Proposal for a COUNCIL REGULATION terminating the partial interim review concerning the anti-dumping measures on imports of certain polyethylene terephthalate (PET) originating in India
Date: 2011-08-09
Institutions: European Commission
Subjects: India, anti-dumping measure, import (EU), plastics

EUROPEAN COMMISSION 

Brussels, 9.8.2011 
COM(2011) 486 final 

2011/0219 (NLE) 

Proposal for a 

COUNCIL REGULATION 

terminating the partial interim review concerning the anti-dumping measures on 
imports of certain polyethylene terephthalate (PET) originating in India 

 
 
  
 
EXPLANATORY MEMORANDUM 

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  proceeding  concerning 
imports of polyethylene terephthalate originating, inter alia, 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 

The  measures  currently  in  force  were  imposed  by  Council  Regulation  (EC)  No 
192/2007 on imports of certain polyethylene terephthalate (PET) originating, inter alia, 
in India, as amended by Council Regulation (EC) No 1286/2008. 

Consistency with the other policies and objectives of the Union 

Not applicable. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

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  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

On 10 June 2010, the Commission initiated an interim review of the measures in force 
in respect of polyethylene terephthalate originating in India further to a request made 
by an Indian exporting producer. The request was based on prima facie evidence that 

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the circumstances on the basis of which measures were established have changed; i.e. 
there  have  been  significant  changes  in  the  production  costs  of  the  company  and  that 
these changes have led to a substantially lower dumping margin since the imposition of 
the  existing  measures  and  therefore  the  continued  imposition  of  measures  at  the 
existing levels would no longer be necessary to offset dumping. 

The  attached  proposal  for  a  Council  Regulation  is  based  on  the  findings  of  the 
investigation carried out which is limited in scope to the examination of dumping and 
as far as the applicant is concerned. 

The  investigation  found  that,  contrary  to  the  applicant's  claims,  normal  value  had 
increased,  not  decreased.  Furthermore,  prices  to  the  Union  were  influenced  by  the 
company's price undertaking with the Commission and because prices to other export 
markets  were  consistently  lower,  a  newly  calculated  dumping  margin  would  thus  not 
be of a lasting nature.  

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
that would terminate the investigation. 

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 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:  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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2011/0219 (NLE) 

Proposal for a 

COUNCIL REGULATION 

terminating the partial interim review concerning the anti-dumping measures on 
imports of certain polyethylene terephthalate (PET) originating in India 

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(3) thereof, 

Having  regard  to  the  proposal  submitted  by  the  European  Commission  ('the  Commission') 
after consulting the Advisory Committee, 

Whereas: 

1. 

PROCEDURE 

1.1.  Measures in force 

(1) 

By  Regulation  (EC)  No  2604/20002,  the  Council  imposed  a  definitive  anti-dumping 
duty on imports of polyethylene terephthalate (‘PET’) originating, inter alia, in India 
('the  country  concerned')  ('original  investigation').  Following  an  expiry  review,  the 
Council, by Regulation (EC) No 192/20073 imposed a definitive anti-dumping duty for 
a further period of five years. The anti-dumping measures were amended by Council 
Regulation  (EC)  No  1286/20084  following  a  partial  interim  review  ('last  review 
investigation'). The measures were set at the level of the injury elimination level and 
consist of specific anti-dumping duties. The rate of the duty ranges between 87,5 and 
200,9 EUR/tonne for individually named Indian producers with a residual duty rate of 
153,6 EUR/tonne imposed on imports from other producers ('current duties'). 

(2) 

By Regulation (EC) No 2603/20005, the Council imposed a definitive countervailing 
duty on imports of polyethylene terephthalate (‘PET’) originating, inter alia, in India. 
Following an expiry review, the Council, by Regulation (EC) No 193/20076 imposed a 
definitive  countervailing  duty  for  a  further  period  of  five  years.  The  countervailing 

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OJ L 343, 22.12.2009, p. 51. 
OJ L 301, 30.11.2000, p. 21. 
OJ L 59, 27.2.2007, p. 1. 
OJ L 340, 19.12.2008, p. 1. 
OJ L 301, 30.11.2000, p. 1. 
OJ L 59, 27.2.2007, p. 34. 

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measures were amended by Council Regulation (EC) No 1286/2008 following the last 
review investigation. The countervailing measures consist of a specific duty. The rate 
of  the  duty  ranges  between  0  and  106,5  EUR/tonne  for  individually  named  Indian 
producers with a residual duty rate of 69,4 EUR/tonne imposed on imports from other 
producers ('current countervailing measures'). 

(3) 

By  Commission  Decision  2000/745/EC  of  29  November  20007  the  Commission 
accepted undertaking offers of several exporting producers setting a minimum import 
price ('MIP') ('undertaking'). 

1.2. 

Request for a review  

(4) 

(5) 

A request for a partial interim review ('the present review') pursuant to Article 11(3) of 
the basic Regulation was lodged by Reliance Industries Limited, an Indian exporting 
producer  of  PET  ('the  applicant'  or  ‘Reliance’).  The  request  was  limited  in  scope  to 
dumping and to the applicant. The applicant at the same time also requested the review 
of the current countervailing measures. The residual anti-dumping and countervailing 
duties  are  applicable  to  imports  of  products  produced  by  Reliance  and  sales  of  the 
applicant to the Union are governed by the undertaking.  

The  applicant  provided  prima  facie  evidence  that  the  continued  application  of  the 
current  duty  at  its  current  level  was  no  longer  necessary  to  offset  dumping.  In 
particular,  the  applicant  claimed  that  there  have  been  significant  changes  in  the 
production  costs  of  the  company  and  that  these  changes  have  led  to  a  substantially 
lower dumping margin since the imposition of the current duties. A comparison made 
by  the  applicant's  of  its  domestic  prices  and  its  export  prices  to  the  Union  had 
suggested that the dumping margin would be substantially lower than the current level 
of current duties. 

1.3. 

Initiation of a partial interim review 

(6) 

Having  determined,  after  consulting  the  Advisory  Committee,  that  the  request 
contained sufficient prima facie evidence to justify the initiation of the partial interim 
review, the Commission announced, by a notice of initiation published in the Official 
Journal  of  the  European  Union8  on  10  June  2010,  the  initiation  of  a  partial  interim 
review pursuant to Article 11(3) of the basic Regulation limited to the examination of 
dumping as far as the applicant is concerned. 

1.4. 

Product concerned and like product  

(7) 

(8) 

The product under review is polyethylene terephthalate (PET) having a viscosity of 78 
ml/g  or  higher,  according  to  the  ISO  Standard  1628-5,  currently  falling  within  CN 
code 3907 60 20 and originating in India ('the product concerned').  

The  investigation  revealed  that  the  product  concerned  produced  in  India  and  sold  to 
the Union is identical in terms of physical and chemical characteristics and uses to the 
product produced and sold on the domestic market in India. It is therefore concluded 
that  products  sold  on  the  domestic  and  export  markets  are  like  products  within  the 

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OJ L 301, 30.11.2000, p.88. 
OJ C 151, 10.6.2010, p. 15. 

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meaning of Article 1(4) of the basic Regulation. Since the present review was limited 
to the determination of dumping as far as the applicant is concerned, no conclusions 
were reached with regard to the product produced and sold by the Union industry on 
the Union market. 

1.5. 

Parties concerned 

(9) 

The Commission officially informed the applicant, the representatives of the exporting 
country  and  the  association  of  Union  producers  about  the  initiation  of  the  review. 
Interested  parties  were  given  the  opportunity  to  make  their  views  known  in  writing 
and to request a hearing within the time limit set in the notice of initiation. 

(10)  All interested parties, who so requested and showed that there were particular reasons 

why they should be heard, were granted a hearing. 

(11) 

In  order  to  obtain  the  information  deemed  necessary  for  its  investigation,  the 
Commission  sent  a  questionnaire  to  the  applicant  and  received  a  reply  within  the 
deadline set for that purpose.  

(12)  The  Commission  sought  and  verified  all  information  deemed  necessary  for  the 
determination  of  dumping.  The  Commission  carried  out  a  verification  visit  at  the 
premises of the applicant in Mumbai, India. 

1.6. 

Review investigation period 

(13)  The investigation of dumping covered the period from 1 April 2009 to 31 March 2010 

('the review investigation period' or 'RIP'). 

2. 

RESULTS OF THE INVESTIGATION  

2.1. 

Lasting nature of the alleged change of circumstances during the RIP 

(14) 

In accordance with Article 11(3) of the basic Regulation, it was examined whether the 
circumstances  with  regard  to  dumping  have  changed  significantly  and  whether  such 
change was of a lasting nature. 

(15)  The applicant claimed that the changes in its normal value and export prices since the 
original investigation establishing its dumping margin were the result of a significant 
change  in  production  costs.  The  change  in  its  cost  of  production  was  claimed  to  be 
linked  to  the  reduction  of  customs  duties  applicable  to  imports  in  India  of  the  basic 
raw  material  used  in  its  production  process.  Furthermore,  the  applicant  also  claimed 
that  the  reduction  of  customs  duties  led  to  a  reduction  in  export  incentives  which  it 
claimed resulted in changed domestic sales prices used to determine the normal value. 

(16)  However,  it  was  found  that,  in  spite  of  the  reductions  of  custom  duties  and  export 
incentives,  the  domestic  sales  prices  of  the  company  used  to  determine  the  normal 
value  in  the  RIP  were  higher  than  the  prices  used  in  the  original  investigation 
establishing the applicant's dumping margin. The higher domestic sales prices resulted, 
inter alia, from the increased cost of certain raw materials and other inputs. 

(17)  As  far  as  export  prices  to  the  EU  in  the  RIP  were  concerned,  they  were  determined 
pursuant  to  Article  2(8)  and  (9)  of  the  basic  Regulation.  However,  it  had  to  be 

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analysed  in  particular  whether  the  existence  of  a  price  undertaking  under  which  the 
applicant was obliged to sell its product to the Union market at a price above a MIP set 
for each month, during the RIP has influenced the export prices of the applicant. It was 
concluded,  for  the  reasons  set  out  below,  that  the  exports  to  the  EU  were  indeed 
influenced  by  the  price  undertaking.  In  this  regard,  given  that  the  applicant  had  to 
comply with the undertaking MIP obligations, it chose not to export to the EU during 
specific months of the RIP when its export prices to other export markets were below 
the MIP. 

(18) 

It was observed that the applicant sold its product to the Union only during six months 
of the RIP. On the other hand, it sold products throughout the period to other export 
markets  where  it  did  not  have  to  comply  with  the  obligation  set  in  the  price 
undertaking.  It  was  noted  that  export  prices  to  third  countries  in  the  months  during 
which  the  applicant  did  not  export  to  the  EU  were  significantly  lower  than  the 
established  MIP.  Therefore,  in  the  light  of  the  above,  it  can  be  reasonably  assumed 
that the applicant's sole reason for not selling products to the Union in the remaining 
months was that it had to comply with its undertaking obligations and could not sell 
below the MIP set.  

(19)  The  applicant  contested  the  finding  that  the  reason  for  not  selling  products  to  the 
Union  market  was  linked  to  the  existing  undertaking.  The  applicant  argued  that  in 
regard to its sales in the RIP to other large export markets there were months during 
which  there  were  no  sales  and  thus  irregular  sales  were  not  a  specific  feature  of  the 
Union market. It also claimed that a monthly comparison of the import prices of the 
product  concerned  to  the  EU  from  all  other  exporting  countries  and  /  or  the  import 
prices  of  the  product  concerned  originating  in  India  with  the  monthly  MIP  of  the 
company would show that Reliance would have been able to sell products to the EU in 
all months of the RIP without breaching its undertaking obligations.  

(20)  The applicant's arguments cannot be accepted because, on the one hand, the company 
focussed  its  activity  on  selected  individual  markets  which  are  driven  by  their  own 
market specificities and do not give indications as to why the company did not sell to 
the  EU.  On  the  other  hand,  the  comparisons  made  by  the  applicant  were  based  on 
overall  statistical  data  whereas  the  findings  of  the  present  review  are  based  on 
company-specific data which is more relevant and reliable to draw conclusions from. 
The arguments presented were also not fully valid e.g. in some months overall import 
prices  to  the  Union  were  indeed  higher  than  the  MIP,  while  in  other  periods  overall 
import  prices  were  lower  than  the  MIP,  therefore  no  general  conclusions  could  be 
drawn from them. However, it is undisputed that the applicant had sales to the Union 
only  in  the  months  when  the  overall  import  prices  to  the  Union  were  at  the  level  or 
higher than the MIP.  

(21)  The applicant's argument that it would have been able, should it have wanted, to sell 
products on the Union market during the six months period it was selling products on 
other export markets at a price lower than its MIP is rejected as speculative and non 
substantiated The applicant did not put forward any other argument as to the reasons 
why it did not sell products to the EU during those six months while at the same time 
it was selling the same products on other export markets at a price lower than its MIP.. 
Therefore, it was concluded that the applicant did not sell products to the Union during 
a  certain  period  because  of  the  need  to  comply  with  its  undertaking  obligations.  In 

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consequence,  the  export  prices  charged  on  the  Union  market  in  the  RIP  are  not 
reliable. 

(22)  A comparison was also made between the sales' prices of the applicant to the Union 
market and the prices achieved on other export markets for which no price undertaking 
obligation  existed.  It  was  observed  that  export  prices  to  those  markets  without  price 
obligations were consistently lower throughout the RIP.  

(23)  The applicant questioned the conclusions drawn from the comparison of prices to the 
Union and other exports markets claiming that when analysed on a country-by-country 
level,  there  are  several  other  export  markets  where  prices  charged  were  above  the 
prices charged on the EU market. However, in this respect, the comparison of average 
prices  is  more  relevant  than  the  individual  differences  on  a  country-by-country 
comparison  which  will  be  linked  to  the  size  as  well  as  to  distinctive  competitive 
factors at play on those individual markets.  

(24) 

In consequence, the export prices on third markets reflect better the company's normal 
pricing behaviour. The price differential between export prices to the Union and export 
prices  to  the  rest  of  the  world  indicates  that  there  are  strong  economic  arguments  to 
induce  Reliance  to  sell  at  lower  prices  to  the  EU  if  the  MIP  would  not  be  in  place. 
Under these circumstances it is considered that any newly calculated dumping margin 
based on the export prices to the EU in the RIP would thus be set on the basis of prices 
that  have  not  changed  significantly  and  in  a  lasting  manner.  The  same  conclusion 
applies to the applicant's claim, as mentioned in recital (5) above, that a comparison of 
its domestic prices and its export prices to the Union would show a dumping margin 
lower than the level of current duties 

(25) 

In  light  of  the  above,  the  condition  set  in  Article  11(3)  of  the  basic  Regulation  that 
circumstances with regard to dumping changed significantly is not met. Therefore the 
continued  imposition  of  the  measures  at  their  current  level  is  necessary  to  offset 
dumping. 

(26)  After disclosure, the applicant insisted that its prices charged on the Union market are 
fully  reliable.  Since  these  export  prices  increased  significantly  between  the  original 
investigation  period  and  the  RIP,  the  company's  export  behaviour  should  be 
considered  also  to  have  changed  significantly  and  lastingly  during  this  period. 
Therefore  the  company's  dumping  margin  would  allegedly  also  have  decreased 
significantly and in a lasting manner.  

(27) 

It  furthermore  argued  that  the  lasting  change  in  circumstances  is  not  necessarily  the 
determining  element  for  the  assessment  to  be  made after  initiating a review but it is 
more  relevant  whether  the  continued  imposition  of  the  duty  is  necessary  to  offset 
dumping.  It  referred  to  the  fundamental  principle  set  out  in  Article  11(1)  and  of  the 
basic  Regulation  and  Article  11.1  of  the  WTO  Anti-dumping  Agreement  that  anti-
dumping measures shall remain in force only as long as and to the extent necessary to 
counteract dumping which is causing injury. In this respect, the applicant claimed that 
the analysis of the necessity should be a prospective assessment that would require at 
the  very  least  the  likely  or  probable  recurrence  of  dumping  at  the  level  previously 
established. 

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(28)  Article  11(1)  of  the  basic  Regulation  provides  that  "An  anti-dumping  measure  shall 
remain in force only as long as, and to the extent that, it is necessary to counteract the 
dumping  which  is  causing  injury".  This  principle  is  carried  through  to  treatment  of 
interim  reviews,  such  as  in  the  case  at  hand,  where  Article  11(3)  of  the  basic 
Regulation provides, inter alia, that "[…]An interim review shall be initiated where the 
request contains sufficient evidence that the continued imposition of the measure is no 
longer  necessary  to  offset  dumping  and/or  that  the  injury  would  be  unlikely  to 
continue  or  recur  if  the  measure  were  removed  or  varied[…]."  The  afore-mentioned 
provision  sets  the  benchmark  to  be  met  where  an  interested  party  considers  that  the 
level of measures is too low or too high and consequently requests a review of those 
measures. Once such a review is initiated, Article 11(3) of the basic Regulation goes 
on to explicitly provide that "in carrying out investigations pursuant to this paragraph, 
the  Commission  may,  inter  alia,  consider  whether  the  circumstances  with  regard  to 
dumping […] have changed significantly […]. In these respects, account shall be taken 
in  the  final  determination  of  all  relevant  and  duly  documented  evidence".  Therefore 
Article 11(3) provides for an additional assessment criterion (i.e. a significant change 
in  circumstances)  in  case  of  interim  reviews  that  should  be  looked  at  during  the 
investigation  in  addition  to  the  initiation  requirement  (i.e.  are  the  measures  at  the 
current level still necessary) as claimed by the applicant. 

(29) 

the 

lasting  nature  of 

It should also be noted that it is standard practice in interim review investigations to 
examine 
the  changed  circumstances  found  during  an 
investigation.  Indeed,  in  this  respect,  the  case  law  of  the  General  Court  of  the 
European  Union9  confirms  that  "when  assessing  the  need  to  continue  existing 
measures the institutions have a wide discretion, which includes the option of carrying 
out  a  prospective  assessment  of  the  pricing  policy  of  the  exporters  concerned".  The 
evidence  at  hand  shows  that  the  export  prices  charged  by  Reliance  on  the  Union 
market do not reflect the applicant's actual pricing policy and therefore, as concluded 
in recital (21) above, the export prices charged on the EU market in the RIP are not 
reliable and consequently any newly calculated dumping margin based on these prices 
would thus be set on the basis of prices that have not changed significantly and in a 
lasting manner, as stated in recital (24) above.  

(30)  Despite the conclusion that export prices to the EU have not changed significantly and 
in  a  lasting  manner,  consideration  was  given  to  the  applicant's  arguments  and  to 
whether the measures at their current level are still necessary to counteract dumping. 
In this regard, the applicant claimed that as its dumping margin would be significantly 
below that found in the original investigation and its export behaviour in other markets 
would  confirm  that  the  change  in  the  dumping  margin  reflects  the  trend  that  can 
reasonably  be  expected  in  the  future,  the  current  level  of  measures  is  manifestly 
excessive.  However,  these  arguments  were  not  found  to  be  supported  by  the  facts. 
First, concerning the applicant's export behaviour on other markets it was found that, 
contrary  to  the  claim  in  the  applicant's  request,  the  prices  to  these  markets  were,  on 
average,  almost  10%  lower  than  those  to  the  EU.  These  other  third  country  export 
markets  comprise  a  number  of  countries  of  different  market  size  with  some  of  them 
unlikely  to  have  domestic  production  of  PET.  These  markets  are  hence  defined  by 
their  own  individual  characteristics  of  competition  leading  to  prices  and  trends 
different  from  those  on  the  EU  market.  Second,  in  light  of  these  findings,  even  if  it 

9 

Para 48 of the judgement in case T-143/06 

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were found that the current level of measures should be changed on the grounds that it 
was no longer necessary to counteract dumping, it is not possible to determine with a 
reasonable degree of accuracy what would be the appropriate level in the absence of 
reliable export prices which result from and reflect the normal conditions on the Union 
market.  

(31)  Finally the applicant considered that an adjustment could be made in accordance with 
Article  2(10)  and  in  particular  with  Article  2(10)(k)  of  the  basic  Regulation  for 
"differences  in  other  factors  […]  if  it  is  demonstrated  that  they  affect  price 
comparability as required under this paragraph". 

(32)  Given the conclusion reached above that export prices did not change in a significant 
and lasting manner, it is not possible to establish a dumping margin. For this reason, 
the claim for an adjustment is irrelevant and thereby rejected. 

3. 

TERMINATION OF THE INVESTIGATION 

(33) 

In  view  of  the  findings  that  circumstances  with  regard  to  dumping  did  not  change 
significantly  and  lastingly,  it  is  considered  that  the  present  review  should  be 
terminated without amending the level of the duty for the applicant. Therefore the anti-
dumping measures imposed by Council Regulation (EC) No 1286/2008 on imports of 
PET produced by Reliance should remain unchanged. 

4. 

DISCLOSURE 

(34)  The  applicant  as  well  as  the  other  parties  concerned  were  informed  of  the  essential 
facts and considerations on the basis of which it was intended to propose to terminate 
the present partial interim review. Comments received were not such as to change the 
above conclusion. 

5. 

FINAL PROVISION 

(35)  This  review  should  therefore  be  terminated  without  any  amendment  to  Regulation 

(EC) No 192/2007.  

HAS ADOPTED THIS REGULATION: 

Article 1 

The  partial  interim  review  of  the  anti-dumping  measures  applicable  to  imports  of 
polyethylene terephthalate currently falling within CN code 3907 60 20 and originating, inter 
alia, in India, is hereby terminated without amending the measures 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 

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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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