Council Regulation (EC) No 388/2008 of 29 April 2008 extending the definitive anti-dumping measures imposed by Regulation (EC) No 1472/2006 on imports of certain footwear with uppers of leather originating in the People’s Republic of China to imports of the same product consigned from the Macao SAR, whether declared as originating in the Macao SAR or not
Date: 2008-04-29
Institutions: Council of the European Union
Subjects: China, Macao, anti-dumping duty, anti-dumping measure, footwear industry, import, leather, originating product

1.5.2008

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Official Journal of the European Union

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

I

REGULATIONS

COUNCIL REGULATION (EC) No 388/2008

of 29 April 2008

extending the definitive anti-dumping measures imposed by Regulation (EC) No 1472/2006 on
imports of certain footwear with uppers of leather originating in the People’s Republic of China
to imports of the same product consigned from the Macao SAR, whether declared as originating in
the Macao SAR or not

THE COUNCIL OF THE EUROPEAN UNION,

2. Ex-Officio Initiation

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 Article 13 thereof,

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

Whereas:

A. PROCEDURE

1. Existing measures and former investigations

(2)

(3)

(4)

(1)

(the ‘original
By Regulation (EC) No 1472/2006 (2),
Regulation’),
anti-
the Council
dumping duties
ranging from 9,7 to 16,5 % on
imports of footwear with uppers of leather originating
in the People’s Republic of China (‘the original
investi-
gation’).

definitive

imposed

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

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

(2) OJ L 275, 6.10.2006, p. 1.

(325) of the original Regu-
In accordance with recital
lation,
the Commission carried out monitoring of
imports in order to identify any changes in the pattern
of
the
trade which could indicate circumvention of
measures.

The evidence at the disposal of the Commission indicated
that since the imposition of the anti-dumping measures,
there had been a change in the pattern of trade, based on
transhipment and/or assembly practices, for which there
was insufficient due cause or economic justification other
than the imposition of the anti-dumping measures. In
addition, the evidence showed that the remedial effects
of the existing anti-dumping measures on imports of
certain footwear with uppers of leather originating in
the PRC were being undermined both in terms of
quantity and price. Finally, the evidence indicated that
the prices of certain footwear with uppers of
leather
consigned from the Macao SAR were dumped in
relation to the normal value established for the like
product during the original investigation.

after

determined,

initiation of

the basic Regulation,

an investigation pursuant

the Advisory
consulting
Having
that sufficient prima facie evidence existed
Committee,
to
for
the
Article 13 of
the Commission
published, in the Official Journal of the European Union, a
Regulation of Initiation (3) (the ‘initiating Regulation’) on
an ex-officio basis to investigate the alleged circum-
vention of the anti-dumping measures. The Commission,
by means of the initiating Regulation and Article 14(5) of
the basic Regulation, also instructed the customs au-
thorities to register imports of certain footwear with
uppers of
leather consigned from the Macao SAR
whether declared as originating in the Macao SAR or
not, as from 7 September 2007.

(3) OJ L 234, 6.9.2007, p. 3.

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(5)

3. Investigation

leather

The Commission officially advised the authorities of the
Macao SAR and the PRC and known manufacturers/ex-
porters in the Macao SAR and the PRC, the importers in
the Community known to be concerned and producers
of certain footwear with uppers of
in the
Community of the initiation of the investigation. Ques-
tionnaires were sent to the exporters/manufacturers in
the Macao SAR, to the exporters/producers in the PRC
and to the importers in the Community which were
known to the Commission from the original
investi-
gation and which had made themselves known within
the deadlines specified in Article 3 of the initiating Regu-
lation. 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 initiating Regu-
lation.

(6)

Eight manufacturers/exporters
in the Macao SAR
submitted questionnaire replies. Replies to questionnaires
were also submitted by 16 unrelated importers in the
importers also made themselves
Community. Other
known but did not complete questionnaire responses.

(7)

The following companies cooperated in the investigation
and submitted replies to the questionnaires:

Macanese manufacturers/exporters:

— Fabrica de Sapatos Paolina Limitada, Macao,

— Feifer Footwear/Ultimate Footwear, Macao,

— Fabrica de Sapatos Fairwear, Macao,

— Hap Yun Shoes Factory, Macao,

— Hong Wan, Macao,

— K. Wah Shoes Factory Limited, Macao,

— Fabrica de Sapatos Sunrise, Macao,

— Vai Un Footwear Factory, Macao.

(8)

(9)

— Caprice

Germany,

Schuhproduktion GmbH & Co. KG,

— Eurohispana De Inversiones, S.A., Spain,

— Firma Handlowa ‘C.A.M.’, Poland,

— Footex International B.V., The Netherlands,

— Heson International B.V., The Netherlands,

— Mexx Shoes B.V., The Netherlands,

— Orion Italiana GmbH & Co. KG, Germany,

— PWH Originals International B.V., The Netherlands,

— Shoe.com GmbH & Co. KG, Germany,

— Wendel GmbH & Co. KG, Germany,

— Wolverine Europe Ltd., UK,

— Wolverine Europe B.V., The Netherlands,

— Wortman
Germany.

KG Internationale

Schuproduktionen,

In addition, twenty-seven producers/exporters in the PRC
replied
in
footwear via Macao.

to mini-questionnaires

regarding

trade

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

— Fabrica de Sapatos Paolina Limitada, Macao,

— Feifer Footwear (Macau)/Ultimate Footwear (Macau),

Macao,

— Fabrica de Sapatos Fairwear (Macau) Limitada, Macao,

Importers in the Community:

— Hap Yun Shoes Factory, Macao,

— a+w shoes GmbH & Co. KG, Germany,

— Hong Wan Factory, Macao,

— Aasics Europe B.V., The Netherlands,

— Fabrica de Sapatos K. Wah Limitada, Macao,

— Aldo UK Ltd, UK,

— Vai Un Footwear Factory, Macao.

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(10)

By visiting seven companies, over 90 % of the production
of the cooperating manufacturers was covered.

(11) Where appropriate, verification visits were also carried
out to traders in both the Macao SAR and the Hong
Kong SAR which traded the product concerned for sale
to the Community market. Such visits were limited to
sales of the product concerned produced by the verified
Macanese companies and the authorities of the Hong
Kong SAR were informed of these visits.

5. Investigation period

(15)

The investigation period (the ‘IP’) covered the period
from 1 July 2006 to 30 June 2007. Data was collected
from 2004 up to the end of the IP to investigate the
alleged change in the pattern of trade and the other
aspects set out in Article 13 of the basic Regulation.

6. Disclosure

(16) All interested parties were informed of the essential facts
and considerations on the basis of which it was intended
to recommend:

(12)

(13)

(14)

4. Product concerned and like product

indoor

footwear

ex 6403 51 05,

slippers and other

The product concerned by the possible circumvention is
footwear with uppers of leather or composition leather,
involving special
excluding sports footwear,
technology,
footwear and
footwear with a protective toecap (‘certain footwear
leather’) originating in the People’s
with uppers of
Republic of China, normally declared under CN codes
ex 6403 51 11,
6403 20 00,
ex 6403 51 19,
ex 6403 51 91,
ex 6403 51 15,
ex 6403 51 99,
ex 6403 59 05,
ex 6403 51 95,
ex 6403 59 31,
ex 6403 59 35,
ex 6403 59 11,
ex 6403 59 91,
ex 6403 59 95,
ex 6403 59 39,
ex 6403 91 05,
ex 6403 91 11,
ex 6403 59 99,
ex 6403 91 16,
ex 6403 91 18,
ex 6403 91 13,
ex 6403 91 93,
ex 6403 91 96,
ex 6403 91 91,
ex 6403 99 05,
ex 6403 99 11,
ex 6403 91 98,
ex 6403 99 33,
ex 6403 99 36,
ex 6403 99 31,
ex 6403 99 38,
ex 6403 99 93,
ex 6403 99 91,
ex 6403 99 96, ex 6403 99 98 and ex 6405 10 00 (the
‘product concerned’).

footwear

The product under investigation is footwear with uppers
leather or composition leather, excluding sports
of
footwear,
technology,
involving
slippers and other indoor footwear and footwear with
a protective toecap consigned from the Macao SAR
(the ‘product under investigation’), whether declared as
originating in Macao SAR or not, normally declared
under the same CN codes as the product concerned.

special

consigned

The investigation showed that footwear exported to the
Community from the People’s Republic of China and
those
the
from the Macao
Community have the same basic physical characteristics
and have the same uses. They are therefore to be
considered as
like products within the meaning of
Article 1(4) of the basic Regulation.

SAR to

(i) the extension of the definitive anti-dumping measures
imposed by Regulation (EC) No 1472/2006 on
imports of certain footwear with uppers of leather
originating in the People’s Republic of China to
imports of
the same product consigned from the
Macao SAR;

(ii) not to grant exemptions to the companies having
In accordance with the provisions
requested them.
the basic Regulation, parties were granted a
of
period in which they could make representations
subsequent to this disclosure.

(17)

The oral and written comments submitted by the parties
were considered and, where appropriate, the definitive
findings were modified accordingly.

B. RESULTS OF THE INVESTIGATION

1. General considerations

the date of

the initiating Regulation. However,

(18) As mentioned above, the analysis of a change in the
pattern of trade covered the period from 2004 up to
the end of the IP. Data was collected and analysed on
the basis of the enlarged Community market (‘EU27’) as
at
it
should be noted that
the original measures were
imposed on the PRC on the basis of calculations based
on the Community market as it existed at that time
(‘EU25’). Bearing this in mind, the import levels into
the two new Member States (Bulgaria and Romania)
were analysed and it was clear that these accounted for
only a very small percentage of total EU27 imports and
that therefore the decision as to which EU market level
(EU27 or EU25) should be used as a basis for analysis
had no impact on the outcome of
the conclusions
reached.

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2. Degree of cooperation and determination of the

(23)

import volume

(19) As stated above in recital (6), eight exporters/manufac-
turers in the Macao SAR cooperated with the investi-
gation by submitting questionnaire replies and all of
those companies exported the product concerned to
the Community during the IP either directly or indirectly
via traders. Based on information supplied by the
it was clear that at least fifteen
Macanese authorities,
companies were manufacturing footwear in Macao at
the initiation of the investigation. However, the largest
manufacturer, which amounted for around 50 % of
exports
to the Community, did not cooperate and
therefore cooperation levels were determined to be
below 50 %. Furthermore, only twenty-seven exporting
replied to the Commission’s mini-ques-
producers
tionnaire for producer/exporters in the PRC. During the
original
investigation it was clear that the number of
producers in the PRC was many hundreds. None of the
twenty-seven respondents stated that they exported to
the Community market via Macao.

(20) As it was clear that the cooperation level for both the
Macao SAR and the PRC was not high, the determination
of the import volume had to be obtained via statistical
sources. This data was cross-checked and confirmed by
other statistical sources available to the Commission. This
approach was further confirmed by other information
received during the investigation which indicated the
existence of a number of other non-cooperating expor-
ters/manufacturers in the Macao SAR and the PRC which
exported the product concerned to the Community
during the IP.

3. Methodology

(21)

(22)

In accordance with Article 13(1) of the basic Regulation,
the assessment of the existence of circumvention was
done by analysing whether there was a change in the
pattern of
and the
trade between third countries
Community, whether
that change stemmed from a
practice, process or work for which there was insufficient
due cause or economic justification other than the impo-
sition of the duty, whether there was evidence of injury
or that
the duty were being
undermined in terms of the prices and/or quantities of
the like product, and whether there was evidence of
dumping in relation to the normal values previously
in
established for
if necessary
accordance with the provisions of Article 2 of
the
basic Regulation.

the remedial effects of

like product,

the

the product subject

the consignment of

The practice, process or work referred to above includes,
to
inter alia,
measures via the Macao SAR and the assembly of parts
by an assembly operation in the Macao SAR. For this
the existence of assembly operations was
purpose,
determined in accordance with Article 13(2) of
the
basic Regulation.

it

is noted that eight manufacturing
In this regard,
companies in Macao submitted questionnaire responses.
The seven largest manufacturers were checked on the
spot and all eight responses were used as a basis for
the calculation of the following aspects of the investi-
gation mentioned at Article 13 of the basic Regulation:

(a)

the value of
operations;

the parts used in the

assembly

(b) the value added in terms of cost of manufacturing

(COM);

(c) dumping using the normal value from the previous

investigation;

(d) the determination of when the companies started
manufacturing, or whether operations substantially
increased, since the imposition of measures;

(e)

the assessment of whether the imported products
had, in terms of quantities and/or prices, undermined
the remedial effects of the measures in force.

(24) As regards (a) and (b) above, cost information from the
Macanese manufacturers including their purchases from
Chinese suppliers was used. As none of
the Chinese
suppliers involved received MET status in the original
investigation, the question arose whether the cost infor-
mation relating to the Chinese suppliers could be used. In
found that
investigation, where it was
the original
Chinese costs were unreliable because no MET status
was granted, costs from an analogue country (Brazil)
were used as a replacement. In respect of this investi-
gation, calculations were made using both Chinese and
analogue country data from the original investigation.

(25) Where a particular company did not supply a full ques-
tionnaire response, findings relating to (a) to (e) above as
necessary were based on facts available in accordance
the basic Regulation. Where this
with Article 18 of
was necessary,
the relevant manufacturer/exporter was
informed by means of, inter alia, a disclosure and given
an opportunity to comment.

(26)

Bearing in mind that the statistical evidence collected in
this investigation did not distinguish amongst the types
of footwear concerned, the tests mentioned at recital (23)
above were assessed on the basis of data received from
the cooperating Macanese manufacturers/exporters.

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(27)

(28)

(29)

(30)

quantities

in terms of

To assess whether the imported products from the Macao
and/or prices,
SAR had,
undermined the remedial effects of
the measures in
force, the sales quantities and prices of the eight co-
operating manufacturers were compared to the injury
elimination level established for Community producers
in the original investigation.

it was

examined whether

In accordance with Article 13(1) and (2) of the basic
Regulation,
there was
evidence of dumping in relation to the normal value
In
previously established for like or similar products.
this regard, export prices of the cooperating manufac-
turers in the Macao SAR during the IP were compared
with the normal value established in the investigation
leading to the imposition of the definitive measures for
investigation normal
the like product.
value was
established on the basis of prices or
constructed value in Brazil, which was found to be an
appropriate market economy analogue country for the
PRC. For the purpose of a fair comparison between the
normal value and the export price, due allowance, in the
form of adjustments, was made for differences which
affect prices and price comparability.

In the original

In accordance with Article 2(11) and (12) of the basic
Regulation, dumping was calculated by comparing the
weighted average normal value as established in the
investigation and the weighted average export
original
investigation’s
prices during this
IP, expressed as a
percentage of the CIF price at the Community frontier,
duty unpaid.

4. Change in the pattern of trade

Imports from China have diminished since the impo-
sition of provisional measures in the original
investi-
gation by Regulation (EC) No 553/2006 (1). In contrast,
imports from the Macao SAR have increased enormously.
This change in trade pattern is most accurately expressed
in this investigation by analysing sales volumes in the
period April to December of the years 2005, 2006 and
2007 because measures were originally imposed in April
2006 and footwear is a product with seasonal variations.

The PRC

Period

Volume exported to the EU

April to December 2005

around 142 million pairs

April to December 2006

around 66 million pairs

April to December 2007

around 70 million pairs (extra-
polation based on available data)

The Macao SAR

Period

Volume exported to the EU

April to December 2005

around 0,5 million pairs

April to December 2006

around 8,0 million pairs

April to December 2007

around 8,5 million pairs (extra-
polation based on available data)

Source — statistical data (TARIC) available to the Commission covering
only the product concerned (figures rounded for reasons of confiden-
tiality)

(31)

It is clear from the above figures that imports from the
PRC fell substantially in the last nine months of 2007
imports
and 2006 as compared to 2005. In contrast,
from the Macao SAR increased substantially over the
same time periods. These findings support the allegation
that goods have been consigned from China via the
Macao SAR to the Community.

(32)

The Commission carried out cross-checking of this data
to other available statistical
sources which revealed
similar trends.

(33)

The Commission also used Macanese import and export
statistics for shoe parts which showed that:

Period

Volume imported to the Macao SAR
from the PRC

April to December 2005

around 30 tonnes

April to December 2006

around 900 tonnes

April to December 2007

around 800 tonnes (extrapolation
based on available data)

In contrast, the volume of exports of such shoe parts during the above
three periods was negligible. Source — Macao Economic Services Database

(34)

The above findings show that the importation of shoe
parts increased by a massive amount after the imposition
of the provisional measures in April 2006 and provides
evidence that a large assembly operation was being set
up in the Macao SAR after the imposition of
those
measures.

(1) OJ L 98, 6.4.2006, p. 3.

(35)

The Commission also used Macanese import and export
statistics for finished footwear which showed that:

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Period

Volume imported to the Macao
SAR from the PRC

April to December 2005

0,04 million pairs

April to December 2006

4,5 million pairs

April to December 2007

5,1 million pairs (extrapolation
based on available data)

Period

Volume exported to the EU
from the Macao SAR

April to December 2005

0,3 million pairs

April to December 2006

10,8 million pairs

April to December 2007

8,2 million pairs (extrapolation
based on available data)

Source — Macao Economic Services Database

(36)

the importation of
show that
The above findings
footwear from the PRC to the Macao SAR and the expor-
tation of the same footwear from the Macao SAR to the
EU increased by a massive amount after the imposition
of the provisional measures in April 2006. This provides
evidence that large-scale transhipment operations were
performed via the Macao SAR after the imposition of
those measures.

(37)

to the
exports
The overall decrease of Chinese
Community and the parallel
increase of exports from
the Macao SAR after the imposition of the provisional
measures constitute a change in the pattern of
trade
between the abovementioned countries.

5. Circumvention via Assembly Operations

(38)

In addition to the evidence used above at recital (37),
circumvention via assembly operations was assessed
using data supplied by the cooperating Macanese expor-
ters/producers.

5.1. The Value of Parts Test (Article 13(2)(b))

(39)

For all eight cooperating Macanese exporters the vast
majority of
the raw materials were supplied from
Chinese suppliers. These raw materials were not simply
leather, plastics, etc. but complete uppers, outsoles,
In
insoles,
some cases, even glue was sourced from these Chinese
suppliers. This was evidenced by copies of raw materials
invoices seen on the spot
together with a physical
inspection of the production lines and stocks of raw
materials.

shoe-boxes and other accessories.

laces,

received MET status

(40) None of the Chinese companies which supplied the eight
in the
Macanese manufacturers
original
investigation and the question therefore arose
whether the purchase data from the Chinese suppliers
investigation, where it
could be used.
was found that Chinese costs were unreliable because
no MET status was granted, costs from an analogue
country (Brazil) were used as a replacement. In respect
of this investigation, calculations were made using both
Chinese and analogue country data.

In the original

(41) As regards the calculation using the cost data of the
including the actual purchase
Macanese manufacturers,
costs from their Chinese suppliers, a limited amount of
very minor materials were sourced locally in Macao but
these did not amount to more than 2 % of the total value
of the assembled parts.

(42) As regards the calculation using the analogue country
result was obtained
data in Brazil, a very similar
the Brazilian raw material costs were
although, as
slightly higher
the
percentage of total raw material costs sourced in the
Macao SAR was even lower.

actual Chinese data,

than the

(43)

It was therefore concluded that more than 60 % of the
total value of the raw materials of the assembled product
were sourced from the PRC.

5.2. The Value Added Test of
(‘COM’) (Article 13(2)(b))

the Cost of Manufacturing

(44)

(45)

all

This test was assessed using data supplied by the eight
cooperating Macanese manufacturers.
the
For
the vast majority of the
companies it was clear that
value added in the COM was carried out in the PRC
rather than in the Macao SAR. The sourcing from the
PRC was in all cases of the parts which were so far
advanced that
assembly in Macao related to
machinery and labour for glueing and finishing of the
footwear.

the

For each company a calculation was performed to assess
the value added in terms of COM in Macao. Such data
was obtained from the accounting records held by each
company. However, some companies operated only on
the basis of processing fees and were unaware of the
value of the processing carried out in the PRC by their
suppliers. In such cases, it was possible to estimate this
value using information relating to raw materials
obtained from the PRC and the export price of
the
goods from Macao excluding profit and SGA costs.
This
through examination of
copies of raw materials invoices, accounting records of
other COM items seen on the spot and export invoices
together with a physical
inspection of the production
lines and stocks of raw materials.

test was carried out

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received MET status

(46) None of the Chinese companies which supplied the eight
in the
Macanese manufacturers
investigation and therefore the question arose
original
suppliers
the purchases
whether
investigation, where it
could be used.
was found that Chinese costs were unreliable because
no MET status was granted, costs from an analogue
country (Brazil) were used as a replacement. In respect
of this investigation, calculations were made using both
Chinese and analogue country data.

from the Chinese

In the original

(53)

the COM of

(47) As regards the calculation using the cost data of the
including the actual purchase
Macanese manufacturers,
costs from their Chinese suppliers, calculations showed
that
the assembly operations in Macao
amounted to between 6 and 18 % depending on the
company and the weighted average was 9,5 %. As
regards the calculation using the analogue country data
in Brazil, a very similar result was obtained although as
the Brazilian COM costs were slightly higher than the
actual Chinese data,
the percentage of COM costs
sourced in the Macao SAR was even lower.

(48) One cooperating importer argued that

the Macanese
manufacturers were not breaching the test concerning
the manufacturing cost. They
25 % value added of
claimed that, as the Macanese manufacturers had Certi-
ficates of Origin for their footwear exports, they were not
circumventing the measures in place. However, whether
the Macanese manufacturers offer Certificates of Origin
with their exports is not at issue. Compliance with the
rules of origin does not exclude the possibility of circum-
vention.

(49)

It was concluded based on recitals (44) to (48) that the
value added to the parts brought in, during the assembly
operation, did not exceed 25 % of the value of the cost
of manufacturing.

5.3. Increase in Production since the Opening of the Original

Investigation (Article 13(2)(a))

(50)

The original
investigation relating to this product was
initiated on 7 July 2005. It was therefore necessary to
establish whether production had increased since that
date. This test was carried out using purchase invoices
of raw materials, production records and sales invoices of
finished goods of
cooperating Macanese
eight
exporters.

the

averaged over 100 %.

therefore
increases
concluded that there had been a substantial increase in
production since the original case was opened in July
2005.

It was

that

legal

claimed

for
their

representatives

several
customers

cooperating
The
importers
(retailers)
preferred footwear made in Macao to those made in
the PRC because they were made to higher production
standards and used a better quality of raw materials. They
also claimed that
intellectual property theft was a
concern in the PRC. The importers claim that this is
one reason why they source from the Macao SAR.
However, none of these claims has been substantiated
by the cooperating manufacturers in the Macao SAR.
Indeed, none of the cooperators had major production
facilities and simply assembled parts sourced from the
PRC. The investigation further showed that in terms of
raw material quality and production standards,
the
footwear sourced in the Macao SAR was identical to
that
intellectual
property rights, this allegation was also unsubstantiated
and could not explain why concerns over this issue had
led to such a sudden increase in production in the Macao
SAR as explained above. The investigation concluded that
the reason for such an increase in production was the
imposition of anti-dumping measures on footwear from
the PRC.

sourced in the PRC.

In respect of

(54) Another importer claimed that the existence of manufac-
turing facilities in the Macao SAR before the imposition
of measures in the PRC showed that
there was an
economic justification for the imports from the Macao
SAR. However, the investigation showed that before the
imposition of measures concerning imports from the
PRC, the level of manufacturing activity in the Macao
SAR was very low. Indeed, as the above findings show,
there has been a massive increase in footwear manufac-
turing activity since the measures were imposed. This was
caused by new companies being formed and pre-existing
companies increasing and/or restarting production.

6. Circumvention via Transhipment

(55) As none of the twenty-seven Chinese exporters which
they
cooperated in the
performed shoe business via Macao,
the Commission
analysed statistical data in order to examine whether
transhipment via Macao occurred.

investigation declared that

(51)

For three companies,
the footwear
production at the company had been set up since July
2005.

it was clear that

(56)

(52)

For all remaining companies, a substantial
production was
production volumes with those of

increase in
established when comparing 2005
IP. These

the

The change in the pattern of trade described above at
recitals (30) to (37) supports the allegation of circum-
vention via transhipment.
the trade in
finished footwear set out in recital (35) shows that the
product
the
Community market from the PRC, was being consigned
through the Macao SAR.

concerned, which was

In particular,

exported

to

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Official Journal of the European Union

1.5.2008

(57)

Bearing in mind that the population of the Macao SAR
numbered only around 0,5 million persons during the IP,
it cannot be claimed that the 4,5 million pairs of shoes
imported from the PRC in 2006 could be consumed in
Macao. On the contrary, the export statistics show that a
large proportion of such footwear was re-exported to the
Community market. The volume exported in the IP from
Macao to the Community was in fact higher than 4,5
million pairs (around 10 million pairs). This increase can
be explained by the conversion of shoe parts into
finished footwear.

(64)

(35) above shows an
recital
In terms of quantities,
increase in footwear exports to the Community market
of around 10 million pairs in the period of April to
December 2006 and 2007 as compared to the same
investigation the
In the original
period in 2005.
Community market was established at 714 million
pairs which mean that the imports account for around
1,5 % of consumption. Furthermore, as CIF import prices
averaged over EUR 10 per pair, the imports from the
Macao SAR totalled over EUR 100 million. The imports
from the Macao SAR must therefore be deemed to be
material and significant.

(58)

The investigation did not uncover any justification other
than the imposition of the measures for such practices.

(59)

In conclusion, the investigation has shown that large-
scale transhipment operations were performed via the
Macao SAR after the imposition of the anti-dumping
measures on footwear originating in the PRC.

(60)

(61)

7. Dumping Test (Article 13(1))

In accordance with Article 2(11) and (12) of the basic
Regulation, a comparison of
the weighted average
normal value as established in the original investigation
and the weighted average of export prices during this
investigation’s IP, expressed as a percentage of the CIF
price at the Community frontier duty unpaid, showed
dumping of
the product concerned
consigned from the Macao SAR.

the imports of

The methodology for this test is described at recitals (21)
to (29). The dumping margin for
the cooperating
companies ranged from 8 % to 57 %. In the absence of
cooperation for transhipping operations, a calculation of
dumping was performed on the basis of available
statistical sources, confirming significant dumping levels.

(62) One cooperating importer claimed that

imports from
Macao were not dumped and contested the methodology
of using normal value from the original
investigation.
However, it must be pointed out that the methodology
employed is the one set out in Article 13(1) of the basic
Regulation.

8. Undermining of the remedial effect of the anti-

dumping duty (Article 13(1))

(63)

The trade flow analysis at recitals (30) to (37) shows a
change in the pattern of Community imports, which
investigation was opened. It
occurred after the original
was therefore examined whether
this change in the
pattern of trade undermined the remedial effects of the
anti-dumping measures imposed in the original investi-
gation.

(65) With regard to dumped prices of the product consigned
from the Macao SAR, it was found that they were, on
average, well below the injury elimination level estab-
lished for Community producers in the original investi-
gation.

(66)

Therefore,
it was concluded that the imports from the
Macao SAR of the product concerned undermined the
remedial effects of the duty in terms of prices and quan-
tities.

(67)

(68)

C. CONCLUSIONS

The present investigation was characterised by a high
level of non-cooperation in the PRC, whereas co-
operation in the Macao SAR, whilst not high, was
deemed adequate to provide a representative basis for
the assessment of trade consigned from the Macao SAR
by means of assemblers. As regards the allegations of
transhipment via the Macao SAR (without assembly),
no companies cooperated with the investigation leaving
the Commission to rely,
infor-
mation.

inter alia, on statistical

The investigation showed that there was clear circum-
vention of
the measures on the product concerned
from the PRC within the meaning of Article 13(1) and
(2) of the basic Regulation via the Macao SAR. In view of
the above, the existing anti-dumping measures imposed
on imports of the product concerned originating in the
PRC should be extended to the same product consigned
from the Macao SAR, whether declared as originating in
the Macao SAR or not.

(69)

The measures to be extended should be those established
in Article 1(3) of the original Regulation for ‘all other
companies’.

(70)

In accordance with Article 14(5) of the basic Regulation,
which provides that any extended measures should apply
to imports which entered the Community under regis-
tration imposed by the initiating Regulation, duties
should be collected on those registered imports of the
product concerned consigned from the Macao SAR.

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Official Journal of the European Union

L 117/9

D. REQUESTS FOR EXEMPTION

(71) None of the eight companies in the Macao SAR which
submitted a questionnaire reply requested an exemption
in accordance with Article 13(4) of the basic Regulation.

ex 6403 91 05, ex 6403 91 11, ex 6403 91 13, ex 6403 91 16,
ex 6403 91 18, ex 6403 91 91, ex 6403 91 93, ex 6403 91 96,
ex 6403 91 98, ex 6403 99 05, ex 6403 99 11, ex 6403 99 31,
ex 6403 99 33, ex 6403 99 36, ex 6403 99 38, ex 6403 99 91,
and
ex 6403 99 93,
ex 6405 10 00

ex 6403 99 96,

ex 6403 99 98

(72) However,

it

should be noted that all of

the eight
companies carried out very similar
limited assembly
functions and sourced all of their main raw materials
in the PRC. As all these companies consequently failed
each of the circumvention tests outlined in Article 13(1)
and (2) of the basic Regulation, no such exemptions
would therefore have been granted even if
they had
been requested,

HAS ADOPTED THIS REGULATION:

Article 1

The definitive anti-dumping duty applicable to ‘all other
1.
companies’
imposed by Regulation (EC) No 1472/2006 on
imports of certain footwear with uppers of leather or compo-
sition leather as defined in Article 1 of Regulation (EC) No
1472/2006 originating in the People’s Republic of China,
is
hereby extended to certain footwear with uppers of leather or
composition leather as defined in Article 1 of Regulation (EC)
No 1472/2006 falling within CN codes:

consigned from the Macao SAR whether declared as originating
in the Macao SAR or not. The TARIC codes for imports
consigned from the Macao SAR are listed in the Annex of
this Regulation.

The duties extended by paragraph 1 of this Article shall be
2.
collected on imports registered in accordance with Article 2 of
Regulation (EC) No 1028/2007 (1) and Articles 13(3) and 14(5)
of Regulation (EC) No 384/96.

The provisions in force concerning customs duties shall

3.
apply.

Article 2

Customs authorities are hereby directed to discontinue the regis-
tration of imports established in accordance with Article 2 of
Regulation (EC) No 1028/2007.

ex 6403 20 00, ex 6403 51 05, ex 6403 51 11, ex 6403 51 15,
ex 6403 51 19, ex 6403 51 91, ex 6403 51 95, ex 6403 51 99,
ex 6403 59 05, ex 6403 59 11, ex 6403 59 31, ex 6403 59 35,
ex 6403 59 39, ex 6403 59 91, ex 6403 59 95, ex 6403 59 99,

Article 3

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

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

Done at Luxembourg, 29 April 2008.

For the Council
The President

D. RUPEL

(1) OJ L 234, 6.9.2007, p. 3.

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Official Journal of the European Union

1.5.2008

ANNEX

TARIC codes for footwear with uppers of leather or composition leather as defined in Article 1 of Regulation (EC)
No 1472/2006, consigned from Macao, whether originating in Macao or not

CN code

TARIC code Consigned from
Macao

CN code

TARIC code Consigned from
Macao

6403 20 00

6403 51 05

6403 51 05

6403 59 05

6403 59 05

6403 91 05

6403 91 05

6403 99 05

6403 99 05

6403 51 11

6403 51 15

6403 51 19

6403 51 91

6403 51 95

6403 51 99

6403 59 11

6403 59 31

6403 59 35

6403 59 39

6403 59 91

6403 59 95

6403 59 99

20

15

95

15

95

15

95

15

95

91

91

91

91

91

91

91

91

91

91

91

91

91

6403 91 11

6403 91 13

6403 91 16

6403 91 18

6403 91 91

6403 91 93

6403 91 96

6403 91 98

6403 99 11

6403 99 31

6403 99 33

6403 99 36

6403 99 38

6403 99 91

6403 99 93

6403 99 93

6403 99 96

6403 99 96

6403 99 98

6403 99 98

6405 10 00

95

95

95

95

95

95

95

95

91

91

91

91

91

95

25

95

25

95

25

95

81