CELEX: 51988PC0123
Language: en
Date: 1988-03-09
Title: Proposal for a COUNCIL REGULATION (EEC) extending the anti-dumping duty imposed by Regulation (EEC) No 1698/85 to certain electronic typewriters assembled in the Community (submitted by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (88) 123
Vol. 1988/0037
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                   COM(88 ) 123 final
                                                   Brussels ,  ^ March 1988
                                Proposai for a
                          COUNCIL REGULATION ( EEC )
 extending the anti-dumping duty imposed by Regulation ( EEC ) No 1698 / 85
      to certain electronic typewriters assembled in the Community
                       ( submitted by the Commission )
 ---pagebreak---                              EXPLANATORY MEMORANDUM
1 . The Council , by Regulation (EEC ) No 1698 /851 , imposed a definitive
anti-dumping duty on imports of certain electronic typewriters
originating in Japan .
2. In July 1987 the Commission received a complaint from the Committee
of European Typewriter Manufactures ( CETMA ) representing a major
proportion of Community output of electronic typewriters . The complaint
alleged that the anti-dunping duty imposed by Regulation (EEC )
No 1698 /85 was being circumvented by thè assembly of thè product
concerned in thè Community under thè conditions specified in
Artide 13(10 ) of Regulation (EEC ) No 2176/84^, as amendecP .
3 . In September 1987 the Commission opened an investigation under
Article 13(10 ) concerning the electronic typewriter assembly operation
of six subsidiaries of Japanese companies on whose products the
definitive anti-dumping duty had been imposed .
4 . AU these companies had started the assembly operations after the
initiation , in March 1984, of the original anti-dumping investigation .
5 . The value of the parts was generally determined on an into factory ,
duty paid basis .
6 . In almost every case it was found that the nature of the parts
sourced in the Community was relatively simple , and in one case limited
to packaging only . All parts of a higher technological value were
imported from Japan and few genuine efforts appear to have been made to
alter the sourcing pattern .
 ---pagebreak---                                      - 2 -
7.  The sole exception was Brother Industries (UK ) Ltd for which the
weighted average of Japanese parts for all models produced by Brother in
the Community was found to be less than 60% . In addition , TEC
Elektroni k-Werk GmbH ceased assembling the product prior to the
beginning of the investigation and the Commission has accordingly
terminated the proceeding as it concerns these two companies .
8 . For the remaining companies the valué of Japanese parts exceeded the
valué of all non-Japanese parts by more than 50% on a weighted average
basis for all models during the investigation period . The figure for
Canon was 80%, Kyushu Matsushita 82%, Sharp 79% and Si Iver Reed 96% .
9.  It is proposed , accordingly , that the definitive anti-dunping duty
be extended to products assembled in the Community by these companies
and that the rate of duty per machine unit assembled by the companies
concerned be as follows : 44.00 ECU for Canon products , 40.94ECU for Kyushu
Matsushita products , 21.82ECU for Sharp products and 56.14 ECU for
Silver Reed products .
                                                                             'i
 ---pagebreak---                                     Proposai for a
                              COUNCIL REGULATION ( EEC )
                    extendlng the ant I -dumping duty Imposed by
                       Régulation ( EEC ) No 1698 / 85 to certain
               électron le typewrlters assembled In the Commun Ity
THE COUNCIL OF THE EUROPEAN COMMUN ITI ES ,
Havlng regard to the Treaty establ Ishlng the European Economie Commun ! ty ,
Having regard to Council Regul at Ion ( EEC ) No 2176/ 84 of 23 July 1984 on
protection     against     dumped    or    subsidized   Imports   from   countries   not
members of the European Economic Community , 1 as amended by Regulation
(EEC) No 1761 / 87 , 2 and In particular Article 13(10) thereof ,
Having    regard      to   the   proposal     submitted   by   the   Commission    after
consul tat Ions within the Advisory Committee as provided for under                  the
above Regul at Ion ,
Whereas :
                                        A.  Procedure
1.    In July 1987 ,     the Commission received a complaint          lodged by CETMA ,
the Committee of European Typewriter Manufacturers , on behalf of French ,
German and Italian producers of electronic typewriters whose collective
output const I tutes pr act leal ly all Community production of the product In
question .    The complaint contained sufficient evidence of the fact that
following the opening of the investigation on electronic typewriters
originating in Japan , which led to the adoption of Council Regulation ( EEC )
            4
No 1698 / 85 imposing a definitive , anti-dumping duty on imports of those
products , a number of companies were assembling electronic typewriters in
the Community under the conditions referred to in Article 13(10 ) of Regulation
( EEC ) No 2176 / 84 . After consultation , the Commission accordingly announced ,
                                                                                      4
by notice published in the Official Journal of the European Communities , the
1    OJ No L 201 , 30.7.1984 , p. 1 .
2    OJ No L 167 , 26.6.1987 , p. 9 .
3    OJ NO C 83 , 24.3.1984 , p. 4 .
4     OJ No L 163 , 22.6.1985 , p. 1 .
5     OJ No C 235 , 1.9.1987 , p. 2 .
                                                                                         S.
 ---pagebreak---  Initiation of an Investigation , under              the said Article 13(10 ), concerning
electronic typewriters assembled in the Community by the following companies
SI Iver Reed Internat lonal ( Europe ) Ltd , Watford , UK
Brother Industries ( UK ) Ltd , Wrexham , UK
Kyushu Matsushl ta ( UK ) Ltd , Newport , UK
Sharp Uanufactur I ng Company of UK , Wrexham , UK
Canon Bretagne SA , Llffrè , France
TEC E lektronl k-Werk GmbH , Braunschwelg , Germany
2.   The      Commission       so     advised       the    companies      concerned ,     the
represent at Ives       of  Japan    and   the    complainants    and   gave   the   parties
directly concerned the opportunity to make known their views In writing
and to request a hearing .
3.   All    the companies concerned as well             as  the complainants made      their
views    known      In  writing ,   requested      and  were   granted    hearings   by   the
Commission .
4.    No   submissions      were   made   by   purchasers     of  electronic    typewriters
assembled       In   the   Community .    The   Commission     sought    and verified    all
 Information It deemed necessary for the purpose of the assessment of the
character        of    the    alleged     assembly      operat Ions    and    carried    out
 Invest I gat Ions at the premises of the following companies :
Astec Europe Ltd , Stourbrldge , UK
Brother Industries ( UK ) Ltd , Wrexham , UK
Canon Bretagne SA , Llffrè , France
Kyushu Uatsuchi ta ( UK ) Ltd , Newport , UK
Sharp Manufacturlng Company of UK Ltd , Wrexham , UK
Furthermore , the Commission carried out an Invest Igat Ion at the premises
of   a   supplier      of   subassemblies      to   some   of   the  companies     Involved .
Because It       Is not directly Involved In this Invest Igat Ion ,           this company
requested      that    Its   name   be   withheld .     Given   the  cl rcumstances ,   this
request appears to be Justified .
 ---pagebreak---                                                -3-
One     other    company ,    whose    activities      In   the    Community      were    to   be
Investigated        according    to   the   opening     notice ,   namely    TEC E lektronl k-
Werk GmbH ,        Braunschweig ,       Germany ,     ceased      assembling        electronic
typewriters In the Community before the beginning of the Investigation .
The Investigation concerning this company was , therfore , terminated by a
Commission decision .
5.    The perlod of Investigation was from 1 January to 31 July 1987 .
                     B. Rel at lonshl p or association wlth exporter
6.    Al I companles referred to under polnt 1 were found to be whol ly-owned
subsidiarles of Japanese exporters of electronlc                     typewr I ters whlch are
subject to the def Inlt Ive ant l-dumpl ng duty Imposed by Regulat Ion ( EEC )
No  1698 / 85 .
7.    One company ,     namely Silver Reed        Internat lonal     ( Europe ) Ltd ,  claimed
that It should not be Included In this Investigation because the assembly
operation was not carried out by Silver Reed but by an unrelated company ,
Astec     Europe     Ltd ,  on    Its   own   premises .     However ,    the    Invest I gat Ion
revealed that Astec' s assembly operation was controlled by Silver Reed ,
Inter alia ,       all   parts     of   electronic      typewriters       were    Imported     by
Silver Reed        and   Astec 's    entire    product Ion     was    sold   exclusively       by
Silver Reed .       Under   these circumstances ,        It  Is not     the  legal   structure
but    the economic reality under which the assembly operation                      Is carried
out which Is relevant and , consequently ,                 this    assembly     operation
has ,    for   the   purpose    of   this   I nvest Igat Ion ,   to   be   considered      to  be
carried out by Silver Reed .
                                         C. Production
8.    Al I companles started thelr assembly operations after the Initiation
of    the    anti-dumping     proceedlng      concernl ng          imports of electronic
typewr I ters or Iglnat Ing In Japan on 24 Uarch 1984 .
                                                                                                  C.
 ---pagebreak---                                                D. Parts
9.     The value of parts In question was generally determined on the basis
of    the companies'        purchase prices of          these parts when delivered           to the
factories       In   the Community .      Some companies requested FOB or CIF values
be used .       This    request    had   to be    rejected since       the  relevant      value   Is
that     of   the     parts    and   materials      as    they   are  used    In   the    assembly
operations , that is on an into–f actory , duty-paid basis .
10 . The companies' purchase prices were not used In those cases referred
to    In detail below where the / nvest I gat Ion has shown that                    they did not
adequately reflect their true value .                  In these cases , the purchase prices
were replaced by appropr I ate at ternat Ive prices .
Стоп
 11 . The Invest Igat Ion revealed that , for some models , the sales price of
Canon Inc . ( Japan )        to  Its subsidiary In the Community did not cover all
the     costs     Incurred      by  Canon Inc .      The    sales   prices   were ,     therefore ,
adjusted      In    order    to   ensure   that    they    reflected Canon Inc.’s          purchase
price of       those parts manufactured by               third parties or      the    totality of
Canon       Inc.’s      own    production       costs      plus   the    sales ,    general      and
administrative expenses             Incurred by Canon Inc .         and shown     In   Its public
accounts .
Canon     claimed       that   one   subassembled        Item   which   was   the    most     costly
Individual       one used for some models was of Community origin .                          It was
found ,   however ,      that   this   Item was assembled In the Community ,              entirely
from parts        Imported     from Japan ,     by a subsidiary company of             a Japanese
producer which normally manufactures these products In Japan and supplies
Canon 's mother company there .             On the basis of Information received from
two sources , one being an electronic typewr I ter producer carrying out a
virtually       Identical      assembly operation          Itself  and   the other      being   the
company referred to above ,            It was concluded that this subassembly did not
const I tute a substant I al process or operation as required by Article 5 of
Council Regulation ( EEC ) No 802/686 . The assembly operation carried out in the
6      OJ No L     148 , 28.6.1968 , p.     1 .
 ---pagebreak---                                            -5-
Community was of an unsubstant I al nature compared with the manufacture of
the components which was performed In Japan .            The Item was thus not of
Community origin .
Canon requested that the assembly costs of one subassembly ,               Incurred In
Its own    factory ,  should be     Included    In the value of EEC parts .        This
request , however , cannot be granted because the cost of assembly cannot
be Included In the value of parts or materials used In the assembly or
production operat Ions ,     but const Itutes a value added to these parts or
materials In the assembly process .
It    was found   that   the  value   of   Japanese   parts   used   by Canon    varied
according to model from 70% to 95% of the total parts value , the weighted
average    value  of   Japanese parts      for   all models    assembled    during  the
Investigation period being 80% .
Brother
12 . The weighted average value of Japanese parts for all models produced
by    Brother   was  found    to   be   less   than  60% .   The   Invest Igat Ion  Is ,
therefore , terminated by a Commission Decision .
Kvushu Matsushita
13 . The    Investigation    revealed ,    for   almost  ail   models ,   a  situation
Identlcal to the one descrlbed under point 11, second paragraph, above .
The same conclusion was drawn .
It was found that the value of Japanese parts used by Kyushu Matsushita
varied according to model        from 77% to 94% of the total parts value , the
weighted average value of Japanese parts for all models assembled during
the Invest Igat Ion period being 82% .
Sharp
 14 . The invest Igat Ion revealed that the sales price of Sharp Corporation
( Japan ) to Its subsidiary In the Community did not cover all               the costs
                                                                                         8.
 ---pagebreak---                                                 -6-
 Incurred by Sharp Corporat Ion .            The same observat Ions          as   In point 11f
first paragraph , above , can be made and the same conclusion drawn In the
case of Sharp .
Sharp claimed that one subassembled Item used for most models ,                       which was
the most costly Individual one , was of Community origin .                      It was found ,
however ,      that   Sharp Corporat Ion     Japan    sold   all    Individual    Items   to  an
unrelated        Community      company    which    carried     out    the  subassembly      and
subsequently sold the product              to Sharp .     Sharp claimed that        the entire
sales price should be Included In the computation as Community value .                        On
the basis of         Information provided by a company carrying out a complete
production cycle of the product concerned and on the basis of generally
known      facts      regarding      this   product ,    It    was    concluded      that   this
subassembly        did   not   const I tute  a   substant I al   process    or   operation    as
required        by   Article 5      of   Regul at Ion  ( EEC )   No 802/ 68 .   The    assembly
operation carried out             In  the Community was of an unsubstant I al             nature
compared with the manufacture of the components which was performed                            In
Japan .      This Item was thus not of Community origin .
 It   was    found     that   the   value  of   Japanese parts        used  by   Sharp    varied
according to model from 72% to 97% of the total parts value , the weighted
average       value    of   Japanese    parts   for   all   models     assembled    during   the
 Investigation period being 75.7% .
Sllver Reed
 15 .  It was     found that      the value of Japanese parts used by Silver Reed
var I ed accordlng to model from 95% to 97% , the welghted average value of
Japanese parts for all models assembled during the I nvest I gat I on per lod
befng 96% .
                                     E. Other cl rcumstances
 16 . Considération was glven to other relevant cl rcumstances wlth regard
to the assembly operations referred to above,ln accordance with Article
13(10 ) ( a ) of Régulation ( EEC ) No 2176 / 84 .
 ---pagebreak---                                               -7-
17 . In most cases .     Brother being an exception ,            It was found that ,      the
nature of      the parts    sourced     In    the Community was        relatively simple ,
limited In one case to packaging materials only , all parts of a higher
technological value were Imported from Japan and few genuine attempts
appear to have been made to substantially change the sourcing pattern .
18 . Some companies claimed that             It was     Impossible to      find sources of
supply In the Community which guarantee a required level of quality . This
was     found    to  be    an    Incorrect      statement .     Community      producers    of
electronic typewriters , the quality of which Is comparable to that of the
companies concerned , source In the Community and Brother has proved that
It Is not Indispensable to use predominantly parts of Japanese origin .
19 . Furthermore ,    It was claimed that It was extremely difficult to have a
high level of sourcing of parts outside Japan during the earlier stages
of    the  production    of    new  models .     The   example    of  Brother ,    which  has
always had a high level of Community sourcing , has shown that this claim
Is   Incorrect .
20 . As to direct     labour ,   It was found that         a certain number of new Jobs
had been created by the companies concerned ,                 In particular by Brother .
However ,    the companies      Invest Igated only carry out          assembly operat lens
whereas     the Community producers         normally have an         Integrated ,    In-depth
production which requires more personnel .                Since the     Increased sales of
assembled      electronic     typewriters       result    In   decreased      sales   by   the
Community producers ,       It   can only be concluded           that   the setting up of
these     companies    has    resulted     In    a  net    loss   of   employment     In   the
Community .
21 .   It was found ihat , almost wlthout exception , ail              Important functlons
In the companles Invest Igated were             performed by Japanese personnel .
22 . Furthermore , as regards research and development ,                 It was found that
none was carried out         In the Community .         In this context ,      Sharp claimed
that Its so-called " Creative Center Europe “ and Its " Engineering Research
Office " should be duly           taken Into consideration .          The purpose of the
former Is to " Improve the design of Sharp products so as to ensure their
complete     compatibility with European            lifestyles ".     The purpose of       the
 ---pagebreak---                                                   -8-
latter    Is to “ survey and collect data on the most advanced engineering
techniques and development s " and “ to collate ail aval labié I nformat Ion on
technologlcal ,      research       and    development       and  engineering      processes   In
Europe ,   analyse these and           lnform “    the Sharp companles        “ of  Improvements
and  developments " .      It    Is   not    évident     that   these   actlvltles     relate  to
electronlc     typewr I ters      and ,    In   any   case ,   they   are  not    consldered   to
const I tute research and development carrled out In the Commun ! ty .
23 . Some    companies       claimed        to   have     transferred     technology      to  the
Community     by  setting      up    assembly      operat Ions .    However ,    since   assembly
technology for electronic typewriters has been known In the Community for
longer than In Japan , this claim cannot be accepted .
24 . Kyushu Hat sushi ta requested that               It be taken Into consideration that
 It had never exported complete electronic typewr I ters to the Community .
Since    the   ant I -dumping      duty     applies    equally    to   Kyushu    Matsushita   and
Article 13(10) of Regulation ( EEC ) No 2176 / 84 makes no exception for a case
 like this , it is considered that Kyushu Matsushita 's sales history cannot be
 a decisive factor .
                                          F.   Conclusions
25 . In view of the foregoing , It Is concluded that the anti-dumping duty
should be extended         to certain electronic              typewriters    assembled     In the
Community .
                                          G. Undertaklngs
26 . The    companies      against       which      protective     measures     are   considered
necessary      have been      Informed of the essential             facts and considerations
on the basis of which the present measures have been proposed .                         All these
companies ,     with    the     exception        of   Silver Reed ,     offered     undertakings
referring ,    In part Icul ar ,      to the attainment of a certain proportion of
parts   originating      In    the Community .          The Commission does not          consider
these undertakings to be acceptable at present for reasons that have been
given     separately      to    the      Interested       companies .    The    Commission    Is ,
however ,   Invited to re-examine the accept ab ! I / ty of undertakings and to
proceed to the necessary ver I f I cat Ion as soon as It has been Informed by
                                                                                                   H
 ---pagebreak---                                               -9-
the    companies     concerned     that    the   conditions      Justifying   the    present
extension     of    the  ant I -dumping     duty   to    assembled    products   have    been
removed .    Sat I sfactory     guarantees      should     also   be   given   that    these
conditions     would    not  recur     In  the   future .    The  acceptance of     such    an
undertaking should result In the suspension of the duty extended by
this Regulation .
HAS ADOPTED THIS REGULATION :
                                          Article    1
1 .   The   definitive      anti-dumping       duty     Imposed    by   Regulation      ( EEC )
No 1698 / 85    on    Imports     of    electronic      typewriters ,    whether    or     not
I ncorporat I ng    calcul at Ing    mechanisms ,    originating     In  Japan , Is   hereby
also     imposed      on electronic typewriters , whether or not I ncorporat I ng
calculating      mechanisms ,     corresponding       to   Combined    Nomencl ature    Codes
8469 10 00 ,    ex 8469 21      00 ,  ex 8469 29 00 and ex 8470 90 00, Introduced
 Into   the commerce of the Community after having been assembled                     In   the
Community by :
      Canon Bretagne ( F )
      Kyushu Matsushl ta ( UK )
      Sharp ( UK )
      Sllver Reed ( UK )
2.    The rate of duty shal I be as set out below per unit assembled by the
companles concerned :
      Canon Bretagne ( F )                      44.00 ECU
      Kyushu Matsushita ( UK )                 40.94 ECU
      Sharp ( UK )                             21.82 ECU
      Sllver Reed ( UK )                       56.14 ECU
3.    The duty shall      be applicable to electronic typewriters assembled by
each of the above companies until such time as a sat I sfactory undertaking
with regard to such products Is accepted .
 ---pagebreak---                                        - 10-
                                     Artlcle 2
 1 .  Parts and materials suitable for use In the assembly or production of
electronic typewriters by the companies referred to In Article 1(1 ) and
originating In Japan can only be considered to be In free circulation
 Insofar as they will not be used In the assembly or production operations
referred to above .
2.    Electronic typewriters thus assembled or produced shall       be declared
to   the competent   authorities before     leaving the assembly or   production
plant for their Introduction Into the commerce of the Community .        For the
purpose    of  levying  an  anti-dumping      duty , this declaration  shall  be
considered to be equivalent      to the declaration referred to In Article 2
of Council Directive 79 / 695 / EEC7 .
3.    The provisions In force concernlng customs dut les shal I apply .
                                     Article 3
Thls Regul at Ion shal I enter Into force on the date of Its publication In
the Official Journal of the European Commun ! t les .
This Régulation shall be binding in its entirety and directly applicable in
ail Member States .
Done at Brussels ,                                           For the Counci l
 70J No L 205, 13.8.1979, p. 19 .