Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of lever arch mechanisms originating in the People's Republic of China
Date: 2006-07-04
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, import, office supplies, originating product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.7.2006 
COM(2006) 362 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitively the provisional duty 
imposed on imports of lever arch mechanisms originating in the People's Republic of 
China 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

110 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of  22 
December 1995 on protection against dumped imports from countries not members of 
the European Community, as last amended by Council Regulation (EC) No 2117/2005 
of 21 December 2005 (‘the basic Regulation’) in the proceeding concerning imports of 
lever arch mechanisms ('LAM') originating in the People's Republic of China. 

120 

•  General context 

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

139 

141 

219 

229 

230 

230 

305 

•  Existing provisions in the area of the proposal 

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

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

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

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

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

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

3)  LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

An  anti-dumping  investigation  on  imports  into  the  Community  of  lever  arch 
mechanisms  originating  in  the  People's  Republic  of  China  was  initiated  on  28  April 
2005. 

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In January 2006, the Commission imposed provisional anti-dumping duties on imports 
into the Community of the product concerned originating in China. 

After the imposition of provisional anti-dumping duties, comments were received from 
the parties concerned. From a general perspective, the definitive findings confirm the 
need  for  anti-dumping  measures  as  imports  of  the  product  concerned  originating  in 
China were dumped and were causing injury to the Community industry. 

Market  Economy  Status  was  refused  to  all  companies.  The  definitive  findings 
confirmed that only one company could be granted individual treatment.  

Since we have reverted to the data contained in the complaint, with some adjustments, 
to establish normal value, definitive dumping margins slightly decreased (from 33.3% 
to  27.1%)  for  the  company  granted  IT,  and  from  48.1%  to  47.4%  for  the  other 
exporting producers. These margins remain lower than the injury margin. 

Following  provisional  disclosure,  the  injury  indicators  and  import  and  consumption 
figures have  been  reviewed but  remain  largely as at the provisional stage. It is likely 
that without measures, the Community industry would disappear since they are already 
in very vulnerable financial situation. This would mean full dependence of lever arch 
files producers on third country sources and a significant reduction of competition on 
the Community market. It is therefore concluded that the definitive measures would not 
be against the Community interest. 

310 

•  Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 2117/2005 of 21 December 2005. 

329 

•  Subsidiarity principle 

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

•  Proportionality principle 

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

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

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

•  Choice of instruments 

Proposed instruments: regulation. 

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

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332 

341 

342 

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

230 

409 

4)  BUDGETARY IMPLICATION  

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitively the provisional duty 
imposed on imports of lever arch mechanisms originating in the People's Republic of 
China 

THE COUNCIL OF THE EUROPEAN UNION, 

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

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

Whereas: 

1. 

PROCEDURE 

1.1. 

Provisional measures 

(1) 

(2) 

On  28  January  2006  the  Commission  imposed,  by  Regulation  (EC)  No  134/2006(2) 
(‘the  provisional  Regulation’),  a  provisional  anti-dumping  duty  on  imports  into  the 
Community  of  lever  arch  mechanisms  originating  in  the  People's  Republic  of  China 
(‘PRC’). 

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

1.2. 

Subsequent procedure 

(3) 

Following  the  imposition  of  the  provisional  anti-dumping  duty  on  imports  of  lever 
arch  mechanisms  from  the  PRC,  some  interested  parties  submitted  comments  in 
writing. The parties, who so requested, were also granted an opportunity to be heard 
orally. 

(4) 

The Commission continued to seek and verify all information it deemed necessary for 
its  definitive  findings.  The  oral  and  written  comments  submitted  by  the  parties  were 

1 

2 

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). 
OJ L 23, 27.1.2006, p. 13. 

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2. 

(5) 

(6) 

(7) 

(8) 

(9) 

examined, and, where considered appropriate, the provisional findings were modified 
accordingly. 

PRODUCT CONCERNED AND LIKE PRODUCT 

It is recalled that, in recital (12) of the provisional Regulation, the product concerned 
was  defined  as  lever  arch  mechanisms  (‘LAM’)  generally  used  for  archiving  sheets 
and other documents in binders or files. They consist of arched sturdy metal elements 
(normally  two)  on  a  back  plate  and  having  at  least  one  opening  trigger  that  permits 
inserting  and  filing  of  sheets  and  other  documents,  originating  in  the  PRC  (‘the 
product concerned’), normally falling within CN code ex 8305 10 00.  

One interested party claimed that one specific type of LAM should be excluded from 
the  definition  of  the  product  concerned  because  (i)  that  type  is  produced  under  a 
patented  design  owned  by  the  interested  party  and  is  not  available  from  any  other 
manufacturer, (ii) there is an exclusive supply contract with a Chinese producer, (iii) 
the type is exclusively used in premium special lever arch files (‘LAF’) with a superior 
quality and design compared to standard LAM and is therefore not competing with the 
segment  of  standard  LAM,  and  (iv)  this  type  is  not  economically  substitutable  with 
standard LAM in view of its much higher cost of production.  

However, another interested party claimed that all LAM have the same characteristics, 
end  uses  and  channels  of  distribution.  Moreover,  it  stated  that  the  manufacturing 
processes  and  costs  are  irrelevant  for  the  determination  of  the  product  concerned.  It 
also stated that any preferential treatment of one type of LAM used by only one LAF 
producer  would  cause  a  serious  distortion  not  only  on  the  Community  LAM  market 
itself, but also on the Community market for LAF. 

It is considered that a patented design or an exclusive contract between an exporting 
producer and a European user for a certain type of product does not, as such, justify 
the  exclusion  of  this  type  from  the  definition  of  the  product  concerned  or  the  like 
product. A LAM with all its characteristics remains the product concerned irrespective 
of whether it is patented or purchased via an exclusive contract. It should also be noted 
that manufacturing processes, production costs and quality differences are not, as such, 
relevant for the determination of the like product.  

The investigation confirmed that all product types including the specific type of LAM 
which  was  claimed  for  exclusion  in  recital  (6)  above  share  the  same  technical  and 
physical  product  characteristics  and  uses  and  that  the  LAM  market  does  not 
distinguish amongst clear market segments. All LAM, are thus substitutable and are in 
competition with each other on the Community market. Therefore, all types of LAM 
fall under the definition of the product concerned and the like product. Consequently, 
the claim set out in recital (6) above had to be rejected. 

(10) 

In  view  of  the  above,  the  findings  made  in  recital  (11)  to  (16)  of  the  provisional 
Regulation are hereby confirmed. 

3. 

DUMPING 

3.1. 

General methodology  

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(11)  The general methodology used to establish dumping of the imports of LAM into the 
Community  market  was  described  in  the  provisional  Regulation  in  recitals  (17)  to 
(50).  The  general  methodology  as  set  out  in  the  provisional  Regulation  is  hereby 
confirmed, with due consideration being taken of the amendments mentioned below. 

3.2. 

Market Economy Treatment (‘MET’)  

(12)  One of the companies granted IT claimed that it should have been granted MET and 
that  its  situation  especially  with  regard  to  criteria  two  (accounting  and  auditing)  and 
three  (distortion  carried-over  from  the  former  non-market  economy  system)  has  not 
properly  been  assessed  during  the  investigation.  The  company,  however,  did  not 
provide any new evidence in support of its claim.  

(13) 

In the absence of new facts and other comments, the findings concerning MET as set 
out in recitals (17) to (25) of the provisional Regulation are hereby confirmed. 

3.3. 

Individual treatment (‘IT’) 

(14)  The  findings  in  recital  (29)  of  the  provisional  Regulation  with  regard  to  the  first 

company granted IT, i.e. Dongguan Nanzha Leco Stationery are hereby confirmed. 

(15)  As mentioned in recital (30) of the provisional Regulation, the other company which 
had been granted IT had subsequently been excluded from the investigation because of 
non-cooperation. In the absence of any reaction from the company, the finding as set 
out in recitals (30) of the provisional Regulation is hereby confirmed. 

3.4. 

Normal value 

(16)  The  findings  below  concern  the  determination  of  normal  value  of  all  exporting 

producers not granted MET. 

(a) 

Analogue country 

(17)  Following further analysis of all the information available from the producer in Iran, it 
had to be concluded that the information was incomplete and/or inconsistent and thus 
could not be used as the basis for the calculation of the normal value at the definitive 
level.  It  was  therefore  resorted  to  another  reasonable  basis  for  the  calculation  of  the 
normal value in accordance with Article 2(7)(a) of the basic Regulation.  

(b) 

Determination of normal value  

(18)  Due to lack of information from other third countries where LAM are produced, it was 
considered  that  the  data  available  from  the  complaint  and  from  the  Community 
industry  constituted  the  most  reasonable  basis  to  establish  normal  value  at  the 
definitive  level.  Adjustments  were  made  to  reflect  specific  verified  data  obtained 
during the investigation, in particular concerning prices of raw materials and freight. 

3.5. 

Export price 

(19)  The  exporting  producer  granted  IT  claimed  that  errors  were  made  in  the  level  of 
SG&A and profit calculated for a related importer and that there was double counting 
of the SG&A applied to establish the ex-works export price. In addition, this exporter 

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claimed  that  the  SG&A  figures  and  profits  from  the  related  companies  should  be 
revised following new calculations provided by the company after the on-site visits.  

(20)  The  examination  of  the  above  claims  confirmed  that  a  clerical  error  occurred  in  the 
SG&A calculation. This error has been corrected accordingly. However, the new data 
provided  by  the  company  had  to  be  rejected  because  they  could  not  be  verified  any 
longer during the investigation.  

(21)  The  general  methodology  as  set  out  in  recitals  (41)  and  (42)  of  the  provisional 

Regulation are hereby confirmed. 

3.6. 

Comparison 

(22)  The normal value established as described in recitals (16) to (18) above and the export 
prices,  revised  as  explained  in  recitals  (19)  to  (21),  were  compared  on  an  ex-factory 
basis  and  at  the  same  level  of  trade.  In  order  to  ensure  a  fair  comparison  between 
normal value and export price, account was taken, in accordance with Article 2(10) of 
the basic Regulation, of differences in factors which were claimed and demonstrated 
to  affect  prices  and  price  comparability.  The  factors  for  which  adjustments  were 
accepted  are  commissions,  transport,  insurance,  handling,  loading  costs,  ancillary 
costs, and credit costs. 

3.7. 

Dumping margin 

(23)  Following the adjustments to normal value and to export price, the definitive dumping 
margin  expressed  as  a  percentage  of  the  CIF  import  price  at  the  Community  border, 
duty unpaid, applicable to the exporter granted IT, should be as follows : 

Company 

Definitive dumping margin 

Dongguan Nanzha Leco Stationery 

27.1% 

(24)  Following  provisional  disclosure,  no  comments  were  received  concerning  the 
methodology  for  calculating  the  dumping  margin  for  all  other  exporting  producers. 
However, the adjustments made to normal value led to an amended definitive dumping 
margin of 47.4% of the CIF Community frontier price for all other exporting producers.  

4. 

INJURY 

4.1. 

Community production 

(25)  Some  interested  parties  claimed  that  one  producer  provisionally  included  in  the 
definition of the Community production and Community industry should be excluded 
because of an alleged relationship with a Chinese exporting producer and because of 
large imports of Chinese LAM, in particular during the IP. Hence, they claimed that 
the  company  should  be  excluded  both  from  Community  production  and  for  the 
purpose of assessing injury.  

(26) 

It is recalled that the situation of the said producer was described in detail in recitals 
(55) to (57) of the provisional Regulation. When examining again its situation in the 

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light of the provisions of Article 4 of the basic Regulation, it has to be recalled that the 
producer  did  not  behave  differently  from  other  complainant  non-related  Community 
producers. Moreover, it was found that the Community producer was not in a position 
neither  legally  nor  operationally  to  control  the  exporting  producer  from  whom  it 
imported. The claim was therefore rejected. 

(27) 

In  the  absence  of  any  new  comments  concerning  the  Community  production,  the 
provisional findings concerning the total Community production as set out in recitals 
(51)-(58) of the provisional Regulation are hereby confirmed. 

4.2. 

Definition of the Community industry 

(28)  One  interested  party  argued  that  another  Community  producer  should  be  excluded 
from the definition of the Community industry. Firstly, because the producer allegedly 
sells large quantities of LAM to related customers and is also using LAM for captive 
use. Secondly, because the said producer did not fully cooperate in the investigation, 
in particular, it did not submit a complete file accessible to all interested parties within 
the deadline. 

(29)  After  having  analysed  this  claim,  it  was  confirmed  that  the  cooperation  of  the  said 
producer  in  the  investigation  was  not  sufficient.  This  producer  should  hence  be 
excluded from the definition of the Community industry and its output should also be 
excluded from the Community production. 

(30)  The production of the four remaining Community producers which cooperated fully in 
the  investigation  and  supported  the  complaint  was  established  at  around  205  million 
units of LAM during the IP.  

(31)  The above four Community producers represent around 75% of the total Community 
production.  Hence,  these  companies  are  sufficiently  representative  to  constitute  the 
Community  industry  within  the  meaning  of  Articles  4(1)  and  5(4)  of  the  basic 
Regulation. 

(32) 

In  this  Regulation  the  absolute  figures  in  the  tables  below  could  not  always  be 
provided.  These  data  cannot  be  disclosed  because  one  Community  producer  was 
excluded  between  the  provisional  and  the  definitive  stage,  hence  its  data  could  be 
derived by comparison. 

4.3. 

Community consumption 

(33)  Some  interested  parties  alleged  that  the  volume  of  Community  consumption  was 
wrongly calculated. In particular, they addressed the issue that the data concerning the 
imports  from  the  country  concerned  was  based  on  the  complaint.  They  claimed  that 
the parties that participated in the investigation, in particular LAF producers and LAM 
importers provided the Commission with more reliable data to establish consumption. 

(34)  The  volume  of  consumption  was  thus  recalculated  on  the  basis  of  data  provided  by 
cooperating  parties  in  the  investigation.  The  figures  shown  in  the  table  below  are 
based  on  the  European  producers’  verified  sales,  the  imports  from  the  PRC  and  on 
other  sources  made  available  by  those  users  and  importers  which  participated  in  the 
investigation.  Given  the  high  cooperation  of  Community  producers,  importers  and 

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users, these data are considered the most reliable, even though it cannot be excluded 
that  a  small  number  of  other  users/importers  exist  and  therefore  the  imports  are 
slightly underestimated. 

Table 1 

Consumption volume (million pieces) 

2001 

2002 

2003 

2004 (IP) 

European Community 

Index 

271 

100 

313 

116 

327 

121 

381 

141 

(35)  A  comparison  shows  that  the  trends  in  consumption  volume  are  similar  to  the  one 
described in the recital (63) of the provisional Regulation, but they indeed appear to be 
more  accurate.  In  particular,  it  appears  that  the  major  increase  in  consumption 
occurred  between  2003  and  the  IP,  amounting  to  17%.  During  the  same  period  the 
Community  industry  only  increased  its  sales  volume  by  3%  (cf.  Table  6)  and  that 
imports  from  the  PRC  significantly  increased  by  28%  or  by  more  than  42  million 
pieces (cf. Table 2). 

4.4. 

Imports into the Community from the PRC and market share  

(36)  Based on the claim made in recital (33) above, the import volume of LAM originating 
in the PRC was also revised. Trends relatively similar to those found in recital (65) of 
the  provisional  Regulation  were  observed.  These  trends  are  illustrated  in  table  2 
below. 

Table 2 

Import volumes (million pieces) 

2001 

2002 

2003 

IP 

PRC 

Index 

98.47 

135.38 

152.73 

195.59 

100 

137 

155 

199 

(37)  The  major  difference  in  comparison  to  the  import  volumes  established  in  the 
provisional  Regulation  was  found  for  2001  where  the  proposed  method  shows  that 
imports  of  Chinese  LAM  were  below  100  million  pieces.  However,  it  should  be 
underlined  that  there  exist  other  importers  and  users  which  imported  LAM  on  the 
Community market but did not provide any input in the investigation; hence as stated 
in recital (34) it cannot be excluded that the import data are slightly underestimated.  

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(38) 

In  any  event,  the  said  parties  claimed  that  the  revised  figures  of  consumption  and 
imports  would  show  that  market  share  of  the  Chinese  imports  remained  relatively 
stable  since  2002.  The  development  of  market  share  based  on  revised  data  is  as 
follows:  

Table 3 

Market shares of the imports 

2001 

2002 

2003 

PRC 

Index 

36% 

100 

43% 

119 

47% 

128 

IP 

51% 

141 

(39)  The revised data on market share indicates that Chinese imports consistently increased 
their  presence  on  the  Community  market  during  the  period  considered:  by  7 
percentage points in 2002, by 4 percentage points in 2003 and again by 4 percentage 
points during the IP. These trends are similar to those observed in recital (65) of the 
provisional Regulation.  

(40)  To  sum  up,  the  data  provided  by  parties  show  that  consumption  of  LAM  in  the 
Community significantly increased by 41%, or by 110 million units during the period 
considered.  In  the  meantime,  the  imports  from  the  PRC  have  significantly  and 
consistently grown, well above the growth in consumption. The revised data show an 
increase  by  more  than  97  million  pieces  and  a  market  share  increasing  from  36%  to 
51%.  

(41)  Although  some  calculations  concerning  imports  were  revised,  the  findings  and 
conclusions  made  in  recital  (66)  of  the  provisional  Regulation,  in  particular  those 
regarding trends between 2002 and the IP, are not contradicted by the above analysis 
and can therefore be confirmed. 

4.5. 

Prices of imports and undercutting 

(42)  Following the claims received by interested parties, the data available on import prices 
was also re-examined. However, it was found that the parties that participated in the 
investigation  could  not  provide  complete,  reliable  and  consistent  data  on  prices  and 
value  of  the  imports  from  the  PRC.  Only  partial  information  was  available  and  this 
information was based on different sales conditions. These partial data could therefore 
not be used to reliably establish the import value and CIF prices of Chinese imports. 
Hence, the data available in table 3 of the provisional Regulation, which was based on 
Eurostat prices, is hereby confirmed. 

(43)  Following the change in composition of the Community industry as outlined in recital 
(29) above, undercutting by all Chinese exporting producers of LAM was recalculated. 
The undercutting margin established in recital (69) of the provisional Regulation needs 
to  be  revised  upwards  to  38%  when  expressed  as  a  percentage  of  the  Community 
industry price.  

(44)  On that basis, the methodology and the conclusions reached under recitals (67) to (69) 

of the provisional Regulation are hereby confirmed.  

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4.6. 

Economic situation of the Community industry 

(45)  Following  the  change  in  composition  of  the  Community  industry  as  discussed  in 
recital  (29),  the  examination  of  the  impact  of  the  dumped  imports  on  the  newly 
defined Community industry was conducted according to the methodology as outlined 
in recital (70) of the provisional Regulation.  

(46)  The  conclusions  drawn  below  are  based  on  the  aggregated  and  verified  Community 
industry  data  for  the  four  remaining  cooperating  Community  producers.  Due  to  the 
exclusion of one Community producer and the fact that in the provisional Regulation, 
data from five producers were included in the injury assessment, the confidential data 
of the excluded Community producer could be derived by comparing the data of the 
provisional Regulation with the data in the definitive Regulation. Hence, at this stage 
the verified data are provided in an indexed format. It should, however, be noted that 
the injury indicators for the four remaining cooperating Community producers are not 
substantially  different as compared  to those established previously in the provisional 
Regulation for the five producers. 

4.7. 

Production capacity 

(47)  Some interested parties argued and substantiated that the calculation of the production 
capacity in the provisional Regulation did not reflect the reality. It was stated that the 
production capacity should take the factual market position of each producer included 
in the Community industry and its real production possibility into account. This claim 
was  accepted  given  that  the  Community  industry  is  composed  only  of  small  and 
medium  sized  enterprises,  some  of  them  are  even  family  businesses,  which  usually 
operate only five working days a week. 

(48)  Based on the above comments, a new estimation regarding the production capacity is 
presented below. Adjustments have been made to establish production capacity on the 
basis of the five working days time-schedule, instead of seven days as done originally.  

Table 4 

Indices 2001 = 100 

2001 

2002 

2003 

Index production (2001=100) 

Index production capacity 

Index capacity utilisation 

100 

100 

100 

96 

95 

102 

97 

105 

92 

IP 

98 

106 

92 

(49)  As outlined above, the change in the composition of the Community industry in recital 

(29) did not affect the conclusions drawn in recital (73) of the provisional Regulation. 

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4.8. 

Stocks 

(50)  The figures below represent the volume of stocks at the end of each period. 

Indices 2001 = 100 

Index stocks  

Table 5 

2001 

100 

2002 

51 

2003 

95 

IP 

131 

(51)  However,  as  already  explained  in  recital  (75)  of  the  provisional  Regulation,  it  is 
considered that stocks held by the Community industry are not a relevant indicator for 
the assessment of the economic situation of the Community industry. 

4.9. 

Sales volume, market shares, average unit prices in the Community and growth 

(52)  The  figures  below  represent  the  Community  industry’s  sales  volume  to  independent 

customers on the Community market. 

Table 6 

Indices 2001 = 100 

2001 

Index Sales Volume 

Index Market Share 

Index Average sales prices 
(EURO/ thousand pieces) 

100 

100 

100 

2002 

103 

89 

93 

2003 

103 

85 

90 

IP 

106 

75 

86 

(53)  The analysis of the revised data confirms the conclusions in recitals (77) to (80) of the 
provisional Regulation. It shows that the Community industry could slightly raise its 
sales volume during the period considered by 6%. In the same period the Community 
consumption grew by 41%, or by 110 million pieces as outlined in the table 1 above.  

(54)  The  Community  industry  also  suffered  from  significantly  dropping  average  sales 
prices  (by  14%),  while  more  low-priced  dumped  imports  were  penetrating  the 
Community market. Their market share decreased as well. 

4.10. 

Profitability 

(55)  The profitability margins shown below are established as outlined in recital (81) of the 

provisional Regulation. The margins changed only slightly for the IP: 

Table 7 

 Profitability  on  Community  Sales 
(RoT) 

2001 

2002 

2003 

IP 

Index Profitability on EC sales 

-4% 

-6% 

-14% 

(56)  Profitability  was  negative  throughout  the  period  considered.  The  conclusions  as 

contained in recital (82) of the provisional Regulation are hereby confirmed.  

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4.11.  Return on investments, cash flow, investments and ability to raise capital 

(57)  The revised trends for the return on investments, cash flow and investments are shown 

in the following table. 

Table 8 

Indices 2001 = 100 

2001 

2002 

2003 

IP 

Index Return on Investments  
(total companies) 

Index Cash Flow (total companies) 

Index Investments  
(product concerned) in EUR 

100 

100 

100 

-191 

39 

136 

-45 

56 

130 

-364 

-79 

105 

(58)  As  already  outlined  in  recitals  (84)  to  (86)  of  the  provisional  Regulation,  the 
decreasing  trend  of  the  Community  industry’s  sales  prices  significantly  affected  its 
profitability. Accordingly, this had a negative impact on the injury indicators linked to 
the  profitability  level.  It  can  be  noted  that  the  above  negative  trends  observed  for 
return  on  investments  and  cash  flow  reflect  to  a  large  extent  those  on  profitability 
shown in Table 7 above.  

(59)  The Community industry increased its investments by 5% only. It can also be seen that 
the investments diminished significantly in the period between 2003 and the IP.  

(60)  As far as the ability to raise capital is concerned, the findings set out in recital (86) of 

the provisional Regulation are hereby confirmed. 

4.12. 

Employment, productivity and wages 

Table 9 

Indices 2001 = 100 

2001 

2002 

2003 

Index Number of employees 

100 

Index Productivity  
(thousand units/employee) 

Index Wages (average per 
employee, per annum in EUR) 

100 

100 

97 

99 

100 

94 

104 

97 

IP 

90 

108 

100 

(61) 

It  is  shown  that  also  these  indicators,  with  the  new  composition  of  the  Community 
industry,  confirm  the  conclusions  as  contained  in  recitals  (87)  and  (88)  of  the 
provisional Regulation. 

4.13.  Magnitude of the actual margin of dumping 

(62) 

In  the  absence  of  any  comments  regarding  the  magnitude  of  the  actual  margin  of 
dumping, recital (89) of the provisional Regulation is herby confirmed.  

4.14. 

Effects of past dumping or subsidization 

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(63)  As outlined in the recital (90) of the provisional Regulation, the Community industry 

is not recovering from the effects of past dumping or subsidization. 

4.15.  Conclusion on injury 

(64)  The investigation showed that imports from the PRC had significantly increased both 
in  absolute  and  relative  terms  during  the  period  considered.  The  revised  import  data 
show  that  the  volume  imported  increased  by  97  million  pieces  and  that  the  gain  in 
market  share  was  as  high  as  15  percentage  points  over  that  period.  Following  the 
revised  calculations,  as  outlined  in  recital  (43)  above,  the  prices  of  LAM  imported 
from the PRC were undercutting Community industry’s prices by 38%.  

(65)  During  the  period  considered,  in  view  of  the  significant  increase  in  consumption  to 
which  it  could  not  participate,  the  Community  industry  sales  volumes  increased  by 
6%, but it suffered a significant loss in market shares. Faced with low priced dumped 
imports  it  also  suffered  from  an  average  price  decrease  of  14%.  The  analysis  of  the 
evolution  of  certain  other  injury  indicators,  such  as  cash  flow  and  return  on 
investments  also  confirms  the  trends  presented  in  recital  (92)  of  the  provisional 
Regulation. 

(66)  Furthermore,  the  conclusions  contained  in  recitals  (93)  to  (94)  of  the  provisional 

Regulation are also confirmed.  

(67)  Based  on  the  above,  it  is  confirmed  that  the  Community  industry  suffered  material 

injury within the meaning of Article 3 of the basic Regulation.  

5. 

CAUSATION 

5.1. 

Effect of imports from the PRC 

(68)  As mentioned in table  2 above, the data provided by the cooperating parties showed 
that  during  the  period  considered  import  volumes  from  the  PRC  significantly 
increased by 99 %, while their market share increased by 15 percentage points. During 
the same period the import prices of LAM originating in the PRC fell by 11%, and the 
overall  price  undercutting  found  for  all  Chinese  exporting  producers  on  the 
Community market during the IP was as high as 38%. 

(69)  As laid down in recital (97) of the provisional Regulation, the investigation confirmed 
that  there  was  a  coincidence  in  time  between  the  surge  of  low-priced  and  dumped 
imports and the  worsening of the  situation of the Community industry. In particular, 
between  2003  and  the  IP,  the  Chinese  imports  increased  by  over  42  million  pieces 
while significant price undercutting was found to exist. Hence, Chinese imports gained  
4 percentage points of market share. During the same period the Community industry 
lost 12% of their market share even though they decreased their prices by around 4% 
and  managed  to  increase  their  sales  volume.  With  due  regard  to  these  findings,  the 
conclusions as outlined in recital (97) of the provisional Regulation are confirmed. 

(70) 

It is confirmed, as mentioned in recital (98) of the provisional Regulation that Chinese 
exporters practicing dumping managed to increase their market share and became the 
major players on the Community market, supplanting the Community industry during 
the IP. 

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5.2. 

Effects of imports from third countries 

(71)  Based on the data provided by cooperating parties and as set out in recital (34) above, 

import volumes from other third countries are as follows:  

Table 10 

2001 

2002 

2003 

IP 

Imports other than 
PRC (million pieces) 

Index 

Market share 

5.63 

100 

2.1% 

5.31 

94 

1.7% 

2.53 

45 

0.8% 

0 

- 

0 

(72)  Based  on  the  above  data,  it  was  concluded  that  the  small  quantities  of  imports  from 
other third countries amounting to around 2% of the market in 2001 and decreasing to 
0%  during  the  IP,  could  not  have  caused  the  injury  suffered  by  the  Community 
industry.  

(73)  Therefore,  the  conclusions  as  contained  in  recitals  (99)  to  (101)  of  the  provisional 

Regulation are hereby confirmed. 

5.3. 

Effects of Chinese imports made by the Community industry 

(74)  As no new information was supplied, the conclusion as contained in recitals (102) to 

(105) of the provisional Regulation is hereby confirmed. 

5.4. 

Effects of the export performance by the Community industry 

(75)  Given  that  the  definition  of  the  Community  industry  was  revised,  the  export 
performance of the Community industry and whether or not the Community industry’s 
export performance of LAM may have been a cause of the injury suffered during the 
IP were re-examined. The quantities exported by the Community industry are given in 
the table below: 

Table 11 

Indices 2001 = 100 

2001 

2002 

2003 

Index Exports  

100 

66 

59 

IP 

46 

(76)  This  re-examination  confirmed  that  the  core  market  of  the  Community  industry  has 
always been the Community market. Exports outside the Community represented 17% 
of  total  sales  in  2001  and  only  7%  during  the  IP.  The  main  decrease  in  export  sales 
occurred between 2001 and 2002 when export sales decreased by 34%. Subsequently, 
exports have consistently decreased until the end of the IP. The information available 
indicates that this situation is similar to that described in recitals (107) to (109) of the 
provisional Regulation. 

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(77)  One party claimed that the loss of sales in export markets suffered by the Community 
industry during the IP was the reason for the injury it suffered. This party also claimed 
that in the face of competition in its core market, a healthy industry would be expected 
to divert its export sales to third countries. However, the investigation showed that the 
Community industry, when facing injurious dumping in the Community market, was 
not in a position to compensate for lost sales by expanding exports to third countries.  

(78) 

It  should  also  be  pointed  out  that  the  Community  is  the  main  worldwide  market  for 
LAM  and  its  downstream  product,  i.e.  lever  arch  files  (LAF).  In  addition,  the 
investigation  concentrated  on  the  economic  situation  on  the  Community  industry  on 
the  Community  market.  Accordingly,  the  analysis  made  on  a  number  of  injury 
indicators such as sales volume, sales prices and profitability, is based on the situation 
of the Community industry on the Community market only and is not affected by the 
export performances.  

(79)  Furthermore,  even  if  the  decrease  in  export  sales  volume  may  have  contributed  to  a 
certain worsening of some injury indicators such as production and may have affected 
the  situation  of  the  Community  industry  as  a  whole  it  cannot  explain  the  significant 
decrease  in  Community  industry’s  prices,  the  losses  in  market  share  and  decreased 
profitability  incurred  by  the  Community  industry  during  the  IP  in  relation  to  LAM 
sold on the EC market. Therefore, the export performance could not break the causal 
link between the injury suffered by the Community industry and the dumped imports 
of LAM originating in the PRC.  

(80)  The conclusion as contained in recital (110) of the provisional Regulation is therefore 

confirmed. 

5.5. 

Exchange rate 

(81)  Some  interested  parties  indicated  that  the  exchange  rate  variation  EUR/USD  which 
amounted to around 40% between 2001 and 2004 was the main cause of any injurious 
situation suffered by the Community industry. It was alleged that the fluctuation in the 
exchange rate was one of the main drivers of the users’ sourcing selection between the 
Community  and  the  PRC  producers.  It  was  also  claimed  that  Chinese  exporters 
generally  invoice  their  sales  to  EU-based  customers  in  USD  or,  if  invoiced  in  EUR, 
the  price  is  linked  to  the  EUR/USD  exchange  rate  usually  agreed  at  the  time  of  the 
order. This allegedly had the effect of off-setting the increases in USD prices that were 
charged by Chinese exporters in that period. Hence, any finding of injury was claimed 
to be unrelated to any alleged dumping from the PRC.  

(82) 

It  is  confirmed  that  the  exchange  rate  variation  between  the  EUR  and  the  USD  was 
significant  during  the  period  considered.  Between  2003  and  the  IP,  however,  the 
fluctuation was found to be limited to 10%. In any event, it is clear that the exchange 
rate variation cannot explain the massive dumping margin found in the PRC during the 
IP because the dumping calculations were not influenced by this variation.  

(83)  A simulation on the impact of the exchange rate on the sales prices practiced on the 
Community  market  indicates  that  even  without  currency  fluctuations  significant 
undercutting  by  Chinese  exporters  would  still  continue  to  exist  during  the  IP.  More 
importantly, the alleged effect of fluctuations in the exchange rate cannot be an “other 
factor”  within  the  meaning  of  Article  3(7)  of  the  basic  Regulation.  Indeed,  other 

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factors within the meaning of the aforementioned provision only refer to factors other 
than  the  dumped  imports.  However,  the  applicable  exchange  rate  determines  the 
export  price  of  the  dumped  imports,  i.e.  it  concerns  the  dumped  imports  themselves 
and not something else which could have injured the Community industry.  

(84)  Based  on  the  above,  it  is  considered  that  the  parties  did  not  provide  any  evidence 
demonstrating  that  the  exchange  rate  fluctuations  could  break  the  causal  link  found 
between  the  material  injury  suffered  by  the  Community  industry  and  the  dumped 
imports. 

5.6. 

Steel price increase 

(85)  One  user  argued  that  there  was  a  serious  steel  crisis  which  caused  dramatic  price 
increases  of  the  main  raw  material  used  in  the  production  of  LAM  in  the  period 
considered. The user alleged that the steel price increase was as high as 25-40% in the 
first quarter of 2004.  

(86)  The price increases in the steel sector were indeed worldwide and should have had an 
impact on all steel users, in particular during the IP. Accordingly, the normal reaction 
of  steel  users  would  have  been  to  reflect  cost  increases  in  the  sales  prices  of  their 
downstream  products.  The  data  available,  however,  indicate  that  overall  Chinese 
export  prices  increased  only  by  5%  between  2003  and  the  IP,  i.e.  at  the  time  of  the 
steel  crisis.  This  finding  points  to  the  fact  that  despite  the  steel  price  increase  up  to 
40%, Chinese exporting producers did not adjust their export prices and were found to 
be exporting at low and dumped prices to the Community market during the IP. 

(87)  The  investigation  showed  that  the  Community  industry’s  raw  material  costs 
significantly  increased,  in  particular  during  the  IP,  but  that  it  was  prevented  from 
adjusting  its  sales  prices  because  of  the  significant  undercutting  practiced  by  low-
priced dumped imports from the PRC on the Community market. 

(88) 

It is thereby confirmed that the injury suffered by the Community industry was not to 
any significant extent caused by the steel price increases. 

5.7. 

Conclusion on causality 

(89)  Based  on  the  above  analysis,  the  conclusion  as  contained  in  recital  (111)  of  the 

provisional Regulation is hereby confirmed. 

6. 

COMMUNITY INTEREST 

6.1. 

Interest of the Community industry and suppliers 

(90) 

In  the  absence  of  any  information  submitted  with  respect  to  the  interest  of  the 
Community industry and suppliers, the findings as set out in recitals (114) to (121) of 
the provisional Regulation are hereby confirmed. 

6.2. 

Interest of users and importers 

(91) 

It is recalled that replies from eight users and two importers located in the Community 
market were received, representing 51% of the total Community consumption. Users 
are  usually  importers  as  well,  in  the  sense  that  they  import  LAM  and  produce  lever 

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arch  files  (LAF),  the  downstream  product.  The  total  business  of  these  parties  is 
significant but the production of LAF only represents 22% of their overall activity. 

6.2.1.  Shortage of supply 

(92)  Some users reiterated their claim that any anti-dumping measure imposed is causing a 
shortage of supply in the Community due to insufficient capacities of the Community 
industry.  They  argued  that  the  shortfall  of  European  production  capacity  versus  the 
level of demand was as much as 40-50%. They argued that they are forced to import 
and thus to pay significant amounts of duty to keep their level of activity.  

(93) 

It  should  be  noted  that  the  users  did  not  bring  any  substantiated  evidence  that  there 
was  a  shortage  of  LAM  in  the  Community  market  before  or  after  the  imposition  of 
provisional  measures.  In  addition,  the  Community  industry  and  other  producers 
present  on  the  Community  market  have  production  capacity  available.  If  necessary, 
additional investments could be made and workforce could easily be increased by the 
Community  producers  to  meet  the  demand  in  a  market  not  distorted  by  dumping 
practices.  Moreover,  the  Community  market  is  not  closed  to  imports  from  the  PRC 
and these products will continue to be available to all users at non-dumped prices. It is 
also considered that underlying this claim is a fear of reduced competitiveness of the 
user industry, which is addressed in recitals (94) to (97) below.  

6.2.2.  Competitiveness of the user industry 

(94)  The imposition of measures should not materially affect the overall competitiveness of 
the  user  industry  given  that  all  users  in  the  Community  would  have  access  to 
alternative sources of supply. The anti-dumping measures should, in principle, have no 
impact  on  the  export  activity  of  this  industry  and  an  increase  of  cost  of  production 
would not be significant. 

(95)  As  regards  possible  cost  increases,  these  may  affect  companies  which  are  mainly 
purchasing  low-priced  dumped  products  from  China.  In  the  best  case  scenario, 
considering  the  current  market  share  of  the  Community  industry,  the  proposed 
measures  may  lead  to  an  average  cost  increase  of  around  2,0%  of  the  cost  of  the 
downstream  product  on  average.  In  the  worst  case  scenario,  the  cost  increase  would 
amount to 3%. However, this cost increase might even be diluted if the users are able 
to pass on part of this cost increase to their customers, which cannot be excluded.  

(96)  However, as explained in recital (128) of the provisional Regulation, the imposition of 
anti-dumping  measures  should  lead  to  an  increase  of  effective  competition  on  the 
Community market and to the recovery of the market share and economic situation of 
the Community industry. This should in the short term enhance effective competition 
and avoid any undue price increase on the Community market. 

(97)  On balance, it is confirmed that any negative impact on the cost of certain users is not 

such as to prevent the imposition of measures. 

6.3. 

Conclusion on Community Interest 

(98)  The investigation has shown that it is likely that without any measures against dumped 
imports  the  Community  industry  would  disappear  since  it  is  already  in  a  very 

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vulnerable  financial  situation.  This  would  certainly  lead  to  the  dependence  of  LAF 
producers  on  outside  sources  and  to  a  significant  reduction  of  competition.  The 
imposition of anti-dumping measures should restore effective trade conditions, without 
undue  burden  or  advantage,  for  all  the  parties  selling  and  buying  LAM  on  the 
Community market.  

(99) 

It  is  therefore  concluded  that  the  definitive  measures  would  not  be  against  the 
Community interest. 

7. 

DEFINITIVE ANTI-DUMPING DUTIES 

7.1. 

Injury elimination level 

(100)  Based  on  the  methodology  explained  in  recitals  (133)  to  (136)  of  the  provisional 
Regulation, an injury elimination level was calculated for the purposes of establishing 
the level of measures to be imposed.  

(101)  When calculating the injury margin in the provisional Regulation, the target profit for 
the Community industry was set at 5%, a level deemed conservative and which could 
be reasonably expected in the absence of injurious dumping. 

(102)  One  party  argued  that  the  injury  margin  should  not  be  based  on  the  Community 
industry’s  cost  of  production  plus  a  reasonable  profit,  given  that  the  Community 
industry  is  not  efficient  and  its  cost  of  production  is  higher  than  it  should  be.  This 
party,  however,  did  not  submit  any  evidence  to  substantiate  its  claim.  The 
investigation did not provide any reason to depart from the methodology followed in 
recital (134) of the provisional Regulation. 

(103)  In  the  absence  of  any  other  comments  on  this  subject,  the  methodology  set  out  in 

recitals (133) to (136) of the provisional Regulation is hereby confirmed. 

7.2. 

Definitive measures 

(104)  In  the  light  of  the  foregoing  and  in  accordance  with  Article  9(4)  of  the  basic 
Regulation,  a  definitive  anti-dumping  duty  should  be  imposed  at  the  level  of  the 
dumping margin calculated as regards imports of LAM originating in the PRC since it 
is confirmed that in all cases the injury margins were higher than the dumping margins 
found. 

(105)  On the basis of the above, the definitive duties are set as follows: 

Company 

Dumping margin 

Dongguan Nanzha Leco Stationery 

All other companies 

27.1% 

47.4% 

(106)  The  individual  company  anti-dumping  duty  rate  specified  in  this  Regulation  was 
established  on  the  basis  of  the  findings  of  the  present  investigation.  Therefore,  it 
reflects the situation found during the investigation with respect to that company. This 
duty rate (as opposed to the country-wide duty applicable to 'all other companies') is 
thus exclusively applicable to imports of products originating in the country concerned 

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and  produced  by  the  company  and  thus  by  the  specific  legal  entity  mentioned. 
Imported products produced by any other company not specifically mentioned in the 
operative part of this Regulation with its name and address, including entities related 
to that specifically mentioned, cannot benefit from the rate and shall be subject to the 
duty rate applicable to 'all other companies'. 

(107)  Any  claim  requesting  the  application  of  the  individual  company  anti-dumping  duty 
rate (e.g. following a change in the name of the entity or following the setting up of 
new  production  or  sales  entities)  should  be  addressed  to  the  Commission3  forthwith 
with all relevant information, in particular any modification in the company's activities 
linked  to  production,  domestic  and  export  sales  associated  with,  for  example,  that 
name  change  or  that  change  in  the  production  and  sales  entities.  If  appropriate,  the 
Regulation  will  then  be  amended  accordingly  by  updating  the  list  of  companies 
benefiting from individual duty rates.  

(108)  In  order  to  ensure  a  proper  enforcement  of  the  anti-dumping  duty,  the  residual  duty 
level  should  not  only  apply  to  the  non-cooperating  exporters,  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 the basic 
Regulation, second paragraph, to present a request for a review pursuant to that Article 
in order to have their situation examined individually. 

8. 

COLLECTION OF PROVISIONAL DUTIES 

(109)  In view of the magnitude of the dumping margins found and in the light of the level of 
the material injury caused to the Community industry, it is considered necessary that 
the  amounts  secured  by  way  of  the  provisional  anti-dumping  duty,  imposed  by 
Commission Regulation (EC) No 134/2006, should be collected at the rate of the duty 
definitely imposed. Where the definitive duties are lower than the provisional duties, 
only  the  amounts  secured  at  the  level  of  the  definitive  duties  should  be  definitively 
collected, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  lever  arch 
mechanisms for archiving sheets and other documents in binders and files and falling 
within  CN  code  ex  8305  10  00  (TARIC  code  8305  10  00  50)  originating  in  the 
People’s  Republic  of  China.  These  lever  arch  mechanisms  consist  of  arched  sturdy 
metal  elements  (normally  two)  on  a  back  plate  and  having  at  least  one  opening 
trigger that permits inserting and filing of sheets and other documents. 

3 

European Commission 
Directorate-General for Trade 
Direction B, office J-79 5/16 
1049 Brussels/Belgium 

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2. 

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

Manufacturer 

Anti-dumping duty 

TARIC additional code 

Dongguan Nanzha Leco Stationery 

The First Industrial Camp, Nanzha, 
Humen, Dongguan, China 

All other companies 

27.1 % 

47.4 % 

A729 

A999 

3. 

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

Article 2 

Amounts  secured  by  way  of  provisional  anti-dumping  duty  pursuant  to  Commission 
Regulation (EC) No 134/2006 on imports of lever arch mechanisms falling within CN code ex 
8305 10 00 (TARIC code 8305 10 00 50) and originating in the People’s Republic of China 
shall be definitely collected at the duty rate definitively imposed by the present Regulation. 
The amounts secured in excess of the definitive rate of anti-dumping duties shall be released.  

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

Article 3 

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

Done at Brussels, 

For the Council 
The President 

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