Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitely the provisional duty imposed on imports of certain footwear with uppers of leather originating in the People's Republic of China and Vietnam
Date: 2006-08-30
Institutions: European Commission
Subjects: China, Viet Nam, anti-dumping duty, anti-dumping legislation, footwear industry, import policy, originating product

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 30.8.2006 
COM(2006) 472 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitely the provisional duty 
imposed on imports of certain footwear with uppers of leather originating in the 
People's Republic of China and Vietnam 

(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 
ertain footwear with uppers of leather originating in the People's Republic of China and 
Vietnam. 

120 

•  General context 

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

139 

141 

219 

229 

230 

•  Existing provisions in the area of the proposal 

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

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

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

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

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

The basic Regulation does not foresee a general impact assessment but the requirement 
that the measures should not be contrary to the “Community interest” means that the 
assessment  of  the  wider  impact  of  the  measures  forms  an  integral  part  of  the 
investigation.  

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3)  LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

On  7  July  2005,  the  Commission  announced  by  a  notice  (‘notice  of  initiation’), 
published  in  the  Official  Journal  of  the  European  Union1,  the  initiation  of  an  anti-
dumping proceeding concerning imports into the Community of certain footwear with 
uppers of leather originating in the People’s Republic of China (‘PRC’) and Vietnam.  

The  anti-dumping  proceeding  was  initiated  following  a  complaint  lodged  on  30  May 
2005  by  the  European  Confederation  of  the  Footwear  industry  (‘CEC’)  containing 
evidence of dumping and of material injury resulting there from. 

On  6  April  2006,  the  Commission  imposed,  by  Regulation  (EC)  No  553/2006,  a 
provisional anti-dumping duty on the imports into the Community of certain footwear 
with uppers of leather originating in the People's Republic of China and Vietnam. 

The  enclosed  Commission  proposal  for  a  Council  Regulation  contains  the  definitive 
conclusions regarding dumping, injury, causality and Community interest.  

Member States were consulted during the Anti-Dumping Committees of 19, 20 and 27 
July  2006.  9  Member  States  were  in  favour  of  the  proposed  course  of  action  and  14 
opposed. 

It  is  proposed  that  the  Council  adopt  the  attached  proposal  for  a  Regulation  which 
should be published in the Official Journal of the European Union on 6 October 2006 
at the latest. 

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). 

331 

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

1 

OJ C 166, 7.7.2005, p. 14. 

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332 

341 

342 

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, but the 
basic Regulation limits the level of the duties that may be imposed to that necessary to 
redress the injury caused by the dumping found. 

•  Choice of instruments 

Proposed instruments: Regulation. 

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

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

4)  BUDGETARY IMPLICATION 

409 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitely the provisional duty 
imposed on imports of certain footwear with uppers of leather originating in the 
People's Republic of China and Vietnam 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against dumped imports from countries not members of the European Community (the ‘basic 
Regulation’)2, as last amended by Regulation (EC) No 2117/20053 and in particular Article 9 
thereof, 

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

Whereas: 

1. 

Provisional Measures 

A. 

PROCEDURE 

(1) 

(2) 

On 23 March 2006, the Commission imposed by Regulation (EC) No 553/20064 (‘the 
provisional  Regulation’)  a  provisional  anti-dumping  duty  on  the  imports  into  the 
Community  of  certain  footwear  with  uppers  of  leather  originating  in  the  People's 
Republic  of  China  and  Vietnam  (‘the  countries  concerned’  or  'the  exporting 
countries'). This Regulation entered into force on 7 April 2006. 

It is recalled that the investigation of dumping covered the period from 1 April 2004 to 
31  March  2005  (‘investigation  period’  or  ‘IP’)  and  that  the  examination  of  trends 
relevant  for  the  assessment  of  injury  covered  the  period  from  1  January  2001  to  the 
end of the investigation period (‘period considered’). 

2. 

Subsequent procedure 

(3) 

Following  the  imposition  of  a  provisional  anti-dumping  duty  on  imports  of  certain 
footwear  with  uppers  of  leather  from  the  countries  concerned,  all  parties  received  a 
disclosure  of  the  facts  and  considerations  on  which  the  provisional  Regulation  was 

2 
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4 

OJ L 56, 6.3.1996, p. 1. 
OJ L 340, 23.12.2005, p. 17. 
OJ L 98, 6.4.2006, p. 3. 

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(4) 

(5) 

(6) 

based. All parties were granted a period within which they could make representations 
in relation to these disclosures.  

Some  interested  parties  submitted  comments  in  writing.  Those  parties  who  so 
requested  were  also  granted  an  opportunity  to  be  heard  orally.  The  Commission 
continued  to  seek  and  verify  all  information  it  deemed  necessary  for  its  definitive 
findings.  

The Commission's services further disclosed all the essential facts and considerations 
on the basis of which it was intended to recommend the imposition of definitive anti-
dumping  measures  and  the  definitive  collection  of  amounts  secured  by  way  of  the 
provisional duty. The interested parties were also granted a period within which they 
could  make  representations  subsequent  to  this  disclosure.  The  oral  and  written 
comments  submitted  by  the  parties  were  considered  and,  where  appropriate,  the 
findings  have  been  modified  accordingly.  Furthermore,  an  additional  disclosure  was 
provided with regard to a change in the envisaged form of measures. 

Various interested parties reiterated their claim that by not disclosing the name of the 
complainants, their right of defence was not preserved. This issue was already raised 
previously (see recital (8) of the provisional Regulation). The matter was reviewed at 
definitive  stage  and  the  following  is  to  be  noted:  the  production  volume  of  the 
complainants, broken down by countries, was disclosed to those interested parties that 
made claims regarding standing. Therefore it is considered that their right of defence 
was adequately preserved. This information was subsequently also made available for 
inspection to all interested parties.  

B. 

PRODUCT CONCERNED AND LIKE PRODUCT 

1. 

Product concerned 

(7) 

It is recalled that, as set out in recital (10) of the provisional Regulation, the product 
concerned  by  this  proceeding,  is  footwear  with  uppers  of  leather  or  composition 
leather originating in the PRC and in Vietnam, other than: 

– 

– 

– 

Sports footwear within the meaning of subheading note 1 to Chapter 64 of the 
combined  nomenclature,  i.e.  (i)  footwear  which  is  designed  for  a  sporting 
activity  and  has,  or  has  provision  for  the  attachment  of,  spikes,  sprigs,  stops, 
clips,  bars  or  the  like,  and  (ii)  skating  boots,  ski-boots  and  cross-country  ski 
footwear, snowboard boots, wrestling boots, boxing boots and cycling shoes; 

slippers and other indoor footwear (falling within CN codes 6403 59 50, 6403 
99 50 and ex 6405 10 00); 

footwear  with  a  protective  toecap,  i.e.  footwear  incorporating  a  protective 
toecap  with  an  impact  resistance  of  at  least  100  joules5  (falling  within  CN 
codes: ex 6403 30 00, ex 6403 51 11, ex 6403 51 15, ex 6403 51 19, ex 6403 
51 91, ex 6403 51 95, ex 6403 51 99, ex 6403 59 11, ex 6403 59 31, ex 6403 
59 35, ex 6403 59 39, ex 6403 59 91, ex 6403 59 95, ex 6403 59 99, ex 6403 
91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 91 18, ex 6403 91 91, ex 6403 

5 

The impact resistance shall be measured according to European Norms EN345 or EN346. 

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91 93, ex 6403 91 96, ex 6403 91 98, ex 6403 99 11, ex 6403 99 31, ex 6403 
99 33, ex 6403 99 36, ex 6403 99 38, ex 6403 99 91, ex 6403 99 93, ex 6403 
99 96, ex 6403 99 98 and ex 6405 10 00). 

(8) 

(9) 

In  addition,  on  the  basis  of  the  elements  set  out  in  recitals  (12)  to  (27)  of  the 
provisional  Regulation,  it  was  provisionally  concluded  that  certain  high  tech  sports 
footwear,  i.e.  Special  Technology  Athletic  Footwear  ('STAF'),  should  be  excluded 
from this definition.  

Furthermore, it was decided to provisionally treat children's shoes as forming part of 
the  product  concerned,  although  this  was  subject  to  further  investigation  and 
consideration at the definitive stage. 

(10)  The  interested  parties  were  invited  to  comment  on  those  specific  issues.  Given  the 
comments they provided with respect to the above, and further requests for exclusion 
of other specific types of footwear, those claims have been analysed in detail below.  

1.1. 

Special technology athletic footwear (‘STAF’)  

(11) 

It  is  recalled  that  STAF,  as  defined  under  recital  (13)  of  the  provisional  Regulation 
was excluded from the definition of the product concerned. 

(12)  This  exclusion  was  based  on  the  fact  that  such  type  of  footwear  has  different  basic 
physical  and  technical  characteristics,  is  sold  via  different  sales  channels,  and  has  a 
different end use and consumer perception.  

(13)  The Community footwear industry contested the exclusion of STAF from the product 
scope claiming STAF footwear has the same sales channels and consumer perception 
as  the  product  under  investigation.  Furthermore,  in  case  STAF  footwear  should 
nevertheless be excluded from the product scope of the investigation, it was stressed 
that  the  minimum  STAF  value  of  9  €  in  the  current  TARIC  definition  should  be 
brought to a higher level, taking into account the devaluation of the dollar vis-à-vis the 
Euro, which occurred over the years.  

(14) 

In reply to these submissions, it is first of all noted that the Community industry did 
not  contest  that  STAF  have  different  basic  physical  and  technical  characteristics. 
Secondly, as regards sales channels, use, consumer perception and import trends, the 
Community  footwear  industry  did  not  put  forward  any  substantiated  arguments  that 
could  change  the  findings  in  recitals  (15)  to  (18)  of  the  provisional  Regulation. 
Furthermore,  the  claim  for  an  increase  of  the  9,00  €  threshold  was  not  further 
substantiated by any evidence. 

(15)  Several importers requested to lower the minimum value of STAF from 9,00 € to 7,50 
€  essentially  due  to  changed  circumstances  in  terms  of  cost  reducing  production 
processes.  

(16)  These  submissions  have  been  analysed  with  care  as  well.  It  is  recalled  that  the  9  € 
threshold  was  established  in  the  TARIC  nomenclature  in  1994,  when  STAF  was 
introduced in the framework of the quota on footwear originating from China, i.e. 12 
years  ago.  Furthermore,  the  importers  sufficiently  substantiated  with  evidence  that 
new  production  technologies  have  led  to  both  a  significant  cost  reduction  per  STAF 

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unit  and  a  reduction  of  waste  in  material  and  energy.  Combined  with  higher 
competition  due  to  an  increased  offer  of  STAF  production,  another  price  lowering 
factor,  this  has  indeed  impact  on  price  levels  as  compared  to  the  situation  12  years 
ago, which cannot be disregarded. A moderate reduction of the STAF threshold of 1,5 
€ is considered reasonable and necessary to reflect those changes.  

(17)  Moreover, various exporters claimed that the STAF definition should be broadened by 
including all footwear with uppers of leather and with Ethylene-Vinyl Acetate (EVA) 
soles and/or direct moulding within its scope.  

(18)  However,  in  reply  to  these  submissions,  it  should  be  underlined  that  the  use  of  the 
EVA moulding technique as such did not clearly distinguish the end product from the 
product concerned. Moreover, it was explained that the moulding technique, as applied 
to EVA soles, could also be used for footwear that were clearly not STAF. In addition, 
no evidence was provided showing that the distinction based on different physical and 
technical  characteristics,  different  sales  channels,  use  and  consumer  perception  and 
different  import  trends  would  not  be  appropriate.  Finally,  the  definitions  of  EVA  as 
proposed  by  various  importers  were  clearly  in  contradiction  with  each  other. 
Therefore, this proposal regarding the definition of STAF was rejected.  

(19) 

In conclusion, the exclusion of STAF from the definition of the product concerned in 
the  provisional  Regulation  is  confirmed.  Furthermore,  the  minimum  value  for  STAF 
should  be  lowered  from  9,00  €  to  7,50  €.  In  the  absence  of  further  comments,  the 
findings of the provisional Regulation on STAF as set out in recitals (13) to (19) of the 
provisional Regulation are hereby confirmed. STAF of not less than 7,5 € is therefore 
definitively excluded from the proceeding. 

1.2.  Children footwear 

(20)  Children's footwear, i.e. footwear with insoles of a length of less than 24 cm, and with 
a sole and heel combined having a height of 3 cm or less falling within the CN codes: 
ex 6403 20 00, ex 6403 30 00, 6403 51 11, 6403 51 91, 6403 59 31, 6403 59 91, 6403 
91  11,  6403  91  91,  6403  99  31,  6403  99  91  and  ex  6405  10  00  was  not  subject  to 
provisional anti-dumping measures, because provisional findings were not such as to 
warrant such measures on Community interest grounds.  

(21) 

In recitals (28) to (31) of the provisional Regulation, no definitive conclusion whether 
or not to include children’s shoes in the definition of the product concerned had been 
drawn yet. Although some arguments were considered to possibly exclude children’s 
footwear from the product scope of the investigation, these arguments did not allow a 
definitive conclusion at that stage of the investigation. It was therefore decided to treat 
children  shoes  as  part  of  the  product  concerned  pending  further  investigation  and 
consideration at the definitive stage. 

(22)  Following disclosure of the provisional findings, certain interested parties claimed that 
children’s  footwear  should  be  excluded  from  the  product  scope  of  the  investigation. 
These  claims  were  based  on  the  assumption  that  in  particular  style,  design,  sales 
channels and customer service, as addressed in recitals (30) and (31) of the provisional 
Regulation,  clearly  divided  children’s  shoes  from  other  types  of  footwear  falling 
within the scope of the current investigation.  

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(23)  However, those claims were deemed insufficient to exclude children’s footwear from 
the  definition  of  the  product  concerned  because  they  were  not  substantiated  with 
sufficient  evidence  showing  that  in  this  investigation  a  clear  dividing  line  could  be 
drawn between children’s footwear and other footwear types within the scope of the 
investigation.  In  fact,  to  the  contrary  it  was  found  that  the  essential  physical  and 
technical  characteristics  of  children's  footwear  which  were  common  to  those  of  the 
product  concerned  –a  combination  of  leather  uppers  with  different  types  of  soles  to 
protect the feet- were much more important than any differences (i.e. essentially size). 
Furthermore,  it  appeared  that  styling,  design,  sales  channels  and  consumer  service 
were not  fundamentally  different from other footwear  types under investigation. Just 
the mere fact that children’s footwear form a distinctive product sub-group within the 
scope of the product concerned does not warrant the exclusion from the product scope. 
Indeed,  it  was  found  that  there  is  no  clear  dividing  line  between  children's  footwear 
and  the  product  concerned,  but  that  there  is  rather  a  large  overlap  regarding  the 
definition of the product concerned, notably that it is a device to cover and protect the 
feet of human beings essentially for walking purposes.  

(24) 

In its reaction to the disclosure of the provisional Regulation, the Community industry 
claimed that children’s footwear should be part of the product concerned. In particular, 
evidence  was  submitted  proving  that  there  was  still  an  important  production  of 
children’s footwear in the Community.  

(25)  The submission of the Community industry only confirms the definitive findings. It is 
therefore  definitively  concluded  that  children  footwear  should  be  included  in  the 
definition of the product concerned. 

1.3.  Other requests for exclusions 

(26)  Several interested parties claimed that certain other types of footwear within these CN 
codes were too different, in particular in terms of use, to belong to the same category 
of products. These claims are analysed below. 

(i) ‘Hiking’, ‘climbing’ and other outdoor shoes  

(27)  Within  the  meaning  of  the  Combined  nomenclature,  ‘hiking’,  ‘climbing’  and  other 
outdoor shoes (‘hiking shoes’) are not considered as a sporting activity and therefore 
these shoe types fall outside the definition of STAF footwear as defined in recital (13) 
of the provisional Regulation. However, certain parties requested that this product be 
excluded  from  the  scope  of  the  proceeding  because  (i)  the  requirements  for  such 
hiking  shoes  are  allegedly  very  similar  to  STAF  specifications,  (ii)  hiking  shoes  can 
allegedly be clearly distinguished from other footwear types in terms of sales channels 
and consumer perception and (iii) paying more duties on hiking footwear would have 
allegedly a detrimental effect on this specific market.  

(28)  No additional evidence concerning specific technicalities and characteristics of hiking 
shoes  was  submitted  to  change  the  conclusion  of  recital  (34)  of  the  provisional 
Regulation which states that, although various types of footwear, f.e. hiking footwear, 
may  indeed  have  some  additional  different  specific  characteristics,  the  basic 
characteristics  of  also  this  type  of  footwear  remain  identical.  Furthermore,  it  was 
found  that  ‘hiking’  shoes  are  widely  produced  in  the  Community  and  that  a  clear 
dividing  line  between  the  imported  ‘hiking  shoes’  and  Community  production  could 

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not  be  drawn.  This  was  also  confirmed  by  the  decision  to  include  the  same  type  of 
footwear  in  the  product  scope  regarding  Council  Regulation  (EC)  No  2155/976. 
Although  hiking  shoes  may  sometimes  have  specific  characteristics,  they  share  the 
same  basic  physical  and  technical  characteristics  of  other  footwear  covered  by  the 
product scope. Furthermore, as regards their use and consumer perception, it was also 
found that there is a large overlap with other types of footwear covered by the product 
definition. Accordingly, it is considered that ‘hiking shoes’ should remain within the 
scope of the investigation.  

(ii) Footwear with mechano-therapeutic applications 

(29)  One  importer  requested  the  exclusion  of  certain  footwear  with  mechano-therapeutic 
applications. Although the product currently falls within CN code 6403 99 93, 6403 99 
96 and 6403 99 98, it was claimed that this type of footwear should be excluded from 
the scope of the proceeding, because it has allegedly different physical and chemical 
characteristics,  different  sales  channels  and  different  consumer  perception  as  a 
certified  medical  product,  authorised  to  be  sold  as  medical  devices  for  mechano-
therapeutic applications.  

(30) 

It  was  found  that  this  type  of  footwear  should  be  considered  as  part  of  the  product 
concerned. Although this product  has a distinctive  technology and application which 
might  be  applied  for  medical  purposes,  these  specific  features  do  not  clearly  and 
structurally differ from the product concerned. This is underlined by the fact that this 
type  of  footwear  is  also  purchased  by  consumers  who  purchase  it  for  their 
convenience, rather than for specific medical reasons, which was even acknowledged 
in the claim as submitted by the importer.  

(31)  For  the  above  reasons  it  is  considered  that  the  claim  to  exclude  footwear  with 

mechano-therapeutic applications should be rejected. 

(iii) EVA beach sandals 

(32)  EVA beach sandals (‘EBS’) are shoes the upper of which it limited to a strip of leather 
material, this upper being attached to both sides of a thick lightweight sole, made of a 
combination of EVA and other materials. Certain interested parties claimed that such a 
product  should  be  excluded  from  the  scope  of  the  present  investigation  since  they 
allegedly have very specific and distinctive basic physical and technical characteristics 
that make them easy to recognize as beach sandals and, hence, have a different end use 
and  consumer  perception  than  other  types  of  footwear  covered  by  the  product 
definition. Furthermore, it was alleged that the technology applying to EBS had been 
completely moved out of Europe.  

(33) 

In this respect it was found that, while EBS indeed have some specific characteristics, 
they  share  the  same  basic  physical  and  technical  characteristics  of  other  footwear 
covered  by  the  product  scope.  Furthermore,  as  regards  their  use  and  consumer 
perception, it was also found that there is a large overlap with other types of footwear 
covered  by  the  product  definition,  e.g.  thongs  and  clogs.  Moreover,  sales  channels, 
marketing,  fashion  etc.  were  found  to  be  the  same  as  for  other  types  of  footwear 

6 

OJ L 289, 1.11.1997, p. 1. 

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covered  by  the  product  definition.  In  addition,  the  Community  industry  submitted 
evidence  showing  there  is  still  a  significant  production  of  EBS  in  the  EC. 
Consequently, it is considered that this claim for exclusion should be rejected. 

(iv) Pigskin leather shoes  

(34)  One  interested  party  claimed  that  footwear  with  pigskin  leather  uppers  should  be 
excluded  from  the  scope  of  the  investigation  because  of  alleged  quality  and  price 
differences and an alleged lack of EC production with such kind of uppers.  

(35)  However,  a  clear  distinction  between  the  imported  pigskin  leather  footwear  and 
Community production could not be made, as both show the same basic physical and 
technical  characteristics  and  use.  Furthermore,  the  sales  channels  proved  to  be 
generally the same which was also reflected in the fact that consumers do not perceive 
pigskin leather shoes differently. The claim was therefore rejected. 

(v) Patented technology footwear 

(36)  One  interested  party  claimed  that  certain  patented  technology  footwear  should  be 
excluded from the scope of the investigation, i.e. a technology consisting of a special 
shock  absorbing  heel,  a  cushioning  mid-sole  and  a  special  technology  that  increased 
the flexibility of this type of footwear.  

(37)  However,  when  comparing  this  footwear  type  with  the  product  concerned,  a  clear 
dividing  line  could  not  be  drawn  with  regard  to  the  basic  physical  and  technical 
characteristics and uses of this type of footwear and the product concerned. While it is 
acknowledged that a patented technology may contribute to increasing comfort it does 
not  by  itself  substantially  change  the  characteristics  of  being  footwear  for  ordinary 
usage. Moreover, the fact that certain technology is patented is as such not a reason to 
justify  its  exclusion  from  the  product  scope.  Hence,  even  though  it  is  acknowledged 
that  this  product  may  have  special  features,  it  remains  in  competition  with  EC 
production of the product under investigation. Therefore, this claim was rejected. 

(vi) Non STAF sports footwear 

(38)  Certain interested parties claimed that all types of sports footwear, thus not only STAF 
and  sports  footwear  within  the  meaning  of  subheading  note  1  to  Chapter  64  of  the 
Combined Nomenclature, should be excluded from the proceeding. These allegations 
are based on the same claims made for the exclusion of STAF and the alleged shortage 
of certain non-STAF footwear on the EC market should these types of footwear not be 
excluded. The latter claim was not substantiated with concrete evidence. Therefore, no 
new compelling information was submitted to change the conclusion in recital (27) of 
the provisional Regulation regarding the remaining types of non-STAF footwear. The 
claim was therefore rejected.  

1.4.  Conclusion 

(39)  Consequently, the provisional conclusions, modified as set out under B. 1.1. above, are 
therefore  definitively  confirmed.  For  the  purposes  of  this  proceeding  and  in 
accordance  with  consistent  Community  practice,  it  is  therefore  considered  that  all 
types of the product concerned should be regarded as forming one single product.  

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2. 

Like product 

(40)  Since  no  comments  were  received  regarding  the  like  product,  the  contents  and 

provisional conclusions are hereby confirmed. 

(41) 

In view of the above, it is definitively concluded that, in accordance with Article 1(4) 
of the basic Regulation, the product concerned and all corresponding types of footwear 
with uppers of leather produced and sold in the in the analogue country Brazil, as well 
as those produced and sold by the Community industry on the Community market are 
alike.  

1. 

Sampling for exporting producers in the PRC and Vietnam 

C. 

SAMPLING 

(42)  Some  parties  argued  that  the  samples  were  not  representative  given  the  exclusion  of 

STAF and children's shoes. 

(43)  As mentioned in recital (61) of the provisional Regulation, the exclusion of the STAF 
products did not influence significantly the representativeness of the sample. As regard 
children's shoes, the argument is irrelevant in view of the decision to keep these types 
of shoes in the scope of the investigation. 

(44)  Comments  were  made  with  regard  to  the  sample  percentages  as  established  in  the 
context of provisional measures. These comments were taken into account. Including 
children's  shoes,  it  was  established  that  the  companies  selected  in  the  samples 
accounted respectively for more than 12 % and more than 15% of the export quantities 
to the Community of the Chinese and Vietnamese cooperating exporting producers of 
the product concerned. Consequently, the sample is clearly representative. Reference 
is also made to the arguments set out in recital (56) below.  

(45) 

It was also claimed that the selection of the samples was inconsistent with the WTO 
Anti-dumping Agreement (‘ADA’), since certain major exporters were chosen at the 
expense  of  the  companies  with  smaller  or  non existent  EC  sales,  but  relatively  large 
domestic sales. 

(46)  As  already  explained  in  recital  (60)  of  the  provisional  Regulation,  the  methodology 
applied intended to ensure the highest possible representativeness of the samples and 
to include within the largest representative volume of exports that could reasonably be 
investigated  within  the  time  available,  some  companies  with  representative  domestic 
sales.  This  should  allow  a  calculation  of  normal  value  on  this  basis  in  case  some 
sampled exporting producers would qualify for Market Economy Treatment ('MET'). 
The samples were not selected in contradiction with the WTO rules nor with Article 
17 of the basic Regulation according to which the sample must be either a statistically 
valid  one  or  must  include  the  largest  representative  volume  of  production,  sales  or 
exports which can reasonably be investigated within the time available. Therefore, the 
above mentioned rules allow the use of sales, domestic and/or for export, as a selection 
criterion. 

EN 

12 

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(47)  Moreover,  it  is  recalled  that  as  explained  in  recitals  (57)  and  (58)  of  the  provisional 
Regulation, the authorities of the countries concerned gave their full agreement to the 
samples chosen.  

(48)  Some interested parties also claimed that agreement on the composition of the sample 
for  the  PRC  should  rather  have  been  sought  with  the  authorities  of  Hong  Kong  and 
Taiwan,  given  that  Chinese  producers  are  largely  owned  by  shareholders  in  these 
countries.  Therefore,  parties  in  these  countries  were  allegedly  concerned  by  the 
proceeding. 

(49)  This  argument  had  to  be  rejected.  It  is  the  consistent  practice  of  the  Community  to 
seek agreement with the authorities of the exporting country and/or the associations of 
producers  in  anti-dumping  proceedings  where  sampling  techniques  are  applied,  in 
accordance with Article 17(2) of the basic Regulation. Moreover, in the present case 
the  State  authorities  of  the  countries  concerned  were  in  close  contact  with  the 
associations  of  producers  of  the  countries.  Exporting  countries  in  the  current 
proceedings  are  the  PRC and Vietnam. Therefore, the agreement of  these authorities 
on the sample compositions was indeed sought and obtained. 

(50)  One non-sampled Vietnamese exporting producer reiterated its comments that since it 
had  duly  completed  an  anti-dumping  questionnaire  it  should  have  benefited  from 
individual  examination.  Nevertheless,  the  fact  that  a  non-sampled  party  submits  an 
anti-dumping  questionnaire  reply  does  not  automatically 
individual 
examination.  Indeed,  as  it  has  been  explained  under  recital  (64)  of  the  provisional 
Regulation,  in  view  of  the  unprecedented  size  of  the  samples  the  Commission 
concluded  that  individual  examination  of  additional  exporting  producers  would  have 
been unduly burdensome and would have prevented completion of the investigation in 
good time. 

lead 

to 

(51)  Finally,  parties  claimed  that  the  selection  of  representative  domestic  sales  in  the 
sample is inappropriate since none of the exporters qualified for MET. This argument 
was  however  deemed  irrelevant  since  the  decision  on  MET  is  taken  subsequently  to 
the selection of the sample. 

(52)  The claim was therefore rejected and in the absence of any further comments on this 

issue, it is concluded that the samples were representative.  

2. 

Sampling for Community producers 

(53)  Various interested parties claimed a breach of the Article 17 of the basic Regulation, 
alleging that the sample of Community producers is not representative. This claim is 
based on the fact that only ten companies were selected in the sample, and that those 
companies  merely  represent  10%  of 
the 
complainants, and only a minor proportion of the overall Community production - i.e. 
less  than  5%  -  given  that  the  complainants  in  this  case  represent  slightly  more  than 
40% of the overall Community production. Moreover it is claimed that certain trends 
observed for the sampled Community producers are not similar to those observed for 
the overall complainants, and that the sample would thus not be representative. 

the  overall  production  volume  of 

EN 

13 

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(54)  An association of importers also claimed that the sample of Community producers is 
not  statistically  valid,  and  that  consequently  a  negligible  proportion  of  Community 
producers were subject to verification visits. 

(55) 

(56) 

In  this  respect,  it  is  recalled  that  Article  17  of  the  basic  Regulation  sets  out  that 
investigations may be limited to samples which are either statistically valid, or which 
constitute the largest representative volume of production, sales, or exports which can 
be reasonably investigated. 

It is clear from the wording of this provision that there is no quantitative indication or 
threshold  as  to  what  constitutes  the  level  of  the  representative  volume.  The  only 
indication  is  that  such  volume  should  be  limited  to  what  can  reasonably  be 
investigated within the time available. 

(57)  Due to the specific circumstances of the case, i.e. given that the Community industry 
is  highly  fragmented,  it  is  unavoidable  that  the  companies  in  the  sample  cover  a 
relatively small portion of the overall Community production. As explained in recital 
(65) of the provisional Regulation the Commission selected a sample based primarily 
on the size in terms of production volume, but also took into account the geographical 
location  of  producers  in  order  to  ensure  that  the  sample  be  representative  in  that 
respect. The number of companies selected in the sample had however to be limited to 
what could be reasonably investigated within the time available, i.e. ten companies in 
this case. Given the  high degree  of  fragmentation of the industry,  and given that  the 
larger  producers  were  selected  in  the  sample,  further  increasing  the  number  of 
companies would in any event not have had a significant impact on the proportion of 
the  sample  as  compared  to  the  overall  Community  production.  In  this  context  it  is 
further  noted,  contrary  to  the  allegation  made  by  some  parties,  that  there  is  no  legal 
obligation  to  include  small  and  medium  sized  enterprises  as  defined  by  the  relevant 
EC  law  in  the  sample  as  follows  from  the  wording  of  Article  17(1)  of  the  basic 
Regulation. 

(58)  As  explained  above,  the  choice  of  the  sample  should  be  either  statistically  valid  or 
based on representative volume. Since this second method was chosen in this case, the 
claim  that  the  sample  is  not  statistically  valid  was  rejected.  Likewise,  the  fact  that 
allegedly  some  trends  observed  for  the  sampled  Community  producers  were  not 
similar to those observed for the overall complainants and that a small proportion of 
Community producers were subject to verification visits do not constitute legally valid 
arguments to put the validity of the sample into question.  

(59)  For the reasons explained above, the claims made by the various parties were rejected 
and  the  legal  validity  of  the  sample  is  hereby  confirmed  since  the  sample  is 
representative  and  was  selected  in  full  compliance  with  Article  17  of  the  basic 
Regulation. 

EN 

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D. 

DUMPING 

1. 

Market economy treatment ('MET') 

1.1.  General remark 

(60)  Certain  interested  parties  claimed  that  the  Commission  failed  to  disclose  on  an 
individual basis for each of the non-sampled Chinese and Vietnamese exporters, why 
they  are  considered  not  to  be  entitled  to  MET.  According  to  their  claim,  which  they 
reiterated  upon  definitive  disclosure,  the  Commission  is  obliged  to  make  individual 
determinations  with  regard  to  submitted  MET  claims  irrespectively  whether  an 
exporter is sampled or not. They considered that the methodology applied deprives the 
non-sampled companies from their right to an individual assessment and constitutes a 
violation of Article 2(7)(b) and 2(7)(c) of the basic Regulation. 

techniques.  The  key  rationale  of  sampling 

(61)  However,  it  is  considered  that  the  existing  provision  on  sampling  (Article  17  of  the 
basic  Regulation),  fully  encompasses  the  situation  of  companies  claiming  MET. 
Indeed,  whether  it  be  in  market  economy  countries  or  in  economies  in  transition, 
exporters are by the nature of the sampling exercise denied individual assessment and 
the conclusions reached for the sample are extended to them. Article 17 of the basic 
Regulation  sets  out  a  general  method  to  deal  with  situations  where  an  individual 
examination is no longer possible due to the high number of companies involved i.e. 
the use of a representative sample. There is no reason why the sampling method could 
not equally be applied to the situation where the high number of companies involved 
includes a high number of companies requesting MET/IT. Like in any other sampling 
case,  a  weighted  average  of  all  sampled  companies  is  established,  regardless  of  the 
methodology  applied  for  the  dumping  calculation  in  respect  of  each  company  as  a 
result of the MET/IT assessment. MET/IT should thus not prevent the application of 
normal  sampling 
to  balance 
administrative  necessities  to  allow  a  case  assessment  in  due  time  and  within  the 
margin  of  mandatory  deadlines,  with  an  individualised  analysis  to  the  best  extent 
possible. Finally, it is recalled that the number of requests for MET in this case was so 
substantial that an individual examination of the requests – as sometimes done in other 
cases  –  was  administratively  impossible.  Therefore,  it  was  considered  reasonable  to 
apply  equally  to  all  non-sampled  companies  the  weighted  average  margin  resulting 
from  all  the  companies  in  the  sample  with  no  distinction  being  made  between 
companies  obtaining  MET/IT  or  not.  It  has  also  been  alleged  that  the  dumping 
calculation was insufficiently reliable because sampling of MET claims had been used. 
This claim has to be rejected. First of all, there was no sampling of MET claims but 
sampling of exporting producers. Secondly,  the provisions on sampling are designed 
to ensure a sufficiently reliable determination as to whether or not there is dumping in 
a  case  of  a  large  number  of  exporting  producers.  Thirdly,  in  cases  where  exporting 
producers have also submitted MET claims there is no reason to conclude that the use 
of  the  routinely  applied  sampling  technique  would  lead  to  an  insufficiently  reliable 
determination.  Indeed,  it  runs  counter  the  very  concept  of  sampling  to  argue  that 
because of the fact that (non-sampled) exporters should be classified as either MET or 
non-MET, a sample of such a population would per se be unrepresentative. As in any 
other  anti-dumping  investigation,  the  individual  situation  of  exporters  is  never 
identical.  Important  differences  can  exist  between  producers  and  sampling  can 
nevertheless be applied. Fourthly, the classification of a company as being non-MET 

is 

EN 

15 

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means only that the normal value cannot be established on the basis of the company's 
own  data  but  that  a  viable  alternative  has  to  be  used.  However,  to  resort  to  viable 
alternatives has also to be done in other important areas of the dumping determination, 
see  e.g.  Article  2(1)  and  Article  2(6)  of  the  basic  Regulation.  Fifthly,  the 
representativity of the sample is further underlined by the fact that the governments of 
the exporting countries themselves have proposed the vast majority of the companies 
chosen in the sample. In other words, they themselves have considered these samples 
as representative for the totality of their exporting producers.  

(62)  Some  exporting  producers  from  the  PRC  and  Vietnam  still  argued  that  the 
Commission  did  make  individual  MET  assessments  in  previous  cases  where  the 
number  of  exporting  producers  was  high.  In  such  cases,  e.g.  “polyester  apparel 
filaments”  (Council  Regulation  (EC)  No  1487/2005  of  12  September  2005)7, 
individual MET assessments had been made although for the purpose of the dumping 
assessment sampling techniques in accordance with Article 17 of the basic Regulation 
had been used.  

(63) 

(64) 

(65) 

In that regard, however, it is recalled that in the above mentioned case an individual 
examination of the MET requests was found to be still feasible, while this was not the 
case  in  this  investigation.  Moreover,  it  is  noted  that  in  the  above  mentioned  case,  in 
accordance  with  the  rules  on  sampling,  companies  not  selected  in  the  sample  but 
awarded MET were given the weighted average margin of companies with MET in the 
sample,  i.e.  they  were  not  granted  any  individual  margin  but  they  were  granted  a 
weighted average margin found for companies with MET. 

In  previous  cases  where  sampling  was  used  and  MET  was  claimed  by  co-operating 
exporters, the numbers involved were such as to allow for an individual examination 
for each claim. In view of the unprecedented number of MET requests received it was 
not possible to assess each claim individually. Other exporters, outside and inside the 
sample, re-iterated that they should have been granted MET. To support their claims, 
some of them submitted their Articles of Associations (AoA) in order to demonstrate 
that  their  case  was  not  different  from  Golden  Step,  the  only  company  that  was 
awarded MET. 

In  this  respect  it  is  noted  that  the  sampling  provisions  of  Article  17  of  the  basic 
Regulation were applied in this proceeding. Subsequent  submissions of  non-sampled 
exporting  producers  were  not  examined  as,  in  accordance  with  Article  17(3)  of  the 
basic Regulation, this would have been unduly burdensome and would have prevented 
completion of the investigation in good time. As regards subsequent claims of sampled 
companies these are dealt in the relevant paragraphs below dealing with specific points 
relating to each of the two countries concerned by this proceeding.  

(66)  Some  of  the  exporting  producers  argued  that  the  Commission  did  not  make  an 
assessment  on  MET  within  three  months  after  the  proceeding  was  initiated,  as 
provided by Article 2(7)(c) last subparagraph of the basic Regulation. 

(67)  Although the MET assessment was made later than three months after the initiation of 
the case, exporting producers in the sample were provided with separate disclosures on 

7 

OJ L 240, 16.9.2005, p. 1. 

EN 

16 

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their MET status and given full right of defence. Certainly, parties are not negatively 
affected  by  any  MET  determination  made  before  the  imposition  of  provisional 
measures.  

(68)  Some  of  the  exporting  producers  which  already  requested  individual  examination 
reiterated  their  request.  However,  for  the  reason  explained  in  recital  (64)  of  the 
provisional Regulation, no individual examination of exporting producers in the PRC 
nor Vietnam could be granted. 

(69)  Consequently,  as  explained  in  recitals  (53)  to  (63)  of  the  provisional  Regulation,  in 
view of the large number of exporting producers in the PRC and in Vietnam which co-
operated,  a  representative  sample  was  used  to  establish  the  duty  to  be  applied  to  the 
co-operating exporters not selected in the sample like in all anti-dumping cases. 

1.2.  MET determination regarding exporting producers in the PRC 

(70)  Following  the  imposition  of  provisional  measures,  the  twelve  Chinese  exporting 
producers  selected  in  the  sample  and  verified  on-spot  claimed  that  they  should  have 
been granted MET and reiterated the arguments they had previously submitted.  

(71)  One  out  of  these  twelve  companies,  namely  Golden  Step  (‘GS’)  also  claimed  upon 
provisional  disclosure  a  substantial  change  further  to  the  examination  of  its  MET 
claim and provided evidence. It is recalled that GS’s MET claim was rejected because 
it failed to meet criterion 1 of Article 2(7)(c) of the basic Regulation. In particular, the 
rejection was based on the existence of an export obligation that entailed that GS was 
not  free  to  determine  its  sales  quantities  without  significant  State  interference. 
However,  upon  disclosure  of  the  MET  findings,  GS  submitted,  within  the  binding 
deadlines  to  provide  disclosure  comments,  evidence  demonstrating  that  it  is  de  facto 
and de jure not subject to an export sales obligation. 

(72)  Duly  considering  the  changed  circumstances  in  case  of  GS  and  the  fact  that  the 
rejection  of  MET  had  only  been  based  on  GS  failing  criterion  1,  it  was  decided  to 
review the original decision and to award MET to GS. 

(73)  Some  producers  concerned  by  the  MET  rejection  argued  that  the  reference  to  sales 
restrictions  in  AoA  did  not  lead  to  the  MET  rejection  in  other  anti-dumping 
proceedings. It should firstly be noted that the MET analysis is made case by case on 
the basis of the facts submitted and no such alleged contradiction to other recent MET 
analyses with a comparable set of facts exists. On the contrary, in the case referred to, 
the exporting producer submitted in due time a changed version of its AoA which did 
not  include  sales  restrictions  and  it  demonstrated  that  it  was  de  facto  not  subject  to 
such sales restrictions. 

(74)  Other parties claimed that the rejection of MET to Chinese shoe exporters was not in 
compliance  with  WTO  rules,  notably  because  exports  from  China  are  no  longer 
subject  to  a  state  monopoly,  as  required  by  the  second  supplementary  provision  to 
Article  VI  paragraph  1  of  Annex  1  to  GATT  1994  as  a  condition  for  contracting 
parties  to  deviate  from  determining  normal  value  on  the  basis  of  normal  value  data 
stemming from the export countries. 

EN 

17 

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(75)  When the above mentioned supplementary note was introduced, the PRC, among other 
countries,  was  indeed  considered  to  have  a  state  monopoly  on  exports.  Since  then 
consideration  has  been  given  to  the  economic  reforms  in  China  which  have  led  to  a 
different  treatment  of  China  in  trade  defence  proceedings.  Presently,  Section  15  of 
China’s Accession Protocol to the WTO makes specific provisions as to how Chinese 
exports  should  be  treated  in  trade  defence  proceedings.  The  provisions  laid  down 
therein indeed allow WTO members to use “a methodology that is not based on a strict 
comparison  with  domestic  prices  or  costs  in  China  …  if  the  producers  under 
investigation  cannot  clearly  show  that  market  economy  conditions  prevail  in  the 
industry producing the like product with regard to manufacture, production and sale of 
that product”.  

(76) 

(77) 

In the case of the other eleven companies part of the sample, it is noted that no new 
reasons were submitted in due time that would have been apt to alter the decision to 
reject MET to them. 

In this context it is in particular noted that the submission of changed AoA, no longer 
containing  sales  restrictions,  of  two  sampled  Chinese  exporting  producers  only 
subsequent to definitive disclosure was made too late to be taken into consideration, 
since at that time insufficient time remained for verification in accordance with Article 
16(1) of the basic Regulation. In any event, however, the companies concerned failed 
to meet the MET standard not just because of sales restrictions (criterion 1).  

(78)  The other comments of these companies were already addressed in recitals (69) to (77) 
of  the  provisional  Regulation.  Consequently,  the  findings  and  conclusion  contained 
therein are hereby confirmed and the decision to reject MET to the eleven companies 
is maintained. 

1.3.  MET determination regarding exporting producers in Vietnam 

(79)  Following the imposition of provisional measures, seven of the Vietnamese exporting 
producers selected in the sample claimed that they should have been granted MET and 
reiterated  the  arguments  they  had  previously  submitted  without  providing  sufficient 
new evidences. These comments were already addressed in recitals (78) to (90) of the 
provisional Regulation. Consequently, the findings set out in the aforesaid recitals of 
the provisional Regulation are hereby confirmed and the decision to reject MET to the 
eight companies is maintained. 

(80)  Two  sampled  Vietnamese  exporting  producers  claimed  that  they  should  have  been 
granted  MET  since  the  reasons  used  in  order  to  grant  MET  to  GS  applied  to  them. 
According to their understanding they were not granted MET because of (i) the sales 
restrictions  in  the  business  license  (‘BL’)  and  the  AoA  and  (ii)  the  existence  of  a 
contract  between  a  related  firm  and  a  100%  state  owned  firm.  The  companies 
submitted that such circumstances applied also to the Chinese exporting producer GS 
and therefore the determination with regard to them should have been identical to that 
of GS.  

(81) 

It should be noted that, according to the explanations given in recitals (78) to (90) of 
the provisional Regulation, the two Vietnamese firms were not granted MET because 
they did not fulfil criteria 1, 2 and 3 of Article 2(7)(c) of the basic Regulation. In this 
respect  it  is  noted  that  these  two  firms  hold  investment  licenses  which  imposed 

EN 

18 

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quantitative sales restrictions. These restrictions were not removed either during the IP 
or  thereafter.  Furthermore,  as  it  is  explained  under  recital  (89)  of  the  provisional 
Regulation,  the  two  companies  did  not  provide  an  MET  claim  form  for  one  of  their 
related producers in Vietnam. It was therefore not possible to establish that the group 
as  a  whole  fulfils  all  the  conditions  for  MET.  The  fact  that  this  related  firm  had  a 
processing contract agreement with a state owned company was not used in the MET 
determination  since  the  Commission  was  not  in  a  position  to  conclude  on  a  non-
submitted MET claim form. It is therefore concluded that the actual situation referring 
to  these  two  Vietnamese  exporting  producers  has  no  similarity  with  GS.  Hence  the 
arguments put forward had to be rejected.  

2. 

Individual treatment (‘IT’) 

2.1. 

IT regarding exporting producers in the PRC 

(82)  Following  the  imposition  of  provisional  measures,  some  of  the  Chinese  exporting 
producers  selected  in  the  sample  claimed  that  they  should  have  been  granted  IT  and 
reiterated  the  arguments  they  had  previously  submitted,  without  providing  any  new 
evidence  in  due  time.  In  this  context  it  is  in  particular  noted  that  the  submission  of 
changed  AoA,  no  longer  containing  sales  restrictions,  of  two  sampled  Chinese 
exporting producers was only made subsequent to definitive disclosure. This was too 
late to be duly verified in accordance with Article 16(1) of the basic Regulation. 

(83)  Consequently, for reasons already stated in recital (94) of the provisional Regulation, 

these claims had to be rejected. 

(84)  Other  Chinese  exporting  producers  claimed  that  the  refusal  to  grant  IT  to  Chinese 
exporting  producers  constituted  a  violation  of  Section  15  of  the  China-WTO 
Accession Protocol and respectively of Article 6(10) of the ADA. 

(85)  This  had  to  be  rejected.  First  of  all  the  ADA  is  not  directly  applicable  in  the 
Community. Secondly, Article 6(10) ADA only sets out the general rule of exporters 
being  allotted  individual  margins.  However,  where  non-market  economy  conditions 
apply, derogations from the general rule are equally provided by WTO law, e.g. by the 
second supplementary provision to Article VI paragraph 1 of Annex 1 to GATT 1994. 
The situation of Chinese exporters is indeed more specifically addressed by the China-
WTO  Accession  Protocol.  However,  no  obligation  to  allot  individual  margins  to 
exporting producers can be derived from Section 15 of that Protocol. 

(86)  For the same considerations, parties claimed that Article 9(5) of the basic Regulation, 

setting out the rules on individual treatment is in conflict with WTO Law. 

(87)  This had to be rejected, not only because WTO rules are not directly applicable in the 
Community  but  also  because  they  do  not  preclude  the  two  step  methodology  of  (i) 
MET and (ii) IT. 

(88)  Four Chinese exporters reiterated their claims on individual examination, as referred to 
in  recital  (7)  of  the  provisional  Regulation.  It  was  argued  that  where  a  sample  of 
twelve Chinese companies could be investigated it should be practicable to investigate 
four more. 

EN 

19 

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(89)  However, for the reasons already stated in recital (64) of the provisional Regulation, 

these claims were rejected. 

(90)  Another  exporting  producer  came  forward  to  request  IT  after  the  imposition  of 
provisional measures. That producer had started operation after the end of the original 
IP. For the same reason as aforementioned, an individual assessment of the merits of 
this  company's  claim  could  not  be  made.  Moreover,  it  was  also  found  that  its  AoA 
contained an export obligation. In addition, it benefited from tax incentives dependent 
on its exports exceeding a certain proportion of its total sales. In these circumstances, 
it would not have been possible, in any event, to grant IT to this company. 

2.2. 

IT regarding exporting producers in Vietnam 

(91)  Following  the  imposition  of  provisional  measures,  six  of  the  Vietnamese  exporting 
producers selected in the sample claimed that they should have been granted IT.  

(92)  The companies which were not granted IT on the basis of Article 9(5)(a) of the basic 
Regulation,  merely  reiterated  their  claim  that  their  export  quantities  are  freely 
determined. It is recalled that their export sales quantities were fixed in the companies 
investment licenses and could therefore not be considered as freely determined by the 
companies  since  any  deviation  from  the  ratio  stipulated  in  their  investment  license 
would  require  beforehand  a  modification  of  this  latter  which  would  need  to  be 
approved by the authorities. Although these exporters claimed that the ratio is freely 
determined by the company on the basis of economic considerations, it is considered 
that  there  is  no  reason  for  an  export  ratio  to  be  stipulated  in  an  investment  license 
thereby  explicitly  forbidding  a  company  from  selling  part  of  its  production  on  the 
domestic market. In such circumstances, the company concerned is no longer free to 
decide  whether  at  any  time  it  prefers  to  sell  more  on  the  domestic  market  than  the 
quantity allowed by its license, since it is subject to a preliminary agreement from the 
authorities. 

(93)  One of the companies which was not granted IT on the basis of Article 9(5)(c) of the 
basic  Regulation  claimed  that  the  Commission  decision  to  reject  IT  was  not 
sufficiently  substantiated.  However,  this  company  is  a  100%  State-owned  company 
and  consequently  the  majority  of  shares  do  not  belong  to  private  persons  but  to  the 
State which also nominates the management. In addition, this company was found to 
be related to a company which did not fulfil the requirements for MET nor IT. Given 
that  if  different  duty  rates  were  to  be  applied  to  these  two  related  companies  there 
would  be  a  risk  of  circumvention  of  measures  and  given  the  consistent  practice  to 
examine  whether  a  group  of  related  companies  as  a  whole  fulfils  the  conditions  for 
MET or IT, it could therefore not be established that the group as a whole fulfils all the 
conditions for IT. 

(94)  Under  these  circumstances,  the  conclusions  drawn  in  recital  (97)  of  the  provisional 

Regulation are confirmed. 

(95)  The two last companies did not provide any new evidence. 

(96)  Consequently,  for  the  same  reason  as  those  explained  in  the  recital  (97)  of  the 
provisional  Regulation,  it  was  considered  that  the  decision  to  reject  IT  to  the  eight 
Vietnamese companies should be maintained. 

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(97)  As regards IT claims by exporting producers not part of the sample, reference is made 

to the relevant paragraph above. 

3. 

Normal value 

3.1.  Determination of the normal value for the exporting producer granted MET 

(98)  The normal value determination for the sole exporting producer granted MET should 
be based on the data it submitted on domestic sales and cost of production. These data 
were verified at the premises of the company concerned. 

(99)  As  far  as  the  determination  of  normal  value  is  concerned,  the  Commission  first 
established, that the exporting producer in question made no domestic sales during the 
investigation period. Therefore, normal value could not be established on the basis of 
the  relevant  exporting  producer's  domestic  prices,  as  provided  by  Article  2(1), 
subparagraph  1,  of  the  basic  Regulation.  Accordingly,  another  method  had  to  be 
applied. 

(100)  To that end, it was checked whether the prices of other sellers or producers in the PRC 
could  be  used  pursuant  to  Article  2(1),  subparagraph  2,  of  the  basic  Regulation. 
However, no other exporting producer in the PRC had been awarded MET. Therefore, 
the use of domestic prices of such exporting producers was not possible. 

(101)  Given that no domestic prices could be used to establish normal value, a constructed 
normal  value  had  to  be  calculated  based  on  the  costs  of  the  producer  in  question. 
Consequently, in accordance  with Article 2(3) of the basic Regulation, normal value 
was  constructed  by  adding  to  the  manufacturing  costs  of  the  exported  shoe  model, 
adjusted where necessary, a reasonable amount for selling, general and administrative 
(‘SG&A’) expenses and a reasonable margin of profit.  

(102)  Since the exporting producer with MET did not perform any domestic sales and since 
no other Chinese exporting producer had been awarded MET, SG&A and profit had to 
be determined on the basis of any other reasonable method pursuant to Article 2(6)(c) 
of the basic Regulation. 

(103)  Consequently,  the  Commission  used  SG&A  and  profit  rates  from  Chinese  exporting 
producers that recently obtained MET in other investigations and which had domestic 
sales  in  the  ordinary  course  of  trade  as  stipulated  by  Article  2(2)  of  the  basic 
Regulation. 

(104)  The SG&A and profit average rates found in these investigations were compounded on 
the cost of manufacturing incurred by the exporting producer in question with regard 
to the exported models.  

3.2.  Determination of the normal value established in the analogue country 

(105)  Some  parties  argued  that  it  was  not  appropriate  to  have  chosen  Brazil  as  analogue 
country allegedly as the sole or main reason on the basis of the representativeness of 
the  domestic  sales,  in  this  country  compared  to  alternatively  suggested  analogue 
countries.  

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(106)  First, it should be stressed that the representativeness of the domestic sales is not the 
sole  reason  for  having  chosen  Brazil.  It  is  recalled  that  other  factors  such  as  the 
competition  on  the  Brazilian  market,  the  difference  in  the  costs  of  production 
structures  including  the  access  to  raw  materials  and  the  know-how  of  the  Brazilian 
producers  were  analysed  in  the  recitals  (109)  to  (123)  of  the  provisional  Regulation 
and led to the same conclusion. Incidentally, the choice of Brazil was found to be even 
more  appropriate  given  the  decision  to  exclude  STAF  from  the  product  scope,  since 
contrary to the other countries proposed by the above mentioned parties, the Brazilian 
companies  hardly  produce  STAF.  As  regards  other  factors  invoked  by  interested 
parties, such as the socio-economic and cultural developments or the labour costs, they 
were not deemed relevant  for determining whether Brazil is  an appropriate  analogue 
country.  Moreover,  in  terms  of  economic  development  Brazil  is  not  very  different 
from other proposed analogue countries such as Thailand and Indonesia. The choice of 
Brazil was therefore not deemed unreasonable. 

(107)  Moreover, although the sole fact that the domestic sales of the analogue country were 
below the minimum level of 5% does not necessarily signify that that country would 
be inappropriate, a figure of less than 2% for domestic sales in the case of the Thai and 
the Indonesian  companies that were proposed by some parties, nevertheless amounts 
to an indication that those markets are less representative than that of Brazil. 

(108)  In  addition,  the  level  of  the  domestic  sales,  although  not  the  sole  reason  for  having 
chosen Brazil, was however particularly relevant in this specific case given the large 
number of different types of shoes which are produced in the countries concerned and 
which  need  to  be  compared  to  the  footwear  produced  in  the  analogue  country  that 
most closely resembles the footwear produced in the countries concerned. 

(109)  Some  parties  claimed  that  the  use  of  closely  comparable  product  control  numbers 
('PCN')  used  by  ther  Commission  to  make  its  preliminary  determination  would  not 
provide  an  accurate  and  fair  comparison  of  export  prices  with  normal  values.  It  is 
noted that obviously not all PCNs sold by the exporting countries could be matched in 
Brazil. In these circumstances, to resort to the most closely resembling PCNs for the 
purpose  of  making  a  fair  comparison  is  deemed  the  most  reasonable  approach.  In 
addition,  adjustments  (e.g.  children's  shoes,  leather  quality)  were  made  to  address 
material differences in features between the shoes exported by the exporting countries 
and  the  closely  resembling  types  sold  in  Brazil.  These  features  were  either  not 
envisaged  by  the  PCN  scheme  at  the  early  time  of  its  creation  or  were  not  fully 
embodied in the available data submitted by interested parties. 

(110)  It  is  further  recalled  that  all  sales  of  leather  footwear  by  the  co-operating  Brazilian 
producers  are  higher  than  the  total  sales  of  producers  willing  to  co-operate  from  the 
proposed other analogue countries of Indonesia, India and Thailand. It was therefore 
considered  that  the  range  of  the  products  manufactured  by  the  Brazilian  companies 
was  likely  to  be  larger  than  those  manufactured  in  the  other  countries  considered. 
Consequently,  the  likelihood  of  finding  Brazilian  shoe  types  comparable  with 
Chinese/Vietnamese shoe types was deemed to be more likely. 

(111)  Indeed the six Thai companies, the two Indonesian companies and the Indian company 
respectively reported total sales (i.e. domestic and exports) of less than 8 million pairs 
(i.e. less than 5% of the exports concerned) while the eight Brazilian companies which 
cooperated reported total sales of more than 40 million pairs, from which more than 18 

EN 

22 

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million  pairs  for  the  sole  three  companies  whose  data  were  used.  Under  these 
circumstances,  it  is  obvious  that  the  likelihood  of  finding  models  produced  by  the 
Brazilian  companies  comparable  to  the  models  sold  by  the  countries  concerned  is 
higher than with the Thai, Indian or Indonesian companies. 

(112)  One  party  argued  that  the  range  of  the  Brazilian  production  is  not  as  wide  and 
diversified  as  the  production  of  the  countries  concerned.  However,  in  view  of  the 
above, it can be reasonably assumed that the product range of the Brazilian companies 
which provided the necessary information and whose sales (domestic and export) were 
found to be 6 to 13 times larger than those reported by the Indian, Indonesian or Thai 
companies, is wide and diversified. 

(113)  Interested parties also referred to an alleged contradiction between recital (108) of the 
provisional  Regulation  which  stated  that  “Brazil  appeared  to  be  the  most  reasonable 
choice in view of the representativeness of its domestic sales which permitted to avoid 
construction of the normal value and possible numerous adjustments” and recital (123) 
of the provisional Regulation which concluded that the difference in the quality of the 
leather used by the companies selected in the sample and the Brazilian producers “is 
not  a  reason  to  reject  Brazil  as  a  suitable  analogue  country  as  an  adjustment  for  a 
difference in physical characteristics can be made to take into account any difference 
in the quality of the leather”. 

(114)  However,  there  is  no  contradiction  since  recital  (108)  of  the  provisional  Regulation 
only states that the choice of Brazil is more suitable because fewer adjustments will be 
required  than for other  potential analogue countries. Furthermore, it is obviously not 
possible at an early stage of the investigation to know exactly which adjustments will 
eventually  be  required  in  order  to  make  an  appropriate  comparison.  Similarly,  such 
adjustments  would  probably  also  have  been  necessary,  had  another  country  been 
chosen as an analogue country. However, given the insufficient representativeness of 
the domestic sales of the other countries proposed and given also the likely thin range 
of their production, it can reasonably be assumed that their normal value would have 
to be constructed and that more adjustments would have been necessary to make Thai, 
Indonesian or Indian models comparable to those produced in the countries concerned 
than it was the case with the Brazilian domestic sales prices.  

(115)  As  regards  the  economic  development  and  the  income  per  capita,  while  they  are 
normally  deemed  irrelevant,  it  is  recalled  as  mentioned  in  recital  (115)  of  the 
provisional  Regulation  that  on  the  basis  of  the  World  Bank’s  main  criteria  for 
classifying  economies  is  gross  national  income  per  capita,  Brazil  is  classified  in  the 
same  category  as  the  PRC,  Thailand  and  Indonesia.  Moreover,  neither  labour  costs 
concerning the sampled exporting producers in the PRC nor in Vietnam were as such, 
compared  to  the  conditions  of  the  sampled  producers  in  Brazil,  that  this  could  have 
warranted an adjustment. It is also noted that nominal differences in costs between the 
analogue  country  and  the  exporting  country  concerned  are  not  as  such  relevant. 
Indeed,  as  costs  and  prices  are  in  general  not  considered  as  a  viable  basis  for 
determining  normal  value  in  countries  falling  under  Article  2(7)  of  the  basic 
Regulation, such comparison in fact defeats the purpose of resorting to the methods set 
out in Article 2(7)(a) of the basic Regulation.  

(116)  Some  parties  argued  that  Brazil  is  not  an  appropriate  analogue  country  due  to  the 
alleged subsidies given to the footwear producers in the northern territories. According 

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to these parties, these subsidies aimed at attracting footwear production to the northern 
part of Brazil thus affecting the competitiveness of the market. 

(117)  First, it should be noted that this allegation was not supported by any evidence. 

(118)  In  addition,  the  companies  used  for  the  determination  of  the  normal  value  were  not 
located in the Northern territories but in the South and could therefore not be affected 
by these alleged subsidies. 

(119)  Finally,  should  these  state  interventions  exist  as  described  by  the  exporters,  that 
mechanism would only prevent other companies from setting up a factory in the same 
area  but  not  to  sell  their  product  in  certain  parts  of  the  Brazilian  market.  The  shoe 
market is certainly neither a local nor a regional market but rather a national and even 
worldwide market. Therefore, the fact that a company may receive subsidies to set up 
a  factory  in  a  remote  area  does  not  prevent  competition  especially  on  a  market  of 
7 000 producers. Even though costs might eventually be affected by the alleged state 
subsidies, these should in all likelihood only have a downward effect on sales prices 
which would tend to reduce normal value and thus any dumping margins. 

(120)  In  addition,  in  view  of  the  reasons  provided  for  in  recital  (109)  of  the  provisional 
Regulation and particularly the fact that there are more than 7 000 producers in Brazil, 
the competition on the Brazilian market was not deemed inappropriate to reject Brazil 
as an analogue country. 

(121)  On the basis of the above and since the claim was not further substantiated, the claim 

was therefore rejected. 

(122)  It  was  therefore  concluded  that  Brazil  was  an  appropriate  analogue  country  for  the 
purpose of establishing the normal value as already concluded in recital (124) of the 
provisional Regulation. 

3.3.  Export price 

(123)  In  the  absence  of  any  comments  by  interested  parties  the  methodology  set  out  in 

recitals (128) to (130) of the provisional Regulation is hereby confirmed. 

(124)  Some parties argued that the findings should not have been based on export prices of 
companies  in  the  samples  when  calculating  the  country-wide  dumping  margin. 
Findings  should  have  rather  been  based  on  the  country  wide  export  volume  (e.g. 
Eurostat data). 

(125)  This  had  to  be  rejected.  It  is  recalled  that  the  sampling  provisions  stipulated  under 
Article 17 of the basic Regulation were applied in this particular proceeding. Therefore 
only export prices of the sampled companies were used. For sampled companies that 
did  not  meet  the  MET/IT  criteria  one  weighted  average  dumping  margin  was 
calculated.  Furthermore,  as  explained  under  recital  (135)  of  the  provisional 
Regulation,  this  weighted  average  dumping  margin  applies  to  co-operating  non-
sampled  companies  in  accordance  with  Article  9(6)  of  the  basic  Regulation.  In 
addition, as co-operation was high the same dumping margin was applied to all other 
Chinese exporting producers as well.  

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24 

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3.4.  Comparison 

(126)  Some parties claimed that not all details relevant to conduct the comparison of export 
prices  had  been  disclosed.  In  particular,  the  adjustments  made  to  the  normal  values 
determined on the basis of Brazilian data had not been quantified according to these 
parties. 

(127)  Having duly considered all comments received by interested parties and duly revised 
the  files,  it  was  found  appropriate  to  make  a  correction  to  the  adjustments  made  on 
leather costs, as addressed in recital (132) of the provisional Regulation. It was found 
that the producers in the exporting countries, particularly those in China, were selling 
leather  footwear  of  higher  quality  than  Brazilian  producers  did  on  their  domestic 
market. The difference in the quality of shoes was essentially due to a higher quality of 
the leather used. The quality difference was also mirrored in the purchase price of the 
leather used: the leather of the footwear exported from China and Vietnam was more 
expensive  than  that  used  in  Brazil  to  manufacture  domestically-sold  shoes.  For  this 
purpose, the value of leather inputs of analogue country producers were compared to 
the corresponding values of leather inputs used by Chinese and Vietnamese producers 
that were part of the sample. It was found that most of the leather used by Chinese and 
Vietnamese producers had been imported from market economy countries. Therefore, 
an average including world market prices was used to determine the adjustment. The 
relevant  calculation  was  made  separately  for  the  two  exporting  countries.  The  value 
difference of leather inputs was multiplied by the share of leather in the total cost of 
production.  The  subsequent  adjustments  upwards  to  the  normal  value  amounted  to 
21.6% (PRC) and 16.4% (Vietnam). 

(128)  Some  parties  argued  that  it  was  not  appropriate  to  make  adjustments  on  the  leather 
quality  where  it  was  found  that  the  cost  of  production  in  the  export  countries  was 
distorted  due  to  the  fact  that  all  but  one  of  the  exporters  in  those  countries  had  not 
been granted MET. 

(129)  This had to be rejected. It is true that MET was rejected also because state influence 
was found that impacted on costs/prices. However, as noted above, it was found that 
leather had been imported from market economy countries. 

(130)  Some parties argued that the Commission did not disclose the exact figures on which 
basis the adjustment was calculated and why the leather adjustment had to be revised 
after the provisional determination. 

(131)  However, the revision on the leather adjustment is explained above. Furthermore, the 
Commission  disclosed  to  all  companies  concerned  by  this  proceeding  the  necessary 
details  underlying  the  essential  facts  and  considerations  on  the  basis  of  which  it  is 
intended to recommend the imposition of definitive measures.  

(132)  Some interested parties claimed that no research and development ('R&D') adjustment 
should have been applied on the normal value, because similar amounts of R&D were 
incurred by the Chinese and Vietnamese producers.  

(133)  However,  it  was  found  that  R&D  costs  incurred  by  the  sampled  producers  from  the 
countries  concerned  related  only  to  production  R&D,  whereas  the  Brazilian  R&D 

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covered  design  and  samples  of  new  footwear  models,  i.e.  such  type  of  R&D  is 
different and therefore it is considered necessary to keep this adjustment.  

(134)  One other party also claimed that an adjustment should be made to take into account 
that the profit made with sales to original equipment manufacturers (‘OEM’) generates 
less profit than other sales. 

(135)  However, this allegation was not supported by the findings of the investigation in the 
Brazilian  companies  where  such  difference  did  not  exist.  Moreover,  any  difference 
between  sales  to  OEM  and  own  brand  sales,  is  already  taken  into  account  in  the 
adjustment  made  to  allow  for  the  R&D  cost  difference.  The  claim  was  therefore 
rejected. 

(136)  It  is  further  noted  that  an  adjustment  with  regard  to  children’s  shoes  was  necessary. 
None  of  the  Brazilian  producers  manufactured  children’s  shoes.  It  can  be  observed, 
e.g.  by  Eurostat  import  data,  that  children's  shoes  are  in  general  cheaper  than  adults' 
shoes.  This  can  be  ascribed  to  the  smaller  size  of  children's  shoes  and  consequently 
smaller  quantity  of  raw  material  required  for  their  production.  Consequently,  an 
adjustment  was  applied  on  the  basis  of  the  proportional  price  differences  between 
children's and adult's shoes sold by the Community industry. The adjustment amounts 
to 33.2% on the normal value. 

(137)  Some  parties  claimed  that  this  adjustment  has  not  been  adequately  explained. 
Furthermore,  it  was  stated  that  the  only  factor  justifying  the  price  difference  is  the 
difference  in  sizes  and  subsequently  the  amount  of  raw  materials  used.  Such  an 
assumption was erroneous according to those parties. In this respect it is noted that the 
adjustment made with regard to children’s shoes was fully disclosed to the parties and 
is set out above. Furthermore, parties that regarded this adjustment erroneous failed to 
provide  any  better  alternative  method  that  could  be  used  and  ensure  comparison  of 
export prices and normal values on a fair basis.  

(138)  In  the  absence  of  further  comments  the  findings  in  recital  (131)  to  (133)  of  the 

provisional Regulation are hereby confirmed. 

(139)  Some  parties  argued  that  the  PCN  scheme  did  not  allow  for  a  fair  comparison.  In 
particular, parties claimed that the PCN scheme used was too broad and not based on 
product-specific  physical  characteristics.  According  to  those  parties  this  allegedly 
constituted a violation of Article 2(4) of the ADA. It was further argued that general 
adjustments  (on  the  leather  quality)  did  not  provide  sufficient  compensation  for  this 
alleged flaw. 

(140)  These arguments had to be rejected. Indeed Article 2(4) of the ADA, as well as Article 
2(10) of the basic Regulation, mandates a fair comparison. However, these provisions 
do not provide any details with regard to the design of PCNs. It is recalled that it is the 
long–standing  practice  of  the  EC  to  facilitate  the  comparability  between  the  product 
concerned  and  the  like  product  by  using  PCNs  which  subdivide  the  product  into 
types/models  according  to  certain  features  or  technical  specifications.  In  the  present 
case five such elements have been taken into consideration, i.e. style of footwear, type 
of consumer,  type  of  footwear,  material of the outer sole and lining. These elements 
sufficiently reflect the essential characteristics of the product concerned. Furthermore, 
it  is  noted  that  no  legal  obligation  is  set  neither  by  the  basic  Regulation  nor  by  the 

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ADA to make use of any PCNs in anti-dumping investigations. In the present case, in 
line with the principle of a fair comparison, one and the same PCN scheme has been 
consistently used to classify models of the product concerned manufactured and sold 
by producers in the Community, the export countries and the analogue country, for the 
sake of comparing Community prices, export prices and normal values on a fair basis.  

(141)  Furthermore, it was found that indeed the leather quality issue, which was not covered 
by  the  PCN  scheme  affected  the  prices  and  price  comparability  of  the  product 
concerned. Leather usually makes up for 50% or more of a leather shoe’s total cost of 
production.  Depending  on  the  type,  quality  and  quantity  of  leather  used,  the  leather 
cost  may  vary  to  a  significant  degree  but  the  cost  differences  were  found  to  be 
reflected accordingly in sales prices. For the purposes of comparing normal value with 
the  export  prices  and  for  the  undercutting/underselling  calculations,  an  appropriate 
adjustment for differences in the physical characteristics was made in line with Article 
2(10)(a) of the basic Regulation. 

(142)  Other parties observed huge price differences within certain PCNs, which in their view 

indicated a flaw in the PCN scheme. 

(143)  The price differences could be due to various circumstances like market fluctuations, 
specific price pressure in case of oversupply etc. and willingness to dump etc. In any 
event,  what  matters  with  regard  to  the  application  of  the  PCN  scheme  is  that  is 
consistently applied for all parties concerned by the case. Price differences can be due 
to a number of factors,  such  as fashion  trends and market  psychology,  which do not 
necessarily  put  into  question  the  comparability  of  products  within  the  same  PCN. 
More  importantly,  the  parties  failed  to  identify  any  better  and  yet  practical 
methodology  to  facilitate  the  comparability.  As  already  noted  any  price  differences 
due to different leather qualities have been taken into account by making appropriate 
adjustments. The claim had therefore to be rejected. 

(144)  Other parties argued that since it was decided to exclude STAF from the scope of the 
product  concerned  this  footwear  type  should  have  been  identified  separately  by  the 
PCN scheme. 

(145)  When in the present case the need arose to exclude STAF from the product concerned 
scope,  a  reasonable  and  consistent  methodology  was  applied  vis-à-vis  all  exporting 
producers to exclude their respective STAF sales from the scope of the investigation. 
The  intention  to  exclude  STAF  from  the  scope  of  the  product  concerned  was 
communicated  to  all  parties  concerned  long  before  the  provisional  disclosure  took 
place.  Neither  after  that  communication  nor  upon  disclosure  of  the  provisional 
findings has any exporting producer submitted revised data which would have allowed 
a  better  identification  of  its  STAF  sales  in  its  transaction  listings.  Under  these 
circumstances, the PCN methodology used in order to exclude STAF sales is deemed 
reasonable and appropriate. 

3.5.  Dumping margins 

3.5.1.  General methodology 

(146)  Some  interested  parties  claimed  that  t  not  distinguishing  between  co-operating 
companies  and  non  co-operating  companies  gives  a  bonus  for  non-cooperation. 

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However, as explained in recital (139) of the provisional Regulation, the level of co-
operation  was  high  and  consequently,  consistent  with  standard  practice,  it  was 
considered appropriate to set the dumping margin for any non-cooperating exporting 
producers  at  the  level  of  the  weighted  average  dumping  margin  established  for  co-
operating exporting producers in the sample in the countries concerned. In the absence 
of  comments  the  general  methodology  used  to  establish  the  dumping  margins  as 
described in recitals (134) to (143) of the provisional Regulation is hereby confirmed. 

3.5.2.  Dumping margins 

a) People’s Republic of China 

– 

– 

The  dumping  margin  for  GS  is  9.7%,  expressed  as  a  percentage  of  the  CIF 
import price at the Community border; 

The definitive country wide dumping margin, expressed as a percentage of the 
CIF import price at the Community border is 28,9%. 

b) Vietnam  

– 

The definitive country wide dumping margin, expressed as a percentage of the 
CIF import price at the Community border is 70.1%. 

1. 

General 

E. 

INJURY 

(147)  As at the provisional stage, and in view of the above definitive conclusions concerning 
the  product  scope,  all  figures  related  to  STAF  have  been  excluded  from  the  data 
analysed  below.  Following  the  request  of  certain  exporting  producers,  it  is  hereby 
confirmed that such exclusion has been equally applied to both the imports from the 
countries  concerned  and  those  from  the  other  third  countries  as  well  as  to  the  data 
relating to the Community industry.  

(148)  However,  given  the  above  definitive  conclusion  that  children’s  footwear  should  be 
included  in  the  scope  of  the  product  concerned,  the  definitive  analysis  of  injury  has 
been made for the totality of the product concerned, i.e. including children’s shoes. 

2. 

Community production  

(149)  An  association  of  importers  reiterated  its  claim  that  if  the  complainants,  who  they 
allege merely assemble in the Community footwear components from non-Community 
sources,  are  considered  being  Community  producers,  then  the  importers  that 
maintained  design,  branding,  R&D,  management  and  retail  activities  in  the 
Community should also be considered Community producers. 

(150)  This  claim  was  already  addressed  in  the  recital  (148)  of  the  provisional  Regulation 
where  it  was  concluded  that  only  the  companies  active  in  the  production/ 
manufacturing  in  the  Community  qualify  as  Community  producers.  The  products 
traded by the importers are, amongst others, produced in China and Vietnam  and  do 
not  qualify  for  EC  origin,  are  subject  to  import  duties,  and  those  operators  in  the 
Community therefore cannot be considered Community producers. 

EN 

28 

   EN 

 
(151)  In the absence of new information, those conclusions are hereby confirmed, and it is 
definitively concluded that the producers mentioned in recital (146) of the provisional 
Regulation  constitute  the  total  Community  production  within  the  meaning  of  Article 
4(1) of the basic Regulation. 

3. 

Definition of the Community industry 

(152)  The definition of Community industry was questioned by various exporting producers, 
importers  and  an  association  of  importers  on  the  grounds  that  the  non-sampled 
companies did not co-operate during the investigation, e.g. by providing a reply to the 
sampling  questionnaire  and  that  therefore  the  legal  requirement  on  standing  of  the 
complaint  was  not  fulfilled  throughout  the  investigation.  For  those  reasons,  they 
alleged that the 814 complainants could not legally constitute the Community industry. 

(153)  Reference  was  also  made  to  various  Council  Regulations  whereby  complainant 
producers who failed to co-operate properly were excluded from the definition of the 
Community industry. 

(154)  In this respect, it should be noted that pursuant to Article 4(1) of the basic Regulation, 
the  term  Community  industry  shall  be  interpreted  as  referring  to  Community 
producers whose collective output of the like products constitutes a major proportion 
as  defined  in  Article  5(4)  of  the  basic  Regulation.  Article  5(4)  further  gives  a 
definition  of  this  major  proportion,  i.e.  that  those  Community  producers  expressly 
supporting the complaint should account for not less than 25% of the total Community 
production and more than 50% of the total production of the like product produced by 
that portion of Community producers expressing either support for or opposition to the 
investigation. 

(155)  In  this  specific  case,  the  complainant  Community  producers  represented  more  than 
40%  of  the  Community  production,  and  according  to  the  above  legal  requirements, 
they  are  deemed  to  constitute  the  Community  industry.  In  addition  no  producer 
opposed the complaint. 

(156)  It  is  correct  that  it  is  the  Institutions  usual  practice  that  the  complainant  Community 
producers who failed to co-operate satisfactorily during the investigation will normally 
be  excluded  from  the  definition  of  the  Community  industry,  and  that  the 
aforementioned  thresholds  should  also  be  fulfilled  at  the  time  when  measures  are 
adopted.  

(157)  However,  in  this  case,  none  of  the  814  Community  producers  was  found  not  to  co-
operate satisfactorily with the investigation. As a matter of fact and as clearly outlined 
in  the  notice  of  initiation,  questionnaires  were  only  sent  to  the  sampled  Community 
producers,  and  replies  were  received  from  all  of  them. Therefore  if  the  non-sampled 
complainant  producers  did  not  submit  any  reply  to  the  questionnaire  for  sampled 
producers, it is simply explained by the fact that they were not requested to do so.  

(158)  It follows from the very nature of sampling that full injury questionnaires are only sent 
to the sampled complainant Community producers and, according to the provisions of 
Article  6(2)  of  the  basic  Regulation,  only  parties  receiving  a  questionnaire  should 
provide a reply. The claims made by the various interested parties were rejected on the 
basis  of  the  above  elements,  and  the  conclusions  set  out  in  recital  (152)  of  the 

EN 

29 

   EN 

 
provisional  Regulation  is  confirmed:  the  814  complainant  Community  producers  are 
deemed to constitute the Community industry within the meaning of Article 4(1) and 
Article  5(4)  of  the  basic  Regulation,  and  they  are  hereinafter  referred  to  as  the 
‘Community industry’. 

4. 

Community consumption  

(159)  One exporter questioned the level of the Community consumption, on the basis that it 
appears to be lower in Europe than in developing countries. This claim was however 
not  further  substantiated,  and  thus  rejected.  In  the  absence  of  other  claims,  the 
methodology  used  for  the  calculation  of  the  Community  consumption  is  hereby 
confirmed.  

(160)  The  apparent  Community  consumption  including  children’s  footwear  developed  as 

follows:  

2001 

2002 

2003 

2004 

IP 

Consumption (000 pairs) 

718.186 

646.843 

669.686 

699.604 

714.158 

Index: 2001=100 

100 

90 

93 

97 

99 

Source: Eurostat, information contained in the complaint. 

(161)  This development is comparable to the consumption established at provisional stage, 

i.e. excluding children’s footwear. 

5. 

Imports from the countries concerned 

5.1.  Cumulative assessment of the effects of the dumped imports concerned 

(162)  The table below shows the import volumes, market shares and average unit prices of 

both countries concerned individually, including children’s footwear: 

Import volume and market shares 

2001 

2002 

2003 

2004 

IP 

PRC (000 pairs) 

15.571 

14.616 

25.810 

30.662 

63.044 

Index: 2001=100 

market shares 

100 

2,2% 

94 

2,3% 

166 

3,9% 

197 

4,4% 

405 

8,8% 

Vietnam (000 pairs) 

51.414 

59.898 

83.334 

103.177 

102.604 

Index: 2001=100 

market shares 

Average prices 

PRC €/pair 

Index: 2001=100 

Vietnam €/pair 

100 

7,2% 

2001 

11,6 

100 

11,9 

117 

162 

201 

200 

9,3% 

12,4% 

14,7% 

14,4% 

2002 

11,3 

97 

11,2 

2003 

2004 

8,6 

74 

9,9 

7,3 

63 

9,3 

IP 

7,2 

62 

9,2 

EN 

30 

   EN 

 
 
 
 
Index: 2001=100 

100 

94 

83 

78 

78 

(163)  Certain  interested  parties  claimed  that  the  cumulative  assessment  is  not  warranted. 
This  allegation  is  based  on  the  fact  that  trends  in  import  volume  and  prices  differ 
between  China  and  Vietnam.  In  addition  it  was  claimed  that  Vietnam  is  one  of  the 
world’s  poorest  countries,  benefiting  from  the  Generalised  System  of  Preference 
(‘GSP’),  and  that  it  should  therefore  not  be  cumulated  with  China  for  the  injury 
assessment. 

(164)  The  first  claim  was  already  made  previously  and  duly  addressed  in  the  provisional 
Regulation.  More  specifically,  concerning  import  trends  in  terms  of  volume  and 
prices,  the  table  in  recital  (160)  of  the  provisional  Regulation  clearly  indicated  that 
those trends followed similar patterns. It is also noted that the inclusion of children’s 
footwear  does  not  alter  those  trends.  In  any  event,  and  in  addition  to  those  import 
trends,  the  provisional  Regulation  set  out  in  detail  the  various  reasons  why  the 
cumulative  assessment  is  appropriate  in  the  light  of  the  conditions  of  competition 
between  imported  and  the  like  Community  product.  This  is  for  example  because 
imported  products  are  alike  in  terms  of  their  basic  characteristics,  interchangeable 
from the consumer’s point of view and distributed via the same distribution channels. 

(165)  As concerns Vietnam, there is no provision in the basic Regulation stipulating that one 
of  the  countries  simultaneously  subject  to  anti-dumping  investigations  should  not  be 
cumulated  because  of  its  overall  economic  situation.  More  specifically,  such  an 
interpretation would also not be in line with the object and purpose of the provisions 
on cumulation which focus on whether the imports from the various sources compete 
with each other and the like Community product. In other words, the characteristics of 
the traded products matter but not the situation of the country from which the imports 
originate.  The  situation  of  the  exporting  country  has  to  be  addressed  in  conformity 
with the provisions of Article 15 of the ADA and the basic Regulation but not in the 
context of cumulation. Therefore, this claim was rejected. 

(166)  An association of importers also claimed that the cumulation is not warranted on the 
grounds  that  the  product  mix  of  the  two  countries  concerned  is  different.  In  this 
respect, it is considered that even though certain differences in product mix may exist 
between both countries, there is still a significant overlap, and thus it is considered that 
overall the product concerned originating in China and in Vietnam do overall compete 
against each other. Reference is also made to the above conclusions that all types of 
the product concerned should be considered as one single product for the purpose of 
this  proceeding,  and  that  all  types  of  leather  footwear  produced  and  sold  by  the 
Community  industry  are  alike  to  those  exported  from  the  countries  concerned  to  the 
Community. This argument was therefore rejected. 

(167)  On  the  basis  of  the  provisional  findings  set  out  in  recitals  (156)  to  (162)  of  the 
provisional  Regulation  and  the  above,  it  is  hereby  definitively  concluded  that  all 
conditions  of  cumulation  set  out  in  Article  3(4)  of  the  basic  Regulation  are  met  and 
that  accordingly  the  effect  of  the  dumped  imports  originating  in  the  countries 
concerned should be assessed jointly for the purpose of the injury analysis. 

EN 

31 

   EN 

 
5.2.  Volume, market share and price development of the dumped imports concerned 

a) Volume and prices 

(168)  The table below shows the development of the import volume and market shares of the 
product  concerned  originating  in  the  countries  concerned,  including  children’s 
footwear.  

2001 

2002 

2003 

2004 

IP 

Imports (000 pairs) 

66.986 

74.514 

109.144 

133.840 

165.648 

Index: 2001=100 

100 

111 

163 

200 

247 

Market share  

9,3% 

11,5% 

16,3% 

19,1% 

23,2% 

Source: Eurostat 

(169)  The trends and absolute figures are comparable to those analysed at provisional stage: 
the  import  volume  more  than  doubled,  and  the  market  share  significantly  expanded 
from 9,3% in 2001 to 23,2% during the IP. It should be noted that there is a significant 
overlap  between  2004  and  IP  (April  2004  to  March  2005),  and  therefore  the  above 
table shows that there was an acceleration of imports during the first quarter of 2005. 
As can be seen from the above table, this is particularly due to the development of the 
Chinese imports. 

(170)  Import  prices,  including  children’s  footwear,  decreased  by  almost  30%  during  the 

period considered, similarly to what was established at provisional stage. 

EUR/pair 

Index: 2001=100 

2001 

2002 

2003 

2004 

11,8 

100 

11,2 

95 

9,6 

81 

8,8 

74 

IP 

8,5 

72 

Source: Eurostat 

(171)  Certain  importers  claimed  that  the  decrease  of  the  import  prices  is  explained  by 
changes  in  the  product-mix.  This  was  however  not  substantiated  and  was  also  not 
confirmed by the investigation. This claim was therefore rejected. 

b) Comments by the interested parties 

(172)  Certain  interested  claimed  a  breach  of  Article  3(2)  of  the  basic  Regulation  on  the 
grounds that the Commission did not carry out an objective examination of the volume 
and  the  prices  of  the  dumped  imports.  They  justified  their  allegation  on  the  grounds 
that external factors such as the lifting of the import quota, development of exchange 
rate, alleged changes in product mix and fashion development have not been taken into 
consideration when examining import trends.  

(173)  Specifically  concerning  the  lifting  of  the  quota,  this  claim  was  already  addressed  in 
recital  (165)  of  the  provisional  Regulation.  It  is  acknowledged  that  the  lifting  of  the 
quota had exacerbated the import trends to a certain extent. This should however also 
be  seen  in  the  light  of  the  fact  that  only  one  of  the  two  countries  concerned  was 
directly concerned by this quantitative limitation and that imports from Vietnam also 

EN 

32 

   EN 

 
 
 
followed  increasing  trends,  that  not  all  product  types  covered  by  this  investigation 
were subject to quota, and finally that the total liberalisation of imports took place as 
of 1 January 2005, and therefore the IP (April 2004 to March 2005) was only partially 
affected. 

(174)  More  generally,  Article  3(3)  of  the  basic  Regulation  provides  that  the  analysis  of 
injury specifically includes the question whether there has been a significant increase 
of  dumped  imports,  and  whether  there  has  been  significant  price  undercutting,  or 
whether the effect of the dumped imports is otherwise to depress prices to a significant 
degree or to prevent price increases which otherwise would have occurred. 

(175)  On this basis, it would appear that the sedes materiae of the aforementioned claims is 
in the context of causation. Moreover, there is no explicit legal requirement in Article 
3(3) of the basic Regulation that positive evidence should be given as the reasons why 
the volume of dumped imports increased, and the corresponding prices decreased. The 
claim  that  external  factors  should  be  taken  into  account  in  the  examination  of  the 
dumped imports was therefore rejected.  

5.3.  Undercutting 

(176)  Various comments were received with respect to the undercutting calculations. Those 
claims were analysed in detail, and the necessary amendments to the calculations have 
been applied where justified and supported by factual evidence. 

(177)  It is recalled that at the provisional stage adjustments to the import price were made 
which  reflected  the  estimated  costs  that  are  incurred  in  the  Community  by  the 
importers,  such  as  design,  selection  of  raw  material  etc,  and  which  would  otherwise 
not be reflected in the import price. Various importers requested this adjustment. An 
estimated adjustment of 15% was applied at the provisional stage. 

(178)  The  association  representing  the  Community  industry  however  contested  such 
adjustment,  and  more  specifically  the  level  of  the  adjustment  applied.  While  they 
conceded  that  certain  costs  are  indeed  incurred  at  the  level  of  the  importers,  the 
association  contested  the  fact  that  all  importers  indeed  incur  such  costs.  Moreover, 
they  claimed  that  the  level  of  the  adjustment  might  be  justified  in  the  case  of  STAF 
importers (incurring high R&D expenses) but, given that such footwear was excluded 
from the proceeding, the level of the adjustment should be revised downwards. 

(179)  This  claim  has  been  carefully  examined,  and  the  following  conclusions  were  drawn. 
Firstly as concerns the adjustment in itself, it was requested by many importers and, in 
principle, not opposed by the Community industry. 

(180)  As to the level of the adjustment, it should be noted that although many importers did 
indeed  request  such  adjustment,  only  one  importer,  which  was  also  subject  to  a 
verification visit, submitted detailed information in that respect. The other importers of 
the  product  concerned  could  not  support  the  claim  that  their  level  of  R&D  costs 
reached the level of the adjustment applied at a provisional stage. It should be noted 
that  some  importers  subject  to  a  verification  visit  mostly  traded  STAF.  As  STAF  is 
now  definitively  excluded  from  the  product  scope,  their  figures  were  ultimately  not 
relevant for the purpose of the adjustment. 

EN 

33 

   EN 

 
(181)  At the definitive stage, in the absence of substantiated claims by the vast majority of 
the importers (irrespective of whether or not subject to a verification visit), the level of 
the  adjustment  has  been  revised  downwards,  and  estimated  on  the  basis  of  the  only 
substantiated data that was made available during the investigation. 

(182)  On  the  basis  of  the  above  the  revised  undercutting  margins  found,  by  country,  and 
expressed as a percentage of the Community industry’s prices, are as follows: 

Country 

PRC 

Price Undercutting 

On weighted average 13,5%  

 Vietnam 

On weighted average 15,9% 

6. 

Peculiarities of the footwear sector in the Community 

(183)  In  the  provisional  Regulation,  certain  information  was  given  with  respect  to  the 
peculiarities  of  the  footwear  sector  in  the  Community.  Various  interested  parties 
claimed that such data should not be taken into consideration because they are either 
not  reliable,  or  that  they  do  not  exclusively  refer  to  the  situation  of  the  Community 
industry, thus have no legal basis. 

(184)  In this respect, it should be clarified that the information in recitals (169) to (173) of 
the  provisional  Regulation  was  provided  only  for  indicative  purposes,  in  order  to 
provide a better understanding of the Community footwear sector. It should be noted 
however  that  the  findings  concerning  injury  are  made  in  relation  to  the  Community 
industry  as  defined  above  and  that  no  further  reference  to  this  information  will  be 
made in the injury analysis.  

7. 

Situation of the Community industry  

7.1. 

Preliminary remarks 

(185)  As  already  mentioned  above,  the  injury  analysis  at  the  definitive  stage  includes  data 

related to children’s footwear.  

(186)  As  mentioned  in  the  recital  (175)  of  the  provisional  Regulation,  and  following  the 
usual  practice,  the  injury  indicators  have  been  established  either  at  macro-economic 
level (based on data for the whole Community industry) or at micro-economic levels 
(based on data of the sampled companies). For the sake of coherence, injury indicators 
are established exclusively at one of those two levels, but not at both. 

7.2.  Macro-economic indictors 

Production, production capacity and capacity utilisation 

2001 

2002 

2003 

2004 

IP 

Production (000 pairs) 

266.931 

218.498 

206.246  189.341 

175.764 

Index: 2001=100 

100 

82 

77 

71 

66 

Source: information established during the investigation 

EN 

34 

   EN 

 
 
(187)  The  production  volume  of  the  overall  Community  industry  went  down  from  267 
million  pairs  in  2001  to  176  million  pairs  during  the  investigation  period.  This 
represents a decrease of more than 30%. 

(188)  Although a factory is theoretically designed to achieve a certain production level, this 
level will strongly depend on the number of workers hired by this factory. Indeed, as 
explained  above,  most  of  the  footwear  manufacturing  process  is  labour  intensive. 
Under those circumstances, for a stable number of companies, the best way to measure 
capacity  is  to  examine  the  level  of  employment  of  those  companies.  Reference  is 
therefore made to the table concerning the development of employment below.  

(189)  As  employment  (and  hence  capacity)  decreased  broadly  in  line  with  production, 

capacity utilisation remained by and large unchanged throughout the period.  

Sales volume and market share 

Sales (000 pairs) 

Index: 2001=100 

Market shares 

2001 

2002 

2003 

2004 

IP 

190.134

150.389

145.087

133.127 

126.555

100

79

76

70 

67

26,5%

23,2%

21,7%

19,0% 

17,7%

Source: information established during the investigation 

(190)  Because production takes place on order, the sales volume of the Community industry 
followed a decreasing trend similar to the production. The number of pairs sold on the 
Community market dropped by more than 60 million between 2001 and the IP, i.e. by 
33%.  

(191)  In terms of market shares, this corresponds to a loss of almost 9 percentage points. The 
Community industry market shares dropped from 26,5% in 2001 to 17,7% during the 
IP.  

Employment 

2001 

2002 

2003 

2004 

IP 

Total employees 

84.736 

69.361 

66.425 

61.640 

57.047 

Index: 2001=100 

100 

82 

78 

73 

67 

Source: information established during the investigation 

(192)  Employment dramatically decreased during the overall period considered. More than 
27 000 jobs were lost within the Community industry, representing a decrease of 33% 
in the IP as compared to the 2001 level. 

Productivity  

Productivity 

3.150 

3.150 

3.105 

3.072 

3.081 

2001 

2002 

2003 

2004 

IP 

EN 

35 

   EN 

 
 
 
 
Index 2001=100 

100 

100 

99 

98 

98 

Source: information established during the investigation 

(193)  Productivity was established by dividing the production volume with the Community 
industry’s  workforce,  as  reported  in  the  above  tables.  On  this  basis,  the  Community 
industry’s productivity remained relatively stable during the period considered.  

Growth, magnitude of dumping margin  

(194)  In the absence of any new and substantiated information or argument in this particular 

respect, recitals (183) and (184) of the provisional Regulation are hereby confirmed. 

Recovery from the effects of past dumping or subsidisation 

(195)  It  is  recalled  that  anti-dumping  measures  against  imports  of  certain  footwear  with 
uppers of leather or plastics originating in PRC, Indonesia and Thailand were imposed 
in February 1998. Those measures had an overlapping scope with the products subject 
to the present investigation. Further to the publication of a notice of impending expiry 
of those measures, no request for a review was received, and the measures accordingly 
lapsed  in  March  2003.  In  the  provisional  Regulation,  it  was  considered  that  in  the 
absence of a review request, the Community industry had, at that time, recovered from 
the effects of past dumping.  

(196)  This was however refuted by the Community industry, on the grounds that the absence 
of  a  review  request  was  not  motivated  by  any  recovery  of  the  injurious  effects  of 
dumping,  but  rather  by  the  fact  that  the  measures  in  place  were  not  sufficiently 
effective. It claimed that, contrary to what was set out in the provisional Regulation, 
the  economic  situation  of  the  Community  industry  could  not  satisfactorily  recover 
because  the  measures  in  place  at  that  time  were  not  sufficiently  efficient  to  remove 
injury.  In  addition  the  imports  from  the  countries  concerned  by  this  proceeding 
became significant in the period 2001 to 2003.  

(197)  However,  the  Community  industry  did  not  sufficiently  substantiate  that  it  sustained 
material injury during the period 2001 to 2003 and any alleged ineffectiveness of the 
earlier  measures  could  have  been  addressed  by  an  interim  review,  which  was  not 
requested.  

(198)  This  claim  was  thus  rejected,  and  the  provisional  conclusion  that  the  industry 
recovered  from  the  effects  of  past  dumping  is  therefore  confirmed  at  this  definitive 
stage,  i.e.  until  2003  the  Community  industry  did  not  yet  sustain  material  injury. 
However, it should be noted that as of 2004 it did. 

7.3.  Micro-economic indicators 

Stocks  

000 pairs 

2001 

2002 

2003 

2004 

IP 

2.188 

2.488 

2.603 

2.784 

2.503 

Index: 2001=100 

100 

114 

119 

127 

114 

EN 

36 

   EN 

 
 
Source: verified questionnaire replies 

(199)  As  already  mentioned,  stocks  are  deemed  to  have  little  bearing  on  the  state  of  the 
Community  footwear  industry  for  the  determination  of  injury  since  production  is  to 
order. In theory, therefore, stocks are not held, and only result from processed orders 
that  have  not  yet  been  delivered  and/or  invoiced.  On  that  basis,  the  stock  level  first 
increase between 2001 and 2004, i.e. by 27%, and then decreased at the end of the IP. 
This decrease during the IP is also to be seen in the context of the seasonality of the 
sector. Indeed, it is expected that the level of stock is higher in December than at the 
end of the first quarter of the year, i.e. in this case the end of the IP. 

Sales prices 

EUR/pair 

Index: 2001=100 

2001 

19,7 

100 

2002 

19,3 

2003 

18,5 

2004 

18,6 

98 

94 

95 

IP 

18,2 

92,5 

Source: verified questionnaire replies 

(200)  The  average  unit  sales  price  continuously  declined  during  the  period  considered. 
Overall,  the  decrease  was  of  7,5%.  The  Community  industry  price  depression  may 
seem  limited,  especially  as  compared  to  the  decrease  of  30%  dumped  import  prices 
over the period considered. It should however be seen in the context that footwear is 
produced  on  order,  and  therefore  new  orders  are  normally  accepted  only  if  the 
corresponding price level allows for, at least, a break even. In this respect, reference is 
made  to  the  table  below  showing  that,  during  the  IP,  the  Community  industry  could 
not further lower its prices without incurring losses. 

Cash flow, profitability and return on investments 

2001 

2002 

2003 

2004 

IP 

Cash-flow (000€) 

13.943 

10.756 

8.575 

10.038 

4.722 

Index: 2001=100 

100 

77 

61 

72 

34 

% Profit on net turnover 

1,6% 

1,8% 

0,2% 

1,8% 

0,5% 

Return on investments 

6,1% 

7,3% 

1,0% 

8,2% 

2,3% 

Source: verified questionnaire replies 

(201)  The  above  return  indicators  confirm  the  picture  described  in  recital  (190)  of  the 
provisional  Regulation  and  show  a  clear  weakening  of  the  financial  situation  of  the 
companies during the period considered. It is recalled that the overall deterioration was 
especially marked during the IP and indicates significant adverse developments during 
the  first  quarter  2005,  i.e.  the  last  quarter  of  the  IP.  In  fact,  the  already  low  level  of 
profitability at the beginning of the period considered further decreased dramatically. 

(202)  In  the  absence  of  any  new  substantiated  information  or  argument  in  this  particular 

respect, recitals (191) to (193) of the provisional Regulation are hereby confirmed.  

EN 

37 

   EN 

 
 
 
(203)  The overall level of profit remained at a low level during the overall period considered 
and emphasizes the financial vulnerability of those SMEs. As detailed below, the level 
of profit achieved during the period considered, and especially during the investigation 
period  is  far  below  the  normal  level  of  profit  that  the  industry  could  achieve  under 
normal circumstances. 

Ability to raise capital 

(204)  The  investigation  showed  that  capital  requirements  of  several  Community  producers 
have been adversely affected by their difficult financial situation. This is stressed by 
the development of their individual level of profit and especially the deterioration of 
their cash flow. As explained above, relatively small and medium sized companies are 
not  always  in  a  position  to  provide  sufficient  bank  guarantees  and  may  have 
difficulties  to  face  the  significant  financial  expenses  that  would  result  from  a 
precarious financial situation. 

Investments  

2001 

2002 

2003 

2004 

IP 

‘000 EUR 

8.836 

11.184 

6.522 

4.403 

4.028 

Index: 2001=100 

100 

127 

74 

50 

46 

Source: verified questionnaire replies 

(205)  The trend for investments as established in recital (194) of the provisional Regulation 
is confirmed by the trends as shown in the above table. The investments consented by 
the companies decreased by more than 50% between 2001 and the IP. The decrease in 
investments is to be seen in relation with the deterioration of the financial situation of 
the Community producers in the sample.  

Wages 

2001 

2002 

2003 

2004 

IP 

Avg.  salaries  and  wages  per 
person (€) 

14.602 

15.933 

18.021 

17.610 

17.822 

Index: 2001=100 

100 

109 

123 

121 

122 

Source: verified questionnaire replies 

(206)  The  trends  of  the  provisional  Regulation  in  recital  (196)  with  regard  to  wages  are 
confirmed by the table above. In the absence of any new information those trends are 
confirmed. 

7.4.  Claims of the interested parties 

(207)  Several exporting producers claimed that the profit margin of the Community industry 
was  a  crucial  indicator  for  the  injurious  situation  of  the  Community  injury.  In 
particular,  it  was  alleged  that,  as  the  profit  margin  used  at  provisional  stage  for  the 
purposes of establishing the injury elimination level (i.e. 2% - see recital (284) of the 
provisional Regulation) was in line with that achieved by some individual companies 
in the sample, this showed that they were not injured with regard to this indicator.  

EN 

38 

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(208)  This is no longer relevant since, after further analysis, as set out in recital (292), the 
profit margin was adjusted to 6%, thereby reflecting more appropriately an achievable 
profit margin for Community footwear producers in the absence of injurious dumping. 
On  this  basis,  profitability  of  the  Community  industry  clearly  decreased  over  the 
period  considered  and  in  any  event,  profitability  fell  as  low  as  0.5%  in  the  IP. 
Moreover, the injury analysis is carried out at the level of the Community industry, or 
a sample thereof, and thus not individually at the level of the companies included in 
the definition of the Community industry. 

(209)  Various interested parties argued that the indicators used for the injury analysis were 
not  reliable  or  not  appropriate.  They  alleged  that  the  economic  indicators  were  not 
verified and not reliable since –in the alleged absence of co-operation– they would not 
refer to a valid Community industry. As concerned the micro economic indicators, and 
given  the  limited  size  of  the  sample,  they  were  claimed  not  to  be  representative. 
Finally, reference was made to the different trends observed between injury indicators 
established at macro- and micro-economic level. 

(210)  Firstly, as concerns the fact that the macro-economic indicators were not verified, it is 
recalled  that  according  to  the  basic  Regulation,  verification  visits  are  left  to  the 
appreciation of the Commission, and thus there is no legal obligation to always carry 
out verification visits. Indeed Article 16 of the basic Regulation only sets out that the 
Commission shall, where it considers it appropriate, carry out verification visits. This 
claim  was  therefore  rejected.  In  addition  these  factors  were  cross-checked,  where 
possible,  with  the  overall  information  provided  by  the  relevant  national  Community 
footwear associations. 

(211)  Secondly,  given  the  above  conclusion  concerning  the  definition  of  the  Community 
industry  and  the  representativity  of  the  sample,  the  claims  related  to  those  elements 
were  also  rejected.  In  addition,  as  already  outlined  above,  for  the  sake  of  coherence 
only  one  set  of  injury  indicators  is  established  for  the  purpose  of  the  definitive 
conclusions, either macro- or micro-economic indicators. It is finally noted that even if 
those trends established at provisional stage both at a micro and macro level did not 
always  show  precisely  the  same  development,  they  nevertheless  did  not  show 
significantly diverging trends either.  

(212)  Finally, interested parties also claimed that not all injury factors show injury, and more 
specifically that at an individual level, no injury can be established for the companies 
selected  in  the  sample.  The  first  claims  have  to  be  rejected  on  the  grounds  that, 
according to the basic Regulation, none of the injury indicators can necessarily give a 
decisive guidance. As to the fact that the individual situation of certain producers did 
not point to injury, it is stressed that this is not relevant since, according to Article 3(1) 
of the basic Regulation, the injury analysis is carried out at the level of the Community 
industry,  or  a  sample  thereof,  and  thus  not  at  the  level  of  the  individual  companies 
included in the definition of the Community industry. 

8. 

Conclusion on injury 

(213)  It follows from the above that the provisional conclusion that the Community industry 
has suffered material injury within the meaning of Article 3(5) of the basic Regulation 
is hereby confirmed.  

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39 

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(214)  More specifically, it is confirmed that at the level of the macro-economic indicators, 
i.e. at the level of the overall Community industry, the injury  mainly materialised in 
terms of decrease of sales volume and market shares. Since footwear is manufactured 
on  order,  this  also  had  a  direct  negative  impact  on  the  production  level  and 
employment in the Community. 

(215)  Furthermore, it is also confirmed that at the level of the microeconomic elements the 
situation  is  largely  injurious.  For  instance,  the  sampled  companies  have  reached  the 
lowest possible level of profit during 2003, which, however can be partially explained 
by  their  relatively  pronounced  prior  investment  practice  (effect  of  depreciation  on 
profitability).  However,  their  level  of  profit  decreased  subsequently  even  despite  a 
significant  decrease  in  investment  and,  in  fact,  during  the  IP  was  at  the  lowest  level 
over  the  period  considered  with  the  exception  of  2003,  i.e.  far  from  any  acceptable 
level  and  in  the  absence  of  other  explanatory  factors,  like  heavy  prior  investment, 
clearly materially injurious. Similarly, the cash flow followed a dangerously declining 
trend  and  reached  the  lowest  level  during  the  IP,  at  a  level,  which  can  only  be 
considered  as  materially  injurious.  The  sampled  companies,  during  the  IP,  were  no 
longer in a position to decrease their price levels further without incurring losses. In 
the case of relatively small and medium sized companies, losses cannot be sustained 
for a significant period without being forced to close down. Overall, although prior to 
2004 the situation of the Community industry may only be qualified as injurious, the 
Community industry since 2004 clearly sustained material injury. 

1. 

Effects of the dumped imports 

F. 

CAUSATION 

(216)  The Community industry’s market share and that of the countries concerned, including 

children footwear, developed as follows: 

2001 

2002 

2003 

2004 

IP 

Countries concerned 

9,3% 

11,5% 

16,3% 

19,1% 

23,2% 

Community industry 

26,5% 

23,2% 

21,7% 

19,0% 

17,7% 

(217)  Certain  interested  parties  challenged  the  Commission’s  conclusion  that  there  was  a 
sufficient  coincidence  in  time  between  the  market  share  increase  of  the  dumped 
imports, and the decrease of the Community industry’s market share. They pointed out 
that when Chinese and Vietnamese imports obtained their greatest increases in market 
shares,  the  Community  industry  experienced  smaller  decreases  in  market  share,  and 
vice-versa.  It  is  also  claimed  that  the  market  share  of  the  complainants  has  not  been 
taken over by countries concerned, namely by looking at the development of the other 
third countries market shares development. 

(218)  An  association  of  importers  further  claimed  that  dumped  imports  from  the  countries 
concerned  did  not  cause  any  injury  to  the  Community  industry  given  that  imported 
footwear is not competing with Community produced footwear. 

(219)  With respect to the coincidence in time, it is considered that in the causation analysis, 
a perfect correlation between the development of the dumped imports and the situation 

EN 

40 

   EN 

 
 
of  the  Community  industry  is  not  required.  Indeed,  it  is  established  and  legally 
recognised  practice  that,  as  in  the  present  case,  a  simple  coincidence  of  increasing 
dumped  imports  in  significant  quantities,  which  undercut  prices  of  the  Community 
industry, and an increasingly precarious situation of the Community industry is a clear 
indicator of causation. In the present case, and as clearly established in recitals (203) 
to (209) of the provisional Regulation, such coincidence in time undeniably occurred. 
Moreover, the coincidence concerning the shift in market share from 2003 to 2004 is 
even  nearly  symmetrical.  In  addition,  the  fact  that  increase  of  market  share  of  the 
dumped  imports  was  occasionally  over  the  period  considered  higher  than  the  loss  of 
market share of the Community industry simply points to the fact that the increase of 
dumped imports not only happened at the expense of the Community industry but also 
at the expense of other players in the Community market. 

(220)  The  claim  that  imported  footwear  did  not  compete  with  Community  produced 
footwear  was  also  rejected  on  the  basis  of  the  above  conclusion  concerning  the 
definition  of  the  product  concerned  and  the  like  produce,  i.e.  that  the  footwear 
imported  from  the  countries  concerned  competes  at  all  levels,  i.e.  all  ranges  and  all 
types, with the footwear produced and sold by the Community industry, and that their 
sales channels are overall identical. Moreover, the investigation has clearly shown that 
Community producers and exporters compete for sales on the Community market.  

(221)  In the absence of further comments, the conclusions of recital (209) of the provisional 
Regulation are hereby confirmed: the dumped imports played a determining role in the 
material injury suffered by the Community industry. 

2. 

Effects of other factors  

2.1.  Comments by the interested parties 

(222)  Following  the  imposition  of  the  provisional  measures,  various  interested  parties 
claimed  that  the  material  injury  suffered  was  caused  by  other  factors.  Those  parties 
referred to claims that were already made at an earlier stage, and duly addressed in the 
provisional  Regulation.  More  specifically,  those  claims  referred  to  the  export 
performance  of  the  Community  industry,  the  imports  from  the  other  third  countries, 
the effect of the lifting of the quota on Chinese exports, the effect of the exchange rate 
fluctuations,  the  relocation  of  the  Community  producers,  and  the  alleged  structural 
lack of competitiveness of the Community industry. No new elements were however 
provided, and therefore the main conclusions set out in the provisional Regulation are 
clarified/expanded, where necessary, below. 

2.2.  Export performance of the Community industry  

(223)  Certain interested parties reiterated their claims that the poor economic situation of the 

Community footwear industry was due to a deterioration of its export performance.  

(224)  In this respect, it is noted that any alleged deterioration of the export performance, if 
any, does not have any impact on most of the indicators analysed above, such as sales 
volume,  market  shares  and  depression  of  prices,  since  those  factors  have  been 
established at the level of sales in the Community. Production figures were provided 
on  an  overall  basis  since  no  distinction  between  goods  destined  for  the  Community 
market and outside the Community can be made. Since footwear is produced to order, 

EN 

41 

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any decrease of sales will necessarily translate into a similar decline in production, and 
given that the vast majority of the production is intended to be sold on the Community 
market, the provisional conclusion that the major part of the decrease in production is 
related to injury suffered on the Community market is confirmed.  

(225)  As a matter of fact, during the period considered, the decrease in sales volume on the 
Community market (-34%) corresponds to the decrease of production during the same 
period (-33%).  

(226)  The  claim  was  therefore  rejected,  and  it  is  definitively  concluded  that  the  export 

performance of the Community industry did not cause any material injury. 

2.3. 

Imports from other third countries 

(227)  The imports from third countries, including children's footwear developed as follows: 

Market shares 

2001 

2002 

2003 

2004 

IP 

Romania 
India 
Indonesia 
Brazil 
Macao 
Thailand 
Other countries 

5,7% 
3,6% 
2,7% 
1,2% 
1,2% 
1,0% 
9,0% 

7,1% 
4,5% 
2,4% 
1,4% 
1,7% 
1,0% 
10,7% 

6,9% 
7,0% 
7,5% 
5,7% 
5,9% 
4,9% 
2,0% 
2,0% 
2,0% 
2,5% 
2,2% 
1,7% 
2,4% 
3,2% 
2,2% 
1,2% 
1,3% 
1,3% 
10,9%  12,5% 11,5% 

Average  prices 
(€/pair) 

Romania 
India 
Indonesia 
Brazil 
Macao 
Thailand 
Other countries 

2001 

2002 

2003 

2004 

13,8 
11,3 
11,2 
16,8 
12,9 
14,4 
14,8 

14,6 
11,3 
10,4 
15,7 
11,5 
12,9 
14,3 

14,8 
10,3 
9,8 
13,5 
10,6 
11,8 
13,6 

15,0 
10,2 
8,6 
13,0 
10,2 
11,4 
12,4 

IP 

14,9 
10,2 
8,7 
12,6 
10,5 
11,2 
12,7 

Variance 01/IP 
(% points) 

+1,2 
+2,1 
-0,7 
+1,3 
+1,2 
+0,3 
+2,5 

Variance 
2001/IP 

+8% 
-10% 
-23% 
-25% 
-18% 
-22% 
-14% 

(228)  It should be noted that none of the countries included (in total more than 150 various 
countries) in the row concerning other countries in the above table accounted for more 
than 2% of the overall Community imports during the IP.  

(229)  Therefore  it  can  be  confirmed  that  individually,  none  of  the  countries  listed  above 
significantly  increased  their  market  shares  during  the  period  considered,  that  the 
absolute  level  of  their  market  share  remained  far  below  that  of  the  countries 
concerned,  and  they  also  developed  differently.  As  to  prices,  they  should  be  seen  in 
the  light  of  the  above  evolution  of  import  volume,  and  also  with  the  fact  that  they 
decreased to a lesser extent as compared to the prices of the countries concerned, but 
especially  their  absolute  price  level  during  the  overall  period  considered  remained, 
with one exception, on average far above the price level of the dumped imports.  

EN 

42 

   EN 

 
 
(230)  For  the  above  reasons,  it  is  definitively  concluded  that  the  imports  from  other  third 

countries did not materially affect the situation of the Community industry. 

2.4.  Exchange rate fluctuations 

(231)  Various  exporting  producers  and  importers  reiterated  their  claims  that  the  injury 
suffered  by  the  Community  industry  was  caused  by  the  appreciation  of  the  EURO 
against the USD which led to significant import price decreases. 

(232)  No new elements were given, and it is therefore referred to recitals (220) to (225) of 
the provisional Regulation. It is also to be noted that, even if one were to accept that 
exchange  rate  fluctuations  had  an  effect  on  import  prices,  the  volume  alone  of  the 
imports  concerned  were  of  such  a  magnitude  as  to  cause  material  injury  to  the 
Community industry. 

2.5.  Lifting of the quota 

(233)  No  new  elements  have  been  put  forward  in  that  respect.  It  should  however  be  noted 
that  given  the  acceleration  of  the  imports  during  the  last  quarter  of  the  IP,  this  may 
indeed have exacerbated the injurious effects of those dumped imports. 

2.6.  Complainants  have  failed  to  modernise,  are  highly  fragmented  and  have  high 
labour costs  

(234)  No new elements have been put forward in that respect. It should also be noted that the 
dumping  margins  are  comparatively  high  (i.e.  even  higher  than  the  undercutting 
margins). In other words, the dumped exports concerned compete with the Community 
industry not on the level of natural advantages, but on the basis of a practice which is 
actionable  under  international  trade  rules.  On  a  non-dumped  level,  prices  of  the 
imports concerned would have been much higher and the Community industry would 
have been in a much stronger competitive situation vis-à-vis these imports.  

2.7.  EC footwear industries re-location of production 

(235)  Various exporting producers and an association of importers claimed that the effect of 
the  re-location  of  EC  producers  on  the  situation  of  the  Community  industry  had  not 
been sufficiently addressed in the provisional Regulation. 

(236)  They criticised in particular the figures provided in the recital (171) of the provisional 
Regulation,  related  to  the  overall  Community  footwear  sector,  on  the  grounds  that 
those  figures  include  data  related  to  Community  producers  that  have  delocalised 
production. In this respect, reference is made to the above paragraph confirming that 
the  recitals  (169)  to  (173)  of  the  provisional  Regulation  were  given  for  information 
only, thus not legally relevant in the context of the definitive conclusions on injury. It 
is therefore also confirmed that those producers that fully delocalised their production 
outside the Community are not included in the definition of Community industry, and 
therefore  the  extent  to  which  those  companies  would  have  also  caused  injury  to  the 
Community  industry  is  analysed  together  with  the  impact  of  the  imports  from  other 
third countries. 

(237)  As concerns the case of those companies that partly delocalised their production, i.e. 
by  also  purchasing  footwear  from  non-Community  sources,  it  is  recalled  that  the 

EN 

43 

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injury analysis has been made exclusively with respect to data pertaining to their own 
production in the Community. Therefore, the extent to which such purchases may as 
well have caused them any injury should also be seen in the light of the analysis of the 
imports from other third countries.  

(238)  Finally,  for  those  companies  who  increased  or  commenced  imports  of  parts  of 
footwear  (e.g.  uppers)  in  the  Community,  those  imports  can  not  be  deemed  to  have 
negatively affected most of the injury indicators such as production, sales, profitability 
etc  for  the  reasons  explained  above.  It  is  true,  as  pointed  out  by  some  interested 
parties, that this may have led to a decrease of employment in the Community, but this 
should  also  be  seen  as  an  act  of  self  defence  by  companies  facing  vastly  increasing 
imports at dumped prices on the Community market, thus related to the existence of 
dumping rather than any self-inflicted injury.  

3. 

Conclusion on causation  

(239)  The  claims  of  the  interested  parties  were  therefore  rejected,  and  the  findings  and 

conclusions of the provisional Regulation confirmed.  

(240)  It  is  therefore  definitively  concluded  that  the  dumped  imports  originating  in  the 
countries concerned have caused material injury to the Community industry within the 
meaning of Article 3(6) of the basic Regulation, and that given the analysis which has 
properly  distinguished  and  separated  the  effects  of  all  the  known  factors  on  the 
situation of the Community industry from the injurious effects of the dumped imports, 
these  other  factors  as  such  did  not  reverse  the  fact  that  the  material  injury  assessed 
must be attributed to the dumped imports. 

G. 

COMMUNITY INTEREST 

(241)  It  has  been  analysed  whether  in  light  of  the  comments  and/or  additional  elements 
provided  by  the  interested  parties  following  the  imposition  of  the  provisional 
Regulation,  the  provisional  conclusion  that  the  Community  interest  called  for 
intervention to prevent the injurious dumping should be modified. 

1. 

Interest of the Community industry 

(242)  Certain  importers  and  exporting  producers  argued  that  the  imposition  of  measures 
would not be in the interest of the Community industry. This is mainly based on the 
claims  that  the  production  of  the  complainants  complement  the  imports  from  the 
countries  concerned,  that  the  imposition  of  anti-dumping  measures  would  cause  a 
major displacement of imports from countries concerned to other third countries, and 
that  finally  the  injury  suffered  by  the  Community  industry  was  not  be  caused  by 
dumping and that the complainants have lost market shares over many years allegedly 
due to factors other than dumping. 

(243)  It should firstly be noted that the provisional Regulation and the above analysis clearly 
established the existence of dumping causing injury to the Community industry, which 
qualifies  as  of  2004  as  material  injury  sustained  due  to  dumping  practices  from  the 
countries  concerned.  It  is  therefore  in  principle  expected  that  the  removal  of  the 
material injury caused by dumping is in the interest of the Community industry. 

EN 

44 

   EN 

 
(244)  The  allegation  that  the  production  of  the  complainants  merely  complements  the 
imports was rejected given the above conclusions that the product concerned competes 
with  the  like  product  produced  and  sold  in  the  Community.  The  fact  that  the 
Community industry lodged a complaint against imports of the product concerned also 
suggests that competition take place between Community manufactured products and 
those imported from the countries concerned. 

(245)  The claim concerning any displacement of the imports was already made earlier, and 
reference  is  made  to  the  recital  (241)  of  the  provisional  Regulation  where  it  was 
concluded that the fact that importers may shift to other supplier countries is certainly 
not a valid reason for not taking actions against materially injurious dumping, and that 
it is in any event impossible to anticipate the extent to which such a shift would take 
place, nor the conditions of those imports, i.e. whether they are dumped or not. 

(246)  As regards the last claim, reference is made to the causation analysis above where the 
impact of the factors other than dumping was examined. In any event it is clear that the 
decrease of the production volume of the Community footwear industry, thus decline 
in  market  share,  was  accelerated  by  the  emergence  of  the  dumped  imports.  This 
obviously has to be the case in the situation of a stable Community consumption.  

(247)  In  the  absence  of  further  substantiated  comments,  the  provisional  findings  are 
confirmed,  and  it  is  definitively  concluded  that  the  imposition  of  anti-dumping 
measures  would  allow  the  Community  industry  to  recover  from  the  effects  of 
materially injurious dumping found.  

2. 

Interest of the other economic operators 

2.1. 

Interest of the consumers 

(248)  As  at  the  provisional  stage,  no  representations  were  received  from  consumers' 
organisations following the publication of the imposition of provisional measures. The 
provisional  conclusion  that  consumer  leather  footwear  prices  would  only  be 
marginally  affected  by  the  imposition  of  definitive  measures  was  therefore  not 
challenged by any association representing the interest of the consumers. 

(249)  Certain  exporting  producers  claimed  that  they  did  not  agree  with  the  findings 
concerning  the  limited  impact  of  measures  on  consumers,  and  that  those  measures 
would result in a major increase in household costs.  

(250)  Importers  also  argued  that  consumer  prices  would  increase  as  a  result  of  definitive 
measures,  and  that  this  price  increase  may  even  reach  the  percentage  of  any  ad-
valorem duty. This claim is based on the allegation that importers usually apply their 
mark-up  to  the  landed  import  price,  including  any  duties,  and  thus  they  would 
therefore apply a margin also on the anti-dumping duties, amongst other elements. On 
the  other  hand,  certain  importers  have  however  claimed  that  they  would  not  be  in  a 
position  to  pass  on  any  duties  to  consumers,  on  the  grounds  that  it  is  the  consumers 
that  set  the  level  of  prices,  and  that  consumers  would  therefore  not  purchase  certain 
footwear if it would exceed a given price.  

(251)  First  of  all,  exporting  producers  do  not  have  standing  on  Community  interest  under 
current rules. Their points have nevertheless been analysed for the sake of argument. It 

EN 

45 

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should  be  underlined  that  those  parties  that  did  not  agree  with  the  Commission’s 
findings concerning the impact of the measures on consumers, did however not submit 
any  specific  data  or  information  that  could  support  their  claims.  Instead,  as  reported 
above,  they  even  provided  contradictory  statements  claiming  that  duties  would  be 
either fully passed on to consumers (and even more by applying mark-ups also on the 
duty) or that it would not be possible at all to pass on any effect of duties. Their claims 
were therefore not considered sufficient to alter the provisional findings. 

(252)  In addition certain exporting producers claimed that the imposition of measures would 
significantly limit consumers’ choice. This is based on the allegation that certain types 
of leather footwear are only produced in China and Vietnam, that anti-dumping duties 
would allegedly result in a decision not to produce certain types of footwear and that 
the  Community  producers  would  not  have  the  capacity  to  supply  the  Community 
market with those types. 

(253)  These  allegations  of  a  reduced  choice  of  footwear  were  already  made  earlier  and 
addressed in the recital (246) of the provisional Regulation. In addition, the claim that 
certain  types  of  footwear  would  no  longer  be  produced  and  that  the  Community 
producers  would  not  have  enough  capacity  to  substitute  the  alleged  shortages  is  a 
simple allegation that was not supported by any objective facts or evidence, and was 
therefore rejected.  

(254)  Finally,  the  exclusion  of  children's  footwear  was  reconsidered  given  the  arguments 

given by the Community industry. 

(255)  Even  though  this  exclusion  was  generally  welcomed  by  exporting  producers  and 
importers,  in  the  absence  of  reaction  from  any  consumer  organisation,  no  further 
evidence or confirmation was received showing that the effect of imposing measures 
on  children  footwear  would  be  different  than  the  effect  it  would  have  on  adult 
footwear.  

(256)  The  Community  industry,  on  the  other  side,  challenged  the  exclusion  of  children's 
shoes  from  the  scope  of  provisional  anti-dumping  measures  and  referred  to  the  fact 
that  there  has  been  production  of  children's  footwear  in  the  Community  and  that 
injurious dumping has been established for children's footwear.  

(257)  The  definitive  findings  with  regard  to  the  status  of  children's  shoes  in  the  present 
proceeding  lead  to  the  following  conclusion.  Firstly,  further  analysis  that  lead  to  the 
definitive  findings  demonstrated  that  children  footwear  should  be  included  in  the 
definition of the product concerned, i.e. that all types of the product concerned should 
be  regarded  as  forming  one  single  product,  and  that  therefore  in  principle  anti-
dumping measures should apply to the totality of the product concerned. Secondly, the 
arguments to provisionally exclude children's shoes from the scope of measures on the 
grounds of Community interest as set out in recitals (250) to (252) of the provisional 
Regulation,  i.e.  notably  more  frequent  replacement  of  children's  shoes  and,  thus,  a 
higher  financial  impact  of  anti-dumping  measures  on  the  financial  situation  of  an 
average  European  family,  were  reassessed.  In  this  respect,  it  was  established  that  on 
average  children's  shoes  import  prices  are  according  to  Eurostat  statistics  in  general 
substantially  lower  than  adults'  shoes  import  prices  (more  than  33%).  Consequently, 
the  impact  of  an  ad  valorem  anti-dumping  duty  on  children's  shoes  would  be 
proportionally  lower.  In  addition,  the  definitive  findings  lead  overall  to  lower 

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definitive duty levels than the measures at provisional stage. This, again, results in a 
lower financial impact of measures. Moreover, as already set out in recital (249) of the 
provisional  Regulation  it  is  not  considered  likely  that  consumers  would  bear  the  full 
brunt  of  any  measures.  No  interested  party  has  provided  any  substantiated  evidence 
which could support a different view. In this context, it is duly noted that consumers' 
organisations  did  not  comment  at  all,  which  suggests  that  the  impact  of  measures  –
regardless whether it concerns children's or adults' footwear- are effectively not a real 
concern for the interests of their constituency. Taking account of the above analysis, it 
is evident that the definitive exclusion of children's shoes from measures could not be 
warranted. As a result there is no compelling evidence to prove, when addressing the 
imposition of definitive measures which remove materially injury caused by dumping 
practices, that consumer's interests outweigh the interests of the Community industry.  

(258)  For those reasons,  the claim was  accepted  and it is hereby confirmed that, given the 
above,  the  imposition  of  definitive  measures  on  the  product  concerned,  including 
children's footwear, would not be against the overall interest of consumers. 

2.2. 

Interest of the distributors/retailers 

(259)  It is recalled that at provisional stage, only a limited number of representations were 
received  from  distributors/retailers  or  organisations  of  distributors/retailers:  one 
submission was received from a consortium of retailers from one Member State, and 
questionnaire  replies  were  received  from  three  importers  who  also  have  their  own 
distribution network, including two supermarket chains. Only one of those four parties 
submitted  comments  following  the  imposition  of  provisional  measures,  and  no 
additional individual distributor or retailer submitted any comment. 

(260)  An association of importer that did co-operate in the investigation since the beginning 
of  the  procedure  challenged  the  conclusion  that  only  a  limited  number  of 
representations  were  received,  on  the  grounds  that  this  association  represents 
companies  that  are  also  distributors  and  retailers  in  addition  to  their  function  of 
importers.  It  also  claimed  that  at  least  two  of  its  members,  located  in  two  different 
Member States have supplied detailed information to the Commission. 

(261)  The Commission recognizes that this association represents companies that sometimes 
also have their own distribution network, and the conclusion regarding the number of 
representations  should  indeed  be  nuanced  in  that  respect.  Nevertheless,  the  primary 
function  of  those  companies  is  to  import  footwear.  Essentially,  however,  no  precise 
and verifiable data, other than provided by the three above mentioned companies, was 
provided  by  distributors  and  retailers  to  the  Commission,  in  order  to  assess  their 
economic  situation  and  to  what  extent  they  would  be  financially  affected  by  any 
measures. And it is mainly only on the basis of such information that the Commission 
is in a position to carry out a detailed analysis.  

(262)  As  concerns  the  alleged  co-operation  of  its  two  members,  is  should  be  clarified  that 
one  of  them  failed  to  provide  a  questionnaire  reply  within  the  deadlines,  and  could 
therefore not be used. 

(263)  In its submission, the association provided figures and examples showing what would 
be  the  impact  of  the  measures  on  importers  that  also  have  retail  activities.  Those 
figures were however made available far beyond the granted deadlines to provide such 

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data, and seems to refer to only one company – the name of which is not mentioned – 
which  did  apparently  not  co-operate  to  the  investigation.  Those  figures,  that  could 
therefore not be validated, could therefore not be considered. 

(264)  The association further claims that due to their financial situation, importers with retail 
activities  will  not  be  in  a  position  to  pass  on,  even  partially,  any  price  increase  to 
consumers,  and  that  some  retailers,  especially  those  exclusively  sourcing  from  the 
countries concerned, would not survive the imposition of measures.  

(265)  The argument that companies would not be in a position to pass on, at least, partially 
any  cost  increase  to  consumers  clearly  conflicts  with  the  claims  made  by  various 
parties, including the submission made by the association of importers, that consumer 
prices will increase as a result of the imposition of anti-dumping measures. Based on 
the  information  gathered  during  the  investigation,  and  as  confirmed  by  those 
contradictory statements, it is very likely that, on average, any impact of measures on 
the import price would at least be partially passed on to consumers. It can naturally not 
be excluded that certain retailers directly and exclusively importing from the countries 
concerned would indeed be negatively affected by any measures. It should however be 
recalled that the Community interest analysis is made on an overall basis, i.e. based on 
the  average  situation  of  the  parties  in  the  Community  concerned  by  the  proceeding, 
and it can therefore never be excluded that some individual parties will be indeed be 
affected differently than the majority. In this respect, reference is made to the recital 
(275)  of  the  provisional  Regulation,  where  it  was  recognized  that  measures  may 
indeed have a possible negative effect on the financial situation of certain importers.  

(266)  Finally, the association claimed that the Commission is mistaken in its understanding 
of the differences between retail channels. In this respect, it claimed that independent 
retailers are supplied not only by wholesalers in the Community, but also sometimes 
import themselves. It claimed that retailers in the, Commission sample were all brand 
retailers and that therefore the Commission’s analysis was not appropriate. 

(267)  In  the  absence  of  detailed  information  concerning  the  financial  situation  of  retailers 
and  distributors,  the  Commission  carried  out  an  overall  analysis  of  the  sector.  The 
purpose  of  this  analysis  was  merely  to  identify  the  main  distribution  channels,  the 
structure  of  those  distributors  and  retailers,  in  order  to  examine  how  they  would  be 
affected  by  measures.  It  can  not  be  excluded  that  the  specific  situation  of  individual 
distributors is not exactly reflected in this overall analysis. For information, it is also 
noted  that  the  description  and  conclusions  drawn  within  the  framework  of  this 
investigation  also  correspond  to  the  findings  of  the  Commission’s  previous  anti-
dumping investigation on footwear8, and no indications were given that the situation 
of the footwear distribution sector changed since then. 

(268)  More  specifically,  the  provisional  Regulation  stated  in  its  recital  (260)  that 
independent  retailers  are  usually  supplied  by  wholesalers  in  the  Community.  From 
this,  it  was  therefore  not  excluded  that  those  retailers  also  have  other  sources  of 
supply.  As  concerns  the  allegation  on  brand  retailers,  the  Commission  did  not  make 
use of any sample, but instead analysed all the information that was made available by 
co-operating parties. In this respect, it should be noted that reference was made in the 

8 

OJ L 60, 28.2.1998, recitals (124) to (134). 

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provisional  Regulation  to  the  absence  of  co-operation  by  branded  retail  chain,  i.e. 
retail chains with a brand name, which is different from retailers of branded footwear, 
of which indeed one co-operated.  

(269)  No  further  claims  was  made  that  would  alter  the  conclusions  of  the  provisional 
Regulation. The conclusion that the impact of the definitive measures on the importers 
and distributors is likely to remain limited, as set out in recital (264) of the provisional 
Regulation, is therefore confirmed.  

2.3. 

Interest of the unrelated importers in the Community 

(270)  The comments received by the various interested parties have been carefully analysed 

to the extent they were duly substantiated, and have been addressed below.  

(271)  Certain importers claimed that given their profit margin, which is less than the level of 
the  anti-dumping  duty,  they  would  be  unable  to  survive  anti-dumping  duties,  unless 
they are able to share that additional burden with wholesalers and retailers. It is further 
claimed  that  this  would  not  be  possible  because  wholesalers  and  retailers  would  not 
accept any price increase, but rather switch to suppliers that can deliver without anti-
dumping duties. 

(272)  The fact that the profit margin is lower than the level of the anti-dumping duty is not 
relevant.  Indeed,  while  the  level  of  the  anti-dumping  measures  is  expressed  as  a 
percentage  of  the  import  price,  the  profit  margin  is  expressed  as  a  percentage  of  the 
turnover,  i.e.  the  selling  price.  In  view  of  the  significant  margins  applied  between 
purchase and resales, it is evident that the two percentages simply cannot be compared. 
Concerning  the  claim  that  wholesalers  and  retailers  would  not  accept  any  price 
increase, it is again stressed that this is conflicting with the claim by many importers 
that price increases will be passed on fully to the consumers, thus also distributors, and 
could  therefore  not  be  accepted.  In  any  event,  it  is  indeed  true  that  wholesalers  and 
retailers may indeed switch to suppliers than can deliver without anti-dumping duties, 
including the Community industry that would thus benefit from measures.  

(273)  An  association  of  importers  contested  the  Commission’s  description  of  the  two 
categories of importers, submitting that it does not reflect the market reality and that it 
is  the  product-mix,  sales  channels  that  are  relevant  for  differentiating  importers.  It 
further  claimed  that  it  is  the  net  margin,  and  not  the  mark-up  that  is  relevant  when 
assessing the effect of measures. 

(274)  In this respect it should be noted that no sampling was applied, that co-operation from 
importers was significant and that therefore the Commission was in a position to draw 
its conclusion on a very detailed factual basis.  

(275)  It  is  conceded  that  product-mix  and  sales  channels  are  indeed  relevant  for  the 
categorisation  of  importers.  In  this  respect  those  elements  were  also  duly  taken  into 
consideration  in  the  analysis.  As  a  matter  of  fact,  the  Commission  differentiated 
between companies active in the high end of the market and the importers active in the 
lower end of the market, and indeed considered that those two categories of importers 
have different product mix and sales channels.  

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(276)  Furthermore, none of the comments given by the association of importers was such as 
to alter the conclusions that in the case of the importers active on the higher end of the 
market any ad-valorem duty has a moderate impact as compared to the much higher 
selling price (thus profit), and that for those active on the lower end of the market the 
ad-valorem duty would result only in a moderate absolute price increase and that given 
the level of their average margin of profit they would not be significantly affected by 
measures.  

(277)  The conclusions set out in the recitals (265) to (275) of the provisional Regulation are 
therefore  confirmed.  It  is  therefore  definitively  confirmed  that  the  imposition  of 
measures  is  unlikely  to  have  a  significant  negative  impact  on  the  situation  of  the 
importers in the Community in general, but also that such imposition may nevertheless 
have  some  negative  effects  on  the  financial  situation  of  certain  individual  importers. 
On  balance,  however,  those  negative  effects  are  not  expected  to  have  a  significant 
impact on the overall financial situation of the importers.  

2.4.  Other considerations 

(278)  It  has  also  been  argued  that  measures  were  not  in  the  Community  interest  because 
Vietnam  is  a  developing  country  which  needs  to  export  shoes,  because  duties  on 
imports from the PRC might imperil good economic relations with this country with a 
potentially  large  market,  and  because  workers  in  Vietnam  and  the  PRC  could  suffer 
from such measures.  

(279)  In  accordance  with  Article  21(1)  of  the  basic  Regulation  and  in  line  with  consistent 
practice  of  the  Institutions  since  the  current  basic  Regulation  entered  into  force,  this 
type  of  arguments  are  not  part  of  the  Community  interest  analysis.  The  Community 
interest  analysis  is  an  economic  analysis  focussing  on  the  economic  impact  of 
taking/not taking anti-dumping measures on operators within the Community. It is not 
a  tool  by  which  anti-dumping  investigations  can  be  instrumentalized  for  general 
political considerations relating to foreign policy, development policy etc. This is also 
confirmed  by  the  list  of  parties  which  have  standing  under  Article  21  of  the  basic 
Regulation. While this list is not exhaustive (in some investigations, suppliers of the 
raw  materials  for  the  product  concerned  have  also  made  comments  and  these 
comments have been taken into account), it follows clearly from the types of parties 
mentioned that only the economic effects on parties within the Community are at stake 
in this test. At the same time, the Community interest test is not a cost/benefit analysis 
in the strict sense. While the various interests are put in balance, they are not weighed 
against  each  other  in  a  mathematical  equation,  not  least  because  of  obvious 
methodological  difficulties  in  quantifying  each  factor  with  a  reasonable  margin  of 
security within the time available, and because there is not just one generally accepted 
model for a cost-benefit analysis. This is also the reason why Article 21(1) of the basic 
Regulation  stipulates  that  the  need  to  restore  effective  competition  shall  be  given 
special  consideration  and  that  measures  may  not  be  applied,  on  the  basis  of 
information  submitted,  where  it  can  clearly  be  concluded  that  it  is  not  in  the 
Community interest to apply such measures. In other words, the law accepts that anti-
dumping  measures  have  certain  negative  effects  on  those  parties  which  are  typically 
not  in  favour  of  such  measures.  Measures  would  only  be  considered  as  not  in  the 
interest of the Community, if they had disproportionate effects on the aforementioned 
parties.  

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(280)  At  the  beginning  of  the  investigation  and  also  at  provisional  stage,  the  Commission 
invited all parties to submit information as to the possible effects of taking/not taking 
measures  on  them.  As  explained  in  detail  at  the  provisional  stage,  but  also  in  this 
Regulation,  no  information  has  been  received  which  points  to  such  disproportionate 
effects. There is nothing in the file, which could even remotely confirm the allegation 
made  that  the  economic  impact  of  duties  is  such  that  every  Euro  which  European 
producers  may  gain  as  a  result  of  the  duties  will  equally  result  in  a  loss  of  8  €  for 
consumer and user industries as claimed by one Member State. 

(281)  As far as the argument of taking measures against developing countries is concerned, 
it  is  the  Community's  constant  practice  to  take  such  actions  indiscriminately  against 
developing  and  developed  countries,  whenever  warranted.  With  regard  to  the 
argument that anti-dumping measures might put into danger good economic relations 
with the PRC, it should be considered that if this argument was pushed to its logical 
consequence, the Community's anti-dumping actions would be dependent on whether 
or not the third country concerned threatens with some negative consequences in the 
event  of  taking measures. Moreover,  such an approach would be an invitation to  the 
third  country  to  raise  the  prospect  of  some  negative  consequences.  Finally,  both 
considerations  are  not  compatible  with  the  notion  of  a  rules-based  instrument  and  a 
quasi-judicial investigation.  

(282)  It  was  also  argued  that  one  Member  State  was  dependent  on  footwear  imports. 
However, nothing in the file suggests that these imports can only be sourced from the 
two  countries  concerned.  There  are  ample  sources  of  supply  within  the  Community 
and in third countries not concerned. Imports can also continue to be sourced from the 
PRC and Vietnam and the effect of the duties is not such as to foreclose the market.  

(283)  In sum, neither the current law nor the results of the investigation justify not to take 
anti-dumping action on any of the grounds mentioned at the beginning of this section.  

3. 

Conclusion on Community interest 

(284)  The  above  analysis  has  taken  into  account,  and  addressed  where  necessary,  the 
comments submitted by the various interested parties. Those did however not alter the 
conclusions drawn at provisional stage. 

(285)  It is therefore definitively confirmed that: 

– 

– 

– 

it is in the interest of the Community industry to impose measures, since those 
measures are expected to, at least, restrain the high level of imports at dumped 
prices  which  proved  to  have  a  significant  negative  impact  on  the  financial 
situation the Community industry; 

consumers will not be affected by the effect of anti-dumping measures or, if at 
all, only to a very marginal extent; 

the  distributors  and  retailers  may  see  their  purchase  prices  of  the  product 
concerned  increase,  but  as  compared  to  their  overall  costs  and  situation,  they 
will probably not be significantly affected by measures; 

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51 

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– 

– 

on average, importers would be in a position to accommodate the imposition of 
measures,  although  depending  on  their  specific  situation,  some  may  indeed 
face certain adverse effects, especially those exclusively supplied by footwear 
from the countries concerned; 

other interests, even if they were to be taken into account, are not as such that 
they would override the interest of taking anti-dumping measures. 

(286)  Therefore,  and  on  balance,  it  is  considered  that  imposing  measures,  i.e.  removing 
materially  injurious  dumping,  would  allow  the  Community  industry  to  maintain  its 
activity and bring an end to the successive closures and job losses it faced in the last 
years,  and  that  the  adverse  effects  that  the  measures  may  have  on  certain  other 
economic operators in the Community are not disproportionate as compared to those 
beneficial effects for the Community industry.  

H. 

DEFINITIVE ANTI-DUMPING MEASURES  

(287)  In  view  of  the  conclusions  reached  with  regard  to  dumping,  resulting  injury  and 
Community  interest,  definitive  measures  on  imports  of  the  product  concerned 
originating in the PRC and in Vietnam should be imposed. 

1. 

Injury Elimination Level 

(288)  The level of the definitive anti-dumping measures should be sufficient to eliminate the 
material  injury  to  the  Community  industry  caused  by  the  dumped  imports,  without 
exceeding  the  dumping  margins  found.  When  calculating  the  amount  of  duty 
necessary to remove the effects of the materially injurious dumping, it was considered 
that any measures should allow the Community industry to cover its costs and obtain a 
profit  before  tax  that  could  be  reasonably  achieved  under  normal  conditions  of 
competition, i.e. in the absence of dumped imports taking into account the existence of 
a quota regime covering imports from PRC until the end of 2004. 

1.1.  Underselling 

(289)  At provisional stage it was considered that a profit margin of 2% of turnover could be 
regarded  as  an  appropriate  level  that  the  Community  industry  could  be  expected  to 
obtain  in  the  absence  of  materially  injurious  dumping,  on  the  grounds  that  this 
corresponds to the highest level of profit achieved by the Community industry during 
the period under examination. This was however strongly contested by the Community 
industry on the grounds that the economic situation of the Community industry during 
the whole period considered did not reflect the level of profit that it could achieve in 
the  absence  of  materially  injurious  dumping,  because  prices  were  already  depressed 
when the industry reached that level of profit, and with that level of profit the industry 
could not make the necessary investments in order to remain competitive. Lastly, the 
Community  industry  claimed  that  the  2%  used  was  far  below  the  profit  margin 
achieved  by  importers,  and  that  using  a  profit  level  of  10%  would  be  the  absolute 
minimum.  

(290)  This claim was carefully analysed, and the issue of the determination of profit level to 

be used for the injury calculation was re-examined. 

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(291)  Firstly,  it  should  be  noted  that  the  level  of  profit  achieved  by  the  importers  is  not  a 
proper benchmark because of the different nature of those operators, and can therefore 
not be used as a reference. 

(292)  Secondly,  with  regard  to  a  reasonably  achievable  profit  margin,  upon  disclosure, 
substantiated  comments  were  submitted  by  the  Community  industry  that  a  profit 
margin  not  just  of  2%  but  of  6%  on  turnover  should  be  regarded  as  an  appropriate 
level  that  the  Community  industry  could  be  expected  to  obtain  in  the  absence  of 
materially  injurious  dumping.  In  this  respect  the  Community  industry  provided 
evidence  that  with  regard  to  footwear  not  subject  to  materially  injurious  dumping  it 
indeed achieved such higher margins. Consequently, the applicable profit margin was 
reconsidered and adjusted to a 6% level on turnover. 

(293)  Some  interested  parties  claimed  that  it  is  the  Commission’s  consistent  practice  to 
calculate  an  injury  margin  only  when  the  Community  industry  is  making  losses,  or 
otherwise  the  level  of  injury  should  be  limited  to  the  undercutting.  This  claim  was 
however rejected because the injury margin is regularly established for the purpose of 
applying the lesser-duty-rule while the undercutting margin is established pursuant to 
Article 3(3) of the basic Regulation. In this context, the injury margin is relevant if the 
dumped imports have depressed prices, and this can be the case even if the industry is 
still profitable. 

(294)  Finally, like in the case of the undercutting margin, various comments were received 
with  respect  to  the  injury  margin  calculations.  Those  claims  were  analysed  in  detail, 
and where clerical mistakes were identified or certain adjustments could be supported 
by factual evidence, the necessary amendments to the calculations have been applied.  

(295)  The necessary price increase was then determined on the basis of a comparison, at the 
same level of trade, of the weighted average import price, as established for the price 
undercutting  calculations,  with  the  non-injurious  price  of  products  sold  by  the 
Community  industry  on  the  Community  market.  The  non-injurious  price  has  been 
obtained  by  adjusting  the  sales  price  of  each  company  composing  the  Community 
industry to a break-even point and by adding the above-mentioned profit margin. Any 
difference  resulting  from  this  comparison  was  then  expressed  as  a  percentage  of  the 
total  CIF  import  value.  This  resulted  in  underselling  margins  of  23%  and  29.5%  for 
PRC and Vietnam respectively. 

1.2. 

Particularities of the present proceeding 

(296)  However, as mentioned above, the present proceeding is characterised by distinct and 
exceptional  features,  which  need  to  be  adequately  reflected  in  the  anti-dumping 
measures.  In  this  respect  it  is  notably  important  to  recall  that  until  January  2005  a 
substantial part of the product concerned was subject to quantitative restrictions.  

(297)  This  background  calls  for  a  closer  consideration  of  the  adequate  level  of  definitive 
anti-dumping measures to address the particularities of the present case. As a result a 
more refined methodology for definitive measures had to be considered, notably with 
a view to the impact of the quantities imported throughout the period considered upon 
the situation of the Community industry. 

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(298)  In this respect the existence of the quota covering imports from PRC had a dampening 
effect and to that extent prevented any material injury being caused to the Community 
industry as compared to the situation during the IP. This is clearly shown in the injury 
and causality analysis, notably in recitals (187) seq. and (216) seq.. Indeed, in the case 
at hand it can be observed that the increase in the volume element of dumped imports 
had a particularly decisive injurious effect on the Community industry after the lapse 
of  the  quota.  In  fact,  the  economic  indicators  concerning  the  situation  of  the 
Community  industry  in  particular  deteriorated  in  the  first  quarter  of  2005  although 
clear indications of material injury can already be found for the last three quarters of 
2004 making up the rest of the IP.  

(299)  In line with the lesser duty rule as set out in Article 9(4) of the basic Regulation, due 
to  the  particularities  of  the  case  at  hand,  notably  the  existence  of  the  quota  until  the 
end of 2004, special consideration and attention was therefore given to the quantitative 
element  of  injurious  dumping.  It  is  considered  that  only  imports  above  a  certain 
volume threshold prior to the lapsing of the quota can cause material injury so that the 
injury threshold determined on the basis of the results of the IP has to reflect the fact 
that certain import quantities did not cause such material injury.  

(300)  Consequently,  the  non-materially  injurious  import  quantities  had  to  adequately  be 

reflected in the injury elimination levels.  

(301)  In  this  respect  based  on  Eurostat  data  the  value  of  total  import  volumes  for  the  year 
2003 from the countries concerned was considered as not yet materially injurious and 
formed  the  basis  for  a  proportional  adaptation  of  the  injury  elimination  levels 
established  above.  In  a  second  step  this  total  non-materially  injurious  value  amount 
('NIV') was allocated to the PRC and Vietnam on the basis of the comparative imports 
ratio of the product concerned from the countries concerned during the IP. In a further 
step, these two non-materially injurious amounts were set into proportion to the year 
2005 imports for the respective country concerned as the first and most recent full year 
available which was not subject to quantitative restrictions with regard to the product 
concerned.  Finally,  in  these  proportions  the  duty  levels  established  for  the  IP  were 
reduced.  This  resulted  in  injury  thresholds  of  16,5%  and  10%  for  the  PRC  and 
Vietnam respectively.  

(302)  On the basis of the same methodology the injury threshold for Golden Step remained 
well  above  the  established  dumping  margin  of  9,7%  for  this  particular  company,  so 
that in this case in line with the lesser duty rule as set out in Article 9(4) of the basic 
Regulation the dumping margin shall set the duty level.  

(303)  Upon  additional  definitive  disclosure  several  interested  parties  commented  upon  the 
course  of  action  outlined  above.  Some  interested  parties  declared  a  preference  for  a 
delayed duty system ('DDS'), which would have left certain annual volume amounts of 
imports out of the scope of measures.  

(304)  However, it should be noted that for administrative and legal reasons it was deemed 

inappropriate to implement such DDS.  

(305)  Others  put  the  opinion  forward  that  the  present  case  would  not  warrant  a  deviation 
from  the  standard  ad  valorem  approach  based  on  dumping  and  underselling  margins 
only.  

EN 

54 

   EN 

 
(306)  It  is  recalled,  as  set  out  above,  that  in  particular  the  fact  that  the  product  concerned 
originating  in  the  PRC  was  subject  to  a  quota  until  2004  necessitated  a  special 
methodology in this particular case to duly  take  account for non-materially  injurious 
imports. Therefore, this submission had to be rejected as well. 

(307)  Other  interested  parties,  in  particular  both  from  the  PRC  and  from  Vietnam, 
questioned the methodology to identify and to allocate the NIV. Firstly, it was argued 
that  the  basic  Regulation  generally  does  not  provide  for  such  approach.  Secondly,  it 
was  claimed  that  an  adjustment  of  underselling  margins  based  on  an  NIV  would  be 
inappropriate  because  the  NIV  is  allegedly  a  volume  based  element,  whereas 
underselling  margins  are  the  result  of  price-comparisons,  i.e.  only  value  based. 
Thirdly, it was put forward that the economic impact of the NIV should not have been 
assessed on the basis of imports during 2005 but, instead on the basis of the IP.  

(308)  In reply to these submissions it is recalled that the basic Regulation does not set out 
any specific methodology to establish injury elimination levels. Consequently, no legal 
provision  restricts  the  analysis  to  establishing  only  underselling  margins.  Instead  the 
legal  framework  provides  for  discretion  to  adopt  an  injury  elimination  calculation  to 
the specificities of a particular case, provided the circumstances warrant this. 

(309)  Secondly, it is recalled that the NIV data are value based as they are derived from the 
2003  import  value  amount.  Consequently  such  data  can  clearly  be  used  to  adjust 
underselling  margins.  A  volume  element  was  only  applied  in  the  context  of  the 
allocation of the NIV to the PRC and to Vietnam by using the respective volume ratio 
during  the  IP.  Rationale  behind  this  allocation  key  was  to  (i)  properly  reflect  the 
situation during the IP and (ii) to even out distortions due to differences in average per 
unit values of Chinese and Vietnamese imports. Finally, with regard to the economic 
impact assessment of the allocated NIV's it was considered to be necessary to refer to 
the most recent full annual period of imports not subject to a quota regime, i.e. 2005, 
because  the  very  reason  to  apply  the  NIV  adjustment  essentially  to  account  for  the 
quota  peculiarity  over  the  period  considered.  While  it  is  admitted  that  as  a  rule 
information subsequent to the IP should not be taken into consideration, Article 6(1) of 
the basic Regulation provides for exceptions as in the case at hand.  

(310)  It  should  further  be  noted  that  Vietnam  could  not  be  disregarded  in  the  adjustment 
exercise  because  the  Chinese  quota  regime  indirectly  had  an  impact  on  imports 
originating in Vietnam as well and overall lead to the result that the imports from the 
countries concerned until 2003 were considered to be not materially injurious. 

(311)  Some  interested  parties  submitted  that  this  approach  would  discriminate  against 
Chinese exporters. In this respect concerns were raised with regard to the result of the 
methodology,  i.e.  that  despite  a  higher  underselling  margin  for  Vietnam  (29,5%)  as 
compared  to  the  PRC  (23%)  this  approach  leads  to  overall  lower  injury  elimination 
levels for Vietnam (10%) as compared to the PRC (16,5%).  

(312)  However,  the  methodology  only  takes  different  import  trends  from  the  PRC  and 
Vietnam  to  the  EC  into  due  account.  The  respective  Vietnamese  import  share  of  the 
product concerned over the period considered was higher. Consequently, its share of 
non-materially injurious imports was larger as well. However, this inevitably results in 
a  larger  impact  of  this  adjustment  methodology  on  the  Vietnamese  underselling 

EN 

55 

   EN 

 
margin.  Because  the  methodology  only  duly  reflects  factual  differences  it  is  not 
unjustified discriminatory.  

(313)  Eventually, several interested parties argued that the time to submit comments on the 
additional definitive disclosure would have been to short and not in line with Article 
20(5) of the basic Regulation. 

(314)  In this respect it is noted that (i) due consideration being given to the urgency of the 
matter  and  (ii)  given  that  the  additional  definitive  disclosure  concerned  only  one 
specific  and  limited  aspect  of  the  case  at  hand  it  was  considered  to  be  necessary,  in 
line with the provisions of the basic Regulation to set a five days deadline instead of 
the  generally  applicable  ten  days  disclosure  deadline.  However,  in  this  context  it 
should  further  be  noted  that  where  a  substantiated  request  for  an  extension  of  this 
deadline was made by interested parties it was granted. 

2. 

Undertaking 

(315)  Some  parties,  exporting  producers  as  well  as  importers  came  forward  with  price 
undertaking  requests.  In  such  cases,  an  undertaking  would  have  committed  the 
respective  exporting  producer  not  to  sell  below  such  price  level  that  would  have 
eliminated injurious dumping. 

(316)  In  the  case  of  importers,  these  requests  were  deemed  irrelevant  because  dumping  is 
caused  by  exporters  for  which  reason  the  exporter  is  responsible  and  in  the  actual 
position to eliminate such dumping by appropriate pricing. 

(317)  In the case of exporting producers, the requests had to be rejected because they were 
made  by  parties  that  did  not  obtain  market  economy  treatment.  In  addition,  for  a 
product  like  shoes  which  is  continuously  changing  due  to  fashion,  it  would  be 
practically  impossible  to  set  a  non-discriminatory  price  level  that  equally  eliminates 
injurious dumping for a huge variety of entirely different models. 

(318)  Following  the  definitive  disclosure  document  one  sampled  Vietnamese  exporting 
producer  came  forward  with  a  price  undertaking  request.  Nevertheless,  this  request 
had to be rejected for the reasons explained above. 

(319)  Other  parties  expressed  a  preference  for  a  general  minimum  price  respectively  a 
minimum-price in combination with an ad valorem duty, i.e. duties should apply only 
to imports below a certain minimum price. This preference has been reiterated by the 
Chinese authorities and several other interested parties upon the additional definitive 
disclosure concerning the form of measures. 

(320)  Such  proposals  had  to  be  rejected  because  a  combined  duty  would  have  led  to  an 
unjustified  burden  on  cheap  shoes  against  the  favour  of  more  expensive  shoes.  It 
would practically be impossible to identify adequate price categories for a product as 
diverse as the one under investigation to avoid such unjustified burden. Furthermore, 
past experience has shown that a minimum price duty is difficult to monitor and may 
easily lead to circumvention. Therefore, a minimum price solution was considered to 
be impractical and inadequate. 

EN 

56 

   EN 

 
(321)  A number of importers and non sampled Vietnamese exporting producers claimed that 
the proposed course of action gives no consideration to Vietnam's developing country 
status.  In  this  respect,  it  is  noted  that  the  purpose  of  the  measures  are  to  objectively 
address  unfair  dumping  practices  that  cause  injury.  The  economic  or  development 
status  of  any  country  concerned  by  a  certain  proceeding  is  not  taken  into  account 
under Articles 2 and 3 of the basic Regulation as a relevant element when determining 
dumping  and  injury.  Adjustments  under  other  factors  non-specified  in  the  basic 
Regulation can only be made if it is demonstrated that they affect price comparability. 
Since the latter was not substantiated by interested parties the aforesaid argument on 
Vietnam's developing country status had to be rejected. 

2. 

Definitive duties 

(322)  In  the  light  of  the  foregoing,  and  in  accordance  with  Article  9(4)  of  the  basic 
Regulation, it is considered that definitive anti-dumping measures should be imposed 
on imports originating in PRC and Vietnam at the level of the lowest of the dumping 
and  injury  margins,  in  accordance  with  the  lesser  duty  rule  as  refined  by  the 
methodology set out above. In this respect for the country wide duty levels the injury 
elimination levels set the ceiling for the anti-dumping duty.  

(323)  However, with regard to Golden Step the duty level was established on the basis of its 

dumping margin, which was lower than the injury elimination level.  

(324)  On the basis of the above, the proposed definitive duties are as follows: 

Country 

Company 

PRC 

Golden Step 

All other companies 

Vietnam  

All companies 

Anti-
dumping 
duty 

9,7 %

16,5%

10%

(325)  In order to ensure that any risk of false declarations or circumvention of the measures 
is minimised, a strengthened administrative import surveillance system on the basis of 
Article  308(d)  of  Commission  Regulation  (EC)  No  2454/939,  will  allow  earlier 
information  on  relevant  import  trends.  Should  evidence  be  found  showing  that  these 
import  trends  change  significantly  this  will  be  urgently  investigated  by  the 
Commission. In this context it should be clarified that the surveillance of STAF now 
will  cover  such  footwear  above  and  below  a  7,5  €  value  threshold  instead  of  the 
original threshold of 9 €. 

9 

Commission  Regulation  (EEC)  No  2454/93  of  2  July  1993  laying  down  provisions  for  the 
implementation of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code 
(OJ L 253, 11.10.1993, p. 1). Regulation as last amended by Regulation (EC) No 2286/2003 (OJ L 343, 
31.12.2003, p. 1). 

EN 

57 

   EN 

 
                                                 
HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  footwear  with 
uppers  of  leather  or  composition  leather,  excluding  sports  footwear,  footwear 
involving special technology, slippers and other indoor footwear and footwear with a 
protective  toecap,  originating  in  the  People’s  Republic  of  China  and  Vietnam  and 
falling within CN codes: 6403 20 00, ex 6403 30 00, ex 6403 51 11, ex 6403 51 15, 
ex 6403 51 19, ex 6403 51 91, ex 6403 51 95, ex 6403 51 99, ex 6403 59 11, ex 6403 
59 31, ex 6403 59 35, ex 6403 59 39, ex 6403 59 91, ex 6403 59 95, ex 6403 59 99, 
ex 6403 91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 91 18, ex 6403 91 91, ex 6403 
91 93, ex 6403 91 96, ex 6403 91 98, ex 6403 99 11, ex 6403 99 31, ex 6403 99 33, 
ex 6403 99 36, ex 6403 99 38, ex 6403 99 91, ex 6403 99 93, ex 6403 99 96, ex 6403 
99 98 and ex 6405 10 0010 (TARIC codes 6403 30 00 39, 6403 30 00 89, 6403 51 11 
90, 6403 51 15 90, 6403 51 19 90, 6403 51 91 90, 6403 51 95 90, 6403 51 99 90, 
6403 59 11 90, 6403 59 31 90, 6403 59 35 90, 6403 59 39 90, 6403 59 91 90, 6403 
59 95 90, 6403 59 99 90, 6403 91 11 99, 6403 91 13 99, 6403 91 16 99, 6403 91 18 
99, 6403 91 91 99, 6403 91 93 99, 6403 91 96 99, 6403 91 98 99, 6403 99 11 90, 
6403 99 31 90, 6403 99 33 90, 6403 99 36 90, 6403 99 38 90, 6403 99 91 99, 6403 
99 93 29, 6403 99 93 99, 6403 99 96 29, 6403 99 96 99, 6403 99 98 29, 6403 99 98 
99 and 6405 10 00 80). 

2. 

For the purpose of this Regulation, the following definitions shall apply: 

"sports  footwear"  shall  mean  footwear  within  the  meaning  of  subheading  note  1  to 
Chapter 64 of Annex I of Commission Regulation (EC) No 1719/200011; 

"footwear involving special technology" shall mean footwear having a CIF price per 
pair of not less than 7,5 €, for use in sporting activities, with a single- or multi-layer 
moulded sole, not injected, manufactured from synthetic materials specially designed 
to absorb the impact of vertical or lateral movements and with technical features such 
as  hermetic  pads  containing  gas  or  fluid,  mechanical  components  which  absorb  or 
neutralize impact, or materials such as low-density polymers and falling within CN 
codes ex 6403 91 11, ex 6403 91 13, ex 6403 91 16, ex 6403 91 18, ex 6403 91 91, 
ex 6403 91 93, ex 6403 91 96, ex 6403 91 98, ex 6403 99 91, ex 6403 99 93, ex 6403 
99 96, ex 6403 99 98; 

"footwear  with  a  protective  toecap"  shall  mean  footwear  incorporating  a  protective 
toecap with an impact resistance of at least 100 joules12 and falling within CN codes: 
ex 6403 30 00, ex 6403 51 11, ex 6403 51 15, ex 6403 51 19, ex 6403 51 91, ex 6403 
51 95, ex 6403 51 99, ex 6403 59 11, ex 6403 59 31, ex 6403 59 35, ex 6403 59 39, 

10 

11 
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. 
OJ L 286, 28.10.2005, p. 1. 
The impact resistance shall be measured according to European Norms EN345 or EN346. 

EN 

58 

   EN 

 
                                                 
ex 6403 59 91, ex 6403 59 95, ex 6403 59 99, ex 6403 91 11, ex 6403 91 13, ex 6403 
91 16, ex 6403 91 18, ex 6403 91 91, ex 6403 91 93, ex 6403 91 96, ex 6403 91 98, 
ex 6403 99 11, ex 6403 99 31, ex 6403 99 33, ex 6403 99 36, ex 6403 99 38, ex 6403 
99 91, ex 6403 99 93, ex 6403 99 96, ex 6403 99 98 and ex 6405 10 00; 

"slippers  and  other  indoor  footwear"  shall  mean  such  footwear  falling  within  CN 
code ex 6405 10 10. 

3. 

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

Country 

Company 

Anti-dumping 
duty 

TARIC Additional 
code 

PRC 

Golden Step 

All other companies 

Vietnam 

All companies 

9,7 %

16,5%

10%

A775  

A999 

- 

4. 

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

Article 2 

The amounts secured by way of the provisional anti-dumping duty pursuant to Commission 
Regulation  (EC)  No  553/2006  of  27  March  2006  shall  be  definitively  collected  at  the  rate 
definitively  imposed  by  the  present  Regulation.  The  amounts  secured  in  excess  of  the 
definitive rate of anti-dumping duties shall be released.  

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 

EN 

59 

   EN