Proposal for a COUNCIL REGULATION amending Regulation (EU) No 585/2012 imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes, of iron or steel, originating in Russia and Ukraine, following a partial interim review pursuant to Article 11(3) of Regulation (EC) No 1225/2009
Date: 2012-07-30
Institutions: European Commission
Subjects: Russia, Ukraine, anti-dumping duty, import (EU), iron, originating product, steel, tube

EUROPEAN COMMISSION 

Brussels, 30.7.2012  
COM(2012) 424 final 

2012/0204 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EU) No 585/2012 imposing a definitive anti-dumping duty on 
imports of certain seamless pipes and tubes, of iron or steel, originating in Russia and 
Ukraine, following a partial interim review pursuant to Article 11(3) of Regulation (EC) 
No 1225/2009 

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EXPLANATORY MEMORANDUM 

Context of the proposal 

Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  1225/2009  of 
30 November 2009 on protection against dumped imports from countries not members 
of  the  European  Community  ('the  basic  Regulation')  in  the  proceeding  concerning 
imports of certain seamless pipes and tubes, of iron or steel, originating in Ukraine. 

General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is  the  result  of  an  investigation  that  was  carried  out  in  line  with  the  substantive  and 
procedural  requirements  laid  out  in  the  basic  Regulation,  in  particular,  Article  11(3) 
thereof. 

Existing provisions in the area of the proposal 

The  measures  currently  in  force  were  imposed  by  Council  Regulation  (EC)  No 
585/2012 imposing a definitive anti-dumping duty on imports of certain seamless pipes 
and  tubes,  of  iron  or  steel,  originating  inRussia  and  Ukraine,  following  an  expiry 
review pursuant to Article 11(2) of Regulation (EC) No 1225/2009, and terminating the 
expiry  review  proceeding  concerning  imports  of  certain  seamless  pipes  and  tubes,  of 
iron or steel, originating in Croatia. 

Consistency with the other policies and objectives of the Union 

Not applicable. 

Consultation of interested parties and impact assessment 

Consultation of interested parties 

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

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

The  basic  Regulation  does  not  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

Legal elements of the proposal 

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Summary of the proposed action 

On 29 July 2011 the Commission initiated, upon a request from the Ukrainian producer 
Interpipe, a partial interim review of the anti-dumping measures applicable to imports 
of certain seamless pipes and tubes, of iron or steel, originating in Ukraine.  

The  attached proposal for a Council Regulation is based  on findings that the level of 
anti-dumping duties currently imposed on imports of certain seamless pipes and tubes, 
of  iron  or  steel,  manufactured  by  the  company  Interpipe  is  no  longer  necessary  to 
eliminate injurious  dumping and that the changed  circumstances leading to the lower 
dumping margin are of a lasting nature.  

It  is  therefore  proposed  that  the  Council  adopt  the  attached  proposal  for  a  regulation 
amending the anti-dumping duty currently in force on imports of certain seamless pipes 
and  tubes,  of  iron  or  steel,  from  LLC  Interpipe  Niko  Tube  and  OJSC  Interpipe 
Nizhnedneprovsky Tube Rolling Plant.  

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  and  in 
particular Article 11(3) thereof.  

Subsidiarity principle 

The  proposal  falls  under  the  exclusive  competence  of  the  Union.  The  subsidiarity 
principle therefore does not apply. 

Proportionality principle 

The proposal complies with the proportionality principle for the following reasons:  

The form of action is described in the above-mentioned basic Regulation and leaves no 
scope for national decision. 

Indication  of  how  the  financial  and  administrative  burden  falling  upon  the  Union, 
national governments, regional and local authorities, economic operators and citizens is 
minimized and proportionate to the objective of the proposal is not applicable. 

Choice of instruments 

Proposed instruments: Regulation. 

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

Budgetary implication 

The proposal has no implication for the Union budget.  

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2012/0204 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EU) No 585/2012 imposing a definitive anti-dumping duty on 
imports of certain seamless pipes and tubes, of iron or steel, originating in Russia and 
Ukraine, following a partial interim review pursuant to Article 11(3) of Regulation (EC) 
No 1225/2009 

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) and Article 11(3), (5) and (6) thereof, 

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

Whereas: 

1. 

PROCEDURE 

1.1. 

Measures in force 

(1) 

By  Regulation  (EC)  No  954/20062  the  Council,  following  an  investigation  ('the 
original investigation'), imposed a definitive anti-dumping duty on imports of certain 
seamless pipes and tubes, of iron or steel, originating in Croatia, Russia and Ukraine. 
The measures consisted of an ad valorem anti-dumping duty ranging between 12,3 % 
and  25,7  %  imposed  on  imports  from  individually  named  exporting  producers  in 
Ukraine, with a residual duty rate of 25,7 % on imports from all other companies in 
Ukraine. The definitive anti-dumping duty imposed on the exporting producer subject 
to  the  current  review  investigation,  CJSC  Nikopolsky  Seamless  Tubes  Plant  Niko 
Tube  and  OJSC  Nizhnedneprovsky  Tube  Rolling  Plant,  now  named  LLC  Interpipe 
Niko Tube and OJSC Interpipe Nizhnedneprovsky Tube Rolling Plant ('the applicant' 
or 'Interpipe') was 25.1%.  

(2) 

Following an application by Interpipe for the annulment of Council Regulation (EC) 
No 954/2006, the General Court of the European Union annuled Article 1 of Council 
Regulation  (EC)  No  954/2006  in  so  far  as  the  anti-dumping  duty  fixed  for  Interpipe 
exceeded  that  which  would  have  been  applicable  had  the  export  price  not  been 
adjusted  for  a  commission  when  sales  took  place  through  the  intermediary  of  the 

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2 

OJ L 343, 22.12.2009, p. 51. 
OJ L 175, 29.6.2006, p. 4.  

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affiliated trader, Sepco SA.3 On 16 February 2012 the Court of Justice of the European 
Union upheld the judgment of the General Court.4  

(3) 

(4) 

(5) 

Following  these  judgments,  the  Council  amended  Council  Regulation  (EC)  No 
954/2006 by Regulation (EU) No 540/20125 to correct the anti-dumping duty imposed 
on  Interpipe  in  sor  far  as  it  had  been  erroneously  established.  Accordingly,  the  anti-
dumping duty currently in force for Interpipe is 17.7 %. 

By  Regulation  585/20126  the  Council,  following  an  expiry  review,  maintained  the 
measures imposed by Council Regulation (EC) No 954/2006 on imports of seamless 
pipes and tubes, of iron or steel, originating in Russia and Ukraine ('the expiry review 
investigation'). 

Accordingly, the measures currently in force are those established by Regulation (EU) 
No  585/2012,  i.e.  between  24.1  and  35.8%  for  imports  from  Russia  and  between 
12.3%  and  25.7  %  for  imports  from  Ukraine,  with  LLC  Interpipe  Niko  Tube  and 
OJSC Interpipe Nizhnedneprovsky Tube Rolling Plant having an anti-dumping duty of 
17.7%.  

1.2. 

Request for a partial interim review 

(6) 

(7) 

On  29  July  2011,  the  Commission  announced  by  a  notice  published  in  the  Official 
Journal  of  the  European  Union  the  initiation  of  a  partial  interim  review  ('Notice  of 
initiation')7  of  the  anti-dumping  measures  applicable  to  imports  of  certain  seamless 
pipes and tubes, of iron or steel, originating in Ukraine pursuant to Article 11(3) of the 
basic Regulation. 

The  review,  which  is  limited  in  scope  to  the  examination  of  dumping,  was  initiated 
following  a  substantiated  request  lodged  by  Interpipe.  In  the  request  Interpipe 
provided  prima  facie  evidence  that  the  continued  imposition  of  the  measure  at  its 
current level is no longer necessary to offset injurious dumping.  

1.3. 

Investigation 

(8) 

(9) 

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The investigation of the level of dumping covered the period fom 1 April 2010 to 31 
March 2011 ('the review investigation period' or 'RIP'). 

The  Commission  officially  informed  the  applicant,  the  authorities  of  the  exporting 
country and the Union industry of the initiation of the partial interim review. Interested 
parties were given the opportunity to make their views known in writing and to request 
a hearing within the time-limit set out in the Notice of initiation. 

Judgment of 10 March 2009 in case T-249/06, Interpipe Nikopolsky Seamless Tubes Plant Niko Tube 
ZAT  and  Interpipe  Nizhnedneprovsky  Tube  Rolling  Plant  VAT  v.  Council  of  the  European  Union, 
(Interpipe v. Council). 
Judgment  of  16  February  2012  in joined  cases  C-191/09  P  and  C-200/09  P,  Council  of  the  European 
Union v. Interpipe Nikopolsky Seamless Tubes Plant Niko Tube ZAT and Interpipe Nizhnedneprovsky 
Tube Rolling Plant VAT (Council v. Interpipe). 
OJ L 165, 26.6.2012, p. 1. 
OJ L 174, 4.7.2012, p. 5. 
OJ C 223, 29.7.2011, p. 8. 

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(10) 

In order to obtain the information necessary for its investigation the Commission sent 
a questionnaire to the applicant, which responded within the given deadline.  

(11)  The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the 
purpose of determining the level of dumping. Verification visits were carried out at the 
premises of the applicant and at its related trading companies LLC Interpipe Ukraine 
and Interpipe Europe SA. 

2. 

PRODUCT CONCERNED AND LIKE PRODUCT 

2.1. 

Product concerned 

(12)  The  product  concerned  is  the  same  as  that  defined  in  Regulation  585/2012  which 
imposed the measures currently in force, i.e. seamless pipes and tubes of iron or steel 
('SPT'), of circular cross-section, of an external diameter not exceeding 406,4 mm with 
a  Carbon  Equivalent  Value  (CEV)  not  exceeding  0,86  according  to  the  International 
Institute  of  Welding  (IIW)  formula  and  chemical  analysis8,  originating  in  Ukraine, 
currently falling within CN codes ex 7304 11 00, ex 7304 19 10, ex 7304 19 30, ex 
7304 22 00, ex 7304 23 00, ex 7304 24 00, ex 7304 29 10, ex 7304 29 30, ex 7304 31 
80, ex 7304 39 58, ex 7304 39 92, ex 7304 39 93, ex 7304 51 89, ex 7304 59 92 and 
ex 7304 59 93 ('the product concerned'). 

2.2. 

Like product 

(13)  As  established  in  the  original  investigation  as  well  as  in  the  expiry  review 
investigation, the current investigation confirmed that the product produced in Ukraine 
and exported to the Union, the product produced and sold on the domestic market of 
Ukraine, and the product produced and sold in the Union by the Union producers have 
the same basic physical and technical characteristics and end uses. These products are 
therefore  considered  to  be  alike  within  the  meaning  of  Article  1(4)  of  the  basic 
Regulation. 

3. 

DUMPING 

3.1. 

Preliminary remarks 

(14) 

Interpipe has two fully owned and controlled exporting producers, LLC Interpipe Niko 
Tube  (Niko  Tube)  and  OJSC  Interpipe  Nizhnedneprovsky  Tube  Rolling  Plant 
(Interpipe  NTRP).  In  line  with  the  Institutions'  standard  practice,  one  common 
dumping  margin  was  calculated  for  the  two  exporting  producers.  The  amount  of 
dumping  was  first  calculated  for  each  individual  exporting  producer  before 
determining a single weighted average rate of dumping for both companies.  

(15)  This  methodology,  however,  was  different  from  the  methodology  applied  in  the 
original  investigation,  where  the  common  dumping  margin  was  calculated  by 
collapsing  all  data  relating  to  production,  profitability  and  sales  in  the  Union  of  the 
two  producing  entities.  The  change  in  circumstances  that  warrants  this  change  in 
methodology  is  due  to  a  marked  change  in  the  corporate  structure  of  the  group 

8 

The  CEV  shall  be  determined  in  accordance  with  Technical  Report,  1967,  IIW  doc.  IX-555-67, 
published by the International Institute of Welding (IIW). 

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allowing  the  identification  of  the  relevant  production  company  with  respect  to  sales 
and production, which was not possible in the original investigation. 

(16)  Furthermore, in the original investigation an adjustment pursuant to Article 2(5) of the 
basic Regulation was made in respect of Interpipe's energy costs in order to reasonably 
reflect  the  costs  associated  with  the  production  and  sale  of  electricity  and  gas  in 
Ukraine. This adjustment was deemed necessary due to the fact that Ukrainian gas and 
electricity prices, at the time, were significantly lower than the average price paid in 
the Union and did not reflect international market prices. The adjustment was based on 
the  average  prices  observed  in  Romania,  which  at  that  time  formed  part  of  the 
investigation. 

(17)  However,  contrary  to  the  original  investigation,  it  is  considered  that  an  energy 
adjustment is not deemed necessary for the purpose of the current interim review. The 
investigation  has  shown  that  the  average  Ukrainian  energy  prices  have  increased 
steadily since the original investigation, at a much higher rate than the average prices 
in  the  European  Union,  thus  gradually  bridging  the  gap  between  them.  The 
considerable  price  difference  in  energy  costs  that  was  found  during  the  original 
investigation and warranted an adjustment is therefore currently not present.  

(18)  Based on the above it is not considered appropriate to make an energy adjustment in 

this interim review.  

3.2. 

Dumping of imports during the RIP  

3.2.1.  Normal value 

(19) 

(20) 

(21) 

In accordance with Article 2(2) of the basic Regulation it was first examined whether 
each of the exporting producers' 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,  i.e.  whether  the  total  volume  of  such  sales  represented  at 
least  5%  of  the  total  volume  of  export  sales  of  the  product  concerned  to  the  Union. 
The  examination  established  that  the  domestic  sales  were  representative  for  both 
exporting producers.  

It  was  further  examined  whether  each  product  type  of  the  like  product  sold  by  the 
exporting  producers  on  its  domestic  market  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 by the applicant on the domestic market to independent customers during the 
RIP represented at least 5% of its total sales volume of the comparable product type 
exported to the Union.  

In accordance with Article 2(4) of the basic Regulation it was subsequently examined 
whether the domestic sales of each product type that  had  been sold in representative 
quantities could be regarded as being made in the ordinary course of trade. This was 
done  by  establishing  the  proportion  of  profitable  domestic  sales  to  independent 
customers  on  the  domestic  market  for  each  exported  type  of  the  product  concerned 
during the RIP.  

(22)  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 

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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.  

(23)  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 the RIP.  

(24)  The normal value for the non-representative types (i.e. those of which domestic sales 
constituted  less  than  5  %  of  export  sales  to  the  Union  or  were  not  sold  at  all  in  the 
domestic market) was calculated on the basis of the cost of manufacturing per product 
type  plus  an  amount  for  selling,  general  and  administrative  costs  and  for  profits.  In 
case  of  existing  domestic  sales,  the  profit  of  transactions  in  the  ordinary  course  of 
trade  on  the  domestic  market  per  product  type  for  the  product  types  concerned  was 
used.  In  case  of  no  domestic  sales,  an  average  profit  was  used.  This  change  in 
methodology, is due to the fact that following the original investigation, a WTO Panel 
issued, and the WTO Dispute Settlement Body adopted, the report in case European 
Communities  -  Anti-dumping  Measure  on  Farmed  Salmon  from  Norway9,  which 
provides  that  the  actual  profit  margin  established  for  the  transactions  in  the  ordinary 
course  of  trade  of  the  relevant  product  types  for  which  normal  value  has  to  be 
constructed cannot be disregarded. 

(25)  After disclosure of the final conclusions, the two exporting producers argued that idle 
costs should not have been included in their total manufacturing costs of the product 
concerned during the RIP, claiming that this was in breach of Article 2(5) of the basic 
anti-dumping  regulation  and  in  contradiction  with  the  accounting  principles  set  out 
under  the  International  Accounting  Standards  (IAS)  and  IAS  2  (  in  particular.  With 
regard to Article 2(5) it should be noted that under this article, when it is considered 
that costs associated with the production of the product concerned are not reasonably 
reflected in the records of the party concerned, they shall be adjusted. The fact that the 
company did not operate at its full capacity implied that costs were however incurred. 
Indeed,  such  costs  were  recorded  as  a  cost  in  the  income  statement  of  the  two 
exporting  companies  and  could  directly  be  linked  to  the  like  product.  Furthermore, 
reference  to  IAS  2  was  found  to  be  irrelevant  because  the  objective  of  IAS  2  is  to 
prescribe the accounting treatment for inventories and does not determine what should 
be considered as cost of manufacturing. The claim was therefore rejected. 

(26)  The  same  exporting  producers  also  claimed  that  certain  financial  expenses  resulting 
from  loans,  which  were  included  in  the  SGA  expenses  should  have  been  excluded. 
They  claimed  that  these  loans  were  taken  to  satisfy  the  needs  for  liquidity  and  short 
term  financing  of  the  company  and  they  were  not  related  to  the  production  of  the 
product  concerned.  During  the  verification  visit  it  was  indeed  found  that  the  interest 
expenses were  mainly related  to finance the  working  capital.  Therefore,  interest  cost 
were allocated to all products. The exporting producers could not demonstrate that the 
interest  expenses  were  specifically  made  for  other  purposes  than  to  finance  the 

9 

WT/DS337/R of 16 November 2007 – adopted by the Dispute Settlement Body on 15 January 2008 

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working capital. The two exporting producers could not provide any further evidence 
to substantiate their claimand this claim was therefore rejected. 

3.2.2.  Export price 

(27)  All exports of the product concerned by the the two exporting producers to the Union 
were  made  through  a  related  trading  company  located  in  Switzerland  directly  to 
independent customers in the Union. The export price was therefore established on the 
basis of export prices actually paid or payable in accordance with Article 2(8) of the 
basic Regulation.  

3.2.3.  Comparison 

(28) 

It  is  recalled  that  in  the  original  investigation  an  adjustment  was  made  to  the  export 
price under Article 2(10)(i) of the basic Regulation in the cases where sales were made 
through related traders. However, in line with the judgment of the Court of Justice in 
the  Interpipe  case10,  which  held  that  the  adjustment  was  not  warranted,  no  such 
adjustment has been made in this interim review.  

(29)  The normal value and the export price of the two exporting producers 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 
differences affecting prices and price comparability in accordance with Article 2(10) 
of the basic Regulation. On this basis, adjustments were made in respect of transport 
costs, rebates and discounts, commissions and credit costs.  

3.2.4.  Dumping margin 

(30)  Pursuant  to  Article  2(11)  and  (12)  of  the  basic  Regulation,  the  weighted  average 
normal value was compared with the weighted average export price per product type 
on an ex-work basis separately for each of the two exporting producers. As mentioned 
in  recital  (14)  above,  one  common  dumping  margin  is  subsequently  established  for 
Interpipe by calculating a single weighted average rate of dumping for both exporting 
producers within Interpipe. 

(31)  On this basis the dumping margin, expressed as an percentage of the cif Union frontier 

price, duty unpaid, is 13.8% 

4. 

LASTING NATURE OF CHANGED CIRCUMSTANCES 

(32) 

In  its  request  for  a  partial  interim  review  the  applicant  claimed  that  changes  in  the 
corporate structure and production organisation, as well as a restructuring of the sales 
organisation on both the domestic and export markets, had had an impact on its cost 
structure  and  that,  therefore,  the  existing  level  of  the  anti-dumping  duty  were  no 
longer necessary in order to offset injurious dumping.  

10 

The Court of Justice of the European Union judgment of 16 February 2012 in joined cases C-191/09 P 
and C-200/09 P, Council of the European Union versus Interpipe Nikopolsky Seamless Tube Plant Niko 
Tube ZAT and Interpipe Nizhnedneprovsky Tube Rolling Plant VAT ('Interpipe'). 

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(33) 

It  was  accordingly  investigated  whether  the  changed  circumstances  that  led  to  the 
initiation of this interim review and the result thereof can reasonably be considered to 
be of a lasting nature.  

(34)  The investigation has established that the main factors leading to the lower dumping 
margin  found  in  this  review  investigation  are  changes  in  the  corporate  organisation, 
which includes a merger between two production companies, and a restructuring of the 
sales  organisation,  which  has  been  streamlined.  These  changes,  which  have  affected 
the  cost  structure  of  the  applicant  for  the  production  and  selling  of  the  product 
concerned  are  of  a  structural  nature  and  thus  unlikely  to  change  in  the  foreseeable 
future. Moreover, there were no indications of significant volatility in the applicant's 
prices. 

(35) 

It  was  therefore  concluded  that  the  changes  are  of  a  lasting  nature  and  that  the 
application of the existing measures at their current level is no longer necessary.  

HAS ADOPTED THIS REGULATION: 

Article 1 

The entry concerning LLC Interpipe Niko Tube and OJSC Interpipe Nizhnedneprovsky Tube 
Rolling Plant (Interpipe NTRP) in the table of Article 1(2) of Regulation (EU) No 585/2012 
shall be replaced by the following: 

LLC Interpipe Niko Tube and OJSC Interpipe Nizhnedneprovsk
Tube Rolling Plant (Interpipe NTRP)  

13.8 % 

A743 

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

Article 2 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the Council 
The President 

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