Council Regulation (EC) No 1010/2008 of 13 October 2008 imposing a definitive countervailing duty on imports of sulphanilic acid originating in India following an expiry review pursuant to Article 18 of Regulation (EC) No 2026/97 and a partial interim review pursuant to Article 19 of Regulation (EC) No 2026/97 and amending Regulation (EC) No 1000/2008 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 Regulation (EC) No 384/96
Date: 2008-10-13
Institutions: Council of the European Union
Subjects: China, India, anti-dumping duty, anti-dumping legislation, chemical product, originating product

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COUNCIL REGULATION (EC) No 1010/2008

of 13 October 2008

imposing a definitive countervailing duty on imports of sulphanilic acid originating in India
following an expiry review pursuant to Article 18 of Regulation (EC) No 2026/97 and a partial
interim review pursuant to Article 19 of Regulation (EC) No 2026/97 and amending Regulation (EC)
No 1000/2008 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
Regulation (EC) No 384/96

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty
Community,

establishing the European

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 Community (1)
(the basic Regulation), and in particular Articles 15, 18 and 19
thereof,

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

Whereas:

1. PROCEDURE

1.1. Previous investigations and existing measures

(1)

In July 2002, by Regulation (EC) No 1338/2002 (2), the
imposed a definitive countervailing duty (the
Council
existing measures) of 7,1 % on imports of sulphanilic
acid falling within CN code ex 2921 42 10 (TARIC
code
The
measures imposed had been based on the findings of
an
to
Article 10 of the basic Regulation (the original investi­
gation).

2921 42 10 60)

antisubsidy

proceeding

originating

pursuant

initiated

India.

in

(2)

At the same time, by Regulation (EC) No 1339/2002 (3),
the Council
imposed a definitive anti-dumping duty of
18,3 % on imports of the same product originating in
India.

by Decision 2002/611/EC (4) accepted a price under­
taking offered by the Indian exporting producer, Kokan
Synthetics and Chemicals Pvt. Ltd (Kokan).

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 Decision 2004/255/EC (5).

In April 2005, following a request lodged by Kokan, the
Commission initiated (6) a partial interim review pursuant
to Article 19 of the basic Regulation and Article 11(3) of
Regulation (EC) No 384/96 (7) (the basic anti-dumping
Regulation) respectively, limited in scope to the examina­
tion of the acceptability of an undertaking to be offered
by the company.

Following an investigation,
in December 2005, by
Decision 2006/37/EC (8), the Commission accepted an
undertaking offered by Kokan in connection with the
anti-dumping and countervailing proceedings concerning
imports of sulphanilic acid originating in India.

In January 2006, as a result of the investigation referred
to above in recital 6, by Council Regulation (EC) No
123/2006 (9), Regulation (EC) No 1338/2002 imposing
a definitive countervailing duty on imports of sulphanilic
and Regulation (EC) No
acid originating in India
1339/2002 imposing a definitive anti-dumping duty on
imports of sulphanilic acid originating, inter alia, in India,
were amended to take into account the acceptance of the
said undertaking.

Following a review in accordance with the provisions of
Article 11(2) of Regulation (EC) No 384/96, the Council,
by Regulation (EC) No 1000/2008 (10), imposed an anti-
dumping duty on imports of sulphanilic acid originating
in the People’s Republic of China and India.

(4)

(5)

(6)

(7)

(8)

(3) Within the framework of the above-mentioned counter­
vailing and anti-dumping proceedings, the Commission,

(1) OJ L 288, 21.10.1997, p. 1.
(2) OJ L 196, 25.7.2002, p. 1.
(3) OJ L 196, 25.7.2002, p. 11.

(4) OJ L 196, 25.7.2002, p. 36.
(5) OJ L 80, 18.3.2004, p. 29.
(6) OJ C 101, 27.4.2005, p. 34.
(7) OJ L 56, 6.3.1996, p. 1.
(8) OJ L 22, 26.1.2006, p. 52.
(9) OJ L 22, 26.1.2006, p. 5.
(10) OJ L 275, 16.10.2008, p. 1.

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1.2. Request for a review

(14)

(9)

Following the publication of a notice of
impending
expiry (1) of the existing measures, the Commission, on
24 April 2007, received a request for an expiry review
the basic Regulation. This
pursuant
request was lodged by two Community producers (the
applicants)
the Community
production of sulphanilic acid.

representing 100 % of

to Article 18 of

(10)

for an expiry review was based on the
The request
the measures would be
grounds that
likely to result in the continuation or recurrence of subsi­
disation and injury to the Community industry.

the expiry of

(15)

The Commission examined the evidence submitted by
the applicants and considered it sufficient to justify the
initiation of a review in accordance with the provisions
of Article 18 of the basic Regulation. After consultation
of the Advisory Committee, the Commission announced
on 24 July 2007, by a notice of initiation published in
the Official Journal of the European Union (2), the initiation
of an expiry review pursuant to Article 18 of the basic
Regulation.

(16)

(11)

(12)

the basic Regulation,

It should be noted that prior to the initiation of the
expiry review, and in accordance with Articles 10(9)
and 22(1) of
the Commission
notified the Government of
India (hereinafter referred
to as GOI) that it had received a properly documented
review request and invited the GOI for consultations with
the aim of clarifying the situation as regards the contents
of
the complaint and arriving at a mutually agreed
solution. The GOI did not react to this offer of consul­
tations. Consultations were likewise offered and held with
the Indian authorities in the context of the partial interim
review referred to below. These consultations did not
arrive at a mutually agreed solution that would have
warranted that the review not be initiated.

1.3. Partial interim review

(13)

initiation),

By a notice of initiation published in the Official Journal of
the European Union on 29 September 2007 (3)
(the
Article 19 notice of
the Commission,
pursuant to Article 19 of the basic Regulation, initiated
on its own initiative a partial interim review limited to
the level of subsidisation, 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.

(1) OJ C 272, 9.11.2006, p. 18.
(2) OJ C 171, 24.7.2007, p. 14.
(3) OJ C 229, 29.9.2007, p. 9.

The review was limited to the level of subsidisation of
the company Kokan listed in the Annex to the Article 19
notice of initiation as well as to other exporters that were
invited to make themselves known under the conditions
in the notice of
and within the time limit set out
initiation.

1.4. Investigation

1.4.1. Investigation period

The investigation of continuation or recurrence of subsi­
disation covered the period from 1 April 2006 to
31 March 2007 (review investigation period or RIP).
This period was also used for the examination of the
alleged changed circumstances that led to the initiation
interim review. The examination of the
of the partial
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

the

advised

officially

associations,

representatives of

The Commission
exporting
producers, importers and users known to be concerned
and their
the
the
exporting country,
the applicant and the Community
producers of the initiation of the expiry review and the
partial interim 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.

(17) All interested parties, who so requested and showed that
there were particular reasons why they should be heard,
were granted a hearing.

(18) Questionnaires were sent

in the expiry review to all
parties known to be concerned, namely to the two
Community producers,
to the exporting producer in
India and to the known importers and users and to
the GOI. In regard to the partial
interim review, ques­
tionnaires were sent to the exporting producer in India
and to the GOI.

(19)

Replies to the questionnaires were received from the GOI,
both of the Community producers and the exporting
producer from the country concerned, as well as from
four users. None of the importers replied to the ques­
tionnaire
the
Commission with any information or made themselves
known in the course of the investigations.

importers

supplied

other

and

no

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(20)

The Commission sought and verified all the information
it deemed necessary for a determination of the likelihood
of a continuation or recurrence of subsidisation and
resulting injury and of the Community interest as well
as of alleged changed level of subsidisation. In this regard
the Commission carried out verification visits at
the
premises of the GOI in Delhi, the Government of Maha­
rashtra in Mumbai, the Reserve Bank of India in Mumbai,
and the following companies:

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(5) of the basic Regulation.

3. LIKELIHOOD OF CONTINUATION OR RECURRENCE
OF SUBSIDISATION

(a) Exporting producer in India:

3.1. Introduction

— Kokan Synthetics & Chemicals Pvt Ltd, Mumbai,

India;

(23) On the basis of the information contained in the review
to the Commission’s ques­
schemes, which allegedly

request and the replies
tionnaire,
following
the
involve the granting of subsidies, were investigated:

(b) Community producers:

— Ardenity, Givet, France,

— CUF Químicos Industriais, Estarreja, Portugal;

(c) Users:

— Subsidy schemes investigated in original investigation:

— Nationwide schemes:

(a) Export Processing Zones Scheme (EPZS)/­
Special
Scheme
(SEZS)/Export Oriented Units Scheme (EOUS);

Economic

Zones

— Kemira Germany GmbH, Leverkusen, Germany,

(b) Duty Entitlement Passbook Scheme (DEPBS);

(21)

— Robama SA, Palafolls, Spain.

2. PRODUCT CONCERNED AND LIKE PRODUCT

2.1. Product concerned

CN

code

ex 2921 42 10

The product under review is sulphanilic acid originating
in India (the product concerned), currently classifiable
(TARIC
within
2921 42 10 60). 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
in the production of optical
is used as a raw material
food colourants and
brighteners, concrete additives,
speciality dyes. While
are different uses of
there
sulphanilic acid, all grades and forms are perceived by
users to be reasonably substitutable, are used inter­
changeably in most applications and are therefore,
treated, as was the case in the original investigation, as
one single product.

2.2. Like product

(22) As established in the original investigation, these review
investigations confirmed that sulphanilic acid and its salts
are pure commodity products, and their 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
concerned on its domestic market and exported to

(c) Export Promotion Capital Goods Scheme

(EPCGS);

(d) Income Tax Exemption Scheme (ITES);

(e) Advance

Scheme
Licence
Authorisation Scheme (AAS),

(ALS)/Advance

— Regional schemes:

(f) Package Scheme of

Incentives (PSI) of

the

Government of Maharashtra,

— Subsidy schemes not investigated in original investi­

gation:

— Nationwide schemes:

(g) Export Credit Scheme (pre-shipment and post-

shipment) (ECS).

(24)

The schemes (a), (b), (c) and (e) specified above are based
on the Foreign Trade (Development and Regulation) Act
1992 (No 22 of 1992) which entered into force on
7 August 1992 (Foreign Trade Act). The Foreign Trade

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Act authorises the GOI to issue notifications regarding
the export and import policy. These are summarised in
‘Export and Import Policy’ documents, which,
since
1 September 2004, has been named ‘Foreign Trade
Policy’, and are issued by the Ministry of Commerce
every five years and updated regularly. One Export and
Import Policy document is relevant to the review inves­
tigation period of this case, i.e. the five-year plan relating
to the period 1 September 2004 to 31 March 2009
the GOI also
(EXIM-policy 2004-2009).
In addition,
the procedures governing the EXIM-policy
sets out
Procedures —
‘Handbook
2004-2009
1 September 2004 to 31 March 2009, Volume I’ (HOP
I 2004-2009).

of

in

a

(25)

The Income Tax Exemption Scheme specified above
is based on the Income Tax Act of 1961,
under (d)
which is amended yearly by the Finance Act.

3.2.3. Practical implementation

(31)

EOUS can be located and established anywhere in India.

(32) An application for EOUS status must include details for
the next five years of, inter alia, planned production quan­
tities, projected value of exports,
import requirements
and indigenous requirements. Upon acceptance by the
authorities of the company’s application, the terms and
conditions attached to this acceptance will be commu­
nicated to the company. The agreement to be recognised
as a company under the EOUS is valid for a five-year
further
period. The agreement may be renewed for
periods.

(33) A crucial obligation of an EOUS as set out in the EXIM-
policy 2004-2009 is to achieve net foreign exchange
(NFE) earnings, i.e. in a reference period (five years) the
total value of exports has to be higher than the total
value of imported goods.

(26)

The scheme (f) is managed by the State of Maharashtra
and is based on resolutions of the Government of Maha­
rashtra Industries, Energy and Labour Department.

(34)

EOUS units are entitled to the following concessions:

(27)

The Export Credit Scheme specified above under (g) is
based on Sections 21 and 35A of the Banking Regulation
Act 1949, which allows the Reserve Bank of India (RBI)
to direct commercial banks in the field of export credits.

3.2. Export Processing Zones Scheme (EPZS)/Special
(SEZS)/Export

Economic
Zones
Oriented Units Scheme (EOUS)

Scheme

(28)

It was found that the cooperating exporting producer
was not located in an SEZS nor in an EPZS. However,
the cooperating exporting producer had been set up
under the EOUS and received countervailable subsidies
in the RIP. The description and assessment below is
therefore limited to the EOUS.

— exemption from import duties on all types of goods
and
goods,
the manufacture,

(including
consumables)
production, processing, or in connection therewith,

raw materials

required

capital

for

— exemption from excise duty on goods procured from

indigenous sources,

— reimbursement of central sales tax paid on goods

procured locally,

— the facility to sell part of

the production on the
domestic market of up to 50 % of the FOB value
to fulfilment of positive NFE
of exports, subject
earnings upon payment of concessional duties,
i.e.
excise duties on finished products,

3.2.1. Legal basis

(29)

The details of the EOUS are contained in chapter 6 of the
EXIM-policy 2004-2009 and the HOP I 2004-2009.

— partial reimbursement of duty paid on fuel procured

from domestic oil companies,

3.2.2. Eligibility

(30) With the exception of pure trading companies, all enter­
prises which, in principle, undertake to export their entire
production of goods or services may be set up under the
EOUS. Undertakings in industrial sectors have to fulfil a
minimum investment threshold in fixed assets (INR 10
million) to be eligible for the EOUS.

— exemption from income tax normally due on profits
realised on export sales in accordance with Section
10B of the Income Tax Act, for a 10-year period after
starting its operations, but no longer than up to
2010,

— possibility of 100 % foreign equity ownership.

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(35) Units operating under these schemes are bonded under
the surveillance of customs officials in accordance with
Section 65 of the Customs Act.

(36)

These units are legally obliged to maintain a proper
imports, of the consumption and utili­
account of all
sation of all
the exports
imported materials and of
made in accordance with section 6.11.1 of the HOP I
2004-2009. These documents should be submitted peri­
odically to the competent authorities through quarterly
and annual progress reports.

(42)

(37) However, ‘at no point in time [an EOU] shall be required
to co-relate every import consignment with its exports,
transfers to other units, sales in DTA (Domestic Tariff
Area) or stocks’, as section 6.11.2 of the HOP I 2004-
2009 states.

(38) Domestic sales are dispatched and recorded on a self-
certification basis. The dispatch process of
export
consignments of an EOU is supervised by a customs/
excise official, who is permanently posted in the EOU.

contingent

subsidies are

the central sales tax and duties normally paid on fuel.
The
in law upon export
performance and, therefore, deemed to be specific and
countervailable under Article 3(4)(a) of the basic Regu­
lation. The export objective of an EOUS as set out in
paragraph 6.1 of the EXIM-policy 02-07 is a conditio sine
qua non to obtain the incentives.

3.2.5. Calculation of the subsidy amount

The subsidy amount was calculated on the basis of the
central sales tax reimbursed on goods procured locally
and the partial reimbursement of duties paid on domes­
tically purchased fuel during the review investigation
period. Fees necessarily incurred to obtain the subsidy
were deducted in accordance with Article 7(1)(a) of the
basic Regulation from this sum to arrive at the subsidy
accordance with
amount
the
subsidy
Article 7(2) of
amount was allocated over
export
turnover generated during the RIP as the appropriate
denominator, because the subsidy is contingent upon
export performance
granted by
reference to the quantities manufactured, produced,
exported or
subsidy margin thus
obtained was 3,2 %.

the basic Regulation this
the appropriate

and it was not

transported. The

numerator.

In

as

(39)

(40)

(41)

In the present case, the cooperating exporting producer
utilised the scheme to procure goods domestically free of
excise duty, to obtain central sales tax reimbursement
and to obtain partial reimbursement of duty paid on
fuel procured from domestic oil companies. The investi­
gation showed that the exporting producer concerned did
not avail of benefits under the income tax exemption
provisions of the EOUS.

3.3. Duty Entitlement Passbook Scheme (DEPBS)

3.3.1. Legal basis

(43) A detailed description of

section 4.3 of
section 4.37-4.53 of the HOP I 2004-2009.

the DEPBS is contained in
the EXIM-policy 2004-2009 and in

3.2.4. Conclusions on the EOUS

3.3.2. Findings

In the case of exemption from excise duty on goods
procured from indigenous sources,
it was found that
the duty paid on purchases by a non-EOUS unit can
be used as a credit for its own future duty liabilities,
e.g. towards payment of excise duty on domestic sales
(the so-called Cenvat mechanism). Therefore, the excise
duty paid on purchases is not definitive. By the means of
‘Cenvat’-credit only an added value bears a definitive
duty, not
the input materials. Thus, by exempting
excise duty on purchases by an EOUS unit, no additional
government revenue is foregone and consequently no
additional benefit accrues to the EOUS.

The reimbursement of the central sales tax and the partial
reimbursement of duty paid on fuel procured from
domestic oil companies constitute subsidies within the
the basic Regulation.
meaning of Article 2(1)(a)(ii) of
Government
in the
absence of
thus conferring a
benefit upon the EOUS within the meaning of
Article 2(2) of
it
improved its liquidity by obtaining reimbursements of

revenue which would be due

the basic Regulation, because

this scheme is forgone,

(44)

It was found that the cooperating exporting producer did
not obtain any benefits under the DEPBS in the RIP. It
was
therefore not necessary to further analyse this
scheme in this investigation.

3.4. Export

Promotion Capital Goods

Scheme

(EPCGS)

3.4.1. Legal basis

(45) A detailed description of

the EPCGS is contained in
the EXIM-policy 2004-2009 and in

chapter 5 of
chapter 5 of the HOP I 2004-2009.

3.4.2. Findings

(46)

It was found that the cooperating exporting producer did
not obtain any benefits under the EPCGS in the RIP. It
was
therefore not necessary to further analyse this
scheme in this investigation.

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3.5. Income Tax Exemption Scheme (ITES)

(47)

It was found that the cooperating exporting producer did
not obtain any benefits under the ITES in the RIP. It was
therefore not
found necessary to further analyse this
scheme in this investigation.

according to their economic development into different
categories, e.g.
lesser developed
less developed areas,
areas and least developed areas) either by setting up a
new industrial establishment or by making a large-scale
capital investment in the expansion or diversification of
an existing industrial establishment. The main criterion to
establish the amount of incentives is the classification of
the area in which the enterprise is or will be located and
the size of the investment.

3.6. Advance Licence Scheme (ALS)/Advance Au­

thorisation Scheme (AAS)

3.6.1. Legal basis

3.7.3. Practical implementation

(48) A detailed description of

the scheme is contained in
sections 4.1 to 4.1.14 of the EXIM-policy 2004-2009
and chapters 4.1 to 4.30 of
the HOP I 2004-2009.
The name of the scheme changed to the Advance Au­
thorisation Scheme from 1 April 2006.

3.6.2. Findings

(49)

It was found that the cooperating exporting producer did
not obtain any benefits under the AAS in the RIP. It was
therefore not
found necessary to further analyse this
scheme in this investigation.

3.7. Package

Incentives
Government of Maharashtra (GOM)

Scheme

of

of

the

(50)

3.7.1. Legal basis

In order to encourage the establishment of industries in
the State of Maharashtra to the less developed areas of
the State, the GOM has been granting incentives to new-
expansion units set up in developing regions of the State
since 1964, under a scheme commonly known as the
‘Package Scheme of
Incentives’
(PSI). The scheme has
been amended many times since its introduction and
the ‘2001 Scheme’ was operative from 1 April 2001
until 31 March 2006 after which it was extended for
one year until 31 March 2007. The PSI of the GOM is
composed of several sub-schemes amongst which the
main ones are: (i) the refund of octroi tax/entry tax; (ii)
the
the
exemption from electricity duty;
exemption from local sales tax/deferral of
local sales
tax. According to the GOM, the 2001 scheme does not
tax
include the latter
exemption nor sales tax deferrals. However, the investi­
gation established that a company’s entitlement
to
benefits under the scheme is stipulated in the ‘Eligibility
Certificate’. The investigation revealed that the only sub-
scheme used by the cooperating exporting producer
during the RIP was,
in fact, the one concerning sales
tax deferrals (part of (iii) above).

tax scheme,

i.e. neither

and (iii)

sales

3.7.2. Eligibility

(51)

In order to be eligible, companies must as a rule invest in
less developed areas of the State (which are classified

(52)

(53)

(54)

(55)

(56)

The Eligibility Certificate issued by the GOM to the coop­
erating exporting producer provided that the company
was, under the sales tax deferral sub-scheme, allowed
to defer the payment of State sales taxes collected on
its domestic sales for a period of 12 years from the
year of collection.

3.7.4. Conclusion

the

subsidies

The sales tax deferral sub-scheme of the PSI of the GOM
provides
of
within
Article 2(1)(a)(ii) and Article 2(2) of the basic Regulation.
The sub-scheme examined constitutes a financial contri­
bution by the GOM, since this concession postpones the
collection of
revenue which would be
otherwise due. This deferral confers a benefit upon the
company as it improves the company’s liquidity.

the GOM’s

meaning

The sub-scheme is only available to companies having
invested within certain designated geographical areas
within the jurisdiction of the State of Maharashtra. It is
not available for companies located outside these areas.
The level of benefit is different according to the area
concerned. The scheme is specific in accordance with
Article 3(2)(a) and Article 3(3) of the basic Regulation
and therefore countervailable.

3.7.5. Calculation of the subsidy amount

The deferred amount of State sales taxes, under the
deferral element of the scheme, collected in the RIP is
considered equivalent to an interest-free loan of the same
amount granted by the GOM. Thus, the benefit to the
cooperating exporting producer has been calculated on
the basis of the interest that was paid on a comparable
commercial loan by the company during the RIP.

to Article 7(2) of

the basic Regulation,

Pursuant
the
amount of subsidy (numerator) was then allocated over
the total company turnover during the RIP as the appro­
priate denominator, because the subsidy is not export
contingent and it was not granted by reference to the
quantities manufactured, produced, exported or trans­
ported.

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(57) On the basis of the above, the amount of subsidy that
the company has obtained under this scheme is 0,6 %.

3.8. Export Credit Scheme (ECS)

3.8.1. Legal basis

(63)

(58)

in the Master
the scheme are set out
The details of
Circular IECD No 02/04.02.02/2006-07 (Export Credit
in Foreign Currency) and the Master Circular IECD No
01/04.02.02/2006-07 (Rupee Export Credit) of
the
Reserve Bank of India (RBI), which is addressed to all
commercial banks in India.

3.8.2. Eligibility

(59) Manufacturing exporters and merchant exporters are
eligible for this scheme.
It was found that the coop­
erating exporting producer availed of benefits under the
ECS.

3.8.3. Practical implementation

(60) Under this scheme, the RBI sets compulsory maximum
ceilings on interest rates applicable to export credits,
both in Indian rupees or in foreign currency, which
commercial banks can charge an exporter ‘with a view
to making credit available to exporters at internationally
competitive rates’. The ECS consists of two sub-schemes,
the Pre-Shipment Export Credit Scheme (packing credit),
credits provided to an exporter
which covers
for
financing
the purchase, processing, manufacturing,
packing and/or shipping of goods prior to export, and
the Post-Shipment Export Credit Scheme, which provides
for working capital loans with the purpose of financing
export receivables. The RBI also directs the banks to
their net bank credit
provide a certain amount of
towards export finance.

(61) As a result of the RBI Master Circulars, exporters can
obtain export
rates
compared with the interest rates for ordinary commercial
credits (cash credits), which are purely set under market
conditions.

at preferential

interest

credits

3.8.4. Conclusion on the ECS

(62)

Firstly, the preferential interest rates of an ECS credit set
by the RBI Master Circulars can decrease interest costs of
an exporter as compared with credit costs set purely in
accordance with market conditions and confer in this
case a benefit within the meaning of Article 2(2) of the
basic Regulation on such an exporter. Only in the case
where such interest rate difference was found to exist,
was it concluded that a benefit was conferred. The
differences in rates between the credits given pursuant
‘cash
to the RBI Master Circulars and commercial

(64)

(65)

credit’
behaviour of the commercial bank.

cannot be

rates

explained by pure market

It

the basic Regulation.

Secondly, and despite the fact that the preferential credits
under the ECS are granted by commercial banks, this
benefit
is a financial contribution by a government
within the meaning of Article 2(1)(a)(iv) of the basic
Regulation. The RBI is a public body and falls therefore
under the definition of a ‘government’ as set out
in
Article 1(3) of
is 100 %
government-owned, pursues public policy objectives,
e.g. monetary policy, and its management is appointed
by the GOI. The RBI directs private bodies, within the
meaning of the second indent of Article 2(1)(a)(iv) of the
basic Regulation, since the commercial banks are bound
inter alia, the maximum
by the conditions it imposes,
ceilings for interest rates on export credits mandated in
the RBI Master Circulars and the RBI provisions that
commercial banks have to provide a certain amount of
finance. This
their net bank credit
to carry out
direction obliges
functions mentioned in Article 2(1)(a)(i) of
the basic
Regulation, in this case loans in the form of preferential
export financing. Such direct transfer of funds in the
form of loans under certain conditions would normally
be vested in the government, and the practice, in no real
sense, differs
from practices normally followed by
governments in the sense of Article 2(1)(a)(iv) of the
basic Regulation. This subsidy is deemed to be specific
interest rates
and countervailable since the preferential
are only available in relation to the financing of export
transactions and are therefore contingent upon export
performance, pursuant
the basic
Regulation.

to Article 3(4)(a) of

commercial banks

towards export

3.8.5. Calculation of the subsidy amount

the particular

The subsidy amount was calculated on the basis of the
difference between the interest paid for export credits
used during the RIP and the interest rate that would
have been payable for ordinary commercial credits used
amount
company. This
by
(numerator) was
export
allocated over
turnover during the RIP as appropriate denominator in
the basic Regulation,
accordance with Article 7(2) of
export
upon
because
performance and it was not granted by reference to the
quantities manufactured, produced, exported or trans­
ported. The cooperating exporting producer availed of
benefits under the ECS and obtained a subsidy of 0,9 %.

subsidy
total

contingent

subsidy

the

the

is

3.9. Amount of countervailable subsidies

The amount of countervailable subsidies found in the RIP
in accordance with the provisions of the basic Regu­
lation,
investigated
valorem,
expressed ad
exporting producer is 4,7 %.

the

for

L 276/10

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(66) On the basis of the available information, the cooperating exporting producer accounted for 100 %
of exports of sulphanilic acid from India to the Community during the RIP. No information was
available showing that the level of subsidisation of other exporting producers that might exist would
be at a lower level.

SCHEME

EOU (*)

DEPBS

EPCGS

ITES

ALS

Maharashtra
State
Scheme

ECS (*)

Total

COMPANY

Kokan Synthetics and
Chemicals Private
Limited

%

3,2

%

nil

%

nil

%

nil

%

nil

%

0,6

%

0,9

%

4,7

(*) Subsidies marked with an asterisk are export subsidies.

(67)

(68)

(69)

(70)

3.10. Conclusions

regarding the continuation or

recurrence of subsidisation

In accordance with Article 18(2) of the basic Regulation,
it was examined whether the expiry of the measures in
force would be likely to lead to a continuation or
recurrence of subsidisation.

(72) With regard to the lasting nature of the changed circum­
stances,
in light of the findings set out in recital 68
above, it was concluded that there were no reasons to
consider that the changed level of subsidisation was not
of a lasting nature.

investigation,

It was established that though the subsidy margin found
during the expiry review investigation is lower than the
one established during the original
the
cooperating Indian exporter of the product concerned
continued to benefit from countervailable subsidisation
by the Indian authorities. As regards the main scheme
investigated during the RIP, i.e. the EOUS, the status of
an Export Oriented Unit pursuant to the EXIM-policy
gives recurring benefits and there is no indication that
these programmes will be phased out in the foreseeable
future. Under
the
exporter of the product concerned will also continue to
receive countervailable subsidies in the future.

these conditions,

is clear

that

it

it has been demonstrated that

Since
subsidisation
continued at the time of the review and that it is likely
likelihood of
to continue in the future,
recurrence of subsidisation is irrelevant.

the issue of

4. DEFINITION OF THE COMMUNITY INDUSTRY

(73) 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 9(1) of the basic Regu­
lation.

(74)

It should be noted that, as compared to the original
and
investigation,
‘Quimigal SA’
the
former to ‘Ardenity’ and the latter to ‘CUF Químicos
Industriais’.

Fine’
the
companies have been renamed,

‘Sorochimie Chimie

(75)

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 9(1) and 10(8) of the basic Regulation.

3.11. Lasting nature of changed circumstances

5.1. Consumption in the Community market

5. SITUATION ON THE COMMUNITY MARKET

In accordance with Article 19(2) of the basic Regulation,
it was also examined whether the changed circumstances
with respect to the original investigation regarding subsi­
disation could reasonably be considered to be of a lasting
nature.

(76)

The apparent Community consumption was established
on the basis of:

— imports

of

the

product

concerned

into

the

Community market derived from Eurostat,

(71)

It is recalled that the scope of the interim review is, in
the absence of cooperation by any other exporters in
India,
limited to the level of subsidisation of Kokan
Synthetics & Chemicals Pvt. Ltd.

— total

sales of

the Community industry on the
Community market derived from the questionnaires’
replies.

17.10.2008

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L 276/11

(77)

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

Consumption (tonnes)

10 684

10 443

10 899

Index

100

98

102

2006

9 939

93

RIP

9 997

94

5.1.1. Current imports from the country concerned

(78)

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.

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

(79)

The volumes and market shares of the imports from India developed as set out in the tables below.

Table 2

Imports from the country concerned

2003

100

2004

54

2005

59

2006

56

Imports ()

Index

Source: Eurostat.

Table 3

Market share of the country concerned

Market share

Index

2003

100

2004

55

2005

58

2006

60

RIP

60

RIP

64

(80)

Imports from the country concerned decreased by 40 % between 2003 and the RIP and market share
of Indian imports decreased by 36 %.

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

Table 4

Prices of the imports concerned

Unit prices

Index

Source: Eurostat.

2003

100

2004

85

2005

96

2006

110

RIP

111

(81)

The average price of the imports concerned originating in India increased by 11 % over the period
considered.

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(82)

For the purpose of calculating the level of price undercutting during the RIP, Community industry’s
ex-works prices to unrelated customers were compared with the CIF Community-frontier import
prices of the country concerned, duly adjusted in order to reflect a landed price. This adjustment was
importation costs. The
made by increasing the prices by the normal custom duty and post
the
comparison showed that
Community industry. The price increase observed and the absence of undercutting should be seen
in the light of the various price undertakings offered by the Indian exporter since the imposition of
measures in 2002.

the adjusted Indian prices were not undercutting the prices of

5.3. Imports from other third countries

Table 5

Imports from other third countries

Rest of the world

Imports (Index)

Market share (Index)

Average prices (EUR/tonne)

Index

Source: Eurostat.

2003

100

100

855

100

2004

93

95

930

109

2005

114

112

1 077

126

2006

91

98

1 059

124

RIP

91

97

1 018

119

(83)

(84)

The volume of imports from other third countries decreased by 9 % over the period considered. Their
market share slightly decreased by 3 %. The main exporting countries, namely the United States of
America (US) and the PRC, accounted for almost 100 % of
these imports during the period
considered.

Prices of sulphanilic acid from other third countries were on average lower than those of the
Community industry and also below the Indian prices. It is recalled that the imports of sulphanilic
acid originating in the PRC were subject to an anti-dumping duty of 21 % in 2002, increased to
33,7 % in 2004 following an anti-absorption investigation.

5.4. Economic situation of the Community industry

5.4.1. Preliminary remarks

(85)

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.

(86)

In accordance with Article 8(5) of the basic Regulation, all relevant economic factors and indices
pertaining to the Community industry were examined.

5.4.2. Data relating to the Community industry

(a) P r o d u c t i o n ,

i n s t a l l e d p r o d u c t i o n c a p a c i t y a n d c a p a c i t y u t i l i s a t i o n

r a t e

Table 6

Production, installed production capacity, capacity utilisation

Capacity tonnes (index)

Production tonnes (index)

Capacity utilisation (index)

2003

100

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.

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Official Journal of the European Union

L 276/13

(87)

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.

(b) I n v e n t o r i e s

(88)

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

Stocks tonnes (index)

2003

100

2004

35

2005

38

2006

64

RIP

78

Source: Questionnaire replies of the Community industry.

(c) S a l e s v o l u m e , m a r k e t s h a r e a n d g r o w t h

(89)

The sales volumes of the Community industry in the RIP were 5 % higher than the beginning of the
period considered. As Community consumption decreased by 6 % over the period considered (see
recital 77 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

Sales volume — tonnes
(index)

Market share % (index)

2003

100

100

2004

114

116

2005

107

105

2006

105

113

RIP

105

112

Source: Questionnaire replies of the Community industry.

(90)

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

(d) F a c t o r s a f f e c t i n g C o m m u n i t y p r i c e s

(91) 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 taken against Chinese imports 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.

L 276/14

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Official Journal of the European Union

17.10.2008

Average sales price (index)

2003

100

Source: Questionnaire replies of the Community industry.

Table 9

Sales prices

2004

104

2005

124

2006

125

RIP

126

(e) E m p l o y m e n t a n d p r o d u c t i v i t y

(92)

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

Employment (index)

Productivity (index)

Average labour cost (index)

2003

100

100

100

2004

96

125

82

2005

96

120

94

2006

98

117

106

RIP

91

129

115

Source: Questionnaire replies of the Community industry.

(f) P r o f i t a b i l i t y

Table 11

Profitability

Index

2003

100

2004

– 1 286

2005

1 519

2006

335

RIP

191

Source: Questionnaire replies of the Community industry.

(93)

(94)

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 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.

the profitability of

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 91 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 signifi­
cantly 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
extent necessary to cover the rise 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.

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(g) I n v e s t m e n t s , r e t u r n o n i n v e s t m e n t s a n d a b i l i t y t o r a i s e c a p i t a l

Table 12

Investments, return on investment

Investments (index)

Return on investments
(index)

2003

100

100

2004

39

– 1 779

2005

57

2 498

2006

255

420

RIP

305

224

Source: Questionnaire replies of the Community industry.

(95)

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 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.

(96) 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.

(97)

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.

(h) C a s h f l o w

(98)

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

2004

41

2005

64

2006

32

RIP

15

Cash flow

Index

2003

100

Source: Questionnaire replies of the Community industry.

5.5. Conclusion

(99)

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.

(100) 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 the
rise in the cost of production and profit margins therefore decreased.

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(101)

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

scenario, exports from India of sulphanilic acid would
very likely replace a large share of the sales made by
the Community industry, as the prices of imports are
likely to be lower than those of the Community industry.

(102) Overall,

it

is clear that

the introduction of

the anti-
subsidy measures enabled the Community industry to
stabilise its situation, but not to fully recover from its
injurious situation because of 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.

(103)

that

indicators pertaining

In the light of the above analysis, it emerged, on the one
the volume indicators developed positively
hand,
during the period considered. On the other hand, the
financial
to the Community
industry such as profitability and cash flow showed
that
in a vulnerable
economic situation. It is therefore concluded that it had
not fully recovered from the effects of injurious subsidi­
sation.

the Community industry is still

(108) The investigation established that the Community market
remains attractive for the Indian exporting producer.
it was found that the average export price of
Indeed,
its sales to other third countries was significantly below
the average export price to the Community. The fact that
no price undercutting was found to exist for the Indian
export prices is explained by the price undertaking, and
in place for India. However, even
thus the measures,
the Indian CIF export prices were found, on
then,
average,
the
Community industry (around 7 %).

than the average price of

to be lower

(109) Therefore, it is likely that without any measures in place,
the Indian exporting producer would have an incentive
to use significant quantities of unused capacity and to re-
direct its exports to other third countries to the more
attractive Community market, at price levels significantly
below the
in the Community
industry.

current price

levels

6. LIKELIHOOD OF RECURRENCE OF INJURY

6.1. General

(104) Pursuant to Article 18(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 country 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 country concerned should measures
be repealed

(105)

It is recalled that even with anti-subsidy measures in
place, the imports from the country concerned had a
market share of 9,7 % in the RIP.

6.3. Conclusion on likelihood of recurrence of injury

(110) On the basis of the foregoing, it can be concluded that,
should measures lapse,
imports into the Community
market from the country concerned would very likely
occur in significant volumes and at subsidised 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
the Community industry. This
economic situation of
would,
reverse the recovery that was
in particular,
partly achieved over the period considered, leading to a
likely recurrence of injury.

7. COMMUNITY INTEREST

7.1. Introduction

(106) The investigation showed that

the cooperating Indian
exporting producer has significant spare capacity, above
30 % of Community consumption. This unused capacity
indicates that the said exporting producer has the possi­
bility to increase its current production and thus also to
increase its exports of sulphanilic acid to the Community.

(111) According to Article 31 of the basic Regulation, it was
examined whether maintenance of
the existing anti-
subsidy 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.

(107)

It is also noted that Community consumption slightly
decreased over
is not
expected that the demand in the next years would be
such as to absorb the potential
increase in imports
from India should the measures be terminated. In this

the period considered and it

(112) The fact that the present investigation is a review, thus
analysing a situation in which anti-subsidy measures have
already been in place, should allow the assessment of any
undue negative impact on the parties concerned by the
current anti-subsidy measures.

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(113) On this basis,

it was examined whether, despite the
conclusions on the likelihood of recurrence of injurious
subsidisation, 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

(114)

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

likely that

concerned

currently

that

and

its

is

it

whether it was in favour or against the maintenance of
the measures.

(120) Regarding the supply situation on the Community
it is to be noted that the current production
market,
the Community industry could satisfy
capacity of
It should
around 80 % of Community consumption.
the Community industry has
also be stressed that
invested in new facilities in order to increase its output
of pure grade sulphanilic acid. In any event, the purpose
of
imports from the
country concerned entering the Community market but
to ensure that they are made at non-subsidised and non-
injurious prices.
imports
from the country concerned will continue to enter the
market as it has been the case following the imposition
of measures in 2002.

is therefore expected that

the measures is not

to prevent

It

(115) On this basis, it can be concluded that the continuation
of measures would be in the interest of the Community
industry.

(121)

7.3. Interest of importers

(116)

It is recalled that
investigation it was
in the original
found that the imposition of measures would not have
had a serious
impact on Community importers of
sulphanilic acid. This seems to be confirmed by the
lack of cooperation 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

(117) 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
company
producing dyes. However, the information provided by
all these users regarding the effect of the measures and
the proportion that sulphanilic acid represented in their
manufacturing costs was not meaningful.

questionnaire

from a

reply

one

(118) 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
acid from the
Community industry, they accounted overall for around
40 % of Community consumption in the RIP.

volumes of

sulphanilic

in the world,

It should be also noted that sulphanilic acid production
outside
the Community is now restricted to few
the People’s
countries
Republic of China and the US. It is therefore important
that the Community industry is allowed to operate under
effective
so that domestic
supplies of the product continue to be available to all
users in the Community.

competition conditions

such as

India,

(122) 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
investigation that anti-subsidy
shown in the original
measures would increase
costs of optical
brighteners and of dyes to containing sulphanilic acid
by less than 1 %.

full

the

(123) On the basis of the above, similarly to the conclusion
drawn in the original investigation, it is considered also
in the framework of the 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

(124) Given the above,

it

is concluded that

the maintenance of

there are no
the

compelling reasons against
current anti-subsidy measures.

(119) Three users have made the same points opposing the
continuation of measures on the grounds
the
production capacity of the Community industry is insuf­
ficient to meet domestic demand and on the grounds
that measures are harming their competitiveness on the
downstream products. The fourth user remained silent on

that

8. COUNTERVAILING MEASURES

(125) All parties were informed of

the essential

facts and
considerations on the basis of which it is intended to
recommend that
the existing measures be maintained
and amended. They 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.

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(126)

In view of the conclusions reached in the context of the
expiry review with regard to the likelihood of conti­
recurrence of
nuation of subsidisation,
injury
countervailing
and Community
measures on imports of sulphanilic acid originating in
India should be maintained in order
to prevent a
recurrence of
injury being caused to the Community
industry by the subsidised imports.

likelihood of
the
interest,

revised level of benefit received from export subsidies
in the RIP of the current anti-subsidy investigation. As
the benefits from export subsidies amounted to 4,1 % in
that RIP and the level of the dumping margin originally
established in Regulation (EC) No 1339/2002 was
24,6 %, the revised level of anti-dumping duty should
be 20,5 %. Regulation (EC) No 1000/2008 should be
amended accordingly,

it

(127) With regard to the findings of the partial interim review
limited to the level of subsidisation concerning the coop­
is considered
erating exporting producer in India,
appropriate
to amend the countervailing duty rate
applicable from 7,1 % to 4,7 %. As the cooperating
exporting producer accounted for 100 % of the exports
of sulphanilic acid from India to the Community in the
it is considered appropriate that this rate of duty
RIP,
should also apply to imports manufactured by other
Indian producers. The duty rate will not be applicable
for imports of the product concerned which are manu­
factured and sold for export to the Community by the
cooperating exporting producer from which an under­
taking has been accepted by Decision 2006/37/EC. In
this regard, it is noted that the minimum import prices
of the undertaking accepted from the Indian company
have been amended in order to reflect the decrease in the
combined overall duty rate (anti-dumping and counter­
vailing) applicable to this company.

to

both

duty was

is recalled that
based

(128) The amendment of the countervailing duty rate will have
an impact on the definitive anti-dumping duty of 18,3 %
imposed on imports of sulphanilic acid from India by
Regulation (EC) No 1000/2008, as the latter was adjusted
in order to avoid any double-counting of the effects of
the
benefits from export subsidies (it
definitive
on the
anti-dumping
dumping margin since the latter was found to be lower
than the injury elimination level). Article 24(1) of the
basic Regulation and Article 14(1) of
the basic anti-
dumping Regulation provide that no product shall be
subject
countervailing
anti-dumping
measures for the purpose of dealing with one and the
same situation arising from dumping or export subsidi­
sation.
investigation that
certain of the subsidy schemes investigated which were
countervailable, constituted export subsidies within the
meaning of Article 3(4)(a) of the basic anti-subsidy Regu­
lation. As such, these subsidies affected the export price
thus leading to an
of the Indian exporting producer,
increased margin of dumping. Therefore, pursuant
to
the definitive
Article 24(1) of
the actual
anti-dumping duty was adjusted to reflect
dumping margin remaining after the imposition of the
definitive countervailing duty offsetting the effect of the
export subsidies (see recital 46 of Regulation (EC) No
1339/2002).

It was found in the original

the basic Regulation,

and

HAS ADOPTED THIS REGULATION:

Article 1

A definitive countervailing duty is hereby imposed on
1.
imports
falling within CN code
ex 2921 42 10 (TARIC code 2921 42 10 60) and originating
in India.

sulphanilic

acid

of

2.
The rate of the definitive countervailing duty applicable to
the net, free-at-Community-frontier price, before duty, shall be
4,7 %.

3.
Notwithstanding paragraph 1, the definitive duty shall not
apply to imports released for free circulation in accordance with
Article 2.

Unless otherwise

4.
concerning customs duties shall apply.

specified,

the provisions

in force

Article 2

1.
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 Decision
2006/37/EC, as from time to time amended, shall be exempt
from the countervailing 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
the
elements and the declaration stipulated in the Annex to
this Regulation, and

invoice containing at

least

(129) Consequently, the definitive anti-dumping duty rate for
the
India must now be adjusted to take account of

— the goods declared and presented to customs correspond
precisely to the description on the undertaking invoice.

17.10.2008

EN

Official Journal of the European Union

L 276/19

the conditions

A customs debt shall be incurred at the time of acceptance
2.
of the declaration for release into free circulation whenever it is
in respect of goods described in Article 1 and
established,
exempted from the duties under
listed in
that one or more of such conditions is not
paragraph 1,
fulfilled. The condition set out
in the second indent of
paragraph 1 shall be considered as not being fulfilled where
to comply with the
the undertaking invoice is found not
provisions of
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 trans­
action(s) and declares the relevant undertaking invoice(s) as
invalid.

the Annex or found not

Importers shall accept as a normal trade risk, the fact that
3.
the
the non-fulfilment, by any party, of one or more of
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 (1). The customs debt incurred shall be recovered upon
withdrawal by the Commission of the acceptance of the under­
taking.

Article 3

Article 1(2) of Regulation (EC) No 1000/2008 is replaced by
the following:

‘2.
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

20,5’

Article 4

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

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

Done at Luxembourg, 13 October 2008.

For the Council
The President

B. KOUCHNER

(1) OJ L 302, 19.10.1992, p. 1.

L 276/20

EN

Official Journal of the European Union

17.10.2008

ANNEX

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:

1. The heading ‘COMMERCIAL INVOICE ACCOMPANYING GOODS SUBJECT TO AN UNDERTAKING’.

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

issuing the commercial invoice.

3. The commercial invoice number.

4. The date of issue of the commercial invoice.

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

frontier.

6. 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,

‘TA98’ grey free-flowing powder,

i.e. for ‘PA99’ and ‘PS85’ white free-flowing powder, and for

— 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. 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.

9. 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.’