Proposal for a Council Regulation (EC) no …/.. imposing a definitive anti-dumping duty and collecting definitely the provisional duties imposed on imports of citric acid originating in the People's Republic of China
Date: 2008-11-06
Institutions: European Commission
Subjects: China, anti-dumping duty, import, organic acid, originating product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 6.11.2008 
COM(2008) 701 final 

Proposal for a 

COUNCIL REGULATION (EC) No …/.. 

imposing a definitive anti-dumping duty and collecting definitely the provisional duties 
imposed on imports of citric acid originating in the People's Republic of China 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1. 

110 

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 23 December 2005 (the 'basic Regulation') in the proceeding concerning imports of 
citric acid originating in the People's Republic of China. 

120 

•  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. 

139 

141 

•  Existing provisions in the area of the proposal 

There are no existing provisions in the area of the proposal. 

•  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 the requirement 
that  the  measures  should  not  be  contrary to  the  "Community  interest"  means  that  the 
assessment  of  the  wider  impact  of  the  measures  forms  an  integral  part  of  the 
investigation. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

219 

229 

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3. 

305 

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On 4 September 2007, the Commission announced by a notice ('notice of initiation'), 
published  in  the  Official  Journal  of  the  European  Union,  the  initiation  of  an  anti-
dumping proceeding concerning imports into the Community of citric acid originating 
in the People's Republic of China. 

The  anti-dumping  proceeding  was  initiated  following  a  complaint  lodged  on  23  July 
2007  by  European  Chemical  Industry  Council  (CEFIC)  on  behalf  of  a  Community 
producer  representing  a  major  proportion  of  the Community production of  citric acid 
containing evidence of dumping and of material injury resulting there from. 

On  3  June  2008,  the  Commission  imposed,  by  Regulation  (EC)  No  488/2008,  a 
provisional anti-dumping duty on imports into the Community of citric acid originating 
in the People's Republic of China.  

The  enclosed  Commission  proposal  for  a  Council  Regulation  contains  the  definitive 
conclusions regarding dumping, injury, causality and Community interest. 

Member  States  were  consulted  during  the  Anti-Dumping  Committee  of  14  October 
2008.  12  Member  States  were  in  favour  of  the  proposed  course  of  action,  5  opposed 
and 10 abstained. 

It  is  proposed  that  the  Council  adopt  the  attached  proposal  for  a  Regulation  which 
should be published in the Official Journal of the European Union by 3 December 2008 
at the latest. 

310 

•  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 23 December 2005. 

329 

•  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 for the following reason(s). 

331 

332 

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 

341 

Proposed instruments: regulation. 

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342 

4. 

409 

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

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

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION (EC) No …/.. 

imposing a definitive anti-dumping duty and collecting definitely the provisional duties 
imposed on imports of citric acid 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: 

A. PROVISIONAL MEASURES  

(1) 

(2) 

(3) 

On 4 September 2007, the Commission published a notice2 initiating an anti-dumping 
proceeding  on  imports  into  the  Community  of  citric  acid  originating  in  the  People's 
Republic of China ('the PRC'). On 3 June 2008, the Commission, by Regulation (EC) 
No 488/20083 ('the provisional Regulation) imposed a provisional anti-dumping duty 
on imports of citric acid originating in the PRC. 

It  is  noted  that  the  proceeding  was  initiated  following  a  complaint  lodged  by  the 
European  Chemical  Industry  Council  (CEFIC)  (‘the  complainant’)  on  behalf  of  a 
producer representing a major proportion of the total Community production of citric 
acid, in this case more than 25 %. 

As set out in recital (14) of the provisional Regulation, 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  1  January  2004  to  the  end  of  the  IP  ('period 
considered'). 

B. SUBSEQUENT PROCEDURE 

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OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  2117/2005  (OJ  L  340, 
23.12.2005, p. 17). 
OJ C 205, 4.9.2007, p. 14. 
OJ L143, 3.6.2008, p.13.  

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(4) 

(5) 

Following the imposition of provisional anti-dumping duties on imports of citric acid 
originating in the PRC, several interested parties submitted comments in writing. The 
parties who so requested were also granted the opportunity to be heard.  

The Commission continued to seek and verify all information it deemed necessary for 
its definitive findings. In particular, the Commission intensified the investigation with 
regard  to  Community  interest  aspects.  In  this  connection,  one  additional  verification 
visit was carried out after the imposition of the provisional measures at the premises of 
the following user of citric acid in the EU: 

– 

Reckitt-Benckiser  Corporate  Services  Ltd,  Slough,  UK  and  Nowy  Dwor, 
Poland 

In  addition,  as  explained  in  detail  in  recital  (11)  below,  verification  visits  were 
carried out at the premises of the following exporting producers: 

– 

Laiwu  Taihe  Biochemistry  Co.  Ltd.  ("Laiwu  Taihe"),  Laiwu  City,  Shandong 
Province 

–  Weifang  Ensign  Industry  Co.  Ltd.  ("Weifang  Ensign"),  Changle  City, 

Shandong Province 

(6) 

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

(7) 

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

C. INITIATION OF THE CASE,  
PRODUCT CONCERNED AND LIKE PRODUCT 

(8) 

(9) 

One  exporting  producer  reiterated  the  claim  that  the  public  version  of  the  complaint 
did not contain any prima facie evidence of material injury to the Community industry, 
preventing the interested parties from exercising their rights of defence. According to 
this exporting producer the case should not have been initiated due to lack of sufficient 
evidence included in the complaint. In this respect, it should be noted that the public 
version  of  the  complaint  contained  all  the  essential  evidence  and  non-confidential 
summaries of data provided under confidential cover in order for interested parties to 
exercise  their  right  of  defence  throughout  the  proceeding.  Therefore,  this  argument 
should be rejected. 

Some interested parties argued that the product concerned, as set out in recital (16) of 
the provisional Regulation, and the like product are not alike as stated in recital (18) of 
the provisional Regulation since they would not share the same physical and chemical 
characteristics and are not used for the same purposes. According to those interested 
parties the statement in recital (18) of the provisional Regulation fails to address the 
arguments  brought  forward  during  the  investigation  and  is  in  contradiction  with  the 
adjustment  made  by  the  Commission  in  the  undercutting  calculations  for  de-caking 
certain  quantities  of  the  product  concerned  after  arrival  in  the  EU.  It  is  firstly  noted 

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that  the  investigation  has  shown  that  the  product  concerned  and  the  like  product  are 
both used in the same basic applications, i.e. mainly for the household cleaning (auto 
dish  wash  products,  detergents,  water  softeners)  and  as  additives  in  food  and 
beverages,  but  also  in  the  personal  care/cosmetics  area.  The  claim  that  the  product 
concerned  would  in  fact  not  be  used  by  certain  users  in  the  detergents,  food  and 
beverages industry because of its smell and/or colour was not further substantiated by 
evidence.  The  investigation  has  shown  that  only  in  one  niche  application,  i.e.  the 
pharmaceutical area, only the European citric acid was indeed used because of the cost 
of  the  special  compliance  test  which  is  required.  Since  the  pharmaceutical  area 
represents only a small portion of the users' total business, running the compliance test 
was not considered as economically justifiable business decision. Secondly, there is no 
contradiction  between  the  adjustment  made  in  the  undercutting  calculation  for  de-
caking parts of the product concerned after importation as mentioned in recital (64) of 
the  provisional  Regulation  and  the  statement  that  both  products  are  alike  as  it  is 
sufficient  that  the  product  concerned  and  the  like  product  share  the  same  basic 
chemical, physical and technical characteristics and have the same basic uses which is 
the case. It is further noted that the caking as such does not happen because of specific 
characteristics  of  the  Chinese  product,  but  happens  because  every  citric  acid, 
regardless  of  its  origin,  due  to  its  chemical  composition  shows  a  tendency  to  cake 
when  being  exposed  to  humidity  and  changes  of  temperature.  As  naturally  only  the 
product concerned is exposed over a longer period of time to humidity and changes of 
temperature  during  the  shipping  time  to  the  EU,  the  problem  mainly  occurs  for  the 
product  concerned,  but  not  exclusively.  Therefore,  the  adjustment  simply  takes 
account  of  the  fact  that  the  de-caking  incurs  additional  costs  mainly  for  the  product 
concerned  as  the  quantities  that  are  affected  by  the  caking  either  are  de-caked  (by 
breaking and sieving or liquefying the caked product) before further selling or are sold 
with a rebate. Thus, this claim should be rejected.  

(10) 

In view of the above, it is definitively concluded that the product concerned and citric 
acid produced and sold in the analogue country, Canada, as well as the one produced 
and sold by the Community industry on the Community market are alike, within the 
meaning  of  Article  1(4)  of  the  basic  Regulation  and  recitals  (15)  to  (17)  of  the 
provisional Regulation are hereby confirmed.  

D. DUMPING 

1.  General  

(11)  At  the  provisional  stage  of  the  investigation  the  Market  Economy  Treatment 
("MET")/Individual  Treatment  ("IT")  claims  of  all  known  exporting  producers  were 
investigated.  Only  a  number  of  the  exporting  producers  had  been  included  in  the 
sample  and  one  company  was  granted  individual  examination.  In  their  comments  to 
the  provisional  Regulation  a  number  of  parties  have  claimed  that  this  approach  has 
some  shortcomings.  The  matter  was  therefore  reconsidered  and,  in  view  also  of  the 
fact that it became possible given the circumstances of the case such as for example 
the available resources to increase the number of companies that could reasonably be 
investigated,  it  was  finally  decided  that  sampling  should  not  be  applied.  Given  that 
every  cooperating  company  has  been  granted  at  least  IT  at  the  provisional  stage,  an 
individual duty rate should be established for each of them. As a consequence, three 
companies not selected in the sample or individually examined at the provisional stage 
were requested to submit questionnaire replies. However, only two of these companies 

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submitted  a  questionnaire  reply.  The  third  company  did  not  submit  a  questionnaire 
reply and was not investigated further. 

2. Market Economy Treatment ("MET") 

(12)  The company referred to in recital (27) of the provisional Regulation insisted that the 
subsidy  mentioned  in  that  recital  was  not  for  the  purposes  of  the  product  concerned 
and  that  the  non-payment  of  rents  was  justified  by  private  inter-group  arrangements 
for  the  setting  off  of  profits  against  rent  due.  However,  in  the  absence  of  any  new 
elements or information concerning the issue, and in view of the distorting effects on 
the accounting of the practices mentioned concerning rent, the conclusions in respect 
of this company remain unchanged and are hereby confirmed. 

(13)  Further to provisional disclosure one group of companies referred to in recital (25) of 
the provisional Regulation claimed that it had received loans on the basis of a detailed 
financial  analysis  of  one  of  the  banks  and  after  having  been  granted  a  high  credit 
rating.  However,  the  fact  that  a  bank  formally  carried  out  an  analysis  and  granted  a 
high  credit  rating  does  not  eliminate  the  fact  that  the  company  in  question  gave 
guarantees  to  other  companies  despite  having  mortgaged  the  majority  of  its  non-
current  assets,  nor  the  fact  that  the  loans  granted  to  the  company  in  question  were 
granted  by  a  bank  found  to  be  under  State  influence.  Therefore,  the  conclusions  in 
respect of this company remain unchanged and are confirmed. 

(14)  One of the companies referred to in recital (26) of the provisional Regulation insisted 
that  it  was  penalized  for  the  fact  that  its  majority  shareholder  had  acquired  land  use 
rights for a good price and then correctly had them re-valued according to market price 
developments.  However,  the  enormous  difference  between  the  acquisition  price  and 
later  evaluations  (1000-2000%)  could  not  be  explained.  Therefore,  in  the  absence  of 
any  new  elements  or  information  concerning  the  acquisition  and  subsequent 
revaluation  of  the  land  use  rights  and  in  view  of  the  advantages  that  the  company 
received  by  obtaining  assets  for  prices  significantly  below  market  value,  the 
conclusions in respect of this company remain unchanged and are confirmed. 

(15) 

In  the  absence  of  any  other  comments  concerning  MET,  recitals  (25)  to  (30)  of  the 
provisional Regulation are hereby confirmed. 

3. Individual treatment (‘IT’) 

(16)  Five  companies  or  groups  of  companies  that  were  not  granted  MET  fulfilled  all  the 
criteria  set  out  in  Article  9(5)  of  the  basic  Regulation  and  were  granted  IT.  One 
company  which  had  been  granted  provisionally  IT,  failed  to  further  cooperate  and, 
thus, no IT was finally granted (see recitals (11) and (34). 

4. Normal value 

(17)  As explained in recital (11) above, following comments to the provisional Regulation, 
it  was  decided  that  sampling  should  not  be  applied  and  the  three  companies  not 
selected  in  the  sample  or  individually  examined  at  the  provisional  stage  were 
requested  to  submit  questionnaire  replies.  Normal  value  was  established  for  one  of 
these  companies  (Laiwu  Taihe),  which  was  granted  MET  and  which  submitted  a 
questionnaire reply. 

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4.1.  Companies or groups of companies which could be granted MET 

(18)  Since  the  sole  company  which  could  be  granted  MET  and  which  was  examined 
individually at the provisional stage of the investigation did not submit any comments 
on normal value, the findings at recitals (35) to (39) of the provisional Regulation are 
hereby confirmed. 

(19)  As for the only other company which was granted MET (Laiwu Taihe) and which was 
further investigated for the reasons explained at recital (11) above, it was first verified 
whether  the  company's  total  domestic  sales  of  the  like  product  were  representative 
within  the  meaning  of  Article  2(2)  of  the  basic  Regulation.  Domestic  sales  of  the 
product  concerned  were  slightly  below  5%  of  the  exports  of  the  like  product  to  the 
Community.  However,  such  lower  ratio  is  nonetheless  of  sufficient  magnitude  to 
provide  for  a  proper  comparison  and  the  domestic  prices  of  the  like  product  are 
considered  representative  given  also  the  overall  domestic  sales  of  the  company  in 
question. Therefore, they were used to determine normal value. 

(20)  For  each  product  type  sold  for  export  to  the  Community  by  Laiwu  Taihe,  it  was 
established  whether  a  directly  comparable  product  type  was  sold  on  the  domestic 
market. Product types were considered to be  directly comparable  when they  were of 
the same product type (defined by the chemical composition), comparable granulation 
and  packing.  It  was  established  that  for  only  one  product  type  sold  for  export  to  the 
Community a directly comparable product type was sold on the domestic market. 

(21) 

It was subsequently examined whether the domestic sales of this product type could be 
regarded as being sold in the ordinary course of trade pursuant to Article 2(4) of the 
basic  Regulation.  It  was  established  that  there  were  profitable  domestic  sales  of  this 
product  type  to  independent  customers  during  the  IP,  and  therefore  in  the  ordinary 
course of trade. 

(22)  Since the volume of profitable sales of this product type represented 80% or less of the 
total sales volume of that type, normal value was based on the actual domestic price, 
calculated as a weighted average of profitable sales of that type only. 

(23)  As  domestic  prices  of  Laiwu  Taihe  could  not  be  used  in  order  to  establish  normal 
value  for  the  other  product  types,  normal  value  was  constructed  in  accordance  with 
Article 2(3) of the basic Regulation. 

(24)  When constructing normal value pursuant to Article 2(3) of the basic Regulation, the 
amounts for selling, general and administrative costs and for profits have been based, 
pursuant to Article 2(6) first introductory subparagraph of the basic Regulation, on the 
actual data pertaining to the production and sales, in the ordinary course of trade, of 
the like product, by the Laiwu Taihe. 

4.2.  Companies or groups of companies which could not be granted MET 

(25) 

In  their  comments  to  the  provisional  Regulation,  some  parties  claimed  that  Canada 
would  not  be  an  appropriate  analogue  country  given  the  fact  that  the  USA  have 
recently initiated an anti-dumping proceeding against citric acid originating inter alia 
in  Canada.  Thailand  was  therefore  again  brought  forward  as  an  alternative  analogue 
country.  However,  the  analysis  showed  that  while  anti-dumping  measures  on  citric 

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acid  originating  in  Canada  were  not  in  force  during  the  IP,  anti-dumping  measures 
were in force during the IP on citric acid originating in Thailand. The latter measures 
were  imposed  by  India  and  consisted  in  substantial  anti-dumping  duties  of 
USD 374.36/tonne, which only expired in August 2007, i.e. two months after the end 
of the IP. Therefore, also considering the arguments already mentioned at recitals (42) 
to  (43)  of  the  provisional  Regulation  and  the  fact  that  the  US  investigation  on  citric 
acid  originating  in  Canada  was  still  ongoing  at  the  moment  of  finalising  this 
investigation, it is concluded that there is no reason why Thailand should be preferred 
to Canada as an analogue country. 

(26)  According  to  Article  2(7)(a)  of  the  basic  Regulation,  normal  value  for  the  exporting 
producers  mentioned  in  recital  (11)  above  that  were  not  granted  MET  had  to  be 
established on the basis of the prices or constructed value in the analogue country. 

5. 

Export Price 

(27) 

In  the  case  of  the  two  companies  which  were  further  investigated  for  the  reasons 
explained  at  recital  (11)  above,  the  export  price  was  established  following  the  same 
methodology explained at recital (45) to (47) of the provisional Regulation. 

(28)  Since no companies submitted any comments on export prices, the findings contained 

in Recitals (45) to (47) of the provisional Regulation are hereby confirmed. 

6.  Comparison 

(29) 

(30) 

(31) 

In  its  comments  to  the  provisional  Regulation  and  to  the  definitive  disclosure,  one 
group of companies contested the deduction of a notional commission for sales via a 
trader  in  the  PRC,  given  that  the  trader  was  an  integral  part  of  the  group.  It  was, 
however, established that the trading company did indeed perform the function of an 
independent  trader,  and  that  the  economic  result  of  the  relationship  of  the  two 
companies is that of a principal and an agent. It was established that the trader was not 
only trading products produced by related companies, but also products produced by 
independent  producers.  Moreover,  the  company  in  question  did  also  sell  directly  to 
non-related  customers.  Therefore,  the  claim  was  rejected,  and  pursuant  to  Article 
2(10)(i) of the basic Regulation, an allowance based on SG&A and profit of unrelated 
importers was deducted. 

In  its  comments  to  the  provisional  Regulation,  one  exporting  producer  claimed  that 
cost for currency conversion should not be taken into account, as pursuant to Article 
2(10)(j)  of  the  basic  Regulation,  exporters  shall  be  granted  60  days  to  reflect  a 
sustained  movement  in  exchange  rates  during  the  investigation  period.  This  claim 
could  be  accepted,  and  the  dumping  margin  of  the  exporting  producer  was  adjusted 
accordingly. 

In the provisional Regulation, a deduction to the export price was made in respect of 
non-refundable VAT charged on export sales, pursuant to Article 2(10)(b) of the basic 
Regulation.  One  exporting  producer  claimed  in  its  comments  to  the  provisional 
Regulation  that  no  such  adjustment  to  the  export  price  should  have  been  made,  as 
Article  2(10)(b)  of  the  basic  Regulation  would  only  relate  to  normal  value.  It  is 
acknowledged  that  the  adjustment  provided  for  under  Article  2(10)(b)  of  the  basic 
Regulation  only  refers  to  the  calculation  of  the  normal  value.  In  fact  the  above-

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mentioned deduction to the export price is due and should be done pursuant to Article 
2(10)(k)  of  the  basic  Regulation.  While  examining  this  claim,  it  was  found  that  a 
clerical  error  had  been  made  in  calculating  the  adjustment  for  the  company  in 
question, and that the same error had been made in respect of other companies. These 
inaccuracies  were  rectified  and  have  led  to  slight  downward  corrections  in  the 
dumping margins previously calculated for these companies. 

(32) 

In  examining  the  claim  referred  to  in  the  previous  recital,  it  was  found  that  the 
necessary  adjustment  had  not  been  made  in  the  case  of  one  company  which  was 
granted individual treatment. This has been rectified and results in a slight increase in 
the dumping margin for that company. 

(33) 

In  the  absence  of  any  other  comments  in  respect  of  comparison,  and  apart  from  the 
changes  indicated  at  recitals  (30),  (31)  and  (32)  above,  recitals  (48)  to  (50)  of  the 
provisional Regulation are hereby confirmed. 

7.  Dumping margin 

(34) 

In  the  case  of  the  two  companies  which  were  further  investigated  for  the  reasons 
explained at recital (11) above, the dumping margin was established by following the 
same methodology explained at recital (51) of the provisional Regulation. In the case 
of  the  one  company  which  did  not  submit  a  questionnaire  reply  and  was  not  further 
investigated,  as  explained  at  recital  (11)  above,  this  company  is  considered  as  non-
cooperating and findings are based on facts available in accordance with Article 18(1) 
of  the  basic  Regulation.  In  this  case,  considering  the  high  level  of  cooperation 
mentioned  at  recital  (19)  of  the  provisional  Regulation,  the  company  has  been 
attributed the highest dumping margin found in respect of all other companies. 

(35)  The  dumping  margins  of  all  the  companies  which  had  already  been  individually 
investigated  at  the  provisional  stage  were  recalculated,  to  correct  the  inaccuracies 
referred  to  at  recitals  (30),  (31)  and  (32)  above.  This  recalculation  has  lead  to  slight 
corrections of the dumping margins. 

(36) 

In the absence of any new element, the conclusions in recital (53) of the provisional 
Regulation, which relates to the level of cooperation, are hereby confirmed. 

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

Community frontier price, duty unpaid, are: 

Company 

Definitive 
dumping margin 

Anhui BBCA Biochemical Co., Ltd 

DSM Citric Acid (Wuxi) Ltd 

RZBC Co. Ltd 

RZBC (Juxian) Co. Ltd 

58,1 % 

19,1 % 

59,8 % 

59,8 % 

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TTCA Co., Ltd 

Yixing Union Biochemical Co. Ltd 

Laiwu Taihe Biochemistry Co. Ltd 

Weifang Ensign Industry Co. Ltd 

All other companies 

57,1 % 

55,7 % 

6,6 % 

53,5 % 

59,8 % 

E. 

INJURY 

1.  Community production and Community industry 

(38)  Some interested parties claimed that S.A. Citrique Belge N.V. ceased production after 
the IP and was only trading the product concerned imported from its related company 
in China (DSM Wuxi), arguing, thus that Citrique Belge should not constitute part of 
the Community  industry.  This  claim was however not substantiated by any evidence 
and from the data submitted by Citrique Belge, it follows that the company continued 
production.  

(39)  One  interested  party  also  complained  that  in  recital  56  of  the  provisional  Regulation 
only a range of imports of Citrique Belge from its related Chinese producer during the 
IP  was  given.  This  party  claimed  that  the  trend  of  all  imports  of  the  Community 
industry  from  related  and  unrelated  companies  should  be  given  for  the  whole  period 
considered  since  imports  constitute  an  important  factor  for  the  assessment  of 
community production and consequently for the conclusion of the existence of injury. 
The  investigation  has  indeed  shown  that  during  the  whole  period  considered  the 
imports  of  the  Community  industry  were  insignificant,  i.e.  between  1%  and  6%  of 
production  –  this  range  is  given  for  confidentiality  reasons.  Therefore  the  argument 
should  be  rejected  and  recitals  (55)  to  (58)  of  the  provisional  Regulation  are  hereby 
definitively confirmed.  

2.  Community consumption 

(40)  As  no  new  and  substantiated  information  was  received  with  regard  to  Community 
consumption recitals (59) and (60) of the provisional Regulation are hereby confirmed. 

3. 

Imports from the country concerned 

(a) Volume and market share of the imports concerned, import prices 

(41)  With  regard  to  import  volumes,  market  share  and  prices,  no  new  and  substantiated 
information  was  found  or  received,  therefore,  and  in  the  absence  of  any  claims  or 
arguments  from  any  interested  parties  relating  to  volume  and  prices  of  the  imports 
concerned, recitals (61) to (63) of the provisional Regulation are hereby confirmed.  

(b) Price undercutting 

(42)  During  the  provisional  stage  of  the  investigation,  in  order  to  compare  the  product 
concerned and the citric acid produced by the Community industry at the same level of 

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trade,  an  adjustment  for  the  mark-up  (including  SG&A)  of  unrelated  importers  was 
made in the price undercutting calculation and, additionally, an adjustment was made 
for special treatment costs incurred by importers in the Community to de-cake certain 
volumes  of  the  product  concerned  before  further  selling.  However,  due  to  a  minor 
revision  of  the  data  concerning  the  level  of  trade  adjustment,  the  weighted  average 
price  undercutting  margin  which  was  calculated  and  found  to  be  17,42%  has  been 
revised downwards to 16,54%.  

(43)  After  final  disclosure,  one  Community  producer  claimed  that  the  level  of  trade 
adjustments should also  be  made in relation to sales of the Community industry, i.e. 
that its sales made via traders should be taken into account. In this respect it should be 
noted that a level of trade adjustment was made indeed for the Community industry's 
sales prices before comparing them with the import prices of the product concerned.  

(44)  The  same  Community  producer  also  requested  that  the  adjustment  for  special 
treatment costs to de-cake certain volumes of the product concerned should also apply 
to  the  like  product.  However,  this  request  was  not  further  substantiated  with  data 
concerning the specific costs incurred by this Community producer and, thus, it could 
not  be  accepted.  In  view  of  the  above,  recital  (64)  of  the  provisional  Regulation  is 
hereby confirmed. 

4. Situation of the Community industry 

(a) General 

(45)  Some interested parties claimed that the Commission had not analysed thoroughly all 
injury  indicators  and  thus,  no  proper  and  complete  link  between  the  situation  of  the 
Community  industry  and  the  Chinese  imports  was  established.  In  particular,  it  was 
claimed  that  there  had  been  no  assessment  of  the  positive  developments  of  certain 
injury  indicators.  It  should  be  noted  that  even  though  some  injury  indicators  show  a 
positive  development  which  was  acknowledged  in  recital  (79)  of  the  provisional 
Regulation,  the  overall  picture  points  to  a  deterioration  of  the  situation  of  the 
Community industry. The moderate improvement of production, production capacity, 
capacity  utilisation,  sales  volume  and  unit  price  levels  as  well  as  the  increased  cost 
efficiency described in recital (76) of the provisional Regulation reflect the efforts of 
the  Community  producers  to  remain  competitive  over  the  period  considered  and  to 
benefit from the increased consumption. However, as can be seen in recital (68) of the 
provisional Regulation, despite these efforts the Community industry lost 5 percentage 
points  (i.e.  the  market  share  decreased  from  54%  to  49%)  of  its  market  share  which 
was mostly taken by Chinese low-priced, dumped imports. As an aggravating factor, it 
is also mentioned that the Community industry could have expected to gain some of 
the market share hold by those three Community producers of citric acid which closed 
down as of 2004. But on the contrary, the Community industry could neither take over 
customers  from  the  three  closed  EC-producers,  nor  benefit  from  the  increased 
consumption.  This  significant  loss  of  market  share  coupled  with  the  clearly 
deteriorating financial indicators, i.e. profitability, return on investment and cash flow, 
show that the overall situation of the Community industry deteriorated over the period 
considered and appeared to be at its worst during the IP. In addition, stocks' decrease 
can not be assessed as a positive development of the Community industry's situation in 
this case since is can not be considered as a meaningful indicator, given the nature of 
the product which does not allow long-term storage.  

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(b) Investments and ability to raise capital  

(46)  One interested party argued that investments are not constant in this field but follow 
certain investments cycles. While even under normal market conditions it can certainly 
not  be  expected  that  important  investments  would  be  made  every  year,  the  fact  that 
over the whole period neither of the two remaining Community producers carried out 
any  important  investment  is  considered  as  a  sign  that  the  low  profitability  (which 
turned into loss as of 2006) did not allow any important investment to be made. It is 
hence considered  that investment is a particularly meaningful injury indicator in  this 
case.  

(47)  Finally, the Community producers' ability to raise capital should be considered. In this 
regard  the  investigation  has  shown  that  both  Community  producers,  due  to  the 
deteriorating citric acid business environment, had difficulties to raise capital. 

(48)  One interested party claimed that the complainant was at least able to raise capital for 
other products since it announced in February 2007 the construction of a new glucose 
plant.  In  this  respect  it  is  noted  that  the  scope  of  the  investigation  is  limited  to  the 
ability  to  raise  capital  in  relation  to  the  product  in  question,  i.e.  citric  acid,  which 
appeared to have been negatively affected by the financial situation of the Community 
industry. 

(49)  Based on the above, the conclusion set out in recital (72) of the provisional Regulation 

on the Community industry's investment is confirmed. 

(c) Profitability and return on investment 

(50)  One interested party claimed that the findings set out in recital (73) of the provisional 
Regulation could not be reconciled with the accounts of both Community producers in 
particular none of the accounts would show the mentioned extraordinary restructuring 
cost.  In  this  respect,  it  is  noted  that,  throughout  the  period  considered,  the 
extraordinary result of one Community producer has to a large extent been affected by 
restructuring efforts, which was presented in the accounts either as a cost or a revenue 
depending  on  whether  it  concerns  the  addition  or  the  release  of  a  provision  and  by 
royalties paid to the mother company in Switzerland. Therefore, it was deemed more 
appropriate to use the operating result as a basis for the injury analysis rather than the 
net profit.  

(51)  The same party claimed that the fine for anti-competitive behaviour that was imposed 
in 2005 on both mother companies of the Community producers could have influenced 
the  profit  situation  of  the  Community  industry.  Any  effects  stemming  from  the  fine 
(both the adding and releasing of provisions) have been recorded under extraordinary 
result. As mentioned in the previous recital, the operating result has been used as an 
injury  indicator  in  this  proceeding.  Therefore,  the  fine  that  was  imposed  on  the 
Community producers, could not have affected the profit situation used in the injury 
analysis. In addition, it should be noted that Community industry was loss making as 
of  2006  until  the  end  of  IP.  Therefore,  the  trends  as  presented  in  the  provisional 
Regulation are hereby definitively confirmed.  

(52)  Several interested parties pointed to some inconsistency between the trend concerning 
profitability  and  the  return  on  investment.  Indeed,  in  contrast  to  profitability  which 

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was  established  by  expressing  the  operating  profit  on  sales  of  the  like  product  to 
unrelated  customers  as  a  percentage  of  the  turnover  of  these  sales,  return  on 
investment  was  calculated  as  the  net  profit  in  percentage  of  net  book  value  of 
investments.  In  order  to  be  consistent  in  the  calculation  of  all  injury  indicators,  the 
calculation  of  return  on  investment  was  revised,  based  on  the  operating  profit  in 
percentage of the net book value of investments. The revised figures are as follows: 

Return on total 
investments (index) 

2004 

100 

2005 

148 

2006 

-147 

IP 

-207 

(53)  The  corrected  figures  however  follow  the  same  trend  and  therefore  do  not  alter  the 
conclusion  drawn  in  recital  74  of  the  provisional  Regulation,  which  is  hereby 
confirmed.  

5. Conclusion on injury 

(54) 

In  the  absence  of  any  new  and  substantiated  information  or  argument  concerning 
production,  sales  volume,  market  shares,  unit  sales  price,  stocks,  cash  flow, 
employment, productivity, wages and magnitude of the dumping margin, the findings 
in recitals (66) to (71), (73) and (75) to (78) of the provisional Regulation are hereby 
definitely confirmed. In addition, the corrected figures given for return on investment 
leave  unaffected  the  trends  as  set  out  in  recital  (73)  to  (74)  of  the  provisional 
Regulation. Therefore, considering the clearly deteriorating financial indicators, such 
as profitability, return on investment and cash flow coupled with the significant loss of 
market share, the conclusion laid down in recital 81 of the provisional Regulation that 
that the Community industry suffered material injury is definitively confirmed.  

F. 

CAUSATION 

1. Effect of the dumped imports 

(55)  As mentioned in recital (42) above, it is definitively concluded that during the IP, the 
average  prices  of  imports  from  the  PRC  undercut  the  average  Community  industry 
prices. Following a minor revision in the calculations, the average undercutting margin 
was found to be 16,54%. This slight downwards revision cannot affect the conclusions 
on the effect of the dumped imports set out in recitals (83) to (85) of the provisional 
Regulation, which are hereby confirmed.  

2. Effect of other factors 

(a) Self-inflicted injury 

(56)  Some  importers  claimed  that  the  Community  industry  self-inflicted  the  injury  as  it 
followed a 'price-over-volume' strategy, i.e. to serve only the high-end segment of the 
market, abstaining from producing and selling the low-end product. According to the 
same  importers  the  consequence  was  that  the  Community  industry  could  not  benefit 
from the increased demand of low-end citric acid, and thereby lost market share and 
deteriorated  its  financial  performance.  The  investigation  however  showed  that  both, 
the product concerned and the like product are basically used in the same applications 
and compete mainly in the same segments (see recital (9), with the exception of one 

EN 

15 

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niche  market  representing  a  small  portion  of  the  European  citric  acid  market  share, 
which  was  supplied  so  far  solely  by  the  Community  industry.  The  investigation  has 
indeed established that the Community industry was present in the low-end segment of 
the market. Therefore, this argument should be rejected.  

(57)  Moreover,  some  interested  parties  considered  the  lack  of  any  investment  during  the 
period  considered  and  in  particular  during  the  years  when  the  Community  industry 
achieved  better  results,  i.e.  2004-2005,  as  a  factor  which  contributed  to  the  market 
share  loss  and  consequently  to  the  deterioration  of  its  situation.  The  investigation 
showed the Community industry did not operate at full capacity and that its capacity 
utilisation  was  stable  throughout  the  period  considered.  Therefore,  some  production 
increase  would  have  been  possible  in  case  of  stronger  demand  without  further 
investments.  Moreover,  given  that  the  profitability  of  the  Community  industry  was 
insufficient, i.e. below target profit, throughout the period considered and even turned 
into negative, it is considered to be an economically justifiable business decision not to 
invest  significant  amounts  in  the  production  of  the  like  product.  This  argument  is 
therefore not convincing and should be rejected. 

(b)  Rise in the costs of raw materials, rising energy prices 

(58)  Almost all interested parties reiterated their claims that any injury found would be due 
to  the  reform  of  the  sugar  market  and  the  consequent  abolition  of  the  production 
refunds in 2006 and/or the rising energy prices.  

(59)  One  interested  party  claimed  that  in  the  annual  report  of  one  Community  producer 
relating to 2007, it was stated that the raw material availability was limited due to the 
European  sugar  regime  which  resulted  in  higher  cost.  In  this  respect,  it  is  noted  that 
the  mentioned  Community  producer  does  not  use  sugar  as  main  raw  material,  but 
molasses and as explained in recital (89) of the provisional Regulation was thus never 
subject  to  production  refunds.  The  cost  increase  for  molasses  was  however  not 
substantial,  but  corresponding  to  the  increase  of  world  market  prices  for  sugar.  As 
concerns the situation of the other Community producer which was described in detail 
in  recitals  (90)  to  (94)  of  the  provisional  Regulation,  no  new  or  substantiated 
information or argument was received. The overall conclusion laid down in recital (93) 
that the reform of the sugar market had no considerable impact on the cost situation of 
the Community industry is hereby confirmed. 

(60)  The  same  interested  party  claimed  that  there  would  indeed  be  a  link  between  sugar 
prices and biofuel production as this was acknowledged in a study of the Commission 
on  "The  causes  of  the  Food  Price  Crisis"4.  In  this  respect  it  is  noted  that  the 
Commission, as already stated in recital (98) of the provisional Regulation, had access 
to  the  cost  data  of  both  Community  producers  and  was  therefore  in  a  position  to 
analyse the concrete cost of raw materials for both Community producers concerning 
the production of citric acid. Any link between sugar prices and biofuel production has 
therefore been investigated and taken into account in assessing the impact of EU sugar 
market  reform  and  the  increasing  biofuel  production.  Based  on  this,  it  could  be 

4 

European  Commission  "The  Causes  of 
http://ec.europa.eu/agriculture/analysis/perspevct/foodprice/sugar_en.pdf. 

the  Food  Price  Crisis:  Sugar",  20  May  2008, 

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concluded and is hereby definitively confirmed that these factors had no considerable 
impact on the injury found and suffered by the Community industry.  

(61) 

In  addition,  it  has  to  be  stated  that  any  cost  increase  concerning  molasses,  sugar  or 
glucose or energy which was acknowledged in the provisional Regulation (see recitals 
(93)  and  (96))  are  not  the  source  of  the  injury  of  the  Community  industry  as  in  a 
normal  market  situation,  the  Community  industry  could  have  passed  on  these 
increased costs at least to a certain extent to its customers. However, the investigation 
showed  the  increasing  presence  of  dumped  imports  which  undercut  the  prices  of  the 
Community  industry  significantly.  Thus,  as  stated  in  recital  (84)  of  the  provisional 
Regulation there was a price depression and the Community industry could only pass 
on a fraction of its own cost increases to its customers, which led to the deterioration 
of its financial situation and a further loss of market share.  

(62)  Finally, it has to be mentioned that the investigation has shown that the Chinese costs 
of  production  of  citric  acid  had  also  increased.  These  increased  costs  were  however 
not  translated  into  higher  sales  prices,  but  on  the  contrary,  unit  sales  prices  even 
decreased by 6 percentage points during the period considered as shown in recital (63) 
of the provisional Regulation. 

(63)  On the basis of the above, the claims should be rejected and recitals (88) to (99) are 

hereby definitively confirmed. 

(c)  Price cartel of Community industry 

(64)  Some  interested  parties  reiterated  their  claims  that  the  loss  of  market  share  for  the 
European producers was self-inflicted because of the citric acid cartel (1991-1995) in 
which both the complainant and the other European producer participated and which 
was  claimed  to  be  the  reason  of  the  boost  of  Chinese  citric  acid  imports.  This 
allegation  was  not  further  substantiated  and,  therefore,  did  not  alter  the  conclusion 
drawn in recital (100) of the provisional Regulation that the big boost of the dumped 
imports happened several years after the cartel ceased to exist. 

(65)  On  the  basis  of  the  above,  it  is  definitively  concluded  that  the  consequences  of  the 
anti-competitive  practices  in  which  the  Community  industry  took  part  did  not 
contribute to the material injury suffered by the Community industry. 

(d)  Currency fluctuations 

(66)  Some interested parties reiterated their claims that the drop in prices of Chinese citric 
acid during the IP was largely due to the unfavourable exchange rate from the USD to 
EUR,  the  fact  that  prices  for  citric  acid  are  generally  expressed  in  USD  on  world 
markets and the difficulty to adjust prices, which are generally negotiated annually, to 
the new currency situation.  

(67) 

It  is  recalled  that  in  recital  (104)  of  the  provisional  Regulation,  the  impact  of  any 
currency fluctuation is considered to be not significant because even if the devaluation 
of the USD against the EUR between 2004 and the IP which amounted to 4,97%, after 
a  fine-tuning  of  provisional  calculations,  would  have  been  fully  disregarded  there 
would still be undercutting of over 10%.  

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(68)  Consequently, it is definitively confirmed that the appreciation of the Euro in respect 
of the USD was not such as to break the causal link between the established injury to 
the Community industry and the imports concerned and the claim should, therefore, be 
rejected. 

3.  Conclusion on causation 

(69) 

(70) 

In the absence of any further new and substantiated information or argument, recitals 
(82) to (110) of the provisional Regulation are hereby confirmed. 

In the light of the above, the provisional finding of existence of causal link between 
the  material  injury  suffered  by  the  Community  industry  and  the  dumped  Chinese 
imports is confirmed. 

G. 

COMMUNITY INTEREST 

1.  Developments after the investigation period 

(71)  Comments  relating  to  the  need  to  take  into  consideration  certain  important  post-IP 
developments have been received both from certain Community industry producers as 
well  as  from  the  cooperating  exporting  producers  and  importers.  It  is  noted  that  in 
accordance with Article 6(1) of the basic Regulation, information concerning dumping 
and injury relating to a period subsequent to the investigation period shall, normally, 
not  be  taken  into  account.  However,  in  view  of  the  statement  made  in  recitals  (119) 
and (129) of the provisional Regulation, it was exceptionally considered necessary to 
collect data and information related to the period after June 2007 until July 2008.  

(72)  Some interested parties claimed that the imposition of measures would be unnecessary 
as  the  profitability  of  the  Community  industry  attained  high  levels  post-IP  due  to 
significantly increased prices and that the market had regulated itself. During the IP, 
there was evidence of dumping and injury and this injury was caused to a significant 
degree  by  the  price  depression  stemming from  the  dumped  imports.  Import  statistics 
show an average increase of Chinese sales prices of only 12 % after the IP. Compared 
to  the  undercutting  level  of  16,54%  found  during  the  IP,  this  increase  is  clearly  not 
sufficient as it would not allow the Community industry to increase its sales price to a 
sustainable  level  without  risking  to  lose  more  customers  in  the  absence  of  anti-
dumping  measures.  Concerning  the  price  level  of  the  Community  industry,  it  was 
found that the Community industry managed to increase its prices moderately as of the 
first  quarter  of  2008  which  appeared  to  have  improved  the  financial  situation  of  the 
Community  industry.  These  price  increases  are,  nevertheless,  in  a  close  timely 
correlation with the initiation of this proceeding and it thus appears that the situation 
of the Community industry may have improved because of the potential anti-dumping 
measures  on  imports  from  the  PRC.  It  was  hence  concluded  that  there  was  no  self-
regulation  of  the  market,  or  the  self-regulation  was  insufficient  to  render  the 
imposition of measures unnecessary. The argument should be thus rejected. 

2. 

Interest of the Community industry 

(73) 

In  the  absence  of  any  new  and  substantiated  information  or  argument  with  regard  to 
the interest of the Community industry, the conclusion made in recitals (112) to (115) 

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of  the  provisional  Regulation  regarding  the  interest  of  the  Community  industry  are 
hereby confirmed. 

3. Competition and security of supply 

(74)  Most  interested  parties  reiterated  their  claim  that  the  imposition  of  measures  would 
significantly  reduce  competition  in  the  European  market  and  create  a  duopolistic 
market situation. It is considered, however, that in view of the strong market position 
that  the  Chinese  exporting  producers  obtained  over  the  last  years,  the  imposition  of 
measures  would  not  drive  them  out  of  the  Community  market,  but  merely  restore  a 
level  playing  field  allowing  the  Community  industry  and  the  Chinese  exporting 
producers  to  compete  on  equal  terms.  Moreover,  a  reasonable  price  increase  on  the 
Community market could indeed attract more imports from other third countries with 
own production, such as Israel and South America which were likely less interested in 
exporting to a market with depressed prices.  

(75)  On  the  other  hand,  should  anti-dumping  measures  not  be  imposed,  it  cannot  be 
excluded  that  the  Community  industry  would  have  to  cease  its  manufacturing 
activities for this particular business, leading to the opposite scenario, i.e. a dominant 
position of the Chinese imports.  

(76)  Most  interested  parties  also  claimed  that  should  Chinese  imports  stop  due  to  the 
imposition  of  measures  the  security  of  supply  would  be  at  stake  because  the 
Community  industry  cannot  satisfy  the  demand  on  the  EU  market  even  if  both 
producers would produce at 100% of their capacity. This would be aggravated by the 
fact  that  the  demand  of  citric  acid  is  predicted  to  even  increase  with  the  effects  of 
Regulation  648/2004  of  the  European  Parliament  and  of  the  Council  on  detergents 
("detergent Regulation")5. In this Regulation, the Commission undertakes to conduct a 
review  regarding  the  use  of  phosphates  in  detergents  and  based  on  the  results,  to 
submit  a  proposal  for  appropriate  action.  Following  this  obligation,  the  Commission 
submitted  a  report,  but  did  not  propose  any  action  yet.  However,  even  if  phosphates 
would be completely banned from the detergents' industry, their main substitutes are 
zeolites and to a smaller extent only citric acid.  

(77)  Furthermore,  several  facts  contradict  the  assumption  that  Chinese  imports  would 

indeed stop.  

– 

– 

Import statistics showed that the Chinese imports increased by 17 % during the 
twelve  months  following  the  IP,  whereas  after  the  imposition  of  provisional 
measures they remained at a substantial level, appearing sufficient to guarantee 
the security of supply in the EU. 

The  investigation  showed  some  overcapacity  of  some  exporting  producers  in 
China  which  is  an  indication  that  Chinese  imports  in  the  EU  market  will  not 
stop,  in  particular  if  the  USA  would  impose  measures  against  PRC,  in  the 
framework of the US anti-dumping investigation. 

(78) 

In addition, the Community industry announced to take appropriate measures in order 
to  increase  its  production  capacity.  The  complainant  announced  to  increase  its 

5 

OJ L 104, 8.4.2004, p. 1-35. 

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production capacity significantly. According to the press release issued in July 2008, 
those  additional  capacities  should  be  fully  available  as  of  mid  2009  with  the  first 
increase already available in January 2009. This should indeed contribute to satisfy the 
demand in the EU. It is further noted that the other Community producer announced in 
August  2008,  that  it  would  close  its  production  site  in  China  by  the  first  quarter  of 
2009 and that it will focus on its production site in the Community.  

(79)  Moreover, a more attractive price level in the EU market would probably also increase 
imports from third countries and with those alternative sources, supply appears to be 
better  secured  as  if  users  would  only  depend  on  Chinese  citric  acid.  During  the  12 
months following the IP, imports from Israel for example have increased by 30%. 

(80) 

It  therefore  appears  that  the  imposition  of  measures  would  not  drive  the  Chinese 
exporting  producers  out  of  the  market,  but  would  rather  restore  a  level  playing  field 
which secures alternative sources of supply.  

3. 

Interest of unrelated importers 

(81)  Some interested parties claimed that due to sampling, the Commission only received 
the results for the largest importers in Europe, thus lacking information of the effects 
of  duties  on  the  overwhelming  majority  of  small  and  medium  sized  importers. 
However, no party raised any objection against the selected sample and, therefore, the 
sample is considered to be representative for all importers.  

(82)  Given that citric acid, on average, constitutes only 1% of the importers' total revenue, 
it is expected that the effects of an anti-dumping duty will be diluted in the companies' 
overall results. 

(83) 

In  the  absence  of  any  further  comments  from  importers,  the  conclusions  made  in 
recitals (116) to (120) of the provisional Regulation are hereby confirmed. 

4. 

Interest of users 

(84)  After the provisional stage, the Commission intensified the investigation as regards the 
possible  impact  of  measures  on  users.  To  this  end,  additional  information  was 
requested from the users and national associations and an additional verification visit 
was carried out at one Community user's premises.  

(85)  The  information  received  confirms  the  provisional  finding,  based  on  users' 
questionnaire  incomplete  responses  as  mentioned  in  recitals  (121)  to  (122)  of  the 
provisional Regulation, that the effect of citric acid in the total cost of production of 
the  users  is  relatively  moderate.  While  the  share  of  citric  acid  in  the  users'  cost  of 
production naturally depends on the product, it was found to range generally between 
less  than  1%  and  20%.  The  additional  information  mentioned  above  has  also 
confirmed the provisional findings that a duty at the level of the underselling margin 
would  have  a  very  limited  effect  on  the  cost  of  production  of  the  cooperating  users. 
After  the  definitive  disclosure,  two  of  the  main  industrial  users  of  citric  acid  argued 
that citric acid represents a high proportion in certain of their products and, thus, the 
effect of the duties would be significant for them. Firstly, it should be noted that both 
users  produce  a  wide  range  of  products  in  which  citric  acid  is  used  in  different 
proportions. Secondly, based on the data submitted, it could not be proved that those 

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users  sold  predominantly  those  products  in  which  the  cost  of  citric  acid  were  more 
important. Finally, the argument was not further substantiated by any additional data. 
Therefore, this argument could not be accepted. 

5.  Conclusion on Community interest 

(86)  The above additional analysis concerning the interest of the importers and the users in 
the Community has not altered the provisional conclusions in this respect. Even if in 
certain  cases  the  burden  would  need  to  be  fully  borne  by  the  importer/user,  any 
negative financial impact on the latter would in any event be not significant. On this 
basis, it is considered that the conclusions regarding the Community interest as set out 
in  the  provisional  Regulation  are  not  altered.  In  the  absence  of  any  other  comments, 
they are therefore definitively confirmed.  

H. DEFINITIVE MEASURES 

1. Injury elimination level 

(87)  Several  interested  parties  contested  the  profit  margin  level  provisionally  used  and 
claimed  the  9%  profit  is  excessive,  arguing  that  the  Community  industry  during  the 
period  considered  never  actually  achieved  this  profit  level.  It  is  acknowledged  that 
indeed  only  one  Community  producer  achieved  this  profit  level  in  the  absence  of 
dumping, i.e. in 2001, whereas the other did not. The methodology used to determine 
the injury elimination level was thus re-examined and it was deemed more appropriate 
to use as profit margin the weighted average profit margin that was achieved by both 
European producers in 2001, i.e. 6%. 

(88)  On  the  basis  of  the  above,  it  is  concluded  that  the  Community  industry  could 
reasonably expect to achieve a pre-tax profit margin of 6% in the absence of dumped 
imports and this profit margin was used in the definitive findings. 

(89)  The Chinese import prices were compared, for the IP, with the non-injurious price of 
the like product sold by the Community industry on the Community market. The non-
injurious  price  has  been  obtained  by  adjusting  the  sales  price  of  the  Community 
industry in order to reflect the profit margin, as now revised. The difference resulting 
from  this  comparison,  when  expressed  as  a  percentage  of  the  total  CIF  value, 
amounted  to  a  range  from  8,3%  to  42,7  %  for  each  company,  i.e.  less  than  the 
dumping margin found, except for one company.  

2.  Definitive measures 

(90) 

In  view  of  the  conclusions  reached  with  regard  to  dumping,  injury,  causation  and 
Community  interest,  and  in  accordance  with  Article  9(4)  of  the  basic  Regulation,  a 
definitive  anti-dumping  duty  should  be  imposed  at  the  level  of  the  lowest  of  the 
dumping and injury margins found, in accordance with the lesser duty rule. In all but 
one case, the duty rate should accordingly be set at the level of the injury found.  

(91)  On the basis of the above, the definitive duties should be as follows:  

Exporting producer 

Proposed anti-dumping duty 

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Anhui BBCA Biochemical Co., Ltd 

DSM Citric Acid (Wuxi) Ltd 

RZBC Co. 

RZBC (Juxian) Co. Ltd. 

TTCA Co., Ltd 

Yixing Union Biochemical 

Laiwu Taihe Biochemistry Co. Ltd 

Weifang Ensign Industry Co. Ltd 

All other companies 

3. 

Form of the measures  

35,7 % 

8,3 % 

36,8 % 

36,8 % 

42,7 % 

32,6 % 

6,6 % 

33,8 % 

42,7 % 

(92)  During  the  course  of  the  investigation,  six  exporting  producers  in  the  PRC  offered 
acceptable price undertakings in accordance with Article 8(1) of the basic Regulation.  

(93)  The  Commission,  by  Decision  [INSERT]6,  accepted  these  undertaking  offers.  The 
Council  recognises  that  the  undertaking  offers  eliminate  the  injurious  effect  of 
dumping and limits to a sufficient degree the risk of circumvention. 

(94)  To further enable the Commission and the customs authorities to effectively monitor 
the compliance of the companies with the undertakings, when the request for release 
for free circulation is presented to the relevant customs authority, exemption from the 
anti-dumping  duty  is  to  be  conditional  on  (i)  the  presentation  of  an  undertaking 
invoice, which is a commercial invoice containing at least the elements listed and the 
declaration stipulated in the Annex; (ii) the fact that imported goods are manufactured, 
shipped and invoiced directly by the said companies to the first independent customer 
in the Community; and (iii) the fact that the goods declared and presented to customs 
correspond  precisely  to  the  description  on  the  undertaking  invoice.  Where  the  above 
conditions are not met the appropriate anti-dumping duty shall be incurred at the time 
of acceptance of the declaration for release into free circulation. 

(95)  Whenever  the  Commission  withdraws,  pursuant  to  Article  8(9)  of  the  basic 
Regulation,  its  acceptance  of  an  undertaking  following  a  breach  by  referring  to 
particular  transactions  and  declares  the  relevant  undertaking  invoices  as  invalid,  a 
customs debt shall be incurred at the time of acceptance of the declaration for release 
into free circulation of these transactions. 

(96) 

Importers should be aware that a customs debt may be incurred, as a normal trade risk, 
at  the  time  of  acceptance  of  the  declaration  for  release  into  free  circulation  as 
described  in  recitals  [INSERT]  and  [INSERT]  even  if  an  undertaking  offered  by  the 

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manufacturer from whom they were buying, directly or indirectly, had been accepted 
by the Commission. 

(97)  Pursuant  to  Article  14(7)  of  the  basic  Regulation,  customs  authorities  should  inform 
the  Commission  immediately  whenever  indications  of  a  violation  of  the  undertaking 
are found. 

(98)  For the reasons stated above, the undertakings offered by the exporting producers are 
therefore  considered  acceptable  by  the  Commission  and  the  companies  concerned 
have been informed of the essential facts, considerations and obligations upon which 
acceptance is based. 

(99) 

In the event of a breach or withdrawal of the undertakings, or in case of withdrawal of 
acceptance of the undertakings by the Commission, the anti-dumping duty which has 
been imposed by the Council in accordance with Article 9(4) shall automatically apply 
by means of Article 8(9) of the basic Regulation. 

I. DEFINITIVE COLLECTION OF THE PROVISIONAL DUTY 

(100)  In  view  of  the  magnitude  of  the  dumping  margin  found  and  given  the  level  of  the 
injury caused to the Community industry, it is considered necessary that the amounts 
secured  by  way  of  provisional  anti-dumping  duty  imposed  by  the  provisional 
Regulation  should  be  definitively  collected  to  the  extent  of  the  amount  of  definitive 
duties imposed. As the definitive duty rates are lower than the provisional duty rates, 
amounts  provisionally  secured  in  excess  of  the  definitive  rate  of  anti-dumping  duty 
should be released, 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

2. 

A  definitive  anti-dumping  duty  is  hereby  imposed  on  imports  of  citric  acid  and  of 
trisodium citrate dihydrate falling within CN codes  2918 14  00 and ex 2918 15  00 
(TARIC code 2918 15 00 10) and originating in the People's Republic of China. 

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

Company 

Anhui  BBCA  Biochemical  Co.,  Ltd  -  N°  73,  Daqing  Road, 
Bengbu City 233010, Anhui Province, PRC 

Anti-
Dumping 
duty (%) 

TARIC 
Additional 
Code 

35,7 

A874 

DSM Citric Acid (Wuxi) Ltd - West Side of Jincheng Bridge, 
Wuxi 214024, Jiangsu province, PRC 

8,3 

A875 

RZBC Co., Ltd - N° 9 Xinghai West Road, Rizhao, Shandong 
Province, PRC 

36,8 

A876 

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RZBC (Juxian) Co. Ltd, West Wing, Chenyang North Road, Ju 
County, Rizhao, Shandong Province, PRC  

36,8 

A877 

TTCA  Co.,  Ltd.  –  West,  Wenhe  Bridge  North,  Anqiu  City, 
Shandong Province, PRC 

42,7 

A878 

Yixing Union Biochemical Co., Ltd – Economic Development 
Zone Yixing City 214203, Jiangsu Province, PRC 

32,6 

A879 

Laiwu  Taihe  Biochemistry  Co.  Ltd,  No.  106  Luzhong  Large 
East Street, Laiwu, Shandong Province, PRC 

6,6 

A880 

Weifang Ensign Industry Co. Ltd, The West End, Limin Road, 
Changle City, Shandong Province, PRC 

33,8 

A882 

All other companies 

42,7  

A999 

3. 

4. 

1. 

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

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

Article 2 

Imports  declared  for  release  into  free  circulation  which  are  invoiced  by  companies 
from  which  undertakings  are  accepted  by  the  Commission  and  whose  names  are 
listed  in  the  Commission  Decision  [2008/…./EC],  as  from  time  to  time  amended, 
shall be exempt from the anti-dumping duty imposed by Article 1, on condition that: 

– 

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

the first independent customer in the Community; and 

– 

such  imports  are  accompanied  by  an  undertaking  invoice  which  is  a 

commercial  invoice  containing  at  least  the  elements  and  the  declaration 

stipulated in the Annex of this Regulation; and 

– 

the  goods  declared  and  presented  to  customs  correspond  precisely  to  the 

description on the undertaking invoice. 

2. 

A  customs  debt  shall  be  incurred  at  the  time  of  acceptance  of  the  declaration  for 
release into free circulation: 

– 

whenever it is established, in respect of imports described in paragraph 1, that 

one or more of the conditions listed in that paragraph are not fulfilled; or 

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– 

when the Commission withdraws its acceptance of the undertaking pursuant to 

Article 8(9) of the basic Regulation in a Regulation or Decision which refers to 

particular  transactions  and  declares  the  relevant  undertaking  invoices  as 

invalid. 

Article 3 

The  amounts  secured  by  way  of  provisional  anti-dumping  duty  pursuant  to  Commission 
Regulation (EC) No 488/2008 on imports of citric acid originating in the People's Republic of 
China  shall  be  definitively  collected  at  the  rate  of  the  definitive  duty  imposed  pursuant  to 
Article  1.  The  amounts  secured  in  excess  of  the  amount  of  the  definitive  duty  shall  be 
released.  

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

Article 4 

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

Done at Brussels, […] 

For the Council 
The President 
[…] 

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The  following  elements  shall  be  indicated  in  the  commercial  invoice  accompanying  the 
companies' sales to the Community of goods which are subject to the undertaking: 

ANNEX  

1. 

2. 

3. 

4. 

5. 

6. 

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

The name of the company issuing the commercial invoice 

The commercial invoice number 

The date of issue of the commercial invoice 

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

The exact description of the goods, including: 

– 

– 

– 

– 

– 

the product code number (PCN) used for the purpose of the undertaking 

plain language description of the goods corresponding to the PCN concerned 

the company product code number (CPC) 

Taric code 

quantity (to be given in tonnes) 

7. 

The description of the terms of the sale, including: 

– 

– 

– 

– 

price per tonnes 

the applicable payment terms 

the applicable delivery terms 

total discounts and rebates 

8. 

9. 

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

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

“I, the undersigned, certify that the sale for direct export to the European Community 
of the goods covered  by  this  invoice is being made within the scope  and under the 
terms  of  the  Undertaking  offered  by  [COMPANY],  and  accepted  by  the  European 
Commission  through  [Decision  2008/XXXX/EC].  I  declare  that  the  information 
provided in this invoice is complete and correct.” 

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