(1)

By Council Regulation (EEC) No 2737/90 (3), the Council imposed a definitive anti-dumping duty of 33 % on imports of tungsten carbide and fused tungsten carbide, originating in the People’s Republic of China (‘the PRC’) (‘the original measures’). By Commission Decision 90/480/EEC (4), the European Commission (‘the Commission’) accepted undertakings given by two major exporters concerning the product subject to measures.

(2)

Following the withdrawal of the undertakings by the two Chinese exporters concerned, the Council, by Council Regulation (EC) No 610/95 (5), amended Regulation (EEC) No 2737/90 so that the definitive duty of 33 % became applicable also to tungsten carbide and fused tungsten carbide exported to the Union by them.

(3)

By Council Regulation (EC) No 771/98 (6), following an expiry review, the Council extended the original measures for another five-year period.

(4)

By Council Regulation (EC) No 2268/2004 (7), following an expiry review, the Council extended the original measures for another five-year period.

(5)

By Council Regulation (EC) No 1275/2005 (8), the Council amended Article 1(1) of Regulation (EC) No 2268/2004.

(6)

By Council Implementing Regulation (EU) No 287/2011 (9), following an expiry review pursuant to Article 11(2) of Council Regulation (EC) No 1225/2009 (10), the Council extended the measures for another five-year period.

(7)

By Commission Implementing Regulation (EU) 2017/942 (11), following an expiry review pursuant to Article 11(2) of the basic Regulation, the Commission extended the measures for another five-year period.

(8)

By Commission Implementing Regulation (EU) 2023/1618 (12), following an expiry review pursuant to Article 11(2) of the basic Regulation, the Commission extended the definitive anti-dumping measures on imports of tungsten carbide, fused tungsten carbide and tungsten carbide simply mixed with metallic powder originating in the PRC (‘the product concerned’) for another five year period (‘the latest expiry review’).

(9)

The product concerned is tungsten carbide, fused tungsten carbide and tungsten carbide simply mixed with metallic powder, originating in the PRC. The product concerned is an intermediate product, used as input material in the manufacture of hard metal components such as cemented carbide cutting tools and high-wear components, in abrasion-resistant coatings, in bits for oil drilling and mining tools as well as in dies and tips for the drawing and forging of metals.

(10)

The product concerned is currently classified under two commodity codes: CN code 2849 90 30 and TARIC code 3824 30 00 10. While CN code 2849 90 30 includes tungsten carbide and fused tungsten carbide, TARIC code 3824 30 00 10 includes tungsten carbide simply mixed with metallic powder. This TARIC code is part of CN code 3824 30 00 , covering non-agglomerated metal carbides mixed together or with metallic binders, together with the residual TARIC code (3824 30 00 90). The residual TARIC code is not covered by the anti-dumping measures in force.

(11)

Residual TARIC code 3824 30 00 90 was created for all products classified under CN code 3824 30 00 but not included within the product scope of the measures.

(12)

In the context of the latest expiry review, the applicants (13), part of the Union industry of the like product, complained that it was not possible to differentiate the products classified under the residual TARIC code. The distinction of the different tungsten carbide products under the residual code was important both for monitoring and enforcement reasons.

(13)

During the latest expiry review, the Commission considered that the data retrievable from the current TARIC code structure was not sufficiently precise to monitor the import flows from the PRC under residual TARIC code 3824 30 00 90, and to distinguish all products imported under the same TARIC code, in particular tungsten carbide ready-to-press powder (‘RTP’). Thus, the Commission requested the parties’ view on the proposal to create a new TARIC code for RTP so that products could be identified more precisely.

(14)

Having received several comments from interested parties, the Commission informed the interested parties that it had decided not to implement the proposed changes in the context of the latest expiry review. Due to the complexity and the technical nature of the issue, the matter required further analysis which could not be dealt with within the statutory time limit of an expiry review investigation.

(15)

All comments on the intended new TARIC structure received during the expiry review were taken into consideration. After the closure of the case file of the latest expiry review, on 6 September 2023 the applicants submitted further additional comments. Those comments were also considered below.

(16)

On 23 November 2023, the Commission informed all interested parties in the latest expiry review that it decided to further investigate whether an amendment of the TARIC code structure was required. Parties were informed that a new case file containing all documents and comments concerning the proposed changes was available for inspection. In order for new interested parties, which had not been part of the latest expiry review, to register in the current proceeding, the proceeding was also made available on the TRON.tdi platform (14) and on the Commission’s website (15), where it also appeared among the ongoing cases (16) and on the webpage reporting all cases related to the product concerned (17).

(17)

The Commission recalled that the applicants in the latest expiry review and two users – Betek GmbH & Co. KG (‘Betek’) and Element Six GmbH (‘Element Six’) – provided extensive comments during that review. All of them were in favour of the TARIC structure change, but disagreed on the actual wording of the new codes.

(18)

In particular, the applicants and Element Six highlighted the importance of the organic binder in the definition of RTP.

(19)

The applicants underlined also the need to define RTP by reference to its spherical shape. On the contrary, Betek submitted that the requirement for the RTP to be spherically shaped would have excluded from the new TARIC code the types of tungsten carbide simply mixed with metallic powder which fulfil the requirements of the footnote 117 of Implementing Regulation (EU) 2023/1618 (18) (‘the footnote’), until then classified in the residual TARIC code. As a consequence, such types of tungsten carbide simply mixed with metallic powder could have run the risk of being classified under TARIC code 3824 30 00 10 subject to measures. The Commission, considering that the objective of the TARIC code restructuring, was to distinguish RTP from other products imported under the same TARIC code, retained the reference to the spherical shape of RTP in order to accurately define RTP.

(20)

Betek further argued that, by deleting the footnote and creating a new TARIC code only for RTP, the Commission would have unwarrantedly extended the product scope of the measures in the context of an expiry review. In fact, according to Betek, the types of tungsten carbide simply mixed with metallic powder, which fulfil the requirements of the footnote and which are thus excluded by the measures thanks to the footnote, would have been classified under TARIC code 3824 30 00 10 subject to measures. Therefore, it proposed the creation of a new TARIC code largely mirroring the wording of the footnote, instead of a new TARIC code only for RTP.

(21)

The applicants submitted that, if the Commission accepted Betek’s suggestion, firstly, this would allow the circumvention of the measures through the types of tungsten carbide simply mixed with metallic powder which fulfil the requirements of the footnote to be excluded from the product scope. Secondly, according to the applicants, the wording proposed by Betek left openned the possibility of circumventing the measures not only through certain types of tungsten carbide simply mixed with metallic powder, but also through tungsten carbide mixed with other carbides. As a consequence, the applicants argued in favour of a new, separate TARIC code catching ‘Tungsten carbide mixed with other carbides and/or nitrides, whether containing metallic powder or not’.

(22)

The applicants and Betek disagreed also on the reference to the organic binder to define RTP, which is needed according to the applicants. However, Betek noted that the requisite of an organic binder would also imply that the types of tungsten carbide simply mixed with metallic powder (other types of tungsten carbide than RTP), which are currently excluded by the measures, would be classified under the TARIC code 3824 30 00 10 that is subject to measures.

(23)

Following the initiation of this proceeding, Betek and the applicants submitted additional comments.

(24)

Betek submitted that it imported certain types of non-agglomerated tungsten carbides mixed together or with metallic binders under TARIC code 3824 30 00 90. This classification was confirmed by a valid binding tariff information (BTI) issued by the Principal Customs Office in Hannover after examination of a sample of the product. Therefore, this product imported by Betek was not subject to the anti-dumping measures.

(25)

Moreover, as regards the TARIC code structure proposed by the applicants in their comments of 6 September 2023, Betek reiterated previous comments stating that the creation of a new TARIC code only for RTP and the deletion of the footnote would result in an unwarranted extension of the product scope.

(26)

Betek also raised certain procedural concerns on the current proceeding. In particular, Betek submitted that the current proceeding could not be a way to circumvent the time limit of the latest expiry review, which cannot be reopened or continued. It also claimed that, in the current proceeding, the Commission did not publish a notice of initiation in the Official Journal of the European Union and, thus, new interested parties, which were not part to the latest expiry review, might not be able to participate in the current proceeding and would not have been given the opportunity to comment. Finally, Betek claimed that, while the Commission is free to create new TARIC codes, there was no applicable legal basis which allows the Commission to further investigate the matter since Article 14(1) of the basic Regulation and Article 56(5) of the Union Customs Code do not allow for the imposition of surveillance measures on the products excluded from anti-dumping measures, as no review or investigation was initiated because of the lack of publication in the Official Journal of the European Union. Anti-dumping measures could only be imposed on products which have been the subject of anti-dumping investigations. Betek alleged also that a sui generis procedure would be incompatible with Article 57 of the Charter of Fundamental Rights of the European Union (19), since it would circumvent essential procedural provisions such as time limits and publication requirements.

(27)

The applicants submitted that the types of tungsten carbide mixed with metallic powder, which happen to fulfil the requirements of the footnote, were never excluded from the scope of the anti-dumping measures. Therefore, importers of this product have no legal right to import it duty-free. For this reason, the applicants argue that the deletion of the footnote and the creation of the new TARIC code only for RTP do not change the product scope.

(28)

The Commission assessed claims on the form and legality of this procedure. Then it considered all information and comments to reach the final wording of the creation of the new TARIC structure.

(29)

First, the Commission highlights that the current proceeding was not meant to change the product scope of the anti-dumping measures in force on imports of the product concerned. The new TARIC structure aims at allowing for more precise data collection without any changes to the coverage of the measures in place. In fact, the Commission detached the creation of the new TARIC structure from the latest expiry review because it needed more time to ensure that the new TARIC codes would have no impact on the scope of the measures.

(30)

Second, contrary to what Betek alleged, the current proceeding is not a continuation or a reopening of the latest expiry review. The current proceeding serves to ascertain whether the creation of the new TARIC structure is warranted and whether surveillance on the basis of Article 56(5) of the Union Customs Code is appropriate. That provision allows the Commission not only to create or restructure TARIC codes in order to monitor imports more precisely – a Commission’s prerogative that Betek concedes – but also to subject the relevant codes to surveillance. Furthermore, Article 14(1) of the basic Regulation empowers the Commission to specifiy the form and the criteria for the customs authorities to collect the duties.

(31)

Third, there is no legal obligation to consult interested parties in a trade defence proceeding about the creation of TARIC codes, which in this case are not even covered by measures, and which are created to monitor more precisely the import flows from the PRC under the residual TARIC code 3824 30 00 90. Nevertheless, the Commission decided to keep interested parties in the latest expiry review involved, as well as to leave the possibility for new interested parties to join the proceeding, because the issue was raised in the context of a trade defence proceeding in which interested parties were involved and provided comments.

(32)

Finally, as regards the claimed incompatibility with Article 57 of the Charter of Fundamental Rights of the European Union, the Commission noted that there is no Article 57 in the Charter of Fundamental Rights of the European Union. In the event that Betek meant Article 41 on the right to good administration or Article 47 on the right to an effective remedy, the argument would be moot, as the surveillance does not adversely affect any interested party. It is a tool whereby customs authorities can monitor more precisely the import flows from the PRC under the residual TARIC code 3824 30 00 90.

(33)

Thus, the Commission dismissed all claims concerning the legality and soundness of this procedure.

(34)

Based on the information available and all comments received, the Commission concluded that the data retrievable from the current TARIC code structure was not sufficiently precise to monitor the import flows from the PRC under the residual TARIC code 3824 30 00 90, and to distinguish RTP from other products imported under the same code. It also concluded that the deletion of the footnote in the product definition and the creation of a new TARIC code only for RTP would change the product scope of the measures because mixtures other than RTP currently excluded from the product scope by the footnote would run the risk to be – in absence of the footnote – classified within the product scope of the measures.

(35)

Thus, the Commission considered that the structure proposed by the applicants in their comments of 6 September 2023 did not allow to segregate (i) RTP, (ii) the types of tungsten carbide simply mixed with metallic powder which fulfil the requirements of the footnote, and (iii) the tungsten carbide mixed with other carbides, whether containing metallic powder or not and whether fulfilling the requirements of the footnote or not. Indeed, the structure proposed by the applicants kept (ii) and (iii) together within one new TARIC code. For this reason, the Commission decided to split this proposed new TARIC code.

(36)

As a consequence, the Commission concluded that the TARIC codes under CN code 3824 30 00 should be restructured.

(37)

Concretely, three new TARIC codes should be created. The first one should cover RTP and read: ‘Ready-to-press powder, in the form of spherical or granular shaped, homogeneous and free-flowing particles, simply mixed with metallic powder and/or other carbides, and an organic binder’, and should fulfil the requirements of the footnote. The second one should include the types of tungsten carbide simply mixed with metallic powder (other types of tungsten carbide than RTP), which also fulfil the requirements of the footnote, and read ‘Other, in the form of spherical or granular shaped, homogenous and free-flowing particles, simply mixed with metallic powder and/or other carbides’. The third one should include other tungsten carbide simply mixed with other carbides, whether containing metallic powder or not, and whether fulfilling the requirements of the footnote or not, and read ‘Other, simply mixed with metallic powder and/or other carbides’.

(38)

The TARIC code to which measures apply – TARIC code 3824 30 00 10 – should remain unchanged and only the description should be updated, in order to ensure consistency with the new TARIC structure, to ‘In the form of irregular and non-free-flowing particles, simply mixed with metallic powder’.

(39)

Residual TARIC code 3824 30 00 90 and its description should remain unchanged. However, based on the new TARIC code structure, it will cease to include tungsten carbide, and will include instead other non-agglomerated metal carbides mixed together or with metallic binders.

(40)

As a result of this new TARIC structure, the footnote should be deleted, without running the risk of classifying within the product scope products currently excluded from the product scope by the footnote.

(41)

The products previously covered by, or excluded from, the scope of the measures remain the same. Based on the new TARIC code structure, excluded products might be classified in a new, different TARIC code, to which measures still do not apply.

(42)

This new TARIC code structure will enable the Commission to monitor more precisely the development of imports of non-agglomerated tungsten carbides mixed together or with metallic binders from the PRC, in particular the import flows of types of tungsten carbide simply mixed with metallic powder, which fulfilled the requirements of the footnote, as well as tungsten carbide mixed with other carbides, from the PRC, which are not subject to anti-dumping measures, in comparison with imports of the product concerned subject to anti-dumping measures. In order to ensure the availability of the data, imports of non-agglomerated tungsten carbides mixed together or with metallic binders from the PRC will be subject to surveillance.

(43)

The surveillance measures should remain in place during the period of application of the anti-dumping duties on imports of tungsten carbide, fused tungsten carbide and tungsten carbide simply mixed with metallic powder originating in the PRC.

(44)

On 20 June 2024, the Commission disclosed its findings to interested parties. Comments were received from the applicants in the latest expiry review and from Betek. The applicants also submitted comments on 17 June 2024, just before disclosure, which could not be taken into account in the disclosure to parties.

(45)

The applicants submitted quarterly import data from Eurostat from Q1 2022 to Q1 2024 showing that significant imports under CN code 3824 30 00 continued and remain unchanged throughout this period. Thus, they urged the Commission to create a separate TARIC code to monitor more precisely imports of the products excluded from the footnote. They stated that, should the Commission decide that mixtures other than RTP fulfilling the requirements of the footnote were excluded from the product scope of the measures, they would need customs data in order to lodge a request for an anti-circumvention investigation. Betek reacted by stating that its imports of mixtures other than RTP and fulfilling the requirements of the footnote are not undermining the anti-dumping measures. Betek recalled that it had obtained a BTI after a detailed examination of the product sample, as stated in recital (24).

(46)

The Commission took note of the applicants’ comment and emphasised it cannot extend the coverage of anti-dumping measures. The present restructuring of the TARIC codes will ensure a more precise monitoring of imports, irrespective of any future investigation and not having any impact on the measures currently in place.

(47)

Furthermore, the applicants claimed that the disclosure did not address the question of whether the mixtures other than RTP fulfilling the requirements of the footnote were covered by the measures or not. In this respect, they referred to the previous submissions made, highlighting that mixtures other than RTP fulfilling the requirements of the footnote are not RTP but have the same essential characteristics as tungsten carbide with metallic powder without free-flowing capabilities. Betek disagreed and submitted that mixtures other than RTP fulfilling the requirements of the footnote do not have any essentially comparable characteristics to the product subject to the anti-dumping measures.

(48)

The Commission confirmed in recital (34) above that mixtures other than RTP were not covered by the product scope as they fulfil the requirements of the footnote precisely based on their characteristics (including the free-flowing capability), and thus they are not covered by the measures. Therefore, these comments were rejected.

(49)

Moreover, the applicants requested the Commission to confirm that imports under the proposed TARIC code 3824 30 00 30 would be subject to the measures.

(50)

The Commission highlights that the current changes in the TARIC structure does not change the coverage of the measures in place. As stated in recital (37), the types of tungsten carbide simply mixed with metallic powder (other types of tungsten carbide than RTP), which also fulfil the requirements of the footnote, included in the proposed TARIC code 3824 30 00 30, are not subject to the measures. Therefore, this claim was rejected.

(51)

Finally, concerning the TARIC code structure, initially the applicants reiterated the TARIC code structure proposed in their comments of 6 September 2023, but subsequently stated that they did not have any comments on the TARIC structure proposed by the Commission.

(52)

The Commission explained in recital (35) why the TARIC structure proposed by the applicants was not appropriate. Therefore, these comments were dismissed.

(53)

Betek instead submitted that the subdivision of free-flowing tungsten carbide mixtures not subject to measures into three codes is artificial and supported the grouping of the proposed TARIC codes 3824 30 00 20, 3824 30 00 30 and 3824 30 00 40 into only one TARIC code covering RTP, mixtures other than RTP and fulfilling the requirements of the footnote, and other tungsten carbide mixtures.

(54)

The applicants reacted to this TARIC structure by claiming that chemical, physical and technical properties are common across all tungsten carbides, with the free-flowing capability being irrelevant. For the applicants the difference was between tungsten carbides mixed with metallic powder and RTP and was given by the presence of an organic binder. Thus, the applicants claimed that Betek’s proposal was meant to prevent a proper separation between RTP and other mixtures fulfilling the requirements of the footnote.

(55)

Finally, Betek claimed that it is unclear what products should fall into the proposed TARIC code 3824 30 00 40.

(56)

The Commission recalled the consideration made in recital (35), according to which the TARIC code structure proposed by Betek, as that of the applicants of 6 September 2023, would not allow to segregate (i) RTP, (ii) the types of tungsten carbide simply mixed with metallic powder which fulfil the requirements of the footnote, and (iii) the tungsten carbide mixed with other carbides, whether containing metallic powder or not and whether fulfilling the requirements of the footnote or not. Only a structure segregating RTP from other mixtures still fulfilling the requirements of the footnote would allow to understand the volume and relevance of the different products and thus to monitor precisely the imports. Furthermore, TARIC code 3824 30 00 40 is needed to ensure a proper surveillance of these codes, as, without such a code, any other modification of the tungsten carbide mixtures would fall under the residual TARIC code 3824 30 00 90, not subject to surveillance, with all other metal carbide mixtures. Therefore, this comment was rejected.

(57)

Having addressed the comments above, the Commission confirmed its findings.

(58)

The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of the basic Regulation and of the Customs Code Committee established by Article 285 of the Union Customs Code,