31991R2904

3 . 10 . 91 Official Journal of the European Communities No L 276/7

COMMISSION REGULATION (EEC) No 2904/91 of 27 September 1991 imposing a provisional anti-dumping duty on imports of certain polyester yarns (man-made staple fibres) originating in Taiwan, Indonesia, India, the People's Republic of China and Turkey and terminating the anti-dumping proceeding in respect of imports of these yarns originating in the Republic of Korea

THE COMMISSION OF THE EUROPEAN COMMUNITIES, production of the polyester yarns concerned. The complaint contained evidence of dumping of this Having regard to the Treaty establishing the European product originating in the countries indicated in Economic Community, the previous paragraph and of material injury resulting therefrom which was considered sufficient to justify opening a proceeding. Having regard to Council Regulation (EEC) No 2423/88 of 11 July 1988 on protection against dumped or subsi­ dized imports from countries not members of the Euro­ pean Economic Community ('), and in particular Article (2) The Commission officially advised the exporters 11 thereof, and importers known to be concerned, the repre­ sentatives of the exporting countries and the complainants and gave the parties directly Having informed the EEC-Turkey Association Council concerned the opportunity to make their views pursuant to Article 47 (2) of the Additional Protocol to known in writing and to request a hearing. the Agreement establishing an association between the European Economic Community and Turkey (2), and being aware that the measures concerning Turkey Representatives of the exporters, some importers, a imposed by this Regulation should be repealed if the Association Council issues a recommendation within the large number of Community producers and the time period provided for in this Article, complainant made their views known in writing. Representatives of the Turkish, the Indian, the Indonesian and the Korean exporters and one After consultations within the Advisory Committee as importer requested and were granted a hearing. provided for under the above Regulation,

(3) In view of the extremely large number of Commu­ nity producers mentioned in the complaint, the Whereas : Commission would have been unable adequately to verify the information received from all of them as this would have resulted in an extremely long delay in completing the investigation which would have A. PROCEDURE been incompatible with the very purpose of anti­ dumping proceedings. For this reason the Commis­ (1 ) In March 1990 the Commission announced, by a sion decided to make a representative selection of notice published in the Official Journal of the firms on the basis of their size and geographic situ­ European Communities (3), the initiation of an ation. A certain number of firms of large, medium anti-dumping proceeding concerning imports into and small size located in 10 Member States were the Community of certain yarns of staple polyester chosen for questionnaires to be sent. The producers fibres (hereafter referred to as 'polyester yarns') from which acceptable replies were received were originating in the Republic of Korea, Taiwan, Indo­ found to be representative of the Community nesia, India, the People's Republic of China and industry within the meaning of Article 4 (5) of Turkey and commenced an investigation. The Regulation (EEC) No 2423/88 . product investigated falls within CN codes 5508 10 11 , 5509 21 10, 5509 21 90, 5509 22 10, 5509 22 90, 5509 51 00 and 5509 53 00 . (4) This conclusion does not apply to sewing thread yarns described in recital (10) for which the The proceeding was initiated as a result of a combined production of the Community producers complaint lodged by the Committee of the Cotton which replied to the questionnaire is not consi­ and Allied Textile Industries of the EEC (Euro­ dered to be representative of the Community coton) on behalf of producers whose collective industry of this product. Indeed, of all firms output constituted substantially all Community reported by the complainant to be finishers of sewing thread those supporting the complaint which supplied the information deemed to be (') OJ No L 209, 2. 8. 1988 , p. 1 . (2) OJ No L 293, 29. 12. 1972, p. 4. necessary for the investigation only represented a 0 OJ No C 80, 30 . 3. 1990, p. 6. minimal share of the total Community output of

No L 276/8 Official Journal of the European Communities 3 . 10 . 91

sewing thread in 1989 on the basis of the informa­ — J Espona SA, Barcelona, tion submitted by the Federation internationale de — Grupo MITASA, Barcelona, la filterie . — Manufacturas Antonio Gassol SA, Barcelona ;

The Commission concludes therefore that, while Italy : for Community producers of yarns other than — Bossi SpA, Cameri, sewing thread the provisions of Article 4 (5) of — Filatura Giovanni Graziani SRL, Busto Regulation (EEC) No 2423/88 are met, that is not Arsizio, the case as far as Community producers of sewing thread are concerned. — Manifattura del Circeo SpA, Milano, — Manifattura Maffeis, Industria Filati SpA, Gazzaniga, (5) In India, the large number of exporters prevented the Commission from carrying out verifications at — Filatura della Valtrompia SpA, S. Vittore the premises of all of them. Because of this the Olona, Commission, in order to achieve the most equi­ — Linificio e Canapificio Nazionale SpA, (Divi­ table method of completing the investigation sione Cotonificio di Conegliano), Vimercate ; within a reasonable period, proceeded as follows : Portugal : — Coelima Indústrias Têxteis SA, Pevidem ; The Commission forwarded questionnaires to all Indian exporters known (43 firms). Most of these United Kingdom : exporters replied to the questionnaire and no requests for questionnaires were received from —- Courtaulds Textiles pic, (Courtaulds Spin­ other firms. The Commission selected, on the basis ning), Oldham, of criteria such as their production and sales both — CV Woven Fabrics Ltd (India Mills), in India and in the Community, seven firms of Darwen, Lancashire ; small, medium and large size. The Commission informed the Synthetic and Rayon Textiles Export France : Promotion Council (SRTEPC) which represents virtually all the exporters of the product concerned — P & J Leurent SA, Tourcoing, in India, of the criteria used for choosing the — La Cotonnière d'Armentières SA, Armenti­ selected companies and of its intention to apply ères, the weighted average findings established for these — La Cotonnière du Touquet SA, Armentières ; seven companies to the rest of the cooperating exporters. No objections were raised by the Belgium : SRTEPC to the proposed methodology. — NV Utexbel, Renaix ;

(6) The Commission sought and verified all informa­ (b) Exporters : tion it deemed to be necessary for the purposes of a preliminary determination and carried out investi­ India : gations at the premises of the following firms : — Banswara Syntex Ltd, Bombay, — The Coimbatore Pioneer Mills Ltd, Peela­ (a) Community producers : medu, Coimbatore, — Modern Syntex Ltd, Bombay, Germany : — Rajasthan Spinning & Weaving Mills Ltd, — Neue Baumwoll-Spinnerei und Weberei Hof Gulapura, AG, Hof, — Reliance Chemotex Industries Ltd, Bombay, — Vogtländische Baumwoll Spinnerei AG, Hof, — The Shree Meenakshi Mills Ltd, Madurai, — Schoeller Textil GmbH & Co. Kg, Düren ; — Shree Satyam Sp., and Wvg Mills Ltd, Secun­ derabad ; Spain : Indonesia :

— CA Hilaturas de Fabra y Coats, Barcelona, — P T Kewalram Indonesia, Bandung ;

— Estabanell y Pahisa SA, Barcelona, Republic of Korea : — Hilaturas Gossypium SA, Barcelona, — Choongnam Spinning Co. Ltd, Seoul,

— Hilaturas MAB SA, Barcelona, — Taekwang Industrial Co. Ltd, Seoul ;

3 . 10 . 91 Official Journal of the European Communities No L 276/9

Taiwan : B. PRODUCT UNDER CONSIDERATION, LIKE PRODUCT — Chung Shing Textile Company Ltd, Taipei ;

Turkey : (i) Definition of product — Bisas Bursa Iplik Sanayii A§, Bursa,

— Ceytas Ceyhan Tekstil Sanayii AS,Ceyhan, (10) The products covered by the complaint and for Adana, which the proceeding was opened are the fol­ — Soktas Pamuk ve Tarim Ürünlerini Deger lowing :

Pendirme Ticaret ve Sanayii AS,Söke. — sewing thread of polyester staple fibres, not put up for retail sale (CN code 5508 10 11 ), (c) Importers in the Community : — single and multiple (folded) yarn containing France : 85 % or more by weight of polyester staple fibres, not put up for retail sale (CN codes — Sartel Tootal SA, Wattrelos, 5509 21 10, 5509 21 90, 5509 22 10 and — Cousin Frères SA, Wervicq-sud ; 5509 22 90),

Belgium : — other yarn of polyester staple fibres mixed — Chemitex SA, Brussels ; mainly or solely either with artificial staple fibres or with cotton (CN codes 5509 51 00 and United Kingdom : 5509 53 00). — Broome and Wellington, Manchester, With the exception of sewing thread all other yarns — English Sewing Ltd, Poynton/Cheshire. covered by the proceeding can be basically divided into three categories : polyester yarns of staple (7) The following producers in India responded to the fibres, polyester yarns of staple fibres mixed with questionnaire sent by the Commission and agreed to cooperate in the investigation but were not viscose and polyester yarns of staple fibres mixed visited for the reasons outlined in recital (5) : with cotton. Within each category yarns are divided into different count numbers depending on their — Deepak Spinners Ltd, Baddi, Solan, thickness and on whether they are single or — Gokak Patel Volkart Ltd, Gokak Mills Division, multiple. For the purpose of this Regulation each Bombay, one of these is called a 'product type'.

— Himachal Fibres Ltd, New Delhi, These yarns have very similar physical characteris­ — Hind Syntex Ltd, Dewas, tics, are manufactured using the same basic techno­ — Indo Rama Synthetics (India) Ltd, New Delhi, logy and on the same type of equipment and are — Loyal Textile Mills Ltd, Kovilpatti, marketed under a similar commercial policy. They have, for the same product types, similar costs of — Orient Syntex Ltd, Bombay, production and selling prices per unit and a high — Precot Mills Ltd, Coimbatore, degree of interchangeability in their uses. — Rajasthan Textile Mills (prop. Sutlej Cotton Mills Ltd), Bhawanimandi, The sewing thread of polyester staple fibres falling — Sholingur Textiles Ltd, Dindigul, within CN code 5508 10 11 has, however, distinct technical characteristics and end uses. In addition — Soundaraja Mills Ltd, Dindigul, to the manufacturing processes common to all — The Madhavnagar Cotton Mills Ltd, Madhav­ yarns, i.e. spinning and in certain cases twisting, nagar, the production of sewing thread requires at least — Vardhman Spinning & General Mills Ltd, three other manufacturing processes, i.e. dyeing, Ludhiana, lubricating and winding which result in different physical characteristics of the finished product. The — Yarn Syndicate Ltd, Calcutta. end uses are clearly different ; sewing thread is used for sewing whereas the other yarns are primarily (8) The investigation of dumping covered the period used for weaving or knitting. from 1 January 1989 to 31 December 1989 (the investigation period). For all these reasons, the Commission has come to (9) This investigation has exceeded the normal time the conclusion that, for the purpose of the present period of one year because of the volume and proceeding, polyester yarns of staple fibres, poly­ complexity of the data initially gathered and ester yarns of staple fibres mixed with viscose and examined, and because the investigation has polyester yarns of staple fibres mixed with cotton required the study of related issues which arose can be considered as one product, whereas sewing during the proceeding and which could not' have thread falling within CN code 5508 10 11 should been foreseen at its outset. be considered as a distinct product.

No L 276/ 10 Official Journal of the European Communities 3 . 10 . 91

(11 ) A Community importer and finisher of sewing Where a particular product type exported to the thread alleged that the so-called unfinished sewing Community was not sold on the domestic market or where such sales were made in insufficient thread or 'grey yarn', which is a 100 % polyester yarn used to produce finished sewing thread, quantities, given the difficulties in making a should be considered as a distinct product and reasonable estimate of the value of the differences should, either be excluded from the scope of the between product types, normal value was proceeding, or be considered separately for all constructed on the basis of the costs of production purposes of the proceeding. In support of its argu­ plus a reasonable profit margin. The selling, ment this importer argued that these 'grey yarns' general and administrative expenses included in had different technical characteristics, economics of the cost of production and the profit margins were production and end uses. calculated by reference to the expenses incurred and the profits realized by the exporter concerned The Commission came to the conclusion that the on sales of other types of the like product on the domestic market. alleged differences in technical characteristics were not exclusive to these 'grey yarns' but were common to many other yarns used for weaving and knitting purposes and that the arguments put (b) Taiwan forward concerning economics of production and end uses could not justify a distinct treatment for a (15) Normal value for the cooperating Taiwanese product which could not be differentiated in its exporter was established on the basis of the physical characteristics. comparable price actually paid or payable in the ordinary course of trade for the - like product in Taiwan . (ii) Like product Where substantial quantities of domestic sales of a particular product type were sold at a loss, normal (12) The results of the investigation carried out by the value was established on the basis of the prices Commission have shown that the yarns manufac­ actually paid or payable for the remaining profi­ tured in the exporting countries concerned by this table sales of this product type in accordance with proceeding use the same basic technology as those Article 2 (4) of Regulation (EEC) No 2423/88. produced in the Community and are alike in their essential physical and technical characteristics and in their end uses . (c) Indonesia The Commission also found that the yarns sold by the exporting countries in their domestic markets (16) Normal value for the cooperating Indonesian are alike, within the meaning of Regulation (EEC) exporter was established on the basis of the No 2423/88, to the yarns exported to the Commu­ comparable price actually paid or payable in the nity. ordinary course of trade for the like product in Indonesia.

Where a particular product type exported to the Community was not sold on the domestic market C. DUMPING or domestic sales were in insufficient quantities or made at a loss, given the difficulties in making a reasonable estimate of the value of differences between product types, normal value was (i) Normal value constructed on the basis of the cost of production plus a reasonable profit margin. The selling, (13) For all exporting countries, normal values were general and administrative expenses included in preliminarily established by the methods provided the cost of production and the profit margins were for by Article 2, (3), (4) and (5) of Regulation (EEC) calculated by reference to the expenses incurred No 2423/88, for each individual product type and the profits realized by the exporter concerned exported to the Community. on sales of other types of the like product on the domestic market.

(a) Republic of Korea (d) India (14) Normal value for the cooperating Korean exporters was established on the basis of the comparable (17) Normal value for the cooperating Indian exporters price actually paid or payable in the ordinary was established on the basis of the comparable course of trade for the like product in the Republic price actually paid or payable in the ordinary of Korea. course of trade for the like product in India.

3 . 10 . 91 Official Journal of the European Communities No L 276/ 1 1

Where a particular product type exported to the cooperating exporters given that, in these cases, Community was not sold on the domestic market data on a monthly basis was not available. or where such sales were in insufficient quantities or were made at a loss, given the difficulties in As the number of sales made by all three exporters making a reasonable estimate of the value of the in the domestic market of the product types differences between product types, normal value exported to the Community was insignificant, was constructed on the basis of the cost of produc­ normal value was constructed on the basis of the tion plus a reasonable profit margin. The selling, cost of production plus a reasonable profit margin. general and administrative expenses included in This profit margin and the selling, administrative the cost of production and the profit margins were and general expenses included in the cost of calculated by reference to the expenses incurred production were established, for two exporters, by and the profits realized by the exporter concerned reference to the profit realized and to the expenses on sales of other types of the like product on the domestic market. incurred in their spinning and weaving activities. This was considered to be the most reasonable solution in view of the fact that neither the selling, In a certain number of cases it was not possible to general and administrative expenses nor the profit follow this approach on establishing the profit could be determined by reference to the domestic margin as either no sales of other types of the like sales of the like product and that in such circum­ product were made by the particular exporters stances these costs and profit are, according to concerned or they were made at a loss or with Article 2 (3) (b) (ii) of Regulation (EEC) No profit margins not suitable for use. In those cases 2423/88, to be calculated by reference to the sales the profit margin used was the weighted average made by the exporter in the same business sector profit realized by other exporters in India on profi­ which, in the present case, is spinning and weaving. table sales of other types of the like product on the domestic market. For the third Turkish exporter, as its spinning and weaving activities did not show any profit during the investigation period, the weighted average profit margin of the other two exporters, as deter­ (e) People 's Republic of China mined above, was used.

(18) Since the People's Republic of China is a non­ market economy country within the meaning of Article 2 (5) of Regulation (EEC) 2423/88, normal (a) Export price value was based on information obtained in a market economy third country. To that effect, the complainant's suggestion that normal value be (20) Export prices were determined for the purpose of determined on the basis of the constructed value of the preliminary findings on the basis of the prices the like product manufactured in India has been actually paid or payable for the products sold for retained in the absence of domestic sales in India export to the Community. of the product types exported from the People's Republic of China. India is considered to be the (21 ) One of the exporters concerned carried out some of most appropriate and reasonable choice of market its sales to the Community through a branch esta­ economy third country among these subject to the blished in the Community. Export prices in respect proceeding as far as similarities in production tech­ of these sales were constructed on the basis of the niques and level of development are concerned. price at which the imported product was first resold to an independent buyer in the Community. For one of the producers concerned, the product These prices were adjusted in order to take account was not exported directly from China to the of all costs incurred between importation and resale Community but via Hong Kong. Normal value for including customs duties and a reasonable profit these exports, however, was not established on the margin which was established on the basis of the basis of prices in Hong Kong as the product in profit margins normally made by independent question was merely transhipped through that importers of the product in question. country.

(22) One of the Chinese exporters involved made all of its sales to the Community through a company in Hong Kong. The company in Hong Kong and (f) Turkey some of the purchasers in the Community were financially linked to the Chinese exporter and are, (19) In view of the high level of inflation in Turkey for the purposes of this proceeding, considered to during the investigation period, normal values were be related. However, given the fact that there were established on a monthly basis for one cooperating no resales of the product in the same condition as exporter and on a quarterly basis for the other two it had been imported and that the prices of the

No L 276/ 12 Official Journal of the European Communities 3 . 10 . 91

goods sold for export to these related importers Turkey, from all the exporters involved, the margin were equivalent to those to independent importers of dumping being equal to the amount by which it was concluded that there was no need to resort to the normal value, as established, exceeds the price the reconstruction of the export price, as these sales for export to the Community. could be considered to have been made in the ordi­ nary course of trade. (27) As far as the exporters from the People's Republic of China other than Guangying Spinning Co., Ltd are concerned and in accordance with previous (iii) Comparison Community practice the Commission considered that, because of the lack of independence of these exporters in setting their export prices, a single (23) The normal value by product type was compared dumping margin should be determined. To do with the export price for the corresponding type on otherwise would favour circumvention as exports to a transaction-by-transaction basis at an ex-works level and for the same level of trade. As far as diffe­ the Community could, in the future, be channelled rences in conditions and terms of sale are through the company with the lowest dumping margin. concerned, allowances were limited to those claimed which bore a direct relationship to the In the case of Guangying Spinning Co., Ltd, sales under consideration and for which satisfactory evidence was submitted . however, evidence was submitted establishing the fact that this company is a joint venture formed by Chinese and Hong Kong partners, the latter being (24) Cooperating Korean, Indonesian exporters related to a Community group, is free to establish requested an allowance with regard to import its export prices and can transfer profits obtained to charges on raw materials physically incorporated in its foreign shareholders subject to certain adminis­ the like product when destined for consumption in trative requirements. This led the Commission to the country of origin and refunded or not collected conclude that an individual dumping margin could in respect of the product exported to the Commu­ be determined for this company by comparing its nity. These allowances were granted to the extent actual export prices with the relevant normal value that satisfactory justification was provided. established for the People's Republic of China in accordance with recital ( 18). (25) Several Indian exporters claimed an allowance in respect of prior stage duties and indirect taxes on (28) The weighted average margins of dumping for each inputs to the like product destined for consump­ exporter, expressed as a percentage of cif Commu­ tion in India which were refunded by the Indian nity frontier prices are as follows : Government under the cash compensatory support system, in respect of the product exported to the Community. Following the examination of the (a) Republic of Korea evidence provided by the claimant exporters, the amount actually refunded (8 % of the fob value of Choongnan Spinning Co., Ltd, the exported goods) was found to correspond to the Seoul : 15,88% duties and indirect taxes effectively borne. The Taekwang Industrial Co., Ltd, Seoul : 3,68 % ; claim has, therefore, been fully allowed pursuant to Article 2 (10) (b) of Regulation (EEC) No 2423/88 . (b) Taiwan Moreover, the Commission has been officially Chung Shing Textile Company Ltd, informed by the Indian authorities of the abolition Taipei : ' 2,24 % ; of the cash compensatory support system with effect from 3 July 1991 and, therefore, it is reaso­ (c) Indonesia nable to expect that export prices will increase P.T. Kewalram Indonesia, Bandung : 0,26 % ; accordingly. (d) India Banswara Syntex Ltd, Bombay : 6,04 % The Coimbatore Pioneer Mills Ltd, (IV) Dumping margins Coimbatore : 3,34 % Modern Syntex Ltd, Bombay : 3,32 % (a) Cooperating exporters Rajasthan Spinning & Weaving Mills Ltd, Gulapura : 2,00 % (26) Normal values and export prices were compared on Reliance Chemotex Industries Ltd, a transaction-by-transaction basis for each of the Bombay : 2,16 % exporters concerned. The preliminary examination The Shree Meenakshi Mills Ltd, of the facts shows the existence of dumping in Madurai : 11,82% respect of imports of the product concerned origi­ nating in the Republic of Korea, Taiwan, Indo­ Shree Satyam Spinning & Weaving nesia, India, the People's Republic of China and Mills Ltd, Secunderabad : 9,84 % .

3 . 10 . 91 Official Journal of the European Communities No L 276/ 13

The weighted average of the dumping margins the most reasonable assumption was that the found for the sampled exporters above amounts to dumping margins were equal to the highest 3,76 % . This percentage is considered as the dumping margin found for a cooperating exporter dumping margin to be attributed to the coopera­ in the same country. ting exporters in India not investigated : As to countries with a low coverage of exports, i.e. Taiwan, Indonesia and Turkey it was considered (e) People 's Republic of China that the information obtained from cooperating Chinatex Non-Cotton Yarns & exporters could not be held to be representative Fabrics Import and Export Co., and other available information, in particular that Beijing : 29,69 % , contained in the complaint for the determination Guangying Spinning Co., Ltd, of normal value and in Eurostat statistics with Guangzhou : 0,42 % ; regard to export prices, was used.

(f) Turkey On the basis of the above, the following dumping margins, expressed as a percentage of cif Commu­ Blsas Bursa Iplik Sanayii AS, Bursa : 10,14 %, nity frontier prices, have been determined : Ceytas Ceyhan Tekstil Sanayii — Republic of Korea : 15,8% , AS,Ceyhan, Adana : 2,66 %, — Taiwan : 24,5 % , Soktas Pamuk ve Tarim Ürünlerini — Indonesia : 21,1 % , Deger Pendirme Ticaret ve Sanayii — India : 11,8 % , AS, Söke : 4,13 % . — People's Republic of China : 29,6 %, — Turkey : 52,1 % . (29) The dumping margins found for Guangying Spin­ ning Co., Ltd, Guangzhou and P.T. Kewalram Indonesia, Bandung can be regarded as de minimis and consequently, for the purposes of this procee­ D. INJURY ding, imports from these two companies are consi­ dered as not to have been dumped. (i) Cumulation of the effects of the dumped imports (b) Non-cooperating exporters (33) In establishing the impact of the dumped imports on the Community industry, the Commission has (30) In addressing the issue of establishing the dumping considered the effect of all dumped imports from margin for the exporters which neither replied to the countries concerned in the present investiga­ the Commission's questionnaire within the esta­ tion. In analysing whether cumulation of these blished time limit nor otherwise made themselves imports was appropriate, the Commission known, the Commission noted that the proportion examined whether the imports at dumped prices of imports into the Community, as recorded in contributed to the material injury suffered by the Eurostat statistics, covered by the exports reported Community producers. For that purpose, the by the cooperating exporters varied according to Commission has considered the comparability of the countries concerned. Thus for the Republic of the products imported from all the countries Korea, India and the People's Republic of China concerned in terms of physical characteristics and the reported exports covered almost the totality of interchangeability of end uses. It has also examined imports into the Community as recorded in the volumes imported, the level of prices of these Eurostat. By contrast, for Taiwan, Indonesia and imports and the extent to which imports from each Turkey this proportion showed a large degree of country competed in the Community with each non-cooperation. other and with the like product of the Community industry. After examination of these facts the (31 ) In these circumstances, it was concluded that, in Commission found that with the exception of the applying Article 7 (7) (b) of Regulation (EEC) No Republic of Korea (see recital (34)) and for the 2423/88 , two different approaches were required for purpose of establishing the level of injury sustained the establishment of dumping margins for non- by the Community industry, regard should be paid cooperating exporters in order that cooperating to the cumulated effect of the dumped imports exporters would not be discriminated against and, from all exporting countries concerned. at the same time, that measures to be taken would constitute an effective protection for the Commu­ (34) It was considered that, given the small and nity industry. distinctly lower market share held since the end of 1987 by the Republic of Korea compared to the (32) For countries with a high coverage of exports, other five countries concerned, there were insuffi­ namely the Republic of Korea, India and the cient grounds to cumulate the imports from that People's Republic of China it was considered that country with those of the remaining five exporting

No L 276/ 14 Official Journal of the European Communities 3 . 10 . 91

countries for which, the similar and simultaneous (iv) Situation of the Community industry effect on the Community industry must be assessed jointly.

(a) Production and capacity utilization

(ii) Volume and market share of dumped (38) The volume of production of the product imports concerned by the Community producers investi­ gated remained generally stable on an annual basis during the period from 1986 to 1989 . (35) The volume of dumped imports into the Commu­ nity of the product concerned originating in the exporting countries which are the subject of the Regarding capacity utilization, it should be noted proceeding, other than the Republic of Korea, that the product concerned is generally manufac­ increased from 7 877 tonnes in 1986 to 17 672 tured on equipment which is also used for the tonnes during the investigation period (January manufacture of other products (e.g. cotton and 1989 to December 1989). Imports from the Repu­ viscose yarns). Because of this, it is not possible in blic of Korea in the same period increased from all cases to determine capacity utilization rates 713 tonnes to 976 tonnes . which are specific for that product. In spite of these difficulties, capacity utilization in respect of the product concerned has been estimated to have (36) The development of imports, assessed in the light remained stable for the investigated producers, on of the apparent Community consumption over the average since 1986, at 75 % . same period led to a combined market share of the Community market held by the exporting coun­ tries concerned, other than the Republic of Korea, (39) The above description reflects the situation of the taken together, which increased from 3,7 % in Community producers investigated. The overall 1986 to 9,5 % during the investigation period. The situation of the Community industry presents more market share held by the Republic of Korea in the negative aspects. Thus, the total volume of produc­ same period increased from 0,3 %. to 0,5 % . tion in the Community, as estimated by the complainant, has decreased from 202 700 tonnes in 1986 to 157 150 tonnes during the investigation period. This decline in production appears to be in (iii) Prices of dumped imports line with the fact that a high number of production units were closed down in the Community, (see . recital (43). (37) Prices of the imported product from the six coun­ tries concerned were, during the investigation period, significantly below the prices practised by the Community producers. Price undercutting was (b) Sales, stocks and market share established for each of the exporters investigated by comparing, at the same level of trade, prices of the (40) The volume of sales of the product concerned by exporter concerned for sales to the first indepen­ the Community industry was in line with that of dent customer in the Community with weighted production since 1986. As a result, the year-end average prices of the Community producers. stock levels showed no real trend. This develop­ ment in sales volume compared to that of the This comparison was made on a per product type apparent Community consumption led to a basis for each of the types imported which were decrease in market share from 90,4 % in 1986 to considered for the dumping determination. In cases 79,0 % during the investigation period. where a particular product type imported had not been sold during the investigation period by any of the Community producers, the price of the nearest (c) Prices resembling type, duly adjusted, was used.

(41 ) Because of the continued downward pressure on Adjustments were also made to ensure compara­ prices resulting from the dumped imports, bility in terms of transport costs deducted from the Community producers were obliged, in general, to Community selling prices as well as in terms of maintain their prices when the upward develop­ customs duty and importers' profit margin added to ment of costs of production would normally have the import prices, to the extent it was applicable. led to increasing them. In many cases, since the end of 1988 they were, in order to maintain their The results of the comparison showed margins of capacity utilization and market share, even forced undercutting for all countries concerned and for to reduce their prices to levels which 1 in most cases almost all the exporters investigated. The weighted did not cover the costs of production and which, in average undercutting, expressed at a free-at­ any case, did not allow a reasonable profit to be Community-frontier level, ranged up to 56,48 % . made.

3 . 10 . 91 Official Journal of the European Communities No L 276/ 15

(d) Profitability maintain capacity utilization as high as possible in an attempt to avoid greater deterioration of profita­ bility which otherwise would have occurred. As a (42) While in 1986 and 1987 profits could be kept result, economic indicators such as production, stable by rationalization factors such as moderniza­ sales, stocks and market share did not show, for tion of equipment and reduction of the personnel these producers, the negative trends experienced by employed, these remedies could no longer the Community industry as a whole. These indica­ compensate in 1988 and 1989 for the increasing tors do not clearly reflect, in all cases, the difficult penetration of the Community market by the low market conditions in which the Community priced imports concerned. Thus, the Community industry has had to operate. Injury must, in these producers investigated showed returns on sales of circumstances, be assessed mainly, on the basis of more than 4,6 % on average in 1986 and 1987 but other parameters such as prices, profitability and incurred losses in 1988 and 1989 amounting, on employment. average, to 1,3 % and 5,9 % in the respective years.

The price erosion, the deterioration of the financial situation with insufficient profitability or even (e) Plant closures losses, and the reduction in employment affecting practically all the Community producers, all led the (43) The general deterioration of the financial situation Commission to conclude, for the purpose of its of the Community industry since 1988 has led to provisional findings, that the Community industry drastic decisions such as further restructuring and has been suffering material injury within the terms closures of production units in order to stop further of Article 4 (1 ) of Regulation (EEC) No 2423/88 . decay.

From 1986 to 1989, 77 production units in nine Community countries were closed down either as a result of restructuring or of cessation of activities. E. CAUSATION OF INJURY

(f) Employment (46) The Commission examined whether the injury suffered by the Community industry- had been (44) More than 1 000 jobs have been lost by the caused by the dumped imports and whether other Community producers investigated during 1988 factors might have caused or contributed to that and 1989. This represents nearly a 20 % reduction injury. of the personnel employed by them in 1987 and is the result of an ongoing restructuring intended to defend profitability and which goes beyond a mere modernization investment programme. (i) Effect of dumped imports

With regard to the employment situation of the (47) On its examination the Commission found that the whole cotton type spinning sector which includes increase in volume and market share of the the polyester spinning industry in the Community, dumped imports from the six countries involved in the combined effect of restructuring plans and the proceeding coincided with the deterioration of closures of factories is estimated to have led to the situation of the Community industry. As more than 10 000 jobs being lost in 1988 and 1989 explained before in recital (41 ), as a result of the alone . low prices at which the imported yarns were sold in the Community market, the Community produ­ cers were either prevented from increasing their selling prices or forced to reduce them in order to (v) Conclusion maintain their levels of capacity utilization and market share. This suppression of price increases (45) In assessing the situation of the Community and reduction in prices led, in turn, to a general industry, account has to be taken of the fact that decrease in profitability and employment in the the manufacture of the product concerned is a Community. The development of negative parame­ capital intensive business in which low capacity ters in these areas, specifically demonstrated by the utilization becomes generally more costly than to financial losses incurred and the jobs lost in 1988 maintain high capacity utilization and sell all the and 1989 corresponds in time with the highest production at prices which neither allow an penetration of the imports concerned. However, adequate return nor even cover the full costs of given the negligible and steady market share held production. by the Republic of Korea since 1987, the Commis­ sion considers that dumped imports from this In view of this characteristic of the industry, country have not significantly contributed to the Community producers investigated decided to injury suffered by the Community industry.

No L 276/ 16 3 . 10 . 91 Official Journal of the European Communities

(ii) Effect of other factors than the Republic of Korea, gained a Community market share which increased from 3,7 % to 9,5 % . By contrast, estimated sales by the Community (48) The Commission examined whether factors other industry in the Community market decreased than the dumped imports might have caused or distinctly faster (by 23,3 %) than Community contributed to the injury suffered by the Commu­ consumption and, consequently, the corresponding nity industry. The Commission particularly market share also decreased from 90,4 % to examined the evolution of Community exports to 79,0 % . third countries, the evolution and impact of imports from third countries not included in this (52) The Commission has also examined the argument proceeding and the trend of consumption in the that, because of the existence of quantitative restric­ Community market. tions applied to the imports of the product in ques­ tion originating in some of the countries (49) Exports by the Community industry to third coun­ concerned, no injury could be caused to the tries only represent approximately 6 % of total Community industry by these imports. The sales and have not shown any significant changes Commission considers, in this respect, that quanti­ since 1986 . tative restrictions protect the Community industry from excessive volumes of imports but do not necessarily prevent injury resulting from unfair (50) Imports from third countries not included in the trading practices such as dumping imports at very proceeding have been increasing since 1986 and low prices. reached an estimated share of 10,1 % of the Community market during the investigation period. More than half of these imports originate in (53) Consequently, the Commission has concluded that, Egypt and Brazil which have been steadily gaining for purposes of its provisional findings, the dumped market share since 1986. Some of the exporters imports originating in Taiwan, Indonesia, India, the argued that the non-inclusion of these two coun­ People's Republic of China and Turkey because of tries in the proceeding would be particularly discri­ their prices and their penetration in the Commu­ minatory. nity market and the resulting loss of profitability, market share and employment, have, taken in isola­ tion, caused material injury to the Community The Commission has noted tjie substantial increase industry. in the imports from Egypt and Brazil as well as the low level of their prices as they appear in the Eurostat statistics. In this last respect the Commis­ sion considers that no conclusions can be drawn from the prices shown in the Eurostat statistics as F. COMMUNITY INTEREST these mask the extremely important differences in prices among different product types and no infor­ mation is available concerning the product types being exported from Egypt and Brazil. (54) The purpose of anti-dumping duties is, in general, to stop distortion of competition arising from unfair commercial practices and thus to re-establish The Commission has also noted that no evidence open and fair competition on the Community concerning the existence of dumping practices by market, which is fundamentally in the general Egypt and Brazil has been received. Community interest.

Furthermore the Commission considers that even if The deterioration of the Community industry is it was admitted that the imports from Egypt and especially noticeable from the decrease in profitabi­ Brazil, whether dumped or non dumped, had lity and from the number of production units caused injury to the Community industry, this which have shut down during the reference period. would not change the fact that the injury caused by This deterioration appears to have continued in the dumped imports originating in the countries 1990 and would, in all likelihood, continue in the concerned by the proceeding other than the future if no measures to counteract the injurious Republic of Korea is material. dumping practices were taken.

(51 ) Apparent consumption of the product concerned (55) Some exporters have argued that an increase in the in the Community decreased during the investiga­ price of the imported yarns as a result of the adop­ tion period by 12,3 % when compared to the tion of anti-dumping measures would be detri­ consumption in 1986. This decline in consumption mental to the interest of the Community weavers. explains only in part the decrease in sales by all The Commission notes that neither weavers nor Community producers, but not the reduction of garment makers in the Community have expressed their market share. Thus, in that period, dumped any objections to the possible adoption of protec­ imports from all the countries concerned, other tive measures in this proceeding and that, in any

3 . 10 . 91 Official Journal of the European Communities No L 276/ 17

case, the incidence of a certain price increase on certain profit margin for the importer, as appli­ the cost of the processing industries does not cable, were compared, during the investigation appear to be significant enough to render these period, with the weighted average cost of produc­ industries less competitive. tion of the Community producers investigated, for the corresponding product type, plus a 5 % profit margin. (56) In conclusion, after balancing the various interests involved, the Commission considers that the adop­ tion of measures in the present case will These comparisons show for all exporters re-establish fair competition by eliminating the concerned, lower export prices with margins which, injurious effects of dumping practices. expressed on a weighted average basis as a percen­ tage of the free-at-Community-frontier price, The Commission considers that it is therefore in varied, according to the exporter concerned, between 5,55 % and 82,72 % . the Community interest to adopt anti-dumping measures in order to prevent further injury being caused by the dumped imports concerned before the end of the proceeding. These measures should (60) Since, in all cases, the margins of dumping found, take the form of provisional anti-dumping duties. in respect of each particular exporter, were below the corresponding increases in export prices neces­ sary to remove the injury, as calculated above, provisional duties to be imposed should therefore correspond to the dumping margins established.

G. DUTY (61 ) For the cooperating Indian exporters not selected for investigation, the Commission, following the methodology described in recital (5), applied the weighted average duty of the investigated exporters. (57) For the purpose of establishing the level of the provisional duty the Commission took account of the dumping margins found and of the amount of duty necessary to eliminate the injury sustained by (62) For the reasons given in recital (27), the Commis­ the Community industry. sion has established a single duty for all the Chinese exporters with the exception of the joint venture concerned for which, in the absence of dumping (see recital (29)) no duty is established.

(i) Cooperating exporters

(58) Since the injury consists mainly of lack of profita­ bility or losses, the removal of such injury requires (n) Non-cooperating exporters that industry should be put in a position in which its prices can be increased to a profitable level. In order to achieve this, export prices should be (63) In establishing the level of provisional duty for increased accordingly. exporters which neither replied to the question­ naire within the established time limit nor other­ wise made themselves known, the Commission For calculating the necessary price increase, the took account of the level of exports coverage of Commission considered that prices of the dumped each of the countries concerned as described in imports had to be compared with the cost of recital (30). production of the Community producers investi­ gated plus a profit margin of 5 % . This profit margin is based on the level of profits realized on average by Community producers prior to the dete­ For countries with a high coverage of exports, the rioration of their profitability as a result of the Commission considered it appropriate to impose a dumped imports. The Commission considers that duty at the level of the highest duty determined for this profit margin is the minimum required to the cooperating exporters in the country ensure the viability of the Community industry concerned. Indeed, it would create an opportunity concerned . for circumvention of the duties and would consti­ tute a bonus for non-cooperation to hold that the duties for non-cooperating exporters in a particular (59) On this basis, the weighted average export prices country were any lower than the highest duty for each product type, on a free-at-Community­ determined in that country with regard to any frontier level increased by customs duties and a exporter who had cooperated in the investigation.

No L 276/ 18 Official Journal of the European Communities 3 . 10 . 91

With regard to countries with a low coverage of may make their views known and request a exports for which the information obtained from hearing. Furthermore, it should be stated that all cooperating exporters could not be considered to findings made for the purpose of this Regulation be representative, other information available to the are provisional and may have to be reconsidered for Commission was used to establish both the the purpose of any definitive duty which the dumping margin (see recital (31 )) and the increase Commission may propose, in export prices necessary to eliminate the injury. In particular, information contained in the complaint and in Eurostat statistics, duly adjusted, was taken into account. Since dumping margins thus established were in all cases below the corres­ HAS ADOPTED THIS REGULATION : ponding increase in export prices, duties should be imposed at the level of the dumping determined.

Article1¶

H. TERMINATION OF THE PROCEEDING IN 1 . A provisional anti-dumping duty is hereby imposed RESPECT OF IMPORTS OF SEWING THREAD ORIGINATING IN ALL THE on imports of single and multiple (folded) or cabled yarns COUNTRIES CONCERNED AS WELL AS IN containing 85 % or more by weight of polyester staple RESPECT OF IMPORTS OF ALL OTHER fibres, not put up for retail sale, falling within CN codes YARNS CONCERNED ORIGINATING IN 5509 21 10, 5509 21 90, 5509 22 10 and 5509 22 90 and THE REPUBLIC OF KOREA other yarns of polyester staple fibres mixed mainly or solely either with artificial staple fibres or with cbtton, not put up for retail sale, falling within CN codes 5509 51 00 (64) In view of the fact that the provisions of Article 4 and 5509 53 00 and originating in Taiwan, Indonesia, India, the People's Republic of China and Turkey. (5) of Regulation (EEC) No 2423/88 are not met as far as the Community producers of sewing thread are concerned, as described in recital (4) above, the 2. The rate of the duty applicable to the net free-at­ Commission considers that the proceeding should Community-frontier price before duty, shall be as be terminated in respect of imports of sewing follows : thread falling within CN code 5508 10 11 origina­ ting in all the countries concerned without protec­ Rate Tartc of additional tive measures being imposed. duty code % (65) As referred to in recital (47), imports of the product concerned originating in the Republic of Korea Taiwan 24.5 8578 have not significantly contributed to the injury Indonesia 21,1 8579 suffered by the Community industry. In these circumstances, the Commission considers that the India 11,8 8580 • proceeding should be terminated in respect of People's Republic of China 29.6 8581 imports of yarns other than sewing thread origina­ ting in this country without protective measures Turkey 52,1 8582 : being imposed.

with the exception of imports which are manufactured (66) No objections to these conclusions were raised in and sold for export to the Community by the following the Advisory Committee. companies. These companies shall be subject to the rate of duty mentioned hereunder. (67) The complainant and the 'Federation Interna­ Rate tionale de la Filterie' were informed of the facts Taric of additional and principal considerations on the basis of which duty code the Commission intended to terminate the o/o proceeding with regard to imports of sewing thread Taiwan originating in all the countries concerned as well as imports of all other yarns concerned originating in Chung Shing Textile Company Ltd, the Republic of Korea and did not object to them. Taipei 2,2 8583

India Rajasthan Spinning & Weaving Mills I. FINAL PROVISION 8584 Ltd, Gulapura 2,0 The Shree Meenakshi Mills Ltd, Madurai 11,8 8585 (68) In the interest of sound administration, a period should be fixed within which the parties concerned Deepak Spinners Ltd, Baddi, Solan 3,7 8586

3 . 10 . 91 Official Journal of the European Communities No L 276/ 19

Rate Taric 3. None of the duties shall apply to imports of the of additional products specified in paragraph 1 manufactured and sold duty code % for export to the Community by P.T. Kewalram Indo­ nesia, Bandung, Indonesia (Taric additional code ; 8595) Gokak Patel Volkart Ltd, Gokak Mills and Guangying Spinning Co. Ltd, Guangzhou, People's Division, Bombay 3,7 8586 Republic of China (Taric additional code : 8596). Himachai Fibres Ltd, New Delhi 3,7 8586 4. In cases where the exporting company is not the Hind Syntex Ltd, Dewas 3,7 8586 same as the producing company, the rate applicable to Indo Rama Synthetics (India) Ltd, the producing company shall apply. New Delhi 3,7 8586 8586 5. The provisions in force concerning customs duties Loyal Textile Mills Ltd, Kovilpatti 3,7 shall apply. Orient Syntex Ltd, Bombay 3,7 8586 Precot Mills Ltd, Coimbatore 8586 6. The release for free circulation in the Community of 3,7 the products referred to in paragraph 1 shall be subject to Rajasthan Textile Mills, (Prop. Sutlej the provision of a security, equivalent to the amount of Cotton Mills Ltd), Bhawanimandi 3,7 8586 the provisional duty. Sholingur Textiles Ltd, Dindigul 3,7 8586 Soundaraja Mills Ltd, Dindigul 3,7 8586 Article 2 The Madhavnagar Cotton Mills Ltd, The anti-dumping proceeding concerning the imports of Madhavnagar 3,7 8586 sewing thread falling within CN code 5508 10 11 and Vardhman Spinning & General Mills originating in the Republic of Korea, Taiwan, Indonesia, Ltd, Ludhiana 3,7 8586 India, the People's Republic of China and Turkey is Yam Syndicate Ltd, Calcutta 3.7 8586 hereby terminated. Modern Syntex Ltd, Bombay 3,3 8587 Article 3 Sree Satyam Spinning & Weaving Mills Ltd, Secunderabad 9.8 8588 The anti-dumping proceeding concerning imports of Reliance Chemotex Industries Ltd, certain yarns of staple polyester fibres falling within CN Bombay 2,1 8589 codes 5509 21 10 , 5509 21 90, 5509 22 10, 5509 51 00 and The Coimbatore Pioneer Mills Ltd, 5509 53 00 and originating in the Republic of Korea is 8590 . hereby terminated. Peelamadu, Coimbatore 3,3 Banswara Syntex Ltd, Bombay 6,0 8591 Article 4 Turkey Without prejudice to Article 7 (4) (b) of Regulation (EEC) Bisas Bursa Iplic Sanayii AŞBursa 10,1 8592 No 2423/88, the parties concerned may make known Soktas Pamuk ve Tarim Ürünlerini their views and apply to be heard orally by the Commis­ sion within one month of the date of entry into force of Değer Pendirme Ticaret ve Sanayii this Regulation. AŞSöke 4,1 8593 Ceytas Ceyhan Tekstil ' Sanayii Article 5 AŞCeyhan, Adana 2,6 8594. This Regulation shall enter into force on the day follo­ wing that of its publication in the Official Journal of the The free-at-Community-frontier price shall be net if the European Communities. actual conditions of payment provide for payment within 30 days of the arrival of the goods on the customs terri­ Subject to Articles 11 , 12 and 13 of Regulation (EEC) No tory of the Community. It shall be increased by 1 % for 2423/88, Article 1 of this Regulation shall apply for a each further month by which the period for payment is period of four months, unless the Council adopts defini­ extended. tive measures before the expiry of that period.

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

Done at Brussels, 27 September 1991 .

For the Commission Frans ANDRIESSEN Vice-President