CELEX: 51995PC0393
Language: en
Date: 1995-07-20
Title: Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of ferro-silico- manganese originating in Russia, Ukraine, Brazil and South Afrika

COMMISSION OF THE EUROPEAN COMMUNITIES
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                                                 Brussels, 20.07.1995
                                                 COM(95) 393   final
                                  Proposal for a
                        COUNCIL REGULATION (EC)
imposing a definitive anti-dumping duty on imports of ferro-silico-manganese
           originating in Russia, Ukraine, Brazil and South Africa
                         (presented by the Commission)
 ---pagebreak---  ---pagebreak---                              EXPLANATORY MEMORANDUM
1.       By Regulation (EC) No 3119/94 of 19 December 1994 \ the Commission
         imposed provisional anti-dumping duties on imports into the Community of ferro-
         silico-manganese (FeSiMn) originating in Russia, Ukraine, Brazil and South
         Africa, falling within CN code 7202 30 00. No provisional anti-dumping duties
         were imposed on imports originating in Georgia because they were found to be de
         minimis.
2.       By Council Regulation (EC) No 866/952, the Council extended the validity of
         these duties for a period of two months.
3.       Subsequently a number of parties requested and were granted hearings and
         presented written comments which were taken into account where appropriate.
         The Commission continued to seek and verify all the information it deemed
          necessary for its definitive findings.
4.        Since both Russia and Ukraine are non-market economies, normal value for these
          countries was based on the normal value established for Brazil, a market economy
          country which was chosen as the reference country.
5.        The South African producers claimed that their exports to the EU should not be
          cumulated with those of Russia, Ukraine, and Brazil for the purpose of
          determination of injury because the trends of import quantities, prices and market
          share were significantly different to those of the other exporting countries
          concerned and, looking at the imports from South Africa in isolation, they would
          not have caused material injury to the Community industry.
 1
   O.J. No L 330, 21.12.1994, p. 15
 2
   O.J. No L 89, 21.4.1995, p. 1
                                                                                           A*
 ---pagebreak--- 6.  The Brazilian producers argued that the dumped imports from the exporting
    countries concerned did not cause the injury suffered by the Community industry.
7.  The definitive determination confirmed the existence of dumping and material
    injury caused by these imports with regard to Russia, Ukraine, Brazil and South
    Africa. For the purpose of the determination of material injury, the imports from
    these countries were analysed cumulatively because it was found that the imports
    from each of these countries competed with each other and with the like product
    of the Community industry, that import volumes from each of the countries
    concerned were significant in the investigation period and that price trends were
    similar.
8.  The provisional findings concerning the de minimis imports originating in
    Georgia were confirmed definitively.
9.  The Ukrainian authorities in conjunction with the Ukrainian producers, the
    Brazilian and the South African producers offered undertakings.
10. The Commission considered the undertakings offered by the two Brazilian
    producers, one of which was the subsidiary of the other, as not acceptable because
    they were considered not to remove injurious dumping.
11. Whereas the undertakings offered by the South African producers and the
    Ukrainian authorities, in conjunction with the two cooperating Ukrainian
    exporters were considered to be acceptable, because it was concluded that they
    could be efficiently monitored and the minimum prices contained in these
    undertakings would remove injurious dumping.
                                                                                       fa
 ---pagebreak--- 12. Definitive anti-dumping duties should be imposed on imports originating in
    Brazil and Russia. The duty should be at the level of the dumping margin
    established for imports from each country since they were found to be lower than
    the injury margins. Furthermore, with regard to non-cooperating exporters from
    Ukraine and South Africa, residual anti-dumping duties should be imposed, for
    Ukraine on the level of the dumping margin determined for the two cooperating
    producers and, for South Africa, on the level of the highest dumping margin
    found for the two producers which cooperated in the proceeding.
13. In view of the dumping margins found and the extend of the injury caused to the
    Community industry, the anti-dumping duties provisionally imposed should be
    collected at the levels of the dumping margins definitively established.
14. It is therefore proposed that the Council adopts the draft Regulation annexed
    imposing a definitive anti-dumping duty on imports of ferro-silico-manganese
    originating in Russia, Ukraine, Brazil and South Africa, exempting those
    producers from which undertakings were accepted by the Commission, and
    collecting the provisional anti-dumping duties.
                                                                                     4c
 ---pagebreak---  ---pagebreak---                                    COUNCIL REGULATION (EC) N°...
                                               of
       imposing a definitive anti-dumping duty on imports of ferro-silico-manganese
                         originating in Russia, Ukraine, Brazil and South Africa
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) N° 3283/94 of 22 December 19941 on protection
against dumped imports from countries not members of the European Community, as last
amended by Council Regulation (EC) No 1251/952, and in particular Article 23 thereof,
which laid down that Council Regulation (EC) No 2423/88 of 11 July 19883 on protection
against dumped or subsidised imports from countries not members of the European
Economic Community as last amended by Council Regulation (EC) No 522/944 shall
continue to apply to proceedings in relation to which an investigation pending on 1
September 1994 has not been concluded by the date of entry into force of Regulation (EC)
No 3283/94,
Having regard to Council Regulation (EEC) N° 2423/88 of 11 July 1988, and in particular
Article 12 thereof,
Having regard .to the proposal submitted by the Commission after consultations within the
Advisory Committee,
Whereas:
1
  OJ No L 349, 31.12.1994
2
  OJ No L 122. 02.06.1995. p.l
3
  O J N o L 2 0 9 , 2.8.1988, p. 1
4
  O J N o L 6 6 , 10.3.1994, p. 10
 ---pagebreak--- A. PROVISIONAL MEASURES
(1) By Regulation (EC) N° 3119/94 ("provisional duty Regulation") 5, the Commission
imposed provisional anti-dumping duties on imports into the Community of ferro-silico-
manganese (FeSiMn) originating in Russia, Ukraine, Brazil and South Africa, falling within
CN code 7202 30 00.
By Regulation (EC) N° 866/95 6, the Council extended the validity of these duties for a
period of two months.
B. SUBSEQUENT PROCEDURE
(2)        Following the imposition of the provisional anti-dumping duties,
- the Comité de Liaison des Industries de Ferro-Alliages ("Euroalliages"; complainant),
- two South African producers, Highveld Steel and Vanadium Corporation Limited
and Samancor Limited,
- the Ukrainian authorities and two Ukrainian producers, Nikopol Ferro Alloy Plant and
Zaporozhye Ferro Alloy Plant,
- two Brazilian producers, Companhia Paulista.de Ferro Ligas and Sibra
Eletrosiderurgica Brasileira S.A.,
- the British Iron and Steel Producers Association (BISPA),
5
  O J N o L 3 3 0 , 21.12.94, p. 15
6
  O J N o L 8 9 , 21.4.95, p. 1
 ---pagebreak--- - an unrelated importer in Luxembourg, S.A. des Minerais,
- an importer in the U.K., Victoria Alloys (U.K.) Limited,
made their views known in writing. Parties who so requested were granted a hearing -
by the Commission.
(3)      The Commission continued to seek and verify all information it deemed necessary for
its definitive findings.
(4)      Upon request, the parties were informed of the essential facts and considerations on
the basis of which it was intended to recommend the imposition of definitive anti-dumping
duties and the collection of amounts secured by way of a provisional duty. The parties were
also granted a reasonable period within which to make representations subsequent to the
disclosures.
(5)      The parties' comments were considered, and the Commission altered its conclusions
where deemed appropriate.
               C. PRODUCT UNDER CONSIDERATION, LIKE PRODUCT
(6)      As no comments have been presented by any party regarding the product under
consideration and the like product after the imposition of provisional anti-dumping
measures, the findings set out in recitals 9 and 10 of the provisional duty Regulation are
hereby confirmed.
 ---pagebreak---                                        D. DUMPING
        I.Normal value
Russia, Ukraine
(7)     In the absence of any new arguments, the findings laid down in recitals 12 and 13 of
the provisional duty Regulation are confirmed.
Brazil
(8)     The Commission had, for the purpose of the provisional findings, calculated one
normal value and, consequently, one dumping margin for the two Brazilian producers which
cooperated in the proceeding because they were found to be related, i. e. one was the
subsidiary of the other.
(9)     The Brazilian producers requested the determination of individual normal values and
accordingly individual dumping margins. They argued that the approach adopted by the
Commission is not in line with Article 13 (2) of the Basic Regulation which stipulates that
anti-dumping duties should be imposed on an individual basis for each cooperating exporter.
It was further argued that this treatment is also contrary to Article 2 (3) (c) according to
which normal value should be based on prices or costs of another exporter only if an exporter
does not produce nor sell the product in the country of origin. They also claimed that they
operate separately in the market place and pointed out that they keep separate records and
accounting systems. Finally, they argued that the determination of only one dumping margin
would unduly penalize one of them because its dumping margin is significantly lower than
that of the other. On these grounds, the Brazilian exporters have requested the determination
of individual dumping margins.
 ---pagebreak--- (10) It is the general practice of the Community institutions to calculate one dumping
margin for producers where one is a subsidiary of, and therefore subject to control by,
another on the basis of an average of the data submitted by both producers. Calculating
individual dumping margins would create the likelihood of circumvention of anti-dumping
measures (thus rendering them ineffective) by enabling the related producers to channel their
exports to the Community through the affiliate with the lowest dumping margin. Such an
approach is neither contrary to Article 2 (3) (c) of the Basic Regulation, since the exporting
entity produces and sells on the Brazilian domestic market, nor to Article 13 (2) which
requires the name of the supplier to be mentioned in the regulation imposing duties only if
this is practical. In the case in question, since only two Brazilian producers cooperated and
one was a subsidiary of the other, one dumping margin was established which was also
considered appropriate for non-cooperating producers.
(11) In conclusion, the methodology used for calculating normal value in respect of the
two cooperating Brazilian producers, as set out in recitals 14 - 18 of the provisional duty
Regulation is confirmed.
South Africa
(12) The Commission determined normal value on the basis of sales prices on the South
African domestic market charged in the ordinary course of trade and in respect of
representative quantities in accordance with Article 2 (3) (a) of the Basic Regulation.
 ---pagebreak--- (13) One South African producer alleged that certain sales on the South African market
were made to customers with which there was, indirectly through one of its shareholders and
an affiliate of the latter, a shareholder relationship. This producer claimed that these
customers should therefore be considered as being related to the effect that the sales should
be disregarded for the determination of normal value. This exporter claimed that the
remaining domestic sales in the investigation period constitute less than 5% of the volume of
exports to the European Union (EU). In consequence, this exporter submitted that the
Commission should construct normal value on the basis of costs of manufacture, SG&A
expenses and a reasonable amount for profit.
(14) This submission has to be rejected. The South African producer did not provide any
information which would suggest that the relationship had any impact on the prices of such
sales transactions to the extent that they should be considered as not being in the ordinary
course of trade. Furthermore, the Commission did not during the investigation find any
indication which would suggest so. Finally, the Commission found, in accordance with
Article 2 (7) of the Basic Regulation, that the sales prices and costs involved for transactions
to the customers in question were in line with those for transactions to clients which,
according to this exporter, were entirely unrelated.
Therefore, the findings set out in recitals 19 - 21 of the provisional duty Regulation are
confirmed.
2. Export prices
        Russia
 (15) In the absence of any new arguments, the findings laid down in recital 22 of the
 provisional duty Regulation are confirmed.
 ---pagebreak---          Ukraine
(16) For the purpose of its preliminary determination, the Commission determined export
prices for FeSiMn originating in Ukraine partly on the basis of verified prices paid or payable
by two unrelated importers cooperating in the investigation and partly on data obtained from
Eurostat. Eurostat was considered the best evidence available in accordance with Article 7
(7) (b) of the Basic Regulation for the remaining export sales not accounted for by the two
importers in question.
(17) One of the two Ukrainian producers cooperating claimed that, in the framework of
the preliminary determination, it had been deprived by the Commission of its basic legal
rights, since export prices (and adjustments to the export prices, see recital 24 below) were
partially based on confidential information, namely data obtained from the two unrelated
importers cooperating in the proceeding which were not made available to it for verification
purposes.
(18) In its investigation the Commission found, as set out in recital 23 of the provisional
duty Regulation, that the information on export sales submitted by the other cooperating
Ukrainian producer was found not to be usable; in particular because it was not possible,
from the information submitted in the questionnaire, to establish whether or not the export
sales reported were destined for the Community. Moreover, the Ukrainian producer
concerned, though submitting data which indicated that the products were destined for the
Community, stated that it could not guarantee that the exported quantities were actually
imported into the EU. Added to this, the total quantity of exports to the Community, as
reported in the. responses to the questionnaires of the two Ukrainian producers in question,
amounted to more than three times the tonnages which were reported in Eurostat as being of
Ukrainian origin. For these reasons, the data submitted by the Ukrainian exporters are
deemed misleading and have been disregarded for the definitive determination of the export
prices in accordance with Article 7 (7) (b) of the Basic Regulation.
 ---pagebreak--- (19) Export prices were definitively determined on the basis of data obtained from
Eurostat. The Eurostat data were considered more appropriate for determining the export
prices for FeSiMn originating in Ukraine because they covered all imports into the
Community during the investigation period. This was not the case for the information
obtained from the two cooperating importers which represented 53 % of such imports.
Nevertheless, the information obtained from these importers, and verified by the
Commission, indicated that the prices obtained from Eurostat were generally in line with
those reported by the cooperating importers. Furthermore, it should be noted that, with regard
to imports from non-market economies, such as Ukraine, the Community institutions
normally establish one dumping margin for all exports to the Community and do not
calculate a specific margin for individual exporters. Therefore, disregarding the price
information of the two Ukrainian exporters does not result in a disadvantage for them, given
the fact that their export transaction prices are encompassed in the Eurostat data. In addition,
the Eurostat data are publically available enabling the Ukrainian exporter concerned to
defend itself by verifying the correctness of the Community institutions' findings.
 Brazil
 (20) In the absence of any new arguments, the findings laid down in recital 25 of the
 provisional duty Regulation are confirmed.
 South Africa
 (21) One South African producer claimed certain amendments to costs and profit
 calculated by the Commission in the context of the reconstruction of export prices pursuant
 to Article 2 (8) (b) of the Basic Regulation. This claim, which was duly substantiated, has
 been accepted and the appropriate amendments have been made.
 ---pagebreak--- Comparison
Russia
(22) The amendments to adjustments for comparison purposes concerning Brazil outlined
in recitals 27 - 31 below were also made for the determination of normal value for Russia
since Brazil was chosen as reference country.
In the absence of any other new arguments, the findings laid down in recitals 27 and 29 of
the provisional duty Regulation are hereby confirmed.
Ukraine
(23) In its preliminary determination, the Commission found that the information
submitted by the two cooperating Ukrainian producers with regard to claims for adjustments
for differences in physical characteristics and selling expenses were either not supported by
tangible evidence (claims for adjustments for higher phosphoros content and crushing and
screening) or did not correspond to the verified information submitted by two unrelated
importers cooperating in the investigation (credit costs and commissions). The Commission
considered, therefore, that the information submitted by the Ukrainian producers was
misleading and based its findings on the data received from the cooperating importers which
were verified and considered to be the best evidence available in accordance with Article 7
(7) (b) of the Basic Regulation.
(24) One of the two cooperating Ukrainian producers claimed that, in the framework of
the preliminary determination, it had been deprived by the Commission of its basic legal
rights, since the determination of adjustments to the export prices was based on confidential
information, namely data obtained from the two unrelated importers cooperating in the
proceeding which were not made available to it for verification purposes.
 ---pagebreak--- (25) It should be pointed out that, since no new evidence was submitted following the
imposition of provisional duties, the adjustments for comparison purposes, as requested by
the producer concerned, provisionally calculated and based on confidential information, have
been maintained for the definitive determination. It was considered reasonable to base such
adjustments on verified information obtained from another source rather than reject the
claims from the exporters concerned on the grounds that they were not properly
substantiated. The allegation that the exporter in question has been deprived of its basic legal
rights is therefore unfounded.
(26)     Those amendments for adjustments made for Brazil, for the reasons given under
recitals 27-31 below, were also applied for Ukraine.
Brazil
(27) The Commission had, for the purpose of the provisional findings, established normal
value on a monthly basis. In months, where the weigthed average domestic prices did not
permit the recovery of all costs in the ordinary course of trade, normal value was based on a
constructed value in conformity with Article 2 (3) (b) of the Basic Regulation.
(28) After disclosure of the provisional findings, the two Brazilian producers claimed, on
the basis of supporting documentation, adjustments to the constructed normal value for
certain direct selling expenses and for direct credit costs.
 (29) This claim has been accepted in part. The adjustments requested for certain direct
selling expenses, in accordance with the provisions of Article 2 (9) and (10) of the Basic
Regulation have been incorporated in the definitive calculations leading to a decrease in the
constructed normal values by 2.2 %.
                                                                                               10
 ---pagebreak---   (30) However, the claim concerning credit expenses has to be rejected. The producers
  concerned have, for the purpose of constructing normal value, not quantified such expenses
  nor isolated them from the total financing costs incurred. In the light of this, the Commission
  allocated total financing costs over domestic and export sales on the basis of total marketable
  tonnage produced. This methodology is therefore confirmed for the definitive determination.
  (31)    For the purpose of definitive findings, normal value was established on the basis of
  the methods used in the provisional dumping determination, after taking into account the
  above-mentioned adjustments.
South Africa
  (32)    One South African producer claimed on the basis of supporting evidence, a
  reassessment of the selling costs incurred in the Community. This claim has been accepted
  and appropriate adjustments for comparison purposes have been made.
  Dumping margins
  (33) In the light of the conclusions set out above in respect of the determination of normal
  value and export price, and the comparison between the two, the definitive examination of
  the facts showed the existence of dumping in respect of imports of the product concerned
  originating in Russia, Ukraine, Brazil and South Africa.
  (34)    The weighted average dumping margins for the countries and companies involved,
  expressed as. a.percentage of the CIF-Community frontier prices, customs duty-unpaid, are
  the following:
          - Russia:                                                             54.2 %
          - Ukraine:                                                            43,9 %
          -  Brazil:                                                            36,1 %
          -   South Africa:
                  - Highveld Steel and Vanadium Corporation Limited:            45,3 %
                  - Samancor Limited:                                           48,3 %.
                                                                                                11
 ---pagebreak--- (35) With regard to the dumping margin for producers in Brazil and South Africa which
did not cooperate in this proceeding, the findings set out in recital 32 of the provisional duty
Regulation are, in absence of any new arguments, hereby confirmed.
                                          E. INJURY
1. Cumulation of the dumped imports
(36)    As regards Georgia, the findings set out in Recital 34 of the provisional duty
Regulation in respect of de minimis import volumes are, in the absence of any new
arguments, hereby confirmed.
(37) Two South African producers and one association of the user industry questioned the
Commission's decision to cumulate imports from South Africa with imports from Ukraine,
Russia and Brazil. It was claimed that while import volumes and market shares increased
significantly for Ukraine, Russia and Brazil in the period 1989 to the investigation period,
there was a decrease for South Africa. Furthermore, it was pointed out that in a past case the
Commission had decided not to cumulate import volumes which showed diametrically
opposed progressions (Tungsten Carbide case, OJ 1990 L 83 p 41). It was also claimed that
the trends of the import volumes from each of the exporting countries concerned should be
similar before cumulating because, it was alleged, the Commission in previous cases had
considered increases in import volumes and therefore import trends as one of the conditions
for cumulation. Moreover, it was claimed that the export prices of the South African
producers were higher than those of Ukraine, Russia and Brazil.
Finally, it was argued that the quality of the South African product was such that it did not
compete with those from the other countries concerned, in particular, because South Africa
was the only country out of the countries concerned that was granted ISO 9002 accreditation.
                                                                                                12
 ---pagebreak--- (38) After consideration of the above mentioned arguments and claims concerning import
volumes, market shares, export prices and quality of the imported product, it is confirmed
that imports from South Africa should be cumulated with those of the other exporting
countries concerned, for the following reasons:
Although the volume of imports from South Africa decreased from 1989 to the investigation
period by 5.4 %, imports remained considerable. More specifically, import volumes were,
apart from 1990 (47227 tonnes), always above 50000 tonnes and market shares ranged from
 12.7 % in 1989 to 9.9 % in the investigation period. Contrary to what was established in the
Tungsten Carbide case, import trends from South Africa did not show diametrically opposed
progressions. In fact, South African import volumes were, over the period 1989 to the
investigation period, relatively stable, rather than declining significantly;
Price trends were similar, i.e. prices for all exporting countries under investigation, including
South Africa, decreased significantly in the period 1989 to the investigation period; and
It was found that the products imported from the countries under investigation competed
with each other and with those of the Community industry. The "ISO 9002" accreditation
does not mean that a producer so accredited produces FeSiMn different from those of other
producers. It indicates that a producer has adopted an internationally recognized quality
control system which offers certain guarantees for purchasers. Furthermore, it has been
established that several Community producers have "ISO 9002" accreditation and, in any
event, producers without this accreditation are, in general, able to produce FeSiMn which is,
with regard to quality, identical or, at least, similar to those with accreditation.
                                                                                               13
 ---pagebreak--- (39) One South African producer further argued that the Commission for the purpose of
examining trends should have considered not only the period 1989 to the investigation period
but also the year 1988 because this would demonstrate more clearly a decreasing trend of
import volumes from South Africa. Furthermore, this exporter argued that, given that the
notice of initiation of the proceeding was published on 4 August 1993, the Commission
should have chosen an investigation period closer to this opening date rather than the period
 1 April 1992 to 31 March 1993. Again, the exporter alleged that this would have shown more
clearly a decreasing trend of imports of the product originating in South Africa.
(40)     It is common practice for the Community institutions to examine trends of imports
volumes, market shares and prices etc over a period of several years, normally four years
including the investigation period. In the present case, a period covering the investigation
period (1 April 1992 to 31 March 1993) and the four calendar years 1989 to 1992 was
chosen. This period was considered appropriate for giving an objective view of the
development of the market situation for all parties concerned. The inclusion of information
for the year 1988 would not result in any different conclusions about the trends of import
volumes etc. for cumulation purposes.
(41) With regard to the selection of the investigation period, it should be noted that the
Commission, in general, aims at setting the investigation period close to the date of the
initiation of the proceeding. However, other considerations sometimes have to be taken into
account in order to ensure that, for example, the submission, verification and evaluation of
data can be carried out promptly and efficiently, e.g. by establishing correspondence between
the investigation period and calendar years or ..financial quarters or semesters. However, if a
party concerned considers that the investigation period chosen by the Commission is not
 appropriate, it has to submit its objections at the earliest opportunity, which, in this case,
 would have been after reception of the questionnaire and not, as was the case here, only after
the disclosure of the provisional findings. In fact, the exporter in question responded to the
questionnaire on the basis of the investigation period indicated, which corresponds to its
 financial year, without any objection nor were any objections to the investigation period
raised, during the on-spot verification of the data submitted.
                                                                                             14
 ---pagebreak--- 2. Material injury
   (42) Several exporters have alleged that the Community industry did not suffer from
   material injury. They have pointed out that financial losses suffered by the EU producers
   were the only identifiable indicator of injury, whereas the EU production and sales of
   FeSiMn increased, production capacity remained constant and capacity utilisation increased.
   It was claimed, furthermore, that the decline in employment was not an appropriate indicator
   of injury, because it resulted in an increase in productivity.
   (43)      The Commission's findings with regard to production, sales, market share and
   financial results make clear that the Community producers, in order to limit the damage
   being caused by the dumped imports, pursued the strategy of reacting to the downward
   pressure on sales prices caused by these imports by following the price trend in order to
   maintain their market share. Although this aim was not completely fulfilled (the market share
   fell from 1989 to the investigation period by 1.2 %), production and sales volume increased
   and capacity utilisation remained more or less stable. In consequence, however, the
   Community industry has incurred heavy financial losses which have put its existence at risk.
   The negative development in the financial situation of the Community industry is considered
   a major indicator of material injury.
   (44) One exporter argued that the Community industry's profit rate in 1989 (16.9 % on
   turnover) is, compared to the financial results of nine metal related manufacturing U.S.
   industries for the period 1987 to 1992 (allegedly ranging beween 7.9 % profit and 8.5 %
   loss), so extraordinarily high that it was likely to be based on unreliable financial reports
   from the EU-producers. The losses incurred by the Community industry in the years 1990 to
   the investigation period were also questioned by this exporter, as was the reliability of the
   cost allocation methods applied by the Community producers. Both arguments were,
   however, not further substantiated.
                                                                                               15
 ---pagebreak--- (45) It is considered that the comparison between the financial results of a specific
industry (here: the FeSiMn industry) and a variety of different industries does not compare
like with like and does not, in general, provide a basis for drawing a fair picture about the
financial situation of the EU FeSiMn industry. Secondly, the investigation has not given any
reason to assume that the financial results, based on audited accounts, were incorrect: It was,
furthermore, established that the allocation methods applied by the EU producers were
appropriate.
(46) One exporter claimed that the loss in market share suffered by the Community
industry had only occurred for particular qualities, i.e. so-called medium carbon and low
carbon FeSiMn, whereas the market share for standard FeSiMn, on which the Commission
has based the price comparisons both for provisional and definitive determinations, had
increased by 0.5 %.
(47) In this respect, it must be pointed out that the market share data submitted in this
context are incorrect because the market shares for the respective product qualities are
expressed as a percentage of the total consumption on the EU market for all quality types
taken together and not separately on the consumption for the respective qualities. The data
submitted gives, therefore, an incorrect picture of the trend of market shares for the different
qualities mentioned above.
 (48) In conclusion, it is definitively determined that the Community industry has suffered
 material injury, given its deteriorating financial situation characterized by increasing losses
 over the years 1989 to the investigation period.
                                                                                               16
 ---pagebreak---                                          F. CAUSATION
1. Effect of the dumped imports
(49) The Commission^ at recital 57 of the provisional duty Regulation reached a
preliminary determination that imports originating in Russia, Ukraine, Brazil and South
Africa had, taken together, caused material injury to the Community industry.
2. Other factors
Raw material prices and general demand from the steel industry
(50) One exporter claimed that the significant increase of manganese supply over several
years, demonstrated by publications of the U.S. Bureau of Mines, causing a fall in
manganese ore prices by 5 to 10 % per annum between 1989 and 1993, together with, in the
same period, the decrease in demand from the steel industry caused the price decline on the
world markets, and therefore also accounted for the fall in prices on the EU market for
FeSiMn.
(51) In this respect, it is considered that decreasing prices for manganese ore, which accounts
only for 10 to 15 % of the total cost of manufacture of FeSiMn, cannot explain the more
substantial price decreases for the end product over the period in question. Secondly, it has
been established that the total consumption of, and therefore the demand for, FeSiMn in the
Community had increased in the period 1989 to the investigation period by around 21 %.
                                                                                             17
 ---pagebreak--- Norway
(52) Producers from Brazil, South Africa and Ukraine as well as one association of the
user industry considered that the injury caused to the Community industry resulted from the
imports of ferro-silico-manganese of Norwegian origin and not from imports from the
exporting countries concerned. More specifically, it was argued that the Community industry
suffered its most significant decrease in profitability from 1989 (profit: 16.9 %) to 1990
(loss: 14.9 %), i.e. in a period where imports from the exporting countries concerned
increased by 8000 tonnes only. In the same period (1989 - 1990), it was claimed that
Community producers' prices on the EU market fell by 27 %, Norwegian prices fell by 21 %
but the prices of the product from the exporting countries concerned declined by only 17 %.
Furthermore, it was pointed out that in 1990 Norwegian prices on the market of one member
state decreased by as much as 24 %.
(53) It should be noted in this context that with regard to imports of FeSiMn from
Norway, the market share decreased from 41.4 % in 1989 to 30.8 % in the investigation
period and that the average import prices on the EU market for ferro-silico-manganese of
Norwegian origin (according to Eurostat) in the investigation period and the calendar years
 1989 - 1992 were always higher than the prices of the other exporting countries and the
Community industry. This situation was also reflected in 1989/1990, when imports from
Norway decreased from 171887 tonnes (market share: 41.4 %) to 139928 tonnes (market
 share: 34.4 %). Although the average Norwegian prices (according to Eurostat) declined by
 21 %, they were still around 17 % (or more than 80 ECU) higher than the weighted average
 prices of the exporters under consideration.
 (54) Under these circumstances, it is considered that imports from Norway were unlikely
 to be responsible for the injury suffered by the Community producers. Therefore, these
 arguments and claims have to be rejected.
                                                                                          18
 ---pagebreak--- Competitiveness of Community producers
(55) The two Brazilian producers which cooperated in the proceeding claimed that the
injury suffered by the Community industry was caused by its lack of competitiveness. They
argued that, even in 1990 when, allegedly, Community prices were around 12 % above world
level, the EU producers reported the first financial losses. The argument is accompanied by a
price comparison for ferro-silico-manganese between the EU and the U.S.A. for the years
 1989 to 1992. They suggested, moreover, that the alleged inefficiency would also be
indicated by the Community producers' low labour productivity, defined as average output
per employee, when compared to non-EU ferro-silico-manganese producers, and submitted
an estimate based on data in the complaint, on statistical data in the U.S.A. and "interviews".
(56) In this context, it should be noted that the price comparison between the EU and the
U.S.A. does not take account of the result of the anti-dumping proceeding carried out by the
U.S. authorities. This proceeding led to the conclusion that the U.S. market was also
influenced by injuriously dumped imports from several countries. It appears likely, therefore,
that the market prices in the U.S.A. were distorted by unfair practices.
(57) With regard to the Community industry's alleged low productivity, it is pointed out
that even if certain exporters enjoy competitive advantages which are not enjoyed by the
Community producers, leading to higher production costs for the latter, this would not be a
justification for refraining from the adoption of remedial measures in cases where injury
caused through the effects of dumping has been established. What is relevant in these
circumstances is to ensure that any injury caused by a lack of competitiveness has not been
attributed to the dumped imports. This has been done in this case. Furthermore, it should be
stressed that the anti-dumping measures have been limited to the dumping margin and not to
the higher injury elimination margin.
                                                                                              19
 ---pagebreak--- Conclusion
(58) As no other arguments concerning the causation of the injury sustained by the
Community industry were submitted after the imposition of the provisional anti-dumping
measures and in the light of the above considerations, it is hereby concluded that," even if
other factors have contributed to the injury suffered by the Community industry, the high
volume, low-priced dumped imports of FeSiMn originating in Russia, Ukraine, Brazil and
South Africa have, taken in isolation, caused material injury to the Community industry,
particularly in the form of heavy financial losses.
                               G. COMMUNITY INTEREST
Steel industry
(59) One association of the user industry and an unrelated importer have submitted that
the Commission should take into account the interests of the EU steel producers as users of
FeSiMn and have pointed out that the imposition of anti-dumping duties on imports of
FeSiMn would increase the production costs of the steel manufacturers and damage their
international competitiveness. The same association has claimed that one company has
estimated that FeSiMn represents 6% of its conversion costs for steel.
(60)     The Commission has established during the proceeding that FeSiMn in general
accounts for only 1 % of the total production costs of steel. The abovementioned submission
does not indicate the impact of the cost of FeSiMn on the total steel production-costs, since
the conversion costs constitute only a part of the total production costs. In addition, the
submission does not make clear whether this argument is based on the situation of the steel
industry as a whole, or only particular branches of it (e.g. so called mini-mills).
                                                                                            20
 ---pagebreak--- Anti-dumping duties and competition
(61) Several exporters claim that the imposition of anti-dumping duties would eliminate
the exporters concerned from the EU market but would not raise the EU market prices to a
level such that the Community industry would become profitable again. Thus, they argue
only the Norwegian exporters would benefit and would be in a position to reinforce their
"dominant position". One exporter concerned has alleged that anti-dumping duties would
only serve to support the largest Norwegian exporter which, it was alleged, already has a
- "dominant position" - on the EU market because it holds 6 % of COMILOG's shares, a
Gabon based company which has large shareholdings in a number of Community producers.
         (62) With respect to these arguments and claims, it should be stressed, firstly, that
it is fundamentally in the general interest of the Community to eliminate the trade distorting
effects of injurious dumping and to restore effective competition. It is considered that
measures would, neither as a matter of general principle nor in relation to the particular
circumstances of this proceeding, not necessarily lead to the exclusion from the EU market
of imports from the countries concerned. It is considered, furthermore, that restoring fair
market conditions would lead to the Community industry regaining their viability and
continuing to be an active player on the market. The imposition of anti-dumping duties
would not, therefore, impede competition on the EU market.
Nor would the imposition of duties result in a dominant position for the Norwegian
exporters. It has been alleged that the largest Norwegian exporter has a dominant position on
the EU market because of its share holding in COMILOG. Firstly, it is highly improbable
that the Norwegian company concerned could, through the low level of its share holding,
control COMILOG and hence the EU market. What is more important is the fact that, if the
Norwegian exporter controlled COMILOG its sales volume and market share trends would at
least be similar to those of the Community producers linked to COMILOG. On the contrary
the data available show that trends in sales volume and market shares were substantially
more negative for the Norwegian exporter than for the EU producers related to COMILOG.
 ---pagebreak--- The measures in question will not reduce competition in the EU market because it will be
supplied at fair prices not only by the complainant Community producers, the Norwegian
exporters and the exporters subject to the investigation, but also from non-cooperating EU
producers and exporters other than those in Norway, not subject to anti-dumping measures
(which taken together accounted in the investigation period for more than 15%- of the
Community consumption of FeSiMn).
These arguments and claims have therefore to be rejected.
Substitution of FeSiMn by other ferro alloys
(63) One exporter argued that, from 1989 to the investigation period, the production
output of the EU steel industry, the almost exclusive user of FeSiMn, fell by nearly 6 %,
whereas the Commission had established that consumption of FeSiMn on the EU market in
the same period increased by 21.4 %. The exporter claims that it would have important
implications for the determination concerning Community interest, if this situation was due
to a substitution of ferro-silico (FeSi) and ferro-manganese (FeMn) by FeSiMn because a
substitution could take place, in the opposite direction, after imposition of anti-dumping
duties on FeSiMn which would prevent any remedial effects of the measures.
(64) In the light of the Commission's findings during the investigation, it appears that a
substitution of FeSi and FeMn, as indicated above, has probably taken place. This does not
however alter the fact that injurious dumping has occurred against which the Community
industry has a legitimate right to be protected. The aim of such protection in the framework
of an anti-dumping proceeding is to restore fair market conditions. It should also be recalled
that anti-dumping measures have been in force for some time against certain imports of FeSi,
which may have been a factor in the substitution of FeSi by FeSiMn. The imposition of
duties on FeSiMn is, however, less likely to result in substitution in the opposite direction
because duties on FeSi remain in force.
                                                                                             22
 ---pagebreak--- Conclusion
(65) In the light of the above, the preliminary determination reached at Recital 63 of the
provisional duty Regulation, that it is in the Community interest to adopt anti-dumping
measures, is confirmed.
                                         H. UNDERTAKINGS
(66) The Commission received offers of undertakings from the Ukrainian authorities in
conjunction with the Ukrainian exporters and from the Brazilian and South African
exporters. These offers have been examined carefully, with particular attention being paid to
the feasibility of monitoring the undertakings proposed. In this latter respect, the Community
Institutions have, in general, certain reservations as regards the acceptance of undertakings
concerning ferro-alloy products of this kind given the possibilities for circumvention
resulting from the fungibility of the products and from the existence of various qualities
which command different prices. However, in view of the limited number of producing
exporters involved in this case, and the nature of the marketing channels in the Community,
the Commission has accepted the undertakings offered by the Ukrainian Authorities in
conjunction with the Ukrainian exporters and by the South African exporters (see
Commission Decision 95/.../EC^) since such undertakings would eliminate the injurious
effects of dumping pursuant to Article 10(2) of the Basic Regulation and could in the
Commission's view be satisfactorily monitored.
With regard to Brazil, the Commission has decided not to accept the undertakings from the
Brazilian exporters because the minimum prices they have offered were not sufficient to
remove injurious dumping. The Commission has informed the Brazilian exporters
accordingly.
Given the above, the Council concludes that measures should be imposed on imports of
FeSiMn originating in Brazil in the form of an anti-dumping duty.
 7
   See page ... of this Official Journal
                                                                                             23
 ---pagebreak--- Notwithstanding the acceptance of the undertakings from the Ukrainian Authorities in
conjunction with the Ukrainian producers and from the South African exporters, a residual
duty should be imposed on imports of FeSiMn originating in Ukraine and South Africa in
order to underpin the undertakings and avoid their circumvention.
                                          I. DUTY
(67) Provisional measures took the form of ad-valorem anti-dumping duties; these were
imposed at the level of the dumping margins found, except for one South African producer,
for which the duty was imposed at the level of the injury margin which was lower than the
dumping margin. The definitive findings indicate that the amended dumping margins are
lower in all cases than the injury margins, which in the absence of any comments following
the imposition of provisional measures are confirmed. Consequently, definitive duties should
be imposed on imports in the EU of FeSiMn originating in Russia, Ukraine, Brazil and South
Africa at the level of the dumping margins pursuant to Article 13 (3) of the Basic Regulation.
The duties should not apply to imports of FeSiMn produced and exported to the EU by the
Ukrainian and South African exporters from which price undertakings have been accepted.
In the case of Brazilian and South African firms which failed to cooperate in the
investigation or otherwise make themselves known, the findings reached at Recital 71 of the
provisional duty Regulation are, in the absence of any new evidence or arguments,
confirmed. Accordingly, for Brazil, the duty for non-cooperators should be at the level of the
dumping margin established for the two cooperating related exporters and, for South Africa,
at the level of the higher of the two dumping margins established for the two cooperating
exporters.
                                                                                             24
 ---pagebreak--- (68) Since imports of FeSiMn originating in Georgia were found to be de minimis and
therefore considered not to have caused injury to the Community industry, the Commission
considered it appropriate to terminate the proceeding in this respect (see Commission
Decision 95/...8).
                    J. COLLECTION OF THE PROVISIONAL DUTIES
(69) In view of the dumping margins established, the injury caused to the Community
industry and of the latter's precarious situation, it is considered necessary that the amounts
secured by way of the provisional anti-dumping duty for all countries and companies
involved should be collected definitively at the levels of the dumping margins definitively
established.
  See page   of this Official Journal
                                                                                            25
 ---pagebreak--- HAS ADOPTED THIS REGULATION:
                                         Article 1
1.   A definitive anti-dumping duty is hereby imposed on imports of ferro-silico-
     manganese falling within CN code 7202 30 00 and originating in Russia, Ukraine,
      Brazil and South Africa.
2.   The rate of the duty applicable to the net-ffee-at-Community-frontier price, not
     cleared through customs, shall be:
     - 54,2 %        for ferro-silico-manganese originating in Russia,
     - 43.9 %        for ferro-silico-manganese originating in Ukraine,
     - 36,1%         for ferro-silico-manganese originating in Brazil.
     - 48,3%         for ferro-silico-manganese originating in South Africa (Taric
                     additional code: 8818)
3.   Unless otherwise specified, the provisions in force concerning customs duties shall
     apply.
4.   The duties shall not apply to imports of the product defined in paragraph 1,
     produced and exported to the Community by the following companies from
     which price undertakings have been accepted:
     Ukraine
     Nikopol Ferro Alloy Plant
     Zaporozhye Ferroy Alloy Plant
     South Africa
     Highveld Steel & Vanadium Corporation Limited
     Samancor Limited
                                                                                         26
 ---pagebreak---                                           Article 2
The amounts secured by way of the provisional anti-dumping duty on imports of ferro-silico-
manganese originating in Russia, Ukraine, Brazil and South Africa pursuant to Commission
Regulation (EC) No 3119/94 shall be definitively collected at the duty rate definitively
imposed, except for imports originating in South Africa and exported by Highveld Steel and
Vanadium Corporation Limited for which a rate of 45.3% shall apply.
                                          Article 3
This Regulation shall enter into force on the day following its publication in the Official
Journal of the European Communities.
               This Regulation shall be binding in its entirety and directly applicable in all
               Member States.
               Done at Brussels, ...
                                                              For the Council
                                                               The President
                                                                                               27
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                            COM(95) 393 final
                                              DOCUMENTS
EN                                                                       02 11
                                     Catalogue number : CB-CO-95-417-EN-C
                                                             ISBN 92-77-92393-8
Office for Official Publications of the European Communities
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