CELEX: 52012PC0163
Language: en
Date: 2012-04-04
Title: Proposal for a COUNCIL IMPLEMENTING REGULATION amending Regulation (EU) No 492/2010 imposing a definitive anti-dumping duty on imports of sodium cyclamate originating in, inter alia, the People's Republic of China

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		52012PC0163
		
			Proposal for a COUNCIL IMPLEMENTING REGULATION amending Regulation (EU) No 492/2010 imposing a definitive anti-dumping duty on imports of sodium cyclamate originating in, inter alia, the People's Republic of China /* COM/2012/0163 final - 2012/0081 (NLE) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
 1.           Context of the proposal 
   || Grounds for and objectives of the proposal This proposal concerns the application of Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community ('the basic Regulation') in the proceeding concerning imports of sodium cyclamate originating, inter alia, in the People's Republic of China. 
   || General context This proposal is made in the context of the implementation of the basic Regulation and is the result of an investigation which was carried out in line with the substantive and procedural requirements laid out in the basic Regulation. 
   || Existing provisions in the area of the proposal The measures currently in force were imposed by Council Regulation (EU) No 492/2010 on imports of sodium cyclamate originating, inter alia, in the People's Republic of China. 
   || Consistency with the other policies and objectives of the Union Not applicable. 
 2.           Consultation of interested parties and impact assessment 
   || Consultation of interested parties 
   || Interested parties concerned by the proceeding have had the possibility to defend their interests during the investigation, in line with the provisions of the basic Regulation. 
   || Collection and use of expertise 
   || There was no need for external expertise. 
   || Impact assessment This proposal is the result of the implementation of the basic Regulation. The basic Regulation does not foresee a general impact assessment but contains an exhaustive list of conditions that have to be assessed. 
 3.           Legal elements of the proposal 
   || Summary of the proposed action On 17 February 2011, the Commission initiated an interim review of the measures in force in respect of sodium cyclamate originating in the People's Republic of China further to a request made by the Union industry. The request was based on prima facie evidence showing that, as far Golden Time Enterprise (Shenzhen) Co. Ltd is concerned, the continued imposition of the measure at its current level is no longer sufficient to counteract the injurious dumping. The attached proposal for a Council Regulation is based on the findings of the investigation carried out which is limited in scope to the examination of dumping as far as one group of producers is concerned. The investigation found that the level of dumping was higher than in the original investigation and that the changed circumstances leading to the increased dumping level are of a lasting nature. It is therefore proposed that the Council adopt the attached proposal for an amending Regulation. 
   || Legal basis Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community. 
   || Subsidiarity principle The proposal falls under the exclusive competence of the Union. The subsidiarity principle therefore does not apply. 
   || Proportionality principle The proposal complies with the proportionality principle for the following reasons: 
   || The form of action is described in the above-mentioned basic Regulation and leaves no scope for national decision. 
   || Indication of how financial and administrative burden falling upon the Union, national governments, regional and local authorities, economic operators and citizens is minimized and proportionate to the objective of the proposal is not applicable. 
   || Choice of instruments 
   || Proposed instruments: implementing Regulation. 
   || Other means would not be adequate for the following reason: The above-mentioned basic Regulation does not foresee alternative options. 
 4.           Budgetary implication 
   || The proposal has no implication for the Union budget. 
2012/0081 (NLE)
Proposal for a
COUNCIL IMPLEMENTING REGULATION
amending Regulation (EU) No 492/2010
imposing a definitive anti-dumping duty on imports of sodium cyclamate
originating in, inter alia, the People's Republic of China
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, 
Having regard to Council
Regulation (EC) No 1225/2009 of 30 November 2009 on
protection against dumped imports from countries not members of the European
Community[1]
('the basic Regulation'), and in particular
Article 9(4), 11(3), 11(5) and 11(6) thereof,
Having regard to the proposal from the
European Commission ('the Commission') after consulting the Advisory Committee,
Whereas:
1.           PROCEDURE
1.1.        Measures in force
(1)       By Regulation (EC) No 435/2004[2], the
Council imposed, following an anti-dumping investigation, a definitive
anti-dumping duty on imports of sodium cyclamate originating in the People’s
Republic of China ('the PRC' or 'the country concerned') and Indonesia ('the original investigation'). Following an expiry
review, the Council, by Regulation (EU) No 492/2010[3] imposed a definitive
anti-dumping duty for a further period of five years. The measures were set at
the level of dumping and consist of specific anti-dumping duties. The rate of
the duty for the PRC ranges between 0 and 0.11 EUR/kilo for individually named Chinese
producers with a residual duty rate of 0.26 EUR/kilo imposed on imports from
other producers ('current duties').
1.2.        Request for a review 
(2)       A request for a partial
interim review ('the current review') pursuant to Article 11(3) of the basic
Regulation was lodged by Productos Aditivos S. A., the sole Union producer of sodium
cyclamate and the complainant in the original investigation ('the complainant').
The request was limited in scope to dumping and to Golden Time Enterprise
(Shenzhen) Co., Ltd. ('GT Enterprise' or 'the company concerned'), member of
the Rainbow Rich group ('the group of companies concerned', 'Rainbow group', or
"Rainbow"), which was also one of the individually named Chinese
producers in the original investigation. The anti-dumping duty applicable to
imports of products produced by GT Enterprise is 0.11 EUR/kilo and the duty
applicable to imports from the other production companies within the group of
companies concerned is 0.26 EUR/kilo (i.e. the residual duty rate). 
(3)       The complainant provided
prima facie evidence that the existing measures are no longer sufficient to
counteract the dumping which is causing injury. 
1.3.        Initiation of a partial
interim review
(4)       Having determined, after
consulting the Advisory Committee, that the request contained sufficient prima
facie evidence to justify the initiation of the partial interim review, the
Commission announced, by a Notice of Initiation published in the Official
Journal of the European Union[4]
on 17 February 2011, the initiation of a partial interim review pursuant to
Article 11(3) of the basic Regulation limited to the examination of dumping as
far as GT Enterprise is concerned. 
1.4.        Product concerned and like
product 
(5)       The product under review
is sodium cyclamate, originating in the People's Republic of China, currently
falling within CN code ex 2929 90 00 (‘the product concerned’). 
(6)       As in previous
investigations, this investigation has shown that the product concerned
produced in the PRC and sold to the Union is identical in terms of physical and
chemical characteristics and uses to the product produced and sold on the
domestic market in Indonesia which served as an analogue country in the current
review. It is therefore concluded that products sold on the domestic market in
Indonesia and sold by the group of companies concerned on the Union market are
like products within the meaning of Article 1(4) of the basic Regulation. 
1.5.        Parties concerned
(7)       The Commission officially
informed the complainant, the company concerned and the representatives of the
country concerned about the initiation of the current review. The Commission
also advised producers in Indonesia of the initiation of the proceedings, as
Indonesia was envisaged as a possible analogue country. 
(8)       Interested parties were
given the opportunity to make their views known in writing and to request a
hearing within the time limit set in the Notice of Initiation. All interested
parties, who so requested and showed that there were particular reasons why
they should be heard, were granted a hearing.
(9)       In order to obtain the
information deemed necessary for its investigation, the Commission sent a questionnaire
to the company concerned and received replies from five companies in the
Rainbow Group within the deadline set for that purpose. (As the Rainbow group
now consists of two production companies (one being GT Enterprise), one raw
material supplier, one company previously involved with the product concerned,
but now dormant, and a trader in Hong Kong, the review encompassed the
activities of the full group). The Commission also sent questionnaires to
producers in Indonesia. One Indonesian producer showed willingness to provide
information in the current review and provided a partial reply to the
questionnaire.
(10)     The
Commission sought and verified all information deemed necessary for the analysis
of market economy treatment and individual treatment and the determination of
dumping. The Commission carried out verification visits at the premises of the following
members of the group of the companies concerned: 
–              
Golden Time Enterprises (Shenzhen) Co. Ltd.,
Shenzhen, PRC, (GT Enterprise),
–              
Jintian Industrial (Nanjing) Co. Ltd., Nanjing,
PRC,
–              
Golden Time Chemical (Jiangsu) Co. Ltd.,
Jiangsu, PRC,
–              
Nanjing Jinzhang Industrial Co. Ltd., Nanjing,
PRC,
–              
Rainbow Rich Ltd., Hong Kong.
1.6.        Review investigation period
(11)     The investigation of
dumping covered the period from 1 January 2010 to 31 December 2010 ('the review
investigation period' or 'RIP').
2.           RESULTS OF THE
INVESTIGATION 
2.1.        Market economy treatment
(MET)
(12)     In anti-dumping
investigations concerning imports originating in the PRC, normal value shall be
determined in accordance with paragraphs 1 to 6 of Article 2 of the basic
Regulation for those producers which were found to meet the criteria laid down
in Article 2(7)(c) thereof. Briefly, and for ease of reference only, the
criteria in Article 2(7)(c) of the basic Regulation, fulfilment of which the
applicant companies have to demonstrate, are set out in summarised form below: 
–              
business decisions and costs are made in
response to market conditions, and without significant State interference and
costs of major inputs substantially reflect market values,
–              
accounting records are independently audited in
line with international accounting standards and applied for all purposes,
–              
there are no significant distortions carried
over from the former non-market economy system,
–              
legal certainty and stability are provided by
bankruptcy and property laws,
–              
currency exchanges are carried out at the market
rate.
(13)     The group of companies
concerned requested MET pursuant to Article 2(7)(b) of the basic Regulation and
submitted claim forms for four producers located in the People's Republic of
China. The Commission sought and verified at the premises of the companies all
information submitted in the companies' requests and deemed necessary.
(14)     The current review revealed
that the situation of the company concerned changed since the original investigation.
It was found that GT Enterprise no longer meets all MET criteria. Furthermore, compared
to the original investigation the Rainbow group had been enlarged and
restructured. The other companies within the group that submitted claim forms
could not demonstrate either that they meet all MET criteria.
(15)     With regard to criterion 1
concerning business decisions and state interference, it was found that the local
government has the authority to interfere in the hiring and dismissal of
personnel in one company within the group. Furthermore, the local government is
a major shareholder of the company producing raw materials. Indications of significant
state interference were identified in the supply of raw materials to the
company (electricity and water) and by the company to its related companies, in
labour costs and in the operations and decision-making of this company. As a
way of example the state shareholder outsourced personnel to the raw material
producer at terms that the company could not specify. Furthermore, the company has
been continuously loss-making due to selling raw material at abnormally low prices
to its related companies and without any further compensation e.g. in the form
of profit distribution. Through the accumulation of these losses, the
state-owned raw material producer influenced the decisions of the related
companies with regard to purchase of raw materials for the production of sodium
cyclamate. Finally, interference and influence could be detected in the financing
and investment decisions of another company within the group by a local government
agency.
(16)     With regard to criterion 2
concerning accounting, the investigation showed that accounting records of all
members of the group of companies concerned were not in line with international
accounting standards as a number of material accounting shortcomings and errors
were found which were not reported by the auditors.
(17)     With regard to criterion 3,
it was found that distortions were carried over from the non-market economy
system through the provision of infrastructure investments to one company of
the group for free. The same company benefited from favourable rental
conditions for the land it uses. The other companies within the group could not
demonstrate that they acquired their land use rights in return for a
consideration and/or that the consideration would have reflected a market
value. Finally one company was not able to demonstrate that certain assets
transferred to it were made for monetary consideration or otherwise at prices
reflecting market values.
(18)     Finally, with regard to
criteria 4 and 5, it was found that the companies met the criteria as the
companies were subject to bankruptcy and property laws which guaranteed
stability and legal certainty. Currency conversions were carried out at or
following the official rate published by the Bank of China.
(19)     The group of companies
concerned and the complainant were given an opportunity to comment on the above
findings. The complainant had no comments but the group of companies concerned objected
on several grounds. Some of these comments were reiterated after final
disclosure of the facts and considerations on the basis of which it was
proposed to impose definitive measures. The most important comments received
are described in the recitals below. 
(20)     The Rainbow group firstly
stated that the Commission illegally imposed an obligation to re-qualify for
MET as the group was given MET in the original investigation and the expiry
review and thus the legal obligation to apply the same methodology in reviews
as in the original investigation was breached. It argued that the Commission
has not shown that circumstances of this company had changed in a way that
would justify a different method to that applied in the original investigation.
According to the claimant several of the issues indentified by the Commission
had already existed at the time of the original investigation and thus the
Commission's new findings do not relate to new circumstances but are merely a
different interpretation of the same circumstances.
(21)     It
should be noted that, contrary to the claimant's statement, the same
methodology was applied both in the original investigation and in the current
review whereas due account was taken of the fact that certain circumstances
have changed since the original investigation. Even if the claimant's
argumentation would be correct in relation to certain facts that were indeed
the same during both the original and current investigations, namely in
relation to GT Enterprise's land use right agreement, the following can be
noted. The current review established additional other facts that - even though
they had already existed during the original investigation - were not disclosed
at that time by GT Enterprise, such as the local government's authority to
approve the hiring and dismissal of its personnel. Finally, the circumstances
of the company have also changed since the original investigation in respect of
Criterion 2. That is because it was established in the current review that
during the RIP GT Enterprise had not had a clear set of accounting records that
were independently audited in line with international accounting standards and
applied for all purposes.
(22)     The claimant later explained
that it considers that it had disclosed the local government's authority to
approve the hiring and dismissal of its personnel by providing in the original
investigation the same Articles of Association as in the current review.
However, the translation of this document provided by the claimant both during
the original and current investigation was incomplete as it did not disclose
the powers given by the Articles of Association to the local government. 
(23)     The Rainbow group further
argued that the MET regime was introduced for countries with an economy in
transition, i.e. from the former non-market economy system towards a market
economy. It would therefore be illogical to require a company that previously
qualified for MET to once again submit sufficient evidence in an interim review
that it still qualifies for MET. In this respect it should be noted that there
is nothing in the basic Regulation which would support such an interpretation
and which would prevent the application of Article 2(7)(c) of the basic
Regulation in reviews initiated pursuant to Article 11(3) of the basic
Regulation. Therefore, this argument had to be dismissed.
(24)     The Rainbow group also invokedthe
procedural requirement in Article 2(7)(c) that an MET determination shall be
made within three months of the initiation of the investigation. Rainbow itself
acknowledges that exceeding this deadline is in itself insufficient ground to
contest the results of the investigation, but it highlights that the Commission
services already had all the information necessary to calculate the dumping
margin at their disposal when MET findings were disclosed. In its argumentation
Rainbow however ignores the fact that even though the Commission indeed for
administrative efficiency requested and verified all necessary information from
the group of companies concerned at the same time, it had not had at its
disposal information about the analogue country that would have made it
possible to determine the dumping margin in case of rejecting MET. Indeed,
information concerning the normal value in the analogue country was made
available to the Commission only after the findings concerning MET had been
disclosed to Rainbow. Thus the timing of the MET determination could not have
any impact on its content. In the light of the above, this claim is rejected as
unfounded. 
(25)     With respect to Criterion
1, it has been submitted as a general comment that the theoretical possibility
of state influence or state control per se does not automatically mean that
there is an actual and significant state interference within the meaning of Article
2(7)(c). Rainbow repeatedly quotes a decision of the Court of First Instance[5] to argue that state control
does not equal significant State interference because this would "lead to
the exclusion, in principle, of state-controlled companies from entitlement to
MES, irrespective of the real factual, legal and economic context in which they
operate." Rainbow also claims that it would mean an unreasonable burden of
proof on MET applicants if they were to show that there can never be a
possibility for the state to interfere in business decisions. Further it argues
that the state action would have to render the company's decisions incompatible
with market considerations so as not to be in line with Criterion 1. 
(26)     Contrary to the above
assertions by the Rainbow group, the current investigation established specific
and significant state interference in the operations of several companies
within the group. In the case of the group company in which the hiring and
dismissal of personnel was subject to the approval of the local government, it
is the company's own rules of internal functioning, i.e. its Articles of
Association, that clearly provide the authority for the state to interfere in its
operational decisions. In the case of another group company, the state partner
was found to have had an influence in the company in a manner which is incompatible
with market considerations. Firstly, the state partner had contributed most of
the capital to this company without this fact being reflected in the share of
its ownership of the company. Secondly, the company's operations were always
loss-making, which was mostly detrimental to the state partner given the
capital it invested. Thirdly, the state partner itself incurred continuous losses
as it supplied inputs such as water and electricity to the group company at below
market prices and without proper receipt of payment.
(27)     Concerning the conclusion
on state interference in the financing and investment decisions of another member
of the group of companies concerned, it was submitted that factual findings of
the Commission on a loan and its conditions were incorrect. The Commission however,
has evidence collected during the verification showing that the company was
instructed by a local government agency to take a loan which was not related to
its business operations. The company reasons that the financing decisions were
taken as a favour to this government agency and not as an obligation and the
transaction in question was without further risk to the company since it would
have had the possibility to seek compensation through the non-payment of utilities'
invoices issued to it by the agency. The evidence collected by the Commission
shows that the land use right of the company is indirectly used as a security
in the relevant financial transaction; therefore the company bears significant
risk. The land use right itself was acquired through the same government agency
to whom the company alleges to have been providing only a favour. The allegation
that a compensation would have been possible through non payment for utilities
demonstrates a basic misunderstanding of basic accounting standards
(offsetting) and contradicts the company's further claim that influence on financial
operations as such do not mean an influence on "decisions on firms
regarding prices, costs and inputs" as required by Article 2(7)(c).
Furthermore, investment decisions are clearly and significantly influenced by
the government agency as there are company-specific requirements set in the
land use right agreement of the company on the investment to be performed and
these requirements go beyond local zoning laws contrary to what has been
suggested by the company. Therefore the claim that state interference in the
financing and investment decisions do not amount to an influence according to Article
2(7)(c) is rejected. 
(28)     As to the group company
producing one of the raw materials used in the production of sodium cyclamate,
it was claimed that any shortcomings with respect to the company's
decision-making and financial situation would have a very limited impact as the
raw material produced by this company represents only around 10% of the cost of
production of sodium cyclamate. As the Commission was able to calculate the
difference between profitable sales price and actual sales price of the raw
material, the company suggests that it would be more appropriate to adjust the
costs of low-priced raw material rather than rejecting MET. However, the
objective of the MET assessment is to ascertain that inputs reflect market values
and business decisions are made in response to market signals. It should be
noted that Article 2(7)(c) of the basic Regulation explicitly requires that
costs of major inputs substantially reflect market value in order the
conditions for the MET to be met without making any reference to the possibility
of adjusting the distorted costs of major inputs. Therefore this claim has to
be rejected.
(29)     The company's claim concerning
the abnormally low prices paid for water and electricity and labour costs - arguing
that these are not major inputs only representing in total around 14% of the
total cost of production of the raw material - had to be rejected as this is
considered, both individually and cumulatively, a significant enough cost
element to have an impact on the total costs of the company. In the case of labour
costs it is also noted that it was not possible to fully verify these elements
as the company was not able to provide contracts or other documentation.
Therefore it could not be ascertained that these costs reflected market values.

(30)     With respect to Criterion 2
it was argued that the Commission ignored the materiality principle pursuant to
which omissions or misstatements of items are material only if they could
influence the economic decisions that users make on the basis of financial statements
and that such immaterial shortcomings would not need to be reported by the
auditor either.
(31)     Contrary to what the group
claims, there were serious shortcomings in the accounting of the companies in
relation to basic accounting principles (see, for more details, the next
paragraph). Secondly, the objective of requiring a clear set of accounts for
MET purposes is not for a user making economic decisions but to ensure that the
financial statements provide a true and fair view of revenues, costs, etc. The
objective of the MET investigation is to establish whether accounts are kept
and audited in accordance with international accounting standards. 
(32)     The Rainbow group disputed
that its companies breached the elements of the IAS rules and accounting practices
mentioned in the MET assessment such as the accrual principle, faithful
representation of transactions principle and offsetting, going concern
principle, correct classification of balance sheets items, recognition of
losses, only business related transactions and recordings within the accounts, correct
classification and depreciation of expenses, respect of IAS and/or Chinese GAAP
rules on the recognition of the value and depreciation of assets. The
above-mentioned breaches of IAS were identified from the information provided
by the group in its MET claim form and all issues were subject to verification
at the premises of the companies. The arguments presented by the companies on
these issues following the disclosure of the MET findings were not such as to
warrant a change in the conclusion that, in regard to these issues, the
companies failed criterion 2. 
(33)     With respect to Criterion 3,
the Rainbow group claims that the provision of infrastructure investments to
one company for free is a normal activity that also takes place in market
economies in order to attract investments and that the impact of this
subsidization would be negligible on the financial situation of the company in
the RIP. However, the fact that a company could avoid payments for
infrastructure developments and at the same time benefited from very low rental
prices for the same land do not reflect a normal situation in a market
economyThis benefit on the other hand had a direct impact on the financial
position of the production company and its ability to take decisions in
response to market signals.
(34)     The Commission accepted the
claimant's arguments concerning GT Enterprise's land use right as explained in
recital (21). Arguments presented concerning the land use right by the other
companies however were not such as to reverse findings as the company itself
acknowledges that it had not paid the agreed amount for its land use right in one
case. In the case of another land use right the Rainbow group claims that
prices of land in that region had been rising sharply and thus it is normal
that the land was valued significantly higher a few years after its acquisition
date. However, the evidence provided by the company referred to price increases
for residential properties in the region and thus it is irrelevant. Rainbow
ultimately claimed that the Commission's approach of requiring positive
evidence that a company has paid a price that reflects market value imposes an
unreasonable burden of proof. However, article 2(7)( c) of the Basic Regulation
explicitly requires that a claim for market economy treatment must
"contain sufficient evidence that the producers operates under market
economy conditions". Therefore this argument had to be rejected. 
(35)     Rainbow group contests the
finding on assets transferred to one company without a monetary consideration
or otherwise at prices reflecting market values on the basis that this company
had stopped production in the RIP. Indeed the company stopped production. However,
the company was still selling its previously produced products on the domestic
market. Thus an MET assessment had to be performed for this company as well to
ascertain that there were no significant distortions carried over from the
former non-market economy system that could affect prices. 
(36)     It is therefore considered
that GT Enterprise failed to meet the first and second criteria for MET,
Jintian Industrial (Nanjing) Ltd. failed to meet criterion two and three,
Golden Time Chemical (Jiangsu) Ltd. failed to meet criteria one and two and
three for MET and Nanjing Jinzhang Industrial Ltd. failed to meet criteria one,
two and three. If one related company associated with the production and sale
of the product concerned does not qualify for MET, MET cannot be granted to the
group of related companies. Therefore, as all of the companies assessed for MET
individually failed to meet the relevant criteria it is concluded that the
Rainbow group cannot be granted MET. In these circumstances, after consulting
the Advisory Committee, the group of companies concerned was denied MET. 
2.2.        Individual treatment (IT) 
(37)     Pursuant
to Article 2(7)(a) of the basic Regulation, a country-wide duty, if any, is
established for countries falling under that Article, except in those cases
where companies are able to demonstrate that they meet all criteria set out in
Article 9(5) of the basic Regulation to be granted IT. Briefly, and for ease of
reference only, these criteria are set out below: 
–              
in the case of wholly or partly foreign owned
firms or joint ventures, exporters are free to repatriate capital and profits, 
–              
export prices and quantities, and conditions and
terms of sale are freely determined, 
–              
the majority of the shares belong to private
persons. State officials appearing on the Boards of Directors or holding key
management positions shall either be in minority or it must be demonstrated
that the company is nonetheless sufficiently independent from state
interference, 
–              
exchange rate conversions are carried out at the
market rate, and 
–              
state interference is not such as to permit
circumvention of measures if individual exporters are given different rates of
duty. 
(38)     The
two exporting producers within the group having exported sodium cyclamate
during the RIP claimed IT. It was not necessary to make an IT assessment for
the other companies in the Rainbow group given that they are not exporters of
the product concerned. On the basis of the information available and verified
during the verification visits, it was found that these two exporting producers
fulfilled the requirements foreseen in Article 9(5) of the basic Regulation and
thus could be granted IT.
2.3.        Dumping
2.3.1.     Analogue country 
(39)     According
to Article 2(7)(a) of the basic Regulation, normal value for the exporting
producers not granted MET has to be established on the basis of the price or
constructed value in a market economy third country (analogue country). 
(40)     In
the Notice of Initiation the Commission indicated its intention to use Indonesia
(the analogue country in the original investigation) as appropriate analogue
country for the purpose of establishing normal value and invited interested
parties to comment thereon.
(41)     The
Commission has received no comments on the choice of the analogue country.
(42)     The
Commission sought cooperation from producers in Indonesia. Letters and relevant
questionnaires were sent to all known companies. Of the several companies
contacted, only one producer submitted the necessary information for the
determination of normal value and agreed to partially cooperate with the review.
As the company could not accept a verification visit at
its premises, the Commission analysed the information provided for completeness
and consistency. The information was found to be sufficient and reliable for
the determination of the normal value and, whenever necessary, the Indonesian
producer provided clarifications sought by the Commission. The information used
was cross-checked with information provided in the review request.
(43)     The
investigation established that Indonesia has a competitive market for the like
product.
(44)     The
investigation further revealed that the production volume of the cooperating Indonesian
producer constitutes considerably more than 5 % of the volume of Chinese
exports of the product concerned to the Union, hence the production was
representative in terms of volume. As for the quality, technical specifications
and standards of the like product in Indonesia, no major overall differences
were found when compared to Chinese products. Therefore, the Indonesian market
was deemed sufficiently representative for the determination of normal value.
(45)     It is noted that to the
Commission's knowledge there are no other production facilities elsewhere in
the world, besides the known producers in Spain, the PRC and Indonesia.
(46)     In
view of all the above it was concluded that Indonesia constitutes an
appropriate analogue country in accordance with Article 2(7)(a) of the basic
Regulation. 
2.3.2.     Determination of normal
value 
(47)     Pursuant
to Article 2(7)(a) of the basic Regulation, normal value was established on the
basis of information received from the producer in the analogue country as set
out below. It is noted that the Indonesian producer was investigated in a
previous investigation concerning imports of sodium cyclamate from Indonesia[6]. The data now provided by the
company in its questionnaire response were found to be reliable and a solid basis
to establish normal value for the purposes of this investigation. Indeed, average
sales prices as well as the average cost of production followed a similar trend
in line with the evolution of the average raw material cost. In addition, this
trend could be confirmed by a similar evolution of the average raw material
cost observed in the EU market.
(48)     The
domestic sales of the Indonesian producer of the like product were found to be
representative in terms of volume compared to the product concerned exported to
the Union by the group of companies concerned in the PRC. 
(49)     The
Commission subsequently identified those product types, sold domestically by
the producer in the analogue country, that were identical or directly
comparable to the types sold for export to the Union. The standard product type
of the Indonesian producer was found to be directly comparable.
(50)     For
the standard product type sold by the producer in the analogue country on its domestic
market and found to be directly comparable with the type sold for export to the
Union, it was established whether domestic sales were sufficiently representative
for the purposes of Article 2(2) of the basic Regulation. Domestic sales of a
particular type of sodium cyclamate were considered sufficiently representative
when the total domestic sales volume of that type during the IP represented 5 %
or more of the total sales volume of the comparable type exported to the Union
by the group of companies concerned.
(51)     An
examination was also made as to whether the domestic sales could be regarded as
having been made in the ordinary course of trade, by establishing for the standard
product type the proportion of profitable sales to independent customers on the
domestic market during the investigation period. Since the volume of profitable
sales of the like product per product type represented more than 80 % of the
total sales volume of that type and where the weighted average price of that
type was equal to or above the cost of production, normal value was based on
the actual domestic price, calculated as a weighted average of the prices of
all domestic sales of that type made during the IP, irrespective of whether
these sales were profitable or not. 
(52)     In
the determination of the normal value for the product type that had not been
sold on the domestic market by the producer in the analogue country, the
weighted average sales price of all the sales of the standard product type was
used, after having adjusted for differences within the two product types.
2.3.3.     Export price
(53)     All exporting producers within the group of companies concerned made
export sales to the Union through their related trading company located outside
the Union. The export price was established on the basis of the prices of the
product when sold by the related trading company to the Union, i.e. to an
independent buyer, in accordance with Article 2(8) of the basic Regulation on
the basis of prices actually paid or payable. 
2.3.4.     Comparison
(54)     The normal value and export
price were compared on an ex-works basis. For the purpose of ensuring a fair
comparison between the normal value and the export price, due allowance in the
form of adjustments was made for differences affecting price and price
comparability in accordance with Article 2(10) of the basic Regulation.
Accordingly, adjustments were made for differences in transport, insurance, handling,
loading and ancillary costs and credit cost where applicable and supported by
verified evidence.
2.3.5.     Dumping margin
(55)     The dumping margin was
established on the basis of a comparison of a weighted average normal value
with a weighted average export price for all exporting producers, in accordance
with Article 2(11) of the basic Regulation.
(56)     This comparison showed a
dumping margin of 14.2%, expressed as a percentage of the CIF frontier price,
duty unpaid.
2.4.        Lasting nature of changed circumstances
(57)     In accordance with Article
11(3) of the basic Regulation, it was examined whether the circumstances on the
basis of which the current dumping margin was based have changed and whether
such change was of a lasting nature. 
(58)     The current findings are
based on the rejection of the claim for the market economy treatment to the
group of companies concerned in the current review whereas the member of the
group of related companies investigated in the original investigation GT
Enterprise was granted MET. The circumstances that led to the different conclusion
are firstly due to the fact that in the current review four companies within
the group were investigated as compared to only GT Enterprise in the original
investigation. The group was recently enlarged and reorganized with
considerable investments and there is no indication that this situation would
change in the foreseeable future. Secondly, as regards GT Enterprise, it was
found that the company's practice of not keeping a clear set of accounting
audited in line with international accounting standard is an established
practice and nothing indicates that this would change in the future. Also, its
Articles of Association allowing for state influence had been in force for a
longer period and there were no indications for their amendment in the future.
In these circumstances, it is considered that the non-MET status of the group
is of a lasting nature.
(59)     Furthermore, as regards
export price, the investigation showed certain stability in pricing policies of
the group of companies concerned over a longer period since the price of the
product concerned charged to the Union and to other third countries did not
differ significantly and followed the same trend between 2007 and the RIP. This
supports the conclusion that the newly calculated dumping margin is likely to
be of a lasting nature.
(60)     It was therefore considered
that the investigation showed that the structure and behaviour of the group of
companies concerned, including the circumstances that led to the initiation of
the current review, were unlikely to change in the foreseeable future in a
manner that would affect the findings of the current review. Therefore it was
concluded that the changed circumstances are of a lasting nature and that the application
of the measure at its current level is no longer sufficient to offset dumping. 
3.           AMENDMENT OF THE ANTI-DUMPING
MEASURES
(61)     In view of the findings of increased dumping as well as the
lasting nature of the changed circumstances, it is considered that the existing
measures are no longer sufficient to counteract the dumping which is causing
injury. The measures imposed by Regulation (EU) No 492/2010 on imports of sodium
cyclamate originating in the PRC should therefore be modified for GT Enterprise
and the same duty should be imposed to the other exporting producer within the
group by amending that Regulation accordingly. 
(62)     No
individual injury margin can be established in the current review, since it is
limited to the examination of dumping as far as the GT Enterprise and its
related companies within the group are concerned. Therefore, the dumping margin
established in the current review was compared to the injury margin as
established in the original investigation. Since the latter was higher than the
dumping margin found in the current review, a definitive anti-dumping duty
should be imposed for the group of companies concerned at the level of the dumping
margin found in the current review.
(63)     Regarding the form of the
measure, it was considered that the amended anti-dumping duty should take the
same form as the duties imposed by Regulation (EU) No 492/2010. To ensure
efficiency of the measures and to discourage price manipulation it was considered
appropriate to impose duties in the form of a specific amount per kilo. As a
result, the anti-dumping duty to be imposed on imports of the product concerned
produced and sold for export to the Union by the group of companies concerned,
calculated on the basis of the dumping margin as established in the current
review expressed as a specific amount per kilo, should be EUR 0.23 per kilo.
4.           DISCLOSURE
(64)     The group of companies
concerned as well as the other parties concerned were informed of the essential
facts and considerations on the basis of which it was intended to propose the amendment
of the anti-dumping measures in force. 
(65)     Rainbow group commented on the
final disclosure. These comments related mostly to the withdrawal of the
complaint in the ongoing investigation concerning imports of sodium cyclamate
originating in the People's Republic of China limited to two Chinese exporting
producers, Fang Da Food Additive (Shen Zhen) Limited and Fang Da Food Additive
(Yang Quan) Limited ("Fang Da group") ("parallel proceeding")[7]. Rainbow claimed that the
withdrawal of the complaint in the parallel proceeding should, logically and
legally, also result in the termination of anti-dumping measures against other
producers in the PRC or, at the least, result in the termination of the current
review with respect to Rainbow group.
(66)     It demanded the termination
of the anti-dumping measures imposed by Regulation (EU) No 492/2010 arguing
that in the absence of any finding that imports by Fang Da were not dumped
and/or imports by Fang Da were not causing injury, the principle of
non-discrimination contained in Article 9 (5) of the basic Regulation mandates
the termination of the anti-dumping measures imposed. To support its argument
it referred to previous Council Regulations where simultaneous interim reviews concerning
imports of some countries were terminated without the imposition of measures
following the non-imposition of measures in anti-dumping investigations
concerning the imports of the same products from other countries (LAECs[8], Flat-Rolled Products of Iron
or Non-Alloy Steel[9]).
However, it should be noted that these cases refer to investigations where
several countries were concerned and the principle of non-discrimination was applied
vis-à-vis imports from different countries. Secondly, in these cases the reason
for terminating the measures on some countries was that measures on other
countries were not imposed because the Council did not adopt the proposal
within the statutory time limits (LAECs, Flat-Rolled Products of Iron or
Non-Alloy Steel). Therefore even though indeed it was found necessary to
terminate the proceedings of anti-dumping measures in the simultaneous
proceedings in the quoted cases in order to respect the principle of
non-discrimination, these have no relevance for the current review. A further
reference to the approach taken in Monosodium Glutamate[10] concerns a case where the
complainant intended to withdraw its complaint concerning imports of Brazil
even though these were found to have been dumped. In that case it was envisaged
not to accept the withdrawal of the complaint because it was concluded that to
take measures against the other countries in the absence of measures against
Brazil would have been discriminatory. 
(67)     Furthermore, the two
situations are quite different. In the parallel proceeding, the complaint was
withdrawn and it was concluded that the termination was not against the Union
interest. In the current review, the request was maintained and it was found
that the dumping by the Rainbow group increased. Therefore, increasing the duty
for that group does not constitute discrimination.
(68)     The Rainbow group also
demanded that the withdrawal of the complaint should result in the termination
of the current review with respect to Rainbow group as the two proceedings were
initiated on the basis of the same procedural document, covered the same period
of investigation and in the complaint the Complainant treated Fang Da group and
Rainbow group together for all practical purposes. 
(69)     Secondly, it claimed that
despite the investigation against Fang Da group being initiated under Article 5
of the basic Regulation, the investigation concerning imports of the Fang Da
group and the interim review concerning the imports of Rainbow group are
legally and for all practical purposes in essence the same proceeding. Finally
it stated that having created the distinction between proceedings and
investigations, Article 9 (3) of the basic Regulation in effect means that even
though Fang Da group was subject to a zero duty following the original
investigation, it remained subject to the proceeding. For this reason, the
withdrawal of the complaint concerning the imports by the Fang Da group should
thus in view of the Rainbow group concerned result in the termination of the
current review as well.
(70)     It
should be noted in this respect that the document presented by the complainant constituted
both the complaint for the anti-dumping investigation on the basis of Article 5
of the basic Regulation and the request for this interim review on the basis of
Article 11(3) of the basic Regulation. It also presented sufficient evidence to
justify initiating both proceedings individually. Indeed, the Commission has initiated
the Article 5 investigation and the interim review in two separate Notices of
initiation. Thus the anti-dumping investigation based on Article 5 of the basic
Regulation and the interim review based on Article 11(3) of the basic
Regulation are two different proceedings.
(71)     Rainbow group presented
further arguments speculating on the possible reasons for the withdrawal of the
complaint. As these arguments are hypothetical and irrelevant, they cannot be
addressed and are thus rejected. 
(72)     Finally, Rainbow group
stated that the Commission has manifestly violated its rights to have ten days
to comment on the final disclosure as a non-confidential version of the
withdrawal letter was disclosed to it 7 days before the deadline to submit
comments.
(73)     As explained in recital (70),
the Article 5 investigation in the framework of which Rainbow group received an
information letter about the withdrawal of the complaint is a separate
proceeding from the current review. Rainbow group was an interested party in
the Article 5 review and only for this reason was it notified of the withdrawal
of the complaint. This notification letter was not part of the final disclosure
in the current review. The Rainbow group had 30 days to comment on the final
disclosure in the current proceeding. Therefore its right to have sufficient
time to comment was not violated.
(74)     To sum up, the comments
received were not such as to change the above conclusion.
HAS ADOPTED THIS REGULATION:
Article 1
The table in Article 1(2) of Council
Regulation (EU) No 492/2010 is hereby amended by replacing the following:
 Country || Company || Rate of duty (EUR per kilogramme) || TARIC additional code 
 The People’s Republic of China || Golden Time Enterprise (Shenzhen) Co. Ltd, Shanglilang, Cha Shan Industrial Area, Buji Town, Shenzhen City, Guangdong Province, People’s Republic of China ||  0.11 || A473 
with the following:
 Country || Company || Rate of duty(EUR per kilogramme) || TARIC additional code 
 The People’s Republic of China || Golden Time Enterprise (Shenzhen) Co. Ltd, Shanglilang, Cha Shan Industrial Area, Buji Town, Shenzhen City, Guangdong Province, People’s Republic of China ; Golden Time Chemical (Jiangsu) Co., Ltd., No. 90-168, Fangshui Road, Chemical Industry Zone, Nanjing, Jiangsu Province, People’s Republic of China ||  0.23 || A473 
.
Article 2
This Regulation shall enter into force on
the day following that of its publication in the Official Journal of the
European Union.
This Regulation shall be binding
in its entirety and directly applicable in all Member States.
Done at Brussels, 
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 343, 22.12.2009, p. 51.
[2]               OJ L 72, 11.3.2004, p. 1.
[3]               OJ L 140, 8.6.2010, p. 2.
[4]               OJ C 50, 17.2.2011, p.6.
[5]               Zhejiang Xinan Chemical Industrial Group Co. Ltd. v.
Council, Case T-498/04, judgment of the Court of First Instance of 17 June
2009, at para 92.
[6]               See Regulation (EU) No 492/2010
(OJ L140, 8.6.2010, p.2).
[7]               OJ C 50, 17.2.2011, p.9.
[8]               OJ L22, 27.1.2000, p.1., recitals (134) and (135)
[9]               OJ L294, 17.9.2004, p.3.
[10]             OJ L264, 29.9.1998, p.1.