CELEX: 51997PC0062
Language: en
Date: 1997-02-21
Title: Proposal for a COUNCIL REGULATION (EC) amending Regulation (EEC) N° 3433/91 in respect of imports originating in Thailand and imposing definitive anti- dumping duties on imports of gas-fuelled, non-refillable pocket flint lighters originating in Thailand, the Philippines and Mexico

COMMISSION OF THE EUROPEAN COMMUNITIES
                                                Brussels, 21.02.1997
                                                COM(97) 62 final
                               Proposal for a
                     COUNCIL REGULATION fEC)
amending Regulation (EEC) N° 3433/91 in respect of imports originating
  in Thailand and imposing definitive anti-dumping duties on imports
of gas-fuelled, non-refillable pocket flint lighters originating in Thailand,
                        the Philippines and Mexico
                      (presented by the Commission)
 ---pagebreak---  ---pagebreak---                           EXPLANATORY MEMORANDUM
(1)  By Regulation (EEC) N° 3433/911, the Council imposed a definitive anti-dumping
     duty on imports of gas-fuelled, non-refillable pocket flint lighters originating, inter
     alia, in Thailand.
(2)  In March 1995, following receipt of a request for a review containing sufficient
      evidence that the measure in force in respect of the above Thai imports was no
     longer sufficient to counteract the injurious dumping, the Commission initiated a
      review2 of Council Regulation (EEC) N° 3433/91.
(3)   Simultaneously, in March 1995, as a result of complaints containing sufficient
      evidence of dumping and material injury resulting therefrom, the Commission
     initiated an anti-dumping proceeding3 concerning imports of the same products
      originating in the Philippines and Mexico.
(4)   Since it was considered appropriate to cumulatively assess the effects of the imports
     from the three countries concerned, it has been decided to proceed directly to
     definitive measures rather than to pass through the provisional stage. In view of
     this, the Commission, prior to drafting its proposal on these cases, provided all
     interested parties with details of its calculation and gave them sufficient time to
      comment and correct material errors.
1
    OJNoL 326, 28.11.1991, p. 1
2
    OJNoC67, 18.3.1995, p. 4.
3
    OJNoC67, 18.3.1995, p. 3.
 ---pagebreak---                                         lb
(5)   The review investigation showed that the dumping margin for Thai exports had
      increased significantly. Expressed as a percentage of the CIF Community frontier
      value of the imports, the dumping margin for the sole Thai exporter having exported
      during the period of investigation was found to be 51.9%. As far as Filipino exports
      are concerned, dumping margins ranging from 36.7% to 52.6% were established,
      while the dumping margin for the sole Mexican exporter was found to be 27.1%.
(6)   The investigation also showed that the injury suffered by the Community industry
      was material since, in a growing market, the Community producers concerned had
      lost market share and their profitability deteriorated.
      The analysis of the causal link between this injury and the dumped imports from the
      countries concerned (set out in recitals 60 to 71* of the attached proposal), led to the
      conclusion that although other elements may have had a negative impact on the
      Community industry, dumped imports from Thailand, the Philippines and Mexico
    , have by themselves caused material injury to the Community industry.
(7)   As explained in recitals 75 to 78 of the attached proposal, the adoption of measures
      in this context is considered to be in the interest of the Community. Since one Thai
      producer, the sole Mexican producer and two Filipino producers offered
      undertakings concerning their exports of the product concerned to the Community
      which were found to be acceptable and, given the high level of co-operation
      obtained in all three cases, the definitive measures proposed to the Council should
      act as a "safety net" additional to the accepted undertakings.
 ---pagebreak--- (8)  The proposed measures should therefore take the following form:
     - As far as Thailand is concerned, the measures in force should be repealed but the
     5.8% duty rate currently applicable to imports from the company Politop should, as
     explained at recitals 83 to 86 of the attached proposal, be retained as the individual
     duty rate for that company in the future. A residual duty should be imposed at the
     level established for the co-operating company with the highest dumping margin,
    namely 51.9% (based on the company's dumping margin as this was lower than its
    injury margin);
    - As far as the Philippines are concerned, an individual duty should be imposed in
    respect of imports from Swedish Match Philippines (which did not offer any
    undertaking ) at the level of its injury margin, namely 17%, which was found to be
    lower than its dumping margin. A residual duty should be imposed at the level
    established for the co-operating company with the highest dumping margin, namely
    43.0% (based on the company's injury margin as this was lower than its dumping
    margin);
    - As far as Mexico is concerned, the residual duty should be imposed at the level
    established for the sole co-operating company whose undertaking was accepted,
    namely 27.1% (based on the company's dumping margin as this was lower than its
    injury margin).
 ---pagebreak---                                  Council Regulation (EC) N°
                                        of...
        amending Regulation (EEC) N° 3433/91 in respect of imports originating
          in Thailand and imposing definitive anti-dumping duties on imports
        of gas-fuelled, non-refillable pocket flint lighters originating in Thailand,
                                 the Philippines and Mexico
 THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) N° 3 84/96, of 22 December 1995 on protection
 against dumped imports from countries not members of the European Community1, and in
particular Articles 9, 11 and 23 thereof,
Having regard to the proposal submitted by the Commission after consulting the Advisory
Committee,
WHEREAS:
                                     A. PROCEDURE
                                    1. Measures in force
(1)   By Regulation (EEC) N° 3433/912, the Council imposed a definitive anti-dumping
       duty on imports of gas-fuelled, non-refillable pocket flint lighters (hereinafter
       referred to as "disposable flint lighters") originating, inter alia, in Thailand. The
       rate applicable to products originating in that country was set at 14.1%, with the
       exception of the company Politop Co., Ltd. ("Politop"), whose duty rate was 5.8%
       and the company Thai Merry Co., Ltd. ("Thai Merry"), which was exempted from
       the duty since it had offered an undertaking, accepted by Commission Decision
      No 91/604/EEC3.
1
    OJ No L 56, 06.03.1996, p. 1. Regulation as amended by Regulation (EC) No 2331/96 (OJ
    No L 317, 6.12.1996, p. 1).
2
    OJNoL 326, 28.11.1991, p. 1.
?   OJNoL326, 28.11.1991, p. 31.
 ---pagebreak---  (2)   Further to the withdrawal of its undertaking by Thai Merry and the subsequent
       imposition of a provisional anti-dumping duty on its exports to the Community, the
        Council, by Regulation (EC) N° 398/944, amended Regulation (EEC) N° 3433/91 in
       order to remove the exemption from the duty originally granted to this company.
        Thai Merry's exports to the Community have since then been subject to the
        definitive anti-dumping duty at the rate of 14.1%.
                                    2. Request for a review
 (3)   On 18 March 1995, the Commission announced, by a notice published in the
       Official Journal of the European Communities5 the initiation of a review of
       Regulation (EEC) N° 3433/91 in respect of imports of disposable flint lighters
       originating in Thailand and commenced an investigation under Article 11 (3) of
       Regulation (EC) No 3283/946 which was replaced during the investigation by
       Regulation (EC) No 384/96, hereinafter referred to as "the Basic Anti-dumping
       Regulation". This interim review was initiated as a result of a request lodged in
       March 1994 by the European Federation of Lighter Manufacturers (EFLM), on
       behalf of its members representing almost the totality of Community production of
       the like product (namely the BIC Group, producer in France, Greece and Spain, the
       Swedish Match Group, producer in France and the Netherlands, Tokai Seiki GmbH,
       manufacturer in Germany and Flamagas, producer in Spain). This request, which
       alleged that the measure in force in respect of Thai imports was no longer sufficient
     . to counteract the injurious dumping, contained sufficient evidence to justify the
       initiation of a review.
4
     OJ No L 54, 25.02.1994, p. 1.
5
     OJNoC67, 18.3.1995, p. 4.
6
     OJ No L 349, 31.12.1994, p i .
 ---pagebreak--- (4J   Since the interim review in respect of imports originating in Thailand was likely not
      to be concluded before the end of the five year period of application of the measures
      concerned (i.e. on 30 November 1996), the interim review has also covered, in
      accordance with the provisions of Article 11 (7) of the Basic Anti-dumping
      Regulation, the circumstances set out in Article 11 (2) of the said Regulation (i.e.
      the circumstances due to be examined in the context of an expiry review).
                                       3. Complaints
(5)   On 18 March 1995, the Commission announced, by a notice published in the
      Official Journal of the European Communities1 the initiation of an anti-dumping
      proceeding concerning imports of disposable flint lighters originating in the
      Philippines and Mexico and commenced an investigation pursuant to Article 5 of the
      Basic Anti-dumping Regulation. This proceeding was initiated as a result of two
     'complaints lodged in August 1994 in respect of imports of disposable flint lighters
      originating respectively in the Philippines and in Mexico.
      The complaint concerning imports originating in the Philippines was lodged by the
      BIC Group, the Swedish Match Group and Tokai Seiki GmbH, representing more
      than 90% of total Community production of the like product. Immediately before
      initiation, the Spanish producer Flamagas became party to the complaint.
      The complaint concerning imports originating in Mexico was lodged by the BIC
      Group and the Swedish Match Group only. The complaint remained however
      admissible since the complaining producers represented a major proportion of total
      Community production of the like product. Immediately before initiation, the
      Spanish producer Flamagas also became party to this complaint.
    OJNoC67, 18.3.1995, p. 3.
 ---pagebreak---     It was considered that the relevant complaints contained sufficient evidence of
    dumping by the Filipino and Mexican imports and of material injury resulting
    therefrom to justify the initiation of anti-dumping proceedings. It was however
    considered appropriate that the relevant investigations be carried out in the
    framework of a single proceeding, given that both complaints, lodged almost at the
    same time, contained similar allegations concerning imports of the same product.
                             4. Initiation of investigations
(6) The Commission officially advised the exporters and importers known to be
    concerned, the representatives of the exporting countries and the complainant
    Community producers about the initiation of the review and the initiation of the new
    proceeding. Interested parties were given the opportunity to make their views
    known in writing and to request a hearing.
(7) A number of importers and producers in the countries concerned made their views
    known in writing. All parties who so requested were granted hearings.
(8) The investigation of dumping in respect of the three exporting countries concerned
    covered the period 1 April 1994 to 31 December 1994 (hereinafter referred to as
     "the investigation period"). For the purpose of the dumping, injury and Community
    interest determinations, the geographical scope of the investigation was the
    Community as composed at the time of initiation, therefore including all fifteen
    Member States.
 ---pagebreak--- (9)  The Commission sent questionnaires to all parties known to be concerned and
     received detailed replies from the complainant Community producers, from two
     producers in Thailand, one producer in Mexico and its related exporter in the United
     States as well as from another related company which was selling the like product
     on the Mexican market, from three producers in the Philippines and a related
     company in Japan, and from four importers in the Community related to the
     producers in the exporting countries concerned and one independent importer in the
     Community.
(10) The Commission sought and verified all the information it considered necessary for
     a determination of dumping and injury and carried out investigations at the premises
     of the following firms:
     (a) complainant Community producers:
     Producing companies:
        - BIC S.A., Redon, France
        - Feudor S.A. (Swedish Match), Rillieux-la-Pape, Prance
     Producing companies and sales offices:
        - Flamagas S.A., Barcelona, Spain
        - LaforestBIC S.A., Tarragona, Spain
        - ViolexBIC S.A., Athens, Greece
     Sales companies:
        - BIC Deutschland GmbH, Ettlingen, Germany
        - BIC S.A., Clichy, France
        - Biro BIC Limited, London, United Kingdom
        - Cricket S.A.(Swedish Match), Rillieux-la-Pape, France
        - Ebas Nederland (Poppell B. V. - Swedish Match), Eindhoven, Netherlands
 ---pagebreak---     (b) producers/exporters:
    From Thailand:             - Politop Co., Ltd. Bangkok, Thailand
                               - Thai Merry Co., Ltd. Samutsakorn, Thailand
    From the Philippines:
                              - Iwax Philippine, Inc., Rosario, Cavité, Philippines (the
                              investigation having also covered the related company
                              Iwahori Philippines, Inc., Mariveles, Bataan, Philippines)
                              - Iwax Inc., Shizuoka, Japan (in respect of exports from its
                              subsidiaries Iwax Philippine, Inc. and Iwahori Philippines,
                              Inc.)
                              - Swedish Match Philippines, Inc., Manila, Philippines
    From Mexico:
                              - JMP Mexico, S.A. de C.V., Tijuana, Mexico (in respect of
                              its production of disposable flint lighters in Mexico)
                              - Tokai de Mexico, S.A. de C.V., Cuernavaca, Mexico (in
                              respect of its domestic sales of disposable flint lighters in
                              Mexico)
                              - Scripto Tokai Corp., Fontana, USA (in respect of its
                              exports to the Community of disposable flint lighters
                              manufactured by JMP in Mexico)
    (c) importers related to producers/exporters:
        - Iwax (U.K.) Ltd8, Ballymoney, United Kingdom
        - Poppell B.V. (Swedish Match), Eindhoven, Netherlands
        - Tokai Seiki GmbH, Mônchengladbach, Germany
        - Tokai Seiki B.V., Hoofddorp, Netherlands
8
  This importer became independent after the period of investigation.
 ---pagebreak---      (d) independent importers:
        - Pollyflame International B.V., Roelofarendsveen, Netherlands
                                 5. Subsequent procedure
(11) It has to be noted that a number of considerations (detailed below at recitals 40 to
     44) have led the Commission to the conclusion that a cumulative assessment of the
     effect of the dumped imports from both the country subject to a review (Thailand)
     and the two countries subject to a new proceeding (the Philippines and Mexico),
     was warranted.
     As a result, from a procedural point of view/ it was considered that definitive
     measures, if any, should be directly adopted in respect of all three countries
     concerned, without resorting to the intermediate step of provisional duties (an
     approach which also implied that the measures in force in respect of Thai imports
     would have to be simultaneously repealed).
(12) The Commission accordingly continued to seek and verify all information it deemed
     necessary for its definitive findings.
(13) Parties were informed of the essential facts and considerations on the basis of which
     it was intended to recommend the imposition of definitive anti-dumping duties.
     They were also granted a period within which to make representations (and/or offer
     undertakings) subsequent to the disclosure.
(14) The parties either did not submit any written comments or submitted comments
     which did not justify any alteration of the preliminary conclusions. Within the
     specified time limit, three producers/exporters offered undertakings.
 ---pagebreak--- (15) The establishment of findings which, without resorting to the intermediate step of
     provisional duties, could be considered as final, made it necessary to provide all
     parties involved with preliminary and final disclosure and grant them sufficient time
     to submit their views. This, together with the setting up of appropriate
     undertakings, proved to be time-consuming and accordingly, the investigation
     overran the normal duration provided for in Articles 6 (9) and 11 (5) of the Basic
     Anti-dumping Regulation.
                 B. PRODUCT UNDER CONSIDERATION AND
                                   LIKE PRODUCT
                            1. Product under consideration
(16) The product subject to the definitive anti-dumping duty referred to at recital 1 as
     well as the product subject to the proceeding initiated in respect of imports
     originating in the Philippines and Mexico is gas-fuelled, non-refillable pocket flint
     lighters. This product falls within CN code ex 9613 10 00.
     It should be recalled in this respect that there are other disposable lighters on the
     market (piezo lighters) the technical characteristics of which are quite different from
     those of the above mentioned product. They were therefore not considered to be
     identical to the product concerned in the original investigation concerning Thailand,
     were not covered by the original investigation and were excluded from the scope of
     the measures. No reasons have emerged in the course of the current review and
     new proceeding which would justify a departure from this approach. Accordingly,
     piezo lighters were kept outside the scope of the current investigations.
 ---pagebreak---  In their representations made further to the final disclosure, the Thai authorities
 have argued that there are two distinct segments in the Community's disposable flint
 lighter market, the high end served by high quality Community produced lighters
 and the low end served by imports, including those from Thailand. This view,
 expressed in previous cases concerning disposableflintlighters, cannot be shared for
 the reasons already given in the past, which can be summarised as follows:
 For the market of a product to be divided into segments requires at least that
 differences in physical characteristics be perceptible to, and actually perceived by,
 consumers and that clearly separate channels of sale exist. These conditions are not
 met in the case of disposable flint lighters since all such products, which are globally
 perceived as being "non-piezo and disposable" lighters, are sold without distinction
 in the same kind of shops to customers having the same expectations (namely to buy
 a disposable product belonging to a single category of utility goods).
 Finally, it has to be noted that although the product under consideration is
'manufactured in different sizes and models, all these disposable flint lighters have
 the same basic technical characteristics, the same basic application and perform the
 same function. Accordingly, as in previous investigations, the whole range of
 models of disposable flint lighters was considered as forming one single category of
 product.
 ---pagebreak---                                             10
                                    2. Like product
(17) As regards the disposable flint lighters produced and sold domestically in the three
     countries concerned where such sales had taken place and information in their
     respect had been made available, the investigation showed that such products were
     either alike in all respects to, or closely resembling, those exported to the
     Communityfromthe countries in question.
(18) The investigation also established that the disposable flint lighters produced by the
     Community industry and sold in the Community market and those imported from
     the three countries concerned possess similar basic physical and technical
     characteristics and are intended for the same use. While there may be some minor
     differences between the product imported from the countries concerned and the
     Community production, these differences (for instance in the presentation or the
     technique used for the assembly of the lighter) do not affect the substantial
     characteristics and properties of the product. The disposable flint lighters produced
     and sold by the Community industry and those imported from the three countries
     concerned should therefore be regarded as like products.
(19) Accordingly, it is concluded that disposable flint lighters produced and sold in the
     Community, as well as those produced and sold in Thailand, the Philippines and
     Mexico and those exported to the Community from these three countries should be
     regarded as "like products", within the meaning of Article 1 (4) of the Basic Anti-
     dumping Regulation.
 ---pagebreak---                                             11
                                      C. DUMPING
                                     1. Normal value
                                       (a) Thailand
(20) One Thai co-operating exporter, whose exports represented almost 100% of total
     Community imports from Thailand during the investigation period, had sold
     disposable flint lighters on its domestic market. For 2 models, normal value was
     based on domestic selling prices, since after exclusion, in accordance with the
     provisions of Article 2 (4) of the Basic Anti-dumping Regulation, of non profitable
     sales, the remaining profitable sales of comparable models were found to represent
     at least 5% of the sales volume of the models concerned to the Community. For a
     third model, in the absence of sufficient profitable sales of a comparable model,
     normal value was constructed on the basis of the company's costs of manufacture,
     selling, general and administrative expenses (hereinafter referred to as "SG&A") and
     profit. These SG&A and profit were established on the basis of the above
     mentioned profitable sales.
(21) For the other Thai exporter no dumping calculation could be made due to the fact
     that the company had ceased to export in 1992.
                                        (b) Mexico
(22) The sole Mexican co-operating exporter, whose exports represented almost 100%
     of total Community imports from Mexico during the investigation period, was fully
     export oriented but was nevertheless able to provide information regarding sales of
     the like product on its domestic market, as another company in the same group was
     producing and selling disposableflintlighters on the Mexican market. However, the
     sales in question, which were the only domestic sales of the like product available in
     Mexico, proved to be partly made at a loss, the remaining profitable sales
     representing less than 5% of the quantities exported to the Community.
 ---pagebreak---                                              12
(23) Accordingly, the Commission constructed normal value for this exporter by adding
     to the cost of manufacture of each exported model, the domestic SG&A available in
     Mexico, i.e. those of its related company selling disposable flint lighters in Mexico.
     As regards profit, given the lack of representative profitable sales in Mexico for
     disposable flint lighters and the non-availability of reliable data in respect of sales of
     the same general category of products in this country, a reasonable alternative
     solution had to be sought.
(24) To this end, it was examined whether Thailand, for which representative and reliable
     data were available, could be considered as a comparable market to Mexico in the
     sector concerned and, thus, an appropriate reference for the profit determination.
     This examination led to the conclusion that the conditions prevailing on both
     markets were similar. Moreover, the exporter concerned acknowledged that the
     profit margin achieved in Thailand was not exceeding the one normally realised on
     the Mexican market in the same business sector. Therefore, for the purpose of
     constructing normal value for each model exported by the Mexican co-operating
     exporter, the profit margin established in Thailand was, in accordance with the
     provisions of Article 2 (6) (c) of the Basic Anti-dumping Regulation, added to the
     above mentioned Mexican cost of manufacture and domestic SG&A.
                                       (c) Philippines
(25) The comparison of import statistics, after exclusion, on the basis of available data,
     of certain lighters which are outside the scope of the investigation (see above, recital
      16, considerations concerning piezo lighters) with quantities reported by the three
     Filipino co-operating exporters for the period of investigation, showed a level of co-
     operation close to 100%.
 ---pagebreak---                                             13
(26) In the Philippines, two co-operating exporters (belonging to the same group) were
     fully export oriented. The third co-operating exporter was selling on its domestic
     market through a related selling company during the investigation period, but the
     latter, recently become independent, refused to co-operate.           Therefore, no
     information regarding sales of the like product (or of the same general category of
     products) on the Filipino market could be collected and normal value had to be
     constructed on the" basis of data available.
(27) To this end, it was examined whether Thailand, for which representative and reliable
     data were available, could be considered as a comparable market to the Philippines
     in the sector concerned and, thus, an appropriate reference for the SG&A and profit
      determination. This examination led to the conclusion that the conditions prevailing
      on both markets were similar. Moreover, the exporters concerned admitted that
     both the SG&A incurred and the profit margin achieved in Thailand were not
      exceeding those normally encountered on the Filipino market in the same business
      sector. Therefore, for the purpose of constructing normal value in the case of the
     three Filipino co-operating exporters, the Commission added to their respective cost
      of manufacture for each exported model, in accordance with the provisions of
      Article 2 (6) (c) of the Basic Anti-dumping F.egulation, an amount for SG&A and
      for profit based on the respective amounts established in Thailand.
                                      2. Export price
(28) Practically all export transactions made by the exporters concerned during the
      investigation period were considered (only a few models sold in very small
      quantities were disregarded in agreement with the representatives of the companies
      concerned).
 ---pagebreak---                                                14
(29) Where export sales were made directly to unrelated importers, export prices were
     established on the basis of the prices actually paid or payable for the product sold
     for export to the Community.
(30) Where exports were made to related companies which imported the product
     concerned into the Community, export prices were constructed on the basis of
     resale prices to the first independent buyer, adjusted to take account of all costs
     incurred between importation and resale including customs duties and a reasonable
     profit margin (namely 5%). The latter was established on the basis of the profit
     margins considered reasonable in thii; business sector for unrelated importers.
     Where cost allocations for importers' SG&A were necessary in the construction of
     export prices, these were generally made on the basis of turnover with the exception
     of those cases where the importers provided sufficient evidence to justify another
     method of allocation. These allocations included all the general administration and
     selling costs related to the sales under consideration, whether financed by the
     exporter or by the related importer. Discounts and rebates given in connection with
     sales of the related importer to independent buyers were taken into account in
     constructing export prices.
                                      3. Comparison
(31) The weighted average normal value by model, as determined above, was compared
     at an ex-factory level with the export price, on a weighted average basis in the case
     of Thailand and on a transaction-by-transaction basis in the case of the Philippines
     and Mexico. Indeed, in the latter cases, the export price had to be constructed on
     the basis of resale prices to the first independent buyer. These resale prices and the
     corresponding constructed export prices showed patterns of pricing differing
     significantly among different purchasers, regions oi time periods, which would have
     resulted in that the full degree of dumping being practised would not have been
     reflected had the method based on weighted-average export prices been used.
 ---pagebreak---                                              15
(32) As far as differences affecting price comparability are concerned, adjustments were
      granted in accordance with Article 2 (10) of the Basic Anti-dumping Regulation,
      where satisfactory evidence was therefor supplied. Such adjustments concerned
      differences in costs for level of trade (calculated on the basis of advertising costs,
      incurred on the domestic market but not on exports), transport, insurance, handling,
      packing and credit.
                                   4. Dumping margins
(33) The examination of the facts showed the existence of dumping for all the co-
      operating exporters for which calculations could be made, the dumping margins
      being equal to the difference between normal value and export price duly adjusted.
                                                        t
 (34) The weighted average dumping margins expressed as a percentage of the free at
      Communityfrontierprice are as set out below:
          Thailand:      Thai Merry:                                 51.9%
         Mexico:         production by JMP Mexico
                         and exports by Scripto Tokai Corp. USA: 27.1%
         Philippines: - production by Iwax Philippine Inc., and
                         Iwahori Philippines Inc. and exports by
                         Iwax Inc. Japan (single dumping margin): 52.6%
                       - Swedish Match Philippines, Inc.             36.7%
 ---pagebreak---                                              16
                           D. COMMUNITY INDUSTRY
(35) The investigation confirmed that the complainant Community producers, either
     represented by the EFLM (on whose behalf the request for an interim review in
     respect of Thai imports had been lodged) or acting separately in two distinct groups
     (one having lodged the complaint concerning imports originating in the Philippines
     and the other one the complaint concerning imports originating in Mexico),
     accounted in all cases for a major proportion of total Community production of the
     like product.
(36) During the course of the investigation carried out in respect of the above
     companies, it became apparent that two producers or groups of producers, namely
     Tokai Seiki GmbH, together with one of its sales subsidiary in the Community, and
     the companies belonging to the Swedish Match Group, were related respectively to
     the sole Mexican exporter and one Filipino exporter and were also importing the
     dumped product from the countries concerned.
     In these circumstances, the Commission examined whether, in the light of the
     provisions of Article 4 (1) (a) of the Basic Anti-dumping Regulation, these
     companies should be excluded from "the Community industry". In this respect, it
     should be recalled that Article 4 (1) (a) does not provide for the automatic exclusion
     of producers who are related to exporters and/or themselves importing the dumped
     products, but rather obliges the Commission to examine on a case by case basis
     whether the exclusion of any producer in this situation is warranted.
 ---pagebreak---                                                17
(37) As far as Tokai Seiki GmbH is concerned, it has firstly to be noted that this
      company had made it clear that it only supported the action against the Philippines
      and Thailand and that its co-operation as a potential Community producer was
      restricted to the investigations in respect of these two countries. Secondly, the
      investigation showed that this producer was not only related to the sole Mexican
      exporter but also responsible for a very large proportion of the total imports into the
      Community of disposableflintlighters declared as originating in Mexico.
      In this respect, it should be recalled that the investigations concerning Mexican and
      Filipino imports were carried out in the framework of a single proceeding (see
      recital 5) and that a cumulative assessment of the effect of the dumped imports from
      Thailand, the Philippines and Mexico was found to be warranted (see recitals 40 to
      44). In this context, it was considered that taking into account the situation of
      Toka> Seiki GmbH in the overall injury assessment was not appropriate since, given
      the importance of the Mexican imports concerned, it would have led to unreliable
      results. Accordingly, it was considered appropriate to exclude Tokai Seiki GmbH
    * from "the Community industry".
(38) As regards the companies belonging to the Swedish Match Group, which are related
      to the Filipino exporter Swedish Match Philippines, Inc., it appeared appropriate to
      determine whether those companies (which were complainants in all three cases and
      fully co-operated in all three investigations) were primarily producers with an
      additional activity based on imports and merely supplementing their Community
      production, or whether they were importers with relatively limited additional
      production in the Community.
 ---pagebreak---                                             18
      The investigation revealed that the import activity of the companies belonging to the
      Swedish Match Group in respect of the product concerned originating in the
      Philippines was extremely limited, thus underlining that the core of their operations
      relating to the product concernedfirmlyremained in the Community. Accordingly,
      it was considered appropriate to maintain the companies concerned within "the
      Community industry".
(39) The injuryfindingsset out below are therefore based on the information submitted
      by the co-operating companies other than Tokai Seiki GmbH, namely the producers
      belonging to the BIC Group and to the Swedish Match Group, and the Spanish
      company Flamagas.
                                        E. INJURY
                                      1. Cumulation
(40) The Basic Anti-dumping Regulation requires, as a precondition of cumulation, that
      the countries concerned be subject to simultaneous investigations, that the margin of
      dumping established in relation to the imports from each country be more than de
      minimis (i.e. more than 2%) and that the volume of imports from each country be
      not negligible. Where such conditions are met, the conditions of competition should
    • then be examined, in particular to determine whether imported products originating
      in the countries concerned are interchangeable, are sold at similar price levels, have
      common or similar channels of distribution and are simultaneously present in the
      same geographical markets.
 ---pagebreak---                                                   19
(41) In this respect, it has to be noted that the disposable flint lighters exported from all
      three countries concerned are subject to simultaneous investigations which have
      established dumping margins ranging from 27.1% to 52.6%. In addition, none of
      the exporting countries concerned delivered to the Community quantities
      representing a market share beneath 1%, which could then have been considered as
      negligible.
      As regards their conditions of competition, the imported products originating in the
      three countries concerned were found to be interchangeable and sold at similar price
      levels, to have similar channels of distribution and to be simultaneously present in
      the same geographical markets.
    . In this context, the following arguments were raised by interested parties:
(42) The two related Filipino producers questioned the appropriateness of cumulation in
      the case of Filipino and Mexican imports on the grounds that differences in volume
       and progression of imports between these two countries would be such as to affect
      the above conclusion that Filipino and Mexican disposable flint lighters were
       competing under similar conditions on the Community market.
      In support of this assertion, they claimed that the actual rate of increase of Filipino
       imports was not, by far, as sharp as that of Mexican imports and that the difference
      was such as to warrant a separate assessment of the impact of the imports
       concerned on the Community market. Information was provided showing that the
       actual progression of Filipino imports was less marked than the one reported by
       Eurostatistics. Reference was also made to a previous case9 where the Commission
       had decided not to cumulate imports from Korea and China because the
       investigation had shown "diametrically opposed progressions"10 as regards import
       volume and market share as well as marked differences in these two countries'
       respective pricing policies.
 9
    Commission Regulation (EEC) No 763/90 of 26 March 1990 (OJ. No L 83 of 30.3.90), imposing a
    provisional anti-dumping duty on imports of tungsten carbide and fused tungsten carbide originating
    in the People's Republic of China and terminating the anti-dumping proceeding concerning imports
    of those products from the Republic of Korea.
 10
    Recital 42 of Regulation (EEC) No 763/90.
 ---pagebreak---                                              20
     However, while the progression of Filipino imports (corresponding to an increase in
     market share from 2% in 1990 to 3.3% in 1994) is less marked than that registered
     in the case of Mexican imports, of which the starting point was lower (the Mexican
     market share, 0.1% in 1990 reached 9.2%. in 1994), it must be noted that both
     countries achieved a significant market share during the investigation period and
     exports were made at prices significantly undercutting those of the Community
     industry. In addition, it is worth noting that both Filipino and Mexican imports have
     increased in absolute terms as well as in market share and the levels of price
     undercutting practised were very similar.
     It was therefore considered that the respective positions of Filipino and Mexican
     imports on the Community market were not sufficiently different so as to justify a
     finding that the conditions of competition between Filipino and Mexican lighters
     were different. Accordingly, the above claim could not be accepted.
(43) The representative of one of the Thai exporters also claimed that the injury caused
     by Thai imports should not be cumulatively assessed with the one attributable to
     Mexican/Filipino imports for the following reasons: Although Article 3 (4) of the
     Basic Anti-dumping Regulation allows cumulation in case of simultaneous
     investigations, cumulation of Thai imports, which are the subject of an interim
     review, with Mexican/Filipino imports would be inappropriate because the legal
      standards (and the consequent legal tests) which apply in such a review would be
     different from those applicable to a new proceeding.
 ---pagebreak---                                               21
      As regards the appropriateness of a global assessment of the impact of imports
      already subject to measures together with imports which are investigated for the
      first time, it is considered that since the Basic Anti-dumping Regulation does not
      preclude such a methodology, in particular where a full scale injury investigation has
      been carried out, any decision in this respect should be made for each case on its
      own merits, i.e. by examining the impact of the respective behaviour of the
      exporting countries concerned.
      In this respect, it should be noted that the anti-dumping measures applicable to Thai
      imports did not prevent this exporting country, after the withdrawal by the main
      Thai exporter of its undertaking in 1993, to resort again to injurious dumping, with
      the result that Thailand appears to have then adopted a very similar behaviour to
      that of the Philippines and Mexico.
      This similarity of behaviour means that, notwithstanding the measures in force
      (likely to have, ipso facto, become insufficient to counteract the injurious dumping),
     'imports from the country being reviewed may have contributed, on a par with
      imports from the countries subject to the new proceeding, to any injury which may
      prove to be attributable to the dumped imports under investigation.
(44) Therefore, it was considered that the similarity of behaviour of the three exporting
      countries concerned (with the consequent impossibility to assess separately their
      respective contribution to injury), together with the fact that the above criteria
      concerning conditions of competition are met, was such as to make cumulation
      warranted.
 ---pagebreak---                                          22
This approach was criticised by the Thai authorities on the grounds that it would
lead to a confusion of the issue of whether to impose anti-dumping duties in the first
instance (i.e. in respect of Filipino and Mexican imports) with the separate, allegedly
higher standard of whether existing duties (applicable to Thai imports) should be
continued (in an amended form, in the context of an interim review having also
covered the circumstances due to be examined in an expiry review).
This view could not be accepted in 'particular because the argument of the Thai
authorities that the standards of injury applicable to reviews of the present kind
would be higher than the one applicable to new proceedings does not appear to be
correct, notably in the light of the combined provisions of Article 3 and Article 11 of
the Basic Anti-dumping Regulation. Indeed, in the context of a review of the
present kind, the Institutions have to take account of the fact that the existing
measures may have limited the injurious effects of the dumped imports under
examination. The latter may have either remained injurious or become such as to
support afindingthat the injury is likely to recur in the absence of measures.
On the basis of all the above considerations, the appropriateness of the cumulative
assessment of the similar and simultaneous effect of the dumped imports from the
three countries concerned was therefore confirmed.
 ---pagebreak---                                              23
                           2. Total Community consumption
(45) In order to calculate total apparent consumption of the product in question on the
     Community market, Community producers' sales in the Community of disposable
     flint lighters were added to the total imports into the Community, as declared under
     CN code 9613 10 00 (excluding however, as far as the Philippines are concerned,
     disposable piezo lighters, on the basis of reliable data made available during the
     investigation). On this basis, the total apparent consumption of disposable flint
     lighters has grown between 1990 and 1994 by 21%.
(46) It is however known that this high rate of increase has to be qualified. Indeed,
     importers (which were anticipating an increased anti-dumping duty on Chinese
     disposable flint lighters) imported large quantities from the P.R. of China at the end
     of 1994. Part of these quantities (around 65 million units), which could not be put
     on the market before 1995, were kept in stock and this situation artificially increased
     total apparent consumption in 1994.
    • Thus, in order to assess the actual rate of increase of Community consumption, the
     Commission has estimated that the share of Chinese imports cleared through
     customs in 1994 (amounting in total to 176.7 million units) likely to have been
     resold (by importers to wholesalers or retailers) in the same year amounted to +/-
      110 million units. On this basis, the increase in total consumption is 11% (instead of
     21%). Such a rate of increase would appear to reflect fairly the actual trend of
     Community consumption.
 ---pagebreak---                                              24
                      3. Factors relating to the dumped imports
                                (a) Imports'increase rate
(47) The overall rate of increase of imports from the countries concerned was found to
     be very significant (more than + 280%). Indeed, between 1990 and 1994,
     quantities:
     - were multiplied by more than 120 in the case of Mexico (even though from an
     admittedly extremely low starting point);
     - increased by more than 95 % in the case of the Philippines;
     - increased by 18 % in the case of Thailand. In the context of a review, such an
     increase rate remains significant, as it appears likely that the imposition of anti-
     dumping measures in 1991 (and their amendment in 1994), has had an impact on the
     rate of increase of Thai imports, even if limited by the decrease in Thai selling prices
     following the withdrawal of its undertaking by the main Thai exporter.
                                     (b) Market share
(48) Imports from the three countries concerned, considered together, have captured
     between 1990 and 1994 an additional 10% of the Community market for the
     product in question (their share of the market indeed increased from 4.6% to 15%).
     In the meantime, in a growing market, the Community producers have lost a
     substantial share of the market, namely more than 8.5 percentage points, from
     57.3% in 1990 to 48.6% in 1994. This means that, globally, the position of other
     third countries has also been slightly eroded (a more detailed examination however
     showed, as explained at recital 70, that the P.R. of China substantially increased its
     share of the Community market to the detriment of exporting countries other than
     those subject to the current investigations).
 ---pagebreak---                                              25
                                    (c) Prices of imports
(49) For the model comparison, as in all previous investigations concerning disposable
     flint lighters, it was considered appropriate that only those lighters with an equal or
     almost equal amount of gas, and therefore a similar number of ignitions, be taken as
     a basis for the calculation of undercutting.
(50) Where sales were made to unrelated importers, the comparison was made between
     the CIF import price, adjusted to duty paid, customer delivered level and the selling
     price in the EC of the Community producers at the same level of trade. Where sales
     were to a related importer, the price comparison was made on the basis of the sales
     to the first independent customer.
     The average level of price undercutting, expressed as a percentage of the
     Community industry's average price, was found to be more than 30% in all cases but
     one (namely the Filipino company related to the Swedish Match Group, whose
     exports to the Community, in extremely limited quantities, cannot be considered as
     representative of Filipino exports of disposable flint lighters). This means that
     prices of the disposable flint lighters imported from the countries concerned were
     significantly below the prices practised by the Community producers during the
     investigation period.
 ---pagebreak---                                                26
                           4. Situation of Community industry
                                         (a) General
(51) The lighter market is very price sensitive. In order to be able to sell or to keep
     market share, the numerous producers and buyers on the market tend to adjust their
     prices to the lowest level or» offer. This means that faced with low priced dumped
     imports, the Community industry is either forced to lower its prices in order to try
     to maintain market share, production level and capacity utilisation, or led to lose
     market share if it tries to maintain its prices.
                             (b) Capacity, production and sales
(52) Between 1990 and the investigation period, capacity remained stable while
     production very slightly increased. Sales slightly increased in volume and very
     slightly increased in value.
                                      (c) Market share
(53) The Community industry's market share decreased from 57.3% in 1990 to 48.6% in
     the investigation period.
 ---pagebreak---                                               27
                                         (d) Prices
(54) Prices, on average, slightly improved until 1992, then slightly decreased. It has to
     be noted in this respect that, in an attempt to keep its market share, the Community
     industry has, over the period examined, sold increasing quantities of products with
     special executions (such as "sleeved" and "printed" lighters, which would have
     normally justified price levels higher than those of "standard" lighters). The
     investigation thus showed that such higher price levels, which would normally be
     associated with more sophisticated products, could not be maintained, with a
     consequent impact on the Community industry's profitability.
                                      (e) Profitability
(55) The Community industry's average return on sales of the like product, negative in
      1990, improved and became slightly positive in 1991. It deteriorated again, but
     remained positive, in 1992. In 1993, the average return was, again, negative.
     ^During the investigation period, the average sales price was slightly above the
     average cost of production.
                                      (f) Employment
(56) In an effort to reduce its costs, the Community industry continued to reduce the
     number of its employees (an 8% reduction between 1990 and 1993 was partly
      compensated for in 1994, but the number of employees remained, in 1994, 4%
     below its level of 1990).
 ---pagebreak---                                               28
                                  5. Conclusion on injury
(57) Prices of imports very substantially undercut the Community industry's average
     price, namely by more than 30% (with the exception of the Filipino company related
     to a Community producer whose exports were too limited to be considered as
     representative of Filipino exports).
(58) Injury to the Community industry over the period under examination mainly took
     the following form:
     - Loss of market share: The Community producers have lost an 8.5 percentage
     point share between 1990 and 1994 (or even a 15 percentage point share if 1994 is
     compared with 1992). Given that, in terms of volume, their sales remained stable,
     this means that Community producers have been totally prevented from benefiting
     from the market expansion.
     - Insufficient profitability: The Community industry's overall profitability remained
     very low (particularly for an industry requiring substantial investments to innovate).
     This results from the fact that its prices, heavily undercut, could not be increased,
     even slightly, over the last five years (despite the fact that the share of the products
     with special executions, normally more expensive, increased). The Community
     producers' very low level of profitability reached in 1994, if allowed to continue,
     will not be sustainable. This creates a seriousriskto see Community producers, in a
     relatively short time, relocating their production outside the Community.
(59) In summary, the Community industry, which appeared to be in the process of
     recovering from the effects of past dumping, is still in a very precariousfinancialand
     market situation and on this basis, it is concluded that it has been adversely affected
     and has suffered injury which is sufficient for it to be classified as material.
 ---pagebreak---                                                  29
                                F. CAUSATION OF INJURY
(60) For the purpose of determining whether the injury suffered by the Community
       industry was caused by the Thai, Mexican and Filipino dumped imports and whether
       other factors caused or contributed to that injury, the following elements were
       examined:
                               1. Effect of the dumped imports
         *
(61) In examining the effects of the dumped imports, it was found that the increasing
       volume and decreasing prices of the dumped imports coincided with the loss of
       market share and the deterioration in the financial situation of the Community
       industry.
(62) Indeed, between 1990 and the investigation period, the market share held by the
       dumped imports from the three countries concerned has significantly increased,
       namely from 4.6% to 15%, i.e. by more than 10% of total consumption, while the
    '• Community industry's market share decreased by more than 8.5% of total
       Community consumption. In addition, during the investigation period, prices of the
       disposable flint lighters imported from Thailand, the Philippines and Mexico were
        significantly below the prices practised by the Community producers (on average by
       more than 30%).
        Given that the market in question is highly price sensitive, as already explained at
        recital 51, it is clear that this significant price undercutting by Thai, Filipino and
       Mexican dumped imports, with consequentialy increased market share, has
        significantly affected the Community industry, even more so as the imported
        products were sold through the same sales channels and to the same customers as
        those of the Community industry.
 ---pagebreak---                                             30
                                2. Effect of other factors
              (a) Volume and prices of imports not sold at dumping prices
(63) Imports from third countries other than those subject to anti-dumping measures or
     to the current investigations were found to have increased by 34% between 1990
     and 1994. However, this increase is not very significant in terms of market share
     (from 10% in 1990 to 11.3% in 1994).
(64) As to the price levels of these imports, it has to be stressed that Eurostatistics data,
     based on a mix of different lighters, cannot be considered as a suitable basis for the
     purpose of establishing accurate unit prices. In any case, no substantiated evidence
     which would show that the actual price levels of these imports were significantly
     undercutting the Community industry's prices was submitted by any interested party.
                  (b) Evolution of demand and pattern of consumption
(65) As can be seen from the above (recitals 45 and 46) no contraction in demand or any
     other negative changes in the patterns of consumption took place during the period
     under examination.
            (c) Trade practices of, and competition between, third countries
                                and Community producers
(66) No evidence concerning the existence of restrictive trade practices of third
     countries, which could have been a source of injury to the Community industry, has
     been submitted. As far as competition between other third countries and
     Community producers is concerned, no other case than that of Chinese imports,
     examined below, appeared to warrant special consideration.
 ---pagebreak---                                                31
                    (d) Developments in technology, export performance
                          and productivity of the Community industry
(67) The ability of the Community industry to follow, or even- get ahead of, its
      competitors as regard technological developments is not in question (Community
      producers have indeed registered several valuable " patents concerning the
      manufacture of disposable flint lighters).
(68) The Community industry's ability to compete on export markets outside the
      Community is also clearly established (Community producers' sales of disposable
      flint lighters to third countries rose by 14% between 1990 and 1994).
(69) The same applies to the Community industry's productivity per worker, which has
      slightly improved between 1990 and 1994.
                      (e) Impact of other imports sold at dumping prices
(70) The case of the P.R. of China was found to warrant special consideration in this
      context. This country indeed appeared to have substantially increased its share of
      the Community lighter market over the period 1990 to 1994. Quantities exported
      from the P.R. of China to the Community were very substantial and prices not only
      dumped but also very low. By Council Regulation (EC) No 1006/95 n , these
      imports were subjected to an increased anti-dumping duty.
    OJ No L 101, 04.05.1995, p. 38.
 ---pagebreak---                                               32
     All co-operating exporters have claimed that they were forced to follow the trend
     set by the Chinese in order to continue to sell. Although tliis argument is not totally
     unfounded, it is considered that the fact that the P.R. of China has become one of
     the major players on the market (largely through dumping) cannot exempt other
     exporting countries, delivering quantities which are far from being negligible, from
     their responsibility for resorting to injurious dumping.
     In addition, this does not detractfromthe fact that severe competition of low priced
     dumped imports from Thailand, the Philippines and Mexico has significantly
     participated to the downward pressure put on disposable flint lighter prices in the
     Community.
                                3. Conclusion on causation
(71) Notwithstanding the fact that another element, namely the dumped imports from the
     P.R. of China, may have had a negative impact on the Community industry, it is
     considered that dumped imports from Thailand, the Philippines and Mexico have by
     themselves caused material injury to the Community industry. This conclusion is
     based on the various elements set out above and especially the level of price
     undercutting and the quantities concerned which resulted in a significant downward
     price pressure.
 ---pagebreak---                                               33
   G. CONTINUATION OR RECURRENCE OF DUMPING AND INJURY
                                        (THAILAND)
(72) Since, as explained at recital 4, the interim review in respect of imports originating
      in Thailand was likely not to be concluded before the end of the five year period of
      application of the measures concerned, the interim review concerning this country
      has also covered the circumstances due to be examined in the context of an expiry
      review as set out in Article 11 (2) of the Basic Anti-dumping Regulation.
(73) In the course of this examination, carried out with a view to determining, in the
      assumption that the measures against Thailand would be due to expire, whether
      such expiry "would be likely to lead to a continuation or recurrence of dumping and
      injury", the following elements were found to be relevant:
      - since, already before any foreseeable expiry, the Thai imports concerned have
      continued to be dumped (moreover at a higher level than the one originally
     .established), it is considered highly unlikely that the expiry of the measures could
      result in, or even coincide with, the disappearance of dumping;
      - similarly, as regards the injury analysis, it should be noted that, had the conclusion
      on cumulation not been reached and therefore had Thai imports been examined in
      isolation, they would still have been found injurious to such an extent (given the
      results of the investigation as to the volume and prices of such imports) that an
      increase in the level of the applicable anti-dumping duty would have been
      warranted. This finding, made in consideration of the existence (and level) of the
      current measures, would be strengthened, if anything, in the light of their possible
       expiry.
 ---pagebreak---                                             34
(74) Accordingly, it is considered that, since the persistent injurious dumping is such as
     to make the amendment of the existing measures against Thailand warranted, it
     follows that the expiry of the measures would be likely to lead to a continuation of
     dumping and injury and that the measures against Thailand should not be allowed to
     lapse.
                             H. COMMUNITY INTEREST
(75) In assessing whether it is in the Community's interest to take or modify anti-
     dumping measures in respect of imports of disposable flint lighters from the
     countries concerned which have been dumped and have caused injury to the
     Community industry concerned, the views of all parties involved in the proceeding
     were considered. This examination was carried out with a view to determining
     whether compelling reasons existed which would make anti-dumping measures
     unwarranted.
                                  1. Community industry
(76) Unless measures are taken in respect of Mexican and Filipino imports and the
     current measures in respect of Thailand amended in such a way that causes the
     Mexican, Filipino and Thai lighter prices to increase significantly, it is considered
     that the Community industry will have to lower further its prices or will lose market
     share at an increased rate. In both situations, the financial situation of the
     Community industry will worsen. As a consequence, production in the Community
     will no longer be viable and might have to cease, resulting in loss of jobs in both the
     industry itself and related sectors.
 ---pagebreak---                                               35
     Also, the revenues required for investment in research and development of products
     in line with lighter safety standard and more sophisticated production techniques,
     which are vital in maintaining competitiveness in a highly competitive sector, will be
     drastically reduced. Consequently, the Community industry could then, after a
     relatively short period of sustained losses, do nothing but withdraw from production
     in the Community.
     It is therefore justified to give the disposable lighter industry, which has a long
     history of investment and resultant innovation in the Community, the chance to
     survive by removing the distortion effects of dumping and thus securing
     employment and future investment.
                                   2. Consumer interest
(77) No information relating to the Community interest issue has been received from
     consumer organisations. The disposable lighter is an inexpensive product which, in
     general, is bought without special preference. Although differences in prices appear
     to have a determining effect on consumers' choice between different lighters, the
     absolute level of prices does not seem to have any influence on the decision to buy
     or not to buy such a disposable product. Therefore, a price increase, at the level of
     the importer and partly or wholly reflected throughout the distribution chain, will be
     likely to have no material impact on the total consumption of disposable flint
     lighters.
     It should also be stressed that, given the usual mark up between the CIF import
      price and the retail price, the lighter distribution chain is likely to be able to absorb
      most of the impact on the consumer of price increase which would result from anti-
      dumping measures. Additionally, it should be noted that price increases, if any, will
      not have a major impact on the budget of the consumer due to the low unit price of
      this item and the very limited amount spent on it per individual.
 ---pagebreak---                                             36
                                      3. Conclusion
(78) Having examined the various interests involved, it is concluded that it is in the
     Community interest to impose anti-dumping measures to eliminate the injurious
     effects of the dumped imports under consideration and that, conversely, no
     compelling reasons exist which would make such measures unwarranted.
     Indeed, failure to take action could mean disappearance of production in the
     Community and, consequently, loss of employment and lack of investment. The
     price increase and the consequent relatively little extra cost for the consumer can by
     no means be considered to be of the same magnitude as the cost of the total
     disappearance of a Community industry.
                          I. ANTI-DUMPING MEASURES
                                1. Injury elimination level
(79) In accordance with the relevant provisions of the Basic Anti-dumping Regulation, it
     was examined whether the measures should be. less than the dumping margins
     found, if such lesser measures would be adequate to remove the injury to the
     Community industry. For that purpose, it was considered that the selling prices of
     each exporter to unrelated importers, adjusted to duty paid, customer delivered
     levels (or, where sales were to a related importer, the resale price to the first
     independent customer) should be compared to selling prices established at the same
     level of trade and reflecting the Community producers' cost of production together
     with a reasonable amount of profit.
 ---pagebreak---                                               37
(80) For that purpose, it was considered that only those lighters with an equal or almost
     equal amount of gas, and therefore a similar number of ignitions, should be taken
     into account. As to the amount of profit considered as reasonable, it was examined
     whether the amount of profit used in the previous proceedings concerning
     disposable flint lighters, namely a margin of 15% on turnover, could be expected to
     be attained in the absence of the dumped imports concerned.
(81) In this respect, it has to be recalled that the dumped imports from the P.R. of China
     may also have had a negative impact on the Community industry during the period
     under examination. Accordingly, in order to ensure that the remedy sought in
     respect of the dumped imports from the three countries concerned remains
     proportionate, it was considered appropriate and not unreasonable that the amount
     of profit used in the current injury elimination level calculations be limited to 10%.
     This limitation of the profit margin to 10% was considered appropriate in order to
     take account of the other factor of injury which may have affected the situation of
     the Community industry during the period currently under examination. It should
     not, therefore, be interpreted as entailing a global reconsideration of previous
     findings in respect of the lighter industry's reasonable profitability.
(82) The injury elimination level calculations carried out on the above basis resulted in
     the average underselling margins, expressed as a percentage of the free at
     Communityfrontierprice, to be higher than the corresponding dumping margins in
     the case of the Thai exporter Thai Merry, as well as in the case of the Mexican
     producer JMP (whose products are exported by Scripto Tokai Corp. USA).
 ---pagebreak---                                             38
     For the Filipino co-operating producers, the average underselling margins,
     expressed as a percentage of the free at Community frontier price, found to be
     lower than the corresponding dumping margins, were:
         - production by Iwax Philippine Inc., and Iwahori Philippines
          Inc. and exports by Iwax Inc. Japan (single margin):              43%
         - Swedish Match Philippines, Inc.                                  17%
                           2. Case of the Thai company Politop
(83) As mentioned above, at the end of the original investigation concerning Thailand,
     the company Politop had an individual anti-dumping duty based on its dumping
     margin (namely 5.8%) imposed. On the occasion of the current review, this
     producer also co-operated but was unable to provide any data on the basis of which
     new dumping and injury margins could be calculated. Indeed, this producer only
     exported small quantities to the Community in 1992 and did not export to the
     Community any disposableflintlighters since then.
(84) From the documents examined (notably the company's commercial
     correspondence), it emerged that this situation came about as a result of Politop's
     refusal to sell at prices below cost. Arguing that its behaviour had been consistently
     fair over the past four years, Politop claimed that the increased residual duty likely
     to be established for Thailand should not apply to its exports to the Community and
     requested to be granted a 0% duty rate, or at least that the current 5.8% duty rate
     be maintained.
 ---pagebreak---                                              39
(85) In seeking an appropriate solution, it was found that since Politop entirety ceased to
     export to the Community, the best available information in its case could not be
     considered to be the residual dumping margin determined during the investigation
     period.
(86) In these circumstances, the best available information appeared to be Politop's own
     data from the previous investigation. It was therefore considered that the
     maintaining of Politop's current duty rate (5.8%) should constitute the most
     appropriate solution to its very specific situation.
                                     3. Undertakings
(87) Having been informed of the essential facts and considerations on the basis of which
     it was intended to recommend the repealing of the existing measures concerning
     Thai imports and the imposition of definitive anti-dumping duties in respect of
     imports originating in the three countries concerned, one Thai producer, the sole
     ^Mexican producer and the two related Filipino producers offered undertakings
     concerning their exports of the product concerned to the Community.
     After examination of these offers, the Commission considered the undertakings as
     acceptable since they would eliminate the injurious effects of dumping pursuant to
     Article 8 (1) of the Basic Anti-dumping Regulation. Furthermore, given in
     particular the type of sales channels of the exports concerned (which are made either
     to related parties or sole importers in the Community), it was considered that these
      undertakings could be monitored effectively.
 ---pagebreak---                                                 40
(88) The Commission consulted the Advisory Committee on the acceptance of these
      undertakings and no objections were raised. The undertakings offered were
      accepted by Commission Decision 97/.. ./EC12.
                                 4. Individual and residual duties
(89) Notwithstanding the acceptance of the undertakings offered by certain Thai,
      Mexican and Filipino producers:
      - the measures in force in respect of Thailand should be repealed;
      - individual duties should be imposed in respect of imports from the Thai company
      Politop (at the rate of 5.8%, as explained at recitals 83 to 86) and the Filipino
      company Swedish Match Philippines, Inc., which did not offer any undertaking (at
      the level of the lesser margin mentioned at recital 82, namely 17%);
      - residual duties should be imposed on imports of the product concerned originating
      in Thailand, the Philippines and Mexico, in order to underpin the undertakings by
      avoiding their circumvention.
12
    See page xx of this Official Journal.
 ---pagebreak---                                                 41
       Given the level of co-operation obtained from the three countries concerned (close
       to 100%), the residual definitive duties should be imposed, for each country, at the
       level established for the co-operating company with the highest dumping margin,
       (i.e. on the basis of the latter company's dumping margin or, where appropriate,
       underselling margin). On this basis, the residual duties should be set at 51.9% in the
       case of Thailand, 43.0% in the case of the Philippines and 27.1% in the case of
       Mexico,
HAS ADOPTED THIS REGULATION:
                                             Article J
Regulation (EEC) No 3433/91, as amended by Regulation (EC) N° 398/94, imposing a
definitive anti-dumping duty on imports of gas-fuelled, non-refillable pocket flint lighters
originating, inter alia, in Thailand, is hereby amended as follows:
1.     at Article 1 (1), in fine, the words "and Thailand" shall be deleted;
2.    paragraph (d) of Article 1 (2) shall be repealed.
                                             Article 2
1.    Definitive anti-dumping duties are hereby imposed on imports of gas-fuelled, non-
       refillable pocket flint lighters falling within CN Code ex 9613 10 00 (Taric code
       9613 10 00*10) originating in Thailand, the Philippines and Mexico.
 ---pagebreak---                                               42
2.     The rate of the duties, applicable to the net,free-at-Community-frontierprice,
       before duty, shall be as follows:
       (a) 51.9% for imports originating in Thailand (Taric additional code 8900) with the
       exception of imports which are produced and sold for export to the Community by
       Politop Co. Ltd, Bangkok where the rate shall be 5.8% (Taric additional code
       8937);
       (b) 43.0% for imports originating in the Philippines (Taric additional code 8900)
       with the exception of imports which are produced and sold for export to the
       Community by Swedish Match Philippines, Inc., Manila where the rate shall be
       17.0% (Taric additional code 8938);
       (c) 27.1% for imports originating in Mexico (Taric additional code 8900).
3.(a) The duties referred to in paragraph 2 (a) shall not apply to gas-fuelled, non-refillable
       pocket flint lighters produced and sold for export to the Community by Thai Merry
       Co., Ltd. Samutsakorn (Taric additional code 8542);
   (b) The duties referred to in paragraph 2 (b) shall not apply to gas-fuelled, non-refillable
       pocket flint lighters produced by Iwax Philippine, Inc., Rosario, Cavité, or Iwahori
       Philippines, Inc., Mariveles, Bataan and sold for export to the Community by
       themselves or by Iwax Inc., Shizuoka, Japan (Taric additional code 8939);
   (c) The duties referred to in paragraph 2 (c) shall not apply to gas-fuelled, non-refillable
       pocket flint lighters produced by JMP Mexico, S.A. de C.V., Tijuana, and sold for
       export to the Community by Scripto Tokai Corp., Fontana, USA (Taric additional
       code 8940).
 ---pagebreak---                                                43
4.    Unless otherwise specified, the provisions in force concerning customs duties shall
      apply.
                                            Article 3
This Regulation shall enter into force on the day following 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
                                                               For the Council
                                                                The President
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---                                          ^9
                                                                   ISSN 0254-1475
                                                             COM(97) 62 final
                                             DOCUMENTS
EN                                                                        02   11
                                    Catalogue number : CB-CO-97-055-EN-C
                                                              ISBN 92-78-16104-7
Office for Official Publications of the European Communities
L-2985 Luxembourg