CELEX: 52000PC0197
Language: en
Date: 2001-02-16
Title: Proposal for a Council Regulation imposing a definitive anti-dumping duty on imports of certain electronic weighing scales originating in Japan

COMMISSION OF THE EUROPEAN COMMUNITIES
                                              Brussels, 16.2.2001
                                              COM(2000) 197 final
                               Proposal for a
                       COUNCIL REGULATION
imposing a definitive anti-dumping duty on imports of certain electronic
                  weighing scales originating in Japan
                      (presented by the Commission)
 ---pagebreak---                     EXPLANATORY MEMORANDUM
(1) Attached is a proposal for a Council Regulation maintaining the anti-
    dumping duties on imports of certain electronic weighing scales (REWS)
    originating in Japan.
(2) The review investigation concerning anti-dumping measures on imports of
    REWS originating in Japan was initiated on 25 April 1998, under Article
    11(2) and Article 11(3) of Council Regulation (EC) No 384/96 (the basic
    Anti-dumping Regulation). In accordance with these Articles the measures
    remain in force pending the outcome thereof.
(3) The proposal to maintain the definitive anti-dumping duties is based on the
    likelihood of recurrence of dumping and injury identified during the review
    investigation.
(4) The co-operating interested parties were informed of the essential facts and
    considerations on the basis of which the Commission intended to recommend
    that definitive anti-dumping duties be maintained. Subsequent to this
    disclosure comments were received from an importer which have been taken
    into consideration but did not alter the basic conclusions of the investigation.
(5) No co-operation was received from users. In reviewing all the interests
    involved in the light of the comments received, and since the measures have
    been in place for a certain period, it can be concluded that maintaining the
    measures would not imply any significant adverse effects on users.
(6) In the light of the above the Commission therefore proposes that the Council
    approve the maintaining of an anti-dumping duty on imports from Japan
    which range from 15,3 % to 31,6 %. Taking into account the duration of the
    investigation, it is considered appropriate that the duration of the measures
    should be limited to four years.
                                            2
 ---pagebreak---                                          Proposal for a
                                  COUNCIL REGULATION
     imposing a definitive anti-dumping duty on imports of certain electronic
                           weighing scales originating in Japan
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 Article 9 and Article 11 thereof,
Having regard to the proposal submitted by the Commission after consulting the
Advisory Committee,
Whereas:
                                     A.     PROCEDURE
1.      Measures subject to review involving Japan
(1)     In April 1993, by Regulation (EEC) No 993/932, the Council imposed
        definitive anti-dumping measures on imports of certain electronic weighing
        scales originating in Japan.
2.      Measures in force involving other countries
(2)     In October 1993, by Regulation (EEC) No 2887/933, the Council imposed
        definitive anti-dumping measures on imports of certain electronic weighing
        scales originating in Singapore. In 1995 these measures were modified by
        Regulation (EC) No 2937/954 following an investigation which showed that
        the dumping margin had increased as a result of the duties being absorbed.
        These measures are also subject to a review which was opened in October
        19985.
1
        OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation (EC) No 2238/2000 (OJ
        L 257, 11.10.2000, p. 2).
2
        OJ L 104, 29.4.1993, p. 4.
3
        OJ L 263, 22.10.1993, p. 1.
4
        OJ L 307, 20.12.1995, p. 30.
5
        OJ C 324, 22.10.1998, p. 4.
                                                     3
 ---pagebreak--- (3) On 16 September 1999, the Commission published a Notice in the Offical
    Journal of the European Communities6 announcing the initiation of an anti-
    dumping proceeding in accordance with Article 5 of Regulation (EC)
    No 384/96 (hereinafter referred to as the “basic Regulation”) regarding
    imports into the Community of certain electronic weighing scales originating
    in the People’s Republic of China, the Republic of Korea and Taiwan. This
    investigation was concluded in November 2000 by Council Regulation (EC)
    No 2605/20007, which imposed definitive anti-dumping measures on imports
    of certain electronic weighing scales originating in these countries.
3.  Request for review
(4) Following the publication of a notice of impending expiry of the anti-dumping
    measures in force on imports of certain electronic weighing scales originating
    in Japan8, the Commission received a request dated 23 January 1998 to review
    the measures pursuant to Article 11(2) of the basic Regulation.
(5) The request was lodged on behalf of Community producers whose collective
    output constituted a major proportion of the total Community production of
    the product concerned.
(6) The request was based on the grounds that the expiry of the measures would
    be likely to result in the continuation or recurrence of dumping and injury to
    the Community industry. Having determined, after consulting the Advisory
    Committee, that sufficient evidence existed for the initiation of a review, the
    Commission initiated an investigation pursuant to Article 11(2) and 11(3) of
    the basic Regulation.9 The opening of the Article 11(3) investigation by the
    Commission was based on the allegation in the request that dumping margins
    had significantly increased since the previous investigation and that the expiry
    of the measures would therefore result in increased dumping and injury.
4.  Investigation
(7) The Commission officially advised the Community producers supporting the
    review request, the exporting producers, importers and Eurocommerce (a user
    association representing multiple and small users in the Community) which
    were known to be concerned. Representatives of the exporting countries were
    also officially advised. Interested parties were given the opportunity to make
    their views known in writing and to request a hearing within the time limits set
    out in the Notice of initiation of the review.
(8) The Commission sent questionnaires to the parties known to be concerned and
    received replies from three Community producers and two Japanese
    producers, only one of which had exported the product concerned to the
    Community during the investigation period. The Commission also sent
6
    OJ C 262, 16.9.1999, p. 8.
7
    OJ L 301, 30.11.2000, p. 42.
8
    OJ C 329, 31.10.1997, p. 6.
9
    OJ C 128, 25.4.1998, p. 11.
                                              4
 ---pagebreak---      questionnaires to importers and the user association. Two importers replied;
     there was no response from the user association or any individual users.
(9)  The Commission sought and verified all the information it deemed necessary
     for the purposes of determining the likely continuation or recurrence of
     dumping and injury and the Community interest. Verifications were carried
     out at the premises of the following companies:
       Exporting producers:
       Yamato Scale Co. Ltd., Akashi
       Ishida Co. Ltd., Kyoto
       Applicant Community producers:
       Bizerba GmbH & Co. KG, Balingen, Germany
       GEC Avery Limited, (a subsidiary of the General Electric Company, plc),
       Birmingham, United Kingdom
       Testut/Lutrana S.A., Béthune, France
       Importers
       Digi Nederland B.V., Purmerend, The Netherlands
       Carrin and Co. NV, Antwerp, Belgium
(10) The investigation of continuation and recurrence of dumping covered the
     period from 1 April 1997 to 31 March 1998 (hereinafter referred to as the
     “investigation period”). The examination of continuation and recurrence of
     injury covered the period from 1994 up to the end of the investigation period
     (hereinafter called the “analysis period”).
(11) The present review exceeded the period of 12 months within which it should
     normally have been concluded pursuant to Article 11(5) of the basic
     Regulation, due to the complexity of the investigation and in particular the
     impact of the Euro-effect on the investigation (see recital (34)) and the
     difficulties in establishing findings given the extent of non co-operation.
(12) All parties concerned were informed of the essential facts and considerations
     on the basis of which it was intended to recommend the maintenance of the
     existing measures. They were also granted a period within which to make
     representations subsequent to these disclosures. The comments of the parties
     were considered and, where appropriate, the findings have been modified
     accordingly.
                                               5
 ---pagebreak---            B.      PRODUCT CONCERNED AND LIKE PRODUCT
1.    The product concerned
(13)  The product concerned is the same as in the original investigation, i.e.
      electronic weighing scales for use in the retail trade (hereinafter referred to as
      “REWS”) which incorporate a digital display of the weight, unit price and
      price to be paid (whether or not including a means of printing this data) falling
      within CN code ex 8423 81 50. REWS have different types or levels of
      performance and technology. In this respect, the industry defines three
      segments of REWS; low, mid and top ranges. These vary from stand-alone
      REWS, without built-in printers to more sophisticated models with pre-set key
      systems and the possibility of integration into computer-related control and
      management systems.
(14)  Although the potential use of REWS can vary, there is no significant
      difference in the basic physical and technical characteristics of the various
      types of REWS. In addition, the investigation has shown that between these
      three segments there are no clear dividing lines, models in neighbouring
      segments often being interchangeable. In line with the results of the previous
      investigation, they have, therefore, to be considered as one single product for
      the purposes of this investigation.
2.    Like product
(15)  It was established that the various REWS produced and sold in Japan have,
      despite differences in size, life span, voltage or design, the same basic
      technical and physical characteristics as compared to the REWS exported from
      Japan to the Community and accordingly have to be considered as like
      products.
      Likewise, apart from minor technical differences, Community-produced
      REWS are basically alike in all respects to the REWS exported from Japan to
      the Community.
   C.    DUMPING AND LIKELIHOOD OF RECURRENCE OF DUMPING
1.    Preliminary remarks
(16)  As indicated above, this investigation is a combination of an expiry review
      based on Article 11(2) of the basic Regulation and an interim review based on
      Article 11(3), the latter having been initiated to examine information contained
      in the request for review indicating that the injurious dumping had increased.
      The Commission decided not to pursue this Article 11(3) review because the
      volumes sold on the Community market by the exporting producers were low
      and there was insufficient evidence for a lasting change in circumstances to be
      established. The Commission’s findings are, therefore, based on those
      established under Article 11(2) relating to the likelihood of continuation and
      recurrence of injurious dumping should the existing measures be removed.
                                               6
 ---pagebreak--- (17) According to Eurostat, some 995 REWS from Japan were imported into the
     Community during the investigation period, as compared to 19,000 units in the
     previous investigation period on which the measures subject to review were
     based. The co-operation in this investigation has been very limited (a total of
     35 units or less than 4 % of imports) with only partial co-operation
     forthcoming from two producers, Yamato Scales Co. Ltd. and Ishida Co. Ltd.,
     the latter not exporting to the Community market during the investigation
     period. This compares to co-operation from four exporting producers in the
     previous investigation.
2.   Likelihood of continuation or recurrence of dumping
(18) In accordance with Article 11(2) of the basic Regulation, the purpose of an
     expiry review is to determine whether, or not, the expiry of the measures
     would be likely to lead to a continuation or recurrence of injurious dumping.
       Likelihood of continuation of dumping
(19) In examining whether there is a likelihood of continuation of dumping if
     measures were removed, it is necessary to verify whether dumping exists at
     present and whether any such dumping is likely to continue.
(20) Only two producers submitted comments in response to the Notice of initiation
     of the investigation. Both of these co-operated only partially. One had no
     exports to the Community during the investigation period and therefore
     provided no information on export prices while the other had exported but
     provided incomplete information on normal values. Three other producers
     which were involved in the previous investigation refused to co-operate
     altogether. In these circumstances, the Commission only had access to very
     limited information from the Japanese producers in order to determine the
     existence of dumping.
(21) The partial co-operator, Yamato Scales Co. Ltd provided complete
     information on its export prices but incomplete information on normal values
     as the data provided only covered one third of its domestic sales of the product
     concerned (the remaining sales being made to related distribution companies).
     The company also failed to provide any data on the selling, general and
     administrative costs it had incurred on its domestic sales. A comparison of
     these export prices with the incomplete data on normal values indicated that
     significant dumping was taking place on this exporter's sales to the
     Community. Also, a comparison of these export prices with the constructed
     normal value established for this producer in the original investigation also
     indicated the existence of significant dumping.
(22) Moreover, one Japanese exporting producer, who accounted for the vast
     majority of REWS imports from Japan during the investigation period, when
     declaring his non co-operation, admitted that he was dumping on his exports to
     the Community. The Commission also examined Eurostat data and the average
     price of all exports from Japan derived from that data supported a finding of
     dumping in that such price was lower than any normal value established for
     the partial co-operator.
                                             7
 ---pagebreak--- (23) In view of the significant non co-operation the above information was
     considered as the facts available under the terms of Article 18 of the basic
     Regulation. As indicated, this showed the existence of a significant dumping
     margin.
(24) Given the exchange rate fluctuations of the Japanese currency since the
     previous investigation, the depreciation of the yen against the invoice
     currency, i.e. US dollar, was examined also but it was found that the increased
     export prices in yen was partly offset by a significant real fall in dollar export
     prices (as reported by Eurostat) since the original case. This was confirmed by
     the findings for the partial co-operator where the depreciation of the yen did
     not, insofar as could be deduced from the incomplete information received,
     result in a lower dumping margin. Moreover, there were clear signs that the
     depreciation of the yen may not prove lasting.
(25) In addition to the finding of the existence of significant dumping during the
     investigation period, no information was submitted showing that dumping was
     unlikely to continue should measures be removed. In fact, the evidence
     available to the Commission strongly suggests that these imports would
     continue to be made at dumped prices for the foreseeable future should the
     measures be removed. In particular, it should be noted that the Community
     market is attractive for exporters in that, on the basis of information received
     from the one partial co-operator, prices there are higher than in other third
     country markets (Taiwan, Malaysia) to which this company also exports.
(26) It should be furthermore noted that in Japan prices have remained
     systematically higher than elsewhere, a situation which has persisted over a
     number of years. Therefore, this situation is considered unlikely to change in
     the short or medium term and makes the continuation of dumping very likely.
       Likelihood of recurrence of dumping
(27) Given that measures are deemed to have resulted in significantly lower
     quantities being exported from Japan to the Community, the question of the
     effects of the removal of measures in terms of increased quantities and
     dumped prices to the Community, i.e. recurrence of dumping, was examined.
(28) There are indicators which make a resumption of these imports in significant
     quantities from both the partially co-operating and the non co-operating
     companies likely. Firstly, the removal of these measures would make the
     Community an attractive destination for Japanese exports in that prices appear
     to be slightly higher there than in certain other third country markets on which
     the exporting producers are present. Thus, given that there are still significant
     Japanese exports to these other third country markets, the re-direction of at
     least some of these exports to the Community would be very likely. Secondly,
     the Community market is a very important one in terms of size and these
     exporters are unlikely not to take advantage of any removal of measures.
(29) As to the price of these imports should they resume, there is no reason to
     consider that the prices would be any different to those charged for the current
     albeit low level of imports. Arguably, lower prices may be a pre-requisite for
                                              8
 ---pagebreak---      significantly increased quantities. A recurrence of dumping is also made more
     likely by the fact that, as indicated in recital (25), Japanese exports to third
     country markets which have no measures in force (Taiwan and Malaysia) are
     made at dumped prices. Nor is there any indication that the relatively high
     prices in Japan are going to alter in the short term.
       D.      SITUATION IN THE COMMUNITY REWS MARKET
1.   Structure of the Community industry
(30) Since the current anti-dumping measures were imposed on imports of REWS
     from Japan in 1993, the Community industry has undergone a restructuring
     and consolidation programme in order to maintain its competitiveness. A total
     of ten companies co-operated in the previous investigation but following the
     restructuring process in the industry only six of these companies remained
     active in the investigation period. Three of these companies co-operated in the
     present investigation. It has become evident during the investigation that other
     Community producers restructured along similar lines.
(31) The co-operating Community producers represent 41 % of total Community
     production in the investigation period and thus qualify as a major proportion
     of the Community production pursuant to Article 4(1) of the basic Regulation.
     These producers are referred to as “Community industry” hereafter. In
     addition two large companies supported the review request but did not fully
     co-operate with the investigation. The representativity of Community
     production supporting the complaint was, therefore, well in excess of 50 %.
(32) It should be noted that for the purposes of the above calculation of the
     representativity of Community production, in accordance with Article 4(1)(a)
     and (2) of the basic Regulation, any company operating in the Community
     related to exporting producers in countries found to be dumping, was excluded
     from the definition of total Community production.
2.   Consumption of REWS on the Community market
(33) Consumption in the Community has been calculated using verified sales data
     provided by the Community industry, figures in the review request (for sales
     of non co-operating Community producers) and import volumes obtained via
     Eurostat. Consumption was as follows during the analysis period:
     Consumption of            1994        1995         1996      1997     Investi-
     REWS in the                                                           gation
     Community (units)                                                     period
     Community               174 448     161 682      172 314   177 391     184 990
     Consumption
                                               9
 ---pagebreak--- (34) The increase in consumption in 1997 and the investigation period was mainly
     due to a one-off increase in demand from retailers arising from the
     introduction of the Euro (“Euro-effect”). From 1997 onwards, retailers
     purchased new, Euro-compliant models in anticipation of the introduction of
     the Euro. As retailers were, thus, bringing forward their replacement of old
     REWS, an increase in demand was created within the Community market and
     the volume of sales increased. This improved situation will be of short-term
     duration and sales volumes are predicted to drop back to normal levels by
     2000, fall further to below normal levels from 2001 before returning to normal
     again by 2004.
3.    Imports concerned
       Volume of imports
(35) Based on information from Eurostat (using Taric code 8423 81 50 10), REWS
     imported from Japan during the analysis period developed as follows:
     Volume of imports       1994      1995        1996         1997    Investi-
     (units)                                                            gation
                                                                        period
     Imports from Japan      1 320      474         954        1 606       995
     Market Share           0,8 %      0,3 %       0,6 %       0,9 %      0,5 %
       Price behaviour of exporting producers
(36) As far as prices of the imports are concerned, it was considered most
     appropriate to use the information provided by the sole co-operating producer
     which exported to the Community market during the investigation period.
     Given the nature of the product, it was considered representative to examine
     the exporting producer’s price behaviour during the investigation period by
     comparing its export prices with those of similar models sold by the
     Community industry. Whilst it was deemed that these models provided a fair
     comparison, the low volume of exports sold by this exporting producer,
     inevitably makes it difficult to draw clear conclusions. On the basis of the
     limited number of transactions available, however, there were indications that
     the exporting producer concerned made sales at very low prices in comparison
     with those of the Community industry. It was also evident that the decrease in
     prices of these models during the analysis period, was roughly mirrored by a
     reduction in prices charged by the Community industry (quoted at recital
     (42)).
4.    Situation of the Community industry
(37) In accordance with Article 3(5) of the basic Regulation, the examination of the
     impact of the dumped imports on the Community industry included an
                                            10
 ---pagebreak---         evaluation of all economic factors and indices having a bearing on the state of
        the industry. However, certain factors are not dealt with in detail below
        because they were found to be not relevant for the situation of the Community
        industry in the course of this investigation. It should finally be noted that none
        of these factors necessarily gives decisive guidance.
          Production, utilisation of capacity and inventories
(38)    Production of all REWS fell over the period 1994 to 1996, but then increased
        in line with the Euro-effect as explained at recital (34). The capacity utilisation
        rate of the Community industry increased by 6 % during the analysis period.
Community industry             1994        1995          1996        1997       Investi-
                                                                                gation
Production and capacity                                                         period
Index 1994 = 100
Volume all REWS                74 829      70 862        69 926      77 057     75 915
produced
Capacity (all REWS)            105 446      106 770      100 338     99 888     100 625
Capacity utilisation rate      71 %        66 %          70 %        77 %       75 %
(all REWS)
        It was considered that the level of inventories could not be considered to have
        any significant effect on the situation of the Community industry because the
        Community industry used a production to order system whereby stocks were
        almost non-existent.
          Sales volume
(39)    Sales of total REWS units made by the Community industry on the
        Community market fell over the period 1994 to 1996, but then increased in
        line with the Euro-effect as explained at recital (34)
       Sales in units            1994         1995         1996        1997     Investi-
                                                                                gation
                                                                                period
       Sales of Community       58 245      54 307        53 485      57 794      58 002
       industry
                                                11
 ---pagebreak---          Sales turnover
(40)   The sales turnover of total REWS made by the Community industry on the
       Community market fell over the period 1994 ot 1997, but then increased in
       line with the Euro-effect as explained at recital (34).
Sales          1994           1995           1996            1997         Investiga-
turnover in                                                               tion period
ECU
Sales of       87 445         80 679         77 066          74 079       77 902
Community
industry
         Market share and growth
(41)   The market share of the Community industry fell from 33,4 % in 1994 to
       31,4 % in the investigation period. Therefore, the Communisty industry could
       not benefit fully from the growth of the market.
         Price development
(42)   An analysis of REWS pricing in the Community was made by reference to the
       sales prices of all models sold by the Community industry. The development
       of weighted average prices for sales to unrelated customers during the analysis
       period is as follows:
       Development of           1994        1995         1996       1997     Investi-
       Prices of REWS                                                        gation
       (ECU/unit)                                                            period
       All REWS                 1 576      1 562         1 508      1 321      1 404
       Index                     100         99           96         84         89
         Sales prices for all ranges decreased between 1994 and the investigation
         period by 11 %. This overall average price reduction was consistent across
         all model ranges of REWS.
         Profitability
(43)   As evidenced by the Table below, return on net turnover was positive
       throughout the period but, at the beginning of the analysis period, was
       consistently below the rate considered necessary for the viability of the
       industry. The improved figures for 1997 and the investigation period were due
       to two factors; the above-mentioned Euro effect which gave a temporary boost
                                              12
 ---pagebreak---         to sales and, to a lesser extent, the effects of large scale restructuring carried
        out by the industry as explained at recital (30).
       Profit (return on                                                      Investi-
       net turnover) in          1994       1995        1996        1997      gation
       the Community                                                          period
       Community
       industry                 2,2 %       3,1 %       1,6 %       4,9 %       9,6 %
          Other performance related factors
(44)    No detailed analysis was carried out on cash flow, ability to raise capital (or
        investments) and return on investments because such an analysis would relate
        to the situation of the company as a whole. The companies other business lines
        represent more than 50 % of total company turnover and, therefore, an overall
        analysis would not necessarily be representative for the product under
        consideration.
        As concerns the impact on the Community industry of the magnitude of the
        actual margin of dumping, given the volume and the prices of the imports
        from the countries concerned, this impact cannot be considered to be
        negligible.
          Productivity, employment and wages
(45)    The table below shows that during the analysis period employment in the
        Community industry decreased by 29 %.
Productivity per                1995        1996        1997        1998         Investi-
employee                                                                         gation
                                                                                 period
Index 1995 = 100
Number of units produced        74 829      70 862      69 926      77 057       75 915
Number of employees             1 370       1 305       1 208       1 063        978
Productivity                    55          54          58          72           78
(46)    Productivity per employee increased by 42 % over the analysis period.
(47)    No detailed analysis was carried out on wages given the importance of other
        business lines in the overall companies’ activities. Such an analysis would
        relate to the situation of the company as a whole and not necessarily be
        representative for the product under consideration.
                                                13
 ---pagebreak---        Conclusions on the situation of the Community industry
(48) The Community industry has undergone a major restructuring programme and
     has improved production and distribution techniques. However, it has
     continued to suffer from pricing pressures, which have squeezed margins and
     resulted in a loss of market share and reductions in employment. Profitability
     improved towards the end of the analysis period but, as mentioned at recital
     (34), this was mainly due to one-off benefits of the “Euro effect”, and profit
     levels are quickly expected to revert to those realised during the main part of
     the analysis period. It is thus considered that the Community industry has not
     fully recovered from the negative situation identified in the previous
     investigation.
 E.   LIKELIHOOD OF CONTINUATION OR RECURRENCE OF INJURY
1.   Analysis of the situation of the Japanese exporting producers
(49) The development of imports from Japan is described at recital (35) above.
     Japanese exporting producers have continued to sell on the Community
     market, and it was submitted by the Community industry that they have
     concentrated their sales in markets of certain Member States with specific
     models, rather than selling the full range of models. This claim was examined
     by the Commission, and it was clear, from sales figures submitted by
     importers, that imports were indeed concentrated in certain markets, where the
     exporters felt that they could compete, mainly on the basis of low prices,
     without the need for large sales and distribution networks necessary for the
     Community industry.
(50) The co-operating importers submitted that the reduction in exports from Japan
     was due to a transfer of production to other countries, and claimed that, as this
     transfer was lasting, there was no likelihood of an increase of REWS output in
     Japan and consequent exports to the Community in the future. In this respect it
     should be noted that the history of anti-dumping investigations involving the
     product concerned suggests that production is mobile, and can be moved to
     countries not subject to measures with relative ease. The investigation has
     shown that this process was aided by the fact that, when production moved
     from Japan to other South East Asian countries in the past, a significant value
     of parts (especially electronic components) continued to be produced and
     supplied from Japan. On this basis the Commission considers that, if measures
     on imports of the product concerned are allowed to expire, contrary to the
     submission made by the co-operating importers, it can not be excluded that
     exports from Japan would quickly reach their previous levels.In view of the
     finding of this investigation that dumping has continued to occur, it can be
     expected that such imports would be at dumped prices.
(51) In addition to the above point regarding the relative ease of relocation of
     production, figures obtained from the partially co-operating exporting
     producer show that capacity utilisation, for the existing production facilities in
     Japan, was only 50 % in the investigation period. This shows that there is
     clearly scope for increased production and exports should measures be
                                             14
 ---pagebreak---      allowed to lapse, as there are no other major markets which could absorb this
     additional production volume.
(52) It should also be noted that this exporting producer also sells at low prices on
     other markets (Malaysia and Taiwan for example). At similar levels of sales as
     those to the Community market, sales to Malaysia and Taiwan were at prices
     around 30 % lower than the sales price (on a CIF basis excluding anti-
     dumping duties) of the same model on the Community market. This clearly
     suggests that the Community market would be very attractive to Japanese
     exporting producers in the absence of anti-dumping measures.
(53) It is also clear that the Community import prices of the small number of
     transactions observed during the investigation period are at low levels despite
     the anti-dumping measures in force, but given their low volume these could
     not exert significant downward pressure on the prices of the Community
     industry. If measures were allowed to lapse exporters and importers would
     have increased price flexibility. Exporting producers might be able to benefit
     from increased export prices but this increase is likely to be limited in order to
     increase the attractiveness of their products. However, in the absence of anti-
     dumping duties it is likely that import prices would decrease and thus exert
     pressure on the Community industry’s prices.
2.   Analysis of the situation of the Community industry
(54) The Community market for REWS is predicted to remain relatively stable in
     the medium term, reflecting the fact that REWS are relatively mature products.
     During the investigation period, the Community industry was enjoying a boost
     in sales volume caused by the “Euro effect”, but, as explained at recital (34),
     this will not be a permanent phenomenon, and can be expected to be offset by
     losses in future sales. In the medium term sales will return to a gradual but
     slow decline. The Community industry can therefore expect to see no medium
     or long term increases in its sales volume, but its market share can be expected
     to be eroded further due to pressure from imports from third countries. This
     situation would be made much worse if measures were allowed to lapse with
     respect to imports originating in Japan, because a large increase in the import
     volumes could be expected, as existing production capacities were more fully
     utilised in Japan or as production was switched back to Japan from countries it
     moved to after the imposition of anti-dumping duties.
(55) Sales prices have declined on average by 10,9 % during the period 1994 to the
     investigation period, and it is expected that this trend will continue as the
     Community industry attempts to maintain its market share. The current trend
     in retailing away from small shops to large supermarket chains also has a
     downward effect on prices because of the bargaining power of these chains.
     The supermarket chains negotiate annual purchase contracts for REWS direct
     with producers. During the investigation, it became clear that these large
     retailers used low-priced offers from Japanese exporting producers to increase
     the downward pressure on prices. Bearing in mind the expected increased
     attractiveness of the Community market, the use of low price offers can be
     expected to have a serious price depressing effect and thus supports the
     likelihood of recurrence of injury.
                                             15
 ---pagebreak--- 3.   Conclusion on recurrence of injury
(56) In the light of the above analysis it is concluded that the expiry of the
     measures on these imports is likely to lead to a recurrence of injury within the
     meaning in Article 11(2) of the basic Regulation. In reaching this conclusion,
     the Commission has also taken into account the fact that the Japanese
     exporting producers could influence the Community market to a far greater
     degree than their market share during the investigation period would suggest.
     If anti-dumping duties are removed it is highly likely that the dumping will
     continue at much higher volumes of imports. This conclusion is supported
     further by the level of unused production capacity available in Japan, by the
     relative ease with which production facilities can be transferred between
     countries, and by the finding at recital (52) above relating to the continuing
     attractiveness of Community market to Japanese exporting producers.
(57) The expiry of the measures therefore would worsen the situation of the
     Community industry, eventually putting at risk the viability of Community
     production of REWS.
                       F.      COMMUNITY INTEREST
1.   General considerations
(58) In accordance with Article 21 of the basic Regulation it was examined whether
     a prolongation of the anti-dumping duties would be against the interest of the
     Community as a whole. The determination of Community interest was based
     on an appreciation of all the various interests such as, the Community
     industry, the importers and traders and the users of the product concerned. In
     order to assess the likely impact of a continuation of the measures, the
     Commission requested information from all interested parties mentioned
     above.
(59) It should be recalled that, in the previous investigation, the adoption of
     measures was considered not to be against the interest of the Community.
     Furthermore, the present investigation is a review, thus analysing a situation in
     which anti-dumping measures are in place. Consequently, the timing and
     nature of the present investigation has allowed an assessment of any negative
     impact on the parties concerned by the anti-dumping measures imposed.
2.   Interests of the Community industry
(60) In view of the continuing weak economic situation of the Community
     industry, especially in terms of inadequate profitability (at the beginning of the
     analysis period and in terms of medium term outlook), employment and
     market share, the Commission considers that, in the absence of measures
     against injurious dumping, the situation of the Community industry is likely to
     deteriorate. The previous review investigation involving REWS from Japan
     expected that certain Community producers would probably cease production
     of REWS, and that there might be a reduction in employment levels, given the
     level of losses incurred by certain producers at that time. Although measures
                                            16
 ---pagebreak---      were maintained in 1993, there was still a reduction in employment due to a
     consolidation process involving various mergers and acquisitions.
(61) Any further shrinking or deterioration of the Community industry would have
     negative implications for employment and investment in the industry itself,
     with knock-on effects, both on the industry’s suppliers and on the related
     sectors of production within the Community industry. Indeed, the technologies
     of REWS and a whole range of other products are related. Examples of these
     are other types of electronic scales (such as industrial scales) and appliances
     used in the retail sector (such as slicing machines). Any loss of technological
     know-how in the REWS products will mean a global loss of competitiveness
     in these related sectors..
(62) In addition, the investigation has demonstrated that the Community industry
     has made every effort to meet the competition from Japan and other countries.
     Examples of such steps are:
       (a)   A progression towards greater consolidation (fewer companies).
       (b)   The closure of excess capacity.
       (c)   Greater use of modern production techniques (e.g. production to order,
             increased mechanisation and computerisation).
       (d)   Improvements in productivity.
       (e)   Reducing costs by contracting out the manufacturing of some
             components, and
       (f)   Investing in new model ranges.
(63) Community producers have, therefore, shown a willingness and determination
     to maintain a competitive presence on the Community market and are capable
     of benefiting from the defence from unfair trade afforded by anti-dumping
     measures.
3.   Interests of importers
(64) The Commission considered the interests of importers in the Community and
     received questionnaire responses from two companies (listed at recital (9))
     which imported the product concerned from Japan during the investigation
     period. The importers considered that the measures should be removed as they
     were hindering their ability to sell a high quality product which was not
     offered for sale by the Community industry. However, the Commission
     considered that the model imported was similar to some of the top range
     models produced and sold by the Community industry, that they were in direct
     competition with each other and that they were, therefore, like products.
(65) As to the importers’ sales and profitability, it is evident that the removal of
     measures would enable importers to reduce their resale prices and increase
     margins. In view of the findings on dumping and injury above, this increase in
     profitability would be due solely to continued dumping.
                                              17
 ---pagebreak--- 4.    Interests of users
(66)  The Commission sought the co-operation of a body representing the interests
      of retail outlets, including multiple users of the product concerned
      (supermarkets), in order to identify if there was any significant impact on any
      users.
(67)  The Commission was notified informally by this body that there was to be no
      response from retail users. Indeed, no other interested parties made themselves
      known. This lack of co-operation is no doubt due to the very small proportion
      of users’ total costs represented by REWS. The impact of maintaining
      measures, in what is a highly competitive market, can be assumed to be
      negligible.
5.    Conclusion
(68)  The low level of co-operation by users and importers clearly makes it difficult
      to draw conclusions on the impact in these sectors. It was concluded, however,
      that the impact would be negligible, particularly for the retail sector where the
      proportion of costs represented by REWS is very small.
(69)  It should be recalled, however, that there is likelihood of recurrence of
      material injury to the Community industry, which has made great efforts to
      remain competitive. The Community industry is temporarily benefiting from
      the introduction of the Euro, however, if measures lapsed, and in view of the
      diminishing effect of the Euro, it is likely that the Community industry will
      deteriorate in the future and threaten the viability of the entire Community
      production.
(70)  On the basis of the above, the Commission finds that there are no compelling
      reasons of Community interest against the maintenance of the anti-dumping
      measures.
                         G.      DEFINITIVE MEASURES
(71)  It will be recalled that the current review was opened under both Article 11(2)
      and Article 11(3) of the basic Regulation. As explained at recital (16), the
      Commission decided not to pursue the Article 11(3) review. The
      Commission’s findings are therefore based on those established under Article
      11(2) relating to the likelihood of continuation and recurrence of injurious
      dumping should the existing measures be removed.
(72)  It follows that the existing anti-dumping duties should therefore be
      maintained:
Yamato Scale Co. Ltd., Akashi                                 15,3 %
Tokyo Electric Co. Ltd., Tokyo                                22,5 %
Teraoka Seiko Co. Ltd., To                                    22,6 %
                                               18
 ---pagebreak--- Ishida Co. Ltd., Kyoto                                           31,6 %
All other companies                                              31,6 %
(73)    For the reasons explained in recital (11) concerning the duration of the
        investigation, it is considered appropriate that the duration of the measures
        should be limited to four years,
HAS ADOPTED THIS REGULATION:
                                         Article 1
1.        A definitive anti-dumping duty is hereby imposed on imports of electronic
          weighing retail trade scales currently classifiable within CN code ex 8423 81
          50 (TARIC code 8423 81 50 10) and originating in Japan.
2.        The duty, calculated on the basis of the net free-at-Community-frontier price
          of the product, before duty, shall be:
          31,6 % (Taric additional code 8697), with the exception for retail electronic
          weighing scales produced by the companies listed below, to which the
          following rate shall apply:
          Yamato Scale Co. Ltd., Akashi         15,3 %
          (Taric additional code 8696)
          Tokyo Electric Co. Ltd., Tokyo        22,5 %
          (Taric additional code 8694)
          Teraoka Seiko Co. Ltd., Tokyo         22,6 %
          (Taric additional code 8695)
3.        Unless otherwise specified, the provisions in force concerning customs duties
          shall apply.
                                         Article 2
The anti-dumping duties shall be imposed for a period of four years from the date of
entry into force of this Regulation.
                                         Article 3
This Regulation shall enter into force on the day following its publication in the
Official Journal of the European Communities.
                                                 19
 ---pagebreak--- This Regulation shall be binding in its entirety and directly applicable in all Member
States.
Done at Brussels,
                                             For the Council
                                             The President
                                               20