CELEX: 51997PC0160
Language: en
Date: 1997-04-21
Title: Proposal for a COUNCIL REGULATION (EC) imposing a definitive anti-dumping duty on imports of unbleached (grey) cotton fabrics originating in the People's Republic of China, Egypt, India Indonesia, Pakistan and Turkey

COMMISSION OF THE EUROPEAN COMMUNITIES
                                              Brussels, 21.04.1997
                                              COM(97) 160 final
                               Proposal for a
                     COUNCIL REGULATION ŒO
imposing a definitive anti-dumping duty on imports of unbleached (grey) cotton
   fabrics originating in the People's Republic of China, Egypt, India, Indonesia,
                                 Pakistan and Turkey
                      (presented by the Commission)
 ---pagebreak---  ---pagebreak---                               Explanatory Memorandum
(1)   The Commission, by Regulation (EC) No 2208/96 (1), imposed provisional anti-
      dumping duties on imports of unbleached (grey) cotton fabrics originating from the
      People's Republic of China, Egypt, India, Indonesia, Pakistan and Turkey on 20
      November 1996.
(2)   After the imposition of provisional duties, interested parties were given the
      opportunity to submit their comments and, if requested, to be heard.
(3)   Following a number of requests by exporters and importers, the scope of the
      investigation was adjusted to exclude medical gauze, given its particular physical
      characteristics and its very specific final use.
(4)   Some claims submitted by exporters relating to the determination of dumping
      margins were accepted and the dumping calculations were amended accordingly,
      where appropriate. The effect of this was an overall reduction of dumping margins.
      The definitive average margins vary between 13 and 15%. The largest reduction in
      dumping margin was for Pakistan, where the average dropped from 27.9% to
       14.3%.
(5)   Following exporters' submissions, the method of calculating undercutting and
      underselling was changed to take account of the different product types existing.
      However, the new method confirmed the existence of substantial price
      undercutting.
 (1) Official Journal No L 295 of 20 November 1996, p. 3.
 ---pagebreak--- (6) Given the sensitivity and the strategic location of the product in the production
    chain, and comments received from interested parties, the Community interest
    aspects of the proceeding were extensively investigated. The analysis confirmed
    that measures would have beneficial effects for the Community industry, in that
    they would allow it to increase production, reduce costs and re-establish
    profitability,   while they would not unduly affect the downstream industry.
    Therefore, the provisional conclusions that anti-dumping measures are not against
    the interest of the Community as a whole were confirmed.
(7) In accordance with Article 9 of Council Regulation (EC) No 384/96, the
    Commission therefore proposes that the Council impose definitive anti-dumping
    duties on imports of unbleached (grey) cotton fabrics originating from the People's
    Republic of China, Egypt, India, Indonesia, Pakistan and Turkey. In view of the
    extent of the injury, it is also recommended that the provisional anti-dumping
    duties should be definitively collected to the extent of the amount of the definitive
    duties imposed.
 ---pagebreak---                         COUNCIL REGULATION (EC) NO                    /97
                                                     of....
   imposing a definitive anti-dumping duty on imports of unbleached (grey) cotton
       fabrics originating in the People's Republic of China, Egypt, India, Indonesia,
                                             Pakistan and Turkey
       THE COUNCIL OF THE EUROPEAN UNION,
       Having regard to the Treaty establishing the European Community,
       Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on
      protection against dumped imports from countries not members of the European
       Community1, and in particular Article 9 thereof,
       Having regard to the proposal submitted by the Commission after consulting the
       Advisory Committee as provided for by the above Regulation,
       Whereas:
                                A. PROVISIONAL MEASURES
(1)    Commission Regulation (EC) No 2208/962 (hereinafter referred to as 'the
       provisional Regulation') imposed a provisional anti-dumping duty on imports into
 1
    OJ No L 56 of 6.3.1996, p. 1, referred to as the Basic Regulation
2
    OJ No L 295 of 20.11.1996, p. 3
 ---pagebreak---      the Community of unbleached (grey) cotton fabrics falling within CN codes 5208
     11 to 5208 19 and 5209 11 to 5209 19 originating in the People's Republic of
     China, Egypt, India, Indonesia, Pakistan and Turkey.
                            B. SUBSEQUENT PROCEDURE
(2)  The Commission continued to seek and verify all information deemed necessary for
     its definitive findings and carried out investigations at the premises of importers in
     the Community related to producers/exporters in the countries concerned:
     - Eurotex Trading Corp. GmbH, Hamburg, Germany
     - Mafatlal Limited, Romaga AG (UK and Switzerland), Lancashire, UK
(3)  As announced in recital (13) of the provisional Regulation, the Commission further
     investigated whether or not gauze should be excluded from the scope of this
     proceeding and carried out investigations at the premises of the following
     companies in the Community:
      - Torval, Torras Valenti S.A., Navarcles, Barcelona, Spain
      - Texpol, Textil Planas Oliveras S.A., Manresa, Barcelona, Spain.
(4)   Following the imposition of the provisional anti-dumping measures, certain
      interested parties submitted comments in writing.
 (5)  Those parties who so requested were granted an opportunity to be heard by the
      Commission.
 ---pagebreak--- (6) Upon request, parties were informed of the essential facts and considerations on the
    basis of which it was intended to recommend the imposition of definitive anti-
    dumping duties and the definitive collection of amounts secured by way of
    provisional duties. They were also granted a period within which to make
    representations subsequent to this disclosure.
(7) The oral and written comments submitted by the interested parties were considered
    and, where deemed appropriate, taken into account for the definitive findings.
       C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT
(8) It should be recalled that this proceeding covers all flat unbleached (grey) cotton
    fabrics containing at least 85% cotton. Grey cotton fabrics are produced in many
    different types or "constructions", which are defined by a combination of the count
    (weight) of the yarn used, and the number of threads used for both warp and weft
    and the way yarns are interlaced. Moreover, many producers can generally produce
    any construction of grey cotton fabrics on demand.
(9) On the basis of the information available at the provisional stage, the Commission
    considered that domestic and export types from the countries concerned were like
    products within the meaning of Article 1 (4) of the Basic Regulation, as shown in
    recital (12) of the provisional Regulation. It also considered that the types sold on
    the domestic market in India and the types exported by Chinese companies were
    like products, as well as the types exported from all countries concerned and the
    types produced by Community producers.
 ---pagebreak--- (10) Following the disclosure of provisional findings, several requests were presented
     for the exclusion of specific types of grey cotton fabrics from the scope of the
     proceeding. The types in question included fabrics of different constructions for
     various specific uses. These types included, inter alia, certain fabrics for use in
     embroidery, fabrics for use in polishing disks, and fabrics for the manufacture of
     bandages, dressings and medical gauze (referred to as "gauze").
(11) With regard to gauze, the Commission found that:
     - gauze fabrics have different physical characteristics, given their particularly light
        constructions which renders them generally unsuitable for any other purpose and
        therefore not interchangeable with the constructions used, for example, in the
        garment and household furnishing sectors;
     - gauze fabrics have a specific sanitary/pharmaceutical application, which is
         different from the other fabrics used in the textile industry, as the product can
         only be used to produce medical gauze, which is defined by the "European
         Pharmacopoeia" set by the Council of Europe (CN 3005 90 31), and has to
         comply with strict hygiene rules;
       - by virtue of their classification under an individual CN code 5208 1110, fabric
         for medical gauze is clearly identifiable as a specific product and can therefore
         be excluded without prejudicing the effectiveness of any measures imposed. The
         evasion of any measures by means of fraudulent product mis-descriptions would
         be difficult and easily detectable.
 ---pagebreak---      Fabrics for the manufacture of bandages, dressings and medical gauze, classified
     under CN heading 5208 11 10, are excluded from the scope of this proceeding. Any
     provisional anti-dumping duty levied on this product should consequently be
     released or reimbursed.
(12) With regard to all other types of fabrics for which requests for exclusion from the
     scope of this proceeding were received, it should be stressed that they clearly fall
     under the like product definition set out above. They are therefore included in the
     scope of the proceeding.
 ---pagebreak---     D. EXPORTERS AND PRODUCERS IN THE COUNTRIES OF ORIGIN
     1.        Individual examination in the context of sampling
(13) Several Turkish parties argued that it was contradictory to consider that, on the one
     hand, a sample containing only two companies would still be representative of
     Turkish production and exports of the product concerned, but on the other hand to
     refuse to grant individual examination to the companies which so requested.
     The argument raised mixes up the question of the representativeness of the sample
     in Turkey with the question of whether requests for individual examination can be
     accepted, which depends on the burden represented by the number of individual
     requests received from all the countries subject to investigation.
     It should be recalled that in recital (26) to (28) of the provisional Regulation, it was
     already concluded that, having regard to Article 17 (3) of the Basic Regulation, no
     individual    examination      could    be     granted    because    the  number      of
     producers/exporters was so large, in a case including several hundred exporters in
     six countries, that individual examination would have been unduly burdensome and
     would have prevented completion of the investigation in good time.
 ---pagebreak---                                      E. DUMPING
     1.      Normal value
     (a)     Market economy countries
             (i) Construction of normal value methodology
(14) Two Egyptian producers/exporters questioned the use of constructed normal value
     where the domestic prices of another producer/exporter in the sample could have
     been used to establish normal value for similar constructions.
     It should be noted that, although some products had the same construction, the
     different spinning methods, the efficiency of the looms and the different qualities of
     cotton used in Egypt caused such a large variation in the cost of the end-product
     that using the price of another producer/exporter as a basis for normal value would
     not have been appropriate.
(15) Two Indian producers/exporters claimed that normal value had been incorrectly
     determined because domestic sales of second quality products had been excluded
     from the calculation of normal value.
     Considering that exports to the Community were first quality products, normal
     value had to be calculated on the basis of the comparable product in accordance
     with Article 1 (2) of the Basic Regulation, i.e. first quality products sold on the
     domestic market of the exporting country.
 ---pagebreak--- (16) Several parties challenged the use of two different thresholds, namely 5% and 10%,
     to assess representativeness of respectively domestic sales and profitability. One
     party argued that if domestic sales were considered unrepresentative in terms of
     profit, they should equally be considered unrepresentative in terms of SG&A.
     The argument raised appears to confuse the different thresholds used by the
     Commission in order to establish (i), whether domestic prices should be used as a
     basis for normal value and, (ii), whether domestic sales are profitable. Reference is
     made to recitals (29) to (36) of the provisional Regulation where the methodology
     followed by the Commission, in conformity with Article 2 of the Basic Regulation
     and its consistent practice, is explained in detail. For the sake of clarification, it
     should be noted that the fact that some sales, or indeed all sales, appear to be loss-
     making does not render the SG&A unreliable when constructing an appropriate
     normal value. On the other hand, it is the Commission's practice to consider the
     entirety of domestic sales as not being in the ordinary course of trade if less than
     10% of the volume of such sales is profitable (see recital (33) of the provisional
     Regulation). This threshold is also used to determine whether the profit realised on
     the domestic market can provide an appropriate basis for the calculation of
     constructed normal value.
              (ii) Costs of manufacturing
(17) Two Egyptian producers/exporters disputed the Commission's decision to increase
     the reported costs of raw cotton purchases.
                                            10
 ---pagebreak---      In one case, this was done because the producer/exporter had failed to take into
     account the actual prices paid which reflected the exceptional increase in the
     market price of raw cotton in the course of the 1994/1995 season (which covered
     most of the investigation period). In the other case, an adjustment was made
     because the reporting of raw cotton costs was based on the financial year rather
     than on the investigation period. Provisional findings are therefore confirmed.
             (Hi) Selling, General and Administrative expenses (SG&A)
(18) Several parties challenged the inclusion of financing costs in the construction of
     normal value.
     In that respect, it should be noted that the Commission's consistent practice has
     been to include all costs incurred to produce and sell the product concerned on the
     domestic market, including financing costs, in the construction of normal value.
     Financing costs as reported were thus used in the construction of normal value.
(19) Two Indonesian producers/exporters with related distributors on the domestic
     market argued that the Commission had wrongly accounted for the costs of these
     distributors and requested that the SG&A be reduced to reflect the limited activities
     of these related companies.
                                             11
 ---pagebreak---      In this context, it should be noted that it is considered normal to treat sales
     companies and the producer/exporter with which they are associated as a single
     economic unit, in so far as the sales companies concerned in this case carry out
     functions on the domestic market which are essentially identical to those performed
     by a subsidiary or sales department. Given that the Commission considered that the
     above conditions were met in this ease with regard to these related distributors,
     their costs were calculated in accordance with Article 2 (5) of the Basic Regulation
     and taken into account in the construction of normal values for the two
     producers/exporters concerned.
             (iv) Domestic profit margin
(20) With regard to the profit margin used in the construction of normal value, some
     producers/exporters argued that domestic profitability should have been assessed
     only on the basis of those constructions sold both domestically and on the
     Community market.
     It should however be recalled that Article 2 (2) of the Basic Regulation provides
     that the "sales of the like product intended for domestic consumption shall
     normally be used to determine normal value". Therefore, all domestic sales of the
     like product intended for domestic consumption were used to establish the domestic
     profit margin, whether or not the particular construction was also exported to the
     Community.
                                            12
 ---pagebreak--- (21) The Pakistani producers/exporters argued that in calculating domestic profit for the
     only producer/exporter with domestic sales in the ordinary course of trade, the
     Commission erroneously excluded certain transactions, the effect of which was
     artificially to inflate the profit margin. In addition, they argued that this profit
     margin was not representative of the Pakistani market and should not have been
     used in the construction of normal value for the other three companies in the
     sample, since none of them made a profit on their domestic sales of the product
     concerned.
     Article 2 (3) of the Basic Regulation provides that the profit achieved on profitable
     domestic sales in the ordinary course of trade should be used in the construction of
     normal value for companies with no or insufficient domestic sales of the like
     product in the ordinary course of trade. In this respect, the methodology used for
     provisional determinations is confirmed.
     However, on reviewing its calculations, it became apparent to the Commission that
     certain transactions which had been excluded for provisional determinations should
     in fact be included in the turnover. A revised profit margin was thus calculated and
     applied in the construction of normal value for the producer/exporter concerned as
     well as the other three producers/exporters which had no or insufficient domestic
     sales.
                                             13
 ---pagebreak---      (b)     Non-market economy country: the People's Republic of China
(22) The representatives of the Chinese producers/exporters argued that the People's
     Republic of China was now a market economy country and therefore the use of an
     analogue country to determine normal value was inappropriate as Chinese domestic
     prices and/or production costs should be considered reliable.
     The Commission recognises that economic reforms are under way in China, and the
     fact that the economy of the People's Republic of China is in transition from a
     planned, fully State-controlled economy to a partially market-oriented economy.
     However, in accordance with Article 2 (7) of the Basic Regulation which applies to
     the People's Republic of China, the request could not be granted and the
     conclusions of recital (47) of the provisional Regulation are therefore confirmed.
     2.      Export price
(23) It was argued, in respect of the sole Chinese related importer based in the
     Community that the dumping calculations were incorrect as they included all
     Chinese products sold by the related importer on the Community market, and not
     only those products purchased from its related producer/exporter in the sample.
     In this respect, it should be noted that, as all three Chinese producers/exporters in
     the sample were directly or indirectly related via the Chinese State, all their exports
     of the product concerned were treated as if they had emanated from one exporter.
      Consequently, all three producers/exporters were considered to be related to the
      importer in question, and all their export prices were reconstructed accordingly.
                                              14
 ---pagebreak--- (24) It was also argued that, as the above related importer in the Community only acted
     as an agent, the profit margin of 5% used by the Commission for provisional
     determinations was too high.
     The functions performed by the related company were found to be those typically
     performed by an importer. For the purpose of definitive determinations, the
     average profit margin of 4.4% found for two unrelated importers in the Community
     was used.
(25) Two Indian producers/exporters which formed part of the same group and sold part
     of their production to the Community through three related trading companies
     claimed that the Commission erroneously constructed export prices using profit and
     SG&A margins disproportionate to the mere trading activities of the related
     importers.
     Having verified the information provided by the three" related companies, the
     Commission constructed export prices on the basis of re-calculated costs incurred
     between importation and resale. This re-calculation was required because the three
     related companies were unable to demonstrate that the allocation of costs submitted
     to the Commission was historically utilised or properly reflected the costs relating
     to the product concerned. The Commission consequently made a new allocation of
     costs on the basis of turnover and a reasonable estimate of costs incurred for
     processed and non-processed textile goods sold in the Community. The profit
     margin provisionally estimated at 5% was changed to 4.4% to reflect information
     received from independent importers in the Community (see recital (24)).
                                            15
 ---pagebreak--- (26) One Indian producer/exporter argued that the Commission should treat "master
      contracts" and not invoices as individual transactions, claiming that master
      contracts determined the export price, and that the prices agreed therein depended
      on the so called "ready quota" system existing in India.
      The verification revealed that 94 master contracts were applicable during the
      investigation period. Prices in the master contracts for identical grey cotton fabric
      types to the same customer varied to such an extent from master contract to master
      contract that they were completely unreliable. Moreover, a random check revealed
      that prices varied significantly between invoices and master contracts. It was
      therefore concluded that master contracts could not form a reliable basis to
      determine export prices, which were therefore established on the basis of the
      invoice prices paid or payable for the product when sold for export to the
      Community during the investigation period.
      3.      Comparison
(27) In accordance with recital (54) of the provisional Regulation, adjustments for the
      purpose of ensuring a fair comparison between normal value and export price were
      granted only when a claim was made within the time limits set for that purpose and
      when the party concerned could demonstrate the effect of any alleged difference on
      price and price comparability.
 (28) Several producers/exporters challenged the Commission's refusal to grant an
       adjustment for level of trade.
                                             16
 ---pagebreak---      Article 2 (10) (d) of the Basic Regulation requires that it be shown that the
     difference in level of trade has affected price comparability, which is demonstrated
     by consistent and distinct differences in functions and prices of the seller for the
     different levels of trade in the domestic market of the exporting country. In the
     absence of substantiated evidence to this effect, the claims were rejected.
(29) All Egyptian producers/exporters companies challenged the Commission's refusal
     to grant them an adjustment to normal value for credit costs.
     As mentioned in recital (57) of the provisional Regulation, no evidence was
     provided that the payment terms had been agreed at the time of sale, and no proof
     was provided that credit terms were a factor taken into account in the determination
     of the prices charged. Indeed, all three producers/exporters admitted that prices did
     not vary according to payment terms. Moreover, the claims were incorrect in
     respect of the number of days and interest rates, and consequently provisional
     findings are confirmed.
(30) Three Indonesian producers/exporters claimed that they should have been granted
     an allowance for sales of second quality products to the Community.
     For one of them, this claim was taken into account by the calculation of an adjusted
     normal value comparable to export prices of second quality products to the
     Community.
                                              17
 ---pagebreak---      For another producer/exporter, the investigation showed that export prices for
     products of printing quality showed no difference compared to prices of first
     quality products and an adjustment was consequently not required.
     A third producer/exporter requested either exclusion of its export sales of second
     quality products from the dumping calculation, or an adjustment for differences in
     physical characteristics. Considering that these second quality products fell within
     the definition of the like product, it was decided not to exclude the transactions
     concerned from the calculation of dumping, but to make an adjustment to normal
     value.
(31) Several producers/exporters claimed that other dates, such as the date of order, the
     date of contract or the date of payment, should be used in preference to date of
     invoice in the dumping calculation which allegedly better reflected the material
     terms of sale.
     It should be noted that Article 2 (10) (j) of the Basic Regulation provides that the
     date of sale should normally be the date of invoice, unless the date of contract,
     purchase order or order confirmation more appropriately reflects the material terms
     of sale. The producers/exporters concemed did not demonstrate that the alternative
     date they proposed more appropriately established the material terms of sale.
     Therefore, there was no reason to depart from the consistent practice of using the
     date of invoice as the date of sale, and provisional findings are hereby confirmed.
                                              18
 ---pagebreak---      4.      Dumping margins
     (a)     General methodology
(32) Several parties claimed that the methodology used by the Commission to determine
     the provisional dumping margins, i.e. comparing the weighted average normal
     value to the prices of all individual export transactions to the Community, deviated
     from regular practice and was inappropriate. They stated that the Commission did
     not demonstrate that there was a pattern of export prices which differed
     significantly among different purchasers, regions or time periods, or that the
     weighted average to weighted average method did not reflect the full degree of
     dumping being practised.
(33) According to Article 2 (11) of the Basic Regulation, the dumping margin should
     normally be established on the basis of a comparison of a weighted average normal
     value with a weighted average of prices of all export transactions to the
     Community. However, if there is a pattern of export prices which differ
     significantly among different purchasers, regions or time periods, and if the above-
     mentioned methodology does not reflect the full degree of dumping being
     practised, the dumping margin should be calculated on the basis of a comparison of
     a weighted average normal value to prices of all individual transactions to the
     Community.
                                             19
 ---pagebreak--- (34) Following the comments made by several producers/exporters, the Commission
     reviewed all dumping calculations for all producers/exporters investigated and
     came to the conclusion that establishment of the dumping margin on the basis of a
     comparison of the weighted average normal value to the weighted average export
     price reflected     the full    degree of dumping being practised          by all
     producers/exporters in the People's Republic of China, Egypt, Pakistan and Turkey,
     and some producers/exporters in India and Indonesia. Provisional findings were
     amended accordingly.
(35) With regard to all remaining producers/exporters in India and Indonesia, it was
     confirmed that there was a pattern of export prices to the Community which
     differed significantly among different purchasers, regions or time periods. It also
     established that the calculation of dumping margins on the basis of a comparison of
     the weighted average normal value to the weighted average export price did not
     reflect the full degree of dumping being practised. For those producers/exporters,
     provisional findings that dumping margins should be established on the basis of a
     comparison of a weighted average normal value to prices of all individual export
     transactions to the Community are confirmed.
     (b)     Dumping margin for cooperating producers/exporters not investigated
(36) The provisions of recital (67) of the provisional Regulation are hereby confirmed.
     The dumping margins for cooperating producers/exporters which were not
     investigated have been based on the average of the individual dumping margins
     calculated for the producers/exporters included in the sample, weighted on export
     turnover to the Communitv.
                                            20
 ---pagebreak---      (c)     Residual dumping margin
(37) In view of the overall high level of cooperation in this proceeding, it was
     considered appropriate to amend provisional findings with regard to the calculation
     of the residual dumping margin, and to use the highest dumping margin found for
     the producers/exporters in the sample for non-cooperating producers/exporters.
     (d)     Methodology for groups of companies
(38) All three Egyptian producers/exporters questioned - but did not oppose - the
     provisions of recital (72) of the provisional Regulation whereby they were all
     treated as one group and subject to the general rule on groups of companies.
     Due to the fact, however, that all three producers/exporters investigated had
     common ownership, the State, provisional findings were confirmed and the three
     Egyptian producers/exporters treated as one group, in order to avoid circumvention
     of the anti-dumping measures by Egyptian producers/exporters channelling their
     exports to the Community through the producer/exporter with the lowest anti-
     dumping duty.
(39) One Indian producer/exporter challenged the application of the general rule to
     calculate a single dumping margin for companies belonging to the same group. It
     stated that, although technically related (common shareholding), the companies in
     the group were separate economic and legal entities.
     To avoid circumvention of the anti-dumping measures by producers/exporters in
     the group channelling their exports to the Community through the
     producer/exporter with the lowest anti-dumping duty, the Commission applied the
     general rule regarding groups of companies to the Indian group.
                                             21
 ---pagebreak--- (40) One Indonesian producer/exporter requested that the assessment of dumping be
      made globally for the group, and not per producer/exporter as provided for in
      recital (69) of the provisional Regulation.
      Considering, however, that it has been the Community's consistent practice to
      calculate first a dumping margin for each producer/exporter in the group which
      was investigated, and subsequently to use the dumping margins found to calculate a
      single margin for the group as a whole, the request was rejected.
(41) The methodology set out in recital (69) of the provisional Regulation is hereby
      confirmed.
      (e)      Definitive dumping margins
                (i) The People's Republic of China
(42) The methodology set out in recital (70) of the provisional Regulation is hereby
      confirmed.
(43) The definitive dumping margin for the People's Republic of China, expressed as a
      percentage of the CIF import price at the Community border, is 18.9%.
             (ii) Egypt
 (44) The definitive dumping margin for Egypt, expressed as a percentage of the CIF
       import price at the Community border, is 13.0%.
                                               22
 ---pagebreak---            (Hi) India
(45) For the producers/exporters or groups of companies in the sample, the definitive
     dumping margins expressed as a percentage of the CIF import price at the
     Community border are:
     Century Textiles & Industries Limited                               17.2%
     Coats Viyella India Limited                                         12.3%
     Vardhman Spinning & General Mills Limited                           5.1%
     Mafatlal Industries                                                 12.6%
     Mafatlal Fine Spinning & Manufacturing Producer/exporter Ltd.       12.6%
(46) The definitive dumping margin for cooperating producers/exporters which were not
     investigated, expressed as a percentage of the CIF import price at the Community
     border, is 15.3%.
(47) The residual dumping margin for India, expressed as .a percentage of the CIF
     import price at the Community border, is 17.2%.
           (iv) Indonesia
(48) For the producers/exporters or groups of companies in the sample, the definitive
     dumping margins expressed as a percentage of the CIF import price at the
     Community border are:
                                           23
 ---pagebreak---       P.T. Apac Inti Corpora / P.T. Kanindo Prima Perkasa         3.5%
      P.T. Argo Pantes                                            14.5%
      P.T. Daya Manunggal                                         14.5%
      P.T. Grand Textile Industries                               14.5%
      P.T. Eratex Djaja                                           12.8%
(4e*) The definitive dumping margin for cooperating producers/exporters which were not
      investigated, expressed as a percentage of the CIF import price at the Community
      border, is 13.5%.
(50) The residual dumping margin for Indonesia, expressed as a percentage of the CIF
      import price at the Community border, is 14.5%.
            (v) Pakistan
(51) For the producers/exporters or groups of companies in the sample, the definitive
      dumping margins expressed as a percentage of the CIF import price at the
      Community border are:
      Diamond Fabrics Ltd                                         9.0%
      Amer Fabrics Ltd                                            9.0%
      Kohinoor Raiwind Mills Ltd                                  22.9%
      Kohinoor Weaving Mills Ltd                                  22.9%
      Lucky Textile Mills                                         15.5%
      Nishat Mills Ltd                                            9.2%
      Nishat Fabrics Ltd                                          9.2%
                                            24
 ---pagebreak--- (52) The definitive dumping margin for cooperating producers/exporters which were not
     investigated, expressed as a percentage of the CIF import price at the Community
     border, is 14.2%.
(53) The residual dumping margin for Pakistan, expressed as a percentage of the CIF
     import price at the Community border, is 22.9%.
       (vi) Turkey
(54) For the companies in the sample, the definitive dumping margins expressed as a
     percentage of the CIF import price at the Community border are:
     Birlik Mensucat Ticaret ve Sanayi Isletmesi A.S.                          13.6%
     Sôktas Pamuk ve Tarim Uriinlerini Degerlendirme Ticaret ve Sanayi A.S.    17.5%
(55) The definitive dumping margin for cooperating producers/exporters which were not
     investigated, expressed as a percentage of the CIF import price at the Community
     border, is 15.2%.
(56) The residual dumping margin for Turkey, expressed as a percentage of the CIF
     import price at the Community border, is 17.5%.
                                            25
 ---pagebreak---                            F. COMMUNITY INDUSTRY
(57) The Chinese exporters' questioned the Commission's methodology for determining
     the scope of the Community industry on the grounds that the representativeness of
     the complainant Community producers had been based on open-market sales of the
     like product only, whereas the production within the EU destined for captive use
     should also have been taken into consideration. Including production for captive
     use would include, for example, the production of the like product in integrated
     companies with operating weaving facilities which directly feed the requirements
     of in-house processing.
     The Commission examined this contention but cannot accept it. It is the practice of
     the Community institutions, confirmed by the European Court of Justice, to
     exclude captive production from the calculation of total Community production,
     where there is a clear separation between the 'captive' and 'free' markets. As the
     captive weaving to which the Chinese exporters' representative refers is not sold on
     the open market and does not compete directly with imports of the like product, the
     Commission concluded that the output of captive weaving in the EU should not be
     included in the calculation of Community production for the purpose of
     determining representativeness.
                                           26
 ---pagebreak--- (58) After the imposition of provisional measures, the Commission received indication
     that a complaining producer was no longer supporting the complaint. The producer
     was accordingly excluded from the definition of Community industry, therefore
     reducing the representativeness of the complainant to 56% of Community
     production. However, following the disclosure of definitive findings, the producer
     in question wrote to the Commission declaring to be still supporting the complaint.
     After examining the evidence available, and after direct contacts with the producer,
     the Commission decided to re-integrate that producer in the definition of
     Community industry.
     It was therefore confirmed that the complainant represents a major proportion of
     around 70% of Community production of the product concerned.
(59) Furthermore, as a result of the exclusion of medical gauze set out in recital (12) and
     of further investigation at the definitive stage, the relevant data relating to injury
     have been adjusted in order to take account of this exclusion.
                                       G. INJURY
     5.      Preliminary remark
(60) Following the changes to the like product definition set out above, some of the
     injury data from the provisional Regulation changed as outlined in the following
     recitals. All data which is not specifically recalled from the provisional Regulation
     is to be considered as having been confirmed by the Commission.
                                             27
 ---pagebreak---      6.     Community consumption
(61) Community apparent consumption rose from 265,984 tonnes in 1992. to 266,158
     tonnes in 1993, to 304,660 tonnes in 1994 but dropped 10% to 274,282 tonnes in
     1995, the investigation period. Over the period          1992-1995, Community
     consumption rose by 3%.
     7.     Volume and market share of the dumped imports
(62) The aggregate volume of dumped imports of the product concerned into the
     Community originating in the countries subject to investigation increased by 16%
     between 1992 and 1994 from 104,330 tonnes in 1992, to 110,741 tonnes in 1993, to
     121,501 tonnes in 1994. The volume decreased 14% in 1995 to 104,987 tonnes,
     broadly in line with the development of Community demand.
     The development of import volumes, assessed in relation to Community
     consumption, led to a substantial share of the Community market being maintained
     by the countries concerned of 39.2% in 1992, 41.6% in 1993, 39.9% in 1994, and
     38.3% in the investigation period.
                                            28
 ---pagebreak--- 8.     Prices of the dumped imports
(63) In recital (102) of the provisional Regulation price undercutting was calculated by
     comparing weighted average EC producers' selling prices with weighted average
     export prices of all transactions by each producer-exporter concerned. This method
     was disputed by the exporters concerned as being imprecise. In order to achieve
     greater accuracy, the Commission used the following categories in its assessment
     of the extent of undercutting: Extra coarse (Counts 0-10 Ne), Coarse (Counts 11-20
     Ne), Medium (Counts 21-30 Ne), Higher Medium (Counts 31-40 Ne), Fine (Counts
     41-60 Ne) and Superfine (Counts 61 Ne and above).
     The results of the comparison showed margins of price undercutting for all the
     exporting producers investigated, with the exporters in each country having
     weighted average margins accross all categories ranging up to:
     -China           34%
     -Egypt           37%
     -India           42%
     - Indonesia      49%
     -Pakistan        30%
     -Turkey          21%.
                                            29
 ---pagebreak---       9.      Situation of the Community industry
      (a)     Data relating to the Community industry as a whole
              (i) Sales and market share of the total Community industry
(64)    Total sales by the Community producers fell by around 10% over the period, from
        90,348 tonnes in 1992, to 80,692 in 1993, to 81,913 in 1994, and to 81,873 in the
        investigation period. Matching this decline, the corresponding market share went
        from 34% in 1992, to 30.3% in 1993, 26.9% in 1994, and 29.9% in the
        investigation period, a decline of 12% in relative terms over the period.
              (ii) Plant closures and reduction of employment
 (65) Recital (106) of the provisional Regulation referred to plant closures and job losses
      among manufacturers of the product concerned. Representations were made,
      however, which pointed out that the job losses mentioned include those suffered by
      integrated producers which, as explained in recital (57) above, are not included in
      the injury investigation. No accurate information is available however which would
      enable the Commission to estimate the proportion of this figure which could be
      ascribed to the Community industry as defined in recital (89) of the provisional
      Regulation.
                                              30
 ---pagebreak---      (b)      Data relating to the sampled Community producers
(66) It will be recalled from recital (89) of the provisional Regulation that sampling was
     applied for the purpose of the investigation of injury.
              ft) Change in product mix
(67) As mentioned in recital (112) of the provisional Regulation, the Commission
     examined the information on five reference constructions which had been used in
     order to avoid distortions to the price comparisons being caused by changes in the
     product mix. The advantage of continuing to use these five reference constructions
     together with the six product categories described in recital (63) above, is that data
     for the former is available for the period 1992-1995. Three of these five reference
     constructions fit into the fabric categories 'Coarse', 'Medium' and 'Higher
     Medium', and can be considered as basic constructions, with low value added but
     produced in high volumes. These three categories alone account for 80% of the
     imports from the countries concerned. The development over time of the quantities
     sold of these three reference constructions shows substantial decline, significantly
     greater than the fall in the total sales of the sampled producers. Sales of these three
     reference constructions, representing about 21% of sales in 1992, dropped 43%
     between 1992 and 1995.
                                               31
 ---pagebreak---       The sampled Community producers had claimed that they had been forced to
      reduce the production of basic constructions and to move into the production of
      niche products as a result of the significant price undercutting of the dumped
      imports from the exporting producers. The smaller production runs of niche
      products imply lower volumes, longer machinery stand-still times between batches
      and consequently higher unit costs.
      10.      Conclusions on injury
 (68) The above conclusions and those in recital (116) of the provisional Regulation are
      confirmed.
                                    H. CAUSATION
11.      Effect of the dumped imports from the countries concerned
(69) The exporters alleged that for injury to exist, significant changes must be seen in
      both the volume of imports and their market share, and there should also be a
      decline in export prices of the product concerned. Since the product concerned is
      subject to quotas and voluntary export restraints, some of the above elements did
      not change significantly. It was therefore submitted that there could have been no
       injury.
                                             32
 ---pagebreak--- In this respect, it should be borne in mind that, according to Article 3 (2) and 3 (3)
of the Basic Anti-Dumping Regulation none of the factors concerning import
volumes, market shares and prices listed in this provision can necessarily give
decisive guidance in an injury analysis.
As far as the volumes and market share of imports in the present case are
concerned, they actually did not significantly increase. This situation has to be seen
in the light of the existence of a quota system limiting imports, which, as has been
found, has been consistently utilised at high rates (the weighted average utilisation
rate for the countries concerned was 95% in 1995) during the period under
consideration. Statistics show that some exporting countries have even borrowed
quantities from other textile categories for their exports of the product concerned.
However, given the absolute level of the imports concerned and the level of import
prices, in the present case and in accordance with Article 3 (2) and 3 (3) of the
Basic Anti-Dumping Regulation, injury has consisted in insufficient profitability
being the result of price depression and price suppression (see recital (116) of the
provisional Regulation and recital (67) above). These price levels are explained by
the characteristics of the quota system in place, which gives companies within the
exporting countries the incentive to compete for the allocation of quotas, and
 consequently for export customers.
                                        33
 ---pagebreak---      Furthermore, it is considered that injury can be caused even where export prices are
     rising, since these prices must be seen in relation to the Community producers'
     prices. In the presence of significant price undercutting, as in this case, and given
     that the exporters concerned have around 40% of the Community market, it is clear
     that whether the prices of the dumped exports are rising or not, they will still be
     exerting price suppression or price depression or both, and injury can be suffered as
     a result.
(70) The Commission's examination of the basic constmctions, as described in
     recital (66) above, provides further evidence on the effects of the dumped imports.
     The data clearly show that the sales of the constructions which are closest in type to
     those widely imported fell much more sharply than total sales, thus demonstrating
     the direct effect of the substantial price undercutting established for these product
     types.
     12.      Effects of other factors
(71) Various exporters and downstream users of the product concerned have contested
     the findings relating to causation in the provisional Regulation, citing other factors
     as being behind the injury suffered by the Community industry.
                                              34
 ---pagebreak---              ft) Fall in apparent consumption
(72) Some exporting countries submitted that it was the decline in consumption of the
     like product between 1994 and 1995 which was the single most important cause of
     material injury to the Community industry.
     The Commission has examined this argument. Consumption of the product
     concerned fell by 10% between 1994 and 1995; imports also declined.
     Nevertheless, over the period 1992-1995, the dumped imports from the countries
     subject to this proceeding remained relatively stable with a high (around 40%)
     market share in 1995, and were sold at prices that undercut Community producers'
     prices to a significant extent. While it is clear, therefore, that the Community
     industry was not immune to the effects of the fall in demand for the like product,
     the dumped imports caused material injury to Community producers.
             (ii) Imports from other third countries
(73) Certain interested parties made reference to the effect of imports from third
     countries as a cause of material injury, but no information was provided that would
     cause an alteration to the findings at recitals (120) to (123) of the provisional
     Regulation. These findings are therefore confirmed.
                                             35
 ---pagebreak---              (Hi) Increase in raw cotton prices
(74) The Commission's findings at recital (124) of the provisional Regulation were
     questioned by certain exporters on the grounds that the rise in the price of raw
     cotton did not affect all of the Community industry in the same way, with some
     producers allegedly less affected than others. Furthermore, it was claimed that the
     raw cotton price rise appeared to have been partially absorbed by the spinning
     sector, which supplies the Community industry with cotton yam. (For a description
     of the spinning sector, see recital (80)).
     The Commission has examined these arguments. Although the impact of the rise in
     the price of raw cotton on the Community industry may have been felt differently
     by individual producers across the Community, it was considered to have been
     significant overall. This conclusion is supported by the finding that certain of the
     sampled Community producers experienced increases in the cost of yam of around
     50% between 1992 and 1995.
     As to partial absorption of the increased raw cotton prices by the spinning sector,
     no evidence was presented to the Commission in this context.
13.    Conclusion on causation
(75) The findings presented in recital (125) of the provisional Regulation are confirmed.
                                              36
 ---pagebreak---                               I. COMMUNITY INTEREST
      14.    The Community interest investigation
(76) Based on the information available, and taking account of the possible price and
     quantity changes of the dumped imports following imposition of definitive
     measures, the Commission examined the impact of anti-dumping measures on the
     various sectors of the Community cotton textiles industry.
     To this end, and in order to obtain the clearest possible overview, the Commission
     services sent a questionnaire to all the parties (users, suppliers, importers) who had
     made themselves known in the course of the proceeding, to various trade
     associations, which forwarded it to their members, as well as to other parties who
     requested it.
(77) It should be noted that, where appropriate, statistics relating to cotton textiles with a
     cotton content of at least 50% were used in the absence of more accurate statistics
     relating to the product concerned, which has a cotton content greater than 85%.
     Fabrics with a cotton content exceeding 50% are hereinafter referred to as 'majority
     cotton fabrics'.
     The economic operators concerned in this analysis
(78) The various parts of the Community cotton textiles production chain are listed in
     the four main categories below.
(79) A significant proportion of the industry is vertically integrated to include at least
     two of the activities in the following four categories.
                                             37
 ---pagebreak---             ft) Suppliers
(80) Spinners: the primary raw material, raw cotton, is imported from the producing
     countries and is spun into yam. Spinning is a highly automated process, and EU
     yam producers have reached a high level of efficiency, largely due to the
     widespread use of open-end spinning technology.
            (ii) The Community Industry
(81) Weavers: grey (i.e. unbleached) yam is woven into fabric. This grey cloth has then
     to undergo an additional, separate finishing stage where it is bleached and printed
     or dyed.
             (Hi) Users
(82) Finishers: the bleaching, printing and dyeing of unbleached cotton fabrics is carried
     out by finishers. The grey cloth is first washed and bleached to prepare it for the
     absorption of dye or printing inks, then it is printed or dyed. These activities are
     generally, but not always, performed by the same company.
(83) Makers-up: the finished cloth is cut and sewn to make garments, household goods,
     or industrial goods by makers-up. This is the most labour intensive stage, especially
     in the clothing industry where the production processes are not normally
     automated.
                                            38
 ---pagebreak---              ftv)Importers/Con verters
(84) Importers/converters: the operators who supply the Community's makers-up with
     cloth are the converters who purchase grey cloth, often imported, and who recruit
     the services of finishers to have the fabric processed to the maker-up stipulations.
     15.     The Community industry
     (a)     Nature and structure of the Community industry
(85) Total production of the product concerned in the Community was around 94,000
     tonnes in 1995. It will be recalled from recital (58) that the Community industry
     accounts for around 70% of this figure.
(86) The Community industry is composed mainly of small and medium-sized
     enterprises. Production is capital intensive and highly automated. It should be noted
     that grey cotton fabric is an intermediate product, with a high degree of
     standardisation and price sensitivity in the basic, most common constmctions, but
     subject to fashion changes, particularly in niche areas of the market.
(87) The cotton weaving industry as a whole, including the Community industry and
     integrated producers (as discussed below), employs 115,000 people. It is not
     possible to exactly allocate employees to the product concerned, as it is produced
     by the same companies and on the same machines which produce the majority
     cotton fabrics.
                                             39
 ---pagebreak---      (b)     Viability of the Community industry
(88) It will be recalled from recital (108) of the provisional Regulation that, during the
     period considered for the analysis of injury, the domestic industry rationalized its
     production process, with a high level of machinery replacement.
(89) Though the Community industry is mainly oriented towards the Community
     market (less than 15% of total sales of the product concerned are exported), their
     export performance improved 12% between 1992-1995, from 10,904 to 12,247
     tonnes. The Commission considers this as an important indication that the
     Community weaving industry is viable and internationally competitive.
     (c)     Expected effects of the imposition of anti-dumping measures on the
            Community industry
(90) The Commission based its analysis of the impact of the anti-dumping measures on
     Community industry on the data provided by the sampled Community producers.
(91) To assess the effects of the anti-dumping measures on the Community industry, it
     is necessary to examine first of all the possible reactions of the exporting producers
     in the countries concerned. This has been done on the assumption of constant
     demand conditions.
(92) Following the imposition of duties, the prices of the imported like product can be
     expected to rise. This price rise would be reflected in a fall in the volumes
      imported, thus leading to a reduction in market supply, allowing the Community
      industry to increase output, particularly of those basic constmctions most subject to
                                               40
 ---pagebreak---      pressure from the dumped imports, as explained in recital (67) and (70) above. The
     Community industry's prices could be expected to increase to some extent, but
     certainly not by anything like the level of the duty. The increases in volume,
     however, would serve to reduce unit costs of production and enable the Community
     industry to restore its financial situation.
     (d)     Comments received
             ft) Comments received from the Community industry
(93) The Community industry has stressed the importance for the Community cotton
     textiles industry of a viable Community cotton-weaving industry. This would
     maintain competition, employment levels, and prevent dependence on imports. The
     industry has also argued that its continued existence would be of benefit to the
     upstream spinning industry by assuring an important source of demand for yam. It
     is also argued that there would be benefits for the downstream sectors arising from
     diversity of supply.
(94) Many claims were also submitted from users and importers relating to the effect of
     the measures on the Community industry. In summary, it was alleged that the
     measures would have no substantial positive outcome on their situation.
                                               41
 ---pagebreak---               (ii) Competition from other imports
(95) It was contended that if the anti-dumping measures bring about a shift in the
     demand away from the import of the dumped products, there would be an increase
     in the demand for imports of grey cotton fabrics from other third countries.
(96) Regarding imports of grey cotton fabrics from other third countries, it was found
     that it cannot be excluded that, within the limits of the existing trade arrangements
     they may increase following the imposition of measures; about 30% of the market
     is supplied by imports which will not be subject to the anti-dumping measures.
     Exporters in these countries would presumably try to increase their market share at
     the expense of their competitors from the countries concerned by this proceeding.
     Some users pointed out that other third countries are at the moment not able to
     supply fabrics of the same quality as those produced by Community industry and
     by the exporting producers in the countries concerned. Although no evidence was
     supplied on this point, it would appear that imports from other third countries will
     not, therefore, prevent the Community industry from taking advantage of the anti-
     dumping measures.
              (Hi) Community industry's production capacity and supply shortage
(97) It was alleged that the anti-dumping measures would have the effect of creating
     supply shortages since the Community industry does not have the capacity to
     satisfy Community demand for the product concerned.
                                            42
 ---pagebreak--- (98) The Commission established that the Community industry was indeed operating at
     a high rate of capacity utilisation during the period under consideration. It should
     be noted, however, that, over this period, the Community industry also reduced its
     maximum capacity in terms of machine hours per year. This was due, among other
     factors, to a reduction in working hours, which means that the Community weavers
     would be able to increase capacity by increasing the number of hours worked in the
     case of an increase in demand.                                                *•
     It should also be mentioned that, since production of grey cotton fabrics uses the
     same equipment and labour as other kinds of fabrics, the Community producers
     could switch productive capacity towards the product concerned after any demand
     increase subsequent to the imposition of measures.
       (iv) Import substitution towards bleached, dyed and printed fabrics
(99) It was claimed by some users that the anti-dumping measures will have no effect,
     as importers will simply switch to importing bleached and finished fabrics.
     However, no evidence was provided to support this allegation. Indeed it is worth
     recalling that bleached fabrics are also subject to international trade arrangements.
     As to bleached fabrics, the only data available to the Commission relating to the
     imports of bleached fabrics are Eurostat figures, which indicate that in 1995 the
     imports of bleached fabrics amounted to a negligible quantity (10,610 tonnes)
                                             43
 ---pagebreak---       relative to the total size of the Community grey cotton fabric market, which was
      around 464,000 tonnes. Moreover, Eurostat figures also show an average value in
      1995 of 6.72 ECUs per tonne, which was almost twice the Eurostat average import
      value relating to unbleached fabric. In any event, indications are that finishers
      prefer to control the bleaching process themselves for quality control reasons.
      As to the switch towards finished fabrics, this is examined further below in recital
      (130)etseq.
      (e)     Effect of non-imposition of the measures
(100) As stated in recital (127) of the provisional Regulation, should definitive measures
      not be imposed, the negative trend of the Community industry would continue,
      with the possibility of its disappearance. The 6,200 people employed by the
      Community industry would be those most directly affected. In this context, the loss
      in employment among the sampled complainants mentioned in recital (115) of the
      provisional Regulation is noted.
              ft) Conclusions
(101) The expected demand increase for the Community industry would enable it to
      choose a strategy for recovery from their current situation of financial losses.
(102) While the industry's prices would not rise to the extent of the duty, the Community
      industry could be expected to improve its sales volume and recover market share in
      basic constmctions. This volume increase will reduce unit costs and increase
      profitability.
                                              44
 ---pagebreak--- (103) In conclusion, the analysis of the Community industry shows that it is stmcturally
      viable and that measures would be effective in affording the industry the
      opportunity to recover from the injury suffered (see recital (130) of the provisional
      Regulation). Therefore, it is in the interests of the Community industry to introduce
      measures.
       16.    The supplier industry
      (a)     Situation of the Community spinning industry
(104) Community spinners employed around 72,000 people in 1994 (the figure refers to
      EU 12). The total yam production in the Community, including all fibres, amounts
      to 1,2 million tonnes. An estimated 25% of this was used for the production of the
      like product, implying that 18,000 people are employed spinning yam destined for
      production of the product concerned.
(105) Over the period 1992-1996 there was an 8% increase in cotton yam sales quantities
      for the companies examined. Production capacity increased by 8% and the rate of
      capacity utilisation, though slightly decreasing, was still about 81% in 1996.
      Insufficient information was provided to establish a trend in production costs,
      though there are indications of an increase in variable costs in 1995. This was most
      probably due to the growing raw cotton prices already examined in the injury
      analysis at recital (124) of the provisional Regulation and which was mentioned by
      some parties as a major factor of instability. Indeed, raw cotton represents about
      50% of spinners' total costs. This could also explain their poor profit performance
      (average return on sales -0.31% in 1995, -0.93% in 1996). Employment decreased
      bv about 9%.
                                              45
 ---pagebreak---       (b)    Effect of the imposition / non imposition of measures
(106) If total Community cotton weaving, i.e. including integrated producers, is
      considered, the percentage of yam used in the production of the like product
      represents over 25% of spinners' output. This means that, though spinners can find
      other outlets for their production (mixed fabrics, knitting, etc.), a major decline in
      Community production of the product concerned would substantially affect them.
(107) If anti-dumping measures are imposed, the improved situation of Community
      weavers will benefit spinners in that they will retain an important sales channel,
      with higher sales volumes and the possibility to negotiate more profitable prices.
      On the other hand, should measures not be imposed, spinners face the risk of a
      major fall in demand not only from the complainants, but also from the integrated
      weavers examined below.
      17.     Users, Importers and Makers-up
(108) The downstream sectors that will be examined below consist of integrated
      producers, converters/importers, finishers and makers-up. Although these parties
      may operate at different stages of the downstream production chain, given the
      degree of integration of this industry, it has been found appropriate to investigate
      them together.
                                             46
 ---pagebreak---       (a)     Integrated producers
              ft) Description
(109) Integrated producers in this context are those who weave and finish and/or make up
      finished goods. They use all or most of their fabric production for their own
      internal downstream consumption or for sales to related companies, and only
      occasionally sell to unrelated customers. Although integrated producers are not part
      of the complaining Community industry, since they do not compete directly with
      the dumped imports, they can be considered to have an interest in the present
      proceeding, since they may also suffer from the competition of finished fabrics or
      made-up goods manufactured using grey fabrics sourced at dumped prices.
(110) Total Community output of woven majority cotton fabrics was 464,000 tonnes in
      1995, of which, according to the industry's estimates, the output of the product
      concerned was 325,000 tonnes. The integrated producers represented an estimated
      72% of these figures.
              (ii) Effect of the imposition of measures
(111)Since integrated producers are indirectly affected by the dumped imports, they
      could be expected to benefit indirectly from anti-dumping measures. The
      competitiveness of their finished fabrics and made-up goods is expected to improve
      relative to the goods produced using the dumped imports. Furthermore, as the
      prices of the dumped imports increase, it becomes more attractive for them to
      employ own-produced grey fabrics, with positive consequences for their weaving
      employment.
                                               47
 ---pagebreak--- (112) However, some downstream-integrated weavers who concentrate on finishing
      and/or making-up, and source most of their grey fabric requirements from imports,
      oppose the imposition of measures. The impact of the measures on this part of the
      industry, however, varies according to each individual company's dependence on
      imports from the countries concerned, so no clear conclusion can be drawn as to the
      effect on this sector.
      Nevertheless, in view of the substantial part of the Community weaving used for
      internal consumption (72%), and of the considerable share that it has in the total
      Community finishing (48%, as described below), it can be concluded that the
      overall impact of anti-dumping measures on the integrated weavers would be
      positive.
              (Hi) Effect of the non-imposition of measures
(113) If measures are not imposed, integrated producers would continue to suffer a cost
      disadvantage vis à vis any EU competitors who use the dumped imports. As a
      consequence, their in-house weaving could cease to be viable and they might be
      obliged to close down their weaving activities.
      In this respect, it should be noted that total majority cotton weaving output, captive
      and non-captive, in the Community shrunk from around 515,600 tonnes in 1992 to
      464,000 in 1995, and in the same period 88 weaving plants closed in Austria,
      France, Germany, Italy, Spain and the United Kingdom, with the loss of 8,625 jobs.
      The overall declining trend of the sector, in the absence of measures, would
      therefore continue, with consequent further losses of employment.
                                               48
 ---pagebreak---       (b)      Converters and finishers
               ft) Introduction
(114) After the imposition of the provisional measures, many representations were
      received from users and importers, reiterating the claims in recital (128) of the
      provisional Regulation. The measures were alleged to severely affect the
      competitive position of Community finishers vis à vis third countries' exporters,
      with substantial losses in turnover and jobs, due to the substitution of fabrics
      imported in grey state and finished in the EU with fabrics imported in 'finished
      state. It was alleged that the consequence may even be the demise of Community
      finishing industry.
               (ii) Structure and size of the downstream industry
(115) The investigation relating to users was based on the information submitted from
      finishers, whether independent or integrated in groups, importers and converters, as
      well as on general information relating to the sector.
(116) The analysis of the impact of anti-dumping measures on the downstream industry
      has to take into account its particular structure. The grey fabric is not usually
      purchased directly by those who process it, but by a middleman (converter), who
      can source from EU weavers or from imports. The converter then passes the fabric
      to the finisher, who does not normally take ownership but works on commission.
                                               49
 ---pagebreak---  (117) The finishing industry is capital intensive and highly price competitive. However,
      in comparison with unbleached fabric, the finished fabric has more possibilities of
      differentiation and a higher value added, and requires higher levels of know-how.
      Though there are some simple patterns and colours which are fairly standardized,
      the product is fashion-sensitive and the designs tend to vary from year to year. This
      enhances the importance of such factors as delivery speed and the possibility for
      the customer to discuss and modify the final output. According to the submissions
      received, these elements are, together with price, major factors in choosing the
      finisher. They explain why the fabrics finished in the Community, unlike grey
      fabrics, can be expected to maintain an advantage compared to imported finished
      fabrics.
(118) The production of the finishing sector was estimated on the basis of the figure
      mentioned in recital (110) above at 464,000 tonnes of total output of majority
      cotton woven fabrics in the EU. Adding total imports of grey (221,000 tonnes) and
      bleached (10,000) fabrics and excluding exports (12,700 tonnes) of grey fabrics, the
      total of the majority cotton fabrics printed and dyed in the EU is 682,000 tonnes.
      The fabrics containing more than 85% of cotton accounts for 78% of this figure.
(119) Imports of finished fabrics were 37,700 tonnes in 1995, with a growing trend in the
       period examined (+17% for Eurl2 from 1992 to 1995) representing a market share
       of 5% of the total market for finished goods.
                                               50
 ---pagebreak--- (120) Total employment in the finishing sector was estimated at 150,000 people in 1995.
      The employment in the sector is declining, following the general trend of the textile
      industry (-9% between 1992 and 1994). Taking into account that the product
      concerned only represents a part of total Community finishing, and the size of
      integrated finishing, the number of jobs in independent finishing of the product
      concerned is estimated at around 23,000.
(121) No estimate is possible of the personnel employed by the importers and converters.
      However, given that these companies are traders and service providers with
      minimal capital investment, their employment levels appear to be relatively low.
               (Hi) Effect of the anti-dumping measures on prices of finished fabrics
(122) It is expected that the anti-dumping measures would increase the sales prices of
      finished fabrics, since the price of the raw material would have increased.
(123) It is stated in recital (92) that the Community industry's price increase would be
      unlikely to reflect the full amount of the duty. Some importers and users claimed
      that, after the imposition of measures, the prices of grey cotton fabrics not subject
      to the measures would also increase by an amount close to the duty rate. This,
      however, appears unfounded as the high degree of competitiveness of the grey
      fabric market makes it unlikely that producers not subject to the measures
      (representing 60% of the market in 1995) would have the freedom to increase their
      prices. Consequently, it is concluded that the average price increase of grey fabrics
      will be considerably lower than the average duty rate.
                                               51
 ---pagebreak--- (124) In order to estimate the impact of the measures on prices of the finished goods, the
      Commission calculated an average proportion of the grey fabric in the production
      cost and in the price of the finished fabric. The analysis of the questionnaire replies
      revealed a wide diversity of this ratio, depending on the weight and quality of grey
      fabric used and on the quality offinishing.An average proportion was calculated at
      45% for respondent companies for all finished fabrics. However, given the
      variation among companies (from 22 to 67%) and the diversity of the products
      involved, it was decided to base the Commission's conclusions on an average
      between 45% and a figure provided by the German finishers' association, which
      estimates the average proportion of the full cost attributable to grey fabric at 36%.
      A profit margin of 6% was added, estimated from the profit margins reported by
      the converters.
(125) The analysis of the submissions showed an average profit on sales in 1995 of
      around 15% for finishers on commission, and of around 6% for converters. Both
      profit margins are considered to be adequate given the nature of the sectors (a
      capital intensive industry in the case of finishers; a trading, service-providing
      industry for converters), and allowing, if necessary, a partial absorption of the cost
      increase after the imposition of definitive anti-dumping measures. Therefore, the
      claim that both converters and finishers operate at low profit margins and cannot
      absorb any duty-induced cost increase was not confirmed.
                                              52
 ---pagebreak--- (126) Different scenarios were envisaged, taking into account different options relating to
      the reactions of the market. A 'maximalist scenario' was considered which assumed
      a price increase by all suppliers by the full amount of the duty, which averages
       15.7%, and no absorption by the converters and finishers. The average price
      increase in this case is estimated at 7.1% with a ratio of 45% and 5.6% with a ratio
      of 36%/
(127) A 'minimalist scenario' was also estimated. It is based on the assumption of no
      price increase by the suppliers not affected by the anti-dumping duties, which
      brings the average price increase by suppliers down to 6.3%. Moreover, it assumes
      that both the converters and the finishers absorb a part of the duty with a decrease
      of their profit margin of 1 % each. The price increase so calculated on finished
      fabrics varies from 0.7% to 1.3%, according to the ratio used.
(128) The two calculations above are considered to be the extremes of a range of
      possibilities. The Commission estimates as most probable an average scenario,
      implying a moderate price increase from the suppliers of grey fabrics not affected
      by the anti-dumping duties and the 1% duty absorption described above.
      The average price increase for Community producers was estimated at 2%, on the
      basis of the minimum price increase required to offset the losses referred to in
      recital (114) of the provisional Regulation.
      For other third country exporters, the Commission, on the assumption that they are
      not market leaders, used an increase of 10.2%, a weighted average of the average
      anti-dumping duty, 15.7% and the estimated price increase of 2% for the
      Community producers.
                                              53
 ---pagebreak---       The subsequent price increase for the finished fabric is estimated as varying from
      2% to 3%, according to the cost ratio adopted.
               ftv) Impact on converters
(129) The converters are those who directly bear the cost increase, and have to decide
      whether to pass it on to their customers or to absorb it, partly or totally. It was
      alleged that the converters, given the low profit margins and price competition in
      the sector, will be squeezed-between the inability to absorb the cost increase and
      the impossibility of passing it on to their customers.
      As to the possibilities of absorption, the Commission's view is set out in
      recital (125). Further, the converters' past behaviour suggests a considerable ability
      to pass on cost increases to their customers. Between 1994 and 1995, in response to
      a generalised increase in input costs and a decrease in demand (the cost of raw
      cotton increased of around 15%, and the Community weavers increased their prices
      of 8.6%) converters were able to increase their prices by 6.66%. Given the value
      added at this stage, this increase was enough to offset the cost increase, and to keep
      the sector profitable despite the fall in demand.
      An alternative course of action for converters could also be to switch to products
      which are not affected by the measures, such as Community production, imports
      from other third countries, or mixed fabrics. They also have the option of importing
      finished fabrics directly, although the analysis below suggests that this is unlikely.
      It is concluded that, as far as converters are concerned, therefore, anti-dumping
      measures may require some adaptation on their part, but are not expected to affect
      them unduly.
                                                54
 ---pagebreak---               (v) Impact on finishers
(130) Finishers, who are not going to be directly affected financially by the measures as
      they do not purchase the product concemed, could suffer a decrease in activity if
      there is a substantial switch in demand towards imports of finished fabrics (so-
      called "substitution effects").
(131) The Commission evaluated, on the basis of the information submitted, the reaction
      of market demand to a price increase in the fabrics finished in the Community, in
      order to arrive at an estimate of any possible substitution effects.
      In the period 1992-96 the quantities finished by Community finishers increased, on
      an indexed basis, from 100 to 108 between 1992 and 1994 and then decreased to 99
      in 1995 and to 97 in 1996. The prices of the finished fabrics sold by converters in
      the same period increased from 100 in 1992 to 115 in 1995, then declined to 99 in
      1996.
      The figures show that no clear relationship exists between prices obtained and the
      level of activity of finishers. Indeed, while in 1995 the market reacted strongly to
      the increase in prices, in 1996 the price fall was not reflected in a quantity increase.
      Similarly, the moderate price increase in 1994 did not prevent a quantity rise of
      over 6%.
                                              55
 ---pagebreak--- (132) As far as imports of finished fabrics from third countries are concerned, no clear
      link between the Community production of the product concerned and these
      imports can be identified from the data analysed. Imports show a steadily growing
      trend at falling prices. On the other hand, the quantities imported represent 5% of
      quantities finished in the Community. These figures do not support the allegations
      of the likelihood of a substitution effect. Indeed, the Commission received no
      evidence showing the existence of a sizeable spare finishing capacity in any third
      country, nor are there any indications that this capital- and know how-intensive
      industry could be built up in the foreseeable future. Furthermore, imports of
      finished fabrics are also subject to quota and licence arrangements, which means
      that their growth is necessarily restricted for the time being.
      In the light of the above, and contrary to the claims of major substitution effect, it
      was concluded that an estimated increase in the price of finished fabrics of between
      2% and 3% is not expected to cause a substantial shift in demand from Community
      finishing to imports from third countries.
(133) It was also alleged that, for an industry as capital intensive as the finishing industry,
      even a moderate decrease in the quantities processed may raise unit costs to such an
      extent as to make continued production unprofitable. However, the finishers
      examined were able to maintain high profit margins even when the quantities
      processed decreased: in 1995 they had a 15% return on sales, despite a fall in the
       quantities processed of 9.7%.
                                                56
 ---pagebreak--- (134) The Commission concludes, therefore, that the imposition of anti-dumping
      measures is not likely to cause a substitution of Community finished fabrics with
      imports. The claims, submitted by users, of significant disruptive effects on the
      Community finishing industry were therefore found to be highly exaggerated.
              (vi) Consequences for employment
(135) In view of the above, no undue impact of the anti-dumping measures on the-activity
      and employment levels for converters and finishers can be expected. Nevertheless,
      the intensity of any effects will also depend on the strategy chosen by the
      converters: should they decide to significantly switch to trading finished fabrics,
      the impact on finishers would be stronger. But, as explained in recitals (132) to
      (134) above, the recourse to imports of finished fabrics does not appear to be a
      credible alternative for converters.
(136) It can be expected, however, that some parts of the industry which rely more
      heavily on the dumped imports will suffer a loss of activity, the extent of which is
      very difficult to predict. It will depend on the possibilities of these parts of the
      industry to absorb the duty and on their ability to turn to different sources of
      supply. On the other hand, it also appears that any losses suffered by these finishers
      could be offset by improvements gained by integrated finishers or by those who
      mainly use Community grey fabrics, which would both become more competitive
      after the introduction of definitive measures.
                                              57
 ---pagebreak---               (vii) Effects of non imposition of measures
(137) In the event that definitive measures were not to be imposed, some users could
      continue to benefit from imports at dumped prices, with an advantage on those who
      use Community production or are integrated in weaving. Should the Community
      weaving industry be severely harmed, however, the whole finishing market would
      suffer, as Community grey production still feeds more than two thirds of total
      Community finishing.
      (c)     Makers-up
              ft) Characteristics of the industry
(138) Making-up is the segment of the cotton industry employing the largest number of
      people. It was estimated, on the basis of the total size of the sector and of the
      amount of cotton input, that 390,000 jobs are involved in the making-up of cotton
      goods.
(139) Making-up is also the stage with, on average, the highest value-added, though this
      varies widely from product to product. For instance, the value added to the finished
      fabric can be very low for a basic bed linen set (only 25% of total cost, including
      cutting, hemming and packing), but much higher for a piece of clothing, such as a
      shirt, where it can amount to 70%. This creates a gap between low value-added,
      basic products, which are very price sensitive, and whose production is largely
      being relocated in low labour cost countries, and high value added, fashion
      products.
                                              58
 ---pagebreak---                (H) Impact of the anti-dumping measures
(140) It has been alleged by some users that the negative consequences of the imposition
      of measures would extend to makers-up, as they would face a cost increase with a
      consequent loss of competitiveness relative to imports of garments and of home
      textiles from third countries.
(141) On the basis of the information submitted, a variable average ratio of the cost of
      finished fabrics in the sales prices up to 50% was found. With the average increase
      of 2 to 3% for finished fabrics estimated in recital (128) above, their price would
      rise by less than 2% at worst, without even considering the possibility of any
      absorption.
(142) In the light of the above, and using the information available, the Commission
      services concluded that the anti-dumping measures will not negatively affect the
      economic position of Community makers-up.
      18.      Conclusion
(143) Information received from parties and information otherwise available allowed the
      Commission to evaluate the various interests involved, as stipulated in Article 21
      (1) of the basic Regulation, and the overall effect of the imposition or of the non-
      imposition of anti-dumping measures.
      In carrying out this examination, the Commission gave special consideration to the
      need to eliminate the trade distorting effects of injurious dumping and to restore
      effective competition.
                                               59
 ---pagebreak--- (144) As to the Community industry, the effects of the measures can be expected to
      afford it the opportunity to restore profitability and to remain active in the grey
      cotton sector, with consequent beneficial effects on employment and competitive
      conditions on the Community market.
(145) Despite the claim of the Community spinners to be strongly dependent on
      Community weavers, this was not fully supported by the results of the analysis.
      Nevertheless, it was shown that any improvement to the Community weavers
      would be expected to have a positive impact on spinners.
(146) It should be added that the positive impact of the measures would not be limited to
      the Community industry, but would extend to the whole of Community weaving
      and to the integrated downstream industry linked to it.
(147) The allegations of dismptive effects on the downstream industries have either not
      been substantiated, or were found to be exaggerated, especially as to the alleged
      substitution effects, though some negative consequences on a part of the finishing
      industry cannot be excluded.
(148) When the position of all sectors involved is considered, it cannot be clearly
      concluded, on the basis of all the information submitted, that the application of
      anti-dumping measures would be against the overall interest of the Community.
(149) In the light of the above, the conclusions drawn in recital (130) of the provisional
      Regulation, concerning the Community interest, are confirmed.
                                             60
 ---pagebreak---                                   J. DEFINITIVE DUTY
(150) On the basis of the conclusions on dumping, injury, causation and Community
      interest set out above, the Commission considered the form and the level of the
      anti-dumping measures to be taken.
(151) Given the wide variety of constmctions from the countries concerned, the
      Commission is of the opinion that an ad-valorem anti-dumping duty is the most
      appropriate form of measure.
(152) For the purpose of establishing the level of the definitive duty, account has been
      taken of the dumping margins found and of the amount of duty necessary to
      eliminate the injury sustained by the Community industry.
(153) It will be recalled from recital (133) of the provisional Regulation that since the
      injury consists principally of price suppression, loss of market share and, in
      particular, lack of profitability or losses, the removal of injury requires that the
      industry should be put in a position where prices can be increased to profitable
      levels. In order to achieve this, the prices of the imports concemed originating in
      the countries currently under investigation should be increased accordingly.
(154) For calculating the necessary price increase, the Commission considered that the
      actual prices of these imports should be compared with a selling price which would
      more accurately reflect the costs of production of Community producers plus a
      reasonable profit.
                                              61
 ---pagebreak--- (155) A number of exporters questioned the profit margin of 8% on tumover which was
      mentioned in recital (133) of the provisional Regulation on the grounds that it was
      too high in relation to levels experienced in recent years: the most favourable profit
      margin for the sampled Community producers recently was around 2%. The
      Commission cannot accept this, however, because 2% is inadequate to ensure the
      financial viability of a capital-intensive industry. In the course of the proceeding,
      profit levels of 5% and upwards were observed in sectors of the cotton textiles
      industry with very low capital requirements. In the light of this, the Commission
      considers 8% to be a reasonable margin for the cotton weaving sector.
(156) The average weighted selling prices charged during the investigation period of the
      Community industry for each of the six categories described in recital (63) above
      were increased in order to achieve the overall minimum amount of profit required.
      The resultant prices thus established were compared with the prices ofthe dumped
      imports used to calculate undercutting as outlined above.
(157) The differences between these two prices, expressed on a weighted average basis
      and as a percentage of the free-at-the-Community-frontier price, were:
      -    China        45%
      -    Egypt        49%
      -    India        34% to 73%
      -    Indonesia 41% to 81%
      -    Pakistan     46% to 54%
       -   Turkey        11% to 25%.
                                              62
 ---pagebreak--- (158) Where the margins of dumping found, in respect of a particular exporting producer,
      were below the corresponding increases in export prices necessary to remove the
      injury, as calculated above, the definitive duties imposed are to be limited to the
      dumping margin established. This was the case for all but one of the companies
      concerned.
      The anti-dumping duty proposed for companies which cooperated, but which were
      not investigated, is the average dumping margin for the sample or the average
      margin necessary to remove injury, whichever is lowest.
      The anti-dumping duty for non-cooperating companies is equivalent to either the
      highest dumping margin or the highest margin necessary to remove injury
      calculated for the producers/exporters in the sample, whichever is the lowest. The
      highest dumping margin was used for all countries.
                                  K. FINAL PROVISIONS
(159) Several Turkish parties protested that Turkey has been treated as any third country
      despite the fact that it has a Customs Union with the Community.
      Article 44 (2) of Decision 1/95 of the EC/Turkey Association Council states that
      the modalities of implementation of anti-dumping measures set out in Article 47 of
      the Additional Protocol to the Association Agreement still apply. The procedure of
      Article 47 of the Additional Protocol to the Association Agreement was indeed
      applied, and the Association Council as well as the Customs Union's Joint
      Committee kept regularly informed.
                                              63
 ---pagebreak--- (160) On 18 January 1996, the EC/Turkey Association Council was formally informed
      that the Commission had received a complaint alleging that imports of unbleached
      cotton fabrics from, inter alia, Turkey were being dumped and thereby causing
      injury to the corresponding Community industry.
      On 23 Febmary 1996, the EC/Turkey Association Council was further informed of
      the( initiation of the proceeding and given a copy of the non-confidential version of
      the complaint. It was also informed of the decision to apply sampling techniques.
      As provided for in Article 47 (1) of the Additional Protocol to the Association
      Agreement, an application was formally made to the Association Council on 8
      August 1996 after the investigation had shown that the Turkish producers/exporters
      were practising dumping. Should they wish to do so, the latter were also invited to
      give undertakings in accordance with Article 8 of the Basic Regulation.
      On 20 November 1996, after the tree month period provided for in Article 47 (2)
      (a) of the above Agreement had elapsed, the Commission notified the Council of
      Association of its decision to impose provisional anti-dumping measures.
      Moreover, on 19 November 1996, the Customs Union Joint Committee had also
       been informed of the Commission's intention to impose provisional anti-dumping
       measures.
       On 21 November 1996, a copy of the provisional Regulation was forwarded to the
       Association Council.
                                               64
 ---pagebreak--- (161) Finally, the Association Council was notified and provided with full disclosure of
       the definitive facts and findings, as provided for in Article 47 (2) of the Additional
       Protocol to the EC/Turkey Association Agreement. The Customs Union Joint
       Committee was informed of the intention to impose definitive anti-dumping
       measures.
(162) One Turkish party sought the annulment by the Court of First Instance of the
       initiation of the present proceeding3. In its Order of 16 December 1996, the Court
       of First Instance, dismissing the application, confirmed that the initiation of the
       proceeding against Turkey in the above circumstances was not incompatible with
       the provisions of the Association Agreement.
(163) In their      comments      on the disclosure     of provisional     findings,  several
       producers/exporters indicated that they might wish to propose undertakings before
       definitive anti-dumping measures were imposed. In the absence of any undertaking
       being offered, all producers/exporters are subject to the anti-dumping measures
       provided in this Regulation.
 3
   Case T-75/96, Sôktas v. Commission
                                               65
 ---pagebreak---                 L. COLLECTION OF THE PROVISIONAL DUTIES
(164) In view of the magnitude of the dumping margins found for the exporting
      producers and countries, and in the light of the seriousness of the injury caused to
      the Community industry, it is considered necessary that the amounts secured by
      way of provisional anti-dumping duties for transactions involving the product
      concerned should be definitively collected at the level of the definitive duties,
HAS ADOPTED THIS REGULATION:
                                          Article 1
1.    Definitive anti-dumping duties are hereby imposed on imports of flat unbleached
      (grey) cotton fabrics, falling within CN codes 5208 11 90, 5208 12 to 5208 19 and
      5209 11 to 5209 19 and originating in the People's Republic of China, Egypt, India,
      Indonesia, Pakistan and Turkey.
2.    Save for the exporters listed in Tables 3 and 4 and in the Annex to this Regulation,
      the rate of the definitive anti-dumping duty applicable to the net, free-at-
      Community-frontier price, before duty, shall be as follows:
                                              66
 ---pagebreak---  TABLE 1:
               Country                  Rate of duty          Taric additional
                                                                    code
 The People's Republic of China            18.9%                   89ÔÔ
 Egypt                                     13.0%                   89ÔÔ
 India                                     17.2%                   8900
 Indonesia                                 14.5%                   8900
 Pakistan                                  22.9%                   89ÔÔ         '
 Turkey                                    17.5%                   89ÔÔ"
       The exporters listed in the Annex to this Regulation shall be subject to the
       following rates of anti-dumping duty:
 TABLE 2:
               Country                  Rate of duty          Taric additional
                                                                   code
Tndïâ"       '                             TTS%                    8909
 Indonesia                                 13.5%                   89ÏÔ
 Pakistan                                  14.2%                    89ÏÏ
 Turkey                                    152%                     89Ï2
       The companies listed below shall be subject to the following rates of anti-dumping
       duty:
                                             67
 ---pagebreak--- TABLE 3:
  Country               Manufacturer            Rate of duty Taric additional
                                                                   code
India     Coats Viyella India Ltd                  12.3%          8914
          Vardhman Spinning & General Mills Ltd    5.1%           8915
          Mafatlal Industries                      12.6%          8916
          Mafatlal Fine Spg. & Mfg.                12.6%          8917
TABLE 4:
  Country               Manufacturer            Rate of duty Taric additional
                                                                   code
Indonesia P.T. Apac Inti Corpora / P.T. Kanindo    3.5%
          Prima Perkasa                                           8918
          P.T. Eratex Djaja                        12.8%          8922
TABLE 5:
  Country               Manufacturer            Rate of duty Taric additional
                                                                   code
Pakistan  Diamond Fabrics Ltd                      9.0%            8923
          Amer Fabrics Ltd                         9.0%            8924
          Lucky Textile Mills                      15.5%           8927
          Nishat Mills Ltd                          9.2%           8928
          Nishat Fabrics Ltd                        9.2%           8929
                                     68
 ---pagebreak--- TABLE 6:
   Country                    Manufacturer                   Rate of duty     Taric additional
                                                                                    code
Turkey         Birlik   Mensucat   Ticaret   ve   Sanayi        13.6%
               Isletmesi A.S.                                                      8930
               Sôktas Pamuk ve Tarim Degerlendirme              11.4%
               Ticaret ve Sanayi A.S.                                              8931
3.    Unless otherwise specified, the provisions in force concerning customs duties shall
      apply.
                                        Article 2
1.    The amounts secured by way of provisional anti-dumping duties under Regulation
      (EC) No 2208/96 shall be definitively collected.
2.    Amounts secured provisionally in excess of the definitive rate of anti-dumping duty
      shall be released.
3.    The amounts secured provisionally on unbleached gauze products falling under CN
      Code 5208 1110 shall be released.
                                             69
 ---pagebreak---                                     Article 3
Where any producer provides sufficient evidence to the Commission that it did not
export the goods described in Article 1(1) during the investigation period, that it is
not related to any exporter or producer subject to the measures imposed by this
Regulation and that it has exported the goods concerned after the investigation
period, or that it has entered into an irrevocable contractual obligation to export a
significant quantity to the Community, then the Council, acting by simple majority
on a proposal submitted by the Commission after consulting the Advisory
Committee, may amend Article 1 (2) by adding that producer to the parties listed in
the Annex. That producer would then be subject to the duties in Table 2 of Article 1
above for producers in India, Indonesia, Pakistan and Turkey, or to the duties in
Table 1 above for producers in China and Egypt.
                                    Article 4
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,       1997
                                                 For the Council
                                        70
 ---pagebreak---                                        Annex
India
    A.S.P.G. Subbiah Nadar & Sons, Dhalavaipuram
    All India Handloom Fabrics Marketing Co-operative Society Ltd, Madras
    Alpha Mills Pvt Ltd, Karur
    Amex Exports, Karur
    Anglo French Textiles, Pondicherry
    Arcot Textile Mill Ltd, Madurai
    Arun Fabrics, Tirupur
    Amn Textiles, Rajapalayam
    Ashima Fabrics, Bombay
    A.S. Marimuthu, Samusigapuram
    Atlas Export Enterprises, Kamr
    Ayyappan Textiles Ltd, Madurai
    B.K.S. Mills, Tirupur
    B.N. Sardar & Sons, Calcutta
    Bharat Vijay Mills, Kalol
    Bhiwani Denim & Apparels Ltd, Faridabad
    Bonanza Overseas Pvt. Ltd, Bombay
    Chhaganlal Kasturchand & Co. Ltd, Bombay
    Emperor Trading Co., Timpur
    Esskay International, Bombay
    Forbes Gokak Ltd, Bombay
    Garden Weaves Pvt. Ltd, Timpur
                                         71
 ---pagebreak--- GDJD Exports, Madras
Govindji Trikamdas & Co., Bombay
I A Intercontinental, Madras
Ideal Expo Fabrics, Salem
Inter Globe Services, Bombay
Indra Exports, Jalandhar
Kançria Chemicals & Industries Ltd, Ahmedabad
Karamal Garment Exports, Madras
Keshavlal Talakchand, Bombay
Kishandas Kikani, Bombay
Kothari Industrial Corporation Ltd, Madras
Loyal Textile Mills Ltd, Kovilpatti
M.S. Mathivanan, Komarapalayam
M.U.A. Arumugaperumal & Sons, Chatrapatti
Maharashta State Textile Corporation Ltd, Bombay
Naatchiar Textile Producers/producer/exporters, Chatrapatti
Navnitlal & Producer/exporter, Bombay
Niyati Overseas, Madras
Nowrosjee Wadia & Sons Ltd., Bombay
N.W. Exports, Bombay
Parag Trading Corporation, Bombay
 Patodia Syntex Ltd, Bombay
 Piramal Sons Ltd, Bombay
Pothys Cotton Products PVT.LTD., Srivilliputtur
 Pradeep Investments Pvt. Ltd, Bombay
 Prathishta Weaving & Knitting Producer/exporter Ltd, Coimbatore
                                       72
 ---pagebreak--- Preemier Textile, Timpur
Preeti Impex, Tiruchengodu
Premier Enterprises
Premier Mills Ltd, Coimbatore
Premier Textile Producers/producer/exporters, Chatrapatti
R. D. Traders, Bombay
Rajnarayan Hosiery Exports Pvt Ltd, Coimbatore
Rama Qualitex Ltd, Bangalore
Ramkumar Mills Ltd, Bangalore
Rawsitasa Exports, New Delhi
Rega Textiles, Komarapalayam
Ruchi Fabrics Ltd, Indore
S. Nikhil, Bombay
Sadhaka Exports
Sajjan Textiles Mills Ltd, Bombay
Sajjan Udyog Export Ltd, Bombay
Senthil Textiles, Timpur
Shanker Kapda Niryat Pvt. Ltd, Bombay
Sheela Apparel Exports Pvt. Ltd, Bombay
Sheth Exports, Bombay
Sheth Investments & Trading Producer/exporter Ltd, Bombay
Singhania Exports, Bombay
Sitalakshmi Mills Ltd, Madurai
Sivakkumar Mills, Palladam
Sree Rangsan Textiles Pvt. Ltd, Komarapalayam
Sri Adhilakshmi Warping & Sizing Mills, Erode
                                      73
 ---pagebreak--- Sri Balaji Fabric, Timpur
Sri Dhavamani Textiles, Erode
Sri Rajasekar Textiles, Chatrapatti
Sri Rani Lakshmi Gng. Spg. & Wvg. Mills P. Ltd, Madurai
Sri Saravanaa Exports Producer/exporter, Tamil Nadu
Srinivasa Textiles, Chatrapatti
Standard Industries Ltd, Bombay
Sudha Mills (India) Pvt. Ltd, Bombay
Supreme Bandages, Chatrapatti
Tamarai Mills Ltd, Coimbatore
Texcot Exports Pvt Ltd, Bombay
The Bombay Dyeing & Manufacturing Co. Ltd, Bombay
The Hindoostan Spinning & Weaving Mills Ltd, Bombay
The Lakshmi Mills Producer/exporter Ltd, Coimbatore
The Morarjee Gokuldas Spinning & Weaving Producer/exporter Ltd, Bombay
The Ruby Mills Ltd, Bombay
The Western India Cottons Ltd., Kerala
Thiagarajar Mills Ltd, Madurai
Trident Textile Mills Ltd, Madras
Vadivel Sizing & Weaving Mills Pvt. Ltd, Timpur
Varadhalakshmi Mills Ltd, Madurai
Virudhunagar Textile Mills Ltd, Madurai
World-Tex Limited, Chaziabad
Yam Syndicate Ltd, Calcutta
                                       74
 ---pagebreak---   Indonesia
     PT. Tyfountex Indonesia, Solo
     PT. Sandratex, Jakarta
     PT. Batik Keris, Jakarta
     PT. Danliris, Jakarta
     PT. Catur Jantra, Jakarta
     PT. Panca Bintang, Jakarta
     Gabungan Koperasi Batik Indonesia, Jakarta
     PT. Primatexco, Jakarta
     PT. Bina Nusantara Prima, Bandung
     PT. Batam Textile, Jakarta
     PT. Tata Adi Pratama, Bandung
     PT. Pacific Express, Denpasar
     PT. Bintang Agung, Jakarta
     PT. Adetex, Bandung
     PT. Maha Mujur Textile, Bandung
     PT. Five Star Industries, Bandung
     PT. Bandung Djaja Textile Mills, Bandung
Pakistan
•    Abdur Rahman Corporation Ltd, Karachi
•    Adamjee Enterprise
.    ACME Mills (Pvt) Ltd, Karachi
•    Ajaz Enterprise
•    Akhtar Textile Industries
                                          75
 ---pagebreak--- Al-Aziz Hosiery International, Faisalabad
Al-Karam Textile Mills, Karachi
Al-Shahid Weaving Industries
Al-Rehmat Traders (Pvt) Ltd, Faisalabad
Anjum Textile Mills (Pvt) Ltd, Faisalabad
Arshad Corporation (Pvt) Ltd, Faisalabad
Arzoo Textile Mills Ltd, Faisalabad
Asjad Textile (Pvt) Ltd
Associated Knitwear (Pvt) Ltd, Karachi
Ayaz Textile Mills Ltd, Lahore
Aziz Sons
Be Be Jan Pakistan (Pvt) Ltd, Faisalabad
Bismillah Fabrics (Pvt) Ltd
Bismillah Textiles (Pvt) Ltd
Chawala Enterprises
Chenas Fabrics & Processing
Colony Sarhad Textile Mills Ltd, Karachi
Cotton Arts (Pvt) Ltd
Dawood Textile Printing Indu
Decent Industries, Faisalabad
Decent Textiles, Faisalabad
Elahi Enterprises Limited, Lahore
Elahi Spinning & Weaving Mills Ltd, Lahore
En Em Industries Ltd
Excel Textile Mills, Karachi
Fabrics International
                                       76
 ---pagebreak--- Fabtex Corporation, Karachi
Faizan Shehzad (Pvt) Ltd
Falcon Textile Corporation
Fazal Abdullah Exports (Pvt) Ltd, Faisalabad
Fine Fabrics (Pvt) Ltd
First Textile Ltd
Ghazi Fabrics International Ltd, Lahore
Globe Managements (Pvt) Ltd
Gohar Enterprises
Gul Ahmed Textile Mills Ltd, Karachi
Gulistan Weaving Mills Ltd, Karachi
Gulshan Weaving Mills Ltd, Karachi
H.A. Industries (Pvt) Ltd, Faisalabad
H.K. M. Exports (Pvt) Ltd
Haji Khuda Bux Amir Umer
Hajra Textiles, Karachi
Husein Ind., Karachi
ICC Textiles Ltd, Lahore
Image Fabrics (Pvt) Ltd, Faisalabad
Imran Textiles
Ishan Yousuf Textile (Pvt) Ltd
Ishaq Textile Mills Ltd, Faisalabad
J.K. Brothers Pakistan (Pvt) Ltd, Faisalabad
J.K. Sons (Pvt) Ltd, Karachi
Jetex Industries (Pvt) Ltd, Karachi
Kam International, Karachi
                                        77
 ---pagebreak--- Kausar Textile Industries (Pvt) Ltd
LatifHansel(Pvt)Ltd
Linox International (Pvt) Ltd
Lucky Impex, Karachi
Lucky Tex,, Karachi
M.A.S. Textiles (Pvt) Ltd
M.F.M.Y. Industries Ltd, Karachi
M.K. Sons (Pvt) Ltd, Faisalabad
M.N. Textiles (Pvt) Ltd, Karachi
Mabro Tex Industries
Mahmood Textile Mills Ltd, Multan
Majeeda Textiles (Pvt) Ltd, Faisalabad
Master Textile Mills Ltd, Lahore
Megatex Limited, Karachi
Mian Textile Industries Ltd, Lahore
Modem Textile Mills, Karachi
Mohammad Farooq Textile Mills Ltd, Karachi
Mohib Exports Ltd, Lahore
Mohib Fabric Industries Ltd, Lahore
Mohib Textile Mills Ltd, Lahore
Mukati Corporation
Mutual Trading Corporation, Karachi
Nakshbandi Industries Ltd, Karachi
Nash Garments (Pvt) Ltd, Karachi
Naveed Industries (Pvt) Ltd, Karachi
Naveena Industries (Pvt) Ltd, Karachi
                                       78
 ---pagebreak--- Nisar Textiles Corporation
Nishatex Enterprises
Nu-Tex (Pvt) Ltd
Oberoi Textile Mills, Lahore
Orient Textile Pakistan (Pvt) Ltd
Parsons Industries (Pvt) Ltd, Karachi
Prosperity Weaving Mills Ltd, Lahore
Regency Textiles Ltd, Lahore
Reliance Weaving Mills Ltd, Multan
Reliance Exports Ltd, Multan
Rizwan Enterprises
Roomi Enterprises (Pvt) Ltd, Multan
S.S. Textiles
Saaqis Fabrics
Saba Textiles (Pvt) Ltd, Karachi
Sadaqat Textile Mills (Pvt) Ltd, Faisalabad
Sadiq Sons Textiles (Pvt) Ltd
Sakina Textile Industries (Pvt) Ltd, Karachi
Samin Textiles Ltd, Lahore
Saya Weaving Mills (Pvt) Ltd, Karachi
Service Fabrics Ltd, Lahore
Shahzad Siddique (Pvt) Ltd, Faisalabad
Shams Textile Mills Ltd, Karachi
Shahraj Fabrics (Pvt) Ltd, Lahore
Sharif Textile Industries (Pvt) Ltd, Faisalabad
Sitara Textile Industries
                                         79
 ---pagebreak--- Sleep & Style, Karachi
Sumira Fabrics (Pvt) Ltd, Faisalabad
Suraj Cotton Mills Ltd, Karachi
Syncotex Agencies, Karachi
Taha Textile (Pvt) Ltd, Karachi
Tanveer Weavings (Pvt) Ltd, Lahore
Tariq Enterprises
Tex Arts, Faisalabad
The Cresent Textile Mills Limited, Faisalabad / Karachi
United Textile Printing Industries (Pvt) Ltd, Faisalabad
Worldover Enterprises (Pvt) Ltd, Faisalabad
Xebec Textiles, Faisalabad
Yakoob Trading Co., Karachi
Yousaf Weaving Mills Ltd, Lahore
Yunus Brothers, Karachi
Zahidjec Fabrics (Pvt) Ltd, Faisalabad
Zahoor Industries (Pvt) Ltd, Faisalabad
Zamzam Weaving & Processing Mills, Faisalabad
Zaur Textile Mills, Karachi
Zebtex Corporation
                                         80
 ---pagebreak--- Turkey
   Bossa Ticaret ve Sanayi Isletmeleri T.A.S., Adana
   Exsa Export Sanayi Mamulleri Satis ve Arastirma A.S., Adana
   Teksmobili Tekstil Sanayi ve Ticaret A.S., Istanbul
   Kipas - Kahramanmaras Iplik Pamuk Ticaret ve Sanayi A.S., Kahramanmaras
   Kipas Textile Industries Inc., Kahramanmaras
   Burdur Mensucat Sanayii ve Ticaret A.S., Ulus/Ankara
   Ataç Anteks Dokuma Fabrikasi Hikmet Ataman ve Ortaklari Tic. ve San. A.S.,
   Yenikôy/Antalya
                                           81
 ---pagebreak---                                                                    ISSN 0254-1475
                                                            COM(97) 160 final
                                              DOCUMENTS
EN                                                                        02 11
                                    Catalogue number : CB-CO-97-148-EN-C
                                                             ISBN 92-78-18330-X
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