Proposal for a COUNCIL REGULATION terminating the expiry review and 'the new exporter' review of the anti-dumping measures concerning imports of certain magnesia bricks originating in the People's Republic of China
Date: 2011-05-31
Institutions: European Commission
Subjects: China, anti-dumping measure, building materials, import (EU), originating product

EUROPEAN COMMISSION 

Brussels, 31.5.2011 
COM(2011) 317 final 

2011/0141 (NLE) 

Proposal for a 

COUNCIL REGULATION 

terminating the expiry review and 'the new exporter' review of the anti-dumping 
measures concerning imports of certain magnesia bricks originating in the People's 
Republic of China 

 
 
  
 
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  ('the  basic  Regulation')  in  the  anti-dumping 
proceeding concerning imports of certain magnesia bricks originating in the People's 
Republic of China. 

•  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 

Council Regulation (EU) No 1659/2005 imposing a definitive anti-dumping duty on 
imports of certain magnesia bricks originating in the People's Republic of China. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

CONSULTATION  OF 
ASSESSMENT 

INTERESTED 

PARTIES  AND 

IMPACT 

•  Consultation of interested parties 

Interested  parties  concerned  by  the  proceeding  have  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. 

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3. 

LEGAL ELEMENTS OF THE PROPOSAL 

•  Summary of the proposed action 

The  attached  proposal  for  a  Council  Regulation  is  based  on  the  definitive  findings 
concerning  the  requirements  to  initiate  an  anti-dumping  proceeding.  It  is  therefore 
proposed that the Council adopt the attached proposal for a Regulation which should 
be published no later than 25 June 2011. 

•  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. 

•  Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  European  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 above-mentioned basic Regulation and leaves 
no scope for national decision. 

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: regulation. 

Other means would not be adequate for the following reason: 

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

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Union budget. 

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2011/0141 (NLE) 

Proposal for a 

COUNCIL REGULATION 

terminating the expiry review and 'the new exporter' review of the anti-dumping 
measures concerning imports of certain magnesia bricks originating in the People's 
Republic of China 

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 Articles 9 and 11(2), (4), (5) and (6) thereof, 

After consulting the Advisory Committee, 

Whereas: 

1. 

PROCEDURE 

1.1.  Measures in force 

(1) 

In October 2005, by Regulation (EC) No 1659/20052, the Council imposed definitive 
anti-dumping  duties  ranging  from  2.7%  to  39.9%  on  imports  of  certain  magnesia 
bricks originating in the People's Republic of China ('the PRC'). Following two interim 
reviews  requested  by  Chinese  exporting  producers,  the  Regulation  was  amended  in 
2009 by Council Regulations (EC) No 825/20093 and (EC) No 826/20094. Following 
the  reviews,  the  anti-dumping  duties  imposed  by  Regulation  (EC)  No  1659/2005 
currently range from 0% to 39.9%.  

1.2. 

Request for an expiry review 

(2) 

Following  the  publication  of  a  notice  of  impending  expiry5  of  the  anti-dumping 
measures  in  force  on  imports  of  certain  magnesia  bricks  originating  in  the  PRC,  the 
Commission received on 9 July 2010 a request for review pursuant to Article 11(2) of 
the  basic  Regulation.  The  request  was  lodged  by  the  Magnesia  Bricks  Production 
Defence  Coalition  ('MBPDC')  ('the  applicant')  on  behalf  of  producers  representing  a 

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5 

OJ L 343, 22.12.2009, p. 51. 
OJ L 267, 12.10.2005, p. 1. 
OJ L 240, 11.9.2009, p. 1. 
OJ L 240, 11.9.2009, p. 7. 
OJ C 111, 30.4.2010, p. 29. 

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major proportion, in this case more than 25%, of the total Union production of certain 
magnesia bricks.  

(3) 

The  request  contained  prima  facie  evidence  of  the  likelihood  of  continuation  of 
dumping  and  recurrence  of  injury  which  was  considered  sufficient  to  justify  the 
initiation of an expiry review proceeding. The applicant also claimed that an Austrian-
based company, RHI AG (RHI) should be excluded from the definition of the Union 
industry  on  the  grounds  that  it  had  shifted  its  core  business  activities  to  the  PRC, 
where  it  has  a  related  company  producing  the  product  concerned  and  increased  its 
business activities relating to the product concerned in the PRC.  

1.3. 

Initiation of the expiry review 

(4) 

On  8  October  2010  the  Commission,  after  consultation  of  the  Advisory  Committee, 
announced by a notice published in the Official Journal of the European Union, ('the 
notice of initiation') the initiation of an expiry review proceeding concerning imports 
into the Union of certain magnesia bricks originating in the PRC6. 

1.4. 

Investigation period of the expiry review 

(5) 

2. 

(6) 

(7) 

In  view  of  the  apparent  large  number  of  parties  involved  in  the  proceeding,  the 
Commission  announced  in  the  notice  of  initiation  that  it  may  apply  sampling  in 
accordance  with  Article  17  of  the  basic  Regulation.  In  order  to  enable  it  to  decide 
whether  sampling  was  necessary  and,  if  so,  to  select  a  sample,  exporting  producers, 
importers  and  Union  producers  were  required  to  provide  certain  information  for  the 
period1 July 2009 to 30 June 2010 ('the investigation period' or 'IP').  

PRODUCT CONCERNED AND LIKE PRODUCT 

The  product  concerned  ('PC')  is  chemically  bonded,  unfired  magnesia  bricks,  whose 
magnesia  component  contains  at  least  80%  MgO,  whether  or  not  containing 
magnesite, currently falling within CN codes ex 6815 91 00 and ex 6815 99 00. 

The  like  product  is  defined  as  chemically  bonded,  unfired  magnesia  bricks,  whose 
magnesia  component  contains  at  least  80%  MgO,  whether  or  not  containing 
magnesite, produced and sold in the Union market. 

(8)  Magnesia bricks are manufactured using magnesite minerals as the main raw material. 
They are normally produced to standard chemical specifications which are then altered 
to  fit  the  demands  of  the  end-user.  Magnesia  bricks  are  normally  used  in  steel 
production as a lining for the vessels in which the steel is melted. 

3. 

(9) 

PARTIES CONCERNED BY THE INVESTIGATION 

The Commission officially advised the applicant, other known producers in the Union, 
the  known  exporting  producers  in  the  PRC,  the  representatives  of  the  exporting 
country concerned and known importers and users of the initiation of the proceeding. 
Interested  parties  were  given  the  opportunity  to  make  their  views  known  in  writing 
and  to  request  a  hearing  within  the  time  limit  set  out  in  the  notice  of  initiation.  All 

6 

OJ C 272, 8.10.2010, p. 5. 

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

(10) 

In view of the large number of parties involved sampling was envisaged in the notice 
of initiation for the Chinese exporting producers, unrelated Union importers and Union 
producers.  Of  the  seventy-eight  exporting  producers  contacted  at  initiation  only  four 
provided  the  information  for  the  selection  of  the  sample  requested  in  the  notice  of 
initiation. 

(11)  With regard to Union producers, a total of ten companies, including the producers on 
behalf  of  whom  MBPDC  requested  the  review, submitted  the requested information. 
The Union producers requesting the review are heavily dependent on the supply of a 
major raw material from the PRC and have requested confidential treatment for their 
company names in view of possible retaliatory action. 

(12)  The Commission services had contacted all Union producers of magnesia bricks prior 
to  initiation  to  obtain  information  on  their  production  levels  and  to  determine  their 
support or opposition to the investigation. One of the companies that replied, RHI AG, 
expressed its opposition to the expiry review prior to initiation.  

(13)  Following  initiation,  RHI  claimed  that  the  facts  presented  by  the  applicant  in  the 
request for review, especially in regard to RHI's production volume, were not accurate 
and  that,  on  the  contrary,  RHI  should  be  included  in  the  definition  of  the  Union 
industry as had been done in the original proceeding in 2005. It consequently disputed 
the definition of the Union industry which had led to the initiation of the proceeding 
on the grounds that the requirements of Article 5(4) of the basic Regulation were not 
met, since it is the largest Union producer, accounting for more than 50% of total EU 
production, and is opposed to the initiation.  

4. 

INVESTIGATION 

(14)  As mentioned in recital (3) above, the applicant had considered that RHI AG should 
be  excluded  from  the  definition  of  the  Union  industry  on  the  grounds  that  it  had 
shifted its core business activities to the PRC. In view of this and the fact that RHI AG 
expressed opposition to the review, the Commission asked RHI to provide additional 
information in order to examine whether or not it should be included in the definition 
of  the  Union  industry.  The  requested  information  concerned  the  company’s  business 
activities both in the EU and in the PRC and included data on its production capacity, 
production volumes, sales value and volumes in and outside the EU and the PRC and 
imports  value  and  volume  of  the  product  concerned  in  the  Union  market.  The 
company  provided  the  additional  information  and  an  on-spot  verification  visit  took 
place at the company’s headquarters in Vienna. 

(15) 

In  the  original  investigation  initiated  in  July  2004,  RHI  was  one  of  the  complainant 
Union producers. At that time RHI was also importing the product concerned from its 
related  company  in  the  PRC  and  it  was  examined  whether  the  company  should  be 
excluded from the definition of the Union industry pursuant to Article 4(1)(a) of the 
basic Regulation.  

(16) 

It  is  recalled  that  the  assessment  of  RHI's  situation  was  made  in  Commission 
Regulation  (EC)  No  552/2005  of  11  April  2005  imposing  a  provisional  duty  on 

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imports of certain magnesia bricks originating in the People's Republic of China7 and 
confirmed by Council Regulation (EC) No 1659/2005 of 6 October 2005 imposing a 
definitive anti-dumping duty. For the purpose of the assessment, the following criteria 
were examined: 

–  the  location  of  the  company's  headquarters,  research  and  development  (R&D) 

centre and main production sites; 

–  the volume/value of the product concerned imported from the PRC compared to 

the total sales volume and value; 

–  the impact the imported sales had on the company's total Union sales, in particular 
by comparing the profitability of  RHI’s sales in the EU of the imported product 
concerned with the profitability rates of the cooperating Union producers.  

(17)  At that time it was found that the company's core business was situated in the Union as 
regards  the  product  concerned  (its  headquarters,  R&D  centre  and  biggest  production 
sites were all located in the Union). Moreover, the vast majority of RHI's sales on the 
Union market were produced in the Union and only a minor part was produced in the 
PRC  (5%  of  its  total  sales  volume  in  the  Union)  as  the  production  of  the  related 
company in the PRC was mainly aimed at the fast-growing Asian market. In addition, 
it was found that these imports were resold at prices comparable to those of the Union 
industry and therefore the company was not enjoying substantial beneficial effects, in 
terms  of  profitability,  by  reselling  the  imported  product.  Finally,  it  was  explicitly 
mentioned that RHI’s Union production company was a separate legal entity from its 
Chinese production company. It was found that, although RHI AG was a global group 
with a production site in the PRC constituting a separate legal entity, it still produced 
the vast majority of its magnesia bricks, which were subsequently sold on the Union 
market, at its Union production sites. On these grounds it was concluded that RHI AG, 
which  supported  the  imposition  of  measures  at  that  time,  formed  part  of  the  Union 
industry. 

(18)  During the on-spot verification in the course of the current proceeding, it was found 
that  the  company's  core  business  was  still  situated  in  the  Union.  The  company's 
headquarters, shareholders and R&D centre were located in the Union. The company 
has  five  plants  in  the  Union  producing  the  product  concerned  and  during  the  period 
2005 to 30 June 2010, the end of the investigation period, the production capacity in 
these  plants  increased.  The  figures  provided  by  RHI  concerning  its  production 
capacity in the Union of the like product and the production volumes per plant in the 
investigation period were verified and found to be correct. 

(19)  The company also continued to invest in its EU plants and, for the period 2007 to the 
end of the investigation period, the investments relating to the like product represented 
a significant portion of the company's total investments in the EU.  

(20)  RHI has several related companies in the PRC involved in the production and trading 
of refractory products including magnesia bricks of which RHI Refractories Liaoning 
Co.  Ltd,  a  separate  legal  entity,  produces  the  product  concerned.  This  company  is  a 

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OJ L 93, 12.4.2005, p. 6. 

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joint venture with a Chinese company and started production in 1997. It has only one 
plant.  Although  the  plant’s  production  capacity  increased  substantially  during  the 
period  from  2005  to  the  end  of  the  investigation  period,  it  still  does  not  represent  a 
major  proportion  of  the  RHI's  total  production  capacity  (EU  and  Chinese  plants 
combined). 

(21)  With regard to the imports volume of the product concerned, following the imposition 
of  the  measures  in  2005,  the  company  imported  only  one  small  shipment  from  its 
related company in the PRC in the investigation period, as it is subject to the highest 
anti-dumping duty rate of 39.9%.  

(22)  RHI provided  its sales value and volume for the like product produced in  the  Union 
and for the product concerned produced in the PRC. The company demonstrated that 
the  majority  of  the  sales  of  its  related  company  in  the  PRC  during  the  investigation 
period were for export to countries other than the EU, with the remainder being sold 
on the Chinese market. 

(23)  Concerning  the  impact  the  sales  of  the  imported  product  concerned  had  on  the 
company's total Union sales, the volume of these imports compared to the company’s 
total  sales  volume  in  the  Union  market  was  insignificant  and  thus  the  impact  on  the 
company’s sales negligible.  

(24)  Based  on  the  data  verified  on-spot  it  is  concluded  that  RHI  should  not  be  excluded 
from  the  definition  of  the  Union  industry.  The  company's  situation  has  not  changed 
substantially since the original investigation, when it was found that the three criteria 
were met and concluded that the company was part of the Union industry. 

(25)  The  findings  confirm  that  the  company  still  has  its  core  business  activities 
(headquarters, R&D centre and main production sites) in the EU. The increase in the 
production  capacity  of  the  plant  in  the  PRC  in  the  period  2005  to  the  end  of  the 
investigation period cannot be considered as a shift of the company's core activities to 
the PRC. Therefore the applicant's argument that RHI should be excluded on the basis 
that  it  has  a  related  company  in  the  PRC  producing  the  product  concerned  and 
increasing business activities in the PRC is rejected. 

(26)  The  information  supplied  by  the  applicant  did  not  accurately  reflect  the  situation  of 
RHI  as  a  Union  producer,  in  particular  with  regard  to  its  production  volume  and 
production capacity in the Union, and its production capacity in the People's Republic 
of China. Thus, by including RHI's production volume in the total Union production 
figure the applicant's  output  constitutes less than 50%  of the total Union  production. 
Furthermore,  as  explained  above,  i)  RHI  should  be  considered  as  part  of  the  Union 
industry  within  the  meaning  of  Article  4  of  the  basic  Regulation,  ii)  RHI  produces 
over 50% of total Union production within the meaning of Article 5(4), 2nd sentence, 
of  the  basic  Regulation  and  iii)  RHI  is  opposed  to  the  expiry  review.  Therefore,  the 
proceeding should be terminated.  

5. 

TERMINATION OF THE PROCEEDING 

(27) 

In  the  light  of  the  above,  it  is  considered  that  the  present  proceeding  should  be 
terminated  in  accordance  with  Articles  9  and  11(2),  (5)  and  (6)  of  the  basic 
Regulation.  

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(28)  The applicant was informed accordingly and was given the opportunity to comment. 
The  applicant  strongly  contested  the  conclusions  of  the  Commission  and  expressed 
doubts that RHI’s production during the investigation period exceeded the production 
of the remaining Union producers supporting the complaint. In particular the applicant 
provided  various  press  releases  concerning  RHI’s  activities  to  substantiate  its  claims 
that the company no longer views the production in the Union as its core business and 
that there is a clear shift in the group’s strategy as it announced massive extensions of 
its production capacities  in  the  PRC. However, it was found that such press  releases 
refer to the company’s general overall business activities and do not relate specifically 
to the  product  investigated. The applicant did not provide any other evidence of any 
shift  in  RHI's  core  activities  with  regard  to  the  period  from  2005  to  the  end  of  the 
investigation  period  that  would  lead  to  the  conclusion  that  RHI  should  be  excluded 
from the definition of the Union industry.  

(29) 

(30) 

It  is  therefore  considered  that  the  expiry  review  proceeding  concerning  imports  into 
the Union of certain magnesia bricks originating in the PRC should be terminated.  

In  view  of  the  particular  circumstances  explained  in  recital  26  above,  the  definitive 
anti-dumping  duties  paid  or  entered  in  the  accounts  pursuant  to  Regulation  (EC)  No 
1659/2005 on imports of certain magnesia bricks originating in the People’s Republic 
of China released for free circulation as from 14 October 2010, the date of expiry of 
the anti-dumping measures, should be repaid or remitted. 

(31)  Repayment  or  remission  must  be  requested  from  national  customs  authorities  in 

accordance with applicable customs legislation.  

(32) 

In  the  view  of  the  circumstances  described  above  in  particular  in  recital  21,  the 
Commission  will  monitor  the  export  and  import  flows  of  the  product  concerned  as 
well  as  the  relevant  CN  Codes.  Should  the  flows  appear  to  change,  the  Commission 
will give consideration to the action to be taken. 

6. 

TERMINATION OF THE 'NEW EXPORTER' REVIEW 

(33)  On 27 May 2010 the Commission received an application for a 'new exporter' review 
pursuant to Article 11(4) of the basic Regulation. The application was lodged by TRL 
China Ltd ('TRL'), an exporting producer in the People's Republic of China. 

(34)  TRL claimed that it operated under market economy conditions as defined in Article 
2(7)(c)  of  the  basic  Regulation  or  alternatively  claimed  individual  treatment  in 
conformity with Article 9(5) of the basic Regulation. It further claimed 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 2003 to 31 March 
2004  ('the  original  investigation  period')  and  that  it  was  not  related  to  any  of  the 
exporting  producers  of  the  product  which  are  subject  to  the  anti-dumping  measures 
mentioned above at recital (1). 

(35)  TRL further claimed that it had begun exporting the product concerned to the Union 

after the end of the original investigation period. 

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(36)  On  28  September  2010  the  Commission,  after  consultation  of  the  Advisory 
Committee, announced, by Commission Regulation (EU) No 850/20108 published in 
the Official Journal of the European Union, the initiation of a 'new exporter' review of 
Council  Regulation  (EC)  No  1659/2005  imposing  a  definitive  anti-dumping  duty  on 
imports of certain magnesia bricks originating in the PRC, the repeal of the duty with 
regard to imports from TRL and the subjection of these imports to registration. 

(37)  The investigation period for the 'new exporter' review was from 1 July 2009 to 30 June 

2010.  

(38) 

In  view  of  the  termination  of  the  expiry  review  and  given  the  fact  that  TRL  did  not 
import  the  product  concerned  between  the  date  of  the  entry  into  force  of  the 
Commission Regulation announcing the initiation of the 'new exporter' review and the 
date  of  expiry  of  the  anti-dumping  measures  (at  the  end  of  13  October  2010),  it  is 
considered that the 'new exporter' review concerning imports into the Union of certain 
magnesia bricks originating in the PRC should therefore also be terminated. 

(39) 

Interested  parties  were  given  the  opportunity  to  make  their  views  known  and  to 
request a hearing within the time limit set out in the notice of initiation,  

HAS ADOPTED THIS REGULATION: 

Article 1 

The  anti-dumping  measures  concerning  imports  of  chemically  bonded,  unfired  magnesia 
bricks,  whose  magnesia  component  contains  at  least  80%  MgO,  whether  or  not  containing 
magnesite, originating in the People's Republic of China, currently falling within CN codes ex 
6815  91  00  and  ex  6815  99  00,  are  hereby  repealed  and  the  proceeding  concerning  these 
imports is terminated. 

Article 2 

The definitive anti-dumping duties paid or entered in the accounts pursuant to Article 1(2) of 
Regulation  (EC)  No  1659/2005  on  imports  of  certain  magnesia  bricks  originating  in  the 
People's  Republic  of  China  released  for  free  circulation  as  from  14  October  2010  shall  be 
repaid or remitted. 

Repayment and remission shall be requested from national customs authorities in accordance 
with applicable customs legislation. 

The 'new exporter' review initiated by Regulation (EU) No 850/2010 is hereby terminated.  

Article 3 

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OJ L 253, 28.9.2010, p. 42. 

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The  customs  authorities  are  hereby  directed  to  cease  the  registration  of  imports  carried  out 
pursuant to Article 3 of Regulation (EU) No 850/2010. 

Article 4 

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

Article 5 

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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