Proposal for a Council Regulation Concluding the partial interim review pursuant to Article 11(3) of Council Regulation (EC) No. 384/96 of the anti-dumping duty on imports of certain graphite electrode systems originating in India
Date: 2009-06-22
Institutions: European Commission
Subjects: India, anti-dumping duty, electrical equipment, import, originating product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 22.6.2009 
COM(2009) 289 final 

Proposal for a 

COUNCIL REGULATION 

Concluding the partial interim review pursuant to Article 11(3) of Council Regulation 
(EC) No. 384/96 of the anti-dumping duty on imports of certain graphite electrode 
systems originating in India 

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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')  in  the  proceeding 
concerning imports of certain graphite electrode systems originating in India. 

•  General context 

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

•  Existing provisions in the area of the proposal 

Measures  are  in  force  against  imports  of  certain  graphite  electrode  systems 
originating in India and were imposed by Council Regulation (EC) No. 1629/2004. 

•  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 contain provisions for 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 

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On  27  June  2008,  the  Commission  initiated  a  partial  interim  review  limited  to 
dumping for one exporting producer of certain graphite electrode systems originating 
in India on request of the exporter concerned. 

The  investigation  showed  that  the  company  concerned  had  ceased  to  dump  the 
product  concerned  onto  the  Community  market  and  that  this  change  could  be 
considered of a lasting nature. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which should be published in the Official Journal of the European Union by 26 June 
2009 at the latest.  

•  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. 

•  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 reasons: 

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 instruments: regulation. 

Other means would not be adequate for the following reason: 

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

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget.  

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Proposal for a 

COUNCIL REGULATION 

Concluding the partial interim review pursuant to Article 11(3) of Council Regulation 
(EC) No. 384/96 of the anti-dumping duty on imports of certain graphite electrode 
systems originating in India 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, 

Having  regard  to  Council  Regulation  (EC)  No  384/96  of  22  December  1995  on  protection 
against dumped imports from countries not members of the European Community1 (‘the basic 
Regulation’) and in particular Articles 9 and 11(3) thereof, 

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

Whereas: 

1. 

(1) 

EXISTING MEASURES 

Following  an  investigation  (‘the  original  investigation’),  the  Council,  by  Regulation 
(EC) No 1629/20042 which was further amended by Regulation (EC) No 1354/20083, 
imposed  a  definitive  anti-dumping  duty  on  imports  of  certain  graphite  electrode 
systems originating in India.  

1.1. 

Initiation of an interim review 

(2) 

(3) 

(4) 

On  the  request  of  Hindustan  Electro  Graphite  Limited  ('HEG'  or  'the  company'),  an 
Indian  exporting  producer  subject  to  the  anti-dumping  measures  in  force,  a  partial 
interim  review  of  the  above-mentioned  Regulation  was  initiated  pursuant  to  Article 
11(3) of the basic Regulation. 

This  partial  interim  review  was  initiated  based  on  prima  facie  evidence  provided  by 
the  company  that  as  far  as  they  were  concerned,  the  circumstances  on  the  basis  of 
which measures were established had changed and that these changes were of a lasting 
nature. 

The request alleged that the cost of production of the product concerned had reduced 
due  to  production  efficiencies  since  the  original  investigation,  and  that  the  company 
had been able to significantly increase their export prices. They claimed therefore that 

1 
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OJ L 56, 6.3.1996, p. 1. 
OJ L 295, 18.9.2004, p.10. 
OJ L 350, 30.12.2008, p.24.  

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the  continued  imposition  of  measures  at  the  existing  level,  which  were  based  on  the 
level of dumping previously established, was no longer necessary to offset dumping. 

(5) 

Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed for the initiation of a partial interim review, the Commission published a notice 
(‘Notice  of  Initiation’)4  and  commenced  an  investigation,  limited  in  scope  to  the 
examination of dumping. 

1.2. 

Parties concerned by the investigation 

(6) 

(7) 

The  Commission  officially  advised  HEG,  as  well  as  the  representatives  of  the 
exporting  country  and  the  Community  industry,  of  the  initiation  of  the  review. 
Interested  parties  were  given  the  opportunity  to  make  their  views  known  in  writing 
and to request a hearing. 

The Commission sent a questionnaire to the applicant and received a reply within the 
deadlines set for that purpose. The Commission sought and verified all the information 
it  deemed  necessary  for  the  determination  of  dumping  and  carried  out  a  verification 
visit at the premises of HEG, Bhopal, India. 

1.3. 

Review investigation period 

(8) 

The investigation of dumping covered the period from 1 April 2007 to 31 March 2008 
(‘the review investigation period’ or ‘RIP’). 

2. 

PRODUCT CONCERNED AND LIKE PRODUCT 

2.1. 

Product concerned 

(9) 

The  product  concerned  by  the  current  review  is  the  same  as  that  in  the  original 
investigation,  i.e.  graphite  electrodes  of  a  kind  used  for  electric  furnaces,  with  an 
apparent  density  of  1,65  g/cm3  or  more  and  an  electrical  resistance  of  6,0  µΩ.m  or 
less,  falling  within  CN  code  ex  8545  11  00  and  nipples  used  for  such  electrodes, 
falling  within  CN  code  ex  8545  90  90  whether  imported  together  or  separately, 
originating in India. 

2.2. 

Like product 

(10)  The current review has shown that the graphite electrode systems produced by HEG 
and  sold  on  the  Indian  domestic  market  were  similar  to  those  exported  to  the 
Community  and  therefore  could  be  considered  to  be  like  product  to  the  product 
concerned. 

3. 

DUMPING 

3.1. 

Normal value 

(11) 

In  accordance  with  Article  2(2)  of  the  basic  Regulation,  the  Commission  first 
examined  whether  the  domestic  sales  of  the  product  concerned  to  independent 

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OJ C 164, 27.6.2008 p. 15. 

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customers were representative, i.e. whether the total volume of such sales was equal to 
or  greater  than  5 %  of  the  total  volume  of  the  corresponding  export  sales  to  the 
Community.  The  domestic  sales  of  HEG  were  found  to  be  representative  during  the 
investigation period. 

(12)  The  Commission  then  identified  those  product  types  sold  domestically  by  that 
company which were identical or directly comparable with the types sold for export to 
the Community. 

(13)  Domestic  sales  of  a  particular  product  type  were  considered  as  sufficiently 
representative  when  the  volume  of  that  product  type  sold  on  the  domestic  market  to 
independent customers during the investigation period represented 5 % or more of the 
total volume of the comparable product type sold for export to the Community. 

(14)  The Commission then examined whether the domestic sales of each type of graphite 
electrode system sold domestically in representative quantities could be considered as 
being  made  in  the  ordinary  course  of  trade  pursuant  to  Article  2(4)  of  the  basic 
Regulation. This was done by establishing the proportion of profitable domestic sales 
to  independent  customers,  of  each  exported  product  type,  on  the  domestic  market 
during the investigation period. 

(15)  For those domestic sales of each type of graphite electrode system sold domestically in 
representative quantities where the sales were over 80% profitable by volume, normal 
value  was  therefore  based  on  the  actual  domestic  price  of  all  transactions  during  the 
investigation period. 

(16)  For  all  other  exported  types  also  sold  on  the  domestic  market,  where  the  sales  were 
less  than  80%  profitable  by  volume,  normal  value  was  based  on  the  domestic  sales 
price of the profitable transactions during the investigation period. 

(17)  Wherever  domestic  prices  of  a  particular  product  type  could  not  be  used  in  order  to 
establish normal value, another method had to be applied. In accordance with Article 
2(3) of the basic Regulation the Commission instead calculated a constructed normal 
value, as follows. 

(18)  Normal value was constructed by adding to the exporter’s manufacturing costs of the 
exported types, a reasonable amount for selling, general and administrative expenses 
(‘SG&A’) and a reasonable margin of profit.  

(19) 

In  all  cases  SG&A  and  profit  were  established  pursuant  to  the  methods  set  out  in 
Article 2(6) of the basic Regulation. To this end, the Commission examined whether 
the SG&A incurred and the profit realised by the exporting producer on sales on the 
domestic  market  of  the  like  product  constituted  reliable  data  and  in  this  case 
determined that it was suitable to be used to construct normal value. 

3.2. 

Export price 

(20)  All export sales of the product concerned by HEG were made directly to independent 
customers  in  the  Community,  and  therefore  the  export  price  was  established  on  the 
basis  of  the  prices  actually  paid  or  payable  for  the  product  concerned  in  the  RIP  in 
accordance with Article 2(8) of the basic Regulation. 

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3.3. 

Comparison 

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

in  factors  which  were  demonstrated 

3.4. 

Dumping margin 

(22)  As  provided  for  under  Article  2(11)  of  the  basic  Regulation,  the  weighted  average 
normal  value  by  type  was  compared  with  the  weighted  average  export  price  of  the 
corresponding type of the product concerned. 

(23)  HEG's  dumping  margin  expressed  as  a  percentage  of  the  net,  free-at-Community-
frontier price, duty unpaid, was found to be de minimis in the sense of Article 9(3) of 
the basic Regulation. 

4. 

LASTING NATURE OF CHANGED CIRCUMSTANCES 

(24) 

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

(25)  Whereas the cost of production of the company had not significantly decreased since 
the  original  investigation,  the  export  price  of  the  product  concerned  had  increased 
substantially  during  the  RIP,  thereby  removing  the  dumping  findings  of  the  original 
investigation. 

(26)  Latest  available  data  collected  for  the  period  after  the  RIP  showed  the  import  prices 
from  HEG  to  have  remained  both  high  and  stable,  thereby  confirming  that  the 
company continued with its non-dumping behaviour after the RIP. 

(27) 

It was also found that, during the RIP, exports by HEG to markets other than the EU 
were made at prices above prices on the Indian domestic market. 

(28) 

In these circumstances, the findings from the RIP can be considered to be lasting.  

5. 

ANTI-DUMPING MEASURES 

(29)  As stated above, HEG was found to be dumping at a de minimis level during the RIP. 
It  is  however  noted  that,  while  the  dumping  margin  established  for  the  company 
concerned in the original investigation was 22.4%, the anti-dumping duty presently in 
force  against  this  company  is  0%5.  This  results  from  the  fact  that  there  are  parallel 
countervailing  duties  in  force  on  imports  of  the  product  concerned.  In  these 
circumstances,  the  finding  of  de  minimis  dumping  has  no  immediate  impact  on  the 
level of the measures currently in force6. 

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See recital 30 of Regulation (EC) No 1629/2004. 
OJ L 295, 18.9.2004, p. 4. 

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6. 

DISCLOSURE 

(30) 

Interested parties were informed of the essential facts, considerations and findings of 
the  investigation  and  were  given  an  opportunity  to  comment.  No  comments  were 
received. 

HAS ADOPTED THIS REGULATION: 

Article 1 

The  partial  interim  review  of  the  anti-dumping  measures  applicable  to  imports  of  certain 
graphite  electrode  systems  originating  in  India,  initiated  pursuant  to  Article  11(3)  of 
Regulation  (EC)  No  384/96  is  hereby  concluded  without  amending  the  level  of  the  anti-
dumping measure in force. 

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

Article 2 

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

Done at Brussels,  

For the Council 
The President 

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