Proposal for a COUNCIL REGULATION terminating the partial interim review pursuant to Article 11(3) of Regulation (EC) No 1225/2009 of the anti-dumping measures applicable to imports of ferro-silicon originating, inter alia, in Russia
Date: 2011-12-21
Institutions: European Commission
Subjects: Russia, anti-dumping duty, dumping, import, originating product, semi-metal, third country

EUROPEAN COMMISSION 

Brussels, 21.12.2011 
COM(2011) 932 final 

2011/0464 (NLE) 

Proposal for a 

COUNCIL REGULATION 

terminating the partial interim review pursuant to Article 11(3) of Regulation (EC) No 
1225/2009 of the anti-dumping measures applicable to imports of ferro-silicon 
originating, inter alia, in Russia 

 
 
  
 
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  partial  interim  review  concerning 
imports of ferro-silicon originating in Russia. 

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 

By Regulation (EC) No 172/2008 the Council imposed definitive anti-dumping measures on 
imports of ferro-silicon originating, inter alia, in Russia. 

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  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. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

On 18 February 2010, the Commission initiated a partial interim review limited to dumping 
and  to  the  applicant  Chelyabinsk  Electrometallurgical  Integrated  Plant  and  its  related 

EN 

2 

   EN 

 
company Joint Stock Company (JSC) Kuznetsk Ferroalloy Works as regards the anti-dumping 
measures  concerning  imports  of  ferro-silicon  originating  in  Russia.  The  outcome  of  the 
review  shows  a  continuation  of  high  dumping.  Moreover,  it  is  concluded  that  the  changed 
circumstances resulting in that high dumping margin are not of a lasting nature. 

Therefore,  it  is  proposed  that  the  Council  adopts  the  attached  proposal  for  a  Regulation 
terminating the partial interim review of the anti-dumping measures applicable to imports of 
ferro-silicon  originating  in  Russia  without  amending  the  measures  in  force.  The  Regulation 
should be published in the Official Journal of the European Union no later than  25 January 
2012. 

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  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 instrument: Council Regulation. 

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. 

5. 

OPTIONAL ELEMENTS  

The proposal has no optional elements. 

EN 

3 

   EN 

 
2011/0464 (NLE) 

Proposal for a 

COUNCIL REGULATION 

terminating the partial interim review pursuant to Article 11(3) of Regulation (EC) No 
1225/2009 of the anti-dumping measures applicable to imports of ferro-silicon 
originating, inter alia, in Russia 

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  after  consulting  the 
Advisory Committee, 

Whereas: 

1. 

Procedure 

1.1.  Measures in force 

(1) 

The Council, by Regulation (EC) No 172/20082 (‘the original Regulation’), imposed a 
definitive  anti-dumping  duty  on  imports  of  ferro-silicon  originating,  inter  alia,  in 
Russia. The measures consist of an ad valorem duty at a rate ranging from 17,8% to 
22,7%. The investigation which led to this Regulation will be referred to below as "the 
original investigation".  

1.2. 

Request for a review 

(2) 

On 30 November 2009, the European Commission (‘Commission’) received a request 
for  a  partial  interim  review  pursuant  to  Article  11(3)  of  the  basic  Regulation  (‘the 
interim  review’).  The  request,  lodged  by  an  exporting  producer  from  Russia,  Joint 
Stock  Company  (JSC)  Chelyabinsk  Electrometallurgical  Integrated  Plant  and  its 
related company Joint Stock Company (JSC) Kuznetsk Ferroalloy Works (hereinafter 
referred  to  jointly  as  ‘the  applicant’)  was  limited  in  scope  to  the  examination  of 
dumping as far as the applicant is concerned. The anti-dumping duty rate applicable to 
the applicant is 22,7%, based on the applicant's dumping margin. 

1 
2 

OJ L 343, 21.12.2009, p. 51.  
OJ L 55, 28.2.2008, p.6. 

EN 

4 

   EN 

 
                                                 
(3) 

(4) 

In  its  request,  the  applicant  claimed  that,  as  far  as  the  applicant  is  concerned,  the 
circumstances on the basis of which the existing measures were imposed have changed 
and that these changes are of lasting nature.  

The  applicant  provided  prima  facie  evidence  showing  that,  as  far  as  the  applicant  is 
concerned,  the  continued  imposition  of  the  measure  at  its  current  level  is  no  longer 
necessary  to  offset  dumping.  According  to  the  information  submitted  in  the  request, 
the  comparison  of  the  applicant's  domestic  prices  and  its  export  prices  to  the  Union 
indicated that the dumping margin appeared to be substantially lower than the current 
level of the measure. 

1.3. 

Initiation of a review 

(5) 

Having determined, after consulting the Advisory Committee, that sufficient evidence 
existed  for  the  initiation  of  an  interim  review,  the  Commission  decided  to  initiate  a 
partial interim review in accordance with Article 11(3) of the basic Regulation, limited 
in  scope  to  the  examination  of  dumping  as  far  as  the  applicant  is  concerned.  The 
Commission published a notice of initiation on 27 October 2010 in the Official Journal 
of the European Union3 (‘Notice of initiation’) and commenced an investigation. 

1.4. 

Product concerned and like product 

(6) 

(7) 

The  product  concerned  by  the  interim  review  is  the  same  as  that  in  the  original 
investigation,  i.e.  ferro-silicon,  originating  in  Russia,  currently  falling  within  CN 
codes 7202 21 00, 7202 29 10 and 7202 29 90.  

The product produced and sold in Russia and that exported to the Union have the same 
basic physical and technical characteristics and uses and are therefore considered to be 
alike within the meaning of Article 1(4) of the basic Regulation. 

1.5. 

Parties concerned 

(8) 

(9) 

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

The Commission sent questionnaires to the applicant and received a reply within the 
deadline set for that purpose. The Commission sought and verified all the information 
it  deemed  necessary  for  the  determination  of  dumping,  and  verification  visits  were 
carried out at the following locations: 

– 

– 

Joint  Stock  Company  JSC  Chelyabinsk  Electrometallurgical  Integrated  Plant 
("CHEM"), Chelyabinsk, Russia; 

Joint  Stock  Company  JSC  Kuznetsk  Ferroalloy  Works  ("KF"),  Kuznetsk, 
Russia; and 

3 

OJ C 290, 27.10.2010, p. 15. 

EN 

5 

   EN 

 
                                                 
– 

RFA  International  LP  ("RFAI")  in  Mishawaka,  USA  &  Nieuwdorp  Zld,  The 
Netherlands. 

1.6. 

Investigation period 

(10)  The investigation covered the period from 1 October 2009 to 30 September 2010 (the 

‘review investigation period or ‘RIP’).  

2. 

Lasting nature of changed circumstances 

2.1. 

Introduction 

(11)  As  a  starting  point,  it  is  recalled  that,  according  to  the  case-law  of  the  EU  courts4, 
when  assessing  the  need  to  continue  existing  measures  in  a  review  based  on 
Article 11(3)  of  the  basic  Regulation,  the  Institutions  have  a  wide  discretion,  which 
includes the option of carrying out a prospective assessment  of  the pricing policy of 
the  exporters  concerned.  It  is  in  this  context  that  the  Institutions  must  examine  the 
applicant's arguments why the circumstances of its situation have changed in a lasting 
manner, allegedly justifying a reduction or even removal of the duty.  

(12)  The applicant claimed that changed circumstances could be reasonably said to be of a 
lasting nature and thus the level of measures should be reduced or the measures should 
be repealed altogether as far as the applicant is concerned, as it was unlikely that in the 
foreseeable  future  there  would  be  a  recurrence  of  dumped  imports  at  all  or  at  levels 
similar to those established in the original investigation.  

2.2. 

Regarding  the  question  whether  the  applicant  was  still  dumping  on  the  EU 
market during the RIP5 

(13)  Before  replying  to  the  various  arguments  of  the  applicant  on  the  (allegedly)  lasting 
nature  of  the  (allegedly)  changed  circumstances,  it  is  useful  to  first  describe  the 
Institutions' considerations regarding the question whether the applicant may still have 
been dumping on the EU market during the RIP. 

2.2.1.  Normal value 

(14)  For the determination of normal value, it was first established whether the company's 
total  volume  of  domestic  sales  of  the  like  product  to  independent  customers  was 
representative  in  comparison  with  its  total  volume  of  export  sales  to  the  Union.  In 
accordance with Article 2(2) of the basic Regulation domestic sales are considered to 
be  representative  when  the  total  domestic  sales  volume  is  at  least  5  %  of  the  total 
volume of sales of the product concerned to the Union. It was found that the overall 
sales by the company of the like product on the domestic market were representative. 

4 

5 

See, in particular, judgment of 17 November 2009 in case T-143/06 MTZ Polyfilms Ltd v. Council of 
the European Union ECR-II p. 4133. 
As  will  be  explained  below,  normal  value,  export  price  and  their  comparison  were  first 
calculated/performed for CHEMK and KF, separately. To clarify this, in this part, the word company is 
sometimes used rather than "applicant", since "applicant", as stated above, refers to CHEMK and KF 
jointly.  

EN 

6 

   EN 

 
                                                 
(15)  For  each  product  type  sold  by  the  company  on  its  domestic  market  and  found  to  be 
directly  comparable  with  the  product  type  sold  for  export  to  the  Union,  it  was 
established whether domestic sales were sufficiently representative for the purposes of 
Article 2(2) of the basic Regulation. Domestic sales of a particular product type were 
considered sufficiently representative when the total volume of that product type sold 
on the domestic market to independent customers during the RIP represented at least 
5% of the total sales volume of the comparable product type exported to the Union. 

(16) 

It  was  also  examined  whether  the  domestic  sales  of  each  product  type  could  be 
regarded 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  domestic  sales  to 
independent  customers  on  the  domestic  market  which  were  profitable  for  each 
exported type of the product concerned during each of the periods. 

(17)  For  those  product  types  where  more  than  80%  by  volume  of  sales  on  the  domestic 
market  of  the  product  type  were  above  cost  and  the  weighted  average  sales  price  of 
that type was equal to or above the unit cost of production, normal value, by product 
type, was calculated as the weighted average of the actual domestic prices of all sales 
of the type in question, irrespective of whether those sales were profitable or not. 

(18)  Where the volume of profitable sales of a product type represented 80% or less of the 
total sales volume of that type, or where the weighted average price of that type was 
below  the  unit  cost  of  production,  normal  value  was  based  on  the  actual  domestic 
price,  which  was  calculated  as  a  weighted  average  price  of  only  the  profitable 
domestic sales of that type made during each of the periods. 

(19)  Wherever domestic prices of a particular product type sold by the company could not 
be  used  in  order  to  establish  normal  value,  the  normal  value  was  constructed  in 
accordance with Article 2(3) of the basic Regulation. 

(20)  When constructing normal value pursuant to Article 2(3) of the basic Regulation, the 
amounts for selling, general and administrative costs and for profits have been based, 
pursuant to the chapeau of Article 2(6), of the basic Regulation, i.e. on the actual data 
pertaining  to  the  production  and  sales,  in  the  ordinary  course  of  trade,  of  the  like 
product, by the company. 

2.2.2.  Export price 

(21)  The company's export sales to the EU are made through the Swiss branch of its related 
company RFAI which during the RIP performed all import functions in relation to the 
goods entering into free circulation in the Union, i.e. that of a related importer. 

(22)  The  export  price  was  thus  established  in  accordance  with  Article  2(9)  of  the  basic 
Regulation, on the basis of prices at which the imported products were first resold to 
an independent buyer, adjusted for all costs, incurred between importation and resale, 
as  well  as  a  reasonable  margin  for  SG&A  and  for  profits.  For  this  purpose,  in  the 
absence of new information from independent importers concerning profits accruing, 
use was made of the profit rate applied in the original investigation, namely 6%.  

EN 

7 

   EN 

 
(23)  The applicant claimed that RFAI should be treated as part of the same single economic 
entity (SEE) and that consequently when determining the export prices no deduction 
should be made for SG&A and profit of RFAI.  

(24)  This claim can not be accepted for the following reasons: 

– 

– 

– 

– 

– 

– 

– 

– 

the two exporting producers have their own export sales department; 

RFAI  is  strongly  involved  in  the  international  activity  of  the  Group  (e.g. 
customer  assistance,  logistics  and  schedule  of  the  deliveries,  purchasing  of 
capital goods and key raw materials, etc); 

the Swiss branch of RFAI is performing all the functions normally performed 
by a related importer in the EU; 

RFAI sells ferro-silicon in its own name and for its own account to unrelated 
customers in the EU and elsewhere; 

RFAI has a purchase-sales relationship with the two related Russian producers 
KF and CHEM; 

each  company  drafts  its  own  financial  report  and  no  consolidated  financial 
report exists; and 

each company files its own tax return with the respective authorities. 

Accordingly, the claim that no deduction should be made for SG&A and profit 
in  the  construction  of  the  export  price  had  to  be  rejected.  The  applicant's 
comments on this point in reply to the final disclosure will be discussed below 
(point 2.3). 

(25)  The applicant also claimed that no deduction of the anti-dumping duty should be made 
in the calculation of the export price in accordance with the Article 11(10) of the basic 
regulation, since the duty is duly reflected in resale prices and the subsequent selling 
prices in the  Union. With respect to this  claim, the investigation  has established that 
the  weighted  average  resale  prices  of  ferro-silicon  in  Europe  have  increased  in 
comparison with the prices in the original investigation and the current resale export 
prices  are  largely  more  than  22,7%  higher  than  such  prices  in  the  original 
investigation.  Therefore,  it  can  be  concluded  that  the  anti-dumping  duty  is  duly 
reflected in the applicant's resale prices. As a result, this claim of the applicant could 
be accepted and, in the calculation of the constructed export prices in accordance with 
Article 2(9) of the basic Regulation, no deduction of the anti-dumping duties has been 
carried out. 

2.2.3.  Comparison 

(26)  The normal value and the export price were compared on an ex-works basis. For the 
purpose of ensuring a fair comparison between the normal value and export price, due 
allowance  in  the  form  of  adjustments  was  made  for  transport  costs,  insurance 
costs, terminal  and  handling  costs,  credit  costs,  and  commissions,  where  applicable 
and justified, in accordance with Article 2(10) of the basic Regulation. 

EN 

8 

   EN 

 
2.2.4.  Dumping margin 

(27)  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.  The  outcome  showed  the  existence  of 
dumping. 

(28) 

In  order  to  calculate  the  dumping  margin,  the  Institutions,  as  in  the  original 
investigation,  noted  that  CHEMK  and  KF  are  closely  related.  As  in  the  original 
investigation,  and  in  line  with  the  Institutions'  standard  practice,  a  single  dumping 
margin  was  calculated  for  the  whole  Group.  In  the  method  used  for  doing  so  in  the 
final disclosure, the amount of dumping was calculated for each individual exporting 
producer  before  determining  a  weighted  average  rate  of  dumping  for  the  group  as  a 
whole. It should be noted that this methodology was different from the methodology 
applied  in  the  original  investigation,  where  the  dumping  calculation  was  done  by 
collapsing  all  relevant  data  with  regard  to  domestic  sales,  cost  of  production, 
profitability  and  EU  sales  of  the  producing  entities.  The  applicant  claimed  that 
applying this methodology would be contrary to Article 11(9) of the basic Regulation. 
This issue, too, will be returned to below (point 2.3).  

2.3. 

Analysis  of  the  reactions  to  final  disclosure  relating  to  the  dumping  margin 
during the RIP. 

(29)  The applicant submitted several comments on certain aspects of the calculations such 
as cost of production, SG&A,  profit margin, normal value and allowances. All these 
comments  were  considered  and,  where  appropriate,  clerical  errors  were  corrected. 
Accordingly, the definitive findings have been modified.  

(30) 

In  addition,  the  applicant  requested  the  Commission  to  express  the  dumping  amount 
on the basis of a CIF value that they constructed themselves for the purposes of this 
investigation, therefore making reference to Article 2(9) of the basic Regulation. The 
claim  was  based  on  the  grounds  that  the  price  declared  to  customs  authorities  is  a 
transfer price which would perhaps be the correct price for customs purposes, but not a 
price that should be used when calculating dumping in anti-dumping proceedings. This 
claim  has to  be  rejected  because  the  difference  between  the  export  price  and  the 
normal value, i.e. the dumping amount, should be expressed on the same basis as the 
one  which  is  subsequently  used  by  customs  authorities  to  determine  any  duty  to  be 
collected. This is in fact the CIF value declared by the applicant to customs authorities. 
Consequently, the latter was used in the calculations. 

(31)  With regards to  the  calculation of the cost of production,  the applicant contested the 
Commission approach to use the average purchase price of a main cost item from an 
unrelated  supplier  in  place  of  the  actual  price  paid  to  a  related  supplier  of  the  same 
cost item in the construction of the normal value. This claim has to be rejected because 
the price charged by the related supplier was significantly lower than the price paid for 
the  same  raw  material  to  an  independent  supplier.  This  price,  therefore,  cannot  be 
considered  as  an  arm's  length  price.  Consequently,  this  cost  element  needed  to  be 
adjusted. 

EN 

9 

   EN 

 
(32)  Following  disclosure,  the  applicant  claimed  that  packing  costs  were  not  treated 
consistently when  comparing  export  prices with normal  values.  This  issue  was 
investigated and, where applicable, clerical errors were corrected. 

(33)  The  applicant  commented  also  on  the  exclusion  of  the  export  transactions  of  a 
particular product type. The EU sales of this product type represented less than 5% of 
the applicant's EU sales of the product concerned during the RIP. This point has to be 
rejected  given  that  no  sales  of  this product  type  were  made  on  the  domestic 
market neither specific cost of production had been provided. As this product type had 
been  exported  to  the  EU in  low volumes during  the  RIP,  it  was therefore  considered 
not  appropriate  to  resort  to  constructing  the  normal  value  on  the  basis  of 
manufacturing  costs  of  other  product  types, thereby  making  adjustments  for  product 
differences. 

(34) 

In addition and as explained above, in particular regarding two important points of the 
dumping margin calculation, namely i) the question whether CHEMK, KF and RFAI 
form  a  single  economic  entity6  and  ii)  the  calculation  of  an  individual  amount  of 
dumping for CHEMK on the one hand, and KF on the other hand,7 the applicant made 
detailed comments in its reaction to the definitive disclosure.  

(35)  Regarding the first claim, and in particular on the points put forward by the applicant 

in its reaction to the definitive disclosure, the following is observed.  

(36)  The  applicant  reiterated  its  position  that  the  two  exporting  producers  and  the  related 
trader RFAI are ultimately owned and controlled by the same beneficiaries and that it, 
therefore, would have no autonomy and simply follow the instructions of the owners 
of  the  applicant.  It  acknowledged  all  the  elements  listed  in  recital  (24)  above,  but  it 
disagreed  to  the  Institutions'  appreciation  thereof  as  they  would  have  no  bearing  on 
whether CHEMK, KF and RFAI are all parts of a SEE.  

(37)  The Institutions reject the applicant’s comments. The criteria already listed above, are, 
especially if all taken together, well-grounded to justify the rejection of the applicant's 
claim. All the elements listed in recital (24) above point at a group structure where all 
the companies are distinctive legal entities in which  KF and CHEMK performed  the 
complete  function  of  an  exporting  producers  (production  and  export  function)  while 
RFAI operates mainly as a related trader/importer in the EU.  

(38)  Regarding the second claim, it is not necessary to take a final position on this matter in 
the  context  of  this  review  investigation.  This  results  from  the  combination  of  two 
reasons.  First,  even  if  this  claim  were  accepted  (on  top  of  the  acceptance,  where 
appropriate,  of  the  claims  referred  to  in  recital  (29)  above),  the  applicant  would  still 
have been found dumping on the EU market, during the RIP, at a dumping margin of 
approximately  13%.  Second,  as  explained  below,  in  any  case  there  is  currently 
insufficient evidence to consider the dumping margin during the RIP as a lasting one.  

(39) 

In its reaction to definitive disclosure, the Union industry argued that, as a result of the 
review investigation, the duty on the applicant's products should be increased, because, 
assuming  that  all  of  the  applicant's  claims  would  be  refused,  the  dumping  margin 

6 
7 

See recital 23 above. 
See recital 27 above.  

EN 

10 

   EN 

 
                                                 
found  during  the  RIP  was  higher  than  the  applicable  duty.  However,  since,  as 
explained  below,  there  is  insufficient  evidence  of  a  lasting  change  in  circumstances, 
there is no justification for modifying the duty, neither upward nor downward.  

2.4. 

Analysis  of  the  question  whether  there  is  a  lasting  change  in  circumstances 
justifying a reduction or removal of the duty  

(40)  Nevertheless,  in  spite  of  the  acceptance  of  certain  of  the  applicant’s  claims  as 
described above, it is still found to have been dumping on the EU market, during the 
RIP, at a dumping margin of at least 13%. Moreover, as will be explained below, in 
any case there is insufficient evidence to consider the dumping margin during the RIP 
as a lasting one.  

(41)  The  applicant  based  its  reasoning  why  there  is  a  lasting  change  of  circumstances  on 

the following points. 

(42) 

(i)  Firstly,  the  applicant  referred  to  the  changes  in  the  export  sales  structure  of  the 
group,  which,  coupled  with  the  exploration  of  new  growing  markets,  would  have 
contributed to higher export prices of ferro-silicon to all export markets, including in 
the  EU,  in  comparison  to  the  prices  during  the  original  investigation.  However,  the 
applicant did not provide any substantiated evidence in order to show the link between 
the new corporate structure, exploration of new growing markets and higher prices on 
the EU market. Nor did the findings of the investigation indicate such a link. On the 
contrary, while export prices were clearly higher in the RIP as compared to the prices 
observed  during  the  investigation  period  of  the  original  investigation,  they  have 
nevertheless  been  extremely  volatile.  As  an  example,  within  the  RIP,  the  difference 
between the lowest and highest transaction price per tonne of the most sold model on 
the  EU  market  was  more  than  100%.  A  similar  volatility  could  be  observed  on  the 
domestic market, but the price trend on the EU market was not comparable to the price 
trend on the domestic market. This is also true for the 12 month period preceding the 
RIP which was closely looked at in the framework of a parallel refund investigation. 
Indeed,  the  export  sales  prices  appear  to  have  simply  followed  the  global  market 
prices. 

(43)  Following  disclosure, similar arguments were used by the applicant. However, again 
insufficient evidence was provided. It is therefore concluded that there is insufficient 
evidence,  at  this  point  in  time,  that  these  higher  export  prices  by  the  applicant  are 
anything else than a consequence of the prevailing market prices (in particular those 
on the EU market) during the RIP. In other words, there is insufficient evidence that 
the changes by the applicant in its corporate export structure were the cause of these 
higher prices, and that therefore these prices can be expected to remain at similar (or 
higher) levels in the future. In particular, contrary to what the applicant implies, even 
assuming that the new structure has made the group more efficient, this does not mean 
that in the future its export prices to the EU will be high and not result in dumping.  

(44) 

(ii) Secondly, the applicant declared that its export prices to other markets were in line 
with or even higher than its sales prices to the EU. Significant investments had been 
made to better supply other markets. Thus, a reduction or removal of the antidumping 
measures in relation to the applicant would not create an incentive to increase exports 
to the EU and/or reduce prices thereof.  

EN 

11 

   EN 

 
(45)  However, this claim cannot lead to a removal or decrease of the measures in force. It is 
recalled  that,  even  according  to  the  applicant  itself,  during  the  RIP  it  was  still 
dumping.  Moreover,  the  applicant  itself  highlighted  that  the  EU  remains  one  of  its 
traditional  markets.  This  is  corroborated  by  the  fact  that  the  volumes  sold  by  the 
applicant in the EU are still very significant; if one compares the sales volumes with 
the EU consumption during the IP of the original investigation,8 they would represent 
a significant market share (between 5 and 20%, the precise figures cannot be disclose 
for reasons of confidentiality).  

(46)  After disclosure the applicant reiterated its position that the new market opportunities 
would be in other markets (India, Asia and United States) rather in the EU. However, 
the applicant did not provide any substantial evidence to support its market strategies. 
The  still  existing  dumping  margin  during  the  RIP,  the  lack  of  data  on  other  markets 
and the volatility of the export sales price in the international market are all elements 
that do not support this claim which, therefore, has to be rejected.  

(47) 

(iii)  Thirdly,  in  the  applicant's  view,  the  Russian  domestic  market,  with  significant 
steel  production,  remains  one  of  its  most  important  markets  and  the  demand  for  the 
like product in Russia is expected to grow. Domestic and export prices of ferro-silicon 
would  also  grow  much  faster  than  cost  of  production.  The  applicant  would  thus  be 
likely to increase its sales on the domestic market further, also because, according to 
the  applicant,  the  sole  other  Russian  producer  of  ferro-silicon  would  since  a  recent 
change of ownership produce predominantly for captive consumption.  

(48)  Even  if  all  these  allegations  are  assumed  to  be  true,  it  nevertheless  remains  the  case 
that  during  the  RIP,  the  applicant  was  dumping  at  a  considerable  margin,  and  at 
volatile prices. Moreover, as explained above, the volumes sold by the applicant to the 
EU during the RIP do not suggest that it has shifted away from that market or that it 
intends to do so in the near future. 

(49) 

In  its  comments  to  the  disclosure,  the  applicant  asserted  that  the  only  reasoning 
presented in the disclosure by the Commission to deny the relevance of the increasing 
demand  on  the  domestic  market  would  be  the  significance  of  the  dumping  margin 
found.  Furthermore,  the  applicant  sustained  that  the  Commission,  although  it 
acknowledged many of the key points relating to the Russian market, fails to draw the 
adequate conclusion from these arguments.  

(50)  These  assertions  have  to  be  rejected.  Firstly,  not  only  the  dumping  findings  but  also 
the volumes findings speak against this argument. Secondly, the Institutions note that 
no  acknowledgment  was  made  by  the  Commission  and  no  conclusive  independent 
data was provided to support the claim that the demand for the product concerned is 
expected  to  grow  in  Russia  and  that  export  prices  of  the  group  would  grow  much 
faster than cost of production.  

(51) 

(iv) Fourthly, the applicant pointed out that its Russian production sites of ferro-silicon 
had been working at full capacity for years, that it had no plans to increase its overall 

8 

The institutions use the data on EU consumption during the IP of the original investigation rather than 
the  RIP.  That  is  because,  since  this  review  is  limited  to  the  examination  of  dumping  -  and  does  not 
cover  injury  issues  –  the  institutions  do  not  have  verified  data  regarding  EU  consumption  during  the 
RIP. 

EN 

12 

   EN 

 
                                                 
production  capacity  of  ferro-silicon  in  the  foreseeable  future  and  that  there  were  no 
indications to the contrary.  

(52)  However,  a  significant  recovery  of  capacities  after  the  financial  crisis  of  2009  was 
noted  and  the  applicant  reported  an  expansion  of  capacities  by  10%  -  20%  (range 
provided  for  reasons  of  confidentiality)  as  compared  to  the  period  prior  to  the  2009 
financial crisis.  

(53)  Following  disclosure,  the  applicant  submitted  that  a  comparison  of  the  post-RIP 
production  capacity  with  that  during  the  reference  period  was  not  appropriate  as  the 
applicant  would  have  anticipated  the  2009  financial  crisis  and,  therefore,  already 
reduced the production capacity. This argument cannot be accepted; an expansion of 
reported  capacities  by  10%  -  20%  can  be observed  as  compared  to  2007  –  not  2009 
when capacities were at their lowest levels. Moreover, the 2009 financial crisis cannot 
yet have impacted the 2007 production capacity of the applicant.  

2.5. 

Conclusion: insufficient evidence of lasting nature of changed circumstances 

(54)  The analysis of the applicant's claims with regard to the lasting nature of the changed 
circumstances,  as  summarised  above,  lead  to  the  conclusion  that  there  is  currently 
insufficient  evidence  that  any  changed  circumstances  are  of  a  lasting  nature.  The 
applicant's export prices, and therefore its dumping margin, appear likely to continue 
to fluctuate, following, in particular, the development of world market prices. To the 
extent that the applicant has shown certain changed circumstances they can, therefore, 
not be considered to show that the pricing behaviour of the applicant during the RIP is 
of a lasting nature. It is therefore concluded that it would be premature and therefore 
unjustified to lower the duty at this point in time.  

3. 

Undertakings 

(55)  The  applicant  together  with  its  related  importer  offered  a  price  undertaking  in 

accordance with Article 8(1) of the basic Regulation.  

(56)  The investigation confirmed that the price of the product is highly volatile. As already 
mentioned in recital (42) above, it was established that the applicant's EU sales prices 
during the RIP varied very significantly. The product is therefore not suited for a fixed 
price undertaking. Although an indexation mechanism was proposed by the exporter, 
it was not possible to establish a correlation between the price volatility of the finished 
product  and  the  indexation  source  proposed,  in  particular  as  it  also  related  to  the 
finished  product  and  referred  to  prices  which  were  influenced  by  dumped  imports. 
Therefore, the proposed indexation was considered not appropriate. 

(57)  As regards company specific risks, it was established that due to the complexity of the 
company  structure,  the  risk  of  cross-compensation  is  very  high:  other  products  than 
the product concerned could be sold via a trader outside the Union to another related 
third country branch and then be re-sold to the Union. 

(58)  Finally, as the product itself exists in different qualities and is mainly imported in bulk 
form,  it  would  not  be  possible  for  customs  authorities  to  distinguish  the  chemical 
specification  (potentially  subject  to  different  Minimum  Import  Prices)  without 

EN 

13 

   EN 

 
individual  analysis  of  each 
burdensome, if not impracticable. 

transaction, 

thus  rendering 

the  monitoring  very 

(59)  The undertaking offer was therefore rejected. 

4. 

Termination of the review  

(60) 

In view of the findings of dumping as well as the absence of a proven lasting nature of 
the changed circumstances, it is concluded that JSC Chelyabinsk Electrometallurgical 
Integrated  Plant  and  its  related  company  JSC  Kuznetsk  Ferroalloy  Works  should 
continue to be subject to the duty level specified in the original regulation, i.e. 22,7%. 

HAS ADOPTED THIS REGULATION: 

Article 1 

The partial interim review of the anti-dumping measures applicable to imports of ferro-silicon 
originating,  inter  alia,  in  Russia,  initiated  pursuant  to  Article  11(3)  of  Regulation  (EC)  No 
1225/2009 is hereby terminated 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 

EN 

14 

   EN