Proposal for a Council Regulation amending Regulation (EC)No 1001/2008 imposing a definitive anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel originating, inter alia, in Malaysia.
Date: 2010-03-26
Institutions: European Commission
Subjects: Malaysia, anti-dumping duty, import, iron, originating product, piping, steel

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EUROPEAN COMMISSION 

Brussels, 26.3.2010 
COM(2010)115 final 

2010/0061 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC)No 1001/2008 imposing a definitive anti-dumping duty on 
imports of certain tube and pipe fittings, of iron or steel originating, inter alia, in 
Malaysia.  

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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 
1225/2009  of  30  November  2009  on  protection  against  dumped  imports  from 
countries  not  members  of  the  European  Community  (codified  version),  in  the 
proceeding concerning imports of certain tube and pipe fittings, of iron or steel 
originating, inter alia, in Malaysia. 

•  General context 

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

•  Existing provisions in the area of the proposal 

In October 2008, definitive anti-dumping measures were re-imposed by Council 
Regulation  (EC)  No  1001/2008  on  imports  of  certain  tube  and  pipe  fittings 
(TPFs'  or  the  'product  concerned')  originating,  in  the  Republic  of  Korea  and 
Malaysia  following  an  expiry  review  pursuant  to  Article  11(2)  of  the  basic 
Regulation.  The  anti-dumping  duties  in  force  for  Malaysia  are:  59,2%  for 
Anggerik Laksana Sdn Bhd and 75% for all other companies; for the Republic of 
Korea the duty is 44% for all companies. 

In  September  2009,  definitive  anti-dumping  measures  were  re-imposed  by 
Council Regulation (EC) No 803/2009 on imports of the same product concerned 
originating,  in  the  People's  Republic  of  China  (58,6%)  and  Thailand  (58,9%), 
with the exception of two companies in Thailand. The measures for the product 
concerned  originating  in  China  were  extended  to  imports  of  the  same  product 
consigned  from  Taiwan,  Indonesia,  Sri  Lanka  and  the  Philippines,  whether 
declared  as  originating  in  Taiwan,  Indonesia,  Sri  Lanka  and  the  Philippines  or 
not. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

•  Consultation of interested parties 

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

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•  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 

The  request  was  lodged  by  Pantech  Steel  Industries  Sdn  Bhd  (PSI,  'the 
applicant'), an exporting producer in Malaysia. 

Having  determined  that  sufficient  evidence  existed  for  the  initiation  of  the 
review, the Commission initiated the case on 30 July 2009. 

The  investigation  showed  that  the  applicant  has  demonstrated  that  it  fulfils  the 
requirement to be granted new exporter status. Therefore, an individual margin of 
dumping  must  be  determined  within  the  frameork  of  the  law  for  Pantech  Steel 
Industries Sdn Bhd and its related companies. The review does not affect the date 
on  which  the  measures  initially  imposed  by  Council  Regulation  (EC)  No 
1001/2008 will expire. 

It  is  proposed  that  the  Council  adopts  the  attached  proposal  for  a  Regulation, 
which should be published in the Official Journal of the European Union on 29 
April 2010 at the latest. 

•  Legal basis 

Council  Regulation  (EC)  No  1225/2009  of  30  November  2009  on  protection 
against  dumped  imports  from  countries  not  members  of  the  European 
Community (codified version) and in particular article 11 (4) thereof.  

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Union. 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 basic Regulation and leaves no scope for 
national decision. 

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Indication  of  how  financial  and  administrative  burden  falling  upon  the  Union, 
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: Council 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 Union budget. 

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2010/0061 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC)No 1001/2008 imposing a definitive anti-dumping duty on 
imports of certain tube and pipe fittings, of iron or steel originating, inter alia, in 
Malaysia.  

THE COUNCIL OF THE EUROPEAN UNION,  

Having regard to the Treaty on the Functioning of the European Union. 

Having regard to Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection 
against dumped imports from countries not members of the European Community1 (the basic 
Regulation), and in particular Article 11(4) thereof, 

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

Whereas: 

1. 

1. PROCEDURE 

1.1. 

Existing measures 

(1) 

In  October  2008,  definitive  anti-dumping  measures  were  re-imposed  by  Council 
Regulation (EC) No 1001/20082 on imports of certain tube and pipe fittings (TPFs' or 
the 'product concerned') originating, inter alia, in Malaysia following an expiry review 
pursuant to Article 11(2) of the basic Regulation. The anti-dumping duties in force for 
Malaysia are 59,2% for Anggerik Laksana Sdn Bhd and 75% for all other companies.  

1.2. 

Request for a review 

(2) 

(3) 

The  Commission  has  received  an  application  to  initiate  a  'new  exporter'  review 
pursuant  to  Article  11(4)  of  the  basic  Regulation.  The  application  was  lodged  by 
Pantech  Steel  Industries  Sdn  Bhd  (the  applicant),  an  exporting  producer  in  Malaysia 
(the country concerned). 

The applicant alleged that it did not export the product concerned to the Union during 
the  period  of  investigation  on  which  the  anti-dumping  measures  were  based,  i.e.  the 
period from 1 April 2000 to 31 March 2001 (the original investigation period) and that 
it is not related to any of the exporting producers of the product concerned which are 
subject to the anti-dumping measures described in recital (1). 

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OJ L 343, 22.12.2009, p. 51. 
OJ L 275, 16.10.2008, p.18. 

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(4) 

The  applicant  further  alleged  that  it  had  entered  into  an  irrevocable  contractual 
obligation to export the product concerned to the Union in the near future. 

1.3. 

Initiation of a new exporter review 

(5) 

(6) 

(7) 

The  Commission  examined  the  prima  facie  evidence  submitted  by  the  applicant  and 
considered it sufficient to justify the initiation of a review in accordance with Article 
11(4) of the basic Regulation. After consultation of the Advisory Committee and after 
the  Union  industry  concerned  had  been  given  the  opportunity  to  comment,  the 
Commission initiated, by Regulation (EC) No 692/20093, a review of Regulation (EC) 
No 1001/2008 with regard to the applicant. 

Pursuant to Commission Regulation (EC) No 692/2009, the anti-dumping duty of 75% 
imposed by Regulation (EC) No 1001/2008 was repealed with regard to imports of the 
product  concerned  produced  and  sold  for  exports  to  the  Union  by  the  applicant. 
Simultaneously, pursuant to Article 14(5) of the basic Regulation, customs authorities 
were directed to take appropriate steps to register such imports. 

Regulation (EC) No 692/2009 determined that if the investigation would show that the 
applicant  fulfils  the  requirements  to  have  an  individual  duty  established,  it  may  be 
necessary  to  amend  the  rate  of  duty  currently  applicable  to  imports  of  the  product 
concerned from companies not individually mentioned in Article 1 of Regulation (EC) 
No 1001/2008. 

1.4. 

Product concerned 

(8) 

The product under review is tube and pipe fittings (other than cast fittings, flanges and 
threaded  fittings),  of  iron  or  steel  (not  including  stainless  steel),  with  a  greatest 
external  diameter  not  exceeding  609,6  mm,  of  a  kind  used  for  butt-welding  or  other 
purposes, originating in Malaysia (the product concerned), currently falling within CN 
codes ex 7307 93 11, ex 7307 93 19, ex 7307 99 30 and ex 7307 99 90. 

1.5. 

Parties concerned 

(9) 

The  Commission  officially  advised  the  Union  industry,  the  applicant  and  the 
representatives  of  the  exporting  country  of  the  initiation  of  the  review.  Interested 
parties  were  given  the  opportunity  to  make  their  views  known  in  writing  and  to  be 
heard. 

(10)  The  Defence  Committee  of  the  steel  butt-welding  fittings  industry  of  the  European 
Union representing the Union industry ('the Union industry') made its views know in 
writing to the Commission services. The Defence Committee challenged the reliability 
of  the  basis  for  the  export  price.  Documents  were  also  provided  allegedly  showing 
attempts  to  circumvent  the  measures  and  information  was  given  about  the  level  of 
price of the product concerned available for EU importers. 

(11)  The  Commission  sent  an  anti-dumping  questionnaire  to  the  applicant  and  its  related 

companies and received a reply within the deadline set for that purpose. 

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OJ L 199, 31.7.2009, p.9. 

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(12)  The Commission also sent anti-dumping questionnaire to unrelated importers located 

in the European Union but no co-operation was obtained.  

(13)  The  Commission  sought  to  verify  all  the  information  it  deemed  necessary  for  the 
determination  of  the  new  exporter  status  and  dumping,  and  verification  visits  were 
carried  out  at  the  premises  of  the  applicant  and  the  following  related  company  in 
Malaysia: 

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– 

Pantech Steel Industries Sdn Bhd (the applicant), 

Pantech Corporation Sdn Bhd ( related trading company) 

1.6. 

Investigation period 

(14)  The review investigation period of dumping covered the period from 1 July 2008 to 30 

June 2009 ('review investigation period' or 'RIP'). 

2. 

RESULTS OF THE INVESTIGATION 

2.1. 

New exporter qualification 

(15)  The investigation confirmed that the company had not exported the product concerned 
during  the  original  period  of  investigation  and  that  it  had  started  to  export  to  the 
European Union after this period. The company entered into an irrevocable contractual 
obligation to export during the RIP. This took the form of three orders from the same 
importing group in the EU.  

(16)  These  orders  were,  after 

the  RIP,  completed  by  export 

transactions  under 
approximately the same conditions with negligible differences in price and quantities. 
While the quantities involved were limited they were nevertheless found sufficient to 
establish a reliable dumping margin. This is because the levels of prices charged were 
further supported by other information at the Commission Services' disposal including 
export prices, of the exporter concerned, to third countries which confirmed the pattern 
of behaviour found in the transactions under scrutiny. 

(17)  As  concerns  the  other  conditions  for  the  recognition  of  a  new  exporter  status,  the 
company was able to demonstrate that it did not have any links, direct or indirect, with 
any  of  the  Malaysian  exporting  producers  subject  to  the  anti-dumping  measures  in 
force with regard to the product concerned. 

(18)  Accordingly, it is confirmed that the company should be considered a 'new exporter' in 
accordance with Article 11(4) of the basic Regulation, and thus an individual margin 
should be determined for it. 

2.2. 

Dumping 

Determination of normal value 

(19)  The applicant produces the fittings and sells the product concerned domestically and 
on  export  markets.  The  investigation  revealed  a  complex  sales  organisation  on  the 
domestic  market  involving  unrelated  distributors  and  related  trading  companies, 
whereby unrelated distributors purchase the product concerned from the producer and 

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then  resell  it  to  the  related  traders  that  then  sell  the  goods  onwards  to  unrelated 
customers  on  the  domestic  market.  De  facto,  the  unrelated  distributors  are  acting  as 
agents for the applicant. 

(20)  Based  on  the  above,  and  taking  into  account  the  fact  that  the  sales  of  the  related 
trading companies can be linked back to the applicant, the prices charged to the final 
consumer  by  these  related  trading  companies  are  considered  as  the  first  price  in  the 
ordinary  course  of  trade  and  therefore  form  the  basis  for  the  Normal  Value 
determination. 

(21) 

In  accordance  with  Article  2(2)  of  the  basic  Regulation,  domestic  sales  were 
considered representative when the total domestic sales volume was at least 5% of the 
total export sales volume to the Union. The Commission established that tube and pipe 
fittings were sold domestically by the applicant in overall representative volumes. 

(22)  The  Commission  then  identified  those  product  types  of  tube  and  pipe  fittings  sold 
domestically by the trading companies which were identical or directly comparable to 
the types sold for export to the European Union. 

(23)  An examination was also made by the Commission as to whether the sales of tube and 
pipe fittings sold domestically in representative quantities could be regarded as having 
been  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.  As  it  was  found  that  there  were  sufficient  sales  in  the 
ordinary course of trade, normal value was based on the actual domestic price.  

(24) 

In  the  few  cases  where  the  type  of  product  concerned  was  not  sold  on  the  domestic 
market during the RIP, the 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 profit margin. 

Export price 

(25)  The product concerned was exported directly to independent customers in the Union. 
Therefore, the export price was established in accordance with Article 2(8) of the basic 
Regulation, i.e. on the basis of export prices actually paid or payable as explained in 
recital (16). 

Comparison 

(26)  The normal value and the export prices were compared on an ex-works basis. 

(27)  For the purpose of ensuring a fair comparison between normal value and export price, 
due  allowance  in  the  form  of  adjustments  was  made  for  differences  affecting  price 
comparability in accordance  with Article 2(10) of the basic Regulation. Adjustments 
for insurance, handling, loading and ancillary expenses, credit costs were granted in all 
cases  where  they  were  found  to  be  reasonable,  accurate  and  supported  by  verified 
evidence. 

(28)  The applicant claimed that if the Commission would use the normal value based on the 
domestic sales of the related trading companies, an adjustment for differences in level 
of trade should be granted between the domestic market and the EU market. It further 

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argued  that  sales  to  the  EU  market  were  done  at  distributor  level  whereas,  in  the 
domestic  market,  the  applicant  used  to  sell  an  important  part  of  the  tube  and  pipe 
fittings  as  part  of  larger  consignments  in  oil  and  gas  project  market  where  fittings 
often  play  an  ancillary  role  only  to  that  of  the  main  pipes,  valves  and  other  major 
components, and that this market was at a different level of trade. 

(29)  After having analysed the sales conditions on the domestic market and in particular the 
sales price patterns, the investigation showed that the applicant did not demonstrate, in 
accordance  with  Article  2(10)  of  the  basic  Regulation,  a  consistent  and  distinct 
difference  in  functions  and  prices  for  the  different  levels  of  trade  in  the  domestic 
market of the exporting country. Therefore no adjustment was taken into account. 

Dumping margin 

(30) 

In accordance with Article 2(11) of the basic Regulation, and taking into account that 
there were only 3 orders at virtually the same point in time during the RIP and that the 
price of the raw material, which accounts for most of the cost of manufacturing, has 
varied significantly during the RIP, the dumping margin was established on the basis 
of a comparison on a transaction to transaction basis between the normal value and the 
export price. 

(31)  The comparison showed the existence of dumping at a level of 49,9%, expressed as a 

percentage of the CIF Union-frontier price. 

(32) 

In addition, the investigation confirmed that the export prices of the applicant to other 
third  countries  with  important  quantities  are  significantly  lower  than  those  to  the 
European Union, suggesting the existence of dumping on third markets. 

3. 

AMENDMENT OF THE MEASURES BEING REVIEWED 

(33) 

In  the  light  of  the  results  of  the  investigation,  it  is  considered  that  a  definitive  anti-
dumping duty should be imposed at the level of the dumping margin found. 

(34)  The  dumping  margin,  established  for  the  RIP,  of  49,9%  is  below  the  country-wide 
injury  elimination  level  of  75%  which  was  established  for  Malaysia  in  the  original 
investigation.  It  is  therefore  proposed  that  a  duty  which  is  based  on  the  dumping 
margin  of  49,9%  be  imposed  and  that  Council  Regulation  (EC)  No  1001/2008  be 
accordingly amended. 

4. 

RETROACTIVE LEVYING OF THE ANTI-DUMPING DUTY 

(35) 

In  the  light  of  the  above  findings,  the  anti-dumping  duty  applicable  to  the  applicant 
shall  be  levied  retroactively  on  imports  of  the  product  concerned  which  have  been 
made subject to registration pursuant to Article 3 of Regulation (EC) No 692/2009. 

5. 

MONITORING CLAUSE AND POSSIBLE FURTHER REVIEW 

(36) 

It should be noted that the companies concerned have a complex system of distribution 
which  also  involves  importing  the  product  concerned  from  other  countries  under 
measures. Also, there is a certain risk of duty avoidance due to the high difference in 
the duty rates between the different exporting companies inside Malaysia. Therefore, 

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special  measures  are  needed  to  ensure  the  proper  application  of  the  anti-dumping 
duties.  

(37)  These  special  measures  consist  of  the  presentation  to  the  customs  authorities  of  the 
Member states of a valid commercial invoice which shall conform to the requirements 
set out in the Annex to this Regulation. Imports not accompanied by such an invoice 
shall  be  made  subject  to  the  residual  anti-dumping  duty  applicable  to  all  other 
exporters. 

(38)  Furthermore, the Council notes that the Commission has informed it that it will invite 
the company concerned to submit regular reports to the Commission in order to ensure 
proper  follow  up  of  their  sales  of  product  concerned  to  the  Union  and  the  price  and 
other conditions related thereto, as well as information regarding developments in the 
company's  domestic  sales  prices.  The  Council  notes  that  in  particular  if  such  reports 
are not submitted, or where such reports disclose that measures may not be adequate to 
eliminate the  effects of  injurious  dumping, it may be necessary to initiate an interim 
review in accordance with Article 11.3 of the basic Regulation. The Council also notes 
that the Commission has the possibility to ex officio initiate an interim review pursuant 
to Article 11(3) of the basic Regulation, in particular once  one year has passed after 
entry  into  force  of  this  Regulation  (although  a  previous  review  may  also  be 
warranted). It is noted that at this point in time the Commission expects that it will be 
appropriate  to  conduct  such a  review  after  one  year  given  the  circumstances  of  this 
case. In this context, it is important to note that the duty established for the company 
concerned by this Regulation is based on only a limited number of orders. 

6. 

DISCLOSURE AND DURATION OF THE MEASURES 

(39)  The parties concerned were informed of the essential facts and considerations on the 
basis of which it was intended to impose on imports of tube and pipe fittings from the 
applicant an amended definitive anti-dumping duty and to levy this duty retroactively 
on  imports  made  subject  to  registration.  Their  comments  were  considered  and  taken 
into account were appropriate. 

(40)  This  review  does  not  affect  the  date  on  which  the  measures  imposed  by  Council 
Regulation  (EC)  No  1001/2008  will  expire  pursuant  to  Article  11(2)  of  the  basic 
Regulation. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

In Article 1(2) of Regulation (EC) No 1001/2008, the following shall be inserted into 
the table under producers in Malaysia: 

Country 

Company 

Rate of duty 
(%) 

TARIC additional 
code 

Malaysia 

Pantech Steel Industries Sdn Bhd 

49,9 

A961 

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2. 

The duty hereby imposed shall also be levied retroactively on imports of the product 
concerned which have been registered pursuant to Article 3 of Regulation (EC) No 
692/2009. 

The customs authorities are hereby directed to cease the registration of imports of the product 
concerned originating in Malaysia produced by Pantech Steel Industries Sdn Bhd. 

3. 

4. 

5. 

In  Article  1  of  Regulation  (EC)  No  1001/2008  the  following  paragraph  is  added: 
"The  application  of  the  individual  duty  rates  specified  for  Pantech  Steel  Industries 
Sdn  Bhd  shall  be  conditional  upon  presentation  to  the  customs  authorities  of  the 
Member  States  of  a  valid  commercial  invoice,  which  shall  conform  to  the 
requirements  set  out  in  the  Annex.  If  no  such  invoice  is  presented,  the  duty  rate 
applicable to all other companies shall apply." 

The addition  of  the above paragraph  in the  Regulation  (EC) No 1001/2008 implies 
that Article 1(3) of this regulation is to be renumbered to Article 1(4). 

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

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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ANNEX 

"A  declaration  signed  by  an  official  of  the  entity  issuing  the  commercial  invoice,  in  the 
following format, must appear on the valid commercial invoice referred to in Article 1(3): 

(1) 

The name and function of the official of the entity issuing the commercial invoice.  

(2) 

The  following  declaration:  “I,  the  undersigned,  certify  that  the  (volume)  of  [product 
concerned]  sold  for  export  to  the  European  Community  covered  by  this  invoice  was 
manufactured  by  (company  name  and  address)  (TARIC  additional  code)  in  (country 
concerned).  I  declare  that  the  information  provided  in  this  invoice  is  complete  and 
correct and that the invoiced price is final and will not be compensated, in part or in 
whole, via any practice." 

Date and signature” 

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