CELEX: 52012PC0453
Language: en
Date: 2012-08-09
Title: Proposal for a COUNCIL REGULATION imposing a definitive anti-dumping duty on imports of lever arch mechanisms originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009

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		52012PC0453
		
			Proposal for a COUNCIL REGULATION imposing a definitive anti-dumping duty on imports of lever arch mechanisms originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009 /* COM/2012/0453 final - 2012/0218 (NLE) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
This proposal concerns the application of
Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against
dumped imports from countries not members of the European Community ('the basic
Regulation') in the expiry review concerning imports of lever arch mechanisms
originating in the People's Republic of China.
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
·              
Consultation of interested parties
Interested parties concerned by the proceeding
have had the possibility to defend their interests during the investigation, in
line with the provisions of the basic Regulation.
·              
Collection and use of expertise
There was no need for external expertise.
·              
Impact assessment
This proposal is the result of the
implementation of the basic Regulation.
The basic Regulation does not contain
provisions for a general impact assessment but contains an exhaustive list of
conditions that have to be assessed. 
3.           LEGAL ELEMENTS OF THE PROPOSAL
·              
Legal basis
Council Regulation (EC) No 1225/2009 of 30
November 2009 on protection against dumped imports from countries not members
of the European Community.
·              
Subsidiarity principle
The proposal falls under the exclusive
competence of the European Union. The subsidiarity principle therefore does not
apply.
·              
Proportionality principle
The proposal complies with the proportionality
principle for the following reasons:
The form of action is described in the
above-mentioned basic Regulation and leaves no scope for national decision.
Indication of how financial and administrative
burden falling upon the Union, national governments, regional and local
authorities, economic operators and citizens is minimized and proportionate to
the objective of the proposal is not applicable.
·              
Choice of instruments
Proposed instruments: regulation.
Other means would not be adequate for the
following reason:
Other means would not be adequate because the
basic Regulation does not provide for alternative options. 
4.           BUDGETARY IMPLICATION
The proposal has no implication for the
Union budget.
5.           OPTIONAL ELEMENTS 
An expiry review investigation on imports
of lever arch mechanisms originating in the People's Republic of China was initiated on 23 July 2011.
The investigation revealed a strong
liklihood of recurrence of dumping and injury and there was no evidence that
the extension of the measures would be against Union interest. Therefore, it is
proposed to continue the measures.
On 22 June 2012, the Commission disclosed
its findings in relation to the present investigation and allowed interested
patries to comment thereon. No comments were received that were of a nature to
alter the findings mentioned therein. Of particular note was that no
cooperation was forthcoming from exporting producers in the PRC.
It is therefore proposed that the
Commission adopts the attached proposal for a Council Regulation with a view to
its transmission to the Council and its publication in the Official Journal
of the European Union on 11 September 2012 at the latest.
2012/0218 (NLE)
Proposal for a
COUNCIL REGULATION
imposing a definitive anti-dumping duty on
imports of lever arch mechanisms originating in the People's Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, 
Having regard to Council Regulation (EC) No
1225/2009 of 30 November 2009 on protection against dumped imports from
countries not members of the European Community ('the basic Regulation')[1], and in particular Articles
9(4), 11(2), 11(5) and 11(6) thereof,
Having
regard to the proposal from the European Commission ('the Commission') after consulting
the Advisory Committee,
Whereas:
A. PROCEDURE
1.           Measures in force
(1)       By Regulation (EC) No
1136/2006[2]
('the original Regulation') the Council imposed a definitive anti-dumping duty
of 27.1% and 47.4% on imports of lever arch mechanisms ('LAM') originating in
the People's Republic of China ('PRC').
2.           Request for an expiry
review
(2)       Following the publication
of a notice of impending expiry[3]
of the definitive anti-dumping measures in force, the Commission received on 26
April 2011 a request for the initiation of an expiry review of these measures
pursuant to Article 11(2) of the basic Regulation. The request was lodged by
LAMMA (Lever arch mechanism manufacturers association)
on behalf of three Union producers ('the applicant')
representing a major proportion, in this case more than 50%, of the Union
production of lever arch mechanisms. 
(3)       The request provided
sufficient evidence that the expiry of the measures imposed on imports of LAM
originating in the PRC would be likely to result in a continuation or
recurrence of dumping and injury to the Union industry.
3.           Initiation of an expiry
review
(4)       Having determined, after
consulting the Advisory Committee, that sufficient evidence existed for the
initiation of an expiry review, the Commission announced on 23 July 2011, by a
notice published in the Official Journal of the European Union[4] ('the notice of
initiation'), the initiation of an expiry review pursuant to Article 11(2) of
the basic Regulation.
4.           Investigation
4.1.    Review investigation period and the
period considered
(5)       The investigation concerning
the likelihood of continuation or recurrence of dumping covered the period from
1 July 2010 to 30 June 2011 ('the review investigation period' or 'RIP'). The
examination of the trends relevant for the assessment of a likelihood of a
continuation or recurrence of injury covered the period from 1 January 2008 to
the end of the review investigation period ('the period considered').
4.2.    Parties concerned by the
investigation
(6)       The Commission officially
advised the applicant, other known Union producers, exporting producers in the
country concerned, unrelated importers, users in the Union known to be
concerned, as well as the representatives of the country concerned of the
initiation of the expiry review.
(7)       Interested parties were
given the opportunity to make their views known in writing and to request a
hearing within the time limit set in the notice of initiation. All interested
parties, who so requested and showed that there were particular reasons why
they should be heard, were granted a hearing.
(8)       In view of the apparent
large number of exporting producers in the PRC, unrelated importers and Union
producers, sampling was envisaged in the notice of initiation in accordance
with Article 17 of the basic Regulation. 
(9)       In
respect of exporting producers in the PRC and unrelated importers, in order to
enable the Commission to decide whether sampling would be necessary and, if so,
to select a representative sample, those parties were requested to make
themselves known within 15 days of the initiation of the review and to provide
the Commission with the information requested in the notice of initiation.
Given that no exporting producer in the PRC made itself known and provided the
Commission with the information requested in the notice of initiation and that
only one unrelated importer made itself known but did not provide the
Commission with the information requested in the notice of initiation ,
sampling was not considered necessary in either case.
(10)     The
Commission announced in the notice of initiation that it had provisionally
selected a sample of Union producers. This sample consisted of two companies,
out of the six Union producers that were known prior to the initiation of the
investigation, selected on the basis of their sales and production volume of
the product concerned in 2010 as well as geographic location in the Union. The sample represented over 50% of the total estimated Union production and sales
during the RIP. Interested parties were invited to consult the file and to
comment on the appropriateness of this choice within 15 days of the date of
publication of the notice of initiation. No interested party opposed to the
proposed sample. 
(11)     The Commission sent
questionnaires to the two sampled Union producers, the importer that made itself
known and all users known to be concerned.
(12)     Replies to the
questionnaires were received from the two sampled Union producers and two
users. The unrelated importer mentioned in recital (9) above that made itself
known neither replied to the sampling questions nor filled in a questionnaire
reply.
(13)     The Commission sought and
verified all the information it deemed necessary for a determination of the
likelihood of continuation or recurrence of dumping and resulting injury and of
the Union interest. Verification visits were carried out at the premises of the
following interested parties:
(a)         
Union producers 
–              
Industria Meccanica Lombarda S.r.l., Offanengo,
Italy
–              
NIKO Metallurgical company, d.d. Zelezniki,
Slovenia
(b)         
user 
–              
HIT OFFICE s.r.o. Teplice, Czech Republic
B. PRODUCT CONCERNED AND LIKE
PRODUCT
(14)     The product concerned by
this review is the same as the one in the original Regulation, namely lever
arch mechanisms generally used for archiving sheets and other documents in
binders or files currently falling within CN code ex 8305 10 00 (TARIC code
8305 10 00 50) ('the product concerned') and originating in the People's
Republic of China. These lever arch mechanisms consist of arched sturdy metal
elements (normally two) on a back plate and having at least one opening trigger
that permits inserting and filing of sheets and other documents. Ring binder mechanisms classified within the
same CN code are not included in the scope of the product concerned for the
purpose of this investigation. 
(15)     The present review
investigation confirmed that, as in the original investigation, the product
concerned and that produced in the Union by the Union producers have the same
basic technical and physical characteristics and the same uses. They were
therefore considered to be like products according to Article 1(4) of the basic
Regulation.
C. LIKELIHOOD OF CONTINUATION OR
RECURRENCE OF DUMPING
(16)     In accordance with Article
11(2) of the basic Regulation, it was examined whether the expiry of the
existing measures would be likely to lead to a continuation or recurrence of
dumping. 
1.           Preliminary remarks
(17)     As mentioned above, in
recital (9), none of the known Chinese exporting producers contacted at
initiation cooperated in the investigation. The Chinese authorities were notified
of this fact, the possible application of Article 18(1) of the basic Regulation
and were given an opportunity to present their comments. No comments were
received in this regard.
(18)     Therefore, and in
accordance with Article 18(1) of the basic Regulation, the findings in relation
to the likelihood of continuation or recurrence of dumping set out below had to
be based on facts available, in particular publicly available information such
as official company websites and product web search engines, information in the
request for review and information obtained from cooperating parties in the
course of the review investigation (namely the applicants and the sampled Union
producers).
2.           Dumping of imports during
the RIP
(19)     For
the purpose of establishing normal value, the notice of initiation made
reference to the use of an analogue country. 
(20)     As concerns the export
price, due to the lack of cooperation from both exporting producers in the PRC
and unrelated importers in the Union market the Commission was unable to
establish any export sales quantities or prices on a transactional basis. In
this respect, the Commission considered alternative means to determine the export price.
(21)     Firstly,
it was considered whether Eurostat, cross-checked with other available data,
could be used as an alternative means to establish export prices. These were
considered unsuitable insofar as one of the sources also covered other imports
than the product concerned and the other sources did not allow for the
possibility to compare export prices with those of the Union industry on a type
per type basis.
(22)     Secondly, the Commission
also considered having recourse to the export prices contained in the request
for review. It is recalled that this methodology was used in the original
investigation and that it permits a comparison on a type per type basis.
However, the invoices contained in the request for review were for export
prices to other third countries.
(23)     Accordingly,
no dumping calculation could be made on the basis of export prices to the Union and it was not possible to establish an
affirmative determination of dumping. The investigation therefore focused on
the likelihood of a recurrence of dumping.
3.           Likelihood of recurrence
of dumping
(24)     As regards the investigation
of the likelihood of recurrence of dumping, the following elements were
analysed: the relationship between normal value and export prices to third
countries; production capacity, production and spare capacity in the PRC; and
the attractiveness of the Union market in relation to imports from the PRC.
3.1 Relationship between the normal value
and export prices to third countries
(25)     In
view of the lack of cooperation from exporting producers in the PRC, normal
value was compared to export prices from the PRC in accordance with Article
2(7) of the basic Regulation.
3.1.1 Basis for determining normal value
(26)     Since
the PRC is an economy in transition, in accordance with Article 2(7)(a) of the
basic Regulation normal value had to be determined on the basis of the price or
constructed value in an appropriate market economy third country (the analogue
country), or the price from the analogue country to other countries, including
the Union, or, where those are not possible, on any other reasonable basis,
including the price actually paid or payable in the Union for the like product,
duly adjusted if necessary to include a reasonable profit margin.
(27)     The request for review by
the Union industry cited a number of producers in market economy countries other
than the Union (namely in India, Iran and Thailand). Upon initiation, these
producers were duly contacted by the Commission as well as other potential
producers in such countries that could be identified from publicly available
sources.
(28)     The notice of initiation
specified that if no cooperation was forthcoming from producers in market
economy countries other than the Union, the Commission envisaged using the
prices actually paid or payable in the Union as the basis for determining the
normal value. Indeed, the prices actually paid or payable in the Union was the basis used to determine normal value in the original investigation.
(29)     No interested party
commented on the appropriateness of the above-mentioned basis for determining
normal value.
(30)     No
producer in market economy countries other than the
 Union contacted by the Commission decided to cooperate
in the present review.
(31)     In
the above context, the Commission was left with no other alternative than to
rely on the prices actually paid or payable in the Union as the basis to determine normal value.
3.1.2 Normal value
(32)     Pursuant to Article 2(7)(a)
of the basic Regulation and as explained at recitals (26) to (31) above, normal
value was established using the price actually paid or payable in the Union for the like product which were found to be in the ordinary course of trade.
(33)     As a result, normal value
was established as the weighted average domestic sales price to unrelated
customers of the sampled Union producers. 
(34)     It
was first established whether the domestic sales of the like product to
independent customers of the sampled Union producers were representative in accordance with Article 2(2) of the basic
Regulation, i.e. whether the total volume of such sales represented at least 5%
of the total sales volume of the product concerned exported to the Union. Given the lack of cooperation from exporting producers in the PRC, information in
relation to the total sales volume exported to the Union had to be determined
according to facts available. As mentioned at recital (21) above, Eurostat and
other statistics were considered unsuitable for the purposes of establishing a
continuance of dumping, however, they can be used to indicate a level of
imports (needed for the overall volume exported from the PRC) to the Union. On that basis, the domestic sales of the sampled Union producers were considered to
be overall sufficiently representative during the RIP. In view of the lack of
cooperation from exporters in the PRC, it was not possible to analyse
representativity on a type per type basis.
(35)     The Commission subsequently
examined whether the domestic sales of each sampled Union producer could be
considered as having been made in the ordinary course of trade,i.e. whether for
each sampled Union producer the average sales prices
were equal or above the average costs of production and therefore profitable.
(36)     On this basis it was
established that sales of the Union producers were on average profitable and
normal value was consequently determined on the basis of the weighted average
sales prices of the sampled Union producers
3.1.3 Export price
(37)     In the absence of cooperation from exporting producers, the
most appropriate basis was found to be the information on the export prices
from the PRC to third countries contained in the request for review.
3.1.4 Comparison
(38)     The
comparison between the weighted average normal value and the weighted average
export price was made on an ex-works basis. This comparison showed that the
export price to third countries in the request for review was significantly
lower than the normal value (over 30%). This indicates that prices to the Union will be very likely dumped should measures
be repealed.
3.2 Production capacity of the exporting
producers
(39)     Since no cooperation from
exporting producers was forthcoming, the following conclusions rely mainly on
the information contained in the request for review, cross-checked where
possible against publicly available information.
(40)     On
this basis, it was found that the PRC production capacity of LAM is estimated
to be at least within a range of between 600 million and 700 million pieces,
which is based on information provided by the Union industry.
(41)     In
addition, information obtained during the investigation shows that the
production capacity in the PRC for LAM can be easily increased, inter alia,
through the employment of additional workforce and by limited investment in
tooling, in case of increased demand.
(42)     No interested party has
come forward with other comments and/or information in relation to production
capacity in the PRC. 
(43)     On
this basis, production capacity in the PRC is around 170%-350% higher than the
Union consumption and significantly more than the Union production. 
3.3    Production and spare capacity of
exporting producers in the PRC
(44)     Since
no cooperation from exporting producers was forthcoming, information in
relation to actual production and spare capacity relied mainly on the
information contained in the request for review, cross-checked where possible
against publicly available information.
(45)     In
the request for review, production of LAM was estimated at between 200-400
million pieces and the spare capacity of between 200-500 million pieces. This
spare capacity corresponds roughly to the equivalent of Union consumption.
(46)     The submitted estimates
were found to be reasonable after being cross-checked by reference to publicly
available sources where possible. 
(47)     In
relation to spare capacity, as mentioned in recital (41) above, the information
obtained during the investigation shows that the production capacity in the PRC
for LAM can be easily increased, inter alia, through the employment of
additional workforce and by limited investment in tooling, in case of increased
demand.
(48)     Based
on the above, it can reasonably be concluded that substantial spare capacity
exists in the PRC. As explained at recitals (49) to (55) below, there is a
strong likelihood that such spare capacity would be directed towards the Union
market should measures be repealed. 
3.4    Attractiveness of the Union market
(49)     Information gathered during the
present review reveals that the Union market would be an attractive market for
imports of LAM from the PRC, should measures be repealed. It is recalled that prior to the imposition of the measures in
force, consumption in the Union was substantial and close to 400 million
pieces. At the same time, imports from the PRC were over 200 million pieces
accounting for over 50% of the entire Union consumption.
(50)     The investigation has
demonstrated that Union demand for LAM remained substantial. The Union
consumption has only modestly declined over the period considered as determined
at recitals (63) to (64) and (98) below and the Union market remains the
largest worldwide for LAM, representing over 50% of the world market. 
(51)     Furthermore,
there are few other markets for LAM, which are not likely to accommodate the
excess PRC capacity
(52)     Moreover,
as established at recital (38) above, a comparison between the export prices of
imports from the PRC to third countries with prices in the Union market shows
that the Union market would be attractive for such low-priced imports, if
measures were repealed. This is also due to the fact that the prevailing prices
are generally higher in the Union market than in other export markets.
(53)     Given
the above considerations, if measures were to be repealed, the likelihood would
be that the exports from the PRC would be directed towards the Union market.
(54)     Publicly available
information in respect of producers in the PRC reveals that such companies
often primarily or exclusively direct their sales to the export market.
(55)     Finally, it should be observed that since the imposition of
definitive measures a number of cases of misclassification of LAM imports have
been observed whereby large volumes of separate LAM and covers were declared as
complete lever arch files. This resulted in no duties being paid for such
imports. This misclassification prompted the Customs Code Committee (in November
2010) to clarify in a statement that LAM imported under such circumstances must
be separately declared. It is too early to determine whether such a statement
has had the required effect and the Commission intends to monitor the situation
closely. However, the practice constitutes further evidence that, in spite of
measures, the Union market continues to be attractive for exporting producers
in the PRC. 
3.5.   Conclusion on the likelihood of a
recurrence of dumping
(56)     As mentioned in recital (38)
above, a comparison between the export prices to other third countries
contained in the request for review with the price on the Union market reveals
a strong likelihood that dumping may recur.
(57)     In addition, considering
the significant production capacity available in the PRC, the ability of
Chinese producers to increase rapidly their production volumes and direct them
for export, the likely low prices of such exports and the attractiveness of the
Union market for such exports, it is reasonable to assume that a repeal of the
measures would result in increased exports at dumped levels of LAM from the PRC
to the Union. 
E. DEFINITION OF THE UNION INDUSTRY
(58)     During
the RIP LAM were manufactured in the Union by six known producers, out of which three
were the applicants in the present case. No other companies came forward as Union producers in the
course of this investigation. It is therefore considered that these six
producers represent the Union industry within the meaning of Articles 4(1) and
5(4) of the basic Regulation (hereinafter referred to as the ‘Union industry’).

F. SITUATION ON THE UNION MARKET
1.           Preliminary remark
(59)     For the purpose of the injury analysis data were
obtained from Eurostat statistics and other statistical sources available to
the Commission, the request for review, the responses to the questionnaire and
information gathered during the verification visits. 
(60)     The macroeconomic
indicators, namely production, production capacity, capacity utilisation, sales
in the EU and to third markets, market share, growth, employment and
productivity, magnitude of the actual dumping margin and the recovery from the
past dumping are based on the data submitted by the Union industry. In this
context the questionnaire responses obtained from the two sampled Union
producers were complemented by information provided by all other Union
producers.
(61)     The microeconomic
indicators, namely stocks, wages, sales prices, profitability, investment,
return on investment, cash flow and ability to raise capital refer to data
supplied by the two sampled Union producers. Due to the fact that the sampled
companies represent over 50% of the total estimated Union production and sales,
the sampled Union producers were deemed to
be representative of the Union industry for the purposes of this review.
Data relating to the two sampled companies can only be provided in indexed
form, so as to preserve confidentiality of business sensitive information
pursuant to Article 19 of the basic Regulation. 
(62)     Due to the lack of cooperation
from the Chinese exporting producers and unrelated importers, the development
of import price and undercutting is based on alternative sources such as the
request for review, Eurostat and other confidential statistics available to the
Commission as well as information collected during the verification visits.
Import data were based on the request for review which was based on Eurostat
data. Given that these data covered also other imports than the product
concerned, they were cross-checked and duly adjusted against other confidential
statistical sources available to the Commission. Therefore, some figures below
have been indexed or bracketed to protect confidential statistics.
2.           Consumption on the Union
market
(63)     The
Union consumption was established on the basis of the sales volume of the Union
industry on the Union market and imports. It was established that the
consumption during the RIP was within the range between 200 and 350 million
pieces.
(64)     The
consumption of LAM in the Union decreased by 12% over the period considered. This could be partly
attributed to the economic crisis as well as changing patterns in consumption
(e.g. promotion of green office and electronic filing, general decrease in
administrative jobs).
 Table 1 
 Consumption 
   || 2008 || 2009 || 2010 || RIP 
 Volume ||   ||   ||   ||   
 Index (2008=100) || 100 || 84 || 90 || 88 
                   Source: Questionnaire replies, Review request, Eurostat and other
statistical sources available to the Commission 
3.           Volume and market share of
imports from the PRC
(65)     As
described in Table 2 below, market share decreased by 54% during the period
considered.
(66)     Moreover, since the imposition of anti-dumping duties in 2006 the Chinese
imports considerably decreased from 51% market share in the IP of the original
investigation to between 7-15% during the RIP. Concerning import volumes from
the PRC, they remained low during the period considered due to the anti-dumping
measures in force. However, the Chinese imports continued to be a major source
(between 85-95% in RIP) of total imports in the Union, due to the limited
exports of LAM by other third countries. In the period considered imports
decreased by 59%. 
 Table 2 
 Imports from PRC 
   || 2008 || 2009 || 2010 || RIP 
 Volume of imports Index (2008=100) || 100 || 56 || 44 || 41 
 Market share of imports Index (2008=100) || 100 || 66 || 48 || 46 
Source:
Questionnaire replies, Review
request, Eurostat and other statistical sources available to the Commission 
4.           Trend in prices of imports
from the PRC and price undercutting
4.1 Trend in prices
(67)     Due to the lack of
cooperation of the Chinese exporting producers and lack of alternative sources
it was not possible to establish an accurate import price. This is because, as
explained in recital (21) above, statistics were considered unsuitable insofar
as one of the sources also covered other imports than the product concerned and
the other sources did not allow for the possibility to compare export prices
with those of the Union industry on a type per type basis.
(68)     Nevertheless, it is
considered that the other confidential statistical sources available to the
Commission were suitable to indicate the overall trend in import prices from
the PRC. The trend in import prices shows a price increase over the period
considered.
 Table 3 
 Prices of imports of the product concerned 
   || 2008 || 2009 || 2010 || RIP 
 PRC ||   ||   ||   ||   
 Index || 100 || 102 || 118 || 118 
         Source: Questionnaire replies, Review request, Eurostat and other
statistical sources available to the Commission
4.2 Price undercutting
(69)     Due
to the lack of cooperation of the Chinese exporting producers and lack of
alternative sources, the undercutting calculation was, for the reasons set out
in recitals (37) above, based on the export prices to third countries contained
in the request for review. The level of undercutting indicatively established
amounts to about 20%.
5.           Import volumes and market
shares of imports from other third countries 
(70)     The main producers of LAM
in the world are located in the Union and the PRC. Imports from other third
countries such as India were found to be negligible, below 1%. 
6.           Economic situation of the
Union industry
(71)     Pursuant to Article 3(5) of
the basic Regulation, the Commission examined all relevant economic factors and
indices having a bearing on the state of the Union industry.
6.1.   Macroeconomic elements
(a)         
Production
(72)     The production volume in the Union remained within the same range over the
period considered with the exception of 2009. The decrease in 2009 due to a
certain degree to the global economic crisis was compensated by an increase in
2010. 
(73)     Despite the downward trend
in sales in the Union as explained in recitals (75) to (77) below, the Union
producers could maintain the production levels during the period considered as
they were able to increase their exports to third markets as explained in recital
(78). 
 Table 4 
 Total Union production 
   || 2008 || 2009 || 2010 || RIP 
 Volume ('000 pieces) ||   ||   ||   ||   
 Production || 351,480 || 301,661 || 360,007 || 354,646 
 Index (2008=100) || 100 || 86 || 102 || 101 
Source: Questionnaire replies.
(b)         
Production capacity and capacity utilisation
(74)     Production capacity
slightly increased due to the investments in extra capacity and modernisation
undertaken by the Union producers over the period considered. Capacity
utilisation remained rather stable, showing a slight decrease in the year 2009.
This slight decrease is primarily attributable to the effects of the global
economic crisis during that year.
 Table 5 
 Production capacity and capacity utilisation 
   || 2008 || 2009 || 2010 || RIP 
 Volume ('000 pieces) ||   ||   ||   ||   
 Production capacity || 452,407 || 453,323 || 465,984 || 465,401 
 Index (2008=100) || 100 || 100 || 103 || 103 
 Capacity utilisation || 77.7% || 66.5% || 77.3% || 76.2% 
 Index (2008=100) || 100 || 86 || 99 || 98 
Source: Questionnaire replies.
(c)          
Sales volume in the Union
(75)     The figures below represent the Union industry’s sales
volume to independent customers on the Union market.
 Table 6 
 Sales to unrelated customers 
   || 2008 || 2009 || 2010 || RIP 
 Volume ('000 pieces) || 315,715 || 281,281 || 309,941 || 304,444 
 Index (2008=100) || 100 || 89 || 98 || 96 
                   Source: Questionnaire replies.
(76)     The sales in the Union decreased over the period considered by 4%. 
(77)     In
2009, the sales dropped by 11%. This decline is to be attributed to the effects
of the global economic crisis. In subsequent years the sales recovered and were
close to 2008 figures during the RIP.
(d)         
Sales to thirds markets 
(78)     The
figures below represent the Union industry’s sales volume to third markets and
show a sharp increase in these sales over the period considered.
 Table 7 
 Sales to third countries 
   || 2008 || 2009 || 2010 || RIP 
 Volume ('000 pieces) || 26,750 || 42,105 || 59,221 || 57,148 
 Index (2008=100) || 100 || 157 || 221 || 214 
Source:
Questionnaire replies.
(e)          
Market share
(79)     Despite the decrease in sales in the Union, the market share of the Union industry
increased by 9% over the period considered to reach a range of 80% to 93%
during the RIP. The increase in the Union market share was a result of the
decrease in consumption in the Union as well as the decrease of the market
share of imports from the PRC.
 Table 8 
 EU market share 
   || 2008 || 2009 || 2010 || RIP 
 Index (2008=100) || 100 || 106 || 109 || 109 
Source: Questionnaire
replies,Review request,
Eurostat and other statistical sources available to the Commission
(f)           
Growth
(80)     Between 2008 and the RIP,
the Union consumption shrank by 12%. The volume of sales by the Union producers
on the Union market decreased by 4%. The Union producers’ market share
increased by 9%. 
(g)         
Employment 
(81)     Employment in the sector
decreased in the Union during the period considered. This decrease was linked
to the modernisation and mechanisation of the production process by the Union
industry.
 Table 9 
 Union employment 
   || 2008 || 2009 || 2010 || RIP 
 Number of employees || 710 || 588 || 561 || 552 
 Index (2008=100) || 100 || 83 || 79 || 78 
Source: Questionnaire replies.
(h)         
Productivity
(82)     The productivity of the Union industry’s
workforce, measured as output per person employed per year, developed
positively over the period considered and remained stable through 2010 and the
RIP. 
(83)     This increase in
productivity was linked to the modernisation process undertaken which is
described in recital (93).
 Table 10 
 Productivity 
   || 2008 || 2009 || 2010 || RIP 
 Productivity ('000 pieces/year) || 495 || 513 || 642 || 642 
 Index (2008=100) || 100 || 104 || 130 || 130 
Source: Questionnaire replies.
(i)           
Magnitude of the actual dumping margin
and recovery from the past dumping
(84)     It is recalled that due to
the circumstances described in recitals (19) to (23), no dumping calculation
could be carried out. However, a likelihood of recurrence of dumping was
established based on a comparison between normal value established on the basis
of the average Union industry sales prices and export price established on the
basis of prices to third countries. 
(85)     The analysis shows that the
Union industry recovered to a large extent due to the imposition of the
measures against dumped imports and the measures in force are proving to be
effective. 
6.2 Microeconomic elements 
(a)         
Stocks
(86)     The figures below represent
the volume of stocks at the end of each period.
 Table 11 
 Closing Stocks 
   || 2008 || 2009 || 2010 || RIP 
 Index (2008=100) || 100 || 43 || 61 || 83 
Source:
Questionnaire replies.
(87)     The investigation showed
that stocks held by the Union industry were not a relevant indicator for the
assessment of the economic situation of the Union industry because the level of
stocks varies on a seasonal basis.
(b)         
Wages
(88)     During the period
considered the average wage increased by 33% per employee.
 Table 12 
 Wages (cost per employee) 
   || 2008 || 2009 || 2010 || RIP 
 Index (2008=100) || 100 || 116 || 133 || 133 
                   Source:
Questionnaire replies.
(c)          
Sales prices
(89)     Average unit prices of LAM
in the Union increased slightly between 2008 and RIP. The relative decrease in
2010 as compared to 2009 is linked to fluctuation of the prices of the raw
materials.
 Table 13 
 Unit price EU market (EUR per 000 pieces) 
   || 2008 || 2009 || 2010 || RIP 
 Index (2008=100) || 100 || 103 || 101 || 104 
Source: Questionnaire replies.
(d)         
Profitability
(90)     The profitability margins
shown below are established by expressing the financial result achieved by the
Union industry as a percentage of the turnover achieved on the Union market.
 Table 14 
 Profitability 
   || 2008 || 2009 || 2010 || RIP 
 Index (2008=100) || 100 || 107 || 105 || 104 
         Source: Questionnaire replies.
(91)     Prior to the imposition of
definitive measures in 2006 the Union industry was heavily loss making. Since
then, the economic situation of the LAM industry improved over the period
considered, however remaining below the target profit of 5% established in the
original investigation during the RIP. 
(e)          
Investments, return on investments and
cash flow
(92)     The trends for investments,
the return on investments and cash flow are shown in the following table.
 Table 15 
 Investments, return on investment and cash flow 
   || 2008 || 2009 || 2010 || RIP 
 Investments ||   ||   ||   ||   
 Index (2008=100) || 100 || 152 || 41 || 51 
 Return on investment ||   ||   ||   ||   
 Index (2008=100) || 100 || 111 || 109 || 108 
 Cash flow ||   ||   ||   ||   
 Index (2008=100) || 100 || 291 || 247 || 236 
         Source: Questionnaire replies.
(93)     Due
to the recovery after imposition of the measures in 2006, the industry carried
out significant investments into modernisation and expansion of the production
facility, in particular in 2008 and 2009. The improved profitability and is
also reflected in the improved cash flow. 
(f)           
Ability to raise capital
(94)     The investigation did not
reveal any particular problems in the ability of the Union industry to raise
capital.
6.3. Conclusion on the economic situation
of the Union industry
(95)     Based on the
above-mentioned analysis, the economic situation of the Union industry has
improved and the industry is proving to be viable after the imposition of the
measures in 2006. Nonetheless, taking into account that the above mentioned
positive developments occurred only after the imposition of measures,
employment is decreasing and profitability is still below its target level, it
is considered that the economic situation of the industry remains fragile and
vulnerable. It may therefore be concluded that the evidence suggests that the
removal of injury is partly or solely due to the existence of measures.
G. LIKELIHOOD OF RECURRENCE OF
INJURY
(96)     Since the imposition of the
measures in force the situation of the Union industry improved considerably.
However, the findings of the present analysis show that the Union industry
still remains fragile and vulnerable. 
(97)     Under such circumstances it
is appropriate to carry out an analysis of the likelihood of recurrence of
material injury in order to examine whether — should the measures be repealed —
projected developments in terms of volumes and prices of imports originating in
the PRC would deteriorate the present situation, as detailed below from recital
(98)to (106).
(98)     There
are two main producers of LAM in the world – the PRC and the Union. The Union is the largest market for LAM
worldwide, followed by South America and Russia. There are small producers in
other countries, such as India, but these concentrate on their respective
domestic markets.. The USA and Canada use different filing systems. 
(99)     It is recalled that there
is significant spare capacity in the PRC and that production of LAM in the PRC
could be easily increased as explained in recitals (45) to(48) above.
(100)   It is also recalled that the
spare capacity available in the PRC corresponds roughly the Union consumption
(see recital (45) above).
(101)   It was also established that
any increase of LAM production in the PRC would be likely to be exported to the
 Union, if measures were repealed (see recital (53) above). This is based on
the fact that the EU market remains the largest market worldwide for LAM, with
a relatively stable consumption and due to the fact that the prevailing prices
are generally higher in the Union market than in other export markets (see
recital (52) above). Also it should be taken into account that apart from the Union and the PRC there are no other significant exporting countries producing LAM.
(102)   In addition, as mentioned in
recital (41) above, production capacity in the PRC can be increased easily by
the simple provision of additional labour. Therefore, the PRC exports would be
able to accommodate any increase in the Union consumption. In view of the
potentially low price of Chinese imports, as shown by the comparison with their
prices to third country markets, and the apparent unlimited ability to supply
at low prices, the Union industry would very likely not be able to benefit of
any increase in demand which would lead to important losses of market share,
should measures be repealed.
(103)   On this basis it is to be
expected that the conditions of any future significant increase of LAM imports
from the PRC to the Union would have serious negative consequences on the
situation of the Union industry. As mentioned above, if measures are repealed,
the import volume of LAM from PRC is expected to be important. Furthermore,
those imports would most probably exert a significant price pressure on the
Union market, thus on the Union industry, as suggested by the data on the level
of prices in third country markets. Indeed, according to the data available it
is estimated that the current Chinese prices do undercut Union prices by around
20% as described in recital (69) above, which points to a strong likelihood for
the Chinese imports to occur at prices substantially below Union prices should
the measures be lifted. 
(104)   The attractiveness of the
Union market for Chinese exporters is also underlined by the misclassification
attempts to avoid the anti-dumping measures in place (recital (55) above). 
(105)   On the basis of the above,
it is likely that the expiry of the anti-dumping measures on imports of LAM
originating in the PRC would result in a sharp increase in the volume of
imports into the Union at very low prices, very likely undercutting
substantially the Union sales prices. This would cause material injury and
annihilate the investment and recovery efforts made by the industry in the past
years. 
(106)   On
this basis, it is concluded that the repeal of measures in force of imports
from LAM originating in the PRC would in all likelihood result in the
recurrence of injury to the Union industry.
H. UNION INTEREST
1.           Preliminary remark
(107)   In accordance with Article
21 of the basic Regulation, it was examined whether the maintenance of the
existing anti-dumping measures would be against the interest of the Union as a whole.
(108)   The determination of the
Union interest was based on an appreciation of all the various interests
involved, i.e. those of the Union industry, the importers and users. 
(109)   In the original
investigation the adoption of measures was considered not to be against the
interest of the Union. Furthermore, the present investigation is an expiry
review, thus analysing a situation in which anti-dumping measures are in place.
(110)   On this basis, it was
examined whether, despite the conclusion on the likelihood of recurrence of
dumping and injury, there are compelling reasons which would lead to the
conclusion that it is not in the Union interest to maintain measures in this
particular case.
2.           Interest of the Union
industry
(111)   The continuation of the
anti-dumping measures on imports from the country concerned would enhance the
possibility for the Union industry to reach a reasonable level of profitability,
as it would help avoiding that the Union industry is pushed out of the market
by substantial volumes of imports from the PRC. 
(112)   Indeed, there is a clear
likelihood of recurrence of the injurious dumping in substantial volumes which
the Union industry could not withstand. The Union industry would therefore
continue to benefit from the maintenance of the current anti-dumping measures. 
(113)   Accordingly, it is concluded
that the maintenance of anti-dumping measures against the PRC would clearly be
in the interest of the Union industry. 
3.           Interest of importers and
users
(114)   As indicated above, none of
the identified unrelated importers submitted questionnaire replies. Importers
of LAM are normally also users of the product concerned since they use it for
the production of lever arch files ('LAF'). 
(115)   Several users, i.e.
producers of LAF, came forward in the course of the investigation. Only one
user provided a questionnaire reply which, given the quality of the data
submitted, was possible to verify only to some extent during the verification
visit. 
(116)   The user that was verified
claimed that anti-dumping measures should also be imposed on imports of LAF
from the PRC. However, these claims were not substantiated by any supporting
evidence. 
(117)   Two users expressed their
opposition against the continuation of the measures. However, their allegations
were not substantiated
(118)   On the other hand, the
analysis also showed that if the Chinese were to become the sole suppliers of
LAM as a consequence of the repeal of the measures, the position of the
producers of lever arch files would also be endangered due to the disappearance
of the competition on the world LAM market. It was therefore considered that
the existing measures contribute to variety of supply and competition on the
world market for LAM, which ultimately is in the interest of the users. 
(119)   Other three users using only
the LAM produced in the Union remained neutral and one of them expressed its
support for the continuation of the measures.
(120)   Given that the cost of LAM
represents a minimal percentage of the retail price of LAF, the measures have
practically no effect, if any, on the price of the final product (LAF), and
therefore no impact on final consumers.
4.           Conclusion on Union
interest
(121)   Taking into account all of
the factors outlined above, it is concluded that there are no compelling
reasons against the maintenance of the current anti-dumping measures.
I. ANTI-DUMPING MEASURES
(122)   All parties were informed of
the essential facts and considerations on the basis of which it was intended to
recommend that existing measures be maintained. They were also granted a period
within which they could make representations subsequent to this disclosure. The
submissions and comments were analysed but have not led to the alteration of
the essential facts and considerations on the basis of which it was decided to
maintain the anti-dumping measures.
(123)   It follows from the above
that, as provided for by Article 11(2) of the basic Regulation, the
anti-dumping measures applicable to imports of lever arch mechanisms
originating in the PRC should be maintained,
HAS ADOPTED THIS REGULATION:
Article 1
1.           A definitive anti-dumping
duty is hereby imposed on imports of lever arch mechanisms generally used for
archiving sheets and other documents in binders or files currently falling
within CN code ex 8305 10 00 (TARIC code 8305 10 00 50) and originating in the
People's Republic of China. These lever arch mechanisms consist of arched
sturdy metal elements (normally two) on a back plate and having at least one
opening trigger that permits inserting and filing of sheets and other
documents.
2.           The rate of the definitive
anti-dumping duty applicable to the net, free-at-Union frontier price, before
duty, of the products described in paragraph 1, and manufactured by the
companies listed below shall be as follows: 
 Manufacturer || Anti-dumping duty || TARIC additional code 
 Dongguan Nanzha Leco Stationary The First Industrial Camp, Nanzha, Humen, Dongguan, China || 27,1% || A729 
 All other companies || 47,4% || A999 
3.           Unless otherwise
specified, the provisions in force concerning customs duties shall apply.
Article 2
This Regulation shall enter into force on
the day following that of its publication in the Official Journal of the
European Union.
This Regulation shall be binding
in its entirety and directly applicable in all Member States
Done at Brussels, 
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 343,
22.12.2009, p. 51.
[2]               OJ L 205, 27.7.2006, p. 1.
[3]               OJ C 5, 8.1.2011, p. 11.
[4]               OJ C 217, 23.7.2011, p. 35.