CELEX: 51993PC0087
Language: en
Date: 1993-03-25
Title: Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty concerning the importation of certain electronic weighing scales originating in Japan

COMMISSION OF THE EUROPEAN COMMUNITIES
                                  C0MC93) 8 7 final
                                   Brussels, 25 March 1993
                          Proposal for a
                     COUNCIL REGULATION (EEC)
imposing a definitive anti-dumping duty concerning the importation
    of certain electronic weighing scales originating in Japan
                   (presented by the Commission)
 ---pagebreak---                                     - 2 -
                          EXPLANATORY MEMORANDUM
1. In a notice published      in Official Journal No C 50 of 26 February
   1991, the Commission announced a review, in accordance with Articles
   14 and 15 of Council Regulation (EEC) No 2423/88, of the anti-dumping
   measures imposed on     imports into the Community of certain electronic
   weighing scales originating in Japan.
2. The Commission carried out its investigation in the period between
   1 January and 31 December 1990.
3. Normal value for all Japanese producers was based on domestic sales,
   if those   sales were comparable      in product     type, price    structure,
   quantity   and   category   of   customer   with    sales   made   during    the
   investigation period to the Community market.           In a few exceptional
   cases, where none of these comparable sales were made on the domestic
   market, normal value was constructed on the basis of the actual cost
   of production plus a reasonable profit margin. The comparison between
   the normal value and export price to the Community showed dumping
   margins for all Japanese producers, ranging from 15.3% to 80.7%.
4. As far as injury is concerned, investigations            sought to determine
   whether there had been any changes in the situation of the Community
   industry   as  a  result   of  the  behaviour    of   the   exporters    on  the
   Community market since the imposition of the anti-dumping measures
   under review. Furthermore, the Commission also examined whether the
   expiry of existing anti-dumping measures would be likely to lead to
   recurrence of injury.
   It emerged from the investigation that the present situation of the
   Community industry - falling sales and financial losses - meant that
   protection was still required against dumped imports originating in
   Japan.   It was found that the measures under review had not prevented
   the  undercutting   of   Community   producers'    prices    by  the   Japanese
   imports,    which   remained    at   an   appreciable      level.    In    these
   circumstances, the    lifting   of  the anti-dumping      measures    in   force
   could not be justified. However, the measures required amendment in
   the light of the information on dumping and injury which had emerged
   from the investigation.
 ---pagebreak---                                     - 3 -
5. With respect to Community interests, the industry concerned not only
   requires a significant number of qualified staff, but also involves
   technologies,    the   loss  of   which  would    mean   a   general   loss   of
   competitive edge in the electronic sector.
   In addition, the removal       of the unfair      advantages    gained   by  the
   dumping practices is designed to prevent the further decline of the
   Community industry and thus help to maintain the availability to the
   consumer of the widest possible choice of product.
   Furthermore,    the   Commission    has  also    carefully     considered    the
   implications of anti-dumping measures for consumer prices and there
   is  no  evidence    that  they   would  be   significantly      affected   by  a
   continuation of such measures.
6. That being the case, the anti-dumping measures should be maintained
   and adjusted in the light of the results of the review.
7. In accordance with Article 13 of Council Regulation (EEC) No 2423/88
   the duty   to be established      for the   individual     Japanese   exporters
   should be less than the dumping margin found, if such lesser duty
   would be adequate to remove the injury. This is the case for the
   following three Japanese exporters:
   -    Tokyo Electric Co Ltd - 22.5%;
        Ishida Scales Mfg Ltd - 31.6%;
        Teraoka Seiko Co Ltd     - 22.6%.
   For Yamato Scales Co Ltd, for which the injury margin established
   exceeds the dumping margin found, the duty would be 15.3%. In the
   case   of   companies    that   failed   to    cooperate,     the    Commission
   established   that   there  was   no  reason   to   believe   that,   for   such
   producers, the duty should be lower than the highest rate considered
   necessary to remove the injury, namely 31.6%.
 ---pagebreak---                                       - 4 -
                                 Proposal for a
                           COUNCIL REGULATION (EEC)
     imposing a definitive anti-dumping duty concerning the importât]
         of certain electronic weighing scales originating in Japan
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having regard to the Treaty establishing the European Economic Community,
Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on
protection against dumped or subsidized imports from countries not members
of  the  European   Community (!),  and   in particular   Articles   14  and  15
thereof,
Having regard to the proposal from the Commission,
After consultations within the Advisory Committee as provided for by the
Regulation,
Whereas:
A.    Procedure
(1)   By   Regulation   (EEC)   No   2865/85(2),  the   Commission    imposed  a
      provisional   anti-dumping   duty   on  imports  of   certain   electronic
      weighing  scales originating     in Japan and accepted    undertakings  in
      respect of certain imports of such products originating in Japan.
(2)   By Regulation (EEC) No 1058/86( 3 ), the Council imposed a definitive
      anti-dumping duty on imports of certain electronic weighing         scales
      originating in Japan.
(1)   OJ No L 209, 2.8.1988, p. 1.
(2)   OJ No L 275, 16.10.1985, p. 5.
(3)   OJ No L 97, 12.4.1986, p. 1.
 ---pagebreak---                                       - 5 -
(3) Following    a subsequent investigation covering the circumvention of
    this duty, the Commission, by Decision 88/398/EEC< 4 ),            accepted an
    undertaking concerning electronic weighing scales assembled             in the
    Community.
(4) In April 1990, the Commission published a noticed) of the impending
    expiry    of  the   undertakings   mentioned   in   recital    (1)   above,   in
    accordance with Article 15(2) of Regulation (EEC) No 2423/88.
(5) In June 1990, producers, representing a major proportion of the total
    Community production of retail electronic weighing scales, submitted
    to  the    Commission   a  request   for  review   of  Regulation     (EEC)   No
    2865/85.
(6) In August 1990, a request for review of the definitive anti-dumping
    duty imposed by Regulation       (EEC) No 1058/86 was lodged by the same
    producers    in   accordance   with  Article   14(1)   of   Regulation    (EEC)
    No 2423/88.
(7) Consequently, in February 1991, the Commission, after consultation,
    announced,    by  a notice published     in the Official      Journal   of   the
    European Communities, the initiation of a review of both Regulation
    (EEC)    No  2865/85   and   Regulation   (EEC)   No   1058/86    pursuant    to
    Articles    14 and   15 of Regulation    (EEC) No 2423/88, and opened an
    investigation(6).
(8) In March 1991, in accordance to Article 15(4) of Regulation                (EEC)
    No 2423/88, the Commission published a noticed) on the continuation
    in force of the anti-dumping measures during the review proceeding.
(9) The Commission officially notified the exporters and the Community
    importers    and  producers   known to be concerned       and  gave them the
    opportunity to make known their views in writing and to request a
    hearing.
(4) OJ No  L  189, 20.7.1988, p. 27
(5) OJ No  C  106, 28.4.1990, p. 5.
(6) OJ No  C  50, 26.2.1991, p. 3.
(7) OJ No  C  81, 26.3.1990, p. 5.
 ---pagebreak---                                   - 6 -
(10) Most of the Japanese exporters and most of the complainant Community
     producers made their views known in writing. Submissions were also
     made by a number of importers. Some of the parties directly concerned
     requested and were granted hearings.
(11) The Commission sought and verified all the information it considered
     necessary for a preliminary determination of dumping and injury, and
     carried out investigations at the premises of the following:
     (a)  Community producers
          Bizerba Werke GmbH, Balingen, Germany
          GEC Avery, Smethwick, United Kingdom
          Maatschappij van Berkels Patent N.V., Rijswijk, Netherlands
          Testut, Béthune, France
          Lutrana, Viry-Châtillon, France
          Esselte Meto E.S.T., Saint Maur, France
          Brevetti van Berkel S.p.a., Milano, Italy
          Santo Stefano S.p.a., Cassano Magnago, Italy
          Vandoni S.p.a., San Donato Milanese, Italy
          Grupo Campesa, Barcelona, Spain
     (b)  Japanese exporting producers
          Ishida Scales Mfg Co Ltd, Kyoto
          Teraoka Seiko Co Ltd, Tokyo
          Tokyo Electric Co Ltd, Tokyo
          Yamato Scales Co Ltd, Akashi
     (c)  Related importers
          TEC Elektronik GmbH, Ratingen, Germany
          TEC UK Ltd, Watford, United Kingdom
     (d)  Unrelated importers
          Biesta BV, Leusden, Netherlands
          Carrin & Co N.V., Antwerp, Belgium
          Digi System N.V., Antwerp, Belgium
          Herbert & Sons, Suffolk, United Kingdom
 ---pagebreak---                                    - 7 -
(12) The Commission requested and received written and oral        submissions
     from the complainants, from the exporters named and from a number of
     related and unrelated importers and verified the information provided
     to the extent considered necessary.
(13) The   exporters,   related importers   and  complaining    industry  were
     informed of the essential facts and considerations on the basis of
     which it was envisaged to recommend the imposition of modified anti-
     dumping duties. Due account was taken of the parties' representations
     in the findings of the Commission.
(14) The  investigation   into dumping  practices  covered   the  period  from
     1 January 1990 to 31 December 1990 ("the investigation period").
(15) The investigation exceeded the normal period because of the volume
     and complexity of the data which had to be gathered and examined, and
     because the completion of the investigation required the examination
     of new issues which had arisen during the proceeding and which could
     not have been foreseen at its outset.
B.   Product
     Product description
(16) The products under investigation are electonic weighing scales for
     use in the retail trade 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)  covered  by  CN  Code   8423 81 50 and
     hereinafter   referred  to as  "R.E.W.S."  (retail, electronic   weighing
     scales).
     R.E.W.S. are produced with different types or levels of performance
     and technology. In this respect, the industry defines three segments
     of R.E.W.S., namely:
     -     a low-range segment which comprises stand-alone R.E.W.S. without
          built-in printer and preset key system;
 ---pagebreak---                                        - 8 -
            a  mid-range   segment   with  built-in printer      and  an   additional
            preset key system;
            a  top-range    segment   having   the   additional    option   of   being
            connected to a computer system and of being computer-related.
 (17) Although the potential use and quality of R.E.W.S. can vary, there is
      no significant difference in the basic physical characteristics or
      marketing methods within the various types of R.E.W.S. In addition,
      between   these three    segments   there    are  no  clear   dividing    lines,
      models   in neighbouring     segments being     often  interchangeable.     They
      have, therefore, to be considered as one product for the purpose of
      this proceeding.
 (18) The Council confirms the above findings.
      Like product
 (19) The investigation has shown that the various R.E.W.S. sold on the
      Japanese market, despite differences in size, life-span, voltage or
      design, are identical to the R.E.W.S. exported            from Japan to the
      Community,   or   closely   resemble  them,    and  accordingly    have   to  be
      regarded as like products.
      Likewise,   apart   from  minor   technical    differences,    the  Community-
      produced R.E.W.S. in all three segments are alike in all respects to
      the R.E.W.S. exported from Japan to the Community.
 (20) The Council confirms those findings.
c
  -   Export prices
      Sales to independent importers
(21)  Where   sales   were   made   direct   to   independent    importers    in   the
      Community, export prices were determined on the basis of the prices
      actually   paid or payable     for the product      sold  for export     to the
      Community. The Japanese producers         identified   these sales as being
 ---pagebreak---                                            - 9 -
      made    at   the    level   of   importer/distributor     or   dealer,   and   the
       Commission is satisfied, on the evidence presented, that such was the
       case. In accepting this claim, the Commission took account of the
       functions of both seller and buyer based on the costs incurred and
      the quantities sold, on a consistency in the prices charged at this
      particular     level    and,   finally,   on  the  evidence    available   on   the
      distribution chain.
 (22) The Council confirms that conclusion.
      Sales to related importers
(23)  Where exports were made to related importers in the Community, export
      prices    were    constructed     in   accordance   with    Article   2(8)(b)    of
      Regulation     (EEC) No 2423/88, on the basis of resale prices to the
      first independent purchaser, adjusted to take account of all costs
      incurred between       importation and resale together with a 5% profit
      margin     which    was   considered     reasonable    in   the   light   of   the
      information available to the Commission from the unrelated importer
      which cooperated.
      The Commission, on the same grounds as those outlined above for sales
      to  independent      importers, accepted      the Japanese producers*       claims
      that the export       prices, reconstructed      to a CIF Community-frontier
      basis, were made at the level of importer/distributor.
(24)  The Council confirms that conclusion.
D.    Normal value
1.    Inadequate reply to the questionnaire
(25)  In   the    case   of   one   of   the   Japanese   producers    concerned,    the
      Commission was unable to use its reply to the questionnaire as the
      basis    for   establishing     the   normal   value.   The   reply  was   deemed
      unreliable because the evidence supplied on costs was incorrect to a
      substantial degree. The true extent of the falsity or unreliability
 ---pagebreak---                                         - 10 -
     of the information presented by the company can be gauged from the
     fact   that   its    claims   for   deductions   from   selling,   general   and
     administrative costs exceeded the total amount of those costs which
     the   firm    claimed     were    incurred    for   the    product    concerned.
     Consequently, the fact that the cost data could not be used meant
     that prices also had to be deemed unreliable because it could not be
     established whether they covered          costs and were thus made        in the
     ordinary course of trade.
(26) In fact, new cost figures were presented during verification at its
     premises, but they diverged in important respects from those given in
     the original reply.
(27) In that    respect    the Commission     recalls that    it   is essential   for
     replies to questionnaires, and significant corrections to them, to be
     submitted within the reasonable period provided for this purpose, as
     a considerable amount of preparatory work and analysis of replies
     must be carried out by the investigating authorities prior to the
     verification     visit.   In the present      case, however,    the  Commission
     attempted    to   verify   the  company's    revised  information,     presented
     during   the verification      visit, but the fact that        it was received
     during    the   visit   and   the    confusing   nature   of   the  conflicting
     information     precluded    an   adequately    accurate    identification   and
     verification of actual costs. Thus, the Commission considered that
     the  company's      reply   was   substantially    false   or   misleading   and
     significantly impeded the investigation process. The Commission was
     accordingly unable to establish normal value for this company on the
     basis of the information supplied and established its findings on the
     basis of the      facts available      in accordance to Article      7(7)(b) of
     Regulation (EEC) No 2423/88 (see recital (63)).
(28) The Council confirms that conclusion.
2.   Normal value based on prices in the exporting country
(29) For the remaining Japanese producers, domestic sales were considered
     sufficiently    representative as a basis for normal value since the
     Commission established that domestic sales volume exceeded 5% of the
     export sales to the Community.
 ---pagebreak---                                        - 11
     Most models were sold domestically in sufficient quantities and at
     prices which permitted the recovery of all costs reasonably allocated
      in the ordinary course of trade on the domestic market in Japan.
     Normal value was therefore for these models established on the basis
     of their weighted average domestic prices, net of all discounts and
     rebates directly related to the sales of R.E.W.S.
     Selective normal value
(30) Three Japanese producers claimed that a distinction should be drawn
     between the several categories of their independent buyers on the
     domestic   market, and     that   the normal    value   should  be  established
     selectively    on the basis of the weighted         average prices of their
     sales   to   one  of   those   categories,    i.e.  alleged    distributors  or
     dealers which they claimed to be at the most appropriate level of
     trade   for   comparison   with   their   export   sales. They    contended  in
     particular    that   this   special   category   of   customer   had  different
     functions from the other unrelated customers, reflected in the scale
     and type of costs incurred, the quantities sold and the pattern of
     prices charged.
(31) It is the Community institutions' consistent position that a specific
     level of trade can only be adequately identified if a demonstration
     is made of     all relevant     factors, including     the functions of both
     seller and buyer and the consistency of quantities, costs and prices
     at the distribution level in question as compared with other levels.
     Another   important    question    in  identifying   a specific    category  of
     customer is how that category stands in relation to the distribution
     system   of   the  market    concerned   and   whether   this   comparison  can
     indicate    that  only    this   category   should   be   compared   to  export
     customers holding a similar position in the distribution system of
     the export market.
(32) One Japanese producer alleged that its sales were made through three
     distribution channels and that its normal value should be based on
     sales to customers alleged to have distribution functions which, this
     producer claimed, were made only through one channel.
 ---pagebreak---                                        - 12 -
     For   one  of    the  three    distribution   channels,    a  distinction    in
     quantities    sold,   a   clear   difference  in   costs,  and   prices   which
     reflect different functions of the category of customer within that
     channel   compared with other       independent   customers, confirmed     that
     sales   in the channel      in question were made      at a   level of    trade
     different from the sales to other categories of client and different
     from the categories of customer to which export sales were made. In
     addition, the evidence available on the distribution chain for the
     market   concerned    supported    this  producer's    claims  on   customers'
     functions.
(33) Regarding    the   other   two   distribution   channels   operated   by   that
     exporter, the Commission found that there was no clear distinction in
     quantities,    in product     sales costs, or    in prices    charged   in one
     distribution channel in relation to the other.
     The Commission therefore concluded that, with respect to sales made
     within those two channels, no specific and clearly            distinguishable
     category of customers could be identified. Accordingly, the normal
     value for this producer was established selectively on the basis of
     the weighted average domestic prices of its sales in those channels
     which were considered       most appropriate    for comparison with export
     sales.
(34) The Council confirms that conclusion.
(35) With regard to the claim of one of the other Japanese producers, the
     Commission    found  that the     information  given   in the reply     to  the
     questionnaire was misleading. In its reply the company had indicated
     that    only    the     sales    through   one    channel    were    made    to
     distributors/dealers, and claimed that normal value should be based
     selectively    on those sales. However, on verification         it was found
     that sales through a second channel were also being made to similar
     customers.
     Therefore the claim was rejected, since normal value had to be based
     on sales made to the same category of independent customers.
 ---pagebreak---                                     - 13 -
(36) Regarding this other channel, the company also claimed that a small
     portion of the sales were made to end-users and should be excluded,
     as   they  were   at a  different  level  of  trade from  export   sales.
     However, the producer failed to establish adequately a consistency of
     quantities, costs and prices at one distribution level in relation to
     other levels.
     In fact, the evidence provided       on some of these   factors  for the
     specific   category  of  customer  in question, showed   that  they  were
     largely similar to other categories alleged to be different.
(37) In those circumstances, the Commission concluded in respect of the
     producer   in question that the evidence presented, which was often
     conflicting, was insufficient to demonstrate that sales were made to
     specific and clearly distinguishable categories of customer or that
     only one of those allegedly different categories was more appropriate
     than all domestic sales for comparison with the export prices. Thus,
     normal value for this producer was determined on the basis of all
     sales to independent customers.
(38) The Council confirms that conclusion.
(39) The third Japanese producer requested during the verification that
     normal value should be restricted to sales to distributors/dealers on
     the domestic market. This claim was not supported by any evidence
     concerning   differences  in costs and prices for such sales and is
     therefore rejected.
(40) Normal value    for this producer was therefore based on a weighted
     average of all sales made to independent customers in Japan.
(41) The Council confirms that conclusion.
     Sales to related companies
(42) One of the Japanese producers also claimed that normal value should
     be established on the basis of its sales to related sales companies -
     that   is, on   the basis  of  transfer  prices within  the meaning    of
     Article 2(7) of Regulation     (EEC) No 2423/88 - and not based upon
     prices charged by those related companies to independent customers.
 ---pagebreak---                                            14 -
(43) The Commission found that the producer in question had divided the
     tasks of marketing its production in Japan between the manufacturing
     company,    selling    direct    to   distributors    or   dealers,    the   sales
     department    of   the   manufacturing      company   and   two   related    sales
     companies which sold to end-users and over which the producer had
     financial control. The sales functions of those different parts of
     the  group    were   not   essentially     different    from   each   other.   The
     division of production and sales activities as arranged within the
     group  can   in no way      alter    the  fact that    the group    is a    single
     economic entity which has thus organized activities which, in other
     cases, will be carried out by a single legal entity.
(44) Another producer which made all domestic             sales through     a related
     sales company claimed that its normal value should not be based on
     prices  charged    by   its sales company to        independent   customers but
     should be constructed on the basis of cost of production, excluding
     selling, general      and   administrative     costs, incurred     by  the   sales
     company.   However,    the Commission      found   that  the   latter   performed
     functions falling into the category of those described in recital 43
     and therefore also formed an economic entity with the manufacturing
     company.
(45) Consequently, in both cases, and in accordance with the Commission's
     consistent practice upheld by the Court of Justice, the activities
     and functions of the various parts of the entity were treated as a
     whole.  Thus,    normal    value    was  not   established    on  the   basis   of
     transfer prices or of the cost of production of the manufacturing
     company alone, but on the basis of the prices charged on sales to
     independent customers.
(46) The Council confirms those conclusions.
3.   Normal value based on constructed value
(47) Certain  models    sold    domestically     were  similar    but  could    not  be
     directly compared to models sold for export to the Community, as a
     result  of    differences     in   technical    specifications     and   physical
     characteristics. Those differences could not be evaluated with any
 ---pagebreak---                                        - 15 -
      precision given the different nature of the technology used and the
      variety of combinations of features and accessories which form part
      of the product.
(48)  The Commission, accordingly, refrained from establishing normal value
      for those models on the basis of domestic prices, since, in order to
      make domestic and import prices comparable to each other, this method
      would have required a great many adjustments which would have had to
      be based on estimations. Consequently, normal value was in these
      cases determined on the basis of constructed value,
(49)  The   constructed    values    were    established,     in   accordance     with
      Article 2(3)(b)(ii) of Regulation (EEC) No 2423/88, on the basis of
      the  costs   in  Japan,   both   fixed    and  variable,    of   materials    and
      manufacture for the models sold for export plus a reasonable amount
      for selling, general and administrative expenses and profit.
      As  regards   the selling, general and        administrative     expenses, the
      amounts were calculated by reference to the average expenses actually
      incurred by each producer concerned on its sales            of R.E.W.S on the
      domestic market. The profit rate of each producer was calculated on a
      weighted-average    basis    for   all   domestic    sales   of    the   product
      concerned.
(50)  The Council confirms that finding.
4.    Comparison
      General
•(51) Japanese  exports    were  made    to   different   Community     customers    at
      different   prices    and   in   different    regions    of    the   Community.
      Therefore,   export   prices   were   compared    with   normal    value   on   a
      transaction-by-transaction basis.
 ---pagebreak---                                     - 16 -
(52) Furthermore,   for the purpose of a fair comparison between         normal
     value and export prices, the Commission, in accordance with Article
     2(9) and   (10) of Regulation    (EEC) No 2423/88, took account, where
     warranted, of differences affecting price comparability wherever a
     direct   relationship   of   those   differences  to   the   sales   under
     consideration could be satisfactorily substantiated. All comparisons
     were made at the ex-works stage and at the same level of trade.
     Differences in physical characteristics
(53) As far as differences     in physical characteristics were concerned,
     normal value was adjusted by an amount corresponding to a reasonable
     estimate of the value of the differences.
(54) The Council confirms that finding.
     Differences in selling expenses
(55) As  far as differences    in selling expenses were concerned,       normal
     value and export prices were adjusted in order to take account of
     differences in credit terms, warranties, commissions, salaries paid
     to  sales   personnel, packing,    transport,  insurance,   handling   and
     ancillary costs, wherever evidence was given that these expenses were
     directly related to the sales under consideration.
(a)  Sales staff salaries
(56) As regards salaries for personnel involved in domestic sales, several
     Japanese producers had requested an allowance for salarial costs for
     personnel  partly  engaged   selling  R.E.W.S. and   partly   involved  in
     activities concerning other products. An allowance was granted for
     the portion of costs incurred in selling the product concerned.
 ---pagebreak---                                      - 17 -
     Some of the salarial costs for which allowances were claimed        related
     to administrative    and promotional     activities. The companies were,
     however, unable to relate those costs to the product concerned and
     they were therefore considered to be       general overheads which did not
     affect price comparability. The Commission, consequently,          rejected
     the claim for deduction of such costs.
(57) The Council confirms that conclusion.
(b)  After-sales servicing
(58) Some companies claimed an adjustment for after-sales servicing but
     were not in a position to link the costs directly to the particular
     sales transactions regarding the product under consideration.
     The Commission therefore concluded that the costs in question had to
     be considered general overheads for which no adjustment could be made
     under Article 2(10) of Regulation        (EEC) No 2423/88. The claim was
     consequently rejected by the Commission.
(59) The Council confirms that conclusion.
(c)  Credit terms
(60) The Commission   made   adjustments   for credit    granted   to customers,
     where it received evidence of a fixed credit period agreed with the
     buyer  at  the  date  of   sale. Several     exporters   claimed that   such
     adjustment  for credit terms should also be granted where no fixed
     credit period had been agreed or where an agreed period had been
     exceeded  and  that   the   cost  of   credit   in  such   cases should   be
     calculated on the basis of the normal interest in Japan for short-
     term borrowing.
     Those claims were examined in order to establish whether, as required
     by Article 2(9)(a) of Regulation (EEC) No 2423/88, the credit costs
     in question could be considered to have affected price comparability.
     In principle, price comparability       can only be affected by     factors
     known to the buyer when he decides on the purchase. Credit periods
 ---pagebreak---                                         - 18 -
     which, contrary to the usual practice in Japan, are not agreed at the
     date   of  sale   do   not   fall   into  this   category.   In  addition,    the
     Commission found that such credit periods varied considerably                from
     one   customer    to   another.     In   such   circumstances   the    Community
     institutions would normally         have rejected the claims. In this case,
     however,    and   in    conformity     with   the   line  taken    in   previous
     proceedings, the Commission estimated the adjustment for these sales
     on the basis of 30 days of credit. This was considered to represent
     the usual average period of credit granted to buyers of products in
     the same business sector on the Japanese market.
(61) The Council confirms those conclusions,
(d)  "Trade-in allowance"
(62) A Japanese producer claimed an allowance for trade-in payments made
     where   a  purchaser     (in  general,    distributors   or   dealers)   of   new
     machines   "traded   in" old and/or used machines. It was established
     that  the   value   of   the   product   traded   in did   not  appear    on  the
     invoiced amount. The producer, however, argued that this should not
     be considered to be relevant since trade-in operations were directly
     related to the sales under consideration and sellers were allowed
     directly to offset the value of the trade-in against the invoiced
     sales   price.   This    producer    therefore    argued  that   its   financial
     contribution to the activities of their customers should be treated
     as a rebate and should therefore be deducted from normal value.
(63) The Commission, however, in conformity with its consistent practice
     upheld by the Court of Justice, considered that the contribution in
     question   was not a rebate but in fact a payment for which a certain
     value was obtained.
     Indeed, with the removal of traded-in machines from the market, the
     demand for new machines is maintained at the highest possible level.
     This higher demand stimulates not only prices but also higher sales
     volumes   and   production      levels   which   should  normally     result   in
     increased economies of scale and commensurately higher profit levels.
 ---pagebreak---                                      19 -
     In these circumstances, the "rebates" in question, were considered to
     be the equivalent to the value which the manufacturer attaches to the
     withdrawal of the old and/or used R.E.W.S. from the market.
     The payments were therefore not deducted from the price actually paid
     or payable by the buyer, and the full domestic price was retained for
     the purpose of comparison.
(64) The Council confirms that finding.
5.   Dumping margins
(65) The  weighted-average  dumping   margins  for  each  Japanese   producer
     concerned,  as  a  percentage  of   free-at-Community-frontier   values,
     exceeded 60% in all cases, except for Yamato Scales Co, for which the
     margin was 15.3%.
(66) In  the  case  of  firms  which   failed  to  cooperate  or   where  the
     Commission was unable to use the producer's submission     (see recital
     (27)) above, the dumping margin should be established on the basis of
     the facts available, pursuant to Article 7(7)(b) of Regulation (EEC)
     No 2423/88.
     The Commission   considered  that  the most   reasonable elements   were
     those established during the investigation and that to attribute to
     such firms a dumping margin lower than the highest established for
     the cooperating companies would act as a bonus for non-cooperation
     and could lead to circumvention of the anti-dumping measures.
(67) The Council confirms that finding.
E.   Recurrence of injury
(68) In the case under consideration, the Commission had to determine, in
     accordance with Article 15(3) of Regulation (EEC) No 2423/88, whether
     the expiry of the measures in force would lead again to injury or
     threat of injury.
 ---pagebreak---                                   - 20 -
     Therefore it was necessary to examine the present economic situation
     of the Community industry and the behaviour of the Japanese exporters
     on the Community market.
1.   Situation of the Community industry
     Community market
(69) The Community market for R.E.W.S. remained stable in size, rising
     from some 135 000 units in 1988 to 140 000 units in 1989 and falling
     to 135 000 units in 1990.
     Production capacity, utilization rate, stocks
(70) Community production of R.E.W.S. fell from 140 000 units in 1988 to
     122 000 units in 1989 and 114 000 units in 1990. Though production
     capacity also fell from 181 000 units in 1988 to 166 000 units in
     1989 and 155 000 units in 1990, the utilization rate decreased from
     77% to 73%.
(71) Stocks remained at a continuously high level (more than 10% of the
     total Community production) between 1988 and 1990.
     Sales volume and market share
(72) The quantity   of R.E.W.S. sold  in the Community   by  the  Community
     industry fell from 113 000 units in 1988 to 105 000 units in 1989 and
     to  97 000  units  in 1990. The   Community  industry's  market  share
     changed as follows: 84% in 1988, 75% in 1989 and 72% in 1990.
     Price trends
(73) Prices  of the Community industry decreased between 1988 and 1990 by
     nearly 6% on a weighted-average basis. This downward trend coincided
     with an overall price decrease on imported R.E.W.S. and considerable
     price undercutting by Japanese imports (see recitals (78) to (81)).
 ---pagebreak---                                        - 21 -
      Profits
(74) The Commission found that, overall, the Community industry has showed
     poor   financial results since 1988. In 1990, a negative return on
      sales  of  5.5%   on   a  weighted-average    basis   was   recorded.   One   EC
     producer,    who   suffered    considerable   losses   throughout    the   cited
     period, discontinued production at the end of 1990.
     Employment and investment
(75) Between    1988   and    1990   the   Community   industry    shed   245   jobs,
     representing 16% of its labour force; investments were cut back and
     two factories closed.
(76) The Council confirms those findings.
2.   Exporters' behaviour on the Community market
     Volume and market shares of the dumped imports
(77) Despite the measures in force, the volume of dumped R.E.W.S. imported
     from Japan rose from 13 000 units in 1988 to 17 000 units in 1989 and
     to approximately 19 000 units in 1990. The market share of Community
     consumption held by Japanese imports rose from 9.8% in 1988 to 12.1%
     in 1989 and to 14.6% in 1990.
     Price of dumped imports
(78) The   Commission    investigated    whether  there   was   price   undercutting
     practised by the Japanese exporters during the investigation period.
     To this end, the exporters' sales in six Community markets               (United
     Kingdom,   Germany,    Netherlands,     Belgium,  France    and  Greece)    were
     examined, where nearly all Japanese imports were sold.
(79) The Commission first selected representative R.E.W.S. of the various
     segments   (low-range, mid-range, high-range models) marketed by the
     Community   producers.     The  Commission   then   considered   the   Japanese
     export models    in the same segments which were directly            comparable
     with the Community      producers' models, so that        no adjustments     for
     technical differences had to be made.
 ---pagebreak---                                      - 22 -
     Prices for the models concerned were compared on the basis of sales
     made at the same level of trade (distributor/dealer level).
(80) The comparison outlined above showed widespread and consistent price
     undercutting on the part of all exporters, ranging from 20 to 70%.
(81) The Council confirms those findings.
3.   Conclusions
(82) On   the  basis   of  the   above,   the  Commission    concluded   that  the
     Community industry is in a precarious situation. Indeed, it suffered
     substantial price erosion which provoked further financial losses and
     a reduction in sales volume and market share.
     This situation was highly       influenced by the fact that the dumped
     imports were made in an open and transparent market where prices are
     very   well   known.   Price  elasticity    and   huge   price   undercutting
     therefore had a clear effect on the sales volumes and the financial
     results of the Community industry.
     For those reasons the Community industry could not take advantage of
     the anti-dumping measures in force.
(83) The Council confirms that conclusion.
(84) The Commission has also considered whether other           factors than the
     dumped   imports   could  have   prevented   the   Community   industry  from
     regaining economic health.
(85) In  that   ronpoct,   one  exporter    alleged   that  the   effects  of  the
     increase in volume and the low price of R.E.W.S. imports from other
     countries, principally Singapore, the Republic of Korea, Taiwan and
     Turkey,   have been   at  least partly    responsible    for the   precarious
     situation of the Community industry.
 ---pagebreak---                                      - 23 -
 (86) The Commission is presently examining the effects of the imports of
      R.E.W.S. from Singapore and Korea. However, even if these imports are
      found to have injured the Community industry, this cannot eliminate
      the fact that the dumped exports from Japan, because of their high
      volume   and  particularly  low prices, remained     an  important  factor
      which prevented the Community industry from improving its economic
      situation.
      As far as imports from Taiwan are concerned, the Commission found
      that such imported scales from Taiwan were mostly counting          scales
      which are not comparable to the product under consideration.
      Finally, no imports from Turkey took place during the investigation
      period.
(87)  Apart from the above, the Commission did not find any other factors
      which could explain the difficult economic situation of the Community
      industry. Indeed, there were no substantial imports other than those
      mentioned above, nor was there any contraction in demand.
(88)  On the basis of the above, the Commission concludes that, while other
      imports may also have contributed to the injury, the dumped Japanese
      imports, taken in isolation, have to be considered an important cause
      of the unsatisfactory situation of the Community industry.
4.    Possible effects of expiry of the measures
(89)  In those circumstances, the Commission is of the opinion that the
      expiry   of  the   measures  would   worsen   the  situation  of   the  EC
      producers.
(90)  Indeed, if there are no measures, an increase in the undercutting by
      Japanese   imports has to be expected.      This would   lead to   further
      losses   in  market   share  for   the   Community   industry  and   would
      negatively affect its sales and market share.
 ---pagebreak---                                         - 24 -
(91) In that connection, two factors deserve particular attention. On the
     one   hand,   the  Japanese      producers    have    recently    expanded    their
     production capacity. On the other hand, the Community market is at
     present in a recession. This points to the conlusion that pressure
     from Japanese dumped imports is likely to increase and that the EC
     industry   is now    even more      vulnerable    to   such practices      than  in
     previous years.
(92) That being so, it can be clearly foreseen that the Community industry
     will suffer material injury from the dumped imports in the event of
     the expiry of the anti-dumping measures. The Commission                  therefore
     concludes that these measures should            not be allowed       to  lapse but
     should be adjusted in the light of the evidence of dumping and of the
     economic situation of the Community industry.
(93) The Council confirms those conclusions.
F.   Community interests
(94) With respect to Community interests, the Council recalls that it had
     already   concluded,     in    its   original    proceeding,      that   Community
     interests   called    for   intervention    in   order    to  prevent     injurious
     dumping. The Commission considers that no substantial change in this
     situation has occurred since then. This applies specifically to the
     negative influence which the disappearance of the Community industry
     would   have    on  the    supply     industry.     Indeed,    R.E.W.S.     involve
     increasingly    high-level    technology    and    any   loss   of   technological
     know-how in the R.E.W.S. sector would mean a loss of competitive edge
     in the electronic sector as a whole.
(95) While   the    Commission     recognizes    that     maintaining      anti-dumping
     measures   in   force   will    continue   to   affect    price    levels   of  the
     exporters concerned in the Community and may subsequently have some
     influence on the relative competitiveness of their products, those
     measures are intended to restore normal and fair market conditions.
     In addition, the      removal    of  the unfair      advantages    gained   by  the
     dumping practices is designed to prevent the further decline of the
     Community industry and thus help to maintain the availability to the
     consumer of the widest possible choice of product.
 ---pagebreak---                                        - 25 -
(96)  Though end-users, which are all professionnals, may have to bear an
      increase in prices, the present low prices were the result of unfair
      competitive behaviour. They cannot therefore expect to continue to
      take advantage of the effect of such practices.
(97)  For  these    reasons,  the    Commission    considers   that   the   Community
      interests call for intervention in order to prevent the continuation
      of injury and a further deterioration in the economic situation of
      the Community industry.
(98)  The Council confirms that conclusion.
G.    Level of the duty
(99)  When calculating the amount of duty necessary to enable the Community
      industry   to   regain   a   healthy    and   non-injurious    situation,    the
      Commission had to bear in mind that the Community industry as a whole
      was not profitable. Accordingly, it is considered necessary for the
      measures taken to allow the Community industry to increase its prices
      so as to cover its costs of production and to obtain a reasonable
      return on sales.
      In the circumstances of the industry concerned, it was found that,
      based on normal market conditions and the industry's ongoing long-
      term investment requirements, an annual return on sales of 10% before
      tax could be regarded as an appropriate minimum.
(100) In order to establish the margin by which the prices of Japanese
      producers   should  be  increased    to allow the Community        industry   to
      achieve the abovementioned return on sales, the Commission classified
      the  most   representative     R.E.W.S.    produced   and   marketed    by   the
      Community    producers    into    three    segments   (see    recital    (16)),
      calculated for each segment a weighted-average price on an ex-works
      basis (see recital (49)) and compared these prices to the prices at
      Community   frontier   of   the   similar    Japanese  export    models,    duly
      adjusted.  The   difference    between   these prices    reflects    the   price
      increase at the Community frontier considered necessary to defeat the
      injurious effects of the dumped imports.
 ---pagebreak---                                       - 26
(101) Except for one company, these price increases were considerably lower
      than the dumping margins found and therefore determine the level of
      anti-dumping duties, in accordance with Article 13(3) of Regulation
       (EEC) No 2423/88. For the latter company, it is the dumping margin
      which should be imposed as a duty.
(102) Accordingly, the following duties should be imposed:
            Tokyo Electric Co Ltd                 22.5%;
            Ishida Scales Mfg Ltd                 31.6%;
            Teraoka Seiko Co Ltd                  22.6%;
            Yamato Scales Co Ltd                  15.3%.
(103) In   the   case   of   companies  which   failed   to   cooperate   in  the
      investigation, the Commission considered that the duties should be
      established on the basis of the facts available in accordance with
      Article 7(7)(b) of Regulation       (EEC) No 2423/88. It was     considered
      that the most reasonable elements were those established during the
      investigation and that to attribute to      such firms a duty lower than
      the highest established for the cooperating companies, namely 31.6%,
      would    act   as  a  bonus   for  non-cooperation    and  could   lead  to
      circumvention of the anti-dumping measures.
(104) The Council confirms those findings.
H.    Prev iou s Regu1at ions
(105) Regulation    (EEC) No 2865/85 and Regulation    (EEC) No 1058/86 should
      accordingly be repealed.
I.    Anti-circumvention measure
(106) By Decision 88/398/EEC, the Commission accepted an undertaking from
      TEC (UK) Ltd concerning certain electronic weighing scales assembled
      in the Community.
 ---pagebreak---                                      - 27 -
(107) The  Commission   considers   that, on   the  basis    of  the  regular   and
      detailed    information   submitted   by   the    company    concerned,    no
      circumvention    has   taken   place  since    the    acceptance    of   that
      undertaking. In these circumstances, the Commission considers that
      Decision 88/398/EEC should be repealed,
HAS ADOPTED THIS REGULATION:
                                   Article 1
1.    A  definitive   anti-dumping   duty  is  hereby    imposed   on  imports   of
      electronic   weighing   retail  trade   scales   falling    within   CN  code
      8423 81 50 (Taric code 84238150*10) and originating in Japan.
2.    The rate of the duty shall be 31.6% (Taric additional code 8697) of
      the  net   free-at-Community-frontier    price    before   duty,   with   the
      exception   of  retail   electronic  weighing   scales    produced    by  the
      companies below, to which the following rates shall apply:
           Tokyo Electric Co Ltd, Tokyo          22.5%
           (Additional Taric code 8694);
           Teraoka Seiko Co Ltd, Tokyo           22.6%
           (Additional Taric code 8695);
           Yamato Scales Co Ltd, Akashi           15.3%
           (Additional Taric code 8696).
3.    Regulation (EEC) No 2865/85, Regulation (EEC) No 1058/86 and Decision
      88/398/EEC are hereby repealed.
4.    The provisions in force concerning customs duties shall apply.
 ---pagebreak---                                    - 28 -
                                 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
all Member States.
Done at Brussels,                             For the Council
                                              The President
 ---pagebreak---                                                   29 -
                                                                     ISSN 0254-1475
                                                               COM(93) 87 final
                                                       DOCUMENTS
EN                                                                         02 i l
                                 Catalogue number : CB-CO-93-108-EN-C
                                                             ISBN 92-77-53521-0
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