CELEX: 51987PC0576
Language: en
Date: 1987-11-13
Title: Proposal for a COUNCIL REGULATION (EEC) imposing a definitive anti-dumping duty on imports of mercury originating in the USSR and definitively collecting the provisional anti-dumping duty imposed on such imports (submitted by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (87) 576
Vol. 1987/0282
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 ---pagebreak--- COMMISSION OF THE EUROPEAN COMMUNITIES
                                                  COM(87 ) 576 final
                                                 Brussels , 13 November 1987
                                 Proposal for a
                          COUNCIL REGULATION ( EEC )
imposing a definitive anti-dumping duty on imports of mercury originating
   in the USSR and definitively collecting the provisional anti-dumping
                       duty imposed on such imports
                       ( submitted by the Commission )
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COM ( 87 ) 576 final
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                              Explanatory memorandum
1 . Commission Regulation 2450/ 87 imposed a provisional anti-dumping duty on
    imports of mercury originating in the USSR .
2 . After imposing the provisional duty          the Commission   continued   its
    investigation of normal value and injury .
    The definitive results were forwarded to the interested parties .
3 . None of the arguments put forward by the exporters and importers was
    sufficiently convincing to challenge the substance of the preliminary
    conclusions on dumping or injury .
4 . As regards the question of dumping, definitive normal value was established
    in the same way as provisional normal value, i.e. by reference to a
    market-economy country , in this case the United States of America . However ,
    since the prices at which mercury was sold on the American market were
    found to be lower than the costs of production, normal value was determined
    on a constructed value basis .
    The comparison of normal value and export prices during the reference
    period - 1 July 1986 to 28 February 1987 - resulted in a weighted average
    dumping margin of 147% .
5 . As regards the question of injury, the Commission 's preliminary conclusions
    were confirmed in their entirety in this final stage of the investigation .
6 . The Commission 's preliminary conclusions on the form and rate of anti ¬
    dumping duty to be imposed are consequently unaltered . A specific duty of
    70 ECU per flask of a net capacity of 34.5 kg of mercury originating in the
    USSR is therefore proposed .
    In determining the level of this specific duty , the Commission took into
    account the average margin by which the Soviet product undercut the
    Community producer 's prices in the Community and the price the Community
    producer could have obtained on the Community market had it not been for
    the sudden appearance on that market of large quantities of Soviet mercury .
                                                                                   I
 ---pagebreak---                                     Proposal for a
                               COUNCIL REGULATION ( EEC )
                iaposing a definitive anti-duaping duty on iaports of
                          ■ercury originating in the USSR and
                       definitively collecting the provisional
                      anti-duaping duty iaposed on such iaports
THE COUNCIL OF THE EUROPEAN COMMUNITIES ,
Having regard to the Treaty establishing the European Economic Community ,
Having regard to Council Regulation ( EEC ) No 2176 / 84 of 23 July 1984 on
protection against dumped or subsidized imports from countries not members of
                                     1                                                 2
the European Economie Community ,      as amended by Régulation ( EEC ) No 1761 / 87 ,
and in particular Article 12 thereof ,
Having regard to the proposal from the Commission                 submitted     after
consultation within the Advisory Committee as provided for under the above
Regulation ,
Whereas :
A. PROVISIONAL DUTY
( 1 ) Commission Regulation ( EEC ) No 2450 / 87 imposed a provisional anti-dumping
      duty on imports of mercury originating in the USSR .
1
2   0J L 201 , 30.7.1984 , p. 1 .
3   0J L 167 , 26.6.1987 , p. 9 .
    0J L 227 , 14.6.1987 , p. 8 .
                                                                                         3
 ---pagebreak---                                          - 2 -
B. SUBSEQUENT PROCEDURE
( 2 ) Following imposition of the anti-dumping duty, the Community producer
      requested and was granted a hearing with the Commission . The Soviet
      exporter " Raznoimport " ■ made written submissions within the period laid
      down by Regulation ( EEC ) No 2450/ 87, to which the Commission replied .
      At its request ,   the Soviet exporter was also informed of the essential
      facts and considerations on which the Commission had based its conclusions
      and on the basis of which it intended to propose the imposition of a
      definitive duty and the definitive collection of the amounts secured as
      provisional anti-dumping duties . The exporter made certain submissions
      within the period granted following the meeting at which this information
      was provided .
( 3 ) The Soviet exporter referred to an investigation being carried out under
      Council Regulation No 17 concerning possible price agreements between
      producers established in the Community and in third countries . The Soviet
      exporter considered that such an investigation indicated that the
      Community mercury producer was not competitive and that the price on the
      Community market was artificially high . However , the Soviet exporter
      submitted no evidence in support of its allegations .
      It is the Commission 's view that    this   proceeding has no bearing on the
      investigations being carried out under Regulation No 17 concerning
      possible price agreements between producers established in the Community
      and in third countries . The object of an anti-dumping proceeding is not
      and could not be to condone or encourage restrictive commercial practices ,"
      and the initiation of such a proceeding in no way restricts a firm 's right
      to invoke the provisions of Articles 85 and 86 of the Treaty . Moreover , if
      an infringement of Articles 85 and 86 is discovered and a proceeding is
      initiated under Council Regulation No 17, the Commission may review the
      present proceeding in accordance with Article 14(1 ) of Regulation ( EEC ) No
      2176 / 84 .
 1 0J No 13, 21.2.1962 , p. 204/62 .
 ---pagebreak--- C.   DUMPING
( 4 ) The Soviet exporter repeated its initial suggestion that the indicative
      prices for spot deals published in the London Metal Bulletin ( LMB ) be used
      for the calculation of normal value .
      That proposal is not acceptable . In the case of exports from a country
      which does not have a market economy , normal value is to be determined on
      the basis of the market price or constructed value in a market-economy
      third country ;      furthermore ,  the investigation showed that during the
      reference period the indicative prices published in the LMB ,       which take
      account only of spot deals and reflect only a fraction of such deals ,      did
      not cover production costs in market-economy countries .
( 5 ) The Commission based its calculation of normal value on the constructed
      value - determined by adding together the cost of production and a
      reasonable margin of profit , as defined in Article 2(3 ) of Regulation
      ( EEC ) No 2176 / 84 - of the like product manufactured by Placer US Inc ., San
      Francisco , an independent producer in the United States of America , and
      set out its reasons for choosing this method in point           B.1(3 ) and ( 6 )
      of Regulation ( EEC ) No 2450 / 87 . No new evidence has justified any change
      to the preliminary findings .
( 6 ) Export prices were taken to be the prices actually paid to the Soviet
      exporter by independent Community importers for mercury which had actually
      entered the Community . The Soviet exporter claimed that the mercury it
      exported was sold to international traders and that it had no control over
      the final destination of the mercury .
 ---pagebreak---                                            - 4 -
      The investigation showed that the exporter 's terms of sale were cif to a
      Community port . For the purposes of Community rules , the determining
      factor is the effect of an exporter 's behaviour, not his intentions .
( 7 ) The Soviet exporter has supplied no new evidence concerning the
      calculation of dumping since the provisional duty was imposed . The
      preliminary findings concerning dumping by the exporter are therefore
      confirmed .
D. INJURY
( 8 ) It has been confirmed that Community imports of mercury originating in the
      USSR increased from nil to nearly 200 tonnes in the second half of 1986,
      equivalent to a market share of 22% for that period (or 11% for the whole
      of 1986 on an annual basis ). The mercury imported from the USSR was sold
      in the Community at prices from 17% to 54% lower than the prices charged
      by the Community producer , as indicated in Chapter C of Regulation ( EEC )
      No 2450 / 87 .
( 9 ) The Soviet exporter claimed that it merely sold at the prices quoted by
      the LMB and that the price collapse on the Community market could not
      therefore be attributed to the prices it charged .
      However, the investigation showed that the Soviet exporter 's sales to
      international traders on the terms described in Chapter C of Regulation
      ( EEC ) No 2450 / 87 of substantial quantities of mercury over a short period ,
      on a narrow market with inelastic demand, regardless of price, led to a
      chain reaction and a general collapse of mercury prices . The Community
      producer       was     thus    forced ,    in ' order    to    maintain    its
                                                                                      6
 ---pagebreak---                                         - 5 -
       market share , to sell at less than cost price, leading to considerable
       financial losses . Community imports of mercury originating in the USSR
       thereby caused material injury to the Community producer .
( 10 ) The Soviet exporter claimed that the injury suffered by the Community
       producer was due to two other factors : the depreciation of the US dollar
       and the underlying downward trend of mercury prices .
       As regards the depreciation of the dollar , the Commission examined the
       trend of the selling prices of the Spanish product expressed in dollars ,
       as explained in Chapter C of Regulation ( EEC ) No 2450 / 87 . It thus ensured
       that its calculation of injury was not        distorted by the effects of
       currency fluctuations .
( 11 )  As regards the underlying downward trend of mercury prices , the
       Commission found that the Community producer 's prices , expressed in
       dollars , were stable until the end of 1985 and fell by some 6% to 8% in
       the first   six months of 1986 .  Had it not been for the Soviet sales at
       dumped prices it can be assumed that ,      given the inelastic demand for
       mercury and the underlying market trend ,   the Community producer 's prices
       would  have   continued to  fall  at  the same  rate  as   before .   Thus the
       Community producer 's prices would have fallen by a further 8% or so in
       the second half of 1986 . This factor would have had only a minor impact
       on the fall in prices , but it was nevertheless taken into account for the
       calculation of injury .
( 12 ) The price of the dumped Soviet mercury, taken in isolation, undercut the
       Community producer 's selling prices by an average of about 35% during the
       second half of 1986 and caused prices to slump by up to 50% or more in
       the second half of 1986 . Taking into account the depreciation of the US
       dollar and the underlying downward trend of mercury prices ,               the
       Commission was able to estimate the injury caused directly by the Soviet
       exporter 's prices .
                                                                                      1-
 ---pagebreak--- ( 13 ) The Commission also examined to what extent the Algerian producer 's sales
       had contributed to the injury suffered .
       The investigation showed that like the Community producer , the Algerian
       producer sold mercury in small quantities to a large number of customers ,
       both final consumers and international traders , in spot deals , forward
       contracts and compensation deals , and in the second half of 1986 was
       likewise forced, in order to find a buyer , to align its prices on those
       charged by the Soviet exporter . The Soviet exporter did not dispute this .
       Consequently , the Algerian producer 's mercury exports were not the cause
       of the collapse of the mercury price in 1986 .
( 14 ) In conclusion , the sharp rise in imports from the USSR, the prices at
       which the product was dumped in the Community and the repercussions this
       had on prices and on the financial situation of the Community producer
       led the Commission to conclude that the dumped imports of mercury
       originating in the USSR, taken in isolation , must be held to be the cause
       of material injury to the Community industry concerned .
       The Council confirms this conclusion .
E. COMMUNITY INTEREST
( 15 ) In order to evaluate the Community interest , the Commission took into
       account the scale of the injury caused solely by the dumped imports from
       the USSR, which threatened the viability of the only Community producer
       of a product held to be of strategic importance, and the fact that the
       said producer found itself threatened by the Soviet producer , the USSR
       being the world 's largest producing country, with a high annual export
       capacity . The Council agrees with the conclusion, set out in Regulation
       ( EEC ) No 2450/ 87, that in these circumstances the Community interest
       requires action to be taken .
 ---pagebreak---                                          - 7 -
F. DEFINITIVE DUTY
( 16 ) In view of the characteristics of the world market for the product in
       question and the competitive situation on that market / the Commission
       opted , when imposing the provisional anti-dumping duty, for a specific
       duty . The Council considers it appropriate to retain that specific duty
       as the definitive duty .
       In view of the impact of dumping by the Soviet exporter on the level of
       prices on the Community market , the injury to the Community producer may
       be eliminated by imposing a duty of 70 ECU per flask of a net capacity of
       34.5 kilograms ( standard weight ) or 2.03 ECU per kilogram of mercury , no
       new evidence having come to light which requires a change in the
       calculation .
G. ENTRY INTO FORCE OF DUTY
( 17 ) In its complaint the Community industry asked for the anti-dumping duty
       to be imposed with retroactive effect .
       Irrespective of whether the importers were or should have been aware that
       the Soviet exporter was dumping , the Council , while confirming the
       Commission 's finding that this was indeed a case of sporadic dumping ,
       does not consider it necessary to impose an anti-dumping duty with
       retroactive effect on these imports , particularly given the fact that
       imports from the USSR during the ninety days preceding the imposition of
       the provisional duty were negligeable .
H. DEFINITIVE COLLECTION OF PROVISIONAL DUTY
( 18 ) However , having regard to the serious nature of the dumping and the
       injury caused, the Council considers that the amounts secured by way of
       the provisional anti-dumping duty imposed on imports of mercury
       originating in the USSR should be definitively collected in their
       entirety .
 ---pagebreak---                                         - 8 -
HAS ADOPTED THIS REGULATION :
                                      Article 1
1 . A definitive anti-dumping duty is hereby imposed on imports of mercury
    falling within      subheading    28.05 D of     the   Common Customs Tariff ,
    corresponding to NIMEXE codes 28.05-71 and 28.05-79, originating in the
    USSR .
2 . The duty shall be 70 ECU per flask of mercury of a net capacity of 34.5
    kilograms ( standard weight ), or 2.03 ECU per kilogram net of mercury .
3 . The provisions in force with regard to customs duties shall apply .
                                      Article 2
The amounts secured by way of the provisional anti-dumping duty imposed by
Regulation ( EEC ) No 2450/ 87 on imports of mercury originating in the USSR
shall be collected definitively .
                                      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 ,                                          For the Council
                                                                                   40