CELEX: 51994PC0425
Language: en
Date: 1994-10-17
Title: Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of furazolidone originating in the People' s Republic of China and collecting definitively the provisional duty imposed

fit,
U COMMISSION OF THE EUROPEAN COMVTUNITIES
                                                C0M(94) 425 final
                                                Brussels, 17.10.1994
                               Proposal for a
                          COUNCIL REGULATION (EC)
                   imposing a definitive anti-dumping duty
                    on imports of furazolidone originating
         in the People's Republic of China and collecting definitively
                         the provisional duty imposed
                     (presented by the Commission)
 ---pagebreak---                            EXPLANATORY MEMORANDUM
1. The Commission, by Regulation (EC) No 1648/94 of 6 July 19941 imposed a
   provisional anti-dumping duty on imports of furazolidone originating in the People's
   Republic of China.
2. Following the adoption of the provisional measures, the interested parties, who so
   requested, were heard by the Commission and made written submissions. Upon
   request, parties were informed of the essential facts and considerations on the basis of
   which it was intended to recommend the imposition of definitive duties and the
   definitive collection of amounts secured by way of a provisional duty. They were
   also granted a period within which to make representations subsequent to the
   disclosure.
3. The oral and written comments submitted by the parties were considered and, where
   appropriate, the Commission's findings were modified to take account of them.
4. The facts, as finally established, show dumping for ail the exporters concerned as
   well as injury to the Community industry caused thereby, especially demonstrated by
   sales suppression, price depression and a resulting lack of profitability.
5. In these circumstances, the Commission considers that it is in the Community interest
   to adopt definitive measures intended to eliminate the injurious effect of the dumped
   imports concerned. Consequently, in accordance with Article 12 of Council
   Regulation (EEC) No 2423/8S2, the Commission, after consultation within the
   Advisory Committee, proposes the imposition of definitive anti-dumping duties on
   imports of furazolidone originating in the People's Republic of China.
6. In view of the dumping margin established, and the seriousness of the injury caused
   to the Community industry, it is also proposed that the amounts secured by way of
   provisional anti-dumping duty be definitively collected.
1
       OJ No L 174, 8.7.1994, p. 4.
2
       OJ No L 209,2.8.1988, p. I.
 ---pagebreak---                             COUNCIL REGULATION (EC) No
                                         of    1994
                          imposing a definitive anti-dumping duty
                            on imports of furazolidone originating
              in the People's Republic of China and collecting definitively
                                the provisional duty imposed
THE COUNCIL OF THE EUROPEAN UNION,
 Having regard to the Treaty establishing the European Community,       .
 Having regard to Council Regulation (EEC) N° 2423/88 of 11 July 1988 on
protection against dumped or subsidised imports from countries not members of the
 European Community1, as last amended by Regulation (EC) N° 522/942, and in
particular Article 12 thereof,
 Having regard to the proposal submitted by the Commission after consultation
within the Advisory Committee,
Whereas :
                                 A. PROVISIONAL MEASURES
(1)     The Commission, by Regulation (EC) N°l648/943, hereafter referred to as
the "provisional Regulation", imposed a provisional anti-dumping duty on imports
into the Community of furazolidone originating in the People's Republic of China
and falling within CN Code 2934 90 40.
                                B. SUBSEQUENT PROCEDURE
(2)     Subsequent to the imposition of the provisional anti-dumping duty, the
interested parties who so requested were granted an opportunity to be heard by the
Commission. They also made written submissions making known their views on the
findings.
l
  OSNoL2Û9, 2.8.1988, p. 1.
2
  OJ No L66, 10.3.1994, p. 10.
3
  OJNoL174, 8.7.94, p.4.
                                             -tu^
 ---pagebreak--- (3)     Upon request, parties were informed of the essential facts and considerations
on the basis of which it was intended to recommend the imposition of definitive
duties and the definitive collection of amounts secured by way of a provisional duty.
They were also granted a period within which to make representations subsequent to
the disclosure.
(4)     The oral and written comments submitted by the parties were considered
and, where appropriate, the Commission's findings were modified to take account
of them.
           C. PRODUCT UNDER CONSIDERATION, LIKE PRODUCT AND
                               COMMUNITY INDUSTRY
(5)     As no further arguments have been presented regarding the product under
consideration, the like product and the Community industry, the findings set out in
recitals (7) to ( 10) of the provisional Regulation are confirmed.
                                          O. DUMPING
                                       I. Analogue country
(6) Following publication of the provisional Regulation, the Chinese exporters
claimed that the selection of India as an analogue country was inappropriate for the
following reasons :
                                - the high customs duty payable in India on imports of
both the product concerned and on raw materials used in its manufacture, constitute
an insurmountable barrier to the existence of normal competition in India for
furazolidone.
                                - there was no reasonable competition on the market in
India as it was highly protected and monopolized by one Indian producer.
 ---pagebreak---                                - the sole producer in India on which the normal value
was based was inefficient and has, since the investigation period, ceased production
of the product concerned. To furthermore use a profit of 9% in constructing normal
value for such a company was inappropriate.
It was suggested that the most appropriate analogue market in this case, given that
no other third country can be used, would be the European Community market.
(7) Having examined these claims, it was considered that the existence of high
customs duties on imports of the product concerned and its raw materials has not
detracted from the competitive nature of the market in India. Indeed, the Chinese
exporters themselves were very much present on the market and indications were x
that, despite the high customs duty, they were able to actively compete on the
Indian market. Furthermore, the Commission, when constructing normal value for
the product concerned, made appropriate adjustments for the high level of customs
duty paid on imported raw materials in order not to artificially inflate the normal
value.
 In addition, while noting that the Indian producer, on whose costs normal value
was based, has since ceased production of the product concerned, it was considered
that the volume of the product on which normal was based, was, during the
investigation period, sufficiently representative when compared to the volume
exported to the Community from China.
While no facts were provided by the Chinese exporters in support of this claim, it is
considered that, in any event, the alleged inefficiency of the Indian producer
concerned is not a relevant factor in establishing the normal value on the market. In
the absence of profitable sales of the product concerned by this producer during the
investigation period, normal value was constructed on the basis of the cost of
manufacture of the producer concerned plus an amount for selling, general and
administrative expenses and a reasonable margin of profit. The profit margin used
(9%) was, as stated in recital (13) of the provisional Regulation, that regarded as
reasonable by the producer concerned, and furthermore, is in the range of the profit
considered reasonable for sales of the product concerned in the Community.
 ---pagebreak--- In any event, to use the European Community as an alternative analogue market
would have no impact on the measures to be imposed, since it would be equivalent
to having the dumping margin based on the injury elimination margin which is the
basis on which the provisional duty was actually imposed.
(8) The claim that India was an inappropriate analogue country and that the
European Community market should be used was, therefore, rejected.
                                     II. Normal value
 (9) For the purpose of the definitive findings, normal value was established on
the basis of the same methods as those used in the provisional determination of
dumping. No objections with regard to these methods were raised by any interested
party. The findings set out in recital (13) of the provisional Regulation are,
therefore, confirmed.
                                         m. Export price
(10) No new arguments were presented regarding the establishment of export
prices. The findings set out in recital (14) of the provisional Regulation are,
therefore, confirmed.
                                         IV. Comparison
(11) No new arguments were presented concerning the method followed by the
Commission in the comparison between normal value and export price. The method
set out in recital (15) of the provisional Regulation is, therefore, confirmed.
                                       V. Dumping margins
(12) No further arguments were submitted on the methodology used by the
Commission in its preliminary determination. Therefore, the weighted average
dumping margin definitively established and expressed as a percentage of the free-
at-Community-frontier price, is 93%.
 ---pagebreak---  (13) In its provisional findings, the Commission considered that the request from
one Chinese exporter that an individual dumping margin be established was not
justified for the reasons given in recitals (17) to (20) of the provisional Regulation.
Following the publication of that Regulation, the exporter concerned repeated the
 request for the establishment of an individual dumping margin. However, as no new
facts or arguments have been provided, the findings in recitals (17) to (20) of the
provisional Regulation are confirmed.
                                           E. INJURY
              I. Community consumption, volume and market share of the dumped
                                              imports
(14) The Chinese exporters claimed that the injury determination in the provisional
Regulation was based on an incorrect assessment of the facts. In particular, they
claimed that the Commission should have used Eurostat statistics relating to imports
of the product concerned during the investigation period, rather than the import
volumes of the product concerned reported in the questionnaire responses by the
Chinese exporters themselves. It was argued that some transactions reported by the
Chinese exporters as being export sales to the European Community were, in fact,
not destined for the Community market but were transhipped outside the
Community.
This claim could not be accepted. It was found that, while on the one hand, no
evidence was provided in support of this claim, the use in the injury assessment of
Eurostat statistics for the investigation period would still show a substantial increase
in the imports concerned since 1990, together with a sizeable increase in market
share held by these imports, and that the trend so established would not differ from
that determined by the Commission in its provisional findings.
 The claim for the injury assessment to be made on the basis of Eurostat statistics is,
therefore, rejected.
 ---pagebreak---                             II. Prices of the dumped imports
(15) In the absence of comment, the findings in recital (22) of the provisional
Regulation are confirmed.
                            III. Situation of the Community industry
(16) As the claim in recital (14) above has been rejected, and as no other comments
have been received on the situation of the Community industry, the findings in
recitals (23) to (28) of the provisional Regulation are confirmed.
                                     F. CAUSATION
(17) In its provisional Regulation, the Commission examined a claim by the Chinese
exporters that the cause of price decreases of the product concerned on the
Community market was the threatened prohibition of the product concerned in the
Community, due to the uncertainty about its future applications. This claim was
rejected by the Commission for the reasons given in recitals (33) and (34) of the
provisional Regulation.
 Following the publication of the provisional Regulation, the Chinese exporters
repeated this claim but, since new arguments have not been submitted on this issue,
the findings of the provisional Regulation are confirmed.
                            G. COMMUNITY INTEREST
(18) As no new arguments have been received in respect of the community interest,
the findings at recitals (36) to (39) of the provisional Regulation are confirmed.
 ---pagebreak---                                        H. DUTY
(19) No comments were received on the methodology adopted by the
Commission for the establishment of the duty rates to be applied, as set out in
recitals (40) to (43) of the provisional Regulation. These are therefore confirmed.
        Since the margin of dumping found was greater than the corresponding
increase in export prices necessary to remove the injury suffered by the Community
industry, the definitive duty to be imposed should, therefore, correspond to the
injury margin established i.e. 70.6%.
                             I. RETROACTIVE DUTIES
(20) The Community producer requested the imposition of retroactive duties on
the grounds that importers were aware that the exporters were practising dumping
and that there would be material injury caused by sporadic dumping in the form of
massive imports of furazolidone in a relatively short period prior to the imposition
of the provisional anti-dumping duty.
(21) The Commission examined this claim, but found that it was not substantiated
by any evidence showing the awareness of dumping practices on the part of the
importers or any indications of the existence of sporadic dumping. In these
circumstances, there were no grounds to impose retroactive anti-dumping duties in
this case. The Council consequently decided not to impose retroactive anti-dumping
duties on furazolidone originating in the People's Republic of China.
               J. COLLECTION OF THE PROVISIONAL DUTIES
(22) In view of the dumping margin established and the injury caused to the
Community industry, it is considered necessary that amounts secured by way of
provisional anti-dumping duty for all companies should be collected definitively.
HAS ADOPTED THIS REGULATION
 ---pagebreak---                                        Article 1
1.      A definitive anti-dumping duty is hereby imposed on imports of
furazolidone, falling within CN code 2934 90 40 and originating in the People's
Republic of China.
2.      The rate of duty applicable to the net free-at-Community-frontier price
before duty shall be 70.6%.
3.      Unless otherwise specified, the provisions in force concerning customs duty
shall apply.
                                        Article 2
        The amounts secured by way of the provisional anti-dumping duty under
Regulation (EC) No. 1648/94 concerning the imports from the People's Republic of
China shall be collected definitively.
                                        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
 ---pagebreak---                                                                          1SSNQ254-1475
                                                                  COM(94) 425 final
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