CELEX: 51997PC0535
Language: en
Date: 1997-10-24
Title: Proposal for a Council Regulation (EC) imposing definitive anti-dumping duties on imports of certain seamless pipes and tubes of iron or non-alloy steel originating in Hungary, Poland, Russia, the Czech Republic, Romania and the Slovak Republic, repealing Regulation (EEC) No 1189/93 and terminating the proceeding in respect of such imports originating in the Republic of Croatia

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                 Brussels, 24.10.1997
                                                 COM(97) 535 final
                                  Proposal for a
                        COUNCIL REGULATION (EC)
 imposing definitive anti-dumping duties on imports of certain seamless pipes and
 tubes of iron or non-alloy steel originating in Hungary, Poland, Russia, the Czech
   Republic, Romania and the Slovak Republic, repealing Regulation (EEC) No
11S9/93 and terminating the proceeding in respect of such imports originating in the
                                  Republic of Croatia
                         (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                EXPLANATORY MEMORANDUM
  (1) On 31 August 1996, the Commission opened two parallel anti-dumping
        investigations in respect of imports of certain seamless pipes and tubes:
        - an interim review investigation of the existing measures concerning Hungary,
           Poland and the Republic of Croatia;
       - a new investigation with regard to Russia, the Czech Republic, Romania and the
           Slovak Republic, following a complaint lodged by the Community industry
           concerned.
 (2) On 31 May 1997, having established the existence of injurious dumping, the
       Commission, by Regulation (EC) No 981/971, imposed a provisional duty on all
       imports subject to the new investigation.
 (3) For its definitive findings, the Commission analysed the information gathered for
       both investigations jointly. This analysis leads to the conclusion that protective
      measures, in the form of ad valorem duties, are warranted in respect of Hungary,
      Poland, Russia, the Czech Republic, Romania and the Slovak Republic. However,
      measures in respect of Croatia should be repealed.
1
  O J N o L 141,31.5.1997, p. 36.
 ---pagebreak--- (4) Having been informed of the Commission's intention to propose to the Council the
    imposition of definitive duties, the Hungarian, Polish, Czech, Romanian and Slovak
    producers listed below have offered price undertakings. In substance, the producers
    offer to sell their product for export to the Community at revised prices so that the
    injurious effect of dumping is eliminated. Further, they offer to ensure that the prices
    of their products will follow a price structure in use in the Community for the trading
    of the seamless steel tubes concerned.
    These undertakings have been offered in relation to annual quantities exempted from
    the ad valorem duty. If these quantities are exceeded, the duty would apply.
(5) Having verified that this system is workable and can be effectively monitored, the
    Commission is of the opinion that these undertakings are acceptable.
(6) In respect of Russia, the Commission also examined the undertakings offered by
    three of the six Russian companies exporting to the Community. However, as Russia
    is a non market economy country, such offers require guarantees from the Russian
    authorities to allow effective monitoring. Having received no adequate assurances
    from the Russian authorities, the Commission is obliged to reject the undertakings
    offered by the three companies concerned.
(7) In the light of the above, and in accordance with Article 9 of Council Regulation
    (EC) No 384/96, the Commission therefore proposes that the Council impose
    definitive anti-dumping duties on imports of certain seamless pipes and tubes
    originating in Hungary, Poland, Russia, the Czech Republic, Romania and the
                                             A.
 ---pagebreak---  Slovak Republic, with the exception of those produced and sold for export by the
companies for which undertakings are accepted. For the Republic of Croatia, it is
 suggested that measures be repealed and the proceeding accordingly terminated for
this country. Finally, in view of the nature of the definitive measures imposed,
provisional duties should be released.
         Country                  Company              Rate of duty
  Hungary              Csepel Tubes Co. Ltd.             36.5%
                       Others                            36.5%
  Poland            ~ Huta Batory SA                      7.1%
                      Huta Andrzej SA                    30.1%
                      Huta Czestochowa                   30.1%
                      Huta Jednosc SA                    30.1%
                      Others                             30.1%
  Russia              All companies                      26.8%
  Czech Republic      Vftkovice a.s.                      5.1%
                      Nova Hut a.s.                       5.1%
                      VT Chomutov a.s.                   28.6%
                      Others                             28.6%
  Romania             SC Artrom SA                        9.8%
                      SC Silcotub SA                      9.8%
                      SC Petrotub SA                      9.8%
                      SC Republica SA Trade Co.           9.8%
                      Others                             38.2%
  Slovak Republic     Zeleziarne Podbrezovâ a.s.          7.5%
                      Others                              7.5%
All companies named above, with the exception of the Czech producers, Vitkovice
a.s. and Nova Hut a.s., have offered acceptable undertakings.
                                             <±é>
 ---pagebreak--- (8) When the Advisory Committee was consulted on the acceptance of the undertakings
    offered, some objections were made. Therefore, in.accordance with Article 8 (5) of
    Regulation (EC) No 384/96, the Commission sent a report to the Council on the
    results of the consultations and a proposal that the investigation be terminated by the
    acceptance of undertakings. Unless the Council decides otherwise within one month,
    it will be possible to adopt the decision accepting the undertakings from the
    exporters concerned.
                                            ^
 ---pagebreak---                             COUNCIL REGULATION (EC) NO
                                           of
    imposing definitive anti-dumping duties on imports of certain seamless pipes and
    tubes of iron or non-alloy steel originating in Hungary, Poland, Russia, the Czech
      Republic, Romania and the Slovak Republic, repealing Regulation (EEC) No
  1189/93 and terminating the proceeding in respect of such imports originating in the
                                    Republic of Croatia
 THE COUNCIL OF THE EUROPEAN UNION,
 Having regard to the Treaty establishing the European Community,
 Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on
 protection against dumped imports from countries not members of the European
 Community1, as amended by Regulation (EC) No 2331/962, and in particular Article
 9 (4) thereof,
 Having regard to the proposal submitted by the Commission after consulting the
Advisory Committee,
Whereas:
1
   OJ No L 56, 6.3.1996, p. 1.
2
  OJ No L 317, 6.12.1996, p. 1.
 ---pagebreak---                                       A. PROCEDURE
(1)     By Regulation (EEC) No 1189/933, the Council imposed definitive anti-dumping
        duties on imports of certain seamless pipes and tubes of iron or non-alloy steel
        originating in Hungary, Poland and the Republic of Croatia. The rate of the duty
        was 21.7% for Hungary, 10.8% for Poland and 17.4% for the Republic of Croatia.
        In addition, the Commission accepted undertakings4 offered by the Hungarian,
        Polish and Croatian exporters.
(2)     On 31 August 1996, the Commission announced by a notice published in the
        Official Journal of the European Communities5 the initiation of an interim review
        of Regulation (EEC) No 1189/93 in respect of imports of certain seamless pipes
        and tubes of iron or non-alloy steel originating in Hungary, Poland and the
        Republic of Croatia and commenced an investigation pursuant to Article 11 (3) of
        Council Regulation (EC) No 384/96 (hereinafter referred to as "the basic
        Regulation").
(3)     This interim review investigation was initiated in parallel with an investigation
        opened on the same date6 in respect of such imports originating in Russia, the
        Czech Republic, Romania and the Slovak Republic following a complaint lodged
        by the Defence Committee of the Seamless Steel Tube Industry of the European
        Union.
3
  O J N o L 1 2 0 , 15.5.1993, p. 34.
4
  O J N o L 1 2 0 , 15.5.1993, p. 42.
5
  OJ No C253,31.8.1996, p. 25.
6
  O J N o C 2 5 3 , 31.8.1996, p. 26.
 ---pagebreak---  (4)     By Regulation (EC) No 981/977 (hereinafter referred to as the "provisional
         Regulation"), the Commission imposed a provisional anti-dumping duty on imports
         into, the Community of the product in question originating in Russia, the Czech
         Republic, Romania and the Slovak Republic.
 (5)     Following the imposition of the provisional anti-dumping measures certain
         interested parties submitted comments in writing.
         Those parties who so requested were granted an opportunity to be heard by the
         Commission.
         The Commission continued to seek and verify all information deemed necessary for
         its definitive findings.
(6)      On 22 May 1997, the Association Councils established under the Agreements
        between the European Communities and their Member States, of the one part and
        the Czech Republic, Romania and the Slovak Republic, respectively, of the other
        part were informed by letter of the Commission's intention to impose provisional
        measures.
        The Czech, Romanian and Slovak authorities all objected that the Commission had
        acted in breach of the Europe Agreement (and in particular Article 34 (2) thereof)
        by failing to hold consultations either before the proceeding was initiated, or
        immediately after the initiation, or prior to the imposition of provisional duties.
7
  O J N o L 141, 31.5.1997, p. 36.
 ---pagebreak--- It should be recalled that, when a complaint is received, the Commission has to
investigate the allegations contained therein. If the Commission is satisfied that the
complainant has provided sufficient evidence to warrant an investigation, it is
obliged, under the provisions of its own anti-dumping legislation, to open a
proceeding. Regarding the Community's legal obligations under the Europe
Agreements, it is considered that these have been met in full. The Agreements state
that the Association Councils have to be informed of any dumping case as soon as
the authorities of the importing country have initiated an investigation. This
requirement was met by the Commission. *
Furthermore, the Europe Agreements state that if no satisfactory solution has been
reached within 30 days of the matter being referred to an Association Council, the
importing party may adopt the appropriate measures. Since no solution was found
within the required time, the Commission was entitled to take measures, as
appropriate, which it did on 31 May 1997. The actual decision to impose
provisional duties was not taken until 21 May, only shortly before the statutory
deadline expired. Nonetheless, the Commission immediately informed the
Association Council and provided it with the data on the basis of which the
decision had been made. Consultations, first with the country authorities and then
with the exporters/producers themselves were started within a matter of days and
were pursued throughout the investigation with a view to reaching a mutually
acceptable solution. Therefore, the Community has fully complied with the
 ---pagebreak---      requirements of the Europe Agreements, and in particular with Article 34 (2) and
     34 (3) (b) thereof.
(7)  In the interim review investigation, the Commission officially advised the
     Hungarian, Polish and Croatian producers/exporters, and the importers known to be
     concerned, the representatives of the exporting countries and the complainant, and
     gave the parties directly concerned the opportunity to make their views known in
     writing and to request a hearing. The interested parties who so requested were
     granted an opportunity to be heard by the Commission. They also made written
    submissions, making known their views on the findings.
(8) The Commission sent questionnaires to all parties known to be concerned and
    received replies from the complaining Community producers, from five companies
    in the Czech Republic, from seven companies in Romania, from one company in
    the Slovak Republic and from six companies in Russia, from one company in
    Hungary, from six companies in Poland and from one company in the Republic of
    Croatia. The Commission also received replies from four unrelated importers in the
    Community, from a Community importer related to one Czech company and from
    two importers related to the Slovak producer, one of which was located in the
    Community and the other in Switzerland.
    Verification visits, with regard to both investigations, were carried out at the
    following companies:
 ---pagebreak---  Community producers
 - Voest Alpine, Kindberg, Austria
 - Vallourec Industries, Boulogne-Billancourt, France
 - Benteler AG, Paderborn, Germany
 - Mannesmannrôhren-Werke AG, Mûlheim an der Ruhr, Germany
 - Dalmine S.p.A., Dalmine, Italy
 - Productos Tubulares S.A., Valle de Trapaga, Spain
 - Tubos Reunidos S.A., Amurrio, Spain *
 - Ovako Steel AB Tube Division, Hofors, Sweden.
 - ESW Rôhrenwerke GmbH, Eschweiler, Germany
 - Rohrwerk Neue Maxhtitte GmbH, Sulzbach-Rosenberg, Germany.
 Importers not related to exporters
- Jannone ARM S.p.A., Naples, Italy
- Geminvest S.R.L., Limbiate, Italy
- Starval, Marly La Ville, France
- Voest Alpine Stahlhandel AG, Linz, Austria.
Exporters and importers/trading companies subject to the new investigation
Importer related to two Czech producers:
- Topham Eisen und Stahlhandelges.m.b.H., Vienna, Austria.
Importers related to the Slovak producer:
- Pipex International AG, Nidau, Switzerland
- Pipex Italia S.p.A., Milan, Italy (a subsidiary of the above).
 ---pagebreak---  Exporters in the Czech Republic
 - Vftkovice a.s. and Vftkovice Export a.s., Ostrava
 - Nova Hut a.s., Ostrava
 - Valcovny Trub Dioss and Dioss Trading, Chomutov.
 - Ferromet Long Products Ltd., Prague (trading company related to Nova Hut)
 - Incos s.r.o., Prague (unrelated trading company).
Exporters in Romania
- SC Artrom SA, Slatina
- SC Silcotub SA, Zalau
- SC Petrotub SA, Roman
- SC Republica SA Trade Company, Bucharest
- Intertube Ltd., Bucharest (trader related to SC Republica SA)
- SC Metalexportimport SA, Bucharest (unrelated exporter/trader)
- Sota Company, Bucharest (unrelated exporter/trader).
Exporters in the Slovak Republic
- Zeleziarne Podbrezovâ a.s., Podbrezovâ.
Exporters subject to the review investigation
Exporter in Hungary
Csepel Tubes Co. Ltd., Budapest
 ---pagebreak--- Exporters in Poland
Huta Andrzej SA, Zawadzkie
Huta Batory SA, Chorzôw
Stalexport SA (related trader), Katowice
Exporter in the Republic of Croatia
Zeljezara Sisak, Sisak Steel Pipe Works, Sisak.
In the course of the investigation, the Croatian exporter informed the Commission
that the company had changed its name to Zeljezara Sisak - Sisak Tubemills Ltd.
The Commission concluded that the change in name in no way affected the
findings established in the investigation.
 ---pagebreak---  (9)   For both investigations, dumping was examined for the period from 1 September
       1995 to 31 August 1996, "the investigation period". The examination of injury, and
       of the likelihood of continuation or recurrence of injury, covered the period from
       January 1992 to the end of the investigation period.
 (10) All parties concerned were informed of the essential facts and considerations on the
      basis of which it was intended to recommend the imposition of definitive measures
      or the amendment of existing definitive measures. They were also granted a period
      within which to make representations and/or to offer undertakings subsequent to
      these disclosures.
                       B. PRODUCT UNDER INVESTIGATION
      1. Product concerned
(11) The product subject to both investigations is:
      a)    seamless pipes, of iron or non-alloy steel, of a kind used for oil or gas
            pipelines, of an external diameter not exceeding 406.4 mm,
      b)    seamless tubes of circular cross-section, of iron or non-alloy steel, cold-
            drawn or cold-rolled, other than precision tubes, and
 ---pagebreak---      c)     other tubes of circular cross-section, of iron or non-alloy steel, other than
            threaded or threadable, of an external diameter not exceeding 406.4 mm
     currently classifiable under CN codes 7304 10 10, 7304 10 30, 7304 31 99, 7304
     39 91 and 7304 39 93.
     In line with the position previously adopted by the Council8, and as confirmed in
     recital (10) of the provisional Regulation, all seamless pipes and tubes falling
     within the above-mentioned CN codes are considered as one product (hereinafter
     referred to as the "product concerned") for the purpose of both the new
     investigation and the review investigation.
     2. Like product
(12) All seamless pipes and tubes subject to both investigations were found to be alike
     in their essential physical and technical characteristics and in their end uses,
     irrespective of whether they are manufactured in the Community or in the countries
     subject to the investigations.
     Some exporters argued that their products should not be considered as like products
     with those of the Community producers or those of other exporting producers on
     the grounds that there were quality and technical differences, as well as differences
     in the distribution channels, use and perception by the market.
8
   OJNoL 120, 15.5.93, p. 34
                                             10
 ---pagebreak---       It was found, however, that the product concerned is distributed through similar
      channels. Basic application and overall use are similar. There is a high degree of
      interchangeability, and consequently of competition, between all imported products
      subject to both investigations and those manufactured by the Community
      producers. It was also established that the basic technical and physical
      characteristics of all these imported products, despite minor differences, were
      identical to, or closely resembled, those of the products manufactured by
      Community producers.
     In conclusion, the products originating in the various countries covered by the
     investigation and those produced and sold in the Community are considered like
     products within the meaning of Article 1 (4) of the basic Regulation.
                                       C. DUMPING
     Anti-dumping investigation
     1. Czech Republic
     (a) Cooperation
(13) The company ruled to be non-cooperating subsequently wrote to the Commission
     to object to this treatment, claiming that the provisions of Article 18 were not
     applicable to it. It stressed that there had been no intention to mislead and argued
                                              11
 ---pagebreak--- that the company had acted to the best of its ability; this meant that even though the
domestic and export sales listings, credit note listings, customer turnover figures
and cost of production information were admitted to be far from ideal, the
Commission was duty bound not to disregard them. It also criticised the
Commission for not taking sufficiently into account the privatisation difficulties
experienced by the company and the special problems of the Czech Republic in its
transition to market economy status. Finally, it argued that since the company had
changed ownership in April 1997 (having ceased production the previous month), it
Would be unfair to impose sanctions on the new owner.
The reasons which led the Commission to consider one of the Czech companies as
not cooperating with the investigation are set out in recital (14) of the provisional
Regulation. It is worth recalling here that the listings submitted to the Commission
in the company's reply to the questionnaire were found at the verification to
contain several hundred domestic and export transactions which had never taken
place. This was not only highly misleading but meant that the Commission was
unable to establish, with any degree of certainty, either a reliable normal value or a
reliable export price. Whatever the reasons for this (and at this point the
Commission would point out that the explanation originally provided by the
company was totally unsatisfactory and completely different from the one it
submitted later in writing), it cannot be said to be in accordance with generally
accepted accounting principles. In the circumstances, the Commission had no other
choice than to reject the reply and to apply Article 18 of the basic Regulation, not
least because to have acted otherwise would have been to discriminate against
other, fully cooperating, companies in the investigation.
                                        12
 ---pagebreak---       As regards the matter of the change of ownership, since it occurred after the end of
      the investigation period it is not a factor which can be considered relevant to this
      proceeding (see Article 6 (1) of the basic Regulation).
      (b) Normal value
(14) One of the Czech producers questioned the methodology employed by the
      Commission to determine normal value for one product group (see recital (16) of
     the provisional Regulation); in particular, it claimed that there was nothing in the
     basic Regulation which justified the Commission calculating normal value on the
     basis of the average of profitable sales only instead of the average of all sales in the
     group. The same producer objected to the Commission's use, in constructing
     normal value for certain groups, of a profit margin achieved on profitable domestic
     sales in other product groups.
     This request could not be accepted since it is in contradiction with both the basic
     Regulation and the Community institutions' consistent practice. With regard to the
     first point, where the volume of domestic sales below unit cost represents more
     than 20% of sales, normal value is based on the profitable sales only, in accordance
     with the third paragraph of Article 2 (4) of the basic Regulation. With regard to the
     second point, the Commission acted in accordance with Article 2 (6) of the basic
     Regulation by applying the profit margin on sales 'in the ordinary course of trade,
     of the like product, by the exporter or producer under investigation'.
                                             13
 ---pagebreak---  One producer also objected to the substitution of its own selling, general and
 administrative (hereinafter referred to as SG&A) expenses by those of its related
 company (see recital (16) of the provisional Regulation) on the grounds that such
 expenses should be based on 'actual data' relating to the producer under
 investigation, in accordance with Article 2 (6) of the basic Regulation. The
 Commission considered that the relevant accounting documents submitted by the
producer insufficiently supported the figures submitted in its reply to the
questionnaire. After being notified of the Commission's intentions, the company
provided further explanations and tables but, since these constituted additional
information which was not verifiable, the information could not be taken into
account.
Both cooperating producers queried the removal from the transaction listings of
sales made to each other on the grounds that they were not related and that, even if
they were, the Commission had failed to show that the prices were affected by the
relationship.
This could not be accepted. Since both companies have a common shareholder (see
recital (22) of the provisional Regulation and recital (17) below), they are related.
Furthermore, Article 2 (1) of the basic Regulation clearly states that 'prices
between parties which appear to be associated (...) may not be considered to be in
the ordinary course of trade (...) unless it is determined that they are unaffected by
the relationship'. Since it was not established that this was the case, the disputed
transactions were not reinstated.
                                        14
 ---pagebreak---      No further, comments were received in respect of normal value and the Council
      therefore confirms thefindingsas set out in the provisional Regulation.
      (c) Export price
(15) No comments were received concerning the determination of the export price.
     Nonetheless a small adjustment to the profit margin deduction was made in respect
     of the related Austrian importer (see recital (18) of the provisional Regulation) after
     reviewing the profit margins achieved by unrelated importers during the course of
     the investigation.
     (d) Comparison
(16) No comments were received under this heading and the Commission's findings are
     therefore confirmed.
     (e) Dumping margin
(17) The cooperating companies objected to the Commission's decision to establish the
     dumping margin on the basis of a comparison of weighted average normal values
     with individual export prices (rather than weighted average export prices), arguing
     that the Commission had failed to provide sufficient justification for its approach at
     recital (21) of the provisional Regulation.
                                             15
 ---pagebreak--- In that Regulation, the Commission stated that its approach was justified by the
need to reflect the full degree of dumping being practised and because there was a
pattern of export prices which differed significantly between Member States and
between time periods. The Commission has reviewed its calculations and
concluded that the variations in export prices between countries did not display a
sufficiently clear pattern. However, the Commission stands by its finding that there
was a pattern of export prices between time periods which led to a significant
increase in dumping (constituting a clear pattern) after the, expiry of quantitative
restrictions on 31 December 1995, and the approach adopted in the provisional
Regulation is therefore confirmed.
The Commission's decision to treat both cooperating producers as being related,
and the consequent establishment of a single dumping margin for them, was
strongly objected to on the grounds that both companies were managed
independently of each other and had different cost and pricing structures. It was
further argued that the majority shareholder (the National Property Fund) acted
merely as a trustee and had no influence over the commercial management of the
companies.
The Commission takes the view that in a market economy country it is up to the
majority shareholder to decide in which legal form it organises its business interests
in the exporting country. Its control, or potential control, over such interests is
                                       16
 ---pagebreak---      normally the same if they are part of one legal entity or if they are organised in
     different legal entities. More specifically, to establish different dumping margins
     for related companies entails the risk that exports may be channelled through the
     company with the lowest dumping margin. For this reason it was concluded that
     different producers in the exporting country must nevertheless be treated as one
     single entity for the purposes of this proceeding where control of all those
     companies lies in the hands of the same shareholder.
(18) On the basis of the Commission's provisional findings, described in recitals (14)-
     (23) of the provisional Regulation, and taking into account the adjustment
     described at recital (15) above, the definitive dumping margins expressed as a
     percentage of the OF free Communityfrontiervalue of imports established for the
     two cooperating companies are:
     - Nova Hut a.s.                         5.1%
     - Vftkovice a.s.                        5.1%
     The calculation of the residual dumping margin was revised. Instead of taking the
     highest normal values found for the two Czech producers, weighted average normal
     values have been used in the final determination. On this basis the residual
     dumping margin expressed as a percentage of the CIF free Community frontier
     value of imports established for the two cooperating companies is now 28.6%.
                                            17
 ---pagebreak---      2. Romania
     (a) Normal value
(19) One company claimed that cost provisions included in the SG&A costs of the
     company should be removed in view of the fact that unused provisions were
     cancelled at the end of the year. Where provisions were indeed cancelled and no
     other cost had then replaced such provisions, and insofar as it could be clearly seen
     from information contained in the response to the questionnaire or provided during
     the on-spot verification that provisions did not represent a real cost, the calculation
     of SG&A costs was adjusted.
     One company made a claim that cost of production should be adjusted to reflect the
     absence of selling costs, principally for packing, incurred for sales made on the
     domestic market. It was argued that with regard to such selling costs, included in
     the calculation of normal value by the Commission, the company had in fact been
     reimbursed by its customers. The Commission accepted this and an appropriate
     revision has therefore been made to the cost of production calculation for this
     company.
                                            18
 ---pagebreak--- One company claimed that the Commission when establishing normal value should
use all sales including those not made in the ordinary course of trade, i.e. sales
made at a loss. The Commission, in view of Article 2 (4) of the basic Regulation,
considered that sales made at a loss have to be excluded from the establishment of
normal value where such sales constitute more than 20% of all domestic sales. The
claim by this company could therefore not be accepted, given the terms of the basic
Regulation and the institutions' consistent practice in the establishment of normal
value.
Two companies argued that in order to respect the Europe Agreement, the
Commission should in establishing normal values always choose the method most
favourable to the companies, citing Article 34 (2) of the Agreement. This argument
was rejected, as Article 34 (2) of the Agreement refers only to the choice of
measures to be imposed by the Commission once, dumping, injury, causality and
Community interest have been established, and not to the actual calculation
methodologies used in the determination.
One company claimed only at a very late stage in the proceeding (at the hearing for
comments on provisional disclosure) that sales from stock should be excluded from
the calculation of normal value as not possessing quality certificates and therefore
not constituting the like product, and that all sales made using compensation as
means of payment should likewise be excluded as not being in the ordinary course
                                      19
 ---pagebreak---      of trade. These claims were not made in a timely manner, having neither been made
      in the response to the questionnaire, nor on-spot, nor at any subsequent stage of the
     proceeding when the company was invited to make comments. In no document
      submitted by the company was the Commission able to differentiate between sales
     made from stock or otherwise, or between sales made with or without quality
     certificates. In addition, during the course of the investigation, it was found that
     sales made using compensation were indeed made in the ordinary course of trade.
     Consequently, both claims were rejected.
     No further comments were received. Taking into account the changes referred to
     above, the findings with regard to normal value as disclosed in the provisional
     Regulation are confirmed.
     (b) Export price
(20) No changes were made to the methodology used to calculate export prices. The
     findings with regard to export prices as disclosed in the provisional Regulation are
     therefore confirmed.
     (c) Comparison
(21) For the provisional findings, the Commission rejected a request by two Romanian
     companies for an adjustment to the normal value for credit terms. The two
     companies reiterated their request. However, it was established during the
                                             20
 ---pagebreak---  investigation that, in the vast majority of cases in Romania, no actual cash changed
 hands in the settlement of transactions. In fact, payment was usually effected by
 'compensation', consisting either of barter trade or the exchange of trade bills.
 Article 2 (10) (g) of the basic Regulation specifies that an adjustment shall be made
 for credit, provided that it is a factor taken into account in the determination of the
 prices charged. The investigation showed that such costs were not a factor taken
 into account in the determination of prices charged. In fact, where compensation
 was the means of payment, no money changed hands and there was therefore no
 impact on the financial situation of the companies. In addition, the investigation
showed that for all means of payment, - dates of settlement were normally not
respected. The claims for a credit adjustment were therefore rejected again.
One company claimed that for export sales made to certain customers in the
European Community, no commission had been paid and that no adjustment to the
export prices charged to those customers should be made. The Commission revised
its calculations accordingly.
One company claimed an adjustment to normal value for differences in level of
trade. As such a claim was not made at any point in the investigation prior to the
company's comments on the provisional findings of the Commission, it could not
be considered valid. It was, furthermore, not substantiated by any evidence and was
in contradiction with information the company had reported in its reply to the
questionnaire and provided during the on-spot verification.
                                          21
 ---pagebreak---      No further comments were received with respect to comparison. The provisional
      findings are therefore confirmed.
      (d) Dumping margin
(22) One company claimed that the calculation of the dumping margin should not be
     made on the basis of a comparison of weighted average normal values with the
     adjusted export price of each corresponding group on a transaction-by-transaction
     basis, but on a weighted average to weighted average basis.
     This claim was rejected after the methodology used for all Romanian companies
     was reconsidered and it was found that:
     - for one company, there was no difference in dumping margin between both
         methods as all export transactions were made at dumped prices;
     - for three companies, a pattern of export prices which differed significantly by
         destination or time period was found.
     In view of the above, and in accordance with Article 2 (11) of the basic Regulation,
     the method comparing the weighted average normal value by time period to
     individual adjusted export prices on a transaction-by-transaction basis was retained
     for the purposes of the definitive determination.
                                             22
 ---pagebreak---      All cooperating Romanian producers/exporters contested the fact that the
      Commission had - on the grounds of a common majority shareholding - imposed a
      single dumping margin, and they accordingly claimed individual treatment. For the
     reasons set out in recital (17), this request could not be accepted.
     Two companies argued that the Commission should have disclosed to them all
     elements of the dumping calculations for all companies, since these had been used
     to establish the global dumping margin; by failing to do so, the Commission would
     had infringed their rights of defence. The Commission has, in accordance with
     Article 20 (1) of the basic Regulation, explained in detail to each company the
     essential facts and considerations on which it calculated that company's individual
     dumping margin and furthermore explained the methodology used to establish the
     single dumping margin. As all companies have the same majority shareholder, they
     can easily exchange all information via that common shareholder and thus fully
     exercise their rights of defence.
     No further comments were received. The findings as disclosed in the provisional
     Regulation are therefore confirmed.
(23) The weighted average dumping margins definitively established for the four
     cooperating producers expressed as a percentage of the CIF free Community
     frontier value of imports are:
                                              23
 ---pagebreak---        SCArtromSA                             9.8%
      SCPetrotubSA                           9.8%
      SC Republica SA Trade Company          9.8%
      SCSilcotubSA                           9.8%
      The residual dumping margin expressed as a percentage of the CIFfreeCommunity
      frontier value of imports remains unchanged at 38.2%.
      3. Slovak Republic
      (a) Normal value
(24) The Slovak producer questioned the methodology employed by the Commission to
     determine normal value for two product groups (see recital (31) of the provisional
     Regulation); in particular, it claimed that the Commission was wrong to have
     calculated normal value on the basis of the average of profitable sales only, and that
     it should have taken the average of all sales in the groups instead. The reason it
     gave was that the groups were profitable overall and therefore all costs were
     recovered over the investigation period on a weighted average basis. In addition, it
     was argued, citing Article 34 (2) of the Europe Agreement, that the Commission
     should have used its discretion to adopt a method which 'least disturb[s] the
     functioning of [that] Agreement'.
                                           24
 ---pagebreak---      Both these arguments were rejected for the same reasons given at recital (19)
     above.
     No further comments with respect to normal value were received and the
     Commission's findings as disclosed in the provisional Regulation are therefore
     confirmed.
     (b) Export price
(25) The company objected to the Commission's construction of the export price (see
     recital (32) of the provisional Regulation), and in particular to its decision to deduct
     a 4% profit margin from the prices charged by its Italian subsidiary. It argued that
     this margin was excessive and that the Commission should have used the Italian
     company's ownfigures.It also claimed that the Commission had misinterpreted the
     SG&A figures submitted by the company, and that the effect of this had been to
     increase its SG&A rate and consequently the dumping margin. It also suggested
     that a more correct approach would have been to consolidate both companies'
     SG&A expenses and apply a single rate.
                                             25
 ---pagebreak---      The Commission based the margin of 4% on the average of the profit margins
     achieved by the four unrelated importers listed at recital (6) (c) of the provisional
     Regulation. However, it has reviewed the figures and concluded that, for the
     purposes of the definitive determination, an adjusted figure of 3.8% should be
     applied. Although it was objected that two of the four importers were in fact related
     to Community producers, the Commission satisfied itself that the profit margins
     found for these companies reflected the profit on their sales to independent
     customers in the Community. With regard to the SG&A rate, the Commission
     reviewed the figures and concluded not only that the expenses had indeed been
     overstated, but also that it would have been more appropriate to consolidate the
     Swiss and Italian trading companies' figures, given that they had a similar
     relationship with the Slovak exporter and operated mostly out of the same
     premises. A global SG&A rate has accordingly been applied.
     (c) Comparison
(26) The company had claimed a 'distribution channel allowance' which the
     Commission, it said, had failed to take account of in its provisional determination.
                                           26
 ---pagebreak---      It argued that such an allowance was justified in order to reflect the fact that the
     company sold directly-to stockists on its domestic market whereas it sold through
     its related Italian and Swiss companies on the Community market; it also argued
     that the allowance was necessary to ensure a fair comparison with the constructed
     export sales price.
     This claim is covered under the discounts and quantities allowance already granted
     to the company. Article 2 (10) of the basic Regulation explicitly states that '[a]ny
     duplication when making adjustments shall be avoided, in particular in relation to
     discounts, rebates, quantities and level of trade'. Since the normal value has already
     been adjusted downwards to reflect the fact that sales in the Community were
     mainly to large customers, there is no justification for granting a further allowance.
     No further comments were received and the Commission's findings are therefore
     confirmed.
     (d) Dumping margin
(27) The company objected to the Commission's decision to establish the dumping
     margin on the basis of a comparison of weighted average adjusted normal values
     with adjusted individual export prices (rather than weighted average export prices),
     arguing that the Commission had failed to provide sufficient justification for its
     approach at recital (34) of the provisional Regulation.
                                             27
 ---pagebreak---       Whilst the Commission stands by its reasoning set out at the above-mentioned
      recital, the modifications it has since made to the figures used to calculate the
      dumping margin have resulted in the difference between the two methods no longer
      being of such a magnitude as to justify its original approach. It has therefore
      decided, for the purposes of the definitive determination, to revert to the method of
    . comparing the weighted average normal value with the weighted average export
      price. The provisional findings have been amended accordingly.
(28) On the basis of the Commission's previous findings, described in recitals (31)-(35)
      of the provisional Regulation, and taking into account the changes referred to
      abovo, the dumping margin expressed as a percentage of the CIF free Community
            • »
      frontier value of imports established for the cooperating producer is:
      Zeleziarne Podbrezovâ a.s.              7.5%.
      The residual dumping margin is set at the same level.
      4. Russia
      (a) Cooperation
(29) Five of the six Russian companies wrote to the Commission to object to its
      decision to treat them as non-cooperating. The reasons for the Commission's
                                             28
 ---pagebreak---  decision are set out in recital (36) of the provisional Regulation. The companies
 argued that, despite any deficiencies the replies may have contained, they
 themselves had been willing to cooperate with the investigation and had been ready
 to supply any additional information the Commission might have required. Certain
 companies requested individual treatment, or offered to subscribe to an individual
undertaking, or asked for their comparative advantages to be taken into
consideration.
The Commission, however, remains of the view that, by failing to provide
information which was accurate, complete, and in the form requested, the Russian
companies have forfeited their right to be considered as cooperating parties in the
investigation. Although it is not disputed that some replies were more detailed than
                                                                    o
others, they were all deficient in one, overriding respect: they did not allow the
Commission to arrive at an accurate determination either of normal value or of the
export price because of the way in which individual products and transactions had
been grouped together. Some companies submitted further information subsequent
to the Commission informing them of its decision to apply Article 18 of the basic
Regulation, and some continued to submit new or revamped information even after
the publication of the provisional Regulation. The fact remains, though, that the
information in the Commission's possession at the time of the deadline for
submitting replies was deemed insufficient in respect of all six companies. It would
be discriminatory to other interested parties cooperating with the investigation if
information were taken into account which was submitted days, weeks and
sometimes months after the deadline for submitting it has passed.
                                       29
 ---pagebreak---       The Commission'sfindingsare therefore confirmed.
      (b) Dumping margin
(30) The Commission recalculated the Russian dumping margin using the same normal
     values as were used in revising the Czech residual margin (see recital (18)). On this
     basis a dumping margin expressed as a percentage of the CIF free Community
     frontier value of imports of 26.8% was established.
     Review investigation
     1. General
(31) The producers/exporters in Poland and Hungary failed to provide detailed
     information on individual products as requested by the Commission in the product
     description table included in all questionnaires sent, but presented it split into
     product groups, covering a range of products, classified together by reference to
     certain criteria e.g. wall thicknesses. In some cases, therefore, the groups contained
     products classified under different CN codes. For this reason, and because of the
     impossibility of collecting more detailed information on-the-spot, the Commission
     could only base its calculations on product groups, rather than on individual
     products.
                                              30
 ---pagebreak---       2. Hungary
      (a) Normal value
(32) During the investigation period, the sole Hungarian producer/exporter sold four
     product groups in the European Community. Groups 1, 2, and 3 fell entirely under
     CN code 7304 39 91, whereas group 4 included a mix of models partly falling
     under CN code 7304 39 91, and partly under CN code 7304 39 93. The technical
     information provided and verified was not detailed enough to enable the
     Commission to split product group 4 into the two CN codes. Taking into account
     that Eurostat statistics showed considerable imported quantities falling under CN
     code 7304 39 93 for the investigation period, and that only one Hungarian
     producer/exporter had sold the product concerned to the European Community
     during the same period, the Commission considered product group 4 as falling
     entirely under CN code 7304 39 93.
     It was found on-the-spot that the detailed export figures provided by the company
     were unreliable as one Community customer, accounting for 7% of the reported
     sales to the European Community of the product concerned, had been omitted and
     the computer file of export transactions was also found to be incorrect in other
     respects, a deficiency the company could not correct. The 5% global
     representativity test was then performed by comparing the quantities sold
                                           31
 ---pagebreak--- domestically with Eurostat import statistics from Hungary, which the Commission
selected as an independent source of information, in accordance with Article 18 (5)
of the basic Regulation. On this basis it was determined that in all cases the
domestic sales could be considered representative for the establishment of normal
value, both globally and at product group level, in accordance with Article 2 (2) of
the basic Regulation.
For each of the four groups mentioned above, it was then determined whether
domestic sales could be considered to have been made in the ordinary course of
trade. For groups 2 and 3, profitable sales constituted less than 10% of the domestic
sales of these product groups. Therefore, for these groups, normal value had to be
constructed in accordance with Article 2 (3) of the basic Regulation. This was done
on the basis of the cost of manufacture plus an amount for SG&A costs and profit.
For this purpose, the producer/exporter's actual data pertaining to production and
sales in the ordinary course of trade were taken into account. As far as product
groups 1 and 4 were concerned, between 10% and 80% of domestic sales were
profitable. Accordingly, for these two groups, normal values were established on
the basis of profitable sales only, in accordance with Article 2 (4) of the basic
Regulation. As the four product groups defined by the company corresponded to
CN codes 7304 39 91 and 7304 39 93, the Commission decided to determine one
normal value per CN code. Since the export transaction listing was found to be
                                       32
 ---pagebreak---       unreliable and could not be used as a basis to weight the first three product groups,
      it was impossible to determine the weighted average of the normal values found for
     the three groups. Therefore, the arithmetical average of the normal values
      calculated for the three corresponding product groups was taken into account in
      order to establish normal value for CN code 7304 39 91. As explained above, the
      Commission considered CN code 7304 39 93 as corresponding to product group 4.
     Accordingly, the normal value for CN code 7304 39 93 was that determined for
     product group 4.
     (b) Export price
(33) As explained in the preceding recital, in the course of the verification visit at the
     premises of the sole Hungarian exporter concerned, it became apparent that the data
     submitted in the questionnaire reply concerning exports showed significant
     divergences from the company's internal records.
     Further to the verification visit, the company was informed in writing that, due to
     the substantial anomalies found on-the-spot and the impossibility of properly
     establishing the real export figures, it was impossible to use the information
     submitted for the determination of the export price to the Community and that
     findings concerning the export price would have to be based on the facts available
     in accordance with Article 18 of the basic Regulation. The company was, at the
     same time, given an opportunity to submit comments. At that point, a completely
                                             33
 ---pagebreak---      new file was submitted, which was allegedly the correct version of the export
     transaction listing. This file was rejected by the Commission, as the new
     information could not be verified.
     In order to establish Hungarian export prices, the Commission selected as an
     independent source of information the official import statistics published by
     Eurostat, in accordance with Article 18 (5) of the basic Regulation. However, only
     the quantities reported therein for the two CN codes which were exported by this
     producer to the European Community were taken into account.
     (c) Comparison
(34) For the purpose of a fair comparison between the normal value and the export price
     at ex-works level, due allowance in the form of adjustments was made for
     differences which were claimed and demonstrated to affect price comparability.
     The adjustments were made, in accordance with Article 2 (10) of the basic
     Regulation, in respect of transport, insurance, handling and ancillary costs and
     credit costs.
                                            34
 ---pagebreak---  As far as requests for adjustments for
 • Import charges and indirect taxes
 • Discounts, rebates and quantities
 • Level of trade
 • Currency conversion
are concerned, the following should be noted:
Import charges and indirect taxes
The company claimed an allowance of 8% for extra customs duties paid on raw
materials imported, in accordance with Article 2 (10) (b) of the basic Regulation.
However, in the course of the on-the-spot verification, the Commission officials
found that no duties were refunded for the exported products. Therefore, the claim
was considered to be unfounded.
Discounts, rebates and quantities
The company requested an adjustment of 4% for differences in volumes bought by
domestic and European Community customers in accordance with Article 2(10) (c)
of the basic Regulation, claiming that lower prices were paid for larger orders.
Since no evidence was produced in support of this claim, it was rejected.
                                       35
 ---pagebreak--- Level of trade
The company claimed an allowance of 12% for differences in distribution channels
between the European Community and the domestic markets in accordance with
Article 2 (10) (d) of the basic Regulation. It was alleged that all European
Community customers were independent traders whereas 49% of domestic
customers were end-users. This figure, reported in the table describing the
distribution channels in the domestic sales section of the questionnaire, was not
consistent with the data contained in the domestic customer list, where all domestic
customers were listed as 'independent traders', a situation equivalent to that
prevailing on the European Community market. The exporter claimed that this
inconsistency was due to a "language error". Whether or not this was indeed a
"language error" is irrelevant since, in addition to this inconsistency in the
company's reply, the Commission officials also found that the domestic prices
applied by the company were subject to the same pricing policy/price list,
regardless of the type of customer. This claim could, therefore, not be taken into
account.
Currency conversion
As far as the conversion of export price is concerned, the exporter argued that
monthly exchange rates should have been used, rather than a yearly rate. However,
                                       36
 ---pagebreak---       it should be recalled that the determination of export price was based on Eurostat
      data since the transaction-by-transaction listing submitted by the exporter could not
      be used. Since Eurostat data do not focus on the date of sale, but on the date of the
      importer's customs declaration, the use of monthly data would not have more
      appropriately reflected the terms of sale. The claim made by the exporter could not,
     therefore, be accepted.
     (d) Dumping margin
(35) The comparison, on a CN code basis, of weighted average normal values and
     weighted average export prices, revealed the existence of dumping, the dumping
     margin corresponding to the amount by which the normal value exceeded the
     export price.
     Expressed as a percentage of the CIF free at Community frontier value of imports,
     the dumping margin for the sole Hungarian producer/exporter is:
     Csepel Tubes Co. Ltd.            36.5%.
     Since the sole known producer accounted for almost all Hungarian exports of the
     product concerned to the Community, the residual dumping margin was set at the
     same level.
                                             37
 ---pagebreak---      3. Poland
     (a) Cooperation
(36) Replies to the Commission's questionnaire were received from six companies,
     three of which (submitted by two producer/exporters and one related trading
     company) were judged to be insufficient. It was therefore concluded that these three
     companies had failed to provide, within the time limits set, the information deemed
     necessary to the investigation and the companies were informed of the
     Commission's intention to apply Article 18 (1) of the basic Regulation and to base
     itsfindingson the facts available.
     The three other companies, whose replies were considered sufficient (two
     producers/exporters and one trading company related to a producer/exporter), were
     subsequently verified on-the-spot. Of the two producers/exporters, one refused,
     however, to provide the Commission officials with copies of basic documents such
     as the domestic sales, customer and price listings, original domestic sales invoices,
     and the list of export customers corresponding to the codes in their export sales
     listing. The verification also showed that the company had failed to report in its
     reply its sales to the European Community during the investigation period effected
     via a related company. In view of these deficiencies and the impossibility of
     verifying essential parts of the information provided by the company, the
                                           38
 ---pagebreak---      Commission was unable to use the information submitted for the determination of
     the normal value and the export price to the Community. Accordingly, the
     company was subsequently informed that, as a result of its non-cooperation, the
     Commission would base its findings on the facts available in accordance with
     Article 18 of the basic Regulation.
     (b) Normal value
     Cooperating parties
(37) As mentioned in recital (36) above, only one Polish producer/exporter and one
     Polish trading company could be considered as cooperating parties in the present
     review investigation. As no individual dumping calculation is meaningful in the
     case of a trading company, one normal value for the single cooperating
     producer/exporter was established.
     During the investigation period, the single cooperating producer/exporter sold six
     product groups on both the domestic market and in the European Community. The
     global representativity test showed that, during the same period, the total quantity
     of the product concerned sold domestically was more than twice as great as the
     quantity exported to the European Community. The 5% test was then performed on
     a product group basis, from which it resulted that all six product groups were sold
     in sufficient quantities on the domestic market, and could thus be considered
                                           39
 ---pagebreak--- representative for the determination of normal value, in accordance with Article 2
(2) of the basic Regulation.
The profitability test showed that of six product groups, the domestic prices paid in
the ordinary course of trade could be used as a basis for normal value for five of
them, in accordance with Article 2 (4) of the basic Regulation. Thé remaining
product group had insufficient profitable sales and normal value was constructed on
the basis of the cost of manufacture plus an amount for SG&A costs and profit, in
accordance with Article 2 (3) of the basic Regulation. For this purpose, the
producer/exporter's actual data pertaining to production and sales of the like
product on the domestic market and in the ordinary course of trade, were taken into
account.
Non-cooperating parties
For the four non-cooperating parties, in accordance with Article 18 (6) of the basic
Regulation, normal value was determined on the basis of the cooperating
producer's product group which corresponded to the highest normal value, since
any other choice would have rewarded non-cooperation. However, this was
mitigated by the fact that all products sold by the cooperating producer on its
domestic market belong to the larger diameter product groups covered by this
investigation, which are relatively cheaper than the smaller diameter product
groups, exported exclusively by the non-cooperating parties.
                                        40
 ---pagebreak---       (c) Export price
      Cooperating parties
(38) During the investigation period, the cooperating producer sold the product
     concerned in the European Community both directly and via a related Polish
     intermediary. The export price was determined by taking into account the direct
     transactions as well as the transactions concluded via one of the related trading
     companies. For transactions effected via the trading company, the export price was
     established by reference to the prices actually paid or payable to it. As the related
     trader's functions can be considered similar to those of a trader acting on a
     commission basis, a commission was estimated on the basis of the trading
     company's mark-up verified at its premises. This mark-up was deducted from the
     prices charged by the related company to independent customers in the
     Community.
     Non-cooperating parties
     In accordance with Article 18 (5) of the basic Regulation, the Commission selected
     as an independent source of information the Eurostat import statistics for the CN
     codes concerned for the three non-cooperating producer/exporters. The export price
     was then established on this basis, after deducting from the total imports the
                                           41
 ---pagebreak---      quantity and value of goods sold by the cooperating producer in the European
     Community both directly and via the cooperating related trading company.
     (d) Comparison
(39) For the purpose of a fair comparison between the normal value and the export price
     at an ex-works level, due allowance in the form of adjustments was made for
     differences which were claimed and demonstrated to affect price comparability.
     The adjustments were made, in accordance with Article 2 (10) of the basic
     Regulation, in respect of physical characteristics, transport, insurance, handling and
     ancillary costs, commissions, and credit costs.
     (e) Dumping margin
(40) The dumping margin for the cooperating producer was established, on a product
     group basis, by comparing the weighted average normal value with the weighted
     average export price, in accordance with Article 2 (11) of the basic Regulation.
     Expressed as a percentage of the total CIF Community frontier value of imports,
     the dumping margin for the sole cooperating producer is:
     Huta Batory SA          7.1%.
                                           42
 ---pagebreak---      For non-cooperating parties a residual dumping margin was calculated by
     comparing the normal value as established in the last paragraph of recital (37) with
     the export price as determined in the last paragraph of recital (38). The residual
     margin, expressed as a percentage of the CIF Community frontier value of imports
     is 33.2%.
     4. Republic of Croatia
(41) In view o f the findings on injury with' regard to the Republic o f Croatia (see
     recitals (51) and (69) below), it was not considered necessary to pursue the
     investigation into dumping.                                                       <»
                           D. C O M M U N I T Y I N D U S T R Y
(42) The same Community producers cooperated in the two investigations (see recital
     (8)). These companies represented more than 90% of the total Community
     production of the product subject to the investigation, and constituted, therefore, a
     major proportion of the total production of the product concerned in the
     Community.
                                           43
 ---pagebreak--- (43) A number of exporters alleged that their products were purchased and imported by
     certain complainant Community producers. They claimed that these producers
     should be excluded from the determination of the Community industry for the
     purpose of the injury assessment pursuant to Article 4 (1) (a) of the basic
     Regulation.
     No substantiating evidence to support this assertion was provided. In addition, the
     investigation carried out by the Commission has shown that none of the
     Community producers imported the products concerned and that certain importers,
     related to such Community producers, imported small quantities of the products
     concerned during the investigation period. These imports were resold in the
     Community market exclusively by these related importers, which were found to
     have acted independently and even to have operated in competition with the sales
     departments of their related producers. In any event, the examination of the facts
     revealed that the volume of these imports accounted for less than 3% of the total
     sales volume of these products on the Community market for each of the
     Community producers.
     It is, therefore, considered that such a low level of imports could not have led to
     any injury to the Community producers and consequently there are no grounds for
     excluding these producers.
                                            44
 ---pagebreak---      Consequently the producers mentioned in recital (8) will be referred to hereinafter
     as the "Community industry" within the meaning of Article 4 (1) of the basic
     Regulation.
                                       E. INJURY
      1. Preliminary remark
(44) It should be mentioned that the anti-dumping measures presently in force with
     respect of Hungary, Poland and the Republic of Croatia are undertakings,
     combining quantitative ceilings and certain pricing commitments, with residual ad
     valorem duties.
     Further, it should be noted that imports of all seamless pipes and tubes (including
     therefore the product concerned), originating in the Czech Republic and the Slovak
     Republic were, between 1993 and 1995*, subject to a tariff quota system, i.e. duty
     free within the limits of a quantitative ceiling; as soon as the ceiling was reached, a
     duty of 30% was levied. This system lapsed at the end of 1995.
(45) It should also be recalled that the present Regulation combines the result of two
     investigations, one of which has led to the publication of a provisional Regulation.
     All findings regarding injury, causation and Community interest should be read in
     conjunction with thefindingsdescribed in the provisional Regulation.
                                            45
 ---pagebreak---      2. Consumption
(46) In recital (48) of the provisional Regulation, it was stated that Community
     consumption in tonnes per month amounted to 89,900 tonnes in 1992, 69,700 in
      1993, 84,070 in 1994, 92,730 in 1995 and 92,130 during the investigation period.
     Thesefindingswere not contested and are confirmed.
     3. Dumped imports
     (a) Cumulation
(47) In the provisional Regulation, the Commission concluded that the dumped imports
     from Russia, the Czech Republic, Romania and the Slovak Republic should be
     assessed cumulatively for the purpose of injury analysis, on the grounds that the
     products concerned were imported from each exporting country in substantial
     quantities, held a significant market share and competed with each other and with
     those manufactured by the Community industry.
(48) Some exporters claimed that due to differences in volume and rates of growth of
     imports, as well as in conditions of competition, the impact of these exports to the
     Community should be examined on an individual basis.
                                            46
 ---pagebreak--- (49) In this respect, the Commission recalls that the criteria set out in Article 3 (4) of the
     basic Regulation were found to be met in order to cumulate the imports from all
     four countries concerned, namely:
     - the margin of dumping established and relating to each country was more than
        de minimis (i.e. between 5.1% and 38.2%);
     - the volume of imports from each country was not negligible; none of the
        exporting countries held a de minimis market share, namely below 1%, since
        their market shares rangedfrom3% to 8.3%;
     - with regard to the conditions of competition both between imported products
        and products sold by the Community industry, the imported products were
        found to be interchangeable, to be following similar price, trends, to have similar
        channels of distribution and similar low-price policy resulting in a high level of
        price undercutting (i.e. between 17.5% and 43.2%), to be simultaneously present
        in the same geographical areas and to compete therefore with each other and
        with those manufactured by the Community industry.
        The fact that imports of the product concerned originating in the Czech Republic
        and the Slovak Republic were subject to a tariff-quota system applying until 31
        December 1995 does not alter the conclusion that these imports fulfil the criteria
                                           47
 ---pagebreak---          laid down in Article 3 (4) of the basic Regulation. It should be noted, in any
         case, that, after the expiry of this system, the market shares of the imports
         concerned increased from 6.7% in 1995 to 9.6% during the first eight months of
         1996 for Czech imports andfrom2.1% to 3.4% over the same period for Slovak
         imports.
      For all the above reasons, it is concluded that the conclusions reached in recital (49)
     of the provisional Regulation should be maintained.
(50) Taking into account the two simultaneous investigations, it was also examined
     whether effects of imports from Hungary, Poland and Croatia should be assessed
     cumulatively with those of the new investigation.
(51) With regard to imports from Croatia, it was established that its share held in the
     Community market declined from 1.8% in 1992 to 0.7% in the investigation
     period. Given the low and sharply decreasing level of these imports, a situation
     contrary to the one found for the other imports, it was not considered appropriate
     that these imports should be analysed cumulatively. In the light of the fact that
     imports from Croatia are subject to anti-dumping measures, this conclusion is
     reached also taking into account thefindingsin recital (70) below on the absence of
     likelihood of recurrence of inj ury.
                                              48
 ---pagebreak--- (52) With respect to imports from Hungary and Poland, it was found that, as with the
      imports of the new investigation, quantities imported and dumping margins were
      significant.
      Concerning imports originating in Hungary, it has been claimed that they are
     negligible and should therefore be disregarded for cumulation purposes in
     accordance with Article 3 (4) of the basic Regulation. However, the investigation
     did not show that these imports were actually negligible.
     In addition, for both investigations, the conditions of competition found between
     the imported products and between the imported products and the Community
     products were similar, in particular, because all the products were considered as
     like products and were sold at prices substantially undercutting those of the
     Community industry (i.e. from 17% to 21.3% for Poland, 25.4% for Hungary). The
     fact that these imports were subject to quantitative undertakings during the period
     considered has no bearing on the conclusion that they can be cumulated with the
     other imports under investigation for injury examination purposes. Indeed, even if
     there were limitations to the quantities exported to the Community and a certain
     increase in their price level as compared with the prices of the exporters in the
                                           49
 ---pagebreak---      countries subject to the new investigation, imports originating in Hungary and
     Poland have, nevertheless, continued to be made at dumped prices undercutting
     quite significantly those of Community producers.
(53) The above considerations on cumulation led, therefore, to the conclusion that a
     cumulative assessment of the effect of the dumped imports from the countries
     subject to both investigations, with the exception of Croatia, was warranted
     (hereinafter the "exporting countries").
     (b) Cumulated volume and market share of dumped imports
(54) The provisional findings according to which, on a cumulated basis, imports
     decreased from 201,920 tonnes in 1992 to 96,080 tonnes in 1993, and then
     increased to 195,220 tonnes in 1994,230,810 tonnes in 1995 and 268,670 tonnes in
     the investigation period were not contested and are therefore confirmed.
     The same applies to the corresponding market shares amounting to 18.7% in 1992,
     11.5% in 1993, 19.4% in 1994, 20.7% in 1995 and 24.3% in the investigation
     period.
                                            50
 ---pagebreak---      (c) Prices of dumped imports
(55) For the determination of price undercutting regarding the exporting countries, the
     data analysed referred to the investigation period. For this purpose, comparison was
     made between weighted average selling prices of the exporting countries concerned
     and weighted average sales prices of Community producers for the seamless steel
     tubes concerned. Price comparison was made on the basis of sales to the first
     independent customer in the Community. In order to ensure comparability, the
     prices of Community producers and those of the imported products were, where
     appropriate, adjusted in terms of transport cost to ex-works or CIF Community
     frontier level. In addition, the import prices were adjusted by an importer's margin,
     including customs clearance, handling charges, commission, financing cost and
     profit based on information available.
     The results of the comparison showed margins of undercutting for all countries and
     exporters concerned. The weighted average price undercutting margins expressed
     as a percentage of Community producers' prices were as follows:
                                            51
 ---pagebreak---        Czech Republic:         from         21.2% to 43.2%
       Hungary:                       25,7%
       Poland:            from              17.0% to 21.3%
       Romania:                       25.8%
       Russia:                        41.5%
       Slovak Republic:               17.5%
     4. Situation of the Community industry
(56) For ease of reference, the results already presented in the provisional Regulation on
     the situation of the Community industry are once again shown below and
     confirmed for the purpose of the definitive determination since they were not
     disputed by the parties.
     (a) Capacity, production and utilisation rate
(57) Between 1992 and the investigation period, eleven production plants and facilities
     ceased production, representing a reduction of about one fourth of the total
     production capacity of seamless steel tubes existing in the Community at the
     beginning of the period.
                                             52
 ---pagebreak---       Production of the Community industry fell from 1,136,640 tonnes in 1992 to
      996,036 tonnes in 1995 and to 938,184 tonnes during the investigation period. In
     line with the substantial reduction of capacity, th,e corresponding rates of capacity
     utilisation rosefrom63.5% to 75.9%, and fell back to 71.3% over the same period.
     (b) Sales volume and market share
(58) Sales of Community producers declined from 781,770 tonnes in 1992 to 775,721
     tonnes in 1995 and to 722,042 tonnes during the investigation period.
     The market share held by the Community industry decreased from 75.2% in 1992
     to 72.1% in 1995, and dropped by a further 4.8% to 67.3% during the investigation
     period.
     (c) Sales prices
(59) On average, unit prices of the product concerned sold by the Community producers
     on the Community market, expressed in ECU per tonne, were 576 in 1992, 578 in
     1995 and 593 during the investigation period, corresponding to an overall increase
     of 3%.
                                           53
 ---pagebreak---      (d) Profitability
(60) The Community industry incurred financial losses on its sales of the like product
     during the period under consideration. Between 1992 and 1994, these losses
     averaged 8%. There followed an improvement in return on sales in 1995 (-2.1%),
     and in the investigation period without reaching break-even. Profitability
     percentage levels were as follows:
         1992          1993        1994         1995       Investigation period
         -7,0         -12,2        -7,9         -2,2               -0,7
     This reduction in losses was to a considerable extent possible because of the anti-
     dumping measures in force in this sector. In the absence of these measures, there
     would have been even less, if any, reduction in financial losses. Furthermore, the
     slight recovery took place during a period when substantial restructuring efforts
     were made, leading, inter alia, to the above-mentioned closure of plants. These
     developments were, however, not sufficient to generate the level of earnings that
     would be required by the Community industry to cover its increasing production
     costs and the high investment in restructuring, make a reasonable profit, recover
     from previous years' losses and ensure its long term viability.
                                          54
 ---pagebreak---       (e) Employment
(61) Employment in the Community industry declined continuously by around 35%
     between 1992 and the end of the investigation period, amounting in absolute terms
     to a loss of about 2,800 jobs.
     5. Final conclusion on injury
(62) The examination of the economic performance of the Community industry during
     the period under consideration showed that, between 1992 and August 1996, there
     was a decline in production, sales volume and market share as well as a reduction
     in employment, despite considerable restructuring efforts intended to reduce costs
     of production.
                                                               i *
     These restructuring efforts and the measures in place enabled the Community
     industry to increase capacity utilisation and improve its financial results, which,
     however, remained negative during the investigation period (- 0.7%), i.e. under the
     break-even point, and were insufficient to enable the Community industry to ensure
     its long term viability.
                                            55
 ---pagebreak---      It is therefore concluded that during the period under consideration, the Community
     industry has suffered material injury within the meaning of Article 3 of the basic
     Regulation, in the form of decreased sales and loss of market share, reduced
     employment andfinanciallosses.
                                     F. CAUSATION
     1. Effect of dumped imports
     (a)     Cumulated effect of imports from the Czech Republic, Hungary, Poland,
             Romania, Russia and the Slovak Republic
(63) While consumption in the Community remained relatively stable, imports from the
     Czech Republic, Hungary, Poland, Romania, Russia and the Slovak Republic
     increased their total market share by around 5.6 percentage points, from 18.7% in
     1992 to 24.3% in the investigation period. By contrast, the Community industry
     lost market share by about 7.9 percentage points from 75.2% to 67.3% over the
     same period. Bearing in mind that significant price undercutting was found for each
     exporting country, and considering that the increase of market share held by the
     dumped imports concerned coincided with the deterioration in the Community
     industry's situation, it is concluded that, taken together, imports from the six
     countries concerned had a negative impact on the situation of the Community
     industry.
                                             56
 ---pagebreak---       (b) Effects of imports originating in Croatia
      Considered in isolation, the imports originating in Croatia cannot be considered as
     having significantly caused material injury to the Community industry due to their
     declining volume and market share.
     2. Effect of other factors
       (a) Other imports
(64) Certain exporters claimed that importsfromother countries, for example Argentina,
     had been made in quantities and at prices that were injurious to the Community
     industry. The examination revealed that imports from other third countries, not
     covered by the two investigations, increased their market share from 4.3% in 1992
     to 6.5% in 1995 and to 7.7% during the investigation period. Although they were
     increasing in volume, the prices of these imports were found, on the basis of the
     statistical data available, to be distinctly higher than those of the dumped imports,
     and there was no indication that importsfromthird countries not subject to the two
     investigations had been dumped. It is, therefore, concluded that the other imports in
     question had little, if any, impact on the situation of the Community industry.
     (b) General economic situation
(65) As stated in the provisional Regulation, Community consumption declined in 1993
     due to the world economic recession, which affected in particular the users of the
                                              57
 ---pagebreak--- product concerned (car industry, construction, etc.). In that year, the volume of
imports, and the corresponding market share held by the exporting countries
concerned, also reached a low level, and the Community industry experienced its
poorest results in terms of sales on the Community market, prices and profitability.
On this basis, it is evident that the deterioration of the market in 1993 had a
negative effect on the situation of the Community industry.
However, save in the exceptional situation of 1993, consumption remained
generally stable during the other years of the period considered (1992, and 1994 to
the investigation period). This stability, however, was mainly to the benefit of the
dumped imports from the countries concerned whose market share increased while
the Community industry's market share declined continuously. The general
economic situation cannot, therefore, be considered as a factor continuously
responsible for the precarious situation still faced by the Community industry.
Indeed, given the considerable efforts of rationalisation and restructuring made by
Community producers, and the trade defence measures in force during this period,
the Community industry should clearly have recovered to a greater extent and
obtained more satisfactory results in 1995 and 1996.
                                        58
 ---pagebreak---        (c) Restructuring of the Community industry
 (66) It was alleged by certain exporters that the unsatisfactory performances of the
       Community industry in the period examined was due not to the effect of dumped
       imports but to the restructuring carried out by the industry at that time.
       Without doubt, the restructuring process undergone by the Community industry in
       the face of excess capacities would have been responsible for some of the decrease
       in production, sales and employment. However, given the volume and market share
       of the dumped imports from the countries concerned and the margin of
      undercutting established, it is clear that the dumped imports in isolation played a
       significant role in the material injury suffered by the Community industry.
      3. Conclusion
(67) Although the world economic recession of 1993 as well as the restructuring of the
      Community industry may have had some negative impact on the performance of
      the Community industry during the period considered, it must be concluded, on the
      basis of the above considerations, that the cumulative effect of the dumped imports
      from the Czech Republic, Hungary, Poland, Romania, Russia and the Slovak
      Republic, considered in isolation, have, through substantial price undercutting and
      significant quantities of dumped imports, caused material injury to the Community
      industry, and that the existing anti-dumping measures under review have not fully
                                               59
 ---pagebreak---      achieved their intended effect. Imports originating in Croatia" considered
     separately, cannot be considered to have caused material injury to the Community
     industry.
     It is worthwhile noting that the injury caused by the dumping suffered by the
     Community industry could only become worse if the measures which apply to
     certain cumulated imports were to be repealed. Indeed, in Hungary and Poland high
     volumes of capacity are available for export to the Community, taking into account
     that internal consumption or exports to third countries could not absorb any
     additional output. Furthermore, it should .be noted that capacity in Poland increased
     subsequent to the investigation period by around 15%.
    G. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF INJURY
                                      CROATIA
(68) The investigation with regard to Hungary, Poland and the Republic of Croatia was
     an interim review which was initiated in parallel with the new investigation in order
     to examine globally the situation with regard to all imports of seamless pipes and
     tubes into the Community. Actual injury, caused by dumped imports which were
     assessed cumulatively for the purpose of examining their effect, was established.
     There was therefore no need to further examine whether there is a likelihood of
     continuation or recurrence of material injury if the existing anti-dumping measures
     concerning imports originating in Hungary and Poland were removed or altered.
                                            60
 ---pagebreak---       However, in the case of imports of Croatian origin, which were not cumulated with
      the other imports under investigation, such an examination must be made.
(69) Following the imposition of anti-dumping measures, imports from Croatia fell
      sharply from 19,201 tonnes in 1992 to 8,077 tonnes during the investigation period,
     representing a decline in market share from 1.8% to 0.7% as stated above in recital
     (51).
     During the period under consideration, exports of the Croatian producer to the
     European Community remained far below the level of the quantitative undertaking
     accepted in 1993. Because of the war-like situation in Croatia in the last few years,
     production facilities of seamless tubes were partially damaged and the work force
     was considerably reduced. As a result, only one quarter, approximately 35,000
     tonnes per year of the theoretical production capacity was pperational. The output
     of the product concerned dropped from around 34,000 in 1992 to 10,515 tonnes
     during the investigation period, thus reducing capacity utilisation from 97% to
     37%. Domestic sales declined from 8,000 tonnes to 2,100 tonnes over the same
     period, while exports to non European Community countries were negligible.
                                            61
 ---pagebreak---      No sizeable increase of export volumes to the European Community is expected,
     and any price undercutting should have a limited effect on price depression or
     prevention of price increases for Community producers. Moreover, growing
     reconstruction activities in former Yugoslavia should increase domestic sales and
     concentrate Croatian exports on the markets in this area.
      Should the measures in force for Croatia be repealed, there appears to be no clearly
     foreseeable threat of increasing import volumes from Croatia. There is
     consequently no likelihood of recurrence of material injury.
     Conclusion
(70) With regard to Croatia, it is considered that recurrence of injury, should the existing
     anti-dumping measures be repealed, is unlikely and that, in the circumstances as
     established, these measures are therefore no longer necessary.
                            H. COMMUNITY INTEREST
     1. Introduction
(71) Considering that both the new anti-dumping investigation and the interim review
     referred to the same market, i.e. the Community market of the seamless pipes and
     tubes in question, the examination of the Community interest issue was made
                                            62
 ---pagebreak---      jointly for both investigations. The purpose of this analysis was to determine the
     possible impact of measures and the consequences of not taking measures for all
     parties involved in both proceedings.
(72) It should be recalled in this respect that recitals (68) et seq. of the provisional
     Regulation contained an appreciation of all the various interests, including those of
     the Community industry, of the importers/traders and of the downstream user
     industries. On the basis of the information available at the time of the provisional
     Regulation, the Commission concluded that there was no compelling reason hot to
     remedy the trade distorting effects of injurious dumping.
(73) After publication of the provisional Regulation, none of the parties concerned made
     comments on the Commission's provisional conclusions on the Community interest
     issue.
     However, although no user industry had^cooperated in the course of the provisional
     examination, the Commission pursued its investigation in order to complete its
     analysis on the possible effect of measures on those industries. It approached in this
     respect the complainant, importers and a federation of different processing
     industries using, inter alia, the product concerned. On the basis of these sources,
     seven industrial users were identified and ad hoc questionnaires were sent to each
     of them. Meaningful comments or replies were received from only four user
     companies.
                                             63
 ---pagebreak---      On the basis of the additional information obtained from these replies, and taking
     into account the absence of comment on the findings contained in the provisional
     Regulation, the following conclusion can be reached.
     2. Impact on the Community industry
     (a) Likely effect of the imposition of anti-dumping measures
(74) Following the adoption of anti-dumping measures, the prices of the imported
     product can be expected to rise. This would be reflected in a fall in the volumes
     imported and a reduction in market supply, allowing the Community industry to
     increase output and sales.
     The Community industry's prices would probably increase to some extent, but
     certainly not by anything like the level of the duty, given the overcapacity
     described above and the transparency of the market.
     The increase of the Community industry's production volume would result in a
     higher utilisation rate of capacity and thus a reduction of unit costs of the product
     concerned which, as a result, would enable the Community industry to achieve a
     more satisfactory financial situation.
                                            64
 ---pagebreak---      (b) Likely effect of non-imposition of measures
(75) Although the situation of the Commumty industry has improved somewhat during
     the period under consideration, it remains unsatisfactory. In these circumstances, if
     anti-dumping measures are not adopted or maintained, the situation could be
     expected to deteriorate again in terms of depressed production levels and capacity
     utilisation rates, loss of market share,financiallosses and reduction in employment.
     This would further threaten its capacity to produce the whole range of products at
     competitive costs.
     As noted in recital (73) of the provisional Regulation, the sector in question is
     dependent on a reasonable capacity utilisation rate. This can only be achieved by a
     satisfactory level of production of standardised commercial, or oil, tubes which are
     in direct competition with the dumped products. A decrease in the production of
     these standard pipes would jeopardise the production of higher quality product
     categories and, therefore, the viability of the whole seamless tube sector.
     3. Impact of measures on importers/traders
(76) In recital (74) of the provisional Regulation, the Commission concluded that,
     because Community importers are known in general to handle all steel products
     and only a small percentage of their turnover consists of the seamless tubes in
                                              65
 ---pagebreak---      question, the measures can be expected to have no more than a minimal effect on
     their overall situation, given the wide diversity of the products they trade.
     Having received no further comments in this respect, it is reasonable to conclude
     that anti-dumping measures will indeed have only a minimal effect, if any, on the
     situation of importers/traders of the product concerned.
     4. Impact on downstream industrial users
(77) As stated in recital (71) of the provisional Regulation, there are several downstream
     user industries of the product concerned, i.e. the machinery industry, transport of
     fluids (oil, gas, water, etc.), the chemical and petro-chemical industries, power
     stations (including nuclear), the automobile and construction industries.
     From the analysis of the comments or replies received as mentioned above
     (recital (73)), it is concluded that the impact on the costs of downstream user
     industries of any price increases resulting from adoption or continuation of anti-
     dumping measures would be insignificant.
     Furthermore, it should be noted that at least 85% of the dumped imports from the
     countries subject to both the new anti-dumping investigation and the interim review
     are sold to large traders, which appear to have been taking advantage of the dumped
     prices to improve profit margins. In so far as traders adjust margins to take account
                                              66
 ---pagebreak---      of some or all of the effects of the measures, they could not be reflected at all in
     their sales prices.
     In the light of the above, it is concluded that any price effect resulting from anti-
     dumping measures will be negligible with respect to downstream industrial users.
     5. Conclusion
(78) On the basis of the above elements, it is concluded that there is no compelling
     reason not to remedy the trade-distorting effects of injurious dumping and that the
     respective adoption and continuation of protective measures are in the interest of
     the Community.
                                I. DEFINITIVE DUTY
     1. Countries under the new investigation
(79) It should be recalled from recital (78) et seq. of the provisional Regulation that in
     order to prevent further injury being caused by the dumped imports concerned
     before the end of the proceeding, the Commission decided to adopt anti-dumping
     measures, in the form of provisional duties.
                                            67
 ---pagebreak---      (a) Injury margins
(80) For the purpose of determining what level of duty would be adequate to remove the
     injury to the Community industry caused by dumping, it was considered that a
     price level based on the Community producers' cost of production plus a
     reasonable profit margin should be calculated. A profit margin of 5% was regarded
     as an appropriate minimum, taking into account the need for long term investment
     and the return which the Community industry could reasonably expect in the
     absence of injurious dumping.
     The injury elimination level was calculated by comparing the weighted average
     CIF import prices, duly adjusted for an independent importer's margin, to the non-
     injurious price of the Community producers, established as above at the same level
     of trade. The amounts resulting from this calculation were expressed as a
     percentage of the weighted average,free-at-Community-frontiers,value of the
     imported goods. The injury margins calculated on that basis are set out below.
       Czech Republic         from        37.4% to 97.9%
       Romania                      48.3%
       Russia                       87.8%
       Slovak Republic              31%.
                                           68
 ---pagebreak---      Having received no further comments in this respect, the above determination of
     the injury elimination level is confirmed.
     (b) Definitive duty
(81) As the injury elimination margins found above are higher than the dumping
     margins that have been calculated, definitive anti-dumping duties should be set at
     the level of the latter, in accordance with Article 9 (4) of the basic Regulation.
     These duties, expressed as a percentage of free-at-Community frontier prices,
     amount to:
               Czech Republic         Vftkovice a.s.                     5.1%
                                      Nova Hut a.s.                      5.1%
                                      Other imports                      28.6%
               Romania :              SC Artrom SA                       9.8%
                                      SC Silcotub SA                     9.8%
                                      SC Petrotub SA                     9.8%
                                      SC Republica SA Trade Company     9.8%
                                      Other imports                     38.2%
               Slovak Republic        Zeleziarne Podbrezovâ a.s.         7.5%
                                      Other imports                      7.5%
              Russia :                All imports                       26.8%.
                                            69
 ---pagebreak---      2. Countries under the review investigation
     (a) Hungary and Poland
(82) As a result of thefindingsconcerning Hungary and Poland, confirming that despite
     the existing measures, dumping has caused injury, and considering that it is in the
     Community's .interest that anti-dumping measures with regard to these two
     countries be maintained, a determination of a revised duty has been made.
     The injury margins required to remove the injury caused by imports of Hungarian
     and Polish origin and calculated on the basis of the same methodology as that used
     for the countries under the new investigation, as explained above in recital (80),
     are:
               for Hungary :                        45.9% (Csepel Tubes Co. Ltd.,
                                                            sole Hungarian producer)
               for Poland:   Huta Batory SA         37.2%
                             Others                 30.1%.
     In accordance with Article 9 (4) of the basic Regulation, the rates of duty should be
     based on the lower of either the injury elimination margin or the dumping margin
     established. The dumping margins with regard to the Polish producer Huta Batory
                                            70
 ---pagebreak---        and the sole Hungarian producer being below the injury margin found, the duty
       should be based on this lower level. For the other Polish producers, the duty is
       limited to the injury margin established.
 (83) On this basis, the existing anti-dumping duties which amount to 10.8% for Poland
       and 21.7% for Hungary should be replaced by the following duties:
         Hungary:              Csepel Tubes Co. Ltd.         36.5%
                               Others                        36.5%
         Poland:               Huta Batory SA                7.1%
                               Others                        30.1%
      (b) Republic of Croatia
(84) Based on the conclusions reached in recital (51) and taking into account that there
      is no clearly foreseeable threat of increasing import volumes from the Republic of
      Croatia (see recital (69)) and that, under these circumstances, the recurrence of
      material injury is not imminent, no determination of a definitive duty has been
      made in respect of the Republic of Croatia.
                                             71
 ---pagebreak---                             J. DEFINITIVE MEASURES
(85) The conclusions reached above as to dumping, injury, causation and Community
     interest call for definitive measures, both for the countries under the new
     investigation and for those under the review investigation, with the exception of
     Croatia, for which the anti-dumping proceeding should be terminated. These
     measures should be in the form of ad valorem duties, the rates of which have been
     fixed individually for cooperating companies. Non-cooperating companies, on the
     other hand, should be subject to the residual duties.
(86) However, as regards Hungary, Poland, the Czech Republic, Romania and the
     Slovak Republic, it has been found appropriate, taking into account the specific
     history of previous anti-dumping proceedings concerning this product, in which
     those countries were subject either to quantitative restrictions or tariff quotas, to
     accept price undertakings which have been offered up to a certain quantity
     threshold on a company by company basis. In other words, the elimination of the
     injury is achieved by two means :first,a price undertaking up to an annual volume
     threshold exempt from the duty, and then an ad valorem duty for the remainder.
     To ensure that the quantity of imports exempted from the ad valorem duty does not
     exceed the quantity in respect of which the undertaking has been offered, the
     exemption should be conditional on the presentation to Member States' customs
     services of a valid production certificate clearly identifying the producer, the
     product concerned and the details listed in the Annex. In cases of doubt, the
     Commission should make a determination as to the certificate's validity, and take
     measures as appropriate.
                                            72
 ---pagebreak--- (87) As regards Russia, the Commission has examined an offer of a joint undertaking
     from three of the six companies which made themselves known during the
     investigation, and has considered the possibility of these Russian producers
     benefiting from a similar form of undertaking to that of the producers in the
     associated countries. However, this offer was not acceptable as it did not contain
     the necessary guarantees on the part of the Russian authorities to allow adequate
     monitoring, particularly with regard to the duty free threshold. In these
     circumstances an ad valorem duty should be imposed at the level definitively
     established.
     The Council notes, however, that the measure in respect of Russia could be
     modified, if and when there was a change in circumstances such that the conditions
     for the acceptance of an undertaking were met.
                                          73
 ---pagebreak---  K. COLLECTION OF PROVISIONAL DUTY WITH REGARD TO COUNTRIES
                                 UNDER THE NEW INVESTIGATION
(88) In view of the circumstances of the present investigation; i.e. the change in the form
       and nature of the definitive measures, as compared with the provisional ad valorem
       duties imposed on imports from the Czech Republic, Romania and the Slovak
       Republic, and with the existing undertakings in respect of imports from Hungary,
       Poland and the Republic of Croatia, the Council considers that it is not appropriate
       to collect the provisional duties. The Council has therefore decided, in accordance
       with Article 10 (2) of the basic Regulation, that the amounts secured by way of the
       provisional duty imposed pursuant to Commission Regulation (EC) No 981/97 on
       imports of the product concerned originating in Russia, the Czech Republic,
       Romania and the Slovak Republic should be released.
                                        L. FINAL PROVISION
(89) The Commission consulted the Advisory Committee on the acceptance of these
       undertakings and, since some objections were raised, sent a report on these
       consultations to the Council. The Council not having decided against the
       acceptance of the undertakings, the undertakings offered were accepted in
       accordance with Article 8 (5) of the basic Regulation by Commission Decision
       97/..../EC9,
9
  See page     of this Official Journal.
                                                 74
 ---pagebreak--- HAS ADOPTED THIS REGULATION :
                                          Article 1
 1. Definitive anti-dumping duties are hereby imposed on the following imports
     originating in Hungary, Poland, Russia, the Czech Republic, Romania and the
     Slovak Republic
    a) seamless pipes, of iron or non-alloy steel, of a kind used for oil and gas
         pipelines, of an external diameter not exceeding 406.4 mm (currently falling
         within CN codes 7304 10 10 and 7304 10 30);
    b) seamless tubes of circular cross-section, of iron or non-alloy steel, cold-drawn or
         cold-rolled, other than precision tubes (currently falling within CN code 7304 31
         99);
    c) other tubes of circular cross-section, of iron or non-alloy steel, other than
         threaded or threadable, of an external diameter not exceeding 406.4 mm
         (currently falling within CN codes 7304 39 91 and 7304 39 93).
2. The rate of definitive anti-dumping duties applicable to the net free-at-Community
    frontier prices before duty, shall be as follows :
                                             75
 ---pagebreak---                                                                           Taric
           Country               Manufacturer          Rate of duty (%) additional
                                                                          Code
    Hungary             Csepel Tubes Co. Ltd.               36,5%         8717
                       Others                               36,5%         8900
    Poland             Huta Batory SA                        7,1%         8476
                       Huta Andrzej SA                      30,1%         8719
                       Huta Czestochowa                     30,1%         8482
                       Huta Jednosc SA                      30,1%         8493
                       Others                               30,1%         8900
    Russia             All companies                        26.8%
    Czech Republic     Vftkovice a.s.                        5.1%         8058
                       Nova Hut a.s.                         5.1%         8463
                       VT Chomutov a.s.                    28.6%          8464
                       Others                              28.6%          8900
    Romania            SC Artrom SA                         9.8%          8059
                       SC Silcotub SA                        9.8%         8467
                       SC Petrotub SA                        9.8%         8468
                       SC Republica SA Trade Company         9.8%         8469
                       Others                               38.2%         8900
    Slovak Republic    Zeleziarne Podbrezovâ a.s.            7.5%         8060
                       Others                               7.5%          8900
3. Unless otherwise specified, the provisions in force concerning customs duties shall
   apply.
                                           76
 ---pagebreak---                                          Article 2
1. Imports shall be exempt from the anti-dumping duties imposed by Article 1 (1)
   provided that they are produced and sold for export to the Community by the
   companies listed in paragraph 4 below which have offered undertakings accepted
   by the Commission and provided that the conditions of paragraphs 2, 3 and 4 of
   this Article are met.
2. When the declaration for release for free circulation is presented, exemption from
   the duty shall be conditional upon presentation to the competent Member States'
   customs services of a valid, original production certificate issued by one of the
   companies listed in paragraph 4 below. The production certificate shall conform
   with the requirements for such certificates set out in the undertaking accepted by
   the Commission, the essential elements of which are listed in the Annex to this
   Regulation.
3. The above-mentioned production certificate must be presented within three months
   of its date of issue. The quantities presented to the Member States' customs
   services for import into the Community free of the anti-dumping duty shall not
   exceed those stipulated on the certificate. When quantities stipulated on the
   certificate are exceeded, the excess shall be subject to the duty, and be declared
   under the relevant Taric additional code of Article 1 (2).
                                         77
 ---pagebreak--- 4.    Imports accompanied by a production certificate shall be declared under the
      following Taric additional codes :
                                                                            Taric
                Country                      Product manufacturer         additional
                                                                            Code
         Hungary               Csepel Tubes Co. Ltd.                         8521
         Poland                Huta Batory SA                                8517
                               Huta Andrzej SA                               8518
                               Huta Czestochowa                              8519
                               Huta Jednosc SA                               8520
         Czech Republic        VT Chomutov a.s.                              8507
         Romania               SCArtromSA                                    8508
                               SASilcotubSA                                  8509
                               SCPetrotubSA                                  8514
                               SC Republica SA Trade Company                 8515
         Slovak Republik       Zeleziame Podbrezovâ a.s.                     8516
                                          Article 3
Member States' reports to the Commission pursuant to Article 14 (6) of Regulation (EC)
No 384/96, shall indicate for each release for free circulation, the year and month of
import, the CN, Taric and Taric additional codes, the type of measure, the country of
origin, the quantity, the value, the anti-dumping duty, the Member State of import and,
where appropriate, the serial number of the production certificate.
                                              78
 ---pagebreak---                                          Article 4
 Regulation (EEC) No 1189/93 is repealed.
                                         Article 5
The anti-dumping proceeding against imports of the product concerned originating in
Croatia is hereby terminated.
                                         Article 6
The amounts secured by way of provisional anti-dumping duties imposed pursuant to
Regulation (EC) No 981/97 on imports of the product concerned originating in Russia,
the Czech Republic, Romania and the Slovak Republic shall be released.
                                        Article 7
This Regulation shall enter into force on the day following its publication in the Official
Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
                                                           For the Council
                                            79
 ---pagebreak---                                                 ANNEX
                            Main elements of the production certificate'
 a) The number of the certificate;
 b) Identification showing whether the certificate is an original;
 c) The date of expiry of the certificate;
 d) The following text :
     "Production certificate issued by <the Company> pursuant to Article 2 (2) of the
     Council Regulation (...) for the export to the European Community within TARIC
     additional Code XXXX of certain Seamless Steel Pipes and Tubes."
e) The name and full address of the Company, and possible identification number such
     as national registration number for incorporated companies;
f)   The name and full address of the customer of the Company in the Community
     importing the goods or the name and full address of the unrelated trader outside the
     Community exporting the goods;
g) The number of the Company invoice to which the production certificate relates;
h) The exact description of the goods, including :
          A product description sufficient to identify the Products, which will be identical
          to the product description on the invoice;
    -     CN code;
          Quantity (in metric tonnes).
*   Under the undertaking offered and accepted by the Commission, each box on the certificate will be in
    four languages, the language of the country of the producer, English, French and German.
                                                    r>
 ---pagebreak---  i) The name of the official of the Company responsible for the issue of the certificate
    and the following signed declaration :
    "I, the undersigned, certify that the sale for export to the European Community of the
    goods covered by this certificate is being made within the scope and under the terms
    of the undertaking by <the Company>, and within the permitted volume for anti-
    dumping duty free imports into the Community set out in the undertaking accepted
    by the Commission pursuant to Decision (...).            I declare that the information
    provided in this certificate is complete and correct."
j)  Space for use by the competent authorities Of the Community.
                                              r>
 ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(97) 535 final
                                              DOCUMENTS
EN                                                                    02 n
                                    Catalogue number : CB-CO-97-551-EN-C
                                                             ISBN 92-78-26088-6
Office for Official Publications of the European Communities
L-2985 Luxembourg
                                             £1