CELEX: 52008PC0702
Language: en
Date: 2008-11-04
Title: Proposal for a Council Regulation imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of monosodium glutamate originating in the People’s Republic of China

EN
EN    EN
 ---pagebreak---                     COMMISSION OF THE EUROPEAN COMMUNITIES
                                                      Brussels, 4.11.2008
                                                      COM(2008) 702 final
                                         Proposal for a
                                 COUNCIL REGULATION
   imposing a definitive anti-dumping duty and collecting definitively the provisional duty
    imposed on imports of monosodium glutamate originating in the People’s Republic of
                                            China
                                (presented by the Commission)
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 ---pagebreak---                            EXPLANATORY MEMORANDUM
   1.   Context of the proposal
      Grounds for and objectives of the proposal
      This proposal concerns the application of Council Regulation (EC) No 384/96 of
      22 December 1995 on protection against dumped imports from countries not members
      of the European Community, as last amended by Council Regulation (EC)
      No 2117/2005 of 21 December 2005 (‘the basic Regulation’).
      General context
      This proposal is made in the context of the implementation of the basic Regulation and
      is the result of an investigation which was carried out in line with the substantive and
      procedural requirements laid out in the basic Regulation.
      Existing provisions in the area of the proposal
      Not applicable.
      Consistency with other policies and objectives of the Union
      Not applicable.
   2.   Consultation of interested parties and impact assessment
      Consultation of interested parties
      Interested parties concerned by the proceeding have already had the possibility to
      defend their interests during the investigation, in line with the provisions of the basic
      Regulation.
      Collection and use of expertise
      There was no need for external expertise.
      Impact assessment
      This proposal is the result of the implementation of the basic Regulation.
      The basic Regulation does not foresee a general impact assessment but contains an
      exhaustive list of conditions that have to be assessed.
   3.   Legal elements of the proposal
      Summary of the proposed action
      On 5 September 2007, the Commission initiated an anti-dumping proceeding
      concerning imports of monosodium glutamate originating in the People’s Republic of
      China.
      The investigation found dumping of the product concerned, which caused injury to the
      Community industry. The investigation also showed that there was no compelling
      Community interest aspect against the imposition of definitive anti-dumping measures.
      On this basis, provisional measures were imposed by Commission Regulation (EC) No
EN                                             2                                                EN
 ---pagebreak---       492/2008. The continuation of the investigation has confirmed the essential provisional
      findings.
      Therefore, it is suggested that the Council adopts the attached proposal for a
      Regulation in order to impose definitive measures.
      Legal basis
      Council Regulation (EC) No 384/96 of 22 December 1995 on protection against
      dumped imports from countries not members of the European Community, as last
      amended by Council Regulation (EC) No 2117/2005 of 21 December 2005.
      Subsidiarity principle
      The proposal falls under the exclusive competence of the Community. The subsidiarity
      principle therefore does not apply.
      Proportionality principle
      The proposal complies with the proportionality principle because the form of action is
      described in the above-mentioned basic Regulation and leaves no scope for national
      decision.
      Indication of how financial and administrative burden falling upon the Community,
      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 instrument: Regulation.
      Other means would not be adequate because the basic Regulation does not foresee
      alternative options.
   4.   Budgetary implication
      The proposal has no implication for the Community budget.
EN                                           3                                                 EN
 ---pagebreak---                                              Proposal for a
                                      COUNCIL REGULATION
     imposing a definitive anti-dumping duty and collecting definitively the provisional duty
      imposed on imports of monosodium glutamate originating in the People’s Republic of
                                                 China
   THE COUNCIL OF THE EUROPEAN UNION,
   Having regard to the Treaty establishing the European Community,
   Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection
   against dumped imports from countries not members of the European Community1 (the 'basic
   Regulation'), and in particular Article 9 thereof,
   Having regard to the proposal submitted by the Commission after consulting the Advisory
   Committee,
   Whereas:
   5.       PROCEDURE
   5.1.     PROVISIONAL MEASURES
   (1)    The Commission, by Regulation (EC) No 492/20082 (the 'provisional Regulation')
          imposed a provisional anti-dumping duty on imports of monosodium glutamate
          ('MSG') originating in the People's Republic of China ('PRC').
   5.2.     SUBSEQUENT PROCEDURE
   (2)    Subsequent to the disclosure of the essential facts and considerations on the basis of
          which it was decided to impose provisional anti-dumping measures ('provisional
          disclosure'), several interested parties made written submissions making their views
          known on the provisional findings. The parties who so requested were granted an
          opportunity to be heard. The Commission continued to seek and verify all information
          it deemed necessary for its definitive findings.
   (3)    The Commission continued its investigation with regard to Community interest
          aspects and carried out an analysis of information provided by some users and
          suppliers in the Community after the imposition of the provisional anti-dumping
          measures.
   (4)    The oral and written comments submitted by the interested parties were considered
          and, where appropriate, the provisional findings were modified accordingly.
   (5)    All 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
          measures on imports of MSG originating in the PRC and the definitive collection of
   1       OJ L 56, 6.3.1996, p.1
   2       OJ L 144, 4.6.2008, p. 14.
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 ---pagebreak---         the amounts secured by way of the provisional duty. They were also granted a period
        within which they could make representations subsequent to this disclosure.
   (6)  It is recalled that the investigation of dumping and injury covered the period from 1
        July 2006 to 30 June 2007 ('investigation period' or 'IP'). With respect to the trends
        relevant for the injury assessment, the Commission analysed data covering the period
        from April 2004 to the end of the IP ('period considered').
   6.     PRODUCT CONCERNED AND LIKE PRODUCT
   (7)  In the absence of any comments concerning the product concerned and the like
        product, recitals (12) to (14) of the provisional Regulation are hereby confirmed.
   7.     DUMPING
   7.1.   Application of Article 18 of the basic Regulation
   (8)  In the absence of any comments concerning the application of Article 18 of the basic
        Regulation to one exporting producer in the PRC, recitals (15) to (18) of the
        provisional Regulation are hereby confirmed.
   7.2.   Market economy treatment ('MET')
   (9)  Following the provisional disclosure, the two Chinese exporting producers which were
        not granted MET contested the provisional findings.
   (10) In the case of the first company it was submitted that, in its opinion, International
        Accounting Standard (IAS) only required the preparation of consolidated accounts and
        did not require the consolidated accounts to be audited in line with IAS.
   (11) In this regard, it should be recalled that, despite several requests, this company did not
        provide the relevant consolidated financial statements, including the auditors' report
        neither in its MET claim form nor during the on-spot visit in the PRC. The IAS state
        and explain internationally agreed accounting principles and provide guidance as to
        how they should be applied. Performing an audit of accounting records in line with
        IAS means that the audit ensures that the accounting records were prepared and
        presented in line with IAS and that they comply therewith. In case of a breach of such
        principles, the audit report should mention the impact of the non-compliance and the
        reasons why IAS principles were not applied. IAS 27, in particular, clearly states the
        conditions under which firms should prepare and present their consolidated accounts.
        The company does not contest that these conditions were applicable to it in the context
        of the MET investigation.
   (12) Article 2(7)(c) second indent of the basic Regulation clearly provides that firms
        applying for MET should have basic accounting records which are independently
        audited in line with IAS and applied for all purposes. It thus seems clear that accounts
        should not only be prepared but also audited in line with IAS. The absence of an audit
        in line with IAS does not allow the Commission to establish whether or not the
        accounts were prepared in line with IAS. On this basis alone it could not be concluded
        that criterion two was fulfilled.
   (13) The same exporting producer further claimed that in its view the offsetting of revenues
        and expenses was not of material nature and that the non-disclosure could not
        influence the economic decision of users taken on the basis of the financial statements.
        Therefore there was no violation of IAS.
   (14) This claim however seems to contradict the first one that accounts should be prepared
        but not audited in line with IAS. If this were the case, the firms themselves, and not
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 ---pagebreak---         competent and independent auditors as required in Article 2(7)(c), would assess
        whether or not offsetting might not be forbidden, if revenues and expenses were not of
        material nature, if such offsetting could not influence the economic decision of users
        and if such offsetting detracts from the ability of users to understand the transactions
        undertaken.
   (15) Moreover, while it has to be accepted that the notion "materiality" leaves room for
        interpretation, paragraph 30 of IAS 1 provides that an item that is not sufficiently
        material to warrant separate presentation on the face of the financial statements may
        nevertheless be sufficient material that it should be presented separately in the notes.
        Therefore, in view of the fact that the offsetting was not mentioned in the audit report
        nor in the notes to the financial statements of the company it is confirmed that the
        accounts of the company were not audited in line with IAS.
   (16) In addition, the offsetting in question were those found by the Commission
        investigators. Only an in-depth audit would have revealed if there were no other cases
        where accounts were not prepared and audited in line with IAS. In the absence of such
        an audit, the Commission does not have the material time, nor is it the purpose of the
        on-spot visit, to audit the accounts and the presentation of the accounts of the
        companies. Therefore, findings of the Commission which point to the fact that firms,
        claiming MET, fail to meet the requirement of the basic Regulations to prepare
        accounting records and ensure that the accounts are prepared and audited in line with
        IAS leads to the conclusion that criterion two is not fulfilled.
   (17) Finally, the same company disagreed with the conclusion that a negative working
        capital together with interest–free borrowings has to be considered as a distortion
        carried over from the former non-market economy system but rather a sign of
        managerial efficiency.
   (18) It should firstly be noted that the findings relating to the negative working capital were
        subsidiary findings and were not the main ones leading to the conclusion that the
        applicant did not fulfil the MET criterion. Secondly, a negative working capital alone
        can be a sign of managerial efficiency but only in a business with low inventory and
        low accounts receivable, which basically can only be found in enterprises operating on
        an almost cash-only basis, such as department stores and supermarkets. The analysis
        of the situation of this Chinese exporting producer, however, was completely different.
        A negative working capital has to be considered rather as a sign that a company may
        be facing bankruptcy or serious financial trouble. Under such circumstances, being
        able to receive huge amounts of "trade credits" without any financial cost would be
        highly unlikely in market economy conditions. Therefore, the significant interest-free
        borrowings of the company which represented a significant share of its total short term
        liabilities (the latter representing 80% of total liabilities) and which resulted to a
        significant level of negative working capital has to be considered as not in line with
        market economy behaviour.
   (19) In the case of the second company, no new arguments were provided which alter the
        provisional findings on MET. In particular, it has been confirmed that the influence of
        the State-owned shareholder on the decision making process of the company was
        disproportionately high and that the State agreed to reduce the established value of the
        land use rights by 50% without any compensation. It was also confirmed that the
        accounts of the company were not audited in line with IAS.
   (20) In the absence of any other comments concerning MET, recitals (19) to (26) of the
        provisional Regulation are hereby confirmed.
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 ---pagebreak---    7.3.     Individual treatment ('IT')
   (21)   One interested party claimed that anti-competitive practices and State interference
          would encourage circumvention of the measures and therefore none of the Chinese
          producers should be granted IT.
   (22)   However, this interested party did not provide any evidence as to how such allegedly
          anti-competitive practices and alleged State interference would permit circumvention
          of measures. Moreover, the investigation revealed that any theoretical State
          interference would be only possible via the China Fermentation Industry Association
          of which both exporting producers are members. However, all decisions and
          recommendations taken by this Association were of a non-binding nature. Therefore,
          this claim had to be rejected.
   (23)   In the absence of any other comments with regard to IT, recitals (27) to (29) of the
          provisional Regulation are hereby confirmed.
   7.4.     Normal value
   7.4.1.   Analogue country
   (24)   One interested party contested the choice made by the Commission to use Thailand as
          analogue country and, in particular, the producer Ajinomoto Thailand, which is related
          to the Community producer. However, the arguments and remarks by this party were
          submitted after the specific time limit set for submitting comments3, but more
          importantly they were provided without any substantiation. Therefore, these comments
          had to be disregarded.
   (25)   In the absence of any other comments concerning the analogue country, recitals (30) to
          (34) of the provisional Regulation are hereby confirmed.
   7.4.2.   Methodology applied for the determination of normal value
   (26)   One Chinese exporting producer claimed that an adjustment for the differences in the
          costs of raw material should be made. In particular this exporting producer alleged that
          MSG produced from molasses as it is the case in the analogue country was more
          costly than MSG produced from corn or rice starch.
   (27)   However, it appeared that the Chinese exporting producer significantly overstated the
          ratio between the input of molasses and the output of MSG in comparison of what was
          found and verified at the co-operating producer in the analogue country. Accordingly,
          the claim that it was more costly to produce MSG in the analogue country had to be
          rejected.
   (28)   In the absence of any other comments concerning the methodology applied for the
          determination of normal value, recital (35) of the provisional Regulation is hereby
          confirmed.
   7.5.     Export price
   (29)   In the absence of any comments concerning the export price, which would alter the
          findings at the provisional stage, recitals (36) to (37) of the provisional Regulation are
          hereby confirmed.
   7.6.     Comparison
   3
          Point 6 (c) of the Notice of Initiation, OJ C 206, 5.9.2007, p .23.
EN                                                         7                                         EN
 ---pagebreak---    (30) In the absence of any other comments concerning the comparison, recitals (38) to (39)
        of the provisional Regulation are hereby confirmed.
   7.7.   Dumping margins
   (31) For the companies granted IT, the weighted average normal value was compared with
        the weighted average export price of the corresponding type of the product concerned,
        as provided for in Articles 2(11) and (12) of the basic Regulation.
   (32) On this basis, the definitive dumping margins expressed as a percentage of the CIF
        Community frontier price, duty unpaid, are:
                –      Fujian Province Jianyang Wuyi MSG Co., Ltd.:          36,5%
                –      Hebei Meihua MSG Group Co., Ltd., and Tongliao Meihua Bio-Tech
                       Co., Ltd.:       33,8 %
   (33) The basis for establishing the country-wide dumping margin was set out in recital (42)
        of the provisional Regulation, which, in the absence of any comments, is hereby
        confirmed. On this basis the country-wide level of dumping was established at 39,7%
        of the CIF Community frontier price, duty unpaid.
   8.     INJURY
   8.1.   Definition of the Community industry
   (34) In the absence of any comments concerning the definition of the Community industry,
        recitals (44) to (46) of the provisional Regulation are hereby confirmed.
   8.2.   Community consumption
   (35) In the absence of any comments concerning the Community consumption, recital (47)
        of the provisional Regulation is hereby confirmed.
   8.3.   Imports into the Community from the PRC
   (36) Following the provisional disclosure, one of the Community importers claimed that
        the Commission findings with regard to the fluctuation of the Chinese export price in
        the period considered were distorted due to using financial years rather than calendar
        years. The period under consideration started on 1 April 2004 whereas the use of
        calendar years would have meant starting this period on 1 January 2004. According to
        the data presented by the company, this change in the starting point would show a 12%
        increase in Chinese export prices between the calendar year 2004 and IP in contrast to
        the slight decrease reported in recital (50) of the provisional Regulation. However, it
        should be noted that data presented by the importer was based on its total purchasing
        prices which obviously covered only part of the Chinese exports to the Community.
        Having examined the data with regard to the average prices of all imports of MSG
        from the PRC, based on Eurostat, it was found that the relevant Chinese prices
        increased by only 0,5% from January 2004 to the end of the IP and not by 12% as
        claimed by the importer. The difference in price trends between that found for the
        period considered (a decrease of 2%) and that found for the period from January 2004
        to the end of the IP (an increase of 0,5%) is not such as to alter the conclusions drawn
        in regard to the effect of these prices on the situation of the Community industry.
        Therefore this claim had to be rejected.
   (37) In the absence of any other comments with regard to imports into the Community from
        the PRC, recitals (48) to (52) of the provisional Regulation are hereby confirmed.
   8.4.   Economic situation of the Community Industry
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 ---pagebreak---    (38) Certain interested parties questioned the analysis of the trends of the injury indicators.
        They claimed that the use of 12-month periods running in line with the complainant's
        financial year rather than calendar years effectively shortened the period under
        consideration to three years as the financial year 2007 is, to a big extent, overlapping
        with the IP. These parties claimed that in order to make a proper appraisal of the trends
        of the injury indicators, the period considered should be prolonged to cover the full
        calendar year 2004. In this regard, it should be pointed out that the basic Regulation
        does not provide for a strict timeline regarding the definition of the period considered.
        Furthermore, the WTO Recommendation concerning the periods of data collection for
        anti-dumping investigations provides that "As a general rule,[…]the period of data
        collection for injury investigations normally should be at least three years[…]."4
        Nevertheless, a comparative analysis of the basic injury indicators on a calendar year
        basis was made, i.e. assuming a period considered of 2004, 2005, 2006 and the IP, in
        order to verify if different conclusions would be drawn as regards injury. This analysis
        has shown that the trends of the main injury indicators do not change significantly.
        Although certain trends such as the decreases in production and sales volumes would
        be less pronounced as compared to the conclusions in the provisional Regulation,
        other findings relating to the negative profitability of the Community industry, the
        huge increase of imports from the PRC and the severe price undercutting would
        remain unchanged. Furthermore, it should be noted that the period considered serves
        as an indicator of the evolution of the Community industry's situation to determine
        whether it can be considered to be suffering material injury during the IP. In these
        circumstances, the argument of the parties is rejected on the ground that the injury
        picture would have continued to show material injury even if the period considered
        was extended by the first trimester of 2004.
   (39) Additionally, the complainant commented on the wording of recital (60) of the
        provisional Regulation. The complainant pointed out that the sentence "the acquisition
        of Orsan SA by Ajinomoto Foods Europe" was not correct as Orsan SA was acquired
        by the Ajinomoto Group and subsequently renamed Ajinomoto Foods Europe.
   (40) Based on the above facts and considerations, the conclusion that the Community
        industry suffered material injury, as set out in recitals (70) to (72) of the provisional
        Regulation, is hereby confirmed.
   9.     CAUSATION
   9.1.   Effects of dumped imports
   (41) One interested party claimed that during the period considered there was no
        coincidence in time between the negative trend in profitability observed for the
        Community industry and the development in the import volumes from the PRC.
        Accordingly, it was claimed that imports from the PRC could not have caused injury
        to the Community industry. Although this matter was explained in detail in recitals
        (60) and (61) of the provisional Regulation, it is further noted that, in accordance with
        Article 3(6) of the basic Regulation, it is not just the volumes of dumped imports
        which may be a relevant factor in assessing whether dumped imports have been the
        cause of material injury to the Community industry, but also, in the alternative, the
        prices of these imports. In recital (76) of the provisional Regulation it was concluded
        that "[…] the low priced dumped imports from the PRC which significantly undercut
   4
        G/ADP/6 of 16 May 2000
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 ---pagebreak---         the prices of the Community industry during the IP, and which also significantly
        increased in volume, have had a determining role in the injury suffered by the
        Community industry". Given the development of volumes and prices of dumped
        imports during the period considered, it is considered that this claim should be
        rejected.
   (42) Another interested party claimed that the increase in imports of MSG from the PRC in
        the period considered did not affect the situation of the Community industry as these
        imports were mainly replacing imports from other sources.
   (43) In this respect it is recalled that, even though the Chinese imports of MSG did indeed
        replace imports from other countries to a certain extend, as explained in recital (57) of
        the provisional Regulation, low-priced dumped imports from the PRC consistently
        managed to gain market share also at the expenses of the Community industry even
        when Community consumption was decreasing. In addition, this claim is not
        supported by the findings of this investigation which showed that the surge of low-
        priced dumped imports from the PRC that significantly undercut the price of the
        Community industry led to a situation of material injury suffered by the Community
        industry during the period considered. On that basis, this claim should be rejected.
   (44) In the absence of any other comments in this regard, recitals (74) to (76) of the
        provisional Regulation are hereby confirmed.
   9.2.   Effects of other factors
   (45) Various interested parties reiterated the claims put forward before the imposition of
        the provisional measures that the material injury suffered by the Community industry
        was caused by factors other than the dumped imports. These claims, with regard
        specifically to the restructuring costs and increasing costs of raw materials which
        allegedly affected the Community industry, were already duly addressed in recitals
        (60) and (61) of the provisional Regulation.
   (46) One interested party reiterated claims made before the imposition of the provisional
        measures that any material injury suffered by the Community industry may also be
        caused by exports of MSG from the PRC made by companies related to the
        Community industry. Additionally, this party claimed that the complainant misled the
        Commission by not disclosing the existence of related companies in the PRC and by
        hiding the fact that these related companies in China exported MSG to the
        Community. On that basis, this party considered that Article 18 of the basic
        Regulation should be applied to the complainant. The same party further claimed a
        breach of its rights of defence because the versions of the complaint and the
        questionnaire reply of the complainant for inspection by interested parties ('open
        version') did not disclose the fact that the complainant has related companies in the
        PRC that were involved in the MSG business.
   (47) As already explained in recital (94) of the provisional Regulation, the question of the
        exports of MSG to the Community by one producer in the PRC known to be related to
        the Community industry was not considered to be relevant due to their insignificant
        volume. It should be stressed also that the complainant did not provide misleading
        information to the Commission in regard to its related companies in the PRC. This
        information was reported in the confidential versions of the complaint and of the
        complainant's questionnaire reply. It is a fact that this information was not originally
        included in the open version of the complaint or in the open version of the
        complainant's questionnaire reply. However, the complainant provided open versions
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 ---pagebreak---          including information on its related companies in the PRC subsequently during the
         procedure. In these circumstances, it is considered that no breach of the right of
         defence of parties took place. Furthermore, no convincing evidence was presented
         which could support the claim that Ajinomoto Group was aware of the alleged indirect
         export activity of one of its related Chinese companies. Therefore, it is considered that
         the application of Article 18 of the basic Regulation is not warranted in this situation
         and the claim is rejected.
   (48)  One of the interested parties reiterated the claims put forward before the imposition of
         the provisional measures as to the impact of the exchange rate of the US dollar against
         the Euro on the price undercutting calculations and export performance of the
         Community industry. However, no additional information or evidence was provided
         that would alter the conclusions reached in recitals (84) to (90) of the provisional
         Regulation which are hereby confirmed.
   (49)  One interested party reiterated its claim made before the imposition of the provisional
         measures regarding the impact of the Ajinomoto Group's global strategy, in particular
         exports to the EU market by Ajinomoto-owned producers of MSG in third countries,
         and the impact of these on the complainant's profits and stock level. In recital (92) of
         the provisional Regulation it was stated that sales of MSG on the Community market
         originating from exporters related to the Community industry in countries outside the
         Community were constantly and significantly decreasing over the period considered.
         As a consequence, it was concluded in recital (95) of that regulation that the imports of
         the Community industry from related parties outside the Community have not
         contributed to the material injury found. This party has not provided any additional
         information or evidence that would alter this conclusion which is hereby confirmed.
   9.3.    Conclusion on causation
   (50)  Given the above analysis which has properly distinguished and separated the effects of
         all other known factors on the situation of the Community industry from the injurious
         effects of the dumped imports, it is hereby confirmed that these other factors as such
         do not reverse the fact that the material injury found must be attributed to the dumped
         imports.
   (51)  Given the above, it is concluded that the dumped imports of MSG originating in the
         PRC have caused material injury to the Community industry within the meaning of
         Article 3(6) of the basic Regulation.
   (52)  In the absence of other comments in this respect, the conclusions in recitals (99) to
         (100) of the provisional Regulation are hereby confirmed.
   10.     COMMUNITY INTEREST
   10.1.   Interest of the Community industry
   (53)  In the absence of any other comments in this particular regard, the findings set out in
         recitals (103) to (106) of the provisional Regulation are hereby confirmed.
   10.2.   Interest of the importers
   (54)  One importer claimed that the negative impact of the anti-dumping measures may
         have on its economic situation was underestimated in recital (108) of the provisional
         Regulation. According to the company, given the low profitability of its MSG sales
         and the limited possibility of passing on the price increase to its clients, the imposition
         of anti-dumping measures would mean closure of its MSG business. It should be noted
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 ---pagebreak---          that the MSG business does not represent a major share of the activity of the said
         importer which is mainly sourcing its MSG from the PRC. The importer in question
         has the option to switch to other sources of supply which are not affected by the anti-
         dumping measures. However, as mentioned in recital (108) of the provisional
         Regulation, the expected effect of the imposition of the measures will be to restore
         effective trade conditions in the Community market, which in this case may lead to
         increased prices of MSG, in particular from the Community industry and from the
         PRC. Therefore, it is expected that all importers should be able to pass on at least
         some of their cost increase resulting from the imposition of anti-dumping measures.
         On that basis, the conclusion reached in recital (108) of the provisional Regulation is
         therefore confirmed.
   10.3.   Interest of users
   (55)  Following the comments made by interested parties concerning the possible impact of
         the proposed measures on the users industry further analyses was carried out on the
         basis of information provided by the main users of MSG in the Community, namely
         Nestle and Unilever. The investigation showed that MSG represents less than 3% of
         the cost of production of all products containing MSG produced by both companies.
         Therefore, taking additionally into account the indications on the relatively high
         average profit rates which both companies had reached during the IP in particular on
         these products, it can be confirmed that the possible impact of the proposed measure
         on their activity would not be significant.
   10.4.   Interest of the suppliers of raw materials
   (56)  Further to recital (115) of the provisional Regulation, the analysis with regard to the
         interests of the upstream supplier of the Community industry was extended to include
         the data provided by a second supplier. On the basis of the questionnaire replies
         provided by the two suppliers, it was found that the situation of the supplying
         companies had deteriorated significantly during the period considered in line with the
         deterioration of the situation of the Community industry. The total turnover of the
         investigated suppliers decreased in the range of 8% to 13% and their sales to the
         Community industry noted even twice as significant drop (in the range of 15% to
         25%). Both companies experienced also a decrease in their profitability rates.
   (57)  Taking into account the above findings, the content of recital (116) of the provisional
         Regulation is hereby confirmed.
   10.5.   Competition and trade distorting effects
   (58)  Some of the interested parties reiterated their comments regarding the alleged
         dominant position of the Ajinomoto Group worldwide and its alleged monopolistic
         position in the Community. These issues were already addressed in recital (117) of the
         provisional Regulation. No new evidence concerning these claims was presented.
   (59)  Several interested parties raised additional arguments in relation to post-IP
         developments on the MSG market. They claimed that import volumes decreased and
         prices rose after the IP, thus eliminating any potential injury to the Community
         industry. In this situation, these parties claimed that the imposition of anti-dumping
         duties would only harm importers and users in the Community. The parties raised also
         a point on alleged global shortages of MSG supplies as, according to their data, several
         important producers worldwide ceased to produce or decreased production capacity.
         However, Eurostat data and additional information obtained from the Community
         industry do not support the above claims. To the contrary, import prices remained
EN                                               12                                               EN
 ---pagebreak---          stable in the post-IP period and in certain months even decreased, while import
         volumes both from the PRC and third countries increased. The latter development
         demonstrates that some none-Chinese competitors have the capacity to develop their
         exports to the Community.
   10.6.   Conclusion on Community interest
   (60)  Given the results of the further investigation of the Community interest aspects of the
         case described above, the findings and conclusions contained in recitals (119) of the
         provisional Regulation are hereby confirmed.
   11.     DEFINITIVE ANTI-DUMPING MEASURES
   11.1.   Injury elimination level
   (61)  In the absence of any substantiated comments that would alter the conclusion
         regarding the injury elimination level, recitals (120) to (122) of the provisional
         Regulation are hereby confirmed.
   11.2.   Form and level of the duties
   (62)  In the light of the foregoing and in accordance with Article 9(4) of the basic
         Regulation, a definitive anti-dumping duty should be imposed at a level sufficient to
         eliminate the injury caused by the dumped imports without exceeding the dumping
         margin found.
   (63)  The rate of the definitive duties are definitively set as follows:
                                                              Injury
                                                                                        Dumping                Anti-dumping
          Company                                         elimination
                                                                                         margin                   duty rate
                                                              margin
          Hebei Meihua MSG Group
          Co., Ltd., and
                                                               54,8%                      33,8%                      33,8%
          Tongliao Meihua Bio-Tech
          Co., Ltd.
          Fujian Province Jianyang
                                                               60,4%                      36,5%                      36,5%
          Wuyi MSG Co., Ltd.
          All other companies                                  63,7%                      39,7%                      39,7%
   (64)  The individual company anti-dumping duty rates specified in this Regulation were
         established on the basis of the findings of the present investigation. Therefore, they
         reflect the situation found during that investigation with respect to these companies.
         These duty rates (as opposed to the country-wide duty applicable to "all other
         companies") are thus exclusively applicable to imports of products originating in the
         country concerned and produced by the companies and thus by the specific legal
         entities mentioned. Imported products produced by any other company not specifically
         mentioned in the operative part of this Regulation with its name and address, including
         entities related to those specifically mentioned, cannot benefit from these rates and
         shall be subject to the duty rate applicable to "all other companies".
   (65)  Any claim requesting the application of these individual company anti-dumping duty
         rates (e.g. following a change in the name of the entity or following the setting up of
         new production or sales entities) should be addressed to the Commission5 forthwith
         with all relevant information, in particular any modification in the company's activities
   5
         European Commission, Directorate-General for Trade, Directorate H, Office N105 04/092, 1049 Brussels, Belgium
EN                                                             13                                                           EN
 ---pagebreak---            linked to production, domestic and export sales associated with, for example, that
           name change or that change in the production and sales entities. If appropriate, the
           Regulation will then be amended accordingly by updating the list of companies
           benefiting from individual duty rates.
   11.3.     Undertakings
   (66)    One co-operating Chinese exporting producer offered a price undertaking.
   (67)    In this respect it is noted that MSG prices are negotiated globally with large
           international firms with production facilities inside and outside the Community. It is
           also noted that the majority of sales of this exporting producer are mainly made to
           such international firms. In view of the above, it was considered that the risk of cross-
           compensation of prices between sales agreements made with international firms for
           their production facilities in the Community and for their facilities located in other
           countries outside the Community as very high. It was also considered that such cross-
           compensation would be extremely difficult to be detected in the framework of the
           monitoring of the undertaking. Therefore, the undertaking offer of this exporting
           producer, in its current form, had to be rejected as its acceptance was considered
           impractical in view of the fact that it could not be appropriately monitored by the
           Commission.
   11.4.     Definitive collection of provisional duties and special monitoring
   (68)    In view of the magnitude of the dumping margins found and in the light of the level of
           the injury caused to the Community industry, it is considered necessary that the
           amounts secured by way of the provisional anti-dumping duty, imposed by the
           provisional Regulation, i.e. Commission Regulation (EC) No 492/2008, should be
           definitively collected to the extent of the amount of the definitive duties imposed.
   (69)    It is recalled that should the exports by the companies benefiting from lower
           individual duty rates increase significantly in volume after the imposition of the anti-
           dumping measures, such increase could be considered as constituting in itself a change
           in the pattern of trade due to the imposition of measures within the meaning of Article
           13(1) of the basic Regulation. In such circumstances, and provided the conditions are
           met, an anti-circumvention investigation may be initiated. This investigation may,
           inter alia, examine the need for the removal of individual duty rates and the
           consequent imposition of a country-wide duty,
   HAS ADOPTED THIS REGULATION:
                                                 Article 1
   1. A definitive anti-dumping duty is hereby imposed on imports of monosodium glutamate
   falling within CN code ex 2922 42 00 (TARIC 2922 42 00 10) and originating in the People's
   Republic of China.
   2. The rate of the definitive anti-dumping duty applicable to the net, free-at-Community-
   frontier price, before duty, of the products manufactured by the companies listed below shall
   be as follows:
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 ---pagebreak---                                                                              TARIC additional
             Company                                   AD duty rate (%)
                                                                                    code
             Hebei Meihua MSG Group Co., Ltd.,
             and                                             33,8                   A883
             Tongliao Meihua Bio-Tech Co., Ltd.
             Fujian Province Jianyang Wuyi MSG
                                                             36,5                   A884
             Co., Ltd.
             All other companies                             39,7                   A999
   3. Unless otherwise specified, the provisions in force concerning customs duties shall apply.
                                               Article 2
   Amounts secured by way of provisional anti-dumping duties pursuant to Commission
   Regulation (EC) No 492/2008 on imports of monosodium glutamate falling within CN code
   ex 2922 42 00 (TARIC 2922 42 00 10) and originating in the People's Republic of China shall
   be definitely collected.
                                               Article 3
   This Regulation shall enter into force on the day following that of its publication in the
   Official Journal of the European Union.
   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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