Council Regulation (EC) No 249/2008 of 17 March 2008 amending Regulation (EC) No 1425/2006 imposing a definitive anti-dumping duty on imports of certain plastic sacks and bags originating in the People’s Republic of China and Thailand
Date: 2008-03-17
Institutions: Council of the European Union
Subjects: China, Thailand, anti-dumping duty, anti-dumping legislation, import, originating product, packaging product, plastics

L 76/8

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Official Journal of the European Union

19.3.2008

COUNCIL REGULATION (EC) No 249/2008

of 17 March 2008

amending Regulation (EC) No 1425/2006 imposing a definitive anti-dumping duty on imports of
certain plastic sacks and bags originating in the People’s Republic of China and Thailand

THE COUNCIL OF THE EUROPEAN UNION,

(4)

Having regard to the Treaty
Community,

establishing the European

Having regard to Council Regulation (EC) No 384/96 of
22 December 1995 on protection against dumped imports
from countries not members of the European Community (1)
(the basic Regulation) and in particular Articles 9 and 11(3)
thereof,

Having regard to Council Regulation (EC) No 1425/2006 of
25 September 2006 imposing a definitive anti-dumping duty
on imports of certain plastic sacks and bags originating in the
People’s Republic of China and Thailand, and terminating the
proceeding on imports of certain plastic sacks and bags origi-
nating in Malaysia (2),

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

Whereas:

(1)

(2)

(3)

1. EXISTING MEASURES

Following an investigation (the original investigation), the
Council, by Regulation (EC) No 1425/2006, imposed a
definitive anti-dumping duty on imports of certain plastic
in the People’s
sacks and bags originating,
Republic of China.

inter alia,

1.1. Initiation of an interim review

interim
On the initiative of the Commission, a partial
review of the above-mentioned Regulation was initiated
for Xinhui Alida Polythene Limited (Xinhui Alida or the
company), a Chinese exporting producer subject to the
anti-dumping measures in force. This partial
interim
review was initiated on the initiative of the Commission
based on prima facie evidence provided by the company.

This review was initiated pursuant to Article 11(3) of the
basic Regulation. In the evidence that the Commission
received from Xinhui Alida, the company claimed that as
far as they were concerned, the circumstances on the
basis of which measures were established had changed
and that these changes were of a lasting nature.

(5)

(6)

(7)

(8)

Information at the Commission’s disposal indicated that
prima facie market economy conditions prevailed for the
company as demonstrated by the company’s claim that it
had fulfilled the criteria of Article 2(7)(c) of the basic
Regulation. The company also alleged that their sales
pattern, both in terms of quantity and destination, had
changed in a lasting way since the period on which the
original measures were established, as did the installed
capacity. They further alleged that a comparison of
normal value based on their own costs and prices and
their export prices to the Community would lead to a
reduction of dumping significantly below the level of the
current measures and provided prima facie evidence
thereof.

In this context, they claimed that the continued impo-
sition of measures at the existing level, which were based
on the level of dumping previously established, was no
longer necessary to offset dumping.

after

determined,
that

consulting
sufficient evidence existed for

the Advisory
Having
the
Committee,
interim review, the Commission
initiation of a partial
Initiation) (3)
published
(Notice
a notice
and
commenced an investigation,
limited in scope to the
examination of dumping.

of

1.2. Parties concerned by the investigation

The Commission officially advised Xinhui Alida and its
related companies, as well as the representatives of the
exporting country, of
the review.
Interested parties were given the opportunity to make
their views known in writing and to request a hearing.

the initiation of

deadlines

The Commission also sent questionnaires
to the
applicant and its related companies and received replies
that purpose. The
within the
Commission sought and verified all the information it
deemed necessary for the determination of dumping
and Market Economy Treatment and carried out verifi-
cation visits at the premises of the following companies:

for

set

— Xinhui Alida Polythene Limited, Xinhui, China,

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 2117/2005 (OJ L 340, 23.12.2005, p. 17).

(2) OJ L 270, 29.9.2006, p. 4. Regulation as amended by Regulation

(EC) No 1356/2007 (OJ L 304, 22.11.2007, p. 5).

— Horneman Chemplas (Far East) Limited, Hong Kong,

(3) OJ C 54, 9.3.2007, p. 5.

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— British Polythene Industries plc, Stockton-on-Tees,

— there are no significant distortions carried over from

United Kingdom,

the former non-market economy system,

— Thai Plastic Bags Industries Co., Ltd, Nakonpathom,

Thailand,

— legal certainty and stability is provided by bankruptcy

and property laws,

— Thai Griptech Co., Ltd, Samae-Dum, Bangkok,

Thailand,

— currency exchanges are carried out at the market rate.

— Sahachit Watana Co., Ltd, Nongkaem, Bangkok,

Thailand.

1.3. Review investigation period

(9)

The investigation of dumping covered the period from
1 July 2005 to 30 June 2006 (the review investigation
period or RIP).

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

(10)

The product concerned by the current review is the same
as that in the original investigation, i.e. plastic sacks and
bags, containing at least 20 % by weight of polyethylene
and of sheeting of a thickness not exceeding 100 micro-
metres (μm); originating in the PRC; and currently classi-
fiable within CN codes ex 3923 21 00, ex 3923 29 10
and
ex 3923 29 90 (TARIC codes 3923 21 00 20,
3923 29 10 20 and 3923 29 90 20).

2.2. Like product

(11)

The current review has shown that Xinhui Alida made no
sales on the Chinese domestic market and therefore no
like product was produced.

3. MARKET ECONOMY TREATMENT (MET)

(12)

In all anti-dumping investigations concerning imports
originating in the PRC, normal value for exporting
producers found to meet
the criteria laid down in
Article 2(7)(c) shall be determined in accordance with
paragraphs 1 to 6 of Article 2 of the basic Regulation.
Briefly, and for ease of reference only, these criteria are
summarised below:

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

— accounting records are independently audited, in line
with international accounting standards and applied
for all purposes,

(13)

The Commission’s services concluded that Xinhui Alida
they fulfilled the five criteria of
demonstrated that
Article 2(7)(c) of
the basic Regulation, and proposed
therefore that they be granted MET.

(14)

Both Xinhui Alida and the Community industry were
given an opportunity to comment on the above findings.

(15)

(16)

(17)

(18)

The Community industry contested the granting of MET
the
to Xinhui Alida, stating that
the company had
company was unclear and that
destroyed certain documents
them to
prove their eligibility for MET.

the governance of

required for

The Articles of Association of the company provide for
the nomination of directors by the shareholders
in
proportion to their shareholding in Xinhui Alida, but,
at present,
the same
the two shareholders appoint
number of directors, despite not having the same
number of shares. This does not, however, make the
governance of the company unclear. The smaller share-
holder is majority-owned by the larger one, thus the
composition of
the
actual ownership of Xinhui Alida.

the Board of Directors

reflects

In addition, it was argued that the company was unable
to provide original bank transfer slips for the original
payment of capital, the payment of the land use right,
and the payment to the State for their shareholding when
the company became entirely privately owned, since it is
not company policy to retain documents for more than
seven years. However, the company was able to provide
evidence from audited sources regarding these trans-
actions and, given the passage of time since they took
place, the absence of the original bank transfer slips was
not considered exceptional.

These arguments were considered, but, as no evidence
was submitted to change the Commission’s decision to
grant
the
Community industry were therefore rejected.

company MET,

arguments of

the

the

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(19)

The Advisory Committee was consulted and the parties
directly concerned were informed accordingly. The main
arguments
raised by the Community industry have
already been addressed above.

4. DUMPING

4.1. Normal value

(20)

4.1.1. Methodology applied for the determination of normal

value

In accordance with Article 2(2) of the basic Regulation, it
was first examined whether the domestic sales of the like
to independent customers by the exporting
product
producer were representative,
the total
volume of such sales was equal to or greater than 5 %
of the total volume of the corresponding export sales to
the Community. Given that Xinhui Alida had no
domestic sales during the RIP the normal value of the
company was constructed in accordance with Article 2(3)
as described below.

i.e. whether

the

amount paid to their

supplier, Horneman
of
Chemplas (Far East) Limited, was in fact paid to their
holding company Venture Hong Kong, which is part-
owned by Horneman Chemplas and the remainder by
British Polythene Industries plc (BPI). This claim was
also rejected. Firstly, although Horneman Chemplas and
Xinhui Alida are related parties, the price charged by
Horneman Chemplas to Xinhui Alida was found to be
a reasonable market price, including a small mark-up by
Horneman on the price at which it had purchased the
goods in order to cover its costs. Moreover, the amounts
were not paid straight back by Horneman to Xinhui
Alida in the form of e.g. a volume rebate or credit
notes, but
to Venture Hong Kong which transferred
injection(s) and other
them to Xinhui Alida as capital
payments. They therefore can not be qualified as a
standard price rebate granted by a seller to a buyer.

(25)

The data for selling, general and administrative expenses
and weighted average profit were taken from companies
who responded to a questionnaire sent to companies in
the analogue country as set out below.

4.1.2. Determination of normal value

4.1.3. Analogue Country

(21) Given the absence of any domestic sales, normal value
was constructed on the basis of
the provisions of
Article 2(3) of the basic Regulation by adding selling,
general and administrative (SGA) expenses incurred and
weighted average profit
to the average manufacturing
cost of Xinhui Alida during the RIP.

(22)

(23)

Xinhui Alida claimed that their cost of manufacturing
should be adjusted to take into account the difference
in depreciation policy between them and their parent
company in the United Kingdom, British Polythene
Industries plc (‘BPI’) with whom their accounts are conso-
lidated. Xinhui Alida provided evidence to show that BPI
adjusted the depreciation of their assets as part of the
consolidation process and also claimed that the depre-
ciation rates in China were fixed by law, thereby stopping
the company from aligning their depreciation policies.

This claim was rejected, partially because the law in
China changed in 2001 and no longer fixes depreciation
rates, and partially because the cost of manufacturing of
Xinhui Alida for the RIP is that set out in their audited
accounts, and not a cost adjusted to allow consolidation
to take place in the United Kingdom. Moreover,
the
assets concerned were also examined and found to be
mainly still in use after 10 years.

(24)

Xinhui Alida also claimed that the cost of raw materials
should be adjusted to take account of the fact that part

in

the

sales,

provisions

(26) Data from the analogue country was used to construct
the normal value for Xinhui Alida given the absence of
domestic
of
line with
Article 2(6)(c) of the basic Regulation. The Notice of
the
Initiation made provision for Malaysia
analogue
to
companies
cooperate with the investigation. However, cooperation
was received from three companies in Thailand who had
domestic sales. Weighted average SGA and profit was
calculated from data received from them and verified at
their premises.

to be
agreed

but no

country,

4.2. Export price

(27) Whenever the exports of Xinhui Alida were made directly
to independent customers in the Community, the export
price was established on the basis of the prices actually
paid or payable for the product concerned in the RIP in
accordance with Article 2(8) of the basic Regulation.

for

related company

(28) However, the vast majority of sales by Xinhui Alida were
either
to their
in Hong Kong,
final onward sale to the
Horneman Chemplas,
Community, or to their related company in the United
Kingdom, BPI, for final sale within the Community. As
regards these export sales to the Community, the export
price was established on the basis of Article 2(9) of the
basic Regulation, i.e. using the resale prices actually paid
or payable to the related company by the first inde-
pendent buyer in the Community in the RIP adjusted
for all costs incurred between importation and resale
and for profits.

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4.3. Comparison

(29)

In order
taken,

The comparison between the normal value and the
export price was made on an ex-factory basis and at
the same level of
to ensure a fair
trade.
in accordance with
comparison, account was
Article 2(10) of the basic Regulation, of differences in
factors which were demonstrated to affect prices and
price
for
differences in discounts, rebates, commissions, transport
costs,
insurance, handling charges, packaging, credit
costs, bank charges and import duties were made
where applicable and justified.

comparability. On this basis,

allowances

Given the parent company’s policy on transfer pricing
it is clear that
between Xinhui Alida and themselves,
during the
transfer price
latter half of 2006 the
remained stable whilst raw material prices rose substan-
tially. BPI have also demonstrated that their onward sales
prices remained stable during the latter half of 2006,
making the dumping margin calculated for
the RIP
clearly valid for the remainder of the calendar year 2006.

(35)

The company alleged that their sales pattern, both in
terms of quantity and destination, changed in a lasting
way since the original investigation period of April 2004
to March 2005.

(30) As the related importer in the United Kingdom has
functions similar to those of an agent working on a
to the export price
commission basis, an adjustment
for
in accordance with
Article 2(10)(i) of the basic Regulation. The level of the
commission was calculated based on direct evidence
pointing to the existence of a mark-up and selling
expenses related to such functions.

commission was made

a

4.4. Dumping margin

(31) As provided for under Article 2(11) of the basic Regu-
lation, the weighted average normal value by type was
compared with the weighted average export price of the
corresponding type of the product concerned.

(32)

Xinhui Alida’s dumping margin expressed as a percentage
of the net, free-a-Community-frontier price, duty unpaid,
was found to be 4,3 %.

5. LASTING NATURE OF CHANGED CIRCUMSTANCES

(33)

In accordance with Article 11(3) of the basic Regulation,
it was also examined whether the changed circumstances
could reasonably be said to be of a lasting nature.

(36)

(37)

(38)

(39)

(34)

Firstly, it should be noted that the company was able to
prove that it should be granted MET, and was therefore
eligible for its own individual dumping margin. The
grounds on which they were granted MET are to be
long-term
considered lasting as
to the
structure
company.
the
of
requested regarding the
Secondly,
evolution of product types and price fluctuation after
the RIP in June 2006. The company
the end of
provided evidence to show that
raw material prices
increased in the latter half of 2006, falling back to the
end of 2006 but still above their level during the RIP.

and
information was

business model

they refer

Evidence obtained during the investigation showed that
the behaviour of the company,
including the circum-
stances that led to the initiation of this review, were
unlikely to change in the foreseeable future in a
manner that would affect the findings of the current
review. This would therefore suggest that the changes
concerned were of a lasting nature and therefore the
conclusions of the review were long-lasting.

6. ANTI-DUMPING MEASURES

the results of

In the light of
considered appropriate
duty applicable to imports of
from Xinhui Alida to 4,3 %.

is
the investigation,
to amend the anti-dumping
the product concerned

it

7. DISCLOSURE

Interested parties were informed of the essential facts and
considerations on the basis of which it was intended to
recommend an amendment to Council Regulation (EC)
No 1425/2006 and were given an opportunity to
comment.

The company contested the findings disclosed where
various adjustments claimed by the company had been
rejected, being the calculation of depreciation in China,
the treatment of an exchange rate gain made in the
United Kingdom and an alleged raw material rebate.
However, the company provided no new evidence to
substantiate their claims and therefore these claims
were again rejected.

(40)

The Community industry requested further information
regarding the calculation of the constructed normal value
using data from Thailand, but provided no evidence to
dispute or contest the calculation or methodology used,

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HAS ADOPTED THIS REGULATION:

Article 1

The table in Article 1(2) of Council Regulation (EC) No 1425/2006 is hereby amended by adding the
following:

Country

Company

Rate of duty (%)

TARIC additional code

The People’s Republic of
China

Xinhui Alida Polythene Limited, Xinhui

4,3 %

A854

The list of companies in Annex I of Council Regulation (EC) No 1425/2006 is hereby amended by
removing the following:

XINHUI ALIDA POLYTHENE LIMITED

Xinhui

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

Article 2

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