2007/814/EC: Commission Decision of 13 November 2007 repealing Decision 1999/572/EC accepting undertakings offered in connection with the anti-dumping proceedings concerning imports of steel wire ropes and cables originating in the People’s Republic of China, Hungary, India, the Republic of Korea, Mexico, Poland, South Africa and Ukraine
Date: 2007-11-13
Institutions: European Commission
Subjects: anti-dumping legislation, anti-dumping measure, import, non-flat product, originating product, steel

12.12.2007

EN

Official Journal of the European Union

L 326/25

(Acts adopted under the EC Treaty/Euratom Treaty whose publication is not obligatory)

II

DECISIONS

COMMISSION

COMMISSION DECISION

of 13 November 2007

repealing Decision 1999/572/EC accepting undertakings offered in connection with the anti-
dumping proceedings concerning imports of steel wire ropes and cables originating in the
People’s Republic of China, Hungary, India, the Republic of Korea, Mexico, Poland, South Africa
and Ukraine

(2007/814/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

concerned originating, inter alia, in South Africa should
be maintained.

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), and in
particular Articles 8 and 9 thereof,

After consulting the Advisory Committee,

Whereas:

(3)

(4)

(1)

(2)

A. PREVIOUS INVESTIGATIONS AND EXISTING
MEASURES

In August 1999, the Council, by Regulation (EC) No
1796/1999 (2),
imposed a definitive anti-dumping duty
on imports of steel ropes and cables originating,
inter
alia, in South Africa.

In November 2005, following an expiry review pursuant
to Article 11(2) of the basic Regulation, the Council, by
Regulation (EC) No 1858/2005 (3) decided that the anti-
dumping measures applicable to imports of the product

(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).

The Commission, by Decision 1999/572/EC of 13
August 1999 (4), accepted a price undertaking from a
South African company, Scaw Metals Group Haggie
Steel Wire Rope (‘Haggie’ or ‘the company’).

By Decision 1999/572/EC the Commission also accepted
price undertakings from the following companies: Usha
India; Aceros
Martin Industries & Usha Beltron Ltd,
Camesa SA de CV, Mexico; and Joint Stock Company
Silur, Ukraine. The Commission withdrew the acceptance
of the undertaking offered by Joint Stock Company Silur,
No
Ukraine
1678/2003 (5). The anti-dumping measures on steel
wire ropes and cables originating in Mexico expired on
12 August 2004 (6). The Commission withdrew the
acceptance of the undertaking offered by Usha Martin
Industries & Usha Beltron Ltd by Commission Decision
2006/38/EC of 22 December 2005.

Commission

Regulation

(EC)

by

(5)

As a result imports into the Community of the product
concerned of South African origin, produced by the
company and of the product type covered by the under-
taking (the product covered) were exempted from the
definitive anti-dumping duties.

(2) OJ L 217, 17.8.1999, p. 1. Regulation as amended by Regulation

(4) OJ L 217, 17.8.1999, p. 63. Decision as last amended by Decision

(EC) No 1674/2003 (OJ L 238, 25.9.2003, p. 1).

(3) OJ L 299, 16.11.2005, p. 1. Regulation as amended by Regulation

(EC) No 212/2006 (OJ L 22, 26.1.2006, p. 1).

2006/38/EC (OJ L 22, 26.1.2006, p. 54).

(5) OJ L 238, 25.9.2003, p. 13.
(6) OJ C 203, 11.8.2004, p. 4.

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Official Journal of the European Union

12.12.2007

In this regard it should be noted that certain types of
steel wire ropes and cables currently produced by Haggie
were excluded from the scope of
the undertaking.
Accordingly,
such steel wire ropes and cables were
liable to the payment of the anti-dumping duty when
entered into free circulation in the Community.

(12)

(6)

(7)

(8)

(9)

B. BREACHES OF THE UNDERTAKING

1. Obligations of the company under the
undertaking

The undertaking offered by the company obliges it to,
inter alia, export the product covered to the European
Community above certain minimum prices (MIPs) as
stated in the undertaking.

the company undertook not

It was further acknowledged by the company in the
undertaking that with regard to the exemption from
the anti-dumping duties afforded by the undertaking,
such exemption is conditional upon the presentation to
the Community customs services of an ‘undertaking
invoice’. Moreover,
to
issue such undertaking invoices for sales of those types
of product concerned which are not covered by the
undertaking and which are therefore liable to the anti-
dumping duty. The company also acknowledged that the
undertaking invoices issued had to contain the infor-
mation set out first in the Annex of Regulation (EC)
No 1796/1999 and later in the Annex of Regulation
(EC) No 1858/2005.

The terms of the undertaking also oblige the company to
provide the Commission with regular and detailed infor-
mation, in the form of a quarterly report of its sales of
the product concerned to the European Community.
Such reports should include the products covered by
the undertaking which benefited from the exemption
from the payment of the anti-dumping duty, as well as
those types of steel ropes and cables which are not
covered by the undertaking and which are therefore
liable to the payment of the anti-dumping duty upon
importation into the European Community.

(10)

It is clear that the aforementioned sales reports should
be, as submitted, complete, exhaustive and correct in all
particulars and that the transactions fully comply with
the terms of the undertaking.

(11)

For the purpose of ensuring compliance with the under-
taking, the Company also undertook to allow on-spot
verification visits at its premises in order to verify the
accuracy and veracity of data submitted in the said
quarterly
information
all
and to provide
considered necessary by the Commission.

reports

It should be noted that the company already received a
warning letter from the Commission Services on 28
October 2003 for breaching the undertaking by issuing
undertaking invoices for products not covered by the
to the anti-
undertaking but otherwise being subject
dumping measures. The warning letter stated that
in
view of the particular circumstances under which these
breaches took place it was not intended to withdraw the
acceptance of the undertaking, but it was also pointed
out that any subsequent infringement of the undertaking,
even of a minor nature, would make it difficult for the
Commission to maintain the acceptance of the under-
taking from the company.

(13)

In this regard, a verification visit was carried out at the
premises of
the Company in South Africa from 5
February 2007 until 6 February 2007. The verification
visit covered the period from 1 January 2004 until 31
December 2006.

(14)

(15)

(16)

(17)

2. Results of the verification visit to the Company

The verification visit established that the company, on
two occasions, issued undertaking invoices (undertaking
invoice numbers: 935515 and 935516) for the products
subject to the anti-dumping measure but not covered by
the undertaking. Therefore, these transactions unlawfully
benefited from the exemption from the payment of the
anti-dumping duty upon importation.

The verification visit established that, on one occasion,
the company failed to adjust
sales price
according to the terms of payment. The failure to
make this adjustment for the financial cost linked to
the actual time of the payment has led to a unit sale
price below the applicable MIP.

the unit

the verification visit established that, on
Furthermore,
several occasions,
company issued undertaking
invoices not in conformity with the Annex of Regulation
(EC) No 1858/2005 by including the sentence ‘For sale
offshore, not to be sold within the European Union’.

the

Examination of the undertaking invoices issued for the
time period concerned by the verification visit showed
that one transaction was not included in the quarterly
undertaking sales report submitted to the Commission.
it was also established that the company
Furthermore,
reported transactions not intended for release into free
circulation in the Community as if they were intended to
be released into free circulation in the Community. The
verification visit also identified several transactions which
were reported as transit sales, but, in reality, the goods
were released into free circulation in the Community.
Moreover
the
quarterly undertaking sales reports and the corresponding
invoices.

discrepancies were

between

found

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3. Reasons to withdraw acceptance of the
undertaking

(18)

The fact that the company issued undertaking invoices
for product concerned which were not covered by the
undertaking and the fact that these transactions benefited
from the exemption from the payment of
the anti-
dumping duty only granted for the products covered
by the undertaking constitute breaches of
the under-
taking.

(19)

The obligation of the company to respect the MIP for all
sales of the product covered was not met.

(20)

(21)

(22)

(23)

Issuing undertaking invoices not in conformity with the
Annex of Regulation (EC) No 1858/2005 for sales of
product covered can be confusing for the customs autho-
rities and no longer allow the customs authorities to
effectively monitor
therefore,
render the undertaking impractical.

the undertaking and,

The facts set out in recital (17) have led to the conclusion
that the quarterly undertaking sales reports as submitted
by the company were not complete, exhaustive and
in all particulars and therefore these reports
correct
were not sufficiently reliable to be used for monitoring
reporting
the
undertaking. Non-compliance with
requirements also constitutes a breach of
the under-
taking.

4. Written submissions and hearing

(a) Lack of understanding of the Undertaking

incorrect

The company acknowledged by its written submission
that errors occurred when issuing undertaking invoices
and preparing the undertaking reports due to a lack of
understanding of the technical provisions of the under-
taking, of
the
reading of
company’s failure to consult it. It was also stated in its
written submission and during the hearing on 26 April
2007 that changes in the senior management and the
restructuring of the organization contributed to lack of
understanding of the complex requirements of the under-
taking.

the text and/or

the company argued that

The company also admitted the receipt of the warning
letter from the Commission Services on the 28 October
2003. However,
it never
received a verification report which it assumed would
have outlined the actual error made. The company
argued that the fact that it was not made aware of the
actual errors also contributed to its failure to change its
practices concerning the preparation of undertaking
reports or improve its understanding.

(24)

In respond to these arguments it has to be noted that the
company on 18 September 2003 received a letter from
the Commission which set out in detail the breaches

identified. The warning letter of 28 October 2003 did
not repeat the breaches in detail any longer but referred
to the earlier correspondence between the Commission
and the company.

(25)

It also should be noted that the company might have
been confused when it referred to a verification report.
The Commission did not carry out a verification visit
to issuing the warning letter on 28 October
prior
2003 as the breaches which let
the
warning letter were established on the basis of desk
analysis of
the undertaking reports. The Commission
did carry out a verification in May 2004 but since that
verification did not
lead to further action no letter
relating to it needed to be sent the company.

to issuance of

(26) Moreover, the company submitted during the hearing
that, after the verification visit, the company revisited
its complete system, based on the comments made on
the spot, in order to accommodate the necessary changes
to meet the requirements of the undertaking.

(27)

The arguments presented by the company in its defence
regarding its lack of understanding of the undertaking do
not alter the Commission’s view that the company failed
to comply with the obligations of the undertaking. It also
has to be noted that the company already received a
warning letter for breaching the undertaking in the past
and it failed to adopt the measures necessary to prevent
that new breaches of the undertaking would occur. The
lack of understanding of the requirements of the under-
taking constitutes a high risk for the sufficiency and
reliability of the monitoring of the undertaking.

(b) Proportionality

(28) With regard to the price violation, the company admitted
that a price violation occurred on one occasion because
it failed to do the necessary adjustments in the sales price
in respect of late payment. However, it was argued that
the sales prices of all other transactions were strictly in
compliance with the MIP. Moreover,
it was submitted
that the late payment occurred due to unforeseen circum-
stances as the client concerned normally pre-pays for
goods prior to shipment taking place.

(29)

In response to these arguments it should be pointed out
that in accordance with the undertaking, the company
undertook to ensure that the Net Sales Price of all sales
covered by the undertaking shall be at or above the MIPs
set out in the undertaking.

(30) Moreover, regarding the issue of proportionality,

the
indirect
basic Regulation
requirement
that a breach of an undertaking must
relate to a minimum percentage of sales or must relate
to a minimum percentage of the MIP.

contains

direct

no

or

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Official Journal of the European Union

12.12.2007

(31)

This approach has also been confirmed by the juris-
prudence of the Court of First Instance which has ruled
that any breach of an undertaking is sufficient to justify
the withdrawal of acceptance of an undertaking (1).

or by impeding the monitoring. However, the repeated
occurrence of the errors renders the proper monitoring
of the undertaking impractical.

C. REPEAL OF DECISION 1999/572/EC

(37)

be withdrawn

In view of the above, the acceptance of the undertaking
should
and Commission Decision
1999/572/EC should be repealed. Accordingly, the defi-
nitive antidumping duty imposed by Article 1(2) of
Regulation (EC) No 1858/2005 should apply,

HAS DECIDED:

Article 1

Decision 1999/572/EC is hereby repealed.

Article 2

This Decision shall take effect on the day following its publi-
cation in the Official Journal of the European Union.

Done at Brussels, 13 November 2007.

For the Commission

Peter MANDELSON
Member of the Commission

(32) Accordingly, the arguments presented by the company
the
alter
the undertaking
the undertaking

with regard to proportionality do not
Commission’s view that a breach of
the acceptance of
occurred and that
should be withdrawn.

(c) Good faith of the company

(33)

The company argued that at the time of submitting their
regular reports to the Commission, the company felt that
the reports were complete, exhaustive and correct in all
particulars.

(34) At no time did the company try to report

incorrect
to withhold any information

information or attempt
requested.

(35)

The company also emphasised both in its written
submission and during the hearing,
it did not
derive any benefit from the breaches of the undertaking,
in any but two cases, and that the errors were not carried
out within the scope of a circumvention scheme.

that

(36)

Referring to the recitals above it must be noted that the
company was not seen to be purposely trying to benefit
from not respecting the requirements of the undertaking

(1) In this context, see case T-51/96 Miwon v Council

(ECR 2000,
II-1841) paragraph 52; case T-340/99 Arne Mathisen S v

p.
Council (ECR 2002, p. II-2905) paragraph 80.