CELEX: 51997PC0485
Language: en
Date: 1997-10-02
Title: Proposal for a Council Regulation (EC) imposing a definitive anti-dumping duty on imports of woven polyolefin sacks originating in the People's Republic of China

COMMISSION OF THE EUROPEAN COMMUNITIES
                                              Brussels, 02.10.1997
                                              COM(97) 485 final
                                              97/ 0246 (ACC)
                               Proposal for a
                     COUNCIL REGULATION (EC)
imposing a definitive anti-dumping duty on imports of woven polyolefin sacks
                originating in the People's Republic of China
                      (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                             A
                              Explanatory Memorandum
  Subject:       Proposed Council Regulation imposing a definitive anti-dumping
                 duty on imports of woven polyolefin sacks originating in the People's
                 Republic of China
 By Council Regulation (EEC) 3308/90 the Council imposed definitive anti-dumping
 measures against imports of woven polyolefin sacks originating in the People's Republic
 of China. The measures were increased in 1993, following a finding that the duty had-
 been borne by the Chinese exporters, by Council Regulation (EEC) 2346/93. A review
 of the measures was announced by means of a Notice of Initiation published in the
 Official Journal of the European Communities No C 271 of 17 October 1995. All
 interested parties were given the opportunity to make themselves known and to submit
 their comments.
No Chinese exporter co-operated with the review.
On-the-spot investigations were carried out at the premises of two importers in the
Community which agreed to cooperate and of the Community producers making up the
Community industry. An on-the-spot investigation was also carried out at the premises
of a producer in Turkey, which was chosen as analogue country in view of China's status
as a non-market economy. The findings of the investigation showed the existence of
dumping and the threat of resultant injury to the Community industry if the existing
measures were allowed to lapse.
The investigation, taking into account all the interests involved, led to the conclusion that
it is in the Community interest to impose definitive anti-dumping measures, amended
according to the findings of the review.
It is consequently proposed that the Council adopt the attached proposal for a Regulation.
 ---pagebreak---                                                        ^
                               COUNCIL REGULATION (EC) No               191
                                                    of....
        imposing a definitive anti-dumping duty on imports of woven polyolefin sacks
                               originating in the People's Republic of China
  THE COUNCIL OF THE EUROPEAN UNION,
  Having regard to the Treaty establishing the European Community,
  Having regard to Council Regulation (EC) No 384/96 of 22 December 19^5 on
  protection against dumped imports from countries not members of the European
  Community1, as amended by Regulation (EC) No 2331/96 of 2 December 19962, and in
  particular Articles 9, 11 and 23 thereof,
  Having regard to the proposal submitted by the Commission after consulting the
  Advisory Committee,
  Whereas:
                                            A. PROCEDURE
                                         1.     Measures in force
 (1)       By Regulation (EEC) No 3308/903, the Council imposed a definitive anti-
           dumping duty of 43.4% on imports of woven polyolefin sacks originating in the
           People's Republic of China.
1
         O J N o L 5 6 , 6.3.1996, p. 1.
2
         OJNoL317, 6.12.1996, p. 1
3
         OJNoL318, 17.11.1990, p.2.
 ---pagebreak---                                            2
                                          4
       By Regulation (EEC) No 2346/93 , the Council amended Regulation (EEC) No
       3308/90 and imposed an increased duty of 85.7% following a finding that the
       duty had been borne by the exporters concerned.
                              2.      Request for a review
 (2)  Following the publication in April 1995, of a notice5 of the impending expiry of
      the measures in force, the Commission received a request for a review lodged by
      the European Association for Textile Polyolefins (EATP) on behalf of eight
      Community producers allegedly representing à major proportion^of the total
      production of the product concerned in the European Community. The request
      contained evidence of dumping of the product originating in China, and of-
      renewed material injury likely to result in the event of expiry of the existing
      measures. This evidence was considered sufficient to justify the opening of a
      review investigation.
 (3)  On 17 October 1995, the Commission announced by a notice published in the
      Official Journal of the European Communities6 (hereinafter referred to as the
      "Notice of Initiation") the initiation of a review of Regulation (EEC) No
      3308/90 and commenced an investigation pursuant to Articles 11(2) and 11(3)
      of Council Regulation (EC) No 3283/947 which was replaced during the
      investigation by Council Regulation (EC) No 384/96 (hereinafter referred to as
      "the basic Regulation").
                                   3.    Investigation
(4)   The Commission officially advised the exporting producers and importers
      known to be concerned as well as their associations, the representatives of the
4
     OJNo L 215, 25.8.1993, p.l.
5
     OJ No C 95, 19.4.1995, p.7.
6
     OJNo C 271, 17.10.1995., p.3.
7
     OJ No L 349, 31.12.1994, p.l.
 ---pagebreak---                                           3
     exporting country and the complainant Community producers of the initiation of
     the review.
(5)  Interested parties were given the opportunity to make their views known in
     writing and to request a hearing within the time limit set in the Notice of
     Initiation.
     A number of importers and one organisation representing such importers made
     their views known in writing. The Commission sent questionnaires to all parties
     known to be concerned and received replies', from four CommunSy producers
     and two importers in the Community.
(6)  The investigation was hampered by the fact that no Chinese exporters replied to
     the Commission's questionnaire or made their views known in writing.
 (7) The Commission sought and verified all information they deemed necessary for
     the purposes of a determination of dumping and injury and carried out
     investigations at the premises of the following companies:
            (a) Complainant Community producers
                   Condepols S.A., Valencia (Spain),
                   Cotesi, Carvalhos (Portugal),
                   Saint Frères Emballage S.A., Paris (France),
                   Thrace Plastics Co., Athens (Greece);
            (b) Producer/exporter in the analogue country
                   Debant Plastik, Istanbul, Turkey
            (c) Importers
                   Blockx, Arendonk, Belgium,
                   Interjute, Hulst, Netherlands
 ---pagebreak---                                                     4
 (8)        The investigation of dumping covered the period from 1 January 1995 "to
            30 September 1995 .(hereinafter referred to as "the investigation period"). The
            examination of injury covered the period from 1 January 1992 to 30 Septembei
            1995.
       B.        PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT
                              1.        Product under consideration
                                                           V     • <•                   ',             'f
(9)        The product under consideration is woven sacks and bags of a kind used for
           packaging of goods not knitted or crocheted, obtained from a polyethylene or
           polypropylene strip or the like of woven fabrics weighing 120 gr./m2 or less.
           There are many different types of sacks and bags manufactured from either raw
           material but they all have similar physical, chemical                        and    technical
           characteristics. The sacks and bags are used for packaging, inter alia, industrial
           and agricultural products.
           Since the basic characteristics of the sacks and bags, whether physical, chemical
           or technical, and their use, are similar, it was considered that this review should
           cover all such sacks and bags. In particular, it was considered that sacks and
           bags from a fabric woven from strips of any width, and from fabric laminated to
           any extent, should be covered by the scope of the investigation.
(10)       The product as described above normally falls now within CN codes 6305 32 81
           and 6305 33 91 in accordance with Regulation (EC) No 2448/95». In the
           framework of the current review, however, the Commission became aware that
           the sacks and bags concerned can, if made from a fabric which is either woven
         Commission Regulation (EC) No 2448/95 of 10 October 1995 amending Annex I to Council
     Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs
     Tariff (OJ L 259, 30.10.1995, p. 1). The proceeding was opened for products falling within CN code
     6305 3191, which the Regulation in question subsequently replaced with the two CN-codes given.
 ---pagebreak---                                           5
     from a strip wider than 5 mm, or laminated on both sides to an extent visible" to
     the naked eye, be classified under CN codes 3923 21 00, 3923 29 10 or 3923 29
     90 while still meeting the product description given above.
                               2.       Like product
(11) The investigation showed that sacks and bags exported to the Community by
     Chinese companies constituted a like product to those produced in Turkey,
     which was eventually chosen as analogue country in view of China being
     considered a non-market economy country (see recitals (14) and (15) below).
     Similarly, the sacks and bags manufactured by the Community industry and sold
     on the Community market and those exported to the Community from China-
     were alike in all respects as regards their physical, chemical and technical
     characteristics. It was found that the printing and hemming of certain bags
     referred to in recital (36) did not render them different from any other bags. It
     was also established that the sacks and bags had the same end-uses and
     competed with each other.
(12) It was therefore concluded that, within the meaning of Article 1.(4) of the basic
     Regulation, the sacks and bags produced and sold in Turkey constituted a like
     product to those exported from China to the Community and to those produced
     and sold by the Community industry.
C.   LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING
                           1.       Preliminary remarks
(13) The aim of the dumping investigation was to consider whether or not it could be
     determined that expiry of measures would be likely to lead to a continuation or
     recurrence of dumping, in particular by examining whether dumping continued
     to take place.
 ---pagebreak---                              2.       Analogue country
(14)  As the People's Republic of China is considered a non-market economy country,
      the Commission announced at the initiation of the review that Turkey was
      envisaged as an appropriate market economy third country (hereinafter the
      analogue country) for the purpose of establishing normal value, in accordance
      with Article 2(7) of the basic Regulation.
 (15) All interested parties were given the opportunity to comment on me choice of
      analogue country.      The Chinese exporters did not submit any comments
      concerning this choice. One importer and one European traders' association-
      objected to it on the grounds that the Chinese and the Turkish macro-economic
      situations were not comparable and that Turkish capacity was not sufficient.
      The importer proposed Indonesia as an alternative analogue country.       This
      proposal was rejected as it was established in an anti-dumping proceeding
      concerning the same product originating inter alia in Indonesia that the latter
      market was not governed by normal market forces. In these circumstances, and
      given the fact that the Turkish and Chinese producers use the same machines
      and the same raw materials, that several producers manufacturing the like
      product in representative quantities compete on the Turkish market and that
      Turkish capacity is currently sufficient, Turkey was found to be an appropriate
      choice of analogue country. The Commission received co-operation from one
      Turkish producer of the like product.
                                3.      Normal value
(16)  As explained in recital (15), the Commission sought and verified from 'one
      producer in the analogue country all the information they deemed necessary for
      the determination of normal value.
(17)  As far as this determination is concerned, the Commission established whether
      the co-operating producer's domestic sales in the analogue country were
      representative in accordance with Article 2(2) of the basic Regulation.
 ---pagebreak---                                            7
     The investigation established that the total domestic sales of the co-opefatihg
     Turkish producer represented by volume less than 5% of the Chinese exports of
     the like product to the Community.
(18) As the volume of domestic sales of the like product was not representative and
      as there were no other domestic sales by a co-operating producer, normal value
     was constructed. In accordance with Article 2(3) of the basic Regulation, the
     constructed « normal value was based on the co-operating Turkish producer's
     average costs of production per type of bag. In accordance with Article 2(6) of
     the basic Regulation, a reasonable amount for selling, general and -administrative
     costs and for profits was added to these costs. The former was established on
     the basis of actual data pertaining to the production and domestic sales of the -
     like product made by the co-operating Turkish producer. With regard to the
     profit margin, given the high proportion of sales at a loss of the product
     concerned made by the co-operating producer, the profit margin was based, in
     accordance with Article 2(6)(c) of the basic Regulation, on the information
     obtained from other Turkish producers on the profit normally realised on sales
     of the like product in Turkey.
(19) For the purpose of the investigation the product was classified by type (simple,
     lined and laminated). The different costs of production were calculated
     separately for the three different types of bags (simple, laminated and lined).
                               4.        Export Price
(20) The exporter's questionnaire was sent to ten alleged producers in China but none
     of them replied.
(21) Chinese exports of the product concerned were made to independent importers
     in the Community. The Commission obtained co-operation from two of the
     importers of the like products. It was considered that the prices reported by
     these importers were the best evidence available for the purpose of establishing
 ---pagebreak---                                            8
      the export price because the volume of these transactions represenfed ~ a
      substantial proportion of the imports of the product from China and allowed a
      calculation per type of bag.
(22)  The export prices were therefore determined on the basis of prices actually paid
      by the two importers for the product concerned during the investigation period.
      These transactions concerned two types of the product concerned, i.e. simple
      and lined bags, which were considered representative of Chinese exports. This
      was because the transaction concerned formed a large proportion of the Chinese
      exports to the Community, since the co-operating importers represent
      themselves a very large proportion of all Chinese imports of the like products.
                                 5.       Comparison
(23)  In accordance with Article 2(10) and (11) of the basic Regulation, the
      constructed normal value by product type was compared to the weighted average
      export price by product type on a free on board basis and at the same level of
      trade. To calculate the constructed normal value free on board Turkish port, the
      inland freight cost to the closest port was added to the constructed normal value
      established above in order to make a fair comparison with the Chinese export
      price which was reported FOB Shanghai.
(24). As set out above, the Chinese export prices obtained from the two co-operating
      importers for the period of investigation concerned only simple and lined bags.
      The Commission therefore limited its comparison to these two types.
 ---pagebreak---                                 6.      Dumping margin
(25)   The comparison of the normal value with the export price showed the existence
       of dumping, the dumping margin being equal to the amount by which the
       normal value exceeded the price for export to the Community.
(26)   The weighted average dumping margin expressed as a percentage of the free-at-
       Community frontier price, duty unpaid, is 102,4%.
                         D.        COMMUNITY INDUSTRY
(27)   The Commission considered whether the Community producers which
       supported the request for a review and cooperated with the investigation
       represented a major proportion of total Community production, as provided for
       in Article 4 (1) of the basic Regulation. In this respect it was found that the four
       producers who co-operated with the review manufactured a major share (at least
       65%) of the Community's total output. It was therefore concluded that the four
       co-operating producers could be considered to constitute the "Community
       industry" for the purposes of the investigation.
  E.    LIKELIHOOD OF RECURRENCE OR CONTINUATION OF INJURY
                             1.       Preliminary remarks
(28)   The aims of the injury investigation were to consider whether or not it could be
       determined that expiry of measures would be likely to lead to a continuation or
       recurrence of injury, in accordance with Article 11(2) of the basic Regulation,
       and whether the measures were either no longer necessary or were no longer
       sufficient to counteract the dumping which is causing injury, in accordance with
     . Article 11(3).
 ---pagebreak---                                          10
                        2.        Community consumption
(29) Apparent Community consumption on the market for free circulation (based on
     questionnaire replies, Eurostat data and market information available to the
     Commission) increased from about 33,000 tonnes in 1992 to about 44,000
     tonnes in 1995, an increase of about 33%.
(30) It should be noted that sacks and bags are imported under different import
     procedures. Anti-dumping and conventional duties are applicable only to
     imports for free circulation.
           3.       Volume and market share of the dumped imports
(31) The quantities of the product concerned imported from China for free circulation
     decreased from 3,884 tonnes in 1992 to 2,672 tonnes in 1995 The market share
     of these imports (calculated on the basis of the apparent consumption figures in
     recital (29) above) fell from 11.7% in 1992 to 6.1% in 1995.
(32) It can be noted that while the volumes of Chinese imports for free circulation
     have fallen in recent years, they retain a significant market share. It can be
     considered that their ability to undercut Community producers on the free
     circulation market, even with the current measures in place (see recital (37)
     below), has contributed to downward pressure on prices on the Community
     market.
 ---pagebreak---                                             11
                      4.         Prices of the dumped imports
(33) The lack of co-operation from the Chinese exporters meant that the export price
     for the undercutting calculation was taken from the actual transactions (almost
     entirely for temporary import) of the two co-operating importers. These figures
     constituted the best information available, in particular since they allowed a
     price comparison by type of sack or bag (simple, lined, laminated etc.).
(34) The Commission services compared average prices by type of sack or bag on the
     basis of sales to the first independent importer, in the case of the imports, and to
     the first independent customer, in the case of the Community producers.
(35) Community producers sell almost entirely direct to end users. In the small
     number of cases where they sold to distributors, no appreciable price difference
     was observed. The import transactions, on the other hand, were all to wholesale
     importers with associated warehousing costs. In order to take account of this,
     the Commission adjusted the average Community producers' prices downwards
     by an appropriate adjustment for the differences in the level of trade.
(36) All the import transactions observed were either (a) of simple sacks and bags or
     (b) of sacks and bags lined with a polyethylene liner. All the lined sacks and
     bags and all but one transaction of simple sacks and bags were hemmed at the
     top of the sack or bag and most were unprinted (printing being undertaken by
     the importer). By contrast most sales by Community producers were of printed,
     unhemmed sacks or bags. The selling prices of Community producers were
     therefore adjusted, where appropriate, by the deduction of printing costs and the
 ---pagebreak---                                            12
      costs of adding a hem. The Commission then calculated an average Communrty
      producers' price for each type of sack or bag imported, weighted by sales by the
      four co-operating producers of the type in question.
(37)  Once these adjusted average prices per type of sack or bag were arrived at, a
      calculation was carried out in order to establish the level of actual undercutting,
      with the current measures in force, on the market in sacks and bags for free
      circulation. - The import prices were increased by 92.9% (7.2% conventional
      plus 85.7% AD duty) and compared with the adjusted Community producers'
      prices. It should be noted that the import transactions were for temr&rary import
      and would not therefore have incurred duty, but in the absence of verified
      transactions intended for free circulation this was the best information available. -
      The result was undercutting margins of 4.7% for simple hemmed sacks and bags
      and 28.6% for lined hemmed sacks and bags, with an average of 15.3%
      (expressed as percentages of the adjusted EC producers' prices).
               5.       Factors relating to the Community industry
(38) .In the following paragraphs, concerning the change in certain key factors
      between 1992 and the investigation period, figures for the investigation period
      have been adjusted to make them comparable with full year figures since the
      period was of nine months only.
      Production
(39)  Production by the Community industry fell from 9,500 tonnes in 1992 to a
      comparable figure of 8,900 tonnes in the investigation period, a fall of 6%.
 ---pagebreak---                                          13
     Sales volume and market share
(40) The Community industry's sales by volume on the Community market fell by
      13%, from approximately 9,600 tonnes in 1992 to a comparable, figure of
     approximately 8,400 tonnes in the investigation period. This represented a fall
     in market share from 30.2% in 1992 to 19.1% in the investigation period.
     Sales value *
(41) The Community industry's sales by value on the Community markél fell by 9%,
     from approximately 23.7 million ECU in 1992 to a comparable figure of
     approximately 21.6 million ECU in the investigation period.
     Profitability
(42) Profitability of the Community industry for the product concerned declined,
     with losses increasing from 0.14% of sales in 1992 to 1.80% in the investigation
     period.
     Conclusion
(43) These findings confirm that the Community industry is in a weakened state.
     This would be exacerbated in the event of undercutting on the scale which
     would arise in the event of the expiry of measures against imports from China.
        6.         Price undercutting in the event of expiry of measures
(44) A second undercutting calculation was undertaken to establish the threatened
     level of undercutting in the event of expiry of measures. The methodology was
     the same as for that described in recitals (34) to (37) above, except that to the
     import prices was added only the 7.2% conventional duty and not the current
 ---pagebreak---                                            14
      anti-dumping duty of 85.7%. In this case undercutting margins"resulted "of
      47.0% for simple hemmed sacks and bags, 60.2% for lined hemmed sacks and
      bags and 52.9% on average, expressed as percentages of the adjusted EC
      producers'prices.
                                 7.  x    Conclusion
(45)  Although imports from China for free circulation have declined, they remain
      significant compared to production by the Community industry.               In this
      economic sector it can be assumed that the Chinese exporters would have little
      or no difficulty in increasing their exports back to previous levels if thé
      economic conditions favoured this. • •.
 (46) Even with the current measures in place, imports from China are able to
      undercut EC producers on the "free circulation" market for sacks and bags.
      Were measures to expire the level of this undercutting would be dramatically
      increased, providing Chinese producers with a strong incentive to increase their
      exports to the Community and creating further downward pressure on
      Community producers' prices.
(47)  The sacks and bags concerned are subject to a quantitative limit (textiles
      category 33). However, the limit currently provides no significant constraint on
      imports (30% utilisation in 1995), in particular since the condition that it should
      apply even to sacks and bags intended for reexport outside the Community does
      not appear to be being rigidly applied.
(48)  It is therefore concluded that expiry of the measures would be likely to lead to a
      recurrence of injury.
 ---pagebreak---                                           15
 (49)  A further exercise, in accordance with Article 11(3) of the basic Regulation, was
       therefore carried out to determine whether the current measures were sufficient
       to counteract the dumping which is causing injury. This is covered in recitals
       (62) to (64) below.
                        F.        COMMUNITY INTEREST
                                 1.      Introduction
(50)  No interested parties came forward in the course of the review other than
      producers and importers (see recital (5)). In particular, no users of sacks and
      bags came forward, which can be taken as a sign that the effect of the measures
      on their interests was limited. Nevertheless, an assessment as set out below was
      done of the wider Community interests involved.
                  2.        Price and quantity effects of measures
(51)  Since imposition of measures in 1990, imports of sacks and bags for free
      circulation from China have fallen.         In that time apparent Community
      consumption has increased, so it can be assumed that purchasers have used other
      sources of supply rather than bought fewer sacks and bags. It can be concluded,
      in the absence of any representation or indication to the contrary, that the
      measures have not resulted in a shortage of supply.
(52)  The price before duty of imports from China fell until 1994 but recovered ' -»
      1995. Assessment on the basis of EUROSTAT statistics suggests that duty paid,
      imports for free circulation from China were some 70% more expensive in 1995
      than in 1990 before the imposition of measures.
(53)  Even at the proposed new rates of duty, Chinese prices will undercut
      Community producers' prices, since the new rate of duty is below the level of
      undercutting which would occur in the event of expiry of measures. EC demand
 ---pagebreak---                                            16
     is apparently increasing. It can be considered unlikely, even after the imposition
     of the proposed new measures, that the Chinese exporters will reduce their duty
     free price or will be obliged to reduce their sales volumes on the market for free
     circulation by comparison with the current situation. It can reasonably be
     assumed that the price of Chinese imports on the market, for free circulation
     (after duties are paid) will rise marginally (less than 10%) as a result of the
     proposed new measures.
                  3.       Interests of the Community industry
                                                                          f
(54) Current turnover of the cooperating EC companies is currently of the order of 23
     million ECU and employment of 650. people (scaled up to all EC producers,
     estimates of 35 million ECU and 1200 employees).
(55) The investigation has shown that the Community industry has made efforts to
     rationalise and to switch to production of more specialised types of sacks and
     bags (such as Flexible Intermediate Bulk Containers), indicating that the
     industry can remain viable. The significant investments made in order to
     achieve this rationalisation would be^wasted if the industry concerned is not
     protected against unfair and injurious imports. Continuation of Anti-Dumping
     measures would serve to put the EC industry on a level playing field with
     imports from China by counteracting unfair competitive practices.
                             4.        Interests of users
(56) The sacks and bags concerned are an industrial product whose main use is to
     package, inter alia, agricultural and chemical products.
 ---pagebreak---                                            17
 (57)  By definition the competitiveness in third country markets of users in the
       Community ofthe sacks and bags (such as agricultural exporters) should not be
       affected by measures since sacks and bags for reexport after filling will not be
       subject to the duty. Measures could however affect the competitiveness of users
       on the EC market vis-à-vis third country competitors. However, for the reasons
       given below this effect is considered to be minimal.
(58)   In order to assess the likely impact on users (in the absence of any submissions
       or complaints by them in the course of the investigation), the likely cost
       increases as a result of measures were expressed as proportions of'the value of
      the likely contents of a sack or bag (agricultural commodities etc.), in order to
      estimate the percentage increase in costs. This analysis showed that the cost
      increase for the large majority of users of Chinese sacks would be ofthe order of
      0.5% of this value. Since the price of the contents is only a part of users' total
      costs, the cost increase expressed as a proportion of total costs would be lower
      still.
                            5.       Interests of importers
(59)  Only two importers cooperated with the investigation out of more than 40
      contacted by the Commission, and submissions were received from one
      association of importers.
(60)  It should be noted that the proposed amended measures are not expected to
      reduce quantities of Chinese imports. Furthermore, importers are able to switch
      to other sources of supply, and are in any case largely involved in handling
      temporary imports which will be unaffected by the new measures.          In these
      circumstances the impact of the proposed limited duty increase on importers is
      not expected to be substantial.
 ---pagebreak---                                            18
                                 6.        Conclusion
(61) The Commission weighed up all the factors outlined above and considered that
     there were no compelling reasons not to maintain measures in force, amended
     according to the outcome ofthe review, in order to restore a competitive regime
     of fair pricing and to remove the threat of injury to the Community industry
     which would result if measures were allowed to expire.
                        G. ANTI-DUMPING MEASURES
                          1.        Injury elimination level
(62) In the course of the injury investigation it became clear that the mix of type of
     sacks and bags imported was different from that produced by the Community
     producers. No laminated sacks or bags, for example, were observed among the
     Chinese imports whereas they represent an important part of the production of
     most Community producers. It was found that simple -sacks and bags (the most
     imported kind) were much less profitable for Community producers than other
     types.
(63) A calculation was therefore made on the basis of cost of production per type of
     sack or bag. In the case of some producers these costs had to be constructed,
     either because the company's standard costings by type were found not to be in
     line with their verified total costs or because no such standard costings existed.
(64) To the costs thus arrived at an adjustment was made to take account of
     differences in the level of trade between the imports and the sales of Community
     producers (as in recital (35) above) and a profit margin was added. Comparison
     was made by type with the CIF prices ofthe observed imports, adjusted for the
     7.2% conventional duty. The weighted average margin thus arrived at,
 ---pagebreak---                                               19
         expressed as proportion of the CIF value of the imports and representing the
         threat of underselling in the event of expiry of measures, and therefore the level
         of duty required to eliminate injury, was 120.9%.
         It was therefore determined that the current measures of 85.7% were not
         sufficient to counteract the dumping which is causing injury.
                                 2.       Definitive duties '
(65)     Since the result of the comparison sftows higher injury margfns than the
         dumping margin established, and since the new dumping margin was higher
         than the level of the duty subject to review, the duty should be based on the
         dumping margin found in accordance with Article 9(4) ofthe Basic Regulation.
         On the basis of the above the level of anti-dumping duty should be set at
         102.4%,
HAS ADOPTED THIS REGULATION:
                                          Article 1
1.      A definitive anti-dumping duty is hereby imposed on imports of woven sacks and
bags of a kind used for packaging of goods, not knitted or crocheted, obtained from a
polyethylene or polypropylene strip or the like, of woven fabrics weighing 120 gr./m2 or
less and originating in the People's Republic of China, falling within the following CN
codes:
            CN code                    Tarie code
            6305 32 81                 -
           6305 33 91                  -
           ex3923 21(T0                3923 2100 10
           ex3923 29 10                3923 29 10 10
           ex3923 29 90                3923 29 90 10
 ---pagebreak---                                               20
 2.      The rate of the definitive anti-dumping duty applicable to the net, free-at-
 Community-frontier price, before duty, shall be 102.4%.
 3.      Unless otherwise specified, the provisions in force concerning customs duties
 shall apply.
                      •   •               Article 2
Regulation (EEC) No 3308/90 as amended by Regulation (EEC) No 2346/93 is hereby
repealed.
                                          Article 3
This Regulation shall enter into force on the day following its publication in the Official
Journal of the European Communities.
It shall expire five years after its entry into force, save that should any review of the
measures adopted by this Regulation be pending on that date, it shall remain in force until
that review is concluded.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
                                              For the Council
 ---pagebreak---                                            o2,
                                                                  ISSN 0254-1475
                                                            COM(97) 485 final
                                              DOCUMENTS
EN                                                                    02 11
                                    Catalogue number : CB-CO-97-495-EN-C
                                                             ISBN 92-78-25063-5
Office for Official Publications of the European Communities
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