Council Regulation (EC) No 451/2007 of 23 April 2007 terminating the partial interim review of the anti-dumping measures applicable to imports of hand pallet trucks and their essential parts originating in the People’s Republic of China
Date: 2007-04-23
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, anti-dumping legislation, hoisting equipment, import, originating product

L 109/8

EN

Official Journal of the European Union

26.4.2007

COUNCIL REGULATION (EC) No 451/2007

of 23 April 2007

terminating the partial interim review of the anti-dumping measures applicable to imports of hand
pallet trucks and their essential parts originating in the People’s Republic of China

THE COUNCIL OF THE EUROPEAN UNION,

(3)

Having regard to the Treaty
Community,

establishing the European

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

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

Whereas:

(4)

(5)

(1)

(2)

A. PROCEDURE

1. Measures in force

Following an investigation (‘the original
investigation’),
the Council, by Regulation (EC) No 1174/2005 (2),
imposed a definitive anti-dumping duty on imports of
hand pallet trucks and their essential parts originating
in the People’s Republic of China (‘PRC’).

2. Ex officio initiation of a review

On the basis of information at the Commission’s disposal
following certain changes after the original investigation
in the structure of one Chinese exporting producer which
was not granted market economy treatment
in that
investigation, namely Ningbo Ruyi Joint Stock Co., Ltd.
(‘Ningbo Ruyi’),
economy
it
In effect, there
conditions prevailed for this company.
was
suggesting that
Ningbo Ruyi
fulfilled the criteria of Article 2(7)(c) of
the basic Regulation. In this context, the circumstances
on the basis of which the existing measures were estab-
lished were considered to have changed and these
changes seemed to be of a lasting nature.

appeared that market

sufficient prima

evidence

facie

(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 189, 21.7.2005, p. 1.

after

determined,
that

consulting
sufficient evidence existed for

the Advisory
Having
Committee,
the
initiation of a partial interim review pursuant to Article
11(3) of the basic Regulation, the Commission published
initiation’) (3) and commenced an
a notice (‘notice of
investigation on its own initiative,
limited in scope to
determine whether Ningbo Ruyi operates under market
economy conditions and, if so, to determine whether its
individual dumping margin and duty rate should be
based on its own costs/domestic prices.

3. Parties concerned by the investigation

The Commission officially advised Ningbo Ruyi and its
related importer Jungheinrich AG, as well as the repre-
sentatives of the exporting country and the Community
industry of the initiation of the review. Interested parties
were given the opportunity to make their views known
in writing and to request a hearing.

(‘MET’) and a questionnaire

The Commission also sent a claim form for market
to
economy treatment
Ningbo Ruyi and received replies within the deadlines
set for that purpose. The Commission sought all the
information it deemed necessary for the determination
information
of MET and dumping,
provided and carried out verification visits at
the
premises of the related companies:

analysed the

— Ningbo Ruyi Joint Stock Co., Ltd, Ninghai,

— Ruyi Industries (Hong Kong) Co., Ltd.

Kong’), Hangzhou,

(‘Ruyi Hong

— Jungheinrich

Lift
(‘Jungheinrich Shanghai’), Shanghai.

Trucks

(Shanghai) Co.,

Ltd.

4. Review investigation period

(6)

The investigation of dumping covered the period from 1
April 2005 to 31 March 2006 (‘review investigation
period’ or ‘RIP’).

(3) OJ C 127, 31.5.2006, p. 2.

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Official Journal of the European Union

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(7)

(8)

(9)

B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

The definition of the product concerned corresponds to
investigation
the one that was used in the original
mentioned under recital (1). The product concerned is
hand pallet trucks (‘HPT’), not self-propelled, used for
the handling of materials normally placed on pallets,
and their essential parts, i.e. chassis and hydraulics, origi-
nating in the PRC, currently classifiable within CN codes
ex 8427 90 00
(TARIC codes
and
8427 90 00 10 and 8431 20 00 10).

ex 8431 20 00

2. Like product

The current review has shown that the HPT produced in
the PRC by Ningbo Ruyi and sold on the Chinese market
have the same basic physical characteristics and the same
uses as those exported to the Community. Therefore,
these products are considered to be a like product
within the meaning of Article 1(4) of the basic Regu-
lation.

to examine whether

(10) Ningbo Ruyi requested MET pursuant to Article 2(7)(b)
of the basic Regulation. It is the Community’s consistent
practice
related
companies involved in the production and/or sale of
the product concerned as a whole fulfils the conditions
for MET. According to Ningbo Ruyi, there was only one
such related company in the PRC — Jungheinrich
Shanghai. Ningbo Ruyi replied to the MET claim form
within the given deadline.

a group of

(11)

the investigation,

the Community
In the course of
industry claimed that
seemed to be various
there
companies related to Ningbo Ruyi which were not duly
disclosed by the company in the information submitted
to the Commission,
including in the audited financial
statements. According to the Community industry, the
companies
non-disclosure
financial
in
statements
IAS 24 (Related Party
is
Disclosures) and it requested the Commission to verify
this issue.

of
a breach of

related

C. RESULTS OF THE INVESTIGATION

(12)

Pursuant to Article 2(7)(b) of the basic Regulation,
in
anti-dumping investigations concerning imports origi-
nating in the PRC, normal value shall be determined in
accordance with paragraphs 1 to 6 of the said Article for
those producers which were found to meet the criteria
laid down in Article 2(7)(c) of the basic Regulation, i.e.
where it
is shown that market economy conditions
prevail
in respect of the manufacture and sale of the
like product. These criteria are set out in a summarised
form below:

to describe

It was found during the verification visits that there were
related companies which were not disclosed in the
audited financial statements (breach of IAS 24) or in
the replies to the MET claim form and to the ques-
tionnaire. In this respect,
it is worth noting that both
the MET claim form and the questionnaire requested
Ningbo Ruyi
corporate
structure and affiliations,
including parent companies,
subsidiaries or other related companies, whether or not
involved in the production and/or sale of the product
concerned. Furthermore, Ningbo Ruyi was requested to
submit a MET claim form for each subsidiary or other
related company in the PRC which was a producer
and/or exporter of HPT and to provide details about all
other related companies.

its worldwide

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

— firms have one clear set of basic accounting records
which are independently audited in line with interna-
tional accounting standards (‘IAS’) and are applied for
all purposes,

— no distortions carried over

from the non-market

economy system,

— bankruptcy and property laws guarantee stability and

legal certainty,

— exchange rate conversions are carried out at market

rates.

(13) According to Ningbo Ruyi’s Auditor’s Report

and
Financial Statements for the year ended 31 December
2005 (‘Report 2005’) and the replies to the MET form
and the questionnaire, Ningbo Ruyi only had three
Jungheinrich AG,
in the RIP:
related
Jungheinrich Shanghai and Ruyi Hong Kong. The inves-
tigation, however, showed that the Chinese shareholders
of Ningbo Ruyi have also controlling shareholdings in
Ningbo CFA Co., Ltd. (‘Ningbo CFA’) and Ningbo Free
Trade Zone Ruyi International Trading Co., Ltd. (‘NFTZ’).

companies

(14)

There are also other companies owned by relatives of the
Chinese shareholders of Ningbo Ruyi: CFA Tools Co.,
(‘CFA Tools’), a company incorporated in Hong
Ltd.
Kong, and Zhejiang Tianyou Import & Export Co., Ltd.
(‘Tianyou’).

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(15) All

the abovementioned companies not disclosed by
Ningbo Ruyi are thus related to Ningbo Ruyi for the
purposes of
them were
the current review. Three of
traders of HPT in the RIP and all have a business
licence allowing them to trade HPT. They seem to have
exported mainly to countries outside the Community. At
least
the sales volumes reported by
Ningbo Ruyi as domestic sales were in fact export sales
channelled
related
through non-disclosed
customers and unrelated customers.

three quarters of

domestic

(16)

(17)

Finally, the nature of the transactions between Ningbo
Ruyi and Ningbo Jinmao Import & Export Co., Ltd.
(‘Ningbo Jinmao’), which was
reported as a related
investigation (Ningbo Ruyi
company in the original
sold its shareholding in November 2003),
is an indi-
cation that the two companies still have close links in
the HPT business. Ningbo Jinmao bought more than half
of the HPT reported by Ningbo Ruyi as domestic sales in
the RIP and then resold a significant quantity to NFTZ,
which exported them. NFTZ did not buy any HPT
that Ningbo
directly from Ningbo Ruyi. The
Jinmao is one of Ningbo Ruyi’s main customers and
sells a large quantity of its purchases to NFTZ shows
that Ningbo Ruyi knew or should have known that
most sales to Ningbo Jinmao could not be domestic
sales as NFTZ, a related company, was exporting the
products bought by Ningbo Jinmao.

fact

Some time after the on-the-spot verification visit, Ningbo
Ruyi submitted some new information concerning the
MET status of certain of
these non-disclosed related
companies arguing that a MET determination for the
whole group could still be made. This was on the
intentional
grounds that
and because the involvement of
these related parties
with sales of the product under investigation was not
reasons, Ningbo Ruyi’s
same
significant.
partner,
this new
Jungheinrich AG, also argued that
information should be considered and MET granted.

the non-disclosure was not

For

the

(18) Whether or not there was any intent

the fact

to impede the
related
investigation by the timely non-disclosure of
parties,
is that questionnaire responses were
substantially incomplete to a degree which made it
impossible to verify the existence or otherwise of
market economy conditions for the Ningbo Ruyi group
during the verification visits which were carried out in
the PRC. With no verification visits possible at
the
premises of the non-disclosed related parties, the extent
to which the Ningbo Ruyi group was involved with HPT
can only remain a matter of conjecture.

(19)

In any event, Ningbo Ruyi’s failure to disclose in its
financial statements all its related parties is a breach of
IAS 24. The objective of IAS 24 is to ensure that an
entity’s
contain the disclosures

statements

financial

necessary to draw attention to the possibility that its
financial position and profit or loss may have been
affected by the existence of related parties and by trans-
actions and outstanding balances with such parties. In
the framework of an anti-dumping investigation, such
disclosure is necessary to allow the institutions
to
examine whether a group of related companies as a
whole fulfils the conditions for MET.

(20)

financial

statements was not carried out

The breach of IAS 24 shows that the audit of Ningbo
Ruyi’s
in
accordance with IAS and casts doubts on the reliability
of Ningbo Ruyi’s accounts. This would lead to the failure
of Ningbo Ruyi to meet the second criterion laid down
in Article 2(7)(c) of the basic Regulation.

(21) Although the provisions of Article 18 of the basic Regu-
lation concerning non-cooperation could apply in this
review,
it is noted that the Commission initiated this
review on its own initiative because it had prima facie
evidence that market economy conditions prevailed for
Ningbo Ruyi, something that Ningbo Ruyi subsequently
failed to demonstrate. Consequently, it is considered that
there is no need to invoke Article 18 of the basic Regu-
lation, but suffices to terminate the review and maintain
the existing measure in force.

D. TERMINATION OF THE REVIEW

(22)

In the light of the results of the investigation, the review
should be terminated without amending the level of the
duty applicable to Ningbo Ruyi, which should be main-
tained at the level of the definitive anti-dumping duty
rate established in the original investigation, i.e. 28,5 %.

E. DISCLOSURE

(23)

Interested parties were informed of the essential facts and
considerations on the basis of which it was intended to
terminate the present review and to maintain the existing
anti-dumping duty on imports of HPT produced by
Ningbo Ruyi. All parties were given an opportunity to
comment. The comments received were not of a nature
to change the conclusions.

(24)

Following disclosure, the Community industry claimed
that the non-cooperation provisions of the basic Regu-
lation (Article 18) should be applied and Ningbo Ruyi
should be penalised with the 46,7 % residual duty as a
non-cooperating exporting producer.

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(25)

(26)

failure

Jungheinrich AG and Ningbo Ruyi considered that
Ningbo Ruyi’s
related
companies was minor and unintentional and had no
impact on Ningbo Ruyi’s financial situation. Therefore,
least a
Ningbo Ruyi should be granted MET or at
revised lower individual duty rate.

to disclose

all

its

the

three out of

The failure to disclose all related companies, in particular
since
four non-disclosed related
companies were involved in HPT business and the
other one has a business licence that allows it to trade
HPT, cannot be considered minor because it did not
allow a determination of whether it has been shown
that all MET criteria are met (and not only the second
in
criterion concerning accounting)
Community’s
practice.
line with
the
Furthermore, whether the failure to disclose all
these
related companies was unintentional
is irrelevant. The
uncontested fact is that these related companies were
not
statements of
Ningbo Ruyi and this by itself showed that at least the
second criterion of Article 2(7)(c) of the basic Regulation
was not met. Consequently, the claim that the failure to
disclose these related companies was minor, uninten-
tional and without any impact cannot be accepted.

even disclosed in the

for all companies,

standard

financial

(27)

Finally, as set out in recital (3), this review is limited in
scope to determine whether Ningbo Ruyi operates under
market economy conditions and, only if MET had been
granted to Ningbo Ruyi, would a new dumping margin
be calculated. Thus, since MET is not granted, no new
dumping margin, higher or lower than the existing one,
can be established for Ningbo Ruyi through this review.

(28)

This review should therefore be terminated without any
amendment to Regulation (EC) No 1174/2005,

HAS ADOPTED THIS REGULATION:

Sole Article

interim review of

The partial
the anti-dumping measures
applicable to imports of hand pallet trucks and their essential
parts originating in the People’s Republic of China,
initiated
is
pursuant to Article 11(3) of Regulation (EC) No 384/96,
anti-dumping
hereby
measures in force.

terminated without

amending

the

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

Done at Luxembourg, 23 April 2007.

For the Council
The President

F.-W. STEINMEIER