29.6.2017   

EN

Official Journal of the European Union

L 166/23

(1)

By Implementing Regulation (EU) No 430/2013 (2) (‘the contested Regulation’), the Council imposed a definitive anti-dumping duty at rates ranging from 14,9 % to 57,8 % on imports of threaded tube or pipe cast fittings, of malleable cast iron, currently falling within CN code ex 7307 19 10 (TARIC code 7307191010) and originating in the People's Republic of China and Thailand. Bodies of compression fittings using ISO DIN 13 metric thread and malleable iron threaded circular junction boxes without having a lid are not covered by the duty.

(2)

On 12 June 2013, one cooperating Chinese exporting producer, Jinan Meide Castings Co., Ltd (‘Jinan Meide or the applicant’), lodged an application at the General Court of the European Union (‘the General Court’) seeking the annulment of the contested Regulation in so far as it applies to the applicant (3).

(3)

On 30 June 2016, the General Court in its judgment found that the rights of defence of Jinan Meide were breached by the rejection of its request for disclosure of normal value calculations using confidential data of an analogue country producer. Jinan Meide had obtained an exclusive authorisation from the analogue country producer waving the confidentiality of its data. In particular, the General Court found that the Commission was wrong to rely on the need to comply with the principle of equal treatment in order to reject this request for disclosure. The General Court held that it could not be ruled out that if the request had been accepted, the outcome of the investigation could have been different. Therefore, the Court annulled the contested Regulation in so far as it imposed an anti-dumping duty on imports of threaded tube or pipe cast fittings, of malleable cast iron, manufactured by Jinan Meide.

(4)

According to Article 266 of the Treaty on the Functioning of the European Union, the Union institutions are obliged to comply with the Court's judgment of 30 June 2016.

(5)

In its judgment in case T-2/95 (4) (the ‘IPS case’), the Court of First Instance recognised that, in cases where a proceeding consists of several administrative steps, the annulment of one of those steps does not annul the complete proceeding. The anti-dumping proceeding is an example of such a multi-step proceeding. Consequently, the annulment of the contested Regulation in relation to one party does not imply the annulment of the entire procedure prior to the adoption of that Regulation. The EU institutions have the possibility to remedy the aspects of the contested Regulation which led to its annulment, while leaving unchanged the uncontested parts which are not affected by the Court judgment — as was held by the Court of Justice in case C-458/98 P (5).

(6)

It should be noted that apart from the finding that the Commission was wrong to rely on the need to comply with the principle of equal treatment in order to reject Jinan Meide's request for disclosure, all other findings made in the contested Regulation which were not contested within the time-limits for a challenge or which were contested but rejected by the General Court's judgment or not examined by the General Court and therefore did not lead to the annulment of the contested Regulation, remain valid.

(7)

Following the Court's judgment of 30 June 2016, the Commission published a notice (6) concerning the partial reopening of the anti-dumping investigation concerning imports of threaded tube or pipe cast fittings, of malleable cast iron, originating in the People's Republic of China. The reopening was limited in scope to the implementation of the judgment of the General Court with regard to Jinan Meide.

(8)

The Commission officially advised Jinan Meide, the representatives of the exporting country and the Union industry of the partial reopening of the investigation. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time-limit set out in the notice.

(9)

Following the initial comments received, all other interested parties known to be concerned from the original investigation were contacted and given the opportunity to make their views known in writing and to request a hearing.

(10)

All interested parties who so requested were granted the opportunity to be heard by the Commission services and/or the Hearing officer.

(11)

The Commission received submissions on various aspects of the investigation from Jinan Meide, other Chinese exporting producers, one Thai exporting producer, five Union producers and eight unrelated importers.

(12)

Jinan Meide argued that the illegality committed by the Union Institutions which led to the annulment of contested Regulation cannot be cured and the proceeding should be terminated without re-imposing any anti-dumping duty on Jinan Meide.

(13)

As stated above in recital 4, the Court of First Instance in the IPS case recognised that, in cases where a proceeding consists of several administrative steps, such as in an anti-dumping proceeding, the annulment of one of those steps does not annul the complete proceeding. Since the Union institutions are obliged to comply with the Court's judgment, this implies the possibility to remedy the aspects of the contested Regulation which led to its annulment, while leaving unchanged the uncontested parts. The claim was therefore rejected.

(14)

One unrelated importer claimed that it is procedurally not possible to reopen an investigation which has previously been concluded, as substantive failures would consequently occur, like accepting new information after the closure of a case, discrimination against all other parties to the investigation whose dumping margins would be different if Jinan Meide's dumping margin was amended and a breach of EU and WTO law in the sense that anti-dumping measures cannot be applied retroactively.

(15)

This importer also claimed that a reopening does not appear to be permitted under the terms of the basic Regulation.

(16)

The same party also stated that the Commission is not authorised to take action to implement a Court judgment in respect of a Council Regulation as the Commission was not the defendant in Case T-424/13. It claimed that the Commission needs to receive formal instructions from the Council to launch a reopening.

(17)

It is clear from the judgment of joined cases C-283/14 and C-284/14 (7) that the EU Institutions may reopen an anti-dumping investigation to amend irregularities found by the European Courts even though this is not expressly provided for in the basic Regulation. The EU Institutions are in fact required to take the necessary measures to remedy illegalities. In this case, as the investigating authority, the Commission reopened the investigation in order to implement the Court's judgement. The reopening of this investigation follows the legal procedures required by the basic Regulation, which provide for adoption by the Commission after consulting the Member States under the examination procedure referred to in Article 15(3) of the basic Regulation. The claims were therefore rejected.

(18)

One importer stated that it was not clear to what extent a reopening can be carried on under the provisions of the current basic Regulation, as it is apparent the Commission intended to pursue the investigation as if it were put back in time when Council Regulation (EC) No 1225/2009 (8) was still in force.

(19)

The law applicable to this reinvestigation is Regulation (EC) No 1225/2009, which was the substantive law at the time of the adoption of the regulation annulled by the Court. In any event, Regulation (EU) 2016/1036 is a codification of Regulation (EC) No 1225/2009 and its amendments. The argument was therefore rejected.

(20)

An exporting producer from Thailand argued that the Commission must re-impose the duty of 40,8 % on Jinan Meide without modification, as the General Court did not find fault with any substantive findings, only a procedural irregularity. It also claimed that any substantive reconsideration can only address the normal value calculation for Jinan Meide and all other findings in the contested Regulation should remain valid, as there was no indication in the General Court's judgment that remedying the procedural irregularity should result in any substantive changes to the normal value calculation for Jinan Meide.

(21)

In the judgment leading to the present reopening, the General Court held that it could not be ruled out that if the request for disclosure of confidential data of the analogue country producer had been accepted, the outcome of the investigation could have been different. The reopening has therefore to examine possible impact on substance of the investigation. The argument was therefore rejected.

(22)

One unrelated importer argued that as the Union industry did not submit any comments concerning the reopening, which allegedly meant that there is no Union interest to conduct this reopened investigation.

(23)

The lack of submission by a certain type of operator cannot per se lead to any conclusion on substance in an investigation. In any case, five Union producers requested the Commission to re-impose the anti-dumping duty on Jinan Meide urgently and even to register imports for potential retroactive imposition of duties, in order to limit the damage the current situation causes to the Union producers. The argument was therefore rejected.

(24)

Jinan Meide claimed that it should get comprehensive access to all information submitted by the analogue country producer and abundant time to lodge comments. All such information was made available to Jinan Meide, and Jinan Meide had time to lodge comments beyond the time-frame foreseen in the basic Regulation, including several hearings with the case team and with the Hearing Officer. Following disclosure of the confidential information and the dumping calculations, Jinan Meide also made submissions outside of deadlines set for that purpose, which were nevertheless considered.

(25)

Jinan Meide claimed that an ordinary course of trade test should not be carried out, since the analogue country producer was not able to provide a reliable cost of production by type of the like product. One importer supported this argument, since a cost allocation based on turnover assumes that the same profit margin is generated for all product types, which is allegedly unreliable.

(26)

However, the Commission consistently carries out the ordinary course of trade test in its investigations. In particular, Article 2(5) of the basic Regulation specifically deals with such situations as referred to by Jinan Meide, stating that in the absence of a more appropriate method, preference shall be given to the allocation of costs on the basis of turnover. In this respect, it is noted that the costs were allocated on the basis of turnover and that no other more suitable method was proposed by any interested party. The decision to allocate costs on the basis of turnover and to carry out an ordinary course of trade test was therefore maintained.

(27)

Jinan Meide requested that product types that are sold by the analogue country producer in quantities below 200 kg should be disregarded from the normal value calculation, as prices of such product types are allegedly unreliable. It is noted that Jinan Meide claimed during the original investigation that the 5 % representativity test should not be carried out when normal value is established in an analogue country, and this claim was accepted by the Commission at the time. The claim to disregard sales of product types sold in quantities below 200 kg is rejected since sales prices for types of the like product sold in quantities below 200 kg cannot be considered unreliable, as they were verified and found as reliable as any other sales prices.

(28)

One importer supported Jinan Meide's argument, since the price volatility for slow-moving product types would allegedly be high. This would mean that product types may have a very similar quality and cost structure, but might be sold at very different prices. However, the Commission established that, in respect of the analogue country producer, the price volatility is high for all product types, even the best-selling items. Therefore, the alleged high price volatility cannot be used as an argument to exclude slow-moving product types from the dumping calculation. The claim was therefore rejected.

(29)

Jinan Meide also claimed that as the Commission had allocated costs of the analogue country producer on the basis of turnover, the normal value should not be constructed if the comparable types of the like product in the analogue country were sold in quantities below 200 kg, but that the normal value should be established in such cases on the basis of prices of other similar types sold in larger quantities. This claim was likewise rejected, as the allocation of total costs on the basis of turnover is in line with Article 2(5) of the basic Regulation and the arguments of Jinan Meide were not sufficient to justify a different methodology in this particular case.

(30)

Jinan Meide brought forward claims concerning adjustments in the analogue country producer's data for credit, packing expenses, level of trade, bank charges, domestic transport, credit notes, indirect taxes, technical support, use of different raw materials and different labour productivity.

(31)

The Commission accepted the claim concerning domestic transport and the credit costs as related to one single customer of the analogue country producer and the corresponding adjustments were made in the dumping calculation of Jinan Meide.

(32)

As concerns the claims regarding the difference in labour productivity and the use of different raw materials, Jinan Meide alleged that the lower productivity per worker and the use of different raw materials lead to a moderate cost increase of the analogue country producer compared to Jinan Meide. In this respect, it should be noted that while some differences in efficiency or productivity might exist between companies, the guiding principle of anti-dumping calculations is to ensure comparability between export prices and normal value, which does not require that the circumstances of an analogue country producer and an exporter in a non-market economy country are completely aligned. Indeed, only differences for factors affecting prices and price comparability between an analogue country producer and an exporter in a non-market economy country warrant an adjustment.

(33)

The other claims were found not to be supported by the evidence collected on spot and present on the file and were thus rejected.

(34)

During the preparation of the final disclosure for Jinan Meide, the Commission spotted a clerical error concerning the adjustment for indirect taxes in the dumping calculation for Jinan Meide. Contrary to what the Commission stated in the text of the provisional (9) and definitive (10) Regulations, due to a clerical error, the adjustment for indirect taxes was not done at the time of the final disclosure to Jinan Meide, although it was done at the provisional stage. For reasons of good administration, this error was corrected.

(35)

On 12 April 2017, the Commission informed all interested parties of the above findings on the basis of which it was intended to propose to re-impose the anti-dumping duty on imports of threaded tube or pipe cast fittings, of malleable cast iron, excluding bodies of compression fittings using ISO DIN 13 metric thread and malleable iron threaded circular junction boxes without having a lid, from Jinan Meide on the basis of the facts collected and submitted relating to the original investigation.

(36)

Jinan Meide and three unrelated importers claimed that the Commission could not proceed with the correction of the clerical error (concerning the adjustment for indirect taxes in its dumping margin calculation) in the framework of the present reopening, because the clerical error was not related to the implementation of the judgment of the General Court. Jinan Meide also requested and was granted a hearing with the Hearing Officer. Two unrelated importers claimed that the Commission is prevented from putting the exporting producer in a position worse than originally found.

(37)

Jinan Meide reiterated its claim that the Commission should treat product types for which the analogue country's sales volume was below 200 kg as quasi-matching or non-matching product types and that it cannot rely on unreliable costs to exclude sales from the normal value determination.

(38)

Jinan Meide challenged the Commission's decision to reject its adjustments requests with regard to level of trade, packing expenses, credit costs, domestic insurance costs and differences in raw materials and productivity.

(39)

Jinan Meide claimed that no duty should be imposed on it as a result of alleged procedural violations and other irregularities in these proceedings. In this context, the company claimed that an error in the disclosure of 23 December 2016 put into question whether the Commission disclosed the confidential version of the calculation made at definitive stage of the original investigation, and that the disclosure did not explain the alleged differences with the calculation made in the original investigation. It further claimed that the Commission refused to disclose certain elements despite Jinan Meide's repeated requests. It also submitted that the claims made in Case T-424/13, but not address by the General Court, remained valid and would continue to vitiate the measures in case they would be re-imposed.

(40)

The Commission recalls that during the preparation of the final disclosure for Jinan Meide, it spotted a clerical error concerning the adjustment for indirect taxes in the dumping calculation for Jinan Meide. For reasons of good administration, the Commission proposed to correct this error at that stage and properly disclosed this proposal to all interested parties.

(41)

Having considered all arguments put forward, the Commission decided to accept Jinan Meide's claim and not to correct the clerical error. The Commission, following the opinion of the Hearing Officer, considered that there is no general prohibition of a reformatio in peius in reopening of trade defence cases — that is to say that an interested party subject to a reopening in trade defence cases may be put in a position less favourable than what it was in before that reopening took place. However, the Commission concluded that, in this specific case, the scope of reopening should be limited to the disclosure of the data from the analogue country, receiving comments from interested parties, and, if necessary, revising the duty accordingly. Since the calculation error with regard to the reimbursement of VAT for export sales, and in particular the rate of VAT reimbursement, is not related to the data obtained from the analogue country producer, such correction is considered to be outside the scope of the reopened investigation.

(42)

On 29 May 2017, the Commission sent the Additional Disclosure Document informing interested parties of its decision not to correct the clerical error referred to in recital 34. The Commission received comments from one importer only, which restated that due to the limited disclosure to importers it is not in a position to comment on adjustments. Accordingly, in the absence of arguments to the contrary, the findings on adjustments are confirmed.

(43)

With regard to the product types sold in quantities below 200 kg, Jinan Meide referred to the Advocate General's opinion in the Goldstar case (11) that ‘for domestic prices to be comparable there must be a sufficient volume of sales in absolute terms on the domestic market stems from the fact that domestic prices may differ from one sales outlet to another. Furthermore, prices may fluctuate in the course of a single reference period’, and ‘[i]n order to be representative that weighted average must be based on a minimum number of sales’.

(44)

In this respect it is noted that the Advocate General continued his opinion in the following subparagraph that this ‘does not mean, however, that the Community institutions should, in addition to the aforesaid relative threshold below which sales should be disregarded, fixed at 5 % and calculated for each model, still be required to apply an absolute threshold as well. It makes little sense to establish an absolute minimum threshold in general since the value of an absolute figure depends too closely on the nature of the product.’ Thus, the opinion of the Advocate General in fact confirms that it is indeed not necessary to apply an absolute minimum threshold such as the absolute threshold of 200 kg claimed by Jinan Meide.

(45)

As regards the issue of price fluctuations, as indicated in recital 28 above, this affected all product types and not only product types in quantities sold below 200 kg.

(46)

One unrelated importer supported Jinan Meide's claim concerning representativity of low turnover products and reiterated its comments in that regard. It provided a general statement that Commission's position contradicts general market experience. The Commission's statement is based on data obtained from the analogue country producer. Given that the claim has not been further substantiated and in light of recitals 28 and 42 et seq. above, the claim is therefore rejected.

(47)

With regard to the claim concerning unreliable costs, Jinan Meide claimed that the Commission eventually resorted to the initial set of cost data submitted even though allegedly it had initially considered that this set did not meet the standards. This argument is not supported by the facts of the investigation. Indeed, the Commission has never considered that the initial set of cost data did not meet the standards. In such circumstances, it is therefore not appropriate to completely disregard the costs reported by the analogue country producer, as claimed by Jinan Meide.

(48)

One unrelated importer reiterated its comment that cost allocation based on turnover assumes that the same profit margin is generated for all product types, which allegedly contradicts observed logic in the market. The claim was not further substantiated. As stated in recital 26 above, in accordance with the basic Regulation, in the absence of a more appropriate method, preference shall be given to the allocation of costs on the basis of turnover. The costs were allocated on the basis of turnover and that no other more suitable method was proposed by any interested party. The claim is therefore rejected.

(49)

Concerning the level of trade adjustment, Jinan Meide reiterated its claim that when determining whether a level of trade adjustment is warranted, it is sufficient to establish a difference in average prices to different categories of customers. Article 2(10)(d)(i) of the basic Regulation however requires that there is a ‘consistent and distinct difference of prices of the seller for the different levels of trade.’ A simple comparison of average prices is therefore not considered sufficient to establish such a consistent and distinct difference of prices. To the contrary, an analysis of the information on file shows that all customer types are in all segments of the price range.

(50)

One unrelated importer claimed that the Commission should carry out a level of trade adjustment, but, because of lack of access to data, could not comment further. It also claimed that because of lack of access to the calculation of the dumping margin, it could not comment further. In this regard, it is recalled that the Commission is under an obligation to protect confidential information that it has received from interested parties. However, all non-confidential submissions are available to interested parties, who are invited to comment. The Commission notes, however, that, as stated in recital 49 above, the information on file showed that in this case there were no consistent and distinct differences in the prices charged to different customer types. Therefore, a level of trade adjustment would not be appropriate.

(51)

Concerning the allowance for credit costs, an allowance was deducted on the basis of the information on the sales documentation, both on the export price and normal value side. Jinan Meide argued that the allowance for credit costs on the normal value side should be made on the basis of the actual number of days between the invoice and the payment, since the Commission allegedly deducted an allowance for credit cost on export sales even though no payment term was made on the sales documentation. This claim was found not to be supported by the evidence on file of the investigation. Nor was Jinan Meide able to provide any evidence to support its claim. In addition, it was established that both on the normal value side and on the export price side, the actual payment was often made after the payment term on the sales documentation. Calculating the allowance on credit cost on the basis of the actual payment date on the normal value side and on the basis of the information contained in the sales documentation of the export price side would therefore not result in a fair comparison. The Commission therefore maintained its approach to establish the allowance for credit costs on the basis of the information on the sales documentation for both the normal value and the export price.

(52)

As regards the allowance for packing costs, Jinan Meide reiterated their claims that the allocation of packing costs was incorrect, and the resulting allowance for packing costs was very low and not reasonable. It did however not further substantiate its argument, in particular why the resulting allowance was unreasonably low. The Commission therefore maintained its methodology concerning the allowance for packing costs.

(53)

Lastly, the Commission rejects Jinan Meide's allegations of procedural violations and other irregularities in these proceedings. The Commission observed all principles and respected all procedural steps. The Commission reopened the investigation, disclosed the data from the analogue country as required to implement the judgement of the Court, and revised Jinan Meide's duty rate accordingly. In all steps of the investigation, interested parties were given the opportunity to comment as well as to be heard at a hearing. In fact, during the whole proceedings, the Commission was transparent and engaging, accommodating meetings at Jinan Meide's request for clarifications and hearings. The Commission clarified the technical problem related to a faulty excel file with calculations which resulted in the inconsistencies referred to by Jinan Meide. This error, in any case, had no impact on the dumping margin and was promptly corrected. The Commission disclosed all confidential information to Jinan Meide, including the confidential file with the figures used for the dumping margin in 2013. With regard to the claims that were made before the General Court but not addressed by the judgment, the Commission contests all the alleged illegalities pointed out by Jinan Meide. The Commission has fulfilled its duty to implement the court judgment by addressing the illegalities found by the General Court. On this basis, the Commission fails to see the procedural violations referred to by Jinan Meide and restates that it complied with all principles and procedural requirements, allowing Jinan Meide (and other interested parties) to exercise its procedural rights throughout the investigation.

(54)

Jinan Meide also reiterated their arguments concerning the difference in labour productivity and the use of different raw materials, without providing further arguments or evidence in this respect. This position was supported by one unrelated importer. These arguments are addressed in recital 32 above.

(55)

One unrelated importer reiterated its claim that the reopening as such was not compatible with the provisions of the basic Regulation. As stated in recital 17, it is clear from the judgment of joined cases C-283/14 and C-284/14 (12) that the EU Institutions may reopen an anti-dumping investigation to amend irregularities found by the European Courts even though this is not expressly provided for in the basic Regulation. The Union's institutions are, in fact, required to take the necessary measures to remedy illegalities. The claim was therefore rejected.

(56)

Another unrelated importer pointed to negative effects of the anti-dumping duties (due to impact on profitability and turnover as well as new market conditions, i.e. new prices, new sourcing). As set out in recital 41 above, the scope of the present reopening was limited to implementation of the judgment of the General Court with regard to Jinan Meide, notably to disclose to Jianan Meide the confidential data of the analogue country producer. The claim was therefore rejected.

(57)

One unrelated importer claimed that the change (an alleged increase) of the duty rate necessitated a reassessment of the impact of the duty on importers and users. However, as stated in recital 41, the Commission did not proceed to correct the clerical error related to the VAT reimbursement because it was considered to be outside the scope of the reopened investigation. The claim was therefore rejected.

(58)

The same party also claimed that the Commission should carry out an interim review since the original investigation period lies more than five years in the past. The scope of the reopening has been clearly defined in the notice of the reopening (13). A reopening and an interim review are instruments with different purposes. That is to say, the purpose of this reopening was to implement the judgment of the General Court with regard to Jinan Meide. An interim reviews, on the other hand, are an instrument with clearly defined legal conditions, notably to review the measures in force due to changed circumstances of a lasting nature. The claim was therefore rejected.

(59)

Finally, one party claimed that the Commission should have analysed claims raised in the court proceedings even if they were not addressed by the court to prevent further litigation. The Commission notes that the scope of the present reopening was limited to implementation of the judgment of the General Court with regard to Jinan Meide, notably to disclose to Jinan Meide the confidential data of the analogue country producer. The claim was therefore rejected.

(60)

The comparison of the weighted average export price with the re-calculated weighted average normal value by product type on an ex-factory basis showed the existence of dumping. The dumping margin established, expressed as a percentage of the CIF import price at the Union frontier, duty unpaid, was 39,2 %.

(61)

The Commission took account of comments made by the parties and concluded that the implementation of the General Court's judgment should take the form of the re-disclosure to Jinan Meide of the final disclosure of 15 March 2013 with the additional information on normal value calculations using confidential data of the analogue country producer. Following the re-disclosure, the Commission received and considered comments from Jinan Meide and other interested parties. On the basis of this assessment, and the considerations recalled in recitals 40 to 58 above, the Commission considered appropriate to re-impose the anti-dumping duty on imports of threaded tube or pipe cast fittings, of malleable cast iron, excluding bodies of compression fittings using ISO DIN 13 metric thread and malleable iron threaded circular junction boxes without having a lid, manufactured by Jinan Meide.

(62)

The Union industry represented by the five still active Union producers argued that the situation following the annulment of the anti-dumping duty for Jinan Meide warrants a registration of imports. The request has been reiterated following the final disclosure.

(63)

Pursuant to Article 9(5) of the basic Regulation, the sole purpose of such registration is however the possible retroactive collection of duties. The conditions for a retroactive collection of duties are however not met in the present case. A registration of imports is therefore not warranted.

(64)

On the basis of the above, the Commission considered it was appropriate to re-impose the definitive anti-dumping duty on imports of threaded tube or pipe cast fittings, of malleable cast iron, excluding bodies of compression fittings using ISO DIN 13 metric thread and malleable iron threaded circular junction boxes without having a lid, currently falling within CN code ex 7307 19 10 (TARIC code 7307191010) and originating in the People's Republic of China and manufactured by Jinan Meide at the rate of 39,2 %.

(65)

This procedure does not affect the date on which the measures imposed by the contested Regulation will expire pursuant to Article 11(2) of the basic Regulation.

(66)

The Committee established by Article 15(1) of Regulation (EU) 2016/1036 did not deliver an opinion,