CELEX: 51991PC0231
Language: en
Date: 1991-06-24
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) IMPOSING A DEFINITIVE ANTI-DUMPING DUTY ON IMPORTS OF SMALL-SCREEN COLOUR TELEVISION RECEIVERS ORIGINATING IN HONG KONG AND THE PEOPLE' S REPUBLIC OF CHINA AND COLLECTING DEFINITIVELY THE PROVISIONAL DUTY

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                 C0M(91) 231 final
                                                 Brussels, 24 June 1991
                                 Proposal for a
t_- ^..                    COUNCIL REGULATION (EEC!
            imposing a definitive anti-dumping duty on imports of
           small-screen colour television receivers originating in
               Hong Kong and the People's Republic of China and
                 collecting definitively the provisional duty
                         (presented by the Commission)
 ---pagebreak---                                      - 2
                            EXPLANATORY M5MQRANPUM
 1. By Regulation (EEC) No 129/91 the Commission Imposed a provisional
     anti-dumping duty on imports of small screen colour television
     receivers (hereafter SCTVs) originating In Hong Kong and the People's
     Republic of China.  That duty was extended for a maximum period of two
     months by Regulation (EEC) No 250/91.
 2. Following the imposition of provisional measures, the Commission has
     continued its investigation and has examined the arguments of the
     complainants and exporters which have demanded to be heard.
 3. The findings made on dumping have, in general, been confirmed although
     some adjustments have been made in response to arguments and data
     presented by the parties.  The most Important was that some
     adjustments were made for differences in physical characteristics for
     some models Imported from the People's Republic of China.
4. Provisional findings that the Community SCTV Industry has suffered
    material Injury in terms of loss of sales volume and market share,
     price undercutting, loss of profitability, accelerated relocation of
    production with consequent loss of employment, were confirmed.     It was
    also confirmed that the dumped imports from Hong Kong and the People's
    Republic of China had, in isolation, caused material Injury to the
    Community SCTV Industry.   Injury thresholds were calculated on the
    basis of the undercutting found, expressed at a c.i.f. level.
5. In the provisional findings, dumping margins were established for the
    Chinese exporters Individually.    As the Chinese exporters cannot
    independently fix the conditions for exporting their products, the
   Commission considers appropriate to establish one dumping margin and
   one duty for all Chinese exporters.    Additionally, it is considered
   that Individual duties could lead to circumvention of the duties as
   all exports are controlled by a single body.
 ---pagebreak---                                    - 3
   However for two of the exporters which are Joint ventures with
   Japanese participation, it was established that they cou id freely fix
   their export prices and therefore Individual dumping margins and
   duties were determined for them.
6. It is also confirmed - no new facts or arguments having been preser,u;o
   - that it is In the Community's interest to eliminate the injurious
   effects of the dumping determined.   The benefits of such protection
   for the current viability and future development of the Community SCTV
   industry outweigh the temporary disadvantages to consumers of limited
   price Increases for certain Imported SCTVs.
7. It Is proposed therefore to Impose definitive ant I-dumping duties
   ranging from 2.1% to 4.8% on SCTVs from Hong Kong and from 7.5% to
   15.3% on SCTVs from the People's Republic of China.
    It Is also proposed that the amounts secured by way of the provisional
   duty should be collected up to the levels of the definitive duties
   fInalI y determined.
 ---pagebreak---                                         - 4 -
                                   Proposal for a
                              COUNCIL REGULATION (EEC)
              imposing a definitive anti-dumping duty on imports of
            small-screen colour television receivers originating In
                Hong Kong and the People's Republic of China and
                   collecting definitively the provisional duty
 THE COUNCIL OF THE EUROPEAN COMMUNITIES,
 Having regard to the Treaty establishing the European Economic Community,
 Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on
 protection against dumped or subsidized imports from countries not members
 of  the   European    Economic  Community^ 1 ),   and   in particular  Article  12
 thereof,
 Having   regard    to   the  proposal   from    the   Commission  submitted  after
 consultation within the Advisory Committee as provided for under the above
 Régulât ion,
 Whereas:
                               A.  PROVISIONAL MEASURES
 (1)     The Commission, by Regulation (EEC) No 129/91 ( 2 ) , (hereinafter the
         Provisional    Duty Regulation),    imposed a provisional     anti-dumping
         duty on imports into the Community of small-screen colour television
         receivers (hereinafter referred to as SCTVs) originating           In Hong
         Kong and the People's Republic of China and corresponding to CN code
(1)     OJ No L 209, 2.1.1988, p. 1.
(2)     OJ No L 14, 19.1.1991. p. 31.
 ---pagebreak---                                         5 -
    S528 10 71.    The    Council,     by   Regulation    (lEEC)   No   1283/91<3>
    extended this duty for a period not exceeding two montre-*
                           B. SUBSEQUENT PROCEDURE
    Following the imposition of the provisional anti-dumping duty, *'
    interested parties who so requested were granted an opportun sty to
    be heard    by the Commission.        They also made written submissions
    making known their views on the findings.
    Upon  request, parties were         informed of   the essential      facts and
    considerations on the basis of which it was intended to recommend
    the imposition of definitive duties and the definitive collection of
    amounts   secured    by   way of    a provisional    duty.   They   were    also
    granted a period within which to make representations subsequent to
    the disclosure.
    The  oral    and   written    comments    submitted   by   the   parties    were
    considered and, where appropriate, the Commission's findings were
    modified to take account of them.
    Due  to the complexity        of   the proceeding,    in particular     to the
    detailed   verification      of   the  voluminous   data   involved    and   the
    numerous   arguments     put   forward,   including   the study    of   related
    issues which arose during the proceeding and which could not have
    been  foreseen     at   its   outset,    the  investigation     could   not   be
    concluded within the normal time limit as was mentioned in Recital 5
    of the Provisional Duty Regulation.
(3) OJ No L 122, 17.5.1991, p. 1.
 ---pagebreak---                                   - 6 -
                     C. PRODUCT UNDER CONSIDERATION
                       ORIGIN FOR CUSTOMS PURPOSES
     In its provisional findings the Commission, subsequent to a claim
    made by a Hong Kong producer exporter and consistently with the
    conclusions   in Council   Regulation   (EEC) No   1048/90<4)  imposing
    definitive anti-dumping duties on imports of SCTVs originating in
    the Republic of Korea, decided to exclude from the scope of the
    proceeding SCTVs with a diagonal screen size of 15.5 cm (six inches)
    or less.
    As no objections by any of the interested parties have been made to
    this   course  of   action,  the   Council   confirms  the  conclusions
    contained in Recitals 6, 7 and 8 of the Provisional Duty Regulation,
    as well as the conclusions set out in Recitals 9 and 10 of that
    Regulation concerning the consideration of SCTVs produced by the
    Community industry, as like products to the SCTVs exported from Hong
    Kong and China and the origin of those SCTVs.         No comments were
     received from interested parties on those conclusions.
                               D. DUMPING
a.  Normal value
    For   the  purpose of   definitive   findings, normal   value was, in
    general, established on the basis of the same methods as those used
     in the provisional    determination of    dumping, after  taking  into
    consideration new facts and arguments presented by the parties.
(4) OJ No L 107, 27.4.1990, p. 56.
 ---pagebreak---                                - 7 *
!)     Hgpg Kçng
One of the Hong Kong exporters claimed that normal value, which hid
been established for OEM sales on the basts of the resale price of a
related trading company to the first independent purchaser adjust*?
by the allowable selling expenses - as mentioned In Recital 13 of
the Provisional Duty Regulation - should have been established on
the basis of     the sales to the trading company          which should    be
considered   as unrelated,    and   that   the commissions     paid   to  the
trading company should have been deducted from the normal value.
The Commission considers that there is no Justification for treating
the trading company as an unrelated company.           The trading company
and the producer     are both fully owned subsidiaries of           the same
parent   company.   It does not     perform    any  activities apart     from
trading and selling and carried out all the producer's sales of the
product   concerned   in  the   domestic   market    during   the  reference
period.   Even if it was admitted that, as this exporter claims, the
manufacturing company carried out certain selling activities, it
would still be     true that   the trading company       performed    selling
activities   normally   carried   out   by   a   sales  department    of  the
manufacturer and this would fully Justify its consideration as a
related sales company.
In these circumstances, the Commission confirms its consideration of
the two companies as forming part of the same economic entity and
its determination of normal value as described in Recital 13 of the
Provisional Duty Regulation.
The Council confirms these conclusions.
 ---pagebreak--- Another Hong Kong exporter contested tho method used to establish
the constructed     values.    It argued    that   the sales, general       and
administrative    expenses and      the profit   which     had   been  used  in
constructing    the   values,    as   explained    in   Recital    16   of  the
Provisional Duty Regulation, were excessive and did not adequately
reflect  its situation, mainly because the company whose SG & A
expenses had been used was a Stock Exchange               listed company and
therefore required a larger and more specialized staff.
The Commission     considers   that    the arguments put       forward by   the
exporter are not duly Justified.         The mere a I legation that a Stock
Exchange listed company requires a larger and more specialized staff
than  a  comparable     fully    private   Company    cannot    be   considered
sufficient   argument   to reduce the SG & A expenses used by the
Commission on constructing the value.        The investigation carried out
by the Commission shows that this Company and the one of which the
SG t A expenses were taken in order to construct the normal value,
may be consi    red comparable as far as costs and type of operation
are concerned.    No Justifiable argument to the contrary has been put
forward.   In any event, this latter Company was the only one with
domestic   sales    on   an   OEM    basis   which    could     be   considered
representative since they exceeded 5% in volume of the sales on the
same basis to the Community market.           It was therefore considered
that this Company's figures which were verified by the Commission,
form the most reasonable basis for the addition of SG ft A expenses
to manufacturing costs as provided for by Article 2(3)(b)(ii) of
Regulation (EEC) No 2423/88.
As far as profit is concerned, this exporter argued that the profit
margin taken into consideration (i.e. 5%) should not be the same as
the one which had been used in the previous investigation concerning
 ---pagebreak---                                   9 -
   the Republic of Korea, the Hong Kong market being more competitive
   and having lower profit margins.   The Commission considers that this
   argument neglects the fact that the Commission      investigation, as
   indicated In Recital 15 of the Provisional Duty Regulation, showed
   that the profit margin of the soie Company with representative OEM
   sales in the domestic market exceeded the 5% profit margin retained.
   The Council confirms these conclusions.
   M)    People's Republic of China
10 No  comments  from  any  of  the   interested parties  were  received
   concerning the way in which the Commission had established normal
   values for all export sales from the People's Republic of China to
   the Community on the basis of the constructed values for comparable
   models manufactured in Hong Kong as set out in Recitals 17 and 18 of
   the Provisional Duty Regulation.
   The Council confirms these conclusions.
b. Export price
   i)    Hong Kong
11 For purposes of the Provisional Duty Regulation the export prices
   were established on the basis of the prices paid or payable for
   export as all export sales were made either directly to unrelated
   importers or through unrelated trading companies in Hong Kong.     No
   comments from any party have been made on this course of action and
 ---pagebreak---                                     10 -
    the Council confirms the conclusions of the Commission as set out in
   Recital 19 of the Provisional Duty Regulation.
    N)    People's Republic of China
12  The export prices for the Chinese exporters have been establI shed on
    the basis of prices paid or payable where no related importers were
    involved and on the basis of resale prices to the first independent
    buyer  adjusted   to   take  account   of   all  costs   incurred   between
    Importation and resale including customs duties and a 10% profit on
    turnover where exports were made to related importers as was the
    case  for FuJIan    Hitachi   Television Co Ltd      and  Huaquiang    Sanyo
    Electronics Co   ltd as described       in Recitals    20 and   21 of     the
   Provisional Duty Regulation.
13 One of the exporters considered that the profit margin used in the
    construction of the export price could not be considered reasonable.
    In support of its consideration it was argued by the exporter that a
   5% profit margin had been used in previous proceedings Involving
   consumer products, that SCTVs were a mature and well established
   product, the 10% margin being therefore unrealistic, and that the
   margin of 10% was not adapted to the size and organization of the
   related importers Involved.
   The Commission notes, however, that it has been consistent            in its
   approach with the methodology used         in the previous    investigation
   concerning   SCTVs    originating    in   the   Republic   of   Korea.    The
   Commission does not contest the fact that the current generation of
   SCTVs can be considered as a technologically-mature product but this
   does not preclude the fact that the SCTV sector was, during both
 ---pagebreak---                                   11 -
reference periods for the Korean and the Chinese and Hong Kong
Investigation,     quite   buoyant    and   profitable    for    independent
importers.    In this respect, it should be noted that in the case of
imports of another consumer electronic product whose investigation
period   corresponded     in   large   part    to  that    of   the   Korean
investigation    a  rate   higher   than  10% was    used   for   definitive
determinations.
The information collected and verified from independent Importers in
the course of this proceeding has shown that the level of profit
during the reference period did not depart significantly from that
observed   and   used  for   definitive   determinations     In  the  Korean
proceeding and therefore the use of a different profit rate was not
Justified.   As far as the size and the organisation of the related
importer are concerned, the Commission retained the profit of one
independent importer as explained in Recital 17 of Regulation (EEC)
No 1048/90, whose structure and size are comparable to both the
related   importers   Involved   in that proceeding and       those related
importers   involved    In the present     proceeding.    This   independent
importer   is of    considerable    size,   is well   established    in  the
Community market, possesses an important network, deals with a wide
product range and sells its products under a very well known brand
name.   These are obviously characteristics which are also common to
the related    importers and therefore the Commission considers that
the size and organization aspects have been properly taken              into
account.
In the light of these considerations and those set out in Recitals
20,  21 and    22 of   the Provisional     Duty Regulation,     the Council
confirms the Commission's findings and conclusions.
 ---pagebreak---                                  - 12 -
c. ComparIson
14 As explained in the Provisional Duty Regulation at Recitals 23 to
   27, all comparisons were made at the ex-works level for the exports
   originating    in Hong  Kong   and  at  f.o.b.    level  for   the   exports
   originating in the People's Republic of China.        For the purposes of
   ensuring a fair comparison between normal value and export prices,
   the  Commission    took  account   where    appropriate   of    differences
   affecting   price  comparability,    such  as   differences    in physical
   characteristics and selling expenses, where a direct           relationship
   between these differences and the sales under consideration could be
   satisfactorily demonstrated.     Under the heading of selling expenses
   for export sales of Hong Kong exporters, adjustments were made for
   differences in commissions, transport, insurance, handling, loading
   and ancillary costs, payment terms, warranty expenses and salesmen's
   salaries and for export sales of Chinese exporters adjustments were
   made for differences in warranty expenses.
   i)    Hong Kong
15 One of the Hong Kong exporters disputed the calculations made by the
   Commission   in the determination of the cost of transporting the
   exported product    to the Community.     The Commission     informed   this
   exporter   in writing of   the basis of      its calculation.      The same
   exporter also disputed the allowance made by the Commission for
   salesmen's salaries on the export price on the grounds that these
   were not true salesmen.      The Commission    informed the exporter      in
   writing that the results of the investigation had shown that these
   salesmen were wholly     involved   in direct    selling activities and
   explained   the basis for    the allocation made on calculating          the
 ---pagebreak---                                    - 13
   amount of the allowance,      «o further comments on any of these points
   were received by the Commission.
16 Another Hong Kong exporter claimed that a number of adjustments for
   differences in physical characteristics should have been made with
   regard to the model used in the calculation of the constructed value
   referred to in Recital 16 of the Provisional Duty Regulation.              It
   alleged,   in particular, that the model on which the constructed
   value had been based may have obtained approval           in accordance with
   German certification practice and may have been equipped with an
   indoor rod antenna component.
   The Commission cannot      accept   this claim as     it could not obtain
   confirmation     as   to    whether    the    alleged    certification    and
   incorporation of     antenna    actually   existed  and,,   if so, on    what
   factual  basis these adjustments should have been made and what
   impact those differences would have had on the price comparability.
   In any event, even if it was established that all mode is exported to
   Germany had obtained that approval, that all models were equipped
   with the indoor rod antenna component and that the costs indicated
   by this exporter were correct, the impact on the outcome of the
   investigation would be negligible.
   M>    People's Republic of China
17 The  China    Commercial   Chamber   of  Audio-Video    Products   Exporters
   requested    through   its    legal  representative     that   a  number   of
   adjustments for physical characteristics be made on the models used
   in the calculation of the constructed value referred to in Recital
   17 of the Provisional Duty Regulation.          In particular, the Chamber
   requested adjustments for the lack of cable tuner and earphone Jack
   and  for   the   different   number   of   preselections,    differences   in
 ---pagebreak---                               - 14 -
sound output available and differences in outlook and design.           The
Commission,   in view of    the arguments presented    by  the   Chamber,
recognized that a cable tuner was a feature relevant to consumers in
Hong Kong and agreed to make the appropriate adjustment.         The rest
of the claimed allowances could not, on the contrary, be accepted by
the Commission as they did not prove to be duly Justified:
      the   sound  output   available  was  considered   not   to    be  of
      relevance to consumers;
      a   large majority   of  the units exported    from  the    People's
      Republic of China were equipped with earphone Jacks;
      due to the limited number of channels available for viewing in
      Hong Kong during the reference period the discussed number of
      preselections was irrelevant and
       in so f r as the outlook was concerned, it appeared that the
      cost of manufacturing a conventionai-look receiver           in Hong
      Kong was higher than that of a monitor-look receiver and that
      for   comparable  models of    two of  the  Hong   Kong   exporters
       involved in the proceeding, the price of the conventionaI-look
      model was higher than that of the monitor-look model.
      For all those reasons, only the request for the cable tuner
      adjustment can be accepted by the Commission which must reject
      the other claims.
The Council confirms these conclusions.
 ---pagebreak---                                      - 15 -
d. Dumping margins
18 Export prices were compared on a transaction by transaction basis
   with normal values for each of the exporters concerned with the
   exception mentioned below.         The final examination of the facts shows
   the existence of dumping         in respect of SCTVs originating            in Hong
   Kong and the People's Republic of China from all                   the exporters
   involved, the margin of dumping being equal to the amount by which
   the normal value as established exceeds the price for export to the
   Community.
19 In   its   provisional      findings    contained    in    Recital    28   of    the
   Provisional     Duty    Regulation,      the   Commission     established       five
   individual dumping margins for each of the Chinese exporters who had
   cooperated    in   the    investigation.     However,    for   the   purposes     of
   definitive findings, the Commission            took the view that a single
   dumping margin should be established for all the Chinese exporters
   with the exception of the two Sino-Japanese Joint venture exporters.
   This is Justified by the fact that the Chinese exporters, even if
   they appear as independent companies which invoice their customers
   directly,    have    in    fact   a   very    limited,     if  any,    degree     of
   independence in their relationship with importers in other countries
   as they lack the possibility of establishing export prices and any
   other   conditions     or    terms   of   sales   by   themselves.     The     three
   cooperating    Chinese     exporters     (i.e.   China    Great   Wall     Industry
   Corporation, China National Electronics Import & Export Corporation
   and   China   National     Light    Industrial    Products     Import    &   Export
   Corporation) are members of the China Commercial Chamber of Audio
   and    Video    Products      Exporters     who    acknowledged      during      the
   investigation that the export of SCTVs from all their members was
   made   under   their   strict    control.     It was    also   declared     by   the
   Chamber that all exporters had to be members of the Chamber and that
 ---pagebreak---                                    - 16 -
   only    the   Joint    ventures    could    export   and    import   products
    independently.
    In addition, the Commission considered that maintaining           individual
   dumping margins for the Chinese exporters subject to the control of
   the   Chamber   could   provide   an   opportunity    for  circumvention   as
   exports to the Community could be channelled            through the company
   with the lowest dumping margin.
   The   lack of   independence of these exporters         in conducting their
   export    policy    is   further    confirmed    by   the   fact   that   the
   representation of the three Chinese exporters in this proceeding has
   been carried out by the Chamber and its legal representatives which
   at all times have submitted Joint arguments and considerations for
   all three exporters without individualizing any positions.           In these
   circumstances, the Commission considered that the establishment of
   three   individual   dumping margins     led to purely arbitrary      results
   which were net Justified and that a single dumping margin, obtained
   by comparing all export transactions of the three Companies with the
   normal values, should be established.          All the cooperating Chinese
   exporters were informed by the Commission of its intention to follow
   this course of action.
20 In so far as the other two Chinese exporters are concerned (i.e. the
   two   Sino-Japanese    Joint   ventures)    the   Commission   was   able  to
   establish to its satisfaction that these companies, even if they did
   not operate fully on a market economy basis, enjoyed a high degree
   of independence in their operations basically because they were able
   to import components and export finished products without control
   from the Chamber or from any other body.         Furthermore, the fact that
   these companies were able to transfer           their profits, subject     to
   certain administrative requirements, out of the People's Republic of
 ---pagebreak---                                  - 17
   China,  ensured   that   these  profit-oriented   companies   enjoyed  a
   sufficient degree of independence which Justifies their individual
   treatment.   For   these   reasons  the  Commission     considered  that
   individual dumping margins should be established for the two Joint
   venture exporters who cooperated with the investigation by comparing
   the normal values and the export prices established on the basis set
   out in Recitals 10 and 12.
   The  Council   confirms   the above   conclusions    in Recitals 18, 19
   and 20.
21 The weighted average margins, expressed as a percentage of c.i.f.
   frontier prices varied according to exporter as follows:
   i. Hong Kong
         Cony Electronic Products Ltd                 3.19
         Hanwah Electronics Ltd                       4.88
         Kong Wah Electronic Enterprises Ltd          3.13
         Koyoda Electronics Ltd       '               4.61
         Luks industrial Co Ltd                       4.17
         Tai Wah Television Industries Ltd            2.16
   i I.   People's Republic of China
         Fujian Hitachi Television Co Ltd           17.04
         Huaquiang Sanyo Electronics Co Ltd           7.55
         All other cooperating Chinese
         exporters                                  15.31
 ---pagebreak---                                      - 18 -
                                   E. INJURY
22 The   Commission   concluded       in   its provisional       findings      that   the
   Community SCTV industry had suffered material injury.                  It based this
   finding principally on the Hong Kong and Chinese exporters' rapid
    increase  in volume      of   exports     and   in market      share,     the   price
   undercutting practised by these exporters in the Community market
   and   the  price   erosion     resulting      therefrom     for    the   complainant
   producers'   selling     prices.      In   addition,     further     relocation     of
   Community   industrial     capacity     in third countries was           foreseeable
   with consequent loss of Community employment and the continuation of
   the   significant     losses     incurred     by    the   complainant       Community
   producers which increased dramatically in 1988.
23 No   new  facts   concerning      these     findings    were    submitted      to  the
   Commission after the publication of the Provisional Duty Regulation.
   Some   exporters, both       Chinese     and   from   Hong   Kong    contested     the
   cumulation o; imports from both countries effected by the Commission
   when   assessing   the     impact    of   dumped     imports    on   the    Community
   industry.   The Commission, however, maintains its arguments set out
   in Recitals 30 and 31 of the Provisional Duty Regulation, i.e. that
   the SCTVs exported by both countries are homogenous and similar to
   the Community products, that they competed with each other and with
   the Community products and were sold through the same distribution
   channels   and   that    the   volumes      imported    from    each    of   the   two
   countries   taken    in   isolation      can,   in no way,       be    described    as
   negligible.    In addition,       the    Commission     notes    that    the    market
   behaviour   of   the    Chinese     and   the   Hong    Kong    exporters     can   be
   considered very similar.        In these circumstances, in accordance with
   the standard practice in antI-dumping proceedings, it is considered
   appropriate to cumulate the injurious effect of imports from Hong
   Kong and from the People's Republic of China.
 ---pagebreak---                                        19 -
24 Some exporters contested the model comparison which formed the basis
   for the Commission's analysis of undercutting.            Their arguments on
   the question     referred    basically   to the fact     that   the  Community
   models   used    in  the    comparison   offered   an   enhanced    appeal   to
   consumers as a result of the presence of a number of features or
   characteristics incorporated in them and which were lacking in the
   exported models.
   The China Commercial Chamber of Audio and Video Products Exporters
   argued that the Community models which had been used for the price
   undercutting comparison contained more and better features than the
   Chinese models with which they had been compared and proposed that
   either adjustments on the basis of market value differences should
   be made or that all Chinese models should be compared to the lowest
   featured   of   the  Cor*; «unity   models   used  in  the    comparison.   The
   Commission    considered     that   accepting   adjustments    on   the  model
   comparison would imply a significant departure from the methodology
   used in the recent SCTVs Korean investigation which was confirmed in
   the present investigation.        This methodology has not been challenged
   by  any   of   the  parties     involved   in either   proceeding    with  the
   exception of the Chamber.         Furthermore, it was considered that the
   wide variety of models and of technical characteristics would make a
   comparison    based on adjustments       too complicated     and unworkable.
   However, the Commission,         recognizing that some of       the Community
   models used in the comparison may be over featured in relation to the
   Chinese models, has proceeded to compare all but one of the Chinese
   models, with the exception of those exported by the Joint venture
   exporters, with the lowest-featured Community models.
25 On that basis and applying the method of comparison explained in
   Recital 39 of the Provisional Duty Regulation, the overall average
 ---pagebreak---                                     - 20 -
     undercutting results expressed at c.l.f. level        is 16.85% for the
     exporters represented by the China Commercial Chamber of Audio and
     Video Products Exporters.
     For all the other exporters the undercutting comparison findings as
     set out in Recital 40 of the Provisional Duty Regulation are hereby
     confirmed.
  26 No other arguments nor facts concerning determination of injury were
     presented to the Commission.
      The Council confirms the conclusions of the Commission as set out in
      Recitals 30 to 39 and 41 to 48 of the Provisional Duty Regulation
      and in Recitals 22 to 25 of this Regulation.
                            F. CAUSATION OF INJURY
\
  27   In Recitals   49   to 53 of     the Provisional  Duty   Regulation,   the
      Commission concluded that the cumulated dumped         imports from Hong
      Kong and the People's Republic of China had caused material injury
      to the Community      industry.   The Commission  found that    the rapid
       increase of Hong Kong and Chinese low priced imports coincided with
      an equally rapid     loss of market share by the Community       industry,
      price erosion for the Community's SCTV models and heaviIy-increased
      financial losses on the part of Community companies together with an
      accelerated relocation of Community producers' assembly facilities
      outside the Community.
       In this respect,     the Commission   notes that   prices play a very
       important role in the market and price undercutting due to dumping
      has therefore an immediate negative effect on the prices practised
      by   the  Community    industry.   It should  be  stressed,   as   already
 ---pagebreak---                                   - 21 -
     indicated in Recital 40 of the Provisional Duty Regulation, that the
    effects of the price undercutting found do not refer only to the
    models of SCTVs in the Community which may be considered to be
    directly comparable to the Hong Kong and Chinese exports, but that
    they apply to the whole range including the newest and most enhanced
    models.   Undercutting at the lower-priced end of the range - the
    major volume market segment - naturally has a depressive effect on
    price throughout the whole SCTV range by reducing the consumer's
    perception of the value of the product and of the different features
   of the various models.
   No new facts nor new arguments concerning          these findings were
   submitted to the Commission after the publication of the Provisional
   Duty Regulation.    The Council therefore confirms the conclusions of
   the Commission as set out in Recitals 49 to 53 of the Provisional
   Duty Regulation.
                         G. COMMUNITY INTEREST
28 No further facts or arguments concerning this subject were submitted
   to the Commission by any of the parties. The Council          therefore
   confirms the Commission's conclusions set out in Recitals 54 to 57       .-"*- =~«K..&r
   of the Provisional Duty Regulation, that it is in the Community's
   interest    to  eliminate  the   injurious  effects   to the  Community
    industry of the dumping determined.    The benefits of such protection
   for the current viability and future development of that industry
   outweigh the possible disadvantages, of a temporary nature, for the
   consumer   in terms of limited price increase for certain       Imported
    SCTVt.
 ---pagebreak---                                    - 22 -
                                  H. DUTY
29 Provisional   measures took the form of anti-dumping            duties.   These
   were imposed at the level of the dumping margins determined, with
   the exception of one Chinese Joint venture exporter for which the
   level imposed was that adequate to remove the injury caused.
30 Although   the   Commission's     findings   on    injury   set   out   in  the
   Provisional   Duty Regulation have now been modified, the level of
   duty necessary to remove the injury remains higher than the dumping
   margin definitively determined, with the exception of one Chinese
   Joint venture exporter.      Therefore, duties should be imposed at the
   level  of   the   dumping   margins    found   except   for   FuJIan    Hitachi
   Television Co Ltd for whom the duty should be imposed at a level
   sufficient to eliminate the price undercutting.
31 As  explained    above   in   Recital    19,   the   Commission    decided   to
   establish a single dumping margin for all the Chinese exporters with
   the exception of the two Joint ventures concerned and, consequently,
   a single duty was established for these companies.
   The Council confirms these conclusions.
                  I. COLLECTION OF PROVISIONAL DUTIES
32 In view of the dumping margins established, and the seriousness of
   the injury caused to the Community         industry, the Council considers
   it necessary    that amounts collected by way of provisional              anti-
   dumping duties should be definitively collected to the extent of the
   amount of the duty definitively imposed.
 ---pagebreak---                                       - 23 -
HAS ADOPTED THIS REGULATION:
                                    Article 1
1.     A   definitive  anti-dumping   duty  is hereby   imposed   on   imports of
small-screen colour    television receivers with a diagonal      screen size of
more than 15.5 cm but no greater than 42 cm, whether or not combined in the
same housing with a radio broadcast receiver and/or a clock, falling within
CN code ex 8528 10 71      (Taric code: 8528    10 71*10) and originating        In
Hong Kong or in the People's Republic of China.
2.    The rate of duty shall be 4.8% of the net free-at-Community-front 1er
price before duty for products originating     in Hong Kong (Taric additional
code: 8500) and 15.3% of the net free-at-Community-front1er price before
duty   for products originating    in the People's Republic of China         (Taric
additional code: 8506).
However, the     rates of  duty  for products specified    in paragraph      1 and
manufactured and sold for export by the following companies shall be as set
out below, expressed as a percentage of the net, free-at-Community-frontier
price before duty:
                                                Rate of duty    Taric additional
                                                                      £ojje_
a.   Hong Kong
         Cony Electronic Products Ltd               3.1            8494
         Hanwah Electronics Ltd                     4.8            8495
         Kong Wah Electronic Enterprises Ltd        3.1            8488
         Koyoda Electronics Ltd                     4.6            8497
         Luks industrial Co Ltd                     4.1             8498
         Tai Wah Television Industries Ltd          2.1             8499
 ---pagebreak---                                     - 24 -
b.   People's Republic of China
        FuJIan Hitachi Television Co Ltd         13.1          8504
        Huaquiang Sanyo Electronics Co Ltd        7.5          8505
3.    The provisions in force concerning customs duties shall apply.
                                  Article 2
The amounts collected or secured by way of provisional anti-dumping duty
under Regulation (EEC) No 129/91 shall be collected at the rates of duty
definitively imposed where the definitive rate of duty is lower than the
provisional anti-dumping duty and at the rates of provisional duty in all
other cases.   Secured amounts which are not covered by the rates of duty
definitively imposed shall be released.
                                  Article 3
This Regulation shall enter into force on the day following that of its
publication in the Official Journal of the European Communities.
This Regulation shall be binding In its entirety and directly applicable in
a 11 Member States.
Done at Brussels,                                  For the Council
                                                    The President
 ---pagebreak---                                                 - 25 -
                                                                     ISSN 0254-1475
                                                              COM(91) 231 final
                                                       DOCUMENTS
EN                                                                              02
                                Catalogue number : CB-CO-91-277-EN-C
                                                             ISBN 92-77-73603-8
Office for Officia] Publications of the European Communities
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