CELEX: 51982PC0878
Language: en
Date: 1982-12-22
Title: Proposal for a COUNCIL DECISION terminating the anti-dumping proceeding concerning imports of codeine and its salts originating in Czechoslovakia, Hungary, Poland and Yugoslavia (submitted to the Council by the Commission)

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DOCUMENTS "COM"
COM (82) 878
Vol. 1982/0268
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
               r
               s
               (
                                                   COM(82)878 final
                                                   Brussels , 22 December 1982
                                   Proposal for a
                                  COUNCIL DECISION
          terminating the anti-dumping proceeding concerning imports
            of codeine and its salts originating in Czechoslovakia ,
                          Hungary , Poland and Yugoslavia
                  ( submitted to the Council by the Commission )
   C0M(82 ) 878 final
 ---pagebreak---                             EXPLANATORY MEMORANDUM
At the beginning of 1981 the Commission received an application alleging
that imports of codeine and its salts originating in Yugoslavia and certain
Eastern European countries were dumped and causing injury to the industry
 in question . This application was lodged by the two German producers of
the product concerned .
The trade of codeine is governed by the " Single Convention " of 1961 which
submits the trade of narcotics to a strict control .   Based on this
convention most Member States which produce codeine restrict or exclude
imports of codeine and its salts into their territory .    The Federal
Republic of Germany does not , however , impose any quantitative Limits
on imports of codeine .
On 1 April 1981 the Commission opened an anti-dumping investigation
against imports of codeine and its salts originating in Czechoslovakia ,
Hungary , Poland and Yugoslavia .  The preliminary investigation
carried out by the Commission showed that imports from all exporting countries
concerned were dumped .   This investigation also showed injury being
 caused to the German industry .
The Commission found , however , that not only imports from the four
countries concerned , bfot also imports originating in other Member States
have caused           injury to the German industry .  Prices of imports
originating in other Member States are as low or even lower than prices
of imports from the four exporting countries concerned . While in 1980
the market share held by these four countries in Germany has been 17,2% , the
market share held by imports from other Member States was 46,4% . Moreover a
detailed analysis of the German import statistics of the period 1977 to 1980
shows that a decrease of imports from the four countries covered by this
investigation is closely linked to an increase of imports from other
Member States .
 ---pagebreak--- Meanwhile the Commission has decided to open a procedure under
Art . 169 of the EEC Treaty against three Member States which restrict
 intra Community trade of codeine .    This procedure has not resulted in
any change of the situation yet .
Under these circumstances the Commission is of the view that         it is not in
the Community 's interest at this time to introduce protective measures
against imports of codeine and its salts from Yugoslavia and three Eastern
European countries and that the anti-dumping proceedings should be
terminated .   The Commission believes that imports from these sources would be
immediately replaced by equally damaging imports from other Member States
and that anti-dumping measures would not give relief to the complainants .
The Advisory Committee set up under Art . 6 of Council Regulation ( EEC )
No 3017 / 79 has been consulted on this question .    Nine Member States have
agreed that this procedure should be terminated .      The representative of
the Federal Republic of Germany , however , has raised objections against
the termination of the procedure .    The Commission submits , therefore ,
in accoraance with Art . 9 ( 1 ) of Regulation ( EEC ) No 3017 / 79 , a proposal
to the Council that the proceedings be terminated .
 ---pagebreak---                                   Proposal for a
                                 COUNCIL DECISION
terminating the anti-dumping proceedina concerning imports of codeine
and its salts originating in Czechoslovakia , Hungary , Poland and Yugoslavia
THE    COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European . Economic Community ,
Having regard to Council Regulation ( EEC ) No 3017 / 79 of 20 December 1979
on protection against dumped or subsidized imports from countries not
members of the European Economic Communityd ), as amended          by Regulation
                     (2)
( EEC ) No 1580 / 82     ,                   and in particular Article 9 thereof ,
Having regard to the proposal of the Commission submitted          after consultations
within the Advisory Committee provided for by the abovement ioned Regulation ;
Whereas the Commission received a complaint lodged by the two major German
manufacturers which , at that time , accounted for a large proportion
of the total Community output of codeine and its salts ; whereas the
complaint contained evidence of the existence of dumping in respect of
like products originating in Czechoslovakia , Hungary , Poland and in
Yugoslavia and of material injury resulting therefrom ;
Whereas , since the said evidence was sufficient to justify initiating
a proceeding , the Commission accordingly announced , by a notice published
in the Official Journal of the European Communities(3 ), the initiation of
a proceeding concerning imports of such products originating in the said
countries and commenced an investigation at Community level ;
Whereas the Commission officially so advised the exporters and importers
known to be concerned as well as the representatives of the exporting
countries and the complainants ;
( 1 ) 0J No L339 , 31 . 12.1979 , p. 1
( 2 ) 0J No L 178 , 22.6.1982 , p. 9
( 3 ) 0J No C 71 , 1.4.1981 , p. 2
 ---pagebreak--- Whereas the Commission gave the parties directly concerned the                  - 2-
opportunity to make known their views in writing and to be heard
orally ; whereas all expoi ters and importers known to be concerned
have taken this opportunity ;
Whereas , in order to arrive at a preliminary determination of
dumping and injury , the Commission sought to obtain and verify all
 information which it deemed to be necessary ;       whereas the Commission had
also to      take into consideration the fact that trade in codeine and its
salts is subject to international control under the 1961 Single
Convention and that , owing to the import restrictions applied on this
basis by the other Member States , the Federal Republic of Germany is the
only important Community market on which the said goods can be freely imported ;
Whereas the Commission carried out inspections at the premises of the sold
Yugoslavian producer Alkaloid , Skopje and at the premises of the two
complainants E Merck , Darmstadt and Boehringer Ingelheim ;
Whereas , for its determination of dumping the Commission had to take account
of the fact that Czechoslovakia , Hungary and Poland are not market
economy countries ;
Whereas for that reason , the Commission had to base its calculations on
the normal value in a market economy country ; whereas , in that connection ,
complaint suggested the domestic price in Yugoslavia ; whereas the Hungarian
exporter disputed the choice of the Yugoslavian domestic price as a basis
for the determination of normal value and alleged that the protection of the
Yugoslavian market led to internal prices which were artificially high ; whereas
    as an alternative the Hungarian exporter suggested that a normal value
    be established by using the export price of another market
    economy third country to Germany ; whereas the Commission considered
    that the additional administrative burden       which would be imposed
    on it by carrying out investigations in a further market economy
    country would be unjustified unless it could be demonstrated that it
    would be manifestly more appropriate and reasonable to use another
    third country 's normal value rather than to use prices or costs in
    Yugoslavia ; whereas , in view of the fact that practically all
    countries producing      codeine protect their home market , the Commission
    considered the choice of a third country 's export price to be
    inappropriate because it was always likely to be dumped and because
      there was no justification for discriminating between Yugoslavia and
    the other three countries concerned by basing the normal value in one
    case    on allegedly artificially high internal prices and in the other
    Cases on a lower and therefore dumped export price ; whereas the
    Commission has consequently ,      since no other objections against
    trie : L^o -- av"an price were brought forward , based
 ---pagebreak---                                   - 3 -
 its preliminary determinations of normal value on the domestic price in
 Yugoslavia during the period 1 January 1980 to 31 March 1981 ;
 Whereas expert prices for the Czechos lovakian exporter Chemapol , the
 Hungarian exporter Medimpex , the Polish exporter Ciech and the Yugoslavian
exporter Alkaloid    were established on the basis of the information
obtained   from these companies ; whereas' in the case 1 of Alkaloid this
 information was verified on the spot , whi le in respect of the other exporting
companies the CIF prices     were checked by reference to the official German
import statistics ;
Whereas the norma I va lue was compared wi th the export pri ces of the four exporting
companies ; whereas these comparisons were made at the ex-factory level
for sales made during the period 1 January 1980 to 31 March 1981 ;
Whereas this preliminary investigation of dumping showed dumping margins of
93,6% for Alkaloid , 94,3% for Chemapol , 99,8% for Medimpex and 87,5% for Ciech ;
Whereas , with regard to injury caused by the dumped imports to the
Community industry , the evidence avai lable to the Commission during the
preliminary investigation shows     that imports from Poland into the Federal .
Republic of Germany have increased from 500 kgs in 1978 to 2 645 kgs in 1980 ;
whereas during the same period imports from Czechoslovakia have increased from
400 kgs to 620 kgs and those from Hungary from 0 kg to 200 kgs after reaching
a peak of 650 kg in 1979 ; whereas imports from Yugoslavia             increased from
275 kgs in 1978 to 3 164 kgs in 1979 and dropped to 450 kgs in 1980 ;
Whereas in 1980 Polish exports held a share of 11,6% and Czechoslovakian
exports a share of 2,7% of the German market ; whereas the market share
of Hungarian exports        dropped from 3,2% in 1979 to 0,9% in 1980 and
during the same period the Yugoslavian market share            dropped from 15,4% to
2,0% ;
Whereas the prices of the dumped imports were significantly below the
prices charged by the two complaining German producers ; whereas
 in 1980 Polish import prices , on average , undercut the domestic
 ---pagebreak---                                     - L  -
 selling prices of the two German producers by more than 41% ; whereas the
 corresponding figures for the other exporters concerned were 32% in the case
of Czechoslovakia ^ 43% in the case of Hungarian and 34% in the case of
 Yugoslavian exports ;
 Whereas the consequent impact on the German industry has contributed to
 a dramatic drop in the market share held by the complainants from 23% in
 1978 to 6,3% in 1980 , a drop in sales volume of up to 90% and an increase
 in the average storing time at the premises of the complainants from around
150 days in 1978 to up to 960 days in 1980 ; whereas both complainants , due
to the depressed price levels ,         suffered serious losses in 1979 and 1980
and were forced to stop their production and to reduce their
work force by 50% ;
Whereas the Commission has also considered whether injury has been caused
by other factors such as volume and prices of imports from other countries ,
which individually or in combination are also adversely affecting the
 complainant industry ; whereas imports into Germany from other Member States
        also increased from 6-946,5 kgs in 1978 to 10 572 kgs in 1980 ; whereas
during the same period the market share held by these imports          increased
from 35,7% to 46,4% ; whereas in 1980 the average price of these imports was
more than 39% below the average domestic selling prices of the two German
f i rms ;
Whereas , in addition, in 1977 import prices of the products concerned
originating in the countries subject to this proceeding       were
well above the comparable price of the products originating in other
Member States ; whereas , in 1978 , while the differential between the
price levels of the various imports was , in general , maintained , a sharp drop
in prices of imports from all sources coincided with an increase in
the market share of imports originating in Member States from 31,9%
to 35,7% ;
 Whereas , under these circumstances , it appears that the imports from other
 Member States have been the principal cause of injury and it is difficult to
 establish     whether the imports from Czechoslovakia , Hungary , Poland and
 Yugoslavia , taken in isolation , have caused material injury to the Community
 industry concerned .
                     $
                £
 ---pagebreak---                            - 5 -
Whereas ,   f urthermore ,             the interests of the Community
do not call for Community intervention against the dumped imports
as Long as other    Member States , while maintaining import restrictions ,
continue to export Low priced codeine to the Federal Republic of
Germany ; whereas any restriction on the imports from the four countries concerned
would probably only result inth a ir being replaced by low-priced
imports from the rest of the Community as happened between 1979 and
1980. when an increase of 7.3% in imports of Community origin coincided
with a drop of 8.9% in imports from the four countries concerned ;
Whereas the Commission 's view is that , on the basi s of the foregoing , the proceeding
should be terminated ; whereas , however , one Member State has raised
an objection in the Advisory Committee ; whereas the Commission has
therefore referred the matter to the Council ;
Whereas on the basis of the above findings it has been determined that any action
taken against the imports found to be dumped would not give relief to
the complainant industry and that it is , therefore , not in the Community 's
interests at this time to take protective measures against these dumped
imports ; whereas , in these circumstances the procedure concerning imports
of codeine and its salts from Czechoslovakia , Hungary , Poland and
Yugoslavia should be terminated ,
HAS DECIDED AS   FOLLOWS :
                              Sole Article
The anti-dumping proceeding concerning imports of codeine and its salts
originating in Czechoslovakia , Hungary , Poland and Yugoslavia is
hereby terminated .
Done at Brussels ,                               For the    Council