Proposal for a COUNCIL REGULATION amending Implementing Regulation (EU) No 585/2012 imposing a definitive anti-dumping duty on imports of certain seamless steel pipes, of iron or steel, originating, inter alia, in Russia, following a partial interim review pursuant to Article 11(3) of Regulation (EC) No 1225/2009
Date: 2012-12-07
Institutions: European Commission
Subjects: Russia, Ukraine, anti-dumping duty, import (EU), iron, originating product, steel, tube

EUROPEAN 
COMMISSION 

Brussels, 7.12.2012  
COM(2012) 731 final 

2012/0345 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Implementing Regulation (EU) No 585/2012 imposing a definitive anti-
dumping duty on imports of certain seamless steel pipes, of iron or steel, originating, 
inter alia, in Russia, 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, inter alia, 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  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  Implementing  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 
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  14  October  2011  the  Commission  initiated,  upon  a  request  from  the  Russian 
producer  TMK,  a  partial  interm  review  of  the  anti-dumping  measures  applicable  to 
imports of certain seamless pipes and tubes, of iron or steel originating in Russia.  

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 group TMK should be increased in order 
to  eliminate  injurious  dumping  and  that  the  changed  circumstances  leading  to  the 
higher 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  the  producers  OAO  Volzhsky  Pipe  Plant,  OAO 
Taganrog  Metallurgical  Works,  OAO  Sinarsky  Pipe  Plant  and  OAO  Seversky  Tube 
Works belonging to the TMK Group.  

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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2012/0345 (NLE) 

Proposal for a 

COUNCIL REGULATION 

amending Implementing Regulation (EU) No 585/2012 imposing a definitive anti-
dumping duty on imports of certain seamless steel pipes, of iron or steel, originating, 
inter alia, in Russia, 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, Romania, Russia and 
Ukraine.  The  measures  consisted  of  an  ad  valorem  anti-dumping  duty  of  24.1  % 
imposed  on  imports  from  individually  named  exporting  producers  in  Russia,  with  a 
residual  duty  rate  of  35.8  %  on  imports  from  all  other  companies  in  Russia.  The 
definitive  anti-dumping  duty  imposed  on  the  group  subject  to  the  current  review 
investigation,  OAO  TMK  ('the  TMK  Group'  or  'the  applicant')  composed  of  OAO 
Volzhsky Pipe Plant, OAO Taganrog Metallurgical Works, OAO Sinarsky Pipe Plant 
and OAO Seversky Tube Works was 35.8%, i.e. the residual duty.  

(2) 

By Regulation (EC) No 812/20083 the Council, following the initiation of an interim 
review requested by the TMK Group pursuant to Article 11 (3) of the basic Regulation 
('the  review  investigation'),  amended  the  definitive  anti-dumping  duty  on  imports  of 
certain seamless pipes and tubes, of iron or steel, to 27.2% for the TMK Group. 

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OJ L 343, 22.12.2009, p. 51. 
OJ L 175, 29.6.2006, p. 4.  
OJ L 220, 15.8.2008, p. 1.  

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(3) 

(4) 

By  Implementing  Regulation  (EU)  No  585/20124  the  Council,  following  an  expiry 
review  ('the  expiry  review  investigation'),  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. 

Accordingly,  the  measures  currently  in  force  are  those  imposed  by  Implementing 
Regulation  (EU)  No  585/2012.  The  TMK  Group  composed  of  OAO  Volzhsky  Pipe 
Plant,  OAO  Taganrog  Metallurgical  Works,  OAO  Sinarsky  Pipe  Plant  and  OAO 
Seversky Tube Works is subject to an anti-dumping duty of 27.2%.  

1.2. 

Initiation of a partial interim review 

(5) 

(6) 

On 14 October 2011, the Commission announced by a notice published in the Official 
Journal of the European Union ('notice of initiation')5 the initiation of a partial interim 
review pursuant to Article 11(3) of the basic Regulation of the anti-dumping measures 
applicable to imports of certain seamless pipes and tubes, of iron or steel, originating 
in Russia. 

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

1.3. 

Parties concerned 

(7) 

(8) 

(9) 

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. 

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

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 ZAO TMK Trade House 
(Moscow),  TMK  Warehouse  Complex  LLC  (Lytkaryno),  TMK  Europe  GmbH 
(Cologne), TMK Italia s.r.l. (Lecco) and TMK Global S.A. (Geneva). 

1.4. 

Review investigation period 

(10)  The investigation of the level of dumping covered the period from 1 October 2010 to 

30 September 2011 ('the review investigation period' or 'RIP'). 

2. 

PRODUCT CONCERNED AND LIKE PRODUCT 

2.1. 

Product concerned 

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OJ L 174, 4.7.2012, p. 5. 
OJ C 303, 14.10.2011, p. 11. 

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(11)  The product concerned is the same as that defined in Implementing Regulation (EU) 
No 585/2012 which imposed the measures currently in force, i.e. seamless pipes and 
tubes of iron or steel , 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  analysis6,  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, originating in Russia ('the product concerned' or 'SPT'). 

2.2. 

Like product 

(12)  As  established  in  the  original  investigation  as  well  as  in  the  expiry  review 
investigation, the current investigation confirmed that the product produced in Russia 
and exported to the Union, the product produced and sold on the domestic market of 
Russia, 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. 

Dumping of imports during the RIP  

3.1.1.  Normal value 

(13)  Sales on the domestic market were made via the related companies, ZAO TMK Trade 

House and TMK Warehouse, which resold SPT to independent customers in Russia. 

(14) 

(15) 

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  all 
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.  

(16) 

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 

6 

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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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. 

(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 the RIP.  

(19)  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.  

(20)  With  regard  to  manufacturing  costs,  and  in  particular  energy  costs,  as  far  as  gas  is 
concerned,  it  was  examined  whether  the  gas  prices  paid  by  the  exporting  producers 
reasonably reflected the costs associated with the production and distribution of gas. 

(21) 

It was found that the domestic gas price paid by the exporting producers was around 
one  third  of  the  export  price  of  natural  gas  from  Russia.  In  this  regard,  all  available 
data  indicates  that  domestic  gas  prices  in  Russia  are  regulated  prices,  which  are  far 
below market prices paid in unregulated markets for natural gas. Therefore, since gas 
costs were not reasonably reflected in the exporting producers’ records as provided for 
in  Article  2(5)  of  the  basic  Regulation,  they  had  to  be  adjusted  accordingly.  In  the 
absence  of  any  sufficiently  representative,  undistorted  gas  prices  relating  to  the 
Russian  domestic  market,  it  was  considered  appropriate  to  base  the  adjustment,  in 
accordance  with  Article  2(5),  on  the  basis  of  information  from  other  representative 
markets. The adjusted price was based on the average price of Russian gas when sold 
for  export  at  the  German/Czech  border  (Waidhaus),  adjusted  for  local  distribution 
costs. Waidhaus, being the main hub for Russian gas sales to the EU, which is both the 
largest  market  for  Russian  gas  and  has  prices  reasonably  reflecting  costs,  can  be 
considered  a  representative  market  within  the  meaning  of  Article  2(5)  of  the  basic 
Regulation. 

(22)  After disclosure, the TMK Group argued that the gas price adjustment was contrary to 
Article  2(5)  of  the  Basic  Regulation  and  2.2.1.1  of  the  WTO  AD  Agreement.  As 
mentioned in recital (21), it was found that the domestic gas price paid by the TMK 
Group was around one third of the export price of natural gas from Russia. Therefore, 
since  gas  costs  were  not  reasonably  reflected  in  the  exporting  producers’  records  as 
provided  for  in  Article  2(5)  of  the  basic  Regulation,  they  had  to  be  adjusted 

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accordingly. The claim made by the TMK Group was considered to be unsubtantiated 
and in the absence of any evidence, it was rejected. 

3.1.2.  Export price 

(23) 

It should be noted that some export quantities of the product concerned had not been 
reported by the TMK Group as they considered that these SPT did not fall within the 
scope  of  the  investigation.  Samples  in  the  form  of  cross-sections  cuts  of  the  product 
allegedly  falling  outside  the  product  scope  before  and  after  further  processing  were 
shown  to  the  Commission  services  during  the  on  spot  verification  visits  which 
however cannot be regarded as conclusive evidence. 

(24)  Having  examined  the  issue,  it  was  considered  that  these  SPT  fall  within  the  product 
scope. The corresponding export transactions were therefore taken into account in the 
dumping calculation.  

(25)  During  a  hearing  chaired  by  the  Hearing  Officer  on  November  9,  2012,  the  TMK 
group  stated  that  it  wished  to  address  mainly  the  classification  issue,  raised  in  the 
disclosure  document,  which  in  their  view  resulted  in  an  increase  of  their  dumping 
margin  from  circa  13-14%.  The  TMK  group  expressed  some  surprise  regarding  the 
fact that these products were considered as falling within the scope of the investigation 
and reiterated that these exported quantities had not been reported on the grounds that 
these products were "blanks" (also named "hollows") and not pipes, and thus, in their 
opinion, did not fall within the product scope. They further indicated that in fact, this 
matter had been addressed very concisely by the Commission services in the course of 
the  verification  visit.  In  this  regard,  it  should  be  noted  that  the  TMK  Group  itself 
indicated  in  one  submission  dated  31  August  2012,  that  "the  question  of  whether  or 
not "hollows" falling under CN code 7304 5910 should be included within the scope of 
the investigation has been extensively addressed in the course of the investigation". In 
fact, both the European Steel Tube Association ('ESTA') and the TMK group have had 
ample  opportunity  to  comment  on  this  issue  on  several  occasions.  Furthermore,  it 
should  be  noted  that  the  Commission  services  requested  TMK's  related  importers  to 
fill in the Annex to the questionnaire and verified the information received during an 
on-spot verification visit in order to collect all relevant information. The statement that 
this  matter  was  very  "concisely"  addressed  by  the  Commission  services  during  the 
investigation and these products had been considered to be part of the product scope 
was incorrect and was therefore rejected.  

(26)  The  TMK  Group  further  indicated  that  the  inclusion  of  these  export  quantities  was 
illegal and unjustified as the Commission services failed to demonstrate that the pipes 
were not "unworked" and the conclusions that these "blanks" were "semi-finished" (or 
partially worked) products were ill-founded.  

(27)  First it is recalled that the products covered by CN codes 7304 3910 and 7304 5910 
are "tubes, pipes and hollow profiles" seamless, of iron (other than cast iron) or steel, 
"unworked, straigth and of uniform wall thickness, for use solely in the manufacture of 
tubes and pipes with other cross sections and wall thicknesses". The Explanatory Note 
to subheadings 7304 3910 and 7304 5910 states that they include “seamless steel tubes 
usually obtained by piercing and hot-rolling or by piercing and hot drawing; they are 
usually called ‘blanks’. They are intended to be transformed into tubes of other shapes 
and wall thickness with more reduced dimensional tolerances. They are presented with 

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the ends roughly cut off and deburred but are otherwise unfinished. Their exterior and 
interior  surfaces  are  rough  and  not  descaled.  They  are  not  oiled,  zinc-coated  or 
painted”.  After  consideration  of  the  arguments  put  forward  by  the  TMK  Group  and 
ESTA, it is considered that based on the various documents collected during the on-
spot  verification  visits  (customer  purchase  order  and  specifications,  intercompany 
contracts, invoices issued by related importers, description of the standard ISO 9809-
1) these tubes are indeed "semi-finished" in the sense that they have to correspond to 
certain requirements and specifications such as "top quality SS hot finished tubes for 
cylinders, in steel type 34CrMo4 subject to UNI EN 10083-1 and DIN 1629 "annealed 
coarse"  and  "smooth  at  ends",  of  the  dimensions  specified  in  the  purchase  order." 
Furthermore, other requirements which are listed in the customer purchase order and 
specifications  such  as  "ultrasonic  testing  for  feasible  defects,  thickness  control, 
ovalization and straightness" also point to further processing of these tubes, which is 
not the case for so-called 'blanks'. 

(28)  The TMK Group claimed that the features of 'annealed coarse' and 'smooth at ends' are 
not among the criteria listed in the text of the relevant CN codes and the Explanatory 
Note to determine whether a pipe is 'unworked'. In this respect, it must be noted that 
heading texts and relevant Explanatory notes do not always contain an exhaustive list 
of  all  the  features  of  the  products  covered.  In  relation  to  products  such  as  those  in 
question, which partake of the characteristics of different kinds of goods, classification 
depends on the most important features of the imported goods. Therefore, while noting 
that these features are not among the criteria listed in the text of the relevant CN codes 
and the Explanatory Note, they remain important elements in assessing whether or not 
product  types  can  be  considered  to  be  'unworked'  and  thus  within  the  scope  of  CN 
codes 7304 39 10 and 7304 59 10. 

(29)  The TMK group also claimed that these tubes were not annealed as they were not heat 
treated as indicated in the mill test certificates. In this regard, it should be noted that 
the purchase specifications of the customer contain contradictory information as they 
mention  heat  treatment  of  the  product.  Reference  to  these  purchase  specifications  is 
made  on  other  documents  such  as  the  manufacturer  declaration  issued  by  the  TMK 
Group  and  the  specification  to  the  contracts  signed  by  the  TMK  Group  and  its 
unrelated customer.  

(30) 

It was further noted that in the above-mentioned intercompany contracts provided by 
the TMK Group during the on-spot verification, these products were initially classified 
in  a  different  CN  code  (under  measures)  and  were  changed  to  a  CN  code  not  under 
measures (including during the IP), although, based on the information available, there 
were no changes to the customer purchase order and product specifications. The TMK 
Group argued that this change in the CN code was irrelevant as what matters under the 
applicable customs classification rules are the objective characteristics of the goods at 
the  time  of  their  importation  to  the  EU.  While  the  objective  characteristics  of  the 
goods  at  the  time  of  their  importation  to  the  EU  are  an  important  element,  it  is  not 
denied  by  the  TMK  Group  that  they  classified  the  product  types  as  falling  under 
measures  before changing that classification even without any change in the product 
specifications. This is considered to be one of the elements that leads to the conclusion 
that the concerned product types fall within the scope of the investigation. 

(31) 

It was also noted that the unrelated customer's purchase specifications clearly refered 
to 'semi finished' products rather than 'blanks' or 'hollows'. On this latter point, TMK 

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argued that it is totally irrelevant for customs classification purposes how the product 
is described by a purchaser. In reply to this, it must be stated that the description of the 
product by the purchaser has some value in the sense that the purchaser is obviously 
aware  of  the  product  requirements  at  the  time  of  order.  To  say,  therefore,  that  the 
purchaser's description is 'totally irrelevant' is doubtful.  

(32) 

In  conclusion,  the  semi-finished  seamless  steel  tubes  produced  with  heat  treatment 
purchased  for  the  purpose  of  producing  such  cylinders  have  to  correspond  to  very 
detailed  technical/quality/dimensional  requirements.  These  features  are  clearly  not 
corresponding with the notion of "unworked" as mentioned in the Explanatory Notes 
to  CN  7304  3910  and  7304  5910  and  therefore,  the  comments  made  by  the  TMK 
Group  regarding  the  alleged  wrong  interpretation  of  the  term  "unworked"  by  the 
Commission had to be rejected.  

(33)  Contrary  to  several  previous  statements,  the  TMK  group  also  argued  that  these 
products  sold  to  an  unrelated  customer  were  not  solely  destined  for  the  same 
application i.e. the production of cylinders, but could also be transformed in so-called 
"precision pipes". The group stated that the unrelated customer first transforms blanks 
into cold rolled pipes (or precision pipes) which are then processed into gas cylinders. 
It should be noted that this element is not only contradictory to what was stated by the 
TMK  group  in  previous  submissions  and  to  what  was  found  in  the  documents 
collected during the verification visits. Notwithstanding the above, it should be noted 
that  this  additional  allegation  was  new,  was  submitted  at  a  late  stage  and  was  not 
substantiated  by  evidence.  In  addition,  the  group  submitted  evidence  that  allegedly 
showed  that  the  unrelated  customer  also  sold  precision  pipes.  While  noting  that  this 
evidence  was  submitted  very  late  in  the  investigation,  it  was  also  noted  that  the 
evidence  related  to  a  period  long  after  the  end  of  the  RIP  and  that  the  documents 
related  to  possible  sales  of  any  types  (or  sections)  of  cold  rolled  products  (pipes). 
These arguments were therefore rejected. 

(34)  The majority of exports of the product concerned by the the exporting producers to the 
Union were made to independent customers in the Union through two related trading 
companies, i.e. TMK Europe GmbH located in Germany and TMK Italia s.r.l. located 
in Italy. The export price for the above-mentioned exports was established on the basis 
of export prices actually paid or payable in accordance with Article 2(9) of the basic 
Regulation, i.e. using the resale prices actually paid or payable to the related company 
by the first independent buyer in the Union in the RIP, adjusted for all costs incurred 
between importation and resale and for profits. 

(35)  Some limited quantities were exported directly to independent customers in the Union. 
The  export  price  for  these  quantities  was  established  on  the  basis  of  export  prices 
actually paid or payable in accordance with Article 2(8) of the basic Regulation. 

3.1.3.  Comparison 

(36)  The normal value and the export price of the 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 packaging, 
transport costs, credit costs and anti-dumping duties. 

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(37)  The  TMK  Group  requested  that  certain  characteristics  pertaining  to  steel  grade, 
threading  type  and  coating  of  SPT  be  taken  into  account  in  order  to  ensure  a  fair 
comparison between SPT sold domestically and for export.  

(38)  The Defence Committee of the Seamless Steel Tube Industry of the European Union 
('ESTA') claimed that any request to change the product definition or the methodology 
used in the original investigation or subsequent review was in breach of Article 11(9) 
of the basic Regulation and should be disregarded.  

(39) 

In this regard, the investigation revealed that the request made by the TMK Group did 
not  affect  the  product  definition  but  rather  allowed  the  identification  of  additional 
characteristics  which  ensure  a  fair  comparison  of  SPT  sharing  the  same  features. 
Further,  it  was  found  that  these  additional  characteristics  affected  prices  and  price 
comparability. 

(40)  On  the  basis  of  the  above,  it  was  considered  that  the  request  was  warranted  and  the 

above mentioned characteristics were therefore taken into account. 

(41)  The  TMK  Group  claimed  that,  in  accordance  with  Article  11(10)  of  the  basic 
Regulation, the duties paid on DDP ('delivered duty paid') transactions should not be 
deducted in order to construct export price. It claims that, in comparison with the last 
full 12-month period prior to the imposition of anti-dumping duties on TMK’s exports 
of SPT to the EU (01.07.2005 – 30.06.2006 or 'reference period'), the duty was duly 
reflected  in  the  prices  charged  in  the  RIP  and  the  subsequent  selling  prices  in  the 
Union.  

(42) 

In  this  regard,  it  was  found  that  the  DDP  prices  charged  to  the  first  unrelated 
customers did not cover costs let alone the anti-dumping duties; i.e. these transactions 
were  overall  loss  making.  It  is  further  noted  that,  even  though  prices  for  similar 
products  increased  by  ca.  30%  since  the  reference  period,  the  price  of  raw  materials 
which account on average for more than 50% of the cost of manufacturing increased 
by  more  than  70%  over  the  same  period.  On  the  basis  of  the  above,  it  is  considered 
that no conclusive evidence was provided to show that the duty is duly reflected in the 
prices charged. 

(43) 

It  is  also  noted  that,  even  if  one  were  to  accept  that  the  duty  is  reflected  in  the 
subsequent selling prices (quod non), Article 11(10) of the basic Regulation requires 
that resale prices and subsequent selling prices both reflect the duty.  

(44)  After  disclosure,  the  TMK  Group  continued  to  object  to  the  deduction  of  the  duties 
from the export prices and further argued that the gas cost adjustment made resulted in 
losses,  which  in  its  view,  were  certainly  of  a  lower  magnitude,  without  providing 
however any further evidence. The TMK Group maintained its view that the fact that 
ex-works export prices should be above the costs of production was legally flawed and 
reiterated that the criteria to be examined was only whether anti-dumping duties paid 
were  duly  reflected  in  the  resale  price  charged  by  its  unrelated  customers  which 
purchased  on  a  DDP  basis.  However,  since  the  DDP  prices  charged  to  the  first 
unrelated  customers  did  not  cover  the  costs,  let  alone  the  anti-dumping  duties,  even 
without  the  gas  adjustment  and  since  the  price  of  raw  materials  which  account  on 
average for more than 50% of the cost of manufacturing increased by more than 70% 
over the same period as mentioned in recital (41) above, it is considered that the TMK 

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Group has not provided conclusive evidence showing that the duty was duly reflected 
in the prices charged or subsequent selling prices. 

(45)  On the basis of the above, this claim had to be rejected. 

3.1.4.  Dumping margin 

(46)  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  exporting  producers.  One  common 
dumping  margin  is  established  for  the  TMK  Group  by  calculating  a  single  weighted 
average rate of dumping for the exporting producers within the TMK Group. 

(47)  On  this  basis  the  dumping  margin,  expressed  as  an  percentage  of  the  CIF  Union 
frontier price, duty unpaid, was 29.6%. Following disclosure, the TMK group pointed 
to some clerical errors in the dumping calculations for two of its production entities. 
These clerical errors were corrected and the weighted average dumping margin found 
for the TMK Group is 28.7% instead of 29.6%. 

(48) 

It is noted that this dumping margin is, contrary to the prima facie evidence provided 
in  the  review  request,  higher  than  the  existing  duty  applicable  to  imports  from  the 
TMK  Group.  The  increase  results  from  a  number  of  factors:  firstly,  the  evidence 
provided in the review request only related to certain transactions of one of the three 
exporting producers. Some of these transactions were found not to relate to the product 
concerned.  Secondly,  during  the  course  of  the  investigation,  as  mentioned  in  recital 
(23) above, some export transactions of the product concerned had not been reported 
by the group. Finally, the group's claim in regard to duty as a cost (see recitals (40) to 
(44))  was  rejected.  The  combination  of  these  elements,  together  with  other  elements 
verified during the course of the investigation, resulted in an increase in the dumping 
margin. 

4. 

LASTING NATURE OF CHANGED CIRCUMSTANCES 

(49) 

In accordance with Article 11(3) of the basic Regulation, it was examined whether the 
changed circumstances regarding dumping could reasonably be considered to be of a 
lasting nature.  

(50)  TMK Group indicated in its review request that there were changed circumstances of a 
lasting  nature  as  it  had  made  significant  changes  in  its  internal  structure  and 
substantial improvements to its production equipment which had a direct impact on its 
cost structure. 

(51)  The  investigation  revealed  that  the  TMK  Group  had  indeed  made  significant 
investments that  lead to efficiency gains and increased  capacity. However,  given  the 
increase  in  raw  material  prices  and  the  evolution  of  the  product  mix  towards  more 
added-value  products,  a  decrease  of  production  cost  could  not  be  ascertained.  The 
improvements referred to in recital (49) were found to be of structural nature and to be 
unlikely to change in the near future. 

(52) 

In  addition,  the  development  of  export  prices  to  non-EU  countries  in  the  RIP  and  to 
the  EU  after  the  RIP  was  also  considered.  It  was  found  that  exports  to  non-EU 
countries  of  identical  products  were  made  at  comparable  price  levels  as  the  export 

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sales to the EU in the same period. As far as the period after the RIP is concerned, it 
was found they were made at slightly higher prices than in the RIP, which is in line 
with international  price level  evolution.  There  was thus  no indication  that  the  export 
prices would fluctuate considerably in the foreseeable future. 

5. 

AMENDMENT OF THE ANTI-DUMPING MEASURES 

(53) 

In the light of the results of the investigation, it is considered appropriate to amend the 
anti-dumping  duty  applicable  to  imports  of  the  product  concerned  from  the  TMK 
Group  to  28.7%  .  The  amended  anti-dumping  duty  should  be  set  at  the  level  of  the 
dumping margin found, as it is lower than the injury margin established in the original 
investigation.  

(54) 

Interested parties were informed of the essential facts and considerations on the basis 
of  which  it  was  intended  to  recommend  an  amendment  of  Implementing  Regulation 
(EU) No 585/2012 and were given an opportunity to comment. 

HAS ADOPTED THIS REGULATION: 

Article 1 

The  entry  concerning  OAO  Volzhsky  Pipe  Plant,  OAO  Taganrog  Metallurgical  Works, 
OAO  Sinarsky  Pipe  Plant  and  OAO  Seversky  Tube  Works  in  the  table  of  Article  1(2)  of 
Implementing Regulation (EU) No 585/2012 is hereby replaced by the following: 

OAO Volzhsky Pipe Plant, OAO Taganrog Metallurgical Works
OAO Sinarsky Pipe Plant and OAO Seversky Tube Works 

28.7% 

A859 

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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