CELEX: 52012PC0580
Language: en
Date: 2012-10-08
Title: Proposal for a COUNCIL IMPLEMENTING REGULATION imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of aluminium radiators originating in the People's Republic of China

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		52012PC0580
		
			Proposal for a COUNCIL IMPLEMENTING REGULATION imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of aluminium radiators originating in the People's Republic of China /* COM/2012/0580 final - 2012/0281 (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 anti-dumping proceeding concerning imports of aluminium
radiators originating 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
Provisional measures were imposed by Commission
Regulation (EU) No 402/2012 (OJ L 124, 11.5.2012, p. 17.).
Consistency with other policies and
objectives of the Union
Not applicable.
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
Consultation of interested parties
Interested parties concerned by the
proceeding have had the possibility to defend their interests during the
investigation, in line with the provisions of the basic Regulation.
Collection and use of expertise
There was no need for external expertise.
Impact assessment
This proposal is the result of the
implementation of the basic Regulation.
The basic Regulation does not contain
provisions for a general impact assessment but contains an exhaustive list of
conditions that have to be assessed.
3.           LEGAL ELEMENTS OF THE PROPOSAL
Summary of the proposed action
The attached proposal for a Council
Regulation is based on the definitive findings on dumping, injury, causation
and Union interest. It is therefore proposed that the Council adopt the
attached proposal for a Regulation which should be published no later than 10
November 2012.
Legal basis
Council Regulation (EC) No 1225/2009 of 30
November 2009 on protection against dumped imports from countries not members
of the European Community.
Subsidiarity principle
The proposal falls under the exclusive
competence of the European Union. The subsidiarity principle therefore does not
apply.
Proportionality principle
The proposal complies with the
proportionality principle for the following reasons:
The form of action is described in the
above-mentioned basic Regulation and leaves no scope for national decision.
Indication of how financial and
administrative burden falling upon the Union, national governments, regional
and local authorities, economic operators and citizens is minimized and
proportionate to the objective of the proposal is not applicable.
Choice of instruments
Proposed instruments: regulation.
Other means would not be adequate for the
following reason:
Other means would not be adequate because
the basic Regulation does not provide for alternative options.
4.           BUDGETARY IMPLICATION
The proposal has no implication for the
Union budget.
2012/0281 (NLE)
Proposal for a
COUNCIL IMPLEMENTING REGULATION 
imposing a definitive anti-dumping duty
and collecting definitively the provisional duty imposed on imports of
aluminium radiators originating in 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 Union[1]
(‘the basic Regulation’), and in particular Article 9 thereof,
Having regard to the proposal submitted by
the European Commission ('the Commission') after having consulted the Advisory
Committee,
Whereas:
1.           PROCEDURE
1.1.        Provisional measures
(1)       The Commission, by
Regulation (EU) No 402/2012[2]
(‘the provisional Regulation’), imposed a provisional anti-dumping duty on
imports of aluminium radiators originating in the People's Republic of China
(‘PRC’ or ‘the country concerned’).
(2)       The proceeding was
initiated on 12 August 2011[3],
following a complaint lodged by the International
Association of Aluminium Radiator Manufacturers Limited Liability Consortium
(AIRAL S.c.r.l. - 'the complainant') on behalf of
producers representing more than 25% of total Union production of aluminium
radiators. 
(3)       As set out in recital (14)
of the provisional Regulation, the investigation of dumping and injury covered
the period from 1 July 2010 to 30 June 2011 (‘the investigation period’ or
‘IP’). The examination of trends relevant for the assessment of injury covered
the period from 1 January 2008 to the end of the IP (‘the period considered’).
1.2.        Subsequent procedure
(4)       Subsequent to the
disclosure of the essential facts and considerations on the basis of which it
was decided to impose a provisional anti-dumping duty ('provisional
disclosure'), several interested parties made written submissions making known
their views on the provisional findings. The parties who so requested were
granted an opportunity to be heard. 
(5)       The Commission continued
to seek and verify all information it deemed necessary for its definitive
findings. The oral and written comments submitted by the interested parties
were considered and, where appropriate, the provisional findings were modified
accordingly.
(6)       As
already mentioned in recital (12) of the provisional Regulation, one group of
related exporting producers claimed individual examination in accordance with
Article 17(3) of the basic Regulation. The examination of those claims at the
provisional stage was too burdensome to be carried out and was deferred to the
definitive stage. It was thus decided to grant an individual examination to the
group claiming it, i.e. the Sira Group. In respect of its operations in the
PRC, the Sira Group is composed of Sira (Tianjin) Aluminium Products Co. Ltd.
and Sira Group (Tianjin) Heating Radiators Co. Ltd.
(7)       All parties were informed
of the essential facts and considerations on the basis of which it was intended
to recommend the imposition of a definitive anti-dumping duty on imports of
aluminium radiators originating in the People's Republic of China and the
definitive collection of the amounts secured by way of the provisional duty
('final disclosure'). All parties were granted a period within which they could
make comments on this final disclosure. 
(8)       The oral and written
comments submitted by the interested parties were considered and taken into
account where appropriate.
2.           PRODUCT CONCERNED AND LIKE
PRODUCT
(9)       As set out in recital (15)
of the provisional Regulation, the product concerned is aluminium radiators and
elements or sections of which such radiator is composed, whether or not such
elements are assembled in blocks, excluding radiators and elements and sections
thereof of the electrical type (‘the product concerned’). The product concerned
currently falls within CN codes, ex 7615 10 10, ex 7615 10 90, ex 7616 99 10 and
ex 7616 99 90.
(10)     After publication of
provisional measures, one party claimed that steel radiators are
interchangeable with the product concerned and the like product and asked the
Commission to analyse and include the steel radiator market trend to compare it
in particular with the market of aluminium radiators.
(11)     Based on information
available, it appears that aluminium radiators have different technical
characteristics, especially as concerning the basic raw material (steel in one
case and aluminium on the other), the weight, the thermal inertia and the heat
conductibility. Furthermore, the information collected did not point to direct
competition and interchangeability between the two products. Finally, the party
did not provide any evidence to support its allegations. Based on the above,
the claim was rejected.
(12)     In the absence of other
comments regarding the product concerned and the like product, recitals (15)
and (23) of the provisional Regulation are hereby confirmed.
3.           DUMPING
3.1.        Market Economy Treatment
and Individual Treatment
3.1.1.     Preliminary Remark
(13)     As
already mentioned in recital (6) above, it was decided to grant an individual
examination to the Sira Group. In respect of its operations in the PRC, the
Sira Group is composed of Sira (Tianjin) Aluminium Products Co. Ltd. and Sira
Group (Tianjin) Heating Radiators Co. Ltd. The Sira Group also claimed market
economy treatment ('MET') or individual treatment ('IT').
3.1.2.     Market Economy Treatment
(MET)
(14)     It is recalled that, as
mentioned in recitals (30) to (31) of the provisional Regulation, none of the
sampled parties had claimed MET. 
(15)     As mentioned above in
recital (13), the Sira Group, which was granted individual examination after
the imposition of provisional measures, claimed MET and submitted MET claim
forms for the two companies involved in the production and commercialisation of
the product concerned.
(16)     Pursuant to Article 2(7)(b)
of the basic Regulation, normal value for imports originating in the PRC shall
be determined in accordance with paragraphs 1 to 6 of the said Article for
those producers which were found to meet the criteria laid down in Article
2(7)(c) of the basic Regulation. Briefly and for ease of reference only, these
criteria are set out in summarised form below: 
–              
business decisions are made in response to
market signals, without significant State interference, and costs reflect
market values, 
–              
firms have one clear set of independently
audited accounting records, 
–              
there are no distortions carried over from the
non-market economy system, 
–              
bankruptcy and property laws guarantee stability
and legal certainty, and 
–              
exchange rate conversions are carried out at
market rates. 
(17)     The information provided by
the two companies belonging to the Sira Group in the MET claim forms was duly
analysed and further information was requested and obtained. In view of the
findings it was not considered necessary to conduct a verification visit at the
premises of the companies.
(18)     The MET investigation
demonstrated that the Sira Group failed to meet the requirements of criterion 1
because of State interference in decisions concerning the main raw material,
aluminium. The cost of aluminium represents ca. 70% of the cost of production
of the product concerned. The investigation demonstrated that both producers in
the Sira Group acquired the aluminium used for the production of the product
concerned on the Chinese domestic market. Prices are based on the quotation of
aluminium in the State-controlled Shanghai Non-ferrous Metal Exchange market
('the Exchange' or 'SHFE'). The SHFE is a closed exchange for
Chinese-registered companies and Chinese citizens and it is controlled by the
State Securities Regulatory Commission. Several rules governing the functioning
of the Exchange contribute to low volatility and depressed prices at the SHFE:
daily price fluctuations are limited to 4% above or below the settlement price
of the previous trading day, trading happens at a low frequency (until the 15th
day of each month), futures contracts are limited to a duration of up to 12
months, and transaction fees are charged by both the Exchange and brokers.
(19)     Moreover, as concerns SHFE
transactions, physical deliveries can only take place in an approved warehouse
within the PRC, unlike international exchanges, where delivery can take place
worldwide. Moreover, as the SHFE is a platform for physical exchanges only (no
derivatives are sold), this completely insulates the Chinese aluminium market.
As a consequence, arbitrage with the worldwide benchmark, the London Metals
Exchange ('LME') or other markets is practically not possible and the exchange
works in isolation from other world markets. Therefore, an equalization among
these markets cannot take place. Aluminium price quotation at the LME was on a
monthly average basis 14% higher than at the SHFE during the IP. 
(20)     The State also interferes
with the price setting mechanisms in the SHFE as it is both a seller and a
purchaser, via the State Reserve Bureau and other State Bodies, of primary aluminium.
In addition, the State sets daily price limits via the rules of the SHFE which
have been approved by the State Regulator, the China Securities Regulatory
Commission ('the CSRC'). 
(21)     In addition, the
investigation demonstrated that primary aluminium for export is subject to a
17% VAT and is not refundable on export whereas VAT for domestically sold
aluminium and on finished goods is refundable at 13%. Moreover, primary
aluminium for export is subject to a 17% export tax. As a result, the vast majority
of primary aluminium production is sold on the Chinese market causing a price
depression of the domestic primary aluminium price and an important cost
advantage for producers of aluminium radiators in the PRC. The Chinese State
further interfered in the market during the IP as it eliminated the 5% import
duty on metals during the financial crisis. 
(22)     A further distortion by the
Chinese State is in the form of interventions in the market by the State
Reserves Bureau ('SRB') which is part of the National Development Reform
Commission ('NDRC'). At the end of 2008 and the beginning of 2009 the SRB
started buying up stocks of primary aluminium from smelters. This was a
stimulus package aimed at limiting the effects of the global financial and
economic crisis which cut demand. Those State-backed purchases absorbed most of
the stocks in the domestic market in March and April 2009, driving up prices
during the first half of 2009. The SRB sold primary aluminium back onto the
market such as at the start of November 2010 when the SRB sold 96 000 tonnes by
auction as reported by Bloomberg[4].
The Xinhua News Agency reported the stockpiling measures in December 2008,
explaining that it was planned to accumulate 300 000 tonnes of aluminium at
prices which were 10% higher than the market price in a measure designed to
prop up prices[5].
The SRB stockpiling plan involved buying from several Chinese smelters although
around half was to be bought from the Aluminium Corporation of China Ltd.
Furthermore, the Minister in charge of the NDRC explained that other parts of
the stimulus package included relaxed export controls, electricity subsidies,
reduced electricity prices and raising loan ceilings. The package is reported
to have had an immediate effect on prices. The above demonstrates that the
Chinese State has a primary role in the setting of prices of primary aluminium
and that it interferes in the market.
(23)     That the significant State
interference, as described above, is clearly targeted is, inter alia,
corroborated by the 12th 5 Year Development Plan for Aluminium (2011-15) in
which the Government of China ('GOC') explicitly states its intention of
"adjusting tax and export tax rebates and other economic levers, and
strictly control the total amount of expansion and exports of primary
products". This plan continues the policy which existed in the previous
Aluminium Plan. Furthermore these plans have been implemented over many years
and, as demonstrated above, during the IP several implementing measures were in
operation.
(24)     Thus, the multiple
State-induced distortions in the Chinese primary aluminium prices affect the
raw material prices. In addition, the producers enjoy an advantage from these
distortions, in the sense that they normally make their purchases in the Chinese
market from local suppliers using Chinese spot markets prices (or SHFE) as a
benchmark. During the IP, these prices were around 15% lower than the world
market prices. In theory, Chinese companies can also buy certain quantities at
LME prices when prices in the Chinese market are higher as a result of State
intervention – whilst the opposite is impossible for non-Chinese operators. 
(25)     An examination of the
questionnaire responses of both Sira (Tianjin) Aluminium Products Co. Ltd. and
Sira Group (Tianjin) Heating Radiators Co. Ltd. showed that they purchased
primary aluminium products at prices linked to the SHFE price in the IP and
that their purchase prices had followed the SHFE index over a longer period. 
(26)     In addition, the
investigation showed that one of the two companies concerned benefited from the
'two free three half' Business Income Tax rebate. This rebate system of the
Chinese State means that once a company starts to realise a profit it pays no
Business Income Tax for two years and then only pays half for the next three
years. Such distortions are recorded as negative costs in the profit and loss
account thereby increasing profitability.
(27)     Under such circumstances,
neither of the companies has been in a position to prove that their business
decisions regarding acquisition of raw materials are not subject to significant
State interference and that costs of major inputs substantially reflect market
values. Therefore, they could not demonstrate that they fulfil criterion 1. 
(28)     In view of the above
findings on criterion 1, it was considered, after consultation of the Advisory
Committee, that MET should be rejected for the Sira Group. 
(29)     In view of the above, the
other MET criteria set out in Article 2(7)(b) of the basic Regulation were not
further analysed. 
(30)     The Commission officially
disclosed the results of the MET findings to the group of related companies
concerned in the PRC and to the complainant. They were also given an
opportunity to make their views known in writing and to request a hearing if
there were particular reasons to be heard. 
(31)     Following the MET
disclosure, the Sira Group commented on the proposed MET findings. However,
since the Sira Group labelled its comments as limited by nature, the Commission
dealt with the issues raised on a bilateral basis by means of a specific
disclosure document. The comments did not lead to changes in the findings
concerning criterion 1.
(32)     Further to the above and in
the absence of any comments, recitals (30) to (31) of the provisional
Regulation are hereby confirmed.
3.1.3.     Individual Treatment (IT)
(33)     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. Briefly, and for ease of reference only, these criteria were
set out in recital (32) of the provisional Regulation.
(34)     Both related exporting
producers of the Sira Group claimed IT in case MET would not be granted. These
claims were examined. The investigation showed that they fulfilled all the
conditions of Article 9(5) of the basic Regulation. 
(35)     The Sira Group was
therefore granted IT.
(36)     On 28 July 2011, the
Dispute Settlement Body of the WTO (‘DSB’) adopted an Appellate Body report and
a Panel report as modified by the Appellate Body report on the case ‘European
Communities – Definitive Anti-Dumping Measures on Certain Iron or Steel
Fasteners from China’[6] (‘reports’).
(37)     In the reports, it was
found, inter alia, that Article 9(5) of the basic Regulation was inconsistent
with Articles 6.10, 9.2 and 18.4 of the WTO Anti-Dumping Agreement and Article
XVI:4 of the WTO Agreement. Article 9(5) of the basic Regulation provides that
individual exporting producers in non-market economy countries which do not
receive market economy treatment pursuant to Article 2(7)(c) of the basic
Regulation will be subject to a countrywide duty rate unless such exporters can
demonstrate that they meet the conditions for individual treatment laid out in
Article 9(5) of the basic Regulation (‘the DSB finding on Article 9(5) of the
basic Regulation’).
(38)     Any exporting producer in
the PRC which considers that this Regulation should be reviewed in the light of
the legal interpretations regarding Article 9(5) contained in the reports is
invited to request a review on the basis of Article 2 of Council Regulation
(EC) No 1515/2001 on the measures that may be taken by the Community following
a report adopted by the WTO Dispute Settlement Body concerning anti-dumping and
anti-subsidy matters[7] (‘the WTO enabling Regulation’).
(39)     The relevant Union
institution may repeal, amend or maintain the measures reviewed in order to
reflect the review findings. Parties requesting a review should be aware that
if the findings relating to them require an amendment of the measures, such
amendment may result in a decrease or an increase in the level of the measures.
(40)     Further to the above, no comments
were received concerning the granting of IT and recitals (32) to (34) of the
provisional Regulation are hereby confirmed.
3.2.        Analogue country
(41)     In the absence of any
comments regarding analogue country, recitals (35) to (41) of the provisional
Regulation are hereby confirmed.
3.3.        Normal value
(42)     The same methodology was
used for establishing normal value for the Sira Group as the one described in
recitals (42) to (46) of the provisional Regulation. In the absence of any
comments regarding normal value, recitals (42) to (46) of the provisional
Regulation are hereby confirmed.
3.4.        Export price
(43)     The Sira Group export price
was calculated in line with Article 2(9) of the basic Regulation because
exports were made at transfer prices which were deemed unreliable. Export
prices were therefore calculated on the basis of the resale prices to the first
independent customers on the Union market, with appropriate deductions for
costs and profit being made to adjust the export price to an ex works level.
Adjustments were made to the resale price to the first independent buyer in the
Union for all costs including duties and taxes, incurred between importation
and resale, as well as a reasonable margin for SG&A and profits. With
respect to the profit margin, the profit realised by the cooperating unrelated
importer of the product concerned was used since the actual profit of the
related importer was not considered reliable because of the relationship
between the exporting producer and the related importer.
(44)     In respect of the sampled
exporters, in the absence of any comments regarding export price, recital (47)
of the provisional Regulation is hereby confirmed.
3.5.        Comparison
(45)     Certain comments were made
concerning the comparison between the normal value and the export price.
(46)     Metal Group Ltd. contested
the comparison between the normal value and the export price on the grounds
that the comparison made was not fair because of the matching methodology used
and the company claimed differences in physical characteristics.
(47)     Regarding the comparison
made, Metal Group suggested an alternative method based simply on weight. This
methodology was rejected because it ignores other important fields included in
the product type comparison system, e.g. power, which therefore ensures better
comparability. 
(48)     The claim for physical
differences made by Metal Group Ltd. was threefold and submitted after the
deadline for submitting comments had passed. None of the three claims in this
respect had been mentioned in the questionnaire response (which specifically
asked for such claims to be made). Furthermore, these claims were not raised
during the verification visit which would have given the investigation team the
opportunity to verify their validity and magnitude. 
(49)     The first claim involved
the type of aluminium alloy used in production. In this respect, it was claimed
that the Chinese standard of this alloy was not the same as the alloy of the
same name used in the Union. Whilst it is clear that these alloys are not
identical, no evidence was submitted to prove that any difference in cost
existed. 
(50)     The second claim involved
the use of an alleged cheaper version of finishing powder. Again, no evidence
was submitted to prove this claim and it must be stated that this finishing
powder constituted such a low percentage of the full cost of production that it
would have only a marginal impact. 
(51)     The third claim was that no
internal anti-corrosion coating was applied by the company in contrast to the
product produced in the EU. As in the two cases above, no evidence was
submitted to prove this claim.
(52)     In view of the above, the
claim for differences in physical characteristics was rejected.
(53)     In the absence of any
further comments, recitals (48) to (50) of the provisional Regulation are
hereby confirmed.
3.6.        Dumping margins
(54)     In respect of the Sira
Group, the dumping margin was calculated on the basis of the methodology
mentioned in recital (51) of the provisional Regulation and was set at 23,0%. 
(55)     In the absence of any
further comments, recitals (51) to (54) of the provisional Regulation are
hereby confirmed.
4.           INJURY
4.1.        Total Union production
(56)     In the absence of comments
concerning the total Union production, recitals (55) to (57) of the provisional
Regulation are hereby confirmed.
4.2.        Union consumption 
(57)     In the absence of comments
concerning the Union consumption, recitals (58) to (61) of the provisional Regulation
are hereby confirmed.
4.3.        Imports from the country
concerned 
4.3.1.     Prices of imports and price
undercutting
(58)     After
disclosure of the provisional findings, one party claimed that the price
undercutting margin of 6.1% found during the IP was low and could not have
caused material injury to the Union industry.
(59)     The undercutting practiced
by Chinese exporters should, however, be seen in the light of the pressure it
has exercised on the Union market and the impact it had on the Union industry
price level. The investigation showed that price pressure due to low-priced
dumped imports did not allow the Union industry to set prices at a level
allowing it to cover for the costs and to achieve a reasonable margin of
profit, in particular during the IP. 
(60)     As
mentioned in recital (65) of the provisional Regulation, the investigation
confirmed that the import prices from the PRC were dumped and were always below
the sale prices of the Union industry during the period considered. The
constant undercutting practised by the Chinese exporters allowed their sales
volume and market share to expand in particular during the IP. Moreover, it was
found that the price difference on certain types of radiators was considerably
higher than the average undercutting found. Hence, the negative impact of the
undercutting found on the Union market and the Union industry cannot be
understimated. The claim was thus rejected.
(61)     The same party reiterated
that the Chinese radiators were of inferior quality compared to the ones
produced in the Union and that they therefore could not be the cause of any
injury to the Union industry. 
(62)     This claim was, however,
not substantiated and the investigation did not reveal facts which could
support this claim. As stated in recital (23) of the provisional Regulation,
the investigation showed that the aluminium radiators produced in and exported
from the PRC and the aluminium radiators produced and sold in the Union by the
Union producers have the same basic physical and technical characteristics as
well as the same basic uses. Moreover, they are also completely interchangeble
and look identical in particular to the public. They are therefore considered
to be alike within the meaning of the Article 1(4) of the basic Regulation. 
(63)     It is noteworthy that the
price undercutting and the injury elimination level are determined on the basis
of a detailed comparison of Chinese and Union products types. Hence, any
alleged difference between the various types of radiators is taken into account
in the detailed price comparison. Based on the above, the claim was rejected.
(64)     In the absence of any other
comments concerning imports from the country concerned, recitals (62) to (67)
of the provisional Regulation are hereby confirmed. 
4.4.        Economic situation of the
Union industry 
(65)     In the absence of other
comments concerning the preliminary remarks, recitals (68) to (71) of the
provisional Regulation are hereby confirmed.
4.4.1.     Production,
production capacity and capacity utilisation
(66)     In the absence of comments
concerning production, production capacity and capacity utilisation, recitals
(72) to (74) of the provisional Regulation are hereby confirmed. 
4.4.2.     Sales
volume and market share
(67)     In the absence of comments
concerning the development of sales volume and market share of the Union
industry, recital (75) of the provisional Regulation is hereby confirmed.
4.4.3.     Growth
(68)     In the absence of comments
concerning growth, recital (76) of the provisional Regulation is hereby
confirmed.
4.4.4.     Employment
(69)     In the absence of comments
concerning employment, recitals (77) and (78) of the provisional Regulation are
hereby confirmed.
4.4.5.     Average
unit prices in the Union and cost of production 
(70)     In the absence of comments
concerning average unit prices in the Union and cost of production, recitals
(79) and (80) of the provisional Regulation are hereby confirmed.
4.4.6.     Profitability,
cash flow, investments, return on investments and ability to raise capital
(71)     In the absence of comments
concerning profitability, cash flow, investments, return on investments and
ability to raise capital, recitals (81) to (83) of the provisional Regulation
are hereby confirmed.
4.4.7.     Stocks
(72)     In the absence of comments
concerning stocks, recital (84) of the provisional Regulation is hereby
confirmed.
4.4.8.     Magnitude
of the actual dumping margin
(73)     In the absence of any
comments concerning the magnitude of the actual dumping margin, recital (85) of
the provisional Regulation is hereby confirmed.
4.4.9.     Conclusion
on injury
(74)     The investigation confirmed
that most of the injury indicators showed a declining trend during the period
considered. Therefore, the conclusion reached in recitals (86) to (89) of the
provisional Regulation that the Union industry suffered material injury within
the meaning of Article 3(5) of the basic Regulation is confirmed. 
5.           CAUSATION
5.1.        Introduction
(75)     In the absence of any
comments to recital (90) of the provisional Regulation, that recital is hereby
confirmed.
5.2.        Effect
of the dumped imports
(76)     In the absence of any
comments concerning the effect of the dumped imports, recitals (91) to (95) of
the provisional Regulation are hereby confirmed.
5.3.        Effect of other factors
5.3.1.     Imports from third countries
(77)     In the absence of any
comments concerning imports from third countries, recital (96) of the
provisional Regulation is hereby confirmed.
5.3.2.     Economic
crisis
(78)     One party claimed that the
cause of the injury, if any, suffered by the Union industry was the economic
crisis which prevailed in the construction and housing sector, and particularly
in certain Member States such as Spain and Italy, considered by this party as
the main sales markets for the Union industry. 
(79)     The investigation, however,
revealed that the Union industry also sold large volumes of radiators in other
Member States than Spain and Italy. Furthermore, the market of the product
concerned and the like product goes beyond the construction and housing markets
of Spain and Italy. Nevertheless, even if it cannot be excluded that the
economic crisis had an impact on the Union market, the presence of increasing
volumes of low-priced Chinese dumped imports intensified any negative effects
the economic downturn may have had during the period considered and prevented
the Union industry from benefitting from the general economic recovery during
the IP. The claim was therefore rejected.
(80)     In the absence of other
comments concerning the economic crisis, recitals (97) to (100) of the
provisional Regulation are hereby confirmed.
5.3.3.     Development
of the Union industry cost of production
(81)     It was claimed that the
increase in the price of aluminium which constitutes a large share of the cost
to produce the like product was the cause of the injury suffered by the Union
industry. 
(82)     However, it is rather
considered that in a market governed by fair competition, prices can be set at
a level as to cover costs and to achieve a reasonable profit margin. As
confirmed in recital (60) above, the average import prices from the PRC were
continuously undercutting the Union industry prices during the period
considered. When costs increased, the Union industry could not increase its
prices accordingly in view of the continued price pressure. Hence, this claim
was rejected.
(83)     In the absence of any other
comments concerning the development of the Union industry cost of production,
recitals (101) to (103) of the provisional Regulation are hereby confirmed.
5.3.4.     Export
performance of the sampled Union industry
(84)     One party claimed that the
level and the decrease in the Union industry export sales had a major influence
on its overall economic performance during the period considered.
(85)     The
investigation showed, however, that although the Union industry export sales
decreased during the period considered , they remained an important part,
accounting for 51% of the Union industry total sales in the EU in the IP and
for 27% of the Union industry total production in the IP. Thus, as stated in
recital (106) of the provisional Regulation, export sales gave the Union
industry the possibility to achieve economies of scale and could therefore not
be considered to have caused the material injury suffered by the Union industry
during the period considered. The trend and the level of the Union industry
export sales are not such as to break the causal link between the injury and
the low-priced dumped imports from the PRC. Therefore, the claim was rejected. 
(86)     The
same party has requested disclosure of the Union industry exports' values and
thus prices, since only exports' volumes were published in the provisional
Regulation. However, this data cannot be disclosed since they are considered
confidential.
(87)     In the absence of other
comments concerning the export performance of the sampled Union industry,
recitals (104) to (106) of the provisional Regulation are hereby confirmed.
5.4.        Conclusion
on causation
(88)     One party claimed that the
decision of the Union industry to increase production capacity in 2008 combined
with the difficult economic situation which also prevailed in the following years
are the main causes of the decrease of the Union industry's capacity
utilisation and its negative profitability. It was thus claimed that injury was
caused by various domestic factors, such as the economic crisis and the wrong
investment decisions made by the Union industry.
(89)     However,
an injury analysis is assessed taking into account all the injury factors
together, of which capacity utilisation and profitability are only two. The
investigation of injury showed in particular that the Union industry sales
volume decreased by 16% over the period considered, while imports from the PRC
increased by 77% over the period considered and the market share increased from
13% to 24% over the period considered. Even during the IP, when consumption
increased compared to 2009, the Union industry market share kept shrinking.
Notwithstanding the deterioration of other injury factors, another sign of the
difficult economic situation suffered by the Union industry is illustrated by
the Union industry stock levels which increased significantly over the period
considered. Therefore, the increased production capacity of the Union industry
in 2008 should be analysed together with all these other elements, in order to
have a complete picture.
(90)     Although
the economic crisis had a certain negative impact on the Union industry's
situation, it cannot be ignored that the low-priced Chinese dumped imports
increased significantly over the period considered and thus intensified any
negative effects the economic downturn may have had during the period
considered and prevented the Union industry from benefitting from the general
economic recovery during the IP. 
(91)     The
investigation showed that there was a 9% increase in consumption between 2009
and the IP, while the Union industry market share kept decreasing and even with
a better general economic situation, the Union industry was unable to recover,
because it was always under pressure of the low-priced dumped imports from the
PRC. Based on the above, the claim was thus rejected.
(92)     In the absence of other
comments concerning the conclusion on causation, recitals (107) to (110) of the
provisional Regulation are hereby confirmed.
6.           UNION INTEREST
(93)     There was no cooperation
from users in this investigation and despite the efforts after publication of
provisional findings no, users came forward. 
(94)     Based on information
available, it was found that the main purchasers of aluminium radiators are
large building companies, distributors and wholesalers, which resale them to
specialised chains or retailer shops for sales to smaller construction
companies or end users. An assessment of the possible impact the imposition of
definitive duties may have on the parties concerned revealed that even with a
potential price increase per element of aluminium radiator imported of 61%,
which is the highest anti-dumping duty proposed, this price increase seems to
be quite low, since the product concerned is usually part of large projects,
where its price is only a small portion of the total business costs. Therefore,
even taking into account the worst case scenario, it seems that the resulted
price increase could be easily absorbed in the chain of downstream sales.
(95)     In the absence of comments
concerning the Union interest, recitals (111) to (118) of the provisional
Regulation are hereby confirmed.
7.           DEFINITIVE ANTI-DUMPING
MEASURES
7.1.        Injury elimination level
(96)     It was claimed that the
profit margin used to calculate the amount of duty necessary to remove the
effects of the injurious dumping was too high. It was argued that the margin of
7,4%, achieved by the sampled Union producers in the year 2008, was exceptional
and unrealistic. The economic crisis which hit the market in the following
years made it impossible to reach such a level of profit.
(97)     It
should be noted that this profit margin was verified during the investigation
as the profit margin reached by the sampled companies under normal market
conditions, namely in the absence of injurious dumping. It cannot be concluded
that the economic crisis had no impact on the Union industry's situation, but
the volume of low-priced dumped imports from the PRC undercutting the prices of
the Union industry kept increasing over the whole period considered to the
detriment of the Union industry prices and market share. It is therefore clear
that the dumped imports from the PRC have intensified any effect of the
economic downturn on the Union industry. Therefore, this claim was rejected.
(98)     It
was also claimed that the post-importation cost used to calculate undercutting
and injury margins (0,2%, including all the costs necessary to release the
goods for free circulation into the EU, such as the handling cost and customs
clearance fee, but excluding the import duty) was underestimated. According to
this party, the post-importation cost should include the handling cost, customs
clearance fee and in-land freight estimated to 3,5%. In order to calculate
undercutting and underselling, the price at the EU border is compared with the
ex-works price of EU industry producers. The price at EU border must include
all the costs necessary to release the goods for free circulation into the EU,
(i.e. customs clearance fee and handling costs), but not any in-land freight,
as claimed by the party. Therefore, this claim was rejected.
(99)     In
the absence of other comments concerning the injury elimination level, the
methodology described in recitals (119) to (123) of the provisional Regulation
is hereby confirmed.
7.2.        Form
and level of the duties
(100)   In
the light of the foregoing, it is considered that, in accordance with Article
9(4) of the basic Regulation, definitive anti-dumping measures should be
imposed on imports of the product concerned at the level of the lower of the
dumping and the injury margins, in accordance with the lesser duty rule.
Accordingly, all duty rates should be set at the level of the injury margins
found.
(101)   The
proposed definitive anti-dumping duties are the following:
 Country || Company || Dumping margin || Injury margin || Definitive duty % 
 PRC || Zhejiang Flyhigh Metal Products Co., Ltd || 23,0% || 12,6% || 12,6% 
   || Metal Group Co., Ltd || 70,8% || 56,2% || 56,2% 
   || Sira Group (Sira (Tianjin) Aluminium Products Co. Ltd. and Sira Group (Tianjin) Heating Radiators Co. Ltd.) || 23,0% || 14,9% || 14,9% 
   || Other cooperating companies || 32,5% || 21,2% || 21,2% 
   || All other companies (country-wide dumping margin) || 76,6% || 61,4% || 61,4% 
(102)   The
individual company anti-dumping duty rates specified in this Regulation were
established on the basis of the findings of the present investigation.
Therefore, they reflect the situation found during that investigation in
respect to these companies. These duty rates (as opposed to the country-wide
duty applicable to 'all other companies') are thus exclusively applicable to
imports of the products originating in the PRC and produced by the companies
and thus by the specific legal entities mentioned. Imports of the product
concerned manufactured by any other company not specifically mentioned in the
operative part of this Regulation with its name and address, including entities
related to those specifically mentioned, cannot benefit from these rates and
shall be subject to the duty rate applicable to ‘all other companies’.
(103)   In order to minimise the
risks of circumvention due to the high difference in the duty rates, it is
considered that special measures are needed in this case to ensure the proper
application of the anti-dumping duties. These special measures include the
presentation to the Customs authorities of the Member States of a valid
commercial invoice, which shall conform to the requirements set out in the
Annex II to this Regulation. Imports not accompanied by such an invoice shall
be made subject to the residual anti-dumping duty applicable to all other
exporters.
(104)   Should the exports by one of
the companies benefiting from lower individual duty rates increase
significantly in volume after the imposition of the measures concerned, such an
increase in volume could be considered as constituting in itself a change in
the pattern of trade due to the imposition of measures within the meaning of
Article 13(1) of the basic Regulation. In such circumstances and provided the
conditions are met an anti-circumvention investigation may be initiated. This
investigation may, inter alia, examine the need for the removal of individual
duty rates and the consequent imposition of a country-wide duty.
(105)   Any claim requesting the
application of an individual anti-dumping duty rate (e.g. following a change in
the name of the entity or following the setting up of new production or sales
entities) should be addressed to the Commission[8]
forthwith with all relevant information, in particular any modification in the
company’s activities linked to production, domestic and export sales associated
with, for instance, that name change or that change in the production and sales
entities. If appropriate, this Regulation will then be amended accordingly by
updating the list of companies benefiting from individual anti-dumping duty
rates.
(106)   In
order to ensure a proper enforcement of the anti-dumping duty, the country-wide
duty level should not only apply to the non-cooperating exporting producers but
also to those producers which did not have any exports to the Union during the
IP.
(107)   In
order to ensure equal treatment between any new exporters and the cooperating
companies not included in the sample, mentioned in Annex I to this Regulation,
provision should be made for the weighted average duty imposed on the latter
companies to be applied to any new exporters which would otherwise be entitled
to a review pursuant to Article 11(4) of the basic Regulation as that Article
does not apply where sampling has been used.
7.3.        Definitive collection of
provisional anti-dumping duties
(108)   In
view of the magnitude of the dumping margins found and given the level of the
injury caused to the Union industry, it is considered necessary that the
amounts secured by way of the provisional anti-dumping duty, imposed by the
provisional Regulation, be definitively collected to the extent of the amount
of the definitive duties imposed.
HAS ADOPTED THIS REGULATION:
Article 1
1.           A definitive anti-dumping
duty is hereby imposed on imports of aluminium radiators and elements or
sections of which such radiator is composed, whether or not such elements are
assembled in blocks, excluding radiators and elements and sections thereof of
the electrical type, currently falling within CN codes ex 7615 10 10, ex 7615
10 90, ex 7616 99 10 and ex 7616 99 90 (TARIC codes 7615 10 10 10, 7615 10 90
10, 7616 99 10 91, 7616 99 90 01 and 7616 99 90 91) and originating in the
People's Republic of China.
2.           The rate of the definitive
anti-dumping duty applicable to the net, free-at-Union-frontier price, before
duty, of the product described in paragraph 1 and produced by the companies
below shall be as follows:
 Company ||   || Definitive duty || TARIC additional code 
 Zhejiang Flyhigh Metal Products Co., Ltd. ||   || 12,6% || B272 
 Metal Group Co. Ltd. ||   || 56,2% || B273 
 Sira (Tianjin) Aluminium Products Co. Ltd. Sira Group (Tianjin) Heating Radiators Co. Ltd. Companies listed in Annex 1 ||   || 14,9%     14,9%   21,2% || B279     B280 
 All other companies ||   || 61,4% || B999 
3.           The application of the
individual duty rates specified for the companies mentioned in paragraph 2
shall be conditional upon presentation to the customs authorities of the Member
States of a valid commercial invoice, which shall conform to the requirements
set out in Annex II. If no such invoice is presented, the duty applicable to
all other companies shall apply.
4.           Unless otherwise
specified, the provisions in force concerning customs duties shall apply.
Article 2
The amounts secured by way of the
provisional anti-dumping duty pursuant to Commission Regulation (EU) No
402/2012 on imports of aluminium radiators originating in the People's Republic
of China, shall be definitively collected. The amounts secured in excess of the
definitive rates of the anti-dumping duty shall be released. 
Article 3
Where any new exporting producer in the
People’s Republic of China provides sufficient evidence to the Commission that:
–                        
it did not export to the Union the product
described in Article 1(1) during the investigation period (1 July 2010 to 30
June 2011),
–                        
it is not related to any of the exporters or
producers in the People’s Republic of China which are subject to the measures
imposed by this Regulation,
–                        
it has actually exported to the Union the
product concerned after the investigation period on which the measures are
based, or it has entered into an irrevocable contractual obligation to export a
significant quantity to the Union,
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 the new exporting producer to the cooperating
companies not included in the sample and thus subject to the weighted average
duty rate of 21,2 %.
Article 4 
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
ANNEX I
PRC COOPERATING EXPORTING PRODUCERS
NOT SAMPLED
 Name || TARIC additional code 
 Jinyun Shengda Industry Co., Ltd. || B274 
 Ningbo Ephriam Radiator Equipment Co.,Ltd || B275 
 Ningbo Everfamily Radiator Co., Ltd || B276 
 Ningbo Ningshing Kinhil Industrial Co.,Ltd. || B277 
 Ningbo Ninhshing Kinhil International Co., Ltd. || B278 
 Yongkang Jinbiao Machine Electric Co., Ltd . || B281 
 Yongkang Sanghe Radiator Co., Ltd. || B282 
 Zhejiang Aishuibao Piping Systems Co.,Ltd || B283 
 Zhejiang Botai Tools Co., Ltd || B284 
 Zhejiang East Industry Co.,Ltd || B285 
 Zhejiang Guangying Machinery Co.,Ltd || B286 
 Zhejiang Kangfa Industry & Trading Co., Ltd. || B287 
 Zhejiang Liwang Industrial and Trading Co., Ltd || B288 
 Zhejiang Ningshuai Industry Co., Ltd || B289 
 Zhejiang Rongrong Industrial Co., Ltd. || B290 
 Zhejiang Yuanda Machinery & Electrical Manufacturing Co., Ltd || B291 
ANNEX II
A declaration signed by an official of the
entity issuing the commercial invoice, in the following format, must appear on
the valid commercial invoice referred to in Article 1(3):
(1) the name and function of the official
of the entity issuing the commercial invoice;
(2) the following declaration:
"I, the undersigned, certify that the (volume)
of aluminium radiators and elements or sections of which such radiator is
composed, sold for export to the European Union covered by this invoice, was
manufactured by (company name and registered seat) (TARIC additional code) in
the People’s Republic of China. I declare that the information provided in this
invoice is complete and correct.
Date and signature".
[1]               OJ L 343, 22.12.2009, p. 51. 
[2]               OJ L 124, 11.5.2012, p. 17.
[3]               OJ C 236, 12.8.2011, p. 18.
[4]               www.bloomberg.com
[5]               http://news.xinhuanet.com/english/2008-12/26/content_10564812.htm
[6]               WTO, report of the Appellate Body, AB-2011-2,
WT/DS397/AB/R, 15 July 2011. WTO, report of the Panel, WT/DS397/R, 29 September
2010. The reports can be downloaded from the WTO's website
(http://www.wto.org/english/tratop_e/dispu_e/cases_ e/ds397_e.htm).
[7]               OJ L 201, 26.7.2001, p. 10.
[8]               European Commission, Directorate-General for Trade,
Directorate H, Office: NERV-105, 08/020, 1049 Brussels, BELGIUM.