CELEX: 51991PC0015
Language: en
Date: 1991-02-07
Title: PROPOSAL FOR A COUNCIL REGULATION (EEC) IMPOSING A DEFINITIVE ANTI-DUMPING DUTY ON IMPORTS OF BARIUM CHLORIDE ORIGINATING IN THE PEOPLE' S REPUBLIC OF CHINA

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                               C0MC91) 15 final
                                                               Brussels, 7 February 1991
                                  Proposal for a
                       COUNCIL REGULATION (EEC)
    imposing a d e f i n i t i v e a n t i - d u m p i n g duty on imports o f
              barium chloride originating in the
                    People's Republic of China
                 (presented by t h e Commission)
 ---pagebreak---                                      - 2-
                           EXPLANATORY MEMORANDUM
1.  By Regulation (EEC) No 2402/89 the Commission imposed a provisional
    anti-dumping duty on imports of barium chloride originating in the
    People's Republic of China and the territory then known as the German
    Democratic Republic^1).
2.  This duty was extended for a period not exceeding two months by
    Council Regulation (EEC) No 3555/89<2>.
3.  The exporters requested and were granted a hearing.   They also put
    their arguments In writing.
4.  The Commission took into consideration all the views expressed before
    arriving at its final conclusions.
5.  The Commission also took Into consideration the fact that the
    proceeding concerning the German Democratic Republic has become
    without object as a result of the unification of the GDR with the
    Federal Republic of Germany on 3 October 1990.
6.   In accordance with Article 12 of Council Regulation (EEC) No 2423/88,
    the Commission proposes that the Council impose a definitive anti-
    dumping duty on imports of barium chloride originating in the
    People's Republic of China.
(1)   OJ No L 227, 4.8.1989, p. 24.
(2)   OJ No L 349, 30.11.1989, p.1.
 ---pagebreak---                                      - 3 -
                                Proposal for a
                          COUNCIL REGULATION (EEC)
           Imposing a definitive antI-dumping duty on imports of
                     barium chloride originating in the
                         People's Republic of China
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
                                                1
members of the European Economic Community* ) and in particular Article
12 thereof,
Having  regard   to  the  proposal   from   the Commission,   submitted  after
consultation within the Advisory Committee as provided for in the above
Regulation,
Whereas:
                                 I.   PROCEDURE
                          A.   PROVISIONAL MEASURES
(1)  By Regulation (EEC) No 2402/89 the Commission imposed a provisional
     antI-dumping duty on imports of barium chloride originating in the
     People'3 Republic of China and the German Democratic Republic*2*.
     This duty was extended      for a period not exceeding     two months by
                                              3
     Council Regulation (EEC) No 3555/89< >.
(1)  OJ No L 209, 2.8.1988, p.1.
(2)  OJ No L 227, 4.8.1989, p. 24.
(3)  OJ No L 349, 30.11.1989, p.1.
 ---pagebreak---                                    - 4 -
                          B.  SUBSEQUENT PROCEDURE
(2) Following    imposition of   the provisional     anti-dumping   duty, the
    exporters of the product in question requested, and were granted, an
    opportunity    to   present   their    case.  They   also  made    written
    submissions.
(3) The  parties were     given  and   made   use  of  every  possibility   of
    exercising the rights provided for in Article 7 (4) of Regulation
    (EEC) No 2423/88.
(4) The Commission took into consideration all the views put forward
    before arriving at its final conclusions, which are endorsed by the
    Counc iI.
              C.   SITUATION CONCERNING THE TERRITORY OF THE
                         GERMAN DEMOCRATIC REPUBLIC
(5) On 3 October 1990 the abovementioned territory formally became part
    of the Federal Republic of Germany and, as a consequence, became an
    integral part of the Community.       Since Regulation (EEC) No 2423/88
    lays down provisions for protection against dumped or subsidised
    imports from countries not members of the European Community, it
    follows   that   the anti-dumping    proceeding   concerning   imports of
    barium   chloride originating     in the abovementioned      territory  no
    longer has any legal basis and is therefore without object.
 ---pagebreak---                                     - 5 -
                 D.  PRODUCT COVERED BY THE INVESTIGATION
                             AND LIKE PRODUCTS
(6)  in Regulation (EEC) No 2402/89 the Commission drew a distinction
     between the crystallized and anhydrous forms of barium chloride but
     further investigation after the imposition of the provisional duty
     has caused this distinction to be dropped.
(7)  Examination of the physical characteristics of the two forms of the
     product shows that the differences are negligible.       Their chemical
     formula is the same, apart from the presence of water molecules in
     the crystallized form, which can be changed to the other form simply
     by drying.   The two forms even      look similar:  the colour    is the
     same,  the  crystals  are   the size    of grains of   sand   while  the
     anhydrous product is a powder, and the packing is almost identical.
(8)  The numerous applications of crystallized barium chloride do not
     allow any final conclusions on this factor.     While anhydrous barium
     chloride has more specific applications, this can hardly lead to the
     conclusion that there is a distinct market for this product since it
     is so easily manufactured from the crystallized form.        The market
     for the anhydrous product    Is thus also an outlet for producers of
     the crystallized product.    This being so, anhydrous and crystallized
     forms of barium chloride constitute one product for the purposes of
     this proceeding.
(9)  The barium chloride produced by the Community industry is identical
     to that originating in the People's Republic of China.
                                E.   DUMPING
a.      Normal value
(10) Since the People's Republic of China is a non-market economy, the
     normal value was established     in the preliminary   investigation, in
     accordance with Article 2(5) of Regulation       (EEC) No 2423/88, by
 ---pagebreak---                                         - 6 -
     using the price at which a like product is sold in a third country
     having a market economy.         The United States was chosen for this
     purpose for the reasons and under the conditions set out in recitals
     10 to 13 of Regulation 2402/89.
(11) However, since it was not possible, for reasons beyond the control
     of the Commission, to verify US market prices on the spot, another
     solution had to be found.         The numerous efforts to do so included
     contacts with a great        number of barium chloride producers of a
     certain size in other countries as well as with local authorities
     which   were   approached    to obtain      the   cooperation   of   the   firms
     contacted.    These efforts, however bore no fruit within a reasonable
     per iod of time.
(12) In view    of   these   difficulties,      the   Commission   was  obliged    to
     establish    the normal     value    by  using    the  price  payable    in the
     Community, duly adjusted to include a profit margin of less than 10%
     corresponding to that of the most efficient company in the sector,
      In accordance with Article 2(5) of Regulation (EEC) No 2423/88.             The
     two exporters concerned were notified of this decision.               While the
     Chinese exporter had objected to the choice of the United States as
     a reference country, no objection was raised against               the use of
     Community prices as a basis for establishing the normal value.
b.       Export price
(13) The   export   price   for   the    purpose   of   applying   the  provisional
     measures was established on the basis of information published by
     Eurostat since the Chinese exporter failed to reply.
(14) In the final stage of the investigation, the Commission                received
     some   information    on   the   prices    and   terms   of  payment   of   this
     exporter.    Although incomplete, it supported the conclusions drawn
     at the time the provisional measures were imposed, notably those set
     out in recital 14 of Regulation 2402/89.
 ---pagebreak---                                      - 7 -
c.      Comparison
(15) In comparing normal value with export prices in the case of the
     Chinese exporter, the Commission took account, where this seemed
     appropriate,    of  differences     affecting   price   comparability,    in
     particular   terms of payment     and the cost of transport       from the
     exporter's works to the Community frontier.        These adjustments were
     calculated on the basis of information obtained in the preliminary
     investigation and confirmed in the final stage of the investigation.
(16) All comparisons were made at the ex-works stage.
(17) The margin was established by comparing the relevant monthly normal
     value with export prices as established by Eurostat by month and by
     Member State.
d.       Dumping margin
(18) The   conclusions of   the   preliminary     investigation,  showing    that
     exports to the Community      of barium     chloride originating     In the
     People's Republic of China were being dumped, were confirmed.            The
     dumping margin corresponds to the difference between            the normal
     value established and the export price to the Community.
(19) On the basis of the free-at-frontier price, the dumping margin is
     50.13% for imports originating in the People's Republic of China.
(20) The Council endorses the Commission's conclusions with reference to
     the People's Republic of China set out in recitals 10 to 19.
                                  F.    INJURY
(21) As the proceeding with regard to the German Democratic Republic has
     become without object     for the reasons stated       in recital   5, the
     Commission   has examined whether       the  imports of   barium   chloride
     originating    in  the People's     Republic   of  China  were,   taken   in
     isolation, causing or threatening to cause injury to the Community
     industry.
 ---pagebreak---                                         - 8-
(22) In this connection, particular consideration has been given to the
     volume and evolution of         these   imports, the degree by which they
     undercut the prices charged by Community producers as well as to the
     production    capacity     in  the  People's   Republic    of   China   and   the
     Chinese   export    policy    towards other    third   country    markets.    The
     findings made     in this regard      (recitals 20 to 33 and 35 to 44 of
     Regulation    (EEC)    No   2402/89),    which  are   not   contested    by   the
     exporter, lead to the conclusion that even when the imports from the
     German Democratic Republic are disregarded, the             imports of barium
     chloride   originating      in the People's     Republic of     China   must   be
     considered    as   causing    and   threatening    to  cause    injury   to   the
     Community industry.
(23) The Chinese exporter has continued to deny that it is the source of
      injury or threat of injury in this matter.           Its arguments, however,
     cannot be accepted for the following reasons.
(24) With regard to the argument that the prices of Chinese exports have
     rarely been below the minimum price laid down by Council Regulation
     (EEC) No 2370/83<4) and         regardless of     the   lack of    complete   and
     fully reliable documentation on the subject, the Commission notes
     that compliance with a measure          is not   in itself a guarantee that
     dumping   is not taking place nor that injury is not being caused by
     such dumping.
(25) With   regard   to   the cost    of   raw materials    and   labour, cited     as
     grounds for low export prices, the Commission points out that this
     argument   is not pertinent to the establishment of            injury and does
     not obviate the undercutting referred to in recital 24 of Regulation
     No 2402/89.
(26) As to the Chinese exporter's argument that the volume of exports had
     fallen since the       imposition of definitive anti-dumping duties in
     1983, it should be noted that, while this is a normal consequence of
     trade protection measures, the exporter was, nevertheless, able to
     retain   a  sizeable     share   of   the  Community   market    despite    these
     measures.
(4)  OJ No L 228, 20.8.1983, p. 28
 ---pagebreak---                                      - 9-
(27) Under these conditions, the Council confirms the above conclusions
     and  those set out     in Regulation     2402/89 concerning      injury   (see
     recitals 20 to 39, with the exception of Recital 34) and threat of
     injury (see recitals 40 to 44).
                           G.   COMMUNITY INTEREST
(28) The  Council   confirms   the   findings    and   conclusions   set   out   in
     recitals 45, 46, 47, 49, 51 and 52 of Regulation (EEC) No 2402/89.
     The Council considers that ensuring the survival of the Community
     firms will be beneficial for competition on the Community market and
     that the disappearance of a major part of Community production would
     pose a threat to the supplies of Community consumers.          The interests
     of the Community therefore call for intervention.
                             II.   DEFINITIVE DUTY
(29) In view of    the  injury caused     and   the threat    of   injury   to the
     Community   industry   as   a  result   of    imports  originating     in  the
     People's Republic of China since the lapsing of measures in August
     1988, the Council     concludes    that  a definitive     ad valorem     anti-
     dumping duty must be imposed.
(30) With regard to the amount of duty necessary to remove the injury and
     threat of injury, the Commission has taken account of both the price
     of the imports concerned and the minimum selling price which would
     enable Community    producers to cover production costs during             the
     investigation   period,   plus   a   reasonable    profit   margin   that   is
     calculated on the basis of the profit margin of the most efficient
     producer before increased penetration of dumped exports.            These two
     prices, duly adjusted to allow for the           importer's commission and
     customs duty, were compared.     The difference between the two prices,
     expressed as a percentage of the cif value of export prices, is the
     percentage by which the prices have to be raised              to remove the
     injury and threat of injury and stands at 25.8% of the net free-at-
     Community-frontier price before duty.        The Council agrees with these
     considerations.
 ---pagebreak---                                    - 10 -
                  III.  COLLECTION OF THE PROVISIONAL DUTY
(31) In view of the difficulties encountered     in establishing the normal
      value, the final   investigation was not completed within the time-
      limits laid down in Article 11 (5) of Regulation (EEC) No 2423/88.
      The Council therefore notes that the amounts secured by the anti-
      dumping duty are released,
HAS ADOPTED THIS REGULATION:
                                  Article 1
1.    A definitive   anti-dumping  duty  is hereby   imposed on  imports of
      barium chloride falling within CN code 2827 38 00 and originating in
      the People's Republic of China.
2.    The amount of the duty shall be equal to 25.8% of the net free-at-
      Community-frontier price before duty.
3.    The provisions in force with regard to customs duties shall apply.
                                  Article 2
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 I I Member States.
Done at Brussels,                              For the Council
                                                The President
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                                                                   COM(91) 15 final
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