CELEX: 51994PC0027
Language: en
Date: 1994-02-04
Title: Proposal for a COUNCIL REGULATION (EC) imposing definitive anti-dumping duties on imports of fluorspar originating in the People' s Republic of China and collecting definitively the provisional anti-dumping duty

IL:
       COMMISSION OF THE EUROPEAN COMV1UNITIES
                                                 C0MC94) 27 final
                                                 Brussels, 04.02.1994
    #
                                   Proposal for a
                              COUNCIL REGULATION (EC)
           imposing definitive anti-dumping duties on imports of fluorspar
                  originating in the People's Republic of china and
                       collecting definitively the provisional
                                  anti-dumping duty
                           (presented by the Commission)
    mm
 ---pagebreak---                                     -.A-
               E X P L A N A T O R Y     M E M O R A N D U M
(1) Commission Regulation (EEC) N" 2463/93*) imposed a provisional
    anti-dumping duty on imports of fluorspar originating in the
    People's Republic of China.
(2) council Regulation (EC) N* 3529/932) extended this duty for a
    period of two months. This provisional duty is therefore due to
    expire on 7 March 1994.
(3) The Chinese exporters requested and were granted a hearing and made
    their views known in writing, as did other interested parties.
(4) Following publication of the provisional duty, in view of the
    difficulties encountered by some Customs Authorities in the
    interpretation of the description of the product concerned by the
    proceeding, the Commission has amended Regulation (EEC) N* 2463/93
    by commission Regulation (EC) N* 3421/933) in order to clarify the
    description of the product which subsequently is defined as
    follows :
    "fluorspar presented in filter cake form or in powder form, falling
    within CN Code ex 2529 21 00 (Taric Code 2529 21 00 10) and CN Code
    2529 22 00 (Taric Code 2529 22 00 10) originating in the People's
    Republic of China".
(5) With regard to the comparison between normal value and export
    price, the Commission made the comparison for its provisional
    findings on an ex works basis for the normal value and on a FOB
    Chinese    harbour   basis    for  the   export    price. After due
    consideration of the arguments raised by the parties, the
    Commission proposes, for the purpose of definitive duty Regulation,
    to make the above comparison on an ex-FOB basis.
(6) As far as other points in the provisional measures are concerned,
    particularly with regard to injury and causality, various arguments
    were put forward by the Chinese exporters as to why definitive
    measures should not be imposed.
    These arguments are discussed in detail in the attached regulation
    and the Commission has proposed that definitive anti-dumping
    measures should be imposed.
(7) This measure has the form of an anti-dumping duty equal to the
    difference between a minimum price of ECU 113.50 per tonne (dry net
    weight) and the net free at Community frontier price before
    customers clearance.
1) O.J. N # L 226, 7.9.1993, p. 3
2) O.J. N* L 321, 23.12.1993, p. 1
3) O.J. N # L 312, 15.12.1993, p. 5
 ---pagebreak---                                       -AC3L-
                     C O m C H . KEGOUkTIOH (EC) M4
                            of
    imposing definitive anti-dumping duties on imports of fluorspar
            originating in the People's Republic of China and
                 collecting definitively the provisional
                                  anti-dumping duty
THE COUNCIL OF THE EUROPEAN UNION
Having regard to the Treaty establishing the European Cnanmrmity,
Having regard to Council Regulation (EEC) N* 2423/88 of 11 July 1988 on
protection   against    dumped     or subsidised   imports  from countries  not
members  of   the    European      Economic   Community(*)  and  in  particular
Article 12 thereof.
Having  regard   to    the     proposal   submitted  by  the  Commission  after
                  •»
consultation within the Advisory Committee as provided for by the above
Regulation,
Whereas:
(1) O.J. »• I» 205, 2.8.1988, p. 1
 ---pagebreak---                                      - 2 -
                           A. Provisional measures
(1)  By Regulation    (EEC) N* 2463/93(2) as amended by Regulation (EC)
     N* 3421/93< 3 ), the Commission imposed a provisional anti-dumping
     duty on imports of       fluorspar, in filter cake or powder         form,
     falling within CN Code ex 2529 21 00 (Taric code 2529 21 00 10)
     and CN Code ex 2529 22 00 (Taric code 2529 22 00 10), originating
     in the People's Republic of China.
     The   Council   by   Regulation     (EC)  N"   3529/93<4)   extended   the
     validity of this duty for a period not exceeding two months.
                           B. Subsequent procedure
(2)  Subsequent to the imposition of the provisional anti-dumping duty,
     the   interested    parties   who    so   requested,   were   granted   an
     opportunity   to   be  heard   by   the  commission.   Certain  of   these
     parties also presented written submission making known their views
     on the findings.
(3)  Upon request, the parties were informed of the essential facts and
     considerations on the basis of which it was intended to recommend
     the   imposition    of   definitive    anti-dumping   measures   and   the
     definitive collection of amounts secured by way of provisional
     duty.
     They    were   also    granted    a   period   within   which    to   make
     representations subsequent to the disclosure.
(2) O.J. N* L 226, 7.9.1993, p. 3
(3) O.J. N # L 312, 15.12.1993, p. 5
(4) O.J. N* L 321, 23.12.1993, p. 1
 ---pagebreak---                                         - 3 -
(4)   The parties' comments were considered and the Commission modified
      its conclusions where it was deemed to be justified.
( 5 ) Because    of   the    complexity   of   the  data   examined   and   of   the
      difficulties     faced    in   selecting   the   reference    country,    the
      investigation     could    not  be   concluded   within    the  time   limit
      provided for in Article 7(9)(a) of Regulation (EEC) N* 2423/88,
      hereafter referred to as the Basic Regulation.
              c. Product under investigation and like product
(6)   Subsequent to      the publication     of   Regulation   (EEC) N*    2463/93
      (hereinafter referred to as the Provisional Duty Regulation), the
      definition    of   the   product was    amended   by   Regulation   (EC) N*
      3421/93.
      No comments were received by the commission in respect of this
      amendment and therefore this product definition is confirmed by
      the Council for definitive determination.
(7)   As regards the definition of like product within the meaning of
      Article   2(12)     of   the   Basic   Regulation,    the   Commission    has
      established    in    recitals    10  and   14  of  the    Provisional    Duty
      Regulation, that fluorspar originating in China, in South Africa -
      selected as a reference country - and in the European Community,
      has the same chemical and physical characteristics, the same final
      application and is fully interchangeable, irrespective of origin.
      In the absence of new arguments submitted by the parties, the
      Council confirms the conclusions of the Commission as set out in
      recital 10 and 11 of the Provisional Duty Regulation.
 ---pagebreak---                                       - 4 -
                                   D. Dumping
                                1. Normal value
(8) In the Provisional Duty Regulation, the Commission concluded that
    South   Africa    was   an    appropriate     reference    country   for   the
    determination    of the normal value of Chinese imports              into the
    Community.
    Therefore,    normal    value    was   established     in   accordance    with
    Article 2(5)(a)(i) of the Basic Regulation on the basis of the
    prices   of  fluorspar     sold by    a South African       producer   on  its
    domestic market, for the reasons explained in recitals 14 and 15
    of the Provisional Duty Regulation.
    As  the   parties    concerned     by   the   proceeding    have   raised   no
    objection to this choice and to the method of the determination of
    the normal value, the Council confirms the Commission's findings
    as  set   out   in  recitals     14   and   15   of  the   Provisional    Duty
    Regulation.
(9) In the provisional findings, recital 13, the Commission had also
    considered   that,    in view of      the   fact   that  the   South   African
    producer has a more difficult access to raw materials, a downward
    adjustment of the selling prices in South Africa was necessary for
    the   establishment     of   the   normal    value   in   a  reasonable    and
    appropriate manner, in accordance with Article 2(5) of the Basic
    Regulation.
 ---pagebreak---                                       - 5 -
(10) The complainants claimed that the above-mentioned adjustment is
     not in line with the Basic Regulation for the following legal and
     technical reasons:
     (1)     The   downward     adjustment     implies    the    fact   that    the
             Commission    has   taken    costs   related    to   the   non-market
             economy   country    into consideration, which        in   accordance
             with   Article    2(5)   of   the   Basic   Regulation     should   be
             avoided;
     (ii)    The Commission     has taken into account only           a  selective
             choice   of   natural    advantages     and   has  not    taken   into
             consideration      many     other     natural      advantages      and
             disadvantages,     in    addition    to   easier    access    to   raw
             materials.
     The   Commission     cannot    accept    these    arguments.    Indeed,    the
     consideration     of   natural     advantages,     as   described     in   the
     Provisional Duty Regulation, does not infer taking into account
     any   costs   in   the   non-market     economy    country.    The   downward
     adjustment is restricted to eliminating, in the determination of
     the normal value in the reference country, certain steps of the
     production process, which are necessary in South Africa and are
     not necessary in the People's Republic of China.             The consequence
     of this elimination being that the relevant costs, as established
     in   the   reference    country,     should   not    be   included    in   the
     determination of the normal value.
 ---pagebreak---                                    - 6 -
     In this respect, the Commission believes that the purpose of this
     adjustment,   based   on  the  natural   advantage   in   the   exporting
     country, is that of establishing the normal value in the reference
     country  in   an   appropriate   and   not   unreasonable    manner,   in
     accordance with Article 2(5) of the Basic Regulation.
(11) As to the technical arguments submitted by the complainants in
     this respect, the Commission considers that these elements are not
     related  to    the   natural  advantages    enjoyed   by    the   Chinese
     production,   in    addition,    all    the    other    advantages     or
     disadvantages   referred   to by   the  complainants    have   only  been
     supported by allegations without any evidence being supplied.          In
     contrast to the above, it should be stressed that the adjustment
     made to the normal value was supported by data provided by the
     South African    producer in the course of the verification visit
     showing that certain steps of the production process carried out
     in South Africa are not necessary in China due to easier access to
     the main raw material as a result of a higher fluorspar content in
     the mined material.
(12) The Commission considers that the arguments submitted are not duly
     substantiated and therefore confirms the determinations set out in
     the Provisional Duty Regulation.
     The Council confirms the above conclusions of the Commission.
 ---pagebreak---                                  - 7 -
                            2. Export price
(13) Due to the insufficient cooperation of the Chinese producers, and
     as  set  out   in recitals  16  to   18 of  the  Provisional  Duty
     Regulation,   the  export  price   was  determined  on   the  best
     information available, in accordance with Article 7(7) (b) of the
     Basic Regulation.  In the specific circumstances, this information
     was considered to be the data contained in Eurostat for Chinese
     exports under CN Code ex 2529 22 00, which shows an average CIF
     price at the Community frontier of ECU 82.5 per tonne.
     As the parties have not contested this determination, the council
     confirms this conclusion.
                             3. Comparison
(14) For purposes of provisional determination, normal value on an ex-
     works basis was compared with a FOB Chinese port export price.
(15) The complainants have objected to this methodology on the basis
     that this comparison is not at the same commercial stage and that
     as a consequence the transport costs which are necessary in South
     Africa to convey the product from the factory to the port have not
     been taken into account.
 ---pagebreak---                                  - 8 -
The exporters insisted on a comparison made on a FOB level for the
export price in the non-market economy country and on an ex-works
basis for the normal value in the reference country, arguing that
in case of    a non-market     economy    country, the premises     of the
exporters correspond to the borders of the country.
The Commission, on considering all the arguments brought forward,
accepts that, for purposes of comparison, the normal value and
export price should normally be compared on an ex-factory level so
that both can be compared at the same stage.            In the case of a
non-market economy country, Article 2(5) of the Basic Regulation
precludes   the  investigation of the transport costs within            the
country.   Because of this, the determination of a normal value at
an ex-factory level is not possible unless the transport costs are
calculated on the basis of the reference country.           This requires,
however,  knowledge    of   the    actual   location  of   the   production
centres in the non-market economy country and in the case of there
being  several    producers     at   different    locations,    the  actual
production of each one of them.
In this specific case and in view of the fact that the cooperating
exporters   represent   only   21% of     the  totality   of   the  Chinese
fluorspar imports into the Community in the investigation period,
the  Commission   has   not   sufficient     information   concerning   the
actual distance of all the production centres to the ports.            This
lack of cooperation makes it impossible to evaluate the actual
location of the production centres which export to the European
Community.
 ---pagebreak---                                       - 9 -
     In the circumstances, the Commission, in view of the fact that the
     comparison cannot be made at an ex-works stage, considers that the
     first equivalent stage at which reliable information is available
     is the FOB level.      Because of this, the Commission considers the
     comparison   at   the   FOB   level  to   be   the   more   reasonable   and
     appropriate.
     The Council confirms these conclusions.
(16) As  to   the    other    adjustments    made    by   the   Commission,    no
     observations    have   been   brought   forward     by  the   parties.   The
     conclusions   of   the   Commission   are   therefore    confirmed   by  the
     Council.
                               4. Dumping margin
(17) As s result of the modification to the export price calculation,
     the definitive dumping margin, expressed as a percentage of the
     CIF value, is equal to 37.8%.          The Council confirms the above
     conclusions   as well     as all the     other conclusions      set  out  in
     recitals 21 and 22 of the Provisional Duty Regulation.
                                   E. injury
(18) In its preliminary findings, (recital 23 of the Provisional Duty
     Regulation), the Commission assessed injury on data referring to
     the  free  market     and   concluded   that    the   Community    fluorspar
     industry had suffered material injury because of the effects of
     the dumped imports from the country concerned.
 ---pagebreak---                                   - 10 -
(19) The exporters have argued that the injury was not caused to a
     Community industry within the meaning of Article 4(5) of the Basic
     Regulation   and  that  the  complainants   do   not   qualify  as  such
     Community industry.
     In respect of this argument, the Commission has established that
     the cooperating producers accounted for approximately 90% of the
     total EC production of fluorspar (see recital 3 of the Provisional
     Duty Regulation), and therefore complied with the requirements of
     Article 4(5) to be qualified as the community industry.
     As established in recital 23 of the Provisional Duty Regulation,
     the   Commission   considered   that,  because     of   the   particular
     characteristics   of the fluorspar market      in the Community,     the
     assessment of injury could be restricted to the free market.        This
     separation only concerns the assessment of injury and does not
     infer   a reduction   of the   size of  the Community      industry  for
     purposes of its qualification under Article 4(5).
(20) Furthermore, the exporters contested the separation of the market
     into   two  different    segments,  which    they    considered   wholly
     unwarranted   and  disputed   that  it  was   in   agreement   with  the
     criteria indicated by the jurisprudence of the court of Justice of
     the European community.
     In this respect, however, no substantiated arguments were made
     concerning the non-respect of these criteria and, accordingly, the
     Commission confirms its findings as indicated in recital 23 of the
     Provisional Duty Regulation.
 ---pagebreak---                                   - 11 -
(21) The Council confirms the conclusions of the Commission concerning
     the   market   to  be   assessed   and  all  data   concerning   the
     determination of injury.
            F. Causal link between injury and dumped Imports
(22) In recital 40 of the Provisional Duty Regulation, the Commission
     concluded that the dumped     imports originating  in the   People's
     Republic of China, because of their increasingly strong presence
     on the Community market, their low prices and the resultant lack
     of profitability of the Community industry, caused material injury
     to the European community industry.
     The exporters contested the causal link between the dumped imports
     from China   and the material    injury suffered  by the   community
     industry, as established by the Commission.
     The Commission has replied to these arguments and has received no
     further comments from the exporters.
     Therefore, the Council confirms the conclusions of the Commission
     as set out in recital 35 to 39 of the Provisional Duty Regulation.
                          G. Pi—unity Interest
(23) The Commission has received no observations from the interested
     parties   concerning  its   provisional  findings.  Therefore,   the
     considerations on the Community interest, as set out in recitals
     41 to 44 of the Provisional Duty Regulation, are to be considered
     final.
 ---pagebreak---                                      - 12 -
     The Council confirms these conclusions.
                               H. Definitive duty
(24) In order to determine whether a lower dumping duty                 should be
     imposed,  the    commission    compared   the weighted     average    selling
     price  of   Chinese    fluorspar    (on  a   Community   frontier     customs
     cleared basis) with the corresponding average price of fluorspar
     produced   and    sold   during   the   same   period   by   the    Community
     industry,   since    this   difference   was   higher   than   the    dumping
     margin established, it is the latter which should be imposed.
     As a result of the modification in the dumping margin, the minimum
     price  referred     to  under   recital    45  of  the   Provisional     Duty
     Regulation    should    be   113.5   ECUs   per   tonne.   All    the   other
     conclusions    of   recital   45   are  confirmed    for   the   purpose   of
     definitive determinations.
     The Council confirms the conclusions of the Commission.
                 .#
                    I. Collection of provisional duties
(25) in view of the dumping margin established and the seriousness of
     the injury caused to the Community industry, the Council considers
     it necessary    that amounts secured by way of provisional anti-
     dumping duties should be definitively collected,
HAS ADOPTED THIS REGULATION:
 ---pagebreak---                                  - 13 -
                               Article 1
1.   A definitive anti-dumping duty is hereby imposed on imports of
     fluorspar in powder or filter cake form, falling within CM Code ex
     2529 21 00 (Taric code 2529 21 00 10) and CM Code ex 2529 22 00
     (Taric code 2529 22 00 10), originating in the People's Republic
     of China.
2.   The duty shall be equal to the difference between a minimum price
     of 113.50 ECU per tonne    (dry net weight) and the net free at
     Community frontier price before customs clearance.
3.   The provisions in force concerning customs duties shall apply.
                               Article 2
The amounts secured by way of provisional anti-dumping duty imposed by
Regulation (EEC) M* 2463/93 shall be definitively collected.
                               Article 3
                •#
This Regulation shall enter into force on the day following that of its
publication in the Official Journal of the European Communities.
The Regulation shall be binding in its entirety and directly applicable
in all Member States.
Done at Brussels,
                                        For the council
 ---pagebreak---                                           -»H-
                                                                     BSN 0254-1475
                                                               COM(94) 27 final
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