Council Regulation (EC) No 1338/2006 of 8 September 2006 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of chamois leather originating in the People's Republic of China
Date: 2006-09-08
Institutions: Council of the European Union
Subjects: China, animal skin, anti-dumping duty, import, leather, originating product

14.9.2006

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Official Journal of the European Union

L 251/1

I

(Acts whose publication is obligatory)

COUNCIL REGULATION (EC) No 1338/2006

of 8 September 2006

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

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Commu-
nity,

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

Having regard to the proposal
consulting the Advisory Committee,

from the Commission after

Whereas:

A.

PROVISIONAL MEASURES

(1) On 16 March 2006, the Commission, by Regulation (EC)
No 439/2006 (2) (the provisional Regulation), imposed a
provisional anti-dumping duty on imports
into the
Community of chamois leather originating in the People's
Republic of China (the PRC).

B.

SUBSEQUENT PROCEDURE

(2)

the

essential

Following the disclosure of
facts and
considerations on the basis of which it was decided to
impose the said provisional anti-dumping measures, several
interested parties made written submissions containing
their views on the provisional
findings. No parties
requested to be heard.

(3) A Chinese exporting producer and an importer which had
not made themselves known to the Commission before the
imposition of provisional measures, protested against the
imposition of definitive anti-dumping duties, without
substantiating any arguments that would put into question
the facts and considerations on the basis of which
provisional measures were imposed. These companies were
in any case informed that, since they had come forward
only at a very late stage of the investigation, they could not
be considered as cooperating parties.

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

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

(2) OJ L 80, 17.3.2006, p. 7.

(4)

The Chinese trading company referred to in recital 25 of
the provisional Regulation reiterated its claim that it should
qualify for an individual determination of dumping. This
company had already been informed before the imposition
of provisional measures that individual determination can
only be made for exporting producers and not for traders.
The claim was therefore rejected.

(5) All parties were informed of

the essential

facts and
considerations, on the basis of which it was intended to
recommend the imposition of a definitive anti-dumping
duty on imports of chamois leather originating in the PRC
and the definitive collection of the amounts secured by way
of the provisional duty. They were also granted a period
within which to make representations subsequent to the
disclosure of the essential facts and considerations.

(6) Comments submitted by interested parties were duly
considered and, where appropriate, the findings have been
modified accordingly.

C.

PRODUCT CONCERNED AND LIKE PRODUCT

(7) Concerning the production process as described in recital 13
of the provisional Regulation, it is hereby clarified that the
grain surface is removed from the skins, which are then
tanned using solely fish or other animal oil in the case of
chamois leather, or partially tanned with aldehydes or other
tanning agents and then with fish or other animal oil in the
case of combination of chamois leather.

(8) Moreover, in order to clarify the reference made to crust
chamois leather and combination of crust chamois leather
in recital 14 of the provisional Regulation, the product
concerned must be defined as
leather, or
combination chamois leather, whether or not cut to shape,
including crust chamois leather and combination crust
chamois leather (chamois leather) originating in the PRC
(the product concerned), currently classifiable within
CN codes 4114 10 10 and 4114 10 90.

chamois

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Official Journal of the European Union

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(9)

In the absence of any other comments in this respect,
recitals 13 to 17 of the provisional Regulation are otherwise
confirmed.

D.

DUMPING

1. Normal value

(10) Following provisional disclosure,

the Chinese trading
company referred to in recital 25 of
the provisional
Regulation objected to the use of the USA as analogue
in
country as set out in recital 22 of that Regulation,
particular as
substantial
production in the USA. Furthermore, it claimed that the
reasons for disregarding Turkey were not properly justified.
This trading company did not substantiate its claim or
provide any evidence.

regards an alleged lack of

(11) As explained in recital 21 of the provisional Regulation, in
the case of Turkey, the analysis showed that the Turkish
domestic market was very limited. Almost all of the Turkish
production is export-oriented (mainly to Europe and the
USA) and therefore domestic sales were not representative
in order to choose Turkey as analogue country. The Turkish
domestic market is less than 2 % of the USA domestic
market and also appears to be more limited than the USA
market in terms of competition. Indeed, there was a high
level of competition in the USA from imports from other
countries, as explained in recital 22 of the provisional
Regulation. As to the alleged lack of production in the USA,
it should be noted that it was only after the investigation
period (IP) that the USA cooperating producer started to
delocalise its production. During the IP, there was a relevant
domestic market for chamois leather in the USA. Therefore,
the choice of
the USA as analogue country is hereby
confirmed.

(12) Following definitive disclosure, this trader continued to
contest the appropriateness of the USA as analogue country
claiming that the data provided by the USA producer would
be difficult to verify because this company had ceased to
produce in the USA, and therefore this data may not be
reliable. In this respect, it should be noted that throughout
the IP, as mentioned in recital 11, the USA producer was
still producing considerable quantities of chamois leather in
the USA for sale on its domestic market. In addition, the
data for the IP on which the normal value was established
were duly verified at the premises of the USA producer and
were found to be accurate and reliable. Thus, the claim from
the trading company is rejected.

(13)

In the absence of any other arguments in this respect,
recitals 20 to 24 of
the provisional Regulation are
confirmed.

2.

Export price

(14)

In the absence of any comments in this respect, recital 25 of
the provisional Regulation is hereby confirmed.

3.

Comparison

(15) Further

to provisional disclosure,

the Chinese trading
company referred to in recital 25 of
the provisional
Regulation claimed that a further adjustment should be
made as regards differences in physical characteristics on
the basis that some of the chamois leather exported to the
Community from the PRC was in the form of patchwork,
made from small pieces of off-cut chamois leather, which
were of lower quality than the chamois leather sold by the
US industry.

(16) The claim was examined on the basis of the information
provided by the trading company and accepted in so far as
leather could be
the exports of patchwork chamois
identified. Consequently, a further adjustment was made
in respect of patchwork chamois leather for the purpose of
ensuring a fair comparison between the normal value and
for
export price, by increasing the adjustment
the
differences in physical characteristics set out in recital 26
of the provisional Regulation.

4. Dumping margin

(17)

In the light of the above, the dumping margin finally
determined, expressed as a percentage of the CIF Commu-
nity frontier price, duty unpaid, is 69,8 %.

E.

INJURY

1.

Community production

(18)

In the absence of any comments in this respect, recital 28 of
the provisional Regulation is hereby confirmed.

2. Definition of the Community industry

(19)

In the absence of any comments in this respect, recitals 29
and 30 of the provisional Regulation are hereby confirmed.

3.

Community consumption

(20)

In reviewing the statistical
information available from
Eurostat, the imports from third countries other than the
PRC were modified. Subsequently, the Community con-
sumption figures were accordingly amended as follows:

Apparent

Community

2001

2002

2003

2004

IP

consumption

Square feet (in
thousands)

Index 2001
= 100

20 462

21 334

22 109

21 312

21 886

100

104

108

104

107

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(21) This shows that demand for the product concerned in the
Community increased by 7 % over the period considered
which is slightly more than set out in recital 31 of the
provisional Regulation. On this basis, and in the absence of
any other comments concerning Community consumption,
the methodology explained in recital 31 of the provisional
Regulation is hereby confirmed.

(27) The significant decrease of the Community industry's sales
in volume over the period considered is fully reflected in
their market share which decreased continuously from
39,9 % in 2001 to 30,8 % in the IP. Therefore, the trend set
out in recital 39 of the provisional Regulation is hereby
confirmed.

4.

Volume of the imports from the country
concerned and market share

(28)

In the absence of any other comments in this respect,
recitals 37, 38 and 40 to 54 of the provisional Regulation
are hereby confirmed.

(22) Given the slightly revised figures for Community consump-
tion, the market share of the imports from the PRC is
accordingly modified over the period considered as follows:

6.

Conclusion on injury

2001

2002

2003

2004

IP

Market share

10,4 %

7,6 %

22,8 %

29,4 %

30,2 %

the Community market

imports from the PRC
(23) During the period considered,
increased their share of
from
10,4 % in 2001 to 30,2 % in the IP. This rapid increase in
market share took place against a background of slower
growth in consumption. Therefore, the trend set out in
recital 33 of
the provisional Regulation is hereby
confirmed.

(24) Further to the acceptance of the claim made by a Chinese
trading company as set out in recital 16 above, and the
relevant adjustment made for the purpose of the dumping
calculations, an alike adjustment was made to the import
prices of the product concerned due to the lower quality of
chamois leather exported to the Community from the PRC
in the form of patchwork for the purpose of calculating the
level of price undercutting. The adjustment for quality
differences
the provisional
Regulation was therefore accordingly revised upwards. On
this basis, the comparison showed that during the IP, the
product concerned originating in the PRC was sold in the
Community at prices which undercut
the Community
industry prices, when expressed as a percentage of the
latter, by 29 %.

in recital 35 of

set out

(25)

In the absence of any other comments in this respect,
recitals 32 and 34 of the provisional Regulation are hereby
confirmed.

5.

Economic situation of the Community industry

(26) Given the revised figures for Community consumption, the
market share of the Community industry is accordingly
modified over the period considered as follows:

2001

2002

2003

2004

IP

Market share

39,9 %

38,3 %

33,8 %

30,1 %

30,8 %

the Community industry and of

(29) The above revised factors, i.e. Community consumption,
market shares of
the
Chinese producers, left unaffected their trends as they were
set out in the provisional Regulation. The undercutting
margin remained at a high level. On this basis,
is
considered that
the conclusions regarding the material
injury suffered by the Community industry as set out in the
provisional Regulation are not altered. In the absence of any
other comments, they are therefore definitively confirmed.

it

F.

CAUSATION

1.

Effects of the dumped imports

(30) The cooperating exporting trader argued that the Commis-
sion failed to establish a well founded causation with regard
to the imports of the product concerned. It further objected
to the analysis in the provisional Regulation, arguing that
since the import prices were steadily low and in particular
even when the Community industry was profitable, there
would be no causal link between the import prices and the
negative profitability of the Community industry during the
IP.

(31)

the expense of

In this respect, it should be firstly noted that pursuant to
Article 3(5) of the basic Regulation, the injury analysis is
not limited to the profitability of the Community industry,
but also takes account of numerous other factors as set out
in recitals 28 to 58 of the provisional Regulation, on the
basis of which the Community industry was found to have
injury during the period considered.
suffered material
Regarding the effect of
the dumped imports, this was
mainly illustrated by the threefold market share increase of
the imports from the PRC over the period considered. This
increase was made at
the Community
industry since it faced a substantial decrease in its sales
volume (– 17 percentage points) albeit in a growing market.
As for the dumped prices,
these were found to have
significantly undercut
the Community industry's prices
during the IP. Although import prices indeed did not follow
a stringent downtrend, but fluctuated somewhat over the
period considered, they remained at a significantly lower
level than that of the Community industry, showing thus
that they continuously depressed the market conditions
which progressively forced the Community industry to
lower its selling prices as this is shown clearly in recital 45
of the provisional Regulation. On this basis, the argument
of the exporting trader was rejected.

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(32)

In the absence of any other comments concerning the
effects of the dumped imports, recitals 60 to 64 set out in
the provisional Regulation are hereby confirmed.

2.

Effects of other factors

(33) The same party further argued that since the average price
of imports from Turkey during the IP was much lower than
the price from the PRC and the prices of imports from
other third countries were admittedly lower than those of
the Community industry, exclusion of those imports from
injury analysis and dumping investigation demonstrate that
the PRC was purposefully targeted on a discriminatory
basis. With regard to the imports from Turkey,
it was
further argued that the methodology used by the Commis-
sion to selectively use price trends is not compatible with
rulings on several WTO provisions.

Imports from

other third

countries

Other countries
excluding those
mentioned
above (thousand
square feet)

Average prices
(EUR/square
foot)

2001

2002

2003

2004

IP

1 029

1 125

939

881

1 138

1,29

0,84

0,88

0,57

0,49

(34)

it

respect,

should be firstly noted that

In this
the
Commission analysed the imports from Turkey separately,
as they were the most significant in volume after those
from the PRC. For the purpose of clarity, transparency and
completeness of the analysis and in view of the revision of
the statistical data mentioned in recital 19, a more detailed
table with revised imports from third countries is presented
below:

Imports from

other third

countries

Turkey
(thousand
square feet)

Average prices
(EUR/square
foot)

Romania
(thousand
square feet)

Average prices
(EUR/square
foot)

Pakistan
(thousand
square feet)

Average prices
(EUR/square
foot)

Mexico
(thousand
square feet)

Average prices
(EUR/square
foot)

2001

2002

2003

2004

IP

353

380

237

893

1 677

1,01

0,73

0,33

0,81

0,52

300

137

280

330

303

0,99

0,68

0,45

0,61

0,64

50

330

167

157

210

1,00

0,37

0,90

1,20

0,54

590

1 017

853

293

170

1,54

1,16

1,06

1,43

1,13

(35) This table shows that solely imports from Turkey increased
substantially, i.e. from 353 thousand square feet in 2001 to
1 677 thousand square feet in the IP at downward prices
below those of
the Community industry. However, as
explained in recital 66 of the provisional Regulation, a
significant part of these imports was made by a cooperating
Community producer in order to complete its product
range or
the product after having been
trimmed and repackaged and therefore these quantities
could not have caused injury to the Community industry.
As for the remaining quantities, they represented a low and
stable market share around 2 %, with the exception of the
IP, and as also explained in recital 66 of the provisional
Regulation, these imports may have contributed, albeit not
significantly,
injury suffered by the
Community industry.

to the material

to re-export

(36) With regard to the ‘other countries’

(excluding Turkey)
mentioned in the table above, their imports represented a
market share of close to or even lower than de minimis in
the IP and with a downward or relatively stable trend over
the period considered. The overall market share of imports
from these countries, decreased from 9,6 % in 2001 to
8,3 % in the IP. On this basis, it is definitively considered
that none of these countries could have caused injury to the
Community.

(37) The argument of the Chinese trading company cited at the
end of recital 33 according to which ‘the methodology used
by the Commission to selectively use price trends is not
compatible with rulings on several WTO provisions’ was
vague and unsubstantiated and has therefore been rejected.

(38) On the basis of the above, and in the absence of any other
submitted information substantiating the effect of imports
is definitively
from countries other
considered that such imports could not be a determining
reason for
the Community
industry.

the injurious situation of

than the PRC,

it

(39)

It was further argued that
the injury suffered by the
Community industry was in a significant part caused by its
losses in export markets. It was submitted that if any losses
in overseas market are attributed to a country subject to an
anti-dumping investigation, the action itself points to a
discriminatory intention.

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(40)

It should be firstly noted that the Commission's analysis of
the Community industry's situation including its profit-
ability takes account solely of its business activity for the
product concerned within the Community. Therefore, any
injury allegedly caused by losses in export markets is not
this
taken into consideration in the
investigation. Furthermore, the exports of the Community
industry were mentioned in so far as necessary to interpret
some aggregated indicators such as for example stocks.
Therefore, it is considered that the analysis of the situation
in the Community industry was made in full accordance
with the basic Regulation.

framework of

(41)

In the absence of any other comments concerning causality,
recitals 59 to 72 set out in the provisional Regulation are
hereby confirmed.

G.

COMMUNITY INTEREST

(42)

In the absence of any comments concerning Community
interest, recitals 73 to 82 set out
in the provisional
Regulation are hereby confirmed.

H.

DEFINITIVE ANTI-DUMPING MEASURES

(43)

In view of the claim referred to in recitals 15, 16 and 24, the
the injury
import data used in the determination of
elimination level, as described in recital 86 of
the
provisional Regulation, was adjusted in order to take into
account the fact that certain quantities of chamois leather
exported to the Community from the PRC in the form of
patchwork were of lower quality than the chamois leather
sold by the Community industry.

(44)

In the light of the above, the injury elimination level finally
determined was 58,9 %.

(45)

In view of the conclusions reached with regard to dumping,
injury, causation and Community interest, and in accord-
ance with Article 9(4) of the basic Regulation, a definitive
anti-dumping duty should be imposed on imports of
chamois leather originating in the PRC at the level of the
lower of
in
accordance with the lesser duty rule. In this case, the duty
rate should accordingly be set at the level of the injury
found. On the basis of the above, the definitive duty is
58,9 %.

the dumping and the injury margins,

I.

DEFINITIVE COLLECTION OF THE PROVISIONAL

DUTY

(46)

In view of the magnitude of the dumping margin found in
the PRC and given the level of the injury caused to the
it is considered necessary that the
Community industry,
amounts secured by way of provisional anti-dumping duty
imposed by the provisional Regulation should be defini-
tively collected to the extent of the amount of the definitive
duty imposed. As the definitive duty is lower than the
provisional duty amounts provisionally secured in excess of
the definitive rate of the anti-dumping duty should be
released,

HAS ADOPTED THIS REGULATION:

Article 1

1. A definitive anti-dumping duty is hereby imposed on
imports of chamois leather and combination chamois leather,
whether or not cut to shape, including crust chamois leather and
combination crust chamois leather originating in the People's
Republic of China, falling within CN codes 4114 10 10 and
4114 10 90.

2. The rate of the definitive anti-dumping duty applicable to
the net,
for
products produced by all companies in the People's Republic
of China shall be 58,9 %.

free-at-Community-frontier price, before duty,

3. Unless otherwise specified, the provisions in force concern-
ing customs duties shall apply.

Article 2

Amounts secured by way of the provisional anti-dumping duty
pursuant
to Regulation (EC) No 439/2006 on imports of
chamois leather originating in the People's Republic of China
shall be definitively collected at the rate of the definitive duty
imposed pursuant to Article 1. The amounts secured in excess of
the amount of the definitive duty shall be released.

Article 3

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

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

Done at Brussels, 8 September 2006.

For the Council
The President
E. TUOMIOJA