Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of coumarin originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96 extended to India, Thailand, Indonesia and Malaysia
Date: 2008-04-04
Institutions: European Commission
Subjects: China, India, Indonesia, Malaysia, Thailand, anti-dumping duty, anti-dumping legislation, chemical compound, import, originating product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.4.2008 
COM(2008)173 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of coumarin originating in the 
People's Republic of China following an expiry review pursuant to Article 11(2) of 
Council Regulation (EC) No 384/96 extended to India, Thailand, Indonesia and 
Malaysia 

 (presented by the Commission) 

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EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

110 

Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  N  384/96  of  22 
December 1995 on protection against dumped imports from countries not members of 
the European Community, as last amended by Council Regulation (EC) N 2117/2005 
of 21 December 2005 ('the basic Regulation') to imports of coumarin originating in the 
People's Republic of China. 

120 

General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is the result of an investigation which was carried out in line with the substantive and 
procedural requirements laid out ion the basic Regulation. 

130 

Existing provisions in the area of the proposal 

Council  Regulation  (EC)  No  600/96  of  25  March  1996  imposing  a  definitive  anti-
dumping duty on imports of coumarin originating in the People's Republic of China 

Council  Regulation  (EC)  No  769/2002  of  7  May  2002  imposing  a  definitive  duty  on 
imports of coumarin originating in the People's Republic of China 

Council Regulation (EC) No 2272/2004 of 22 December 2004 extending the definitive 
anti-dumping  duty  imposed  by  Regulation  (EC)  N  769/2002  on  imports  of  coumarin 
originating in the People's Republic of China to imports of coumarin consigned from 
India or Thailand, whether declared as originating in India or Thailand or not. 

Commission  Decision  No  2005/3/EC  of  3  January  2005  accepting  an  undertaking 
offered  in  connection  with  the  anti-circumvention  investigation  concerning  anti-
dumping  measures  imposed  by  Council  Regulation  (EC)  No  769/2002  on  imports  of 
coumarin  originating  in  the  People's  Republic  of  China  to  imports  of  coumarin 
consigned from India or Thailand, whether declared as originating in India or Thailand 
or not. 

Council Regulation (EC) No 1650/2006 of 7 November 2006 extending the definitive 
anti-dumping duty imposed by Regulation (EC) No 769/2002 on imports of coumarin 
originating in the People's Republic of China to imports of coumarin consigned from 
Indonesia or Malaysia, whether declared as originating in Indonesia or Malaysia or not. 

141 

Consistency with the other policies and objectives of the Union 

Not applicable. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

211 

Interested parties concerned by the proceedings have had the possibility to defend their 

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interests during the investigation in line with the provisions of the basic Regulation.  

212 

229 

230 

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

The  basic  Regulation  does  not  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

LEGAL ELEMENTS OF THE PROPOSAL 

305 

Summary of the proposed action 

An  expiry  review  concerning  the  anti-dumping  measures  in  place  since  1996  on 
imports of coumarin originating in the People's Republic of China pursuant to Article 
11(2)  of  the  basic  Regulation  was  initiated  on  8th  May  2007.  The  investigation 
confirmed the likelihood of continuation or recurrence of dumping and injury and it is 
hereby proposed to maintain the anti-dumping measures on imports of coumarin, at the 
same level. 

Member States were consulted at the Anti-Dumping Committee of 12 March 2008 and 
24 were in favour of the proposal. 

It is therefore proposed that the Council adopts the attached proposal for a Regulation 
which  should  be  published  in  the  Official  Journal  of  the  European  Union  on  the  7th 
May 2008 at the latest. 

310 

Legal basis 

Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection  against 
dumped  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 2117/2005 of 21 December 2005 

329 

Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reason. 

The form of action is described in the basic Regulation and leaves no scope for national 
decision. 

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341 

342 

Choice of instruments 

Proposed instruments: regulation. 

Other means would not be adequate for the following reason. 

Other  means  would  not  be  adequate  because  the  basic  Regulation  does  not  foresee 
alternative options. 

BUDGETARY IMPLICATION 

409 

E-2742 

The proposal has no implication for the Community budget. 

(Explanatory memorandum validated - 2 742 characters - complying with DGT norm.) 

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Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of coumarin originating in the 
People's Republic of China following an expiry review pursuant to Article 11(2) of 
Council Regulation (EC) No 384/96 extended to India, Thailand, Indonesia and 
Malaysia 

THE COUNCIL OF THE EUROPEAN UNION, 

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  Community1,  and  in 
particular Articles 9, 11(2), 8 and 13 thereof, 

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

Whereas: 

A. 

PROCEDURE 

1.  Measures in force 

(1) 

(2) 

The  Council,  by  Regulation  (EC)  N°  769/20022  imposed  a  definitive  anti-dumping 
duty  of  3  479  EUR  per  tonne  on  imports  of  coumarin  originating  in  the  People's 
Republic  of  China  and  extended  to  imports  consigned  from  India  and  Thailand  by 
Council Regulation (EC) N° 2272/20043 and to imports consigned from Indonesia and 
Malaysia by Council Regulation (EC) N° 1650/20064. 

The  Commission,  by  a  Decision5  dated  3  January  2005,  accepted  an  undertaking 
offered  by  an  Indian  producer  in  connection  with  the  investigation  into  alleged 
circumvention of the anti-dumping measures by imports of coumarin consigned from 
India or Thailand. 

2. 

Request for a review 

(3) 

The  request  was  lodged  on  8  February  2007  by  the  European  Chemical  Industry 
Council  (CEFIC)  ('the  applicant')  on  behalf  of  the  sole  producer  in  the  Community, 
representing the totality of the Community production of coumarin. 

1 

2 

3 
4 
5 

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). 
OJ  L  123,  9.5.2002,  p.  1.  Regulation  as  amended  by  regulation  (EC)  No  1854/2003  (OJ  272, 
23.10.2003, p.1).  
OJ L 396, 31.12.2004, p.18 
OJ L 311, 10.11.2006, p.1 
OJ L 1, 4.1.2005, p.15 

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(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

The applicants alleged and provided sufficient prima facie evidence that: (a) there is a 
likelihood  of  continuation  or  recurrence  of  dumping  and  injury  to  the  Community 
industry, and (b) the imports of the product concerned from the People's Republic of 
China have continued to enter the Community in significant quantities and at dumped 
prices. 

It was also alleged that the volumes and the prices of the imported product concerned 
have continued, among other consequences, to have a negative impact on the level of 
prices charged by the Community industry, resulting in substantial adverse effects on 
its financial situation and its employment. 

Furthermore,  the  applicant  pointed  out  that  during  the  period  of  imposition  of 
measures,  the  exporters/producers  of  the  product  concerned  from  the  People's 
Republic of China has undermined the existing measures by circumvention practices, 
which  have  been  counteracted  by  the  extension  of  measures  as  enacted  by  Council 
Regulation (EC) N° 2272/2004 and Council Regulation (EC) N° 1650/2006. 

3. 

Initiation 

Having  determined,  after  consultation  of  the  Advisory  Committee,  that  sufficient 
evidence  existed  for  the  initiation  of  an  expiry  review,  the  Commission  initiated  an 
investigation pursuant to Article 11(2) of the basic Regulation by a notice published in 
the Official Journal of the European Community6. 

4. 

Period of investigation 

The  review  investigation  period  ('RIP')  for  the  examination  of  continuation  or 
recurrence of dumping and injury covered the period from 1 April 2006 to 31 March 
2007.  The  examination  of  trends  relevant  for  the  assessment  of  continuation  or 
recurrence of injury covered the period from 1 January 2003 up to the end of the RIP 
('period under review'). 

5. 

Parties concerned by the investigation 

The Commission officially advised the applicant Community producer, the exporting 
producers  in  the  PRC  and  their  representatives,  the  Chinese  authorities  and  the 
importers,  users  and  associations  known  to  be  concerned,  of  the  initiation  of  the 
review.  The  Commission  sent  questionnaires  to  exporting  producers,  a  producer  in 
India  (analogue  country  as  mentioned  at  recital  (26)), the sole  Community  producer, 
known importers and users and to those parties which made themselves known within 
the time limit set in the notice of initiation of the review. 

Sampling for exporters/producers in the People's Republic of China 

(10) 

In view of the apparent number of exporting producers involved in this proceeding, the 
use  of  sampling  techniques  was  envisaged  in  the  notice  of  initiation  in  accordance 
with Article 17 of the basic Regulation. In order to decide whether sampling would be 
necessary  and,  if  so,  to  select  a  sample,  all  exporting  producers  were  asked  to  make 
themselves  known  and  to  provide,  as  specified  in  the  notice  of  initiation,  basic 

6 

OJ C 103, 8.5.2007, p. 15. 

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information on their activities related to coumarin during the investigation period. Two 
companies in the People's Republic of China replied to the sampling questionnaire but 
only  one  indicated  its  willingness  to  cooperate  and  replied  to  the  dumping 
questionnaire, as follows : 

– 

Nanjing Jingqiao Perfumery/China Tuhsu Flavours & Fragrances Imp. & 
Exp. Corp. 

(11)  The Community producer and four importers/users replied to the questionnaires. With 
respect  to  the  analogue  country,  the  Indian  producer  contacted  by  the  Commission 
services refused to cooperate.  

6.  Verification of information received 

(12)  The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the 
purpose  of  the  determination  of  the  likelihood  of  continuation  or  recurrence  of 
dumping and injury and of Community interest. The Commission also gave the parties 
directly  concerned  the  opportunity  to  make  their  views  known  in  writing  and  to 
request a hearing. 

(13)  Verification visits were carried out at the premises of the following companies: 

Community producer: 

– 

Rhodia Organics, (Lyon) France 

Importers/Users: 

– 

Henkel KGaA, (Krefeld) Germany 

B. 

PRODUCT CONCERNED AND LIKE PRODUCT 

1. 

Product concerned 

(14)  The  product  concerned  is  the  same  as  in  the  original  investigation,  i.e.  coumarin,  a 
whitish crystalline powder with the characteristic odour of newly mown hay. Its main 
uses  are  as  an  aroma  chemical  and  as  a  fixative  in  the  preparation  of  fragrance 
compounds,  such  compounds  being  used  in  the  production  of  detergents,  cosmetics 
and fine fragrances. 

(15)  Coumarin, which was originally a natural product obtained from Tonka beans, is now 
produced synthetically. It can be obtained by a synthesis process starting from phenol 
to obtain salicilaldehyde (Perkin reaction) or by a synthesis from orthocresol (Raschig 
reaction).  The  main  physical  specification  of  coumarin  is  its  purity,  of  which  the 
melting  point  is  the  indicator.  The  standard  quality  coumarin  marketed  in  the 
Community has a melting point varying between 68°C and 70°C which corresponds to 
99% purity. 

(16)  The product concerned falls within CN code ex 2932 21 00. 

2. 

Like product 

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(17)  As in the original investigation, coumarin exported to the Community from the PRC as 
well  as  coumarin  produced  and  sold  by  the  Community  industry  in  the  Community 
market were found to have effectively identical physical characteristics and uses and 
are thus like products within the meaning of Article 1(4) of the basic Regulation. 

C. 

LIKELIHOOD OF A CONTINUATION OR RECURRENCE OF DUMPING 

1.  General Issues 

(18) 

(19) 

In  accordance  with  Article  11(2)  of  the  basic  Regulation,  it  was  examined  whether 
dumping  was  currently  taking  place  and  whether  or  not  the  expiry  of  the  measures 
would be likely to lead to a continuation or recurrence of dumping. 

In accordance with Article 11(9) of the basic Regulation, the same methodology was 
used  as  in  the  original  investigation.  As  an  expiry  review  does  not  provide  for  any 
examination  of  changed  circumstances,  it  was  not  reconsidered  whether  producers 
were entitled to market economy treatment ('MET'). 

(20)  Statistical  data  showed  that  about  214  tonnes  were  imported  to  the  EU  from  all 
sources, out of which about 137 tonnes originated in China, representing around 20 % 
of EU consumption 

2. 

Sampling (exporters) and co-operation 

(21) 

It is recalled that, in the previous investigation, the results of which were published in 
May  2002,  there  was  no  co-operation  from  Chinese  exporting  producers  and  none 
were awarded MET or IT. 

(22)  Sampling forms were sent out to 21 potential producers/exporters in the PRC but only 
two  companies  responded,  only  one  of  which  co-operated  with  the  investigation  by 
completing  a  questionnaire  response;  sampling,  therefore,  was  not  warranted.  This 
single response covered around 5% of Chinese imports in the RIP. In terms of capacity 
this co-operator possessed around 17% of total Chinese capacity. 

(23) 

In light of this very low level of co-operation and the limited representativeness of one 
company  of  the  Chinese  market  and  production,  it  was  determined  that  no  reliable 
information  on  imports  of  the  product  concerned  to  the  Community  during  the  RIP 
could  be  gathered  directly  from  the  exporting  producers.  Under  these  circumstances, 
and in accordance with Article 18 of the basic Regulation, the Commission resorted to 
the use of the facts available, i.e. CN code data. Nevertheless, the information in the 
single questionnaire response was used to the extent possible to cross check the results 
based on the data available pursuant to Article 18. 

(24) 

It was established that the CN code data were the best facts available for most of the 
aspects of this investigation. TARIC data and data collected under Article 14(6) of the 
basic Regulation confirmed the accuracy of the CN code figures.  

(25)  Wherever  warranted,  export  price  data  from  co-operating  producers  and  Chinese 
export statistics available to the Commission (which also included products other than 
the product concerned) used as a complement. 

3.  Analogue country 

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(26)  Coumarin  is  a  fragrance  produced  in  only  a  few  countries  around  the  world  and 
therefore the choice for an analogue country was extremely limited. According to the 
information available to the investigation, the only producing countries during the RIP 
were France, China and India. The USA was used in the previous review investigation 
but the company had since ceased its production. India was suggested in the Notice of 
Initiation but no Indian producer agreed to co-operate.  

(27) 

In  light  of  these  findings  the  normal  value  had  to  be  established  "on  any  other 
reasonable  basis"  in  accordance  with  Art.  2(7)(a)  of  the  basic  Regulation.  The 
Community industry data was considered reasonable for such a purpose.  

4.  Dumping during the review investigation period 

(28)  For the reasons explained at recital (23), dumping margins were calculated using CN 
code  data  which  were  cross-checked  with  the  information  received  from  the  sole 
cooperating Chinese exporting producer. The export prices of the imports from China 
were  adjusted  to  ensure  that  they  were  on  a  comparable  basis  to  the  normal  value. 
These adjustments ensured that the calculations were made on the ex works basis and 
the  difference  between  the  export  price  and  the  normal  value  was  expressed  as  a 
percentage of the CIF export price. On this basis, the margin of dumping was around 
45% during the RIP. 

5. 

Price comparisons 

(29) 

It  was  clear  that  should  the  measures  be  allowed  to  lapse  that  there  was  a  clear 
incentive for the Chinese exporters to sell high volumes on the very large EU market. 
This  conclusion  is  based  on  the  following  information  calculated  during  the 
investigation: 

i) 

ii) 

Chinese domestic prices in the RIP were around 25% lower than those on the 
EU market; 

The Chinese producers sell most of their production on export markets because 
their  domestic  market  is  not  large  enough  to  absorb  all  their  production  and 
because  domestic  prices  are  similar  to  those  achievable  in  third  country 
markets; 

iii)  Community market prices were higher than the export prices to third countries 
achieved  by  the  Chinese  exporting  producers,  which  would  signal  that 
dumping  exists  also  in  other  third  country  markets  and  that  there  would  be  a 
significant incentive for producers in the PRC to re-direct their exports to the 
Community 

6.  Unused capacity and stocks in the PRC 

(30) 

In  the  previous  investigation  which  concluded  in  May  2002,  it  was  established  that 
there  was  an  enormous  availability  of  unused  Chinese  production  capacity  (between 
50% and 60% of production capacity). Due to the low co-operation rate of the Chinese 
exporting  producers  very  little  information  was  made  available  to  the  investigation 
concerning current unused capacity and stocks in the PRC.  

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(31)  However, according to its questionnaire response, the sole co-operator had substantial 
unused capacity. This producer had around 500 tonnes in stock at the end of the RIP, 
which represented more than 70% of the EU market in the RIP. Bearing in mind that 
this producer only represents between 15-20% of the Chinese production capacity it is 
likely  that  even  higher  stocks  are  available  to  penetrate  the  EU  market  should 
measures be repealed. 

7. 

Possible absorption capacity of third country markets or home market of PRC 

(32)  Bearing in mind the above price comparisons and availability of unused capacity and 
stocks it cannot be argued that Chinese production will be absorbed by third country 
markets  and  the  Chinese  domestic  market.  This  is  because  consumption  on  the  third 
country markets has remained relatively stable over the past 10 years and is expected 
to  remain  stable  in  the  future.  Bearing  this  in  mind  it  is  evident  that  the  Chinese 
producers are likely to need to continue to export to the Community. This is due to the 
fact that the EU market is one of the most attractive in the world bearing in mind its 
size and the relatively high prices that can be achieved. If measures are repealed, it is 
clear  that  even  larger  volumes  of  dumped  imports  would  be  re-directed  into  the  EU 
market. 

8. 

Circumvention practices 

(33)  As mentioned in recital (1), the measures under review have been extended to India, 
Thailand,  Malaysia  and  Indonesia  as  a  result  of  a  circumvention  investigation.  This 
indicates the strong interest of the Chinese producers to enter the Community market 
and  their  willingness  to  do  so  even  when  anti-dumping  measures  are  in  place.  The 
existence of the circumvention practices therefore support the conclusion that there is 
a  strong  likelihood  that  greater  levels  of  dumped  imports  would  return  to  the 
Community market should the measures be repealed. 

9. 

Conclusion on the likelihood of a continuation and/or recurrence of dumping 

(34)  On  the  basis  of  the  above,  it  is  concluded  that  dumping  is  likely  to  continue  should 

measures be repealed.  

D. DEFINITION OF THE COMMUNITY INDUSTRY 

(35)  The company represented by the applicant was the only producer of coumarin in the 
Community  during  the  investigation  period.  This  Community  producer  is  therefore 
deemed to constitute the Community industry within the meaning of Article 4(1) and 
Article 5(4) of the basic Regulation. 

E. ANALYSIS OF THE SITUATION IN THE COMMUNITY  

1. 

Community consumption7 

(36)  The product under review constitutes a part of a single CN Code. In order to establish 
the volume of products within this CN code which are not the product concerned the 

7 

For  confidentiality  reasons,  given  that  one  single  Community  producer  constitutes  the  Community 
industry; the figures contained in this Regulation will be indexed or given approximately. 

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Commission  services  compared  CN  data  with  other  available  statistical  sources  as 
mentioned in recital (23). This comparison showed that almost 100% of the products 
imported under this code were in fact the product concerned. 

(37)  The  Community  consumption  was  therefore  established  in  adding  the  full  CN  Code 
data  for  the  imports  into  the  European  Community  to  the  sales  volumes  of  the 
Community industry on the Community market as reported in the questionnaire reply.  

(38)  Overall,  the  apparent  consumption  of  coumarin  decreased  by  8%  during  the  period 
under  review,  with  a  decrease  until  2005  and  an  increase  thereafter.  Consumption 
levels would now have appeared to have stabilised. 

(39)  The Community consumption developed as follows: 

Table 1 

2003 

100 

2004 

91.4 

2005 

82.4 

2006 

90 

RIP 

92.3 

Community consumption 

(index 2003=100) 

2. 

Imports from the country concerned 

(a) Volume and market share  

(40)  As  explained  in  recital  (36)  CN  code  2932  21  00  was  used  as  the  source  for  the 

imports of the product concerned onto the Community. 

(41)  With  respect  to  the  Chinese  imports,  attention  must  be  paid  to  the  proven 
circumvention practices that led to the extension of measures to imports of coumarin 
from  India,  Thailand,  Indonesia  and  Malaysia.  As  a  consequence  of  the  anti-
circumvention  measures  adopted,  imports  originating  in  the  PRC  as  well  as  imports 
originating in PRC but shipped from other countries have decreased during the period 
under  review.  While  the  imports  of  Chinese  origin  is  still  significant  this  decrease 
showed that the anti circumvention measures were effective. 

(42)  As  explained  in  recital  (38)  the  apparent  consumption  decreased  in  the  period 
considered.  The  Chinese  imports  diminished  even  further  in  proportion  to  the 
consumption resulting in a loss of market share in the Community to the benefit of the 
Community industry. The volume of imports from third countries into the Community 
remained at the same level during the period under review. 

Table 2 

2003 

Volume  of  dumped 
(index 2003 = 100) 

imports 

100 

2004 

99.4 

2005 

49.7 

2006 

47 

RIP 

50.1 

Volume  of  imports  from  third 
countries 

100 

78 

74.7 

65.5 

66.6 

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Range  of  market  share  of 
dumped imports 

(b) Prices 

30% - 40%  40% - 50%  20% - 30%  10% - 20%  20% - 30% 

(43)  Over the period under review, the average CIF prices of the coumarin imported from 

China were steadily far below the Community industry's prices. 

3. 

Economic situation of the Community industry 

(a) Production 

(44)  The  Community  industry  had  to  decrease  its  production  volume  of  the  product 
concerned by 25% between 2003 and the RIP. This is linked to the fact that from 2003 
and  onwards,  the  Community  industry  lost  sales  volume  due  to  circumvention 
practices.  Furthermore,  it  also  lost  sales  volume  in  exports  to  third  countries  as  the 
Community industry also in the third country export markets faced the pressure of low 
priced Chinese exports. 

(b) Capacity and capacity utilisation 

(45)  As  explained  in  recital  (36)  to  (39),  the  Community  industry's  sales  of  the  product 
concerned  in  the  Community  were  relatively  stable  throughout  the  period  under 
revision.  However,  during  the  same  period,  the  Community  industry  saw  a  serious 
decline  in  the  volume  exported  to  third  countries.  In  these  circumstances  in  order  to 
optimise  the  level  of  capacity  utilisation,  the  Community  industry  had  to  reduce 
capacity. This notwithstanding, capacity utilisation remained relatively low. 

Table 3 

2003 

2004 

2005 

2006 

Production 

Production capacity 

Capacity utilisation 

100 

100 

100 

63.4 

63.5 

99.8 

66.3 

63.5 

70.3 

63.5 

104.4 

110.8 

118.8 

RIP 

75.4 

63.5 

(c) Sales in the Community 

(46)  The sales volume in the EC of the Community industry has increased by 36% during 
the period under review. This development was made possible due to the extension of 
the  measures  for  a  new  period  of  5  years  and  due  to  the  effective  elimination  of 
circumvention practices. In consequence and as explained in recital (41), the Chinese 
imports decreased during that same period of time. Imports from India, the only other 
known third country producing coumarin, were limited-to that under the undertaking. 

(d) Stocks 

(47)  The level of the stocks of the Community industry decreased during the period under 

review  

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(e) Market shares 

(48)  The  Community  industry  gained  market  share  during  the  period  under  review.  As 
explained in recitals (41) and (42) the efficiency of the measures in place has allowed 
the Community industry to recover market share. The 22 percentage points increase of 
market share during the period under review was clearly linked to the elimination of 
the circumvention practices.  

(f) Prices 

(49)  The average net sales price of coumarin on the EC market decreased by 10% in 2004 
in  comparison  with  the  prices  of  the  year  2003.  After  2004,  the  prices  recovered 
gradually but never reached those of 2003 in the RIP. A full recovery in terms of price 
was thus far not reached, as would have been expected. 

(50)  The price situation reflects the strong pressure by imports from China. Over the period 
considered, the average CIF prices of the imports from China were steadily far below 
the  Community  industry's  prices.  With  the  measures  in  place,  during  the  RIP, 
coumarin originating in China was sold at the same prices as those of the Community 
industry.  To  this  end  the  prices  of  Chinese  exports  has  acted  as  ceiling  forcing 
Community industry to align their prices accordingly As a consequence, Community 
industry prices are severely depressed and the industry shows low profitability.  

(51)  For  the  purpose  of  determining  the  continuation  of  undercutting  by  coumarin 
originating  in  China,  Community  industry's  ex-works  prices  to  unrelated  customers 
have  been  compared  with  the  CIF  Community  frontier  import  prices  using  CN  code 
data as explained in recitals (23). The comparison showed that while prices were close 
to  the  non-injurious  price  established  for  the  Community  industry,  imports  were  not 
undercutting the prices of the Community industry;  

Table 4 

2004 

50.3 

98 

90.4 

2003 

100 

100 

100 

2005 

31 

2006 

20.9 

136.5 

149.3 

RIP 

3.7 

148 

93.7 

96.6 

97.3 

Stocks 

Market shares of the C.I. 

Prices 

(g) Profitability 

(52)  The  profitability  on  sales  of  the  product  concerned  to  unrelated  customers  in  the 
Community appears to be slightly positive during the RIP. It remained negative from 
the  year  2004  onwards  with  a  small  improvement  as  from  the  year  2006.  This  low 
profitability level is partially due to depressed sales prices as explained in recital (49) 
and  (50),  combined  with  an  increase  in  cost,  notably  as  concerns  the  price  of  raw 
materials.  Improvement  of  the  productivity  could  only  partly  compensate  for  the 
negative  impact  of  these  elements  on  the  profitability.  Overall  the  profit  was  well 
below the normal profit for the whole period considered. 

(h) Cash flow and ability to raise capital 

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(53)  The development of the cash flow generated by the Community industry in relation to 
sales  of  the  product  concerned  on  the  EU  market  mirrors  the  development  of 
profitability.  It  is  worth  noting  that,  while  the  cash  flow  was  low,  it  remained  in 
positive values during the period under review. 

(54)  The  investigation  established  that  the  Community  industry  is  not  experiencing  any 
difficulties  to  raise  capital  and  that  capital  expenditure  was  very  limited  through  the 
period under review. The ability to raise capital cannot, however, be considered as a 
meaningful  indicator  for  this  investigation  since  the  Community  industry  is  a  large 
group  for  which  the  production  of  coumarin  represents  only  a  small  part  of  its  total 
production.  The  ability  to  raise  capital  is  closely  linked  to  the  performance  of  the 
group as a whole rather than the individual performance of the product concerned. 

(i) Employment, productivity and wages 

(55)  Employment by the Community industry decreased during the period under review in 
particular from the year 2004 onwards. This decrease is linked to the reorganisation of 
the  production  process  of  coumarin  undertaken  by  Community  industry..  The 
productivity of the Community industry measured in terms of production volume per 
person employed increased markedly during the period under investigation. 

(56)  The cost of wages as a whole diminished as a direct consequence of the reorganisation 
described  under  recital  (55).  The  average  wages  per  employee  remained  at  the  same 
level during the period under review. 

Table 5 

2003 

2004 

2005 

2006 

61 

65.5 

57 

63.4 

RIP 

57 

63.4 

111.8 

129.4 

135.3 

Employees 

Wages 

Productivity 

100 

100 

100 

86 

89.6 

76.4 

(j) Investment and return on investment 

(57)  During  the  period  under  investigation,  the  level  of  investments  reached  its  peak  in 
2004, whereas since then it started to decrease. Under the current market conditions, 
the Community industry is more concerned with maintaining the existing production 
equipment than with extending production capacity. 

(58)  Seen from this perspective, the return on investment expressed as the relation between 
the net profit of the Community industry and the book value of its fixed assets mirrors 
the profitability trend as explained in recital (52).  

(k) Growth 

(59)  As explained from recital (36) onwards the sales volume of the Community industry 
on the EU market has largely increased allowing the Community industry to recover 
significant market share. 

(l) Magnitude of the dumping margin  

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(60)  The analysis with regard to the magnitude of dumping takes into account the fact that 
there  are  measures  in  force  in  order  to  eliminate  injurious  dumping.  Nevertheless, 
given  the  volume  of  imports  during  the  RIP  combined  with  a  significant  level  of 
dumping  found  (see  recital  (28)),  its  impact  on  the  situation  of  the  Community 
industry cannot be considered negligible. 

(m) Recovery from the effects of past dumping 

(61) 

It should also be taken into account that the Community industry would not have been 
able to recover from past dumping after the imposition of the anti-dumping measures 
in 2002 because of circumvention practices against which measures were only adopted 
in  2004  and  2006.  Before  the  imposition  of  anti-circumvention  measures  by  the 
Council  on  India,  Thailand,  Indonesia  and  Malaysia  and  the  acceptance  of  the 
undertaking by the Commission in 2005, the level of imports from the four countries 
above was considerable and prevented the Community industry from recovering from 
the effects of dumping. 

4. 

Conclusion on the situation of the Community market 

(62)  The imposition of the anti-dumping measures on imports of coumarin originating from 
the PRC and the extension of the measures to the countries from which circumvention 
was found has had a positive impact on the Community industry, in that it allowed a 
partial  recovery  from  a  difficult  economic  situation.  The  continuous  efforts  made  by 
the  Community  industry  in  terms  of  cost  cutting  and  increase  of  productivity  per 
employee  could  only  just  counterbalance  the  increase  of  raw  material  prices  and  the 
decrease in sales prices on the Community market. 

(63)  The  circumvention  practices  of  the  Chinese  producers,  as  explained  in  recital  (33), 
support the conclusion that the Chinese exporting producers have a strong interest in 
entering the Community market.  

(64)  Having regard to  the above  analysis, the situation of  the Community industry is still 
precarious  although  the  measures  have  served  to  limit  the  injurious  effects  of 
dumping.. Any increase of imports at dumped prices would however in all likelihood 
aggravate the situation and wipe out all the efforts made by the Community industry 
that would in all likelihood have to cease production of Coumarin. 

F. LIKELIHHOOD OF RECURRENCE OF INJURY 

1. 

Likelihood of recurrence of injury 

(65)  With  regard  to  the  likely  effect  on  the  Community  industry  of  the  expiry  of  the 
measures  in  force,  the  following  factors  were  considered  in  line  with  the  elements 
summarised in recitals (28) to (34). 

(66)  The  Community  industry  has  increased  the  volume  of  its  sales  on  the  Community 
market  as  a  consequence  of  the  measures  in  force.  It  is  clear  from  the  data  that  the 
market share of the Community industry has increased significantly in a market where 
the  consumption  decreased  by  8%during  the  period  under  review.  However,  the 
Community industry continued to suffer from price depression. 

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(67)  As  explained  above  in  recital  (38)  while  the  consumption  decreased  by  8%,  the 
forecast of the world consumption of coumarin, although subject to a certain extent to 
fashion  trends,  is  not  expected  to  change  to  a  major  degree.  In  the  absence  of 
measures, there are clear indications that significant imports from China will continue 
at dumped prices. Moreover, the large spare production capacity in China suggests that 
there  is  a  significant  likelihood  that  the  import  volumes  in  the  Community  would 
increase if the measures were repealed.  

(68)  The extension of measures following the anti circumvention proceedings was largely 
effective  in  terms  of  halting  the  circumvention  practices  of  the  product  concerned 
originating in the PRC but consigned from India, Thailand, Indonesia and Malaysia. It 
is  likely  that  the  Chinese  exporting  producers  will  have  to  pursue  aggressive  price 
practices in the Community in order to compensate for the market share that was lost 
when circumvention was stopped.  

(69)  As concluded above in recital (29) the investigation has established that there would 
be  a  clear  incentive  for  the  Chinese  exporters  to  direct  large  volumes  to  the 
Community should measures allow to lapse. This would allow the Chinese exporters 
to use some of their excess capacity. 

(70)  The likelihood of this development is further supported by the fact that the prices in 
the Community are higher than the Chinese export prices to other third countries. This 
would  most  certainly  encourage  the  Chinese  producers  to  increase  activities  in  the 
Community market. 

(71)  The increase in imports at lower prices, which would be the likely consequence of the 
lifting  of  measures,  would  also  most  likely  have  significantly  detrimental  effects  on 
Community industry. Under such circumstances the Community industry would either 
have  to  follow  the  decrease  in  prices  in  order  to  maintain  market  share,  or  maintain 
sales  prices  at  current  level  and  instead  loose  customers  and  eventually  sales.  In  the 
former case, Community industry would have to operate at a loss and in the latter case 
the loss of sales as such would eventually lead to increased costs followed by losses.  

(72)  Therefore,  should  imports  increase  as  forecasted  in  the  case  of  termination  of 
measures, the investigation has revealed that there is a clear likelihood of recurrence of 
injury to a Community industry that is already in a fragile state. In essence, it would 
no longer be viable for Community industry to continue production of coumarin. 

G. COMMUNITY INTEREST 

1. 

Introduction 

(73)  According to Article 21 of the basic Regulation, the Commission examined whether a 
prolongation  of  the  existing  anti-dumping  measures  would  be  against  the  interest  of 
the Community as a whole. The determination of the Community interest was based 
on  an  appreciation  of  all  various  interests  involved,  i.e.  those  of  the  Community 
industry,  the  importers/traders  and  the  users  of  the  coumarin.  In  order  to  assess  the 
likely  impact  of  maintaining  or  repealing  the  measures,  the  Commission  requested 
information from all interested parties mentioned above. 

(74)  On  this  basis  it  was  examined  whether,  despite  the  conclusions  on  the  likelihood  of 
continuation  of  dumping  and  likely  recurrence  of  injury,  compelling  reasons  existed 

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which would lead to the conclusion that it is not in the interest of the Community to 
maintain measures in place in this particular case. 

2. 

Interest of the Community industry 

(75) 

(76) 

It  would  clearly  be  in  the  interest  of  the  sole  Community  producer  to  be  able  to 
continue with the production of coumarin.  

It is also considered that, should the anti-dumping measures be repealed, dumping is 
likely to continue and increase resulting in a continuous deterioration of the situation 
of  the  Community  industry,  to  the  point  when  the  industry  would  in  all  likelihood 
disappears. 

(77)  Overall, it can be concluded that the continuation of measures clearly would be in the 

interest of the Community industry. 

3. 

Interest of importers and users 

(78) 

13 importers and 10 industrial users were contacted and questionnaires were sent. The 
Commission services received four answers from companies that agreed to cooperate. 

(79)  Out of the four answers, one importer expressed opposition to the measures, as it was 
primarily concerned about price when sourcing the product concerned. This company 
did however also state that the impact of the cost of the coumarin on its total cost of 
production is very limited. 

(80)  Although the product concerned is used in other industries, where quite often it cannot 
be substituted, its importance in the composition of the finished product is very limited 
in quantities and in prices, in most cases less than one percent. The impact of the duty 
on the user as well as on final consumer is therefore very limited. 

(81)  Some  users  stated  that  they  have  a  strong  preference  for  coumarin  of  Community 
origin  due  to  its  quality  advantages.  These  users  would  be  seriously  affected  if  the 
Community  industry  were  to  stop  its  production  as  a  result  of  the  measures  being 
repealed.  

(82) In analysing Community interest, the need to eliminate the trade-distorting effects of 
injurious  dumping  and  to  restore  effective  competition  should  be  considered,  in 
particular.  In  this  respect  it  should  be  noted  that  the  coumarin  world  market  is  very 
concentrated with only a few producers, with the most important located in China and 
in  the  Community.  From  that  perspective,  the  safeguarding  of  several  sources  of 
supply  (including  the  Community  industry)  should  be  considered  as  important. 
Moreover, it should also be recalled that the purpose of the anti-dumping measures is 
not  to  restrict  supply  from  sources  outside  the  Community,  and  that  coumarin 
originating in China may still continue to be imported to the Community in sufficient 
quantities. 

(83)  The  above  considerations  seen  in  conjunction  with  the  low  level  of  cooperation, 
confirms that importers and users did not suffer any substantial negative effect on their 
economic  situation  as  a  result  of  the  measures  currently  in  force.  Furthermore,  the 
investigation  has  not  revealed  that  any  such  negative  effects  would  be  aggravated 
should measures be prolonged.  

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4. 

Conclusion on Community interest 

(84)  Taking into account all the above factors, it is concluded that there are no compelling 

reasons the continuation of the measures would be against the Community interest. 

H. ANTI-DUMPING MEASURES 

(85)  All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which  it  is  intended  to  recommend  that  the  existing  measures  be  maintained.  They 
were also granted a period to make representations subsequent to this disclosure. 

(86) 

It  follows  from  the  above  that  the  anti-dumping  measures  currently  in  force  with 
regard to imports of coumarin originating in the People's Republic of China should be 
maintained. 

(87)  As outlined in recital (1), the anti-dumping duties in force on imports of the product 
concerned  from  the  PRC  were  extended  to  cover,  in  addition,  imports  of  coumarin 
consigned  from  India,  Thailand,  Indonesia  and  Malaysia,  whether  declared  as 
originating in India, Thailand, Indonesia and Malaysia or not. The anti-dumping duty 
to be maintained on imports of the product concerned, should continue to be extended 
to  imports  of  coumarin  consigned  from  India,  Thailand,  Indonesia  and  Malaysia, 
whether declared as originating in India, Thailand, Indonesia and Malaysia or not. The 
Indian  exporting  producer  referred  to  in  recital  (2)  who  was  exempted  from  the 
measures on the basis of an undertaking accepted by the Commission should also be 
further  exempted  from  the  measures  as  imposed  by  this  Regulation  under  the  same 
conditions. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1.  A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  coumarin  falling  within 
code  ex  2932  21  00  (TARIC  code  2932  21  00  19)  originating  in  the  People's  Republic  of 
China. 

2. The rate of the duty is set at EUR 3 479 per tonne. 

3. The definitive anti-dumping duty of EUR 3 479 per tonne applicable to imports originating 
in  China  is  hereby  extended  to  imports  of  the  same  product  mentioned  in  paragraph  1 
consigned  from  India,  Thailand,  Indonesia  and  Malaysia  whether  declared  as  originating  in 
India, Thailand, Indonesia and Malaysia or not (TARIC codes 2932 21 00 11, 2932 21 00 15 
and 2932 21 00 16).  

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

Article 2 

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

Article 3 

Article 4 

In cases where goods have been damaged before entry into free circulation and, therefore, the 
price  actually  paid  or  payable  is  apportioned  for  the  determination  of  the  customs  value 
pursuant  to  Article  145  of  Regulation  (EEC)  No  2454/93,  the  amount  of  the  anti-dumping 
duty, calculated on the basis of the amount set above, shall be reduced by a percentage which 
corresponds to the apportioning of the price actually paid or payable. 

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

Done at Brussels,  

For the Council 
The President 
[…] 

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