CELEX: 51993PC0166
Language: en
Date: 1993-07-20
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 3308/90 by imposing an additional anti-dumping duty on imports of woven polyolefin sacks originating in the People' s Republic of China

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                           COM(93) 166 final
                                                           Brussels, 20 July 1993
                             Proposal for a
                   mijNriL^_G^AT!ON (EEC)
   amending Regulation (EEC) No 3308/90 by imposing an additional
       anti-dumping duty on imports of woven polyolefin sacks
             originating in the People's Republic of China
                     (presented by the Commission)
 ---pagebreak---                         EXPLANATORY MEMORANDUM
1. By Council Regulation (EEC) No 3308/90, an anti-dumping duty of 43.4% was
   imposed on imports of woven polyolefin sacks originating in the People's Republic
   of China.
2. Subsequently, the Commission received a complaint lodged by the European
   Association for Textiles Polyolefin alleging that the anti-dumping duty imposed by
   Regulation 3308/90 had been borne by the exporters concerned. Since this complaint
   contained sufficient evidence that the duty had been borne by the exporters, the
   Commission announced the initiation of an investigation, provided for in Article
    13(11) of Regulation (EEC) No 2423/88, in a notice published in the Official Journal
   of the European Communities on 15 June 1991.
3. The Commission based its findings on the information supplied by the Chinese
   exporters.
4. It was found that, by reducing their prices for export to the Community after
   imposition of an anti-dumping duty, exporters of these sacks originating in the
   People's Republic of China have borne the anti-dumping duty.
5. The absorption of duty was calculated on the basis of the difference between the
   import price of woven polyolefin sacks originating in the People's Republic of China
   during the period of the original investigation and the import price during the period
   following imposition of the anti-dumping duty. On the basis of this comparison and
   taking into account the reduction in the export price, the level of absorption is 97.6%
   when expressed as a percentage of the amount of duty paid on the reduced export
   price.
6. Given that the imposition of the original duty of 43.4% had been considered to be in
   the Community's interest, it follows that a measure aimed at restoring the effect of the
   duty concerned is in the Community's interest.
   Since the exporters have borne 97.6% of the exisitng 43.4% anti-dumping duty, an
   additional anti-dumping duty equivalent to the level of this absorption must therefore
   be imposed (97.6% of 43.4% = 42.3%).
   It is therefore proposed that the Council amend Regulation (EEC) No 3308/90 and
   impose a total duty of 85.7% on the net, free-at-Community frontier price of imports
   of woven polyolefin sacks originating in the People's Republic of China.
 ---pagebreak---                                              Proposal lor a
                                  COUNCIL REGULATION (EEC)
               amending Regulation (EEC) No 3308/90 by imposing an additional
                     anti- dumping duty on imports of woven polyolefin sacks
                            originating in the People's Republic of China
  THE COUNCIL OF THE EUROPEAN COMMUNITIES,
  Having regard to the Treaty establishing 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 , and in particular Articles 12 and 13(11) and 14 thereof,
 Having regard to the proposal submitted by the Commission after consultation within the
  Advisory Committee as provided for under the abovementioned Regulation,
 Whereas:
 A.       PROCEDURE
 1.      By Commission Regulation (EEC) No 2051/90(2), a provisional anti-dumping duty of
         43.4% was imposed on imports of woven polyolefin sacks originating in the People's
         Republic of China. This duty was confirmed by Council Regulation (EEC) No
         3308/90(3).
 2.      The Commission received a complaint lodged by the European Association for
         Textiles Polyolefin (EATP) on behalf of producers representing a major proportion of
         Community production of woven polyolefin sacks, alleging that all or part of the anti-
         dumping duty had been borne by the exporters concerned
 3.      Since the complaint contained sufficient evidence of absorption of anti-dumping duty
         by the exporters, the Commission announced the initiation of an investigation as
         provided for in Article 13(11) of Regulation (EEC) No 2423/88, in a notice published
         in the Official Journal of the European Communities(4).
 4.      The Commission officially advised the exporters and importers known to be concerned
         and gave interested parties the opportunity to make their views known in writing.
 5.      Replies to the Commission's questionnaire were received on behalf of nine Chinese
         exporters. Only two of the replies of the importers to whom questionnaires were sent
         contained substantive information. These two importers accounted for approximately
         36% of total imports into the Community of woven polyolefin sacks originating in the
         People's Republic of China.
(i)
         OJ No L 209,    2.8.1988, p. 1.
(2)
        OJ NoL 187,      19.7.1990, p. 36.
t»)
        OJ No L 318,     17.11.1990, p. 2.
(4)
        OJ No C 157,      15.6.1991, p. 5 .
 ---pagebreak--- 6.   None of the interested parties requested the Commission to undertake a full review
     Regulation (EEC) No 3308/90 pursuant to Article 14 of Regulation (EEC) No
     2423/88. Moreover, on the basis of the information available, the Commission did not
     consider that circumstances had changed sufficiently to justify the need for such a
     review on the Commission's initiative.
7.   The investigation into absorption of the anti-dumping duty by the exporters covered
     the original investigation period, I January 1988 to 31 December 1988, which had
     been taken into account for calculation of the anti-dumping duty, and the nine-month
     period following the imposition of the provisional anti-dumping duty and prior to the
     initiation of the present investigation i.e. from 1 August 1990 to 30 April 1991.
B    PRODUCT
8.   The product under consideration is identical to the product subject to the definitive
     anti-dumping duty referred to in recital 1, i.e. woven polyolefin sacks (polyethylene
     or polypropylene) falling within CN code 6305 31 91.
C.   ABSORPTION OF THE ANTI-DUMPING DUTY BY THE EXPORTER
(I)  Existence of absorption of duty
9.   The Commission based its findings on the export prices provided by the Chinese
     exporters who replied to the Commission's questionnaire, and used official customs
     statistics and information verified at the premises of the co-operating importers to
     corroborate the information obtained from the Chinese exporters.
10.  The information on prices provided by the Chinese exporters clearly shows that,
     following the imposition of provisional anti-dumping duties by Regulation (EEC) No
     2051/90 on woven polyolefin sacks, the import price at Community frontier (i.e. the
     CIF price before payment of customs and anti-dumping duties) fell considerably.
11.  As a consequence, by reducing their prices for export to the Community after
     imposition of the anti-dumping duty, the exporters of woven polyolefin sacks
     originating in the People's Republic of China have absorbed completely or partially
     the effect of the anti-dumping duty.
(II) Extent of absorption of the duty
12.  Since the absorption took the form of a lowering of export prices, the extent of
     absorption of the anti-dumping duty has been calculated on the basis of a comparison
     of prices of woven polyolefin sacks originating in the People's Republic of China
     during the period 1 January 1988 to 31 December 1988, and prices during the period
     following imposition of an anti-dumping duty i.e., from 1 August 1990 to
     30 April 1991.
 ---pagebreak---      :'L.t;C' *, i\ ait c _/;u   *'^ rt ..      ' it      '* c jtj *« - vc* t-t " " * LT
              j         r
     with : i upTio!* i "or :i :   o.:.j, i the a* ti-Hi.nr p>i-f :"iny to rcach r ;.rK"v ;» - ' *, i\r
     produu ur.Utr cot:s»c€ic»on sb^i'l'- Iiave be.          .-U* -n th.. Copui^mî}'
     This price was then compared to the O F price, anti-dumping duty paid, for the nine
     month period following the imposition of the provisional duty. In establishing these
     prices, the Commission followed the same methodology and used the same exchange
     rates as for the calculation of the prices in the original investigation period. On the
     basis of this comparison, taking into account the reduction in the export price, the
     level of absorption is 97.6% when expressed as a percentage of the amount of duty
     paid on the reduced export price.
D    OTHERS FACTORS
14.  The Chinese exporters claimed that in investigating the allegation of absorption the
     Commission should take into account the impact of currency fluctuations and changes
    in raw material prices in China on their export prices to the Community. They argued
     that any decrease in their export price after the imposition of duty was attributable to
    those factors.
     In addressing this argument, it is recalled that as the People's Republic of China is not
    a market economy country, normal value had to be based on the normal value of the
     like product in India. Since the Commission has no convincing evidence at its
    disposal, nor was any submitted that the normal value established for the Indian
    producers has altered and in any event not to an extent to influence the conclusions
    of this investigation, a general review is not warranted nor has any request for such
     a review been received.
E    CONCLUSION
15. On the basis of the above findings, the Council concludes that the exporter has
    effectively borne a large part of the anti-dumping duty through a corresponding
    reduction in its export price and that its dumping margin is not lower than the sum
    of the original duty and the amount borne.
F.  COMMUNITY INTEREST
16. The purpose of the additional anti-dumping duty provided for in Article 13(11) of
    Regulation (EEC) No 2423/88 is to compensate for the amount of the anti-dumping
    duty borne by the exporter, which effectively increases his dumping margin and
    nullifies the effect of the original duty.
17. The Commission has no reason to believe that the findings concerning Community
    interest expressed in recitals 7 and 8 of Regulation (EEC) No 3308/90 warrant
    amendment.
 ---pagebreak--- 18.     Moreover, given that the absorption of an anti-dumping duty by the exporters cancels
        the effect of the anti-dumping duty and therefore prevents the removal of the injury
        suffered by the Community industry, and that the imposition of this duty had been
        considered to be in the Community's interest, a measure aimed at restoring the effect
        of the said duty is therefore in the Community's interest.
19.     No other arguments showing that additional measures would not be in the Community
        interest have been put forward.
G.      ADDITIONAL ANTI-DUMPING DUTY
20.     In order to compensate for the level of absorption and to restore the effect of the
        original duty, an additional duty, equivalent to 97.6% of the existing duty, i.e. 42.3%
        is required to bring the current Chinese export price up to the level envisaged by
        Regulation (EEC) No 3308/90.
21.     Since the anti-dumping duty currently in force is 43,4% of the net, free-at-Community
        frontier price, an additional duty of 42.3% must be imposed. The total anti-dumping
        duty imposed on imports of woven polyolefin sacks originating in the People's
        Republic of China should, therefore, be 85.7%
        For practical reasons, the imposition of this additional duty takes the form of an
        amendment to Regulation (EEC) No 3308/90. This does not constitute a modification
        of the anti-duhiping duty within the meaning of Article 15(1) of Regulation (EEC)
        No 2423/88 and, therefore, the expiry date of the anti-dumping duty, including the
        additional duty, remains unchanged,
HAS ADOPTED THIS REGULATION
                                            Article I
Article 1(2) of Regulation (EEC) No 3308/90 is replaced by the following.
"2.     The rate of duty, applicable to the net, free-at-Community frontier price, before duty
        shall be 85.7%".
                                            Article 2
This Regulation shall enter into force on the day following that of its publication in the
Official Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member States
Done at Brussels,                                             For the Council
                                                              The President
 ---pagebreak---                                                                   COM (93) 166 final
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