CELEX: 51988PC0608
Language: en
Date: 1988-11-09
Title: Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty on imports of serial impact dot matrix printers originating in Japan (presented by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 608
Vol. 1988/0205
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
 REVISED VERSION                                      COM(88 ) 608 final / 2
                                                     Brussels , 9 November 1988
                               Proposal for a
                         COUNCIL REGULATION ( EEC )
  imposing a definitive anti-dumping duty on imports of serial impact
                 dot matrix printers originating in Japan
                       (presented by the Commission )
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 ---pagebreak---                                EXPLANATORY MEMORANDUM
1.   1.    The Commission , by Regulation ( EEC ) No 1418 /88 1 , Imposed a
provisional anti-dumping duty on Imports of serial Impact dot matrix
printers originating In Japan .      That duty was extended for a maximum period
of two months by Regulation ( EEC ) No 2943 / 88 2 .
2 . The like product for provisional findings was considered to be all
serial Impact dot matrix ( SIDM ) printers , these products being based on the
same Impact technology whatever their speed or specifications .          No new
evidence was submitted in support of a number of like products based on
print speed and thus It Is proposed that the provisional findings be
conf I rmed .
3.   As regards dumping , the Commission 's provisional findings that all
companies investigated had been dumping the product concerned In the
Community were confirmed .      Normal values were based where possible on
domestic Japanese prices but for the most part the companies concerned had
few sales of the models exported on the Japanese market and , accordingly ,
 In these Instances , costs of production with a reasonable margin for profit
were used as the basis of normal value .      Most exporters sold through
related importers In the Community and In such cases the export prices were
those to the first Independent buyer In the Community , costs between
 Importation and resale being deducted to arrive at a constructed CIF level .
Transfer prices between related exporters and Importers were , accordingly ,
not used .
1       OJ No L  130 , 26.05.1988 , p.  12 .
2       OJ  No L 264 , 24.09.1988 , p.  56
 ---pagebreak--- 4.   The comparison of export prices and normal value was for each model
exported , the allowance being made for differences In selling costs .      The
comparisons were made at the same level of trade .      The following dumping
margins were established -.-
      Alps Electrical Co Ltd                        6.1%
      Brother   Industries Ltd                     39.6%
      Citizen Watch Co Ltd                         43.3%
      Copa I Co Ltd                                18.6%
      FuJ I tsu Ltd                                86.0%
      Japan Business Computer Co Ltd               22.4%
      Juki Corporation ( previously Tokyo Juki ) 80.0%
      Naka J Ima Ltd                               12.0%
      NEC Corporation                              67.5%
      OKI Electric Industry Co Ltd                  8.1%
      Seiko Epson Corporation                      29.7%
      Selkosha Co Ltd                              73.0%
      Shlnwa Digital Industry Co Ltd                9.5%
      Star Micronlcs Co Ltd                        13.6%
      Tokyo Electric Co Ltd                         4.8%
5.   The Community Industry concerned comprised four producers which
produced 65% of total output of dot matrix printers .      Three of these
companies also Imported the product concerned from Japanese companies the
subject of the Investigation .     It was established , however , that these
Community producers had had to cease production of the types of printers
 Imported In the face of low priced ( dumped )   Imports and their Importation
of Japanese printers was a legitimate measure of self-defence In
maintaining a full product range .
6.   As regards Injury ,   It was established that , In a market which grew by
162% between 1983 and 1986 Japanese sales Increased by 290% .       This
represented an Increase In market share from 49% to 73% for the same
period , the Community producers' share declining from 38% to 19% .
 ---pagebreak--- 7.      Following the imposition of provisional measures , a detailed
 Investigation into price undercutting was carried out . The models compared
comprised 67% of the Community producers' sales and 65% of the Japanese
exporters' sales In the Community . Where appropriate , adjustments were
made regarding different sales channels and for different physical
characteristics of the models compared . Undercutting of between 3.9% and
43.4% was found for all but three exporters where prices were ,
nevertheless , If applied to comparable EEC produced models , Insufficient to
allow a reasonable return for the Community producers .
8.      In conclusion , It is considered that the effect of the dumped Imports
on the Community producers has been a loss of sales and market share , price
depression , consequent increased unit costs and loss of profitability .
Employment has also been reduced as has investment In research and
development and Improved technology .
9.      The Commission’s provisional findings on Community Interest are also
confirmed .      It Is considered that the taking of anti-dumping measures would
be In the Community Interest since these measures would have the effect of
re-establishing a fair competitive situation allowing the Community
Industry to benefit , like the Japanese exporters did In the past , from
Increased economies of scale , Intensified research and development efforts ,
the establishment of new production methods and , finally , the further
reduction of manufacturing costs .       It can also be expected that the
processing Industry , the printer trade , end-users and consummers will
benefit from such an Improvement In the Community Industry 's economic
cond 1 t ions . Therefore , the Council Is of the opinion that anti-dumping
duties which do not exceed the amount which Is necessary to remove the
Injury , will not have the protectionist effect claimed by the exporters .
10 .     The level of duty proposed for each Individual exporter has been
calculated as that required to eliminate the price undercutting practised
In the Community by the exporter concerned and to allow the Community
producers to Increase their prices to achieve an adequate return on sales
( 12% ) without losing market share . The levels thus calculated are as
f o I I ows : -
 ---pagebreak---                                          4 -
       Alps Electrical Co . Ltd                    6.1%
       Brother Industries Ltd                     35.1%
       Citizen Watch Co . Ltd                     37.4%
       Copal Co . Ltd                             18.6%
       FuJ Itsu Ltd                               47.0%
       Japan Business Computer Co . Ltd            6.4%
       Juki Corporation ( formerly Tokyo Juki )   27.9%
       NakaJIma All Precision Co . Ltd            12.0%
       NEC Corporation                            32.9%
       Ok I Electric Industry Co . Ltd             8.1%
       Seiko Epson Corporation                    25.7%
       Selkosha Co . Ltd                          36.9%
       Shlnwa Digital Industry Co . Ltd            9.5%
       Star Mlcronlcs Co . Ltd                    13.6%
       Tokyo Electric Co . Ltd                     4.8%
11 . Given the Importance of dumping margins found and the serious nature
of the Injury caused It Is now proposed that the amounts secured by way of
provisional duty should be definitively collected either In full or to a
maximum of the duty definitively Imposed In the Instances where the
definitive duty Is less than the provisional duty .
12 .  It Is proposed that certain specific and very specialised SIDM
printers be not subject to the definitive duty and In such cases the
provisional duty should not be definitively collected .
13 .  In conclusion , therefore ,  It Is proposed that the Council Impose the
definitive anti-dumping duties as specified In paragraph 10 and
definitively collect the provisional anti-dumping duties In accordance with
the provisions of Articles 11 , 12 and 13 of Regulation ( EEC ) No 2423 / 88 .
 ---pagebreak---                                Proposal for a
                          COUNCIL REGULATION ( EEC )
   Imposing a definitive anti-dumping duty on Imports of serial Impact dot
                     matrix printers originating In Japan
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establ Ishlng the European Economic Community ,
Having regard to Council Regulation ( EEC ) No 2423/ 88 of 11 July 1988 on
protection against dumped or subsidized Imports from countries not
members of the European Economic Community 1 , and In particular
Article 12 thereof ,
Having regard to the proposal submitted by the Commission after
consul tat Ion within the Advisory Committee as provided for under the
above Regulation ,
flhereas ;
A.    PROVISIONAL MEASURES
 1.   The Commission , by Regul at Ion (EEC ) No 1418/ 88 2 , Imposed a
provisional ant l-dumplng duty on Imports of serial Impact dot matrix
printers originating In Japan .      That duty was extended for a maximum
period of two months by Council Regulation ( EEC ) No 2943 / 88^.
B.    SUBSEQUENT PROCEDURE
 2.   Following the Imposition of the provisional       anti-dumping duty , all
exporters and a number of Independent Importers as well as the
complainant Community Industry , requested , and were granted , an
opportunity fo be heard by the Commission .       They also made written
submissions making known their views on the findings .
 1     OJ No L 209 , 2.08.1988 , p. 1
 2     OJ No L 130 , 26.05.1988 , p. 12 .
 3     OJ No L 264 , 24.09.1988 , p. 56
 ---pagebreak---                                            2
 3.    Upon request , parties were also 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 they could make representations subsequent to the disclosure
 given .    Their comments were considered and ,     where appropr I ate , the
 Commission 's findings were adjusted to take account of them .
 4.     In addition to the Invest I gat Ions leading to the preliminary
 determl nat Ions , the Commission carried out further Invest I gat Ions at the
 premises of all the complainant companies .
 C.     PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT
 5.     In Its provisional findings , the Commission concluded that the
 products under conslderat Ion are ser I al -I mpact-dot matrix printers
 which print dots by electronically activated needles on a print medium
(s I DM   printers ).        Further , the Commission found that all Community
 produced SIDM printers form one like product to all SIDM printers
 exported from Japan , with the exception of special purpose printers
 ( recitals 7 and 31 of Commission Regul at Ion ( EEC ) N'   1418 / 88 , hereinafter
 referred to as the " Commission Regul at Ion ") .
 These concl us Ions were contested by exporters and Importers .         Firstly ,
 the argument was mal ntalned that no single market for SIDM printers
 existed and that dear dividing lines could be drawn between the
 different market segments , as defined In terms of end-uses by a study of
 Ernst & Whlnney Consel I , l.e . a low-, mid-, letter quality and a high-end
 segment .    Therefore , It was argued that at least four or five different
 like products should be determined and , consequent ly , four or five
 different dumping and Injury determl nat Ions should be established .
 Secondly , some exporters and one Importer argued that specific printer
 models should be excluded from the like product definition because of
 their unique specifications , their exclusive design , their specific
software and / or their specific appl Icat Ion and use .
                                                                                     r
 ---pagebreak--- a)    Arguments concerning the like product definition .
6.    The Commission took all these arguments Into conslderat Ion .          It found
that It was not contested that all SIDU printers on the Community market
( about 800 models ) were based on the same Impact technology and their
basic physical and technical characteristics were Identical .             On the
other hand ,     It Is obvious that the numerous      printer models on the market
differ In physical technical specifications , Interfaces , softwares ,
weight , size , quality , features and accessories .
7.    The printer market Is , moreover , characterized by the fact that the
dot-matr I x printer technology , and the different physical and technical
characteristics of the SIDU printers , their size , weight , specifications
and features are subject to rapid developments and changes .            In this
respect , the German market research company IUV Info-marketing
Ver I agsgesel 1 schaft flir Bllrosysteme , Dllsseldorf ( herel naf ter I UV Info -
Uarketlng ), confirmed a present market trend to decentral I ze pr ! nting
facl 1 1 1 les I . e . to subst I tute heavy-duty printers by sever al  less
durable , lighter , smaller and less expenslve printers .
The relation between price and performance of these subst I tute printers
Is , according to IUV Info-Uarket Ing , constantly Increasing .
8.    As far as the appl Icat Ion and use of the printers Is concerned , no
new arguments were advanced by the exporters against the like product
definition In the Commission Regulation .          In particular , no new aspects
were supplied on the basis of which dear dividing lines among the
products concerned , In terms of distinct characteristics and uses , should
be found .      In such cl rcumstances , the Commission considered that , when
faced with a spectrum or continuum of products where there are no dear
distinctions among these products , It would be arbitrary , open to
circumvention and probably unworkable to separate the products Into a
number of separate articles or series of like products .
 ---pagebreak---                                          4
9.   In the light of the evidence presented , the Council confirms the
Commissions 's provisional findings ( recitals 11 to 17 of the Commission
Regul at Ion ) that the SIDU printer market In the Community Is best
considered as a series of products with no clearly defined boundaries
between them .    SIDU printers which , regardless of their differences , have
the same basic physical and technical characteristics and the same basic
appl Icat Ion and use . have therefore to be considered as being like
products .
b)   Arguments concernl ng spécifie pr Inter models .
10 . As far as the requests to exclude specific printer models are
concerned , Selkosha argued that Its printer SBP10 , because of Its print
speed and Its other qualities , could not be considered       a like product to
the other SIDU printers on the Community market .       The Commission did ,
however , not consider that high print speed and quality differences
distinguish the SBP10 printer as a separate product from other fast
printing SIDU printers .     Indeed , only such technical or quality
differences which have the effect that the use , the appl teat Ion or the
consumers' perception distinguish fundamental I y a given printer from the
other SIDU printers are susceptible to render a SIDU printer " unlike " .
Although It Is true that , at present , the high speed of the SBP10 ,
measured In characters per second ( cps ) Is not equalled by any Community
produced SIDU printer , the cps figure does not give an accurate figure of
a printer 's speed on typical texts .      If the throughput of the SBP10 Is
compared to those of the Europrlnt models , the difference Is not such as
to distinguish this printer fundamental I y from the Community printer
models .
11 . An exporter ( Hitachi Ltd ) and an Importer ( Apple Computer
Internat lonal ) submitted that they export and Import respectively ,      Into
the Community , SIDU printers for use within either the exporter 's main ¬
frame    or the Importer ' s computer system .   These printers form an
Integral part of these computer systems , have unique spec / f Icat Ions
designed for the respect Ive computer system 's requirements and cannot be
used other than as a part of these systems .       The Importer ( Apple ), which
 ---pagebreak---  is not a SIDU manufacturer could , however , also purchase its system
printers from Community printer manufacturers while the exporter
 ( Hitachi ) Is Itself a SIDU printer manufacturer and exports and sells its
printers only as part of Its mainframe computer system .
 12 . In the light of these arguments , the Commission found , that It Is not
unusual that SIDU printers are sped f leal !y designed and manufactured for
a part Icul ar computer system .   Since SIDU printers cannot be used as a
stand alone product but have to be connected to a computer , they always
form part of a system .    The basic physical and technical characteristics
and the application and use of these specifically designed and
manufactured printers remain      similar to other   SIDU printers not
exclusively designed and manufactured for a given computer system .
Furthermore , the products under consideration are serial      Impact dot
matrix needle printers and not computer systems .      Therefore , SIDU
printers which form an Integral part of , and are exclusively dedicated
to , a computer system supplied by the manufacturer and / or the exporter of
the printer In question , and which are only Imported and sold within such
a computer system , cannot be considered as being similar to the Community -
manufactured SIDU printers .     The mere fact , however , that printers are
exclusively designed and manufactured for a computer system of an
Importer , without forming an Integral part of and being Imported together
with such a computer system , cannot be considered sufficient to render
these printers unlike to Community-manufactured SIDU printers .
13 . Epson argued that Its compact mini printer models 15011 , 160 , 180 and
183 which are designed for use with the Epson PX16 and HX20 portable
computers and the EHT hand held computers , are not like products to the
Community manufacturers' printer models .
As regards this argument , the Commission found , on the one hand , that
these printers do not have the basic physical and technical
characteristics of SIDU needle printers .      These compact mlnl-pr Inters are
line Impact dot matrix printers and print line to line rather than
character by character .    Furthermore , they use only paper with a width
smaller than that used by     other SIDU printers .   Thirdly , these printers
are hand held , light weight   portable printers for the specific needs of
portable data printouts .
 ---pagebreak---                                         6
14 . In contrast , the Community-produced SI DU printers which are the
subject of these proceedings are at least desk-top printers and not
perceived as portable printers for use In a portable pocket computer
system .   For these reasons , the Commission considers these printers as
being different from the Community-produced SIDU needle printers .      The
Council confirms this finding and concludes that these printers fall
outside the scope of the products under cons I derat Ion .
15 . As far as requests for exceptions for other printer models are
concerned ,  these have been dealt with In recitals 24 to 29 of the
Commission     Regul at Ion . Since no new arguments were submitted In this
respect , the Council confirms the Commission 's provisional conclusions .
16 . In the light of the findings presented In the Commission       Regul at Ion
( recitals 11 to 31 ), and of the conslderat Ions set out above ,  the Council
concludes that        SIDM     printers are sufficiently alike to be
considered as one like product In the context of this proceeding .
Consequently , all Community produced        SIDM    printers are like
products to those exported from Japan , with the exception of special -
purpose printers , printers forming an Integral part of a computer system
and Imported and sold together with this system , and hand held pocket
printers .
D.   NORMAL VALUE
17 . Normal value for those products subject to the provisional duty was ,
for the purpose of def Ini t Ive findings , generally established on the
basis of    the methods used for the provisional determl nat Ion of dumping ,
taking Into account new evidence submitted by the parties concerned .
18 . One exporter claimed that the normal value established for certain of
Its sales on the domestic market should take account of the value of
certain goods which , It alleged , were given as a form of rebate on the
price paid for the product under consideration .     It was , however ,
establ I shed that these rebates were given only on accesorles and were ,
accordingly , not directly linked to the sales under consideration .
 ---pagebreak---                                       - 7 -
19 . Certain exporters continued to request that account be taken , for the
purposes of      establishing normal value by means of domestic prices , of
transfer prices between related companies or sales branches of these
exporters on the Japanese market .      The Commission , however , continued to
consider such an approach as Inappropriate for the reasons Indicated In
recitals 33 , 39 and 40 of the Commission      Regulation ~and c; this Is
confirmed by the Council .
20 . Some exporters objected to the elimination of certain sales , or sales
channels , from the calculat Ion of normal value where It was based on
domestic prices on the grounds that these sales were In fact made In the
ordinary course of trade .     However , the Commission was satisfied that ,
where such elimination occurred ,    the sales had been made In substant lal
quantities during the reference period and at prices which did not permit
recovery In the normal course of trade of all costs reasonably allocated
and within the reference period as provided for In Article 2(4 ) of
Regulation (EEC) No 2423/ 88 .    This conclusion Is confirmed by the
Councl I .
For the purposes of definitive findings , the Council confirms that
normal values In such circumstances and In cases where the remaining
sales ,    l.e . those considered to be In the normal course of trade ,
comprised less than 5% of the volume of exports of the particular model
concerned to the Community were established by means of constructed
va I ues .
21 . As regards the method of constructing normal values and In particular
the amounts of selling , admlnlstrat Ive and other general expenses and
profit one exporter claimed that since It had no sales of the product
under consideration on the domestic market the selling , admlnlstrat Ive
and other genera I expenses and profit of Its rel at Ively few sales of
other , unrelated , products should form the basis of the appropriate
figure to be allocated for these expenses and profit to the constructed
value of the products under consideration .
The Commission , however , saw no reason to change Its view , as stated In
recital 36 of the Commission Regulation ,       and this Is confirmed by the
Council , that the fact that a particular exporter does not sell the
 ---pagebreak---                                         - 8 -
product concerned , and accordingly , does not have a sales orge.nl sat I on on
Its domestic market , should not alter the basis for estimating selling ,
administrative and other general expenses and profit In the construction
of that exporter 's normal value .      Furthermore , Article 2 . ( 3)(b)(ii ) of
Regulat Ion ( EEC ) No 2423 / 88 now confirms that , In such cl rcumstances ,
such expenses and profit shall be calculated by reference to the expenses
Incurred and the profit realised by other producers or exporters In the
country of origin or export on profitable sales of the like product .
22 . Certain exporters objected to an allocation ,      In constructing their
normal values , on the basis of the sales , administrative and other
general expenses and profit realised by other producers or exporters on
their prof I table sales of the like product In Japan .      In these cases , the
exporters concerned had not sold .      In the normal course of trade , 5% or
more of the volume of exports of the particular model concerned to the
Community and .   In these circumstances ,    In accordance with the
Commission 's normal practice ,       normal value      constructed as provided
for by Article 2(3)(b)(ll ) of Regulation ( EEC ) No 2423 / 88 .       One of the
exporting companies , which had not disputed the Commission 's preliminary
findings on the 5% rule , later argued that It had sold the like product
In sufficient quantities In the domestic market for the selling ,
adml nlstrat Ive and other general expenses and profit for these sales to
be taken   Into consideration     In the calculation of constructed normal
values .  No ver I f Icat Ion of this assertion was , however , possible and ,
accordingly the Council confirms the Commission 's preliminary findings .
The Council therefore confirmed the Commission 's position , that , In these
cl rcumstances , In accordance with Article 2(3)(b )( 1 1 ) of Regul at Ion ( EEC )
No 2423/ 88 , the amount of selling , general and administrative costs and
profit should be cal cut ated with reference to the expenses Incurred and
the profit realised by other exporters on their profitable sales of the
like product In the Japanese market .
 ---pagebreak---                                          - 9 -
 23 . Another exporter argued that an at locat Ion should not be made to
 Include certain selling , administrative and other general expenses of
 subsidiary or related distributor companies .        However , the Commission
 consldersand the Council confirms that In order to Include all costs
 Incurred In the constructed normal value ,       In accordance with
Article 2(3)(b)(ii )    of Regulation (EEC) No 2423/ 88 , appropriate account must
be taken of such costs .
24 . As regards profit , certain exporters argued that the figure Included
 In their normal values was excessive .        However , where an Individual
 figure could be calculated for an exporter then that figure , I . e . the
actual profit realised on profitable sales , was used In constructing
normal   value .
25 . Some exporters also argued that by restricting the calculat Ion to
sales of machines In the normal course of trade and thereby eliminating
certain sales at a loss an artificially high profit margin was obtained .
 In addition , It was argued that certain sales at a loss should be
considered In the normal course of trade being normal commercial practice
 In the dot matrix printer business .       The Commission rejected this view
since the provisions of Article 2(4 ) of Regulat Ion ( EEC ) No 2423 / 88
 provide that        In such circumstances normal value shall be determined on
 the basis of the remaining , I . e . profitable , sales only .
 26 . For those exporters for which the Information available was
 Insufficient to make this calculat Ion or who traded at a loss or who did
 not make sales , or sufficient sales , of comparable products on the
 domestic market , In view of the variety of profit margins found , a
 weighted average profit margin for like products of the other exporters
 for which appropriate Informat Ion was available was applied .
 This weighted average profit margin was calculated to be 37% .
 The method adopted by the Commission concerning the Inclusion of profit
 In constructed normal values appears entirely In line with that laid down
  In Article 2(3)(b)(ii ) of Regulation (EEC ) No 2423/88 and , accordingly , the
 Council confirms the Commission 's findings .
 ---pagebreak---                                          10
27 . As regards sales of the product concerned to Independent customers
which resold the product under their own brand names ( OEMs ), one exporter
continued to claim that normal values should be based on a weighted
average of all sales In the ordinary course of trade on the Japanese
market ,  I . e . a weighted average of both own-brand sales and OEU sales .
On this point ,     the Council confirms    the Commission 's position    as stated
In recital 38 of the Commission       Regulation .     / n addition , the Council
considers that , while all serial      Impact dot matrix printers should be
considered like products within the meaning of Article 2(12 ) of
Regulation ( EEC ) No 2423 / 88 ( recitals 5 to 9 ), to establish a single
normal value for all models of the product concerned would not allow a
fair comparison with export prices as Is required by Articles 2(9 ) and
2(10 ) of Regulation ( EEC ) No 2423 / 88 .   In order for such a fair
comparison to be carried out , normal values were established for each
model and comparison made with the export price of the same or most
closely resembling model .      Such an approach Is In line with that adopted
for the calcul at Ion of the Injury threshold , where for purposes of
arriving at levels of price undercutting , only Identical or similar
models were compared .
28 . The Council also confirmed the Commission’s position as regards
certain selling , admlnlstrat Ive and other general expenses Incurred by
sales companies or departments In Japan as stated In recitals 39 and 40
of -the Commission Régulation .
E.   EXPORT PRICE
29 . With regard to exports by Japanese producers directly to Independent
Importers In the Community , export prices were determined on the basis of
the prices actually paid or payable for the product sold .
30 . In other cases , exports were made to subsidiary companies which
Imported the product Into the Community .        In such cases It was considered
appropr I ate ,   In view of the relationship between exporter and Importer ,
that export prices be constructed on the basis of prices at which the
 ---pagebreak---                                        11
Imported product was first resold to an Independent buyer . Discounts ,
rebates and the value of free goods directly linked with a sale under
consideration were deducted from the price to the Independent customer
and suitable adjustment was made to take account of all costs Incurred
between I mportat Ion and resale , Including all duties and taxes .
31 . In addition , a number of sales to Independent customers In the
Community were made by exporters' subsidiary companies either In or
outside the Community . In some such cases , It appeared that although the
related company was not the forma ! Importer It assumed certain functions
of , and bore certain costs normally Incurred by , an Importer .  It took
orders , purchased the product from the exporter and resold , to , Inter
alia , unrelated customers . These customers were generally distributors of
the product concerned In areas , In which the exporter did not have a
subsidiary company Importing and distributing the products .
Sales by some exporters were also made to an Independent customer In the
Community via more than one of the exporter 's subsidiaries .  In all such
cases except one , both subsidiaries were situated within the Community
and for the exception , one subsidiary was located within and one outwlth
the Community .  In these cases , the costs normally Incurred by an Importer
were Incurred by both the subsidiaries of the exporters concerned .     In all
Instances , there was a price paid by one subsidiary to the exporters and
a higher price paid by the second to the first subsidiary . It was claimed
that , In all such circumstances , the export price actually paid or
payable In terms of Article 2(8)(a ) of Regulation ( EEC ) No 2423 / 88 should
be that Invoiced by whichever subsidiary sells to Independent customers
In the Community .
The Commission considers that , In these cl rcumstances , the products were
sold for export to the Community by the exporter In Japan to a subsidiary
 located either Inside of or outside the Community . These subsidiaries ,
whether formally Importing the product or not , assume functions typical
of an Importing subsidiary . Given the relationship between the exporter
 ---pagebreak---                                          12
and Its subsidiary , the export price .     In such cases , considered to be a
transfer price , Is therefore      rejected as unreliable . Accordingly , the
export price had to be constructed on the basis of the price at which the
product was first sold to an Independent buyer , allowance being made for
all costs Incurred by the subsidiary or        subsidiaries In question , as
provided for by Article 2(8)(b ) of Regulation ( EEC ) No 2423 / 88 .
32 . The Council confirms    the Commission 's findings on establ Ishlng
export prices as set out In recitals 45 to 49 of the Commission
Regulation .
F.   COUPAU ! SON
33 . For the purpose of a fair comparison between normal value and export
prices , the Commission took account , where appropriate , of differences
affecting price comparability , such as differences In physical
characteristics , and differences In selling costs , where claims of a
direct relationship of these differences to the sales under consideration
could be satisfactorily demonstrated .       This was the case In respect of
differences In credit terms , warrant les , commissions , salaries paid to
salesmen , packing , transport , Insurance , handling and ancillary costs .
34 . Normal value and export prices , the latter based on both prices paid
and constructed export prices , were compared at the same level of trade .
The prices or constructed values to which adjustments were made, were
establ I shed at the level of exporting companies' domestic sales companies
or sales organ I zat Ions . Export prices were established ex export sales
company or sales organ I zat Ion .
35 . One exporter continued to claim an allowance for differences In
quantities sold domestically from those sold for export to the Community .
The claim was based on an alleged cost difference resulting from
differences In volume of production .       However , no additional evidence to
that available for provisional findings was supplied regarding savings In
the cost of producing different quantities .       The Council therefore
confirmed the Commission 's finding that the claim should be rejected .
 ---pagebreak---                                        13 -
 36 . The Council also confirms   the Commission 's findings on comparison of
 normal value and export price as set out In recitals 52 and 54 to 56 of
the Commission Régulation .
 G.   DUMPING MARGIN
 37 . Normal value for each of the models of each exporter was compared
with export prices of comparable models on a transact I on-by- transact Ion
basis . The examination of the facts shows the existence of dumping In
 respect of Imports of dot matrix printers originating In Japan from all
 the Japanese exporters Investigated , the margin of dumping being equal to
 the amount by which the normal value as established exceeds the price for
 export to the Community .
 38 . The margins of dumping varied according to the exporter , and
expressed as a percentage of CIF Community frontier values the weighted
 average margins were as follows :
       Alps Electrical Co Ltd                    6.1 %
       Brother Industries Ltd                   39.6%
       Citizen Watch Co Ltd                     43.3%
       Copal Co Ltd                               18.6X
       Fujitsu Ltd                               86.0%
       Japan Business Computer Co Ltd         22.4%
       Juki Corporat Ion (previously Tokyo Juki ) 80.0%
       NakaJIma Ltd                               12.0%
       NEC Corporation                           67.5%
       OKI Electric Industry Co Ltd             8.1%
       Seiko Epson Corporation                  29.7%
       Selkosha Co Ltd                           73.0%
       Shlnwa Digital Industry Co Ltd           9.5%
       Star Mlcronlcs Co Ltd                    13.6%
       Tokyo Electric Co Ltd                     4.8%
 ---pagebreak---                                        14
39 . For tt>:.se exporters which neither replied to the Commission 's
questionnaire , nor otherwise made themselves known , dumping was
determined on the basis of the facts available In accordance with the
provisions of Article 7(7)(b ) of Regulation ( EEC ) No 2423/ 88 .
In this connection the Commission considered that the results of Its
Invest Igat Ion provided the most appropr I ate basis for determlnat Ion of
the margin of dumping and that It would create an opportunity for
circumvention of the duty to hold that the dumping margin for these
exporters was any lower than the highest dumping margin of 86% determined
with regard to an exporter who had co-operated In the Invest Igat Ion . For
these reasons It Is considered appropriate to use this latter dumping
margin for this group of exporters .
As regards the company which refused to cooperate with the Commission
during the preliminary Investigation , the circumstances remained
unchanged up to the final examination of the facts and accordingly the
Council confirmed that It would be appropriate that definitive findings
for this company also be made on the basis of the facts aval I able ,    le .
the results of the Investigation .
40 . It was considered that ,  In this case ,   It would also create an
opportunity for cl rcumvent Ion of the duty and would const I tute a bonus
for non-cooperation to hold that the dumping margin for this exporter was
any lower than the highest dumping margin determined with regard to an
exporter who had cooperated In the Investigation .       For these reasons It
Is considered appropr I ate to use the highest dumping margin for this
company .
H.    COMNUN I TY INDUSTRY
41 .  The Commission Interpreted the term “ Community Industry " as
referring to the four Community producers that are members of Europrlnt
( see recital 69 of Commission     Regul at Ion ) . This conclusion was based
on the consideration that the four Europrlnt members manufactured about
65% of the total Community output of SIDM printers ,      le . a major
 ---pagebreak---                                         15
proportion of the total Community production of the like product , and
that the reasons which led three Europrlnt members to Import SIDU
printers from Japan , as well as the volume . value and other cl rcumstances
of these Imports could be taken as legitimate measures of self defence
(see recitals 63 to 67 of the Commission       Regul at Ion ) .
42 .  With regard to this conclusion , some exporters argued , firstly , that
there was no need for the three producers to Import Japanese SIDU
printers and to offer a full range of printers , secondly , that these
Imports Inflicted Injury on the Importing producers because these SIDU
printers are like products to the producer ' s own manufactured SIDU
printers , and , thirdly , that the amount and the growth of those Imports
show that such Imports surpassed the limits of what could reasonably be
defined as a measure of mere self-defence .
43 . As to the the first argument , It should be recalled , In the first
place , that all three Community producers manufactured similar types of
printers before they decided ,    In the years 1984 to 1986 , to substitute
these own produced printers by low price printers of Japanese origin .
The three producers , thefore , did not Increase their range of printers
merely , but replaced   own produced printers by Japanese models .
Secondly , It Is obvious that potential clients are more Inclined to buy
office automat Ion equipment from a supplier who offers a full range of
printers .  The three Community producers can therefore not be criticised
for their decision to continue to offer a full range of SIDU printer
models .
Thirdly , It Is not contested that the main reason for these Imports Is
the fact that , because of the low price level of the printer market
caused by Imports from Japan , the costs of development and product ton of
such substitute new printer models Incurred by the three companies would
not have been recovered within a reasonable time .
                                                                              %
 ---pagebreak---                                         16
  44 .  The exporters' second argument    confuses two different issues ,
  namely the determination of the like product and the question whether the
  Imporied models are In direct competition to the Importers' own
  manufactured printers .   For the purposes of defining the like product ,
  the fact that no dear dividing lines between the different products can
  be drawn Is , In the opinion of the Council , sufficient to determine that ,
  In general , all SIDU needle printers form one like product .    This lack of
  dear dividing lines does , however , not mean that the Community producers
  Inflicted Injury on themselves by Importing these printers .     Since the
  majority of Japanese exporters sel I printer models In the different
  market segments and offer a full range of printer models , there cannot be
  any question of self-inflicted Injury when their Community competitors
  try , by these Imports , also to offer such a range of printer models .
  45 .  As far as the third argument Is concerned , the Commission reviewed
  the Import figures of three producers during the Invest Igat Ion period .   It
  found that these Imports represented respectively 10,68% , 28,9% and 47,4%
  of the total product Ion of these producers .   In this respect , the
  Commission considered that these Imported printers all belonged to the
  low end of the market ( as defined by the study of Ernst and Whlnney
  Consell ).  This market segment Is the most Important of the printer
  market and has recently grown significantly faster than the total market .
  In addition , the Community producers wished to regain their market shares
  lost by abandonnlng their own production In this sector .     The volume ,
  value and growth of these    Imports can , therefore , not be considered as
  being dlsproport lonate to their own production levels .
  46 .  In the light of the foregoing , and for the reasons and circumstances
  which led the Community producers to Import Japanese SIDU printers ( see
  recitals 63 to 67 of the Commission Regulation ), the Council concludes
  that the Imports of SIDU printers from Japan by the Europrlnt members
  have to be considered as reasonable measures of self-defence .
  Consequently ,  the three Europrlnt members should not be excluded from the
  Community producers representing the Community Industry .
\
 ---pagebreak---                                         17 -
 /.  INJURY
a)    Volume and market shares of dumped Imports
47 .    In Its provisional findings , the Commission establ shed that    the
market share held by Japanese exporters In the Community had Increased
from 49% In 1983 to 73% In 1986 .     While the total SIDM printer market
grew from 800 000 units In 1983 to 2 093 000 units In 1986 . I.e .. a
growth of 162% , the Japanese market share shows growth from 390 000 units
In 1983 to 1 522 000 units In 1986 , a growth of 290% .      The Commission
also found a considerable Increase of the Japanese market presence In the
different market segments defined In terms of print speed by some market
research companies ( 1 DC and Data quest ) and referred to In the study of
Ernst and Whlnney Consel I . between 1983 and 1986 .     In the low end
segment , the    Japanese exporters share Increased from 65% to 88% . and the
Community Industry 's decreased from      from 24% to 7% . In the medium market
segment , the    Japanese exporters' share Increased from 46% to 65% , and
the Community Industry 's decreased from      34% to 25% . In the high market
segment , the Japanese exporters' share Increased from 4% to 47% and the
Community Industry 's decreased from 61% to 28% .     Ernst and Whinney
Consel I commented on this development that the EEC manufacturers were ,      In
 the low end segment , the least successful and resorted to Japanese OEU
sales to cover this range of products under their brand names .
48 . With respect to the figures concerning the low end segment , the
exporters argued that the market share of the Community Industry should
be adjusted because of the OEU-I mports of the three Europr / nt members .
The Imported printers of these producers are sold under their own brand
name .    According to the exporters , the market share of the Community
 Industry was therefore significantly under-est I mated .    The Council
considers , however , that for these so called OEU Imports , the Community
producers act more as distributors of Japanese SIDM printers than as
manufacturers .    No adjustment Is therefore Justified .
                                                                                 2 г
 ---pagebreak---                                            18
b)    Prices
aa )   Price depression
49 .   Based on the Ernst and Whlnney Consel I study , the Commission found
the unit price trend of the total SIDU printer market In the Community
during 1983 to 1986 showed an overall decrease of between 25% and 35% .
The price decrease was considerably higher In the low and high end
segment than In the medium segment .         These different price decrease
factors are consistent with the          considerable Increase In relative terms
of the Japanese exporter 's market share In the low and high end segments .
The Community Industry had also to follow this price depression trend .
bb )   Price undercutting
50 .   -4s far as price under cut t / ng Is concerned , the Commission
establ I shed a detailed price undercutting study concerning the Japanese
exporters' prices and those of the Community manufacturers ,           In both cases
to the first unrelated buyer .
Firstly , represent at I ve SIDU printer models of the four Europrlnt members
were selected .       The SIDU printer models treated as represent at ive
accounted for about 68% of the total sales of all models of the Community
Industry within the Community .         As a second step , on the basis of a model
comparison study supplied by ,       Info-Uarket I ng ,  IUV and In close
col I aborat Ion with It , the SIDU printer models of the Japanese exporters
most similar to the Europrlnt member models , as far as technical
spec ! f I cat Ions , features , speed , appl Icat Ion and use was concerned , were
determined .      These selected Japanese printer models accounted for about
65% of all Japanese exporters sales during the period of Invest lg :           ion In
the Community .       Thirdly , the net weighted average prices of these
comparable printer models In France , Germany ,         Italy and the United
Kingdom were compared , In the OEU , distributor , dealer and the end-user
sales channel .
 ---pagebreak---                                         19 -
 61 .   Where no corresponding prices In the different sales channels were
 found , adjustments were made ( 25% between dealer and distributor 's sales
channels').    When the Commission was satisfied that Important technical or
physical differences had a considerable Impact on the consumer 's
perception of the printers and on prices , adequate adjustments were made
or the printer models were excluded from the comparison .      Additional
adjustments were made for differences In the weight of the compared
printer models ( for difference between 50% and 74% : 10% price
adjustments , for differences between 75% and 99% : 20% price adjustment ) .
52 .    Some exporters argued that the adjustments for weight differences
were too low and that add ! t Iona’ adjustments should be made for
differences In durability of the printers ( l.e ., for ' mean time between
failure' and the print head life).      An other exporter argued that
differences In the costs of product Ion between his SI DM printers and the
Community printers should be taken Into account .
The Commission could , however , not accept these arguments .     As far as the
weight differences are concerned , the market research Institutes ,      I MV
Inf o-Market I ng and Ernst and Whlnney Consel I , stated that weight
differences should , but only to a certain degree , be taken Into account
for price comparison purposes .    While I MV Info-Marketing stated that a
precise weight adjustment was Impossible , Ernst and Whlnney Consel I
submitted a formula for cal cut at I ng such adjustments .  However , this
organ ! sat Ion also admitted that the formula was based on assumptions and
estimations and not on precise , reliable and verifiable data .      The
heavier weight of a printer might also be the consequence of out-dated
production techniques and does , therefore , not necessarily result In
higher quality or better consumer appreciation .      Under these
circumstances , only limited weight adjustments were considered
appropriate .    As far as adjustments for durability are concerned , the
Commission found , based on the advice of I MV Info-Market / ng , that these
differences , when they exist at all , are not quantifiable .     Moreover , no
commonly accepted standards exist for measuring these differences .         No
adjustments were therefore granted .      The Council confirms these findings
of    the Commission .
                                                                                '2Λ
 ---pagebreak---                                            20
53 .  The price comparison showed that all out three Japanese exporters
had , on average ,   undercut the prices cf comparable models of the
Community manufacturers .       The weighted average price undercutting ranged
from 3 . 93% to 43.42% .    Of the three non-undsrcut t I ng exporters , two had
either exported very low quantities or sold through specific customers ,
or both .   All three sold at prices , which ,      If applied to the comparable
printer models of the Community Industry , would not have permitted a
reasonable return on sales .
In these circumstances ,      the Council concludes that the prices of the
dumped Imports undercut significantly the prices of comparable Community
produced SI DU printers .
c)   Other relevant economic factors
54 .  In Its provisional findings ( see recitals 83 to 87 of the Commissi on
Regul at Ion ) the Commission found that capacity , production and the sales
of SIDM printers of the Community Industry Increased between 1983 and
1986 . Capacity ut 1 1 1 sat Ion remained , however , stable at about 70% .
During the same period , the Community producer 's stocks of unsold SIDM
printers Increased more rapidly than their sales .         Moreover , while In
1984   the complainant Community Industry as a whole had an weighted
average return on sales on their own SIDM printer production of about 9% .
the weighted average return on such sales for the period under
Invest Igat Ion was around 1% .      In this context , It should be noted that
from 1984 to 1987 ( first three months ) the average production costs for
SIDU printers of the Community Industry decreased .          Nevertheless , the
Community Industry suffered a growing decline In prof I tabl I ty .      Moreover ,
the Community producers Invested more to reduce their costs of production
than In new capacity .       Finally , they have been forced to scale down their
research and development expenditure on printers which Is substantially
below that of their main Japanese rivals .
 ---pagebreak---                                          21
d)    Conclusions
55 .   In recitals 88 to 92 of the Commission       Regulation , the reasons are
specified which led the Commission to conclude that the Community SIDM
printer Industry experienced material Injury . Indeed , the figures
concerning the SIDU printer market In general show a steady increase of
demand , and consequently , a continuously growing market .      In contrast ,
the figures concerning the     Community manufacturers     show that their
performance    did not follow the market trends , their presence In the
market declining considerably.'     Moreover , the dramatic drop In their
profitability leads the Council to consider that the Community Industry
remained at a low    and still declining level of financial performance and
suffered material   Injury .
J.   CAUSATION OF INJURY BY THE DUMPED      IMPORTS
56 .   The Commission concluded In recital 108 of Its Regu ! at ion that the
volume of the dumped Imports , their market penetration , and the prices at
which the dumped SIDM printers had been offered ,     taken In Isol at Ion ,
caused material   Injury to the Community Industry .
57 . With regard to this cone / us Ion , the exporters and Importers raised ,
effectively , two arguments , firstly , that the Commission failed to show
the specific Injurious effect of the dumped Imports of each of the
CJPRINT members and , secondly , that the difficult market situation of the
Community Industry was either self-inflicted or caused by other factors
such as low priced non-dumped Imports from third countries other than
Japan .   In this respect , the exporters argued further that the Community
producers had a long history of conservat Ive market behaviour which *as
 Inappropriate In the fast developing printer market , that they applied
 the wrong market strategies ( l.e ., a niche market strategy ) , that they
were unwilling to devote sufficient resources to necessary research and
development Investments , and . In the end , that they were only suffering
from their own high cost structures .
 ---pagebreak---                                               22
 58 . The Council cannot accept these arguments .           As to the first argument ,
  It should be noted that Article 4 ( 1 ) of Regulation           ( EEC )
 No 2423 / 88 requires a determination that the Injury was caused by dumped
 Imports .   This provision which refers to all dumped Imports cannot be
 Interpreted In such a narrow way that the Injurious effects of the sales
of each exporter ,    taken In Isolation , have to be determined .           Such an
 Individual   Injury determl nat I on would ,    In the vast majority of cases , be
 Impossible and , thus , render          Regulation ( EEC ) No 2423 / 88 unworkable .
Furthermore , dumped exports which ,         looked at In Isolation , did not cause
material    Injury , would fall outside any ant I -dump ! ng proceeding , while
their cumulative effect might well have considerable Injurious effects .
 In accordance with the objectives of             Regul at Ion ( EEC ) N’ 2423 / 88 , the
overall effect of the Imports on Community Industry should be examined
and adequate measures taken In respect of all exporters , even If the
volume of their exports ,      taken on an Individual basis .        Is of little
Importance ( see Judgment of the Court 5 October 1988 , case No 294 / 86 ,
Technol ntorg v Commission , not yet published ).           The Council considers ,
therefore ,   that the Injurious effects of the dumped Imports of all
exporters concerned have to be assessed on a cumul at Ive basis and not
separately for each exporter .
59 .   As to the second argument , further Invest Igat Ion by the Commission
has shown that the marketing strategies and the OEM Imports of the
Community Industry were substant I al ly Influenced by the low price Imports
of Japanese printers since 1983 .          Indeed , on the one hand ,     the price
level for SIDM printers on the Community market decreased constantly
since the Increase of the Imports of SIDM printers from Japan and , on the
other hand , the costs of the Community producers , despite considerable
efforts , did not proportionally follow this price decrease .               The
Community Industry can therefore not be criticised , either for looking to
market segments In which there was low price elasticity , at least for a
certain time period , and where low priced Japanese Imports did not yet
have a high market penetration or for Importing low priced SIDM printers
from Japan .     The I nvest I gat I on showed , further , that the marketing
strategies of the Community Industry were mainly Influenced by the lack
of financial resources due to reduced profitability which was                itself tne
result of the low priced dumped Imports .           Finally , as far as the quality
argument Is concerned , the Japanese exporters Insisted , for the purposes
 ---pagebreak---                                         23 -
of the determlnat Ion of price undercutting , that the Community produced
printers are . In general , of equal , If not of superior quality , to
comparable printers of Japanese orgln .
60 . It was also argued by certain exporters , that Imports of low-priced
SI DM printers from third countries other than Japan had a significant
negative effect on the market and on the price level .       According to the
Information supplied by these exporters , the effects of these Imports
were , however , restricted to one member state and became substantial only
after the end of the period under Invest I gat Ion .    They can , therefore ,
not have had the Injurious Impact on the Community market as claimed by
the exporters .    Moreover , the Council Is of the opinion , In keeping with
the Jurisprudence of the Court ( see Judgment of 5 October 1988 ,
Canon v Council , Joint cases 277 / 85 and 300 / 85 , not yet published ) that
findings of Injury are not confined to cases where dumping Is the
principal cause and , accordingly , that responsibility for Injury Is
attributable to the exporters , even If the losses resultant from dumping
are Just a part of a greater Injury arising from other factors .        Finally ,
the fact that a Community producer Is facing difficulties attributable to
causes other than dumping Is not a reason to deprive that producer of all
protection against the Injury caused by dumping .
61 . In conclusion , the Council confirms the Commission 's findings that
the volume of the dumped Imports , their market penetration , the prices at
which the dumped printers have been offered In the Community , and the
 losses and loss of profit suffered by the Community Industry caused
material   Injury to the Community Industry .
K.   COMMUNITY   INTEREST
62 .   In Its provisional findings , the Commission considered the position
of the Community printer Industry , the processing Industry ,       printer
dealers and end users .     For the reasons given In recitals 109 to 120 of
 the Commission Regulation , ft cone / uded that It was In the over-r Id I ng
 Interest of the Community that Injury due to dumping be el Imlnated .
 ---pagebreak---                                             24
 63 . The exporters contested   these conclusions , with In essence , three
arguments . Firstly , they argued that the four Europrlnt members each form
part of bigger Industrial conglomerates which have sufficient resources
 to make the necessary I nvestments for future generations of printer
 technology , to Increase their marketing efforts and to reduce their costs
of product I on .     Secondly , the processing Industry , the distributors and
dealers , but above all the end users would suffer from duty Inflated
printer prices .       Thirdly , any duty Imposed on Japanese orgln SIDU
printers would only serve to protect the higher cost structure of EC
producers .      One exporter In particular stressed that It had substantial
return on sales of Its SIDM printers In the Community .            Since Independent
studies had shown that the costs of manufacture of the Europrlnt models
are higher than the comparable models of this exporter ( even on the
assumpt Ion of similar production quantities and conditions ) ant l-dumpl ng
duties would become an Instrument to protect the decision of the
Community producers to make more cost expensive models than the said
exporter .     Ant I -dump ! ng measures would , therefore , have a clear
protectionist effect which cannot be In the Interest of the Community .
64 . As to the first argument ,       It should be noted that , as the Commission
already Indicated In Its Regul at Ion , the fact that all Europrlnt members
form part of a bigger company will not put them Into a position to take
up the technological challenge of Improving the present SIDM technology
or , even less , of developing new non-impact technologies .           Experience has
shown that even overall profitable          companies are not    Inclined to Invest
for long In low- performance or loss-making departments of their business .
Such Investments are the more unlikely as they will           Involve considerable
financial     amounts with the risk of no or small      return .   Similar
considerations are valid for Increases of marketing efforts or
I nvestments to reduce costs of production .         The Council , therefore ,
confirms       the Commission 's findings that , without protection from unfair
trade practices ,      the Community Industry would fall further behind In the
S I DM printer market and , consequently ,      In the development of new printer
techno I ogy .    Since printers and computers are closely connected , the
abandoning of , or substant I al cuts In , the production of printers would
also seriously effect the electronic data processing Industry In the
Community .
 ---pagebreak---                                           25
65 . /4s far as the processing Industry , the distributors , dealers and the
end users are concerned , It should be borne In mind that the possible net
Increase of costs for the users of SI DU       printers , due to the amount of
duty , would represent only a rel at Ively small proportion of the total
operating costs of the users of SIDM printers .         In addition , the previous
price advantages or Iglnated from unfair business practices and there
cannot be any guarantee of or Just I f I cat Ion for , allowing these unfair
low prices to persist .      Moreover , these Interests have to be weighed
against the multiple consequences In the Community , Including those of
unemployment ,      of not offering protection to the Community Industry and
thus putting at risk the continued existence of a viable European
manufactur Ing Industry of SIDM printers .       Indeed , the short term
advantages of low prices are by far outwelghted by the long term
disadvantages of losing a Community based printer manufacturing Industry .
For these reasons , the Council considers that It Is In the Community
Interest to protect a SIDM printer        manufacturing capacity In the
Community .
66 .    As to the cost argument , It should be noted that the Community
manufacturers had already reduced their manfactur Ing costs during recent
years .    It has , however , also to be noted that the steady decline In
prof I tabl 1 1 ty as a consequence of reduced sales In the face of huge
quantities of dumped Imports prevented the Community manufacturers from
Improving their cost structure to the necessary degree and to build more
cost efficient SIDM printers .       Also after the Imposition of duties the
Community Industry will continue to be exposed to price and quality
competition .      The Council Is of the opinion that Community Interests are
effect Ively protected by the measures against dumped Imports , even If an
ant I -dumping duty does not result In Insulating the complainant Industry
from competition from other Community producers or from other third
countries who are not engaged In dumping ( see Judgment of the Court of
5 October 1988 , case 250 / 85 , Brother v Council , not yet published ).     The
re-establ I shment of such a fair competitive situation will allow the
Community Industry to benefit , like the Japanese exporters did In the
past , from Increased economies of scale , thus allowing Intensified
research and development efforts , the establ Ishment of new product Ion
methods and , finally , the further reduction of manufacturing
costs .    It     can   also   be   expected    that     the
 ---pagebreak---                                           26
processing Industry , the printer trade , end-users and consummers will
benefit from such an Improvement In the Community Industry 's economic
condl t Ions . Therefore , the Council  Is of the opinion that ant I -dumpl ng
duties which do not exceed the amount which Is necessary to remove the
Injury , will not have the protectionist effect claimed by the exporters .
67 . As to other arguments raised by the exporters or Importers , they have
been already dealt with In detail       In the Commission 's provisional
f Indl ngs .
No new arguments have been submitted In this respect .        Therefore , for the
above mentioned reasons and for those expressed In recitals 103 to 120 of
the Commission Regul at Ion , the Council concludes that It Is In the over ¬
riding Interest of the Community that the Injury due to dumping be
el I ml nated and that the Community Industry be accorded protect Ion against
dumped Imports of SIDM printers from Japan .
L .     DUTY
68 .    In order to el I mlnate the Injury suffered by the Community
producers , they should be permitted to Increase substant I al ly the selling
prices of their own produced SIDU printers without losing ,        perhaps even
regal nl ng ,    market share In the Community .  Consequently , the duty should
be such as to el I mlnate the price undercutting of each Japanese SIDU
printer exporter and to allow the Community producers to Increase their
prices    In order to achieve an adequate return on sales .     Indeed , In a
market situation where prices are already depressed by dumped Imports
( see recitals 49 to 53 ),    It Is   not sufficient to eliminate only the
price undercutting but the duty has also to guarantee a reasonable return
on sales for the Community Industry .
a)      The method of cal cut at Ion
69 .    For the purposes of the duty calcul at Ion and as far as the
el I ml nat I on of price undercutting Is concerned , the Commission
established the weighted average price undercutting margin for each
exporter ( see recital 53 ).      The average price level of each Japanese
 ---pagebreak---                                        27 -
exporter cal cul ated on the basis of the models compared was then compared
with   the average Community Industry 's price level , Indexed at 100 .
70 . As far as the return on sales of SIDM printers In the Community Is
concerned , the Commission took the view that the profit rate of about 9%
of the Community Industry In the year 1984 was not appropr I ate for this
calcul at Ion since the profitability In this year was Influenced by the
adoption by the Community producers of the IBM emul at Ion .   In this
respect a return on sales before tax for SIDM printers of 12% was
considered to be an appropr I ate minimum for the Community Industry .     This
return should cover additional costs of research and development ,
additional costs to Improve the marketing and advertising efforts and the
additional costs of the appropr I ate financing In the Community .    These
additional efforts should enable the Community producers to regain lost
market presence and to make up the leeway In SIDM and non-impact print
technology .  In this context , account was taken of the average return of
the Community producers on their sales of SIDM printers ( own production )
In the Community during the period under Investigation ( 1%).
In view of the foregoing , a net profit factor was calcul ated representing
the difference between the average actual prices of the Community
Industry and a target price which would enable the Community Industry to
achieve a 12% return on sales .    This net profit factor Is 12,5 , and the
target price of the Community Industry had consequently be fixed at 112.5
( the average Community Industry 's price level being 100 ).
71 .  In order to calculate for each Japanese exporter an Individual
Injury factor ( Injury threshold) , the Individual price undercutting
margin was added to the net profit factor .     This Injury threshold Is the
price Increase necessary for the el / ml nat Ion of Injury by each exporter .
For those exporters where no price undercutting was found , the difference
between the average selling price for the Japanese models and the target
price for the comparable Community model was established .
For this calcul at Ion , the same method as explained In recitals 50 and 51
was applied .  It was found that all three exporters sold their models for
less than the target prices of the comparable Community models , the
difference between the weighted average selling price of the exporter and
                                                                                II
 ---pagebreak---                                       - 28 -
 the target price for the Community producers being the Injury threshold
 for each of these exporters .
 72 . In order to establish the rate of duty to be Imposed , the Individual
 Injury threshold referred to In recital 71 has to be expressed as a
percentage of the CIF value of the Imports .      To do this , for each
exporter the weighted average selling price of Its sales to the first
 unrelated buyer , used for the purpose of establishing price undercutting
 ( see recital 50 ), has been compared with the average CIF value of these
sales .   The Individual   Injury threshold was then expressed as a
percentage of the weighted average resale price of each exporter at CIF
 level .  The result of this calcul at Ion Is the price Increase at the
Community frontier necessary to remove the Injury caused by each
exporter .
b)     Arguments of the exporters
73 .   Some exporters argued that the calcul at Ion of the Injury threshold
and the duty should not be made on an Individual and exporter-specific
basis but should be establ I shed on a global and equal basis for all
exporters on the basis that , since the existence of the Injury Is
determined on a global and cumul at Ive basis and price undercutting Is
only one potential cause of Injury , an I nd Iv I dual duty calculation based
alone on price undercutting and target profit Is not adequate .
As regards this argument , It has to be noted that Injury can be
determined on the basis of numerous factors .      When assessing whether a
duty below the dumping margin established would be adequate to remove the
Injury , difficult and complex economic apprec I at Ions are necessary which
Imply Inevitably a certain use of discretion .      In this context ,   the
Council Is of the opinion that In this case the effects of dumping
resulted substant I al ly In the Japanese exporters    selling at lower prices
than the Community Industry .     The reference to price undercutting and the
use of a target price , at which the Community Industry would have sold
had the dumping not occurred are , therefore ,    In the opinion of the
Council proper means to establish the extent of the Injury . Since the
price undercutting margins were Individually calculable and varied
                                                                               iî
 ---pagebreak---                                         29 -
considerably ,    the Council  is  of the opinion that In the present case
the amount of the price undercutting of one exporter should not be
Imputed for the duty cal cut at Ion of another exporter .
74 . Some exporters argued that when calcul at Ing the duty , the Commission
should take account of the fact that a high difference between the lowest
and the highest duty establ l shed might force the exporters with high
dumping duties out of the Community market .      This might reduce
competition and benefit only the Japanese exporters with low dumping
dut les .
The Commission could not accept this argument .      Firstly , It has to be
noted that It Is based only on conjecture .      Secondly , the Commission
considered that It Is In the Community 's Interest to re-establ Ish a fair
competitive situation .    The Council confirms this view .
Consequently ,   ant l-dumplng duties should neither have a protectionist
effect for the Community Industry nor cause an undue handicap for the
Japanese exporters . They are designed to re-establ Ish and protect fair
and workable competition rather than to protect      Individual competitors .
If , therefore , some exporters' position on the market       suffers after the
Imposition of anti-dumping duties , then      this Is only the consequence of
their Inability to face a fair and workable competitive market situation .
75 . On the basis of these cons I derat Ions , the Council confirms the
Commission 's position that It would not be In the      Community 's Interest
to mitigate    the consequences of the unfair business practices of the
exporters concerned and , In the end , to Insulate them from the effects of
a normal commercl al market situation and workable competition .
In conclusion , and on the basis of the duty calculation method as
described In recitals     69 to 71    as provided for In Article 13(3 ) of
Regulat Ion ( EEC ) AT 2423/ 88 the Council considers   It appropriate that
the amount of the duty to be Imposed should be the following :
       Alps Electrical Co . Ltd                          6 . 1%
       Brother  Industries Ltd                          35 . 1%
 ---pagebreak---                                          30 --
        Citizen Watch Co . Ltd                            37.4%
        Copal Co.Ltd                                      18.6%
        Fujitsu Ltd                                       47.0%
        Japan Business Computer Co . Ltd                   6.4 %
        Juki Corporation ( previously Tokyo Juki )        27.9%
        Nakajima                                          12.0%
        Nec Corporation                                   32.9%
        Okl Electric Industry Co.Ltd                       8.1 %
        Seiko Epson Corporat Ion                          25.7%
        Selkosha Co . Ltd                                 36.9%
        Shlnwa Digital    Industry Co.Ltd                  9.5%
        Star Mfcronlcs Co.Ltd                             13.6%
        Tokyo Electric Co Ltd                              4.8%
76 . For those which neither replied to the Commission questionnaire , nor
otherwise made themselve known or refused full        access to   Information
deemed to be necessary by the Commission for Its ver I f I cat Ion of the
company 's records , the Council considers       It appropr I ate to Impose the
highest duty calculated , I . e . 47% .   Indeed , It would const I tute a bonus
for non-cooperation to hold that the duties for these exporters were any
lower than the highest ant I -dump ! ng duty determined .
77 . The definitive anti-dumping duties should apply to all models of
 SIDM      printers       from Japan with the following exceptions : Firstly ,
SI DM     printers       used In bank machines , automated teller machines ,
electric cash registers , polnt-of -sales machines , calcul ators , ticket ¬
issuing machines and receipt Issuing machines which have only one pitch
and / or magnetic-stripe readers and / or automatic page-turner drives :
Secondly ,      SIDM       printers which   form an Integral part of , and are
exclusively dedicated to a computer system supplied by the manufacturer
and / or exporter of the printers In question and which are Imported or
sold only within such a computer system : Thirdly , hand held , portable
SIDM       printers      which are designed for use within portable and / or
hand held computers , which are line Impact dot matrix printers and are
exclusively used for portable data printouts .
 ---pagebreak---                                         31
U.   COLLECTION OF PROVISIONAL DUTY
78 . In view of the Importance of the dumping margins found and the
seriousness of the Injury caused to the Community Industry , the Council
considers It necessary that amounts by way of provisional anti-dumping
duties should be collected , either In full or to a maximum of the duty
definitively Imposed In those cases where the definitive duty Is less
than the provisional duty .     Provisional anti-dumping duties collected or
securities received for SIDM printers which are not covered by the
deflnltve anti-dumping duties should be released .
HAS ADOPTED THIS REGULATION'.
                                   Article  1
1 .  A deflnltve anti-dumping duty Is hereby Imposed on Imports of serial
     Impact dot matrix needle printers falling within CN code
     ex 8471 92 90 and originating In Japan .
2.   The rate of duty shall be 47.0% of the net f ree-at -Community- front I er
     price before duty , with the exception of Imports of the products
     specified In paragraph 1 which are sold for export to the Community
     by the following companies , the rate of duty applicable to which Is
     set out below    :
       Alps Electrical Co . Ltd                         6.1 %
       Brother  Industries Ltd                         35.1 %
       Citizen Watch Co . Ltd                          37.4%
       Copal Co . Ltd                                  18.6%
       Japan Business Computer Co . Ltd                 6.4%
       Juki Corporat Ion                               27.9%
       Nakajlma All Precision Co . Ltd                 12.0%
       Nec Corporation                                 32.9%
       Okl Electric Industry Co . Ltd                   8.1 %
       Seiko Epson Corporat Ion                        25.7%
       Selkosha Co . Ltd                               36.9%
       Shlnwa Digital Industry Co . Ltd                 9.5%
 ---pagebreak---                                          32
       Star tücronlcs Co.Ltd                              13.6%
       Tokyo Electric Co Ltd                               4.8%
3.  The duty specified In this Article shall not apply to those products
    described In paragraph 1 which have the following spec ! f teat Ions :
    - serial   Impact dot matrix needle printers used In bank machines ,
      automated teller machines , electric cash registers , polnt -of-sa les
      machines , calcul ators , ticket-issuing machines and receipt Issuing
      machines which have only one pitch and / or magnetic-stripe readers
      and/ or automatic page-turner drives ;
    - serial   Impact dot matrix needle printers which form an Integral
      part of , and are exclusively dedicated to a computer system
      supplied by the manufacturer and/ or exporter of the printers In
      question , and which are Imported and / or sold only within such a
      computer system ;
    - hand-held and portable SIDM needle printers which are designed for
      use within portable and/or hand~held computers , and which are line
      Impact dot matrix printers       and     exclusively used for portable
      data printouts .
                                     Article 2
The amounts secured by way of      provisional anti-dumping duty under
Regulation ( EEC ) No 1418 / 88 shall be    collected at  the   rates of
duty definitively Imposed where the       definitive rate of duty Is lower than
the provisional anti-dumping duty and at the rates of provisional duty In
all other cases .   Secured amounts which are not covered by the rates of
duty definitively Imposed shall be released .
 ---pagebreak---                                      - 33 -
                                    Article 3
 This Regulation shall enter Into force on the day following that of its
 publ I cat Ion 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