Proposal for a Council Regulation amending Council Regulation (EC) No 1212/2005 imposing a definitive anti-dumping duty on imports of certain castings originating in the People’s Republic of China
Date: 2008-04-18
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, cast-iron, import, iron and steel product, originating product, road services department

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.4.2008 
COM(2008)205 final 

Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 1212/2005 imposing a definitive anti-dumping 
duty on imports of certain castings originating in the People’s Republic of China 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1) 

110 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  384/96  of  22 
December 1995 on protection against dumped imports from countries not members of 
the  European  Community  ("the  basic  Regulation")1  in  the  proceeding  concerning 
imports of certain castings 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 in the basic Regulation. 

139 

•  Existing provisions in the area of the proposal 

Council  Regulation  (EC)  No  1212/20052  imposing  a  definitive  anti-dumping  duty  on 
imports of certain castings originating in the People’s Republic of China. 

Proposal  for  granting  new  exporting  producer  treatment  to  new  exporters  of  the 
product concerned to the European Community. 

141 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2) 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

219 

229 

230 

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2 

The applicants and the Community industry have been informed of the findings of the 
examination and have had the opportunity to submit their comments. 

•  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  make  provision  for  a  general  impact  assessment  but 
contains an exhaustive list of conditions that have to be assessed. 

OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Council  Regulation  (EC)  No  2117/2005  (OJ 
L 340, 23.12.2005, p. 17). 
OJ L 199, 29.7.2005, p. 1. Regulation as last amended by Council Regulation (EC) No 268/2006 (OJ 
L 47, 17.2.2006, p. 3). 

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3) 

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LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

By  Regulation  (EC)  No  1212/2005,  the  Council  imposed  a  definitive  anti-dumping 
duty on imports of certain castings originating in the People’s Republic of China.  

During  the  investigation  which  led  to  the  imposition  of  measures,  given  the  large 
number  of  exporting  producers  of  the  product  concerned  in  the  People's  Republic  of 
China, sampling was applied. 

Article 1(4) of Council Regulation (EC) No 1212/2005 gives the possibility to Chinese 
exporting producers which meet certain criteria to be granted the same treatment as the 
co-operating companies not included in the sample ('new exporting producer treatment' 
or 'NEPT'). 

Nine  companies  have  requested  new  exporting  producer  treatment  and  their  claims 
have been examined. 

It is therefore proposed that the Council adopts the attached proposal for a Regulation, 
which sets the names and duty rates of the companies to which new exporting producer 
treatment is granted. The Regulation should be published in the Official Journal of the 
European Union. 

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 ("the basic 
Regulation"). 

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(s). 

331 

332 

Council  Regulation  (EC)  No  1212/2005  imposing  a  definitive  anti-dumping  duty  on 
imports  of  certain  castings  originating  in  the  People’s  Republic  of  China  leaves  no 
scope for national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Community, 
national governments, regional and local authorities, economic operators and citizens is 
minimized and proportionate to the objective of the proposal is not applicable. 

•  Choice of instruments 

341 

Proposed instruments: regulation. 

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342 

4) 

409 

Other means would not be adequate for the following reason(s). 

The above-mentioned basic Regulation does not foresee alternative options. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

amending Council Regulation (EC) No 1212/2005 imposing a definitive anti-dumping 
duty on imports of certain castings originating in the People’s Republic of China 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community,  

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 (the ‘basic 
Regulation’)3,  

Having  regard  to  Article  1(4)  of  Council  Regulation  (EC)  No  1212/20054  of  25  July  2005 
imposing  a  definitive  anti-dumping  duty  on  imports  of  certain  castings  originating  in  the 
People’s Republic of China, 

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

Whereas: 

A.  MEASURES IN FORCE 

(1) 

(2) 

By  Regulation  (EC)  No  1212/2005,  the  Council  imposed  a  definitive  anti-dumping 
duty on imports into the Community of castings of non-malleable cast iron of a kind 
used to cover and/or give access to ground or sub-surface systems, and parts thereof, 
whether  or  not  machined,  coated  or  painted  or  fitted  with  other  materials,  excluding 
fire  hydrants,  originating  in  the  People's  Republic  of  China  ('PRC')  (‘the  product 
concerned’), normally declared within CN codes 7325 10 50, 7325 10 92 and ex 7325 
10 99 (Taric code 7325 10 99 10). Given the large number of co-operating parties, a 
sample  of  Chinese  exporting  producers  was  selected  during  the  investigation  which 
led to the imposition of the measures. 

The  sampled  companies  were  attributed  the  individual  duty  rates  established  during 
the investigation. The cooperating non-sampled companies which were granted market 
economy treatment ('MET'), in accordance with the provisions of Article 2(7)(c) of the 
basic Regulation, were attributed the 0 % dumping duty which was established for the 
sole  sampled  company  which  was  granted  MET.  The  cooperating  non-sampled 
companies  which  were  granted  individual  treatment  ('IT'),  in  accordance  with  the 
provisions of Article 9(5) of the basic Regulation, received the weighted average duty 

3 

4 

OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Council  Regulation  (EC)  No  2117/2005  (OJ 
L 340, 23.12.2005, p. 17). 
OJ L 199, 29.7.2005, p. 1. Regulation as last amended by Council Regulation (EC) No 268/2006 (OJ 
L 47, 17.2.2006, p. 3). 

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of 28,6 % established for the sampled companies that were granted IT. A countrywide 
duty of 47,8 % was imposed on all other companies. 

(3) 

Article  1(4)  of  Regulation  (EC)  No  1212/2005  gives  the  possibility  to  Chinese 
exporting producers which meet the four criteria set out in that Article to be granted 
the  same  treatment  as  the  one  mentioned  in  recital  (2)  above  for  the  co-operating 
companies  not  included  in  the  sample  ('New  Exporting  Producer  Treatment'  or 
'NEPT'). 

B. 

NEW EXPORTING PRODUCERS’ REQUESTS 

(4) 

Nine companies have requested to be granted NEPT. 

(5) 

An  examination  has  been  carried  out  to  determine  whether  each  of  the  applicants 
fulfils  the  criteria  for  being  granted  NEPT  as  set  out  in  Article  1(4)  of  Council 
Regulation (EC) No 1212/2005, by verifying that: 

(1) 

(2) 

(3) 

(4) 

it did not export to the Community the products described in recital (1) above 
during the investigation period (1 April 2003 to 31 March 2004), 

it is not related to any of the exporters or producers in the People's Republic 
of  China  which  are  subject  to  the  anti-dumping  measures  imposed  by  that 
Regulation, 

it  has  actually  exported  to  the  Community  the  products  concerned  after  the 
investigation period on which the 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 defined in Article 2(7)(c) of the 
basic  Regulation  or  alternatively  that  it  fulfils  the  requirements  to  have  an 
individual duty in accordance with Article 9(5) of the basic Regulation. 

(6) 

(7) 

Since the fourth criterion implies that the applicants submit a claim for MET or IT, the 
Commission  sent  MET  and  IT  claim  forms  to  all  Chinese  applicants.  All  Chinese 
applicant companies requested MET pursuant to Article 2(7) of the basic Regulation.  

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

(1) 

(2) 

Business  decisions  and  costs  are  made  in  response  to  market  signals  and 
without significant State interference; and costs of major inputs substantially 
reflect market values. 

Firms have one clear set of basic accounting records which are independently 
audited in line with international accounting standards5 and are applied for all 
purposes. 

5 

International accounting standards refer to all  major recognized international standards of accounting, 
including  US  GAAP  and  the  works  of  the  International  Accounting  Standard  Committee  Foundation 

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(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. 

(5) 

Exchange rate conversions are carried out at market rates. 

(8) 

(9) 

Questionnaires  were  sent  to  all  applicants  who  were  asked  to  supply  evidence  to 
demonstrate that they met the criteria mentioned above.  

Exporting producers fulfilling these criteria may be granted the duty rate applicable to 
the  co-operating  companies  not  included  in  the  sample,  pursuant  to  Article  1(4)  of 
Council Regulation (EC) No 1212/2005. 

C. 

FINDINGS 

COMPANIES WHICH HAVE SUBMITTED INCOMPLETE REPLIES 

(10)  One Chinese company requesting NEPT did not submit any reply to the questionnaire 
and one company did not submit any reply to a deficiency letter of their questionnaire 
reply.  It  was  therefore  not  possible  to  verify  whether  these  companies  fulfilled  the 
criteria  set  out  in  Article  1(4)  of  Council  Regulation  (EC)  No  1212/2005  and  their 
request  had  to  be  rejected.  These  companies  were  informed  that  their  application 
would not be considered any further and were given the opportunity to comment. No 
comments were received. 

COMPANIES WHICH HAVE SUBMITTED A COMPLETE REPLY 

(11)  Seven  companies  submitted  complete  replies  to  the  questionnaires.  The  Commission 
sought  and  verified  all  information  it  deemed  necessary  for  the  purpose  of  the 
determination  of  the  fourth  criterion  (MET/IT)  set  out  in  Article  1(4)  of  Council 
Regulation (EC) No 1212/2005. Verification visits were carried out at the premises of 
the seven following companies:  

–  Wuxi Norlong Foundry Co., Ltd. (Wuxi New District, Jiangsu) ('Norlong'), 

– 

– 

– 

Baoding City Maikesaier Casting Ltd. (Xinanli, Hebei) ('Maikesaier'), 

XianXian  Guozhuang  Precision  Casting  Co.,  Ltd.  (Gouzhuang,  Hebei) 
('XianXian'), 

Changsha  Wuxing  Foundry  Co.,  Ltd.  (Wangcheng  County,  Changsha) 
('Wuxing')  and  related  company  Changsha  J  &  J  Sunshine  Machinery  and 
Electronic Co., Ltd (189 Wuyi Road, Changsha) ('Sunshine'), 

– 

Baoding Yuehai Machine Manufacturing Co., Ltd. (Baoding, Hebei) ('Yuehai'), 

('IASCF')  effectuated  by  the  International  Accounting  Standards  Board  ('IASB'),  covering  the 
International Accounting Standard Board Framework ('IASBF'), the International Accounting Standard 
('IAS'),  the  International  Financial  Reporting  Standards  ('IFRS')  and  the  International  Financial 
Reporting Interpretations Committee publications ('IFRIC'). 

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– 

HanDan County Yan Yuan Smelting and Casting Co., Ltd. (Han Dan County, 
Hebei) ('Yan Yuan'), 

– 

Tianjin Loiselet Art Casting Co., Ltd. (Jinghai, Tianjin) ('Loiselet'). 

(12)  For  each  of  the  seven  companies  visited,  it  was  verified  whether  the  four  criteria 

mentioned at recital (5) above were met. 

(13)  For two Chinese exporting producers, Maikesaier and Yuehai, the examination of the 
information submitted showed that they had provided sufficient evidence to prove that 
they  meet  the  four  criteria  set  out  in  Article  1(4)  of  Council  Regulation  (EC)  No 
1212/2005  and,  concerning  the  last  criterion,  that  they  meet  the  five  conditions  for 
MET. Therefore, these two producers can be granted the weighted average duty rate 
for companies granted MET applicable to the co-operating companies not included in 
the sample (i.e. 0 %) in accordance with Article 1(4) of Council Regulation (EC) No 
1212/2005  and  be  added  to  the  list  of  exporting  producers  of  Article  1(2)  of  that 
Regulation. 

(14)  Four  Chinese  exporting  producers,  Norlong,  XianXian,  Yan  Yuan  and  Loiselet 
provided sufficient evidence to prove that they meet the four criteria set out in Article 
1(4)  of  Council  Regulation  (EC)  No  1212/2005.  However,  concerning  the  last 
criterion, they could not show that they meet the conditions to be granted MET.  

(15)  For  Norlong  it  was  found  that  it  had  received  a  substantial  public  land-use  right 
refund. Criterion 3 for MET was therefore not considered to be fulfilled. It was also 
concluded  that  in  the  light  of  the  fact  that  criterion  3  could  not  be  met,  a  final 
determination  concerning  criterion  1  could  not  be  made.  However,  no  evidence  was 
found that this company did not fulfil the five criteria for IT. 

(16)  For XianXian it was found that it could not fulfil the criterion 1, 2 and 3 for MET. The 
company  did  not  submit  sufficient  evidence  to  show  that  it  operated  under  market 
economy  conditions  and  that  its  costs  reflected  market  values.  Furthermore,  the 
company was found not to have one clear set of accounting standards audited in line 
with  international  accounting  standards.  Finally,  it  was  found  that  the  company  had 
obtained  land  rent  contracts  at  abnormally  low  prices  in  both  absolute  and  relative 
figures. 

(17) 

It was found that Yan Yuan did not meet criterion 2 for MET. The 2006 accounts of 
this  company  had  not  been  audited,  contrary  to  Chinese  law  and  international 
accounting standards, and other accounting irregularities were also discovered, notably 
the fact that raw materials were purchased from private individuals, without invoicing.  

(18)  For Loiselet it was found that criterion 2 and 3 for MET were not met. In particular, it 
was established that most of the company's main assets did not appear in the accounts 
of the company. It also appeared that rental agreement for the land and buildings of the 
plant was not respected.  

(19) 

In  view  of  the  conclusions  reached  on  the  accounting  practices  of  XianXian,  Yan 
Yuan and Loiselet, it cannot be concluded that their export prices are reliable enough 
to  be  used  for  an  individual  dumping  margin  calculation  and  therefore  it  cannot  be 
concluded whether they fulfil the second criterion for IT. All other four criteria for IT 

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are met. However, considering the fact, that their export prices would not be used to 
calculate  the  dumping  margin,  if  these  three  companies  fell  under  the  weighted 
average  duty  rate  of  28,6  %  calculated  for  the  sampled  companies  granted  IT  in  the 
original  investigation,  it  is  concluded  that,  in  the  context  of  this  examination,  these 
companies  can  be  granted  the  same  treatment  as  those  falling  under  the  weighted 
average duty rate. 

(20)  Therefore,  Norlong,  XianXian,  Yan  Yuan  and  Loiselet  can  be  granted  the  weighted 
average duty rate for companies granted IT applicable to the co-operating companies 
not  included  in  the  sample  (i.e.  28,6  %)  in  accordance  with  Article  1(4)  of  Council 
Regulation  (EC)  No  1212/2005  and  be  added  to  the  list  of  exporting  producers  of 
Article 1(2) of that Regulation. 

(21)  Wuxing was found not to provide sufficient evidence to show to be the producer of the 
product concerned exported to the EC. Therefore, this producer did not fulfil the third 
criterion  set  out  in  Article  1(4)  of  Council  Regulation  (EC)  No  1212/2005,  and  its 
request for NEPT was therefore rejected. 

D.  MODIFICATION OF THE LIST OF COMPANIES BENEFITING FROM 
INDIVIDUAL DUTY RATES 

(22) 

In consideration of the findings of the investigation as indicated in recital (13) above, 
it is concluded that the companies Maikesaier and Yuehai should be added to the list 
of individual companies mentioned under Article 1(2) of Council Regulation (EC) No 
1212/2005 with a duty rate of 0 %. 

(23)  For the companies Norlong, XianXian, Yan Yuan and Loiselet, based on the findings 
of the investigation indicated in recitals (14) to (20) above, it is concluded that these 
four companies should be added to the list of individual companies mentioned under 
Article 1(2) of Council Regulation (EC) No 1212/2005 with a duty rate of 28,6 %. 

(24)  The  company  Wuxing,  considering  the  findings  of  the  investigation  as  indicated  in 
recital (21) above, cannot be granted NEPT and should therefore remain subject to the 
residual  duty  of  47,8  %  according  to  Article  1(2)  of  Council  Regulation  (EC)  No 
1212/2005. 

(25)  All the applicants and the Community Industry have been informed of the findings of 
the  investigation  and  have  had  the  opportunity  to  submit  their  comments.  Following 
disclosure,  comments  were  received  from  Norlong,  XianXian  and  Loiselet.  No 
additional  information  was  brought  forward  permitting  to  lead  to  any  different 
conclusions for any of the three companies, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Article 1(2) of Council Regulation (EC) No 1212/2005 shall be replaced by the following: 

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

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Company 

Anti-dumping 
duty (%) 

Taric additional 
code 

Shijiazhuang Transun Metal Products Co. Ltd., Xinongcheng 
Liulintun, Luancheng County, Shijiazhuang City 
Hebei Province, 051430 PRC 
Shaoshan Huanqiu Castings Foundry, Fengjia Village 
Yingtian Township, Shaoshan, Hunan, PRC 

Fengtai Handan Alloy Casting Co. Ltd. 
Beizhangzhuang Town, Handan County, Hebei, PRC 

Shanxi Jiaocheng Xinglong Casting Co. Ltd. 
Jiaocheng County, Shanxi Province, PRC 
Tianjin Jinghai Chaoyue Industrial and Commercial Co. Ltd. 
Guan Pu Tou Village, Yang Cheng Zhuang Town 
Jinghai District, 301617 Tianjin, PRC 
Baoding City Maikesaier Casting Ltd. 
Xin'anli Town, Tang County 
Hebei; Baoding 072350, PRC 
Baoding Yuehai Machine Manufacturing Co., Ltd.,  
No 333 Building A Tian E West Road,  
Baoding, Hebei, PRC 
Shanxi Yuansheng Casting and Forging Industrial Co. Ltd  
No. 8 DiZangAn, Taiyuan, Shanxi, 030002, PRC 
Botou City Simencum Town Bai fo Tang Casting Factory 
Bai Fo Tang Village, Si Men Cum Town, Bo Tou City 
062159, Hebei Province, PRC 
Hebei Shunda Foundry Co. Ltd., Qufu Road, Quyang 
073100, PRC 
XianXian Guozhuang Precision Casting Co., Ltd. 
Guli Village, Xian County,  
Hebei, Gouzhuang, PRC 
Wuxi Norlong Foundry Co., Ltd.  
Wuxi New District 
Jiangsu, PRC 
HanDan County Yan Yuan Smelting and Casting Co., Ltd 
South of Hu Cun Village, Hu Cun Town,  
Han Dan County, Hebei, PRC 
Tianjin Loiselet Art Casting Co., Ltd 
Dongzhuangke, Yangchenzhuang,  
Jinghai, Tianjin, PRC 
Changan Cast Limited Company of Yixian Hebei 
Taiyuan main street, Yi County, Hebei Province 
074200, PRC 
Shandong Huijin Stock Co. Ltd., North of Kouzhen Town 
Laiwu City, Shandong Province, 271114, PRC. 

All other companies 

0 

0 

0 

0 

0 

0 

0 

A675 

A676 

A677 

A678 

A679 

A867 

A868 

18,6 

A680 

28,6 

A681 

28,6 

A682 

28,6 

A869 

28,6 

A870 

28,6 

A871 

28,6 

A872 

31,8 

A683 

37,9 

47,8 

A684 

A999 

' 

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This  Regulation  shall  enter  into  force  on  the  day  following  that  of  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,  

For the Council 
The President 

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