Proposal for a COUNCIL IMPLEMENTING REGULATION amending Regulation (EU) No 492/2010 imposing a definitive anti-dumping duty on imports of sodium cyclamate originating in, inter alia, the People's Republic of China
Date: 2012-04-04
Institutions: European Commission
Subjects: China, anti-dumping duty, anti-dumping legislation, food additive, import (EU), originating product

EUROPEAN COMMISSION 

Brussels, 4.4.2012  
COM(2012) 163 final 

2012/0081 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING REGULATION 

amending Regulation (EU) No 492/2010 imposing a definitive anti-dumping duty on 
imports of sodium cyclamate originating in, inter alia, the People's Republic of China 

EN 

   EN 

 
 
 
  
 
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  proceeding  concerning 
imports of sodium cyclamate originating, inter alia, 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 

The  measures  currently  in  force  were  imposed  by  Council  Regulation  (EU)  No 
492/2010  on  imports  of  sodium  cyclamate  originating,  inter  alia,  in  the  People's 
Republic of China. 

Consistency with the other policies and objectives of the Union 

Not applicable. 

2. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

Interested parties concerned by the proceeding have 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 17 February 2011, the Commission initiated an interim review of the measures in 

EN 

2 

   EN 

 
 
 
 
 
 
 
 
 
 
force  in  respect  of  sodium  cyclamate  originating  in  the  People's  Republic  of  China 
further to a request made by the Union industry. The request was based on prima facie 
evidence  showing  that,  as  far  Golden  Time  Enterprise  (Shenzhen)  Co.  Ltd  is 
concerned,  the  continued  imposition  of  the  measure  at  its  current  level  is  no  longer 
sufficient to counteract the injurious 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 as far 
as one group of producers is concerned. 

The  investigation  found  that  the  level  of  dumping  was  higher  than  in  the  original 
investigation  and  that  the  changed  circumstances  leading  to  the  increased  dumping 
level are of a lasting nature.  

It is therefore proposed that the Council adopt the attached proposal for an amending 
Regulation. 

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 instruments: implementing Regulation. 

Other  means  would  not  be  adequate  for  the  following  reason:  The  above-mentioned 
basic Regulation does not foresee alternative options. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Union budget. 

EN 

3 

   EN 

 
 
 
 
 
 
 
 
 
 
2012/0081 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING REGULATION 

amending Regulation (EU) No 492/2010 imposing a definitive anti-dumping duty on 
imports of sodium cyclamate originating in, inter alia, 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 Article 9(4), 11(3), 11(5) and 11(6) thereof, 

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

Whereas: 

1. 

PROCEDURE 

1.1. 

Measures in force 

(1) 

By Regulation (EC)  No 435/20042, the  Council  imposed,  following an  anti-dumping 
investigation,  a  definitive  anti-dumping  duty  on  imports  of  sodium  cyclamate 
originating  in  the  People’s  Republic  of  China  ('the  PRC'  or  'the  country  concerned') 
and Indonesia  ('the original investigation'). Following an expiry  review, the Council, 
by  Regulation  (EU)  No  492/20103  imposed  a  definitive  anti-dumping  duty  for  a 
further period of five years. The measures were set at the level of dumping and consist 
of specific anti-dumping duties. The rate of the duty for the PRC ranges between 0 and 
0.11 EUR/kilo for individually named Chinese producers with a residual duty rate of 
0.26 EUR/kilo imposed on imports from other producers ('current duties'). 

1.2. 

Request for a review  

(2) 

A request for a partial interim review ('the current review') pursuant to Article 11(3) of 
the basic Regulation was lodged by Productos Aditivos S. A., the sole Union producer 
of  sodium  cyclamate  and  the  complainant  in  the  original  investigation  ('the 
complainant').  The  request  was  limited  in  scope  to  dumping  and  to  Golden  Time 
Enterprise (Shenzhen) Co., Ltd. ('GT Enterprise' or 'the company concerned'), member 
of the Rainbow Rich group ('the group of companies concerned', 'Rainbow group', or 

1
2 
3 

OJ L 343, 22.12.2009, p. 51. 
OJ L 72, 11.3.2004, p. 1. 
OJ L 140, 8.6.2010, p. 2. 

EN 

4 

   EN 

                                                 
 
"Rainbow"), which was also one of the individually named Chinese producers in the 
original  investigation.  The  anti-dumping  duty  applicable  to  imports  of  products 
produced by GT Enterprise is 0.11 EUR/kilo and the duty applicable to imports from 
the  other  production  companies  within  the  group  of  companies  concerned  is  0.26 
EUR/kilo (i.e. the residual duty rate).  

(3) 

The  complainant  provided  prima  facie  evidence  that  the  existing  measures  are  no 
longer sufficient to counteract the dumping which is causing injury.  

1.3. 

Initiation of a partial interim review 

(4) 

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 Union4 on 17 February 2011, 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 GT Enterprise is concerned.  

1.4. 

Product concerned and like product  

(5) 

(6) 

The product under review is sodium cyclamate, originating in the People's Republic of 
China, currently falling within CN code ex 2929 90 00 (‘the product concerned’).  

As in previous investigations, this investigation has shown that the product concerned 
produced  in  the  PRC  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 Indonesia which served as an analogue country in the current review. It is 
therefore concluded that products sold on the domestic market in Indonesia and sold 
by the group of companies concerned on the Union market are like products within the 
meaning of Article 1(4) of the basic Regulation.  

1.5. 

Parties concerned 

(7) 

(8) 

(9) 

The Commission officially informed the complainant, the company concerned and the 
representatives of the country concerned about the initiation of the current review. The 
Commission also advised producers in Indonesia of the initiation of the proceedings, 
as Indonesia was envisaged as a possible analogue country.  

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

In  order  to  obtain  the  information  deemed  necessary  for  its  investigation,  the 
Commission sent a questionnaire to the company concerned and received replies from 
five companies in the Rainbow Group within the deadline set for that purpose. (As the 
Rainbow group now consists of two production companies (one being GT Enterprise), 
one  raw  material  supplier,  one  company  previously  involved  with  the  product 
concerned, but now dormant, and a trader in Hong Kong, the review encompassed the 

4 

OJ C 50, 17.2.2011, p.6. 

EN 

5 

   EN 

                                                 
activities of the full group). The Commission also sent questionnaires to producers in 
Indonesia. One Indonesian producer showed willingness to provide information in the 
current review and provided a partial reply to the questionnaire. 

(10)  The  Commission  sought  and  verified  all  information  deemed  necessary  for  the 
analysis of market economy treatment and individual treatment and the determination 
of  dumping.  The  Commission  carried  out  verification  visits  at  the  premises  of  the 
following members of the group of the companies concerned:  

– 

– 

– 

– 

– 

Golden  Time  Enterprises  (Shenzhen)  Co.  Ltd.,  Shenzhen,  PRC,  (GT 
Enterprise), 

Jintian Industrial (Nanjing) Co. Ltd., Nanjing, PRC, 

Golden Time Chemical (Jiangsu) Co. Ltd., Jiangsu, PRC, 

Nanjing Jinzhang Industrial Co. Ltd., Nanjing, PRC, 

Rainbow Rich Ltd., Hong Kong. 

1.6. 

Review investigation period 

(11)  The investigation of dumping covered the period from 1 January 2010 to 31 December 

2010 ('the review investigation period' or 'RIP'). 

2. 

RESULTS OF THE INVESTIGATION  

2.1. 

Market economy treatment (MET) 

(12) 

In  anti-dumping  investigations  concerning  imports  originating  in  the  PRC,  normal 
value  shall  be  determined  in  accordance  with  paragraphs  1  to  6  of  Article  2  of  the 
basic Regulation for those producers which were found to meet the criteria laid down 
in Article 2(7)(c) thereof. Briefly, and for ease of reference only, the criteria in Article 
2(7)(c)  of  the  basic Regulation,  fulfilment of which the applicant companies have to 
demonstrate, are set out in summarised form below:  

– 

– 

– 

– 

– 

business  decisions  and  costs  are  made  in  response  to  market  conditions,  and 
without  significant  State  interference  and  costs  of  major  inputs  substantially 
reflect market values, 

accounting  records  are  independently  audited  in  line  with  international 
accounting standards and applied for all purposes, 

there  are  no  significant  distortions  carried  over  from  the  former  non-market 
economy system, 

legal certainty and stability are provided by bankruptcy and property laws, 

currency exchanges are carried out at the market rate. 

(13)  The group of companies concerned requested MET pursuant to Article 2(7)(b) of the 
basic Regulation and submitted claim forms for four producers located in the People's 
Republic  of  China.  The  Commission  sought  and  verified  at  the  premises  of  the 

EN 

6 

   EN 

companies  all  information  submitted  in  the  companies'  requests  and  deemed 
necessary. 

(14)  The  current  review  revealed  that  the  situation  of  the  company  concerned  changed 
since  the  original  investigation.  It  was  found  that  GT  Enterprise  no  longer  meets  all 
MET criteria. Furthermore, compared to the original investigation the Rainbow group 
had  been  enlarged  and  restructured.  The  other  companies  within  the  group  that 
submitted claim forms could not demonstrate either that they meet all MET criteria. 

(15)  With regard to criterion 1 concerning business decisions and state interference, it was 
found  that  the  local  government  has  the  authority  to  interfere  in  the  hiring  and 
dismissal  of  personnel  in  one  company  within  the  group.  Furthermore,  the  local 
government  is  a  major  shareholder  of  the  company  producing  raw  materials. 
Indications  of  significant  state  interference  were  identified  in  the  supply  of  raw 
materials  to  the  company  (electricity  and  water)  and  by  the  company  to  its  related 
companies, in labour costs and in the operations and decision-making of this company. 
As  a  way  of  example  the  state  shareholder  outsourced  personnel  to  the  raw  material 
producer at terms that the company could not specify. Furthermore, the company has 
been continuously loss-making due to selling raw material at abnormally low prices to 
its related companies and without any further compensation e.g. in the form of profit 
distribution.  Through  the  accumulation  of  these  losses,  the  state-owned  raw  material 
producer influenced the decisions of the related companies with regard to purchase of 
raw  materials  for  the  production  of  sodium  cyclamate.  Finally,  interference  and 
influence  could  be  detected  in  the  financing  and  investment  decisions  of  another 
company within the group by a local government agency. 

(16)  With  regard  to  criterion  2  concerning  accounting,  the  investigation  showed  that 
accounting records of all members of the group of companies concerned were not in 
line  with  international  accounting  standards  as  a  number  of  material  accounting 
shortcomings and errors were found which were not reported by the auditors. 

(17)  With  regard  to  criterion  3,  it  was  found  that  distortions  were  carried  over  from  the 
non-market  economy  system  through  the  provision  of  infrastructure  investments  to 
one  company  of  the  group  for  free.  The  same  company  benefited  from  favourable 
rental conditions for the land it uses. The other companies within the group could not 
demonstrate that they acquired their land use rights in return for a consideration and/or 
that the consideration would have reflected a market value. Finally one company was 
not  able  to  demonstrate  that  certain  assets  transferred  to  it  were  made  for  monetary 
consideration or otherwise at prices reflecting market values. 

(18)  Finally, with regard to criteria 4 and 5, it was found that the companies met the criteria 
as  the  companies  were  subject  to  bankruptcy  and  property  laws  which  guaranteed 
stability and legal certainty. Currency conversions were carried out at or following the 
official rate published by the Bank of China. 

(19)  The group of companies concerned and the complainant were given an opportunity to 
comment on the above findings. The complainant had no comments but the group of 
companies  concerned  objected  on  several  grounds.  Some  of  these  comments  were 
reiterated after final disclosure of the facts and considerations on the basis of which it 
was proposed to impose definitive measures. The most important comments received 
are described in the recitals below.  

EN 

7 

   EN 

(20)  The Rainbow group firstly stated that the Commission illegally imposed an obligation 
to re-qualify for MET as the group was given MET in the original investigation and 
the  expiry  review  and  thus  the  legal  obligation  to  apply  the  same  methodology  in 
reviews as in the original investigation was breached. It argued that the Commission 
has not shown that circumstances of this company had changed in a way that would 
justify a different method to that applied in the original investigation. According to the 
claimant several of the issues indentified by the Commission had already existed at the 
time of the original investigation and thus the Commission's new findings do not relate 
to  new  circumstances  but  are  merely  a  different  interpretation  of  the  same 
circumstances. 

(21) 

It  should  be  noted  that,  contrary  to  the  claimant's  statement,  the  same  methodology 
was applied both  in  the  original investigation and  in the  current review whereas  due 
account  was  taken  of  the  fact  that  certain  circumstances  have  changed  since  the 
original  investigation.  Even  if  the  claimant's  argumentation  would  be  correct  in 
relation to certain facts that were indeed the same during both the original and current 
investigations,  namely  in  relation  to  GT  Enterprise's  land  use  right  agreement,  the 
following  can  be  noted.  The  current  review  established  additional  other  facts  that  - 
even  though  they  had  already  existed  during  the  original  investigation  -  were  not 
disclosed  at  that  time  by  GT  Enterprise,  such  as  the  local  government's  authority  to 
approve  the  hiring  and  dismissal  of  its  personnel.  Finally,  the  circumstances  of  the 
company have also changed since the original investigation in respect of Criterion 2. 
That  is  because  it  was  established  in  the  current  review  that  during  the  RIP  GT 
Enterprise  had  not  had  a  clear  set  of  accounting  records  that  were  independently 
audited in line with international accounting standards and applied for all purposes. 

(22)  The  claimant  later  explained  that  it  considers  that  it  had  disclosed  the  local 
government's  authority  to  approve  the  hiring  and  dismissal  of  its  personnel  by 
providing  in  the  original  investigation  the  same  Articles  of  Association  as  in  the 
current  review.  However,  the  translation  of  this  document  provided  by  the  claimant 
both during the original and current investigation was incomplete as it did not disclose 
the powers given by the Articles of Association to the local government.  

(23)  The Rainbow group further argued that the MET regime was introduced for countries 
with  an  economy  in  transition,  i.e.  from  the  former  non-market  economy  system 
towards a market economy. It would therefore be illogical to require a company that 
previously  qualified  for  MET  to  once  again  submit  sufficient  evidence  in  an  interim 
review  that  it  still  qualifies  for  MET.  In  this  respect  it  should  be  noted  that  there  is 
nothing in the basic Regulation which would support such an interpretation and which 
would  prevent  the  application  of  Article  2(7)(c)  of  the  basic  Regulation  in  reviews 
initiated  pursuant  to  Article  11(3)  of  the  basic  Regulation.  Therefore,  this  argument 
had to be dismissed. 

(24)  The Rainbow group also invokedthe procedural requirement in Article 2(7)(c) that an 
MET  determination  shall  be  made  within  three  months  of  the  initiation  of  the 
investigation.  Rainbow  itself  acknowledges  that  exceeding  this  deadline  is  in  itself 
insufficient ground to contest the results of the investigation, but it highlights that the 
Commission  services  already  had  all  the  information  necessary  to  calculate  the 
dumping  margin  at  their  disposal  when  MET  findings  were  disclosed.  In  its 
argumentation  Rainbow  however  ignores  the  fact  that  even  though  the  Commission 
indeed  for  administrative  efficiency  requested  and  verified  all  necessary  information 

EN 

8 

   EN 

from the group of companies concerned at the same time, it had not had at its disposal 
information about the analogue country that would have made it possible to determine 
the  dumping  margin  in  case  of  rejecting  MET.  Indeed,  information  concerning  the 
normal  value  in  the  analogue  country  was  made  available  to  the  Commission  only 
after the findings concerning MET had been disclosed to Rainbow. Thus the timing of 
the  MET  determination  could  not  have  any  impact  on  its  content.  In  the  light  of  the 
above, this claim is rejected as unfounded.  

(25)  With  respect  to  Criterion  1,  it  has  been  submitted  as  a  general  comment  that  the 
theoretical possibility of state influence or state control per se does not automatically 
mean  that  there  is  an  actual  and  significant  state  interference  within  the  meaning  of 
Article 2(7)(c). Rainbow repeatedly quotes a decision of the Court of First Instance5 to 
argue that state control does not equal significant State interference because this would 
"lead to the exclusion, in principle, of state-controlled companies from entitlement to 
MES,  irrespective  of  the  real  factual,  legal  and  economic  context  in  which  they 
operate." Rainbow also claims that it would mean an unreasonable burden of proof on 
MET applicants if they were to show that there can never be a possibility for the state 
to interfere in business decisions. Further it argues that the state action would have to 
render the company's decisions incompatible with market considerations so as not to 
be in line with Criterion 1.  

(26)  Contrary  to  the  above  assertions  by  the  Rainbow  group,  the  current  investigation 
established  specific  and  significant  state  interference  in  the  operations  of  several 
companies within the group. In the case of the group company in which the hiring and 
dismissal  of  personnel  was  subject  to  the  approval  of  the  local  government,  it  is  the 
company's  own  rules  of  internal  functioning,  i.e.  its  Articles  of  Association,  that 
clearly provide the authority for the state to interfere in its operational decisions. In the 
case of another group company, the state partner was found to have had an influence 
in the company in a manner which is incompatible with market considerations. Firstly, 
the state partner had contributed most of the capital to this company without this fact 
being reflected in the share of its ownership of the company. Secondly, the company's 
operations were always loss-making, which was mostly detrimental to the state partner 
given the capital it invested. Thirdly, the state partner itself incurred continuous losses 
as  it  supplied  inputs  such  as  water  and  electricity  to  the  group  company  at  below 
market prices and without proper receipt of payment. 

(27)  Concerning  the  conclusion  on  state  interference  in  the  financing  and  investment 
decisions of another member of the group of companies concerned, it was submitted 
that  factual  findings  of  the  Commission  on  a  loan  and  its  conditions  were  incorrect. 
The Commission however, has evidence collected during the verification showing that 
the company was instructed by a local government agency to take a loan which was 
not  related  to  its  business  operations.  The  company  reasons  that  the  financing 
decisions were taken as a favour to this government agency and not as an obligation 
and the transaction in question was without further risk to the company since it would 
have  had  the  possibility  to  seek  compensation  through  the  non-payment  of  utilities' 
invoices issued to it by the agency. The evidence collected by the Commission shows 
that the land use right of the company is indirectly used as a security in the relevant 

5 

Zhejiang Xinan Chemical Industrial Group Co. Ltd. v. Council, Case T-498/04, judgment of the Court 
of First Instance of 17 June 2009, at para 92. 

EN 

9 

   EN 

                                                 
financial transaction; therefore the company bears significant risk. The land use right 
itself  was  acquired  through  the  same  government  agency  to  whom  the  company 
alleges  to  have  been  providing  only  a  favour.  The  allegation  that  a  compensation 
would  have  been  possible  through  non  payment  for  utilities  demonstrates  a  basic 
misunderstanding  of  basic  accounting  standards  (offsetting)  and  contradicts  the 
company's further claim that influence on financial operations as such do not mean an 
influence  on  "decisions  on  firms  regarding  prices,  costs  and  inputs"  as  required  by 
Article  2(7)(c).  Furthermore,  investment  decisions  are  clearly  and  significantly 
influenced by the government agency as there are company-specific requirements set 
in the land use right agreement of the company on the investment to be performed and 
these requirements go beyond local zoning laws contrary to what has been suggested 
by  the  company.  Therefore  the  claim  that  state  interference  in  the  financing  and 
investment  decisions  do  not  amount  to  an  influence  according  to  Article  2(7)(c)  is 
rejected.  

(28)  As to the group company producing one of the raw materials used in the production of 
sodium cyclamate, it was claimed that any shortcomings with respect to the company's 
decision-making and financial situation would have a very limited impact as the raw 
material  produced  by  this  company  represents  only  around  10%  of  the  cost  of 
production  of  sodium  cyclamate.  As  the  Commission  was  able  to  calculate  the 
difference between profitable sales price and actual sales price of the raw material, the 
company suggests that it would be more appropriate to adjust the costs of low-priced 
raw  material  rather  than  rejecting  MET.  However,  the  objective  of  the  MET 
assessment is to ascertain that inputs reflect market values and business decisions are 
made in response to market signals. It should be noted that Article 2(7)(c) of the basic 
Regulation  explicitly  requires  that  costs  of  major  inputs  substantially  reflect  market 
value in order the conditions for the MET to be met without making any reference to 
the possibility of adjusting the distorted costs of major inputs. Therefore this claim has 
to be rejected. 

(29)  The  company's  claim  concerning  the  abnormally  low  prices  paid  for  water  and 
electricity and labour costs - arguing that these are not major inputs only representing 
in  total  around  14%  of  the  total  cost  of  production  of  the  raw  material  -  had  to  be 
rejected as this is considered, both individually and cumulatively, a significant enough 
cost element to have an impact on the total costs of the company. In the case of labour 
costs  it  is  also  noted  that  it  was  not  possible  to  fully  verify  these  elements  as  the 
company was not able to provide contracts or other documentation. Therefore it could 
not be ascertained that these costs reflected market values.  

(30)  With respect to Criterion 2 it was argued that the Commission ignored the materiality 
principle  pursuant  to  which  omissions  or  misstatements  of  items  are  material  only  if 
they could influence the economic decisions that users make on the basis of financial 
statements  and  that  such  immaterial  shortcomings  would  not  need  to  be  reported  by 
the auditor either. 

(31)  Contrary to what the group claims, there were serious shortcomings in the accounting 
of the companies in relation to basic accounting principles (see, for more details, the 
next paragraph). Secondly, the objective of requiring a clear set of accounts for MET 
purposes is not for a user making economic decisions but to ensure that the financial 
statements  provide  a  true  and  fair  view  of  revenues,  costs,  etc.  The  objective  of  the 

EN 

10 

   EN 

MET investigation is to establish whether accounts are kept and audited in accordance 
with international accounting standards.  

(32)  The  Rainbow  group  disputed  that  its  companies  breached  the  elements  of  the  IAS 
rules and accounting practices mentioned in the MET assessment such as the accrual 
principle, faithful representation of transactions principle and offsetting, going concern 
principle,  correct  classification  of  balance  sheets  items,  recognition  of  losses,  only 
business related transactions and recordings within the accounts, correct classification 
and  depreciation  of  expenses,  respect  of  IAS  and/or  Chinese  GAAP  rules  on  the 
recognition of the value and depreciation of assets. The above-mentioned breaches of 
IAS  were  identified  from  the  information  provided  by  the  group  in  its  MET  claim 
form and all issues were subject to verification at the premises of the companies. The 
arguments presented by the companies on these issues following the disclosure of the 
MET findings were not such as to warrant a change in the conclusion that, in regard to 
these issues, the companies failed criterion 2.  

(33)  With  respect  to  Criterion  3,  the  Rainbow  group  claims  that  the  provision  of 
infrastructure investments to one company for free is a normal activity that also takes 
place in market economies in order to attract investments and that the impact of this 
subsidization would be negligible on the financial situation of the company in the RIP. 
However,  the  fact  that  a  company  could  avoid  payments  for  infrastructure 
developments and at the same time benefited from very low rental prices for the same 
land  do  not  reflect  a  normal  situation  in  a  market  economyThis  benefit  on  the  other 
hand had a direct impact on the financial position of the production company and its 
ability to take decisions in response to market signals. 

(34)  The Commission  accepted the claimant's arguments concerning  GT Enterprise's  land 
use  right  as  explained  in  recital  (21).  Arguments  presented  concerning  the  land  use 
right  by  the  other  companies  however  were  not  such  as  to  reverse  findings  as  the 
company  itself  acknowledges  that  it  had  not  paid  the  agreed  amount  for  its  land  use 
right in one case. In the case of another land use right the Rainbow group claims that 
prices of land in that region had been rising sharply and thus it is normal that the land 
was  valued  significantly  higher  a  few  years  after  its  acquisition  date.  However,  the 
evidence provided by the company referred to price increases for residential properties 
in  the  region  and  thus  it  is  irrelevant.  Rainbow  ultimately  claimed  that  the 
Commission's approach of requiring positive evidence that a company has paid a price 
that reflects market value imposes an unreasonable burden of proof. However, article 
2(7)(  c)  of  the  Basic  Regulation  explicitly  requires  that  a  claim  for  market  economy 
treatment must "contain sufficient evidence that the producers operates under market 
economy conditions". Therefore this argument had to be rejected.  

(35)  Rainbow  group  contests  the  finding  on  assets  transferred  to  one  company  without  a 
monetary  consideration  or  otherwise  at  prices  reflecting  market  values  on  the  basis 
that  this  company  had  stopped  production  in  the  RIP.  Indeed  the  company  stopped 
production. However, the company was still selling its previously produced products 
on  the  domestic  market.  Thus  an  MET  assessment  had  to  be  performed  for  this 
company  as  well  to  ascertain  that  there  were  no  significant  distortions  carried  over 
from the former non-market economy system that could affect prices.  

(36) 

It is therefore considered that GT Enterprise failed to meet the first and second criteria 
for  MET,  Jintian  Industrial  (Nanjing)  Ltd.  failed  to  meet  criterion  two  and  three, 

EN 

11 

   EN 

Golden Time Chemical (Jiangsu) Ltd. failed to meet criteria one and two and three for 
MET and Nanjing Jinzhang Industrial Ltd. failed to meet criteria one, two and three. If 
one related company associated with the production and sale of the product concerned 
does not qualify for MET, MET cannot be granted to the group of related companies. 
Therefore,  as  all  of  the  companies  assessed  for  MET  individually  failed  to  meet  the 
relevant  criteria  it  is  concluded  that  the  Rainbow  group  cannot  be  granted  MET.  In 
these circumstances, after consulting the Advisory Committee, the group of companies 
concerned was denied MET.  

2.2. 

Individual treatment (IT)  

(37)  Pursuant  to  Article  2(7)(a)  of  the  basic  Regulation,  a  country-wide  duty,  if  any,  is 
established  for  countries  falling  under  that  Article,  except  in  those  cases  where 
companies are able to demonstrate that they meet all criteria set out in Article 9(5) of 
the  basic  Regulation  to  be  granted  IT.  Briefly,  and  for  ease  of  reference  only,  these 
criteria are set out below:  

– 

– 

– 

– 

– 

in the case of wholly or partly foreign owned firms or joint ventures, exporters 
are free to repatriate capital and profits,  

export  prices  and  quantities,  and  conditions  and  terms  of  sale  are  freely 
determined,  

the  majority  of  the  shares  belong  to  private  persons.  State  officials  appearing 
on the Boards of Directors or holding key management positions shall either be 
in  minority  or  it  must  be  demonstrated  that  the  company  is  nonetheless 
sufficiently independent from state interference,  

exchange rate conversions are carried out at the market rate, and  

state  interference  is  not  such  as  to  permit  circumvention  of  measures  if 
individual exporters are given different rates of duty.  

(38)  The  two  exporting  producers  within  the  group  having  exported  sodium  cyclamate 
during the RIP claimed IT. It was not necessary to make an IT assessment for the other 
companies  in  the  Rainbow  group  given  that  they  are  not  exporters  of  the  product 
concerned.  On  the  basis  of  the  information  available  and  verified  during  the 
verification  visits,  it  was  found  that  these  two  exporting  producers  fulfilled  the 
requirements  foreseen  in  Article  9(5)  of  the  basic  Regulation  and  thus  could  be 
granted IT. 

2.3. 

Dumping 

2.3.1.  Analogue country  

(39)  According  to  Article  2(7)(a)  of  the  basic  Regulation,  normal  value  for  the  exporting 
producers  not  granted  MET  has  to  be  established  on  the  basis  of  the  price  or 
constructed value in a market economy third country (analogue country).  

(40) 

In the Notice of Initiation the Commission indicated its intention to use Indonesia (the 
analogue country in the original investigation) as appropriate analogue country for the 

EN 

12 

   EN 

purpose  of  establishing  normal  value  and  invited  interested  parties  to  comment 
thereon. 

(41)  The Commission has received no comments on the choice of the analogue country. 

(42)  The Commission sought cooperation from producers in Indonesia. Letters and relevant 
questionnaires were sent to all known companies. Of the several companies contacted, 
only  one  producer  submitted  the  necessary  information  for  the  determination  of 
normal value and agreed to partially cooperate with the review. As the company could 
not accept a verification visit at its premises, the Commission analysed the information 
provided  for  completeness  and  consistency.  The  information  was  found  to  be 
sufficient  and  reliable  for  the  determination  of  the  normal  value  and,  whenever 
necessary, the Indonesian producer provided clarifications sought by the Commission. 
The  information  used  was  cross-checked  with  information  provided  in  the  review 
request. 

(43)  The  investigation  established  that  Indonesia  has  a  competitive  market  for  the  like 

product. 

(44)  The  investigation  further  revealed  that  the  production  volume  of  the  cooperating 
Indonesian producer constitutes considerably more than 5 % of the volume of Chinese 
exports  of  the  product  concerned  to  the  Union,  hence  the  production  was 
representative  in  terms  of  volume.  As  for  the  quality,  technical  specifications  and 
standards  of  the  like  product  in  Indonesia,  no  major  overall  differences  were  found 
when  compared  to  Chinese  products.  Therefore,  the  Indonesian  market  was  deemed 
sufficiently representative for the determination of normal value. 

(45) 

(46) 

It is noted that to the Commission's knowledge there are no other production facilities 
elsewhere in the world, besides the known producers in Spain, the PRC and Indonesia. 

In  view  of  all  the  above  it  was  concluded  that  Indonesia  constitutes  an  appropriate 
analogue country in accordance with Article 2(7)(a) of the basic Regulation.  

2.3.2.  Determination of normal value  

(47)  Pursuant  to  Article  2(7)(a)  of  the  basic  Regulation,  normal  value  was  established  on 
the basis of information received from the producer in the analogue country as set out 
below.  It  is  noted  that  the  Indonesian  producer  was  investigated  in  a  previous 
investigation concerning imports of sodium cyclamate from Indonesia6. The data now 
provided by the company in its questionnaire response were found to be reliable and a 
solid  basis  to  establish  normal  value  for  the  purposes  of  this  investigation.  Indeed, 
average sales prices as well as the average cost of production followed a similar trend 
in line with the evolution of the average raw material cost. In addition, this trend could 
be confirmed by a similar evolution of the average raw material cost observed in the 
EU market. 

(48)  The  domestic  sales  of  the  Indonesian  producer  of  the  like  product  were  found  to  be 
representative in terms of volume compared to the product concerned exported to the 
Union by the group of companies concerned in the PRC.  

6 

See Regulation (EU) No 492/2010 (OJ L140, 8.6.2010, p.2). 

EN 

13 

   EN 

                                                 
(49)  The Commission subsequently identified those product types, sold domestically by the 
producer  in  the  analogue  country,  that  were  identical  or  directly  comparable  to  the 
types  sold  for  export  to  the  Union.  The  standard  product  type  of  the  Indonesian 
producer was found to be directly comparable. 

(50)  For  the  standard  product  type  sold  by  the  producer  in  the  analogue  country  on  its 
domestic market and found to be directly comparable with the 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 
type  of  sodium  cyclamate  were  considered  sufficiently  representative  when  the  total 
domestic sales volume of that type during the IP represented 5 % or more of the total 
sales volume of the comparable type exported to the Union by the group of companies 
concerned. 

(51)  An examination was also made as to whether the domestic sales could be regarded as 
having  been  made  in  the  ordinary  course  of  trade,  by  establishing  for  the  standard 
product  type  the  proportion  of  profitable  sales  to  independent  customers  on  the 
domestic market during the investigation period. Since the volume of profitable sales 
of  the  like  product  per  product  type  represented  more  than  80  %  of  the  total  sales 
volume of that type and where the weighted average price of that type was equal to or 
above  the  cost  of  production,  normal  value  was  based  on  the  actual  domestic  price, 
calculated as a weighted average of the prices of all domestic sales of that type made 
during the IP, irrespective of whether these sales were profitable or not.  

(52) 

In the determination of the normal value for the product type that had not been sold on 
the  domestic  market  by  the  producer  in  the  analogue  country,  the  weighted  average 
sales price of all the sales of the standard product type was used, after having adjusted 
for differences within the two product types. 

2.3.3.  Export price 

(53)  All exporting producers within the group of companies concerned made export sales to 
the Union through their related trading company located outside the Union. The export 
price was established on the basis of the prices of the product when sold by the related 
trading company to the Union, i.e. to an independent buyer, in accordance with Article 
2(8) of the basic Regulation on the basis of prices actually paid or payable.  

2.3.4.  Comparison 

(54)  The  normal  value  and  export  price  were  compared  on  an  ex-works  basis.  For  the 
purpose of ensuring a fair comparison between the normal value and the export price, 
due allowance in the form of adjustments was made for differences affecting price and 
price  comparability  in  accordance  with  Article  2(10)  of  the  basic  Regulation. 
Accordingly, adjustments were made for differences in transport, insurance, handling, 
loading and ancillary costs and credit cost where applicable and supported by verified 
evidence. 

2.3.5.  Dumping margin 

(55)  The  dumping  margin  was  established  on  the  basis  of  a  comparison  of  a  weighted 
average normal value with a weighted average export price for all exporting producers, 
in accordance with Article 2(11) of the basic Regulation. 

EN 

14 

   EN 

(56)  This  comparison  showed  a  dumping  margin  of  14.2%,  expressed  as  a  percentage  of 

the CIF frontier price, duty unpaid. 

2.4. 

Lasting nature of changed circumstances 

(57) 

In accordance with Article 11(3) of the basic Regulation, it was examined whether the 
circumstances  on  the  basis  of  which  the  current  dumping  margin  was  based  have 
changed and whether such change was of a lasting nature.  

(58)  The current findings are based on the rejection of the claim for the market economy 
treatment  to  the  group  of  companies  concerned  in  the  current  review  whereas  the 
member  of  the  group  of  related  companies  investigated  in  the  original  investigation 
GT  Enterprise  was  granted  MET.  The  circumstances  that  led  to  the  different 
conclusion are firstly due to the fact that in the current review four companies within 
the  group  were  investigated  as  compared  to  only  GT  Enterprise  in  the  original 
investigation.  The  group  was  recently  enlarged  and  reorganized  with  considerable 
investments  and  there  is  no  indication  that  this  situation  would  change  in  the 
foreseeable  future.  Secondly,  as  regards  GT  Enterprise,  it  was  found  that  the 
company's  practice  of  not  keeping  a  clear  set  of  accounting  audited  in  line  with 
international accounting standard is an established practice and nothing indicates that 
this  would  change  in  the  future.  Also,  its  Articles  of  Association  allowing  for  state 
influence had been in force for a longer period and there were no indications for their 
amendment  in  the  future.  In  these  circumstances,  it  is  considered  that  the  non-MET 
status of the group is of a lasting nature. 

(59)  Furthermore,  as  regards  export  price,  the  investigation  showed  certain  stability  in 
pricing  policies  of  the  group  of  companies  concerned  over  a  longer  period  since  the 
price of the product concerned charged to the Union and to other third countries did 
not differ significantly and followed the same trend between 2007 and the RIP. This 
supports the conclusion that the newly calculated dumping margin is likely to be of a 
lasting nature. 

(60) 

It  was  therefore  considered  that  the  investigation  showed  that  the  structure  and 
behaviour of the group of companies concerned, including the circumstances that led 
to the initiation of the current review, were unlikely to change in the foreseeable future 
in  a  manner  that  would  affect  the  findings  of  the  current  review.  Therefore  it  was 
concluded  that  the  changed  circumstances  are  of  a  lasting  nature  and  that  the 
application of the measure at its current level is no longer sufficient to offset dumping.  

3. 

AMENDMENT OF THE ANTI-DUMPING MEASURES 

(61) 

In  view  of  the  findings  of  increased  dumping  as  well  as  the  lasting  nature  of  the 
changed  circumstances,  it  is  considered  that  the  existing  measures  are  no  longer 
sufficient  to  counteract  the  dumping  which  is  causing  injury.  The  measures  imposed 
by Regulation (EU) No 492/2010 on  imports  of sodium cyclamate originating in the 
PRC  should  therefore  be  modified  for  GT  Enterprise  and  the  same  duty  should  be 
imposed to the other exporting producer within the group by amending that Regulation 
accordingly.  

(62)  No individual injury margin can be established in the current review, since it is limited 
to the examination of dumping as far as the GT Enterprise and its related companies 
within  the  group  are  concerned.  Therefore,  the  dumping  margin  established  in  the 

EN 

15 

   EN 

current  review  was  compared  to  the  injury  margin  as  established  in  the  original 
investigation. Since the latter was higher than the dumping margin found in the current 
review, a definitive anti-dumping duty should be imposed for the group of companies 
concerned at the level of the dumping margin found in the current review. 

(63)  Regarding the form of the measure, it was considered that the amended anti-dumping 
duty  should  take  the  same  form  as  the  duties  imposed  by  Regulation  (EU)  No 
492/2010. To ensure efficiency of the measures and to discourage price manipulation 
it  was  considered  appropriate  to  impose  duties  in  the  form  of  a  specific  amount  per 
kilo.  As  a  result,  the  anti-dumping  duty  to  be  imposed  on  imports  of  the  product 
concerned  produced  and  sold  for  export  to  the  Union  by  the  group  of  companies 
concerned, calculated on the basis of the dumping margin as established in the current 
review expressed as a specific amount per kilo, should be EUR 0.23 per kilo. 

4. 

DISCLOSURE 

(64)  The  group  of  companies  concerned  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 the amendment of the anti-dumping measures in force.  

(65)  Rainbow group commented on the final disclosure. These comments related mostly to 
the  withdrawal  of  the  complaint  in  the  ongoing  investigation  concerning  imports  of 
sodium cyclamate originating in the People's Republic of China limited to two Chinese 
exporting producers, Fang Da Food Additive (Shen Zhen) Limited and Fang Da Food 
Additive (Yang Quan) Limited ("Fang Da group") ("parallel proceeding")7. Rainbow 
claimed  that  the  withdrawal  of  the  complaint  in  the  parallel  proceeding  should, 
logically and legally, also result in the termination of anti-dumping measures against 
other  producers  in  the  PRC  or,  at  the  least,  result  in  the  termination  of  the  current 
review with respect to Rainbow group. 

(66) 

It  demanded  the  termination  of  the  anti-dumping  measures  imposed  by  Regulation 
(EU) No 492/2010 arguing that in the absence of any finding that imports by Fang Da 
were not dumped and/or imports by Fang Da were not causing injury, the principle of 
non-discrimination  contained  in  Article  9  (5)  of  the  basic  Regulation  mandates  the 
termination of the anti-dumping measures imposed. To support its argument it referred 
to  previous  Council  Regulations  where  simultaneous  interim  reviews  concerning 
imports  of  some  countries  were  terminated  without  the  imposition  of  measures 
following  the  non-imposition  of  measures  in  anti-dumping  investigations  concerning 
the imports of the same products from other countries (LAECs8, Flat-Rolled Products 
of  Iron  or  Non-Alloy  Steel9).  However,  it  should  be  noted  that  these  cases  refer  to 
investigations  where  several  countries  were  concerned  and  the  principle  of  non-
discrimination  was  applied  vis-à-vis  imports  from  different  countries.  Secondly,  in 
these  cases  the  reason  for  terminating  the  measures  on  some  countries  was  that 
measures on other countries were not imposed because the Council did not adopt the 
proposal within the statutory time limits (LAECs, Flat-Rolled Products of Iron or Non-
Alloy  Steel).  Therefore  even  though  indeed  it  was  found  necessary  to  terminate  the 
proceedings of anti-dumping measures in the simultaneous proceedings in the quoted 

7 
8 
9 

OJ C 50, 17.2.2011, p.9. 
OJ L22, 27.1.2000, p.1., recitals (134) and (135) 
OJ L294, 17.9.2004, p.3. 

EN 

16 

   EN 

                                                 
cases in order to respect the principle of non-discrimination, these have no relevance 
for  the  current  review.  A  further  reference  to  the  approach  taken  in  Monosodium 
Glutamate10 concerns a case where the complainant intended to withdraw its complaint 
concerning imports of Brazil even though these were found to have been dumped. In 
that case it was envisaged not to accept the withdrawal of the complaint because it was 
concluded that to take measures against the other countries in the absence of measures 
against Brazil would have been discriminatory.  

(67)  Furthermore,  the  two  situations  are  quite  different.  In  the  parallel  proceeding,  the 
complaint  was  withdrawn  and  it  was  concluded  that  the  termination  was  not  against 
the Union interest. In the current review, the request was maintained and it was found 
that the dumping by the Rainbow group increased. Therefore, increasing the duty for 
that group does not constitute discrimination. 

(68)  The Rainbow group also demanded that the withdrawal of the complaint should result 
in  the  termination  of  the  current  review  with  respect  to  Rainbow  group  as  the  two 
proceedings were initiated on the basis of the same procedural document, covered the 
same  period  of  investigation  and  in  the  complaint  the  Complainant  treated  Fang  Da 
group and Rainbow group together for all practical purposes.  

(69)  Secondly,  it  claimed  that  despite  the  investigation  against  Fang  Da  group  being 
initiated under Article 5 of the basic Regulation, the investigation concerning imports 
of the Fang Da group and the interim review concerning the imports of Rainbow group 
are  legally  and  for  all  practical  purposes  in  essence  the  same  proceeding.  Finally  it 
stated  that  having  created  the  distinction  between  proceedings  and  investigations, 
Article 9 (3) of the basic Regulation in effect means that even though Fang Da group 
was subject to a zero duty following the original investigation, it remained subject to 
the  proceeding.  For  this  reason,  the  withdrawal  of  the  complaint  concerning  the 
imports  by  the  Fang  Da  group  should  thus  in view of the Rainbow group concerned 
result in the termination of the current review as well. 

(70) 

It  should  be  noted  in  this  respect  that  the  document  presented  by  the  complainant 
constituted  both  the  complaint  for  the  anti-dumping  investigation  on  the  basis  of 
Article 5 of the basic Regulation and the request for this interim review on the basis of 
Article  11(3)  of  the  basic  Regulation.  It  also  presented  sufficient  evidence  to  justify 
initiating  both  proceedings  individually.  Indeed,  the  Commission  has  initiated  the 
Article  5  investigation  and  the  interim  review  in  two  separate  Notices  of  initiation. 
Thus the anti-dumping investigation based on Article 5 of the basic Regulation and the 
interim  review  based  on  Article  11(3)  of  the  basic  Regulation  are  two  different 
proceedings. 

(71)  Rainbow  group  presented  further  arguments  speculating  on  the  possible  reasons  for 
the withdrawal of the complaint. As these arguments are hypothetical and irrelevant, 
they cannot be addressed and are thus rejected.  

(72)  Finally, Rainbow group stated that the Commission has manifestly violated its rights 
to have ten days to comment on the final disclosure as a non-confidential version of 
the  withdrawal  letter  was  disclosed  to  it  7  days  before  the  deadline  to  submit 
comments. 

10 

OJ L264, 29.9.1998, p.1. 

EN 

17 

   EN 

                                                 
(73)  As  explained  in  recital  (70),  the  Article  5  investigation  in  the  framework  of  which 
Rainbow group received an information letter about the withdrawal of the complaint is 
a separate proceeding from the current review. Rainbow group was an interested party 
in the Article 5 review and only for this reason was it notified of the withdrawal of the 
complaint.  This  notification  letter  was  not  part  of  the  final  disclosure  in  the  current 
review.  The  Rainbow  group  had  30  days  to  comment  on  the  final  disclosure  in  the 
current  proceeding.  Therefore  its  right  to  have  sufficient  time  to  comment  was  not 
violated. 

(74)  To sum up, the comments received were not such as to change the above conclusion. 

HAS ADOPTED THIS REGULATION: 

The  table  in  Article  1(2)  of  Council  Regulation  (EU)  No  492/2010  is  hereby  amended  by 
replacing the following: 

Article 1 

Rate of duty 
(EUR per 
kilogramme) 

TARIC additional 
code 

 0.11 

A473 

Rate of 
duty(EUR per 
kilogramme) 

TARIC additional 
code 

 0.23 

A473 

Country 

Company 

The People’s 
Republic of 
China 

Golden Time Enterprise 
(Shenzhen) Co. Ltd, 
Shanglilang, Cha Shan 
Industrial Area, Buji Town, 
Shenzhen City, Guangdong 
Province, People’s Republic of 
China 

with the following: 

Country 

Company 

The People’s 
Republic of 
China 

Golden Time Enterprise 
(Shenzhen) Co. Ltd, 
Shanglilang, Cha Shan 
Industrial Area, Buji Town, 
Shenzhen City, Guangdong 
Province, People’s Republic of 
China ; Golden Time Chemical 
(Jiangsu) Co., Ltd., No. 90-168, 
Fangshui Road, Chemical 
Industry Zone, Nanjing, Jiangsu 
Province, People’s Republic of 
China 

EN 

18 

   EN 

 
. 

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 

19 

   EN