/2000, terminating the interim and expiry reviews of the anti-dumping
duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter
alia, in Russia and Romania and terminating the interim reviews of the anti-dumping duties on
imports of certain seamless pipes and tubes of iron or non-alloy steel originating, inter alia, in
Russia and Romania and in Croatia and Ukraine

THE COUNCIL OF THE EUROPEAN UNION,

(2)

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 384/96 of 22
December 1995 on protection against dumped imports from
(‘the
countries not members of the European Community (1)
basic Regulation’), and in particular Articles 8, 9, 11(2) and
(3) thereof,

(3)

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

Whereas:

1. PROCEDURE

1.1. Initiation

(1)

the European Union (2),

On 31 March 2005, the Commission announced by a
initiation’), published in the Official
notice (‘notice of
the initiation of an
Journal of
anti-dumping proceeding concerning imports into the
Community of certain seamless pipes and tubes (‘SPT’),
of iron or steel (‘extended product scope’) originating in
Croatia, Romania, Russia and Ukraine and the initiation
of two interim reviews of the anti-dumping duties on
(‘original
imports of SPT of
product scope’) originating,
in Russia and
Romania and in Croatia and Ukraine.

iron or non-alloy steel
inter alia,

The anti-dumping proceeding was initiated following a
complaint lodged on 14 February 2005 by the Defence
Committee of the Seamless Steel Tube Industry of the
European Union (‘the
complainant’) on behalf of
producers representing a major proportion, in this case
more than 50 %, of the total Community production of
the extended product scope. The complaint contained
the said product and of
evidence of dumping of
from, which was
material
there
resulting
injury
considered sufficient
a
initiation of
to justify the
proceeding.

for

the

and

Council

definitive

necessary

Regulation

The interim reviews were initiated by the Commission on
its own initiative, pursuant to Article 11(3) of the basic
in order to allow for any amendment or
Regulation,
anti-dumping
repeal
imposed by Council Regulation (EC) No
measures
2320/97 (3)
No
348/2000 (4) on imports of the original product scope
from,
inter alia, Croatia, Romania, Russia and Ukraine
(‘the definitive measures’). The necessary amendment or
repeal may arise, should it be determined that measures
are to be imposed on the extended product scope, due to
the fact that the products upon which measures have
been imposed by Regulation (EC) No 2320/97 and Regu-
fall within the extended
lation (EC) No 348/2000,
product scope.

(EC)

1.2. Measures in force on the original product scope

(4)

Regulation (EC) No 2320/97 imposed anti-dumping
duties on imports of the original product scope origi-
nating, inter alia, in Romania and Russia. By Commission
Decisions 97/790/EC (5)
and 2000/70/EC (6), under-
inter alia,
takings were accepted from exporters
Romania and Russia. By Council Regulation (EC) No
1322/2004 (7),
it was decided to no longer apply

in,

(3) OJ L 322, 25.11.1997, p. 1. Regulation as last amended by Regu-

lation (EC) No 1322/2004 (OJ L 246, 20.7.2004, p. 10).

(4) OJ L 45, 17.2.2000, p. 1. Regulation as last amended by Regulation

(EC) No 258/2005 (OJ L 46, 17.2.2005, p. 7).

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

(EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17).

(2) OJ C 77, 31.3.2005, p. 2.

(5) OJ L 322, 25.11.1997, p. 63.
(6) OJ L 23, 28.1.2000, p. 78.
(7) OJ L 246, 20.7.2004, p. 10.

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Official Journal of the European Union

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the measures in force on imports of the original product
scope from Romania and Russia as a matter of prudence
in connection with an anti-competitive behaviour of
certain Community producers in the past
(see recital
(9) et seq. of that Regulation). Recital (20) of the same
Regulation confirmed the interim and expiry reviews,
initiated by
initiation in November
2002 (8), to be still ongoing until new findings would
be available to permit an assessment for the future on
the basis of new data that could in any event not be
affected by the anti-competitive conduct.

a Notice of

(5)

(6)

(7)

(8)

a

out

carried

review investigation

Following
in
accordance with Article 11(3) of the basic Regulation,
the Council, by Regulation (EC) No 258/2005 (9),
amended the definitive measures imposed by Regulation
(EC) No 348/2000, repealed the possibility of exemption
from the duties provided for in Article 2 of the same
Regulation and imposed an anti-dumping duty of 38,8 %
on imports of the original product scope from Croatia
and an anti-dumping duty of 64,1 % on imports of the
original product scope from Ukraine with the exception
of imports from Dnepropetrovsk Tube Works (‘DTW’)
which are subject to an anti-dumping duty of 51,9 %.

By Decision 2005/133/EC (10), the Commission partially
suspended the definitive measures for a period of nine
months, with effect from 18 February 2005. The partial
suspension was extended for a further period of one
year by Council Regulation (EC) No 1866/2005 (11).
Therefore, the duties in force are those established by
i.e. 23 % for Croatia
Regulation (EC) No 348/2000,
and 38,5 % for Ukraine.

1.3. Provisional measures

Given the need to further examine certain aspects of the
investigation and also because of the interrelation with
the interim and expiry reviews, referred to in section 1.2
above,
it was decided to continue the investigation
without the imposition of provisional measures.

1.4. Parties concerned by the proceeding

advised

officially

exporting
The Commission
producers in Croatia, Romania, Russia and Ukraine, the
associations
importers/traders,
known to be concerned,
the
exporting countries concerned and the complainant
Community producers and other Community producers

suppliers
and
the representatives of

users,

the

(8) OJ C 288, 23.11.2002, p. 2.
(9) OJ L 46, 17.2.2005, p. 7.
(10) OJ L 46, 17.2.2005, p. 46.
(11) OJ L 300, 17.11.2005, p. 1.

concerned of

the
known to be
proceeding. Interested parties were given the opportunity
to make their views known in writing and to request a
hearing within the time limit-set
in the notice of
initiation.

initiation of

the

(9)

(10)

In view of the large number of Russian and Ukrainian
exporting producers listed in the complaint, the large
number of Community importers of
the product
large number of Community
concerned and the
producers
the notice of
initiation envisaged the use of sampling for the determi-
nation of dumping and injury, in accordance with Article
17 of the basic Regulation.

supporting the

complaint,

if so,

In order to enable the Commission to decide whether
sampling would be necessary and,
to select a
sample, all Russian and Ukrainian exporting producers,
Community importers and Community producers were
asked to make themselves known to the Commission
and to provide, as specified in the notice of initiation,
related to the
basic information on their activities
investigation period
concerned during the
product
(1 January 2004 to 31 December 2004).

1.4.1. Sampling of exporters/producers

(11) After examination of the information submitted by the
Russian and Ukrainian exporting producers and due to
the fact that in both countries the majority of companies
belong to large producer groups,
it was decided that
sampling was not necessary with regard to Russia and
Ukraine.

1.4.2. Sampling of Community industry and importers

(12) With regard to Community producers,

be

the

reasonably

investigated within

in accordance
with Article 17 of the basic Regulation, a sample was
selected based on the largest representative volume of
production and sales of Community producers, which
can
time
the information received
available. On the basis of
from Community producers,
the Commission selected
five companies located in four different Member States.
One of the originally sampled Community producers did
subsequently not cooperate and was replaced by another
Community producer. In terms of production volume the
five sampled companies represented 49 % of the total
In accordance with Article
Community production.
the parties concerned
17(2) of
the basic Regulation,
In addition,
were consulted and raised no objection.
the remaining Community producers were requested to
provide certain general data for the injury analysis. In
the small number of responses received by
view of
importers,
importers
was not necessary.

it was decided that sampling of

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(13)

(14)

1.5. Market economy treatment/Individual treatment
claim forms

treatment

In order to allow exporting producers in Ukraine to
submit a claim for market economy treatment (‘MET’)
(‘IT’),
the
if
or individual
Commission sent
to the Ukrainian
claim forms
exporting producers known to be concerned. Claims
for MET, or for IT in case the investigation establishes
that they do not meet the conditions for MET, were
received from three groups of exporting producers and
their related companies.

they so wished,

1.6. Questionnaires

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
initiation. Replies were received from three
notice of
Romanian exporting producers together with their two
related companies,
two groups of Russian exporting
producers together with five related companies, three of
them located in the Community, and three groups of
Ukrainian
related
producers
companies. Questionnaire replies were also received
from five
six
importers replied to the sampling form, only three coop-
erated by submitting a full questionnaire reply. Another
importer agreed to have a verification visit carried out at
its premises, despite the fact that it did not submit a
questionnaire reply.

producers. Although

Community

exporting

their

and

(15)

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

— Dalmine S.p.A., Bergamo, Italy

— Rohrwerk Maxhütte GmbH, Sulzbach-Rosenberg,

Germany

— Tubos Reunidos S.A., Amurrio, Spain

— Vallourec & Mannesmann France S.A.,

Boulogne Billancourt, France

— V & M Deutschland GmbH, Düsseldorf, Germany

Exporting producers in Russia

— Volzhsky Pipe Works Open Joint Stock Company

(‘Volzhsky’), Volzhsky

— Joint Stock Company Taganrog Metallurgical Works

(‘Tagmet’), Taganrog

— Joint

Stock Company

Pervouralsky Novotrubny

Works (‘Pervouralsky’), Pervouralsk

— Joint Stock Company Chelyabinsk Tube Rolling Plant

(‘Chelyabinsk’), Chelyabinsk

Related company in Russia

— CJSC Trade House TMK, Moscow

Exporting producers in Ukraine

— CJSC Nikopolsky Seamless Tubes Plant Niko Tube,

Nikopol

— CJSC Nikopol Steel Pipe Plant Yutist (Yutist), Nikopol

— OJSC Dnepropetrovsk Tube Works (DTW), Dnepro-

petrovsk

— OJSC Nizhnedneprovsky Tube Rolling Plant (NTRP),

Dnepropetrovsk

Related trader in Ukraine

— SPIG Interpipe, Dnepropetrovsk, related to NTRP and

Niko Tube

Related trader in Switzerland

— SEPCO S.A., Lugano, related to NTRP and Niko Tube

Related importer

— Sinara Handel GmbH, Köln, related to Artrom

Unrelated importers

— Thyssen Krupp Energostal S.A., Torun, Poland

— Assotubi S.P.A., Cesena, Italy

— Bandini Sider S.R.L., Imola, Italy

Exporting producers in Romania

1.7. Investigation period

— S.C. T.M.K. — Artrom S.A., Slatina

(16)

— S.C. Silcotub S.A., Zalau

— S.C. Mittal Steel Roman S.A., Roman

The investigation of dumping and injury covered the
period from 1 January 2004 to 31 December 2004
(the ‘investigation period’ or ‘IP’). The examination of
trends relevant for the assessment of injury covered the
period from 1 January 2001 to the end of the IP (‘the
period considered’).

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(17)

(18)

(19)

(20)

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

and chemical
currently

The product concerned is certain seamless pipes and
tubes (‘SPT’), of iron or steel, of circular cross-section,
of an external diameter not exceeding 406,4 mm with
a Carbon Equivalent Value (CEV) not exceeding 0,86
Institute of Welding
according to the International
analysis. The product
formula
(IIW)
classified under CN codes
concerned is
ex 7304 21 00,
ex 7304 10 10,
ex 7304 39 58,
ex 7304 29 11,
ex 7304 51 89,
ex 7304 39 92,
ex 7304 59 92 and ex 7304 59 93 (12)
(TARIC codes
7304 10 30 20,
7304 21 00 20,
7304 10 10 20,
7304 39 58 30,
7304 31 80 30,
7304 29 11 20,
7304 39 92 30,
7304 51 89 30,
7304 39 93 20,
7304 59 92 30 and 7304 59 93 20).

ex 7304 10 30,
ex 7304 31 80,
ex 7304 39 93,

The product concerned is used in a wide variety of appli-
cations,
in the
like line pipes
construction business for piling,
for mechanical uses,
gas tubes, boiler tubes and oil and country tubular
goods (‘OCTG’) for drilling, casing and tubing for the
oil industry.

to transport

liquids,

as

(i.e. without

SPT take very different forms at the time of their delivery
threaded,
to the users. They can be e.g. galvanized,
delivered
any heat
green tubes
treatment), with special ends, different cross-sections,
cut to size or not. There are no generalized standard
sizes for the tubes, which explains why most of the
SPT are made upon customers' order. SPT are normally
connected by welding. However, in particular cases they
can be connected by their thread or be used alone,
although they
investigation
showed that all SPT share the same basic physical,
chemical and technical characteristics and the same
basic uses.

remain weldable. The

The definition of the product scope of this proceeding
was contested by some interested parties. Firstly, some
parties alleged that some product types included in the
product description have different basic mechanical and
to (26)).
(see
chemical
Secondly, several claims challenged the use of the weld-
ability criterion and the CEV threshold which are linked

characteristics

recitals

(21)

(27)

(see recitals
requested that
exempted from the product scope (see recital (37)).

to (36)). Furthermore, one party
should be

so-called ‘certified SPT’

Other basic physical, chemical and technical characteristics and
end-uses

(21)

It was alleged that some product types included in the
product description, namely the OCTG and gas tubes,
would have different basic mechanical and chemical char-
acteristics and end-uses as compared to the other SPTs
and would not be interchangeable.

(22)

types

The product as defined consists in different product
types. However, product
falling in different
segments (including bottom end and top end) will be
considered as forming a single product if there are no
clear dividing lines between the various segments, i.e. if
there is some overlapping and competition between
adjoining segments. This is the case in the present
proceeding, as evidence was submitted that the alloyed
and non-alloy tubes subject to investigation could be
used for the same end-uses, and that there are no clear
dividing lines inside both the non-alloyed and the alloyed
tubes categories.

(23) As regards the OCTG and gas tubes, the investigation
showed that they have,
inter alia, comparable chemical
characteristics to the remaining SPT types since they
fall within the 0,86 CEV threshold. Furthermore, they
share other basic characteristics with the remaining
such as outside diameter and wall
product
thickness.

types,

(24) As far as the end-uses of the OCTG and gas tubes are
concerned,
argued that
certain exporting producers
OCTG and gas tubes would be used in different appli-
cations and not be interchangeable with the remaining
SPT types. In this respect, it was found that plain end
OCTGs currently classified under CN code 7304 21 00
and used in the construction sector are interchangeable
with other non-alloy steel tubes currently classified under
CN code 7304 39 58. There is therefore at least a partial
overlap as regards the end-use of the different SPT types.

(12) As defined in Commission Regulation (EC) No 1719/2005 of
27 October 2005 amending Annex I to Council Regulation (EEC)
No 2658/87 on the tariff and statistical nomenclature and on the
Common Customs Tariff (OJ L 286, 28.10.2005, p. 1). The product
coverage is determined in combining the product description in
Article 1(1) and the product description of the corresponding CN
codes taken together.

(25) On the basis of the above, the claim that, on the one
hand, OCTG and gas tubes and, on the other hand, other
SPT types are not interchangeable is rejected.

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CEV is a chemical characteristic of the product

(26) Another exporting producer claimed that the CEV was
not a chemical characteristic of the product, since it is
not directly linked to the chemical composition of an
SPT, but is a function of it. Whereas it is true that the
CEV is the result of a formula, the formula is directly
linked to the chemical composition of the product, and
allows a comparison of different grades of steel regarding
linked either to any
the weldability. The CEV is not
technical or mechanical
steel, and
solely depends on its chemical composition. On this
basis, it is considered that the CEV is a chemical char-
acteristic of the product, and this claim was rejected.

characteristic of

(30) Given the above, the weldability of SPT is considered a
suitable criterion to determine the product scope. The
argument that the proposed definition of the product is
artificially
therefore
rejected.

grouping different products

is

CEV threshold being unsuitable to determine the weldability of
SPT

(31)

It was claimed that the use of the CEV threshold was not
a criterion allowing to define the product scope as it
would not be a suitable criterion to determine the weld-
ability of different types of SPT.

Weldability being an unsuitable criterion to determine the
product scope

Some parties argued that the criterion of weldability as
such is an irrelevant property for the product concerned
since a significant part of the products included in the
product scope (threaded tubes and OCTG tubes) are
claimed not to be ever welded. It was therefore claimed
that by using weldability as a criterion, different products
were artificially being considered as one single product.

(32)

(27)

(28)

It should firstly be noted that weldability is indeed a
chemical and technical characteristic (since it depends
on the chemical composition of a steel and determines
the weldability of it) common to all SPT. As most of SPT
are connected by welding, it is an essential feature for the
definition of
the product. Secondly, with regard to
threaded tubes and OCTG which might usually not be
welded, the investigation showed that they remain never-
theless weldable and thus also share this basic chemical
and technical characteristic. Moreover,
it cannot be
excluded that
threaded or threadable SPT as well as
OCTG would be transformed into weldable SPT by a
simple removal action. In particular as regards OCTG,
there is evidence that the same tube may be classified
two different categories (and even CN codes)
under
i.e. usage in the
purely depending on its end use,
construction or in the oil drilling industry. Finally,
it
from the countries
was
concerned which had been classified as OCTG had not
been used in the oil/gas sector.

found that certain imports

(29) An exporter

submitted that according to European
Norms, only one steel grade is suitable for threadable
tubes, and that
these products could thus be distin-
guished from other SPTs. However, the analysis of the
different norms existing for OCTG in particular has
shown that there is not a unique steel grade which can
be used for producing threadable tubes.

The investigation showed that
the CEV is indeed an
indicator which is directly linked at the same time to
the chemical composition of the steel and to its weld-
ability. A high CEV not only means that
the steel
contains more carbon and/or alloys but also means
that the steel is less easy to weld. On the other hand,
a lower CEV value means that the steel
is less rich in
carbon and/or alloys and also easier to weld. In other
words, different levels of CEV require different conditions
for welding. A steel with a level of CEV of 0,86 will
already require special welding conditions and therefore
not normally be welded. Thus, as the CEV is an indicator
of the weldability, the CEV threshold was considered a
relevant criterion for the determination of the product
scope.

(33) An exporting producer claimed that the CEV was only
one of many chemical, technical and mechanical charac-
teristics of the steel, and therefore could not be used
alone to define the product scope. It is noted in this
regard that the CEV is considered a suitable criterion to
determine the product scope. Moreover, as the product
definition shows, CEV is not the only criterion used. Last
but not least, the comparability of product types was
done on a more detailed basis,
taking into account
various characteristics of the product (e.g. dimensions
and heat treatment).

CEV of 0,86 was set in an arbitrary manner

(34) Moreover,

some

alleged that

the
interested parties
threshold CEV of 0,86 was set in an arbitrary manner
as the limit for easy weldabilty would be lower than
0,86. However, the CEV value of 0,86 is not linked to
the concept of easy weldability. Indeed, the complainant
Community industry argued and provided evidence that
it represents the maximum CEV value for a non-alloyed
steel that can be used for SPT according to the European
norms.

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(35)

Therefore, it is concluded that both the use of the CEV
and the defined threshold of 0,86 capture a range of
products which can be considered as a single product,
albeit excluding from the definition, for instance, stainless
steel or ball bearing tubes, which have CEV values higher
than 0,86.

granted. The presentation of the findings on dumping for
each of the countries concerned therefore only describes
what is specific for each exporting country.

3.1.1. Normal value

(36) On the basis of

the CEV threshold as
proposed by the applicant was maintained in the defi-
nition of the product concerned.

the above,

‘Certified SPT’

(37) One of the importers in the Community claimed that so
called ‘certified’ SPT should not fall within the product
scope. These SPT are produced according to a certified
procedure approved by the Italian Ministry for Public
Works and used in consolidation works in construction
projects in Italy. However, it was established that all types
of the product concerned, including certified SPT, had the
same basic physical, chemical and technical character-
found which
istics and end-uses. No evidence was
would have allowed to conclude that
these certified
and should
a different product
tubes would be
therefore be excluded from the scope of the measures
(nor did the company provide any such evidence). This
claim had therefore to be rejected.

(38) On the basis of the above, it was concluded that all SPT,
types,
notwithstanding the different possible product
constitute one product for the purpose of this proceeding
because they have the same basic physical, chemical and
technical characteristics and the same basic uses.

2.2. Like product

(39)

The product exported to the Community from Croatia,
Romania, Russia and Ukraine, the product produced and
sold on the domestic market of these countries as well as
the product produced and sold in the Community by the
Community producers were found to have the same
basic physical and technical and chemical characteristics
as well as the same uses and are therefore considered as
like products within the meaning of Article 1(4) of the
basic Regulation.

3. DUMPING

3.1. General methodology

(40)

The general methodology set out hereinafter has been
applied to all
in
Croatia, Romania, Russia, as well as for the cooperating
for which MET was
Ukrainian exporting producers

cooperating exporting producers

(41)

(42)

(43)

(44)

i.e. whether

In accordance with Article 2(2) of the basic Regulation, it
first examined for each cooperating exporting
was
the product
producer whether
its domestic sales of
concerned were representative,
the total
volume of such sales represented at least 5 % of the
total export
to the
Community. The Commission subsequently identified
those types of
the product concerned sold on the
domestic market by the companies having overall repre-
sentative domestic sales that were identical to or directly
comparable with the types
to the
Community.

sales volume of

sold for export

the producer

For each type sold by the exporting producers on their
domestic market 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 the product concerned 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 the product concerned exported to the Community.

Subsequently, it was examined whether each type of the
product concerned sold domestically in representative
quantities could be considered as being sold in the
ordinary course of trade pursuant to Article 2(4) of the
basic Regulation, by establishing the proportion of prof-
itable sales to independent customers on the domestic
market of the product type in question.

In cases where the sales volume of the relevant product
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
product 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

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29.6.2006

value was based on the actual domestic price, calculated
as a weighted average of profitable sales of that type
only, provided that
these sales represented 10 % or
more of the total sales volume of that type. In cases
where the volume of profitable sales of any product
type represented less
sales
volume, it was considered that this particular type was
sold in insufficient quantities for the domestic price to
provide an appropriate basis for the establishment of the
normal value.

than 10 % of

the total

applied.

In this

the basic Regulation, normal

(45) 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
the Commission used
be
regard,
In accordance with Article
constructed normal value.
2(3) of
value was
constructed by adding to the exporter's manufacturing
costs of the exported types, adjusted where necessary, a
reasonable percentage for selling, general and adminis-
trative expenses (‘SG&A’) and a reasonable margin of
profit. Pursuant to Article 2(6) of the basic Regulation,
the percentage for SG&A and profit margin were based
on the average SG&A and profit margin of sales in the
ordinary course of trade of the like product.

3.1.2. Export price

(46)

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

(47) Where the export sale was made via related importers,
the export price was constructed, pursuant to Article 2(9)
of the basic Regulation, on the basis of the price at which
the imported products were first resold to an inde-
pendent buyer, duly adjusted for all costs
incurred
between importation and resale, as well as a reasonable
margin for SG&A and profits. In this regard, the related
importers' own SG&A costs were used. The profit margin
was established on the basis of the information available
from cooperating unrelated importers.

the basic
ability in accordance with Article 2(10) of
Regulation. Appropriate adjustments were granted in all
cases where they were found to be reasonable, accurate
and supported by verified evidence.

3.1.4. Dumping margin for the companies investigated

(49) According to Article 2(11) and (12) of the basic Regu-
lation, for each exporting producer the weighted average
normal value was compared with the weighted average
export price per product type.

(50)

those exporting producers

For
found to be related
companies, a weighted average dumping margin was
calculated in accordance with the standard practice of
the Commission for related exporting producers.

3.1.5. Residual dumping margin

(51)

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

the basic Regulation, on the basis of

(52)

(53)

3.2. Croatia

3.2.1. Non-cooperation of the Croatian exporter

The sole producer in Croatia, Mechel Željezara Ltd., went
into liquidation in autumn 2004. In its place, a new legal
(‘VCS’) was
entity named Valjaonica Cijevi Sisak d.o.o.
founded by the Croatian Privatisation Foundation, a
governmental
institution in charge of the privatisation
process in Croatia.

VCS informed the Commission that it was not able to
cooperate in the current
investigation, since its legal
predecessor had formally ceased to exist and production
of SPT had stopped in July 2004. According to the
company,
it did not have the authorisation to disclose
any commercial, accounting or production data held by
its previous owners. Therefore, since it was not possible
to establish the dumping margin based on the company's
own data, it was calculated on the basis of facts available,
in accordance with Article 18 of the basic Regulation.

3.1.3. Comparison

(48)

The normal value and export prices were compared on
an ex-works basis. For the purpose of ensuring a fair
comparison between the normal value and the export
price, due allowance in the form of adjustments was
made for differences affecting prices and price compar-

(54)

From the information submitted it appears that VCS
resumed the production of SPT in June 2005. The
company may lodge a request for an interim review in
accordance with Article 11(3) of the basic Regulation.

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3.2.2. Normal value

(55)

In the absence of any other information, the normal
value was calculated on the basis of facts available, i.e.
information in the complaint.

sales were insufficient to be considered representative or
they were not made in the ordinary course of trade, and
therefore normal value was constructed as described in
recital (45).

3.2.3. Export price

(56)

The export price was calculated on the basis of Eurostat
data for the IP.

3.3.2. Export price

(62) Most of the export sales of one exporting producer to the
Community during the IP were to two related importers.
The export price was therefore constructed as described
in recital (46).

3.2.4. Comparison

(57)

to Article 2(10) of

the basic Regulation,
Pursuant
adjustments were made to the export price in respect
of
transport and insurance costs and commissions,
based on information in the complaint.

3.2.5. Dumping margin

(58)

The dumping margin, expressed as a percentage of the
CIF import price at the Community border, duty unpaid,
is as follows:

Company

Dumping margin

Valjaonica Cijevi Sisak d.o.o.

29,8 %

(59)

Since VCS is the sole producer of the product concerned
in Croatia, the residual dumping margin was set at the
same level.

3.3. Romania

(60) Questionnaire replies were received from three exporting
producers, two of which being related to importers of the
product concerned in the Community.

3.3.1. Normal value

(61)

For all three exporting producers, the total volume of
domestic sales of the like product was representative as
defined in recital (41). For the majority of product types
normal value was based on prices paid or payable, in the
ordinary course of trade, by independent customers in
Romania. However, for some product types the domestic

(63)

(64)

This exporter contested the calculation made by the
the profit margin used
Commission and argued that
was excessive. It stated that the average profit margin
calculated based on the figures provided by the three
cooperating unrelated importers in the Community was
not representative, as it never sold products to these
companies. It further argued that the three companies
were bigger than the importers to which it sold its
products, that in the last investigation, a lower profit
margin was used, and that the actual profit of the two
related importers was lower than the average profit rate
used by the Commission.

In this respect,
it should be noted that it is the Insti-
tutions' consistent practice to use the weighted average
profit of unrelated importers, where warranted, for the
adjustment provided for in Article 2(9) of the basic Regu-
lation. Whether the exporter actually sold its products to
these companies is not relevant in the determination of a
reasonable margin for profit pursuant to Article 2(9) of
the basic Regulation. Furthermore, no evidence as to how
the size of importers would influence their profit rate
was submitted. Finally, due to the relation between
exporters and their
the profit of
related importers cannot be used as a basis or as a
reference in this context because the level of profit of
the related importer will depend on the transfer price
between the related parties. This claim was therefore
rejected.

related importers,

(65) A substantial part of

to

price

the export

to the Community was

sales of another
exporting producer
to two
companies, one being related to the exporter and one
the IP. The
having been related to it during part of
latter did not cooperate in the investigation, and its
resale
the
Community was thus not submitted to the Commission.
The only export prices available for those transactions to
the related importer having been related to the exporter
during part of the IP were the prices agreed between the
exporter and its related importer. It was established that
those prices were equivalent
to arm's length prices.
Indeed, a price comparison between the period during

independent

customers

in

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29.6.2006

which the two companies were related and the period
within which they were not related any longer showed
there were no significant differences in the unit
that
prices charged. Moreover,
the prices charged to this
related importer were compared with prices charged to
unrelated customers in the EC and they were found in
line. The export price was thus based, for those trans-
actions, on the sales price of the Romanian exporting
producer to its related trading company.

sufficient evidence was

(66) As regards the transactions to the other related company,
which cooperated in the investigation, it was found that
the product concerned was further transformed by the
related company before it was resold in the Community.
In that case, no resale price of the product concerned to
an independent customer in the Community could be
determined. However,
found
that the transfer price between the Romanian exporting
producer and its related company in the Community
could be considered as equivalent to an arm's length
price, provided that, pursuant to Article 2(10)(d)(i) of
the basic Regulation, an adjustment for level of trade
for those original equipment manufacturer (OEM) sales
were made. Indeed, a comparison was made between the
prices charged for all models to the related importer and
to unrelated importers. Therefore, the export price was
based on the transfer price.

3.3.3. Comparison

(69) Adjustments were made, where

appropriate,

in
accordance with Article 2(10) of the basic Regulation,
in respect of discounts for differences in quantities,
loading, and ancillary
transport,
costs, credit, commissions, and differences in level of
trade.

insurance, handling,

(70) One

claimed

adjustments

exporting producer

for
for extra logistics costs
trade,
differences in level of
which were allegedly incurred for domestic sales and
not for export sales and for differences in quantities.
However, the exporter did not substantiate the claims
nor did the investigation otherwise establish that these
claims were warranted. Therefore, they had to be rejected.
The claim for differences in quantities was partially
rejected insofar as the amount claimed could not be
justified with the evidence collected on the spot and
the information provided in the exporting producer's
questionnaire response.

(71) Another exporting producer claimed adjustments for
level of

differences in inflation, currency conversions,
trade and differences in indirect selling expenses.

(67)

(68)

exporting producer were made

The investigation showed that the export sales of the
third
to
unrelated customers in the Community. Therefore, the
export price was established on the basis of export
prices
the product
concerned when sold to the first independent customer
in the Community as described in recital (46).

actually paid or payable

directly

for

(72) With regard to the claim for an adjustment

for the
inflation,
it should be noted that the inflation rate in
Romania was at a level of 10,8 % during the investi-
gation period, far from hyperinflation level. As it was
not found that price comparability had been affected,
the claim was rejected. The exporter objected to this
conclusion and reiterated its claim for an allowance.
However, no new argument or evidence rebutting the
preliminary
is
confirmed that the claim is rejected. It should also be
noted that the possibility of a quarterly assessment was
envisaged, but declined by the exporter.

conclusion was

submitted

and

it

This exporting producer requested that part of the sales
of the product concerned to the Community should be
excluded from the dumping calculation on the grounds
that the production of certain models of SPT had been
stopped at some point during the IP. However, as
it is the Institution's practice to take
explained above,
normally
the product
sales of
all
concerned to unrelated parties in the weighted average
export price. It should also be noted that sales of those
types of the product concerned occurred during the IP in
important volumes and that in addition it was found that
the production facilities for those types of SPT had not
been dismantled and could be started again in the future.
Given the above, the claim was rejected.

into account

(73) As regards currency conversions, the exporting producer
claimed that it should be granted a period of 60 days to
reflect movements in the currency exchange rates, under
the provision of Article 2(10)(j) of the basic Regulation. It
was found that this provision cannot be applied in this
case, as evidence was found that no sustained movement
in the relevant currency exchange rates occurred during
the IP, but merely fluctuations of a small amplitude.
Therefore,
this claim had to be rejected, and the
conversion of currencies was based in all cases on the
rate at the date of invoice, as provided for by Article
2(10)(j) of the basic Regulation.

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for

(74) As regards the claim for differences in level of trade, the
certain categories of
investigation showed that
customers,
for which the claim was made, consistent
and distinct differences in functions and prices existed
the level claimed by the exporting producer. The
at
claim was therefore accepted as regards the categories
of customers for which the differences could be demon-
strated, and only partially accepted as regards the other
categories of customers for which the difference was
than claimed by the exporting
found to be lower
producer.
the
adjustment was based on the evidence collected at the
premises of the exporting producer.

In the latter case,

the calculation of

(80)

producers and five related companies (‘TMK group’) and
(‘Pervouralsky and
the other one of
two producers
Chelyabinsk’).

3.4.1. Non-cooperation of TMK Group

The questionnaire replies of all four producers and the
five related companies were significantly deficient and
inconsistent, and except for two related companies, no
replies were
given for
completing the questionnaire replies.

the deadline

received by

(75) As regards the claim for difference in indirect selling
expenses, it was found redundant with the adjustments
trade, and it was
granted for differences in level of
therefore rejected.

(76)

Furthermore,
received from
following the comments
exporters, some clerical mistakes were corrected, and
dumping margins were recalculated accordingly.

3.3.4. Dumping margin

(77)

The comparison between the normal value and the
export price showed the existence of dumping. The
dumping margins expressed as a percentage of the CIF
import price at the Community border, duty unpaid, are
the following:

Company

Dumping margin

S.C. T.M.K. — Artrom S.A.

S.C. Mittal Steel Roman S.A.

S.C. Silcotub S.A.

17,8 %

17,7 %

11,7 %

(78)

Since the level of cooperation was high (more than 80 %
of the exports of the product concerned from Romania
to the Community) and there was no reason to believe
that any exporting producer deliberately abstained from
cooperation, the residual dumping margin applicable to
all other exporters in Romania was set at the same level
as the one established for the cooperating exporting
producer S.C. Artrom S.A., namely 17,8 %.

3.4. Russia

(79) Questionnaire replies were received from two groups of
four
exporting producers, one of which consists of

(81) On-spot verifications were carried out at two of the four
producers and one related company in Russia but these
revealed further weaknesses of the questionnaire replies.
Regarding the two producers visited, no reliable normal
value and export prices could be established since both
domestic and export sales listings were largely deficient;
values and quantities did not correspond with invoices
and product control numbers (‘PCNs’) were found to be
wrong. Furthermore, no reliable cost of production data
could be obtained.

(82) Given this entirely unsatisfactory cooperation of the two
producers visited,
the highly deficient questionnaire
replies of the two remaining producers of the group, in
particular the fact that one producer did not provide any
sales listings, and the fact that no replies were provided
to the deficiency letters of the Commission by the given
deadline, it was decided not to carry out verification visits
at the other two producers of the group.

(83) Only two of the three related importers provided a more
comprehensive questionnaire reply, of which only one
was verifiable whereas the resale listing of
the other
related importer was largely deficient. Therefore, even
the related importers only cooperated partially, and to
a very poor degree indeed.

(84)

The TMK group claimed that they could not properly
cooperate because of the choice of the PCN, which in
their opinion was inadequate given the very diversified
production range of the four producers.
It should be
the classification of the product
noted, however, that
concerned into the proposed PCN structure did not
cause any problems to either the Community producers
or other exporting producers,
some of which also
produce a large variety of SPT. The claim was therefore
rejected.

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(85)

In view of the above, it was considered that the dumping
margin for the TMK Group could not be established on
the basis of their own data. The dumping margin was
therefore determined on the basis of facts available,
in
accordance with Article 18 of the basic Regulation.

(86)

(87)

3.4.1.1. N o r m a l v a l u e

In this case, it was found that the normal value infor-
mation established for Pervouralsky and Chelyabinsk
would constitute the most appropriate facts available,
pursuant to Article 18 of the basic Regulation. Indeed,
this information seemed to reflect best the situation on
the Russian market.

Pursuant to Article 2(5) of the basic Regulation the price
of gas used for the calculation of cost of production in
the complaint was adjusted in the same manner as for
the two cooperating producers, as described below in
recitals (94)
to reflect market prices for gas
during the IP.

to (99)

3.4.1.2. E x p o r t p r i c e

(88)

The export price was calculated on the basis of Eurostat
data for the IP, reduced by the quantities and values
obtained from the two cooperating producers
listed
infra in recital (91).

3.4.1.3. C o m p a r i s o n

(89)

to Article 2(10) of

Pursuant
the basic Regulation,
adjustments were made to the export price in respect
of
transport and insurance costs and commissions,
based on information in the complaint.

(91)

(92)

(93)

3.4.2. Pervouralsky and Chelyabinsk

Chelyabinsk and Pervouralsky were separate legal entities
during the IP, but since the end of 2004 they are related
as Chelyabinsk owns
in
shares
company.
Pervouralsky,
Therefore, only one duty should be imposed on the
group.

the majority of
the
controls

directly

and

3.4.2.1. N o r m a l v a l u e

the
For both exporting producers, domestic sales of
(41).
product were representative as defined in recital
In accordance with the methodology described in
recitals (42)
to (45), normal values were established,
depending on the product type exported, on the basis
of sales prices of all sales, of sales prices of profitable
sales only or on the basis of constructed normal values.

sales prices, nor

variation in domestic

It was found that the cost allocation of the company for
certain individual product types did neither reflect the
large
the
important cost drivers. Thus, it had to be considered as
unreliable. Therefore facts available were used as set out
in Article 18 of the basic Regulation. In this case, a profit
for the whole group had to be calculated based on all
sales of the product concerned which was subsequently
used for the determination of normal values.

(94) With regard to the manufacturing costs, and in particular
energy costs, it was found during the investigation that
electricity prices paid by both companies reasonably
reflected the actual production costs of the electricity
purchased. This was evidenced in this case by the fact
that the electricity prices were in line with international
market prices, when compared to countries like Norway
and Canada, which also rely on hydroelectricity.
However, the same could not be said with regard to
gas prices. Indeed it was found that the gas prices paid
by both companies did not reasonably reflect the costs of
gas.

3.4.1.4. D u m p i n g m a r g i n

(90)

The comparison between the normal value and the
export price showed the existence of dumping. The
dumping margin expressed as a percentage of the CIF
import price at the Community border, duty unpaid, is
the following:

(95)

Company

Dumping margin

Joint

Stock

Volzhsky Pipe Works Open Joint Stock
Company,
Company
Taganrog Metallurgical Works, Sinarsky
Pipe Works Open Joint Stock Company
and Seversky Tube Works Open Joint
Stock Company

35,8 %

same

It was established on the basis of data found in the
Russian gas provider OAO Gazprom's published annual
report for 2004, that the domestic price of gas paid by
the two Russian producers was much lower than the
average export prices from Russia to both Western and
Eastern parts of Europe. The
states:
‘Gazprom Group is required to supply natural gas to
Russian consumers at prices regulated by the Federal
Tariff Service. As of now these prices are lower than
the international prices for natural gas.’ and further:
‘OAO Gazprom together with the Russian Federation
carry out a lot of work to optimize the regulated gas
wholesale prices’. Moreover, the price of gas paid by the
two Russian producers was significantly lower than the
gas price paid by the Romanian and Community
producers.

report

(96)

(97)

(98)

(99)

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it was considered that the gas
In view of the above,
prices paid by the two Russian SPT producers in the
investigation period could not
the
costs associated with the production and distribution of
gas.

reasonably reflect

Company

Dumping margin

Joint Stock Company Chelyabinsk Tube
Rolling Plant and Joint Stock Company
Pervouralsky Novotrubny Works

24,1 %

Therefore, as provided for in Article 2(5) of the basic
Regulation, the gas costs of the two Russian exporting
producers were adjusted to reflect market prices for gas
during the IP, based on the price of gas for export to
Western Europe, net of transport costs and excise duty.

3.4.3. Conclusion on dumping regarding Russia

(103) Since the companies mentioned in recital (79) represent
all export sales from Russia to the Community,
the
residual dumping margin was set at the same level as
the one established for the non-cooperating group of
exporting producers, namely 35,8 %.

the costs of gas were
Both producers argued that
properly reflected in their accounting records and that
an adjustment in accordance with Article 2(5) of the
basic Regulation was not warranted. In this regard, it is
not disputed that the companies had correctly accounted
for the prices paid to their gas provider. However, the
adjustment is justified by the fact that the price of the gas
purchased does not
the cost of
production and distribution of gas.

reasonably reflect

The two producers further claimed that it had not been
proven that prices charged by Gazprom to industrial
users are below cost-recovery levels. However, several
publicly available sources confirm the approach of the
‘The
them the policy brief
Commission,
among
the Russian Federation, 2004’,
Economic Survey of
published by OECD in July 2004.

3.4.2.2. E x p o r t p r i c e

(100) All export sales to the Community were made directly to
independent customers and therefore the export price
was established as set out in recital (46).

3.4.2.3. C o m p a r i s o n

(101) Adjustments were made, in accordance with Article 2(10)
of the basic Regulation, in respect of transport, handling,
loading, and ancillary costs, packing and commissions.

3.4.2.4. D u m p i n g m a r g i n

(102) The comparison between the normal value and the
export price showed the existence of dumping. The
dumping margin expressed as a percentage of the CIF
import price at the Community border, duty unpaid, is
the following:

3.5. Ukraine

3.5.1. MET

applicable

the basic Regulation was

initiation of this investigation, Article
(104) At the time of
to
2(7)(b) of
Ukraine. This Article stated that the procedure in anti-
dumping investigations, concerning imports originating
in Ukraine, was that normal value shall be determined
in accordance with paragraphs 1 to 6 of the said Article
the
for those producers which were found to meet
criteria laid down in Article 2(7)(c) of the basic Regu-
lation.

(105) Briefly, and for ease of reference only,

these criteria,
fulfilment of which the applicant companies have to
demonstrate, are set out in summarised form below:

— Business decisions are made in response to market
signals, without significant State interference, and
cost reflect market values,

— Firms have one clear set of basic accounting records
which are independently audited, in line with inter-
national accounting standards and are applied for all
purposes,

— There are no significant distortions carried over from

the former non-market economy system,

— Legal certainty and stability is guaranteed by bank-

ruptcy and property laws,

— Exchange rate conversions are carried out at

the

market rate.

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(106) Three groups of Ukrainian exporting producers requested
MET pursuant to Article 2(7)(b) of the basic Regulation
and replied to the MET claim form for exporting
producers.

(107) The Commission sought and verified at the premises of
these companies all necessary information submitted in
their MET applications.

than the prices in Europe and other markets. This was
not deemed to be sufficient grounds, however,
to
consider that criterion 1 was not
fulfilled, since gas
and electricity only represent a relatively minor part of
the cost of production of SPT and since these prices, in
so far as they were found to be distorted, have been
adjusted to market prices
the
dumping calculation (see recitals (119) to (127)).

the purpose of

for

(108) The investigation showed that

the three groups of
Ukrainian
above
fulfilled all the criteria required and they were therefore
granted MET.

producers mentioned

exporting

(114) Furthermore, the investigation showed that the laws in
force in Ukraine with regard to employment and labour
conditions were in line with market economy principles.
In particular,
the three groups of
exporting producers were free to hire or dismiss their
staff.

it was found that

(109) The Community industry was given the opportunity to
comment and objected that several of the five criteria set
out in Article 2(7)(c) of the basic Regulation were not
met by all exporting producers. More specifically, the
Community industry argued that
the State might
take back control of certain of the privatised exporting
(ii) the State intervened in their day-to-day
producers;
decisions;
in force in
the regulations and laws
(iii)
Ukraine during the IP as regards labour, bankruptcy
and
proper market
economy conditions; and (iv) State intervention took
place with regard to export sales price and costs of
inputs. The comments of the Community industry were
duly taken into account.

guarantee

property

not

did

(i)

(110) However,

these comments did not provide sufficient
evidence that any of the five criteria against which the
for MET was
Ukrainian exporting producers' claims
analysed pursuant to Article 2(7)(c) of the basic Regu-
lation as described above was not fulfilled. Indeed, the
investigation showed that no significant interference of
the State was taking place in the companies' business
decisions.

(115) Similarly, no argument

brought

the
Community industry was able to rebut the conclusion
of the Commission that bankruptcy and property laws
guaranteed proper market economy conditions for the
three groups of exporters.

forward by

(116) There was therefore no reason not to grant MET to the
three groups of Ukrainian exporting producers. The
Advisory Committee was consulted and did not object
to the conclusions of the Commission.

3.5.2. Dumping calculation

(117) Questionnaire replies were received from three groups of
exporting producers. One
two
producers and two related traders, whereas another
group consists of one producer and two related traders,
the latter exporting producer has no related
whilst
company involved in the production or sale of
the
product concerned.

group consists of

(111)

it can be recalled that partial State
In this respect,
ownership is not as such, according to the Commission's
practice, sufficient grounds to consider that criterion 1 of
Article 2(7)(c) of the basic Regulation is not fulfilled.

3.5.3. Normal value

(112)

It was also found that
reflected market values.

the costs of the main inputs

(113) As regards gas and electricity prices, they were found to
be in line with average prices in Ukraine, although lower

(41). For part of

(118) For all three groups of exporting producers, the total
volume of domestic sales of the like product was repre-
sentative as defined in recital
the
product types normal value was based on prices paid
in the ordinary course of trade, by inde-
or payable,
pendent customers in Ukraine, and for
the product
types for which the domestic sales were insufficient to
be considered representative or they were not made in
the ordinary
value was
constructed as described in recital (45).

trade, normal

course of

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(119) With regard to the manufacturing costs, and in particular
energy costs, it was found during the investigation that
energy prices paid by the three groups of companies
were regulated by the State and significantly lower than
international prices.

determined above, as well as to average gas prices in
North America, which were determined using Nymex
Henry Hub index for gas.
In both cases they were
found considerably lower.

(120) The prices charged by the Ukrainian State-owned and/or
State-regulated suppliers of electricity to the three groups
of exporting producers were compared to prices in
Romania as well as to prices in the Community for the
same general category of electricity users. In all cases,
these prices were found to be considerably lower than
the prices in Romania and in the Community, and it was
electricity prices paid by the
concluded that
Ukrainian exporters did not
the
actual production and sale costs of
the electricity
purchased.

reasonably reflect

the

(121) The three cooperating Ukrainian exporters opposed to
these conclusions and submitted that the costs reported
in their accounting records reflected the price actually
paid to their suppliers of electricity. However, none of
the arguments put forward could explain the differences
found with prices in Romania and average prices in the
Community, and the conclusions above were confirmed.

(122) The same approach was followed as regards gas prices. A
comparison showed that gas prices charged to Ukrainian
exporters by their State-owned and/or State-regulated
suppliers were around half the prices in Romania and
also considerably lower than average prices charged in
the Community for gas to the same general category of
customers.

(123) During the IP, Ukraine got a major part of its supplies of
gas from Russia. OAO Gazprom's stated in its annual
‘As it supplied gas to CIS states,
report 2004 that:
OAO “Gazprom” pursued its main strategic objective of
providing environment for unimpeded transit of Russian
gas to Europe through and their territory’ and further
‘In the reporting year 84,9 % of the total amount
that:
of gas supplied to Ukraine […] was treated as payment
for transit services’. The export price of gas from Russia
to Ukraine could therefore not serve as a proper basis for
comparison to determine whether the gas prices paid by
the Ukrainian exporters reflected the cost associated with
the production and sale of the gas purchased, since this
export price may well have been influenced by the barter
trade agreement.

(124) Moreover,

the prices paid by Ukrainian exporting
producers were compared to the average export price
as
from Russia

to Western and Eastern Europe,

(125) Given the above,

it was concluded that the gas prices
paid by the Ukrainian exporting producers, which were
in direct relation with the export price declared by OAO
Gazprom for exports to Ukraine and which was found to
be very likely influenced by an existing barter trade
agreement, did not reasonably reflect the costs associated
with production and sale of the gas purchased.

(126) Again the three cooperating Ukrainian exporters opposed
to these conclusions and submitted that
the costs
reported in their accounting records reflected the price
the
actually paid to their suppliers of gas. However,
the
arguments put
forward were not able to rebut
conclusions above,
the gas
supplied by Russia to Ukraine was significantly affected
by an agreement in place during the IP concerning the
transit of gas through Ukraine, as confirmed by the
annual report for 2004 of ‘OAO Gazprom’.

the price of

insofar as

the

and gas

electricity

producers were

the
exporting
reflect

costs of
adjusted
associated with

(127) Therefore, as provided for in Article 2(5) of the basic
the
Regulation,
to
Ukrainian
the
costs
reasonably
production and sale of electricity and gas during the IP.
The adjustment was based on an average of the prices
observed during the IP in Romania, a market-economy
country which also imports gas from Russia, and is
roughly the same distance from the Russian gas fields.
The average price for Romania was based on the verified
data collected at Romanian exporting producers of the
product concerned. It has to be noted that this average
price is not significantly different from the average gas
export price determined above for Russia.

(128) One exporter claimed that the profit margin used for the
construction of the normal value was different from the
average profit made by this exporter on sales on the
domestic market, and too high. This claim had to be
rejected as the profit used in constructing normal value
was the one calculated in accordance with the applicable
i.e. the first sentence of Article 2(6) of the
provision,
basic Regulation.
the profit margin
In other words,
used equalled the profit margin pertaining to production
in the ordinary course of trade, of the like
and sales,
product on the Ukrainian domestic market.
It was
information which was
calculated
submitted
questionnaire
company
response and could be verified.

based on the
by

in its

the

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Official Journal of the European Union

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3.5.4. Export price

their export

(129) Two groups of exporting producers made the vast
majority of
sales via a related trading
company located in a third country. The export price
for those two groups of exporting producers was estab-
lished on the basis of
the related trading companies'
resale prices to the first independent customers in the
Community, except for the few transactions which corre-
sponded to direct sales of those exporting producers to
independent customers in the Community. In the latter
case,
the export price was determined as the price
actually paid or payable for the product when sold for
export from Ukraine to the Community.

(130) Another exporting producer made all its sales to inde-
pendent customers in the Community, and the export
price was therefore established, as described in recital
(46), on the price actually paid or payable for
the
product when sold for export
from Ukraine to the
Community.

3.5.5. Comparison

(131) Adjustments were made, where

in
accordance with Article 2(10) of the basic Regulation,
insurance,
in respect of
handling,
and
commissions.

transport,
costs,

and ancillary

appropriate,

discounts

loading,

credit,

for

as

these

related traders,

(132) For the two groups of exporting producers which chan-
nelled most of their sales through related traders, an
adjustment to the export price for a commission was
made in accordance with Article 2(10)(i) of the basic
Regulation, in the cases where sales were made through
these
related traders had
functions similar to those of an agent working on a
commission basis. The level of
the commission was
calculated based on direct evidence pointing to the
existence of such functions. In this context, in the calcu-
lation of the commission, the SGA expenses incurred by
the
concerned
the product
produced by Ukrainian producers were
taken into
account, as well as a reasonable profit margin. This
latter was based on a weighted average of the profit
margins
to unrelated
customers found for the three unrelated importers in
the Community which cooperated with the investigation
and submitted information which was verified.

related traders

like products

sales of

to sell

for

(133) The two groups of exporters contested the calculation
made by the Commission and argued that the profit
margin used in this adjustment was excessive. One
group of exporters alleged that one of
the unrelated
importers imported and resold only one type of tubes,
which was not sold in the EC by the Ukrainian exporter.
Moreover, both groups of exporters stated that
the
average profit margin calculated based on the figures
provided by the three cooperating unrelated importers
the
in the Community was not
weighted average profit margin found was higher than
the target profit of the Community industry.

reasonable,

since

(134)

In this respect, it should be noted that the assertion that
the profit margin used to base this adjustment was higher
than the target profit of the Community industry is not
relevant. Both profit margins are established in a different
context and serve different purposes. In addition, it does
not prove that the profit margin used is not reasonable.
In the present case, it should be reminded that the profit
margin used was based on verified information submitted
by cooperating companies and pertaining to the IP.
Furthermore, no evidence as to how the types of the
like products
sold by these cooperating companies
would have biased the calculation of the profit margin
was provided. Under these circumstances, the adjustment,
pursuant to Article 2(10)(i), for sales made via the related
trading companies, is maintained.

(135) Furthermore,

received from
following the comments
exporters, some clerical mistakes were corrected, and
dumping margins were recalculated accordingly.

3.5.6. Dumping margin

(136) The comparison between the normal value and the
export price showed the existence of dumping. The
dumping margins expressed as a percentage of the CIF
import price at the Community border, duty unpaid, are
the following:

Company

Dumping margin

OJSC Dnepropetrovsk Tube Works

CJSC Nikopolsky Seamless Tubes Plant
Niko Tube and OJSC Nizhnedneprovsky
Tube Rolling Plant

12,3 %

25,1 %

CJSC Nikopol Steel Pipe Plant Yutist

25,7 %

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(137) Since the level of cooperation was high (more than 80 %
of the exports of the product concerned from Ukraine to
the Community), and there was no reason to believe that
any exporting producer deliberately abstained from coop-
the residual margin applicable to all other
eration,
exporters in Ukraine was set at the same level as the
one established for the cooperating exporting producer
CJSC Nikopol Steel Pipe Plant Yutist, namely 25,7 %.

— V&M Deutschland GmbH, Düsseldorf, Germany

— Voest Alpine Tubulars GmbH, Kinderberg-Aumuehl,

Austria

4. INJURY

4.1. Community production

(138) Within the Community the product concerned is known
to be manufactured by eight producers on behalf of
which the complaint was lodged. They are located in
Germany, Italy, Spain, France and Austria and represent
62 % of the Community production which amounted to
2 618 771 tonnes during the IP.

(142)

(139) Furthermore, there were at initiation stage 12 known
Community producers which were not complainants
located in the UK, Poland, Czech Republic, Sweden,
Italy and Slovakia. Other Community producers which
had not been known at initiation stage mainly located
in the new Member States were also contacted. Only two
information
of
concerning the production and sales of the like product
for the period under consideration. On this basis, the
Community production of the like product amounted
to 2 618 771 tonnes in the IP.

submitted

producers

these

basic

(141) As

these

six complainant

cooperating Community
producers represent 57 % of the Community production
the
of
Community industry within the meaning of Articles
4(1) and 5(4) of the basic Regulation.

concerned,

constitute

product

they

the

is

the

related to one of

is noted that one of

the complaining producers
It
(Dalmine)
cooperating
Romanian exporting producers (Silcotub) and imported
It has been
the product concerned from the latter.
verified that
limited in
these imports were, however,
comparison to the production volume of Dalmine and
mainly to complement its product range. It was therefore
concluded that
this relationship was not such as to
exclude this Community producer from the definition
of the Community industry.

4.3. Community consumption

(143) The Community consumption was established on the
basis of the sales volumes on the Community market
of the five sampled Community producers and by all
other producers in the Community which submitted
such information plus imports from all third countries
under the relevant CN codes according to Eurostat.

4.2. Community industry

(140) The following Community producers

supported the

complaint:

— Dalmine S.p.A., Bergamo, Italy

— Rohrwerk Maxhütte GmbH, Sulzbach-Rosenberg,

Germany

— Tubos Reunidos S.A., Amurrio, Spain

— Vallourec & Mannesmann France S.A,

Boulogne Billancourt, France

(144) On the basis of these data, it was found that over the
period considered, consumption decreased by 8 % from
2 149 024 tonnes 2001 to 1 985 361 tonnes in 2004.
First, consumption decreased considerably by 14 % in
2002 compared to 2001 and remained stable in 2003
after which it picked up again in 2004, when it
amounted to 1 985 361 tonnes. Consumption of SPT
is related to the overall economic cycle and in particular
to developments in the oil and gas sector. The increase of
consumption in the IP could be explained by the fact that
high oil and gas prices in 2004 encouraged investments
in these sectors and therefore increased the demand for
certain STP.

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Community consumption
(tonnes)

Index

Table 1

2001

2002

2003

2004 (IP)

2 149 024

1 855 723

1 851 502

1 985 361

100

86

86

92

4.4. Imports of SPT from the countries concerned

Cumulation

(145) The Commission considered whether the effects of imports of SPT originating in Croatia, Ukraine,
Romania and Russia should be assessed cumulatively in accordance with Article 3(4) of the basic
Regulation.

Margin of dumping and volume of imports

(146) As indicated above, the present investigation has shown that average dumping margins established
for each of the four countries concerned are above the de minimis threshold as defined in Article 9(3)
of the basic Regulation, and that the volume of imports from each of these countries is not negligible
in the sense of Article 5(7) of the basic Regulation (their respective market shares attaining 1,3 % for
Croatia, 4,3 % for Romania, 4,6 % for Ukraine and 11,3 % for Russia in the IP).

Conditions of competition

(147)

Import volumes increased from all countries concerned, except from Ukraine which maintained its
imports on a high level over the period considered. Price trends of imports are similar for all
countries concerned, undercutting significantly the prices of the Community industry. The average
price levels of the imports of the countries concerned were all significantly below the Community
industry price level. Import prices from Croatia, Ukraine and Romania were broadly at the same level.
Russia had significantly lower price levels which may, however, be the result of a different product
it has been established that the product
mix exported to the Community. As mentioned above,
concerned imported from the four countries and the like product produced and sold by the
Community industry share the same basic technical, physical and chemical characteristics and end-
uses. In addition, all products were sold via similar sales channels to the same customers and were
found to be competing with each other.

(148) On the basis of the above, it was concluded that all conditions justifying the cumulation of imports

of SPT originating in the four countries concerned by the investigation were met.

(149) Some exporting producers in Ukraine and Romania argued that imports from their countries should
not be cumulated to those of the other countries under investigation for the injury and causation
analysis since trends in import volumes were different. In this respect, it is noted that the import
trends are only one of the many parameters which are examined in this context. The fact that the
import levels from the various countries are not identical, is not as such a reason to de-cumulate.
Indeed,
in recital (147), the similarities between the imports from the four countries subject to
investigation have been described. On this basis, and in the absence of any further indications
concerning a lack of competition, it is not possible to distinguish the effect of the imports from
these four countries simply on the basis of the respective volume trends. On the contrary, the
similarities described above warrant a cumulative assessment.

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Official Journal of the European Union

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(150)

In the present case, it was found for all four countries, including Ukraine and Romania, that the
imported products on the one hand and the Community produced products on the other hand
shared the same basic physical and/or chemical characteristics (see recital (39) concerning the like
product). Moreover, imports from each of the four countries were significant, i.e. above the neglig-
ibility threshold defined in Article 5(7) of the basic Regulation. In this respect, it is noted that imports
from Ukraine and Romania represented a market share of more than 4,5 % and 4,3 % respectively.
Finally, and in addition to the arguments stated above, imports from all four countries were signifi-
cantly undercutting the prices from the Community industry (from 22 to 43 %), Ukrainian and
Romanian imports undercutting by 36 % and 22 % the Community industry prices (see below).
it is concluded that all conditions are met for the cumulation of
On the basis of the above,
imports from the four countries under investigation for the purpose of
injury and causation
analysis. The claim for de-cumulation had therefore to be rejected.

Cumulated volume and market share

(151)

Imports from the four countries concerned increased from 304 268 tonnes in 2001 to 426 186
tonnes in the IP. The combined market share increased from 14,2 % in 2001 to 21,5 % during the IP.
This has to be seen against the background of a declining consumption.

Table 2

2001

2002

2003

2004 (IP)

304 268

307 441

342 626

426 186

100

101

113

140

14,2 %

16,6 %

18,5 %

21,5 %

Imports (tonnes)

Index

Market share

Prices

(152) The weighted average price of imports of SPT originating in the four countries increased by 16 %, i.e.
from EUR 433 per tonne to EUR 501 per tonne between 2001 and the IP. Between 2001 and 2002
prices initially slightly decreased by 3 % from EUR 433 to EUR 418 and dropped further in 2003 to
EUR 397, after which they sharply increased to EUR 501,
i.e. a significantly higher level than in
2001. The price increase in the IP can mainly be linked to the increase in the cost of raw materials in
the IP.

Table 3

CIF

Community

2001

433

2002

418

2003

397

100

97

92

average

Weighted
frontier price
(EUR/tonne)

Index

2004 (IP)

501

116

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Undercutting

(153) For the determination of price undercutting, the Commission analysed data referring to the IP. The
relevant sales prices of the Community industry were those to independent customers, adjusted where
necessary to an ex-works level, i.e. excluding freight costs in the Community and after deduction of
discounts and rebates. Prices for the different types of SPT defined in the questionnaires were
compared with the sales prices charged by the exporters, net of discounts, and adjusted, where
necessary, to CIF Community frontier with an appropriate adjustment for the anti-dumping duties
and post-importation costs.

(154) For the calculation of weighted average undercutting margins, export prices of cooperating producers
and Eurostat data were taken into consideration. During the IP, the weighted average undercutting
margin was 43 % for Russia, 36 % for Ukraine, 22 % for Romania and 26 % for Croatia.

4.5. Situation of the Community industry

(155)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped
imports on the Community industry included an evaluation of all economic factors having a bearing
on the state of the Community industry during the period considered.

Production

(156) The production volume showed a similar trend to that of consumption, although the decline during
2002 and 2003 and recovery during the IP was more pronounced in relative terms than the decline
and recovery of consumption during the same periods. It sharply declined by 21 %, from 1 495 278
tonnes in 2001 to 1 174 414 tonnes in 2002. In 2003, the production volume reached only three
quarters of the volume produced in 2001. However, in line with the improved demand situation
resulting from the investment activity in the oil and gas industry during the IP, the production
volume increased again and reached 1 290 258 tonnes in the IP.

Production
(tonnes)

Index

Table 4

2001

2002

2003

2004 (IP)

1 495 278

1 174 414

1 126 188

1 290 258

100

79

75

86

Capacity of production and capacity utilisation rates

(157) The production capacity was established on the basis of the nominal capacity of the production units
owned by the Community industry, taking into account interruptions in production as well as the
fact that in certain cases part of the capacity had been used for other products manufactured with the
same production lines.

(158) SPT production capacity has remained stable during the period considered. However, capacity utili-
sation rates diminished by 12 percentage points from 87 % to 75 %, as a result of the decrease in the
production volume. The increase of capacity utilisation during the IP is a result of the increased
production volume in the IP against the background of a stable production capacity.

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Table 5

2001

2002

2003

2004 (IP)

1 722 350

1 717 919

1 709 605

1 709 078

100

87 %

100

68 %

99

66 %

99

75 %

Capacity of production
(tonnes)

Index

Capacity utilisation

Stocks

(159) As far as stocks are concerned, the vast majority of production is made in response to orders.
Therefore, whilst an increase in stocks of 13 % was observed over the period considered,
it is
considered that in this case stocks were not a relevant indicator of injury.

Table 6

2001

2002

2003

2004 (IP)

95 032

100 471

90 979

107 521

100

106

96

113

Stocks (tonnes)

Index

Investments

(160) Between 2001 and the IP,

investments for the production of the like product diminished from
EUR 66 852 644 to EUR 26 101 700 and were only made to maintain production capacity at its
current level and not with the purpose to increase the production volume.

Table 7

2001

2002

2003

IP

Investments (EUR)

66 852 644

56 581 829

45 518 515

26 101 700

Index

100

85

68

39

Sales and market share

(161)

It was found that sales of the Community industry to related customers were made at market prices
and therefore those sales were also taken into consideration for the analysis of sales and market share
of the Community industry.

(162) SPT sales in volume on the Community market decreased from 862 054 tonnes in 2001 to 725 145
tonnes in 2002, i.e. by 16 %, and further to 683 985 tonnes in 2003, where demand was excep-
tionally low according to the Community industry. During the IP, sales picked up again and reached
729 555 tonnes, which is still considerably lower than the level of 2001.

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(163) Whereas overall SPT sales in volume on the Community market decreased from 2001 to the IP by
15 %, at the same time, Community consumption decreased by only 8 % and hence the Community
industry experienced a loss of market share amounting to 3 percentage points. The market share
dropped from 40,1 % in 2001 to 36,7 % in the IP.

Table 8

2001

2002

2003

IP

Sales in the EC (tonnes)

862 054

725 145

683 985

729 555

100

84

79

85

40,1 %

39,1 %

36,9 %

36,7 %

Index

Market share

Prices

(164) The Community industry's average unit selling price increased by 10 % over the period considered as

a result of the increased cost of raw material, which impacted the whole industry.

(165) After a 4 % increase in average prices from EUR 672 in 2001 to EUR 701 in 2002, prices hit rock
bottom at EUR 651 in 2003, after which they considerably increased again in the IP when they
reached EUR 736.

(166) Depending on the production process, the Community industry either used scrap or billets and ingots
as raw material for the production of SPT. The raw material is the major cost driving component in
the production cost of SPT and has a direct impact on the sales price evolution. Whereas in 2001
and 2002 raw material accounted for 35 % of the full production cost of SPT of the Community
industry and for 38 % in 2003, during the IP the cost for raw material represented already 47 % of
full cost.

(167)

Indeed, it was found that average prices of raw materials went up sharply during 2004, which was
reflected in the higher sales prices of the Community industry and higher import prices alike.

Table 9

2001

672

100

2002

701

104

2003

651

97

IP

736

110

Weighted average price (EUR/tonne)

Index

Profitability and cash flow

(168) During the period considered the weighted average profitability on net turnover of the Community
industry decreased sharply from 3 % in 2001 to – 10 % in the IP. The trend in profitability does not
develop in line with the trend in sales value. Profitability of the product concerned was indeed more
negative during the IP than in any of the three preceding years, whereas sales actually increased in the
IP compared to the levels in 2002 and 2003. The reason for this development is that the increase in
raw material prices could not be completely reflected in sales prices. Indeed, the increased costs of
raw materials could not be passed on to the end customers due to the low price level of imports
from the countries concerned.

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Table 10

Pre-tax profit margin

2001

3 %

2002

– 9 %

2003

– 5 %

IP

– 10 %

(169) The Community industry generated a negative cash flow of EUR – 16 735 140 during the IP. The
liquidity of the Community industry turned very negative in 2003, after which the cash flow
situation somewhat improved, but still remained far from re-gaining a positive level. Cash flow
had to be calculated on the basis of the net profit before tax for the product sold in and outside
the Community which was positive in 2002 (EUR 26 million) but turned into a major net loss in
2003 (minus 86 million) which explains the massive drop in cash flow between 2002 and 2003. The
trend in cash flow did not evolve in line with the trend in profitability as depreciation, which is
typically high for this capital
intensive industry, declined between 2002 and 2003 from EUR
51 795 853 to EUR 48 276 850, but increased again in the IP to EUR 58 820 712. However, the
cash flow situation remained negative during the IP.

Table 11

2001

2002

2003

IP

68 221 405

83 464 355

100

122

– 35 612 924
– 52

– 16 735 140
– 25

Cash flow (EUR)

Index

Return on net assets

(170) The return on net assets was calculated by expressing the pre-tax net profit of the like product sold in
and outside the Community as a percentage of the net book value of fixed assets allocated to the like
product sold in and outside the EC. The negative evolution of this indicator after 2001 is caused, on
the one hand, by the declining investments in the like product from 2001 to the IP, and, on the
other hand, by the pre-tax profit of the like product sold in and outside the Community, which was
still positive in 2001 and 2002, but turned negative in 2003. Return on assets albeit improving in
it still only reached – 11 % during the IP. The profit figure used for
the IP compared to 2003,
determining this factor was the profit obtained both of the Community industry's domestic sales and
export sales. This was necessary because the assets were used for both sales channels and an
allocation to the assets was impossible.

Table 12

2001

10 %

2002

6 %

2003

– 18 %

IP

– 11 %

Return on net assets

Ability to raise capital

(171) With the exception of one company, there was no claim from the Community industry nor indi-
cation that the Community industry encountered problems to raise capital for its activities and it was
therefore concluded that the Community industry, as a whole, was in a position to raise capital for its
activities throughout the period considered.

Employment and wages

(172) Employment in the Community industry decreased by 13 % and labour cost declined by 9 % during

the period considered.

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Employees

Index

Table 13

2001

6 058

100

2002

5 424

90

2003

5 276

87

IP

5 245

87

Labour cost (EUR/year)

275 296 896

251 059 144

244 153 692

249 190 971

Index

100

91

89

91

Productivity

(173) Productivity measured in output (production) per employee per year amounted to the same level in

the IP as in 2001, after a decrease in 2002 and 2003.

Productivity
(tonnes/employee)

Index

Table 14

2001

247

100

2002

217

88

2003

213

86

IP

246

100

Growth

4.6. Conclusion on injury

the sales volume of

(174) While Community consumption decreased by 8 %
between 2001 and the IP,
the
Community industry to unrelated and related customers
decreased by 15 %. On the other hand, the market share
of imports from the four countries concerned went up
by 7,3 percentage points. Thus, sales by the Community
industry declined much more sharply than the demand
during the period considered.

Magnitude of the dumping margin and recovery from past
dumping

(175) 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 four
countries concerned, this impact cannot be considered
negligible.

IP,

the

the

indicators

(177) The analysis of the injury indicators revealed that the
situation of the Community industry deteriorated signifi-
cantly after 2001 and reached rock bottom in 2003.
showed an
injury
During
improvement compared to the extremely bad situation
in 2003. The improved situation in the IP can be linked
to a generally better market situation in the IP and in
particular to the higher demand for SPT products by the
oil and gas industries. However, the Community industry
was by far not able to get back to the level of 2001, i.e.
prior to the increase of dumped imports. In this respect,
it is noted that the increase of sales prices observed in
the
the IP was not even sufficient
to fully reflect
increased costs of raw materials,
let alone to improve
the situation of the Community industry.

(178)

the economic and financial

(176) As demonstrated in the analysis of the injury indicators
the
above,
improve further to the
Community industry did not
imposition of anti-dumping measures on imports of
parts of
and
Romania in 1997 and from Croatia and Ukraine in
February 2000. They also evidence that the Community
is still in a fragile and vulnerable situation.

concerned from Russia

the product

situation of

other

injury

It is true that at first sight some injury indicators showed
a stable (ability to raise capital, employment) or even
positive (average sales prices) development. However,
most
profitability,
investments, production and sales volumes) showed a
clear negative evolution over
the period considered,
albeit slightly improving during the IP as compared to
the preceding year. However, this improvement does not
change the picture as the most relevant injury indicators
remain negative.

indicators

(e.g.

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the situation of

(179) As far as the positive development in prices is concerned,
the price increase during the IP cannot be attributed to
an improvement of
the Community
industry, but was a mere consequence of the increased
the above factors
prices of raw materials. Moreover,
showing a stable development do not determine the
overall state of the Community industry. Indeed, given
the vastly negative development of the profit-related indi-
cators, the viability of the industry is even at stake if —
in the medium term if not before — this situation is not
remedied.

that

argued

producers

(180) Following the disclosure of definitive findings, some
the Community
exporting
injury during
industry was not suffering from material
the IP.
It was claimed that publicly available data
suggested that the Community industry was in a sound
financial situation and that sales and profitability of
the Community industry showed a positive trend during
the IP.

(181)

the

overall

financial

results of

is noted that annual

It
some
Community producers were indeed positive during the
IP, sales volumes increased and profitable results were
achieved. However, whereas
financial
situation of some Community producers in the IP has
in fact been favourable, the relevant analysis must be
based on the financial performance of the Community
industry with regard to the production and sales in the
the like product. As the like
Community market of
the entire production
product does not account
volume of
their
found that
entire sales
despite
some
the
Community producers of SPT, material injury existed as
far as the like product sold in the Community was
concerned.

for
the Community industry neither of
in the Community,

it was
performance

overall

good

of

(184)

5.2. Effect of the dumped imports

share. At

Imports from the four countries concerned increased
considerably during the period considered, i.e. by 40 %
in terms of volume, and by 7,3 percentage points in
the same time, average
terms of market
imports originating in the four countries
prices of
the average Community industry
concerned undercut
prices by 32 % in the IP. The price increase of
the
dumped imports noticed during the IP merely reflected
the increase of costs of raw materials. The substantial
increase in the volume of imports of the four countries
concerned and their gain in market share during the
period under consideration, at prices which remained
well below those of the Community industry, coincided
with the evident deterioration of the overall
financial
situation of the Community industry during the same
period.

(185) Unit prices of the Community industry also increased
over the period under consideration by 10 %. However,
these prices were depressed and could not even cover the
massive increase of cost of raw materials as evidenced by
the significant level of losses incurred by the Community
industry.

four

imports

low-priced

from the

(186) Based on the above considerations, it would appear that
the
countries
concerned have had a determining role in the dete-
rioration of the situation of the Community industry,
which is reflected in particular in the insufficient devel-
opment of sales prices as well as in the decrease of
production, sales volumes, market share, and in the
diminishing
sharp
investments.

profitability

decrease

and

of

(182)

it is concluded that the
In the light of the foregoing,
Community industry has suffered material injury within
the meaning of Article 3(6) of the basic Regulation.

5. CAUSATION

5.1. Introduction

(183)

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

5.3. Effect of other factors

Decrease in the EC consumption

(187) Community consumption decreased by 8 % during the
period considered. However, the decrease in consumption
in itself cannot be considered as the determining cause of
the injurious situation of the Community industry as
the Community industry declined in relative
sales of
terms more
than consumption during the period
considered (respectively – 16 % and – 14 % between
2001 and the end of the IP). Moreover,
it was shown
that imports from the countries concerned increased in
the period considered and were thus taking over the
Community industry's
these
reasons, it was found that the decrease of consumption
could not have been a substantial cause of the injury
suffered by the Community industry.

lost market

share. For

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Imports originating in third countries other
countries concerned

than the four

(188) According to Eurostat and to the information collected
during the investigation, the main third countries from
which SPT are imported are Japan, Argentina and the
USA.

their combined market share exceeded 4 % in the IP and
that US prices
charged by
exporting producers in three out of the four countries
concerned.

remained below those

(189)

Imports from Japan amounted to 52 960 tonnes in 2001
and decreased by 34 % to 34 857 tonnes over the period
considered. The market share of Japanese imports of the
product concerned amounted to 2,5 % in 2001, which
declined to 1,8 % in the IP. Japanese imports were made
at prices which at least doubled those of the Community
industry. Hence imports from Japan were not considered
as having had a negative effect on the situation of the
Community industry.

(190)

to a market

Imports from Argentina increased by 52 %, from 30 962
tonnes in 2001 to 46 918 tonnes in the IP. This corre-
sponds
share which increased by one
percentage point from 1,4 % in 2001 to 2,4 % in the
IP. The price level of imports from Argentina remained
throughout the period considered well above the one of
the four countries considered, e.g. in the IP the average
CIF price per tonne of imports from Argentina amounted
to EUR 660, whereas the weighted average CIF price of
the four countries concerned was EUR 501 per tonne. In
the course of the analysis the fact that one Community
producer is related to an exporting producer located in
Argentina has been taken into consideration.
It was,
however, demonstrated that the SPT imported by this
Community producer
related company in
from its
Argentina, were neither
in terms of quantities nor
prices a determining reason for the injurious situation
the
this particular Community producer and of
of
Community imports were industry as a whole.

(191) As to the USA, Eurostat statistics show that the market
share of imports of SPT from the USA increased from
0,6 % in 2001 to 1,8 % in the IP. Average selling prices
of US at the beginning of the period under consideration
at EUR 2 414 per tonne,
i.e. almost four times higher
than those of the Community industry and subsequently
decreased hugely by 77 % to EUR 797 per tonne during
the IP, still exceeding the Community industry's prices by
8 %. Therefore, despite the increased imports from the
USA, given their price level, they cannot be considered as
a substantial
injury suffered by the
the
Community industry.

cause of

(192)

It was claimed that imports from Argentina and United
States have been steadily increasing since 2001 and that

(193) The allegation that US prices were lower than those
charged by three out of the four countries concerned is
not borne out by the facts. More generally,
it was
concluded that in particular in view of their high price
levels, these imports cannot be regarded as a determining
cause of the injury.

(194) One exporting producer claimed that the Community
industry was primarily active in the production and
sales of high end product categories (OCTGs) which
would compete with imports from Japan, Argentina
and the United States. It was argued that imports from
these three countries combined represented an increase
of market share of 1,5 percentage points between 2001
and the IP and that imports from these three countries
were replacing SPT produced by the Community industry
rather than SPT imported from Russia and Ukraine.

(195)

It is pointed out that the Community industry despite
more putting more emphasis on the production of high
end added value products, continues producing all
including low end products in
different types of SPT,
substantial quantities. As a matter of fact, OCTGs only
represent a small share of
the Community industry's
activities, namely 5 % of
the total sales volume and
7 % of the total sales value of the like product sold on
the Community market during the IP. The increase of the
combined market share of
Japan, Argentina and the
United States by 1,5 percentage points from 4,5 % in
2001 to 6,0 % in the IP can,
if at all, only be linked
to a minor degree to the more pronounced loss of
the Community industry during the
market share of
same period, i.e. from 40,1 % to 36,7 %. Consequently,
the claim that imports of these three countries caused
material
injury to the Community industry has to be
rejected.

it was

(196) One exporting producer claimed that the Commission
services omitted to take into account
the impact of
SPT imports from the new Member States. Mainly for
Slovakia,
imports were
previously found to have been made into the EC at
injurious dumped prices. Such imports were subject to
anti-dumping duties which lapsed as a result of enlar-
gement in the middle of the IP.
It was also claimed
that such imports were the cause of the loss in market
share of the Community industry.

argued that

these

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L 175/29

(197) However,

sales volume from the
is noted that
it
Community
European
from other
and
industry
producers (including Slovakia) decreased respectively by
around 133 000 tonnes and by 112 000 tonnes between
2001 and 2004, whereas, at the same time, the imports
from the four countries concerned increased by around
120 000 tonnes (13).

(198) As to the imports from Slovakia before enlargement, it
cannot be claimed that
such imports could cause
injurious dumping to the Community Industry for the
(i.e. 1st May 2004)
period 2001 until enlargement
since they were subject to anti-dumping duties re-estab-
lishing a level playing field with the Community Industry.
Any possible effect of these sales inside the EU-25 as
from 1st of May is not considered such as to reverse
the injury findings or break the causal link between the
dumped imports from the four countries under investi-
gation and the injury suffered by the Community
Industry. Indeed, an analysis of imports of the product
concerned from Slovakia into the Community market
before and after enlargement based on Eurostat showed
that
the
in the year of accession,
product concerned in the rest of
the Community
market
increased by 7 % or 5 911 tonnes
compared to the year before accession. This increase in
volume is very small as compared to the development of
imports from the four countries concerned.

these imports of

(EU-24)

(199) Given the above, it is concluded that the market share of
the Community industry did not diminish as a result of
intra-Community competition.

an impact on the Community industry and exporting
producers alike. Hence, a downward cycle in the SPT
market which allegedly had a negative impact on the
state of the Community industry should have also had
i.e.
a negative impact on the volume of SPT imports,
import volumes
from the four countries concerned
should have decreased. However, as described in recital
(151), cumulated import volumes of the four countries
concerned increased every single year from 2001 to
it is concluded that the cyclicality of
2004. Therefore,
the steel market cannot be considered as having caused
the injury suffered by the Community industry.

(203) One company claimed that the fall in the value of the
USD versus the EUR from 2001 to the IP had an impact
the Community industry without
on the situation of
providing any evidence that these exchange rate fluc-
impact on the
actually had a negative
tuations
performance of
In the
industry.
the Community
absence of any substantiated information showing that
the injury situation of the Community industry has been
influenced by a appreciation of the EUR against the USD,
it is concluded that exchange rate fluctuation did not
break the causal link between dumped imports and the
injurious situation of the Community industry. Moreover,
the analysis of the Community industry was based on the
financial performance of the like product produced and
sold in the Community market. As the vast majority of
sales of the like product in the Community market was
invoiced in EUR and as all major production expenses
were also primarily made in EUR, exchange rate fluc-
tuations did in any case not have a major impact on
the injurious situation of the Community industry.

(200) Therefore, the claim that intra-community competition
could be the cause of the decrease of loss of market
share of the Community industry is hereby rejected.

(204)

In view of the above described evolution of volumes,
price and market shares of imports originating in other
third countries,
injury
suffered by the Community industry cannot be attributed
to these imports.

it is concluded that the material

Market cyclicality and exchange rates

(201)

In reaction to the disclosure of definitive findings, one
exporting producer stated that the factor of cyclicality of
the steel market had not be taken into account as
required by Article 3(7) of the basic Regulation.

(205)

(202)

In this respect it is noted that the exporting producer did
not submit any evidence to substantiate the claim that
the cyclicality of the steel market has caused the injurious
situation of the Community industry. In addition,
it is
noted that the cyclicality of the steel market should have

(13) Note that consumption went down by 165 000 tonnes between

2001 and 2004.

Increase of raw material prices

It has been claimed by two exporting producers that the
decrease in profitability was a result of the rise in raw
material cost and could therefore not be linked with
dumped imports from the countries concerned. Indeed,
the cost for scrap or billets which are the main raw
materials for the production of SPT increased signifi-
cantly over the period considered. It was evidenced by
two Community producers
scrap
increased between the last quarter of 2003 and the last
quarter of the IP by 66 % and 77 % respectively. One
Community producer demonstrated that over the whole
period considered, from 2001 until the IP, the scrap price
more than doubled from EUR 99 per tonne in 2001 to
EUR 253 per tonne in the IP. A similar price trend could
be observed with regard to average prices of billets.

the price of

that

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Official Journal of the European Union

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(206) However, material injury to the Community industry was
not caused by the increased raw material prices as such,
but as explained in recital
(168), by the fact that the
Community industry was unable to pass on these
Indeed, due to the
higher costs
dumped imports from the countries concerned which
substantially undercut the Community industry's prices,
the Community industry could not
increase its sales
prices to an amount which would have duly reflected
the increase of raw material prices.

to the customers.

products, until 1999) and the period considered (2001
until 2004) of
the present anti-dumping proceeding.
Moreover, no information has been found during the
investigation that prices of the Community industry or
other injury indicators were influenced by any anti-
competitive behaviour Given the above, and in the
absence of
indication to the
contrary, it can be concluded that the cartel formed by
certain Community producers before 2001 did not have
an effect on the injurious situation of the Community
industry during the period considered.

any information or

it was incorrect

(207) Following the disclosure of definitive findings, one
exporting producer claimed that
to
state that profitability decreased in the IP because
Community producers were unable, due to the price
pressure from dumped imports,
to increase prices at
such levels as to cover the increase in raw materials.
According to this company, the price of raw materials
(scrap) in the IP increased by 15,8 %. It was argued that
prices of dumped imports increased in excess of
the
increase of the costs of raw materials.

information

(208) However, as mentioned above, evidence obtained in the
course of the investigation showed that the cost increase
of raw material of the Community producers was far
higher than the alleged 15,8 % during the IP. Based on
the
some Community
by
it was also found that the increase in raw
producers,
material prices exceeded the increase of the weighted
average price of SPT from the four countries concerned
throughout
the
argument is maintained that due to the price pressure
from dumped imports, the Community producers were
unable to increase prices and render sales profitable.

considered. Therefore,

the period

provided

Anti-competitive behaviour of certain Community producers

(209) Anti-dumping measures in force since 1997 on the
original product scope concerning Romania and Russia
are no longer applied since July 2004 as a matter of
prudence
in connection with an anti-competitive
behaviour of certain Community producers in the past.

(210) Some exporting producers and importers requested that
formed by certain
to which the cartel
the extent
Community producers could have had an impact on
the performance of the overall Community industry be
investigated.

(211)

In this regard, it was found that there was no overlap in
time between the duration of the infringement of some
Community producers (1990 until 1995 and, for certain

(212) Following the disclosure of definitive

that

claimed

finding, one
exporting producer
the Commission
services failed to examine the likely effects of recovery
the Community
to normal competitive conditions of
industry following the end of the cartel behaviour in
1999.
It was argued that the overlap in time of the
cartel behaviour and the period under consideration of
the present proceeding was
the
Commission services had erred in its assessment with
respect to the analysis of injury and causality and may
have violated Article 3(7) of the basic Regulation.

irrelevant and that

(213) Firstly,

it is underlined that only a small part of the
product concerned, namely OCTGs (classified under CN
7304 21 00 20 and CN 7304 29 11 20) was concerned
by the cartel proceeding. During the IP, the volume of
OCTGs sold in the Community market represented only
5 % of the total sales volume of the Community industry.

(214) Moreover,

is considered that

the two years period
it
between the end of
the cartel behaviour and the
beginning of the period used for the injury determination
is sufficient as to have allowed for a return to normal
competitive conditions
the Community industry.
for
However, the situation during the IP was injurious.

(215) Given the above, this claim is rejected.

5.4. Conclusion on causation

from the

in dumped

(216) The coincidence in time between, on the one hand, the
increase
countries
imports
concerned, the increase in market shares and the under-
cutting found and, on the other hand, the evident dete-
rioration in the situation of the Community industry,
leads
the dumped imports
injury suffered by the Community
caused the material
industry within the meaning of Article 3(6) of
the
basic Regulation.

to the conclusion that

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6. COMMUNITY INTEREST

(217)

dumping,

In accordance with Article 21 of the basic Regulation, it
has to be examined whether, despite the conclusion on
injurious
for
compelling
concluding that it is not in the Community interest to
adopt measures in this particular case. The likely impact
of possible measures on all parties involved in the
proceeding and also the consequences of not
taking
measures have to be considered in this respect.

reasons

exist

the

imposition

other producers of the product concerned in the new
Member States as mentioned in recital
(139). The
number of producers in the Community is considered
such as to ensure competition within this market, even
anti-dumping measures.
of
with
Furthermore, as mentioned in recitals (188) to (195),
producers in other third countries (e.g. in the USA) are
also competing with the Community industry with
similar products and prices. Therefore it is considered
that the imposition of measures will neither jeopardize
the supply of SPT nor
restrict competition on the
Community market.

6.1. Community industry

(218) The injurious

situation of

the Community industry
resulted from its difficulty to compete with the low-
priced, dumped imports.

(219)

is considered that

It
the imposition of measures will
enable the Community industry to increase the volume
of
its sales and market share and thereby generating
better economies of scale and thus the necessary profit
level to justify continued investment in its production
facilities.

(220) Should measures not be imposed, the deterioration of the
situation of the Community industry would continue. It
would not be able to invest in new production capacity
and to compete effectively with imports from third
countries. Some companies would have to cease the
their
production of
employees. It is therefore concluded that the imposition
of anti-dumping measures is in the interest of
the
Community industry.

like product and lay off

the

6.2. Interest of unrelated importers

(223) As far as importers are concerned, only three unrelated
importers replied to the questionnaire and a verification
visit was subsequently carried out to two of them. A
fourth unrelated importer accepted a verification visit at
a late stage in the proceeding. The volumes of
the
product concerned imported by these four importers
represented 8 % of the total imports in the Community
and 3 % of the Community consumption.

(224)

In view of the fact that the majority of all imports of SPT
into the Community is channelled through importers
which are related to exporting producers and less than
half of all imports enter the Community market through
unrelated importers, the imports of the four unrelated
importers can be considered as representative for all
other unrelated importers.

(221) One non-complainant producer in the Community which
is related to an exporting producer in Romania claimed
that producers in the Community would already work at
full production capacity and would not be able to meet
the high demand for SPT on the Community market and
in third countries. The company argued that conse-
quently the imposition of duties would lead to a
on the Community market.
shortage
However, as stated above,
the investigation revealed
that throughout the period considered, the Community
industry had significant spare production capacity which
could be used in the future to produce the product
concerned in order to meet the demand for SPT on
the Community market.

supply

of

(222)

It was also claimed that
would result
Community market.
It
complaining producers,

the imposition of measures
in a limitation of competition on the
the
significant

is noted that besides
there are

several

(225) For one of

imports of

the importers,

the product
concerned represented 22 % of its total imports of SPT
and the corresponding sales value represented 3 % of its
total
turnover during the IP. These sales were highly
profitable during the IP. Taking into account that the
majority of suppliers of
this company are located in
the Community or in countries not concerned by the
imposition of anti-dumping duties, the impact of the
be
imposition
considered as significant.

anti-dumping measures

cannot

of

(226) A second importer whose main activity consisted in
imported all SPT
importing and transforming SPT,
from the
from
concerned,
countries
Russia. A small part of these imports consisted of so-
called ‘certified tubes’ It is thus considered that an impo-
sition of duties on imports from Russia will have a
negative impact on the overall business activity and parti-
cularly on the profitability of this company. However,
taking into consideration that there is currently besides

in particular

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Official Journal of the European Union

29.6.2006

this importer only one other supplier of certified SPT in
the Community, it is very likely that any price increase
due to the anti-dumping duty on this product can be
passed on to the final customer. Furthermore,
the
company would also be able to source at least a part
of its purchases from a local supplier in the Community
or
their purchases with other
products than the product concerned.

to substitute part of

7. DEFINITIVE ANTI-DUMPING MEASURES

7.1. Injury elimination level

(232)

In order to prevent further injury being caused by the
it is considered appropriate to adopt
dumped imports,
anti-dumping measures.

(227) The other

two cooperating importers whose import
the
volumes represented also only a minor share of
total
import volume of the product concerned during
the IP considered themselves as not affected by an impo-
sition of duties.

(228)

depending on their

In the light of the above, it is considered that importers
would be affected differently by the imposition of anti-
dumping measures
individual
situation. It can thus be concluded that the imposition
of measures may indeed possibly have a significant
situation of one
negative
it is not expected that
importer. On average however,
measures have a significant
impact on the
overall situation of the importers.

effect on the

financial

financial

6.3. Interest of users

companies. According to the

(229) No user of the product concerned replied to the ques-
tionnaire sent by the Commission. However, the investi-
gation showed that SPT are used mainly by construction
and oil
information
(boilers,
available, SPT are part of
pipelines, construction) of which they form only a
limited part. Therefore,
the
impact on costs resulting from the imposition of anti-
dumping measures on SPT would very likely not result in
a significant impact in the costs of such users, and thus
giving a possible explanation to the lack of cooperation
of users in the present proceeding.

it was concluded that

larger projects

(230) On the basis of the above findings, and in the absence of
any other element or reaction from consumer organi-
sations, it is concluded that the impact of the proposed
measures on the consumers is likely to be marginal.

i.e.

in the

(233) The measures should be imposed at a level sufficient to
eliminate the injury caused by these imports without
exceeding the dumping margin found. When calculating
the amount of duty necessary to remove the effects of
the injurious dumping,
it was considered that any
measures
should allow the Community industry to
cover its costs of production and to obtain overall a
profit before tax that could be reasonably achieved by
this type in the sector under normal
an industry of
conditions of
absence of
competition,
dumped imports, on the sales of the like product in
the Community. Taking into account the average level
of profitability obtained by the Community industry in
2001,
it was found that a profit margin of 3 % of
turnover could be regarded as an appropriate minimum
which the Community industry could have expected to
obtain in the
injurious dumping. The
necessary price increase was then determined on the
basis of a comparison of the weighted average import
price, as established for the price undercutting calcu-
lations, 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 the Community industry by the actual
loss/profit made during the IP 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.

absence of

7.2. Definitive measures

(234)

In the light of the foregoing,
it is considered that in
accordance with the Article 9 of the basic Regulation,
the
definitive anti-dumping measures on imports of
product concerned should be imposed at the level of
the lowest of
the dumping and the injury margins
found, in accordance with the lesser duty rule.

(231) Therefore, it is concluded that there are no compelling
reasons on the grounds of Community interest, why anti-
dumping duties should not be imposed.

(235) As the injury elimination levels are higher than the
dumping margins established,
the definitive measures
should be based on the latter. The residual dumping
margins were set at the level for the company with the
highest individual margin in each country.

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(236) The following duty rates, expressed as a percentage of the
CIF Community border price, customs duty unpaid, are
as follows:

Country

Company

Croatia

All companies

Romania

S.C. T.M.K. — Artrom S.A.

Rate of duty
(%)

29,8 %

17,8 %

S.C. Mittal Steel Roman S.A.

17,7 %

S.C. Silcotub S.A.

All other companies

Russia

Joint Stock Company Chelyabinsk
Tube Rolling Plant and Joint Stock
Company Pervouralsky Novotrubny
Works

11,7 %

17,8 %

24,1 %

All other companies

35,8 %

Ukraine

OJSC Dnepropetrovsk Tube Works

12,3 %

CJSC Nikopolsky Seamless Tubes
Plant Niko Tube and OJSC Nizhned-
neprovsky Tube Rolling Plant

25,1 %

CJSC Nikopol Steel Pipe Plant Yutist

25,7 %

All other companies

25,7 %

findings of

the present

the
they reflect

(237) The individual company specific anti-dumping duties
specified in this Regulation were established on the
basis of
investigation.
the situation found during the
Therefore,
investigation with respect
to these companies. These
duties (as opposed to the country-wide duty applicable
to ‘all other companies’) are thus exclusively applicable to
imports of products originating in the country concerned
and produced by the companies and thus by the specific
legal entities mentioned. Imported products produced by
any other company not specifically mentioned in the
operative part of
this Regulation with its name,
included entities related to those specifically mentioned,
cannot benefit from these duties and shall be subject to
the duties applicable to ‘all other companies’.

(e.g.

(238) Any claim requesting the application of these individual
following a
company anti-dumping duty rates
change in the name of
the entity or following the
setting up of new production or sales entities) should
be addressed to the Commission (14) forthwith with all
relevant information,
in particular any modification in
the company's activities linked to production, domestic
and export sales associated with e.g. that name change or
that change in the production and sales entities.
If
warranted, the appropriate arrangements will be made,
including by updating the list of companies benefiting
from individual duty rates. In order to ensure a proper
enforcement of the anti-dumping duty, the country-wide
duty level should not only apply to the non-cooperating
exporter, but also to those companies which did not
have any exports during the IP. However,
the latter
companies are invited, when they fulfil the requirements
of Article 11(4) of
second
paragraph, to present a request for a review pursuant
to that Article
situation
examined individually.

the basic Regulation,

in order

to have

their

(239) As far as the identification of

at

concerned is

the Community border

the CEV threshold by
is
Custom authorities
concerned, the identification of the CEV can be done
indirectly through the verification of the 11 CN codes
classified.
under which the product
the period considered, 99,9 % of
Throughout
all
the product concerned were SPT with a
imports of
CEV below the 0,86 threshold. Therefore,
it was
concluded that all SPT imports
from the countries
concerned under the 11 CN codes should be considered
as the product concerned, except in those very rare cases
when the importer is able to demonstrate that the CEV
of the goods imported exceeds the 0,86 threshold.

7.3. Exemption request

(240) One importer who imported so-called ‘certified SPT’ in
the Community suggested that his company should be
excluded from the application of the anti-dumping duty.
However, the company has not invoked any reasons on
the basis of which such an individual exemption would
be justified. It should be noted that this importer was
importing dumped SPT which caused injury to the
Community industry and that there was therefore no
exemption to this
reason to grant any individual
that
company.
exempting this importer from the anti-dumping duties
would constitute an inappropriate high risk of circum-
vention of the measures. Indeed, since also certified tubes
can be used in a variety of applications, it could not be
sufficiently ensured that these imports would only be
used in construction works in Italy.

Furthermore,

considered

it was

(14) European Commission

Directorate-General Trade
B-1049 Brussels/Belgium.

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29.6.2006

7.4. Partial suspension request

(241) Following the disclosure of definitive findings, one
importer
requested a nine-month (extendable for a
further period of 12 months) partial suspension of the
the product concerned,
duties on certain imports of
produced by the Russian exporting producer TMK, clas-
sified under CN code 7304 39 92 and certified by the
Italian Ministry of Labour
for utilisation in public
construction works in Italy.

(242) The importer argued that a partial suspension would be
justified on grounds of Community interest according to
Article 14(4) of the basic Regulation. It was claimed that
without the partial suspension of measures the importer
would stop importing certified tubes and consequently
only one
company producing certified SPT
would be left in Italy which would hence constitute a
monopoly.

single

(243) The importer claimed that

the partial suspension of
measures would not cause any injury to the alleged
single Community producer whose production volume
of certified SPT allegedly only covers approximately
two thirds of the annual demand of certified SPT in
Italy. The
a partial
suspension of the measures could be easily monitored
by Italian customs through a simple verification of the
certification documents which have to be presented to
customs at each import transaction.

argued further

importer

that

of

to

tubes

imports

industry

(244) As far as the argument is concerned that the non-partial
suspension of measures would create a monopoly in the
Community market, it is noted that whereas during the
IP two producer existed in Italy producing certified SPT
since the end of 2005 there is indeed only one company
left. However,
it could be shown that during the IP
from Russia
certified
dumped
undercut prices of certified tubes produced by the
Community
the
Community producers were not able to compete with
these dumped imports and consequently had to cease
or sharply reduce the production of certified SPT. As
the fact that only one Community producer of certified
SPT remained in the Community market was actually a
consequence of dumped imports of certified SPT from
Russia, the argument that partially suspending the duties
would not cause any injury to the Community industry
has to be rejected. On the contrary, it is expected that the
imposition of duties will lead to an increase of compe-
tition and the re-entry of other Community producers of
certified tubes in the Community market.

extent

such

that

the

in Italy,

authorities

also to be

(245) Whereas it is acknowledged that the monitoring of the
suspension could in principle be feasible by
partial
requested partial
customs
suspension has
same
grounds as the exemption request mentioned before in
recital (240). Granting a partial suspension of measures
for one individual
importer would constitute an inap-
propriate high risk of circumvention, as certified SPT
imported by this company could also be used for other
purposes than in construction works in Italy.

rejected on the

7.5. Undertakings

accepted from its

(246) The same importer suggested that an undertaking should
supplying Russian exporting
be
producer. The undertaking should set a duty free
import volume with a quantitative ceiling. The importer
argued that imports up to such quantity would be used
solely in public construction projects in Italy. Therefore,
these imports would not cause any injury to Community
industry. Furthermore, there would be insufficient supply
of certified SPT in the Community. However, it should be
noted that in accordance with Article 8(1) of the basic
Regulation only exporting producers can offer under-
takings, but not importers. Therefore, this request was
rejected.

(247) Following the disclosure of essential facts and consid-
erations on the basis of which it was intended to
recommend the imposition of definitive anti-dumping
in the
duties,
the majority of exporting producers
countries
in
concerned offered price undertakings
accordance with Article 8(1) of the basic Regulation.

the product

(248) However, the product concerned is characterised by a
considerable number of product types with some char-
acteristics not easily discernible upon importation. This
makes it virtually impossible to establish minimum prices
for each product type which would be meaningful and
could be properly monitored by the Commission and by
the Member States upon
the customs authorities of
importation. Moreover,
concerned has
shown in the last years a considerable volatility in
prices and therefore it is not suitable for a fixed price
undertaking for an extended period of time. The volatility
in prices is due to the volatility of raw material prices,
namely metal billets,
scrap, which
constitute major but variant components of the cost of
production. If the minimum import prices were indexed
to the price of one of
the raw materials, different
indexing formulae would have to be established by
sub-product group making the determination of the para-
meters of indexation formulae and the monitoring of the
undertakings extremely complex.

ingots or

steel

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Official Journal of the European Union

L 175/35

(249)

In addition, it is recalled that undertakings were accepted
in the past for certain products falling within the product
scope of the current investigation. Those undertakings
that were based on the principle
that prices per
in line with the price
product group would fall
structure in use in the Community proved to be very
difficult to monitor by the Commission or were found
to have failed to raise prices to non-injurious levels that
would restore fair trade on the Community market (15).

(250) Moreover, in a number of cases the product classification
proposed was not sufficiently detailed to allow a proper
monitoring, or the price level proposed did not allow for
the removal of injurious dumping.

(251)

the

the duration of

are not workable

to the Community,

in particular the difficulties in
In view of the above,
it is
monitoring the different minimum import prices,
considered that undertakings
in
principle. However, given the upcoming accession of
the
Romania
measures against Romania will be limited in time.
Therefore, the risk of circumvention of the minimum
import prices by the Romanian exporters is limited and
so is the potential for significant changes of the prices.
its Decision
Commission
Accordingly
2006/441/EC of 23 June 2006 (16) accepting under-
takings offered in connection with the anti-dumping
certain seamless
proceeding concerning imports of
inter alia,
pipes and tubes, of iron or steel, originating,
the
in Romania, accepted the undertaking offers of
Romanian
for
reasons
accepting this undertaking are set out in more detail in
this Regulation. The Commission recognises that
the
undertaking offers eliminate the injurious effect of
dumping and limit to a significant degree the risk of
circumvention.

producers.

exporting

The

by

description on the undertaking invoice. Where the
above conditions are not met
the appropriate anti-
dumping duty shall be incurred at the time of acceptance
of the declaration for release into free circulation.

(253) Whenever

the Commission withdraws, pursuant

to
its acceptance of
Article 8(9) of the basic Regulation,
an undertaking following a breach by referring to
particular transactions and declares the relevant under-
taking invoices as invalid, a customs debt shall be
incurred at the time of acceptance of the declaration
for release into free circulation of these transactions.

(254)

Importers should be aware that a customs debt may be
incurred, as a normal trade risk, at the time of acceptance
of
the declaration for release into free circulation as
described in recitals (252) and (253) even if an under-
taking offered by the manufacturer from whom they
were buying, directly or indirectly, had been accepted
by the Commission.

(255) Pursuant

to Article 14(7) of

the basic Regulation,
customs authorities
should inform the Commission
immediately whenever indications of a violation of the
undertaking are found.

exporting

producers

(256) For the reasons stated above the undertakings offered by
the Romanian
therefore
considered acceptable by the Commission and the
companies
the
and obligations upon
essential
which acceptance is based. However,
for the reasons
stated above the undertakings offered by the Russian
and Ukrainian exporting producers are not acceptable.

concerned have been informed of

considerations

facts,

are

(252) To further enable the Commission and the customs
authorities to effectively monitor the compliance of the
companies with the undertakings, when the request for
release for free circulation is presented to the relevant
customs authority, exemption from the anti-dumping
duty is to be conditional on (i) the presentation of an
invoice
undertaking invoice, which is a commercial
containing at least the elements listed and the declaration
stipulated in the Annex; (ii) the fact that imported goods
are manufactured, shipped and invoiced directly by the
said companies to the first independent customer in the
Community; and (iii) the fact that the goods declared and
correspond precisely to the
presented to customs

(15) See recital (137) of Regulation (EC) No 258/2005.
(16) See p. 81 of this Official Journal.

(257)

It should be noted that in the event of a breach or
withdrawal of the undertaking or a suspected breach,
to
an anti-dumping duty may be imposed, pursuant
Articles 8(9) and (10) of the basic Regulation.

7.6. Conclusion regarding the two interim reviews
and existing measures

(258)

It is recalled that, as mentioned in recital (3), two interim
reviews were
initiated on the Commission's own
initiative, to allow for any amendment or repeal of the
existing definitive anti-dumping measures in force on
imports of
the original product scope from Croatia,
Romania, Russia and Ukraine.

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Official Journal of the European Union

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(259) On the basis of the findings of the present investigation,
measures should be imposed on imports of SPT as
defined in recital (17) originating in Croatia, Romania,
Russia and Ukraine. As the product concerned as defined
the
in section 2.1 covers also the product scope of
already existing measures, the continued imposition of
measures imposed on the original product scope by
Regulation (EC) No 2320/97 and Regulation (EC) No
348/2000, is no longer appropriate and therefore those
Regulations, as amended, should be repealed.

Country

Company

Anti-
dumping
duty

TARIC
Additional
code

Croatia

All companies

29,8 %

Romania

S.C. T.M.K. — Artrom S.A.

17,8 %

A738

S.C. Mittal Steel Roman S.A.

17,7 %

A739

S.C. Silcotub S.A.

11,7 %

A740

All other companies

17,8 %

A999

(260)

In parallel, the two interim reviews aforementioned, as
initiated in
well as
November 2002 and referred to in section 1.2 should
be terminated.

the interim and expiry reviews

Russia

Stock

Company
Joint
Rolling
Chelyabinsk
Plant
Stock
and
Company Pervouralsky Novo-
trubny Works

Tube
Joint

24,1 %

A741

(261) Furthermore,

the Regulation (EC) No 1866/2005
extending the partial suspension of measures on the
original product
and Ukraine
becomes obsolete following the repeal of Regulation
(EC) No 348/2000,

from Croatia

scope

HAS ADOPTED THIS REGULATION:

Article 1

iron or

International

ex 7304 10 10,

A definitive anti-dumping duty is hereby imposed on imports
of certain seamless pipes and tubes of
steel, of
circular cross-section, of an external diameter not exceeding
406,4 mm with a Carbon Equivalent Value (CEV) not ex-
ceeding 0,86 according to the
Institute of
Welding (IIW) formula and chemical analysis (17) falling within
ex 7304 21 00,
CN codes
ex 7304 39 58,
ex 7304 31 80,
ex 7304 29 11,
ex 7304 39 92, ex 7304 39 93, ex 7304 51 89, ex 7304 59 92
7304 10 10 20,
(TARIC
and
7304 29 11 20,
7304 21 00 20,
7304 10 30 20,
7304 39 92 30,
7304 31 80 30,
7304 39 58 30,
and
7304 39 93 20,
7304 59 93 20) and originating in Croatia, Romania, Russia
and Ukraine.

ex 7304 59 93 (18)

7304 51 89 30,

ex 7304 10 30,

7304 59 92 30

codes

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

(17) The CEV shall be determined in accordance with Technical Report,
1967, IIW doc. IX-535-67, published by the International Institute
of Welding (IIW).

(18) As defined in Commission Regulation (EC) No 1719/2005 of
27 October 2005 amending Annex I to Council Regulation (EEC)
No 2658/87 on the tariff and statistical nomenclature and on
the Common Customs Tariff (OJ L 286, 28.10.2005, p. 1). The
product
is determined in combining the product
description in Article 1(1) and the product description of the corre-
sponding CN codes taken together.

coverage

All other companies

35,8 %

A999

Ukraine

OJSC Dnepropetrovsk Tube
Works

12,3 %

A742

CJSC Nikopolsky
Seamless
Tubes Plant Niko Tube and
OJSC
Nizhnedneprovsky
Tube Rolling Plant

25,1 %

A743

CJSC Nikopol Steel Pipe Plant
Yutist

25,7 %

A744

All other companies

25,7 %

A999

Notwithstanding the first subparagraph,
the definitive anti-
dumping duty shall not apply to imports released for free circu-
lation in accordance with Article 2.

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

Article 2

1.
Imports declared for release into free circulation which are
invoiced by companies from which undertakings are accepted
by the Commission and whose names are listed in the
Commission Decision 2006/441/EC of 23 June 2006 (19), as
from time to time amended, shall be exempt from the anti-
dumping duty imposed by Article 1, on condition that:

— they are manufactured, shipped and invoiced directly by the
said companies to the first independent customer in the
Community, and

(19) See p. 81 of this Official Journal.

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— such imports are accompanied by an undertaking invoice
which is a commercial
the
elements and the declaration stipulated in the Annex of
this Regulation, and

invoice containing at

least

Article 3

Regulation (EC) No 2320/97 and Regulation (EC) No 348/2000
are hereby repealed.

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

Article 4

A customs debt shall be incurred at the time of acceptance

2.
of the declaration for release into free circulation:

— whenever it is established, in respect of imports described in
paragraph 1, that one or more of the conditions listed in
that paragraph are not fulfilled, or

— when the Commission withdraws its acceptance of

the
undertaking pursuant to Article 8(9) of the basic Regulation
in a Regulation or Decision which refers to particular trans-
actions and declares the relevant undertaking invoices as
invalid.

The interim reviews of the anti-dumping duties on imports of
SPT of iron or non-alloy steel originating, inter alia, in Russia
and Romania and in Croatia and Ukraine,
initiated in March
2005, are hereby terminated.

The interim and expiry reviews,
and confirmed by
recital
1322/2004 to be ongoing, are hereby terminated.

initiated in November 2002
(20) of Regulation (EC) No

Article 5

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 Luxembourg, 27 June 2006.

For the Council
The President

J. PRÖLL

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ANNEX

The following elements shall be indicated in the commercial
seamless pipes and tubes, of iron or steel, to the Community which are subject to an undertaking:

invoice accompanying the company's sales of certain

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

2. The name of the company mentioned in Article 1 of the Commission Decision 2006/441/EC accepting the under-

taking 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.

6. The exact description of the goods, including:

— Product code number (PCN) used for the purposes of the investigation and the undertaking (e.g. PCN 1, PCN 2,

etc),

— plain language description of the goods corresponding to the PCN concerned,

— company product code (CPC) (if applicable),

— CN code,

— quantity (to be given in metric tonnes).

7. The description of the terms of the sale, including:

— price per metric tonne,

— the applicable payment terms,

— the applicable delivery terms,

— total discounts and rebates.

8. Name of the company acting as an importer in the Community to which the commercial invoice accompanying goods

subject to an undertaking is issued directly by the company.

9. The name of the official of the company that has issued the 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 Commission through its Decision 2006/441/EC, I declare that the information provided in this invoice is
complete and correct.’