CELEX: 51988PC0855
Language: en
Date: 1988-12-23
Title: Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty on imports of copper sulphate originating in Bulgaria or the Soviet Union (presented by the Commission)

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COM (88) 855
Vol. 1988/0275
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                     COM ( 88 ) 855 final
                                                     Brussels , 23 December 1988
                           Proposal for a
                      COUNCIL REGULATION ( EEC )
     imposing a definitive anti-dumping duty on imports of
                  copper sulphate originating
                in Bulgaria or the Soviet Union
                   ( presented by the Commission )
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By a notioa published in the Offioial Journal of the European Communities ,
                                                                     rev i ew
the Commission announced that it was Initiating an anti-dumping/ proceeding
concerning Imports of copper sulphate originating in Bulgaria or the
Soviet Union . 1
Commission Regulation (EEC) No 2386/88 of 29 July 1988 imposed a
provisional anti-dumping duty on Imports of copper sulphate originating in
the countries concerned . 2   Regulation No 3720/88/ extended the duty for a
period not exceeding two months . 3
II .  Dumping
The Commission , with sufficient evidence at its disposal , reviewed the
dumping margins whioh had been provisionally established . The dumping
margins definitively established are 81% for Bulgaria and 79% for the
Soviet Union .   Thssse margins are based on a comparison of the two
countries ' export prioes with a normal value oaloulated by reference to the
prices Charged on, the domestic market in Mexico , the country whioh was
suggested by the European Council of Chemioal Manufacturers' Federations
(CEFIC) and accepted by the Commission since :
1 OJ No C 200 , 30.7.1988 , p. 9 .
2 OJ No L 208 , 30.7.1988 , p. 68 .
3 OJ NO L 326 , 30.11.1988 , p.
 ---pagebreak---                                     - 2 -
 (i)    according to the Information available , there were no major
        differences In the technology and production processes for oopper
        sulphate ;
(11)    there Is genuine competition In oopper sulphate production on the
        Mexloan market , because there are at least five manufacturers .
Normal value and export prioes were oampared at the ex-works level .
III .  Tnftiry
The Commission 's principal oanoluslons are as follows :
  (1)   imports Into the Community of oopper sulphate from Bulgaria and the
        Soviet Union from 1 July 1967 to 30 June 1966 rose by 299% oampared
        with the previous year .
 (11)   The prioes charged by the two exporters oonoemed were on oooaslon
        below the prioe of oopper on the London Metal Exchange (I2ffl) , yet
        the prioe of oopper , the principal raw material , aooounts for only
        about 7C% of the production oost of oopper sulphate .
(ill)   Over the period from 1 January to 30 June 1988 the Community
        Industry 's sales fell by about 1C% compared with the same period of
        the previous year , and its narket share fell by about 13.8% ,
        leading to continued stagnation of oapaolty utilization at the lew
        level of 64% .
 ---pagebreak---                                       - 3 -
  (lv)    The cost of copper , and all the other costs which make up the total
          production oost of copper sulphate , have increased considerably .
          rising by £in average of 52% over the period from 1 January to
          30 June 1988 compared with the same period in 198?.
   (v)    During the reference period , two Community producers oeased
          production, partly as a result of dumped imports . These olosuree
          reduced the number of people employed in the manufacture Of copper
          sulphate .
IV .    Cammunlty lnlæreat
In view of the serious difficulties facing the Community Industry and the
increase in imports from the countries concerned , and in particular the
oessatlon of production by two Community producers during the reference
period , there is a danger that in the absence of effective protection the
dumping in question would lead to oontinued erosion of the Community
Industry 's position and would endanger its long-term viability . In these
olroumstanoes the Commission has concluded that the Community 's interests
make it neoessary to adopt definitive anti-dumping measures oonoeming
imports of oopper £julphate originating in Bulgaria or the Soviet Union .
V.
The Commission oonfdders that a definitive anti-dumping duty Should be
imposed on the imports in question .
On the basis of the facts laid out above , the Commission presents herewith
to the Council a proposal for a Regulation :
     Imposing the following definitive anti-dumping duties on Imports of
     oopper sulphate from Bulgaria and the Soviet Union ;
     - Bulgaria :  08%
     - Soviet Union :  56%
 ---pagebreak---                                 - 4 -
definitively collecting the provisional anti-dumping duty , in full or up
to the amount of the definitive anti-dumping duty Imposed , Where the
latter is lower than the provisional duty .
 ---pagebreak---                              Proposal for a
                       COUNCIL REGULATION ( EEC )
               imposing a definitive anti-dumping duty on imports of
           copper sulphate originating in Bulgaria or the Soviet Union
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
                                       1
of the European Economic Community ,     and in particular Article 12 thereof ,
Having regard to the proposal from the Commission , presented after
consultations within the Advisory Committee set up by that Regulation ,
Whereas :
A.   Procedure
1.   In March 1984 the Commission opened an anti-dumping proceeding concerning
                                                       2
imports of copper sulphate originating in Bulgaria .      In October 1984 the
Commission accepted the undertaking offered by the Bulgarian firm Chimimport ^
and closed the investigation in February 1 985 - ^
In August 1986 the Commission initiated a review of the anti-dumping measures
which had been in force since 1983'* concerning imports of copper sulphate
originating in the Soviet Union . ^ In August 1987 the Commission accepted
the price undertaking offered by the Soviet firm Sojuzchimexport under the
                                           7 ..... _            J_              8
anti-dumping proceeding mentioned above and terminated the investigation .
50J No L 209, 2.8.1988, p.1 .
|0J No C 90, 31.3.1984, p.2 .
fOJ No L 275, 18.10.1984, p . 12 .
5OJ No L 41 , 12.2.1985, p.13 .
?0J No L 274, 7.10.1983, p . 1 .
, 0J No C 200, 9.8.1986, p . 4 .
a0J No L 235, 20.8.1987, p . 18 .
  0J No L 235 , 20.8.1987, p . 22 .
 ---pagebreak---                                         - 2 -
 In May 1988 the European Council of Chemical Manufacturers' Federations
 ( CEFIC ) presented the Commission with allegations that these two undertakings
 were being violated . The Commission examined the information submitted to it
 and offered both exporters the opportunity to comment . No satisfactory
 explanation was given by either party . The Commission noted that the
 allegations against both exporters were supported by the official import
 statistics , and that neither of the exporters concerned contested these
 figures .
 2 . Commission Regulation ( EEC ) No 2386 / 88 withdrew the acceptance of
 the undertakings offered by the Bulgarian firm Chimimport in October 1984
 and by the Soviet firm Soju2chimexport in August 1987 and , in the Community 's
 interest , immediately imposed a provisional anti-dumping duty on imports
                                                                             9
 into the Community of copper sulphate originating in Bulgaria or the USSR .
 3 . At the same time , the Commission reopened the investigations concerning
 imports into the Community of copper sulphate originating in Bulgaria or
      - .....       10
 the Soviet Union .
 B.   Further procedure
 4 . The Commission officially informed the exporters and importers known
 to be concerned and gave the parties directly concerned the opportunity to
 make known their views in writing and to request a hearing .
 5 . The Bulgarian firm Chimimport , the Soviet firm Soj uzchimexport and
 all the complainant Community manufacturers made known their views in
 writing .
 6.   The Commission collected and verified all the information it deemed
 necessary and carried out checks at the premises of the following firms :
 9
1Q0J No L 205 , 30.7.1988, p.68 .
   0J No C 200, 30.7.1988, p.9 .
                                                                                 6
 ---pagebreak---                                            - з -
   -   La Cornubia SA, Bordeaux , France
   ■   Manica SpA , Rovereto , Italy
   -   Quimigal , Lisbon , Portugal
   -   Industrias Químicas del Valles , Barcelona , Spain
   -   Incomet , Madrid , Spain .
   7.     The investigation into dumping covered the period from 1 July 1987 to
   30 June 1988 inclusive .
  C.     Normal value
  8 - In seeking to re-establish whether imports of copper sulphate from
  Bulgaria and the Soviet Union were being dumped the Commission had to take
  account of the fact that Bulgaria and the Soviet Union are not market economy
  countries , and it had therefore to base its calculations on the normal value
  of the product in a market economy country .
  9 . The Commission had initially decided to take Yugoslavia as the reference
  country in establishing normal value . However , the non-cooperation of the
  Yugoslav firm which was consulted made this solution impossible . In these
  circumstances , CEFIC proposed Mexico as being an analogous country .
10 .     The Commission accepted Mexico as an analogous country since :
  ( i ) according to the facts available , there were no major differences in
         the technology and production processes for copper sulphate ;
( ii ) there was genuine competition in the manufacturing of copper sulphate ,
         because there were at least five producers on the Mexican domestic market .
 ---pagebreak--- 11 .  Normal value was calculated on the basis of prices charged on the
Mexican domestic market .    There was sufficient evidence to allow the
Commission to establish that representati ve quantities of copper sulphate
had been sold on the Mexican market during the reference period .
0,   EXPORT PRICES
12 . Export prices were determined on the basis of the prices actually
paid or payable for the products sold for export to the Community .
E.   COMPARISON
13 . For a valid comparison between normal value and export prices , the
Commission took account where necessary of differences affecting price
comparability where the existence of a direct link between the prices and
sales in question was duly established . In particular , the Commission
took account of differences in purity and copper content , concerning which
sufficient information was supplied by the Bulgarian and Soviet exporters .
The Commission also took into account differences in credit , transport and
insurance terms .
14 .  Normal value and export prices were compared at ex-works level .
F.   MARGINS
15 .  This examination of the facts shows that imports of copper sulphate
originating in Bulgaria or the Soviet Union were being dumped .       The dumping
margins were calculated according to the difference between the normal value
established and the price on export to the Community as a percentage of the
total cif f ree-at - Community -front1er value , before duty , for each of the
exporters . The resulting dumping margins are as follows :
 ---pagebreak---                                         - 5 -
- Bulgaria           81%
- Soviet Union       79% .
G.     INJURY
 ( a ) Volume and price of importa
16 .    As regards the injury caused by the dumped imports , the evidence
available to the Commission shows that imports into the Community of
copper sulphate from Bulgaria and the Soviet Orion rose between 1 July 1987
and 30 June 1988 by 229% compared with the previous year . This increase
brings their market share to 14.3% over the reference period , despite the
effect of the undertakings offered by the Bulgarian and Soviet exporters ,
acceptance of which was withdrawn by Commission Regulation ( EEC ) No 2386 / 88
of 29 July 1988 imposing provisional anti-dumping duties .
17 . The prices of imports from both Bulgaria and the Soviet Union were
lower than those charged by Community producers . Over the reference
period , the prices charged by the two exporters concerned were on occasion
below the price of copper on the London Metal Exchange ( LME ), yet the price
of copper , the principal raw material , accounts for only about 70% of the
production cost of copper sulphate .
< b ) Impact on the Community industry
18 . Over the period from 1 January 1988 to 30 June 1988 the Community
industry 's sales fell by approximately 10% compared with the same period
of the previous year , and its market share fell by about 15.5% , leading
to continued stagnation of capacity utilization at the low level of 64% .
In addition , the Community industry was unable to pass on in the price
of copper suLphate the increase in the price of copper and in all the other
production costs for the product , which have increased considerably , rising
 ---pagebreak--- over the period from 1 January to 30 June 1988 by an average of 52X
compared with the same period in 1987 . Prices have fallen to a level which
does not allow the Community industry to cover its production costs .
Its financial situation has therefore deteriorated and investment has
suffered .    During the reference period two Community manufacturers ceased
production , partly as a result of the effects of the dumped imports .
These closures led to a reduction in the workforce employed in copper
sulphate production .
 ( c ) Causal link
19 . The Community industry 's difficulties coincided with the increase
1n imports from the countries concerned and the low price level of these
imports on the Community market .
20 . The Commission investigated whether the injury had been caused by
other factors such as a fall in the complainants' sales in non-Community
countries , a fall in Community demand or an increase in imports from
non-member countries other than those concerned by this proceeding .
A detailed analysis shows that these factors have had no effect on the
injury caused to Community copper sulphate production , since Community exports
and demand have remained at the same level and there has been no increase in
imports from non-member countries other than those concerned by this proceeding .
21 . The Bulgarian exporter contended that Its exports had not caused
any Injury to the Community industry , arguing that the ultimate destination
of its exports to the Community was Africa and North America . This argument ,
which the Bulgarian exporter backed with statements from the Belgian and UK
importers , was not accepted . According to official Community statistics and
the information obtained by the Commission , 77% of Bulgaria 's total exports
of copper sulphate during the period under investigation went to other Member
 ---pagebreak---                                          - 7 -
 States , i.e. Germany , France , Ireland , Italy , the Netherlands and Portugal ,
 for which no evidence of re-export was produced .
 ( d ) Conclusion
 22 . It is clear from the above that despite the measures in force the
volume of dumped imports from the two countries concerned and the prices
of these imports , taken in isolation , have caused material injury to the
 Community industry concerned .
H.     COMMUNITY INTEREST
23 . In view of the serious difficulties facing the Community industry
and the increase in imports from the countries concerned , and in particular
the cessation of production by two Community producers during the reference
period , there is a danger that failure to adopt effective protective measures
against the dumping in question would lead to continued undermining of the
Community industry 's position and would threaten its long-term viability .
In these circumstances , the Commission has concluded that the Community
interest requires the imposition of definitive anti-dumping measures
concerning imports of copper sulphate originating in Bulgaria or the Soviet
Union .
I.     DEFINITIVE DUTY
( a ) Rate of duty
24 . In determining the rate of the duty the Commission has taken account
of the dumping margins and the amount of duty necessary to eliminate the
injury . With this in view the Commission has determined the weighted
average production costs of the Community manuf acturers , and has added a
reasonable margin for profit .
 ---pagebreak---                                        - 8 -
The profit margin taken into account was 5% of the cost of production .
 It emerged from the investigation , and from previous investigations , that
this margin was necessary to aLlow a copper sulphate producer to operate
a plant under reasonable , modern technical conditions .
Production costs , plus this profit margin , were compared with f ree -at - Communi ty -
frontier export prices , plus customs duties and a profit margin for the
importer . The difference between the two was taken as the level of injury
to be eliminated .
As in the case of both the exporters concerned the level of injury was
 lower than the dumping margins established , the amount of definitive duties
to be imposed should be the amount required to eliminate the injury .
< b ) Form
25 . The Commission considered that , to ensure the effectiveness of the
protective measures and to facilitate customs clearance , the definitive
duty should take the form of an ad valorem duty .
J.    DEFINITIVE COLLECTION OF THE PROVISIONAL DUTY
26 . Because of the size of the dumping margins established and the
serious nature of the injury caused to the Community industry , the Council
considers it necessary to collect definitively the amounts secured by way
of provisional anti-dumping duty , either in full or up to the amount of
the definitive duty imposed where the latter is lower than the provisional
duty ,
HAS ADOPTED THIS REGULATION :
 ---pagebreak---                                        Artide 1
 1.  A definitive anti-dumping duty is hereby imposed on imports of copper
 sulphate originating in Bulgaria or the Soviet Union , falling within CN
 code 2833 25 00 .
 2 . The rate of the duty shall be equal to the percentages indicated below
of the f ree-at - Community-f rontier price for each country :
- Bulgaria           58%
“ Soviet Union       56%
3.   The provisions in force concerning customs duties shall apply .
                                       Article 2
The amounts secured by way of provisional anti-dumping duties under
Regulation ( EEC ) No 2386 / 88 shall be definitively collected up to the rate
of the definitive duty , where the latter is less than the rate of the
provisional anti-dumping duty , or at the full rate of the provisional duty
in other cases .
                                      Article 3
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
                                                  .•?>T
all Member States .
Done at Brussels ,                                         For the Counci
                                                                   Councill