CELEX: 51996PC0523
Language: en
Date: 1996-10-21
Title: Proposal for a COUNCIL REGULATION (EC) IMPOSING DEFINITIVE ANTI-DUMPING DUTIES ON IMPORTS OF POLYESTER TEXTURED FILAMENT YARN ORIGINATING IN INDONESIA AND THAILAND, TERMINATING THE PROCEEDING CONCERNING IMPORTS OF POLYESTER TEXTURED FILAMENT YARN ORIGINATING IN INDIA, AND COLLECTING DEFINITIVELY THE PROVISIONAL DUTIES IMPOSED

COMMISSION OF THE EUROPEAN COMMUNITIES
    it  it
                                              Brussels, 21.10 1996
                                             COM(96) 523 final
                              Proposal for a
                     COUNCIL REGULATION (EC)
                    IMPOSING DEFINITIVE ANTI-
DUMPING DUTIES ON IMPORTS OF POLYESTER TEXTURED FILAMENT YARN
    ORIGINATING IN INDONESIA AND THAILAND, TERMINATING THE
PROCEEDING CONCERNING IMPORTS OF POLYESTER TEXTURED FILAMENT
   YARN ORIGINATING IN INDIA, AND COLLECTING DEFINITIVELY THE
                   PROVISIONAL DUTIES IMPOSED
                     (presented by the Commission)
 ---pagebreak---  ---pagebreak---                        EXPLANATORY MEMORANDUM
1.  In May 1996, by Regulation (EC) N° 940/96, the Commission imposed a
    provisional anti-dumping duty on imports of polyester textured filament yarn
    (PTY) originating in Indonesia and Thailand, and concluded provisionally that,
   due to its negligible market share, no measures should be imposed on imports of
   the same product originating in India.
2. By Regulation (EC) N° 1370/96, the Council extended the validity of the
   provisional Regulation for a period of two months until 1 December 1996.
3. Subsequent to the imposition of provisional anti-dumping duties, certain parties
   requested and were granted hearings, and presented written comments, which
   were taken into account where appropriate.
4. The definitive determination confirmed the existence of dumping. Changes in the
   individual dumping margins compared to the provisional findings are due to the
   reassessment of certain adjustments.
5. As to the conclusion of the Commission at the provisional stage of the
   investigation that the Community industry suffered material injury, and that this
   was caused by the surge of Indonesian and Thai dumped imports of PTY into the
   Community at low prices, which has had a particular destabilizing impact on the
   Community market by lowering the price level on that market and thus leading the
   Community industry to suffer losses in profitability, no further arguments were
   made. These findings needs therefore to be confirmed.
                                                                                     ^
 ---pagebreak--- 6. Given the need to eliminate the trade-distorting effects of the injurious dumping
   found, and to restore effective competition, the fact that a continuation of low
   priced imports would jeopardize the adjustment efforts made by the Community
   industry, and would have a negative effect on the level of employment in the
   Community industry, and in view of the limited impact for consumers, it is
   considered in the Community interest that definitive duties should be imposed.
7. In these circumstances, and in accordance with the "lesser duty rule", the level at
   which definitive measures should be set was determined by the dumping margins
   definitively established, which were lower than the injury elimination margins.
8. It is therefore proposed that the Council adopts the draft Regulation annexed,
   imposing a definitive anti-dumping duty on imports into the Community of
   polyester textured filament yarn originating in Indonesia and Thailand, terminating
   the proceeding as far as India is concerned, and collecting definitively the amounts
   secured by way of the provisional duty.
                                                                                    ^t ^
 ---pagebreak--- Proposal for a
         COUNCIL REGULATION (EC) N°                                   /96 IMPOSING DEFINITIVE ANTI-
DUMPING DUTIES ON IMPORTS OF POLYESTER TEXTURED FILAMENT YARN
           ORIGINATING IN INDONESIA AND THAILAND, TERMINATING THE
PROCEEDING CONCERNING IMPORTS OF POLYESTER TEXTURED FILAMENT
        YARN ORIGINATING IN INDIA, AND COLLECTING DEFINITIVELY THE
                                       PROVISIONAL DUTIES IMPOSED
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community,
Having regard to Council Regulation (EC) N° 384/96 of 22 December 1995 on protection
against dumped imports from countries not members of the European Community1, and
in particular Article 23 thereof,
Having regard to Council Regulation (EEC) N° 2423/88 of 11 July 1988 on protection
against dumped or subsidized imports from countries not members of the European
Economic Community2, and in particular Article 12 thereof,
Having regard to the proposal submitted by the Commission after consulting the
Advisory Committee,
WHEREAS:
 ' O J W L S Ô , 06.03.1996, p. 1.
 2
   OJ N° L 209,02.08.1988, p.l. Regulation as last amended by Regulation (EC) N° 522/94 (OJ N° L
   66, 10.03.1994, p.10).
                                                                                                 4 6-
 ---pagebreak---                                    A. PROVISIONAL MEASURES
(1)     The Commission, by Regulation (EC) N° 940/963 (hereafter referred to as the
        "provisional Regulation") imposed provisional anti-dumping duties on imports of
        polyester textured filament yarn (hereafter referred to as "PTY" or "product
        concerned"), originating in Indonesia and Thailand, and falling within CN codes
        5402 33 10 and 5402 33 90.
(2)     With the same Regulation, it was provisionally concluded that imports of the
        product concerned originating in India, essentially due to their negligible import
        volume, did not have contributed to the material injury suffered by the Community
        industry, and therefore it was considered unnecessary to impose provisional
        protective measures onto these imports at that stage of the investigation.
(3)     By Council Regulation (EC) N° 1370/964, the provisional duties were extended for
        a period of two months, up to 1 December 1996.
                                     B. SUBSEQUENT PROCEDURE
(4)     The provisional duty Regulation set up a time limit, within which the parties
        concerned could make known their views in writing and apply to be heard orally by
        the Commission.
3
  OJ N° L 128, 29.05.1996, p.3 ff.
4
  OJN°L 178, 17.07.1996, p.l.
                                                                                           <^
 ---pagebreak--- (5) Immediately after the imposition of the provisional measures on imports of PTY
    from Indonesia and Thailand, the interested parties were informed of the essential
    facts and considerations on the basis of which provisional measures had been
    adopted.
    Comments thereupon were received in writing from the following interested parties
    within the time limit set:
    L Producers in Indonesia:
    P.T. Panasia Indosyntec (formerly: P.T. Hadtex Indosyntec)
    P.T. Indo Rama Synthetics
    P.T. Polysindo Eka Perkasa
    P.T. Susilia Indah Synthetic Fibres Industries
    P.T. Vastex Prima Industries
    2. Producers in Thailand:
    Sunflag (Thailand) Ltd.
    Tuntex (Thailand) PCL.
(6) Parties, who so requested, were also granted an opportunity to be heard orally by
    the Commission services.
(7) Parties were informed of the essential facts and consideration on the basis of which
    it is intended to recommend the imposition of definitive measures and the definitive
    collection of amounts secured by way of provisional duties. They also were granted
    a period within which they could make representations subsequent to this
    disclosure.
 ---pagebreak--- (8)  The parties' oral and written comments were considered, and where appropriate, the
     provisional determinations were modified to take account of these comments.
                        C. PRODUCT AND LIKE PRODUCT
(9)  The product under consideration is PTY, directly derived from polyester oriented
     yarn ("POY"). PTY is used in both the weaving and the knitting sectors to make
     polyester or polyester/cotton fabrics.
     It was concluded at the provisional stage of the investigation that PTY sold on the
     domestic markets of India, Indonesia and Thailand has similar basic characteristics
     and uses compared to that exported from those countries to the Community.
     Similarly, the PTY manufactured by the Community industry and sold on the
     Community market has similar basic characteristics and uses when compared to
     that exported to the Community from the countries in question.
(10) Since no new arguments were made by any of the parties concerned on the
     Commission's provisional findings on the product under consideration and the
     considerations made on like product, the facts and findings as set out in recital (9)
     and (10) of the provisional Regulation, are confirmed by the Council.
                                    D.    DUMPING
1.   India
(11) It was provisionally established by the Commission that the Indian exporters who
     cooperated in the proceeding, had exported PTY to the Community during the
     investigation period at dumped prices, individual dumping margins ranging from
     0.3% to 42.9%.
 ---pagebreak--- (12) Since no new arguments were made by any of the parties concerned as to the
      Commission's provisional conclusions on normal value, export price, comparison
      and hence the dumping margins provisionally established for exports to the
      Community of PTY originating in India, the facts and findings as set out in recitals
      (12) to (18) and (29) to (35) of the provisional Regulation are confirmed by the
      Council, as far as India is concerned.
2.    Indonesia
      Normal value
( 13) The Indonesian exporters argued that, when comparing their costs of production to
      the corresponding domestic selling prices in order to assess whether domestic sales
      were made in the ordinary course of trade within the meaning of Article 2(4) of the
      basic Regulation, certain directly related selling expenses such as inland freight and
      packing had been included in the costs whereas they had been deducted from the
      domestic prices.
      After verifying additional data submitted in that respect by the companies
      concerned and retracing the individual claims to the audited accounts of the
      companies, the provisional calculations on normal values, where warranted, were
      duly revised.
(14) The production of PTY of first quality, which was the only exported by the
      Indonesian producers concerned to the Community, implies the manufacturing of
      PTY of inferior quality, so called substandard PTY. However, the Indonesian
      producers did not keep separate accounting data for each quality and, therefore, the
      costs associated with the first quality exported to the Community were not
      reasonably reflected in the producers' records.
 ---pagebreak---      At the provisional stage of the investigation, and in order to establish the cost of
     production of first quality PTY, the Commission estimated the cost of production
     of the substandard PTY by reference to the average variable manufacturing costs
     associated with the overall production of PTY only. This approach was considered
     reasonable, in particular given the relatively limited production of substandard PTY
     and its inevitable linkage with the production of first quality PTY. Furthermore, the
     allocation of the full cost of production on the basis of turnover did not appear to be
     an appropriate method, as not all the elements in the cost of production appeared to
     be associated with the production and sale of substandard PTY.
     One Indonesian producer asked the Commission to reconsider the possibility to
     accept the cost allocation method leading to the costs reported in the reply to the
     Commission's questionnaire, and which has been historically utilized by the
     exporter concerned.
     Following this request, the Commission reviewed its provisional findings, and
     considered acceptable the allocation method in question though only to the extent
     that it reasonably reflected the costs associated with the production and sale of both
     qualities of PTY. This approach was extended to all Indonesian producers, since
     they all replied to the Commission's questionnaire using the same allocation
     method.
(15) Upon the request of the Indonesian producers, the Commission revised its
     provisional findings as regards the amount of financial expenses, as well as the
     criteria for the allocation of the net financial costs to the product concerned.
 ---pagebreak---      In this respect it was considered appropriate to offset against financial expenses
     only financial income, which showed a clear link with the production and sale of
     PTY. Furthermore, the allocation of net financial expenditure, which at the
     provisional stage of the proceeding had been made by reference to turnover, was
     modified to take separate account of products manufactured or merely traded.
(16) Since no further arguments were made by any of the parties concerned as to the
     Commission's provisional conclusions on normal value for Indonesia, the facts and
     findings as set out in recitals (19) to (23) of the provisional duty Regulation are
     confirmed by the Council, considering also the revisions made under recitals (13)
     and (14) above.
     Export prices
(17) Two of the Indonesian producers sold PTY for export to the Community through
     two related trading companies located in Singapore. In the provisional
     determinations, the export prices were established by reference to the prices
     actually paid or payable for the products concerned when sold for export to the
     Community by the related trading companies in Singapore, since the prices charged
     by the Indonesian producers to the related Singaporean traders were considered as
     being influenced by this relationship, and thus not being reliable.
 ---pagebreak---      To establish a reliable export price to the Community from Indonesia, the prices
     charged from Singapore were adjusted to an ex-Indonesia level by deducting from
     the prices charged by the related companies in Singapore to the independent
     customers in the Community an average amount of 4% of these prices, which was
     calculated by reference to the selling, general and administrative expenses incurred
     by the related companies in respect of the sales under consideration.
     This approach was contested by the two Indonesian producers concerned, arguing
     that the said adjustment was too high. Alternatively, these producers proposed their
     own calculation method by singling out only some allegedly directly related selling
     expenses, thus ignoring the vast majority of all other expenses incurred by the
     related trading companies in Singapore.
     The Council, however, confirms the provisional approach taken by the
     Commission, considering the degree of involvement of the related traders in the
     selling activities of the Indonesian producers. Furthermore, on the basis of the
     accounting data of the related traders, no additional information was provided by
     the latter, which would indicate that the adjustment applied was inappropriate.
(18) Since no further arguments were made by any of the parties concerned as to the
     Commission's provisional conclusions on export prices for exports to the
     Community of PTY originating in Indonesia, the facts and findings as set out in
     recital (29) of the provisional Regulation are confirmed by the Council as far as
     Indonesia is concerned.
 ---pagebreak---      Comparison
(19) Since no new arguments were made by any of the parties concerned as to the
     Commission's provisional conclusions on the comparison made between normal
     value and export prices, the facts and findings as set out in recitals (31) and (32) of
     the provisional Regulation are confirmed by the Council as far as Indonesia is
     concerned.
     Dumping margins
(20) Taking into account the above mentioned revisions, the Council confirms, in
     applying the same methodology as used for the provisional assessment (see recital
     (34) of the provisional Regulation), the definitive dumping margins for the
     cooperating Indonesian exporters concerned as follows:
     P.T. Indo Rama Synthetics                                                1.7 %
     P.T. Panasia Indosyntec (formerly: P.T. Hadtex Indosyntec)               5.4 %
     P.T. Polysindo Eka Perkasa                                               8.8 %
     P.T. Susilia Indah Synthetic Fibres Industries                           8.3 %
     P.T. Vastex Prima Industries                                            20.2 %
(21) Confirming the method chosen for the provisional assessment (see recital (35) of
     the provisional Regulation), the Council considered that the dumping margin for
     non-cooperating producers in Indonesia should be based on facts available and
     verified during the investigation. On that basis it is considered that the highest
     definitive dumping margin, i.e. 20.2%, found with regard to a producer in Indonesia
     which had cooperated in the investigation, should also apply to non-cooperating
     producers in this country.
 ---pagebreak--- 3.   Thailand
     Normal value
(22) One Thai producer realized that the costs data, which it had submitted, contained an
     arithmetical material error. Indeed, in allocating the costs for two raw materials
     produced by this company and used both in the production of PTY and in other
     polyester end-products, the company erroneously added to the PTY cost of
     production the total transformation costs of the aforementioned two raw materials,
     instead of considering the appropriate proportion for PTY only.
     After verifying the revised additional data submitted in that respect by the company
     concerned, the Commission duly revised the normal value where warranted.
(23) One Thai producer argued that its costs during the investigation period were
     affected by the use of new production facilities, and certain cost items should
     therefore be adjusted accordingly.
     The Commission could not share this approach since no adjustment had been
     claimed in the company's reply to the questionnaire or prior to the verification visit.
     Furthermore, the capacity utilization rates as well as the production costs of the
     company during the investigation period, which commenced eight months after the
     start-up of the production, appeared reasonable and in line with those incurred by
     most of the other PTY producers. The claim was therefore disregarded by the
     Commission.
(24) One Thai producer argued that its depreciation rate of 10% on machinery, as
     reflected in its costs, was too high as compared to other Thai producers, and that its
     costs should therefore be adjusted accordingly by using a 5 % rate.
10
 ---pagebreak---      To apply a straight depreciation rate of 10% on machinery is not uncommon.
     Furthermore, this rate is reflected in the accounting records of the company. The
     claim was therefore disregarded by the Commission.
(25) Since no further arguments were made by any of the parties concerned as to the
     Commission's provisional conclusions on normal value for Thailand, the facts and
     findings as set out in recitals (24) to (28) of the provisional Regulation are
     confirmed by the Council, considering also the revision made under recital (22)
     above.
     Export prices
(26) Since no new arguments were made by any of the parties concerned as to the
     Commission's provisional conclusions on export prices for exports to the
     Community of PTY originating in Thailand, the facts and findings as set out in
     recital (29) of the provisional Regulation are confirmed by the Council.
     Comparison
(27) One Thai producer argued that the normal credit rates applicable in respect to the
     currency expressed on the export invoice should be corrected.
     After verifying the additional data submitted the Commission duly revised, where
     warranted, the allowance for credit costs granted for the sales under consideration.
(28) Since no further arguments were made by any of the parties concerned as to the
     Commission's provisional conclusions on the comparison made between normal
     value and export prices, the facts and findings as set out in recitals (31) to (33) of
     the provisional Regulation are confirmed by the Council, with the exception of the
     revision under recital (27) above and as far as Thailand is concerned.
                                                                                          11
 ---pagebreak---      Dumping marzins
(29) Taking into account the above mentioned revisions, the Council confirms, in
     applying the same methodology as used for the provisional assessment (see recital
     (34) of the provisional Regulation), the definitive dumping margins for the
     cooperating Thai exporters concerned as follows:
     Tuntex (Thailand) PCL.                                                    6.7 %
     Sunflag (Thailand) Ltd.                                                  13.5 %
     Chareonsawatt Stretched Yarn Co. Ltd.                                   20.2%
(30) Confirming the method chosen for the provisional assessment (see recital (35) of
     the provisional Regulation), the Council considered that the dumping margin for
     non-cooperating producers in Thailand should be based on facts available and
     verified during the investigation. On that basis it is considered that the highest
     definitive dumping margin, i.e. 20,2%, found with regard to a producer in Thailand
     which had cooperated in the investigation, should also apply to non-cooperating
     producers in this country.
                          E.     COMMUNITY INDUSTRY
(31) In the absence of new evidence or any further substantiated argument made by any
     of the parties concerned, the facts and findings set out in recitals (36) to (39) of the
     provisional Regulation are confirmed by the Council, i.e. the complainant
     Community producers representing more than 50% of the Community output of
     PTY constitute the Community industry, in accordance with Article 4 (5) of the
     basic Regulation.
12
 ---pagebreak---                                       F.    INJURY
(32) As mentioned under recital (20) above, the individual definitive dumping margin
     established for one of the Indonesian exporters is de minimis. Whether, under these
     conditions, the imports in question should be excluded from the injury assessment,
     does not need to be decided in the present case.
     Indeed, even if these producers' imports were excluded from the injury assessment,
     the volume and the Community market share of the remaining dumped imports
     from Indonesia were still significant enough to justify the Commission's provisional
     conclusions in this respect.
(33) Since no new arguments were made by any of the parties concerned as to the
     provisional findings concerning the injury suffered by the Community industry, the
     Council confirms those findings as established in recitals (40) to (55) of the
     provisional Regulation, i.e. the exclusion of imports of PTY originating in India
     from the injury assessment due to its negligible market share, as well as the
     precarious situation of the Community industry, in particular the deterioration of its
     financial results, the decline in production, capacity utilization and market share,
     notwithstanding a certain increase in the Community consumption of PTY, which
     demonstrates that this industry has suffered material injury within the meaning of
     Article 4 (1) of the basic Regulation.
                            G.    CAUSATION OF INJURY
(34) It was provisionally concluded that, notwithstanding the fact that imports from
     other third countries might have contributed to the injury suffered by the
     Community industry, the surge of Indonesian and Thai dumped imports of PTY
     into the Community at low prices has had a particular destabilizing impact on the
     Community market by lowering the price level on that market, and has led the
     Community industry to suffer a loss of profitability, thus causing material injury to
      this industry.
                                                                                          13
 ---pagebreak--- (35) Since no new arguments were made by any of the parties concerned as to the
     Commission's provisional conclusions on causation of injury, the facts and findings
     as set out in recital (56) to (81) of the provisional Regulation are confirmed by the
     Council.
                            H.     COMMUNITY INTEREST
(36) The Commission concluded at the provisional stage of the investigation that, after
     examining the various interests involved, it is in the Community interest to prevent
     a further decline in the already precarious situation of the Community industry, and
     to re-establish with the imposition of remedial measures a fair and competitive
     economical environment in the Community market. Furthermore it was considered
     necessary to ensure a non-discriminatory treatment with regard to imports of PTY
     originating in Indonesia and Thailand as compared to imports of PTY originating in
     other third countries presently subject to anti-dumping measures.
(37) On this basis, the Council confirms, as set out in recitals (82) to (93) of the
     provisional Regulation, that the Community interest calls for the imposition of
     definitive anti-dumping measures on imports of PTY originating in Indonesia and
     Thailand.
                                I.    DEFINITIVE DUTY
     India
(38) Given the above confirmed provisional conclusions with regard to exports of PTY
     to the Community originating in India (insignificant market share), the Council
     confirms that no definitive anti-dumping duty should be imposed and the
     proceeding be terminated in respect of this country.
14
 ---pagebreak---      Indonesia and Thailand
(39) For the purpose of establishing the level of the definitive measures to be imposed,
     and in line with the same methodology applied at the provisional stage of the
     investigation, the Council took account of the dumping margins found and the level
     of duty necessary to eliminate the injury sustained by the Community industry.
(40) It is confirmed at this definitive stage that for all Indonesian and Thai exporters
     concerned the level of the injury margins were higher than the dumping margins
     found, both being expressed as a percentage of the CIF Community frontier price.
     Consequently, in accordance with Article 13 (3) of the basic Regulation, it is
     confirmed that the level of the duty should be based on the level of the dumping
     margins definitively established.
(41) With regard to the Indonesian company P.T. Indo Rama Synthetics, the Council
     confirms, considering that the individual definitive dumping margin established is
     de minimis, that the investigation be terminated without measures although the
     company shall remain subject to the proceeding and may be reinvestigated in any
     subsequent review carried out for Indonesia.
               J.     COLLECTION OF THE PROVISIONAL DUTY
(42) In view of the dumping margins definitively established and the substantial injury
     caused to the Community industry, the Council considers that the amounts secured
     by way of the provisional anti-dumping duties should be definitively collected at
     the level of the amounts of duties definitively imposed.
HAS ADOPTED THIS REGULATION:
                                                                                       15
 ---pagebreak---                                        Article I
1. A definitive anti-dumping duty is hereby imposed on imports of polyester textured
   filament yarn, falling within CN code 5402 33 10 and 5402 33 90 and originating in
   Indonesia and Thailand.
2. The rate of the definitive anti-dumping duty applicable to the net, free-at-
   Community-frontier price, before duty, shall be as follows:
   Indonesia                                       Duty         Taric additional Code
   P.T. Panasia Indosyntec
            (formerly: P.T. Hadtex Indosyntec)       5.4 %             8884
   P.T. Polysindo Eka Perkasa                        8.8 %             8886
   P.T. Susilia Indah Synthetic Fibres Industries    8.3 %             8887
   Others                                          20.2%               8888
   The duties shall not apply to imports of the products specified in paragraph 1,
   which are produced and exported by the Indonesian company P.T. Indo Rama
   Synthetics (Taric additional Code 8885).
   Thailand                                        Duty         Taric additional Code
   Tuntex (Thailand) PCL.                            6.7 %             8889
   Sunflag (Thailand) Ltd.                         13.5%               8907
   Others                                          20.2%.              8891
3. No anti-dumping duty shall be applicable to imports of the product specified in
   paragraph 1 and originating in India. The proceeding concerning imports of the
   product originating in India shall be terminated.
4. Unless otherwise specified, the provisions in force concerning customs duties shall
   apply.
16
 ---pagebreak---                                         Article 2
1.    The amounts secured by way of the provisional anti-dumping duties under
      Regulation (EC) N° 940/96 shall be definitively collected at the rate of the duties
      definitively imposed. Amounts secured in excess of the definitive rate of anti-
      dumping duties shall be released.
2.    The provisions of Article 1 (4) shall also apply to the definitive collection of the
      amounts secured by way of the provisional anti-dumping duties.
                                         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 Brussels,
The Council
                                                                                          17
 ---pagebreak---                                                                    ISSN 0254-1475
                                                            COM(96) 523 final
                                              DOCUMENTS
EN                                                                       02    il
                                    Catalogue number : CB-CO-96-528-EN-C
                                                             ISBN 92-78-10422-1
Office for Official Publications of the European Communities
L-2985 Luxembourg