Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of sulphanilic acid originating in the People’s Republic of China and India following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 384/96
Date: 2008-09-12
Institutions: European Commission
Subjects: China, India, anti-dumping duty, anti-dumping legislation, chemical product, import, originating product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 12.9.2008 
COM(2008)549 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty on imports of sulphanilic acid originating in the 
People’s Republic of China and India following an expiry review pursuant to Article 
11(2) of Council Regulation (EC) No 384/96 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

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,  as  last  amended  by  Council  Regulation  (EC) 
No 2117/2005  of  21  December  2005  ('the  basic  Regulation')  in  the  proceeding 
concerning  imports  of  sulphanilic  acid  originating  in  the  People’s  Republic  of  China 
and 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 measures in the area of the proposal 

Council  Regulation  (EC)  No  1339/2002  imposing  a  definitive  anti-dumping  duty  on 
imports of sulphanilic acid originating in the People’s Republic of China and India as 
last amended by Council Regulation (EC) No 123/2006.  

Consistency with the other policies and objectives of the Union 

Not applicable. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

Interested parties concerned by the proceeding have had the possibility to defend their 
interests during the investigation, in line with the provisions of the basic Regulation. 

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  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

On  24  July  2007,  the  Commission  initiated  an  expiry  review  of  the  anti-dumping 
measures applicable to imports into the Community of sulphanilic acid originating in 
the People’s Republic of China and India. 

This expiry review was initiated following a request for a review lodged on 24 April 

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2007 by two Community producers representing 100% of the Community production 
of sulphanilic acid. 

The  enclosed  Commission  proposal  for  a  Council  Regulation  contains  the  definitive 
findings on dumping, injury and Community interest. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which should be published in the Official Journal no later than 23 October 2008. 

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,  as  last 
amended by Council Regulation (EC) No 2117/2005 of 21 December 2005.  

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 because the form of action is 
described  in  the  aforementioned  basic  Regulation  and  leaves  no  scope  for  national 
decision.  

An  indication  of  how  the  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  because  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 

imposing a definitive anti-dumping duty on imports of sulphanilic acid originating in the 
People’s Republic of China and India following an expiry review pursuant to Article 
11(2) of Council Regulation (EC) No 384/96 

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 Community1 (‘the basic 
Regulation’), and in particular Articles 9 and 11(2) thereof, 

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

Whereas: 

1. 

PROCEDURE 

1.1.  Measures in force 

(1) 

(2) 

In  July  2002,  by  Regulation  (EC)  No  1339/20022,  the  Council  imposed  a  definitive 
anti-dumping  duty  (the  'existing  measures')  of  21%  on  imports  of  sulphanilic  acid 
falling within CN codes ex 2921 42 10 (TARIC code 2921 42 10 60) originating in the 
People's  Republic  of  China  ('PRC')  and  a  residual  duty  rate  of  18,3  %  on  imports 
originating in India. The measures imposed had been based on the results of an anti-
dumping  proceeding  initiated  pursuant  to  Article  5  of  the  basic  Regulation  ('the 
original investigation'). 
At  the  same  time,  by  Regulation  (EC)  No  1338/20023,  the  Council  imposed  a 
definitive countervailing duty of 7,1% on imports of the same product originating in 
India. 

(3)  Within  the  framework  of  the  above-mentioned  anti-dumping  and  countervailing 
proceedings, the Commission, by Decision 2002/611/EC4 accepted a price undertaking 
offered by one Indian exporting producer, Kokan Synthetics and Chemicals Pvt. Ltd 
('Kokan'). 

(4) 

In February 2004, following an anti-absorption reinvestigation pursuant to Article 12 
of the basic Regulation, the Council, by Regulation (EC) No 236/20045, increased the 

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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). 
OJ L 196, 25.7.2002, p. 11. 
OJ L 196, 25.7.2002, p. 1. 
OJ L 196, 25.7.2002, p. 36. 
OJ L 40, 12.2.2004, p. 17. 

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(5) 

(6) 

(7) 

(8) 

rate  of  the  definitive  anti-dumping  duty  applicable  to  imports  of  sulphanilic  acid 
originating in the PRC from 21% to 33,7%. 

In  December  2003,  Kokan  informed  the  Commission  that  it  wished  to  withdraw  its 
undertaking  voluntarily.  Accordingly,  the  Commission  Decision  accepting  the 
undertaking was repealed by Commission Decision 2004/255/EC6. 
In  April  2005,  following  a  request  lodged  by  Kokan,  the  Commission  initiated7  a 
partial interim review pursuant to Article 11(3) of the basic Regulation and Article 19 
of  Regulation  (EC)  No  2026/97  on  protection  against  subsidized  imports  from 
countries  not  members  of  the  European  Community8  ('the  basic  anti-subsidy 
Regulation'), limited in scope to the examination of the acceptability of an undertaking 
to be offered by the company. 
By  Decision  2006/37/EC9,  the  Commission  accepted  the  undertaking  offered  by 
Kokan 
the  anti-dumping  and  countervailing  proceedings 
concerning imports of sulphanilic acid originating in India. 

in  connection  with 

At  the  same  time,  Council  Regulation  (EC)  No  1338/2002  imposing  a  definitive 
countervailing  duty  on  imports  of  sulphanilic  acid  originating  in  India  and  Council 
Regulation (EC) No 1339/2002 imposing a definitive anti-dumping duty on imports of 
sulphanilic acid originating, inter alia, in India, were amended by Council Regulation 
(EC) No 123/200610, to take into account the acceptance of the said undertaking.  

1.2. 

Request for a review 

(9) 

Following the publication of a notice of impending expiry11, the Commission, on 24 
April  2007,  received  a  request  for  an  expiry  review  pursuant  to  Article  11(2)  of  the 
basic  Regulation.  This  request  was  lodged  by  two  Community  producers  (the 
'applicants') representing 100% of the Community production of sulphanilic acid. 

(10)  The applicants alleged and provided sufficient prima facie evidence that there was a 
likelihood  of  continuation  and/or  recurrence  of  dumping  and  recurrence  of  injury  to 
the Community industry with regard to imports of sulphanilic acid originating in the 
PRC and India (the 'countries concerned'). 

(11)  Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed for the initiation of an expiry review, the Commission announced on 24 July 
2007,  by  a  notice  of  initiation  published  in  the  Official  Journal  of  the  European 
Union12,  the  initiation  of  an  expiry  review  pursuant  to  Article  11(2)  of  the  basic 
Regulation. 

1.3. 

Parallel investigations 

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OJ L 80, 18.3.2004, p. 29. 
OJ C 101, 27.4.2005, p. 34. 
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 22, 26.1.2006, p. 52. 
OJ L 22, 26.1.2006, p. 5. 
OJ C 272, 9.11.2006, p. 18. 
OJ C 171, 24.7.2007, p. 18. 

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(12)  By a notice of initiation published in the Official Journal of the European Union on 24 
July 200713, the Commission also initiated an expiry review investigation pursuant to 
Article 18 of the basic anti-subsidy Regulation on the countervailing measures in force 
on imports of sulphanilic acid originating in India. This investigation is still on-going. 

(13)  By a notice of initiation published in the Official Journal of the European Union on 29 
September  200714,  the  Commission  initiated  on  its  own  initiative  a  partial  interim 
review  limited  to  the  level  of  subsidisation,  pursuant  to  Article  19  of  the  basic  anti-
subsidy  Regulation,  since  there  was  sufficient  prima  facie  evidence  available  to  the 
Commission that the circumstances with regard to subsidisation on the basis of which 
measures had been established have changed and that these changes were of a lasting 
nature. This investigation is still on-going. 

1.4. 

Investigation 

1.4.1. 

Investigation period 

(14)  The investigation of continuation or recurrence of dumping covered the period from 1 
April 2006 to 31 March 2007 ('review investigation period' or 'RIP'). The examination 
of the trends relevant for the assessment of a likelihood of a continuation or recurrence 
of injury covered the period from 2003 to the end of the review investigation period 
('the period considered'). 

1.4.2.  Parties concerned by the investigation 

(15)  The  Commission  officially  advised  the  exporting  producers,  importers  and  users 
known  to  be  concerned,  the  representatives  of  the  exporting  countries  and  the 
applicants  of  the  initiation  of  the  expiry  review.  Interested  parties  were  given  the 
opportunity to make their views known in writing and to request a hearing within the 
time limit set out in the notice of initiation. 

(16)  All interested parties, who so requested and showed that there were particular reasons 

why they should be heard, were granted a hearing. 

(17)  Questionnaires  were  sent  to  all  parties  known  to  be  concerned,  namely  to  the  two 
Community producers and to all known exporting producers, importers and users. 

(18)  Replies to the questionnaires were received from the two  Community producers and 
from  one  exporting  producer  in  India,  as  well  as  from  four  users.  None  of  the 
exporting producers in the PRC and none of the importers replied to the questionnaire 
nor made themselves known in the course of this investigation. 

(19)  The  Commission  sought  and  verified  all  the  information  it  deemed  necessary  for  a 
determination  of  the  likelihood  of  a  continuation  or  recurrence  of  dumping  and 
resulting injury and of the Community interest. In this regard the Commission carried 
out verification visits at the premises of the following companies: 

(a)  Exporting producer in India: 

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Kokan Synthetics & Chemicals Pvt Ltd., Mumbai, India; 

(b)  Community producers: 

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OJ C 171, 24.7.2007, p. 14. 
OJ C 229, 29.9.2007, p. 9. 

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(c)  Users: 

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Ardenity, Givet, France, 

CUF Quimicos Industrials, Estarreja, Portugal; 

Kemira Germany GmbH, Leverkusen, Germany, 

Robama SA, Palafolls, Spain. 

2. 

PRODUCT CONCERNED AND LIKE PRODUCT 

2.1. 

Product concerned 

(20)  The product under review is the same as the original investigation, i.e. sulphanilic acid 
currently classifiable within CN code ex 2921 42 10. There are basically two grades of 
sulphanilic acid, which are determined according to their purity: a technical grade and 
a  purified  grade.  In  addition,  the  purified  grade  is  sometimes  commercialised  in  the 
form  of  a  salt  of  sulphanilic  acid.  Sulphanilic  acid  is  used  as  a  raw  material  in  the 
production  of  optical  brighteners,  concrete  additives,  food  colorants  and  speciality 
dyes.  While  there  are  different  uses  of  sulphanilic  acid,  all  grades  and  forms  are 
perceived  by  users  to  be  reasonably  substitutable,  are  used  interchangeably  in  most 
applications and are, therefore, treated, as was the case in the original investigation, as 
one single product.  

2.2. 

Like product 

(21)  As established in the original investigation, this review confirmed that sulphanilic acid 
is  a  pure  commodity  product  and  its  quality  and  basic  physical  characteristics  are 
identical  whatever  the  country  of  origin.  The  product  concerned  and  the  products 
manufactured and sold by the exporting producer in India on its domestic market and 
to  third  countries,  as  well  as  those  manufactured  and  sold  by  the  Community 
producers  on  the  Community  market  have  thus  been  found  to  have  the  same  basic 
physical and chemical characteristics and essentially the same uses, and are therefore 
considered  to  be  like  products  within  the  meaning  of  Article  1(4)  of  the  basic 
Regulation. 

3. 

(22) 

LIKELIHOOD  OF  CONTINUATION  AND/OR  RECURRENCE  OF 
DUMPING 

In  accordance  with  Article  11(2)  of  the  basic  Regulation,  it  was  examined  whether 
dumping  was  taking  place  during  the  RIP  and  whether  or  not  the  expiry  of  the 
measures would be likely to lead to a continuation or recurrence of dumping. 

3.1. 

Preliminary remarks 

(23) 

It should be noted that, as the Community expanded to 25 Member States in 2004 and 
to  27  Member  States  in  2007,  export  volumes  and  market  shares  of  imports  in  the 
previous investigation and the current expiry review cannot be directly compared.  

3.1.1. 

India 

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(24) 

In order to respect confidential business information and in view of the fact that Kokan 
represents  100%  of  imports originating  in India, it  has been  necessary to  present  the 
relevant information in ranges. 

(25)  This examination was based on the verified questionnaire reply from the cooperating 
exporting  producer  in  India  that  fully  cooperated  with  the  investigation.  It  appears 
from the information provided by the company and the available Eurostat data that all 
imports of the product concerned during the RIP were accounted for by this exporting 
producer. 

(26) 

It was found that during the RIP around 800 to 1 000 tonnes of sulphanilic acid were 
imported  from  India  into  the  Community,  i.e.  approximately  8-10%  of  Community 
consumption.  In  the  original  investigation,  imports  from  India  amounted  to  1  712 
tonnes.  

3.1.2.  People's Republic of China 

(27) 

In  the  absence  of  cooperation  from  any  of  the  Chinese  exporting  producers,  the 
examination of whether or not dumping was currently taking place had to based on the 
information  available  to  the  Commission  from  other  sources.  In  this  respect  and  in 
accordance with the provisions of Article 18 of the basic Regulation, official Eurostat 
data was used in order to establish import quantities and prices. 

(28)  Based on available data, it was found that during the RIP 1 482 tonnes of sulphanilic 
acid  were  imported  from  the  PRC  into  the  Community,  i.e.  approximately  15%  of 
Community consumption. In the original investigation period, imports from the PRC 
amounted to 2 950 tonnes. 

3.2. 

Likelihood of continuation of dumping 

3.2.1. 

India 

(29) 

In accordance with Article 11(9) of the basic Regulation, the same methodology was 
used in establishing the dumping margin as in the previous investigation. It is recalled 
that in the original investigation a dumping margin of 24,6% was established. 

(a) 

Normal Value 

(30)  For  the  determination  of  normal  value,  it  was  first  established  for  the  cooperating 
exporting  producer  whether  its  total  domestic  sales  of  the  product  concerned  were 
representative  in  comparison  with  its  export  sales  to  the  Community.  In  accordance 
with  Article  2(2)  of  the  basic  Regulation,  domestic  sales  were  considered 
representative when the total domestic sales volume was at least 5% of its total export 
sales  to  the  Community.  The  investigation  showed  that  the  domestic  sales  were 
representative. 

(31)  Subsequently, those types of the product concerned sold domestically by the exporting 
producer  having  overall  representative  domestic  sales,  and  that  were  identical  or 
directly  comparable  to  the  types  sold  for  export  to  the  Community,  were  identified. 
The  criteria  used  for  the  identification  of  the  different  product  types  were  the  grade 
(pure or technical), the form (acid powder or sodium salt) and the acid concentration.  

(32)  For  each  product  type  sold  by  the  exporting  producer  on  its  domestic  market  which 
was found to be directly comparable with the type sold for export to the Community, it 
was  established  whether  domestic  sales  were  sufficiently  representative  for  the 

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purposes of Article 2(2) of the basic Regulation. Domestic sales of a particular product 
type were considered sufficiently representative when the total domestic sales volume 
of  that  type  during  the  RIP  represented  5%  or  more  of  the  total  sales  volume  of  the 
comparable  product  type  exported  to  the  Community.  The  investigation  showed  that 
out of the three types exported by the exporting producer concerned, two were sold in 
representative quantities on the domestic market. 

(33)  An examination was also made as to whether the domestic sales of the company could 
be regarded as being made in the ordinary course of trade pursuant to Article 2(4) of 
the basic Regulation. 

(34)  This  was  done  by  establishing  the  proportion  of  domestic  sales  to  independent 
customers, of each of the two types sold in representative quantities, not sold at a loss 
during the RIP. For these product types, since more than 80% by volume was not sold 
at a loss on the domestic market, and the weighted average sales price was equal to or 
higher than the weighted average production cost, normal value, by product type, was 
calculated  as  the  weighted  average  of  all  domestic  sales  prices,  paid  or  payable  by 
independent customers, of the product type in question, as set out in Article 2(1) of the 
basic Regulation.  

(35)  For the product type which was not sold in representative quantities on the domestic 
market,  normal  value  had  to  be  constructed.  In  order  to  establish  the  constructed 
normal  value, 
the  cooperating  exporting  producer's  own  sales,  general  and 
administrative  (SG&A)  costs  incurred  and  weighted  average  profit  realised  on  the 
domestic sales of the like product, in the ordinary course of trade, during the RIP, were 
added  to  the  average  cost  of  manufacturing  during  the  RIP,  pursuant  to  Article  2(3) 
and 2(6) of the basic Regulation. 

(b) 

Export price 

(36)  The investigation showed that the exports of the Indian exporting producer were made 

only to unrelated customers in the Community. 

(37)  Consequently, the export price was established in accordance with Article 2(8) of the 
basic Regulation, namely on the basis of export prices actually paid or payable.  

(c) 

Comparison 

(38)  The  normal  value  and  export  price  were  compared  on  an  ex-works  basis.  For  the 
purpose of ensuring a fair comparison between the normal value and the export price, 
due allowance in the form of adjustments was made for differences affecting the price 
and  price  comparability  in  accordance  with  Article  2(10)  of  the  basic  Regulation. 
These adjustments were made in respect of transport and insurance costs. 

(d) 

Dumping margin 

(39)  As provided by Article 2(11) and (12) of the basic Regulation, the weighted average 
normal  value  of  each  product  type  of  the  product  concerned  exported  to  the 
Community  in  the  RIP  was  compared  to  the  weighted  average  export  price  of  each 
corresponding type of the product concerned. 

(40)  This  comparison  showed  the  absence  of  dumping  for  the  cooperating  exporting 

producer in India that exported to the Community during the RIP.  

(41)  With  regard  to  the  absence  of  dumping  by  the  cooperating  exporter  in  the  RIP,  it 
should  be  noted  that,  as  mentioned  in  recital  (7)  above,  a  price  undertaking  was  in 
force  during  the  RIP  which  required  the  exporting  producer  concerned  to  respect  a 

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certain price level for exports to the Community. Certain transactions were found to be 
slightly  higher  than  the  level  of  the  minimum  import  prices  ('MIPs')  of  the 
undertaking, but the majority of the sales were priced at the level of the MIPs. 

3.2.2.  People's republic of China 

(42) 

(43) 

(44) 

In  accordance  with  Article  11(9)  of  the  basic  Regulation,  the  same  methodology  as 
used in the previous investigation was used in establishing the dumping margin. It is 
recalled that in the original investigation, a dumping margin of 21% was established. 
However,  following  an  anti-absorption  reinvestigation  initiated  in  June  2003,  the 
dumping margin was reassessed and found to have increased to 33,7%, as described in 
Regulation (EC) No 236/2004. 

(e) 

Analogue country 

In  accordance  with  Article  2(7)  of  the  basic  Regulation,  the  PRC  is  not  a  market 
economy country and therefore, the normal value for imports from the PRC had to be 
based on data from a market economy third country.  

In the notice of initiation, India was envisaged as an appropriate market economy third 
country in respect to the Community exports of the PRC. India was also used as the 
analogue country in the original investigation. 

(45)  The  applicants  suggested,  however,  that  it  would  be  more  appropriate  to  use  the 
United States of America ('US') as an analogue country in this case. It was argued that 
contrary to India, prices of sulphanilic acid in the US are driven by normal undistorted 
market forces. Moreover, it was claimed that the process of producing sulphanilic acid 
in  the  US  is  carried  out  in  a  manner  comparable  to  that  in  the  PRC  and  that  the 
quantities produced and sold in the US are representative. In addition, the applicants 
also argued that access to raw materials in India is not comparable with access to raw 
materials in the PRC, as Indian producers, due to the Advance License Scheme, prefer 
importing raw materials instead of buying domestic materials.  

(46)  As regards the suggestion of using the US as an analogue country, it is noted that the 
US, for a number of years, has had protective measures in the form of anti-dumping 
measures against imports from the PRC and India and countervailing measures against 
imports  from  India.  For  this  reason,  it  cannot  be  excluded  that  prices  have  been 
influenced by these trade defence measures.  

(47)  Concerning the access to raw materials, it was also found that Indian manufacturers of 
sulphanilic  acid  purchase  raw  materials  on  the  domestic  market.  Accordingly,  it 
cannot be argued that access to raw materials makes India an inappropriate analogue 
country.  Moreover,  there  are  several  producers  of  sulphanilic  acid  in  India  and 
imports,  e.g.  from  the  PRC,  are  also  present  on  the  market.  There  is  therefore  no 
evidence to suggest a lack of competition in India. 

(48) 

In  light  of  the  above,  and  in  the  absence  of  convincing  other  arguments  of  changed 
circumstances since the original investigation, it is concluded that India constitutes an 
appropriate  analogue  country  for  the  purpose  of  establishing  normal  value  in 
accordance  with  Article  2(7)(a)  of  the  basic  Regulation  in  the  context  of  this  expiry 
review. 

(f) 

Determination of normal value 

(49)  Pursuant  to  Article  2(7)(a)  of  the  basic Regulation,  normal  value  was  established  on 
the basis of verified information received from the cooperating exporting producer in 

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the analogue country. More specifically, normal value was based on the price paid or 
payable in India by unrelated customers for comparable product types, as these were 
found to be made in the ordinary course of trade. 

(g) 

Export price 

(50)  Given the lack of cooperation from Chinese exporting producers, the export price had 
to be based on facts available in accordance with Article 18 of the basic Regulation. 
Official  Eurostat  figures  were  chosen  as  the  appropriate  basis  for  establishing  the 
export price.  

(h) 

Comparison 

(51)  For the purposes of making a fair comparison between the normal value and the export 
price, due allowance was made for differences which could affect price comparability. 
These adjustments were made in respect of transport and insurance costs in accordance 
with Article 2(10) of the basic Regulation. Normal value at Indian ex-works level was 
then compared to the adjusted Chinese export price at the same level. 

(i) 

Dumping margin 

(52)  The comparison of normal value and export price showed the existence of dumping, 
the dumping margin being equal to the amount by which normal value exceeded the 
price for export to the Community. The dumping margin found, as a percentage of the 
CIF Community-frontier price, was in the order of 15 to 20%.  

3.3. 

Development of imports should measures be repealed 

3.3.1. 

India 

(j) 

Preliminary remarks 

(53) 

In  the  absence  of  dumping  during  the  RIP,  it  was  examined  whether  dumping  from 
India would be likely to recur should measures be repealed. In order to assess whether 
there  was  a  likelihood  of  recurrence  of  dumping,  the  pricing  behaviour  of  Kokan, 
namely its prices to other export markets in comparison with its export prices to the 
Community and with its domestic prices, and its production, production capacity and 
stocks  were  examined.  The  analysis  was  based  on  the  information  provided  in  the 
questionnaire reply and verified at the premises of Kokan during the investigation. 

(k) 

Relationship between prices in the Community and prices within India 

(54)  Prices  on  the  Community  market  were  higher  that  those  achieved  by  Kokan  on  its 
domestic  market  during  the  RIP.  This  development,  however,  should  be  seen  in  the 
light of the fact that the export prices of this company were subject to the discipline of 
the MIPs of the undertaking.  

(l) 

Relationship between export prices to third countries, export prices to 
the Community and domestic prices in India 

(55) 

It  was  found  that  the  average  export  price  charged  by  Kokan  to  third  countries  was 
significantly below its average export price to the Community. It was also found that 
these prices were dumped as they were found to be well below the prices charged by 
Kokan on its domestic market. 

(56)  As mentioned in recitals (7) and (41) above, Kokan was subject to a minimum price 
undertaking  for  its  exports  to  the  Community  during  the  RIP,  whereas  the  prices 

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charged  to  customers  in  other  third  countries  were  freely  established.  In  these 
circumstances, the latter prices are an indication of the likely price level for export to 
the  Community  should  measures  be  allowed  to  lapse.  It  was  thus  concluded  that 
Kokan  is  likely  to  reduce  its  export  prices  to  the  Community  and  that  dumping  is 
likely to recur in the Community market in case measures are repealed. 

(m)  Relationship  between  export  prices  to  third  countries  and  the  price 

level in the Community market 

(57) 

It is also noted that export prices to third countries were found to be on average below 
the sales prices of the Community industry in the Community market. This means that 
the prevailing price level for the product concerned in the Community market makes 
this  market  very  attractive  for  the  exporting  producer  in  India.  On  this  basis,  it  is 
considered that there is indeed an economic incentive to shift sales to the higher-priced 
Community market in case of repeal of the measures in force. 

(n) 

Unused capacities and stocks 

(58)  The  investigation  revealed  that  the  cooperating  exporting  producer  did  not  build  up 
stocks  during  the  RIP.  However,  it  was  found  that  the  company  would  be  able  to 
increase its production as its capacity utilisation rate was around 65% during the RIP. 
It is noted in this respect that unused production capacity of the co-operating exporting 
producer was found to correspond to more than 30% of Community consumption.  

(o) 

Conclusion on India 

(59)  The  investigation  clearly  showed  that  the  level  of  price  in  India  and  in  other  third 
countries  markets  is  significantly  lower  than  the  level  of  price  in  the  Community 
market.  If  the  existing  anti-dumping  measures  are  repealed,  there  will  be  a  strong 
incentive  for  the  cooperating  Indian  exporting  producer  to  deploy  unused  capacities, 
but  also  to  shift  more  sales  to  the  Community  market  and  therefore  to  continue 
exporting, even at increased quantities. The assessment made above indicates that the 
increased quantities of exports to the Community would in all likelihood be made at 
dumped prices. 

3.3.2.  PRC 

(p) 

Preliminary remarks 

(60)  Further to the finding of dumping during the RIP, the likelihood of the continuation of 
dumping  in  case  measures  are  repealed  was  also  examined.  In  the  absence  of 
cooperation  from  any  Chinese  exporting  producers,  the  conclusions  below  rely  on 
facts  available,  namely  information  submitted  by  the  applicants,  in  accordance  with 
Article 18 of the basic Regulation, together with data extracted from Eurostat. 

(q) 

Production capacity 

(61)  Publicly  available  data  show  that  the  Chinese  production  volume  is  around  22  000 
tonnes, which is more than double the consumption in the Community during the RIP. 
In  the  absence  of  cooperation  from  any  Chinese  exporting  producer,  no  information 
was available as to whether spare capacities exist in the PRC. However, according to 
the  information  available,  Chinese  producers  have  the  ability  to  use  the  relatively 
simple batch process currently used to make speciality dyes and chemicals in order to 
produce  sulphanilic  acid.  Moreover,  as  mentioned  in  recital  (63)  below,  the 
Community  market  has  continued  for  many  years  to  be  an  attractive  market  for 
Chinese  exporters.  It  is,  therefore,  reasonable  to  assume  that  any  spare  production 

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capacities that might exist in the PRC would be used to channel additional quantities 
to  the  Community  market  and/or  that  existing  production  increased  by  switches  in 
production  between  speciality  dyes  and  chemicals  would  be  redirected  to  the 
Community, should the existing anti-dumping measures be repealed. 

(r) 

Relationship between export prices to third countries and export prices 
to the Community 

(62)  According to the available data, Chinese export prices to third countries were below 
Chinese export prices to the Community during the RIP. There is a strong likelihood, 
therefore,  that  if  the  measures  were  to  be  repealed,  the  Chinese  exporters  would  re-
direct their current exports to third countries to the Community market and that these 
would continue to be at dumped prices. 

(s) 

Absorption practices 

(63)  As established by Regulation (EC) No 236/2004, it was found that absorption of the 
anti-dumping  duty  had  taken  place  in  respect  of  exports  from  the  PRC  to  the 
Community.  This  practice  demonstrated  the  continued  attractiveness  for  Chinese 
exporting producers of the Community market. Since exports were found to be made 
at  dumped  prices  during  the  RIP,  it  can  be  concluded  that  dumping  is  likely  to 
continue if the measures are allowed to lapse and export volumes will likely increase. 

(t) 

Conclusion on PRC 

(64)  The  investigation  showed  that  the  Chinese  exporters  continued  their  dumping 
practices during the RIP at a significant level. On the basis of the findings in recitals 
(62) and (63) above, it is concluded that there is a likelihood that significant dumping 
would continue if the existing measures were repealed. Also, there is a likelihood that 
the  volume  of  dumped  imports  would  significantly  increase  in  the  absence  of 
measures. 

3.4. 

Conclusion regarding the likelihood of a continuation or recurrence of dumping 

(65)  On  the  basis  of  the  above,  it  is  concluded  that  dumping  is  likely  to  continue  as 
concerns  the  Chinese  exporters  and  likely  to  recur  as  regards  the  Indian  exporting 
producers, should the existing measures be repealed. 

4. 

DEFINITION OF THE COMMUNITY INDUSTRY 

(66)  Within  the  Community,  the  like  product  is  manufactured  by  two  producers  whose 
output  is  deemed  to  constitute  the  total  Community  production  of  the  like  product 
within the meaning of Article 4(1) of the basic Regulation. 

(67) 

It  should  be  noted  that  as  compared  to  the  original  investigation,  the  ‘Sorochimie 
Chimie  Fine’  and  'Quimigal  SA'  companies  have  been  renamed,  the  former  to 
‘Ardenity’ and the latter to 'CUF Quimicos Industrials'.  

(68)  These  two  producers  cooperated  in  the  investigation  and  supported  the  request  for  a 
review.  They  therefore  constitute  the  Community  industry  within  the  meaning  of 
Articles 4(1) and 5(4) of the basic Regulation. 

5. 

SITUATION ON THE COMMUNITY MARKET 

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5.1. 

Consumption in the Community market 

(69)  The apparent Community consumption was established on the basis of: 

–  imports  of  the  product  concerned  into  the  Community  market  derived  from 

Eurostat, 

–  total sales of the Community industry on the Community market derived from the 

questionnaires' replies. 

(70)  Community  consumption  of  sulphanilic  acid  in  the  RIP  was  around  10  000  tonnes. 

Over the period considered a decrease in consumption of 6% was observed.  

Table 1: Consumption on the Community market 

2003 

2004 

2005 

2006 

RIP 

Consumption (tonnes)

10 684 

10 443 

10 899 

9 939 

9 997 

Index  

100 

98 

102 

93 

94 

5.2. 

Current imports from the countries concerned 

(71) 

In  order  to  respect  confidential  business  information,  in  view  of  the  fact  that  Kokan 
represents  100%  of  imports  originating  in  India  and  that  the  Community  industry 
consists  of  only  two  producers,  it  has  been  necessary  to  present  the  information  in 
Tables 2 to 5 below in an indexed form. 

5.2.1. 

Import volume and market share of the imports concerned in the RIP 

(72)  The volumes and market shares of the imports from the PRC and India developed as 

set out in the tables below. The import volume data is based on Eurostat. 

Table 2: Imports from the countries concerned 

Imports (index) 

2003 

PRC  

India  

Total countries 

concerned  

Source: Eurostat 

100 

100 

100 

2004 

106 

54 

81 

2005 

128 

59 

95 

2006 

RIP 

86 

56 

72 

84 

60 

73 

Table 3: Market share of the countries concerned 

Market shares (index) 

2003 

2004 

2005 

2006 

RIP 

PRC 

India 

Total countries 

concerned 

100 

100 

100 

126 

58 

94 

92 

60 

77 

90 

64 

78 

109 

55 

83 

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(73) 

Imports  from  the  countries  concerned  decreased  by  27%  over  the  period  considered. 
The market share of the countries concerned decreased by 22% between 2003 and the 
RIP.  

(74)  Considering  each  country  separately,  import  volumes  from  India  decreased  by  40% 
between 2003 and the RIP and market share of Indian imports decreased by 36%. 

(75)  The volume of the imports originating in the PRC decreased by 16% over the period 

considered and the market share decreased by 10% over the same period.  

5.2.2.  Price evolution and price behaviour of the imports of the product concerned 

Table 4: Prices of the imports concerned 

Unit prices (Euro / tonne)

2003 

2004 

PRC 

Index  

India (Indexed)  

Total countries 
concerned 

Index  

Source: Eurostat 

773 

100 

100 

956 

100 

876 

113 

85 

910 

95 

2005 

1 138 

147 

96 

2006 

1 128 

146 

110 

RIP 

1 040 

135 

111 

1 131 

1 180 

1 138 

118 

123 

119 

(76)  The average price of the imports concerned originating in the PRC increased by 35% 
over  the  period  considered.  Over  the  same  period  the  average  price  of  the  imports 
concerned originating in India increased by 11%. 

(77)  For  the  purpose  of  calculating  the  level  of  price  undercutting  during  the  RIP, 
Community  industry’s  ex-works  prices  to  unrelated  customers  have  been  compared 
with  the  CIF  Community-frontier  import  prices  of  the  countries  concerned,  duly 
adjusted in order to reflect a landed price. This adjustment was made by increasing the 
prices  by  the  normal  custom  duty  and  post  importation  costs,  for  both  the  PRC  and 
India,  and  by  further  increasing  the  Chinese  prices  with  the  anti-dumping  duty.  The 
comparison showed that the adjusted Chinese and Indian prices were not undercutting 
the prices of the Community industry.  

5.3. 

Imports from other third countries 

Table 5: Imports from other third countries 

Rest of the world 

2003 

2004 

Imports (Index)  
Market share (Index) 
Average prices (€/tonne) 

Index 

Source: Eurostat 

100 
100 

935 

100 

80 
82 

927 

99 

2005 

100 
98 

1 100 

118 

2006 

97 
104 

1 255 

134 

RIP 

97 
104 

1 285 

137 

(78)  The volume of  imports from other third  countries  slightly decreased by 3% over the 
period considered. However, in view in the contraction in demand, their market share 

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increased  by  0,7  percentage  points.  The  main  exporting  country,  notably  the  US, 
accounted for most of these imports during the period considered. 

(79)  Prices of sulphanilic acid from other third countries were slightly lower than those of 
the Community industry and followed the Indian price trends from 2005 onwards. 

5.4. 

Economic situation of the Community industry 

(a) 

Preliminary remarks 

(80) 

In order to respect confidential business information, it has been necessary to present 
information  concerning  the  two  companies  forming  the  Community  industry  in  an 
indexed form. 

(81) 

In accordance with Article 3(5) of the basic Regulation, all relevant economic factors 
and indices pertaining to the Community industry were examined. 

(b) 

Data relating to the Community industry 

– 

Production, installed production capacity and capacity utilization rate 

Table 6: Production, installed production capacity, capacity utilization 

2003 

Capacity tonnes (index)

100 

Production tonnes 

(index) 

Capacity utilization 

(index) 

100 

100 

2004 

100 

119 

119 

2005 

100 

115 

115 

2006 

105 

115 

109 

RIP 

112 

117 

105 

Source: Questionnaire replies of the Community industry 

(82)  The  Community  industry's  level  of  production  in  the  RIP  was  17%  higher  than  the 
level  recorded  at  the  start  of  the  period  considered.  The  Community  industry's 
production  capacity  also  increased  over  the  period  considered  by  12%  as  one 
Community  producer  increased  its  capacity  by  investments  in  equipment  in  order  to 
produce  pure  grade  sulphanilic  acid.  The  combination  of  these  two  factors  led  to  an 
overall increase in the capacity utilisation rate of the Community industry during the 
period  considered.  It  should  be  also  noted  that  the  Community  industry  achieved  a 
satisfactory level, of capacity utilisation (in the range of 75-80%) in the RIP. 

– 

Inventories 

(83)  The Community industry's year-end stock levels decreased over the period considered 
by  22%.  The  levels  of  stock  fell  significantly  in  2004  and  2005  but  progressively 
increased in 2006 and in the RIP. 

Table 7: Closing stock in volume 

2003 

Stocks tonnes (index) 

100 

2004 

35 

2005 

38 

2006 

64 

RIP 

78 

Source: Questionnaire replies of the Community industry 

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– 

Sales volume, market share and growth 

(84)  The  sales  volumes  of  the  Community  industry  in  the  RIP  were  5%  higher  in 
comparison with the beginning of the period considered. As Community consumption 
decreased by 6% over the period considered (see recital (70) above), the market share 
held by the Community industry increased by 12% over the same period. Specifically, 
the Community industry gained around 7 percentage points of market share over the 
period  considered.  The  Community  industry  market  share  was  kept  above  50% 
throughout the period considered. 

Table 8: Sales volume and market share 

2003 

2004 

2005 

2006 

RIP 

Sales volume - tonnes 

(index) 

100 

Market share % (index) 

100 

114 

116 

107 

105 

105 

113 

105 

112 

Source: Questionnaire replies of the Community industry 

(85) 

It should be noted that the decrease in the Community consumption in 2006 and in the 
RIP somewhat affected the growth of the Community industry. The increase in market 
share  is  explained  almost  equally  by  an  increase  in  the  sales  volumes  and  by  the 
weaker consumption towards the end of the period considered.  

– 

Factors affecting Community prices 

(86)  Average sales prices of the Community industry increased substantially by 26% over 
the period considered. The developments observed as of from 2005 appear to reflect in 
particular  the  effects  of  the  anti-absorption  measures  imposed  in  2004.  The 
Community industry's average selling prices increased significantly between 2004 and 
2005 and remained rather stable thereafter. However, this increase was at a lower rate 
than the increase in the price of aniline, which is the most significant raw material for 
the  production  of  sulphanilic  acid.  Indeed,  aniline,  which  is  a  benzene  derivative, 
represented around 50% of the total manufacturing cost during the RIP, marked a price 
increase of around 45% between 2003 and the RIP. 

Table 9: Sales prices 

2003 

2004 

2005 

2006 

RIP 

Average sales price 

(index) 

100 

104 

124 

125 

126 

Source: Questionnaire replies of the Community industry 

– 

Employment and productivity 

(87)  The level of employment declined by 9% between 2003 and the RIP, while production 
increased,  thus  reflecting  an  increase  in  the  Community  industry  productivity  and 
competitiveness.  The  average  cost  per  employee,  however,  rose  during  the  same 
period by 15%.  

Table 10: Employment and productivity 

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2003 

2004 

2005 

2006 

Employment (index) 

Productivity (index) 

Average labour cost 

(index) 

100 

100 

100 

96 

125 

82 

96 

120 

94 

98 

117 

106 

Source: Questionnaire replies of the Community industry 

– 

Profitability 

Table 11: Profitability 

Index 

2003 

100 

2004 

2005 

-1 286 

1 519 

2006 

335 

Source: Questionnaire replies of the Community industry 

RIP 

91 

129 

115 

RIP 

191 

(88)  The  Community  industry's  profitability,  with  the  exception  of  the  year  2005,  was 
around or below 1% of its turnover. Important losses were recorded in 2004, whereas 
the  Community  industry  recorded  profits  in  2005,  2006  and  the  RIP.  Given  that  the 
profitability  of  the  Community  industry  was  remarkably  low  in  2003,  the  apparent 
increase shown in the period considered led to a level of profitability still far below the 
level which could be acceptable in this type of industry. 

(89) 

It  is  also  noted  that  the  Community  industry's  profitability  was  influenced  by  the 
evolution  of  raw  material  prices.  The  average  production  cost  increased  by  25% 
between 2003 and the RIP. As mentioned in recital (86) above, aniline is the key input 
in  sulphanilic  acid  production  and  it  accounts  for  approximately  half  of  the 
manufacturing  cost.  Given  the  fact  that  aniline  prices  significantly  rose  in  2004,  the 
Community  industry  was  not  able  to  pass  this  price  increase  to  its  customers  and 
incurred  losses.  The  situation  for  the  Community  industry  improved  in  2005  as  the 
prices of aniline stabilised and the Community industry was able to increase its prices 
of sulphanilic acid to the extend necessary to cover the raise in raw material costs. In 
2006 and the RIP, confronted with new rise  of  prices  of the aniline,  the  Community 
industry's profitability declined to levels below 1% in relation to turnover. 

– 

Investments, return on investments and ability to raise capital 

Table 12: Investments, return on investment 

Investments 
(index) 
Return on investments 
(index) 

2003 

100 

100 

2004 

39 

2005 

57 

-1 779 

2 498 

2006 

255 

420 

RIP 

305 

224 

Source: Questionnaire replies of the Community industry 

(90)  The  Community  industry  continued  to  make  investments  in  its  sulphanilic  acid 
activities throughout the period considered. In 2006 and the RIP, besides investments 
primarily  related  to  the  maintenance  of  existing  capital  assets,  one  Community 

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producer made investments in order to increase its capacity concerning the production 
of  pure  grade  sulphanilic  acid.  It  should  be  however  noted  that  this  new  capacity  is 
expected to be fully operational only from 2008.  

(91)  As the Community industry realised low profits throughout the period considered, the 
figure for the return on investments, which expresses the pre-tax result as a percentage 
of  the  average  opening  and  closing  net  book  value  of  assets  employed  in  the 
production of sulphanilic acid, has also remained very low, namely around 2% during 
the RIP. 

(92)  The  investigation  showed  that  the  capital  requirements  of  the  Community  industry 
have been adversely affected by the difficult financial situation. Although, one of the 
Community producers is part of a large group, capital requirements are not always met 
to the desired level, as financial resources are generally allocated within this group to 
the most profitable entities.  

– 

Cash flow  

(93)  The  cash  flow  significantly  decreased,  by  85%  between  2003  and  the  RIP,  but  still 
remained positive. The cash flow is not following the trend of profitability as it was 
influenced by non–cash items such as depreciation and inventory movements. 

Table 13: Cash flow 

Cash flow 

Index 

2003 

100 

2004 

41 

2005 

64 

2006 

32 

RIP 

15 

Source: Questionnaire replies of the Community industry 

5.5. 

Conclusion  

(94)  Between  2003  and  the  RIP,  most  of  the  indicators  pertaining  to  the  Community 
industry developed positively: sales volumes, capacity utilisation, production volume, 
closing  stocks,  productivity,  investments  and  return  on  investment.  However,  its 
profitability remained below 1% of turnover during the RIP.  

(95)  The Community industry has benefited from a rise in its unit price of sulphanilic acid 
notably  from  2004  to  the  end  of  the  RIP.  However,  the  increase  in  the  selling  price 
could  not  fully  compensate  for  the  rise  in  the  cost  of  production  and  profit  margins 
therefore decreased. 

(96) 

In  addition,  the  decrease  in  the  Community  consumption  in  2006  and  in  the  RIP 
somewhat hindered the recovery of the Community industry.  

(97)  Overall,  it  is  clear  that  the  introduction  of  the  anti-dumping  measures  enabled  the 
Community industry to stabilize its situation, but not to fully recover from its injurious 
situation because of the continuation of the presence of dumped imports from the PRC 
and also because the increase in raw material costs which the Community industry was 
unable  to  pass  on  to  its  customers.  Nevertheless,  the  investigation  showed  that  the 
Community industry started to invest in new equipment during the period considered.  

(98) 

In  the  light  of  the  above  analysis,  it  emerged,  on  the  one  hand,  that  the  volume 
indicators  developed  positively  during  the  period  considered.  On  the  other,  the 
financial  indicators  pertaining  to  the  Community  industry  such  as  profitability  and 
cash  flow  showed  that  the  Community  industry  is  still  in  a  vulnerable  economic 

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situation.  It  is  therefore  concluded  that  it could  not  fully  recover  from  the  effects  of 
injurious dumping. 

6. 

LIKELIHOOD OF RECURRENCE OF INJURY 

6.1. 

General 

(99)  Pursuant  to  Article  11(2)  of  the  basic  Regulation,  the  analysis  of  the  likelihood  of 
recurrence of injury should the existing measures be repealed was carried out. In this 
respect,  the  likely  development  of  export  volumes  and  prices  from  the  countries 
concerned was examined in particular, as well as their likely effects on the situation of 
the Community industry in the absence of measures. 

6.2. 

Development of import volumes and prices from the countries concerned should 
measures be repealed 

(100)  It  is  recalled  that  even  with  anti-dumping  measures  in  place,  the  imports  from  the 

countries concerned had a market share of 24,6% in the RIP. 

(101)  The  investigation  showed  that  the  cooperating  Indian  exporting  producer  has 
significant  spare  capacity,  corresponding  to  more  than  30%  of  Community 
consumption.  In  addition,  information  available  to  the  Commission  showed  that  the 
existing  production  of  sulphanilic  acid  in  the  PRC  is  around  22  000  tonnes,  which 
corresponds  to  more  than  double  the  Community  consumption.  On  the  basis  of  the 
same  information  it  also  appears  that  Chinese  producers  are  able  to  easily  switch 
production  from  speciality  dyes  and  chemicals  to  sulphanilic  acid.  These  capacities 
which  may  be  available  in  the  countries  concerned  indicate  that  the  exporting 
producers  have  the  possibility  to  increase  their  current  production  and  thus  also  to 
increase their exports of sulphanilic acid to the Community.  

(102)  It  is  also  noted  that  Community  consumption  slightly  decreased  over  the  period 
considered and it is not expected that the demand in the next years would be such as to 
absorb the potential increase in imports from the PRC and India should the measures 
be  terminated.  In  this  scenario,  exports  from  the  PRC  and  India  of  sulphanilic  acid 
would very likely replace a large share of the sales made by the Community industry, 
as the imports' prices are likely to be lower. 

(103)  The  investigation  established  that  the  Community  market  remains  attractive  for  both 
Chinese and Indian exporting producers. Indeed, as mentioned under recitals (57) and 
(62) above, it was found that the average export price of Indian and Chinese sales to 
other  third  countries  was  significantly  below  the  average  export  price  to  the 
Community. Despite the fact that no price undercutting was found to exist for Chinese 
and  Indian  export  prices  when  adjusted  by  the  current  anti-dumping  and  normal 
customs duties, the Chinese and Indian CIF export prices were found, on average, to 
be  considerably  lower  (around  18%)  than  the  average  price  of  the  Community 
industry.  Therefore,  without  any  measures  in  place,  imports  of  sulphanilic  acid  from 
the countries concerned into the Community are likely to significantly increase in the 
light  of  i)  the  unused  capacities  (namely  in  India),  ii)  the  re-direction  of  exports  to 
other  third  countries  into  the  Community  market,  iii)  the  possibility  to  switch 
production  from  speciality  dyes  and  chemicals  to  sulphanilic  acid  (namely  in  the 
PRC), at price levels significantly below the current price levels in the Community.  

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6.3. 

Conclusion on likelihood of recurrence of injury 

(104)  On the basis of the foregoing, it can be concluded that, should measures lapse, imports 
into the Community market from the countries concerned would very likely occur in 
significant  volumes  and  at  dumped  prices  which  would  be  below  the  Community 
industry’s prices. This would in all likelihood have the effect of introducing a price-
depressive trend on the Community market, with an expected negative impact on the 
economic situation of the Community industry. This would, in particular, reverse the 
recovery that was achieved over the period considered, leading to a likely recurrence 
of injury. 

7. 

COMMUNITY INTEREST 

7.1. 

Introduction 

(105)  According to Article 21 of the basic Regulation, it was examined whether maintenance 
of the existing anti-dumping measures would be against the interest of the Community 
as a whole. The determination of the Community interest was based on an appreciation 
of all various interests involved. 

(106)  Furthermore,  the  fact  that  the  present  investigation  is  a  review,  thus  analysing  a 
situation  in  which  anti-dumping  measures  have  already  been  in  place,  allows  the 
assessment of any undue negative impact on the parties concerned by the current anti-
dumping measures. 

(107)  On this basis,  it  was  examined whether, despite the conclusions on the likelihood of 
recurrence of injurious dumping, compelling reasons existed which would lead to the 
conclusion  that  it  is  not  in  the  Community  interest  to  maintain  measures  in  this 
particular case. 

7.2. 

Interest of the Community industry 

(108)  It  can  reasonably  be  expected  that  the  Community  industry  will  continue  to  benefit 
from  the  measures  currently  imposed  and  further  recover  by  regaining  market  share 
and improving its profitability. Should the measures not be maintained, it is likely that 
the  Community  industry  will  start  again  to  suffer  injury  from  increased  imports  at 
dumped  prices  from  the  countries  concerned  and  that  its  currently  fragile  financial 
situation will deteriorate.  

(109)  On this basis, it can be concluded that the continuation of measures would be in the 

interest of the Community industry. 

7.3. 

Interest of importers 

(110)  It  is  recalled  that  in  the  original  investigation  it  was  found  that  the  imposition  of 
measures would not have a serious impact on Community traders of sulphanilic acid. 
As  indicated  above,  no  importer  cooperated  in  this  investigation;  therefore,  no 
compelling reasons were presented that the imposition of measures would be against 
the interest of the importers.  

7.4. 

Interest of users 

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21 

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(111)  The  Commission  sent  questionnaires  to  all  31  known  users,  of  which  only  four 
submitted  a  questionnaire  reply.  Three  questionnaire  replies  were  received  from 
Community  companies  producing  optical  brighteners  and  one  questionnaire  reply 
from  a  company  producing  dyes.  However,  the  information  provided  by  these  users 
regarding  the  effect  of  the  measures  and  the  proportion  that  sulphanilic  acid 
represented in their manufacturing costs was not meaningful. 

(112)  The volumes of the product concerned imported by these four users represented 47,3% 
of  the  total  imports  in  the  Community.  Moreover,  as  these  four  users  purchase 
significant volumes of sulphanilic acid from the Community industry, they accounted 
overall for around 40% of Community consumption in the RIP. 

(113)  Three users have made the same comments opposing the continuation of measures on 
the grounds that the production capacity of the Community industry is insufficient to 
meet  domestic  demand  and  on  the  grounds  that  measures  are  harming  their 
competitiveness  on  the  downstream  products.  The  fourth  user  remained  silent  on 
whether it was in favour or against the maintenance of the measures. 

(114)  Regarding  the  supply  situation  on  the  Community  market,  it  is  to  be  noted  that  the 
current production capacity of the Community industry could satisfy in the region of 
80%  of  Community  consumption.  It  should  also  be  stressed  that  the  Community 
industry  has  invested  in  new  facilities  in  order  to  increase  its  output  of  pure  grade 
sulphanilic acid. In any event, the purpose of the  measures  is not to  prevent imports 
from the countries concerned entering the Community market but to ensure that they 
are made at non-dumped and non-injurious prices. It is therefore expected that imports 
from the countries concerned will continue to enter the market as it has been the case 
following the imposition of measures in 2002.  

(115)  It should be also noted that sulphanilic acid production outside the Community is now 
restricted  to  a  few  countries  in  the  world,  such  as  India,  the  PRC  and  the  US.  It  is 
therefore important that the Community industry is allowed to operate under effective 
competition  conditions  so  that  domestic  supplies  of  the  product  continue  to  be 
available to all users in the Community.  

(116)  Regarding the competitiveness of the users, it should be noted that, despite the lack of 
information  obtained  from  the  users  in  the  framework  of  this  investigation,  it  was 
shown in the original investigation that anti-dumping measures would increase the full 
costs of optical brighteners and of dyes containing sulphanilic acid by less than 1%.  

(117)  On the basis of the above, it is considered also in the framework of this expiry review 
investigation that the maintenance of measures would not have a major adverse impact 
on the situation of users. 

7.5. 

Conclusion on Community interest 

(118)  Given  the  above,  it  is  concluded  that  there  are  no  compelling  reasons  against  the 

maintenance of the current anti-dumping measures. 

8. 

ANTI-DUMPING MEASURES 

(119)  All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which it was intended to recommend that the existing measures be maintained. They 

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22 

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were  also  granted  a  period  to  make  representations  and  to  comment.  No  comments 
which were of a nature to change the above conclusions were received. 

(120)  In  view  of  the  conclusions  reached  with  regard  to  the  likelihood  of  continuation  of 
dumping  regarding  imports  of  sulphanilic  acid  from  the  PRC,  the  likelihood  of 
recurrence of dumping in regard to imports from India, the likelihood of recurrence of 
injury and Community interest, the anti-dumping measures on imports of sulphanilic 
acid should be maintained in order to prevent a recurrence of injury being caused to 
the Community industry by the dumped imports. 

(121)  The  duty  rate  will  not  be  applicable  for  imports  of  the  product  concerned  which  are 
manufactured  and  sold  for  export  to  the  Community  by  one  Indian  company  from 
which an undertaking has been accepted by Commission Decision 2006/37/EC.  

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

2. 

3. 

4. 

1. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  sulphanilic  acid 
falling within CN codes ex 2921 42 10 (TARIC code 2921 42 10 60) originating in 
the People's Republic of China and India. 

The rate of the definitive anti-dumping duty applicable, before duty, to the net free-
at-Community  frontier  price  of  the  products  described  in  paragraph  1,  shall  be  as 
follows: 

Country 

Definitive duty (%) 

The People's Republic of China 

India 

33,7 

18,3 

Notwithstanding paragraph 1, the definitive duty shall not apply to imports released 
for free circulation in accordance with Article 2. 

Unless  otherwise  specified,  the  provisions  in  force  concerning  customs  duties  shall 
apply. 

Article 2 

Imports  declared  for  release  into  free  circulation  which  are  invoiced  by  companies 
from  which  undertakings  are  accepted  by  the  Commission  and  whose  names  are 
listed in the Commission Decision 2006/37/EC, as from time to time amended, shall 
be exempt from the anti-dumping duty imposed by Article 1, on condition that: 

– 

– 

they are manufactured, shipped and invoiced directly by the said companies to 

the first independent customer in the Community; and 

such  imports  are  accompanied  by  an  undertaking  invoice  which  is  a 

commercial  invoice  containing  at  least  the  elements  and  the  declaration 

stipulated in the Annex of this Regulation; and 

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23 

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2. 

3. 

– 

the  goods  declared  and  presented  to  customs  correspond  precisely  to  the 

description on the undertaking invoice. 

A  customs  debt  shall  be  incurred  at  the  time  of  acceptance  of  the  declaration  for 
release into free circulation whenever it is established, in respect of goods described 
in Article 1 and exempted from the duties under the conditions listed in paragraph 1, 
that  one  or  more  of  such  conditions  is  not  fulfilled.  The  condition  set  out  in  the 
second  indent  of  paragraph  1  shall  be  considered  as  not  being  fulfilled  where  the 
undertaking  invoice  is  found  not  to  comply  with  the  provisions  of  the  Annex  or 
found not to be authentic or where the Commission has withdrawn the acceptance of 
the  undertaking  pursuant  to  Article  8(9)  of  Regulation  (EC)  No  384/96  or  Article 
13(9) of the basic anti-subsidy Regulation in a Regulation or Decision which refers 
to  (a)  particular  transaction(s)  and  declares  the  relevant  undertaking  invoice(s)  as 
invalid. 

Importers shall accept as a normal trade risk, the fact that the non-fulfilment, by any 
party, of one or more of the conditions listed in paragraph 1 and further defined in 
paragraph 2 may give rise to a customs debt incurred under Article 201 of Council 
Regulation  (EEC)  No  2913/92  of  12  October  1992  establishing  the  Community 
Customs  Code  (15).  The  customs  debt  incurred  shall  be  recovered  upon  withdrawal 
by the Commission of the acceptance of the undertaking. 

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

Article 3 

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

Done at Brussels, […] 

For the Council 
The President 
[…] 

15 

OJ L 302, 19.10.1992, p. 1. Regulation as last amended by Council Regulation (EC) No 1791/2006 (OJ 
L 363, 20.12.2006, p. 1). 

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24 

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The  following  elements  shall  be  indicated  in  the  commercial  invoice  accompanying  the 
company's sales of sulphanilic acid to the Community which are subject to an undertaking: 

ANNEX  

1. 

2. 

3. 

4. 

5. 

6. 

The  heading  "COMMERCIAL  INVOICE  ACCOMPANYING  GOODS  SUBJECT 
TO AN UNDERTAKING". 

The  name  of  the  company,  mentioned  in  Article  1  of  Commission  Decision 
2006/37/EC accepting the undertaking, issuing the commercial invoice. 

The commercial invoice number. 

The date of issue of the commercial invoice. 

The TARIC additional code under which the goods on the invoice are to be customs-
cleared at the Community frontier. 

The exact description of the goods, including: 

– 

– 

– 

– 

– 

the product code number (PCN) used for the purpose of the undertaking (e.g. 
"PA99", "PS85" or "TA98", 

the  technical/physical  specifications  of  the  PCN,  i.e.  for  “PA99”  and  “PS85” 
white free flowing powder, and for “TA98” grey free-flowing powder,  

the company product code number (CPC) (if applicable), 

CN code, 

quantity (to be given in tonnes). 

7. 

The description of the terms of the sale, including: 

– 

– 

– 

– 

price per tonne, 

the applicable payment terms, 

the applicable delivery terms, 

total discounts and rebates. 

8. 

9. 

Name  of  the  company  acting  as  an  importer  in  the  Community  to  which  the 
commercial invoice accompanying goods subject to an undertaking is issued directly 
by the company.  

The name of the official of the company that has issued the commercial invoice and 
the following signed declaration: 

“I, the undersigned, certify that the sale for direct export to the European Community of the 
goods  covered  by  this  invoice  is  being  made  within  the  scope  and  under  the  terms  of  the 
Undertaking  offered  by  [COMPANY],  and  accepted  by  the  European  Commission  through 
Decision 2006/37/EC. I declare that the information provided in this invoice is complete and 
correct.” 

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