2008/437/EC: Commission Decision of 11 June 2008 amending Decision 2006/109/EC accepting an undertaking offered in connection with the anti-dumping proceeding concerning imports of certain castings originating in the People's Republic of China
Date: 2008-06-11
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, cast-iron, import, iron and steel product, originating product, road services department

12.6.2008

EN

Official Journal of the European Union

L 153/37

COMMISSION

COMMISSION DECISION

of 11 June 2008

amending Decision 2006/109/EC accepting an undertaking offered in connection with the anti-
dumping proceeding concerning imports of certain castings originating in the People's Republic
of China

(2008/437/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

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),
and in particular Article 8 thereof,

After consulting the Advisory Committee,

Whereas:

(1)

(2)

A. EXISTING MEASURES

In July 2005,
1212/2005 (2),
on imports of
People's Republic of China (the PRC).

the Council, by Regulation (EC) No
imposed a definitive anti-dumping duty
certain castings originating in the

The Commission, by Decision 2006/109/EC (3), accepted
inter alia, the Benito Group,
a price undertaking from,
(Spain), Benito
including Fundició Dúctil Benito, S.L.
France, S.A.R.L, Zibo Benito Metalwork Co. Ltd, Benito
(Tianjin) Metals Products Co. Ltd, and Qingdao Benito
Metals
the
companies).

(Benito Group or

Products Co.

Ltd

(3)

The companies from which the undertaking was accepted
have a joint and several liability for any infringement of

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

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

(2) OJ L 199, 29.7.2005, p. 1. Regulation as last amended by Regu-

lation (EC) No 426/2008 (OJ L 129, 17.5.2008, p. 1).

(3) OJ L 47, 17.2.2006, p. 59.

(4)

(5)

(6)

(7)

the undertaking. This means that if one of the members
of the Benito Group breaches the undertaking, it should
be withdrawn for all members of the group.

B. BREACHES OF THE UNDERTAKING

1. Obligations of the companies under the
undertaking

The undertaking offered by the companies obliges them
to, inter alia, resell the product covered to the first inde-
pendent customer in the European Community above a
certain minimum re-sale price (MRP) as stated in the
undertaking, as well as in the side letter attached to it.

the undertaking the

In section 3.1 of
companies
undertook to ensure that the product concerned, after
any direct or deferred discounts or rebates, credits or
indirectly
other benefits granted, whether directly or
linked to a sale, on a CIF price level, is not sold below
the MRP.

terms,

the payment

the undertaking,

In section 3.10 of
the companies
undertook to calculate the MRP on ‘cash’ or equivalent
payment
i.e. with zero credit granted to the
customer. In accordance with the same section of the
terms (specified on the
undertaking if
Invoice or on the re-sale invoice, or as
Commercial
from ‘cash’ or
otherwise contractually agreed) differ
equivalent payment
to be
compared with the MRP should be reduced by 1 % for
each additional month of credit granted on a pro-rata
basis.

then the price

terms,

in the form of a quarterly report of

The terms of the undertaking also obliged the companies
to provide the Commission with regular and detailed
information,
its
sales and re-sales of
the product concerned to the
European Community. Such reports should include the
re-sale transactions of the products covered by the under-
taking purchased from the related companies in the PRC,
as well as those re-sale transactions of
the product
covered where the purchases were made from any
other Chinese companies.

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Official Journal of the European Union

12.6.2008

(8)

(9)

In addition, and as stipulated in the undertaking, the
companies undertook to consult with the European
Commission regarding any difficulties which may arise
during the implementation and subsequent application
of the undertaking.

For the purpose of ensuring compliance with the under-
taking, the companies also undertook to allow on-spot
verification visits at its premises in order to verify the
accuracy and veracity of data submitted in the said
quarterly
information
all
and to provide
considered necessary by the Commission.

reports

2. Results of the verification visit to Fundició Dúctil
Benito

(10) A verification visit was carried out at the premises of
Fundició Dúctil Benito (the company)
in Spain from
2 July 2007 until 3 July 2007. The verification visit
covered the period from 1 April 2006 until 31 March
2007.

(11)

The verification visit established that in 13 transactions
the MRP was not respected because the company issued
credit notes concerning these transactions with no other
underlying economic justification than to lower the re-
sale price shown on the invoice. These transactions fall
below the MRP by an average of 10 %.

(12) During the verification visit the company stated that this
could occur because its sales personnel was not aware
that an MRP had to be respected for the re-sales of
from its
certain castings
related Chinese producers).

(namely the ones bought

(13) Moreover, the MRP was not respected in a further 39
transactions as the company did not take into consi-
the MRP was calculated on ‘cash or
deration that
equivalent basis’;
i.e. when it agreed on the payment
terms for a particular transaction it did not increase its
re-sale price compared to the MRP with 1 % for each
additional month granted for payment. Therefore, the
company failed to fulfil
its obligation under section
3.10 of
the undertaking. These transactions were on
average 7 % below the MRP.

(14) During the verification visit the company acknowledged
that it was not aware of the fact that ‘cash or equivalent
basis’ means maximum 10 days of payment terms. The
company was erroneously considering it to be 30 days
instead.

3. Reasons to withdraw the acceptance of the
undertaking

(15)

The facts set out
conclusion that

in recitals 9 and 11 led to the
the company to

the obligation of

respect
product covered was not met.

the MRP for all

re-sale transactions of

the

(16)

(17)

(18)

(19)

For 13 transactions the company issued credit notes with
no other economic justification but to lower the price
shown on the invoice, which resulted in the re-sale price
on average falling below the MRP by 10 %.

For a further 39 transactions, the MRP was not respected
due to the company's failure to take due account of the
calculation of the MRP on ‘cash or equivalent basis’. The
average re-sale price of these transactions falls 7 % below
the MRP.

4. Written submissions and hearing

(a) Complexity of the undertaking

The company acknowledged during the on-spot verifi-
cation that it did not report all the re-sales transactions
of the product covered, but only those for which the
products were purchased from the related companies.

The company argued in its written submission that
certain reporting violations could occur because of the
complexity of the undertaking text and because it did not
receive any feedback on its reports from the Commis-
sion's services.

(20)

In respect of the reporting problems,
it is pointed out
that the company received clear instructions on how to
report.

(21) Moreover,

the Commission's services always answered
the company's questions regarding the implementation
of the undertaking in a timely manner.

(22)

(23)

It should be further noted that it is not customary for the
Commission's services to send out
feedback on the
certain
quarterly reports
problems are identified during the desk-analyses of the
reports.

companies unless

to the

In this case, problems related to the MRP were first
identified as a result of the quarterly report submitted
company was
on 15 April 2007 on which the
issues were
consulted on 23 May 2007. These
examined during the verification visit carried out on 2-
3 July 2007. During this verification visit, other reporting
problems were also found which could only have been
identified during an on-spot verification visit. The
company was briefed immediately on this issue.

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(b) Proportionality

(24) With regard to the price violations,

a price

the company
admitted that
violation occurred on 52
occasions, but it claimed that this would be a minor
transactions in the
portion of
period considered and that,
in accordance with the
principle of proportionality, the undertaking should not
be withdrawn.

the total number of

(25)

In response to these arguments, it should be pointed out
that, in accordance with the undertaking, the company
undertook to ensure that the re-sale price of all trans-
actions covered by the undertaking shall be at or above
the MRP set out in the undertaking.

(26) Moreover, regarding the issue of proportionality,

the
indirect
that a breach of an undertaking must

basic Regulation
requirement
relate to a minimum percentage of sales.

contains

direct

no

or

(27)

This approach has also been confirmed by the juris-
prudence of the Court of First Instance which has ruled
that any breach of an undertaking is sufficient to justify
the withdrawal of acceptance of an undertaking (1).

(28) Accordingly, the arguments presented by the company
with regard to proportionality do not alter the Commis-
sion's view that a breach of the undertaking occurred and
that
the undertaking should be
withdrawn.

the acceptance of

(c) Precedent invoked by the company

The company also referred to a case where a new under-
taking offer was accepted from a company from which
the acceptance of
its previous undertaking had been
withdrawn as a consequence of violations (2).

(29)

(30)

In the case invoked as a precedent the company breached
its original undertaking by failing to submit its under-
taking report in due time. Later on, upon request of the
company, an interim review was initiated and during the
review the company could prove that it introduced new
measures so that it could ensure that no further reporting
breach of the undertaking would happen.

(37)

(31)

In this regard it has to be noted that
the case the
company is referring to as a precedent is not directly
comparable as (i)
the undertaking was
formal in nature (i.e. late submission of the undertaking

the breach of

(1) In this context, see case T-51/96 Miwon v Council (ECR 2000, p. II-
1841) paragraph 52; case T-340/99 Arne Mathisen S v Council
(ECR 2002, p. II-2905) paragraph 80.

(2) Gje-Vi AS; Council Regulation (EC) No 322/2002 (OJ L 51,

22.2.2002, p. 1).

report); and (ii) the Commission withdrew the under-
taking and only accepted a new undertaking in the
framework of an interim review at a later stage. The
argument of the company is therefore dismissed.

(32)

(d) Undertaking related practices of the company

this notification happened only after

The company argued that during the verification visit, it
voluntarily notified the Commission's officials that there
were certain transactions which fell below the accepted
MRP due to credit notes issued. However, firstly, this
that violations occurred.
does not change the fact
Secondly,
the
Commission's services had analysed the quarterly report
submitted on the 15 April 2007 and as a result of the
analysis, requested further information and thus drew the
company's attention to the problem. Therefore, it was the
Commission's services that drew the company's attention
to the problem following a desk analysis of the quarterly
reports submitted.

(33)

The company argued that at the time of submitting its
regular reports to the Commission, the company felt that
the reports were complete, exhaustive and correct in all
particulars and that the company thought that the MRP
was respected.

(34)

The company also emphasised that the management and
the personnel responsible for reporting was not aware of
the fact that the sales personnel issued credit notes which
resulted in re-sales prices falling below the MRP.

(35) During the hearings and the written submissions, the
company informed the Commission that one salesman
was responsible for these actions and that this person is
not working for the company any more.

(36) Moreover,

it was submitted that

the company imple-
mented changes in order to correct
the mistakes: a
restrictive policy concerning the issuing of credit notes
was applied, the re-sales prices were increased and the
company updated its computerised system. Furthermore,
the sales personnel were informed about the details of
the undertaking.

the

and/or

activities of

Furthermore,

Referring to the recitals above it must be noted that the
fact that the management was not aware of any possible
price violations
sales
the
personnel related to the undertaking does not exempt
the
the company from respecting the obligations of
undertaking.
to
initiated
remedy the situation were introduced only after the
company's
Commission's
In light of the above, the
attention to the problems.
repeated occurrence of
and the price
the
violation caused by these activities warrants the with-
drawal of
the undertaking despite the actions taken
after the on-spot verification visit.

services have drawn the

actions

errors

the

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Official Journal of the European Union

12.6.2008

C. AMENDMENT OF DECISION 2006/109/EC

(38)

In view of the above, the acceptance of the undertaking offered by the Benito Group,
including
Fundició Dúctil Benito (Spain), Benito France, S.A.R.L, Zibo Benito Metalwork Co. Ltd, Benito
(Tianjin) Metals Products Co. Ltd, and Qingdao Benito Metals Products Co. Ltd, should be
withdrawn and Article 1 of Decision 2006/109/EC should be amended. Accordingly, the definitive
anti-dumping duty imposed by Article 1(2) of Regulation (EC) No 1212/2005, under ‘All other
companies’, should apply to the products manufactured by Zibo Benito Metalwork Co., Ltd,
Benito (Tianjin) Metals Products Co. Ltd, and Qingdao Benito Metals Products Co. Ltd,

HAS DECIDED AS FOLLOWS:

Article 1

Acceptance of the undertaking in relation to re-sale of certain castings offered by the Benito Group,
including Fundició Dúctil Benito (Spain), Benito France, S.A.R.L, Zibo Benito Metalwork Co. Ltd, Benito
(Tianjin) Metals Products Co. Ltd, and Qingdao Benito Metals Products Co. Ltd, is hereby withdrawn.

Article 2

The table of Article 1 in Decision 2006/109/EC is replaced by the following table:

‘Company

Taric Additional Code

Beijing Tongzhou Dadusche Foundry Factory, East of Dongtianyang Village, Dadushe,
Tongzhou Beijing

Botou City Simencun Town Bai Fo Tang Casting Factory, Bai Fo Tang Village, Si Men Cun
Town, Bo Tou City, 062159, Hebei Province

Botou City Wangwu Town Tianlong Casting Factory, Changle Village, Wangwu Town, Botou
City, Hebei Province

Changan Cast Limited Company of Yixian Hebei, Taiyuan main street, Yi County, Hebei
Province, 074200

Changsha Jinlong Foundry Industry Co., Ltd, 260, Jinchang Road, JinJing Town, Changsha,
Hunan

A708

A681

A709

A683

A710

Changsha Lianhu Foundry, Lianhu Village, Yuhuating Town, Yuhua District, Changsha, Hunan

A711

Manufactured and sold by GB Metal Products Co., Ltd, Zhuanlu Town, Dingzhou, Hebei or
manufactured by GB Metal Products Co., Ltd, Zhuanlu Town, Dingzhou, Hebei and sold by
its related sales company GB International Trading Shanghai Co. Ltd, B301-310 Yinhai
Building, 250 Cao Xi Road, Shanghai

Guiyang Bada Foundry Co., Ltd, Mengguan Huaxi Guiyang, Guizhou

Hebei Jize Xian Ma Gang Cast Factory, Nankai District. Xiao Zhai Town, Jize County, Handan
City, Hebei

Manufactured and sold by Hebei Shunda Foundry Co. Ltd, Qufu Road, Quyang, 073100, PRC
or manufactured by Hebei Shunda Foundry Co. Ltd, Qufu Road, Quyang, 073100, PRC and
sold by its related sales company Success Cast Tech Ltd, 603A Huimei Business Centre 83
Guangzhou Dadao(s), Guangzhou 510300

Hong Guang Handan Cast Foundry Co. Ltd, Nankai District, Xiao Zhai Town, Handou City,
Jize County, Hebei

Qingdao Qitao Casting Co. Ltd, Nan Wang Jia Zhuang Village, Da Xin Town, Jimo City,
Qingdao, Shandong Province, 266200

A712

A713

A714

A715

A716

A718

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Official Journal of the European Union

L 153/41

Company

Taric Additional Code

Shandong Huijin Stock Co. Ltd, North of Kouzhen Town, Laiwu City, Shandong Province,
271114

Shahe City Fangyuan Casting Co. Ltd, West of Nango Village, Shiliting Town, Shahe City,
Hebei Province

Shanxi Yuansheng Casting and Forging Industrial Co. Ltd, No 8 DiZangAn, Taiyuan, Shanxi,
030002

Tianjin Fu Xing Da Casting Co. Ltd, West of Nan Yang Cun Village, Jin Nan District, 300350,
Tianjin

Weifang Jianhua Casting Co. Ltd, Kai Yuan Jie Dao Office, Hanting District, Weifang City,
Shandong Province

Zibo City Boshan Guangyuan Casting Machinery Factory, Xiangyang Village, Badou Town,
Boshan District, Zibo City Shandong Province

Zibo Dehua Machinery Co. Ltd, North of Lanyan Street, Zibo High-tech Developing Zone

A684

A719

A680

A720

A721

A722

A723’

This Decision shall take effect on the day following its publication in the Official Journal of the European
Union.

Article 3

Done at Brussels, 11 June 2008.

For the Commission

Peter MANDELSON
Member of the Commission