Proposal for a Council Regulation extending the definitive anti-dumping duty imposed by Regulation (EC) No 398/2004 on imports of silicon originating in the People’s Republic of China to imports of silicon consigned from the Republic of Korea whether declared as originating in the Republic of Korea or not
Date: 2006-12-18
Institutions: European Commission
Subjects: China, anti-dumping duty, import, originating product, semi-metal

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.12.2006 
COM(2006)826 final 

Proposal for a 

COUNCIL REGULATION 

extending the definitive anti-dumping duty imposed by Regulation (EC) No 398/2004 on 
imports of silicon originating in the People’s Republic of China to imports of silicon 
consigned from the Republic of Korea whether declared as originating in the Republic 
of Korea or not 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

(1) 

CONTEXT OF THE PROPOSAL 

1 

•  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 proceedings concerning imports of silicon 
metal originating in the People’s Republic of China consigned from the Republic of Korea. 

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 

•  Existing provisions in the area of the proposal 

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

141 

•  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 

229 

There was no need for external expertise. 

230 

•  Impact assessment 

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

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

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(3) 

LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

By Regulation No 2200/90 the Council imposed a definitive anti-dumping duty on imports of 
silicon originating in the People's Republic of China. Shortly thereafter, following a complaint 
lodged  by  the  Community  industry  and  the  Commission's  subsequent  investigation,  the 
Council, by Regulation N° 1607/92, concluded that the anti-dumping duty in force had been 
absorbed and imposed an additional duty on imports of silicon originating in the PR China. 

It  should  be  noted  that  both  expiry  reviews,  Regulations  N°  2496/97  and  N°  398/2004, 
confirmed  the  definitive  rate  of  the  anti-dumping  duty  applicable  to  the  net,  free-at-
Community-frontier price, at 49%. 

On  6  March  2006,  the  Commission  received  a  new  request  to  investigate  an  alleged 
circumvention,  through  transhipment  via  the  Republic  of  Korea,  of  the  anti-dumping 
measures imposed on imports of silicon originating in China.  

This investigation showed that there was insufficient due cause or justification other than the 
imposition  of  anti-dumping  measures  for  such  change  in  the  pattern  of  trade  and  that  the 
remedial effects of the existing anti-dumping measures were being undermined both in terms 
of  quantity  and  price.  Significant  volumes  of  imports  of  the  product  concerned  from  the 
Republic of Korea appeared to have replaced imports of silicon from China. In addition, there 
was  sufficient  evidence  that  this  increase  in  imports  was  made  at  prices  below  the  non-
injurious  price  established  in  the  investigation  that  led  to  the  existing  measures  and  that 
significant dumping had still taken place. 

It  is  therefore  proposed  to  extend  the  anti-dumping  measures  in  place  on  imports  of  silicon 
metal originating in the People’s Republic of China to imports of the same product consigned 
from the Republic of Korea. 

Member States were consulted and a majority supported this proposal. 

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

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  subsidiary 
principle therefore does not apply. 

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•  Proportionality principle 

The proposal complies with the proportionality principle for the following reasons: 

331 

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

332 

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

•  Choice of instruments 

341 

Proposed instruments: regulation. 

342 

Other means would not be adequate for the following reason: 

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 

extending the definitive anti-dumping duty imposed by Regulation (EC) No 398/2004 on 
imports of silicon originating in the People’s Republic of China to imports of silicon 
consigned from the Republic of Korea whether declared as originating in the Republic 
of Korea or not 

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 Community1 (‘the basic 
Regulation’), and in particular Article 13 thereof, 

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

Whereas: 

A. PROCEDURE 

1. Existing measures 

(1) 

(2) 

(3) 

1 

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By  Regulation  (EC)  No  2200/902,  (‘original  investigation’)  the  Council  imposed 
definitive  anti-dumping  measures  in  the  form  of  a  fixed  duty  per  tonne  of  silicon 
originating in the People's Republic of China ('China') imported in the Community.  

Shortly  thereafter,  following  a  request  lodged  by  the  Community  industry,  the 
Council,  by  Regulation  N°  1607/923,  concluded  that  the  anti-dumping  measures  in 
force  had  been  absorbed  by  Chinese  exporters  and  imposed  an  additional  duty  on 
imports of silicon originating in China.  

In  1997,  both  expiry  and  interim  reviews  were  initiated.  These  reviews  were 
concluded  by  Regulation  N°  2496/974.  As  a  result  of  these  reviews,  measures  were 
maintained but it was considered more appropriate to change the form of the measures 
from a fixed duty to an ad valorem duty. The duty rate amounted to 49% of the CIF 
price  of  the  imports  in  question.  In  accordance  with  the  lesser-duty-rule,  this  rate 
corresponded to the injury margin.  

OJ  L  56,  6.3.1996,  p.  1  Regulation  as  last  amended  by  Regulation  (EC)  No  2117/2005  (OJ  L  340, 
23.12.2005, p. 17). 
OJ L 198, 28.07.1990, p. 57 
OJ L 170, 25.06.1992, p. 1 
OJ L 345, 16.12.1997, p. 1 

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(4) 

Following an expiry review, the Council concluded by Regulation (EC) N° 398/20045 
that the anti-dumping duty should be maintained.  

(5) 

(6) 

(7) 

(8) 

(9) 

2. Request 

On 6 March 2006, the Commission received a request pursuant to Article 13(3) of the 
basic  Regulation  to  investigate  the  alleged  circumvention  of  the  anti-dumping 
measures  imposed  on  imports  of  silicon,  classifiable  within  CN  code  2804  69  00 
(silicon  content  less  than  99,99%  by  weight)  originating  in  China.  The  request  was 
submitted  by  Euroalliages  (Liaison  Committee  of  the  Ferro-Alloy  Industry)  ('the 
applicant')  on  behalf  of  producers  representing  a  major  proportion,  namely  100%  of 
the  Community  production  of  silicon.  The  request  alleged  that  the  anti-dumping 
measures in force on imports of silicon originating in China were being circumvented 
by means of transhipment via the Republic of Korea (‘Korea’). 

The request further alleged that there was insufficient due cause or justification other 
than the imposition of anti-dumping measures for such change in the pattern of trade 
and  that  the  remedial  effects  of  the  existing  anti-dumping  measures  were  being 
undermined  both  in  terms  of  quantity  and  price.  Significant  volumes  of  imports  of 
silicon  from  Korea  appeared  to  have  replaced  imports  of  silicon  from  China.  In 
addition, there was sufficient evidence that these imports were made at prices below 
the cost of production and reasonable profit established for the Community industry in 
the investigation that led to the existing measures. 

Finally,  the  applicants  alleged  that  the  prices  of  silicon  consigned  from  Korea  were 
dumped in relation to the normal value previously established for silicon originating in 
China. 

3. Initiation 

Having  determined,  after  consulting  the  Advisory  Committee,  that  sufficient  prima 
facie evidence existed for the initiation of an investigation pursuant to Article 13 of the 
basic  Regulation,  the  Commission  initiated  an  investigation  by  Regulation  (EC) 
607/20066  (‘the  initiating  Regulation’).  Pursuant  to  Articles  13(3)  and  14(5)  of  the 
basic  Regulation,  the  Commission,  by  the  initiating  Regulation,  also  directed  the 
customs  authorities  to  register  imports  of  silicon  consigned  from  Korea,  whether 
declared as originating in Korea or not. 

4. Investigation 

The  Commission  officially  advised  the  authorities  of  China  and  Korea,  the 
producers/exporters  and  the  importers  in  the  Community  known  to  be  concerned  as 
well  as  the  applicant  Community  industry  of  the  initiation  of  the  investigation. 
Questionnaires were sent to the producers/exporters in Korea and to the Chinese and 
Korean authorities. Interested parties were given the opportunity to make their views 
known  in  writing  and  to  request  a  hearing  within  the  time  limit  set  in  the  initiating 
Regulation.  All  parties  were  informed  that  non-cooperation  might  lead  to  the 

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OJ L 66, 22.03.2004, p.15 
OJ L 107, 20.04.2006, p.24  

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application  of  Article  18  of  the  basic  Regulation  and  to  findings  being  made  on  the 
basis of the facts available. 

(10)  No questionnaire replies were received from exporters/producers in China, nor did the 

Commission receive any comments from the Chinese authorities.  

(11)  Two  Korean  companies  offered  to  cooperate  in  the  investigation.  Only  one  of  these 
imported silicon from China into Korea, but did not export it to the Community. The 
second cooperating Korean company neither produced nor imported silicon at all.  

5. Investigation Period 

(12)  The investigation period covered the period from 1 April 2005 to 31 March 2006 (‘the 
IP’).  Data  was  collected  from  2001  up  to  the  end  of  the  IP  ('period  considered')  to 
investigate the alleged change in the pattern of trade. 

B. RESULTS OF THE INVESTIGATION 

1. General considerations/degree of cooperation 

(13)  As  mentioned  above  in  recital  (10),  no  producers/exporters  of  silicon  in  China 
cooperated  in  the  investigation  nor  did  any  Community  importer  submit  information 
relevant for the investigation. As mentioned in recital (11) above only two companies 
in  Korea  cooperated  but  they  did  not  export  silicon  to  the  Community  during  the 
period considered. Accordingly, findings in respect of silicon consigned from Korea to 
the Community had to be made on the basis of the facts available in accordance with 
Article 18 of the basic Regulation. 

2. Product concerned and like product 

(14)  The  product  concerned  is  the  same  as  in  the  original  investigation,  i.e.  silicon 
originating in China classifiable within CN code 2804 69 00 (silicon content less than 
99,99% by weight). It is recalled that silicon with a higher purity, that is containing by 
weight not less than 99,99 % of silicon, used mostly in the electronic semi-conductor 
industry, falls under a different CN code and is not covered by this proceeding.  

(15)  From the information received from the two cooperating Korean companies as well as 
information available in the request submitted by the applicant, -it was concluded that 
silicon  exported  to  the  Community  from  China  and  silicon  consigned  from  Korea  to 
the  Community  have  the  same  basic  physical  characteristics  and  the  same  uses. 
Therefore, they are considered as like products within the meaning of Article 1(4) of 
the  basic  Regulation.  No  submissions  to  the  contrary  were  made  during  the 
investigation. 

3. Change in the pattern of trade between third countries and the Community 

(16)  As  stated  above,  the  change  in  the  pattern  of  the  trade  was  alleged  to  stem  from 

transhipment via Korea. 

(17)  Due to the absence of cooperation from Korean exporting companies, the volume and 
value of Korean exports of the product concerned to the Community were determined 

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on  the  basis  of  the  information  available,  which  in  this  case  was  Eurostat  import 
statistics. 

(18)  The  change  in  the  pattern  of  trade  is  based  on  data  from  the  first  table  reproduced 
below.  Large  volumes  of  silicon  started  to  be  imported  from  Korea  into  the 
Community  in  2002  and  2003,  and  continued  at  a  high  level  until  the  IP.  The 
significant volumes of imports consigned from Korea between, in particular, 2003 and 
the  IP,  while  fluctuating  during  this  period,  coincided  with  a  substantial  and 
continuing reduction (more than 50%) of imports from China. 

Table 1: imports of silicon from China and Korea (volume) 

Country 

2002 

2003 

2004  

2005  

IP  (04/2005 
– 03/2006 

China (tonnes) 

39 705 

56 226

55 939

30 346

22 358 

Korea (tonnes) 

1 070 

5 540

2 340

4 380

3 658 

Source: Eurostat. 

4. Circumvention process found and insufficient due cause or economic justification  

(19)  Since no Korean company which exported silicon to the EU cooperated in the present 
investigation, the assessment of circumvention was based on information available in 
accordance with Article 18 of the basic Regulation, including information provided in 
the complaint. The investigation did not reveal information suggesting that that silicon 
was  produced  in  Korea.  .  On  the  contrary,  both  Korean  cooperating  companies 
confirmed that no production of silicon exists in Korea.  

(20) 

It  is  therefore  concluded  that,  in  the  absence  of  any  other  sufficient  due  cause  or 
economic justification within the meaning of the second sentence of Article 13(1) of 
the  basic  Regulation,  the  change  in  the  pattern  of  trade  stemmed  from  the  anti-
dumping  duty  imposed  on  imports  of  silicon  originating  in  China  and  must  be 
assumed, as the complainant states, to consist in transhipment through Korea. 

5.  Undermining  of  the  remedial  effects  of  the  duty  in  terms  of  the  prices  and/or  the 
quantities of the like product 

(21) 

It is evident from the data mentioned in recital (18) that a quantitative change in the 
pattern  of  Community  imports  of  the  product  concerned  occurred  and  that  Chinese 
imports  into  the  Community  decreased  significantly  in  2005,  while  at  the  same  time 
there was a surge of exports of the product concerned to the Community from Korea, a 
country where there is no production of silicon.. It is therefore clear that the marked 
change in trade flows undermined the remedial effects of the measures in terms of the 
quantities imported into the Community market even if the imports from Korea during 
the IP amounted significantly less than the reduction of imports from China between 
2004 and the IP. 

(22)  With regard to prices of silicon consigned from Korea, in the absence of cooperation, 
it was necessary to refer to Eurostat data. . It was found that the average export prices 
from  Korea  to  the  Community  were  far  below  the  sale  prices  and  the  costs  of  the 

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Community industry as established in the investigation which led to the imposition of 
the current measures.  

Table 2: imports of silicon from China and Korea (EUR per tonne) 

Country 

2002 

2003 

2004 

2005 

IP (04/2005 – 
03/2006 

China 

Korea 

1 063 

1 031 

1 000 

912 

1 026 

961 

964 

1 039 

1 001 

1 061 

Source : Eurostat. 

(23) 

It  is  therefore  concluded  that  the  imports  of  the  product  concerned  from  Korea 
undermine the remedial effects of the duty both in terms of quantities and prices. 

6.  Evidence  of  dumping  in  relation  to  the  normal  value  previously  established  for  the 
like product 

(24)  As explained in recitals (10) and (11), given the absence of cooperation and in order to 
determine whether evidence of dumping could be found with respect to the exports of 
the  product  concerned  to  the  Community  from  Korea  during  the  IP,  Eurostat  data  at 
CN  level  were  used  pursuant  to  Article  18  of  the  basic  Regulation  as  the  basis  for 
establishing export prices to the EU. 

(25) 

(26) 

(27) 

In  accordance  with  Article  13(1)  of  the  basic  Regulation,  these  export  prices  were 
compared with the normal value previously established, in this case the normal value 
established in the most recent expiry review.  

In accordance with Article 2(11) and 2(12) of the basic Regulation, a comparison of 
the  weighted  average  normal  value  as  established  during  the  expiry  review 
investigation and the weighted average of export prices during this investigation’s IP, 
expressed  as  a  percentage  of  CIF  price  at  the  Community  frontier  duty  unpaid, 
confirmed significant dumping. 

C. MEASURES 

In view of the findings above it is found that circumvention has taken place within the 
meaning of Article 13(1), second sentence, of the basic Regulation. In accordance with 
Article  13(1)  first  sentence  of  the  basic  Regulation,  the  existing  anti-dumping 
measures  on  imports  of  the  product  concerned  originating  in  China,  should  be 
extended to imports of the same product consigned from Korea, whether declared as 
originating in Korea or not. 

(28)  The  measures  to  be  extended  should  be  the  ones  established  in  Article  1(2)  of 
Regulation  (EC)  No  398/2004,  which  are  a  definitive  anti-dumping  duty  of  49% 
applicable to the net, free-at-Community-frontier price, before customs duty. 

(29) 

In accordance with Articles 13(3) and 14(5) of the basic Regulation, which provides 
that  any  extended  measure  should  apply  to  imports  which  entered  the  Community 

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under registration imposed by the initiating Regulation, duties should be collected on 
those registered imports of silicon consigned from Korea. 

D. REQUESTS FOR EXEMPTION 

(30)  Although  during  this  investigation  no  genuine  producer  /  exporter  of  silicon  to  the 
Community was found to exist in Korea or made itself known to the Commission, any 
exporters  concerned  which  consider  lodging  a  request  for  an  exemption  from  the 
extended anti-dumping duty pursuant to Article 13(4) of the basic Regulation will be 
required to complete a questionnaire in order to enable the Commission to determine 
whether  an  exemption  may  be  warranted.  Such  exemption  may  be  granted  after  the 
assessment of the market situation of the product concerned, production capacity and 
capacity  utilisation,  procurement  and  sales  and  the  likelihood  of  continuation  of 
practices  for  which  there  is  insufficient  due  cause  or  economic  justification  and  the 
evidence  of  dumping.  The  Commission  would  normally  also  carry  out  an  on-spot 
verification visit. The request should be addressed to the Commission forthwith, with 
all  relevant  information,  in  particular  any  modification  in  the  company's  activities 
linked to production and sales.  

(31)  Where  an  exemption  is  warranted,  the  Commission  will,  after  consultation  of  the 
Advisory  Committee,  propose  the  amendment  of  this  Regulation  accordingly. 
Subsequently, any exemption granted will be monitored to ensure compliance with the 
conditions set therein. 

E. PROCEDURE 

(32) 

Interested parties were informed of the essential facts and considerations on the basis 
of which the Council intended to extend the definitive anti-dumping duty in force and 
were given the opportunity to comment and to be heard. No comments which were of 
a nature to change the above conclusions were received. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

2. 

The  definitive  anti-dumping  duty  imposed  by  Regulation  (EC)  No  398/2004  on 
imports  of  silicon  falling  within  CN  code  2804  69  00  originating  in  the  People’s 
Republic of China, is hereby extended to imports of silicon, falling within CN code 
ex 2804 69 00 (TARIC code 2804 69 00 10), consigned from the Republic of Korea 
whether declared as originating in the Republic of Korea or not.  

The  duties  extended  by  paragraph  1  of  this  Article  shall  be  collected  on  imports 
registered in accordance with Article 2 of Commission Regulation (EC) No 607/2006 
and Articles 13(3) and 14(5) of Regulation (EC) No 384/96. 

3. 

The provisions in force concerning customs duties shall apply. 

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1. 

2. 

Article 2 

Requests for exemption from the duty extended by Article 1 shall be made in writing 
in one of the  official languages of the Community and must be signed by a person 
authorised  to  represent  the  applicant.  The  request  must  be  sent  to  the  following 
address: 

European Commission 
Directorate-General for Trade 
Directorate B 
Office: J-79 05/17 
B - 1049 Brussels 
Fax (32 2) 295 65 05 

In  accordance  with  Article  13(4)  of  Regulation  (EC)  No  384/96,  the  Commission, 
after consulting the Advisory Committee, may authorise by decision, the exemption 
of  imports  which  do  not  circumvent  the  anti-dumping  measures  imposed  by 
Regulation (EC) No 398/2004 from the duty extended by Article 1. 

Customs authorities are hereby directed to discontinue the registration of imports, established 
in accordance with Article 2 of Regulation (EC) No 607/2006. 

Article 3 

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

Article 4 

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

Done at Brussels,  

For the Council 
The President 

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