CELEX: 51992PC0157
Language: en
Date: 1992-04-30
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 1768/89 relating to a definitive anti-dumping duty on imports of video cassette originating in Hong Kong

COMMISSION OF THE EUROPEAN COMMUNITIES
                                COM(92) 157 final
                                Brussels, 30 April 1992
                       Proposal for a
                 COUNCIL REGULATION (EEC)
    amending Regulation (EEC) No 1768/89 relating to a
     definitive anti-dumping duty on imports of video
            cassettes originating in Hong Kong
               (presented by the Commission)
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                         EXPLANATORY    MEMORANDUM
(1) By Regulation   (EEC) No 1768/89, the Council      imposed a definitive
    anti-dumping duty of 21.9% on imports of VHS video tape in cassettes
    originating in Hong Kong. In this Regulation, the Council indicated
    that  the  Commission   will  review   this  duty,  should  a newcoming
    exporter make a substantiated request in this respect.
(2) By a notice published in the Official Journal on the 11 January 1991
    the  Commission   initiated  such   a  review  of  Regulation (EEC)  No
    1768/89 as it concerned a Hong Kong company, Wai Shing.
(3) The  investigation  showed that Wai Shing had begun to export       own
    produced video cassettes to the European Community after the entry
    into force of the above Regulation.
(4) Normal value was determined on the basis of constructed value of the
    models concerned. Export price was based on the actual price paid or
    payable for export. The dumping margin established was 13.8%.
(5) Given the specific economic circumstances of this case, the anti-
    dumping duty to be imposed should be a variable duty equal to the
    difference between the normal value and the net price free-at-the-
    Community-frontier.
(6) In conclusion, it is proposed that the Council amends its Regulation
    (EEC)  No  1768/89,   and  impose  on   VHS  video  tapes  in cassettes
    manufactured by Wai Shing and originating       in Hong Kong the above
    variable duty for the models    exported to the Community.
 ---pagebreak---                                       - 3 -
                                  Proposal for a
                             COUNCIL REGULATION (EEC)
             amending Regulation (EEC) No 1768/89 relating to a
               definitive anti-dumping duty on imports of video
                       cassettes originating in Hong Kong
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   Economic   Community(^),       and  in   particular
Article 14 thereof,
Having   regard    to   the   proposal   submitted     by   the   Commission    after
consultation within      the Advisory    Committee    as provided    for under    the
above Regulation,
Whereas:
                              I - PREVIOUS PROCEDURE
(1)  In   Regulation      (EEC)   No   1768/89( 2 ),    the   Council    imposed   in
     particular a definitive anti-dumping duty of 21.9% on imports of VHS
     video    tape   in   cassettes  falling   within     CN   code   ex  8523 13 00
     originating in Hong Kong, with the exception of imports from several
     exporters specifically mentioned which were subject to a lesser rate
     of duty or no duty at all.
(1)  OJ No L 209, 2.8.1988, p. 1.
(2)  OJ No L 174, 22.6.1989, p. 1
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(2) In recital 43 of Regulation (EEC) No 1768/89, concerning           companies
    which started or will start exporting own-produced cassettes to the
    Community   after the investigation period       (newcomers), the Council
    noted that the Commission was ready to          initiate without delay a
    review   proceeding     if   the  exporting    company    could    show  the
    Commission, and supply to that effect sufficient evidence, that it
    did not export the products concerned to the Community during the
    period of investigation.      The company also had to demonstrate that
    it only started those exports after the said period          and that it is
    not related to or associated with any of the companies subject to
    the investigation.
                            II - REVIEW PROCEDURE
(3) By a notice published on 11 January 1991 (3), the Commission, after
    consultation   with   the Advisory    Committee   and  in  accordance   with
    Article   14 of Regulation     (EEC) No 2423/88     initiated   a review of
    Regulation (EEC) No 1768/89 as it concerned a Hong Kong company, Wai
    Shing.   This   company   had  submitted   that   it  did  not   export  the
    products subject to the anti-dumping duty during the previous period
    of investigation (1 January - 30 November 1987).           In addition, it
    submitted that it was      not related to any of the companies subject
    to  the   previous   investigation    for which    dumping  was   found  and
    provided   substantiated   evidence that    it just had begun to export
    video   cassettes   to   the   Community.   Accordingly,    the   Commission
    commenced an investigation in order to verify that Wai Shing could
    be considered as a newcomer and to establish a dumping margin, if
    any,   for this company.
(3) OJ Ho C 7, 11.1.1991, p. 2.
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                    III -   RESULTS OF THE INVESTIGATION
                                  1. Newcomer
(4) The investigation showed that Wai Shing began to export own-produced
    video cassettes to the Community after the previous          investigation
    period mentioned in recital 3.      In addition, it was found that this
    company had no link of any sort with the exporters involved in the
    previous procedure and      for which dumping was    found.   The Council
    confirms that it should accordingly be considered as a newcomer and
    that a partial review of Regulation (CEE) No 1768/89 as it concerned
    Wai Shing was warranted.
                               2. Normal value
(5) Since Wai Shing did not sell any video cassettes on the domestic
    market during the investigation period for this review, normal value
    was determined on the basis of the constructed value of the models
    concerned in accordance with Article 2(3)(b) of Regulation (EEC) No
    2423/88.   This constructed value was computed on the basis of all
    costs,  both   fixed   and   variable,  in  the country   of   origin,  of
    materials and manufacture for the models exported to the Community
    plus a reasonable amount for selling, administrative, other general
    expenses and profit.
(6) As  far   as   selling,    administrative   and general   expenses    were
    concerned,   they   were   calculated  by  reference   to  such   expenses
    incurred by another Hong Kong manufacturer for its sales of video
    cassettes on the domestic market, since it was verified that these
    expenses  corresponded    to   such costs  as they  were  stated   in the
    audited accounts of Wai Shing.
    As far as profit was concerned, it was found appropriate to apply a
    profit rate of 8% on turnover; this rate was used           in Regulation
    (EEC) No 1768/89 for the Hong Kong exporters and, according to the
    information available to the Commission, can still be regarded as
    the profit that Hong Kong companies can normally achieve on their
    domestic market.    The Council confirms the foregoing findings.
 ---pagebreak---                                  - 6 -
(7) On this basis, normal value was established for the models exported
    to the Community and for the three qualities of tapes used by Wai
    Shing , namely normal grade, high grade and super high grade.
                             3. Export price
(8) Export prices were determined on the basis of the prices, net of all
    rebates, actually paid or payable for the video cassettes sold for
    export by Wai Shing to the Community.      Indeed, since exports were
    made  directly  to independent   importers   in  the Community, these
    export prices were found to be reliable.
    The Council confirms   this finding.
                              4. Comparison
(9) For the purpose of a fair comparison between normal value and export
    price, the Commission took account of differences affecting     price
    comparability in accordance with Article 2(9) and (10) of Regulation
    (EEC) No 2423/88.   All comparisons were made at ex-works level, at
    the same level of trade and, for the export price, on a
    transaction by transaction basis.
    The examination of the facts shows the existence of dumping,      the
    margin of dumping being equal to the amount by which normal value
    exceeds the price for export to the Community, which, as expressed
    as a percentage of total c.i.f. value, was 13.8%.
    The Council confirms the above findings.
 ---pagebreak---                                      - 7 -
                 IV    -  AMENDMENT OF THE REVIEWED MEASURES
(10) No new investigation was carried out as regards injury since this
     was not requested.      In addition, the Commission considers that the
     injury findings established in Regulation (EEC) No 1768/89 are still
     valid.  Therefore, since the price increase which would be required
     to eliminate the injury level exceeds the dumping margin found for
     the company concerned, as established in Regulation (EEC) No 1768/89
     (recital  7 1 ) , the  duty  to   be  imposed  should  correspond to  the
     dumping margin.
(11) The complainants and Wai Shing were informed of the essential facts
     and considerations on the basis of which it was intended to propose
     the replacement of the duty imposed by Regulation (EEC) No 1768/89
     in respect of Wai Shing by an anti-dumping duty established on the
     basis of the above and were given every opportunity           to comment.
     After this disclosure, Wai Shing offered a price undertaking.
     However, in the light of the economic structure of the exporter, in
     particular the fact that it supplies and exports to the Community
     video cassettes of various origins, and given the evolution of the
     flows of trade for this product from Hong Kong, the monitoring of
     such undertaking would not be manageable.       Therefore, the Commission
     considered, after consultation, that the undertaking offer submitted
     by Wai Shing was not acceptable.
(12) In addition, the Commission found that the prices of video cassettes
     originating    in Hong Kong were subject to a high volatility.        The
     Commission thus considered       that, for the models investigated, the
     duty should take the form of a variable duty equal to the difference
     between  price     per  cassette   net,  free-at-Community-frontier,  not
     cleared through customs, and a floor price established on the basis
     of the normal value for each individual model. Since it cannot be
     excluded that the exporter will also export models which were not
     covered by the investigation, it appears appropriate to establish an
     ad valorem duty at the level of the dumping margin found for all
     other video cassettes exported to the Community by this company.The
     Council confirms the above findings.
 ---pagebreak---                                  - 8 -
(13) Accordingly, it is considered appropriate that Regulation (EEC) No
     1768/89 should be amended in respect of Wai Shing and that, until
     the Regulation's expiry,   a definitive anti-dumping duty shall be
     imposed on VHS video tapes in cassettes manufactured by Wai Shing
     and originating in Hong Kong in respect of the models E-30, E-60, E-
     90, E-120, E-180, E-195 and E-240, either normal grade, or high
     grade  or  super  high  grade.  This  duty  shall  be  equal  to  the
     difference between a floor price based on this normal value and
     their net price free-at-the-Community-frontier not cleared through
     customs, payable by the first importer.    All other models of video
     cassettes manufactured by Wai Shing and originating     in Hong Kong
     shall be subject to a duty of 13.8% ad valorem,
HAS ADOPTED THIS REGULATION:
                                Article 1
The following subparagraph is added to Article 1(3) of Regulation (EEC)
No 1768/89:
"The duty specified in paragraph 2(b) shall not apply to models of video
tape in cassettes E-30, E-60, E-90, E-120, E-180, E-195      and E-240 in
quality normal grade (NG), high grade (HG) or super high grade (SHG) as
specified hereafter and manufactured and sold for export to the Community
by Wai Shing (Hong Kong) (TARIC additional Code 8255); these models shall
instead be subject to a duty equal to the difference between the price
mentioned hereunder for each of the models concerned and their net price,
free-at-Community-frontier before duty:
                                       ECU         Additional Taric Code
     E-30      SHG                     0,55               8626
     E-60      SHG                     0,68               8627
                HG                     0,66               8628
     E-90      SHG                     0,81               8629
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      E-120      SHG                   0,94               8630
                  HG                   0,85               8631
      E-180      SHG                   1,20               8632
                  HG                   1,13               8633
                  NG                   1,10               8634
      E-195      SHG                   1,27               8635
                  HG                   1,20               8636
      E-240      SHG                   1,47               8637
                  HG                   1,36               8638
For all other video tapes in cassettes produced by Wai Shing the duty
shall   be  13.8% of their net  price,  free-at-Community-frontier  before
duty."
                                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,
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                                                                      ISSN 0254-1475
                                                               COM(92) 157 final
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