Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of monosodium glutamate originating in the People’s Republic of China
Date: 2008-11-04
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, food additive, import, originating product

EN 

EN 

   EN 

 
 
COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 4.11.2008 
COM(2008) 702 final 

Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitively the provisional duty 
imposed on imports of monosodium glutamate originating in the People’s Republic of 
China 

(presented by the Commission) 

EN 

   EN 

 
 
 
  
EXPLANATORY MEMORANDUM  

1. 

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’). 

General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is the result of an investigation which was carried out in line with the substantive and 
procedural requirements laid out in the basic Regulation. 

Existing provisions in the area of the proposal 

Not applicable. 

Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

Consultation of interested parties and impact assessment 

Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  already  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. 

3. 

Legal elements of the proposal 

Summary of the proposed action 

On  5  September  2007,  the  Commission  initiated  an  anti-dumping  proceeding 
concerning imports of monosodium glutamate originating in the People’s Republic of 
China. 

The investigation found dumping of the product concerned, which caused injury to the 
Community  industry.  The  investigation  also  showed  that  there  was  no  compelling 
Community interest aspect against the imposition of definitive anti-dumping measures. 
On this basis, provisional measures were imposed by Commission Regulation (EC) No 

EN 

2 

   EN 

 
 
 
 
 
 
 
 
 
 
 
492/2008. The continuation of the investigation has confirmed the essential provisional 
findings. 

Therefore,  it  is  suggested  that  the  Council  adopts  the  attached  proposal  for  a 
Regulation in order to impose definitive measures. 

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  above-mentioned  basic  Regulation  and  leaves  no  scope  for  national 
decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Community, 
national governments, regional and local authorities, economic operators and citizens is 
minimized and proportionate to the objective of the proposal is not applicable. 

Choice of instruments 

Proposed instrument: Regulation. 

Other  means  would  not  be  adequate  because  the  basic  Regulation  does  not  foresee 
alternative options. 

4. 

Budgetary implication 

The proposal has no implication for the Community budget. 

EN 

3 

   EN 

 
 
 
 
 
 
 
 
 
 
Proposal for a 

COUNCIL REGULATION 

imposing a definitive anti-dumping duty and collecting definitively the provisional duty 
imposed on imports of monosodium glutamate originating in the People’s Republic of 
China 

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 Article 9 thereof, 

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

Whereas: 

5. 

5.1. 

(1) 

5.2. 

(2) 

(3) 

(4) 

(5) 

PROCEDURE 

PROVISIONAL MEASURES 
The  Commission,  by  Regulation  (EC)  No  492/20082  (the  'provisional  Regulation') 
imposed  a  provisional  anti-dumping  duty  on  imports  of  monosodium  glutamate 
('MSG') originating in the People's Republic of China ('PRC'). 

SUBSEQUENT PROCEDURE 

Subsequent to the disclosure of the essential facts and considerations  on the basis of 
which  it  was  decided  to  impose  provisional  anti-dumping  measures  ('provisional 
disclosure'),  several  interested  parties  made  written  submissions  making  their  views 
known  on  the  provisional  findings.  The  parties  who  so  requested  were  granted  an 
opportunity to be heard. The Commission continued to seek and verify all information 
it deemed necessary for its definitive findings. 

The  Commission  continued  its  investigation  with  regard  to  Community  interest 
aspects  and  carried  out  an  analysis  of  information  provided  by  some  users  and 
suppliers  in  the  Community  after  the  imposition  of  the  provisional  anti-dumping 
measures. 

The  oral  and  written  comments  submitted  by  the  interested  parties  were  considered 
and, where appropriate, the provisional findings were modified accordingly.  

All  parties  were  informed  of  the  essential  facts  and  considerations  on  the  basis  of 
which  it  was  intended  to  recommend  the  imposition  of  definitive  anti-dumping 
measures on imports of MSG originating in the PRC and the definitive collection of 

1 

2 

OJ L 56, 6.3.1996, p.1 

OJ L 144, 4.6.2008, p. 14. 

EN 

4 

   EN 

 
                                                 
(6) 

6. 

(7) 

7. 

7.1. 

(8) 

7.2. 

(9) 

(10) 

(11) 

the amounts secured by way of the provisional duty. They were also granted a period 
within which they could make representations subsequent to this disclosure. 

It is recalled that the investigation of dumping and injury covered the period from 1 
July  2006  to  30  June  2007  ('investigation  period'  or  'IP').  With  respect  to  the  trends 
relevant for the injury assessment, the Commission analysed data covering the period 
from April 2004 to the end of the IP ('period considered'). 

PRODUCT CONCERNED AND LIKE PRODUCT 

In  the  absence  of  any  comments  concerning  the  product  concerned  and  the  like 
product, recitals (12) to (14) of the provisional Regulation are hereby confirmed. 

DUMPING 

Application of Article 18 of the basic Regulation 

In the absence of any comments concerning the application of Article 18 of the basic 
Regulation  to  one  exporting  producer  in  the  PRC,  recitals  (15)  to  (18)  of  the 
provisional Regulation are hereby confirmed.  

Market economy treatment ('MET')  

Following the provisional disclosure, the two Chinese exporting producers which were 
not granted MET contested the provisional findings.  

In  the  case  of  the  first  company  it  was  submitted  that,  in  its  opinion,  International 
Accounting Standard (IAS) only required the preparation of consolidated accounts and 
did not require the consolidated accounts to be audited in line with IAS. 

In this regard, it should be recalled that, despite several requests, this company did not 
provide  the  relevant  consolidated  financial  statements,  including  the  auditors'  report 
neither in its MET claim form nor during the on-spot visit in the PRC. The IAS state 
and  explain  internationally  agreed  accounting  principles  and  provide  guidance  as  to 
how  they  should  be  applied.  Performing  an  audit  of  accounting  records  in  line  with 
IAS  means  that  the  audit  ensures  that  the  accounting  records  were  prepared  and 
presented in line with IAS and that they comply therewith. In case of a breach of such 
principles, the audit report should mention the impact of the non-compliance and the 
reasons why IAS principles were not applied. IAS 27, in particular, clearly states the 
conditions under which firms should prepare and present their consolidated accounts. 
The company does not contest that these conditions were applicable to it in the context 
of the MET investigation.  

(12)  Article  2(7)(c)  second  indent  of  the  basic  Regulation  clearly  provides  that  firms 
applying  for  MET  should  have  basic  accounting  records  which  are  independently 
audited in line with IAS and applied for all purposes. It thus seems clear that accounts 
should not only be prepared but also audited in line with IAS. The absence of an audit 
in  line  with  IAS  does  not  allow  the  Commission  to  establish  whether  or  not  the 
accounts were prepared in line with IAS. On this basis alone it could not be concluded 
that criterion two was fulfilled. 

(13)  The same exporting producer further claimed that in its view the offsetting of revenues 
and  expenses  was  not  of  material  nature  and  that  the  non-disclosure  could  not 
influence the economic decision of users taken on the basis of the financial statements. 
Therefore there was no violation of IAS. 

(14)  This claim however seems to contradict the first one that accounts should be prepared 
but not audited in line with IAS. If this were the case, the firms themselves, and not 

EN 

5 

   EN 

 
competent  and  independent  auditors  as  required  in  Article  2(7)(c),  would  assess 
whether or not offsetting might not be forbidden, if revenues and expenses were not of 
material nature, if such offsetting could not influence the economic decision of users 
and if such offsetting detracts from the ability of users to understand the transactions 
undertaken.  

(15)  Moreover,  while  it  has  to  be  accepted  that  the  notion  "materiality"  leaves  room  for 
interpretation,  paragraph  30  of  IAS  1  provides  that  an  item  that  is  not  sufficiently 
material to warrant separate presentation on the  face of  the financial statements may 
nevertheless be sufficient material that it should be presented separately in the notes. 
Therefore, in view of the fact that the offsetting was not mentioned in the audit report 
nor  in  the  notes  to  the  financial  statements  of  the  company  it  is  confirmed  that  the 
accounts of the company were not audited in line with IAS.  

(16) 

In  addition,  the  offsetting  in  question  were  those  found  by  the  Commission 
investigators. Only an in-depth audit would have revealed if there were no other cases 
where accounts were not prepared and audited in line with IAS. In the absence of such 
an audit, the Commission does not have the material time, nor is it the purpose of the 
on-spot  visit,  to  audit  the  accounts  and  the  presentation  of  the  accounts  of  the 
companies. Therefore, findings of the Commission which point to the fact that firms, 
claiming  MET,  fail  to  meet  the  requirement  of  the  basic  Regulations  to  prepare 
accounting records and ensure that the accounts are prepared and audited in line with 
IAS leads to the conclusion that criterion two is not fulfilled.  

(17)  Finally,  the  same  company  disagreed  with  the  conclusion  that  a  negative  working 
capital  together  with  interest–free  borrowings  has  to  be  considered  as  a  distortion 
carried  over  from  the  former  non-market  economy  system  but  rather  a  sign  of 
managerial efficiency. 

(18) 

It should firstly be noted that the findings relating to the negative working capital were 
subsidiary  findings  and  were  not  the  main  ones  leading  to  the  conclusion  that  the 
applicant did not fulfil the MET criterion. Secondly, a negative working capital alone 
can be a sign of managerial efficiency but only in a business with low inventory and 
low accounts receivable, which basically can only be found in enterprises operating on 
an  almost  cash-only  basis,  such  as  department  stores  and  supermarkets. The  analysis 
of the situation of this Chinese exporting producer, however, was completely different. 
A negative working capital has to be considered rather as a sign that a company may 
be  facing  bankruptcy  or  serious  financial  trouble.  Under  such  circumstances,  being 
able  to  receive  huge  amounts  of  "trade  credits"  without  any  financial  cost  would  be 
highly unlikely in market economy conditions. Therefore, the significant interest-free 
borrowings of the company which represented a significant share of its total short term 
liabilities  (the  latter  representing  80%  of  total  liabilities)  and  which  resulted  to  a 
significant level of  negative  working capital has  to be  considered as  not  in  line with 
market economy behaviour.  

(19) 

In the case of the second company, no new arguments were provided which alter the 
provisional findings on MET. In particular, it has been confirmed that the influence of 
the  State-owned  shareholder  on  the  decision  making  process  of  the  company  was 
disproportionately high and that the State agreed to reduce the established value of the 
land  use  rights  by  50%  without  any  compensation.  It  was  also  confirmed  that  the 
accounts of the company were not audited in line with IAS.  

(20) 

In  the  absence  of  any  other  comments  concerning  MET,  recitals  (19)  to  (26)  of  the 
provisional Regulation are hereby confirmed.  

EN 

6 

   EN 

 
7.3. 

Individual treatment ('IT') 

(21)  One  interested  party  claimed  that  anti-competitive  practices  and  State  interference 
would  encourage  circumvention  of  the  measures  and  therefore  none  of  the  Chinese 
producers should be granted IT. 

(22)  However, this interested party did not provide any evidence as to how such allegedly 
anti-competitive practices and alleged State interference would permit circumvention 
of  measures.  Moreover,  the  investigation  revealed  that  any  theoretical  State 
interference would be only possible via the China Fermentation Industry Association 
of  which  both  exporting  producers  are  members.  However,  all  decisions  and 
recommendations taken by this Association were of a non-binding nature. Therefore, 
this claim had to be rejected. 

(23) 

In  the  absence  of  any  other  comments  with  regard  to  IT,  recitals  (27)  to  (29)  of  the 
provisional Regulation are hereby confirmed.  

7.4. 

Normal value 

7.4.1.  Analogue country 

(24)  One interested party contested the choice made by the Commission to use Thailand as 
analogue country and, in particular, the producer Ajinomoto Thailand, which is related 
to the Community producer. However, the arguments and remarks by this party were 
submitted  after  the  specific  time  limit  set  for  submitting  comments3,  but  more 
importantly they were provided without any substantiation. Therefore, these comments 
had to be disregarded. 

(25) 

In the absence of any other comments concerning the analogue country, recitals (30) to 
(34) of the provisional Regulation are hereby confirmed.  

7.4.2.  Methodology applied for the determination of normal value  

(26)  One Chinese exporting producer claimed that an adjustment for the differences in the 
costs of raw material should be made. In particular this exporting producer alleged that 
MSG  produced  from  molasses  as  it  is  the  case  in  the  analogue  country  was  more 
costly than MSG produced from corn or rice starch.  

(27)  However, it appeared that the Chinese exporting producer significantly overstated the 
ratio between the input of molasses and the output of MSG in comparison of what was 
found and verified at the co-operating producer in the analogue country. Accordingly, 
the claim that it was more costly to produce MSG in the analogue country had to be 
rejected. 

(28) 

7.5. 

(29) 

In  the  absence  of  any  other  comments  concerning  the  methodology  applied  for  the 
determination  of  normal  value,  recital  (35)  of  the  provisional  Regulation  is  hereby 
confirmed.  

Export price 

In  the  absence  of  any  comments  concerning  the  export  price,  which  would  alter  the 
findings at the provisional stage, recitals (36) to (37) of the provisional Regulation are 
hereby confirmed.  

7.6. 

Comparison  

3 

Point 6 (c) of the Notice of Initiation, OJ C 206, 5.9.2007, p .23. 

EN 

7 

   EN 

 
                                                 
(30) 

In the absence of any other comments concerning the comparison, recitals (38) to (39) 
of the provisional Regulation are hereby confirmed.  

7.7. 

Dumping margins 

(31)  For the companies granted IT, the weighted average normal value was compared with 
the weighted average export price of the corresponding type of the product concerned, 
as provided for in Articles 2(11) and (12) of the basic Regulation. 

(32)  On  this  basis,  the  definitive  dumping  margins  expressed  as  a  percentage  of  the  CIF 

Community frontier price, duty unpaid, are: 

– 

– 

Fujian Province Jianyang Wuyi MSG Co., Ltd.: 

36,5% 

Hebei  Meihua  MSG  Group  Co.,  Ltd.,  and  Tongliao  Meihua  Bio-Tech 
Co., Ltd.: 

33,8 % 

(33)  The basis for establishing the country-wide dumping margin was set out in recital (42) 
of  the  provisional  Regulation,  which,  in  the  absence  of  any  comments,  is  hereby 
confirmed. On this basis the country-wide level of dumping was established at 39,7% 
of the CIF Community frontier price, duty unpaid. 

8. 

8.1. 

(34) 

8.2. 

(35) 

INJURY 

Definition of the Community industry 

In the absence of any comments concerning the definition of the Community industry, 
recitals (44) to (46) of the provisional Regulation are hereby confirmed.  

Community consumption 

In the absence of any comments concerning the Community consumption, recital (47) 
of the provisional Regulation is hereby confirmed. 

8.3. 

Imports into the Community from the PRC 

(36)  Following  the  provisional  disclosure,  one  of  the  Community  importers  claimed  that 
the Commission findings with regard to the fluctuation of the Chinese export price in 
the period considered were distorted due to using financial years rather than calendar 
years.  The  period  under  consideration  started  on  1  April  2004  whereas  the  use  of 
calendar years would have meant starting this period on 1 January 2004. According to 
the data presented by the company, this change in the starting point would show a 12% 
increase in Chinese export prices between the calendar year 2004 and IP in contrast to 
the slight decrease reported in recital (50) of the provisional Regulation. However, it 
should be noted that data presented by the importer was based on its total purchasing 
prices  which  obviously  covered  only  part  of  the  Chinese  exports  to  the  Community. 
Having  examined  the  data  with  regard  to  the  average  prices  of  all  imports  of  MSG 
from  the  PRC,  based  on  Eurostat,  it  was  found  that  the  relevant  Chinese  prices 
increased  by  only  0,5%  from  January  2004  to  the  end  of  the  IP  and  not  by  12%  as 
claimed  by  the  importer.  The  difference  in  price  trends  between  that  found  for  the 
period considered (a decrease of 2%) and that found for the period from January 2004 
to the end of the IP (an increase of 0,5%) is not such as to alter the conclusions drawn 
in  regard  to  the  effect  of  these  prices  on  the  situation  of  the  Community  industry. 
Therefore this claim had to be rejected.  

(37) 

In the absence of any other comments with regard to imports into the Community from 
the PRC, recitals (48) to (52) of the provisional Regulation are hereby confirmed. 

8.4. 

Economic situation of the Community Industry  

EN 

8 

   EN 

 
(38)  Certain interested parties questioned the analysis of the trends of the injury indicators. 
They claimed that the use of 12-month periods running in line with the complainant's 
financial  year  rather  than  calendar  years  effectively  shortened  the  period  under 
consideration to three years as the financial year 2007 is, to a big extent, overlapping 
with the IP. These parties claimed that in order to make a proper appraisal of the trends 
of  the  injury  indicators,  the  period  considered  should  be  prolonged  to  cover  the  full 
calendar year 2004. In this regard, it should be pointed out that the basic Regulation 
does not provide for a strict timeline regarding the definition of the period considered. 
Furthermore, the WTO Recommendation concerning the periods of data collection for 
anti-dumping  investigations  provides  that  "As  a  general  rule,[…]the  period  of  data 
collection  for  injury  investigations  normally  should  be  at  least  three  years[…]."4 
Nevertheless, a comparative analysis of the basic injury indicators on a calendar year 
basis was made, i.e. assuming a period considered of 2004, 2005, 2006 and the IP, in 
order to verify if different conclusions would be drawn as regards injury. This analysis 
has  shown  that  the  trends  of  the  main  injury  indicators  do  not  change  significantly. 
Although certain trends such as the decreases in production and sales volumes would 
be  less  pronounced  as  compared  to  the  conclusions  in  the  provisional  Regulation, 
other  findings  relating  to  the  negative  profitability  of  the  Community  industry,  the 
huge  increase  of  imports  from  the  PRC  and  the  severe  price  undercutting  would 
remain unchanged. Furthermore, it should be noted that the period considered serves 
as  an  indicator  of  the  evolution  of  the  Community  industry's  situation  to  determine 
whether  it  can  be  considered  to  be  suffering  material  injury  during  the  IP.  In  these 
circumstances,  the  argument  of  the  parties  is  rejected  on  the  ground  that  the  injury 
picture  would  have  continued  to  show  material  injury  even  if  the  period  considered 
was extended by the first trimester of 2004.  

(39)  Additionally,  the  complainant  commented  on  the  wording  of  recital  (60)  of  the 
provisional Regulation. The complainant pointed out that the sentence "the acquisition 
of Orsan SA by Ajinomoto Foods Europe" was not correct as Orsan SA was acquired 
by the Ajinomoto Group and subsequently renamed Ajinomoto Foods Europe.  

(40)  Based  on  the  above  facts  and  considerations,  the  conclusion  that  the  Community 
industry suffered material injury, as set out in recitals (70) to (72) of the provisional 
Regulation, is hereby confirmed. 

9. 

CAUSATION 

9.1. 

Effects of dumped imports  

(41)  One  interested  party  claimed  that  during  the  period  considered  there  was  no 
coincidence  in  time  between  the  negative  trend  in  profitability  observed  for  the 
Community  industry  and  the  development  in  the  import  volumes  from  the  PRC. 
Accordingly, it was claimed that imports from the PRC could not have caused injury 
to  the  Community  industry.  Although  this  matter  was  explained  in  detail  in  recitals 
(60) and (61) of the provisional Regulation, it is further noted that, in accordance with 
Article  3(6)  of  the  basic  Regulation,  it  is  not  just  the  volumes  of  dumped  imports 
which  may  be  a  relevant  factor  in  assessing  whether  dumped  imports  have  been  the 
cause  of  material  injury  to  the  Community  industry,  but  also,  in  the  alternative,  the 
prices of these imports. In recital (76) of the provisional Regulation it was concluded 
that "[…] the low priced dumped imports from the PRC which significantly undercut 

4 

G/ADP/6 of 16 May 2000 

EN 

9 

   EN 

 
                                                 
the  prices  of  the  Community  industry  during  the  IP,  and  which  also  significantly 
increased  in  volume,  have  had  a  determining  role  in  the  injury  suffered  by  the 
Community  industry".  Given  the  development  of  volumes  and  prices  of  dumped 
imports  during  the  period  considered,  it  is  considered  that  this  claim  should  be 
rejected.  

(42)  Another interested party claimed that the increase in imports of MSG from the PRC in 
the period considered did not affect the situation of the Community industry as these 
imports were mainly replacing imports from other sources.  

(43) 

In this respect it is recalled that, even though the Chinese imports of MSG did indeed 
replace imports from other countries to a certain extend, as explained in recital (57) of 
the  provisional  Regulation,  low-priced  dumped  imports  from  the  PRC  consistently 
managed  to  gain  market  share  also  at  the  expenses  of  the  Community  industry  even 
when  Community  consumption  was  decreasing.  In  addition,  this  claim  is  not 
supported  by  the  findings  of  this  investigation  which  showed  that  the  surge  of  low-
priced  dumped  imports  from  the  PRC  that  significantly  undercut  the  price  of  the 
Community industry led to a situation of material injury suffered by the Community 
industry during the period considered. On that basis, this claim should be rejected.  

(44) 

In  the  absence  of  any  other  comments  in  this  regard,  recitals  (74)  to  (76)  of  the 
provisional Regulation are hereby confirmed. 

9.2. 

Effects of other factors 

(45)  Various  interested  parties  reiterated  the  claims  put  forward  before  the  imposition  of 
the provisional measures that the material injury suffered by the Community industry 
was  caused  by  factors  other  than  the  dumped  imports.  These  claims,  with  regard 
specifically  to  the  restructuring  costs  and  increasing  costs  of  raw  materials  which 
allegedly  affected  the  Community  industry,  were  already  duly  addressed  in  recitals 
(60) and (61) of the provisional Regulation.  

(46)  One  interested  party  reiterated  claims  made  before  the  imposition  of  the  provisional 
measures  that  any  material  injury  suffered  by  the  Community  industry  may  also  be 
caused  by  exports  of  MSG  from  the  PRC  made  by  companies  related  to  the 
Community industry. Additionally, this party claimed that the complainant misled the 
Commission by not disclosing the existence of related companies in the PRC and by 
hiding  the  fact  that  these  related  companies  in  China  exported  MSG  to  the 
Community.  On  that  basis,  this  party  considered  that  Article  18  of  the  basic 
Regulation  should  be  applied  to  the  complainant.  The  same  party  further  claimed  a 
breach  of  its  rights  of  defence  because  the  versions  of  the  complaint  and  the 
questionnaire  reply  of  the  complainant  for  inspection  by  interested  parties  ('open 
version')  did  not  disclose  the  fact  that  the  complainant  has  related  companies  in  the 
PRC that were involved in the MSG business.  

(47)  As already explained in recital (94) of the provisional Regulation, the question of the 
exports of MSG to the Community by one producer in the PRC known to be related to 
the  Community  industry  was  not  considered  to  be  relevant  due  to  their  insignificant 
volume.  It  should  be  stressed  also  that  the  complainant  did  not  provide  misleading 
information  to  the  Commission  in  regard  to  its  related  companies  in  the  PRC.  This 
information  was  reported  in  the  confidential  versions  of  the  complaint  and  of  the 
complainant's questionnaire reply. It is a fact that this information was not originally 
included  in  the  open  version  of  the  complaint  or  in  the  open  version  of  the 
complainant's questionnaire reply. However, the complainant provided open versions 

EN 

10 

   EN 

 
including  information  on  its  related  companies  in  the  PRC  subsequently  during  the 
procedure.  In  these  circumstances,  it  is  considered  that  no  breach  of  the  right  of 
defence  of  parties  took  place.  Furthermore,  no  convincing  evidence  was  presented 
which could support the claim that Ajinomoto Group was aware of the alleged indirect 
export activity of one of its related Chinese companies. Therefore, it is considered that 
the application of Article 18 of the basic Regulation is not warranted in this situation 
and the claim is rejected.  

(48)  One of the interested parties reiterated the claims put forward before the imposition of 
the provisional measures as to the impact of the exchange rate of the US dollar against 
the  Euro  on  the  price  undercutting  calculations  and  export  performance  of  the 
Community  industry.  However,  no  additional  information  or  evidence  was  provided 
that  would  alter  the  conclusions  reached  in  recitals  (84)  to  (90)  of  the  provisional 
Regulation which are hereby confirmed.  

(49)  One interested party reiterated its claim made before the imposition of the provisional 
measures regarding the impact of the Ajinomoto Group's global strategy, in particular 
exports to the EU market by Ajinomoto-owned producers of MSG in third countries, 
and the impact of these on the complainant's profits and stock level. In recital (92) of 
the provisional Regulation it was stated that sales of MSG on the Community market 
originating from exporters related to the Community industry in countries outside the 
Community  were constantly  and significantly decreasing over the period considered. 
As a consequence, it was concluded in recital (95) of that regulation that the imports of 
the  Community  industry  from  related  parties  outside  the  Community  have  not 
contributed  to  the  material  injury  found.  This  party  has  not  provided  any  additional 
information or evidence that would alter this conclusion which is hereby confirmed.  

9.3. 

Conclusion on causation 

(50)  Given the above analysis which has properly distinguished and separated the effects of 
all other known factors on the situation of the Community industry from the injurious 
effects of the dumped imports, it is hereby confirmed that these other factors as such 
do not reverse the fact that the material injury found must be attributed to the dumped 
imports.  

(51)  Given the above, it is concluded that the dumped imports of MSG originating in the 
PRC  have  caused  material  injury  to  the  Community  industry  within  the  meaning  of 
Article 3(6) of the basic Regulation. 

(52) 

In  the  absence  of  other  comments  in  this  respect,  the  conclusions  in  recitals  (99)  to 
(100) of the provisional Regulation are hereby confirmed. 

10. 

COMMUNITY INTEREST 

10.1. 

Interest of the Community industry 

(53) 

In the absence of any other comments in this particular regard, the findings set out in 
recitals (103) to (106) of the provisional Regulation are hereby confirmed. 

10.2. 

Interest of the importers 

(54)  One  importer  claimed  that  the  negative  impact  of  the  anti-dumping  measures  may 
have on its economic situation was underestimated in recital (108) of the provisional 
Regulation.  According  to  the  company,  given  the  low  profitability  of  its  MSG  sales 
and the limited possibility of passing on the price increase to its clients, the imposition 
of anti-dumping measures would mean closure of its MSG business. It should be noted 

EN 

11 

   EN 

 
that  the  MSG  business  does  not  represent  a  major  share  of  the  activity  of  the  said 
importer which is mainly sourcing its MSG from the PRC. The importer in question 
has the option to switch to other sources of supply which are not affected by the anti-
dumping  measures.  However,  as  mentioned  in  recital  (108)  of  the  provisional 
Regulation,  the  expected  effect  of  the  imposition  of  the  measures  will  be  to  restore 
effective  trade  conditions  in  the  Community  market,  which  in  this  case  may  lead  to 
increased  prices  of  MSG,  in  particular  from  the  Community  industry  and  from  the 
PRC.  Therefore,  it  is  expected  that  all  importers  should  be  able  to  pass  on  at  least 
some  of  their  cost  increase  resulting  from  the  imposition  of  anti-dumping  measures. 
On that basis, the conclusion reached in recital (108) of the provisional Regulation is 
therefore confirmed. 

10.3. 

Interest of users 

(55)  Following the comments made by interested parties concerning the possible impact of 
the  proposed  measures  on  the  users  industry  further  analyses  was  carried  out  on  the 
basis of information provided by the main users of MSG in the Community, namely 
Nestle and Unilever. The investigation showed that MSG represents less than 3% of 
the cost of production of all products containing MSG produced by both companies. 
Therefore,  taking  additionally  into  account  the  indications  on  the  relatively  high 
average profit rates which both companies had reached during the IP in particular on 
these products, it can be confirmed that the possible impact of the proposed measure 
on their activity would not be significant.  

10.4. 

Interest of the suppliers of raw materials 

(56)  Further to recital (115) of the provisional Regulation, the analysis with regard to the 
interests of the upstream supplier of the Community industry was extended to include 
the  data  provided  by  a  second  supplier.  On  the  basis  of  the  questionnaire  replies 
provided  by  the  two  suppliers,  it  was  found  that  the  situation  of  the  supplying 
companies had deteriorated significantly during the period considered in line with the 
deterioration  of  the  situation  of  the  Community  industry.  The  total  turnover  of  the 
investigated  suppliers  decreased  in  the  range  of  8%  to  13%  and  their  sales  to  the 
Community  industry  noted  even  twice  as  significant  drop  (in  the  range  of  15%  to 
25%). Both companies experienced also a decrease in their profitability rates.  

(57)  Taking into account the above findings, the content of recital (116) of the provisional 

Regulation is hereby confirmed.  

10.5.  Competition and trade distorting effects  

(58)  Some  of  the  interested  parties  reiterated  their  comments  regarding  the  alleged 
dominant  position  of  the  Ajinomoto  Group  worldwide  and  its  alleged  monopolistic 
position in the Community. These issues were already addressed in recital (117) of the 
provisional Regulation. No new evidence concerning these claims was presented.  

(59)  Several  interested  parties  raised  additional  arguments  in  relation  to  post-IP 
developments on the MSG market. They claimed that import volumes decreased and 
prices  rose  after  the  IP,  thus  eliminating  any  potential  injury  to  the  Community 
industry.  In  this  situation,  these  parties  claimed  that  the  imposition  of  anti-dumping 
duties would only harm importers and users in the Community. The parties raised also 
a point on alleged global shortages of MSG supplies as, according to their data, several 
important  producers  worldwide  ceased  to  produce  or  decreased  production  capacity. 
However,  Eurostat  data  and  additional  information  obtained  from  the  Community 
industry  do  not  support  the  above  claims.  To  the  contrary,  import  prices  remained 

EN 

12 

   EN 

 
stable  in  the  post-IP  period  and  in  certain  months  even  decreased,  while  import 
volumes  both  from  the  PRC  and  third  countries  increased.  The  latter  development 
demonstrates  that  some  none-Chinese  competitors  have  the  capacity  to  develop  their 
exports to the Community.  

10.6.  Conclusion on Community interest 

(60)  Given the results of the further investigation of the Community interest aspects of the 
case described above,  the  findings and conclusions contained in recitals (119) of the 
provisional Regulation are hereby confirmed. 

11. 

DEFINITIVE ANTI-DUMPING MEASURES 

11.1. 

Injury elimination level 

(61) 

In  the  absence  of  any  substantiated  comments  that  would  alter  the  conclusion 
regarding  the  injury  elimination  level,  recitals  (120)  to  (122)  of  the  provisional 
Regulation are hereby confirmed. 

11.2. 

Form and level of the duties 

(62) 

In  the  light  of  the  foregoing  and  in  accordance  with  Article  9(4)  of  the  basic 
Regulation, a definitive anti-dumping duty should be imposed at a level sufficient to 
eliminate  the  injury  caused  by  the  dumped  imports  without  exceeding  the  dumping 
margin found.  

(63)  The rate of the definitive duties are definitively set as follows: 

Company 

Hebei Meihua MSG Group 
Co., Ltd., and  
Tongliao Meihua Bio-Tech 
Co., Ltd. 
Fujian Province Jianyang 
Wuyi MSG Co., Ltd. 
All other companies 

Injury 
elimination  
margin 

Dumping 
margin 

Anti-dumping
duty rate 

54,8% 

33,8% 

33,8% 

60,4% 

63,7% 

36,5% 

39,7% 

36,5% 

39,7% 

(64)  The  individual  company  anti-dumping  duty  rates  specified  in  this  Regulation  were 
established  on  the  basis  of  the  findings  of  the  present  investigation.  Therefore,  they 
reflect  the  situation  found  during  that  investigation  with  respect  to  these  companies. 
These  duty  rates  (as  opposed  to  the  country-wide  duty  applicable  to  "all  other 
companies") are thus exclusively applicable to imports of products originating in the 
country  concerned  and  produced  by  the  companies  and  thus  by  the  specific  legal 
entities mentioned. Imported products produced by any other company not specifically 
mentioned in the operative part of this Regulation with its name and address, including 
entities  related  to  those  specifically  mentioned,  cannot  benefit  from  these  rates  and 
shall be subject to the duty rate applicable to "all other companies". 

(65)  Any claim requesting the application of these individual company anti-dumping duty 
rates (e.g. following a change in the name of the entity or following the setting up of 
new  production  or  sales  entities)  should  be  addressed  to  the  Commission5  forthwith 
with all relevant information, in particular any modification in the company's activities 

5 

European Commission, Directorate-General for Trade, Directorate H, Office N105 04/092, 1049 Brussels, Belgium  

EN 

13 

   EN 

 
                                                 
linked  to  production,  domestic  and  export  sales  associated  with,  for  example,  that 
name  change  or  that  change  in  the  production  and  sales  entities.  If  appropriate,  the 
Regulation  will  then  be  amended  accordingly  by  updating  the  list  of  companies 
benefiting from individual duty rates. 

11.3.  Undertakings 

(66)  One co-operating Chinese exporting producer offered a price undertaking.  

(67) 

In  this  respect  it  is  noted  that  MSG  prices  are  negotiated  globally  with  large 
international  firms  with  production  facilities  inside  and  outside  the  Community.  It  is 
also  noted  that  the  majority  of  sales  of  this  exporting  producer  are  mainly  made  to 
such international firms. In view of the above, it was considered that the risk of cross-
compensation  of  prices  between  sales  agreements  made  with  international  firms  for 
their  production  facilities  in  the  Community  and  for  their  facilities  located  in  other 
countries outside the Community as very high. It was also considered that such cross-
compensation  would  be  extremely  difficult  to  be  detected  in  the  framework  of  the 
monitoring  of  the  undertaking.  Therefore,  the  undertaking  offer  of  this  exporting 
producer,  in  its  current  form,  had  to  be  rejected  as  its  acceptance  was  considered 
impractical  in  view  of  the  fact  that  it  could  not  be  appropriately  monitored  by  the 
Commission.  

11.4.  Definitive collection of provisional duties and special monitoring 

(68) 

(69) 

In view of the magnitude of the dumping margins found and in the light of the level of 
the  injury  caused  to  the  Community  industry,  it  is  considered  necessary  that  the 
amounts  secured  by  way  of  the  provisional  anti-dumping  duty,  imposed  by  the 
provisional  Regulation,  i.e.  Commission  Regulation  (EC)  No  492/2008,  should  be 
definitively collected to the extent of the amount of the definitive duties imposed.  

It  is  recalled  that  should  the  exports  by  the  companies  benefiting  from  lower 
individual duty rates increase significantly in volume after the imposition of the anti-
dumping measures, such increase could be considered as constituting in itself a change 
in the pattern of trade due to the imposition of measures within the meaning of Article 
13(1) of the basic Regulation. In such circumstances, and provided the conditions are 
met,  an  anti-circumvention  investigation  may  be  initiated.  This  investigation  may, 
inter  alia,  examine  the  need  for  the  removal  of  individual  duty  rates  and  the 
consequent imposition of a country-wide duty, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1.  A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  monosodium  glutamate 
falling within CN code ex 2922 42 00 (TARIC 2922 42 00 10) and originating in the People's 
Republic of China.  

2.  The  rate  of  the  definitive  anti-dumping  duty  applicable  to  the  net,  free-at-Community-
frontier price, before duty, of the products manufactured by the companies listed below shall 
be as follows: 

EN 

14 

   EN 

 
Company 

AD duty rate (%) 

TARIC additional 
code 

Hebei Meihua MSG Group Co., Ltd., 
and  
Tongliao Meihua Bio-Tech Co., Ltd. 
Fujian Province Jianyang Wuyi MSG 
Co., Ltd.  

All other companies 

33,8 

36,5 

39,7 

A883 

A884 

A999 

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

Article 2 

Amounts  secured  by  way  of  provisional  anti-dumping  duties  pursuant  to  Commission 
Regulation (EC) No 492/2008 on imports of monosodium glutamate falling within CN code 
ex 2922 42 00 (TARIC 2922 42 00 10) and originating in the People's Republic of China shall 
be definitely collected. 

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 
[…] 

EN 

15 

   EN