Proposal for a Council Regulation amending Regulation (EC) No 74/2004 imposing a definitive countervailing duty on imports of cotton-type bedlinen originating in India
Date: 2008-07-18
Institutions: European Commission
Subjects: India, anti-subsidy proceeding, import, originating product, textile product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 18.7.2008 
COM(2008) 477 final 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 74/2004 imposing a definitive countervailing duty on 
imports of cotton-type bedlinen originating in India  

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  2026/97  of 
6 October 1997 on protection against subsidised imports from countries not members 
of  the  European  Community,  as  last  amended  by  Council  Regulation  (EC)  No 
461/2004  of  8  March  2004  ("the  basic  Regulation")  in  the  proceeding  concerning 
imports of cotton-type bedlinen, originating in India. 

•  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. 

•  Existing provisions in the area of the proposal 

Council  Regulation  (EC)  No  74/20041,  amended  by  Council  Regulations  (EC) 
No 2143/20042,  No 122/20063  and  No  1840/20064 
imposing  a  definitive 
countervailing  duty  on  imports  into  the  Community  of  cotton-type  bedlinen, 
originating in India. 

Proposal  for  granting  new  exporting  producer  treatment  to  new  exporters  to  the 
Community. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

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 

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OJ L 12, 17.1.2004, p. 1. 
OJ L 370, 17.12.2004, p. 1. 
OJ L 22, 26.1.2006, p. 3. 
OJ L 355, 15.12.2006, p.4. 

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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. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

By  Regulation  (EC)  No  74/2004  the  Council  imposed  a  definitive  countervailing 
duty on imports into the Community of cotton-type bedlinen originating in India. 

During  the  original  investigation,  given  the  large  number  of  exporters/producers  of 
the  product  concerned  in  India,  a  sample  of  exporting  producers  was  chosen. 
Individual  duty  rates  ranging  from  4.4% to 10.4% were imposed on the  companies 
selected  for  the  sample,  while  other  co-operating  companies  not  included  in  the 
sample received a duty rate of 7.6%. A residual duty rate of 10.4% was imposed on 
companies which either did not make themselves known or did not co-operate in the 
investigation. 

Article  2  of  Council  Regulation  (EC)  No  74/2004  gave  the  possibility  to  Indian 
exporters/producers  which  met  the  criteria  set  out  in  the  same  Article  not  to  be 
treated  differently  from  the  co-operating  companies  not  included  in  the  sample 
(‘newcomer status’). 

Council  Regulation  (EC)  No  74/2004  has  been  amended  three  times,  namely  by 
Council Regulation  (EC)  No 2143/2004, by Council  Regulation (EC) No 122/2006 
and  by  Council  Regulation  (EC)  No  1840/2006.  All  three  Regulations  added  the 
names  of  companies  exporting  the  product  concerned  originating  in  India  who  met 
the  criteria  set  out  in  Council  Regulation  (EC)  No  74/2004  to  the  list  of  Indian 
exporting producers in the Annex to the Regulation. 

Two  of  the  twenty  Indian  exporters/producers  who  requested  newcomer  status 
provided  evidence  which  was  considered  sufficient  to  amend  Council  Regulation 
(EC)  No  74/2004  by  adding  their  names  to  the  list  of  companies  subject  to  the 
weighted average duty margin of 7.6%. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation, 
which should be published in the Official Journal as soon as possible. 

•  Legal basis 

Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection  against 
subsidised imports from countries not members of the European Community as last 
amended by Council Regulation (EC) No 461/2004 of 8 March 2004. 

•  Subsidarity principle 

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

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•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The  form  of  action  is  described  in  the  above-mentioned  Regulations  and  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 

Proposed instruments: regulation. 

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

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

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 74/2004 imposing a definitive countervailing duty on 
imports of cotton-type bedlinen originating in India  

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  2026/97  of  6 October  1997  on  protection 
against  subsidised  imports  from  countries  not  members  of  the  European  Community5  (the 
'basic Regulation'),  

Having  regard  to  Article  2  of  Council  Regulation  (EC)  No 74/2004  of  13 January  2004 
imposing a  definitive  countervailing  duty on imports of  cotton-type bed linen originating in 
India6, 

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

Whereas: 

A. PREVIOUS PROCEDURE 

(1) 

By  Regulation  (EC)  No  74/20047(the  'original  Regulation'),  the  Council  imposed  a 
definitive countervailing duty on imports into the Community of cotton-type bed linen 
falling within CN codes ex 6302 21 00 (TARIC codes 6302 21 00 81, 6302 21 00 89), 
ex 6302 22 90 (TARIC code 6302 22 90 19), ex 6302 31 00 (TARIC code 6302 31 00 
90) and ex 6302 32 90 (TARIC code 6302 32 90 19), originating in India. Given the 
large number of cooperating exporting producers of the product concerned in India, a 
sample  of  Indian  exporting  producers  was  selected  in  accordance  with  Article  27  of 
Council  Regulation  (EC)  No  2026/97  ('the  basic  Regulation')  8  and  individual  duty 
rates  ranging  from  4.4%  to  10.4%  were  imposed  on  the  companies  included  in  the 
sample, while other cooperating companies not included in the sample were attributed 
a  duty  rate  of  7.6%.  A  residual  duty  rate  of  10.4%  was  imposed  on  all  other 
companies. 

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OJ  L  288,  21.10.1997,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No 461/2004  (OJ  L  77, 
13.3.2004, p. 12). 
OJ  L  12,  17.1.2004,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  1840/2006  (OJ  L  355, 
15.12..2006, p. 4). 
OJ L 12, 17.1.2004, p. 1. 
Council Regulation (EC) No 2026/97, OJ L 228 21.10.1997, p. 1. as last amended by Regulation (EC) 
No 461/2004 (OJ L 77, 13.3.2004, p. 12). 

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(2) 

Article  2  of  Council  Regulation  (EC)  No  74/2004  stipulates  that  where  any  new 
exporting producer in India provides sufficient evidence to the Commission that it did 
not  export  to  the  Community  the  products  described  in  Article  1(1)  during  the 
investigation period (1 October 2001 to 30 September 2002) (the first criterion), that it 
is not related to any of the exporters or producers in India which are subject to the anti-
subsidy  measures  imposed  by  that  Regulation  (the  second  criterion)  and  that  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  (the  third 
criterion), then Article 1(3) of that Regulation may be amended by granting the new 
exporting  producers  the  duty  rate  applicable  to  the  co-operating  companies  not 
included in the sample, i.e. 7.6%. 

(3) 

The  original  Regulation  has  been  amended  three  times,  by  Council  Regulation  (EC) 
No 2143/20049, Council Regulation (EC) No 122/200610 and Council Regulation (EC) 
No  1840/200611.  All  three  Regulations  have  added  to  the  annex  the  names  of 
companies  exporting  the  product  concerned,  which  met  the  criteria  set  out  in  the 
original Regulation. 

B. NEW EXPORTER/PRODUCER REQUESTS 

(4) 

Twenty  Indian  companies  applied  to  be  granted  the  same  status  as  the  companies 
co-operating  in  the  original  investigation  not  included  in  the  sample  (‘newcomer 
status’) since the publication of the previous amending Regulation.  

(5) 

The 20 applicants were: 

Applicant Company 

City 

K.K.P. Textiles Limited 

Tamil Nadu 

Kashmiri  Lal  Tarun  Khanna  PVT 
LTD 

Amritsar 

Premier Polyweaves Private Limited Coimbatore 

Home Fashions International 

Kerala 

Y.J. Enterprises 

KaLaM Designs 

Himatsingka Linens 

S.K.T. Textile Mills 

Mumbai 

Ahmedabad 

Bangalore 

Coimbatore 

Shetty Garments Private Ltd. 

Mumbai 

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OJ L 370, 17.12.2004, p. 1. 
OJ L 22, 26.1.2006, p. 3. 
OJ L 355, 15.12.2006, p. 4. 

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TAVOY Workwear 

Orient Craft Limited 

GHCL Limited  

Mumbai 

Haryana 

Gujarat 

Indo Count Industries Limited 

Mumbai 

Vijayeswari Textiles Limited 

Coimbatore 

Nest Exim 

Prakash Textiles  

Mumbai 

Coimbatore 

Prakash Woven Private Limited. 

Coimbatore 

Sotexpa  Qualidis  Textiles 
Private Ltd 

India 

Coimbatore 

BKS Textiles Pvt. Ltd 

Coimbatore 

JDA Textiles 

Chennai 

(6) 

(7) 

(8) 

Eleven companies did not reply to the questionnaire intended to verify that they met 
the  conditions  set  out  in  Article  2  of  Council  Regulation  (EC)  No 74/2004  and  their 
requests therefore had to be rejected. 

The  remaining  nine  companies  submitted  complete  replies  to  the  questionnaire  and 
were therefore considered for newcomer status. 

The evidence provided by two of the above-mentioned Indian exporting/producers is 
considered  sufficient  to  show  that  they  fulfil  the  criteria  set  out  in  the  original 
Regulation and therefore to grant them the rate of duty applicable to the co-operating 
companies not included in the sample (i.e. 7,6%) and consequently to add them to the 
list  of  exporting  producers  in  the  Annex  to  Council  Regulation  (EC)  No 74/2004,  as 
amended  by  Council  Regulation  (EC)  No  2143/2004,  Council  Regulation  (EC)  No 
122/2006 and Council Regulation (EC) No 1840/2006. 

(9) 

The  remaining  seven  companies  had  their  applications  for  new  exporting  producer 
status rejected for the following reasons. 

(10)  Two  companies  failed  to  provide  evidence  that  they  had  exported  the  product 
concerned  to  the  EC  after  the  investigation  period  or  that  they  had  irrevocable 
contractual obligations to export the product concerned in significant quantities to the 
EC. Thus they did not fulfil the third criterion. 

(11)  One company failed to provide the sales ledger for the period considered and was thus 
unable to show that it had not exported the product concerned during the investigation 
period.  Another  company  was  found  to  have  exported  the  product  concerned  during 
the investigation period. These companies therefore did not fulfil the first criterion.  

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(12)  One  company  sent  the  reply  to  the  questionnaire  after  the  deadline  and  crucial 
documents were missing from the application. One other company did not reply to a 
deficiency  letter  requesting  more  information.  These  two  companies  had  thus  not 
provided  sufficient  evidence  to  show  that  they  fulfilled  the  criteria  set  out  in  the 
original Regulation.  

(13)  Finally,  one  company  was  found  to  be  related  to  one  that  was  named  in  the  original 
Regulation and its application for newcomer status was therefore rejected as it failed 
the second criterion.  

(14)  Companies for which newcomer status was not granted were informed of the reasons 
for this decision and given an opportunity to make their views known in writing. 

(15)  All  arguments  and  submissions  made  by  interested  parties  were  analysed  and  duly 

taken into account where warranted. 

HAS ADOPTED THIS REGULATION: 

The following companies shall be added to the list of producers from India listed in the Annex 
to Council Regulation (EC) No 74/2004: 

Article 1 

Company 

Home Fashions International 

GHCL Ltd. 

City 

Kerala 

Gujarat 

Article 2 

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 Brussels, […] 

For the Council 
The President 
[…] 

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