31990R3617

15. 12 . 90 Official Journal of the European Communities No L 351 / 17

COMMISSION REGULATION (EEC) No 3617/90 of 11 December 1990 imposing a provisional anti-dumping duty on imports of certain welded tubes of iron or non-alloy steel, originating in Turkey or in Venezuela and accepting undertakings offered in connection with such imports

THE COMMISSION OF THE EUROPEAN COMMUNITIES, to make known their views in writing and to request a hearing.

Having regard to the Treaty establishing the European Economic Community, During the investigation, all exporters concerned and some importers and Community producers asked for an extension for replying to the Commis­ Having regard to Council Regulation (EEC) No 2423/88 sion's questionnaires. Since these requests were of 11 July 1988 on protection against dumped or subsi­ considered justified, the Commission extended the dized imports from countries not members of the Euro­ set time limits . pean Economic Community ('), and in particular Articles 10 and 11 thereof, (4) Most of the Community producers, some of the importers, two Turkish producers/exporters, a producer and an exporter of Venezuelan products After consultations within the Advisory Committee as made known their views in writing. Some of them provided for by the abovementioned Regulation, requested and were granted hearings.

Whereas : (5) No submissions were made by or on behalf of Community purchasers or processors of the products in question.

A. PROCEDURE (6) The Commission sought and verified all informa­ tion it deemed to be necessary for the purposes of establishing the facts and carried out investigations (1 ) In June 1989 the Commission received a at the premises of the following : complaint lodged by the Liaison Committee of the European Community Steel Tube Industry on behalf of manufacturers representing the majority (a) EC producers : of the Community production of the products in — Mannesmannröhren-Werke AG, Düsseldorf, question. Germany, — Saarstahl Völklingen GmbH, Homburg/ (2) The complaint contained evidence of dumping and Saar, Germany, injury caused thereby which was considered suffi­ cient to justify the initiation of a proceeding. — IBS (United Tube Mills) SA, Athens, Greece, — Dalmine SpA, Dalmine, Italy, The Commission accordingly announced, by notice — Arbed SA, Luxembourg, Luxembourg, published in the Official Journal of the European — British Steel Tubes, Corby, Northants, Communities (2) the initiation of an anti-dumping United Kingdom ; proceeding concerning imports into the Commu­ nity of certain welded tubes of iron or non-alloy steel falling within CN codes 7306 30 51 , (b) non-EC producers/exporters : 7306 30 59, ex 7306 30 71 and ex 7306 30 79, origi­ nating in Turkey and in Venezuela, and Turkish products : commenced an investigation. — Borusan Salipazari, Istanbul, Turkey, — Yücel Boru Group Kadiköy, Istanbul, (3) The Commission officially so advised the produ­ Turkey ; cers/exporters and importers known to the Commission to be concerned, the representatives of Venezuelan products : the exporting countries and the complainant and — producer : CA. Conduven, Caracas, Vene­ gave the parties directly concerned the opportunity zuela, — exporter : Connectors Inc., Hauppauge, New (') OJ No L 209, 2. 8 . 1988 , p. 1 . 0 OJ No C 226, 2. 9 . 1989, p. 18 . York, USA ;

No L 351 / 18 Official Journal of the European Communities 15 . 12. 90

(c) EC importers : other general expenses and a reasonable margin of profit. — Leopold Lazarus Ltd, London, United Kingdom, Normal value was calculated for each month of the — Rheinerz, Koln, Germany, investigation period.

— Coutinho Caro & Co GmbH, Diisseldorf, ( 10) Venezuela Germany, — bj\.L.l.S>. i>pA, Sassan, Italy. Normal value was based on sales in the ordinary course of trade of comparable like products on the Venezuelan market, net of all discounts and rebates. (7) The Commission gave the different parties known to be concerned the opportunity to inspect all information made available to the Commission . Normal values have been established on the basis Furthermore, exporters of the product under inves­ of the weighted average ex-works sales prices for the tubes concerned. tigation were informed in conformity with Article 7 (4) of Regulation (EEC) No 2423/88 of the essential facts under consideration, on the basis of which it was intended to impose measures. (b) Export prices :

(1 1 ) Turkey (8) The investigation of dumping covered the period from 1 July 1988 to 30 June 1989 . The export prices were determined on the basis of the prices actually paid or payable for the like product sold for export to the Community. Export B. DUMPING sales taken into consideration were made to inde­ pendent customers. The products sold for export were identical to those which were considered for (a) Normal value : the calculation of normal value. No quantity discounts were granted. (9) Turkey (12) Venezuela The determination of the normal value varied according to the producer/exporter. For Yiicel Boru All exports to the Community were channelled Group, normal value was established on the basis of through Connectors Inc. located in New York. the comparable prices actually paid or payable in Connectors has the function of an export depart­ the ordinary course of trade for the like product on ment of Conduven. It handles no other products the Turkish market. and is fully controlled by Conduven. Export contracts, invoicing and collection of payments are Domestic sales considered for the calculation of made by Connectors ; handling and shipping of the goods is carried out by Conduven which ships the normal value were those made to independent goods directly to the Community. The exporting customers at a profit and in substantial quantities. country is therefore Venezuela. The export price There were no quality differences between the was taken to be that invoiced by Connectors since products sold on the domestic market and those for this company merely performed the functions of an exportation. export department of Conduven which would otherwise have been carried out in Venezuela. Normal value was established on a monthly weighted average basis for the period July 1988 to March 1989 falling within the investigation period, (c) Comparison since Yiicel Boru had made no exports to the Community between April 1989 and June 1989 (13) In comparing normal value with export prices the (end of the investigation period). Commission took account, where appropriate and to the extent of evidence available, of differences in For Borusan, the investigation by the Commission conditions and terms of sale, such as transport, showed that a substantial part of its sales on the , insurance, forwarding, handling costs and payment. Turkish domestic market were made at a loss during the investigation period. Consequently, it All comparisons were made at an ex-works level. was considered that these sales were not made in the ordinary course of trade. (d) Dumping margins Thus the normal value was based on a constructed value, determined by adding cost of production, a (14) The above determination of the facts shows the reasonable amount for selling, administrative and existence of dumping.

15 . 12. 90 Official Journal of the European Communities No L 351 / 19

The margins of dumping are equal to the amount The considerable inflow of dumped imports by which the normal values as established exceed prevented Community producers from benefiting the prices for export to the Community. adequately from the increase in consumption. Growth of Community production destined to the The margins of dumping varied according to the Community market lagged distinctly behind the producer/exporter and the weighted average development of consumption. margins expressed as a percentage of total cif Community frontier values were as follows : The effect was particularly pronounced in the Yiicel Boru Group 18,5 % German market which absorbed a substantial part Borusan 8,1 % of the dumped imports from the two countries Conduven 22,1 % concerned during the period 1986 to 1989.

C. INJURY In line with the retarded progress of production in (a) Cumulation connection with the massive inflow of dumped imports, Community producers could achieve only (15) Because tubes originating in Turkey and in Vene­ a moderate improvement of their capacity utiliza­ zuela are alike and in competition on the same tion which on average advanced by 5,5 percentage markets and distributed through similar channels, points from 57 % to 62,5 % between 1986 and the the Commission considered that the cumulation of investigation period. the impacts of the dumped imports from Turkey and Venezuela was appropriate. The overall capacity utilization in the Community thus remained unsatisfactory and prevented the (b) Volume and market share of dumped Community producers from realizing the advan­ imports tages of decreasing unit cost which they would have obtained if production had followed the ( 16) Imports from Turkey and Venezuela rose from expansion of demand. This effect was particularly 5 874 tonnes in 1986 to 52 835 tonnes during the detrimental in the light of increasing raw material investigation period, corresponding to a rate of cost following the sharp increase of prices for flat 800 % within less than four years. rolled steel products and zinc.

The corresponding market share increased from 0,8 % to 5,8 % in the same period. In the most affected Member States, the market shares reached 7,6 % in the Federal Republic of Germany and Prices and profitability 11,2% in the United Kingdom.

(c) Prices (19) From 1986 to the investigation period, there was a distinct increase in the sales prices of the Commu­ (17) The evidence available to the Commission also nity producers. However, the price increases were indicates that the prices at which the dumped to a large extent absorbed by the higher purchase imports from Turkey and Venezuela were sold in prices of the main input materials. the Community undercut the prices of Community producers during the investigation period signifi­ cantly. The generally buoyant situation of the steel markets and the strong demand for tubes in the The weighted average price undercuttings varied Community also led to an improvement of the according to the producer/exporter and were as financial results of Community producers. follows : However, Community prices remained suppressed and Community producers were prevented from Yucel Boru Group 21,2% realizing the necessary price increases to recover Borusan 7 % the rise of raw material cost and to generate satis­ Conduven 25,8 % factory returns of their sales. Most of the relevant Community producers could not generate positive financial results and have continued to make losses (d) Impact on the Community industry despite the very favourable market situation. Production and capacities

(18) Between 1986 and the investigation period Furthermore, the Commission was informed that a Community consumption increased by 22,9 % , Community producer decided to stop production while production destined for the Community of welded tubes because of the very low profitabi­ market rose by only 9,8 % over the same period. lity of this sector.

No L 351 /20 Official Journal of the European Communities 15 . 12. 90

(e) Causality and Venezuelan exports, taken in isolation, had to be qualified as material .

(20) In assessing whether dumped imports from Turkey and Venezuela have caused the injury sustained by the Community industry, the Commission took (f) Conclusion account of the fact that Community producers should have benefited from the recovery in the steel sector. However, the serious difficulties faced (21 ) In these circumstances the Commission has by Community producers in extending production concluded that the volume of dumped imports and sales, obtaining better prices to cope with the from Turkey and Venezuela and the prices at sharp rise in the purchase of raw material persisted, which they were offered for sale in the Commu­ while the volume of dumped imports offered at nity, taken in isolation, have to be considered as prices, which undercut significantly those of the having caused material injury to the Community injured industry were sharply increasing. In this industry. respect, the import volume of both Turkey and Venezuela (35 660 tonnes and 17 175 tonnes during the investigation period) and the correspon­ ding market share (3,9 % and 1,9 % during the investigation period) were considered as being D. COMMUNITY INTEREST significant.

(22) In assessing whether the interests of the Commu­ Because the buyer s decisions are mainly orientated nity call for intervention, the Commission has by the prices at which the products are offered, the considered that the iron and steel tube production Commission concluded that both exporting coun­ is an important basic industry in the Community tries caused injury. closely linked upstream with the steel industry and is the most important customer for the transforma­ tion of primary ECSC steel products. About 1 5 % of total EEC raw steel production is absorbed by The Commission also examined whether other the manufacture of tubes. The sector has gone factors might have contributed to the injury through a severe restructuring process because of sustained by the community industry. overcapacity. In 1988 , the sector employed 74 500 people in the Community as against 1 23 500 in 1981 . Regionally the plants are located in the vici­ For this purpose, the Commission took account nity of the steel producing centres which are that dumped imports of the products concerned already suffering from employment problems originating in Romania and Yugoslavia, which also linked to the downturn in the steel industry. had a negative impact on the Community market, have been subject to protective measures ('). Downstream the sector is an important supplier of all branches of the manufacturing industry. The most important customer groups are mechanical The Commission established that imports from engineering, vehicle building, construction, struc­ other third countries not alleged to be dumped had tural steel works and the energy sector including also moderately progressed during the period under nuclear. In order to be in a position to manufacture consideration leading to an increase of their market the whole range of products at competitive costs, share of 2,6 % which is to be measured against an the industry depends on a reasonable utilization expansion of the market share of the combined rate of its equipment. This is principally achieved dumped imports from Turkey, Venezuela, Romania by the production of standard commercial quality and Yugoslavia by 7 % over the same period. tubes which are in direct competition with the dumped products imported from Turkey, Vene­ zuela, Romania and Yugoslavia and account for a major part of the revenue generated by the As the Commission had no indication that the industry. In view of these facts, it is considered in slight expansion of the market share of other third the Community's interest to maintain a viable and countries had been achieved by dumping it was healthy steel tube manufacturing industry. considered that the injury inflicted by the Turkish

(') Notice of initiation, OJ No C 241 , 16. 9 . 1988, p. 3 ; Com­ (23) The Commission also took into account the inte­ misson Regulation (EEC) No 3074/89, OJ No L 294, 13. 10. rests of the users of Turkish and Venezuelan 1989, p. 10 ; Council Regulation (EEC) No 868/90, OJ No L 91 , 6. 4. 1990, p. 8 ; Commission Decision 90/ 166/EEC, OJ welded tubes and considered that the secondary No L 91 , 6. 4. 1990, p. 36. effects of the necessary price increases in respect of

15 . 12. 90 Official Journal of the European Communities No L 351 /21

the output of the main downstream branches other cases the dumping margin will be eliminated mentioned above will be insignificant. No submis­ in full . sions to the contrary were made by or on behalf of Moreover the Commission notes that in case of Community purchasers or processors of the welded steel tubes concerned. violation of these price undertakings it can impose immediate provisional duties and the Council can then impose definitive duties based on the facts established in the present investigation, without E. PROTECTIVE MEASURES carrying out new investigations concerning dumping and injury resulting thereform. (24) Given the serious difficulties facing the Commu­ nity industry concerned, the Commission has G. RESIDUAL DUTIES concluded that, in order to maintain the effective­ ness of the measures already imposed against (29) In order to cover other companies which did not dumped imports from Romania and Yugoslavia and to avoid discrimination, action should be taken cooperate during the investigation period and to prevent circumvention, it is considered appropriate also against dumped imports from Turkey and Venezuela . to impose provisional anti-dumping duties.

Since the price undercuttings of some exporters The Commission considers that the situation exceeded the dumping margin, the rate of these warrants the imposition of provisional measures at duties should correspond to the highest dumping this stage of the proceeding in order to prevent margin found for each country. It is established at : further injury being caused during the remainder of the proceeding. 18,5 % for Turkey, 22,1 % for Venezuela. (25) Having regard to the injury caused, the Commis­ Indeed, it would constitute a bonus for non-coope­ sion intended to impose provisional duties at a rate ration to hold that the duties for these producers/ adequate to remove the injury but not exceeding exporters were any lower than the highest anti­ the dumping margins established. Since the injury dumping duty determined. consists mainly in loss of profitability due to price undercutting, the Commission considered neces­ sary to eliminate price undercutting due to H. CONCLUSION dumping. (30) In the light of the above findings, it is considered Consequently, the duty necessary to remove injury that the interests of the Community require the was calculated on the basis of the price undercut­ imposition of protective measures. ting or the dumping margin of each exporter, whichever was the lowest. (31 ) The Commission is of the opinion that the price undertakings offered can be accepted for the producers/exporters concerned and that the investi­ gation against these companies may be terminated. F. UNDERTAKINGS (32) A provisional duty should be imposed on imports (26) The Turkish and Venezuelan producers/exporters of the product in question originating in Turkey which cooperated during the investigation having and in Venezuela realized by companies other than been informed of the preliminary findings of the these which have offered undertakings. Commission services with regard to dumping and (33) The Advisory Committee has been consulted with injury have offered price undertakings. regard to this course of action and has raised no objection to the proposals. (27) The Yiicel Boru Group, which was considered as a single economic entity for the purposes of this (34) A period should be fixed within which the parties investigation, has pointed out that it was composed concerned may make their views known and of two producing companies and one exporting request a hearing, company, which may export in the future under its own separate names. Consequently, price underta­ kings have been offered in the name of each of HAS ADOPTED THIS REGULATION : these three companies.

28) The Commission is satisfied that the effect of these Article 1 undertakings offered by the Turkish and Venezu­ elan producers/exporters will be an increase of the 1 . A provisional anti-dumping duty is hereby imposed export prices of the exporters concerned to the on imports of welded tubes, of iron or non-alloy steel, extent that the injury will be eliminated in cases threaded or threadable, zinc coated or not, of circular where it is lower than the dumping margins and in cross-section, of an. external diameter of not more than

No L 351 / 22 Official Journal of the European Communities 1 5. " 1 2. 90

168,3 mm, falling within CN codes 7306 30 51 , — Cayirova Boru Sanayi Ve Ticaret AS (Taric addi­ 7306 30 59, ex 7306 30 71 (Taric code : 7306 30 71*90), ex tional code : 8510), 7306 30 79 (Taric code : 7306 30 79*90), originating in — Yücel Boru Ihracat Ithalat Ve Pazarlama AS (Taric Turkey and Venezuela. additional code : 8510),

2. The rate of the duty shall be 18,5 % for products — produced by Conduven, Caracas, Venezuela and originating in Turkey (Taric additional code : 8511 ) and exported by Connectors, New York, USA (Taric addi­ 22,1 % for products originating in Venezuela (Taric addi­ tional code : 8512). tional code : 8513). The duty shall be calculated on the 2. The undertakings offered by the companies cited in net price, free-at-Community-frontier, customs uncleared. paragraph 1 are hereby accepted. 3. The provisions in force concerning customs duties 3. The investigation against the companies cited in shall apply. paragraph 1 is hereby terminated. 4. The release for free circulation in the Community of Article 3 the products Referred to in paragraph 1 shall be subject to the provision of a security, equivalent to the amount of Without prejudice to Article 7 (4) (b) and (c) of Regulation the provisional duty. (EEC) No 2423/88, the parties concerned may make known their views in writing and apply to be heard by the Article 2 Commission within one month of the entry into force of this Regulation. 1 . Notwithstanding Article 1 , the duties shall not apply for the products concerned Article 4 — exported directly to the Community by This Regulation shall enter into force on the day follo­ — Borusan Birlesik Boru Fabrikalari AS (Taric addi­ wing that of its publication in the Official Journal of the tional code : 8510), European Communities. — Borusan Ihracat Ithalat Ve Dagitim AS. (Taric Subject to Articles 11 , 12 and 13 of Regulation (EEC) No additional code :, 8510), 2423/88, Article 1 shall apply for a period of four months, — Yücel Boru Ve Profil Endüstrisi A.S. (Taric addi­ unless the Council adopts definitive measures before the tional code : 8510), expiry of that period.

This Regulation shall be binding in its entirety and directly applicable in all Member States .

Done at Brussels, 11 December 1990 .

For the Commission Frans ANDRIESSEN Vice-President