Council Regulation (EC) No 812/2008 of 11 August 2008 amending Regulation (EC) No 954/2006 imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes of iron or steel originating, inter alia, in Russia
Date: 2008-08-11
Institutions: Council of the European Union
Subjects: Russia, anti-dumping duty, anti-dumping legislation, import, originating product, piping, tube

15.8.2008

EN

Official Journal of the European Union

L 220/1

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

I

REGULATIONS

COUNCIL REGULATION (EC) No 812/2008

of 11 August 2008

amending Regulation (EC) No 954/2006 imposing a definitive anti-dumping duty on imports of
certain seamless pipes and tubes of iron or steel originating, inter alia, in Russia

THE COUNCIL OF THE EUROPEAN UNION,

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 Articles 9 and 11(3)
thereof,

Having regard to Council Regulation (EC) No 954/2006 of
27 June 2006 imposing a definitive anti-dumping duty on
imports of certain seamless pipes and tubes, of iron or steel
(SPT) originating, inter alia, in Russia (2),

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

(3)

Whereas:

(1)

(2)

A. PROCEDURE

1. Existing measures

Following an investigation (the original investigation), the
Council, by Regulation (EC) No 954/2006,
imposed a
definitive anti-dumping duty on imports of certain
seamless pipes and tubes of iron or steel (SPT) originat­
ing, inter alia, in Russia.

2. Special monitoring

having

the entry into force of Regulation (EC) No
After
and
the Advisory
informed
954/2006
the Commission monitored with special
Committee,
attention the
from all
countries concerned by the measures. This monitoring
the Russian exporting
showed that

evolution of SPT imports

the exports 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 175, 29.6.2006, p. 4.

(hereinafter TMK,

producer group OAO TMK (OAO Volzhsky Pipe Plant,
OAO Taganrog Metallurgical Works, OAO Sinarsky Pipe
related
Plant, OAO Seversky Tube Works and their
companies)
the
group) to the Community during the first six months
after the imposition of measures had dropped drama­
tically. It also indicated that the level of duty as regards
TMK should be reexamined. Indeed, the cost and price
information provided by TMK in the monitoring ques­
the group’s dumping margin
tionnaire indicated that
would be lower than the current 35,8 %.

company or

the

3. Initiation of an interim review

It

On the initiative of the Commission, a partial
interim
review of the Regulation above was initiated for TMK,
on the basis of evidence that the Commission received
from that exporter. The company claimed that
the
circumstances which had led to the establishment of
the measure in force, had changed and that
these
changes were of a lasting nature.
is recalled that
TMK did not cooperate fully in the original investigation
and therefore its dumping margin was calculated on the
basis of facts available, i.e. the normal value of another
producer group in Russia which cooperated with the
it
investigation and Eurostat data. According to TMK,
investigation
failed to cooperate during the original
mainly because of
changes
which had already begun to take place within the
group during the original
investigation period. Due to
these exceptional circumstances, which had an impact
on the corporate governance of the group, as well as
its accounting and auditing practices, TMK could not
provide adequate
its prices and costs
investigation. According to the
during the original
in its organisation since the
company,
original
simpler
corporate structure, improved corporate governance and
a switch to IFRS accounting, which would allow it to
cooperate.
It also provided prima facie evidence to
show that a comparison of normal value based on its

investigation have

the changes

evidence of

significant

resulted

internal

in a

the

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(4)

(5)

(6)

own domestic prices or costs and export prices to the
Community would lead to a reduction of dumping well
below the level of
the current measure. Therefore it
claimed that the continued imposition of the measure
at the existing level, which was based on the level of
dumping
longer
necessary to offset dumping.

established, was

previously

no

after

determined,
that

consulting
sufficient evidence existed for

the Advisory
Having
the
Committee,
initiation of a partial
interim review, the Commission
decided on its own initiative to initiate a partial interim
the basic
review in accordance with Article 11(3) of
Regulation, limited in scope to the level of dumping as
far as the exporting producers/members of
the TMK
group are concerned. The Commission published a
initiation on 22 June 2007 in the Official
notice of
the European Union (1) and commenced an
Journal of
investigation.

(8)

B. REVIEW INVESTIGATION

1. Product concerned

The product concerned by the current review is the same
as that in the original investigation, i.e. certain seamless
pipes and tubes of iron or steel, of circular cross-section,
of an external diameter not exceeding 406,4 mm with a
Carbon Equivalent Value (CEV) not exceeding 0,86
Institute of Welding
according to the International
formula and chemical analysis (2) originating in
(IIW)
Russia (the product concerned), currently classifiable
ex 7304 19 10,
within CN codes
ex 7304 23 00,
ex 7304 19 30,
ex 7304 29 30,
ex 7304 24 00,
ex 7304 39 92,
ex 7304 31 80,
ex 7304 39 93,
and
ex 7304 59 93 (3).

ex 7304 22 00,
ex 7304 29 10,
ex 7304 39 58,

ex 7304 51 89,

ex 7304 11 00,

ex 7304 59 92

The Commission officially advised TMK and its related
companies, as well as the representatives of the exporting
country, of the initiation of the interim review. Interested
parties were given the opportunity to make their views
known in writing and to request a hearing.

The Commission also sent questionnaires to TMK and its
related companies
and received replies within the
deadlines set for that purpose. The Commission sought
and verified all the information it deemed necessary for
the determination of dumping and carried out verifi­
cation visits at the premises of the following companies:

— OAO Volzhsky Pipe Plant, Russia,

— OAO Taganrog Metallurgical Works, Russia,

2. Like product

(9)

The product produced and sold on the Russian domestic
market and that exported to the Community have the
same basic physical, technical and chemical characteri­
stics and uses and are therefore considered to be alike
within the meaning of Article 1(4) of
the basic
Regulation.

C. RESULTS OF THE INVESTIGATION

1. Normal value

(10)

Sales on the domestic market are made via the related
company, ZAO TMK Trade House, which then resells the
product concerned to independent customers in Russia.

— OAO Sinarsky Pipe Plant, Russia,

(11)

— OAO Seversky Tube Works, Russia,

— ZAO TMK Trade House, Russia,

— TMK Europe GmbH, Germany,

— TMK Global AG, Switzerland,

— TMK Italia s.r.l., Italy.

4. Review investigation period

(7)

The investigation of dumping covered the period from
1 April 2006 to 31 March 2007 (the review investi­
gation period or RIP).

(1) OJ C 138, 22.6.2007, p. 37.

In accordance with Article 2(2) of the basic Regulation, it
was first examined, with regard to the four cooperating
exporting producers of the group, whether their domestic
sales of the like product to independent customers were
representative, i.e. whether the total volume of such sales
was equal to or greater than 5 % of the total volume of
the corresponding export sales to the Community. The
total volume of domestic sales of the like product was
found to be representative. The Commission’s services
subsequently identified those types of the like product
sold on the domestic market that were identical to or
directly comparable with the types exported to the
Community.

(2) The CEV shall be determined in accordance with Technical Report,
1967, IIW doc. IX-535-67, published by the International Institute
of Welding (IIW).

(3) As presently defined in Commission Regulation (EC) No 1214/2007
of 20 September 2007 amending Annex I to Council Regulation
(EEC) No 2658/87 on the tariff and statistical nomenclature and on
the Common Customs Tariff (OJ L 286, 31.10.2007, p. 1). The
product
the product
description in Article 1(1) of Regulation (EC) No 954/2006 and
the product description of
the corresponding CN codes taken
together.

is determined in combining

coverage

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(12)

(13)

(14)

For each type sold by the exporting producers on their
domestic market and found to be directly comparable
with the type of the product concerned exported to the
it was established whether domestic sales
Community,
the purposes of
were sufficiently representative for
Article 2(2) of the basic Regulation. Domestic sales of
a particular type were considered sufficiently representa­
tive when the total domestic sales volume of that type
during the IP represented 5 % or more of the total sales
volume of the comparable type of the product concerned
exported to the Community.

Subsequently, it was examined whether each type of the
product concerned sold domestically in representative
quantities could be considered as being sold in the
ordinary course of trade pursuant to Article 2(4) of the
basic Regulation, by establishing the proportion of prof­
itable sales to independent customers on the domestic
market of the product type in question.

In cases where the sales volume of the relevant product
type, sold at a net sales price equal to or above the
calculated cost of production, represented more than
80 % of the total sales volume of that type and where
the weighted average price of that type was equal to or
above the cost of production, normal value was based on
the actual domestic price, calculated as a weighted
average of the prices of all domestic sales made during
the IP, irrespective of whether these sales were profitable
or not. In cases where the volume of profitable sales of a
product type represented 80 % or less of the total sales
volume of that type or where the weighted average price
of that type was below the cost of production, normal
value was based on the actual domestic price, calculated
as a weighted average of profitable sales of that type
only, provided that
these sales represented 10 % or
more of the total sales volume of that type. In cases
where the volume of profitable sales of any product
type represented less
sales
volume, it was considered that this particular type was
sold in insufficient quantities for the domestic price to
provide an appropriate basis for the establishment of the
normal value.

than 10 % of

the total

(15) Wherever domestic prices of a particular product type
sold by an exporting producer could not be used in
order to establish the normal value, another method
had to be applied. In this regard, the Commission used
constructed normal value. In accordance with Article 2(3)
of the basic Regulation, normal value was constructed by
adding to the exporting producer’s manufacturing costs
of
the exported types, adjusted where necessary, a
reasonable percentage for selling, general and adminis­
trative expenses (SG&A) and a reasonable margin of
profit. Pursuant to Article 2(6) of the basic Regulation,
the percentage for SG&A and profit margin were based
on the average SG&A and profit margin of sales in the
ordinary course of trade of the like product.

(16) With regard to manufacturing costs, and in particular
energy costs, as
it was
far as gas
examined whether the gas prices paid by the exporting
producers reasonably reflected the costs associated with
the production and distribution of gas.

concerned,

is

(17)

It was found that the domestic gas price paid by the
the
exporting producers was around one fourth of
export price of natural gas from Russia. In this regard,
all available data indicates that domestic gas prices in
Russia are regulated prices, which are far below market
for natural gas.
prices paid in unregulated markets
Therefore, since gas costs were not reasonably reflected
in the exporting producers’ records as provided for in
Article 2(5) of
they had to be
the basic Regulation,
adjusted accordingly. In the absence of any sufficiently
relating to the
representative, undistorted gas prices
Russian domestic market, it was considered appropriate
to base the adjustment, in accordance with Article 2(5),
on the basis of information from other representative
markets. The adjusted price was based on the average
the
price of Russian gas when sold for export at
German/Czech border
local
distribution costs. Waidhaus, being the main hub for
Russian gas sales to the EU, which is both the largest
reasonably
market
reflecting costs, can be considered a representative
market within the meaning of Article 2(5) of the basic
Regulation.

for Russian gas and has prices

(Waidhaus), adjusted for

(18)

For those product types where the normal value was
constructed, as described above,
the construction was
done on the basis of the manufacturing costs of the
exported types after the adjustment for the gas cost.

2. Export price

(19) All export sales of TMK are made via related companies
located either in the Community or in Switzerland. Thus
the
export price was established on the basis of
Article 2(9) of the basic Regulation, i.e. using the resale
prices actually paid or payable to the related company by
the first independent buyer in the Community in the RIP,
adjusted for all costs incurred between importation and
resale and for profits.

(20) As for the export prices charged to customers in the
Community by the related company in Switzerland,
TMK Global AG, TMK claimed that it would be unwar­
ranted to deduct from the export price the profit, SG&A
and commissions or agency fees since TMK Global acts
as a fully integrated export sales department outside the
Community. According to TMK such deductions would
located in the
only be warranted for
group’s
Community
importing network, as provided for in Article 2(9) of
the basic Regulation.

and forming

a part of

companies

the

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(21)

The above claim was accepted, as it was found that TMK
Global’s role after the organisational changes within the
group had evolved into that of an export department
responsible for exports outside the Community and
that
also the export sales to the Community, albeit
these had dropped to low volumes prior and during
Indeed, TMK Global acts as a ‘sales hub’,
the RIP.
which simplifies
the purchasing and documentation
processes for the front offices located directly in the
key markets, i.e. TMK North America and TMK Middle
functions of an export
East.
It also performs other
to its key
department with regard to export
markets,
such as
management accounting and enforcement of goods
these functions were
tracking standards.
performed by the local export departments of each
mill, but they are now carried out by TMK Global for
the sake of centralisation and to ensure consistency.

to the Community,

In the past,

as well

sales

as

3. Comparison

(22)

The comparison between the weighted normal value and
the weighted export price was made on an ex-works
basis and at the same level of trade. In order to ensure
a fair comparison, account was taken, in accordance with
Article 2(10) of the basic Regulation, of differences in
factors which were demonstrated to affect prices and
allowances
price
for
comparability. On this basis,
differences in physical characteristics,
transport costs,
insurance, handling charges, credit costs and import
duties were made where applicable and justified.

4. Dumping margin

(23) As provided for under Article 2(11) of the basic Regu­
lation, the weighted average normal value by type was
compared with the weighted average export price of the
the product concerned. This
corresponding type of
comparison showed the existence of dumping.

of facts available, in accordance with Article 18 of the
basic Regulation. As
the
Commission used the normal value established for
another,
cooperating, Russian producer group and
Eurostat data.

available,

facts

the

for

(27)

(28)

(29)

The insufficient cooperation which led to the use of facts
internal
available was caused mainly by significant
changes which had already begun to take place within
the group during the original investigation period. Due to
these exceptional circumstances, which had an impact on
the corporate governance of the group as well as on its
accounting and auditing practices, TMK could not
provide adequate
its prices and costs
evidence of
during the original investigation.

in contrast to the original

investigation TMK cooperated fully.
In the current
Indeed,
investigation, when
the group was still in a state of flux, the data provided
investi­
in the questionnaire responses in the current
gation could be verified in a satisfactory manner.
Hence,
since the group provided reliable data with
regard to the normal value and the export price, the
dumping margin could be calculated based on its own
data.

the changes

Evidence obtained during the investigation has shown
in TMK’s corporate structure and
that
accounting practices, which allowed the group to
to be
cooperate
long-term
considered lasting as
structure of the group.

investigation,

they refer

to the

in the

current

are

(30)

It is therefore considered that the circumstances that led
to the initiation of this review are unlikely to change in
the foreseeable future in a manner that would affect the
findings of the current review. Therefore the changes are
considered to be of a lasting nature.

(24)

TMK’s dumping margin expressed as a percentage of the
net, free-at-Community-frontier price, duty unpaid, was
found to be 27,2 %.

D. LASTING NATURE OF CHANGED CIRCUMSTANCES

(25)

In accordance with Article 11(3) of the basic Regulation,
it was also examined whether the changed circumstances
could reasonably be said to be of a lasting nature.

(31)

E. ANTI-DUMPING MEASURES

the results of

is
the investigation,
In the light of
to amend the anti-dumping
considered appropriate
duty applicable to imports of
the product concerned
from TMK to 27,2 %. The amended anti-dumping duty
should be set at the level of the dumping margin found,
as it is lower than the injury margin established in the
original investigation.

it

(26)

In this respect it is recalled that TMK did not cooperate
properly during the original
investigation. Therefore its
dumping margin, which forms the basis of the currently
applicable duty of 35,8 %, was determined on the basis

(32)

Interested parties were informed of the essential facts and
considerations on the basis of which it was intended to
recommend an amendment of Regulation (EC) No
954/2006 and were given an opportunity to comment.

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F. UNDERTAKING

(33)

Following the disclosure of the essential facts and considerations on the basis of which it was
intended to recommend amending the definitive anti-dumping duty applicable to imports of the
product concerned from TMK, the group offered a price undertaking in accordance with Article 8(1)
of the basic Regulation. The undertaking offered by TMK did not alter the Commission’s initial
conclusion that the product concerned is not suitable for an undertaking as set out in recitals
the Commission considers that TMK’s
248 to 250 of Regulation (EC) No 954/2006.
current undertaking offer does not address the technical difficulties relating to the product
concerned as stated in recital 248 of the above mentioned Regulation to an extent that would
make the offered price undertaking practicable,

Indeed,

HAS ADOPTED THIS REGULATION:

The following is added to the table in Article 1(2) of Regulation (EC) No 954/2006:

Article 1

Country

Company

Anti-dumping duty

TARIC additional code

‘Russia

OAO Volzhsky Pipe Plant, OAO Taganrog Metal­
lurgical Works, OAO Sinarsky Pipe Plant and
OAO Seversky Tube Works

27,2 %

A859’

This Regulation shall enter into force on the day following 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, 11 August 2008.

For the Council
The President

B. KOUCHNER