20.10.2007   

EN

Official Journal of the European Union

L 277/15

(1)

Following parallel anti-dumping and anti-subsidy proceedings, the Council imposed, by Regulation (EC) No 1628/2004 (2) (the original Regulation), definitive countervailing measures of 15,7 % for Graphite India Limited, 7,0 % for HEG Limited and 15,7 % for all other companies on imports of certain graphite electrode systems originating in India.

(2)

On 15 January 2007 the Commission received a request pursuant to Article 23(2) of the basic Regulation to investigate the alleged circumvention of the countervailing measures imposed on imports of certain graphite electrode systems originating in India. The request was submitted by the European Carbon and Graphite Association (ECGA) on behalf of Community producers of certain graphite electrode systems.

(3)

The request contained prima facie evidence showing that there had been a change in the pattern of trade following the imposition of the countervailing measures on imports of certain graphite electrode systems originating in India, as shown by a significant increase in imports of artificial graphite from India (the product under investigation) while imports of certain graphite electrode systems from India (the product concerned) had decreased substantially during the same period.

(4)

The request to investigate the alleged circumvention of the duties in force argued that one exporting producer of the product concerned originating in India was, after imposition of the duties, exporting the product under investigation to its related company in the Community. This company was then performing a completion operation in the Community to produce the product concerned from the product under investigation.

(5)

It was alleged that there was insufficient due cause or economic justification for these changes other than the existence of the countervailing duties on certain graphite electrode systems originating in India.

(6)

Finally, the applicant alleged that the remedial effects of the existing countervailing measures on the product concerned were being undermined in terms of quantity and that the imported product still benefited from the subsidy.

(7)

The Commission initiated an investigation by Regulation (EC) No 217/2007 (3) (the initiating Regulation) into the alleged circumvention and, pursuant to Articles 23(2) and 24(5) of the basic anti-subsidy Regulation, directed the customs authorities to register imports of the product under investigation, being artificial graphite rods of a diameter of 75 mm or more originating in India, falling under CN code ex 3801 10 00 (TARIC code 3801100010), as from 2 March 2007.

(8)

The Commission advised the authorities of India of the initiation of the investigation. Questionnaires were sent to the exporting producers in India as well as to importers in the Community named in the request or known to the Commission from the previous investigation. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set in the initiating Regulation.

(9)

Two exporting producers in India submitted complete replies to the questionnaire. One reply was also received from an importer in the Community.

(10)

The Commission carried out investigations at the premises of the following companies:

(11)

The investigation period was set as from 1 January 2006 to 31 December 2006.

(12)

Two exporting producers of the product concerned and the product under investigation cooperated with the investigation. The information submitted by the two companies could be reconciled to the data available on the imports of the product under investigation so as to show that the two companies, Graphite India Limited and HEG Limited, were the sole exporters of the product under investigation to the Community during the IP.

(13)

The product concerned by the possible circumvention is graphite electrodes of a kind used for electric furnaces, with an apparent density of 1,65 g/cm3 or more and an electrical resistance of 6,0 μΩ.m or less, falling within CN code ex 8545 11 00 (Taric code 8545110010) and nipples used for such electrodes, falling within CN code ex 8545 90 90 (Taric code 8545909010) whether imported together or separately originating in India (the product concerned).

(14)

The product under investigation is artificial graphite rods of a diameter of 75 mm or more originating in India, normally declared under CN code ex 3801 10 00 (TARIC 3801100010) (the product under investigation). The product under investigation is an intermediate product in the manufacturing of the product concerned, and it already embodies the basic characteristics of the latter product.

(15)

According to Eurostat data, imports under CN codes 8545 11 00 and 8545 90 90 from India decreased from 11 866 tonnes in 2004 to 3 244 tonnes in 2006. During the same period, imports under CN code 3801 10 00 increased from 1 348 tonnes in 2004 to 10 289 tonnes in 2006.

(16)

As stated in recital 3, the change in the pattern of trade was alleged to stem from the substitution of imports of finished graphite electrode systems by artificial graphite rods produced in India.

(17)

However, on inspection of the related company in Germany, Graphite COVA, it became clear that the part of the imports from India declared as artificial graphite were in fact imports of re-baked electrodes in the form of rods of carbon which had not yet been through the process of graphitisation. These re-baked electrodes were then graphitised and machined in Germany before being resold.

(18)

The change in the pattern of trade described by the applicant is confirmed by the available data, insofar as the imports under CN codes 8545 11 00 and 8545 90 90 appeared to be partly replaced by an increase in imports under CN code 3801 10 00.

(19)

The latter increase consisted essentially of imports of carbon rods destined for the manufacture of electrodes with a diameter of 600 mm or above, and artificial graphite rods for the manufacture of electrode nipples, imported by COVA from GIL, its parent company in India.

(20)

Regarding HEG, it was found that no such change in the pattern of trade had taken place.

(21)

The Commissions services examined whether, as alleged, the acquisition of COVA by GIL in 2004, and the subsequent changes in the pattern of trade, could be considered as having an economic justification other than the duty imposed in 2004.

(22)

In particular, the following aspects were examined:

(23)

Following examination of these points in both the German and Indian producers, it was found that:

(24)

Therefore, it was concluded that there were reasonable economic grounds, other than the imposition of duties on imports of certain graphite electrode systems originating in India, for the change in the pattern of trade referred to in recital 3.

(25)

In view of the findings mentioned in recital 24, it appears appropriate that the current anti-circumvention investigation be terminated. The registration of imports of certain artificial graphite originating in India introduced by the initiating Regulation should therefore be discontinued, and that Regulation should be repealed.

(26)

Interested parties were informed of the essential facts and considerations on the basis of which the Commission intended to terminate the investigation and were given the opportunity to comment. The comments received were not of a nature to change the above conclusions,