Council Regulation (EC) No 261/2008 of 17 March 2008 imposing a definitive anti-dumping duty on imports of certain compressors originating in the People’s Republic of China
Date: 2008-03-17
Institutions: Council of the European Union
Subjects: China, anti-dumping duty, import, mechanical engineering, originating product

20.3.2008

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Official Journal of the European Union

L 81/1

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

I

REGULATIONS

COUNCIL REGULATION (EC) No 261/2008

of 17 March 2008

imposing a definitive anti-dumping duty on imports of certain compressors originating in the
People’s Republic of China

THE COUNCIL OF THE EUROPEAN UNION,

2. Provisional measures

Having regard to the Treaty
Community,

establishing the European

(4)

Given the need to further examine certain aspects of the
investigation, it was decided to continue the investigation
without the imposition of provisional measures.

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 9 thereof,

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

Whereas:

A. PROCEDURE

1. Initiation

On 20 November 2006,
the Commission received a
complaint concerning imports of certain compressors
originating in the People’s Republic of China (PRC)
lodged pursuant to Article 5 of the basic Regulation by
Federazione ANIMA/COMPO (the complainant) on behalf
of producers representing a major proportion,
in this
case more
total Community
the
production of certain compressors.

than 50 %, of

The complaint contained evidence of dumping and of
material
to
justify the opening of a proceeding.

considered sufficient

injury which was

(1)

(2)

(3)

On 21 December 2006, the proceeding was initiated by
the publication of a notice of initiation in the Official
Journal of the European Union (2).

(7)

(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 314, 21.12.2006, p. 2.

(5)

(6)

3. Parties concerned by the proceeding

the

advised

officially

The Commission
exporting
producers in the PRC, importers, traders, users and asso-
ciations known to be concerned, the representatives of
the complainant Community producers and
the PRC,
other Community producers known to be concerned of
the initiation of the proceeding. Interested parties were
given the opportunity to make their views known in
writing and to request a hearing within the time limit
set in the notice of initiation. All interested parties who
so requested and showed that
there were particular
reasons why they should be heard were granted a
hearing.

(MET) or

In order to allow exporting producers to submit a claim
for market economy treatment
individual
treatment (IT), if they so wished, the Commission sent
claim forms to the Chinese exporting producers known
to be concerned and to the representatives of the PRC.
Fourteen exporting producers, including groups of related
companies, requested MET pursuant to Article 2(7) of the
basic Regulation, or IT should the investigation establish
that
the conditions for MET. One
exporting producer requested only IT.

they do not meet

the apparent high number of exporting
In view of
producers in the PRC,
importers and producers in the
Community, in the notice of initiation, the Commission
indicated that sampling might be applied for the deter-
mination of dumping and injury,
in accordance with
Article 17 of the basic Regulation.

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Official Journal of the European Union

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(8)

(9)

all

exporting

if so,
in

In order to enable the Commission to decide whether
to select a
sampling would be necessary and,
sample,
PRC,
the
producers
Community importers and Community producers were
asked to make themselves known to the Commission
and to provide, as specified in the notice of initiation,
related to the
basic information on their activities
product
investigation period
concerned during the
(1 October 2005 to 30 September 2006).

exports of

certain compressors

As far as the exporting producers are concerned,
in
accordance with Article 17 of the basic Regulation, a
sample was selected based on the largest representative
volume of
in the
Community, which could reasonably be investigated
within the time available. On the basis of the information
received from the exporting producers, the Commission
related
selected the
companies (the sampled companies) having the largest
volume of exports to the Community.
In terms of
export volume the six sampled companies represented
93 % of the total exports of certain compressors from
the PRC to the Community during the investigation
In accordance with Article 17(2) of the basic
period.
Regulation,
the parties concerned were consulted and
raised no objection.

six companies, or groups of

(10) With regard to the Community producers, given that
only three groups of companies cooperated in the inves-
tigation, it was decided that sampling was not necessary.

(b) Exporting producers in the PRC

— Nu Air (Shanghai) Compressor and Tools Co. Ltd

of the ABAC Group, Shanghai (Nu Air),

— Zhejiang Xinlei Mechanical & Electrical Co. Ltd,

Wenling (Xinlei),

— Hongyou/Taizhou Group: 1. Zhejiang Hongyou
Air Compressor Manufacturing Co. Ltd, Wenling
(Hongyou); 2. Taizhou Hutou Air Compressors
Manufacturing Co. Ltd, Wenling (Taizhou),

— Wealth Group: 1. Shanghai Wealth Machinery &
Appliance Co. Ltd, Shanghai (Shanghai Wealth);
2. Wealth (Nantong) Machinery Co., Ltd, Nantong
(Wealth Nantong),

— Zhejiang Anlu Cleaning Machinery Co., Ltd,

Taizhou (Anlu),

— FIAC Air Compressors (Jiangmen) Co. Ltd of the

FIAC Group Jiangmen (FIAC),

(c) Related companies in the PRC

— Wealth

Shanghai

Import-Export

Co.

Ltd,

Shanghai (Wealth Import Export),

— FIAC Air Compressors (Hong Kong) Ltd of the

FIAC Group (FIAC Hong Kong),

(11) With regard to importers, given that only one importer
it was decided that

cooperated in the investigation,
sampling was not necessary.

(d) Unrelated importer in the Community

— Hans Einhell AG, Landau, Germany.

(12) Questionnaires were sent to all companies selected for
sampling and to all other parties known to be concerned.
Full replies were received from six exporting producers in
the PRC, three producers in the Community and one
importer. One producer in the Community replied only
to the sampling questionnaire. No questionnaire replies
were received from other interested parties.

(14)

In view of the need to establish a normal value for
to which MET might not be
exporting producers
granted, a verification to establish normal value on the
in this
basis of data from an analogue country, Brazil
case,
the following
companies:

the premises of

took place at

(13)

The Commission sought and verified all the information
deemed necessary for a determination of dumping,
resulting injury and Community interest and carried
out verifications at
following
companies:

the premises of

the

(e) Producers in Brazil

— FIAC Compressores de ar do Brasil Ltda of the

FIAC Group, Araquara,

— Schulz S/A, Joinville, Santa Catarina, Brasil.

(a) Producers in the Community

4. Investigation period

— ABAC Aria Compressa SpA of the ABAC Group,

(15)

Torino Italy,

— FIAC SpA of the FIAC Group, Bologna, Italy,

— FINI SpA, Zola Predosa (BO), Italy,

The investigation of dumping and injury covered the
period from 1 October 2005 to 30 September 2006
(investigation period or
the
trends relevant for the assessment of injury covered the
period from 1 January 2003 to the end of the investi-
gation period (period considered).

IP). The examination of

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B. PRODUCT CONCERNED AND LIKE PRODUCT

1. Product concerned

(16)

The product concerned is reciprocating compressors,
giving a flow not exceeding 2 cubic metres (m3) per
minute, originating in the PRC (compressors or
the
product concerned), normally declared within CN codes
ex 8414 40 10,
and
ex 8414 80 51.

ex 8414 80 22,

ex 8414 80 28

(17) A compressor is typically made up of a pump, driven by
through a belt
an electric motor either directly or
is
mechanism.
In most
pumped into a tank and exits
through a pressure
regulator and a rubber hose. Compressors, in particular
the larger ones, can have wheels to make them mobile.
They can be sold alone or with accessories for spraying,
cleaning, or inflating tyres and other objects.

the pressurised air

cases

(18)

The notice of initiation of this proceeding also referred to
reciprocating
investigation
compressor pumps. The
the reciprocating compressor pumps are
showed that
one (but not the only) of the essential components of
the compressors under investigation (they account for —
depending on the model — between 25 % and 35 % of
the total cost of the final product) and that they can also
be sold separately as well as assembled on other
compressors not falling within the scope of this investi-
gation. The investigation also showed that they do not
have the same technical and physical characteristics of
the complete compressors and are not used for the
same purposes. The complete compressor also contains
other key components
the motor).
(e.g.
Channels of distribution and customer perception of a
pump on one hand and a complete compressor on the
other hand also differ. Therefore, it is concluded that in
this case reciprocating compressor pumps should not be
considered as the product concerned.

tank,

the

(19)

The product concerned is used for driving air-powered
tools or for spraying, cleaning, or inflating tyres and
other objects. The investigation has shown that, despite
differences in shapes, materials and production process,
the different types of the product concerned all share the
same basic physical and technical characteristics and are
basically used for the same purposes. They are therefore
considered to constitute a single product for the purpose
of this proceeding.

in

by

sold

industry

the Community

the
and
Community, compressors produced and sold on the
domestic market
in the PRC and on the domestic
market in Brazil, which served as an analogue country,
and compressors produced in the PRC and sold to the
Community have essentially the same basic physical and
technical characteristics and the same basic use.

(21) All these compressors are therefore considered to be alike
within the meaning of Article 1(4) of the basic Regu-
lation.

C. DUMPING

1. General

(22)

Fourteen companies or groups of companies made them-
selves known representing 100 % of total exports of the
product concerned to the EC. The level of cooperation
was therefore high. Thirteen companies or groups of
companies
company
six
requested only IT. As mentioned at
companies were selected in the sample on the basis of
their export volume.

requested MET while

recital 9,

one

2. Market Economy Treatment (MET)

(23)

Pursuant to Article 2(7)(b) of the basic Regulation,
in
anti-dumping investigations concerning imports origi-
nating in the PRC, normal value shall be determined in
accordance with points 1 to 6 of the said Article for
those producers which were found to meet the criteria
laid down in Article 2(7)(c) of the basic Regulation.

(24)

Briefly, and for ease of reference only, the MET criteria
are set out in summarised form below:

1. business decisions and costs are made in response to
market signals and without significant State inter-
ference; costs of major inputs substantially reflect
market values;

2. firms have one clear set of basic accounting records
which are independently audited in line with interna-
tional accounting standards and are applied for all
purposes;

3. there are no significant distortions carried over from

the former non-market economy system;

4. bankruptcy

and property

laws

guarantee

legal

certainty and stability;

2. Like product

(20)

The investigation showed that
technical characteristics of

the basic physical and
the compressors produced

5. exchange rate conversions are carried out at market

rates.

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(25)

Five companies or groups of companies of Chinese
exporting producers
included in the sample initially
requested MET pursuant to Article 2(7)(b) of the basic
Regulation and replied to the MET claim form for
exporting producers within the given deadlines. All of
these groups included both producers of the product
concerned and companies related to the producers and
involved in the sales of the product concerned. Indeed, it
the Commissions consistent practice to examine
is
related companies as a whole
whether a group of
fulfils the conditions for MET. The following groups
had requested MET:

meet criterion 3 as summarised in recital 24 either.
Accordingly, it could not therefore be granted MET.

(31) One unrelated importer objected to the granting of MET
to Nu Air, on the basis of some alleged inconsistencies in
the audited accounts for 2004 and 2005. Nu Air,
however, could show that there were no inconsistencies
importer.
the points
and
Accordingly, this objection was dismissed.

raised by

clarify

that

— Nu Air,

— Xinlei,

— Hongyou/Taizhou,

— Shanghai Wealth/Wealth Nantong,

— FIAC.

(32)

The same importer objected to the granting of MET to
FIAC, in view of the fact that the company had nego-
tiated in 2002 a preliminary agreement with the regional
authorities, which would have given them the use of a
plot of land without charge for a maximum of three
expropriation formalities.
years, pending
However,
the agreement expired without FIAC ever
making any use of it or acquiring a title for this land.
On the other hand, FIAC was able to demonstrate that it
always paid rental for the premises used in its activities.
This argument was therefore dismissed.

lands

the

(26)

(27)

For the abovementioned cooperating exporting producers
included in the sample, the Commission sought all infor-
mation deemed necessary and verified the information
the
submitted in the MET claim at
companies in question as deemed necessary.

the premises of

The investigation showed that MET could not be granted
to three of the abovementioned five Chinese exporting
producers that had requested MET as none of
these
companies or groups of companies met criterion 2 as
summarised in recital 24. In addition, one of the groups
of companies did not fulfil criterion 3 either.

it

(33) One company (Hongyou) of the group of companies
(Hongyou/Taizhou) objected that
should not be
refused MET due to issues arising in another company
(namely, Taizhou). However, on the basis of
the
Commission Regulation (EEC) No 2454/93 of 2 July
1993 laying down provisions for the implementation
of Council Regulation (EEC) No 2913/92 establishing
and
the Community Customs
Taizhou are
related parties.
Therefore, as Taizhou could not be granted MET,
Hongyou could not be granted MET neither.

code (1), Hongyou

considered as

to be

(28)

Two companies or groups of companies (FIAC and Nu
Air) fulfilled all the criteria as summarised in recital 24
and could be granted MET.

(34) On the basis of the above, three of the five Chinese
sampled companies or groups of companies that had
requested MET could not show that they fulfil all the
criteria set out in Article 2(7)(c) of the basic Regulation.

(29) One company (Taizhou) part of the group of companies
(Hongyou/Taizhou) and one company (Wealth Shang-
hai/Nantong Wealth) could not demonstrate that they
fulfilled criterion 2 as summarised in recital 24 since
they were not found to have accounting practices and
accounting standards that were in line with international
accounting
companies
The
(Hongyou/Taizhou) and the company (Wealth Shanghai/-
Nantong Wealth) could therefore not be granted MET.

standards.

group

of

(30) One company (Xinlei) could not demonstrate that

it
fulfilled criterion 2 as summarised in recital 24 since
its accounting practices and accounting standards were
in line with international accounting standards.
not
fully demonstrate
Moreover,
It did therefore not
payment

the company could not

for its land use rights.

(35)

It was therefore considered that MET should be granted
to two companies (FIAC and Nu Air) and rejected for the
remaining three companies/groups of companies. The
Advisory Committee was consulted and did not object
to the conclusions of the Commissions services.

3. Individual treatment (IT)

(36)

to Article 2(7)(a) of

the basic Regulation, a
Pursuant
country wide 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,

(1) OJ L 253, 11.10.1993, p. 1. Regulation as last amended by Regu-

lation (EC) No 214/2007 (OJ L 62, 1.3.2007, p. 6).

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(37) All exporting producers who requested MET also claimed
IT in the event that they would not be granted MET. One
company (Anlu) had only requested IT.

(38) Of the four sampled companies or groups of companies
that could either not be granted MET (Xinlei, Honyou/-
Taizhou, Wealth Shanghai/Nantong Wealth) or had not
requested MET (Anlu), three companies or groups (Xinlei,
Anlu and Wealth Shanghai/Nantong Wealth) fulfilled all
the criteria set out in Article 9(5) and could be granted
IT.

(39)

It was found that Taizhou failed to demonstrate that it
cumulatively met all the requirements for IT as set forth
in Article 9(5) of the basic Regulation. Namely, the severe
problems with the accounting system of the company
made it
the criterion
stipulated in Article 9(5)(b) of the basic Regulation that
export prices and quantities, and conditions and terms of
sale are freely determined, was fulfilled.

impossible to verify whether

(40)

The IT claim of Taizhou was thus rejected.

trade, of

could not be

could not be established on the basis of Article 2(6)(a)
because there was no other company to which MET
could be granted. Moreover, SG&A expenses
and
profits
established on the basis of
Article 2(6)(b) as none of the companies or groups of
companies had representative sales,
in the ordinary
course of
the same general category of
products. SG&A expenses and profits were therefore
(any
determined in accordance with Article 2(6)(c)
the SG&A
other reasonable method) on the basis of
and profits
expenses
cooperating
incurred by the
in the analogue country. Publicly available
producer
information showed that
this profit margin did not
exceed the profit made by other known producers of
the same general category of products (i.e. electrical
machinery) in the PRC during the IP.

4.2. Companies or groups of companies which could not be

granted MET

(43) According to Article 2(7)(a) of

the basic Regulation,
normal value for the exporting producers not granted
MET has to be established on the basis of the prices or
constructed value in an analogue country.

4. Normal Value

(44)

4.1. Companies or groups of

companies which could be

granted MET

In the notice of initiation, the Commission indicated that
it envisaged using Brazil as an appropriate analogue
country for the purpose of establishing normal value
for
to
comment on this. No interested parties objected to this
proposal.

Interested parties were

invited

PRC.

the

(41) As far as the determination of normal value is concerned,
the Commission first established,
in accordance with
Article 2(2) of the basic Regulation, for those exporting
producers in the sample that could be granted MET
whether their domestic sales of the product concerned
to independent
i.e.
whether the total volume of such sales represented at
the
least 5 % of
product concerned to the Community. Since the two
companies or groups of companies had almost non-
existent sales on the domestic market, it was considered
that the product was not sold in representative quantities
so as to provide an appropriate basis for the estab-
lishment of the normal value.

total export sales volume of

customers were

representative,

their

(42)

in

regard,

normal

In this

Since domestic sales could not be used in order to
establish normal value, another method had to be
the Commission used a
applied.
constructed
accordance with
value,
Article 2(3) of the basic Regulation. Normal value was
constructed on the basis of the companies or groups of
companies manufacturing
product
concerned. When constructing normal value pursuant
to Article 2(3) of
the basic Regulation, a reasonable
amount for selling, general and administrative (SG&A)
expenses and profit
is added to the manufacturing
costs. The SG&A expenses and profit could not be estab-
lished on the basis of the chapeau of Article 2(6) of the
basic Regulation since none of the companies or groups
of companies had representative domestic sales. They

costs

the

of

(45)

There are four known producers in Brazil, making about
220 000 compressors per year, and imports are about
30 000 units. The Commission sought cooperation from
all known producers in Brazil.

(46)

Two Brazilian producers cooperated in the investigation.
One of them is related to a Community producer, the
FIAC Group. The investigation showed that this producer
had generally high prices, mainly due the fact that he
produced a small volume of sophisticated compressors
for medical purposes which were not directly comparable
to the product concerned. Due to the very different
characteristics of the product and the market, it would
be difficult
to establish the necessary adjustments in
order to use this data as normal value for the Chinese-
produced compressors. The second cooperating Brazilian
some
producer was
compressor
exported to the
models
exporting producers.
Community
Therefore,
the
comparable models of this Brazilian producer sold in
the ordinary course of trade were used as a basis for
establishing normal value for the exporting producers
not granted MET.

found to produce
to the ones

the prices in the Brazilian market of

comparable
by

the Chinese

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5. Export price

(47)

The exporting producers made export
to the
Community either directly to independent customers or
through related or unrelated trading companies located
inside and outside the Community.

sales

accordance with Article 2(10)(i) of the basic Regulation,
where these companies have been shown to perform
functions similar to that of an agent working on a
commission basis. This adjustment was based on the
the trading companies plus a profit data
SG&A of
obtained an unrelated trader in the Community.

5.1. Companies or groups of
granted either MET or IT

companies which could be

7. Dumping margins

(48) Where export sales to the Community were made either
directly to independent customers in the Community or
through unrelated trading companies, export prices were
established on the basis of the prices actually paid or
payable for the product concerned in accordance with
Article 2(8) of the basic Regulation.

(54)

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

(49) Where export

to the Community were made
sales
through related trading companies
located in the
Community, export prices were established on the basis
of the first resale prices of these related traders to inde-
to
pendent customers
Article 2(9) of the basic Regulation. For the sales chan-
nelled
the
companies
Community,
the export price was established on the
basis of the first resale prices to independent customers
in the Community.

in the Community, pursuant

through

outside

related

(50)

(51)

5.2. Companies or groups of companies which could not be

granted MET/IT

For the two sampled Chinese exporting companies that
were granted neither MET nor
IT (Taizhou/Honyou
Group),
the data on their export sales could not be
used to establish individual dumping margins for the
reasons explained above in recital 29. Therefore, a
dumping margin was calculated as set out in recital 55.

6. Comparison

The normal value and export prices were compared on
an ex-works basis and at the same level of trade. For the
purpose of ensuring a fair comparison between the
normal value and export prices, 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.

(52) On this basis, for those Chinese exporting producers that
could be granted MET/IT, allowances for differences in
level of trade, transport and insurance costs, handling,
loading and ancillary costs, packing costs, credit costs
and after sales costs (warranty/guarantee) were made
where applicable and justified. For the other companies,
an average
adjustments
adjustment based on the
mentioned before was made.

Zhejiang Xinlei Mechanical & Electrical Co., Ltd,
Wenling

77,6 %

Zhejiang Hongyou Air Compressor Manufac-
turing Co., Ltd, Wenling and Taizhou Hutou
Air Compressors Manufacturing Co. Ltd, Wenling

Shanghai Wealth Machinery & Appliance Co.,
Ltd, Shanghai and Wealth (Nantong) Machinery
Co., Ltd, Nantong

76,6 %

73,2 %

Zhejiang Anlu Cleaning Machinery Co., Ltd,
Taizhou

67,4 %

Nu Air (Shanghai) Compressor and Tools Co.,
Ltd, Shanghai

13,7 %

FIAC Air Compressors
Jiangmen

(Jiangmen) Co., Ltd,

10,6 %

Cooperating companies not
sample (listed in Annex)

included in the

51,6 %

All other companies

77,6 %

(55)

For the two sampled companies which were granted
neither MET nor IT, the dumping margin was calculated
as a weighted average of the margins established for the
three companies or groups of companies granted IT but
not MET.

(56)

the cooperating companies not
the dumping margin was

included in the
For
sample,
calculated as a
weighted average of the margins established for all the
companies in the sample.

(53)

For the sales channelled through related traders based
outside the Community, an adjustment was applied in

(57) Given the high level of cooperation (100 %), referred to
at recital 22, a country-wide average dumping margin
was set at the highest level applicable to any of the
sampled companies.

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D. INJURY

1. Community production

(61)

It was thus examined whether, despite those import
volumes, the centre of interest of those companies was
within the Community.

(58)

the

In the light of the definition of Community industry as
set out in Article 4(1) of the basic Regulation, the output
following Community manufacturers was
of
considered for
the
inclusion in the definition of
Community production at the initiation of the investi-
gation:

— four

complainant

Community manufacturers:
CHINOOK SpA, FERRUA SYSTEM BLOCK Srl, FIAC
SpA and FINI SpA,

— one other producer in the Community who fully
cooperated in the investigation and who supported
the proceeding: ABAC Aria Compressa SpA of the
ABAC Group.
the ABAC Group
is noted that
sold this company to another company in 2007,

It

— six other Community producers
listed in the
complaint. Those companies
received a sampling
questionnaire, but only one of them expressed the
cooperate with the proceeding
wish to further
within the time limits indicated in the notice of
initiation. However,
stopped co-
operating shortly thereafter and did not provide a
full questionnaire reply,

this producer

— 20 other manufacturers

by

the

the

listed in the complaint,
like product using parts
which assemble
abovementioned Community
produced
producers and/or
imported from third countries.
There is also a very limited production of the like
product coming from manufacturers in the industrial-
use compressors sector. Questionnaires were sent to
all of them but none replied to the questionnaire.

(59)

Two of the complaining producers ceased cooperating
shortly after the initiation of the proceeding and did
not reply to the sampling questionnaire.

Exclusion of a Community manufacturer from the definition of
the Community production for reasons of significant imports
within the period considered

(60)

companies,

The investigation has shown that all three cooperating
(groups of)
in addition to their own
Community manufacturing, had also imported increasing
amounts of
the product concerned for resale on the
Community market. As shown by the investigation, all
of
cooperators
their
that was mostly
production, at
exposed to the increasing dumped imports from the
PRC. The imports by the cooperating (groups of)
companies were predominantly from their
respective
related sister companies or subsidiaries established in
the PRC.

delocalise
the part

decided
least

to
for

part

(62) As far as the volume of

two of

imports by the cooperating
it was
manufacturers in the Community is concerned,
these (groups of) companies
established that
imported increasing but relatively
(company A and B)
the product concerned (throughout
low quantities of
the period considered the volumes of
the
product concerned originating in the PRC remained
inferior to the respective net sales of own production
of these companies). Moreover, those companies kept
their headquarters
in the
Community. It is therefore concluded that the centre of
interest for companies A and B is still in the Community
and that despite their imports from the PRC they should
be considered as part of the Community production.

and R & D activities

resale of

cooperating

group of
(63) With regard to the other
companies (company C),
it was established that in the
period considered not only there was a considerable
increase in the proportion of
the imported product
sold on the Community market, but that, starting from
2005, this proportion exceeded the volumes of the like
product manufactured and sold within the Community.
During the investigation period the volumes of resale of
the product concerned originating in the PRC constituted
the vast majority of the total sales of company C on the
Community market.

(64)

the

that

It appeared, however,

It was considered whether, despite the significant import
volumes, the imported volumes could be considered to
complement the product range or to be of a temporary
nature.
imports of
company C cannot be considered to complement the
product range, but are based on a strategic decision to
outsource the production of the product concerned to
the PRC in a move to lower the cost of production and
to be in a position to compete with the other Chinese
imports. It was established that during the investigation
period many models produced in the PRC were also
produced in Italy by another company of
the same
group. Therefore, the compressors produced in the PRC
were in direct competition with compressors produced
by the same group in Italy. In view of the above and
imported
considering the
products in the total sales of company C, it could thus
not be concluded that company C’s centre of interest for
the manufacturing of
the product concerned is still
within the Community. It appeared likely that company
C would continue or even increase imports of the like
product from the country concerned for the resale on the
Community market, which would mean that company C
should be considered as an importer
than a
Community producer.

significance of

resale of

rather

L 81/8

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Official Journal of the European Union

20.3.2008

(65)

Therefore, it is concluded that company C should not be
included in the definition of Community production.

(68)

(66)

(67)

To conclude,
the Community production of certain
compressors within the meaning of Article 4(1) of the
basic Regulation has been defined as all the production
by all the companies referred to in recital 58, minus the
production of the company C.
In the absence of co-
operation of a number of producers and assemblers in
the Community, the output was estimated on the basis of
information gathered during the investigation and data
submitted in the complaint.

2. Community industry

The proceeding was initiated as a result of a complaint
lodged by the Italian federation ANIMA representing four
companies manufacturing compressors and one producer
supporting the complaint (as detailed in the recital 58).
Despite the abovementioned lack of cooperation from
two complaining companies and the exclusion of one
Community manufacturer from the definition of
the
Community production, the two remaining Community
producers that properly cooperated with the investigation
were found to account for a major proportion of the
total Community production, in this case around 50 %.
These two cooperating producers are therefore deemed
to constitute Community industry within the meaning of
Articles 4(1) and 5(4) of the basic Regulation.

(69)

(70)

The remaining producers listed in the complaint and
detailed in recital 58, minus the company excluded
from the definition of the Community production, will
‘the other Community
be hereinafter
producers’. None of these other Community producers
opposed the complaint.

referred to as

3. Community consumption

Community consumption was established on the basis of
the sales volumes of company Cs and the Community
industry’s own production destined for the Community
the import volumes data on the Community
market,
market obtained from Eurostat and, concerning the
sales of
the other Community producers from infor-
mation available in the complaint.

the period considered,

Throughout
the Community
market for the product concerned and the like product
has declined by 6 % reaching in the IP around 3 066 000
pieces. More specifically, the Community consumption
decreased in 2004 by 7 % before increasing slightly by
1 percentage point in 2005 and it stabilised at this level
in the IP. The drop in the Community consumption can
be attributed to the shrinking sales of the producers in
the Community and to reduced imports from other third
countries (mainly US and Japan).

EU Consumption (pieces)

3 270 283

3 053 846

3 075 358

3 065 898

Index

100

93

94

94

2003

2004

2005

IP

4. Imports from the country concerned

(a) Volume

(71)

The volume of imports of the product concerned into the Community rose massively between 2003
and the IP. They rose during the period considered by 182 % and reached over 1 600 000 pieces. In
detail, imports from the country concerned increased by 66 % between 2003 and 2004, by a further
110 percentage points in 2005, and by six percentage points in the IP.

(b) Market share

(72)

The market share held by exporters in the country concerned increased by more than 35 percentage
points throughout the period considered and reached 53 % in the IP. The Chinese exporters increased
their market share between 2003 and 2004 by 13 percentage points and by another 20 percentage
points in 2005. In the IP, the market share of the exporters from the country concerned increased
slightly by another percentage point.

2003

2004

2005

IP

Volume of imports from the PRC (pieces)

574 795

953 001

1 586 614

1 622 702

Index

Market share of imports from the PRC

100

17,6 %

166

31,2 %

276

51,6 %

282

52,9 %

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Official Journal of the European Union

L 81/9

(c) Prices

(i) P r i c e e v o l u t i o n

(73)

Prices of the imports of the product concerned in the table below are based on the data submitted by
cooperating exporters and verified during the investigation. During the period considered, there was
an overall increase of the average price of imports of the product concerned originating in the PRC
that rose by 6 % between 2003 and the IP. The increasing price trend is possibly a reflection of the
change in the product mix, as Chinese manufacturers gradually start the production and export of
more advanced and more expensive compressors.

Price of imports from the PRC (EUR/piece)

Index

2003

35,15

100

2004

34,61

98

2005

35,70

102

IP

37,27

106

(ii) P r i c e u n d e r c u t t i n g

(74) A comparison for comparable models of the product concerned was made between the sampled
exporting producers’ and the Community industry’s average selling prices in the Community. To this
end, Community industrys’ ex-works prices to unrelated customers, net of all rebates and taxes have
been compared with the cif Community frontier prices of exporting producers of the PRC, duly
adjusted for unloading and customs clearance costs. Given that Community industry normally sells its
Community production directly to retailers, whereas the Chinese goods are sold to retailers via related
or unrelated importers and/or traders, an adjustment to the import price was made where appropriate
to ensure that the comparison is made at the same level of trade. The comparison showed that
during the IP the product concerned sold in the Community undercut the Community industry's
prices by between 22 % and 43 %, depending on the exporter concerned.

5. Situation of the Community industry

(75)

Pursuant to Article 3(5) of the basic Regulation, the Commission examined all relevant economic
factors and indices having a bearing on the state of the Community industry.

(76) Given that the Community industry comprises only two producers, data relating to the Community
industry is presented in an indexed format and/or in ranges in order to preserve confidentiality,
pursuant to Article 19 of the basic Regulation. It is recalled that the data presented below only refers
to the like product produced in the Community by the Community industry, thereby excluding
stand-alone pumps and compressors manufactured by the related companies of the Community
industry in the PRC and subsequently resold in the Community.

(a) Production

(77)

The Community industry's production decreased significantly between 2003 and the IP. Specifically,
it declined by 16 % in 2004, by a further 23 percentage points in 2005 and another 7 percentage
points in the IP. In the IP the Community industry's production volume ranged between 300 000
pieces and 400 000 pieces.

Production (pieces)

Index

2003

2004

2005

Cannot be disclosed

100

84

61

IP

54

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Official Journal of the European Union

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(b) Capacity and capacity utilisation rates

(78)

The production capacity increased slightly by 3 % between 2003 and 2004, increased further by 9
percentage point in 2005 and stabilised on that level during the IP. The increase in the production
capacity in 2005 is attributable to the investment made by one Community producer into an
additional production line for compressors serving a higher segment of the market. During the IP,
the Community industry's production capacity ranged between 600 000 pieces and 800 000 pieces.

(79)

The capacity utilisation rate of the Community industry constantly fell during the period considered
and in the IP it was less than half of its level in 2003. This reflects a fall in the production levels.
During the IP the Community industry’s capacity utilisation ranged between 40 % and 50 %.

Production capacity (pieces)

Index

Capacity utilisation

Index

(c) Stocks

2003

2004

2005

IP

100

100

Cannot be disclosed

103

112

Cannot be disclosed

81

54

112

48

(80)

The level of closing stocks increased in 2004 by 37 %, by a further 45 percentage points in 2005,
before decreasing by 138 percentage points in the IP. During the IP the Community industry’s stocks
ranged between 10 000 and 20 000 pieces. Considering that the production of the like product in
the Community is predominantly done on order, the level of inventories is not considered to be a
useful injury indicator for this product.

Closing stocks (pieces)

Index

(d) Sales volume

2003

2004

2005

Cannot be disclosed

100

137

182

IP

44

(81)

The sales by the Community industry of its own production on the Community market steadily
decreased throughout the period considered. Specifically, it fell by 19 % in 2004, by a further 24
percentage points in 2005 and by another nine percentage points in the IP. During the IP the sales
volume of the Community industry ranged between 200 000 pieces and 300 000 pieces.

EC sales volume (pieces)

Index

(e) Market share

2003

2004

2005

Cannot be disclosed

100

81

57

IP

48

(82)

The market share of the Community industry constantly declined throughout the period considered.
In detail, the index reflecting the evolution of the Community industry's market share fell by 13 % in
2004, by 27 percentage points in 2005 and by a further nine percentage points in the IP. During the
IP the market share of the Community industry ranged between 5 % and 10 %.

Market share of the Community industry

Cannot be disclosed

Index

100

87

60

2003

2004

2005

IP

51

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L 81/11

(f) Growth

(83)

Between 2003 and the IP, when the Community consumption decreased by 6 %, the volume of sales
of the Community industry on the Community market decreased much more by a massive 52 %.
During the period considered the Community industry's market share almost halved, while dumped
imports gained more than 35 percentage points of market share, reaching 53 %. It is thus concluded
that there was no growth from which the Community industry could have benefited.

(g) Employment

(84)

The employment level of the Community industry showed a steady decline throughout the period
considered. It decreased by 10 % in 2004, by further 16 percentage points in 2005, and by another
five percentage points in the IP. During the IP, the Community industry's employment devoted to the
production and sales of the like product ranged between 150 and 200 persons.

Employment

Index

(h) Productivity

2003

2004

2005

Cannot be disclosed

100

90

74

IP

69

(85)

The productivity of the Community industry's workforce, measured as output (pieces) per person
employed per year, declined in 2004 by 7 %, by a further 10 percentage points in 2005, and by
another five percentage points in the IP. During the IP, the productivity of the Community industry
ranged between 1 500 and 2 000 pieces per employee. The steady decrease in the productivity is a
reflection of the declining production that was falling throughout the period considered on a
somewhat quicker pace than the corresponding employment.

Productivity (pieces per employee)

Cannot be disclosed

Index

100

93

83

2003

2004

2005

IP

78

(i) Labour costs

(86)

The average labour cost per employee increased by 8 % between 2003 and 2004 and stabilised on
that level in 2005 before slightly decreasing the IP by one percentage point. The 2004 increase was
due in particular to a wage rise negotiated by one of the Community industry producers following a
dispute with its trade unions. In addition, this negotiated increase in wages was preceded by a strike
in 2003 and the resulting unpaid hours relatively lowered the annual labour cost in comparison to
the following years.

Annual labour cost per employee (EUR)

Cannot be disclosed

Index

100

108

108

107

2003

2004

2005

IP

(j) Factors affecting Community prices

(87)

The unit prices of the Community industry's sales of own production to unrelated customers
increased by 20 % between 2003 and the IP. Specifically, the average sales price increased by 9 %
in 2004, by a further 13 percentage points in 2005, before slightly dropping by two percentage
points in the IP. During the IP, the average unit price ranged between EUR 100 and EUR 150.

Unit price EC market (EUR)

Cannot be disclosed

Index

100

109

122

120

2003

2004

2005

IP

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Official Journal of the European Union

20.3.2008

(88)

The increase in the average unit price is a reflection of the Community industry’s gradual partial shift
of the production towards upper segment of the market,
i.e. higher quality, better performance,
bigger capacity and consequently more costly and expensive models of the like product.

(89) Given the volume and the level of price undercutting, these imports were certainly a factor affecting

prices.

(k) Profitability and return on investments

(90) During the period considered the profitability of the Community industry’s own production sales in
the Community, expressed as a percentage of net sales, remained negative but improved throughout
the period considered. The negative profitability improved in 2004 and further in 2005 when the
level of losses was relatively the lowest and only slightly deteriorated in the IP. During the IP, the
profitability of the Community industry ranged between – 3 % and – 10 %.

2003

2004

2005

IP

Profitability of EC sales (% of net sales)

Cannot be disclosed

Index

– 100

– 93

– 28

ROI (profit in % of net book value of assets)

Cannot be disclosed

Index

– 100

– 85

– 19

– 32

– 20

(91)

The return on investment (ROI), expressed as the profit in percent of the net book value of
investments, followed the above profitability trend.
It also remained negative during the period
considered. It improved in 2004 and further in 2005, before slightly deteriorating in the IP. In
the IP, the ROI ranged between – 30 % and – 15 %.

(l) Cash flow

(92)

The net cash flow for operating activities remained also negative through the period considered, but
clearly improved and was only slightly negative in the IP, ranging between EUR – 100 000 and
EUR 0.

Cash flow (EUR)

Index

2003

2004

2005

Cannot be disclosed

– 100

– 67

– 9

IP

– 1

(m) Investment and ability to raise capital

(93)

The Community industry’s annual
investment in the production of the like product increased in
2004 by 72 % and by a further 75 percentage points in 2005, before slightly declining by seven
percentage points in the IP. The net investment during the IP was, however, relatively low and ranged
between EUR 1 300 000 and EUR 2 300 000. The increase can be attributed to an investment made
by one of the Community producers for leasing a new building with a view to centralise and
modernise the production process as well as some investment by the Community industry
intended for maintenance and renewal of existing equipment but also in new equipment and
modules in an attempt to improve competitiveness of their product vis-à-vis the dumped imports
from China.

Net investments (EUR)

Index

2003

2004

2005

IP

Cannot be disclosed

100

172

247

240

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(94) No evidence was provided to the Commission in respect
of a reduced or increased ability to raise capital over the
period considered.

(100)

it is concluded that the
In the light of the foregoing,
Community industry has suffered material injury within
the meaning of Article 3(5) of the basic Regulation.

(n) Magnitude of dumping margin

(95) Given the volume, the market share and the prices of the
imports from the country concerned, the impact on the
the actual
Community industry of
margins of dumping cannot be
considered to be
negligible.

the magnitude of

(101)

(o) Recovery from past dumping

(96)

In the absence of any information on the existence of
dumping prior to the situation assessed in the present
proceeding, this factor is considered irrelevant.

(97)

(98)

6. Conclusion on injury

Between 2003 and the IP, the volume of the dumped
imports of the product concerned originating in the PRC
increased massively, by 182 % and their share of the
Community market grew by over 35 percentage points.
The average prices of the dumped imports were consi-
derably lower than those of the Community industry
during the period considered. Moreover, during the IP,
the prices of imports from the PRC significantly undercut
those of the Community industry. On a weighted average
basis, price undercutting was in the IP, between 22 % and
43 %.

Some indicators experienced a positive development
between 2003 and the IP. Average unit sales price
increased by 20 %,
the production capacity indicator
rose by 12 % and there was an increase in the investment
by 140 %. However, it has been shown in recitals 78, 88
reasons explain these deve-
and 93 that particular
lopments. In addition, as indicated above in recital 90,
the profitability
the period considered
showed signs of recovery as losses declined significantly
to be
between 2003 and the IP. However,
remembered that
the profitability remained negative
and the level of losses in the IP cannot be considered
negligible.

throughout

is

it

(99) A significant deterioration in the

situation of

the
Community industry has been found over the period
considered. Most of the injury indicators developed nega-
tively between 2003 and the IP: production volume
declined by 46 %, capacity utilisation more than halved,
Community industry's sales declined by 52 % and the
corresponding market share almost halved, employment
decreased by 31 %, and productivity fell by 22 %.

E. CAUSATION

1. Introduction

In accordance with Article 3(6) and (7) of
the basic
Regulation, the Commission examined whether dumped
imports have caused injury to the Community industry
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 Community
industry, were also examined to ensure that possible
injury caused by these other factors was not attributed
to the dumped imports.

2. Effects of the dumped imports

the

(102) The significant increase in the volume of the dumped
imports by 182 % between 2003 and the IP, and of its
corresponding share of the Community market,
i.e. by
35 percentage points, as well as the undercutting found
(between 22 % and 43 % during the IP) generally
coincided with the deterioration of
economic
situation of the Community industry, as explained in
recital 99. In addition, dumped prices were, on average,
considerably below those of
the Community industry
throughout the period considered. It is considered that
these dumped imports exerted a downward pressure on
the prices, preventing the Community industry from
increasing its sales prices to a level that would have
been necessary to realise a profit and that the dumped
impact on the
imports had a significant negative
situation of
it
appears that the Community industry lost a significant
part of its market share to those increased volume of
dumped imports. The decreased sales volumes lead to a
relative increase of the fixed costs of the CI which had a
situation as well.
negative impact on the financial
link between imports
Therefore, there is a clear causal
from the PRC and the material
injury suffered by the
Community industry.

the Community industry. Moreover,

3. Effects of other factors

Export performance of the Community industry

(103) As can be seen from the table below, during the period
considered there was a decrease by 33 % of the volume
of export sales, which however was not as profound as
the decrease of the EC sales, described in recital 81.
During the IP the export sales ranged between 100 000
pieces and 150 000 pieces. The average unit price of
export sales remained stable between 2003 and the IP
and ranged between EUR 100 and EUR 150.

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Official Journal of the European Union

20.3.2008

Export sales (pieces)

Index

Export unit price (EUR)

Index

100

100

2003

2004

2005

IP

77

Cannot be disclosed

89

74

Cannot be disclosed

100

102

100

(104) Given the price stability on the export markets and the relatively smaller drop in the export volumes,
it is considered that even if export activity might have contributed to the injury suffered by the
Community industry, but did not do so to such an extent as to break the causal link.

Rise in the costs of production

(105) One interested party claimed that the rise in the costs of production of the Community industry
could not have been caused only by the rise in the price of the raw materials (notably metal parts),
but also by other causes thereby pointing to self-inflicted injury. It is noted that that party was not
specific about the causes which would point to self-inflicted injury.

(106) The investigation showed that

the Community industry have
the unit costs of production of
increased by around 8 % between 2003 and the IP. The increase could be partly attributed to the
apparent rise in the price of raw materials. The investigation showed that some part of the cost
increase is due to the deteriorated cost structure and in particular the unit fixed costs, that rose as a
result of significant reduction in the number of units produced. Still, the bulk of the increase is to be
attributed to the noticeable rise in the price of components used for the production of models in the
upper segment of the market.

(107) However, the rise in the average unit cost of production has been more than compensated by the
increase of the average unit selling price (see recital 87) that resulted in improvement of (although
still negative) profitability, as described in recital 90. It therefore considered that the rise in the cost of
production did not contribute to the injury suffered by Community producers.

Imports from other countries

(108) Based on Eurostat data, the volume of imports into the Community of the like product originating
from the rest of the world (i.e. excluding the PRC) declined by 33 % in 2004, by a further seven
percentage points in 2005, before recovering slightly by nine percentage points in the IP. Overall, the
drop between 2003 and the IP amounts to 31 %. The corresponding market share held by imports
from the rest of the world declined from 35 % in 2003 to 26 % in the IP.

(109) No detailed information was available concerning the price of imports from the rest of the world.
Given that Eurostat data does not take account of the product mix, this data could not be used for
any reasonable comparison with the Community industry's prices. The investigation did not give any
indication that the prices of imports from the rest of the world would undercut the Community
prices.

(110) Given the declining volume and market share and given the lack of any evidence to the contrary, it is
concluded that imports from the rest of the world did not cause material injury, if at all, to the
Community industry.

2003

2004

2005

IP

Imports from the rest of the world (pieces)

1 164 228

780 921

699 129

807 893

Index

Market share of imports from the rest of the
world

100

35,6 %

67

60

69

25,6 %

22,7 %

26,4 %

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Competition from other producers in the Community

(111) As indicated under recital 65, one producer in the Community was excluded from the definition of
the Community production. In addition, a number of producers and assemblers did not cooperate in
this proceeding (see recital 58). Based on information obtained in the course of the investigation
it is estimated that sales volumes of these other
from cooperating producers and the complaint,
producers in the Community for the EC market was around 1 000 000 pieces in the year 2003 and
declined significantly throughout the period considered, reaching about 400 000 pieces in the IP.
Similarly, the corresponding market share declined throughout the period considered from 31 % in
2003 to 13 % in the IP. These producers therefore did not gain any sales volume and market share at
the expense of the Community industry. To the contrary, similarly to the Community industry, they
lost a big portion of their sales and market share to the dumped imports from China.

(112) Given the above, and given the absence of information to the contrary, it is concluded that other
producers in the Community have not contributed to the injury suffered by the Community industry.

EC sales of other producers in the Community
(estimation in pieces)

2003

2004

2005

IP

1 039 780

919 375

510 659

399 891

Index

100

88

49

38

Market
Community

share of other producers

in the

31,4 %

29,7 %

16,4 %

12,9 %

Decline of consumption on the Community market

(113) As seen under recital 70, consumption declined by about
200 000 pieces or 6 % throughout the period considered.
However, it is to be noted that during the same period,
the decline in the Community industry's sales on the
Community market was much more profound both in
(sales dropped by between 250 000 and
absolute
(sales dropped
300 000 pieces)
the same time, while the
massively by 52 %). At
Community industry lost almost half of
its market
share (see recital 82), the market share of the Chinese
compressors increased by 35 percentage points (see
recital 71).
the decline of
is thus concluded that
consumption did not cause the injury suffered by the
Community industry.

and relative

terms

It

4. Conclusion on causation

(114) The coincidence in time between, on the one hand, the
massive increase in dumped imports from the PRC, the
corresponding increase in market shares and the under-
cutting found and, on the other hand, the deterioration
in the situation of the Community industry, leads to the
conclusion that the dumped imports caused the material
injury suffered by the Community industry within the
meaning of Article 3(6) of the basic Regulation.

(115) The investigation showed that the export performance of
the Community industry might have contributed to a
to an
limited degree to the injury suffered, but not

link. Other known
extent that would break the causal
factors were analysed but were found not
to have
contributed to the injury suffered. The rise in the unit
cost of the production of the Community industry was
found to be more than offset by the simultaneous
increase in the selling price, and it was consequently
considered that
it could not have contributed to the
injury suffered. As concerns imports from other third
countries, given their declining volumes and market
share and in view of
the lack of possibility for a
proper price comparison with the Community prices, it
these imports did not cause the
was concluded that
other
competition
injury. Concerning
producers in the Community, given their declining sales
volumes and lost market share to the dumped imports, it
was established that their activity did not contribute to
the
in
than the
consumption, given that
decrease in sales in the Community of the Community
it coincided with the significant
producers and that
increase of
it was
concluded that it, as such, did not cause the injury.

the dumped imports from China,

Regarding
it was

the
smaller

from the

suffered.

decline

injury

(116) Based on the above analysis, which has properly distin-
guished and separated the effects of all known factors
the Community
having an effect on the situation of
industry from the
the dumped
imports, it is concluded that the imports from the PRC
have caused material injury to the Community industry
within the meaning of Article 3(6) of the basic Regu-
lation.

effect of

injurious

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F. COMMUNITY INTEREST

(122)

(117) The Council

and Commission examined whether
compelling reasons existed which would lead to the
conclusion that it is not in the Community interest to
adopt measures in this particular case. For this purpose,
and pursuant to Article 21(1) of the basic Regulation, the
Council and Commission considered the likely impact of
measures for all parties concerned. The Commission
services originally sent a final disclosure in the sense of
Article 20(4), first sentence, of the basic Regulation, in
to impose measures.
which the orientation was not
in
Pursuant
certain operators,
particular
the
Community, put forward certain arguments which have
led to a re-examination of the issue. The most important
of these arguments will be discussed below.

to that disclosure,
cooperating

producers

two

in

the last
in

few years,
favour

In this regard, the analysis of the detailed data submitted
by two cooperating producers in the Community and
their related subsidiaries in the PRC clearly showed that
in the particular economic situation prevailing in the PRC
there were important cost
over
differences
product
of
concerned destined for the Community market in the
PRC rather than in the Community. These differences
and the dumping practiced by the Chinese exporters in
the Community market might have led all cooperating
producers in the Community to delocalise (part of) their
production in the first place.

producing

the

1. Interest

of
Community

cooperating

producers

in

the

companies

is important

in the Community

(118) Without prejudice to the definition of Community
industry (see recital 67),
to bear in
it
mind that, as mentioned in recital 60, all cooperating
groups of
set up
production facilities in the PRC and imported increasing
amounts of
the product concerned for resale on the
Community market. As mentioned in recital 58, one
its Community-based
group
sold
production facility to another company in 2007,
i.e.
after the IP. Considering that it is a post-IP development
and that throughout the period considered this group
was manufacturing the like product in the Community,
its interests are discussed under this heading and the
group is referred to as a producer in the Community.

companies

of

(119) The investigation showed that should measures not be
imposed,
industry would possibly
continue to suffer injury. Indeed, there would likely be
a further deterioration of the situation of the Community
industry and a further decline of their market share.

the Community

(120) On the other hand, if measures were to be imposed, this
could allow for an increase in prices and/or sales volumes
(and market share) which would in turn provide the
Community industry with the possibility to improve its
financial and economic situation.

(121) As far as the possible development of the market share
should
concerned,
the Community
of
measures be imposed,
is to be noted that all co-
operating producers claimed during the proceeding that
this would result
in reversing the current process of
delocalisation and in moving (at least some part of) the
production back to the Community.

industry
it

is

(123)

It was therefore examined whether the imposition of
anti-dumping duties, which in the case of the exporters
related to the producers mentioned in recital 122 are
relatively low, would, regarding at least two of the co-
operating producers, change the main economic para-
meters that have led to the process of delocalisation. It
was established that the full cost of compressors sold in
the Community and produced in the PRC (including, inter
alia, manufacturing costs, selling, general and administra-
tive expenses, ocean freight, conventional duty and a
possible anti-dumping duty) would be in the same
order of magnitude, although slightly lower, as the full
cost of producing and selling alike compressors in the
Community.

(124) Moreover, these two companies reiterated their position
that should measures reduce the level of price under-
cutting suffered from the Chinese dumped products,
they would be in a position to increase and/or restart
their production in the Community using the existing
idle capacities.

the

that

that

onto

the fact

delivered

it can not be excluded that

(125) Therefore, it cannot be excluded, as claimed by two of
the cooperating producers in their submissions following
the disclosure,
those producers could use their
substantial spare capacities in Europe. This appears to
the proposed
be possible in view of
measures would come close to levelling the cost of
goods,
Community market,
produced in the PRC and in the Community. Conse-
quently,
those producers
increase their production in the Community as a
will
consequence of the imposition of measures. Finally,
it
can not be excluded that,
if duties on exports from
their related producers in the PRC would reduce the
the goods delivered to the
difference in the cost of
Community market, produced in the PRC and in the
Community,
to
concentrate all production outside of the Community,
in order to specialise production of certain models in
certain locations, or to diversify risk.

those producers would prefer not

20.3.2008

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Official Journal of the European Union

L 81/17

fall,

in case of

imposing measures,

(126) As far as a third cooperating producer is concerned, its
related company in the PRC was not included in the
sample for calculating dumping margins and would
therefore,
in
principle, under the average duty of 51,6 % applicable
to cooperating, non-sampled companies. Given that it
was not included in the sample, the Commission does
not possess verified information regarding the production
costs of that Chinese company. Therefore, it cannot be
excluded that in that case the full cost of compressors
sold in the Community and produced in the PRC
(including,
selling,
alia, manufacturing
costs,
general
expenses, ocean freight,
conventional duty and possible anti-dumping duty)
would exceed the full cost of producing and selling
alike compressors in the Community.

and administrative

inter

(127) Following

the

Italian

disclosure,

stressed the need for

of
association
lodged the complaint
compressor manufacturers that
(ANIMA)
anti-dumping
measures in order to allow the producers to continue
manufacturing in the Community and their economic
the related
survival. They made it clear that even if
Chinese suppliers of some European producers would
be subject to relatively high anti-dumping duties, they
would still be in favour of imposing measures.

the

industry

the situation of

and further decline of

to build production capacity

(128) An evaluation of the potential benefit of the Community
industry in case measures were imposed was carried out.
It has been noted that not imposing measures might lead
the
to a further deterioration of
Community
their
market share. This would probably lead to the loss of
a number of jobs as well as of the investment that had
in the
been made
Community. These elements also, although difficult to
quantify, need to be taken into account in the overall
the Community interest. On the other
assessment of
hand,
it
cannot be excluded that an increase in the production
in the Community may occur, possibly involving a relo-
cation of some portion of the production back to the
Community. This
to an increase of
employment and may have an additional impact on the
upstream industry, supplying semi-finished products to
the Community producers of compressors.

should anti-dumping duties be

could lead

imposed,

2. Interest of other Community producers

(129) These producers did not cooperate in the investigation.
Their market share is similar to the one held by the
Community industry. In view of the lack of cooperation
and the fact that most of these producers did not take
any clear position on this proceeding, there are no indi-
cations of what would be the interest of these producers.
Following disclosure one non-cooperating producer and
that did not cooperate
two complaining producers
further in this proceeding (see recital 59) as well as the
Italian association of compressor manufacturers (ANIMA)
came forward to repeat
the arguments mentioned in
recital 127. They clearly stated that they are in favour
of imposing measures.

3. Interest of (unrelated) importers, consumers and
other economic operators in the Community

(130) During the IP, the only cooperating unrelated importer
imported around 20 % of the Community’s total import
volume of the product concerned originating in the PRC.
In the absence of alternative cooperation and given the
above percentage, this importer is deemed representative
of the situation of unrelated importers. This cooperating
party indicated that it is against the imposition of anti-
dumping measures on imports of this particular product
from the PRC. During the IP, the activity of resale of the
product concerned accounted for between 2 % and 8 %
of this importers total company turnover. In terms of
workforce, between 30 and 70 persons are directly
involved in the purchasing, trading and resale of the
product concerned.

(131) Cooperation was also sought from consumer associations
as well as all known retailers, distributors, traders and/or
other economic operators involved in the distribution
chain in the Community. However, no cooperation was
obtained. Given that only one unrelated importer co-
operated in this proceeding and given the lack of parti-
cipation of
in the
Community or consumer associations, it was considered
appropriate to analyse a global, overall potential impact
of possible measures on all these parties. Overall, it was
concluded that the situation of consumers and economic
operators
involved in the distribution chain in the
Community could be negatively affected by the possible
measures.

economic operators

any other

4. Conclusion on Community interest

(132) For the reasons expressed in recitals 125 and 126, in this
specific case, it can not be excluded that the cooperating
producers in the Community might take the opportunity
to benefit from the measures by recovering some of the
production lost due to the injurious dumping by utilising
the existing idle capacities.

(133)

It is recognised that, imposition of measures may have a
negative effect on consumers and all economic operators
in the distribution chain in the Community. However, it
is also clear that if production in the Community is
increased (and,
the number of
therefore, probably,
people employed in this production in the Community
is increased) the measures would create certain benefits
for the Community.

(134) Article 21 of the basic Regulation refers to the need to
give special consideration to the need to remedy the
trade distorting effects of
injurious dumping and to
restore effective competition, although this particular
provision has to be seen in the overall framework of
the Community interest test as laid down in the afore-
mentioned Article. Thus,
imposing
measures or not
imposing measures on all parties
concerned have to be examined.

effects of

the

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20.3.2008

(135)

In conclusion, in view of the high dumping and injury
margins, it is considered that, in this particular case, on
the basis of
the information submitted there is not
enough evidence to conclude that the possible imposition
of measures would be clearly disproportionate and
against the Community interest.

(136) Should, however, in spite of the imposition of duties, the
situation prevailing prior to the imposition of measures
(in particular the 53 % market share of imports from the
PRC and the relatively small market share of cooperating
producers in the Community) remain unchanged,
the
cost of the possible duty to be borne by consumers
and economic operators in the Community (including
importers, traders and retailers) might be considered, in
the long run,
for the
Community industry. Therefore,
the measures will be
imposed for two years, and certain reporting requests
will be made to, in particular, Community producers.

to be greater than the benefit

G. DEFINITIVE MEASURES

Estimated injury elimination level

(137) The level of any anti-dumping measures

should be
sufficient
to eliminate the injury to the Community
industry caused by the dumped imports, without
exceeding the dumping margins found. When calculating
the amount of duty necessary to remove the effects of
the injurious dumping,
it was considered that any
measures
should allow the Community industry to
obtain a profit before tax that could be reasonably
i.e.
achieved under normal conditions of competition,
in the absence of dumped imports. Given that
the
Community industry was not profitable with regard to
the entire period under
the like product
consideration, it was considered that a profit margin of
5 % achieved by this industry on other products of the
same category they produced and sold during the IP, is
an appropriate level that the Community industry could
be expected to obtain also with regard to the like product
in the absence of injurious dumping.

throughout

(138) The necessary price increase was then determined on the
basis of a comparison, per product type, of the weighted
average import price, as established for the price under-
cutting calculations, with the non-injurious price of the
like product sold by the Community industry on the
Community market. The non-injurious price has been
obtained by adjusting the sales price of the Community
industry in order to reflect the abovementioned profit
margin. Any difference resulting from this comparison
was then expressed as a percentage of
the total cif
import value.

(139) The abovementioned price comparison showed that the
calculated injury margins are between 61,3 % and
160,8 % and in case of all companies are higher than
the respective dumping margins.
the
foregoing and pursuant to Article 9(4) of the basic Regu-
lation, it is considered that a definitive anti-dumping duty
imports of certain
should be imposed in respect of

In the light of

compressors originating in the PRC at the level of the
dumping margins.

Definitive measures

(140) Consequently,
follows:

the anti-dumping duties should be as

Zhejiang Xinlei Mechanical & Electrical Co., Ltd,
Wenling

Zhejiang Hongyou Air Compressor Manufac-
turing Co., Ltd, Wenling and Taizhou Hutou
Air Compressors Manufacturing Co.,
Ltd,
Wenling

Shanghai Wealth Machinery & Appliance Co.,
Ltd, Shanghai and Wealth (Nantong) Machinery
Co., Ltd, Nantong

Zhejiang Anlu Cleaning Machinery Co., Ltd,
Taizhou

Nu Air (Shanghai) Compressor and Tools Co.,
Ltd, Shanghai

77,6 %

76,6 %

73,2 %

67,4 %

13,7 %

FIAC Air Compressors
Jiangmen

(Jiangmen) Co., Ltd,

10,6 %

Cooperating companies not
sample (listed in Annex)

included in the

51,6 %

All other companies

77,6 %

duty

countrywide

(141) The individual anti-dumping duty rates specified in this
Regulation were established on the basis of the findings
of the present investigation. Therefore, they reflect the
situation found during that
investigation with respect
to these companies. These duty rates (as opposed to
other
the
companies’) are thus exclusively applicable to imports
of products originating in the PRC and produced by
these companies and thus by the specific legal entities
Imported products produced by any other
mentioned.
company not specifically mentioned in the operative
part of
this Regulation with its name and address,
including entities related to this specifically mentioned,
cannot benefit from this rate and shall be subject to the
countrywide duty.

applicable

‘all

to

(e.g.

(142) Any claim requesting the application of an individual
company anti-dumping duty rate
following a
the entity or following the
change in the name of
setting up of new production or sales entities) should
be addressed to the Commission forthwith with all
relevant information,
in particular any modification in
the company’s activities linked to production, domestic
and export sales associated with, for example, that name
that change in the production and sales
change or
entities.
If appropriate, the Regulation will accordingly
be amended by updating the list of companies benefiting
from individual duties.

20.3.2008

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Official Journal of the European Union

L 81/19

(143) Measures are imposed to allow the producers in the
Community to recover
from the injurious effect of
dumping. To the extent that there would be any initial
imbalance between the potential benefit for producers in
the Community and the cost for consumers and other
economic operators in the Community, this imbalance
could be offset by an increase and/or restart of
the
production in the Community. However, as already
indicated above, given the magnitude of the burden of
the possible duties and considering that the envisaged
increased production in the Community
scenario of
might also not materialise,
in
such exceptional circumstances, to limit the duration of
measures to a period of two years only.

it is considered prudent,

(144) This period should be enough for the producers in the
Community to increase and/or restart their production in
Europe, while at the same time not significantly endanger
the situation of consumers and other economic operators
in the Community. It is considered that the period of two
years will be the most appropriate to analyse whether the
imposition of measures had indeed the
effect of
increasing European production and thereby balancing
the negative effects on importers and consumers.

Implementation

(145)

It is also considered appropriate to closely monitor the
situation on the Community market, following the impo-
sition of measures,
in view of possibly reviewing the
measures expeditiously should it appear that the duties
are not reaching their intended effect,
i.e. allowing for
ensuring the viability of existing producers in the short
term and the improvement of
their economic and
financial situation in the medium term.

(146) To this effect, the producers in the Community will be
invited by the Commission to report to it periodically on
the evolution of a number of key economic and financial
indicators. Also importers and other operators involved
may be so invited, or provide such information of their
the
own initiative. On the basis of
these data
Commission will make a periodic assessment of
the
situation of imports and Community production, so as
to be in a position to act swiftly should this be necessary.

(147) All parties were informed of

the essential

facts and
considerations on the basis of which it was intended to
recommend the imposition of definitive anti-dumping
duties. They were also granted a period within which
to this
they could make representations
subsequent
submitted by the parties
disclosure. The comments
were duly considered, and, where appropriate,
the
findings have been modified accordingly. All parties
were given detailed responses to the comments they
have submitted.

(148)

In order to ensure equal treatment between any new
exporters and the cooperating companies not included
in the sample, mentioned in the Annex to this Regu-
lation, provision should be made for
the weighted
average duty imposed on the latter companies to be
applied to any new exporters which would otherwise
be entitled to a review pursuant to Article 11(4) of the
basic Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

1.
A definitive anti-dumping duty is hereby imposed on
imports of reciprocating compressors (excluding reciprocating
compressor pumps), giving a flow not exceeding 2 cubic
(m3)
metres
CN codes
ex 8414 40 10,
and
ex 8414 80 51, (TARIC codes 8414 40 10 10, 8414 80 22 19,
8414 80 22 99,
8414 80 28 91,
8414 80 28 11,
8414 80 51 19 and 8414 80 51 99) and originating in the
People’s Republic of China.

falling within

ex 8414 80 22,

ex 8414 80 28

per minute,

The rate of anti-dumping duty applicable to the net, free-
2.
at-Community-frontier price, before duty, of
the products
described in paragraph 1 and produced by the companies
below shall be as follows:

Company

Duty

TARIC
additional
codes

Zhejiang Xinlei Mechanical & Electrical Co., Ltd,
Wenling

77,6 %

A860

Zhejiang Hongyou Air Compressor Manufac-
turing Co., Ltd, Wenling and Taizhou Hutou
Ltd,
Air Compressors Manufacturing Co.,
Wenling

76,6 %

A861

Shanghai Wealth Machinery & Appliance Co.,
Ltd, Shanghai and Wealth (Nantong) Machinery
Co., Ltd, Nantong

73,2 %

A862

Zhejiang Anlu Cleaning Machinery Co., Ltd,
Taizhou

67,4 %

A863

Nu Air (Shanghai) Compressor and Tools Co.,
Ltd, Shanghai

13,7 %

A864

FIAC Air Compressors
Jiangmen

(Jiangmen) Co., Ltd,

10,6 %

A865

Cooperating companies not
sample (listed in Annex)

included in the

51,6 %

A866

All other companies

77,6 %

A999

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Official Journal of the European Union

20.3.2008

Unless otherwise

3.
concerning customs duties shall apply.

specified,

the provisions

in force

4. Where any new exporting producer
Republic of China provides
Commission that:

sufficient

in the People's
to the

evidence

— it did not export to the Community the product described
in paragraph 1 in the period between 1 October 2005 and
30 September 2006 (investigation period),

— it is not related to any exporter or producer in the People's
Republic of China which is subject to the anti-dumping
measures imposed by this Regulation,

— it has actually exported to the Community the product
the investigation period on which the
concerned after
measures are based, or it has entered into an irrevocable
contractual obligation to export a significant quantity to
the Community,

— it operates under market economy conditions, as defined in
Article 2(7)(c) of the basic Regulation, or alternatively that it
fulfils
to have an individual duty in
accordance with Article 9(5) of that Regulation,

the requirements

the Council, acting by simple majority on a proposal submitted
by the Commission after consulting the Advisory Committee,
may amend paragraph 2 by adding the new exporting producer
to the cooperating companies not included in the sample and
thus subject to the weighted average duty of 51,6 %.

Article 2

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

It shall apply until 21 March 2010.

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

Done at Brussels, 17 March 2008.

For the Council
The President

I. JARC

ANNEX

CHINESE COOPERATING EXPORTING PRODUCERS NOT SAMPLED

TARIC Additional code A866

Fini (Taishan) Air Compressor Manufacturing Co., Ltd.

Lacme Dafeng Machinery Co., Ltd.

Taishan

Dafeng

Qingdao D&D Electro Mechanical Technologies Co., Ltd. and Qingdao D&D International Co., Ltd.

Qingdao

Shanghai Liba Machine Co., Ltd.

Taizhou Sanhe Machinery Co., Ltd.

Taizhou Dazhong Air Compressors Co., Ltd.

Taizhou Shimge Machinery & Electronic Co., Ltd.

Quanzhou Yida Machine Equipment Co., Ltd.

Shanghai

Wenling

Wenling

Wenling

Quanzhou