CELEX: 51996PC0689
Language: en
Date: 1996-12-16
Title: Proposal for a COUNCIL REGULATION (EC) extending the definitive anti-dumping duty imposed by Council Regulation (EEC) No 2474/93 on bicycles originating in the People's Republic of China to imports of certain bicycle parts from the People's Republic of China, and levying the extended duty on such imports registered under Regulation (EC) No 703/96

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                          COMMISSION OF THE EUROPEAN COMMUNITIES
                                                            Brussels, 16.12.1996
                                                            COM(96)689 final
                                             Proposal for a
                                   COUNCIL REGULATION HEC)
          extending the defimtive anti-dumping duty imposed by Council Regulation (EEC)
          No 2474/93 on bicycles originating in the People's Republic of China to imports of
         certain bicycle parts from the People's Republic of China, and levying the extended
                  duty on such imports registered under Regulation (EC) No 703/96
                                    (presented by the Commission)
 ---pagebreak---  ---pagebreak---                                 Explanatory Memorandum
1.      The Commission, by Regulation (EC) No 703/96, initiated an investigation
into the circumvention of the anti-dumping duties imposed on imports of bicycles
originating in the People's Republic of China by imports of bicycle parts originating
in that country and used in the assembly of bicycles in the European Community.
2.       The Commission carried out investigations on the premises of 7 companies,
two of which turned out to be Community producers and 5 of them circumventing
assemblers. Non-co-operation was substantial.
3.       Following the on-the-spot investigation, it was established that the assemblers
concerned fulfilled the conditions of Article 13 as follows:
         -their assembly operations started or substantially increased since the initiation
         of the original anti-dumping investigation,
         -60% or more of the total value of the parts of the assembled product were
         concluded to be of Chinese origin,
         -the value added to the parts brought in for these assembly operations was
         found to be below 25 %,
         -there was evidence that the remedial effects of the duty were undermined (the
         sales prices of the assembled bicycles were found to undercut the non-dumped
        export prices of Chinese bicycles in the original investigation period by 14.5%
         on average) and,
         - there was evidence of dumping in relation to the normal values established in
         the original investigation (the dumping margins were found to range from 16
         to 53%).
4.       The Commission informed interested parties of the essential facts and
considerations on the basis of which it was intended to recommend the extension of
the original anti-dumping duty.
                                         U
 ---pagebreak--- 5.     The oral and written comments by the parties were considered and where
appropriate, the Commission's findings were modified to take account of them.
6.      The Commission, in accordance with Articles 13, 14 and 15 of the basic
Regulation and after consultation with the Advisory Committee is now proposing to
extend the anti-dumping duty imposed on imports of bicycles originating in China
(30.6%) to essential bicycle parts originating in or consigned from China when the
non-Chinese origin of the parts cannot be proven.
7.      The essential bicycle parts are finished frames and forks, sets of gears, sets of
brakes, pre-assembled handlebars and complete wheels.
8.      It is also foreseen to exempt imports which do not constitute circumvention
from the extension of the measure.
                                           /a
 ---pagebreak---                               Council Regulation (EC) No
                                       of
 extending the definitive anti-dumping duty imposed by Council Regulation (EEC)
 No 2474/93 on bicycles originating in the People's Republic of China to imports of
certain bicycle parts from the People's Republic of China, and levying the extended
          duty on such imports registered under Regulation (EC) No 703/96
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on
protection against dumped imports from countries not members of the European
Community1, and in particular Articles 13 and 14 thereof,
Having regard to the proposal submitted by the Commission after consulting the
Advisory Committee,
Whereas:
  OJ No L 56, 6. 3 1996, p. 1                  | ,
 ---pagebreak--- A.      PROCEDURE
(1)     By Regulation (EC) No 703/962 the Commission initiated an investigation into
the circumvention of the anti-dumping duties imposed by Council Regulation (EEC) No
2474/93 of 8 September 19933 on imports of bicycles originating in the People's Republic
of China by imports of parts originating in that country which are used in the assembly of
bicycles in the Community, and directed customs authorities, pursuant to Article 14 (5) of
Regulation (EC) No 384/96, to register imports of bicycle frames, forks, rims and hubs,
which constitute the principal components of a bicycle.
(2)      The products concerned by this investigation are bicycle parts and accessories
from the People's Republic of China which are used in the assembly of bicycles in the
European Community. These products are currently classifiable within the CN codes
ranging from 8714 91 10 to 8714 99 90.
(3)       The Commission officially advised the representatives of the People's Republic
of China about the initiation of the investigation and sent questionnaires to the EC
companies concerned mentioned in the complaint and to other EC companies which
made themselves known to the Commission or were named by the complainant at a later
stage.
 2
   OJ No L 98, 19. 4. 1996, p. 3
 3
   OJ No L 228, 9. 9. 1993, p. 1
 ---pagebreak--- (4)     The investigation covered the period 1 April 1995 to 31 March 1996.
(5)     Of the companies mentioned in the complaint, or subsequently named by the
complainant and those which made themselves known within the 40 days set by
Regulation (EC) No 703/96, the Commission received complete replies from the
following:
-Helmig, Overath, Germany
-Moore Large & Co, Derby, United Kingdom
-One + One, Oostvoorne, The Netherlands
-Promiles, Villeneuve d' Ascq, France
-Reece, Birmingham, United Kingdom
-Splendor, Naninne, Belgium
-Starway, Luynes, France
-Tandem, Brigg, United Kingdom
The Commission sought and verified all information it deemed to be necessary and
carried out investigations at the premises of the above companies. Of these companies,
Tandem and Promiles were found to be genuine Community producers and Helmig was
found to be an importer.
 ---pagebreak--- (6)    Companies which requested to be heard within the time limit set by Regulation
(EC) No 703/96 were granted a hearing.
(7)    The following Community producers requested a certificate of non-circumvention
pursuant to Article 13 (4) of the Basic Regulation:
-Batavus, the Netherlands
-BH, Spain
-Cycleurope, France
-Dawes, UK
-Promiles, France
-Hercules, Germany
-Mercier, France
-MICMO, France
-Raleigh, UK
-Tandem, UK
 ---pagebreak--- (8)     The following companies came forward outside the 40 days set by Regulation
(EC) No 703/96 and also requested a certificate of non-circumvention:
-Buchel, Germany
-Horlacher, Germany
-Monark Crescent, Sweden
-Pantherwerke, Germany
-Quantum, France
-PRO-FIT Sportartikel GmbH, Germany
-Tekno Cycles, France
-TNT, Spain
B.      SCOPE OF THE INVESTIGATION
(9)     As regards parts used in circumvention operations, Article 13 (1) and (2) provide
for anti-dumping duties in force to be extended to imports of parts from the country
subject to the measures, i.e. they can either originate in or be consigned from that
country.Interested parties importing the concerned parts from China were therefore
offered, for those parts consigned from China, the possibility to prove an eventual non-
Chinese origin.
The scope of the investigation covered bicycle parts imported into the European
Community from China which are assembled into finished bicycles for sale in the
European Community under conditions which, according to the complainant's
allegations, fulfil the criteria set out in Article 13 (1) and (2) (a), (b) and (c) of the Basic
Regulation:
 ---pagebreak--- C.       RESULTS OF THE INVESTIGATION
         1.     Nature of the circumvention practice
(10)     The investigation has established that of the 8 companies identified in recital (5)
above 4 assemblers ordered during the investigation period almost complete bicycles in a
disassembled form from the producers in China. For the corresponding shipments to
Europe the suppliers ensured that parts destined for the same assembler were spread
across different containers, sent on different dates and sometimes unloaded at different
ports. By this practice which is rather costly and implies important additional logistical
constraints, the assemblers avoided that the imported parts were classified in accordance
with Rule 2 (a) of the General Rules for the Interpretation of the Nomenclature of the
Common Customs Tariff (hereafter CCT) as finished bicycles which would have been
subject to the anti-dumping duty.
One of the companies mentioned in recital (5) applied the above described modus
operandi for about 75 per cent of its total assembly of bicycles during the investigation
period. However, during that period it changed its sourcing pattern and started towards
the end of that period to assemble these bicycles by using more than 40% of parts
originating in non-Chinese countries, which it purchased either directly from
manufacturers located in those countries or from subsidiaries of these manufacturers
located in the Community (see recital 17).
In order to ensure that certain imported subassemblies of bicycle parts would not be
classified in accordance with Rule 3 (b) of the General Rules for the Interpretation of the
Nomenclature of the CCT as finished bicycles, some assemblers have asked for and
received from national Customs authorities binding tariff information classifying these
assemblies as parts and thus obtaining official assurance that the anti-dumping duty
would not be applied to these subassemblies.
 ---pagebreak--- 2.      Conditions of Article 13
(i)     Change in the pattern of trade
(11)    Between 1992 and the investigation period, imports of bicycles (in. units) from
China into the Community decreased by more than 98%, which represents a decrease of
1.5 million units, whereas, for example, imports of finished bicycle frames, the main
bicycle part imported by assembly operations, increased by more than 146% (in units) in
the same period, which represents an increase of about 521.000 units. This substitution
effect is corroborated by the data gathered during the on-the-spot investigation: the output
of bicycles assembled from sets from the People's Republic of China by the five
investigated companies -based on the practice described above at recital (10)- increased
by 80%, which represents for these assemblers alone an increase of about 110.000 units
between 1992 and the investigation period.
(ii)    Insufficient due cause or economic justification
(12)     Two of the investigated companies argued that they started assembling bicycles in
the Community due to the end of year suspension of the preferential rates for import
duties for bicycles originating in China under the General System of Preferences for
developing countries in 1991 and 1992 and not because of the imposition of anti-
dumping duties. However this argument is not convincing. The shipping arrangements as
described in recital (10) are costly and imply important additional logistical constraints
which, in themselves, were not, on economic grounds, needed to benefit from the GSP as
long as not suspended. On the contrary, it is reasonable to conclude that in the view of the
high dumping margins relevant to these operations, their timing, volume of output, the
purchasing arrangements and the small degree of value added, these operations, as well as
the three others, had, within the meaning of Article 13 of the basic Regulation,
insufficient due cause or economic justification other than the imposition of an anti-
dumping duty..
 ---pagebreak--- (iii)  Start or substantial increase of operations
(13) For all 5 companies concerned, their assembly operations, or their imports of
bicycle parts from China with a view to bicycle assembly, started in or substantially
increased since 1992-93, when the original investigation was taking place/
(iv)    60% of the total value of the parts constituting the assembled product
(14) It has been established for the five assemblers which ordered almost complete
bicycle sets in the People's Republic of China, that all the parts for these sets were
consigned from China. Three of these companies admitted as it had been declared to
customs that all parts imported from China were of Chinese origin.
The two other assemblers alleged that more than 40 per cent of the parts used in the
assembly of bicycles based on these sets were originating in other countries. It has
however been established that the parts sets ordered by these two companies were
consigned from China and that parts of EC origin were only used to a limited - in fact
negligible - extent in the assembly of bicycles out of these sets.
 ---pagebreak--- (15)    For some of the parts consigned from China, these two assemblers presented
Chinese certificates of origin (Form A) to the Customs in order to benefit from
preferential treatment for the Chinese goods falling under the GSP while the rest of the
goods consigned from China were declared as being of non-Chinese origin and were thus
subject to the normal third country duty. As regards the parts claimed to be of non-
Chinese origin -but which were consigned from China- it should be noted that the
assemblers were unable to prove to the Commission the non-Chinese origin of these
parts. These two companies, however, although having been given extended deadlines for
collecting authentic documentation like certificates of origin, invoices of producers and
transport documents, were unable to give sufficient evidence during the on-spot
verifications which could have proven the origin of the non-Chinese parts, as declared on
the invoices by their Chinese supplier, the said origin having been declared to customs on
importation of these parts. The verification on the premises of these two companies
revealed that they had imported complete wheels which were assembled in the People's
Republic of China. These wheels, however, appeared on the suppliers invoice as tyres,
tubes, rims, hubs, freewheel etc. with different origins and were accordingly declared to
customs at importation as individual parts with a specific origin for each part.
The Commission services could only conclude therefore that in the absence of evidence
to the contrary, all parts which were consigned from China were of Chinese origin and
that, under these circumstances, 60% or more of the total value of the parts used in the
assembly of bicycles out of these parts were of Chinese origin.
(16)    Furthermore, it was established during the on-spot verification that the value of
identical parts of sets consigned from China which these two companies had declared to
customs authorities on importation varied from one shipment to another for no apparent
reason. This "erratic pricing" has prevented the exact determination of the value of the
parts concerned.
 ---pagebreak--- (17)    One assembler, which used during the investigation period sets ordered in China
for about 75 % of its output of bicycles, could show that it used for the assembly of the
remaining 25 % of its output more than 40 % of parts originating in other countries than
China. By the end of the investigation period (March 1996) this company started to
assemble bicycles, which were previously ordered as sets from China, using parts of non-
Chinese origin which were directly purchased from the manufacturers or their
Community subsidiaries (see recital 10). For these bicycles the assembler was finally able
to demonstrate during the on-spot verification that the models assembled in this way
between March and October 1996 contained more than 40 % of parts originating in
countries other than the People's Republic of China. The Commission services, therefore,
established that this assembler, even though 75 % of its output during the investigation
period contained initially more than 60 % of parts originating in the People's Republic of
China, had reduced since March 1996 its share of Chinese parts below 60 % of the total
value of parts of the assembled product due to the changed circumstances in the purchase
of the non-Chinese parts.
(v)     25% rule on the added value to the parts brought in
(18)    For all 5 companies concerned, the value added in the European Community on a
per model basis to the parts brought in was found to vary between only 10 and 16 % of
the manufacturing cost of a complete bicycle, and was therefore clearly below the 25%
threshold set by Article 13 (2) (b).
                                              10
 ---pagebreak--- 3.      Undermining of the remedial effects of the duty and evidence of dumping
(i)     Undermining
(19)    In order to determine whether the remedial effects of the anti-dumping duty had
been undermined in terms of sales prices, a comparison was made of the sales prices of
bicycles assembled in the Community from Chinese parts, and sold in the Community in
the investigation period by the co-operating assemblers ("assembled bicycles"), with the
"non-dumped" export prices of Chinese bicycles in the original investigation period (i.e.
actual export prices, duty paid, plus anti-dumping duty).
(20)    Following exactly the method applied in the original investigation, the
comparison was made between identical or comparable groups of bicycles. Weighted
average prices were determined for each group and adjustments to these prices were
made, in order to ensure that the comparison was made at the same level of trade, on the
same net price basis, and with comparable delivery terms. Subsequently, it was
determined for each group, whether the sales prices of assembled bicycles have undercut
the non-dumped export prices of Chinese bicycles in the original investigation period. In
order to determine an average margin, the sum of the undermining margins for those
groups for which undermining was established was expressed as a percentage of the total
non-dumped import value (CIF Community border) of Chinese bicycles, as established in
the original investigation, for all groups which were included in the comparison.
                                               11
 ---pagebreak--- With respect to the groups of bicycles used in the comparison, 77 % of the total sales
volume of the assemblers concerned were found to be models equivalent to those o*f the
original investigation period, and were consequently used for the comparison. More than
90 % of the sales used for the comparison were found to have undercut the non-dumped
export prices in the original investigation period.
(21)    Overall, the comparison showed that the sales prices of assembled bicycles have
undercut the non-dumped export prices of Chinese bicycles in the original investigation
period by on average 14.5 %.
(22)     The existence of undermining in terms of sales quantities flows directly from the
finding that the import volume of Chinese bicycles in the original investigation period
has largely been replaced, in terms of quantities, by the imports of bicycle frames of
Chinese origin, as determined in recital (11).
In this context, it should be noted that due to the considerable level of non-co-operation
from the assemblers, (see recital (25)) there was no direct information available
concerning the total sales quantity of bicycles assembled in the Community. However,
the Commission found that the volume of bicycles sold by the small number of co-
operating assemblers alone in the investigation period actually amounted to 24 % of the
sales of comparable Chinese bicycles in the original investigation period, whereas these
co-operating assemblers accounted for only 13 % of the total imports of frames of
Chinese origin in the investigation period of the circumvention investigation. Thus the
figures available from the co-operating assemblers fully support the conclusion that the
sales of bicycles assembled in the Community from Chinese parts have largely replaced
imports of finished Chinese bicycles.
                                               12
 ---pagebreak--- (23)     In the light of the foregoing, it is determined that the sales of bicycles assembled
in the Community from parts originating in or consigned from China have undermined
the remedial effects of the anti-dumping measures in question, both in terms of sales
prices and quantities.
(ii)     Evidence of Dumping
(24)      Dumping was calculated on the basis of most popular models of assembled
bicycles for each company, which represented from 50 to 100% of their turnover4. These
models were compared to the normal values previously established (Taiwan being the
reference country in the original investigation), using the same 8 criteria (i.e. category of
the bicycle, material of the frame, number of gears, dérailleurs, crank-gear, gear levers,
brake sets and hubs) in a manner as reasonable as possible.
In view of the fact that normal values had been established at FOB Taiwan level for the
exporters concerned, resale prices in the EC had to be made comparable to this level. The
actual comparison was thus made FOB China/ FOB Taiwan.
Dumping was found to range from 16 to 53% for the companies concerned.
4.        Non-co-operating assembly operations
(25)      In view of the significant change in the pattern of trade described in recital (11)
above and in the absence of co-operation by many undertakings, there is no reason to
believe that the non-co-operating companies have contributed to the circumvention of the
anti-dumping duties in force to any lesser extent than the co-operating companies.
4
  For one of the companies, the comparison was based on the turnover of assembled models sold to
unrelated companies only since this company did not succeed in giving the Commission sufficiently
 accurate information to link related transactions to final sales in a reliable manner.
                                                         13
 ---pagebreak--- The anti-dumping duty should therefore not only be extended to co-operators but also to
non-co-operators. Any other treatment would actually give a premium to non-co-
operators, a paradox even more unacceptable in the field of circumvention than in a
conventional dumping case. However, the measures taken will have to be designed in
such a way as to affect only the imports of parts used in assembly operations by
circumventing assemblers.
D.      PROPOSED MEASURES
1.      Nature of the measures:       Extension of the duty
(26)    In view of the findings made, the anti-dumping duty in force on complete bicycles
(30.6%) should be extended to certain bicycle parts originating in or consigned from
China with the exception of those parts of proven non-Chinese origin.
The investigation has shown that the imports of pre-assembled, pre-treated or pre-painted
parts is typical of assembly operations. Community producers do, by and large, treat or
paint the parts they import and do not import pre-assembled bicycle. A case in point is
the example of complete wheels, as opposed to the imports of rims and hubs for example.
                                             14
 ---pagebreak--- (27)    Therefore, in order to minimise the risk of affecting imports which do not
constitute circumvention, in particular imports of non-essential parts, the extension" of the
duty should be limited to essential parts (see column I of the table below), i.e.
-painted or anodised or polished and/or lacquered frames (including when brakes and
gears are attached)
- painted or anodised or polished and/or lacquered forks (including when brakes are
attached)
- pre-assembled wheels (with or without tubes, tyres and sprocket)
-pre-assembled handlebars (when they are presented with a stem, brake and/or gear lever
attached)
-complete sets of gears (i.e. rear and front dérailleurs, crank gear and freewheel)
-complete sets of brakes (i.e. brakes and brake levers)
                                               15
 ---pagebreak---     Product         CN Code            Extension of   Initial    Subsequent
                                        measures    Registration Collection
                                            I            II         III
     Frames        8714 91 10                            X
                 painted or anodised
                 or polished and/or         X                        x
                  lacquered
                 other
      Forks        8714 9130                             X
                 painted or anodised
                 or polished and/or         X                        x
                 lacquered
                 other
      Rims         8714 92 10                            x
      Hubs         8714 93 10                            x
 Sets of Gears:  ex 8714 99 50
   8714 99 50                               X
   8714 96 30
   8714 93 90
 Sets of Brakes: ex 8714 94 30
   8714 94 30                               x
   8714 94 90
Complete wheels  ex 8714 99 90              X
   Handlebars    ex 8714 99 10              x
                                    16
 ---pagebreak--- 2.       Collection of the duty on imports entered under registration
(28) The collection of the duty on imports under Registration as per Cornmission
Regulation (EC) N°703/96 should only be made on those parts which are also described
in recital (27) above.
(29) Companies which are exempted from the application of the extended anti-
dumping duty as indicated in recital (32) below should also be exempted from the
collection of the duty on imports under registration.
E.       EXEMPTION FROM THE EXTENSION OF THE DUTY
(30) Article 13 (4) of the basic Regulation provides that products shall be exempted
from the measure where they are accompanied by a certificate of non-circumvention.
Where an authorization was granted during the circumvention investigation the duty on
imports which have been registered in accordance with Article 2 of Regulation (EC) No
703/96 should not be collected.
(31) The issue of certificates requires prior authorisation by the Commission, or by the
Council if granted when extending the measure. An authorisation can only be granted
following a thorough appraisal of the facts.
                                             17
 ---pagebreak--- (32)     The Commission has received applications for such certificates from the
companies mentioned in recital (7) which contacted the Commission following the
initiation of the investigation. These applications were received before the deadline set in
Regulation 703/96 for parties to make themselves known. Most of these applicants are
Community producers which were part of the Community industry in the previous
investigations. The others which had not participated in the original proceeding, could be
identified as Community producers on the basis of their replies to the questionnaire,
which were verified on-the-spot. The anti-dumping duty on bicycles from China should,
therefore, not be extended to imports of essential bicycle parts used in the operations of
these companies.
In addition, the Commission considered it also appropriate not to extend the anti-
dumping duty on bicycles from China to the parts used in the operations of the company
which has reduced since March 1996 its share of Chinese parts below 60 % (see recitals
10, 17) since this company could not be considered to be circumventing the anti-dumping
duty in force from this time on.
(33)     Further applications were made by the parties mentioned in recital (8), which
approached the Commission after the deadline set in Regulation 703/96 for parties to
make themselves known. It is noted, that no deadline is set by Article 13(4) for
applications for certificates of non-circumvention.
The Commission sent questionnaires to these companies immediately upon receipt of
their applications. The Commission has however not yet been able to verify whether
these parties are assemblers or importers, and whether the operations in which the
imported goods are used fall within Article 13 (2) of the basic Regulation. Furthermore, it
cannot be excluded that, in the present case, more companies might apply for a certificate
of non-circumvention once the measure has been extended.
 ---pagebreak--- (34) In order to ensure therefore that, notwithstanding late application by the
companies concerned, parties not circumventing the duty are duly exempted from the
extension of the duty to imports of parts, the adoption of this Regulation should not
prevent the Commission from investigating pending or future requests with a view to
authorising the exemption of imports from the extended duty. Where a company applied
for a certificate of non-circumvention during the investigation, an eventual exemption
should take effect as from the date of initiation of the present circumvention
investigation. Where a company applies for a certificate after the extension of the duty an
eventual exemption should only take effect from the date of the request. On the other
hand, it must be ensured that where, after examination of an operation, circumvention is
found to take place, the extended duties due can be effectively collected (see recital 43).
(35) The operation of the system for granting an authorisation and for the subsequent
issue of certificates is not fully set out in Article 13 (4) of the basic Regulation. It is
therefore appropriate to provide for detailed rules on the implementation of the
exemption system to be adopted by a Commission Regulation. In this respect the
following should be noted:
(36) The granting of an authorisation depends on the goods not being used in an
assembly operation which constitutes circumvention, as laid down in Article 13 (2) of the
basic Regulation. Therefore, where assemblers do not import directly, a procedure must
be devised permitting to ascertain whether or not imports of essential bicycle parts are
used for circumvention purposes.
                                              19
 ---pagebreak--- (37) To this end, it is appropriate to use the exisiting mechanism of end-use control
according to customs law, i.e. Article 82 of Regulation (EEC) No 2913/925 (Community
Customs Code) and Articles 291 et seq. of Regulation (EEC) No 2454/936 (Implementing
provisions) and to apply it mutatis mutandis within the framework of the anti-
circumvention legislation to the issue of authorisations for certificates of non-
circumvention in accordance with Article 13 (4) of the basic Regulation.
(38) The end-use by reason of which imports should benefit from an exemption from
the anti-dumping duty shall be defined by reference, (i) to assembly operations found not
to be circumventing, and (ii), by reference to the use of essential bicycle parts in small
quantities by small scale operators, notably for replacement purposes, which should be
presumed not to constitute circumvention. In the latter case, imports of essential bicycles
parts will have a rather limited economic significance, and will be unlikely to undermine
the effect of the existing duty in terms of the quantities of bicycles that might be
produced from such imported parts(Article 13(2)(c) of the basic Regulation).
In order to allow intermediaries, which do not import essential bicycle parts directly, to
purchase these parts from importers and to resell them to non-circumventing assembly
operations, such transactions should also be monitored under the end-use control system.
 5
   O J N o L 3 0 2 , 19.10.1992, p. 1
 6
   O J N o L 2 5 3 , 11.10.1993, p. 1
                                             20
 ---pagebreak--- (39) Finally, the system should also allow to exempt direct imports by non-
circumventing assembly operations from the extended duty.
(40) In order to achieve the necessary flexibility to adjust the exemption system where
needed, it is appropriate to entrust to the Commission the setting up and the operation of
such system within a framework set by the Council, and after consulting the advisory
Committee.
(41) In this respect, and with a view to pending or future applications, the Commission
should be charged to establish within such a system lists of companies exempted from the
extended duty, after having examined, pending or new requests for certificates of non-
circumvention.
(42) In order to create an incentive to abstain from circumventing practices, the
management of the exemption system has to provide for the possibility of reviewing the
situation of those companies which have been found circumventing, but which have
changed their operation to the extent that the conditions of circumvention are no longer
fulfilled. Similarly, it must be possible to revoke exemptions which are no longer
justified. Finally, any new operation should also have the possibility to request an
investigation by the Commission with a view to an exemption from the duty.
                                              21
 ---pagebreak--- (43) Provision should be made for the possibility, if appropriate, of imports to be
conditionally exempted from the extended duty while the operations in which they are to
be used are under examination. However, in order to ensure that, where an operation is
found circumventing, the extended duty can be effectively collected, customs authorities
shall be enabled to require the provision of a security if necessary.
(44) Since this is the first case in which anti-dumping measures are being extended and
where exemptions are being granted pursuant to Article 13 (4) of the basic Regulation,
provision has also to be made that the Commission may adapt the exemption system
where necessary to take account of experience gained with the operation of that system.
F.      PROCEDURE
(45) Interested parties were informed of the essential facts and considerations on the
basis of which the Commission intended to extend the definitive anti-dumping duty in
force to the parts concerned and have been given the opportunity to comment.
Interested parties have also been informed about the main features of the exemption
system which will be established (see recital 37).
                                              22
 ---pagebreak--- HAS ADOPTED THIS REGULATION
                                           Article 1
'Essential bicycle parts' within the meaning of this Regulation are:
       Painted, anodised, polished and/or lacquered bicycle frames currently classifiable
       under CN code ex 8714 91 10,
       Painted, anodised, polished and/or lacquered bicycle forks currently classifiable
       under CN code ex 8714 91 30,
       Sets of gears consisting of
                rear and front dérailleurs (CN code 8714 99 50),
                a crank gear (CN code 8714 96 30), and
                a free-wheel (CN code 8714 93 90),
       whether or not presented together, and currently classifiable under CN code
       ex 8714 99 50,
        Sets of brakes consisting of
                brakes (CN code 8714 94 30), and
                brake levers (CN code 8714 94 90),
        whether or not presented together, and currently classifiable under CN code
       ex 8714 94 30
       Complete wheels with or without tubes, tyres and sprockets currently classifiable
        under CN code 8714 99 90, also if presented as parts, and
        Pre-assembled handlebars currently classifiable under CN code 8714 99 10,
        whether or not presented with a stem, brake and/or gear levers attached.
                                               23
 ---pagebreak---                                          Article 2
1.      The definitive anti-dumping duty imposed by Regulation (EC) No 2474/93 on
imports of bicycles falling within CN code 8712 00 and originating in the People's
Republic of China is hereby extended to imports of essential bicycle parts originating in
the People's Republic of China.
2.      Essential bicycle parts which are consigned from the People's Republic of China
shall be considered to originate in that country unless it can be proven by production of
an origin certificate issued in accordance with the origin provisions in force in the
Community that the parts in question originate in another specific country.
Where essential bicycle parts are consigned from a country other than the People's
Republic of China, customs authorities may, in the event of serious doubts concerning
their origin, require production of an origin certificate issued in accordance with the
origin provisions in force in the Community certifying that the parts in question originate
in a country other than the People's Republic of China.
3.      The duty extended by Paragraph 1 shall be collected on imports of essential
bicycle parts originating in the People's Republic of China registered in accordance with
Article 2 of Regulation (EC) No 703/96 and Article 14 (5) of Regulation (EC) No
384/96.
4.      Unless otherwise specified, the provisions in force concerning customs duties
shall apply.
                                             24
 ---pagebreak---                                         Article 3
1.     The Commission shall, after consulting the Advisory Committee, adopt by
Regulation the necessary measures to authorise the exemption of imports of essential
bicycle parts which do not circumvent the anti-dumping duty imposed by Regulation
(EEC) No 2474/93 from the duty extended by Article 2.
2.     The Commission Regulation shall, in particular, provide for:
       authorisation of the exemption and control of imports of essential bicycle parts
       used by companies whose assembly operations are not circumventing,
       authorisation of the exemption and control of other imports of essential bicycle
       parts, in particular by companies which do not circumvent, or with regard to
       imports which can be presumed not to circumvent, .
       rules governing the functioning of such exemptions in accordance with the
       relevant customs provisions, and
       exchanges of information between customs authorities and the Commission
       concerning the operation of such exemptions.
                                           25
 ---pagebreak--- 3.      The Commission Regulation shall also provide for:
a)      the examination of whether the conditions of non-circumvention are fulfilled, in
particular in case of requests by:
        assembly operations by parties which made themselves known during the
        investigation but after the time-limit set out in Article 3 of Regulation (EC) No
        703/96,
        assembly operations which started using essential bicycle parts for the production
        or assembly of bicycles only after the investigation period set out in Regulation
        (EC) No 703/96,
        assembly operations which had been found to be circumventing during the
        investigation,
        other assembly operations using essential bicycle parts for the production or
        assembly of bicycles by parties which had not made themselves known during the
        investigation, and
                                             26
 ---pagebreak--- b)       the necessary procedural provisions for such examination, and in particular the
conditions under which future requests for an examination will be accepted. To this end,
where essential bicycle parts are declared for free circulation by an assembly operation in
respect of which an examination by the Commission is pending, the Commission
Regulation shall also make provision that:
         the payment of the customs debt incurred for the anti-dumping duty extended or
         to be collected pursuant to Article 2 be suspended pending the outcome of the
         examination by the Commission,
         where upon examination the operation is found to be non-circumventing, the
         customs debt arising pursuant to Article 2 be extinguished, and
         in other cases, the suspension of the customs debt be lifted.
The Commission may also provide that customs authorities may require the provision of
a security when considered necessary to ensure the effective payment of the customs debt
in case the suspension is being lifted.
4.       Following an examination, under paragraph 3 the Commission may decide, where
justified, after consulting the Advisory Committee, to authorise the exemption of the
operation concerned from the extension of the measures provided for by Article 2.
5.       Authorisation for exemptions granted pursuant to the Commission Regulation
shall have retroactive effect to the date of initiation of the present circumvention
investigation, provided the party concerned made itself known during that investigation.
It shall have retroactive effect to the date of the request for an authorisation in other
cases.
                                               27
 ---pagebreak--- 6.      The Commission shall also take the necessary steps to to revoke an authorisation
for exemption, where justified and after consulting the Advisory Committee.
7.      The Commission may amend, after consulting the Advisory Committee, the
Regulation adopted pursuant to Paragraph 1 in the light of experience with its operation.
                                         Article 4
Customs authorities are hereby directed to discontinue registration pursuant to Article 2
of Regulation (EC) No 703/96 and Article 14 (5) of Regulation (EC) No 384/96 of
bicycle frames, forks, rims and hubs falling within CN codes 8714 91 10, 8714 91 30,
8714 92 10 and 8714 93 10 respectively.
                                         Article 5
This Regulation shall enter into force on the day following its publication in the Official
Journal of the European Communities.
This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
For the Council
The President
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 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                   ISSN 0254-1475
                                                           COM(96) 689 final
                                             DOCUMENTS
EN                                                                       02 n
                                    Catalogue number : CB-CO-96-700-EN-C
                                                             ISBN 92-78-13705-7
Office for Official Publications of the European Communities
L-2985 Luxembourg
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