Commission Regulation (EC) No 994/2007 of 28 August 2007 imposing a provisional anti-dumping duty on imports of ferro-silicon originating in the People's Republic of China, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia and Russia
Date: 2007-08-28
Institutions: European Commission
Subjects: China, Egypt, Kazakhstan, North Macedonia, Russia, anti-dumping duty, import, iron, originating product, semi-metal

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(Acts adopted under the EC Treaty/Euratom Treaty whose publication is obligatory)

I

REGULATIONS

COMMISSION REGULATION (EC) No 994/2007

of 28 August 2007

imposing a provisional anti-dumping duty on imports of ferro-silicon originating in the People's
Republic of China, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia and Russia

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

1.2. Parties concerned by the proceeding

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
countries not members of the European Community (1)
(the
basic Regulation), and in particular Article 7 thereof,

After consulting the Advisory Committee,

Whereas:

1. PROCEDURE

1.1. Initiation

(1)

(2)

the European Union (2),

On 30 November 2006, the Commission announced, by
a notice (notice of initiation) published in the Official
the initiation of an
Journal of
anti-dumping proceeding with regard to imports into
the Community of ferro-silicon (FeSi) originating in the
People's Republic of China (PRC), Egypt, Kazakhstan, the
former Yugoslav Republic of Macedonia and Russia
(countries concerned).

The proceeding was initiated as a result of a complaint
lodged on 16 October 2006 by Comité de liaison des
industries Ferro-Alliages (Euroalliages) (the complainant),
on behalf of producers representing a major proportion,
in this case more than 90 % of the total Community
production of FeSi. The complaint contained prima
facie evidence of dumping of the said product and of
material
injury suffered by the Community industry
resulting therefrom, which was considered sufficient to
justify the initiation of a proceeding.

(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 C 291, 30.11.2006, p. 34.

(3)

(4)

(5)

(6)

(7)

(8)

exporting

producers,

The Commission officially advised the complainant,
Community
producers,
the
importers, suppliers and users known to be concerned,
and representatives of the countries concerned and the
EU-former Yugoslav Republic of Macedonia Stabilisation
and Association Council of
the
proceeding. Interested parties were given an opportunity
to make their views known in writing and to request a
hearing within the time limit
in the notice of
initiation.

initiation of

the

set

complainant,

a producer who supported the
The
complaint, exporting producers, importers, raw material
producers, users and user associations made their views
interested parties, who so requested and
known. All
showed that
there were particular reasons why they
should be heard, were granted a hearing.

large number of

the apparent
be

In the notice of initiation, the Commission indicated that
in view of
importers
investigation.
sampling may
However, given the lower than expected number of
importers in the Community which indicated their will-
ingness to cooperate, it was decided that sampling was
not necessary.

applied

this

in

In order to allow exporting producers in the PRC and in
Kazakhstan to submit a claim for market economy
treatment (MET) or individual treatment (IT), if they so
to the
wished,
exporting producers known to be concerned and the
authorities of the two countries.

the Commission sent

claim forms

The Commission sent questionnaires to all parties known
to be concerned and to all the other companies that
made themselves known within the deadlines set out in
the notice of initiation.

received from the

Replies were
complainant
Community producers, one Community producer who
supported the complaint and cooperated fully, seven
unrelated importers, three raw material suppliers, eight
users, and one association of users.

five

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(9) With regard to the countries concerned by this investi-
from three
gation the Commission received replies
two exporters in Egypt, one
exporters in the PRC,
exporter
in the former
Yugoslav Republic of Macedonia and two exporters in
Russia.

in Kazakhstan, one exporter

Egypt

— The Egyptian Ferroalloys Company, Cairo,

— Egyptian Chemical

Industries KIMA, Cairo and

Aswan.

(10)

(11)

The Kazakh exporter subsequently did not allow an on-
the-spot verification of its MET claim and questionnaire
reply. Due to this non-cooperation in the meaning of
Article 18(1) of the basic Regulation, its data could not
be verified and had to be disregarded. The company was
informed accordingly.

The Commission sought and verified all the information
deemed necessary for a provisional determination of
dumping, resulting injury and Community interest. Veri-
fication visits were carried out at the premises of the
following companies:

(a) Producers located in the Community:

— Ferroatlantica, Cee, Dumbria and Madrid, Spain

— Ferropem, Laudun and Chambéry, France

— Vargön Alloys, Vargön, Sweden

— OFZ, Istebné, Slovakia

— Huta Laziska, Laziska Gorne, Poland

— TDR Metalurgija, Ruse, Slovenia.

(b) Community user:

— Thyssen Krupp Steel AG, Germany.

(c) Exporting producers and related companies in the

exporting countries:

PRC

— Dragon Northwest Ferroalloy Co., Ltd, Liangchen

Town,

— Lanzhou Good Land Ferroalloy Factory Co., Ltd,
Xicha Town, and Rich Trading Co. Ltd. (related
exporter), Lanzhou City,

— Erdos Xijin Kuangye Co., Ltd, Qipanjing Town,
and Inner Mongolia Erdos International Trade
Co., Ltd (related exporter), Dangshen Town.

(12)

(13)

The former Yugoslav Republic of Macedonia

— SILMAK DOOEL Export Import, Jegunovce.

Russia

— Chemk Group (Chelyabinsk Electrometallurgical
Integrated
Ferroalloy
and
Works), Novokuznetsk,

Kuznetsk

Plant

— ICT Group of Companies (Bratsk Ferroalloy Plant
and its related trading companies: TD North West
Ferro Alloy Company and Bakersfield Marketing
Ltd), Bratsk and Saint Petersburg.

(d) Related importer in the Community:

— Interalloys RFA Limited, Limassol.

1.3. Investigation period

The investigation of dumping and injury covered the
period from 1 October 2005 to 30 September 2006
the
(IP). The
assessment of injury covered the period from January
2003 to the end of the IP (period considered).

examination of

relevant

trends

for

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

than 95 % silicon and at

FeSi is a ferro-alloy containing by weight more than 8 %
and less
least 4 % iron.
Production of FeSi takes place in electric arc furnaces
by means of
reducing quartz using carbon-bearing
products. The product is essentially used as a deoxidiser
and as an alloying component
in the iron and steel
industry. FeSi
is sold in the form of lumps, grains or
powder and exists in various qualities depending on
the silicon and the impurity content (e.g. aluminium).
FeSi with a silicon content of 70 % and higher was
considered as high purity, with a silicon content of
more than 55 % and less than 70 % as medium purity,
and with a silicon content of less than 55 % as low
purity FeSi.

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(14)

(15)

FeSi exported to the EC and originating in the PRC,
the former Yugoslav Republic of
Egypt, Kazakhstan,
Macedonia
is
(the product
normally
declared within CN codes 7202 21 00,
7202 29 10 and 7202 29 90.

and Russia

concerned)

In the course of the investigation it was alleged by several
exporters that slag, which often contains significantly less
then 45 % silicon, should be excluded from the scope of
the investigation, because of an alleged lack of the same
basic physical characteristic and the same basic uses.

(16) However, this issue needs to be clarified further. In this
context interested parties are invited to submit infor-
mation as to whether the basic physical characteristics
and usages of low purity FeSi (i.e. slag) differ substantially
from other
the
exclusion of slag could significantly increase the risk of
circumvention of measures. However, on the basis of
information received so far, it is provisionally determined
that low purity FeSi should be considered as product
concerned.

types of FeSi and to which extent

2.2. Like product

(17) No differences were

in the countries concerned,

found between the product
concerned and the FeSi produced and sold on the
domestic market
to the
extent domestic sales were verified, and in Norway,
which served as an analogue country for the purpose
to
establishing the normal value with respect
of
imports from the PRC and Kazakhstan. Indeed, FeSi has
the same basic physical and chemical characteristics and
uses compared with that exported from the countries
concerned to the Community. Likewise, no differences
were found between the product concerned and the
FeSi produced by the Community industry and sold on
the Community market.
is therefore provisionally
It
concluded that all types of FeSi are considered to be
alike within the meaning of Article 1(4) of the basic
Regulation.

1. business decisions and costs are made in response to
market conditions, and without significant State inter-
ference;

2. accounting records are independently audited, in line
with International Accounting Standards (IAS) and
applied for all purposes;

3. there are no significant distortions carried over from

the former non-market economy system;

4.

legal certainty and stability is provided by bankruptcy
and property laws;

5. currency exchanges are carried out at the market rate.

(19)

Three Chinese and one Kazakh exporting producers
requested MET pursuant to Article 2(7)(b) of the basic
Regulation and replied to the MET claim form within the
given deadlines.

(20) One Chinese producer demonstrated during an on-the-
spot verification visit that it meets all five MET criteria.
Consequently its MET claim was accepted and the
dumping and injury analysis were based on its data.

(21)

For the other two Chinese exporting producers,
it was
established during the verification visit that MET was not
warranted.

3. DUMPING

3.1. Market economy treatment (MET)

(18)

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

(22)

The verification established that one Chinese exporting
producer did not meet criteria one to three. Firstly, it did
not demonstrate to be free from State interference, inter
alia because the Communist party, which was not a
shareholder,
interfered in basic company decisions and
the organisational responsibility for profit distribution
it
decisions remained unclear (criterion one). Secondly,
did not substantiate that it had one clear set of basic
accounting records which were prepared and audited in
compliance with IAS, because its depreciation technique
was neither in line with IAS nor Chinese accounting
costs.
the
principles

overstating

and

led

to

of

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IAS were not
Furthermore, as the above breaches of
mentioned in the audit report, the company did not
demonstrate that its records were audited in line with
the international accounting standards,
(criterion two).
Finally, it did not demonstrate to be free from significant
distortions carried over from the former non-market
economy,
in particular because it obtained from the
State land use rights without payment and its assets
evaluation during
the
the
company remained unclear (criterion three).

foundation process of

turnover and was therefore not noted in its financial
statements nor in the audit report. However, the investi-
gation showed that indeed the materiality of the change
was significant when compared to the operating or the
net profit of the company (over 20 %). Moreover the
company provided contradicting information as regards
to materiality thresholds allegedly used by the various
audit firms. On this basis the claim of the company
was rejected.

3.2. Individual treatment (IT)

(23) Another Chinese exporting producer was unable to
demonstrate that it had one clear set of basic accounting
records which were prepared and audited in line with
IAS:
lives
it changed its estimates regarding the useful
of its assets between two financial years without clear
notice, which led to the understating of costs, a
practice which is neither in compliance with IAS nor
Chinese accounting principles. Moreover,
failed to
disclose in its financial statements, and for any class of
its assets, the depreciation methods used and the useful
lives of the assets or the depreciation rates used. Finally,
as this incompliance of IAS was not mentioned in the
audit report, it did not demonstrate that its records were
accounting
audited in line with the
standards (criterion two).

international

it

it was

Consequently,
exporting producers did not
out in Article 2(7)(c) of the basic Regulation.

concluded that both Chinese
the conditions set

fulfil

The Kazakh exporter did not allow an on-the-spot veri-
fication visit to verify its MET claim. Consequently its
MET claim had to be disregarded. In this regard,
it is
noted that even if the exporting producer in Kazakhstan
would appear to meet
the MET criteria in an anti-
in
dumping proceeding regarding other alloy products,
the absence of cooperation and in particular in view of
the lack of information concerning the decisions of the
company regarding prices, costs and inputs,
including
raw materials, the Commission is not in a position to
transpose the MET determination of the other investi-
gation to this proceeding.

(24)

(25)

(26)

(27)

to Article 2(7)(a) of

the basic Regulation, a
Pursuant
countrywide duty,
is established for countries
falling under that Article, except in those cases where
companies are able to demonstrate that they meet all
criteria set out in Article 9(5) of the basic Regulation.

if any,

(28) As far as the PRC is concerned, both exporting producers
which did not meet the MET criteria had also claimed IT
in the event that they were not granted MET.

(29) On the basis of information available it was found that
one of these Chinese exporting producers did not meet
all the requirements for IT as set forth in Article 9(5) of
the basic Regulation, specifically it did not demonstrate
to be sufficiently free from State interference.
It was
therefore concluded that IT should not be granted to
this exporting producers in the PRC.

(30)

The other Chinese exporter which did not meet the MET
the
criteria, however, demonstrated that
requirements for IT as set forth in Article 9(5) of the
basic Regulation.

it met all

(31) As

concerned,

far as Kazakhstan is

exporting
producer who requested MET also claimed IT in the
event
this
company did not allow an on-the-spot verification of
its IT request, which therefore had to be rejected.

it was not granted MET. However,

that

the

Comments were received from all three companies that
were not granted MET. One Chinese exporting producer
and the Kazakh exporting producer did not provide any
new evidence that would change the findings regarding
their MET determination. The other Chinese exporting
producer claimed that the effect of the change in the
immaterial
estimated useful
its
a percentage of
(around 1 %) when expressed as

assets was

life of

3.3. Normal value

3.3.1. Analogue country

(32) According to Article 2(7)(a) of the basic Regulation, in
economies
in transition normal value for exporting
producers not granted MET has to be established on
the basis of the price or constructed value in a market
economy third country (analogue country).

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(33)

In the notice of initiation Norway was proposed as an
appropriate analogue country for the purpose of estab-
lishing normal value for the PRC and Kazakhstan. The
Commission invited all interested parties to comment on
this proposal.

overall representative domestic sales, which were identical
or directly comparable with the types sold for export to
the Community. The criteria used are the following:
silicon content, granular
impurities (aluminium,
size,
titanium, magnesium and raw earth) and packing.

(34) Only

one

party

analogue

interested

submitted

alternative

comments
proposing as
countries Brazil,
South Africa or, but conditional on not making energy
price adjustments
to the normal value, Russia. The
Commission contacted known companies in Brazil and
South Africa. However, no questionnaire replies or any
meaningful comments were received from producers in
Brazil or South Africa. With regard to Russia, it is noted
that in one case an energy price adjustment turned out to
be necessary in accordance with Article 2(5) of the basic
Regulation. Moreover, in line with consistent practice a
country engaged in injurious dumping is not taken as an
analogue country. Therefore, the suggested alternatives to
Norway have not been pursued further.

(40)

In any event, Norway is worldwide one of the biggest
FeSi producers with a competitive market and the three
Norwegian major FeSi producers fully cooperated, apply
state-of-the-art production techniques and have good
access to input materials.

3.3.2.3. P r o d u c t
t i v e n e s s

t y p e s p e c i f i c r e p r e s e n t a -

(39) Domestic

sufficiently

that product

sales of a particular product

type were
representative when the
considered as
type sold on the domestic
volume of
to independent customers during the investi-
market
gation period represented 5 % or more of
the total
volume of the comparable product type sold for export
to the Community.

3.3.2.4. O r d i n a r y c o u r s e o f

t r a d e t e s t

countries

The Commission subsequently examined whether the
domestic sales of cooperating exporting producers in
the
in
analogue country could be considered as being made in
the ordinary course of trade pursuant to Article 2(4) of
the basic Regulation.

concerned and of

the producers

is concluded that Norway
In view of
in
constitutes
accordance with Article 2(7)(a) of the basic Regulation.

the above,
an

appropriate

analogue

country

it

3.3.2. Methodology applied for the determination of normal

value

3.3.2.1. G l o b a l r e p r e s e n t a t i v e n e s s

In accordance with Article 2(2) of the basic Regulation,
the Commission first examined in each of the countries
concerned whether the domestic sales of the like product
to independent customers by each cooperating exporting
producer (with the exception of the two Chinese and one
Kazakh exporter which did not demonstrate to meet the
MET criteria) were representative,
i.e. whether the total
volume of such sales was equal to at least 5 % of the
total volume of the corresponding export sales to the
Community.

(41)

This was done by establishing the proportion of domestic
sales to independent customers, of each exported product
type, sold at a loss on the domestic market during the
investigation period:

(a) For those product types where more than 80 % by
volume of sales on the domestic market were not
below unit costs and where the weighted average
sales price was
than the
weighted average production cost, normal value, by
product type, was calculated as the weighted average
of all domestic sales prices of the type in question.

to or higher

equal

(b) For those product types where at least 10 %, but no
more than 80 %, by volume of sales on the domestic
market were not below unit costs, normal value, by
product type, was calculated as the weighted average
of domestic sales prices which were found equal to
or above unit costs only, of the type in question.

(35)

(36)

(37)

3.3.2.2. P r o d u c t

t y p e c o m p a r a b i l i t y

(38)

The Commission subsequently identified those product
companies having
types

sold domestically by the

(c) For those product types where less than 10 %, by
volume, was sold on the domestic market at a
price not below unit costs,
it was considered that
type concerned was not sold in the
the product
ordinary course of
trade and therefore, normal
value was constructed.

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3.3.2.5. N o r m a l

v a l u e
d o m e s t i c p r i c e

b a s e d

o n

a c t u a l

(42)

For the types sold for export to the Community by the
investigated companies where the requirements set out in
Sections 3.3.2.3 to 3.3.2.4(a) and (b) above were met,
normal value was based for the corresponding product
types on the actual prices paid or payable, by inde-
pendent customers
the
country under investigation, during the IP, as set out in
Article 2(1) of the basic Regulation.

in the domestic market of

(43)

(44)

(45)

3.3.2.6. N o r m a l v a l u e b a s e d o n
c o n s t r u c t e d v a l u e

For product types falling under Section 3.3.2.4(c) above,
as well as for the product types which were not sold by
the exporting producer in representative quantities on the
domestic market of the countries under investigation, as
mentioned in Section 3.3.2.3 above, normal value had to
be constructed.

To construct normal value pursuant to Article 2(6) of the
basic Regulation, the selling, general and administrative
(SG&A) expenses incurred and weighted average profit
producers
realised
concerned on domestic sales of the like product, in the
ordinary course of trade, during the IP, was added to
their own average cost of manufacturing during the IP.

cooperating

exporting

the

by

In the case where an exporting producer did not have
domestic sales of the like product in the ordinary course
of trade during the IP, normal value was constructed.
This was the case for the exporting producer of the
former Yugoslav Republic of Macedonia. Normal value
was constructed by using the cost of manufacturing of
the said exporting producer concerned. To this cost of
manufacturing it was provisionally considered appro-
priate to add the weighted average SG&A expenses
incurred by the Egyptian producers, because of
their
structures, and a
comparable production and sales
profit margin of 5 % which was considered a reasonable
profit for this type of commodity market, pursuant to
Article 2(6)(c) of the basic Regulation.

from the producers in the analogue country, i.e. on the
basis of prices paid or payable on the domestic market of
Norway for comparable product types, where these were
found to be made in the ordinary course of trade, or on
constructed normal values, where no domestic sales in
the ordinary course of
trade for comparable product
types were found.

(47) As a result, normal value was established as the weighted
average domestic sales price to unrelated customers or
constructed value per type by the three cooperating
producers in Norway.

3.3.3. Determination of normal value

3.3.3.1. P R C

(48)

For the two Chinese exporting producers which did not
obtain MET, normal value for the PRC was established as
set out in recitals 46 to 47 above.

(49)

(50)

For
the one Chinese exporting producer which was
granted MET normal value was established as set out
in recital 42, i.e. based on actual prices paid or payable
by independent customers
in the domestic market.
However,
in view of the fact that this company was
purchasing electricity from a related supplier, its energy
the product
costs associated with the production of
under investigation will be investigated further before a
final determination is made.

3.3.3.2. E g y p t

For the two Egyptian exporting producers it was found
that for some product types no representative domestic
sales in the ordinary course of trade for the like product
existed. Therefore, in these case normal value had to be
in
constructed in accordance with the provisions set
recitals 43 and 44 above. For
types
where representative domestic sales
in the ordinary
course of trade existed normal value was established in
accordance with the provisions set in recital 42, i.e. based
on the actual prices paid or payable by independent
customers in the domestic market.

those product

3.3.2.7. E c o n o m i e s i n t r a n s i t i o n

(46)

Pursuant to Article 2(7)(a) of the basic Regulation, but
for one Chinese exporting producer which was granted
MET, normal value for the PRC and Kazakhstan was
established on the basis of verified information received

3.3.3.3. K a z a k h s t a n

(51)

Since no MET was granted, normal value for Kazakhstan
was established as set out in recitals 46 to 47 above.

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3.3.3.4. T h e f o r m e r Y u g o s l a v R e p u b l i c o f

3.4. Export price

M a c e d o n i a

3.4.1. PRC

(52)

For the sole Macedonian exporting producer it was estab-
in the
lished that no representative domestic sales
ordinary course of
the like product existed.
Therefore, normal value had to be constructed in
accordance with the provisions set in recital 45 above.

trade of

(55) All three Chinese exporting producers, made export sales
to the Community directly to independent customers.
the export prices were established on the
Therefore,
basis of
the prices actually paid or payable for the
product concerned in accordance with Article 2(8) of
the basic Regulation.

(53)

(54)

3.3.3.5. R u s s i a

For the two Russian exporting producers it was found
that for some product types no representative domestic
sales in the ordinary course of trade for the like product
existed. Therefore, in these cases normal value had to be
in
constructed in accordance with the provisions set
recitals 43 and 44 above. For
types
where representative domestic sales
in the ordinary
course of trade existed normal value was established in
accordance with the provisions set in recital 42, i.e. based
on the actual prices paid or payable by independent
customers in the domestic market.

those product

the

the

costs

energy

energy supplier

In the case of one Russian exporting producer it was
associated with the
found that
concerned were not
product
production of
reasonably reflected in the records, because it paid on
weighted average significantly less (50 %)
for energy
than its competitor, despite both being located in
Siberia. Although the
in question
produces hydropower, this by itself cannot explain the
low electricity prices. In fact, even when compared to
other suppliers of electricity generated by hydroelectric
power stations e.g. in Norway, the prices are very low.
Moreover, in this regard, all available data provisionally
indicate that domestic electricity prices in Russia were
regulated prices. It was found that the Russian authorities
set maximum tariffs for energy in different regions of
Siberia, which appears to be the major reason for the
huge price discrepancy (1). As already noted by the OECD
in 2002 energy price regulations are used in Russia as
cross-subsidies between regions, charging poorer regions
less for energy than richer regions (2). Consequently, in
accordance with Article 2(5) of the basic Regulation its
energy prices were provisionally adjusted on the basis of
the other Russian exporter, which en-
the costs of
situated in two different
compasses
in the silicon AD case
other Siberian regions.
in 2003 a similar adjustment
in accordance with
the basic Regulation was made with
Article 2(5) of
regard to energy specifically provided by the same
energy supplier (3).

two producers,

Indeed,

(56) With regard to all other Chinese

exporters,

the
Commission first established the level of cooperation. A
comparison was made between the total export quan-
tities indicated in the questionnaire replies of the three
cooperating exporting producers
and total dumped
imports from the PRC, calculated as explained in recital
66. The percentage found was 18 %. On this basis, the
level of cooperation was deemed to be low. As a conse-
quence, export prices were provisionally established on
the basis of the transactions with the highest dumping
and injury margin made by one of the two cooperating
Chinese exporting producers that were granted MET or
IT in accordance with Article 18(1) of the basic Regu-
lation and the export prices of the third cooperating
Chinese exporting producer that did not receive MET
or IT.

3.4.2. Egypt

(57)

The two Egyptian exporting producers made export sales
to the Community directly to independent customers.
Therefore, provisionally the export prices were estab-
lished on the basis of
the prices actually paid or
payable for the product concerned in accordance with
Article 2(8) of the basic Regulation.

3.4.3. Kazakhstan

(58) Due to non-cooperation, i.e. the refusal of the exporting
producer of an on-the-spot verification of submitted data,
export prices had to be established in accordance with
Article 18(1) of the basic Regulation. This exporter had
consequences of non-
the
been made
cooperation. A weighted average
for
import price
Kazakhstan on the basis of Euro stat import data for
the IP was provisionally found to be appropriate.

aware of

3.4.4. The former Yugoslav Republic of Macedonia

(1) Russian Federal Tariffs Service Order of 7.9.2004, No 69-3/4 about
limiting tariff levels for electric and heat energy for the years 2005
to 2006.

(2) OECD Economic Surveys, Russian Federation, Volume 2002/5,

(59)

p. 122.

(3) Council Regulation (EC) No 2229/2003 of 22 December 2003

(OJ L 339, 24.12.2003, p. 3, recital 27).

directly

to the
The exporting producer made export
Community
customers.
Therefore, provisionally the export prices were estab-
lished on the basis of
the prices actually paid or
payable for the product concerned in accordance with
Article 2(8) of the basic Regulation.

independent

sales

to

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3.4.5. Russia

(60)

The

parties.

Both Russian exporting producers made their imports via
related
therefore
export
the prices at which the
constructed on the basis of
imported products were first
resold to independent
buyers. In accordance with Article 2(9) of the basic Regu-
lation adjustments for all costs incurred between impor-
tation and resale and for profits accrued were made.

price was

3.5. Comparison

(61)

The comparison between normal value and export price
was made on an ex-works basis.

(62)

(63)

(64)

(65)

For the purpose of ensuring a fair comparison between
the normal value and the export price, due allowance in
the form of adjustments was made for differences
affecting prices and price comparability in accordance
with Article 2(10) of the basic Regulation. For all inves-
tigated exporting producers allowances for differences in
costs, ocean freight and insurance
transport
costs,
loading and ancillary costs, packing costs,
handling,
credit
and
and
commissions have been granted where applicable and
justified.

costs, warranty

guarantee

costs,

In the case of one Russian and one Egyptian exporting
producer level of trade adjustments were claimed. These
claims had to be rejected because the companies did not
demonstrate that such adjustments were warranted,
i.e.
there were consistent and distinct
demonstrating that
differences in functions and prices for
the different
levels of trade in the domestic market of the respective
exporting countries as stipulated by Article 2(10)(d) of
the basic Regulation.

3.6. Dumping margins

3.6.1. General Methodology

Pursuant to Articles 2(11) and (12) dumping margins
were established on the basis of a comparison of a
weighted average normal value by product type with a
weighted average export price by product type as estab-
lished above.

For those exporting producers which neither replied to
the Commission's questionnaire nor otherwise made
themselves known, the dumping margin was established
on the basis of the facts available,
in accordance with
Article 18(1) of the basic Regulation.

(66)

In order to determine the dumping margin for non-coop-
erating exporting producers the level of non-cooperation

was first established. To this end, the volume of exports
to the Community reported by the cooperating exporting
producers was compared with the equivalent Eurostat
import statistics.

for

cooperating

it was considered appropriate to set

(67) Where the level of non-cooperation was high, i.e. more
the
than 20 %,
the non-cooperating exporting
dumping margin for
producers at a level higher than the highest dumping
margin established
exporting
the
producers.
Indeed, there is reason to believe that the
high level of non-cooperation results from the non-
in the investigated
cooperating exporting producers
country generally having dumped at a higher level than
any cooperating exporting producer. In such cases (i.e.
the PRC and Russia), the dumping margin was therefore
established at a level which corresponds to the weighted
representative
average dumping margin of
product
type with the highest dumping and injury
margin on the basis of an assessment per cooperating
exporting producer.

the most

(68) Where the level of cooperation was high (i.e. where non-
cooperating exporters represent less than 20 %),
it was
considered appropriate to set the dumping margin for
any non-cooperating exporting producers at the level of
the highest dumping and injury margin found for a
cooperating
country
concerned, since there was no reason to believe that
any non-cooperating exporting producer had dumped
at a lower level.

exporting

producer

the

in

3.6.2. Dumping margins

3.6.2.1. P R C

(a) F o r

t h e
M E T a n d I T

c o o p e r a t i n g p r o d u c e r s

g r a n t e d

(69)

the weighted
For the companies granted MET or IT,
average normal value of each type of
the product
concerned exported to the Community was compared
with the weighted average export price of
the corre-
sponding type of the product concerned, as provided
for in Article 2(11) and (12) of the basic Regulation.

(70) On this basis, the provisional weighted average dumping
margins expressed as a percentage of the cif Community
frontier price, duty unpaid, are:

Company

Erdos Xijin Kuang Co., Ltd.

Lanzhou Good Land Ferroalloy Factory Co.,
Ltd

Provisional
dumping margin

2,8 %

57,2 %

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(b) F o r a l l o t h e r e x p o r t i n g p r o d u c e r s

(71)

The countrywide dumping margin was calculated on the
basis of a comparison between the export price as set out
in recital 56 and the normal value as set out in recitals
46 to 47.

(72) On this basis the countrywide level of dumping was
cif

provisionally
established
Community frontier price, duty unpaid.

60,7 % of

the

at

dumping margins, expressed as a percentage of the cif
import price at the Community border duty unpaid, are
the following:

— Chemk Group (Chelyabinsk Electrometallurgical Inte-
Ferroalloy Works),
and Kuznetsk

grated
Chelyabinsk and Novokuznetsk 22,8 %

Plant

— ICT Group (Bratsk Ferroalloy Plant, Bratsk 22,2 %

— All others 25,5 %.

3.6.2.2. E g y p t

(73)

There was significant cooperation of exporting producers
(around 95 %). The provisional dumping
in Egypt
margins, expressed as a percentage of
import
price at the Community border duty unpaid, are the
following:

the cif

— The Egyptian Ferroalloys Company, Cairo 20,4 %

— Egyptian Chemical Industries KIMA, Cairo 24,8 %

4.

INJURY

4.1. Community production

(77)

the like product

The investigation established that
is
manufactured by seven producers in the Community.
The complaint was lodged on behalf of five of these
producers. After the initiation, a sixth producer decided
to support the proceeding by cooperating fully in the
investigation. The remaining producer did not take any
position and supplied no data.

— All others 20,4 %.

3.6.2.3. K a z a k h s t a n

(74)

In the absence of cooperation only a countrywide
dumping margin was
established. The provisional
dumping margin, expressed as a percentage of the cif
import price at the Community border duty unpaid, is
the following:

— Kazakhstan 37,1 %.

3.6.2.4. T h e f o r m e r Y u g o s l a v R e p u b l i c o f

M a c e d o n i a

(75) As the cooperating exporting producer is virtually the
only FeSi producer in the former Yugoslav Republic of
Macedonia,
cooperation was high. The provisional
dumping margins, expressed as a percentage of the cif
import price at the Community border duty unpaid, are
the following:

— SILMAK DOOEL Export Import, Jegunovce 5,4 %

(78)

(79)

(80)

— All others 5,4 %.

3.6.2.5. R u s s i a

(76)

There was
producers

significant non-cooperation of exporting
in Russia (around 68 %). The provisional

4.2. Definition of the Community industry

The six cooperating Community producers accounted for
95 % of the Community production of FeSi during the
IP. They
the
Community industry (CI) within the meaning of Article
4(1) and Article 5(4) of the basic Regulation.

therefore deemed to constitute

are

Certain interested parties argued that the five producers
in similar
supporting the complaint were not at all
economic situations and that at
them
would incur no injury. Therefore these two Community
producers should be excluded from the current investi-
gation which would lead to a lack of standing.

two of

least

In this regard, it is noted that pursuant to Article 4 of the
basic Regulation the term ‘Community industry’ refers to
collective output
the Community producers whose
represents a major proportion of the total Community
production. The same Article provides for the circum-
stances in which certain Community producers may be
excluded from the definition of CI. These circumstances
do not
the performance of Community
producers. Moreover, the exclusion of producers based
on performance goes against
the very principle of
making an objective assessment of the situation of the
CI. On the basis of the above, the claim was rejected.

include

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29.8.2007

4.3. Community consumption

(81)

Community consumption was established on the basis of sales volumes of the CI on the Community
market plus estimated sales volume of the non cooperating producer in the Community plus imports
from the countries concerned and other third countries, based on Eurostat. Community consumption
of FeSi remained rather stable during the period considered with the exception of 2003 and 2004
when it increased by 6 % due to the exceptional large demand from the steel industry.

2003

2004

2005

IP

Community consumption (tonnes)

871 794

922 978

881 930

883 311

Index

100

106

101

101

4.4. Imports into the Community from the countries concerned

4.4.1. Cumulative assessment of the effects of dumped imports

(82)

The Commission considered whether the effects of imports of FeSi originating in the PRC, Egypt,
Kazakhstan, the former Yugoslav Republic of Macedonia and Russia should be assessed cumulatively
in accordance with Article 3(4) of the basic Regulation.

(83)

The dumping margin found for each of the countries concerned was more than de minimis, the
volume of imports from each of these countries was not negligible and the cumulative assessment
was considered appropriate in view of the conditions of competition between the imports from the
countries concerned and the like Community product. Similar conditions of competition were
evidenced by the fact that the product concerned imported from the countries concerned and the
like product produced and sold by the CI within the Community market were alike and distributed
via the same trade channels. Moreover all import volumes were substantial and resulted in significant
market shares.

(84) On the basis of the above, it was concluded that the conditions justifying the cumulative assessment
of imports of FeSi originating in the PRC, Egypt, Kazakhstan, the former Yugoslav Republic of
Macedonia and Russia were met.

4.4.2. Cumulated volume and market share

(85)

Import volumes from the PRC, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia and
Russia, as derived from Eurostat, increased significantly from 134 081 tonnes in 2003 to 452 108
tonnes in the IP. Their combined market share increased continually from 15,4 % to 51,2 % during
the same period. This has to be seen against the background of an almost stable consumption —
with the exception of 2004 as explained above.

2003

2004

2005

IP

Import volumes (tonnes)

134 081

198 164

319 265

452 108

Index

Market share

Unit selling price (EUR/tonne)

Index

100

15,4 %

557

100

148

21,5 %

580

104

238

36,2 %

569

102

337

51,2 %

574

103

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4.4.3. Prices

4.4.3.1. P r i c e e v o l u t i o n

(86)

Between 2003 and the IP, the average price of imports of the product concerned originating in the
countries concerned increased by 3 %. Specifically, the prices increased by 4 % in 2004 (a year
marked with significant increase in demand of steel worldwide), decreased by 2 % the following
year 2005 and then increased by around 1 % in the IP.

4.4.3.2. U n d e r c u t t i n g

(87)

For the determination of price undercutting the Commission analysed data referring to the IP. The CI
and the exporting producers concerned were requested to provide information on sales prices of FeSi
categorised in models according to the criteria indicated in recital 38 above.

(88)

(89)

The relevant sales prices of the CI were those to independent customers, adjusted where necessary to
an ex-works level, i.e. excluding freight costs in the Community and after deduction of discounts and
rebates. These prices were compared with the prices of
imports of the cooperating producers
concerned. With regard to Kazakhstan, given that there was no cooperation, the weighted average
export price was derived from Eurostat. As for the PRC, Egypt, the former Yugoslav Republic of
Macedonia and Russia the comparison was made against the export prices charged by the coop-
erating exporting producers, net of discounts, duly adjusted, where necessary, to cif Community
frontier prices and duly adjusted for conventional duties unloading and customs clearance costs.

The comparison showed that during the IP the product concerned sold in the Community market
undercut the CI's prices between 4 % and 11 %, depending on the exporting producer concerned,
with the exception of a Russian, an Egyptian and the exporting producer in the former Yugoslav
Republic of Macedonia, for which no undercutting was found. However, on a type-by-type basis it
was found that in several instances the prices practised by the exporting producers concerned were
significantly lower than the above average undercutting margins or in the case of exporting producers
where no overall undercutting was found, undercutting margins were established for certain product
types. Moreover, in view of the significant losses suffered by the CI, the undercutting margins do not
show the full effect of dumped imports on prices as there was considerable price depression. Finally,
the amount of undercutting found should not be considered insignificant taking into account the
nature of the product which is a commodity, sensitive even to minor price variations.

4.5. Situation of the Community industry

(90)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped
imports on the CI included an analysis of all economic factors and indices having a bearing on the
state of the industry during the period considered.

4.5.1. Production, production capacity and capacity utilisation

(91)

Production decreased by 40 % between 2003 and the IP. The evolution of production volumes was as
follows:

2003

2004

2005

IP

Production (tonnes)

272 364

267 149

211 906

163 908

Index

100

98

78

60

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(92)

The production capacity was established on the basis of the theoretical nominal capacity of the
production units of the CI. In this regard production capacity remained stable during the period
considered. As a result of the decrease in production volumes, the capacity utilisation decreased at the
same ratio as the production during the period considered.

(93) However, in order to take account of the fact that two producers in the Community switched part of
their production from FeSi to other Ferroalloys during the period considered, production capacity
was adjusted accordingly.

Production capacity

348 261

348 261

325 601

325 601

2003

2004

2005

IP

Index

Capacity utilisation

Index

4.5.2. Stocks

100

78 %

100

100

77 %

99

93

65 %

83

93

50 %

64

(94)

Stocks went down by 46 % during the period considered, reflecting the decrease in the production
output of the CI.

2003

2004

2005

IP

Stocks (tonnes)

Index

29 432

30 741

21 525

15 630

100

104

73

53

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

(95)

Sales of FeSi by the CI to independent customers on the Community market decreased steadily from
250 316 tonnes in 2003 to 156 633 tonnes in the IP, i.e. by 38 %. Hence the CI experienced a loss
of market share amounting to 11 percentage points. The market share dropped from 28,7 % in 2003
to 17,7 % in the IP.

2003

2004

2005

IP

Sales volume in the EC (tonnes)

250 316

244 561

197 782

156 920

Index

Market share

Index

100

28,7 %

100

98

79

26,5 %

22,4 %

92

78

63

17,7 %

62

(96) Average sales prices to unrelated customers in the Community market remained rather stable
between 2004 and the IP after an increase of 10 % between 2003 and 2004. Specifically, a slight
price decrease occurred between 2004 and 2005, after which prices reached again the level of 2004.
The price increase reflected a certain raise in costs and a shift to certain higher value products at the
expense of dropping market shares. Current price levels, however, are unsustainable since the CI is
forced to sell below full cost in order to stay on the market.

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L 223/13

Weighted average price (EUR/tonne)

Index

2003

623

100

2004

685

110

2005

670

107

IP

686

110

4.5.4. Profitability and cash flow

(97) During the period considered profitability of the CI decreased from a low profit of 2,3 % in 2003 to
– 12,9 % in the IP. A slight increase can be observed in 2004, which was an exceptionally prosperous
year for the steel business and its related industry. However, after this period a significant downwards
trend in terms of profitability took place. The main reason for this development is the dramatic
decrease in the production output of the CI (– 40 %) and its corresponding decline in capacity
utilisation (– 18 percentage points) which led to relatively high increase of the unit fixed costs per
produced unit and which did not allow the CI to benefit from the economies in scale which higher
capacity utilisations would have entailed. To a lesser extent, profitability was negatively affected by
the fact that as of 2004 the CI was not able to increase its sales prices at the level necessary to cover
price increases in energy and certain raw materials that incurred as of that year.

Pre-tax profit margin

2003

2,3 %

2004

2,7 %

2005

– 9,2 %

IP

– 12,9 %

(98)

Cash flow also deteriorated over the period considered, reflecting the above negative trend in profit-
ability.

Cash flow (EUR)

Index

2003

2004

2005

IP

7 834 497

10 029 457

– 10 103 355

– 12 081 451

100

128

– 129

– 154

4.5.5. Investments, return on investments, and ability to raise capital

(99)

Investments showed a positive trend over the period considered. The investments relate mainly to
upgrading of production equipment to conform to environmental requirements.

2003

2004

2005

IP

Investments (EUR)

1 917 786

3 145 409

9 788 877

5 827 463

Index

100

164

510

304

(100) The return on investment from the production and sales of the like product was negative and
decreased substantially during the period considered, reflecting the abovementioned negative trend
in profitability.

Return on investment

Index

2003

18,9 %

100

2004

19,8 %

105

2005

– 46,5 %

– 246

IP

– 47,3 %

– 250

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(101) There were no indications that the CI, which consists essentially of medium sized companies also
involved in the production of other products, encountered problems to raise capital for its activities
and it was therefore concluded that the CI was in a position to raise capital for its activities
throughout the period considered.

4.5.6. Employment, productivity and wages

(102) The evolution of employment, productivity and wages was as follows:

Number of employees

Index

Productivity (tonnes/employee)

Index

2003

1 579

100

172

100

2004

1 155

73

231

134

2005

1 141

72

186

108

Labour costs per employee (EUR)

14 568

19 602

18 107

Index

100

135

124

IP

1 153

73

142

82

17 464

120

(103) The number of employees decreased by 27 % during the period considered. As a result of the
decreasing production volumes, productivity showed a negative trend since 2004. The average
labour costs per employee increased by 20 % over the period considered.

4.5.7. Growth

(104) While the Community consumption increased by just 1 % over the period considered, the sales
volume of
the import volumes from the countries
concerned increased by 35,8 %. This led to the loss of market share by the CI, whereas the
imports concerned managed to increase theirs.

the CI decreased by 37 % and in parallel

4.5.8. Magnitude of the actual margin of dumping and recovery from past dumping

(105) The dumping margins for the PRC, Egypt, Kazakhstan, the former Yugoslav Republic of Macedonia
and Russia are specified above in the dumping section. These margins are clearly above de minimis.
Furthermore, given the volumes and the prices of the dumped imports, the impact of the actual
margins of dumping cannot be considered to be negligible.

(106) There is no indication that the CI is recovering from the effects of past dumping or subsidisation. It is

noted that imports of the FeSi were not subject to measures since 2001.

4.5.9. Conclusion on injury

(107) The analysis of the injury indicators shows that the situation of the CI deteriorated significantly after

2003 and reached its lowest point in the IP, when the industry made a loss of 12,9 %.

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(108)

the Community
In the context of a rather stable consumption during the period considered,
production decreased by 40 % and its capacity utilisation by 28 percentage points during the
same period. Sales on the Community market decreased by 37 % in terms of volume and 31 % in
terms of value. This led to a decrease in market share from 28,7 % in 2003 to 17,7 % in the IP.
Average unit prices increased by 10 % during the period considered, but remained stable between
2004 and the IP. However,
in view of the dramatic decrease in production output, which was
dictated by the fall
in sales volumes, the CI lost economies of scale as its unit fixed costs per
produced unit increased significantly. Moreover, as of 2004 the CI was not in a position to set its
prices to the necessary level in order to compensate certain increases in its input costs. Both these
factors resulted in the significant drop in profitability in the IP.

(109)

Investments showed a positive trend due the environmental requirements that the CI needs to meet.
Stocks also showed a positive trend (decreased in value by 47 % over the period considered) but this
was mainly due to the dramatic drop in the level of production. All other injury indicators confirm
the negative situation of the CI. Return on investments and cash flow were negative and productivity
decreased.

(110)

In the light of the foregoing, it can be concluded that the CI suffered material injury within the
meaning of Article 3(5) of the basic Regulation.

5. CAUSATION

5.1. Introduction

(111)

In accordance with Article 3(6) and (7) of the basic Regulation, the Commission has examined
whether the dumped imports of FeSi originating in the countries concerned have caused injury to
the CI to a degree that enables it to be classified as material. Known factors other than the dumped
imports, which could at the same time be injuring the CI, were also examined to ensure that possible
injury caused by these other factors was not attributed to the dumped imports.

5.2. Effect of the dumped imports

(112) Between 2003 and the IP, the volume of dumped imports increased significantly by 237 % and their
corresponding market share of the Community market increased by 35,8 percentage points. The
average price of these imports increased by 3 % between 2003 and the IP, being however signifi-
cantly lower than those of the CI during the same period. Also, during the IP, the average price of the
dumped imports undercut the prices of the CI by 3,7 % to 11 %, depending on the exporting
producer, with the exception of three cooperating exporting producers for which no undercutting
was found. Moreover, prices of the CI were depressed.

(113) The substantial increase in volume of the imports from the countries concerned at low and dumped
prices and their gain in market share over the period considered coincided with the deterioration of
the situation of the Community industry during the same period, in particular in terms profitability,
sales volumes, market share, production, capacity utilisation, cash flow, return on investments and
employment. Moreover, the CI was not able to increase its sales prices up to the necessary level to
cover its full costs, as its sales prices were undercut during the IP by the dumped imports.

(114)

It is therefore provisionally concluded that the dumped imports had a significant negative impact on
the situation of the CI.

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5.3. Effect of other factors

5.3.1. Imports from other third countries

(115) The analysis of imports from all third countries, other than the countries concerned, was based on
data from Eurostat. In the case of Norway it was possible to cross-check this data with information
provided by the analogue country producers, which confirmed the reliability of Eurostat data.

(116) Overall imports from all other third countries decreased over the period considered by around 45 %,
i.e. from around 477 400 tonnes in 2003 to around 264 600 in the IP. The corresponding market
share declined from 54,8 % to 30 %. Over the same period, the prices of these imports increased by
7 % (from EUR 609/tonne in 2003 to EUR 653/tonne in the IP). The average price of these imports
was above that of
the period
(2,3 % to 5,7 %) over the same period. The
considered and slightly lower than that of the CI
main sources of
Iceland and
Venezuela.

imports from other third countries during the IP were Norway,

the imports originating in the countries concerned throughout

Imports from third countries other
than the countries concerned
(in tonnes)

Index

Market share

Unit selling price (EUR/tonne)

Index

2003

2004

2005

IP

477 397

470 253

354 883

264 570

100

54,8 %

609

100

99

74

50,9 %

40,2 %

646

106

659

108

55

30 %

653

107

5.3.1.1. N o r w a y

(117) The imports from Norway followed to a certain extent a development similar to that of the CI,
significantly decreasing in volume and market share. During the IP, the average price of imports from
Norway amounted to EUR 686/tonne. This means that Norwegian products were considerably more
expensive than imports from the countries concerned and had the same price level as the products
sold by the CI. It is therefore concluded that imports from Norway did not contribute to the material
injury suffered by the CI.

Imports from Norway
(quantity in tonnes)

Index

Norway unit selling price
(EUR/tonne)

Index

Market share

2003

2004

2005

IP

186 429

274 130

185 334

90 381

100

669

100

21 %

147

668

100

30 %

99

650

97

21 %

48

686

103

10 %

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5.3.1.2. I c e l a n d

(118)

Imports from Iceland increased by 16 % and the market share of these imports increased by 1,2
percentage points over the period considered (IP = 9,3 %). This development can be explained to a
certain extend by the fact that one major Norwegian producer transferred part of its production to
Iceland where the conditions for the production of FeSi were more favourable. While the average
import price from Iceland was below that of the CI during the IP, it was well above the average
import price of the countries concerned (12 % higher). Therefore, while it cannot be excluded that the
imports from Iceland had a certain effect on the negative situation of the CI, this effect cannot be
considered to be of any material significance when compared with to volume and prices of the
dumped imports.

Imports from Iceland (quantity in
tonnes)

70 506

86 120

70 607

81 881

2003

2004

2005

IP

Index

Iceland unit selling price
(EUR/tonne)

Index

Market share

5.3.1.3. B r a z i l

100

645

100

8,1 %

122

612

95

9,3 %

100

675

105

8,0 %

116

643

100

9,3 %

(119) The third most important country among third countries not concerned by this investigation in
terms of quantities during the IP was Brazil. Imports from Brazil decreased by 11 % in terms of
quantity while the market share decreased by 0,4 % during the period considered. During the whole
period under consideration the average import price from Brazil was significantly above that of the
CI. It is therefore concluded that imports from Brazil did not contribute to the material
injury
suffered by the CI.

Imports from Brazil
(quantity in tonnes)

Index

Brazil unit selling price (EUR/tonne)

Index

Market share

2003

2004

2005

IP

29 902

25 028

24 117

26 491

100

686

100

84

732

107

81

756

110

89

732

107

3,4 %

2,7 %

2,7 %

3,0 %

5.3.1.4. V e n e z u e l a

(120)

Imports from Venezuela increased by 140 % and the market share of these imports increased by 1,3
percentage points over the period considered reaching to a market share of 2,2 % during the IP. They
appeared in significant levels only during the IP since in the other years of the period considered their
market share was below 1 %. Overall, however, Venezuela remained a very small player on the
Community market. While the average import price from Venezuela was below that of the CI
during the IP, it was well above the average import price of the countries concerned (9 % higher).
While it cannot be excluded that these imports had a certain effect on the negative situation of the
CI, this effect cannot be considered to be of any material significance when compared to volume and
prices of the dumped imports.

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Official Journal of the European Union

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Imports from Venezuela
(quantity in tons)

Index

Venezuela unit selling price
(EUR/ton)

Index

Market share

2003

8 255

100

706

100

0,9 %

2004

0

0

0

0

0 %

2005

4 489

54

712

101

0,5 %

IP

19 787

240

626

89

2,2 %

(121) On the basis of the above, it is concluded that imports
from other
not materially
contributed to the injury suffered by the Community
industry.

countries

third

have

the whole period considered.

is
production) over
therefore, concluded that
the export activity cannot
have contributed in any way to the injury suffered by
the CI.

It

5.3.2. Competition from the other Community producer

5.3.5. Currency fluctuations

(122) As

indicated under

recital 77 above, one other
Community producer did not cooperate with the inves-
tigation. Based on information obtained in the course of
is
the investigation from cooperating producers,
estimated that its sales volume and market share in the
Community market were stable throughout the period
considered and remained at
levels. Also
the other producer did not gain any sales volume and
market share at the expense of the Community industry.
No information was available concerning the prices of
the other Community producer.

insignificant

it

(126) Some interested parties have claimed that

into the

the USD against
FeSi

the de-
the euro has favoured
preciation of
European Community.
imports of
the USD did indeed loose
Between 2003 and 2004,
from
the euro. However,
9,7 % of
its value against
2004 onwards until
the IP the USD
decreased against the euro by only 2,7 %. Neither the
price development of the CI nor the import volumes
from the countries concerned or
third
countries reflect the rather low depreciation of the USD
against the euro.

the end of

from other

(123) Given the above, and given the absence of information to
the contrary, it is concluded that the other Community
producer has not contributed to the injury suffered by
the CI.

5.3.3. Development of demand

(127) Therefore the depreciation of the USD against the euro
has
to be considered as negligible and cannot be
considered as a major cause of the loss of the market
it was provisionally
share of
concluded that the appreciation of the euro in respect
of the USD was not a factor causing material injury to
the CI and the claim was, therefore, rejected.

the CI. Consequently,

(124) As

to the development of demand,

apparent
consumption of FeSi on the Community market with
the
the exception of 2004 was
period
injury
suffered by the CI cannot be attributed to a contraction
in demand on the Community market.

considered. Therefore,

the material

stable over

rather

the

5.3.4. Export performance of the Community industry

(125) With regard to the CI's

sales made outside

the
Community, the investigation showed that there was an
overall increase of 69 % in terms of volume during the
period considered. During the same period,
the unit
selling price was on average 22 % higher than on the
Community market. However, the share of exports as
percentage of the total sales volume of the CI remained
with at a fairly low level (around 3,1 % in relation to

(128) Moreover,

it

is recalled that

the investigation has to
examine whether
the dumped imports (in terms of
prices and volumes) have caused material injury to the
CI or whether such material
injury was due to other
factors.
In this respect, with regard to prices, Article
3(6) of the basic Regulation states that it is necessary
to show that
the dumped imports
causes injury. It therefore merely refers to a difference
between price levels, and there is thus no requirement to
analyse the factors affecting the level of those prices.

the price level of

(129) The above is also confirmed by the wording of Article
3(7) of
the basic Regulation, which refers to known
factors other than dumped imports. Indeed, the list of
the other known factors in this Article does not make

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reference to any factor affecting the price level of the
dumped imports. To summarise,
the exports are
dumped, and even if they benefited from a favourable
development of exchange rates, it is difficult to see how
the development of such exchange rate could be another
factor causing injury.

if

(130) Thus, the analysis of the factors affecting the level of the
prices of the dumped imports, be it differences in prices
in exchange
cannot be
conclusive and such analysis would go beyond the
the basic Regulation. Equally on this
requirements of
basis,
the claims concerning the exchange rate fluc-
tuations were provisionally rejected.

something

rates or

else,

5.3.6. Further factors

(131) Several users and importers argued that

is
suffering injury due to the high costs of production, in
particular due to the raise in electricity costs experienced
especially in Europe.

the CI

(132) While it is true that electricity costs constitute a major
the product
the costs of production of
the investigation also revealed that energy
including in the countries
in some instances to a much

portion of
concerned,
prices all over the world,
concerned,
higher degree than in Europe.

increased,

(133) Against this background the energy issue cannot break
link between the dumped imports and the

the causal
material injury suffered by the CI.

the
factor constraining the switch in production is
difficulty in sourcing of the raw materials required for
the production of manganese alloys, as the few world-
wide suppliers of such materials are located outside the
long-term
Community and work on the basis of
contracts. Despite
in
switch
production happened in 2004 when there was a lack
of manganese alloys on the EC market and at the same
time sufficient supply of FeSi.

limitations

these

a

(136)

In conclusion, the decision taken by some CI producers
to cut back production has not been taken on a
voluntary basis, as alleged by the interested party, but
was caused by the dumped imports preventing the CI
to make profitable sales on the like product. Therefore,
the argument of self inflicted injury had to be rejected.

5.4. Conclusion on causation

(137) The above analysis demonstrated that

there was a
substantial increase in volume and market share of the
imports originating in the countries concerned during the
period considered. Also, during the IP,
the dumped
imports were undercutting the sales prices of the CI.

(138) The increase in market share of the low-priced imports
from the countries concerned coincided with a significant
drop in sales volume and market share of the CI. At the
same time, the CI was not able to increase its sales prices
up to the necessary level to cover its full costs as its sales
prices were undercut during the IP by the dumped
imports. This resulted,
losses
for the CI.

in substantial

inter alia,

(134) One interested party argued that the CI is suffering from
self-inflicted injury by switching from the production of
in particular ferro-manganese and
FeSi to other alloys,
silico-manganese.

(139) On the other hand, the examination of the other factors
which could have injured the CI revealed that none of
these could have had a significant negative impact on the
situation of the CI.

(135) The investigation revealed that such a switch is possible
provided that the furnaces are technically equipped for
such a change in production. The CI has only few such
furnaces which limit its possibilities to switch production
according to actual market trends. In fact only three CI
producers have already such furnaces but even for them
a change in production involves high costs due to idle
equipment up to 14 days needed for cleaning and
adapting to the new production process. An additional

(140) Based on the above analysis which has properly dis-
tinguished and separated the effects of all known
from the injurious
factors on the situation of the CI
is provisionally
the dumped imports,
effects of
it
countries
imports
that
concluded
concerned
the
to
caused material
have
Community within the meaning of Article 3(6) of the
basic Regulation.

from the
injury

the

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6. COMMUNITY INTEREST

6.1. Preliminary remark

(141)

In accordance with Article 21 of the basic Regulation, the
Commission examined whether, despite the conclusion
on injurious dumping, compelling reasons existed for
concluding that it is not in the Community interest to
adopt measures in this particular case. The determination
of the Community interest was based on an appreciation
of all the various interests involved, i.e. those of the CI,
the importers, the raw material suppliers and the users of
the product concerned.

6.2. Investigation

(142)

In order to assess the likely impact of the imposition or
non-imposition of measures, the Commission requested
information from all interested parties. The Commission
sent questionnaires to the seven Community producers,
three suppliers of raw materials, 72 importers and 31
Six Community
users of
producers,
seven
importers and eight users replied.

the product
three

raw materials,

suppliers of

concerned.

noted that the CI's losses are to a large extent the result
of its difficulty to compete with the dumped, low-priced
imports originating in the
If
measures are taken, the CI will be able to regain at
its lost market share with a consequent
least part of
positive impact on profitability.

concerned.

countries

(146) As mentioned above,

investments made

the CI suffered material

injury
caused by dumped imports originating in the countries
concerned. If measures are not imposed, a further de-
terioration in the situation of the CI is probable. This
would entail a further loss of employment and frustrate
in recent years. The price-
the
imports would
depressive
in particular to
continue to foil all efforts by the CI,
regain a profitable level. Not
taking measures would
jeopardise the long-term presence of the industry and it
is
some Community
at
producers might have to shut down as a result of the
competition from dumped imports.

certain that

effect of

dumped

almost

least

the

6.3. Interest of the Community industry

6.3.1. Nature and structure of the Community industry

(147)

it is expected that measures would be
In conclusion,
effective in giving the CI
the opportunity to recover
from the injurious dumping found in this investigation.

(143) The CI

is

essentially composed of medium sized
companies located in six Member States (Spain, France,
Sweden, Slovenia, Slovakia and Poland). The CI employed
1 153 people in the IP and bought its raw materials from
Community suppliers,
thus having an impact on the
employment levels of raw material suppliers.

6.3.2. Effects of the imposition or non-imposition of measures

on the Community industry

(144) The injury found has taken the form of a significant
decrease in the volume of sales and an insufficient
increase in the sales price, which in turn resulted in
the CI's losses. It is expected that, following the impo-
sition of anti-dumping duties, the volume of FeSi sold by
the CI will increase. To a certain extent, the prices on the
Community market will also rise. This would enable the
CI to reach an acceptable level of profitability. However,
the prices of the CI are unlikely to increase more than by
if any, due to the conditions of
a moderate amount,
competition among Community producers and the
presence of other low-priced imports not subject
to
anti-dumping measures.

(145)

is considered that

It
restore fair competition on the market.

the imposition of measures will
It should be

6.4. Interest of the other Community producer

(148) There is only one other producer in the Community in
addition to the Community industry. In the absence of
cooperation from this producer, and thus of precise data
it is estimated, based on infor-
concerning its activity,
mation from cooperating Community producers,
that
this manufacturer's production is around 6 % to 8 % of
the CI. Should anti-dumping measures be
that of
imposed,
the same type of positive developments, as
set out in recital 144 for the CI, can be expected for
this other Community producer as well.

(149)

In conclusion,
the other Community producer would
certainly benefit from the imposition of anti-dumping
measures.

6.5. Interest of the suppliers of raw materials

(150) Three questionnaire replies were received from suppliers
electricity,

supplying/distributing

raw materials

of
quartzite and cokes to the CI.

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(151)

If measures are imposed and the CI regains lost market
share, the suppliers of raw materials will also be able to
increase the sales of their products. As the raw materials
concerned constitute a major part of the turnover of
likely improve the
this will most
these companies,
financial situation of the raw material suppliers.

(158) On the basis of the above, it was provisionally concluded
that the effect of the anti-dumping measures, if any, will
most likely not have a material impact on importers.

6.7. Interest of the users

(152)

If measures are not imposed, the sales of the CI will
continue to go down and consequently also their
demand for raw materials. This will most likely nega-
tively affect the profitability of the raw material suppliers.

6.6. Interest of the importers

(153) Seven questionnaire replies were received from importers.
The seven cooperating importers represented around
12,7 % of the total Community consumption of FeSi
during the IP. They were all against the imposition of
measures.

(154) The profit margin of

the importers for sales of

the
product concerned is on a weighted average basis 6 %.
Thus, they would be able to bear part of the possible
price increases and pass on part of it to their customers.
In view of the weighted average level of the duties to be
imposed on the companies operating under market
sources
economy
available without
price
any
increases are likely to be in any event limited.

alternative
the

the
duties,

conditions

possible

and

(159) Eight

and

replies

from users

questionnaire

one
submission from an association of users were received.
One verification visit was carried out at the company
purchasing the biggest quantity of FeSi during the IP.
The eight cooperating users represented around 24 %
the total Community consumption of FeSi during
of
the
taken position
against the imposition of anti-dumping duties for fear
of losing a cheap source of supply, which would harm
their competitiveness in the downstream market vis-à-vis
competitors in third countries.

cooperating users have

IP. All

stainless

(160) Users of FeSi are mainly concentrated in the steel making
business and in foundries. One metric ton of steel
contains approximately 3 to 4 kilograms of FeSi,
whereas one metric ton of
steel contains
approximately 20 kilograms of FeSi. Based on the ques-
tionnaire replies, a verification visit at one user and infor-
mation submitted during hearings, the highest share of
FeSi in the total costs of production of steel makers was
established to be 0,7 %. However, the average is lower
and amounts by way of example to 0,6 % for steel
profiles, 0,59 % for steel plates, 0,4 % for wire rod,
0,24 % for cold thin sheets, and 0,14 % for cold rolled
steel and galvanised and colour coated steel products,
merchant bar and cast blooms.

(155) This view was supported by a cooperating importer who
confirmed that Ukraine, which was a large exporter of
the product concerned before, has idle capacity which
could be re-established under more favourable market
conditions.

(161) Some users even confirmed that any anti-dumping
measures will have little influence since other suppliers
without measures are available.

(156) The same importer confirmed that its most important
located in Europe but outside the EC shut
supplier
down production in August 2005 but started up again
production early 2007 at a rate of 80 % of capacity
utilisation. It is expected that this producer will be able
to restore full capacity which will make additional
100 000 tons of the product concerned available.

(157) Taking into account the fact that imports of the product
concerned from the countries under investigation counts
on average for around 12 % of their total turnover, the
financial situation of the importers will not be seriously
affected by the imposition of a duty.

(162) Others confirmed that for their production purposes at
least partly FeSi can be replaced by other ferro-alloys,
such as silico-manganese and silicon-metal.

(163) As

the users of

the profit margin of

the product
concerned is on a weighted average basis 10,4 %,
it is
estimated that the effect of even a significant increase of
30 % in the price affecting all FeSi would be to reduce
the profitability of steel producers by only around 0,2 %.
Given that measures would be on average at a lower rate,
the effect of any possible measures on the profitability of
the steel industry would be extremely limited and users
would have no difficulties whatsoever in bearing the
costs of the measures. Moreover, steel producers will,

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Official Journal of the European Union

29.8.2007

in any case, have the possibility to pass on the effect of
any price increase for the product concerned, which will
be limited by the relatively minor significance of FeSi in
the overall cost of steel production. The number of
related to
employees
products using FeSi was around 45 000 people.

companies directly

in these

(164)

It was submitted that the CI is not in a position to satisfy
the whole demand for FeSi
in the Community. In this
respect,
it has to be recalled that measures are not
intended to prevent imports into the Community but
to ensure that they are not made at injurious dumped
prices. Indeed, the countries concerned can continue to
export
to the Community, but at non-dumped/non-
injurious prices. Although it is possible that, following
the imposition of measures, the sales volume and market
imports
share of the imports concerned may decrease,
from other third countries will continue to represent
an alternative source of supply. In addition, the return
to
the
conditions
to these other
Community market more attractive
sources of
supply. Moreover, while the Community
industry held a market share of around 18 % during
the IP,
it is recalled that its capacity utilisation in the
same period dropped to an unprecedented level of
50 %, which means that it has room to increase substan-
tially its production volumes before
reaching any
capacity constraint. Given the above considerations, the
imposition of anti-dumping measures is not expected to
cause any shortage of supply.

normal market

should make

(165)

It was also found that users were very much interested in
having at their disposal reliable sources of supply, which
are not too far away from them. Both conditions which
the CI is in a position to fulfil.

(166) On the basis of the above, it was provisionally concluded
that the effect of the anti-dumping measures, if any, will
impact on users.
most
However,
look further and in
more detail
into the effect of provisional measures on
the situation of the users, before any final determination
is made.

likely not have a material
the Commission will

6.8. Competition and trade distorting effects

(167) With respect

the
given their

the Community,
concerned,

to the effects of possible measures on
cooperating
in
competition
strong
exporting producers
their
market positions, will probably continue to sell
products, albeit at non-dumped prices. Indeed, the rela-
tively moderate duty rates for the cooperating exporting
producers working under market economy conditions
should allow them to operate under
fair market
conditions in the Community. Thus, given the overall

including the producers

range of duties imposed, it is likely that there will still
be a sufficient number of major competitors on the
Community market,
in the
countries concerned, Norway,
Iceland, Venezuela and
Ukraine. Therefore, users will continue to have the
choice of different suppliers of FeSi.
If, on the other
hand, no measures were to be imposed, the future of
the Community producers would be at stake. Its disap-
pearance would not only effectively reduce competition
on the Community market, but also reduce reliable
sources of supply which, as mentioned above,
is of
major importance for users.

6.9. Conclusion on Community interest

(168) Given the above reasons,

it is provisionally concluded
that there are no compelling reasons against the impo-
in the present case.
sition of anti-dumping duties
However,
investigate further the
the Commission will
Community interest aspects of the case before any final
determination is made.

7. PROPOSAL
MEASURES

FOR

PROVISIONAL

ANTI-DUMPING

7.1. Injury elimination level

(169)

the conclusions reached with regard to
In view of
dumping,
injury, causation and Community interest,
provisional anti-dumping measures should be imposed
in order to prevent further injury being caused to the
CI by the dumped imports.

(170)

In order to establish the level of duty, account has been
taken of the level of the dumping margins found and of
the amount of duty necessary to eliminate the injury
suffered by the CI.

(171)

investment on a

It was found that a profit margin of 5 % of turnover
could be regarded as an appropriate minimum which
the CI could have expected to obtain in the absence of
injurious dumping, based on past performances of the CI
and considered reasonable for guaranteeing the industry
productive
long-term basis. The
necessary price increase was then determined on the
basis of a comparison of the weighted average import
price, as established for the price undercutting calcu-
lations, with the non-injurious price of products sold
by the CI on the Community market. The non-
injurious price has been obtained by adjusting the sales
price of the CI by the actual loss made during the IP 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.

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7.2. Provisional measures

(172)

it is considered that,

in
In the light of the foregoing,
accordance with Article 7(2) of
the basic Regulation,
provisional anti-dumping duties should be imposed in
imports originating in the PRC, Russia,
respect of
Egypt, Kazakhstan and the former Yugoslav Republic of
Macedonia at the level of the lower of the dumping and
the injury margins,
in accordance with the lesser duty
rule.

rates

(as opposed to the

to these companies. These
investigation with respect
duty
countrywide duty
applicable to ‘all other companies’) are thus exclusively
applicable to imports of products originating in the
countries concerned and produced by the companies
and thus by the
entities mentioned.
Imported products produced by any other company
not specifically mentioned in the operative part of this
Regulation with its name and address, including entities
related to those specifically mentioned, cannot benefit
from these rates and shall be subject to the duty rate
applicable to ‘all other companies’.

specific

legal

(173) The

company

individual

rates
specified in this Regulation were established on the
basis of
investigation.
Therefore, they reflect the situation found during that

anti-dumping

the present

findings of

duty

the

(174) The proposed anti-dumping duties are the following:

Country

Company

Injury elimi-
nation margin

Dumping
margin

Anti-dumping
duty rate

China

Erdos Xijin Kuang Co., Ltd.

21,4 %

2,8 %

2,8 %

Lanzhou Good Land Ferroalloy
Factory Co., Ltd.

33,7 %

57,2 %

33,7 %

All other companies

35,5 %

60,7 %

35,5 %

Russia

Chelyabinsk Electrometallurgical
Integrated Plant, Chelyabinsk and
Kuznetsk Ferroalloy Works,
Novokuznetsk

31,1 %

22,8 %

22,8 %

Bratsk Ferroalloy Plant, Bratsk

18,8 %

22,2 %

18,8 %

all other companies

36,6 %

25,5 %

25,5 %

Egypt

The Egyptian Ferroalloys Company

24,4 %

20,4 %

20,4 %

Egyptian Chemical Industries KIMA

18,0 %

24,8 %

18,0 %

all other companies

24,4 %

20,4 %

20,4 %

Kazakhstan

All companies

33,9 %

37,1 %

33,9 %

The former Yugoslav
Republic of Macedonia

All companies

19,0 %

5,4 %

5,4 %

7.3. Undertakings

(175) The exporting producer in the former Yugoslav Republic of Macedonia has offered a price under-
taking in accordance with Article 8(1) of the basic Regulation. By doing so, it has agreed to sell the
product concerned at or above price levels which eliminate the injurious effects of dumping. The
company will also provide the Commission with regular and detailed information concerning its
exports to the Community, meaning that the undertaking can be monitored effectively by the
Commission. In addition, the nature of the product, the structure of the company and its sales
patterns is such that the risk of circumvention of the undertaking is also minimised.

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29.8.2007

(176) To further enable the Commission and the customs authorities to effectively monitor the compliance
of the company concerned with the undertaking, when the request for release for free circulation is
presented to the relevant customs authority, exemption from the anti-dumping duty is to be con-
ditional on (i) the presentation of an undertaking invoice, which is a commercial invoice containing
at least the elements listed and the declaration stipulated in the Annex; (ii) the fact that imported
goods are manufactured, shipped and invoiced directly by the said company to the first independent
customer in the Community; and (iii) the fact that the goods declared and presented to customs
correspond precisely to the description on the undertaking invoice. Where the above conditions are
not met the appropriate anti-dumping duty shall be incurred at the time of acceptance of the
declaration for release into free circulation.

(177) Whenever the Commission withdraws, pursuant to Article 8(9) of the basic Regulation, its acceptance
of the undertaking following a breach by referring to particular transactions and declares the relevant
undertaking invoices as invalid, a customs debt shall be incurred at the time of acceptance of the
declaration for release into free circulation of these transactions.

(178)

Importers should be aware that a customs debt may be incurred, as a normal trade risk, at the time
of acceptance of the declaration for release into free circulation even if an undertaking offered by the
manufacturer from whom they were buying, directly or indirectly, had been accepted by the
Commission.

(179) Pursuant to Article 14(7) of the basic Regulation, customs authorities should inform the Commission

immediately whenever indications of a violation of the undertaking are found.

(180) For the reasons stated above, the offer of the price undertaking is considered acceptable and the
company concerned has been informed of the essential facts, considerations and obligations upon
which acceptance is based.

(181)

In the event of a breach or withdrawal of the undertakings, or in case of withdrawal of acceptance of
undertaking by the Commission, the anti-dumping duty which has been imposed by the Council, in
accordance of Article 9(4) shall automatically apply by means of Article 8(9) of the basic Regulation.

8. DISCLOSURE

(182) Above provisional findings will be disclosed to all interested parties which will be invited to make
their views known in writing and request a hearing. Their comments will be analysed and taken into
consideration where warranted before any definitive determinations are made. The provisional
findings may have to be reconsidered for the purposes of any definitive findings,

HAS ADOPTED THIS REGULATION:

Article 1

1.
A provisional anti-dumping duty is hereby imposed on imports of ferro-silicon falling within CN
codes 7202 21 00, 7202 29 10 and 7202 29 90, and originating in the People's Republic of China, Egypt,
Kazakhstan, the former Yugoslav Republic of Macedonia and Russia.

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The rate of the provisional anti-dumping duty applicable to the net, free-at-Community-frontier price,

2.
before duty, of the products manufactured by the companies below shall be:

Country

Company

People's Republic of China

Erdos Xijin Kuangye Co., Ltd, Qipanjing
Industry Park,

AD duty
rate ( %)

TARIC
additional
code

2,8

A829

Lanzhou Good Land Ferroalloy Factory Co.,
Ltd Xicha Village

33,7

A830

Egypt

The Egyptian Ferroalloys Company, Cairo

All other companies

Kazakhstan

Egyptian Chemical Industries KIMA, Cairo

All other companies

All companies

The former Yugoslav Republic of Macedonia

Silmak Dooel Export Import, Jegunovce

Russia

All other companies

Chelyabinsk Electrometallurgical Integrated
Plant, Chelyabinsk and Kuznetsk Ferroalloy
Works, Novokuznetsk

Bratsk Ferroalloy Plant, Bratsk

All other companies

35,5

20,4

18,0

20,4

33,9

5,4

5,4

22,8

18,8

25,5

A999

A831

A832

A999

A833

A999

A834

A835

A999

The release for free circulation in the Community of the product referred to in paragraph 1 shall be

3.
subject to the provision of a security, equivalent to the amount of the provisional duty.

4.

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

1.

The undertaking offered by Silmak Dooel Export Import is hereby accepted.

Article 2

Imports declared for release into free circulation which are invoiced by Silmak Dooel Export Import,

2.
shall be exempt from the provisional anti-dumping duty imposed by Article 1, on condition that:

— they are manufactured, shipped and invoiced directly by the said company to the first independent

customer in the Community, and

— such imports are accompanied by an undertaking invoice which is a commercial invoice containing at

least the elements and the declaration stipulated in the Annex of this Regulation, and

— the goods declared and presented to customs correspond precisely to the description on the undertaking

invoice.

L 223/26

EN

Official Journal of the European Union

29.8.2007

A customs debt shall be incurred at the time of acceptance of the declaration for release into free

3.
circulation:

— whenever it is established, in respect of imports described in paragraph 2, that one or more of the

conditions listed in that paragraph are not fulfilled, or

— when the Commission withdraws its acceptance of the undertaking pursuant to Article 8(9) of the basic
Regulation in a Regulation or Decision which refers to particular transactions and declares the relevant
undertaking invoices as invalid.

Article 3

interested parties may request
1. Without prejudice to Article 20 of Regulation (EC) No 384/96,
disclosure of the essential facts and considerations on the basis of which this Regulation was adopted,
make their views known in writing and apply to be heard orally by the Commission within one month of
the date of entry into force of this Regulation.

Pursuant to Article 21(4) of Council Regulation (EC) No 384/96, the parties concerned may comment

2.
on the application of this Regulation within one month of the date of its entry into force.

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

1.
of the European Union.

Article 4

2.

Article 1 of this Regulation shall apply for a period of six months.

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

Done at Brussels, 28 August 2007.

For the Commission

Peter MANDELSON
Member of the Commission

29.8.2007

EN

Official Journal of the European Union

L 223/27

ANNEX

The following elements shall be indicated in the commercial
Community of goods which are subject to the undertaking:

invoice accompanying the company's sales to the

1. The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING’.

2. The name of the company issuing the commercial invoice.

3. The commercial invoice number.

4. The date of issue of the commercial invoice.

5. The TARIC additional code under which the goods on the invoice are to be customs-cleared at the Community

frontier.

6. The exact description of the goods, including:

— the product code number (PCN) used for the purpose of the undertaking,

— plain language description of the goods corresponding to the PCN concerned,

— the company product code number (CPC),

— TARIC code,

— quantity (to be given in tonnes).

7. The description of the terms of the sale, including:

— price per tonne,

— the applicable payment terms,

— the applicable delivery terms,

— total discounts and rebates.

8. Name of the company acting as an importer in the Community to which the commercial invoice accompanying goods

subject to an undertaking is issued directly by the company.

9. The name of the official of the company that has issued the commercial invoice and the following signed declaration:

‘I, the undersigned, certify that the sale for direct export to the European Community of the goods covered by this
invoice is being made within the scope and under the terms of the Undertaking offered by [COMPANY], and accepted
by the European Commission through Regulation (EC) No 994/2007. I declare that the information provided in this
invoice is complete and correct.’