CELEX: 51989PC0395
Language: en
Date: 1989-08-08
Title: PROPOSAL FOR A COUNCIL REGULATION ( EEC ) IMPOSING A DEFINITIVE ANTI-DUMPING DUTY ON IMPORTS OF CALCIUM METAL ORIGINATING IN THE PEOPLE' S REPUBLIC OF CHINA AND THE SOVIET UNION AND DEFINITIVELY COLLECTING THE PROVISIONAL ANTI-DUMPING DUTY IMPOSED ON SUCH IMPORTS

COMMISSION OF THE EUROPEAN COMvlUNITIES
                                        COM(89) 395 final
                                        Brussels, 8 August 1989
                              Proposal for a
                        COUNCIL REGULATION (EEC)
  imposing a definitive anti-dumping duty on imports of calcium metal
  originating In the People's Republic of China and the Soviet Union
     and definitively collecting the provisional ant I-dumping duty
                         Imposed on such Imports
                     (presented by the Commission)
 ---pagebreak---                                     ~A-
                          TgrPTAWAiray  HPumAwm
 1. By Regulation (KBC) No 707/891) the Commission Imposed a
    provisional anti-dimrping duty on Imports of oalcium metal
     originating in the People's Republic of China and the Soviet Union.
2. By Council Regulation (BBC) No 2165/892) the period of validity of
     the provisional duty imposed on Chinese and Soviet Imports of
    oalcium metal was extended for a further period not exceeding two
    months. This provisional duty will expire on 21 September 1989.
3. After the imposition of the provisional duties, an independent
    importer (who also transforms the calcium metal) and the sole
    Community producer requested and were granted hearings. Both these
    two parties made their views known in written submissions and were
    informed of the essential facts and considerations on the basis of
    which it was Intended to recommend the Imposition of definitive
    duties. The Chinese and Soviet exporters were also informed of the
    intention to impose definitive duties higher than the amount of the
    provisional anti-dumping duties.
4. As regards the description of the product, an Importer has ni Aimai
    that the Imported Chinese and Soviet oalcium is not a like product
    to oalcium produced In the Community. The Commission, having
    examined the arguments, has found that, although Community produced
    oalcium is of a slightly lower degree of purity than the Imported
    calcium, Community produced oalcium and the Imported Chinese and
    Soviet product have sufficiently d o s e physical and technical
    characteristics, the same end uses and the same markets to be
    considered as like products.
5. As regards the dumping, definitive normal value was established in
    the same way as the provisional normal value, i.e. by reference to
    domestic selling prices in a market economy country, the United
    States of America. An importer has contested the calculation
    alleging that prices were based on inter company transactions by
1) ŒT No L 78, 21.3.1989, p.10
2) OT No L 208, 20.7.1989, p. 1
 ---pagebreak---                                   - 2 -
    the US producer giving excessive profits and the importer suggested
    that normal value should be determined on the basis of constructed
    value. Tills suggestion has been rejected since the Commission had
    only taken sales transactions to Independent end users and found
    that these sales allowed a reasonable but not excessive profit.
    One comparison of normal value to export prices, after taking
    account where appropriate of differences affecting price
    comparability, showed Chinese and Soviet exports were being dumped
    in the Community with weighted average dumping margins of 21.8% and
    22.0% for the Chinese and Soviet product respectively.
6. An importer has also disputed the preliminary conolusions as
   regards injury on the grounds that:
     - the period chosen to examine Injury Is not appropriate;
     - the Community producer's decision to Invest in new capacity was
        unjustified and was responsible for low capacity utilization;
     - the Community producer has chosen not to supply the importer
        resulting in self Inflicted Injury;
     - the fall in selling prices of the Community producer has been
        due to other factors than just low prices of imported products;
     - other third countries have also been responsible for any injury
        caused;
     - prior to 1985, it was the Community producer who practiced
        price undercutting and has forced the Chinese and Soviet
        exporters to follow these price trends.
   After due consideration, however, none of the above arguments put
   forward by the importer leads the Commission to amend the
   preliminary conclusions set out in the above Regulation, which are
   consequently confirmed.
7. Concerning Community Interest, an Importer has also contested the
   Commission's preliminary oonoluslonfl claiming that:
    - calcium Is no longer used In the production of uranium;
    - the impact of a duty would significantly Increase its costs and
       threaten its viability to oontlTme in business;
 ---pagebreak---                                  - 3 -
    -   it Is In the interests of the Community to pursue developments
       in the industrial sector of new types of magnets, which the
       importer as a transformer is a leading contributor through the
       use of Imported Chinese and Soviet calcium.
   After due consideration, the Commission Is unable to accept the
   claims made by the importer. The Commission considers that, in
   view of the injury suffered by the Community industry, the limited
   Impact of such a duty on prices for Community end users, and the
   strategic importance of continuing to produce calcium within -Use
   Community, the Community interest requires action to be taken.
8. The Commission has re-examined the purchase prices of the Community
   importers with the selling price necessary to provide an adequate
   profit (8% margin on the sales price) for the Community producer,
   the injury threshold. Taking into account the conclusions reached
   concerning injury, that there has been price undercutting and that
   the Community producer has suffered considerable financial losses
   in selling below its cost of production, the Commission has
   concluded that definitive anti-dumping duties should be imposed
   against imports of calcium originating in the People's Republio of
   China and the Soviet Union higher than the amount of the
   provisional anti-dumping duties and equivalent to the definitive
   dumping margins found, which are below the Injury threshold. The
   Commission subsequently proposes the Council Impose a definitive
   anti-dumping duty of 21.8% and 22.0% of the net free-at-Community-
   frontier price before duty of imported calcium metal originating in
   the People's Republio of China and the Soviet Union respectively.
9. The Anti-dumping Committee has been consulted and has given a
   favourable opinion.
 ---pagebreak---                                Proposal for a
                    COUNCIL RBOTATICN (BBC)
      imposing a definitive anti-dumping duty on imports of calcium
     metal originating in the People's Republic of China and the Soviet
     TTnjnn jyri definitively collecting the provisional anti-dumping
     duty Imposed on such imports
THE COUNCIL OF THE EUROPEAN OCWMDNITIES,
Having regard to the Treaty establishing the European Economie
Community,
Having regard to Council Régulation (BBC) No 2423/88 of 11 July 1988 on
protection against dumped or subsidised imports from countries not
members of the European CommunltyCl)f Q ^ in particular Article 12
thereof,
Having regard to the proposal submitted by the Commission after
consultation within the Advisory Committee as provided for under the
above Regulation,
Whereas:
                           A. RrovislODal action
1.   The Commission, by Regulation (KBC) No 707/89(2), imposed a
     provisional anti-dumping duty on imports of calcium metal
     originating In the People's Republio of China and the Soviet
     Union. That duty was extended for a maximum period of two months
     by Regulation (BBC) No 2165/89.(3).
Cl) Off No L 209, 2.8.1988, p . 1
(2) OJNoL 78, 21.3.1989, p . 10
(3) Off NO L 208, 20.7.1989, p . 1
 ---pagebreak---                                  - 2 -
                        B. Subsequent r^xwv^n^
(2) Following the imposition of the provisional anti-dumping duty, the
     Community producer and an Independent Importer (who also
     transforms the product) requested, and were granted, an
     opportunity to be heard by the Commission. They also made written
     submissions making known their views on the findings.
(3) Upon request, the Community producer and the Importer were
     informed of the essential facts and considerations on the basis of
    which it was intended to recommend the imposition of definitive
    duties and the definitive collection of amounts secured by way of
    a provisional duty. They were also granted a period within which
    they could make further representations to these disclosure
    meetings. The Importer made comments which were considered prior
    to the Commission finalising its conclusions.
    The Chinese and Soviet exporters were also informed of the
    intention to recommend the imposition of definitive duties wgh«r
    than the amount of the provisional anti-dumping duties. The
    Chinese exporter responded by repeating an allegation concerning
    injury, which was considered prior to the Commission finalising
    its conduisions.
                     C. Description of the product
(4) In its provisional findings, recital 6 of Regulation (BBC) No
    707/89, the Commission had concluded that calcium metal (calcium)
    is used essentially In the metallurgical and uranium industries.
    This conclusion was contested by one importer, who also transforms
    the product in question, on the grounds that oaloium is no longer
    used In the production of uranium. The Commission has examined
    thisfiiA-imftrrihag found that, whilstfifj'l'"*1rifi>oontlnues to be used
    In the uranium Industry, this usage is Indeed limited and that
    fiftirrivtm ±Q used essentially in the metallurgical Industry.
(5) The same Importer has also claimed that the imported oaloium from
    the People's Republic of China and -Use Soviet Union Is not a like
    product to oaloium produced in the Community. The Importer has
    alleged that Community^produoed oaloium Is of a poorer quality and
 ---pagebreak---                                    - 3 -
     is more difficult to transform than Chinese or Soviet imported
     calcium and that only Chinese and Soviet imported calcium can be
     used for many of the uses of calcium metal.
     Concerning physical and technical characteristics, although
     Ccmmunity^prcduoed calcium, without distillation, is of a slightly
     lower degree of purity than Chinese and Soviet imported calcium,
     both the Ccnnraunity-produoed calcium and the imported products are
     commercial grade material and both need further distillation to
     produce the highest purity grade of calcium.
    The majority of calcium end use Is for metallurgical applications,
    where, in many cases, Community~prodnoed calcium is directly
    substitutable by Chinese and Soviet imported calcium. The
    importer has claimed that only calcium from the People's Republio
    of China and the Soviet Union can be used for certain technical
    applications In the iron and steel Industry and for calcium
    thermio réactions, although this claim was denied by the Community
    producer. The importer has also requested that an expert be
    nominated to carry out a technical analysis of the products in
    question. This request has not been accepted since the Importer,
    as a transformer, whilst claiming to experience difficulties In
    using the Community product, has itself acknowledged that it can
    technically use the Community-produced calcium Instead of the
    Chinese or Soviet imported product. The Importer has even
    complained that the Community producer has refused to supply
    immunity produced calcium for its use. (See recital 15 below).
(6) The Soviet exporter had also claimed during the procedure that its
    product was not a like product to the Community producer, but on
    the grounds that Soviet-produced calcium was poorer in quality.
    No end user of calcium has either requested a hearing or made any
    written submission to contest the Commission's findings on this
    subject.
    In these circumstances, the Commission has cynniiiH^ that,
    although Ccramunity-produoed calcium is of a slightly lower degree
    of purity than Chinese and Soviet Imported calcium, Community
 ---pagebreak---                                   - 4 -
    produced calcium and the imported product from the People's
    Republic of China and the Soviet Union have sufficiently d o s e
    physical and technical characteristics, the same end uses and the
    same markets to be considered as like products.
(7) In the light of the findings presented in Regulation
     (BBC) No 707/89 (recitals 6 to 8), and of the considerations set
    out above, the Council concludes that the Chinese and Soviet
     imports are like products to calcium produced in the Community,
    within the meaning of Article 2(12) of Regulation (BBC) No
     2423/88.
                               D. TTnmnlng
(8) In establishing the nnrpma.1 value, the rsruwrnipprfr^ had to take
    account of the fact that neither the People's Republic of China
    nor the Soviet Union have a market economy and that, therefore, In
    aooordance with Regulation (BBC) No 2423/88, normal value'should
    be determined with reference to prices or costs of a producer or
    producers in a market economy country. In this connection the
    Commission based its calculation of normal value on the domestic
    market prices of the like product In the United States and set out
    its reasons for so doing In recital 11 of Regulation (EEC) No
    707/89.
    One Importer contested the calculation of the normal value
    alleging that the prices used by the Commission were based on
    Inter-Kxanrpany transactions by the US producer and that, as a
    result, the US producer had made excessive profits. To support
    this claim, the Importer produced statistics for US consumption
    for the year 1983 and suggested, therefore, that normal value
    should be determined on the basis of constructed value, as per
    Article 2(5)(b) of Council Regulation (BBC) No 2423/88.
    The Commission has only taken sales transactions to independent
    end users into account for the period of the investigation, year
    1987, to determine prices and, as pointed out in recital 11 of
    Regulation (BBC) 707/89, the prices charged by the United States
 ---pagebreak---                                   - 5 -
     producer d^r**^ the reference period allowed a reasonable but not
     excessive profit. The Council therefore confirms the Commission's
     provisional findings concerning the basis for determining the
     normal value.
(9) As regards the calculation of normal value, the Commission has
      only considered the United States sales prices of calcium crowns
     and pieces, requiring no distillation or major transformation of
      form by the producer, and determined a weighted average normal
     value.
(10) Export prices were determined on the basis of prices actually paid
     or payable for the Chinese or Soviet product sold for export to
     the Community.
(11) In comparing normal value with export prices, the Commission took
     account, where appropriate, of différences affecting price
     comparability, Including transport, Insurance, handling, loading
     and anoilliary costs, commissi cms paid in respect of the sales
     under consideration, and credit terms. All comparisons were made
     on an ex-works basis.
     One Importer has claimed that an adjustment for physical
     characteristics should be made as the quality of the US'prcduced
     calcium is slightly lower than that of the Chinese and Soviet
     product. This request has not been accepted as the normal value
     In the United States market was determined by restricting the
     calculation to sales prices of calcium crowns and pieces,
     requiring no distillation or major transformation, i.e. those
     products directly comparable to, and which compete directly with,
     Chinese and Soviet products.
(12) The comparison showed that Chinese and Soviet exports to the
     Community were being dumped during the reference period, weighted
     average dumping margins, calculated as a percentage of the cif
     price of the product at the Community frontier, excluding customs
     duties, are 21.8 % for the Chinese product and 22.0 % for the
 ---pagebreak---                                   - 6 -
      Soviet product. The Council confirms these definitive dumping
     margins.
                               B. Injury
(13) As regards the Injury caused by the dumped imports, one importer
     has presented six arguments to contest the Commission's
     conclusions as set out In Regulation (BBC) No 707/89.
     The first argument Is that year 1988 cannot serve as the reference
     year for examining Injury as the Community production in year 1985
     is not in line with the trend for production seen in years 1981 to
     1983.
     The argument cannot be accepted since the period to examine
     Injury, the years from 1985 to 1987, was chosen as these years
     corresponded to the most recent period to examine the evolution of
     Imports into the Community. As regards the figures of production
     for this period, they have been verified by the Commission.
     References made by the importer to trends in the earlier years of
     1981 to 1983 are not therefore considered relevant.
(14) The second argument Is that the producer's decision to Invest In
     new capacity was not justified and was responsible for the fall In
     capacity utilisation.
     This claim is considered to be unfounded. In recital 20 of
     Regulation (BBC) No 707/89, the Commission had referred to
     investments made by the Community producer in 1985 and 1986. The
     decision, however, to invest in new capacity, representing a 35%
     Increase, was taken In 1984 when capacity utilisation was at a
     level of 92% and with the market in a period of expansion. In any
     case, the announcement to double capacity, to which the importer
     is referring, was consequently suspended and has not taken place.
(15) The third argument concerns a claim that the Community producer
     has suffered self-inflicted injury in refusing to supply calcium
 ---pagebreak---                                    - 7 -
      to the importer, who has begun Court proceedings in one Member
      State against the Community producer alleging abuse of dominant
      position.
      The Commission notes that the Community producer has denied these
      allegations and that no final judgement has yet been reached In
      the Court proceedings in the Member State concerned.
      The Commission takes the view that the purpose of anti-dumping
      proceedings is not, and cannot be, to condone or encourage
      restrictive business practices, and that the Initiation of such a
      proceeding does not therefore deprive an enterprise of its right
      to  initiate proceedings under Articles 85 or 86 of the Treaty, the
     outcome of which cannot be prejudiced by an anti-dumping
     investigation. Moreover, if and when an infringement of Articles
     88 and 86 is discovered and a decision has been made under Council
     Regulation No 17(4), the Commission may review the present anti-
     dumping proceeding In accordance with Article 14(1) of
     Regulation (EBC) No 2423/88.
(16) The fourth argument Is that the fall in sales price of the
     Community producer was not only due to competition from Imported
     products but also due to a lack of competition in the absence of
     any other producers, coupled with poor management practices and
     large fixed costs of the Community producer. The importer
     requested that the Commission should recalculate the «ftinr^g
     prices of the Community producer by deducting the level of its
     fixed costs.
     The request cannot be accepted since the Commission has
     established the actual selling prices in the marketplace based on
     the sales transactions to Independent purchasers. In addition, it
     has been found that the fall in sales price has occurred during
     the period In which Imports of Chinese and Soviet calcium have
     increased in terms of both volume and market share. In any case,
     fixed costs are not a factor to be deducted in determining the
     actual sales prices found In the marketplace. Under these
(4) Off No 13, 21.2.1962, p. 204/62
 ---pagebreak---                                   - 8 -
     oiroumstanoes, there is no reason to recalculate the selling
     prices.
(17) The fifth argument claims that other third country imports have
     been responsible for any injury caused.
     The Commission, in its preliminary determination, has already
     examined whether the Injury sustained by the Community producer
     was caused by factors other than the dumped Imports. Concerning
     the level of Imports from other third countries, these have
     deolInert by over 46 % during the period 1985 to 1987 with a
     reduction in market share. Additionally the price of other
     Imports during the reference period was found to be higher than
     those of the imported Chinese and Soviet product.
(18) The sixth argument alleges that, prior to 1985, it was the
     Community producer who practiced price undercutting and has forced
     the Chinese and Soviet exporters to follow its prices. This
     allegation was also made by -Use Chinese exporter.
     Thfr Commission, in its preliminary nnry>iiiffinnf»t had eff*,Ah1 * p*K*d
     price undercutting by the Chinese and Soviet exporters during the
     reference period. A recalculation of the undercutting figures,
     based on weighted average GIF export prices, shows price
     undercutting of 6.8% for the Chinese imported product and 9.8% for
     the Soviet Imported product, i.e. figures lower than provisionally
     established (10.7% and 11.2% respectively). The argument as to
     who started the price undercutting, prior to 1988, is now
     considered difficult, if not impossible, to determine and In any
     case, whether the exporters concerned Initially intended only to
     align their prices to those of the Community producer Is not
     considered relevant to the Issue of price undercutting during the
     period in which injury had been examined. The recalculation of
     price undercutting has confirmed that there Is evidence that
     dumped Chinese and Soviet exports have undercut the prices of the
     Community producer.
 ---pagebreak---                                      -9-
(19) None of the above arguments put forward by the importer calls into
      question the conclusions as regards the injury to the Community
      industry which the Commission reached In its preliminary
      conclusions, recitals 16 to 22 of Regulation (BBC) No 707/89.
      Consequently, the Council confirms these conclusions.
                             F. OoBsunlty interest
(20) One importer has also disputed the Commission's preliminary
      conc3.iis1.ons concerning Community Interest. Firstly, it is olalmRrt
      that calcium is no longer used In the production of uranium and
     therefore there is no strategic reason for maintaining oaloium
     production In the Community.
     This claim, referring to the use of oaloium in the production of
     uranium, has already been examined in recital 4 above. Even
     without this particular use, the Commission, however, still
     considers that, in the absence of any protection against the
     injurious effects of the dumped Chinese and Soviet Imports, the
     viability of the sole Community producer would be jeopardised and
     the Community would then be entirely dependent on outside sources
     of oaloium for use in the metallurgical Industry.
(21) Secondly, the importer, who also transforms the product, has
     alleged that the impact of a duty would significantly increase its
     costs and threaten its viability to continue in business.
     The Commission is unable to accept this claim. An examination of
     the submission made by the importer shows that the Importer has
     based its claim on a calculation incorporating, not only the
     expected duty increase but also, other increases in product costs
     and changes in currency rates In the period 1988/89. The
     Commission, In examining the Impact of the duty on imports of
     calcium, has necessarily to base its examination on the facts
     established In the Investigation period. This shows that the
     proposed measures would have the effect of a limited Increase in
     the total costs of a company which transforms the product and an
 ---pagebreak---                                   - 10 -
     insignificant Increase for the Community end users of oaloium.
(22) Finally, the importer has claimed that it is in the interest of
     12)e CoDmunity to pursue developments In the industrial sector of
     new types of magnets, to which the Importer as a transformer of
     calcium is a leading contributor through the use of imported
     Chinese and Soviet calcium.
     The claim has already been examined, recital 5 above, and had to
     be rejected as Chinese and Soviet Imported products are considered
     as like products to the Community produced oaloium. Additionally,
     as discussed In recital 21 above, the limited impact of definitive
     anti-dumping duties, on the total costs of a company which
     transforms calcium, is not considered to be an economio deterrent
     to pursuing these developments.
(23) Nô Community end users have either requested a hearing or made any
     written submission after the imposition of provisional measures.
     Taking into account the considerations set out above, the Council
     has come to the conclusion that it is In the Community's interest
     that action be taken and that protection of the Community's
     Interest calls for the Imposition of a definitive anti-dumping
     duty on Imports of calcium originating In the People's Republic of
     China and the Soviet Union.
(24) One Independent Importer has also requested a special exemption in
     the event that a decision would be taken to Impose definitive
     duties. The Council Is unable to grant such a request from an
     Independent Importer, when it is clear that it Is in the
     Community's Interest that action be taken to prevent the injurious
     effect of dumped Chinese and Soviet Imports and since this
     objective would be azmuled if such an exemption were to be made
     and which would also be difficult to defend on the grounds of
     equality of treatment of all Importers.
 ---pagebreak---                                     - 11 -
                            6. Définitive duty
 (25) The Commission has re-examined the purchase prices of the
      Community importers with the selling price necessary to provide an
      adequate profit (5% margin on the sales price) for the Community
      producer, the Injury threshold. Taking Into account the
      conclusions reached concerning Injury, that there has been price
      undercutting and that the Community producer has suffered
      considerable financial losses in selling below its cost of
      production, the Commission has concluded that definitive anti-
      dumping duties should be imposed against imports of calcium
      originating in the People's Republio of China and the Soviet Union
      higher than the amount of the provisional anti-dumping duties and
      equivalent to the definitive dumping margins found, which are
      below the injury threshold. The Council confirms this conclusion.
(26) The Council considers that, to ensure the effectiveness of the
      protective measures and to facilitate customs clearance, the
     definitive duty should take the form of an ad valorem duty.
                  H. Col lection of the provisional duty
(27) The amounts secured by way of provisional, anti-dumping duty should
      therefore be oolleoted in their entirety.
HAS ADOPTED THIS REGULATION:
                                 ATtlttlft 1
1.   A definitive anti-dumping duty is hereby imposed on Imports of
     calcium metal originating In the People's Republio of China and the
      Soviet Union and corresponding to CN code 2806 21 00, and the rate
     thereof is set as follows:
 ---pagebreak---                                  - 12 -
  a) The rate of duty for calcium metal originating in the People's
      Republic of China shall be 21.8 % of the net freest-Community-
      frontier price of the product before duty;
  b) The rate of duty for calcium metal originating in Hie Soviet
      Union shall be 22.0 % of the net free-at-Gommunity-frcntier price
      of the product before duty.
2.   The provisions in force with regard to customs duties shall apply.
                               Article 2
The sums secured by way of provisional anti-dumping duty under
Regulation (EEC) No 707/89 shall be definitively collected.
                               Article 3
This Regulation shall enter into foroe 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 all Member States.
Done at Brussels,                      For the Council
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                       ISSN 0254-1475
                                                               COM (89) 395 final
                                                      DOCUMENTS
EN                                                                          08 i l
                                 Catalogue number : CB-CO-89-349-EN-C
                                                             ISBN 92-77-52412-X
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