Report from the Commission - Eighteenth annual report from the Commission to the European Parliament on the Community's anti-dumping and anti-subsidy activities - Overview of the monitoring of third country safeguard cases and of the implementation of the trade barriers Regulation (1999) /* COM/2000/0440 final */
REPORT FROM THE COMMISSION - EIGHTEENTH ANNUAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT ON THE COMMUNITY'S ANTI-DUMPING AND ANTI-SUBSIDY ACTIVITIES - OVERVIEW OF THE MONITORING OF THIRD COUNTRY SAFEGUARD CASES AND OF THE IMPLEMENTATION OF THE TRADE BARRIERS REGULATION (1999) (18th Annual report to the Parliament - 1999) CONTENTS Purpose and Aim 1. Overview of anti-dumping and anti-subsidy legislation 1.1. The legal framework 1.1.1. The applicable law 1.1.1.1. The international framework 1.1.1.2. The Community legislation 1.1.2. What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties 1.1.2.1. Dumping and Subsidies 1.1.2.2. Material Injury and Causation 1.1.2.3. Community interest 1.1.3. Procedure 1.1.4. The anti-dumping and anti-subsidy services 1.2. Changes to the basic Regulations 1.3. Implementation of Council Regulation (EC) No 905/98 related to individual Market Economy Status for companies in China and Russia 1.3.1. Regulation (EC) No 905/98 amending the anti-dumping basic Regulation 1.3.2. Observations on the application of the new rule since 1 July 1998 1.4. WTO dispute settlement in the field of anti-dumping and anti-subsidy 1.4.1. Definition of the WTO dispute settlement procedure 1.4.2. Panel proceedings involving EU anti-dumping and anti-subsidy activities 2. General overview of measures in force 3. Initiations of Anti-dumping and Anti-subsidy Investigations 3.1. Introduction 3.2. Cases 3.2.1. Flat rolled products of iron or non-alloy steel from Bulgaria, India, Iran, South Africa, the Federal Republic of Yugoslavia and Taiwan 3.2.2. Flat rolled products of iron or non-alloy steel from India, Taiwan and outh Africa (AS) 3.2.3. Yellow phosphorus from the People's Republic of China 3.2.4. Television camera systems from the USA 3.2.5. Parts of television camera systems from Japan 3.2.6. Compact-disc boxes from the People's Republic of China 3.2.7. Video tapes on reels from the Republic of Korea 3.2.8. Synthetic fibres of polyester from Australia, Indonesia and Thailand 3.2.9. Synthetic fibres of polyester from Australia, Indonesia, the Republic of Korea, Taiwan and Thailand (AS) 3.2.10. Hot-rolled flat products of non-alloy steel from India, the People's Republic of China and Romania 3.2.11. Steel wire rod from Turkey 3.2.12. Malleable cast iron tube or pipe fittings from Brazil, Croatia, the Czech Republic, the Federal Republic of Yugoslavia, Japan, the People's Republic of China, the Republic of Korea and Thailand 3.2.13. Solutions of urea and ammonium nitrate from Algeria, Belarus, Lithuania, Russia, the Slovak Republic and Ukraine 3.2.14. Stainless steel fasteners from Malaysia, Singapore, the Philippines and Thailand (AS) 3.2.15. One Dye Black 1 (ODB-1) from Japan 3.2.16. One Dye Black 2 (ODB-2) from Japan 3.2.17. Cathode-ray colour television picture tubes from the People's Republic of China, India, the Republic of Korea, Lithuania and Malaysia 3.2.18. Hair brushes from the People's Republic of China, Hong Kong, the Republic of Korea, Taiwan and Thailand 3.2.19. Glycine from the People's Republic of China 3.2.20. Styrene-butadiene-styrene (SBS) thermoplastic rubbers from Taiwan (AS) 3.2.21. Styrene-butadiene-styrene (SBS) thermoplastic rubbers from Taiwan 3.2.22. Electronic weighing scales from the People's Republic of China, the Republic of Korea and Taiwan 3.2.23. Woven glass fibre fabrics from Taiwan (AS) 3.2.24. Coke over 80 mm from the People's Republic of China 3.2.25. Polyester staple fibres from the Republic of Korea 3.2.26. Ammonium nitrate from Lithuania, Poland and Ukraine 3.2.27. Bicycle forks from the People's Republic of China and Taiwan 3.2.28. Bicycle frames from the People's Republic of China and Taiwan 3.2.29. Bicycle wheels from the People's Republic of China 3.2.30. Polyethylene terephthalate (PET) from India, Indonesia, Malaysia, the Republic of Korea, Taiwan and Thailand 3.2.31. Polyethylene terephthalate (PET) from India, Indonesia, Malaysia, the Republic of Korea, Taiwan and Thailand (AS) 3.2.32. Polyester staple fibres from India 4. Provisional measures 4.1. Overview 4.2. Cases 4.2.1. Steel ropes and cables from the People's Republic of China, Hungary, India, Mexico, Poland, South Africa and Ukraine 4.2.2. Stainless steel wire having a diameter of less than 1 mm from India and the Republic of Korea (AS) 4.2.3. Stainless steel wire having a diameter of less than 1 mm from the Republic of Korea 4.2.4. Stainless steel wire having a diameter of 1 mm or more from India 4.2.5. Stainless steel wire having a diameter of 1 mm or more from India and the Republic of Korea (AS) 4.2.6. Seamless pipes and tubes from Croatia and Ukraine 4.2.7. Polyethylene terephthalate (PET) film from India (AS) 4.2.8. Compact discs boxes from the People's Republic of China 5. Definitive measures 5.1. Overview 5.2. Cases 5.2.1. Hardboard from Bulgaria, Estonia, Latvia, Lithuania, Poland and Russia 5.2.2. Bicycles from Taiwan 5.2.3. Polypropylene binder or baler twine from Poland, the Czech Republic and Hungary 5.2.4. Stainless steel wires with a diameter of 1 mm or more from India (AS) 5.2.5. Stainless steel wires with a diameter of 1 mm or more from India 5.2.6. Stainless steel wires with a diameter of less than 1 mm from India (AS) 5.2.7. Steel ropes and cables from the People's Republic of China, Hungary, India, Mexico, Poland, South Africa and Ukraine 5.2.8. Polyethylene terephthalate (PET) film from India (AS) 6. Investigations terminated without measures 6.1. Overview 6.2. Cases 6.2.1. Laser optical reading systems from Japan, the Republic of Korea, Malaysia, the People's Republic of China and Taiwan 6.2.2. Hardboard from Brazil 6.2.3. Large electrolytic aluminium capacitors from the USA and Thailand 6.2.4. Polypropylene binder or baler twine from Saudi Arabia 6.2.5. Polypropylene binder or baler twine from Saudi Arabia (AS) 6.2.6. Stainless steel heavy plates from Slovenia and South Africa 6.2.7. Polyester textured filament yarn from India and the Republic of Korea 6.2.8. Polyester textured filament yarn from India and the Republic of Korea (AS) 6.2.9. Stainless steel wires with a diameter of 1 mm or more from the Republic of Korea (AS) 6.2.10. Stainless steel wires with a diameter of 1 mm or more from the Republic of Korea 6.2.11. Stainless steel wires with a diameter of less than 1 mm from the Republic of Korea (AS) 6.2.12. Stainless steel wires with a diameter of less than 1 mm from the Republic of Korea 6.2.13. Steel ropes and cables from the Republic of Korea 6.2.14. Video tapes on reels from the Republic of Korea 7. Reviews of anti-dumping and anti-subsidy measures 7.1. Overview 7.2. Expiry reviews 7.2.1. Expiry reviews initiated 7.2.1.1. Ethanolamine from the USA 7.2.1.2. Fluorspar from the People's Republic of China 7.2.1.3. Potassium chloride from Belarus, Russia and Ukraine 7.2.1.4. Silicon carbide from the People's Republic of China, Russia and Ukraine 7.2.1.5. Television camera systems from Japan 7.2.1.6. Magnetic disks (3,5" microdisks) from Hong Kong and the Republic of Korea 7.2.1.7. Potassium permanganate from the People's Republic of China 7.2.1.8. Urea ammonium nitrate solution (UAN) from Poland 7.2.2. Expiry reviews concluded 7.2.2.1. Magnesium oxide from the People's Republic of China 7.2.2.2. Synthetic fibres of polyester from Taiwan 7.2.3. Expiry reviews terminated 7.2.3.1. Ferro-silicon from Egypt and Poland 7.2.3.2. Synthetic fibres of polyester from the Republic of Korea 7.3. Interim reviews 7.3.1. Interim reviews initiated 7.3.1.1. Ethanolamine from the USA 7.3.1.2. Fluorspar from the People's Republic of China 7.3.1.3. Personal fax machines from Japan and Singapore 7.3.1.4. Seamless pipes and tubes of iron or non-alloy steel from Russia 7.3.1.5. Potassium chloride from Belarus, Russia and Ukraine 7.3.1.6. Polyester textured filament yarn (PTY) from Taiwan 7.3.1.7. Microwave ovens from the Republic of Korea 7.3.1.8. Magnetic disks (3,5" microdisks) from Taiwan 7.3.1.9. Tube or pipe fittings, of iron or steel from Thailand 7.3.1.10. Polyester textured filament yarn (PTY) from Malaysia 7.3.1.11. Bicycle parts from the People's Republic of China 7.3.1.12. Urea ammonium nitrate solution from Poland 7.3.2. Interim reviews concluded 7.3.2.1. Calcium metal from the People's Republic of China and Russia 7.3.2.2. Salmon (AD/AS) from Norway 7.3.2.3. Personal fax machines from Japan and Singapore 7.3.2.4. Ferro-chrome (low carbon) from Kazakhstan, Russia and Ukraine 7.3.2.5. Magnetic disks (3,5" microdisks) from Japan, Taiwan, the People's Republic of China, Hong Kong, the Republic of Korea, Malaysia, Mexico, U.S.A. and Indonesia 7.3.2.6. Furfuraldehyde from the People's Republic of China 7.4. Newcomer reviews 7.4.1. New exporter reviews initiated 7.4.1.1. Handbags (leather) from the People's Republic of China 7.4.2. New exporter reviews concluded 7.4.2.1. Polyethylene/polypropylene sacks and bags from India 7.4.2.2. Magnetic disks (3,5" microdisks) from Indonesia 7.5. Absorption investigations 7.5.1. Anti-absorption investigations initiated 7.5.1.1. Ring-binder mechanisms from the People's Republic of China 7.5.1.2. Stainless steel fasteners & parts thereof from Malaysia and Thailand 7.5.1.3. Magnesium (unwrought, unalloyed) from the People's Republic of China 7.6. Circumvention investigations 7.6.1. Anti-circumvention investigations initiated 7.6.1.1. Magnetic disks (3,5" microdisks) from the People's Republic of China and Taiwan 7.6.1.2. Tube and pipe fittings of iron or steel from the People's Republic of China 7.6.2. Anti-circumvention investigations concluded 7.6.2.1. Lighters (refillable and non-refillable) from the People's Republic of China 7.6.2.2. Television camera systems from Japan 7.7. Accelerated review investigations 7.7.1. Accelerated review investigations initiated 7.7.1.1. Stainless steel bars from India 7.7.1.2. Stainless steel wire with a diameter of less than 1 mm from India 7.7.1.3. Stainless steel wire with a diameter of 1 mm or more from India 7.7.1.4. Stainless steel bars from India 7.7.2. Accelerated review investigations concluded 7.7.2.1. Stainless steel bars from India 8. Monitoring of undertakings 9. Refunds 10. Judicial review : Decisions by the Court of Justice/Court of First Instance 10.1. Overview of the judicial reviews in 1999 10.2. Cases pending 10.3. New cases 10.4. Judgments rendered by the Court of First Instance 10.4.1. Microwave ovens originating, inter alia, in Thailand 10.4.2. Gas-fuelled, non refillable pocket flint lighters originating in, inter alia, the Philippines 10.4.3. Ammonium nitrate originating in Russia 10.4.4. Certain seamless pipes and tubes of Iron or non-alloy steel originating in Hungary, Poland, Russia, the Czech Republic, Romania and the Slovak Republic 11. Anti-dumping and anti-subsidy investigations of third countries concerning imports from EU Member States 11.1. Anti-dumping cases against EU Member States 11.1.1. Initiations (still at initiation stage) 11.1.1.1. Supertension cable from Germany 11.1.1.2. Sterile synthetic absorbable surgical sutures from Germany 11.1.1.3. X-ray film from Germany 11.1.1.4. Pure terephtalic acid from Spain 11.1.1.5. Pre-sensitised printing plates from the Netherlands 11.1.1.6. Over-headed aluminium stranded wire or cable with steel core from France 11.1.1.7. Tin from the Netherlands 11.1.1.8. Structural steel beams from Germany and Spain 11.1.1.9. Carton-board from Austria, Spain, Italy and Sweden 11.1.1.10. Oxo alcohol from, inter alia, the European Union 11.1.1.11. Vitamin-C from the European Union 11.1.1.12. Insulin products from France and Denmark 11.1.1.13. Cars from, inter alia, the European Union 11.1.1.14. Milk from, inter alia, the European Union 11.1.1.15. Photographic paper from the UK and France 11.1.1.16. Salt from the European Union 11.1.1.17. D-Glucitol (Sorbitol) from the European Union 11.1.1.18. Methyl methacrylate from Germany, Spain, United Kingdom & France 11.1.1.19. Polyurethane products from, inter alia, the European Union 11.1.1.20. Certain hot-rolled carbon steel plate from, inter alia, Finland 11.1.1.21. Glass microspheres from, inter alia, France and Germany 11.1.2. Provisional measures 11.1.2.1. Cut-to-length steel plate from France and Italy 11.1.2.2. Thermal sensitive paper from Finland, Germany and the European Union 11.1.2.3. Insecticide from Denmark 11.1.2.4. Sodium cyanide from Germany and the European Union 11.1.2.5. Seamless tubes from Austria 11.1.3. Definitive measures 11.1.3.1. Acrylic fibre from Spain, Italy and Portugal 11.1.3.2. Filter tipped cigarette tubes from France and Germany 11.1.3.3. Uncoated white cut ream copy papers from Finland 11.1.3.4. Cartonboard from Germany 11.1.3.5. Hypodermic needles from Belgium, Germany, Ireland and Spain 11.1.3.6. Stainless steel plate in coils from Belgium and Italy 11.1.3.7. Acetaminophenol from France 11.1.3.8. Flat hot-rolled carbon and alloy sheet and strip from France 11.1.3.9. Stainless steel sheet and strip in coils from France, Germany, Italy and the UK 11.1.3.10. Polycarbonates from Germany 11.1.3.11. Cold-rolled steel sheet from Belgium and Spain 11.1.3.12. Tyres from France and the EU 11.1.3.13. Thermal sensitive paper from Finland, Germany and the European Union 11.1.3.14. Floor tiles from Italy 11.1.3.15. Woven pile weather stripping from Spain and the UK 11.1.3.16. Wound skin and closure strips from France and Germany 11.1.4. Investigations terminated without measures 11.1.4.1. Polymeric plasticisers from the UK 11.1.4.2. Styrene butane rubber from Germany and France 11.1.4.3. Industrial sewing machine needles from Germany 11.1.4.4. Stainless steel round wire from, inter alia, Spain 11.1.4.5. Glass containers from Germany, Italy, Portugal and Spain 11.1.4.6. Infant milk formula from Denmark and the Netherlands 11.1.4.7. Structural steel beams from Germany and Spain 11.1.4.8. Inhibitors from Germany 11.1.4.9. Acrylic Fibre from, inter alia, the European Union 11.1.5. Pending investigations initiated before 1999 11.1.5.1. Coated paperboard from Austria, Germany, the Netherlands and Spain 11.1.5.2. Rock wool from the Netherlands 11.1.5.3. Crystal polystyrene from the European Union 11.1.5.4. Woven polypropylene carpet from, inter alia, Belgium and the UK 11.1.5.5. Bolts and nuts from, inter alia, Spain 11.1.5.6. Hydroethylcellulose from, inter alia, the Netherlands 11.1.5.7. Hot and cold-rolled stainless steel from France, Germany, Italy and Spain 11.1.6. Sunset review investigations having led to a change in the imposed duties 11.1.6.1. Stainless steel bars from France, Germany, Italy, Spain, Sweden, United Kingdom 11.1.6.2. Refined sugar from Belgium, Denmark, Germany, The Netherlands 11.1.6.3. Certain coated papers from Austria and Finland 11.2. Anti-subsidy cases against EU Member States 11.2.1. Initiations (still at initiation stage) 11.2.1.1. Brandy from France 11.2.1.2. Canned ham and canned pork luncheon meat from Denmark and the Netherlands 11.2.2. Provisional measures 11.2.2.1. Cut-to-length carbon steel plate from Italy and France 11.2.2.2. Milk powder from the European Community 11.2.3. Definitive measures 11.2.3.1. Stainless steel plate in coils from Italy and Belgium 11.2.3.2. Cut-to-length carbon steel plate from Belgium 11.2.3.3. Stainless steel sheet and strip from Italy and France 11.2.3.4. Lead and bismuth steel from the UK 11.2.4. Investigations terminated without measures 11.2.4.1. Sugar from the European Community 11.2.4.2. Lead and Bismuth Steel from Germany 11.2.4.3. Leaded billets from UK and Germany 11.2.5. Review investigations having led to a change in the imposed duties 11.2.5.1. Pasta from Italy 12. Safeguard measures 12.1. Legal framework 12.2. The Community's activities in the field of safeguards 12.3. Overview of the recent main third country safeguard cases 12.3.1. Brazil 12.3.1.1. Toys 12.3.2. Chile 12.3.2.1. Wheat, wheat flour, sugar and edible vegetable oils 12.3.3. Czech Republic 12.3.3.1. Sugar 12.3.4. Egypt 12.3.4.1. Safety wooden matches 12.3.4.2. Fluorescent lamps 12.3.5. India 12.3.5.1. Phenol 12.3.5.2. Acetone 12.3.5.3. White/yellow phophorus 12.3.6. Latvia 12.3.6.1. Swine meat 12.3.7. Poland 12.3.7.1. Flat steel products 12.3.7.2. Tractors 12.3.7.3. Yoghurt 12.3.8. Slovenia 12.3.8.1. Swine meat 12.3.9. Slovakia 12.3.9.1. Swine meat 12.3.10. USA 12.3.10.1. Wheat gluten 12.3.10.2. Steel wire rod 12.3.10.3. Welded line pipe 12.3.10.4. Lamb 12.4. Appellate body reports on safeguard measures 12.4.1. Appellate Body Report on Argentina Footwear 12.4.2. Appellate Body Report on Korea - Dairy Products 13. The Trade Barriers Regulation (TBR) 13.1. Background and objectives 13.2. Legal framework of the TBR 13.2.1. Applicability 13.2.2. Procedure 13.2.3. Action under the TBR 13.2.3.1. Procedures initiated in 1999 13.2.3.2. Overview of the application of the TBR since its entry into force LIST OF ANNEXES ANNEXES : SUMMARY ANNEX A // New investigations initiated during the period 1 January - 31 December 1999 ANNEX B // New investigations initiated by country of export during the period 1994 - 1999 (31 December) ANNEX C // New investigations initiated by product sector during the period 1994 - 1999 (31 December) ANNEX D // New investigations concluded by the imposition of provisional duties during the period 1 January - 31 December 1999 ANNEX E // New investigations concluded by the imposition of definitive duties during the period 1 January - 31 December 1999 ANNEX F // New investigations terminated without imposition of measures during the period 1 January - 31 December 1999 ANNEX G // Expiry reviews initiated or concluded during the period 1 January - 31 December 1999 ANNEX H // Interim reviews initiated or concluded during the period 1 January - 31 December 1999 ANNEX I // New exporter reviews initiated or concluded during the period 1 January - 31 December 1999 ANNEX J // Anti-absorption investigations initiated or concluded during the period 1 January - 31 December 1999 ANNEX K // Anti-circumvention investigations initiated or concluded during the period 1 January - 31 December 1999 ANNEX L // Accelerated review investigations (anti-subsidy) initiated or concluded during the period 1 January - 31 December 1999 ANNEX M // Undertakings accepted or repealed during the period 1 January - 31 December 1999 ANNEX N // Measures which expired during the period 1 January - 31 December 1999 ANNEX O // Definitive measures in force on 31 December 1999 A. Ranked by product B. Ranked by country ANNEX P // Undertakings in force on 31 December 1999 A. Ranked by product B. Ranked by country ANNEX Q // Anti-dumping & anti-subsidy investigations pending on 31 December 1999 : A. New investigations (ranked by product) B. Review investigations (ranked by product) C. Ranked by country (new & review investigations) ANNEX R // Refunds during the period 1 January - 31 December 1999 ANNEX S // Court cases A. Court cases pending before the Court of Justice and the Court of First Instance of the European Communities on 31 December 1999 B. Judgments and orders rendered by the Court of Justice and the Court of First Instance of the European Communities during 1999 Purpose and Aim This report is submitted to the European Parliament following its Resolution of 16 December 1981 on the Community's anti-dumping activities [1], and the reports of the European Parliament's Committee on industry, external trade, research and energy [2]. The 1999 issue has been extended in scope in order to also offer an overview of certain other Community trade policy activities, in particular, the application of the Trade Barrier Regulation (TBR) and the activities in relation to the safeguard measures adopted by third countries and actions under the dispute settlement understanding of the World Trade Organisation. This extension has been done for two reasons. These activities are implemented by the services responsible for anti-dumping and anti-subsidy, and more important, anti-dumping, anti-subsidy and the other trade policy activities covered by the report, all have the same goal to ensure fair competition, not only within the European Community but also on the third country markets. [1] OJ C 11, 18.1.1982, p 37. [2] PE 141.178/fin of 30.11.1990, reporter Mr Gijs DE VRIES. However, the anti-dumping and anti-subsidy activities remain the main subject of this report. It summarises developments in general policy and contains a concise commentary on each case initiated, each provisional and definitive measure taken, the reviews undertaken, and each case terminated without measures. It also provides information on the court cases relating to these trade policy instruments, and summarises the anti-dumping and anti-subsidy investigations carried out by other countries against the European Community or its Member States. In 1999, there was a substantial increase in anti-dumping and anti-subsidy activities, which in particular is evidenced by the large number of new investigations opened (86), in comparison to 1998 (29) and previous years. The present report analyses this development and concludes that it results in part from the economic crisis in Asia. As a consequence of the situation there, certain sensitive Community sectors, such as the iron and steel, electronics and chemical industries, found themselves facing a massive inflow on to their domestic markets of low-priced and/or subsidised imports. However, the evolution of the activities in 1999 was in line with that of the other main users of the anti-dumping and anti-subsidy instruments, notably the US. In addition, as the special circumstances of the Asian crisis are unlikely to be repeated, the increase in the number of new investigations in 1999 can be seen as being an exception to the normal trend, particularly as the practices of the Community institutions concerned in the interpretation and application of anti-dumping/anti-subsidy legislation have not changed. The annexes to this report provide easy access to the activities in table form. This report is also available to the general public. (Internet Website http://europa.eu.int/comm/dg01/trade10.htm) 1. Overview of anti-dumping and anti-subsidy legislation 1.1. The legal framework 1.1.1. The applicable law 1.1.1.1. The international framework On an international level, unfair trading practices, such as dumping and the granting of subsidies, were identified as a threat to open markets as early as 1947, when the first GATT Agreement was signed. The agreement contained specific provisions allowing GATT members to take action against these practices if they caused material injury to the domestic industry of a GATT member. Since that time, considerable efforts have been made to harmonise the rules relating to trade policy instruments. Particularly during the last GATT round (the so-called Uruguay Round), which led to the creation of the WTO and to detailed Anti-dumping and Anti-Subsidy Agreements, these efforts focused on the procedural rules as well as the material conditions to be fulfilled before protective measures can be taken. The Community played an active role in the negotiation of these relevant criteria which are reflected in its own legislation. 1.1.1.2. The Community legislation The first Community anti-dumping and anti-subsidy legislation was enacted in 1968, and has subsequently been modified several times. The current basic Regulations (EC and ECSC), which form the legal basis of anti-dumping and anti-subsidy investigations in the Community, entered into force between March 1996 and April 1998 [3]. They are in line with the Anti-dumping and Anti-subsidy Agreements agreed upon in the GATT/WTO negotiations. [3] Council Regulation (EC) No 384/96 of 22 December 1995 (OJ L 56, 6.3.1996), as last amended by Regulation (EC) No 905/98 (OJ L 128, 30.04.1998) and Commission Decision No 2277/96/ESCS of 28.11.1996 (OJ L 308, 29.11.1996) for anti-dumping, and Council Regulation (EC) No 2026/97 of 6 October 1997 (OJ L 288, 21.10.1997) and Commission Decision No 1889/98/ECSC of 3 September 1998 (OJ L 245, 4.9.1998) for anti-subsidies. Furthermore, Community legislation contains a number of provisions aimed at ensuring a balanced application for all interested parties of the Community's anti-dumping and anti-subsidy rules. These provisions are the "Community interest test" and the "lesser duty rule". The Community interest test corresponds to a public interest clause, and foresees that measures can only be taken if they are not contrary to the overall interest of the Community. This requires an appreciation of all the economic interests involved, including the interests of the domestic industry, users and consumers. The lesser duty rule allows the measures imposed by the Community to be lower than the dumping or subsidy margin, if such a lower duty rate is sufficient to protect the Community industry adequately. 1.1.2. What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties 1.1.2.1. Dumping and Subsidies Dumping is traditionally defined as price discrimination between national markets, or as selling below cost of production. The Community's anti-dumping legislation defines dumping as selling a product in the Community at a price below its "normal value". This "normal value" is usually the actual sales price on the domestic market of the exporting country. Consequently, a company is selling at dumped prices if the prices on its home market are higher than its export prices (price discrimination). However, if sales on the domestic market are not representative, for instance because they have only been made in small quantities, the normal value may be established on another basis, such as the sales prices of other producers on the domestic market, or the cost of production. In the latter case, a company is selling at dumped prices if its export prices are below the cost of production. In the majority of cases where dumping occurs on a more than incidental basis, a certain market segregation exists. That segregation may be due to government regulation, but also to other circumstances, including consumer preferences. As a result, exporters are shielded, at least to a certain degree, from international competition on their domestic market. Subsidies can have similar effects as sales at dumped prices. They consist of a direct support from a government, which confers a benefit to producers or exporters (e.g. grants, tax and duty exemptions, preferential loans at below commercial rates, export promotion schemes, which allow exporters to sell at low prices in the Community). 1.1.2.2. Material Injury and Causation For measures to be taken against these unfair trading practices, it is not sufficient that companies are exporting their products to the Community at dumped or subsidised prices. Measures can only be taken if these exports cause material injury to Community producers, which cannot compete on an equal footing with the exporters. Typical injury indicators are that the dumped and subsidised import volumes increase over a certain period and import prices undercut the sales prices of the Community industry. As a consequence, the latter is forced to decrease production volumes and sales prices, loses market shares, makes losses or has to make employees redundant. In the worst case, exporters may try to eliminate viable Community producers by using a predatory pricing strategy. In any event, the injury analysis requires that all relevant factors be taken into account before deciding whether the Community industry is suffering material injury. Another condition for the imposition of measures is that the injury must be caused by the dumping or the subsidies. This condition is fulfilled when the deterioration of the situation of the Community industry coincides with the increase in dumped and subsidised imports. It is important to note that the dumped or subsidised imports do not have to be the only cause of the injury. 1.1.2.3. Community interest Finally, it has to be established that the application of measures would not be contrary to the overall interest of the Community. In this respect, the interests of all relevant economic operators, which might be affected by the outcome of the investigation, are to be taken into account, the so-called Community interest test. In this context, the interest to preserve employment in the Community is carefully considered. 1.1.3. Procedure Investigations are carried out in accordance with the procedural rules laid down in the basic Regulations. These rules guarantee a transparent, fair and objective proceeding by granting significant procedural rights to interested parties. In addition, the results of an investigation are published in the Official Journal of the European Communities, and the Community is obliged to justify its decisions in this publication. Finally, it is ensured that each case is decided on its merits and the Commission does not hesitate to terminate a case if the conditions to impose measures are not met. Whereas each investigation is different, depending on the products and countries involved, all cases follow the same procedural rules, however certain preferential rules only apply to the Central and Eastern European Countries and Turkey. The rules relating to a new case are summarised below. Initiation A case normally starts with a sufficiently substantiated complaint from the Community industry. After receipt of this complaint, the Commission assesses whether the complaint contains sufficient evidence to allow for the initiation of the case. A case is opened by a notice of initiation published in the Official Journal. In this notice, all interested parties, including users and, where appropriate, consumer organisations, are invited to participate in the proceeding. Detailed questionnaires are sent to producers in the exporting countries and the Community, traders (in particular importers) and other interested parties, such as users. These parties are also informed that they can request a hearing and ask for access to the non-confidential files, which will help them to defend their case. The investigation up to provisional measures Following receipt of the replies to the questionnaire, investigations are carried out by Commission officials at the premises of the co-operating parties. The purpose of these visits is to verify whether the information given in the questionnaire is reliable. The verified information is subsequently used to calculate the dumping margin, the price undercutting margin and injury elimination level. These calculations often involve the processing of thousands of transactions, and require a complex analysis of production costs. The results of the calculations and the other findings are summarised in a working document, on the basis of which it is decided - after consultation of the Member States in the Advisory Committee - whether to impose provisional measures or to terminate the proceeding. In either eventuality, the decision at this stage is the Commission's responsibility. The investigation up to definitive measures Following the publication in the Official Journal of a Commission regulation imposing provisional duties, interested parties, who so request, receive a full disclosure, which allows them to verify the calculations of the Commission and to submit comments. Comments can also be made in a hearing. All submissions and comments are taken into account when a second, definitive, working document is prepared by the Commission. After final disclosure and consultation of the Member States on the basis of the second working document, the Commission makes a proposal to the Council whether or not to confirm the provisional measures and impose definitive measures. Another possibility is that the Commission accepts undertakings offered by exporters, which undertake to respect minimum prices. In this case, no duties are imposed for the companies from which undertakings are accepted. The Council decides on the adoption of the Commission proposal by simple majority vote, i.e. at least eight Member States have to be in favour of the Commission proposal. The regulation imposing definitive duties, and deciding on the collection of the provisional duties, is published in the Official Journal. Timing The procedure described above is subject to strict statutory deadlines. Thus, a decision to impose provisional duties must be taken within nine months of initiation and the total duration of an investigation is limited to fifteen months. This leads to significant time pressures, taking into account, inter alia, internal consultations and the necessity to publish regulations and decisions in all Community languages at the same time. Anti-dumping or countervailing measures will normally remain in force for five years, and may consist of duties or undertakings concluded with exporters. Measures are taken on a countrywide basis, but individual treatment, i.e. the application of a company-specific duty, can be granted to exporters which have co-operated throughout the investigation. During the five-year period, interested parties may, under certain conditions, request a review of measures or the refund of anti-dumping duties paid. Measures may also be suspended for a certain period, subject to given criteria. The anti-dumping and anti-subsidy regulations provide for administrative reviews and distinguish between interim reviews, newcomer reviews and expiry reviews. Those procedures are initiated normally only on the basis of the substantiated evidences and will normally not exceed 12 months in length . The expiry review is intended to determine if the expiry of the measures would lead to continuation or recurrence of dumping and injury. During the five years period, the Commission may perform an interim review. Under the latter procedure, the Commission will consider whether the circumstances with regard to subsidy/dumping and injury have changed significantly or whether existing measures are achieving the intended results in removing the injury. Finally, the basic Regulations provide that a review shall be carried out to determine individual margins for new exporters in the exporting country concerned. Judicial reviews: The procedural rights of the parties, including hearing and access to non-confidential files, are respected in the course of the proceeding, and a system of judicial review exists to ensure their correct implementation. The competence to review anti-dumping and anti-subsidy cases lies with the Court of First Instance and the Court of Justice in Luxembourg. Furthermore, the possibility of recourse to the WTO dispute settlement mechanism exists for WTO members. 1.1.4. The anti-dumping and anti-subsidy services Anti-dumping and anti-subsidy investigations are, among other responsibilities, carried out by Directorates C and E of Directorate General Trade in charge of external commercial policy. Whilst Directorate C deals with the dumping aspects of investigations, Directorate E covers the areas of injury and Community interest. In addition, Unit 3 in Directorate E is in charge of anti-subsidy investigations and the enforcement of the Trade Barrier Regulation. 1.2. Changes to the basic Regulations The basic Regulations on anti-dumping and anti-subsidy were not amended during 1999. However, it was necessary to align some provisions of Decision No 2277/96/ECSC with those of Regulation (EC) No 384/96 in order to ensure consistency in the application of the anti-dumping rules provided under the EC and ECSC treaties respectively. To this end, the Commission adopted two sets of amendments by Decision No 1000/99/ECSC [4]. [4] Commission Decision No 1000/1999/ECSC of 11 May 1999 amending Decision No 2277/96/ECSC on protection against dumped imports from countries not members of the ECSC (OJ L 122, 12.5.1999). Firstly, this new decision extends the reform of the anti-dumping basic Regulation contained in Regulation (EC) No 905/98 [5] to products under the ECSC. That reform allows for market economy status to be granted on an individual basis to companies in China and Russia (See 17th report, 1998, fn). Under Decision No 1000/99/ECSC, the criteria for such a status to be granted are exactly the same as under Regulation (EC) No 905/98. [5] Council Regulation No 905/98 of 27 April 1998 amending Regulation No 384/96 on protection against imports from countries not members of the EU (OJ L 128, 30.4.1998). Secondly, Article 1(2) of Decision No 1000/99/ECSC aligns Decision No 2277/96/ECSC with Regulation (EC) No 384/96 as amended by Regulation (EC) No 2331/96. More precisely, Decision No 1000/99/ECSC abolishes the exhaustive nature of the list of factors for adjustment for the purpose of the comparison between the normal value and the export price. 1.3. Implementation of Council Regulation (EC) No 905/98 related to individual Market Economy Status for companies in China and Russia 1.3.1. Regulation (EC) No 905/98 amending the anti-dumping basic Regulation This regulation brought a new element into the regime applicable to cases involving China and Russia, affecting mainly the method applied for the assessment of normal value. The traditional approach is, in principle, maintained (i.e. based on prices and costs established in an analogue country), but a case-by-case approach is applied in investigations involving China and Russia whereby exporters may apply for market economy treatment. Under the basic Regulation, companies may apply for individual market economy status. This status will be granted only if evidence is brought that (a) decisions of applicant firms related to prices, costs, inputs, sales, investments are made in response to market signals and without significant State interference; (b) firms have one clear set of basic accounting records independently audited in line with international accounting standards; (c) the production costs and financial situation of firms are not subject to any significant distortions carried over from the former non-market economy system; (d) firms are subject to bankruptcy and property laws which guarantee legal certainty and stability, and (e) exchange rate conversions are carried out at the market rate. These five criteria are cumulative. 1.3.2. Observations on the application of the new rule since 1 July 1998 Market economy status was granted in a very limited number of cases, due to the failure of the applicant companies to comply with the conditions set in the basic Regulation. It appears from the early applications under Article 2(7) that most of the applicant companies did not have a clear set of accounting records or did not have any accounting records at all. In those cases, under no circumstances could the market economy status be granted, as the second criteria of Article 2(7) was clearly not fulfilled. Another factor that seems to have been determinant is the capacity of the company to sell on the domestic market. When the company was prevented by the State from doing so, such a restriction was understood as a clear infringement of the first criteria of Article 2(7), that is, the requirement that decisions by firms regarding, inter alia, sales are made in response to market signals reflecting supply and demand, and without significant state interference in this regard. 1.4. WTO dispute settlement in the field of anti-dumping and anti-subsidy 1.4.1. Definition of the WTO dispute settlement procedure In line with the conclusions of the Uruguay Round, the WTO provides for a procedure for the settlement of disputes between WTO Member States on the application of certain WTO agreements. This was a major development for international trade law. The procedure is divided into two stages. The first stage is at the level of the Member States and consists of a bilateral consultation. Upon failure of the consultation, the second stage can be opened by consulting a special group ("panel"). The panel will publish a report, which can be appealed before the Appellate Body. Both the panel report and the report by the Appellate Body are deemed to be adopted by the Dispute Settlement Body unless the latter rejects the report by unanimity [6]. [6] Each appeal is heard by three members of a permanent seven-member Appellate Body set up by the Dispute Settlement Body. The Dispute Settlement Body has to accept or reject the appeals report within 30 days and rejection is only possible by consensus. The Marrakech agreement identifies the specific WTO agreements that may be invoked for the initiation of the dispute settlement procedure. The dispute settlement procedure applies expressly to the agreements on anti-dumping and to the agreement on anti-subsidy and countervailing duties. 1.4.2. Panel proceedings involving EU anti-dumping and anti-subsidy activities There are a number of pending consultations related to anti-dumping and anti-subsidy. Among them, five were initiated following a complaint by the EU. There are two pending cases challenging EU anti-dumping or anti-subsidy legislation. In addition, two panel reports and one interim report were adopted in 1999 in relation to anti-dumping and anti-subsidy. In each of those cases, the findings of the panel are relevant to EU anti-dumping and anti-subsidy policy, and support the Community's interpretation of the WTO rules. (i) Case in which the EU is complaining party : WTO Panel on the imposition of countervailing duties on certain hot-rolled lead and bismuth carbon steel products originating in the United Kingdom. On 6 October 1999, the WTO Panel delivered its interim report in the above case. The Panel accepted the main arguments put forward by the Community and concluded that, by imposing countervailing duties on imports of leaded bars from the UK, produced by UES and British Steel plc (the privatised successors of the British Steel Corporation), the United States had violated Article 10 of the Subsidy and Countervailing Measures Agreement. Most importantly, the Panel established that an arm's length sale of assets for fair market value (whether in the context of a privatisation or a sale between private parties) eliminates the benefit of previous subsidisation, and rules out the imposition of further countervailing duties. This is a major victory for the Community, since the panel's findings will oblige the US to change its countervailing practice in this area, and calls into question the continued imposition of US countervailing duties, particularly on steel products, against several other Member States of the EU. (ii) Other panel proceeding concerning anti-dumping: WTO panel on US anti-dumping duties on DRAMS from Korea. On 29 January 1999, the Dispute Settlement Body set up a panel on US anti-dumping duties on dynamic random access memory semi-conductors (DRAMS) from Korea [7]. Although this case did not involve the European Union, it is of particular interest for EU anti-dumping practice, as it effectively confirmed the conformity of certain aspects of the EU basic Regulation with the WTO Anti-dumping Agreement. Following a decision by the Department of Commerce not to revoke an anti-dumping order, Korea requested a panel on the basis that this decision was in violation of various provisions of the anti-dumping legislation. The panel assessed the compatibility of US anti-dumping legislation with, notably, Articles 11(2), 2(1) and 6(6) of the WTO Anti-Dumping Agreement. Most importantly, the Panel found that a risk of recurrence of dumping test should also be carried out in an interim review, although Article 11(2) of the WTO Agreement does not explicitly include any reference to an examination of dumping being likely to recur, as is the case with regard to injury. Thus, the Panel confirms the Community's practice in interim reviews. [7] WT/DS99/R. (iii) Panels initiated by third countries against the EU: - Complaint by India against the EU regarding anti-dumping proceedings related to unbleached cotton fabrics from India. India alleges that the determination of standing, the initiation, the selection of the sample and the determination of dumping and injury are inconsistent with the EU's WTO obligations. (Pending consultation) - Complaint by India against the EU regarding the imposition of anti-dumping duties on imports of cotton-type bed linen from India. India alleges that the determination of standing, the initiation, the determination of dumping and injury as well as the reasoning of the EU authorities' findings are inconsistent with the EU's WTO obligations. (Active Panel) 2. General overview of measures in force At the end of 1999, the Community had 156 measures [8] in force, covering 63 products and 35 countries (see Annex O). Five of the measures related to anti-subsidy proceedings. Of the definitive measures, the large majority was in the form of duties; however, in a significant number of cases, in particular those relating to CEEC countries, undertakings were accepted. [8] The measures are counted per product and country concerned. Of the measures in force at the end of 1999, 33 concerned China, 11 Russia and 11 measures applied to non-market-economy countries, including Belarus and Kazakhstan with 2 measures and Ukraine with 7 measures. Eighteen measures (or 11,54%) concerned one or more of the 10 Central and Eastern European Countries (CEEC) [9]. [9] These countries are: Romania, Bulgaria, Slovak Republic, Czech Republic, Slovenia, Hungary, Poland, Latvia, Lithuania and Estonia. For a more realistic view of the impact of anti-dumping measures, however, one has to look at the trade volume of the products concerned, which varies considerably depending on the product sector. The biggest trade volumes are often generated by high technology, such as electronics, which are high-value products. It should be noted that in 1999, 0,4% [10] of total imports into the Community is affected by anti-dumping or anti-subsidy measures. [10] Source Comext TABLE 1 Anti-dumping and anti-subsidy investigations during the period 1 January 1995 - 31 December 1999 [11] [11] The initiation of a case concerning several countries is accounted as separate investigations/proceedings per country involved. >TABLE POSITION> 3. Initiations of Anti-dumping and Anti-subsidy Investigations 3.1. Introduction The most notable characteristic of 1999 is the large number of new initiations in comparison with the previous year; in 1998, the Commission initiated 29 new investigations while, in 1999, new initiations reached 86. However, between 1995 and 1999, the number of new initiations has been rather stable and even decreased between 1997 and 1998, with respectively 45 and 29 new initiations (see Table 1). This increase is particularly apparent concerning the sectors of chemical and allied products (with 0 new cases in 1998 and 28 in 1999), iron and steel (with 14 new cases in 1998 and 21 in 1999) and electronics (with 0 cases in 1998 and 10 in 1999). Asian countries, with a smaller increase for countries of Central and Eastern Europe and the CIS. Furthermore, it should be emphasised that the proportion of anti-subsidy cases grew significantly, reaching 23% of all new investigations in 1999, having represented only 4% of the total in 1996. Certain factors show a correlation between the Asian financial crisis and the surge in new investigations. The crisis started in April 1997 and directly affected Hong Kong, Indonesia, Japan, Malaysia, Taiwan, Thailand and South Korea. The main feature of the crisis was the collapse of domestic demand in South East Asia, especially in the steel sector. Domestic consumption in this region was depressed and countries became more dependent than ever on an export-based recovery. Consequently, the crisis led to a surge in exports sold below cost or at subsidised prices. It is alleged that governments in South East Asia subsidised the maintenance of steel-making facilities, even in conditions of overcapacity. This allegation is lent credibility by the sudden growth in new anti-subsidy investigations, from 4 in 1997 to 20 in 1999, out of which 19 concerned South East Asia. Ultimately, the decline in domestic consumption in South East Asia affected trade with countries traditionally exporting to this region. These countries were compelled to redirect exports into other available markets, mainly towards the US and the EU. In this context, reference is made to the increase in new investigations opened by the EU concerning the People's Republic of China and Taiwan. It should be noted that the increase in new investigations in 1999 in the EU followed the same trend of the other main users of the anti-dumping and anti-subsidy instruments. For instance, the US initiated more investigations in 1999 than in 1998, with an increase from 46 in 1998 (36 anti-dumping and 10 anti-subsidy) to 56 in 1999 (46 anti-dumping and 10 anti-subsidy). It would appear, however, that this growth in new cases should not be taken as a change of trend but rather as the result of very specific circumstances that are unlikely to be repeated. In a global context where new countries are introducing and using anti-dumping and anti-subsidy instruments more and more, EU policy remains unchanged, and does not promote a broader use of anti-dumping and anti-subsidy regulations. In conclusion, it is worth recalling that Community anti-dumping and anti-subsidy legislations contain strict requirements concerning the presentation of complaints and initiation of proceedings, particularly as regards evidence relating to the existence of dumping and injury caused thereof. An overview of the new investigations initiated in 1999 is given in Annex A, whilst this section of the report gives a summary of each of these cases. 3.2. Cases 3.2.1. Flat rolled products of iron or non-alloy steel from Bulgaria, India, Iran, South Africa, the Federal Republic of Yugoslavia and Taiwan The notice of initiation of the anti-dumping proceeding was published on 7 January 1999. The proceeding was initiated following a complaint lodged by Eurofer on behalf of the Community industry. The complaint was supported by more than 89% of the total Community production. The allegation of dumping in respect of India, Iran, South Africa and Taiwan is based on a comparison of normal value, established on the basis of domestic prices, with the export prices of the product concerned to the Community. The allegation of dumping for Bulgaria and the Federal Republic of Yugoslavia is based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. On this basis the dumping margins calculated are significant for all exporting countries concerned. The complainant alleges and has provided evidence that imports of the product concerned from Bulgaria, India, Iran, South Africa, the Federal Republic of Yugoslavia and Taiwan have increased both in absolute terms and in terms of market share. It is further alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on the quantities sold and the level of prices charged by the Community producers, resulting in substantial adverse effects on the financial situation of the Community industry. 3.2.2. Flat rolled products of iron or non-alloy steel from India, Taiwan and South Africa (AS) The notice of initiation of the anti-subsidy proceeding was published on 8 January 1999. The proceeding was initiated following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer) on behalf of the Community producers representing a major proportion of Community production of flat rolled steel coils. The complaint contained evidence that producers and/or exporters of the product concerned have benefited from a number of subsidies granted by the Governments of India, South Africa, and Taiwan. The alleged subsidies are tax credits, corporate income tax exemptions, accelerated depreciation, import duty exemptions, loans at preferential interest rates, direct grants, and preferential transport and utility costs. They are alleged to be contingent on the use of domestic over imported goods, or to be otherwise limited to certain enterprises and are therefore specific and countervailable. With regard to injury, it was alleged that imports of the product concerned from India, South Africa, and Taiwan have increased both in absolute terms and in terms of market share. Further, that the volume and the prices of these imports had, inter alia, a negative impact on the market share, the quantities sold, and the level of prices charged by the Community producers. It was alleged that these factors resulted in substantial adverse effects on the overall performance and the financial situation of the Community industry. 3.2.3. Yellow phosphorus from the People's Republic of China The notice of initiation of the anti-dumping proceeding was published on 14 January 1999. The proceeding was initiated following a complaint lodged by Thermphos International BV, the sole producer of yellow phosphorus in the Community. The proceeding constitutes the first full-scale investigation in application of the amended Article 2(7) of Council Regulation (EC) No 384/96 where the market economy status of Chinese exporting producers has to be examined if so requested. The complainant proposed to base the calculation of dumping on a comparison of normal value established on the basis of domestic prices in the USA with the respective export prices of the product concerned to the EC. On this basis, the dumping margin calculated is significant. The complainant alleged and provided evidence that the imports of the product concerned from the People's Republic of China had increased overall and in absolute terms of market share. It was further alleged that the volume and the prices of the imported product had, among other consequences, had a negative impact on the quantity sold and the level of the prices charged by the Community producer, resulting in substantial adverse effects on the overall performance, the financial situation and the employment situation of the Community industry. 3.2.4. Television camera systems from the USA The notice of initiation of the anti-dumping proceeding was published on 22 January 1999. The proceeding was initiated following a complaint lodged by Philips BTS Broadcast Television Systems BV representing a major proportion of the total Community production of television camera systems. The allegation of dumping for the USA was based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. On this basis, the dumping margin calculated was significant. The complainant alleged and provided evidence that imports of the product concerned from the USA have increased overall in absolute terms and in terms of market share. It was further alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on the quantities sold and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance, the financial situation and the employment situation of the Community industry. 3.2.5. Parts of television camera systems from Japan The notice of initiation of the anti-dumping proceeding was published on 12 February 1999. The Commission decided to initiate a proceeding and open an investigation concerning imports of certain parts of television camera systems, originating in Japan. In June 1998, the Commission opened an investigation into the circumvention of definitive anti-dumping duties imposed on imports of modules, kits, sub-assemblies and parts for television camera systems originating in Japan allegedly used in assembly operations in the Community. The investigation was concluded by a proposal for termination without imposition of measures on the grounds of the withdrawal of the complaint. However, information made available to the Commission in that investigation indicated that there is prima facie evidence of dumping, injury and a causal link, as described in Article 5(2) of the basic Regulation. In these special circumstances, the Commission decided to initiate a new anti-dumping proceeding on the basis of Article 5 of the basic Regulation. 3.2.6. Compact-disc boxes from the People's Republic of China The notice of initiation of the anti-dumping proceeding was published on 5 March 1999. The proceeding was initiated following a complaint lodged by the European Plastics Converters (EuPC) on behalf of the Community industry. The complaint was supported by a total of eight companies. The complaint contained evidence of significant dumping based on a comparison of normal value, established on the basis of the price in a market economy third country (Thailand), with the export price of the product concerned to the Community. With regard to injury, evidence was provided that imports from the People's Republic of China had increased overall in absolute terms and in terms of market share. It was further alleged that the volumes and the prices of the imported products had a negative impact on the quantities sold and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance and the financial situation of the Community industry. 3.2.7. Video tapes on reels from the Republic of Korea The notice of initiation of the anti-dumping proceeding was published on 11 March 1999. The proceeding was initiated following a complaint lodged by the Video Pancake Manufacturers Association (VIPAM) on behalf of the Community industry. The complaint was supported by producers representing more than 70% of the total Community production of videotapes on reels. The allegation of dumping was based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. On this basis, the dumping margins were substantial. The complainant alleged and provided evidence that imports from Korea have increased significantly in absolute terms and in terms of market share. It was further alleged that the volume and prices of the imported product had, among other consequences, a negative impact on the quantities sold and the prices charged by the Community producers, resulting in a substantial adverse effect on the financial situation of the Community industry. 3.2.8. Synthetic fibres of polyester from Australia, Indonesia and Thailand The notice of initiation of the anti-dumping proceeding was published on 22 April 1999. The proceeding was initiated following a complaint lodged by the International Rayon and Synthetic Fibres Committee on behalf of the Community industry. The complaint was supported by a total of 9 companies. The allegation of dumping for Australia, Indonesia and Thailand was based on a comparison of a constructed normal value in these countries with the export prices of the product concerned to the Community. In its complaint, the International Rayon and Synthetic Fibres Committee provided also evidence that imports of the product concerned from Australia, Indonesia and Thailand increased overall in absolute terms and in terms of market share. It was alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the financial situation of the Community industry. 3.2.9. Synthetic fibres of polyester from Australia, Indonesia, the Republic of Korea, Taiwan and Thailand (AS) The notice of initiation of the anti-subsidy proceeding was published on 22 April 1999. The proceeding was initiated following a complaint lodged by the International Rayon and Synthetic Fibres Committee (CIRFS) on behalf of a major proportion of the Community industry, i.e. producers representing more than 85% of the total Community production. The complaint contained sufficient evidence of the existence of countervailable subsidised imports that cause material injury to the Community industry. Consultations according to Article 10(9) of Council Regulation (EC) No 2026/97 were held with the Governments of Australia, Indonesia, Korea, Taiwan and Thailand in Brussels prior to the initiation of this proceeding. 3.2.10. Hot-rolled flat products of non-alloy steel from India, the People's Republic of China and Romania The notice of initiation of the anti-dumping proceeding was published on 13 May 1999. The proceeding was initiated following a complaint lodged by Eurofer on behalf of the Community industry. The complaint was supported by a total of 77% of the total Community production. The allegation of dumping in respect of India is based on a comparison of normal value established on the basis of domestic prices in this country with the export prices of the product concerned to the Community. The allegation of dumping for Romania is based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. As regards the People's Republic of China, in view of the fact that normal value will be established pursuant to Article 2(7)(a) of the basic Decision, save where exporting producers satisfy the conditions set out in Article 2(7)(c) of this Decision, the complainant has proposed that normal value be established on the basis of the price in a market economy third country. On this basis, the dumping margins calculated are significant for all exporting countries concerned. The complainant alleges and has provided evidence that the imports from the People's Republic of China, India and Romania have increased overall in absolute terms and in terms of market share. It is further alleged that the volume and the prices of the imported product have, among other consequences, had a negative impact on the quantities sold and the level of prices charged by the Community producers, resulting in a substantial adverse effect on the financial situation of the complainant Community industry. 3.2.11. Steel wire rod from Turkey The notice of initiation of the anti-dumping proceeding was published on 22 May 1999. The proceeding was initiated following a complaint lodged by Eurofer on behalf of the Community industry. The complaint was supported by producers representing a major proportion of total Community production. The allegation of dumping is based on a comparison of normal value, established on the basis of domestic prices, with the export prices of the product concerned to the Community. On this basis, the dumping margin calculated is significant. The complainant has provided evidence that imports of the product concerned from Turkey have increased overall in absolute terms and in terms of market share. It is alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance and the financial situation of the Community industry. 3.2.12. Malleable cast iron tube or pipe fittings from Brazil, Croatia, the Czech Republic, the Federal Republic of Yugoslavia, Japan, the People's Republic of China, the Republic of Korea and Thailand The notice of initiation of the anti-dumping proceeding was published on 29 May 1999. The proceeding was initiated following a complaint lodged by the Defence Committee of Malleable Cast Iron Tube or Pipe Fittings Industry of the European Union on behalf of the Community industry. The complaint was supported by a total of six companies. The allegation of dumping in respect of Brazil, the Czech Republic, Japan, the Republic of Korea and Thailand was based on a comparison of normal value established on the basis of domestic prices with the export prices of the product concerned to the Community. The allegation of dumping for Croatia and the Federal Republic of Yugoslavia was based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. For China, the complainant proposed to base the calculation of dumping on a comparison of normal value established on the basis of domestic prices in Poland with the respective export prices of the product concerned to the EU. On this basis, the dumping margins calculated are significant for all exporting countries concerned. The complainant alleged and provided evidence that imports of the product concerned from Brazil, Croatia, the Czech Republic, the Federal Republic of Yugoslavia, Japan, the People's Republic of China, the Republic of Korea and Thailand had increased overall in absolute terms and in terms of market share. It was further alleged that the volume and prices of the imported product had, among other consequences, had a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance, the financial situation and the employment situation of the Community industry. 3.2.13. Solutions of urea and ammonium nitrate from Algeria, Belarus, Lithuania, Russia, the Slovak Republic and Ukraine The notice of initiation of the anti-dumping proceeding was published on 26 June 1999. The proceeding was initiated following a complaint lodged by the European Fertiliser Manufacturers Association on behalf of the Community industry. The complaint was supported by producers representing a major proportion, i.e. more than 99,8%, of the total Community "integrated" production of urea ammonium nitrate. The complaint contained evidence of significant dumping based on a comparison of normal values established on the basis of a constructed value in Algeria and Lithuania, on domestic prices in the Slovak Republic, and on domestic prices of the proposed analogue country (USA) for Belarus, Ukraine, and Russia with the export prices of the product concerned to the Community. With regard to injury, it was alleged that the imports of the product concerned from Algeria, Belarus, Lithuania, Russia, Slovak Republic and Ukraine have increased overall in absolute terms and in terms of market share. It was further alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the financial situation of the Community industry. 3.2.14. Stainless steel fasteners from Malaysia, Singapore, the Philippines and Thailand (AS) The notice of initiation of the anti-subsidy proceeding was published on 26 June 1999. The proceeding was initiated following a complaint lodged by the European Industrial Fasteners Institute (EIFI) on behalf of a major proportion of the Community industry, i.e. producers representing more than 67% of the total Community production. The complaint contained sufficient evidence of the existence of countervailable subsidised imports that cause material injury to the Community industry. Consultations according to Article 10(9) of Council Regulation (EC) No 2026/97 were held with the Government of Malaysia in Brussels prior to the initiation of this proceeding. 3.2.15. One Dye Black 1 (ODB-1) from Japan The notice of initiation of the anti-dumping proceeding was published on 24 July 1999. This proceeding was initiated following a complaint lodged by the European Chemical Industry Council (CEFIC) on behalf of the sole producer in the Community. The product allegedly being dumped is a certain colorformer, generally known as ODB-1, whose chemical definition falls under Chemical abstract number 29512-49-0. ODB-1 is mainly used in conjunction with other chemicals to coat paper, which can then be used as carbonless copying paper. The complaint contained evidence of significant dumping. The complaint provided evidence that imports of the product concerned from Japan had increased overall in absolute terms and in terms of market share, and that those volumes and the prices of the imports had had a negative impact on the Community industry's market share, the quantities sold and the level of prices charged. 3.2.16. One Dye Black 2 (ODB-2) from Japan The notice of initiation of the anti-dumping proceeding was published on 24 July 1999. The proceeding was initiated following a complaint lodged by the European Chemical Industry Council (CEFIC) on behalf of the sole producer in the Community. The product allegedly being dumped as a certain colorformer, generally known as ODB-2, whose chemical definition falls under Chemical abstract number 89331-94-2. ODB-2 is mainly used in conjunction with other chemicals to coat paper, which can then be used for thermal image applications. The complaint contained evidence of significant dumping. The complaint provided evidence that imports of the product concerned from Japan had increased overall in absolute terms, and that those volumes and the prices of the imports had had a negative impact on the quantities sold and the level of prices charged by the Community industry. 3.2.17. Cathode-ray colour television picture tubes from the People's Republic of China, India, the Republic of Korea, Lithuania and Malaysia The notice of initiation of the anti-dumping proceeding was published on 29 July 1999. The product scope defined therein was further clarified by a notice published on 20 October 1999. The proceeding was initiated following a complaint lodged by the Taskforce against Unfair Business in Europe (TUBE), on behalf of the sole producer of the product concerned in the Community. The allegation of dumping was based on a comparison of normal value with the export prices of the product concerned to the Community. The normal value in respect of India and Malaysia was established on the basis of domestic prices, while for Lithuania and the Republic of Korea constructed normal values were used. The comparison for the People's Republic of China was based on the normal value established for India, which was proposed by the complainant as an appropriate market economy third country. On this basis, the dumping margins were substantial. The complainant alleged and provided evidence that imports from the countries concerned had increased overall in terms of market shares. It was further alleged that the volumes and the prices of the imported product had, among other consequences, had a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the financial situation of the Community industry. 3.2.18. Hair brushes from the People's Republic of China, Hong Kong, the Republic of Korea, Taiwan and Thailand The notice of initiation of the anti-dumping proceeding was published on 13 August 1999. The proceeding was initiated following a complaint lodged by the Fédération Européenne des Industries de la Brosserie et de la Pinceauterie (FEIBP) on behalf of the Community industry. The complaint was supported by more than 70% of total Community production. The allegation of dumping in respect of Hong Kong, Taiwan and Thailand is based on a comparison of normal value, established on the basis of domestic prices, with the export prices of the product concerned to the Community. The allegation of dumping for the Republic of Korea is based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. In view of the fact that normal value for the People's Republic of China will be established on the basis of the rules set out in Article 2(7)(a) of the basic Regulation for those exporting producers which cannot meet the conditions set out in Articles 2(7)(b) and (c) of that Regulation, the complainant has proposed that normal value be established on the basis of the price in a market economy third country, i.e. Argentina. The allegation of dumping is based on a comparison of normal value, as set out above, with the export prices of the product concerned when sold for export to the Community. On this basis, the dumping margins calculated are significant for all exporting countries concerned. The complainant has provided evidence that imports of the product concerned from the People's Republic of China, Hong Kong, the Republic of Korea, Taiwan and Thailand have increased overall in absolute terms and in terms of market share. It is alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on the quantities sold and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance and the financial situation of the Community industry. 3.2.19. Glycine from the People's Republic of China The notice of initiation of the anti-dumping proceeding was published on 24 August 1999. The proceeding was initiated following a complaint lodged by the European Chemical Industry Council (CEFIC) on behalf of the sole producer of glycine in the Community. In view of the fact that the People's Republic of China was considered to be a non-market economy, the complainant proposed that normal value be established on the basis of constructed value in a market economy third country, i.e. India. The allegation is based on a comparison of normal value, as set out above, with the export prices of the product concerned from the People's Republic of China when sold to the Community. On this basis the dumping margin calculated is substantial. Exporting producers in the People's Republic of China were notified that the normal value may be determined on the basis of prices and costs in China if they can show, by submitting a properly substantiated claim, that in their case market economy conditions prevail for the manufacturing and sales of the product concerned. Two claims that were submitted by Chinese exporting producers failed to substantiate that in their case market economy conditions prevail. With regard to injury, it was alleged that imports from the People's Republic of China increased significantly in absolute terms and in terms of market share. It was further alleged that the volume and prices of the imported product have, among other consequences, had a negative impact on the market share, the quantities sold and the prices charged by the Community producer, resulting in substantial adverse effects on its overall performance and financial situation. 3.2.20. Styrene-butadiene-styrene (SBS) thermoplastic rubbers from Taiwan (AS) The notice of initiation of the anti-subsidy proceeding was published on 26 August 1999. The proceeding was initiated following a complaint lodged by the European Chemical Industry Council (CEFIC) on behalf of Community producers representing a major proportion of Community production of styrene-butadiene-styrene thermoplastic rubbers. The complaint contained evidence that producers and/or exporters of the product concerned have benefited from a number of subsidies granted by the Government of Taiwan. The alleged subsidies are tax credits, corporate income tax exemptions, accelerated depreciation, import duty exemptions and loans at preferential interest rates. They are alleged to be contingent on the use of domestic over imported goods, or otherwise limited to certain enterprises and therefore specific and countervailable. With regard to injury, it was alleged that imports of the product concerned from Taiwan have increased overall in absolute terms and in terms of market share, and that the volume and the prices of the imports, among other consequences, had a negative impact on the market share, the quantities sold and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance and the financial situation of the Community industry. 3.2.21. Styrene-butadiene-styrene (SBS) thermoplastic rubbers from Taiwan The notice of initiation of the anti-dumping proceeding was published on 26 August 1999. The proceeding was initiated following a complaint lodged by the European Chemical Industry Council (CEFIC) on behalf of the Community industry. The complaint was supported by producers representing the total Community production of SBS thermoplastic rubbers. The allegation of dumping was based on a comparison of normal value established on the basis of domestic prices in Taiwan with the export prices of the product concerned to the Community. On this basis, the dumping margins were significant. The complainant alleged and provided evidence that imports from Taiwan have increased significantly in absolute terms and in terms of market share. It was further alleged that the volume and prices of the imported product had, among other consequences, a negative impact on the quantities sold and the prices charged by the Community producers, resulting in a substantial adverse effect on the financial situation of the Community industry. 3.2.22. Electronic weighing scales from the People's Republic of China, the Republic of Korea and Taiwan The notice of initiation of the anti-dumping proceeding was published on 16 September 1999. The proceeding was initiated following a complaint lodged by Community producers representing more than 50% of the total Community production of the electronic weighing scales concerned. The allegation of dumping for Korea and Taiwan was based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. For the People's Republic of China normal value will be established pursuant to Article 2(7) of the basic Regulation. For exporters unable to meet the conditions set out in Articles 2(7)(b) and (c) of the basic Regulation, the complainant proposed to base the calculation of dumping on a comparison of a constructed normal value in Indonesia with the respective export prices to the Community. On this basis, the dumping margins were substantial. The complainant alleged and provided evidence that imports from the People's Republic of China, Korea and Taiwan have increased significantly in terms of market share. It was further alleged that the volume and prices of the imported product had, among other consequences, a negative impact on the market share and the prices charged by the Community producers, resulting in a substantial adverse effect on the financial situation of the Community industry. 3.2.23. Woven glass fibre fabrics from Taiwan (AS) The notice of initiation of the anti-subsidy proceeding was published on 16 September 1999. The proceeding was initiated following a complaint lodged by the European Apparel and Textile Organisation (Euratex) on behalf of producers representing 100% of the total Community production. The complaint contained sufficient evidence of the existence of countervailable subsidised imports, which cause material injury to the Community industry. The Government of Taiwan submitted to the Commission its views on the complaint prior to the initiation of this proceeding. 3.2.24. Coke over 80 mm from the People's Republic of China The notice of initiation of the anti-dumping proceeding was published on 16 September 1999. The proceeding was initiated following a complaint lodged by EUCOKE-EEIG on behalf of the Community industry. The complaint was supported by a total of six companies. The complainant proposed to base the calculation of dumping on a comparison of normal value established on the basis of domestic prices in the USA with the respective export prices of the product concerned to the EU. On this basis, the dumping margin calculated is significant. The complainant alleged and provided evidence that imports of the product concerned from the People's Republic of China had increased overall in absolute terms of market share. It was further alleged that the volumes and the prices of the imported product had, among other consequences, had a negative impact on the market share, the quantities sold and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance and the financial situation of the Community industry. 3.2.25. Polyester staple fibres from the Republic of Korea The notice of initiation of the anti-dumping proceeding was published on 7 October 1999. The proceeding was initiated following a complaint lodged by the International Rayon and Synthetic Fibres Committee on behalf of the Community industry. The complaint was supported by a total of 8 companies. The allegation of dumping was based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. In its complaint, the International Rayon and Synthetic Fibres Committee provided also evidence that imports of the product concerned from the Republic of Korea increased overall in absolute terms and in terms of market share. It was alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance of the Community industry. 3.2.26. Ammonium nitrate from Lithuania, Poland and Ukraine The notice of initiation of the anti-dumping proceeding was published on 29 October 1999. The proceeding was initiated following a complaint lodged by the European Fertiliser Manufacturers Association on behalf of the Community industry. The complaint was supported by 11 producers representing a major proportion, i.e. 96%, of the total Community production of ammonium nitrate. The complaint contained evidence of significant dumping based on a comparison of normal values established on the basis of a constructed value in Lithuania, and on domestic prices in Poland with the export prices of the product concerned to the Community. With regard to injury, it was alleged that imports from Lithuania, Poland and Ukraine had increased significantly in terms of volumes and of market share. It was further alleged that the volumes and the prices of the imported product concerned have had, among other consequences, a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the financial situation of the Community industry. 3.2.27. Bicycle forks from the People's Republic of China and Taiwan The notice of initiation of the anti-dumping proceeding was published on 5 November 1999. The proceeding was initiated following a complaint lodged by the European Bicycle Manufacturers Association (EBMA) on behalf of producers representing more than 55% of the total Community production of bicycle forks. The complaint was supported by a total of 47 companies. The allegation of dumping for Taiwan was based on a comparison of a constructed normal value with the export price of the product concerned to the Community. The complainant based its allegation of dumping in respect of the People's Republic of China on a comparison of a normal value in a market economy third country, Mexico, with the export price of the product concerned when sold for export to the Community. On this basis, the dumping margins calculated were significant. The complainant provided evidence that imports of the product concerned from the People's Republic of China and Taiwan had increased overall and in terms of market share. It was alleged that the volumes and the prices of the imported product concerned had, among other consequences, a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on their financial situation and on the employment situation in the Community industry. 3.2.28. Bicycle frames from the People's Republic of China and Taiwan The notice of initiation of the anti-dumping proceeding was published on 5 November 1999. The proceeding was initiated following a complaint lodged by the European Bicycle Manufacturers Association (EBMA) on behalf of producers representing more than 55 % of the total Community production of bicycle frames. The complaint was supported by a total of 47 companies. The allegation of dumping for Taiwan was based on a comparison of a constructed normal value with the export price of the product concerned to the Community. The complainant based its allegation of dumping in respect of the People's Republic of China on a comparison of a normal value in a market economy third country, Mexico, with the export price of the product concerned when sold for export to the Community. On this basis, the dumping margins calculated were significant. The complainant provided evidence that imports of the product concerned from the People's Republic of China and Taiwan had increased overall and in terms of market share. It was alleged that the volumes and the prices of the imported product concerned had, among other consequences, a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on their financial situation and on the employment situation in the Community industry. 3.2.29. Bicycle wheels from the People's Republic of China The notice of initiation of the anti-dumping proceeding was published on 5 November 1999. The proceeding was initiated following a complaint lodged by the European Bicycle Manufacturers Association (EBMA) on behalf of producers representing more than 55% of the total Community production of complete wheels of bicycles. The complaint was supported by a total of 47 companies. The complainant based its allegation of dumping on a comparison of a normal value in a market economy third country, Mexico, with the export price of the product concerned when sold for export to the Community. On this basis, the dumping margin calculated was significant. The complainant provided evidence that imports of the product concerned from the People's Republic of China had increased overall and in terms of market share. It was alleged that the volumes and the prices of the imported product concerned had, among other consequences, a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on their financial situation and on the employment situation in the Community industry. 3.2.30. Polyethylene terephthalate (PET) from India, Indonesia, Malaysia, the Republic of Korea, Taiwan and Thailand The notice of initiation of the anti-dumping proceeding was published on 6 November 1999. The proceeding was initiated following a complaint lodged by the Polyethylene Terephthalate (PET) Committee of the Association of Plastic Manufacturers in Europe (A.P.M.E.) on behalf of the Community industry. The complaint was supported by a total of seven companies. The allegation of dumping was based, in absence of sufficient information on prices in the domestic market, on a comparison of a constructed normal value with the export prices of the product concerned to the Community. On this basis, the dumping margins calculated were significant for all six exporting countries. The complainant alleged and provided evidence that imports from India, Indonesia, Malaysia, the Republic of Korea, Taiwan and Thailand had increased significantly in absolute terms and in terms of market share. It was further alleged that the volume and prices of the imported product had, among other consequences, a negative impact on the market share and the level of the prices charged by the Community producers, resulting in a substantial adverse effect on the overall performance and the financial situation of the Community industry. 3.2.31. Polyethylene terephthalate (PET) from India, Indonesia, Malaysia, the Republic of Korea, Taiwan and Thailand (AS) The notice of initiation of the anti-subsidy proceeding was published on 6 November 1999. The proceeding was initiated following a complaint lodged by the Polyethylene Terephthalate (P.E.T.) Committee of the Association of Plastic Manufacturers in Europe on behalf of producers representing 85% of the Community production of polyethylene terephthalate. The complaint contained evidence that the exporting producers in the countries concerned benefit from a number of subsidies (estimated at between 10% and 43% of the value of the product depending on the country concerned) which appear to be countervailable under the provisions of Article 3 of the basic Regulation. These subsidies include tax credits/exemptions, loans at preferential interest rates, accelerated depreciation, imports of raw materials and machinery free of customs duties. As regards injury, it was alleged that imports of the product concerned from these countries have increased overall in absolute terms and in terms of market share, and that the volume and the prices of the imports, among other consequences, had a negative impact on the market share, the quantities sold and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance and the financial situation of the Community industry. Concerning Saudi Arabia, the Commission considered that the exports from this country should be excluded from the scope of the investigation since the volume of imports constituted only 3,5% of total imports. The Commission decided that the import volume was de minimis. 3.2.32. Polyester staple fibres from India The notice of initiation of the anti-dumping proceeding was published on 21 December 1999. The proceeding was initiated following a complaint lodged by the International Rayon and Synthetic Fibres Committee on behalf of the Community industry. The complaint was supported by a total of 8 companies. The allegation of dumping was based on a comparison of a constructed normal value with the export prices of the product concerned to the Community. In its complaint, the International Rayon and Synthetic Fibres Committee provided also evidence that imports of the product concerned from India increased overall in absolute terms and in terms of market share. It was alleged that the volumes and the prices of the imported product concerned have, among other consequences, had a negative impact on the market share and the level of prices charged by the Community producers, resulting in substantial adverse effects on the overall performance of the Community industry. 4. Provisional measures 4.1. Overview In 1999, provisional duties were imposed in 17 proceedings involving imports from 10 different countries. As shown in Table 1 (see point 2), this figure compares to 30 in 1998 and 33 in 1997. An overview of the provisional duties imposed in 1999 is given in Annex D where it can be seen that India featured most prominently with 5 investigations. This section of the report gives a summary of each of these cases. 4.2. Cases 4.2.1. Steel ropes and cables from the People's Republic of China, Hungary, India, Mexico, Poland, South Africa and Ukraine On 19 February 1999, the Commission imposed a provisional anti-dumping duty on imports of steel ropes and cables originating in the People's Republic of China, India, Mexico, South Africa and the Ukraine and accepted undertakings offered by certain exporting producers in Hungary and Poland. The proceeding had been initiated in May 1998 following a complaint lodged by the Liaison Committee of European Union Wire Rope Industries (EWRIS) acting on behalf of twenty three Community producers representing a major proportion of the total production of steel ropes and cables in the Community. The value of total imports of ropes and cables from the countries concerned during the investigation period (from 1 January 1997 to 31 March 1998) amounted to 40.017 million ECU. Dumping As far as the exporting producers in the market-economy countries subject to the investigation were concerned, the comparison of normal value with the export prices revealed, for the investigation period, the existence of dumping in all cases. The provisional dumping margins established ranged from 0,1% to 132%. Since the People's Republic of China and the Ukraine are non-market economy countries, the Commission determined the normal value on the basis of data obtained from producers in a market economy country. Since it appeared that the country proposed by the complainant was not an appropriate analogue country and since no co-operation could be obtained from alternative market-economy countries outside the scope of the investigation, it was therefore decided to have recourse to a country subject to the investigation. Since India was considered the most appropriate analogue country, normal value was based on the weighted average of normal values established for the co-operating Indian exporting producers. The provisional dumping margins thus established were 54,8% and 74,8%. Injury and causation of injury Certain exporters argued that one Community producer should be excluded from the definition of the Community industry as its related companies had imported the product concerned during the period under investigation. Despite this import activity, it was established that the principal activity of this Community producer was the production of the product concerned. Furthermore, it was found that this Community producer had not benefited unduly from these imports nor had it been shielded from the effects of the injurious dumping. The Community producer in question was therefore not excluded from the definition of the Community industry. Given the large number of producers in the Community industry, injury was assessed on the basis of a sample of companies in the Community industry. This sample was chosen on the basis of geographic location and size of the companies in terms of production. Certain exporters argued against the cumulation of imports from Hungary and Mexico. It was, however, established that the conditions for cumulation were met as concerns imports from all countries concerned, with the exception of South Korea. This argument was therefore rejected. The investigation showed that despite an increase in consumption of 5%, the Community industry suffered a decrease in sales, market share, employment and profitability. The Commission concluded that the Community industry had suffered material injury resulting in particular from the significant undercutting practised by the countries concerned and the increasing quantities imported from these countries. Certain exporters argued that the injury suffered by the Community industry was caused by its own imports of the product concerned. This argument was rejected given that these imports corresponded to the standard commercial practice of producers having to supplement their range of manufactured products with a small proportion of purchased goods. A clear causal link was established between the dumped imports and the material injury suffered by the Community industry and no other factors were considered to have been such as to break this causal link. Community interest It was concluded that in the absence of anti-dumping measures the increases in dumped imports would in all likelihood continue and further aggravate the injury suffered by the Community industry. Any price increase in the product concerned resulting from the imposition of anti-dumping measures, was expected to only have a marginal impact on the user industries. It was therefore concluded that there were no compelling reasons not to impose anti-dumping measures. Measures and undertakings The injury margins were found to be higher than the dumping margins established for all exporting producers except for the Mexican and the South African exporting producers. The provisional duty rates were therefore based on the dumping margins, except for the Mexican and South African exporting producers for whom the injury margins applied. The rates of duty imposed ranged from 0% to 74,8%. Undertakings were offered by the Hungarian and Polish exporting producers and the Commission accepted these. 4.2.2. Stainless steel wire having a diameter of less than 1 mm from India and the Republic of Korea (AS) On 24 March 1999, the Commission imposed a provisional countervailing duty on imports of stainless steel wire having a diameter of less than 1 mm originating in India and the Republic of Korea. The proceeding had been initiated in June 1998 following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer), representing a number of the Community producers of the product concerned. The value of the total imports of stainless steel wire having a diameter of less than 1 mm from the countries concerned during the period of investigation (12 months) amounted to 538.860 Euro. Subsidisation In respect of India, the complainant alleged that five schemes involved the granting of countervailable subsidies to the exporters. These schemes are the Passbook Scheme, the Duty Entitlement Passbook Scheme, the Export Promotion Capital Goods Scheme, the Export Processing Zones/Export Oriented Units Scheme, and the Income Tax Scheme. Following an investigation of these schemes, it was found that four of the schemes benefited at least some of the exporters of the product concerned. With the exception of the Export Processing Zones/Export Oriented Units Scheme, the investigation found that all of the schemes are countervailable under Regulation (EC) No 2026/97 because they all involve a financial contribution from the Indian Government in the form of revenue forgone, and they confer a benefit on the companies concerned by relieving them of certain costs. The subsidies are all contingent upon export performance and are therefore specific under the provisions of the basic Regulation. Concerning the total amount of benefit received by the co-operating Indian exporters during the investigation period, it was found that one of the exporters received no benefit from the schemes. For the eight others, the subsidy ranged from 10,1% to 43,0%. In respect of Korea, the complainant alleged that nine schemes involved the granting of countervailable subsidies to the exporters. These schemes are policy loans, export financing loans, Government direction of commercial loans, Government direction of foreign currency loans, tax schemes, a duty drawback scheme, the supply of electricity without adequate remuneration, ad-hoc subsidies and equity infusions, and debt forgiveness. Following an investigation of these schemes, it was found that the loan schemes, the tax schemes, and the duty drawback scheme benefited at least some of the exporters of the product concerned. The investigation further found that these schemes are countervailable under Regulation (EC) No 2026/97 because they involve a financial contribution from the Government of Korea in the form of revenue forgone, and they confer a benefit on the companies concerned by relieving them of certain costs. The subsidies are all either contingent upon export performance or are otherwise limited to certain enterprises and are therefore specific under the provisions of the basic Regulation. Concerning the total amount of benefit received by the co-operating Korean exporters during the investigation period, it was found that for five of the exporters the subsidy was below the de minimis level of 1% applicable to Korea. For the two others, the subsidy ranged from 2,4% to 2,7%. Injury and causation of injury After examination of all elements affecting the community industry, the Commission concluded that material injury had been suffered. This assessment was based on the significant price undercutting practised by the exporting producers (up to 51% in India and up to 31% in Korea) and the constant increase of imports from India and Korea, both in absolute terms and in terms of market share, between 1994 and the Investigation Period. Initially the sales volume and market share of the Community industry followed the same evolution as the market. From 1996 onwards, however, no further benefit was seen. This was against the background of a growing market. Indeed, whilst the Community industry managed to keep its sales volume stable in absolute terms, this was at the expenses of its profitability which, with depressed sales prices, deteriorated rapidly, especially from 1996 onwards. Neither did, its market share recover to its previous levels. Community interest In order to investigate whether the measures were in the interest of the Community, questionnaires were sent to all known users of stainless steel wire, but only four replies were received. The suppliers of inputs to the stainless steel wire producers in the Community claimed that the imposition of measures was necessary in order to protect their interests. In these circumstances, it was considered that there were no compelling reasons to conclude that it was not in the Community interest to impose measures. Measures A total of eight Indian exporters co-operated in the investigation. For the company for which no subsidisation was found, the rate of provisional duty was set at 0%. For the remaining seven co-operating exporters, provisional ad valorem countervailing duties varying between 10,1% and 43,0% were imposed. These rates were based either on the company specific injury margin or the subsidy margin, whichever was the lower. The rate of residual duty to apply to Indian companies which failed to co-operate was, in accordance with the Commission's policy not to reward non-co-operation, set at 48,9%. This last rate corresponds to the level of the sum of the highest duty rates found for each scheme. A total of seven Korean exporters co-operated in the investigation, two of which were considered to be related. For the five companies for which a de minimis level of subsidisation was found, the rate of provisional duty was set at 0%. For the remaining two co-operating exporters, provisional ad valorem countervailing duties varying between 2,4% and 2,6% were imposed. These rates were based either on the company specific injury margin or the subsidy margin, whichever was the lower. The rate of residual duty to apply to Korean companies which failed to co-operate was, in accordance with the Commission's policy not to reward non-co-operation, set at 6,0%. This last rate corresponds to the level of the sum of the highest duty rates found for each scheme. 4.2.3. Stainless steel wire having a diameter of less than 1 mm from the Republic of Korea On 24 March 1999, the Commission imposed a provisional anti-dumping duty on imports of stainless steel wires with a diameter of less than 1 mm originating in Korea. The proceeding had been initiated in June 1998 following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer) acting on behalf of twelve Community producers representing a major proportion of the total production of stainless steel wires in the Community. The value of total imports of stainless steel wires from the country concerned during the investigation period (from 1 April 1997 to 31 March 1998) amounted to 20,6 million ECU. Dumping The comparison of normal value with the export prices revealed, for the investigation period, the existence of dumping for three co-operating companies. The provisional dumping margins established for these companies ranged from 0,6% to 17%. Injury and causation of injury The investigation showed that between 1994 and the investigation period, the market for stainless steel wire within the Community expanded by 27% (from 17.171 tons to 21.810 tons). Nevertheless, the sales volume of the Community industry remained stable, not following the expansion of the market. By contrast, during the same period, the volume of Korean imports increased by 281%, representing nearly 4 times the volume in 1994 and their market share went up from 7% to 20%. It was also found that sales prices of the Community industry were substantially undercut (12,1% on weighted average). This expanding situation of the dumped imports coincided with the deterioration of the situation of the Community industry in terms of decrease of market shares (by 12%), price depression as well as decreasing profitability (from 3,6% in 1994 to -0,6% during the investigation period) and investments (which went also steadily down as from 1995), depriving the Community industry of any possibilities to further develop both its production technologies and product range. In view of the above findings, it was concluded that the Community industry suffered material injury, which was caused by dumped imports. It was argued in the framework of the parallel anti-subsidy investigation that the concerted practice between certain Community producers consisting in the uniform application of the alloy surcharge and which was found in a Commission Decision for flat products also existed for the product concerned, and that even if such a practice would not be established for the product concerned, the existing illegal practice for flat products would have an effect on the product concerned. As a consequence, no accurate injury analysis would be possible, as all injury data would be distorted. In this respect, it was examined whether these arguments were relevant in this proceeding. The Commission decision related to flat products whereas stainless steel wires belong to the long product category and the application of the alloy surcharge as such is not illegal; it could have been illegal only in a case where it would be applied in a concerted manner but no substantiated allegation was made and the investigation showed that there was no uniform application of the alloy surcharge by the Community industry. The argument was therefore rejected. As to the role played by other Community producers, it was alleged that they might have contributed to the injury suffered by the Community industry. However, their situation during the period under consideration is not any different from that of the Community industry (stable sales volume but decreasing market shares: 23% in 1994 and 16% during the investigation period). The argument was rejected. As to the role played by third countries' imports, some interested parties argued that third countries' imports (mainly from Switzerland) had contributed to the injury suffered by the Community industry. However these imports are, both in terms of volume and market shares, below the level reached by the dumped imports and they have remained more or less stable (between 5 and 6% market share) during the period under consideration. The argument was rejected. Community interest At this stage of the proceeding, no compelling reasons were found against the imposition of anti-dumping duties. Measures Given the existence of a parallel countervailing investigation, anti-dumping duties corresponding to the dumping margin, which was found to be lower than the injury margin, were cumulated with the countervailing duties to the extent that the total amount did not exceed the injury threshold, except that export subsidies were not cumulated with anti-dumping duties. On this basis one Korean company was subject to a provisional anti-dumping duty of 17,0%. 4.2.4. Stainless steel wire having a diameter of 1 mm or more from India On 24 March 1999, the Commission imposed a provisional anti-dumping duty on imports of stainless steel wires with a diameter of 1 mm or more originating in India. The proceeding had been initiated in June 1998 following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer) acting on behalf of eighteen Community producers representing a major proportion of the total production of stainless steel wires in the Community. The value of total imports of stainless steel wires from the countries concerned during the investigation period (from 1 April 1997 to 31 March 1998) amounted to 22,4 million ECU. Dumping The comparison of normal value with the export prices revealed, for the investigation period, the existence of dumping for all co-operating companies from India. The provisional dumping margins established ranged from 1,2% to 76,2%. The dumping margins found for Korea were de minimis or very close to de minimis. Injury and causation of injury The investigation showed that the growing trend of the market (+20%) between 1994 and the investigation period benefited the dumped imports. During this period, they increased substantially in terms of both sales volume (+862%) and market share (from 1,4% to 1,1%) and they undercut substantially the sales prices of the Community industry. By comparison, during the same period, the Community industry experienced loss of market share (from 63% to 55,3%), downward pricing, deteriorating profitability (from 6,4% to 1,1%) and job losses. In view of the upward trend of the market, the Community industry made continuous investments, managing to increase slightly its production and sales volume, but its efforts were frustrated by the steady increase in dumped imports at low prices, resulting in decreasing capacity utilisation. In view of the above findings, it was concluded that the Community industry suffered material injury, which was caused by dumped imports from India. It was argued that the concerted practice between certain Community producers consisting in the uniform application of the alloy surcharge and which was found in a Commission Decision for flat products, also existed for the product concerned, and that even if such a practice would not be established for the product concerned, the existing illegal practice for flat products would have an effect on the product concerned. As a consequence, no accurate injury analysis would be possible, as all injury data would be distorted. The Commission decision related to flat products whereas stainless steel wires belong to the long product category and the application of the alloy surcharge as such is not illegal; it could have been illegal only in a case where it would been applied in a concerted manner but no substantiated allegation was made and the investigation showed that there was no uniform application of the alloy surcharge by the Community industry. The argument was therefore rejected. As to the role played by non-complainant Community producers, it was alleged that they might have contributed to the injury suffered by the Community industry. However, their situation during the period under consideration was not different from that of the Community industry (stable sales volume but decreasing market shares: 27% in 1994 and 23% during the investigation period). The argument was therefore rejected. As to the role played by third country imports, some interested parties argued that third country imports (mainly from Switzerland) might have contributed to the injury suffered by the Community industry. However, in terms of both volume and market share, these imports were below the level reached by the dumped imports and they remained more or less stable (between 8,4% and 10,6% market share) during the period under consideration. The argument was therefore rejected. Community interest At this stage of the proceeding no compelling reasons have been found not to impose anti-dumping duties. Measures Given the existence of a parallel countervailing investigation, anti-dumping duties corresponding to the dumping margin, which was found to be lower than the injury margin, were cumulated with the countervailing duties to the extent that the total amount did not exceed the injury threshold, except that export subsidies were not cumulated with anti-dumping duties. On this basis five Indian companies were subject to provisional anti-dumping duties ranging from 2,4 to 55,6%. For Korea, no provisional anti-dumping measures were imposed at this stage. 4.2.5. Stainless steel wire having a diameter of 1 mm or more from India and the Republic of Korea (AS) On 24 March 1999, the Commission imposed a provisional countervailing duty on imports of stainless steel wire having a diameter of 1 mm or more originating in India and the Republic of Korea. The proceeding had been initiated in June 1998 following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer), representing a number of the Community producers of the product concerned. The value of the total imports of stainless steel wire having a diameter of 1 mm or more from the countries concerned during the period of investigation (12 months) amounted to 1.069.552 Euro. Subsidisation In respect of India, the complainant alleged that five schemes involved the granting of countervailable subsidies to the exporters. These schemes are the Passbook Scheme, the Duty Entitlement Passbook Scheme, the Export Promotion Capital Goods Scheme, the Export Processing Zones/Export Oriented Units Scheme and the Income Tax Scheme. Following an investigation of these schemes, it was found that four of the schemes benefited at least some of the exporters of the product concerned. With the exception of the Export Processing Zones/Export Oriented Units Scheme, the investigation found that all of the schemes are countervailable under Regulation (EC) No 2026/97 because they all involve a financial contribution from the Indian Government in the form of revenue forgone, and they confer a benefit on the companies concerned by relieving them of certain costs. The subsidies are all contingent upon export performance and are therefore specific under the provisions of the basic Regulation. Concerning the total amount of benefit received by the co-operating Indian exporters during the investigation period, it was found that two of the exporters received no benefit from the schemes. For the eight others, the subsidy ranged from 13,2% to 42,9%. In respect of Korea, the complainant alleged that nine schemes involved the granting of countervailable subsidies to the exporters. These schemes are policy loans, export financing loans, Government direction of commercial loans, Government direction of foreign currency loans, tax schemes, a duty drawback scheme, the supply of electricity without adequate remuneration, ad-hoc subsidies and equity infusions, and debt forgiveness. Following an investigation of these schemes, it was found that the loan schemes, the tax schemes, and the duty drawback scheme benefited at least some of the exporters of the product concerned. The investigation further found that these schemes are countervailable under Regulation (EC) No 2026/97 because they involve a financial contribution from the Government of Korea in the form of revenue forgone, and they confer a benefit on the companies concerned by relieving them of certain costs. The subsidies are all either contingent upon export performance or are otherwise limited to certain enterprises and are therefore specific under the provisions of the basic Regulation. Concerning the total amount of benefit received by the co-operating Korean exporters during the investigation period, it was found that for five of the exporters the subsidy was below the de minimis level of 1% applicable to Korea. For the two others, the subsidy ranged from 2,4% to 2,7%. Injury and causation of injury After examination of all elements affecting the community industry, the Commission concluded that material injury had been suffered. This assessment was based on the significant price undercutting practised by the exporting producers (up to 36% in India and up to 30% in Korea) and the constant increase of imports from India and Korea, both in absolute terms and in terms of market share, between 1994 and the investigation period. Initially, the sales volume and market share of the Community industry followed the same evolution as the market. From 1996 onwards, however, no further benefit was seen. This was against the background of a growing market. Indeed, whilst the Community industry managed to keep its sales volume stable in absolute terms, this was at the expenses of its profitability which, with depressed sales prices, deteriorated rapidly. Neither did its market share recover to its previous levels. Community interest In order to investigate whether the measures were in the interest of the Community, questionnaires were sent to all known users of stainless steel wire, but only two replies were received. The suppliers of inputs to the stainless steel wire producers in the Community claimed that the imposition of measures was necessary in order to protect their interests. In these circumstances, it was considered that there were no compelling reasons to conclude that it was not in the Community interest to impose measures. Measures A total of ten Indian exporters co-operated in the investigation. For the two companies for which no subsidisation was found, the rate of provisional duty was set at 0%. For the remaining eight co-operating exporters, provisional ad valorem countervailing duties varying between 13,2% and 35,4% were imposed. These rates were based either on the company specific injury margin or the subsidy margin, whichever was the lower. The rate of residual duty to apply to Indian companies which failed to co-operate was, in accordance with the Commission's policy not to reward non-co-operation, set at 48,9%. This last rate corresponds to the level of the sum of the highest duty rates found for each scheme. A total of seven Korean exporters co-operated in the investigation, two of which were considered to be related. For the five companies for which a de minimis level of subsidisation was found, the rate of provisional duty was set at 0%. For the remaining two co-operating exporters, provisional ad valorem countervailing duties varying between 2,4% and 2,6% were imposed. These rates were based either on the company specific injury margin or the subsidy margin, whichever was the lower. The rate of residual duty to apply to Korean companies which failed to co-operate was, in accordance with the Commission's policy not to reward non-co-operation, set at 6,0%. This last rate corresponds to the level of the sum of the highest duty rates found for each scheme. 4.2.6. Seamless pipes and tubes from Croatia and Ukraine On 18 August 1999, the Commission imposed a provisional duty on imports of certain seamless pipes and tubes of iron or non-alloy steel originating in Croatia and Ukraine. The proceeding was initiated in November 1998 following a complaint lodged by the 'Defence Committee of the Seamless Steel Tube Industry of the European Union' on behalf of the Community industry. The investigation found that apparent Community consumption in the investigation period from 1 November 1997 to 31 October 1998 amounted to 1.195.329 tonnes. The value of the total imports from Croatia and Ukraine during the same period amounted to ECU 66.224.000. Dumping For the sole Croatian producer, the provisional dumping margin, established on the basis of a comparison of weighted average normal values with weighted average export prices, was 40,8%. Since Ukraine is considered to be a non-market economy country, normal value was established on the basis of the prices and costs of the Croatian producer for products comparable to those sold by the Ukrainian exporting producers in the Community. The provisional countrywide dumping margin for Ukraine, established on the basis of a comparison of weighted average normal values with weighted average export prices, was 123,7%. Injury and causation of injury The investigation showed that consumption in the Community increased by 10% between 1997 and the investigation period. Dumped imports originating in Croatia and Ukraine increased significantly during the same period going from 83.783 tonnes to 164.403 tonnes. Their market share went from 7,7% in 1997 to 13,8% in the investigation period. During the same period, sales of the Community increased by 10% whereas their market share remained stable. Profitability remained at break-even point, at a level largely insufficient to ensure the long-term viability of the Community industry and employment decreased by 2%. In the analysis, account was taken of the fact that the Community industry had been unable to regain previously lost market share as had been expected given the imposition of anti-dumping measures on imports from the Czech Republic, Hungary, Poland, Romania, Russia and the Slovak Republic in November 1997. It was thus considered that the Community industry had suffered material injury and as no other cause of material injury could be established, it was concluded that the dumped imports from Croatia and Ukraine had caused this material injury. Community interest After it had examined al the arguments raised in the course of the investigation, the Commission concluded that no compelling reasons could be found on grounds of Community interest against the imposition of anti-dumping measures. Measures The injury elimination levels were lower than the dumping margins and therefore the provisional duties were based on the former. The provisional duty for Croatia was set at 31,2% and for Ukraine at 56,5%. 4.2.7. Polyethylene terephthalate (PET) film from India (AS) On 19 August 1999, the Commission imposed provisional countervailing duties on imports of polyethylene terephthalate (PET) film originating in India. The proceeding had been initiated in November 1998 following a complaint lodged by the following Community producers: Du Pont de Nemours International SA (Luxembourg and United Kingdom), Mitsubishi Polyester Film GmbH - formerly Hoechst Diafoil GmbH - (Germany), Toray Plastics Europe S.A. (France) and Nuroll Spa (Italy). Subsidisation The complaint alleged that a large number of schemes (i.e. the Passbook scheme, the Duty Entitlement Passbook scheme, the Export Promotion Capital Goods scheme, the scheme relating to Export Processing Zones and Export Oriented Units, the Income Tax Exemption scheme as well as a number of regionally available schemes, namely the Sales Tax incentive, Refund of Electricity Duty, Octroi refund, Special Capital incentive and Trade Tax incentive) involved the granting of countervailable subsidies to the Indian exporters. Following an investigation of these schemes, it was found that all were countervailable under Council Regulation (EC) No 2026/97 and that benefits accrued thereunder to the exporters of the product concerned. It was found that all companies investigated received subsidies ranging from 6,7% to 37,2%. Injury and causation of injury Even though consumption in the European Community increased by 15% during the years from 1995 to the end of the investigation period, the Community industry lost 12% of its market share during the same period. Faced with the low priced Indian imports but determined to maintain its production and sales volumes, the Community industry was forced to lower its prices by 23% and sustained a sharp drop in profitability leading to a loss-making situation during the investigation period. This negative evolution over a period of growing demand coincided with a notable increase in the volume of the imports from India at prices, which significantly undercut those of the Community industry. Other factors were analysed but none were found to be such as to break the causal link between the injury suffered by the Community industry and the subsidised imports. The Commission therefore considered that the Indian imports have caused material injury to the Community industry. Community interest In view of the submissions received, the Commission considered that there were no compelling reasons to conclude that it was not in the Community interest to impose such measures. Measures A total of seven Indian exporters co-operated in the investigation. For these companies, provisional ad-valorem countervailing duties, varying between 6,7% and 37,2%, were imposed. These rates were based on the company-specific subsidy margins, which were consistently lower than the respective injury margins. Given the high level of co-operation, which appears to have covered practically all imports of the product concerned originating in India, it was considered appropriate to establish the duty rate for non-co-operating companies at the same rate as the highest rate that has been established for the co-operating companies i.e. 37,2%. 4.2.8. Compact discs boxes from the People's Republic of China On 4 December 1999, the Commission imposed a provisional duty on imports of compact disc boxes originating in the People's Republic of China. The proceeding was initiated in March 1999 following a complaint lodged by the European Plastics Converters (EuPC). The investigation found that total Community consumption in the investigation period from 1 March 1998 to 28 February 1999 amounted to 2.679 million units. The value of the total imports from the People's Republic of China during the same period amounted to 42.900.000 EURO. Dumping It was found that for one producer, market economy conditions prevailed in respect of the manufacture and sale of the like product. Consequently, normal value was established on the basis of its cost of manufacturing in China. For the other producers involved, Canada was selected as a market economy third country for the determination of normal value. Dumping was found for the three co-operating companies in China: the margins ranged from 6,6% to 10,4%. In order not to reward non-co-operation, the residual margin was based on the product type with highest dumping margin produced by the company with the highest dumping margin and amounted to 20,1%. Injury and causation of injury The Community industry was found to have suffered material injury during the period considered, i.e. from January 1995 to February 1999. The increase of imports from China by 285%, doubling their market share in the Community, was undercutting the Community industry by 15%. Attempting to match the Chinese prices in order to maintain its market share, production and capacity-utilisation, the Community industry's profitability declined significantly to a level considered insufficient for the long-term viability of this industry. It was found that a direct causal link existed between the increased volume of dumped imports and the material injury suffered by the Community industry. Community interest The different interests involved were examined in particular those of the Community industry, of the importers and the users. The Commission considered that there were no compelling reasons not to impose measures in order to correct the distortive effect of injurious dumping. Measures The injury elimination levels were higher than the dumping margins and therefore the provisional duties were based on the latter. The individual duties ranged from 6,6% to 10,4% and the residual duty amounted to 20,1%. 5. Definitive measures 5.1. Overview In 1999, definitive duties were imposed in 21 cases involving imports from 14 different countries and covering 8 products. India featured most prominently with 5 investigations, followed by Poland with 3 investigations. As shown in Table 1 (see point 2), this figure compares to 28 in 1998 and 24 in 1997. Whilst an overview of the definitive duties imposed in 1999 can be found in Annex E, a summary of each case is given below. 5.2. Cases 5.2.1. Hardboard from Bulgaria, Estonia, Latvia, Lithuania, Poland and Russia On 29 January 1999, the Council imposed a definitive anti-dumping duty on imports of hardboard originating in Bulgaria, Estonia, Latvia, Lithuania, Poland and Russia. The proceeding had been initiated on 7 November 1997 following a complaint lodged by 8 companies producing more than 50% of the Community output of the like product. The investigation had originally included imports of hardboard originating in Brazil. Provisional duties were imposed on all countries, including Brazil, in August 1998. The investigation confirmed that the total Community consumption in the investigation period (from 1 October 1996 to 30 September 1997) amounted to 777.000 tonnes. The value of the total cumulated imports (including those from Brazil) during the same period amounted to 64.828 million ECU for a volume of 276.992 tonnes. Product After the imposition of the provisional anti-dumping measures, a number of importers and users continued to argue for an extension of the product scope to include thin dry-process fibreboard, as well as plywood and chipboard panels. These products allegedly share the same end-uses as hardboard and should thus be treated as interchangeable. The investigation showed that even though there were certain overlaps between the uses of the different types of wood-based panel products, their physical and chemical characteristics were sufficiently different to conclude they are not a single product, thus confirming the provisional findings. The Brazilian exporters and certain users, mostly door makers, repeated their claims, made at the provisional stage, that eucalyptus hardboards were not a like product because of their different physical characteristics and unique high quality properties. This claim was rejected. Dumping Provisional duties imposed on imports originating in Bulgaria, Estonia and Lithuania remained unchanged, ranging from 6 to 11,4%. The Latvian exporting producer as well as the co-operating Polish exporting producers made several claims to modify certain cost calculations. As most of these claims were accepted after further investigation, reduced dumping margins were calculated. Dumping margins for co-operating and non co-operating exporting producers from these countries ranged from 4,7% to 34,8%. As normal values for Russia had been calculated using Poland as an analogue country, the changes made in calculating the normal value for Polish companies were taken into account and led to a recalculation of the dumping margin for Russian imports to 30,6%. Injury and causation of injury After the publication of provisional measures, Brazilian exporting producers reiterated their claim that imports into the Community from Brazil should not be cumulated with imports from the other countries concerned because their product corresponded to a very different market segment and did not compete with the others. After re-examination, this claim was accepted and led to new price undercutting calculation, which showed no price undercutting for Brazil. It was also demonstrated that imports from Brazil were not competing with hardboards produced in the Community on this particular market segment and therefore could not cause injury to the Community industry. It was then decided to terminate the proceeding with regard to Brazil without measures. Various exporting producers claimed that injury was partly caused by imports of thin dry-process fibreboard, which were not included in the product under consideration. Even though the imports of such boards had increased noticeably, they still represented a small part of the Community consumption of boards. Furthermore, the injury to the Community industry did not consist in a loss in sales volume that would indicate a substitution, but rather in major financial losses due to strong downward pressure on prices as a result of injurious dumping. The provisional findings that imports from Bulgaria, Estonia, Latvia, Lithuania, Poland, Russia caused material injury were confirmed. Community interest After the imposition of provisional measures, several parties claimed that a substitution of thin dry-process fibreboard would occur after the imposition of definitive measures on hardboard and that this would not be in the Community hardboard producers' interest. The investigation revealed that a switch in consumption could indeed occur in the future in favour of thin dry-process fibreboard, but only in those segments were these products are interchangeable with hardboard and then only where a suitably small price differential existed between thin dry-process fibreboard and hardboard. At the time of the investigation, however, the thin dry-process fibreboard market was relatively limited, and the price level of thin dry-process fibreboard was still above those of hardboard of equivalent thickness.The Commission concluded that imposing definitive anti-dumping measures on imports of hardboard from the countries concerned was not against the overall Community interest. Measures It was decided to terminate the proceeding against Brazil without measures. Ad valorem duties were imposed to remove the injury caused by the dumped imports originating in the other countries concerned. The injury margins were found to be higher than the dumping margins, apart from the case of one co-operating Polish exporting producer. The duties were therefore based on the dumping margins found except for this latter producer for whom the injury margin was used. Undertakings accepted in the provisional Regulation were definitively accepted. The rates of the duties imposed ranged from 4,7% to 34,8%. 5.2.2. Bicycles from Taiwan On 25 February 1999, the Commission imposed a definitive anti-dumping duty on imports of bicycles originating in Taiwan. The proceeding has been initiated in November 1997 following a complaint lodged by the European Bicycle Manufacturers' Association on behalf of a large number of Community producers. The investigation confirmed that the total Community consumption in the investigation period (i.e. from 1 November 1996 to 31 October 1997) amounted to 15,45 million bicycles, corresponding to a total value ECU 2.266 million. The volume of the total imports of bicycles originating in Taiwan during the investigation period amounted to 2,7 million bicycles with a value of ECU 278 million. It is recalled that the Commission used sampling for the investigation of dumping and injury. Dumping Dumping was found for all exporting producers included in the sample and investigated by comparing constructed normal values with export prices to the Community. The definitive dumping margins established for the sampled companies ranged from 2,4% to 18,2%. A weighted average dumping margin of 5,4% was attributed to co-operating companies not included in the sample. Injury and causation of injury After publication of provisional measures, exporters' and importers' associations questioned the representativeness of the Community industry and the sample. They also claimed that only the interests of the large European groups had been taken into account and that small independent manufacturers had refused to participate in the investigation. The investigation showed that even small producers participated in the investigation and that the support from Community producers was correctly established. It also showed that the sample of Community producers was representative of the Community industry. Contrary to what was suggested by the associations, it was found that the large European groups in question only represented a share of 40% in the Community production. The exporters' and importers' associations also contested the methodology followed by the Commission services to assess the injury, in particular sales volume, sales value and profitability. On the basis of a variety of press releases and extracts from annual accounts, they claimed that the groups included in the Community industry had made significant improvements during the period under investigation and that the Community industry was thus not suffering material injury. All these claims were carefully examined but did not change the findings on injury provisionally established. On causation, the associations claimed that Taiwanese imports had had no effect on the Community industry. For them, the negative evolution of consumption and the Italian manufacturers' pricing methods were responsible for the alleged bad situation of the Community industry. They argued that the restructuring of certain European groups is almost over and has resulted in larger groups becoming profitable nowadays. The investigation confirmed that the situation of the Community industry significantly deteriorated whereas, in a shrinking market, Taiwanese exporters significantly increased their market share both in terms of volume and in terms of value. As high volumes of Taiwanese low-dumped import prices undercut the Community industry's prices and thus had a negative impact on that industry, it was found that the pricing behaviour of Italian manufacturers did not affect it. The exporters and importers' associations did not demonstrate that the effects of the decrease in consumption were such as to break the causal link between the dumped imports and the material injury suffered by the Community industry. It was thus concluded that Taiwanese imports, taken in isolation, had caused material injury to the Community industry. Community interest In reviewing the other interests involved in the light of the comments received by the associations, it was concluded that there were no compelling reasons not to adopt anti-dumping measures. Indeed, the measures will not affect competition nor innovation in the Community market and the negative effects of not taking measures for certain operators cannot outweigh the positive effects of imposing measures for a larger number of other operators in the Community. Finally, the large number of competitors in the market and the level of the measures proposed should limit any increase in the consumer price up to a maximum of 2,6%. Measures Since the injury margins are in all cases higher than the dumping margins, definitive anti-dumping duties were imposed at the level of the dumping margins found, namely between 2,4 to 18,2% for the sampled Taiwanese exporters and an average duty of 5,4% for all the other co-operating Taiwanese exporters. The rate of residual duty was set at the level of the highest dumping margin found namely 18,2%. 5.2.3. Polypropylene binder or baler twine from Poland, the Czech Republic and Hungary On 15 March 1999, the Council imposed a definitive anti-dumping duty on imports of polypropylene binder or baler twine originating in Poland, the Czech Republic and Hungary. A first proceeding concerning Poland, and another concerning the Czech Republic, Hungary and Saudi Arabia, had been initiated in January and February 1998 respectively, following two complaints lodged by the Liaison Committee of European Union Twine, Cordage and Netting Industries (Eurocord) on behalf of the Community industry. The two investigations were subsequently combined. The value of the total imports of baler twine from the countries concerned during the investigation period (calendar year 1997) amounted to 13,6 million ECU. Dumping Following the publication of provisional measures, three Polish companies, which had not co-operated with the Commission at the provisional stage, asked to be allowed to co-operate in the proceeding. This request was only accepted in the case of one company, which was in the particular situation of producing baler twine under an outward processing regime, whereby raw materials acquired in the Community were processed into finished products in Poland and then returned to the Community for sale. A specific dumping margin was therefore established for this company. Following the comments received from other Polish, Czech and Hungarian exporting producers, the dumping margins published in the provisional duty regulation were either confirmed or slightly amended, where appropriate. Injury and causation of injury After the publication of the provisional duty regulation on 1 October 1998, by which measures were imposed on imports originating in Poland, Czech Republic, Hungary and Saudi Arabia and undertakings were accepted from some exporting producers, the Commission continued its investigation, obtained and verified new data. On-the-spot verifications were carried out on the premises of 2 additional complainant Community producers. Following an adjustment of the import figures, the Community consumption increased from 40.231 tonnes in 1994 to 51.288 tonnes during the investigation period. Nevertheless, the definitive findings pertaining to the Community industry were not significantly different from those stated in the provisional duty regulation. Some exporting producers were unable to substantiate their allegation that concerted practices amounting to anti-competitive behaviour existed for polypropylene granulates as the raw material and for baler twine as the final product, and did not provide substantiated arguments concerning the situation of the Community industry. Accordingly, the Council confirmed that the Community industry had suffered material injury. As far as causality is concerned, it could not be excluded that some other factors than dumped imports may have had a negative impact on the situation of the Community industry. Nevertheless, the conclusion that the dumped imports from Poland, the Czech Republic and Hungary, taken in isolation, had caused material injury to the Community industry, was confirmed. The measure provisionally imposed against Saudi Arabia was terminated on the basis of a revision of the injury margin, which was found to be de minimis. Community interest In the absence of substantiated comments from importers and as no reaction from users was received, it was assumed that the impact of any expected price increase would be limited and that the imposition of measures would lead to a reinstatement of effective competition that would enable the Community industry to regain the lost market share and improve its profitability. Measures Definitive ad valorem duties, based on the lower of the injury or the dumping margin, were imposed on imports of binder or baler twine from Hungary, Czech Republic and Poland. The rate of duties, set at the net free-at-Community frontier prices, ranged from 6,1 % to 32,9 %. However, price undertakings offered by three co-operating exporting producers in Hungary, two in the Czech Republic and one Polish company were accepted. Undertakings offered by five other Polish producers were rejected because these undertakings would have given the companies a free choice whether or not to export under the undertaking. The proceeding concerning imports from Saudi Arabia was terminated without the imposition of measures. 5.2.4. Stainless steel wires with a diameter of 1 mm or more from India (AS) On 22 July 1999, the Council imposed a definitive countervailing duty on imports of stainless steel wires with a diameter of 1 mm or more originating in India. The proceeding had been initiated on 25 June 1998, following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer), which contained sufficient evidence of material injury caused by countervailable subsidies. Provisional countervailing duties were imposed on 24 March 1999 on imports of stainless steel wires with a diameter of 1 mm or more originating in India and in the Republic of Korea. However, since the further investigation showed that the countrywide subsidy margin for the latter was below the de minimis threshold, the proceeding was terminated as regards imports originating in the Republic of Korea. The investigation confirmed that overall Community consumption in the investigation period (1 April 1997 to 31 March 1998) amounted to about 82.772 tonnes. Subsidisation Further investigation did not lead to any changes with regard to subsidisation under the Passbook, DEPB, Export Promotion Capital Goods and Income Tax Exemption Scheme with the exception of the acceptance of additional evidence concerning the Income Tax Exemption Scheme for one company, which lead to a downward revision of benefits received thereunder. The investigation resulted in high subsidy margins, which ranged from 13,2% to 42,9%. Injury and causation of injury The further investigation did not bring to light any new factors with respect to the injury caused by the dumped imports. In particular as regards the competition aspects raised by certain Indian exporting producers, in the meantime, the Commission had officially rejected the complaint regarding alleged concerted practices in the sector of long products. Therefore, the findings of the provisional investigation, namely the existence of material injury caused by dumped imports of large stainless steel wire originating in India, were confirmed. As to the economic indicators relating to the situation of the Community industry, the provisional findings were confirmed. With respect to causality, and in view of the termination with respect to imports originating in Korea, it was concluded that subsidised imports originating in India increased both in terms of sales volume (+ 862%) and market share (from 1,4% to 11,1%) and that they have substantially undercut the sales prices of the Community industry (by 22% on weighted average). As to the role played by third country imports, these imports were, both in terms of volume and market share, below the level reached by the subsidised imports and remained more or less stable (between 8,4% and 10,6% market share) during the period under consideration. It was therefore concluded that imports from third countries might have contributed to the injury suffered by the Community industry but this alone was not found to be sufficient to break the causal link established between the subsidised imports from India and the material injury suffered by the Community industry, particularly in view of the development of the market share of these third countries over the period considered. Thus, it was concluded that the Community industry suffered material injury caused by subsidised imports from India. Community interest With respect to the Community interest, further investigations were undertaken with respect to users of large stainless steel wire. In this respect, some companies alleged that the imposition of measures would have a direct impact on their economic situation since it would lead to an increase of the price of their raw material. However, they also stated that they could source their supplies from countries other than the countries concerned or from producers located in the Community. In addition, other users insisted on the quality and reliability of the Community industry's products and stated that they supported the imposition of measures because this was the only means to reinstate fair competition in the Community. Therefore, it was concluded that there were no compelling reasons against the imposition of measures. Measures Countervailing duties were imposed corresponding to the amount of subsidy on individual exporting producers, up to the level of the injury margins. These duties for eight co-operating exporters in India ranged from 13,2% to 35,4%, with two companies de minimis and the rate for the non-co-operating exporting producers set at 48,8%. 5.2.5. Stainless steel wires with a diameter of 1 mm or more from India On 22 July 1999, the Council imposed a definitive anti-dumping duty on imports of stainless steel wires with a diameter of 1 mm or more originating in India. The proceeding had been initiated on 25 June 1998, following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer) alleging that imports were being dumped and were causing material injury to the Community industry. Provisional anti-dumping duties were imposed on 24 March 1999 only on imports originating in India. The further investigation showed that the countrywide subsidy margin for Korea was below the de minimis threshold, the proceeding was therefore terminated as regards imports originating in the Republic of Korea. The investigation confirmed that overall Community consumption in the investigation period (1 April 1997 to 31 March 1998) amounted to about 82.772 tonnes. Dumping Following the disclosure, one exporting producer claimed that account should be taken of the goods-in-process stock variation in the determination of the constructed normal value. This claim was granted and, consequently, its individual dumping margin decreased from 44,6% to 35,8%. No other substantiated arguments were presented in respect of the findings concerning dumping and, therefore, the provisional conclusions and margins were confirmed. The definitive dumping margins were ranging from 1,2% to 76,2%. Injury and causation of injury The further investigation did not bring to light any new factors with respect to the injury caused by the dumped imports. In particular as regards the competition aspects raised by certain Indian exporting producers, in the meantime, the Commission had officially rejected the complaint regarding alleged concerted practices in the sector of long products. Therefore, the findings of the provisional investigation, namely the existence of material injury caused by dumped imports of large stainless steel wire originating in India, were confirmed. Community interest With respect to the Community interest, further investigations were undertaken with respect to users of large stainless steel wire. In this respect, some companies alleged that the imposition of measures would have a direct impact on their economic situation since it would lead to an increase of the price of their raw material. However, they also stated that they could source their supplies from countries other than the countries concerned or from producers located in the Community. In addition, other users insisted on the quality and reliability of the Community industry's products and stated that they supported the imposition of measures because this was the only means to reinstate fair competition in the Community. Therefore, it was concluded that there were no compelling reasons against the imposition of measures. Measures Given the existence of a parallel countervailing investigation, anti-dumping duties were adjusted to reflect the actual dumping margins remaining after the imposition of the countervailing duties offsetting the effect of the export subsidies. On this basis, five Indian exporting producers were subject to a definitive anti-dumping duty that ranged from 2,4% to 55,6%, with the duty rate for non-co-operators amounting to 55,6%. 5.2.6. Stainless steel wires with a diameter of less than 1 mm from India (AS) On 22 July 1999, the Council imposed a definitive countervailing duty on imports of stainless steel wires with a diameter of less than 1 mm originating in India. The proceeding had been initiated on 25 June 1998, following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer), which contained sufficient evidence of material injury caused by countervailable subsidies. Provisional countervailing duties were imposed on 24 March 1999 on imports of stainless steel wires with a diameter of less than 1 mm originating in India and in the Republic of Korea. However, since the further investigation showed that the countrywide subsidy margin for the latter was below the de minimis threshold, the proceeding was terminated as regards imports originating in the Republic of Korea. The investigation confirmed that overall Community consumption in the investigation period (1 April 1997 to 31 March 1998) amounted to about 21.810 tonnes. Subsidisation The further investigation did not lead to any changes with regard to subsidisation under the Passbook, DEPB, Export Promotion Capital Goods and Income Tax Exemption Scheme with the exception of the acceptance of additional evidence concerning the Income Tax Exemption Scheme for one company which lead to a downward revision of benefits received thereunder. The investigation resulted in high subsidy margins, which ranged from 8,8% to 42,9%. Injury and causation of injury The further investigation did not bring to light any new factors with respect to the injury caused by the dumped imports. In particular as regards the competition aspects raised by certain Indian exporting producers, in the meantime, the Commission had officially rejected the complaint regarding alleged concerted practices in the sector of long products. Therefore, the findings of the provisional investigation, namely the existence of material injury caused by dumped imports originating in India, were confirmed. As to the economic indicators relating to the situation of the Community industry, the provisional findings were confirmed. With respect to causality, and in view of the termination with respect to imports originating in Korea, it was concluded that subsidised imports originating in India increased both in terms of sales volume (+ 1278%) and market share (from 0,3% to 3,3%) and that they have substantially undercut the sales prices of the Community industry (by 26% on weighted average). As to the role played by third country imports, these imports have significantly increased both in terms of volume and market share (between 12% and 26% market share) during the period under consideration. Imports originating in Korea were examined in the context of this investigation. They have significantly increased in terms of volume and corresponding market share (from 7% to 20%) and were made at prices undercutting those of the Community industry. However, the price-undercutting margin established for imports originating in Korea (which amounted to 12% on weighted average) was significantly lower than the price-undercutting margin established for imports originating in India (which amounted to 26% on weighted average). As to other third countries, their imports remained stable between 1994 and the investigation period, and no indication of any price undercutting of the Community industry's sales prices was found. It was therefore concluded that imports from third countries, in particular from Korea, contributed to the injury suffered by the Community industry. However, in view of the market share of the imports originating in India and the significant undercutting found, it was concluded that this alone was not sufficient to break the causal link established between the subsidised imports from India and the material injury suffered by the Community industry. In the light of the above, it was concluded that the subsidised imports originating in India taken in isolation have caused material injury to the Community industry. Community interest With respect to the Community interest, further investigations were undertaken with respect to users of large stainless steel wire. In this respect, some companies alleged that the imposition of measures would have a direct impact on their economic situation since it would lead to an increase of the price of their raw material. However, they also stated that they could source their supplies from countries other than the countries concerned or from producers located in the Community. In addition, other users insisted on the quality and reliability of the Community industry's products and stated that they supported the imposition of measures because this was the only means to reinstate fair competition in the Community. Therefore, it was concluded that there were no compelling reasons against the imposition of measures. Measures Countervailing duties were imposed corresponding to the amount of subsidy on individual exporting producers, up to the level of the injury margins. These duties for seven Indian exporting producers ranged from 8,8% to 42,9%, with one company de minimis and the rate for the non-co-operating exporting producers set at 44,4 %. 5.2.7. Steel ropes and cables from the People's Republic of China, Hungary, India, Mexico, Poland, South Africa and Ukraine On 17 August 1999, the Council imposed a definitive anti-dumping duty on imports of steel ropes and cables originating in the People's Republic of China, Hungary, India, Mexico, Poland, South Africa and Ukraine. The proceedings had been initiated in May 1998 and July 1998 following complaints lodged by the Liaison Committee of European Union Wire Rope Industries (EWRIS). A provisional duty was imposed in February 1999. The investigation confirmed that the total Community consumption in the investigation period (1 January 1997 to 31 March 1998) amounted to 321.825 ECU and 184.303 tonnes. The value of the imports concerned during the same period amounted to 40.017 ECU. Dumping Substantial dumping margins were established for all exporters from the countries concerned, with the exception of the Republic of Korea in respect of which de minimis dumping margins were found. Following the imposition of provisional anti-dumping duties, a number of submissions were received as regards the choice of analogue country for the establishment of normal value in the non-market economy countries. The Chinese and Ukrainian exporting producers contested the provisional choice of India as analogue country. Although the Republic of Korea was proposed as an alternative, it was found that Poland represented the most appropriate choice in this case given its low level of import duties, its domestic market and the range of models produced by the Polish exporting producers. With regard to Hungary, India and Poland, modifications to the dumping margins were made due to the granting of adjustments to take into account differences in level of trade which were found to affect price comparability. The dumping margins, expressed as a percentage of the free-at-Community frontier price, were 60,4% for the People's Republic of China; 28,1% (residual 28,1%) in respect of Hungary; ranged between 23,8% and 30,8% (residual 30,8%) in respect of India; 0,1% and 1,2% in respect of the Republic of Korea; 95,6% (residual 95,6%) in respect of Mexico; 27,9% and 48,3% (residual 48,3%) for Poland; 132% (residual 132%) for South Africa and 51,8% for Ukraine. Injury and causation of injury Certain exporters argued that the injury suffered by the Community industry was caused by its own imports and that these imports had been underestimated in the provisional duty regulation. The level of imports made by the Community industry was recalculated following provisional measures; however, it was found to only be 4,4% of consumption in the investigation period. This level of imports was not considered such as to be the cause of the injury suffered by the Community industry. It was also argued by certain exporters that the period during which the situation of the Community industry was analysed (i.e. 1 January 1994 to 31 March 1998) did not allow for a proper assessment on the basis that 1994 was an unrepresentative year. This, however, was not substantiated given that an analysis beginning in 1995, as suggested, revealed a similar development. Certain exporters argued that the categorisation used for describing steel wire ropes did not allow a proper and meaningful price comparison. This argument was rejected on the basis that additional elements, or elements not included in the product categorisation, did not have a significant impact on the injury calculations. The causal link between the dumped imports and the material injury suffered by the Community industry, established in the provisional duty regulation, was confirmed. Community interest In the absence of any new arguments, the provisional findings were confirmed. Measures For all countries concerned with the exception of Mexico and South Africa, since the dumping margins were lower than the injury elimination margins, the dumping margins were used to establish the level of the definitive measures. As regards Mexico and South Africa, the level of the definitive measures was based on the injury elimination margins. Definitive ad valorem duties were imposed, however as regards Hungary, India, Mexico, Poland and South Africa, undertakings were accepted by the Commission on a company-by-company basis allowing the exemption of these companies from the duties in force. In the case of Ukraine, the Commission accepted the undertaking, which was offered by the company in conjunction with the undertaking offered by the Ukrainian authorities. 5.2.8. Polyethylene terephthalate (PET) film from India (AS) On 6 December 1999, the Council imposed a definitive countervailing duty on imports of polyethylene terephtalate (PET) film originating in India. The proceeding had been initiated in November 1998 following a complaint lodged by Du Pont de Nemours International SA, Mitsubishi Polyester Film GmbH (formerly Hoechst Diafoil GmbH), Toray Plastics Europe SA and Nuroll Spa. Provisional duties were imposed on 17 August 1999. The investigation confirmed that the total Community consumption in the investigation period (1 October 97 - 30 September 1998) amounted to 211.000 tons. The value of the imports from India during the same period amounted to about 30.000.000 EURO. Subsidisation The Council confirmed that the schemes investigated, i.e.: the Passbook and its successor the Duty Entitlement Passbook, the Export Promotion Capital Goods, the schemes relating to the export promotion zones/export oriented units and a number of Regional schemes involved the granting of countervailable subsidies to the Indian exporters. It was found that some of these schemes benefited at least some of the exporters of the product concerned. The total amount of benefits received by the seven co-operating exporters, during the investigation period, ranged between 3,8% and 19,1%. Injury and causation of injury It was found that the Community industry suffered material injury between 1995 and September 1998, particularly in terms of a reduction in sales prices, market shares and profitability. The Community industry lost 12% of its market share in the investigation period; on the other hand, the market share of imports from India reached almost 10%. The profitability of the Community industry also declined becoming a loss during the investigation period. While other imports than those subsidised from India may have contributed to the difficult state of the Community industry, the substantial increase in imports volume from India and their considerable price decrease and consequent undercutting, taken in isolation, caused material injury to the Community industry. Community interest Some representatives of the users' industry claimed that PET film is an important raw material for them and any duty would jeopardise their competitiveness; these arguments, however, were only supported by a small number of users and not substantiated. On the other hand, the absence of measures could have in the long run threatened the survival of three complaining Community producers, whose sole product is PET film. It was concluded that there were no compelling reasons not to take action against the imports in question in order to restore a competitive market situation of fair pricing practising and prevent further injury to the Community industry. Measures All the investigated Indian exporters benefited from countervailable subsidies. The rates of duty were based on the company-specific subsidy margins, which were lower than the respective injury margins. The rates of duty range from 3,8 to 19,1%. The rate of the residual duty for all other Indian companies was set at 19,1%. 6. Investigations terminated without measures 6.1. Overview In accordance with the provisions of the respective basic Regulations, investigations may be terminated without the imposition of measures if a complaint is withdrawn or if protective measures are unnecessary (i.e. no dumping/no subsidies, no injury resulting therefrom, measures not in the interest of the Community). In 1999, 22 new proceedings were concluded without measures. The ratio of investigations terminated without imposition of measures to the total number of new investigations concluded is around 0,5. An overview of the investigations terminated without measures can be found in Annex F, and a short summary of each case is given below. 6.2. Cases 6.2.1. Laser optical reading systems from Japan, the Republic of Korea, Malaysia, the People's Republic of China and Taiwan The notice of initiation of the anti-dumping proceeding was published on 25 October 1997. The proceeding was initiated following a complaint lodged by the Association for Laser Optical Reading Systems on behalf of the Community industry. Given that the product scope as defined in the notice of initiation, i.e. a Laser Optical Reading System, comprising CD tuners, disc-changers and car radios with a disc control device, implied certain problems as regards the definition of a "system" and a number of other technical issues, the Commission decided not to impose provisional measures but to further continue the investigation. The further investigation showed that the above elements taken together could not be regarded as a "system" forming one single product. The proceeding with respect to the Laser Optical Reading System was therefore to be terminated. However, the Commission services considered it appropriate to investigate the three constituent elements separately. With respect to car radios, the Community industry withdrew the complaint as regards this constituent element. The Commission considered that a termination of the proceeding with respect to car radios would not be against the interest of the Community. Regarding CD tuners, the investigation confirmed the existence of dumping and injury. However, in view of the decreasing market share of the dumped imports and the parallel increasing market share of imports from third countries, it was considered that imports originating in other third countries were breaking the causal link between the dumping and the injury found. Concerning disc-changers, it was found that the Community industry was in a start-up phase. Injurious dumping was established. However, it was considered that it was disproportionate and thus not in the interest of the Community to impose measures. In these circumstances, the proceeding was terminated without imposition of measures on 23 January 1999. 6.2.2. Hardboard from Brazil The notice of initiation of the anti-dumping proceeding was published on 7 November 1997 following a complaint lodged by 8 companies producing more than 50% of the Community output of the like product. Provisional duties were imposed in August 1998. Brazilian exporting producers claimed that imports into the Community from Brazil should not be cumulated with imports from the other countries concerned into the proceeding because their product corresponded to a very different market segment and did not compete with the others. Subsequent to a re-examination after the imposition of provisional measures, this claim was accepted and led to new price undercutting calculation, which showed no price undercutting for Brazil. It was also demonstrated that imports from Brazil were not competing with hardboard produced in the Community on this particular market segment and therefore did not cause injury to the Community industry. In these circumstances, the proceeding was terminated without imposition of measures on 29 January 1999. 6.2.3. Large electrolytic aluminium capacitors from the USA and Thailand The notice of initiation of the anti-dumping proceeding was published on 29 November 1997. The proceeding was initiated following a complaint lodged by the Federation for Appropriate Remedial Anti-Dumping (FARAD) on behalf of the Community industry. According to Article 6(9) of the basic Regulation, an investigation shall be concluded within 15 months of initiation, in accordance with the definitive findings made. In the present proceeding, this period passed without imposition of measures. Since no measures can thereafter be imposed, the proceeding is deemed to be terminated by operation of law. 6.2.4. Polypropylene binder or baler twine from Saudi Arabia The notice of initiation of the anti-dumping proceeding was published on 28 February 1998. The proceeding was initiated following a complaint lodged by the Liaison Committee of European Union Twine, Cordage and Netting Industries (Eurocord) on behalf of the Community industry. Subsequent to the imposition of provisional measures on 1 October 1998, the Commission continued its investigation of dumping, injury and Community interest. In their comments following the disclosure of the provisional findings, the Saudi Arabian exporting producer argued that the Commission should include in its calculations of the injury margin one specific type of baler twine, which represented the majority of Saudi Arabian sales to the UK market. The Commission concluded that the inclusion of these sales would make the calculation more representative and it revised its calculation accordingly. Consequently the revised injury margin for the sole Saudi exporting producer was found to be at a de minimis level. In these circumstances, the proceeding was terminated without the imposition of measures on 15 March 1999. 6.2.5. Polypropylene binder or baler twine from Saudi Arabia (AS) The notice of initiation of the anti-subsidy proceeding was published on 25 July 1998 following a complaint lodged Eurocord on behalf of the Community industry. The investigation showed that the injury margin was less than 2% and therefore any duty would have been below the de minimis level for a developing country such as Saudi Arabia, in accordance with Article 14(5)(a) of Regulation (EC) No 2026/97. In these circumstances it was not necessary to establish findings on subsidies. In these circumstances, the proceeding was terminated without imposition of measures on 28 May 1999. 6.2.6. Stainless steel heavy plates from Slovenia and South Africa The notice of initiation of the anti-dumping proceeding was published on 17 December 1998. The proceeding was initiated following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer) on behalf of the Community Industry. On 4 March 1999, Eurofer formally withdrew its complaint. The Commission could thus decide to terminate the proceeding unless such termination would not be in the Community interest. The investigation did not bring to light any such considerations. In these circumstances, the proceeding was terminated without imposition of measures on 29 May 1999. 6.2.7. Polyester textured filament yarn from India and the Republic of Korea The notice of initiation of the anti-dumping proceeding was published on 21 August 1998. The proceeding was initiated following a complaint lodged by the International Committee of Rayon and Synthetic Fibres (CIRFS). In the course of the investigation, CIRFS withdrew its complaints. The Commission considered that a termination of the proceeding in this context would not be against the interest of the Community. In these circumstances, the proceeding was terminated without the imposition of measures on 16 June 1999. 6.2.8. Polyester textured filament yarn from India and the Republic of Korea (AS) The notice of initiation of the anti-subsidy proceeding was published on 21 August 1998. The proceeding was initiated as a result of a complaint lodged by the International Committee of Rayon and Synthetic Fibres (CIRFS). In the course of the investigation, CIRFS withdrew its complaints. The Commission considered that a termination of the proceeding in this context would not be against the interest of the Community. In these circumstances, the proceeding was terminated without the imposition of measures on 16 June 1999. 6.2.9. Stainless steel wires with a diameter of 1 mm or more from the Republic of Korea (AS) The notice of initiation of the anti-subsidy proceeding was published on 25 June 1998. The proceeding was initiated following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer). Subsequent to the imposition of provisional countervailing duties on 24 March 1999, the investigation showed that the weighted average country-wide subsidy margin for all imports originating in Korea was below the de minimis threshold, i.e. under 2%. In these circumstances, the proceeding was terminated without the imposition of measures on 22 July 1999. 6.2.10. Stainless steel wires with a diameter of 1 mm or more from the Republic of Korea The notice of initiation of the anti-dumping proceeding was published on 25 June 1998. The proceeding was initiated following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer). Given that the provisional dumping margins found were de minimis or close to de minimis, it was decided not to impose provisional measures on imports of stainless steel wires with a diameter of 1 mm or more originating in the Republic of Korea. Since no arguments were put forward by any interested party and the investigation did not lead to any different conclusion, it was concluded that the dumping margins for the Korean exporting producers concerned were de minimis except for two exporters. However, the weighted average country-wide dumping margin for all imports originating in Korea was below the de minimis threshold, i.e. under 2%. In these circumstances, the proceeding was terminated without the imposition of measures on 22 July 1999. 6.2.11. Stainless steel wires with a diameter of less than 1 mm from the Republic of Korea (AS) The notice of initiation of the anti-subsidy proceeding was published on 25 June 1998, following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer). Subsequent to the imposition of provisional countervailing duties on 24 March 1999, the investigation showed that the weighted average country-wide subsidy margin for all imports originating in Korea was below the de minimis threshold, i.e. under 2%. In these circumstances, the proceeding was terminated without the imposition of measures on 22 July 1999. 6.2.12. Stainless steel wires with a diameter of less than 1 mm from the Republic of Korea The notice of initiation of the anti-dumping proceeding was published on 25 June 1998, following a complaint lodged by the European Confederation of Iron and Steel Industries (Eurofer). Subsequent to the imposition of provisional measures on 24 March 1999, the investigation showed that the weighted average country-wide subsidy margin for all imports originating in Korea was below the de minimis threshold, i.e. under 2%. In these circumstances, the proceeding was terminated without the imposition of measures on 22 July 1999. 6.2.13. Steel ropes and cables from the Republic of Korea The notices of initiation of the anti-dumping proceedings concerning imports of steel ropes and cables originating in the People's Republic of China, Hungary, India, Mexico, Poland, the Republic of Korea, South Africa and Ukraine were published on 20 May 1998 and 30 July 1998. The proceedings were initiated following complaints lodged by the Liaison Committee of European Union Wire Rope Industries (EWRIS) on behalf of the Community industry. With regard to the People's Republic of China, Hungary, India, Mexico, Poland, South Africa and Ukraine, definitive measures were introduced in August 1999. As far as the Republic of Korea is concerned, the Commission investigation revealed that in the period 1 January 1997 to 31 March 1998 the dumping margin for steel wire ropes exported from the Republic of Korea was de minimis. In these circumstances, the proceeding was terminated without imposition of measures on 17 August 1999. 6.2.14. Video tapes on reels from the Republic of Korea The notice of initiation of the anti-dumping proceeding was published on 11 March 1999. The proceeding was initiated following a complaint lodged by the Video Pancake Manufacturers Association (VIPAM). In the course of the investigation, VIPAM withdrew its complaint. The Commission considered that the termination of the proceeding in this context would not be against the interest of the Community. In these circumstances, the proceeding was terminated without the imposition of measures on 26 November 1999. 7. Reviews of anti-dumping and anti-subsidy measures 7.1. Overview Anti-dumping measures, including price undertakings, may be subject, under the basic Regulation, to five different types of review: expiry (Article 11(2)), interim (Article 11(3)), newcomer (Article 11(4)), absorption investigations (Article 12) and circumvention investigations (Article 13). Anti-subsidy measures may also be subject to accelerated reviews (Article 20 of the basic anti-subsidy Regulation). These reviews continue to represent a major part of the work of the Commission's anti-dumping services. In the period from 1995 to 1999, a total of 152 review investigations were initiated. These review investigations represented almost 41% of all investigations. In 1999, 40 reviews were initiated. Of these, 13 were expiry reviews, 15 interim reviews, 3 circumvention reviews, 1 newcomer review, 4 absorption reviews and 4 accelerated reviews. An overview of the review investigations in 1999 can be found in Annexes G to L. Table 2 provides statistical information for the years 1995 - 1999. TABLE 2 Reviews of anti-dumping and anti-subsidy investigations During the period 1 January 1995 - 31 December 1999 >TABLE POSITION> 7.2. Expiry reviews Article 11(2) of the basic Regulation provides for the expiry of anti-dumping measures after five years, unless an expiry review demonstrates that they should be maintained in their original form. In 1999, 7 measures (both duties and undertakings) were allowed to expire automatically under Article 11(2). The references for these measures are set out in Annex N. Since the expiry (or "sunset") provision of the basic Regulation came into force in 1985 (Article 15 of the basic Regulations No 2176/84 and No 2423/88, Article 11(2) of the current basic Regulation), a total of 301 measures have been allowed to expire automatically. An overview of the expiry reviews that were initiated or concluded in 1999 can be found in Annex G. It should be noted that some expiry reviews are carried out in parallel with interim reviews, which will allow the amendment of the duty rates. These reviews are marked specifically in the annexes. This section of the report gives a summary of each of these cases. 7.2.1. Expiry reviews initiated 7.2.1.1. Ethanolamine from the USA The notice of initiation of the expiry review was published on 2 February 1999. The review was initiated following a request lodged by the European Chemical Industry Council (CEFIC) on behalf of the Community industry. The request was supported by producers representing a major proportion of the total Community production of ethanolamine. At the same time, the Commission initiated an interim review. The request was based on the grounds that the expiry of the measures would be likely to result in the continuation or recurrence of dumping and injury to the Community industry. The allegation of continuing dumping was based on a comparison of normal value established on the basis of domestic prices in the USA with the export prices of the product concerned to the Community. On this basis, the dumping margins were significant. It was further alleged that export prices were likely to decrease if the measures in the form of a variable duty were allowed to lapse and thus dumping would increase further. With regard to the continuation and likelihood of injury, the complainant alleged and provided evidence that imports from the USA have continued to increase in absolute terms and in terms of market share after the imposition of the existing measures preventing the Community industry to absorb cost increases of the main raw materials and to re-establish its profitability. It was further argued that US producers had expanded their capacities with a continuing trend while domestic demand in the US remained relatively stable and anti-dumping duties had been imposed on the US product in an important third export market giving room for excess production likely to be redirected to the Community at decreasing prices and to aggravate the injury suffered by the Community industry. In view of the allegation of changed circumstances and the likelihood of increased dumping and injury after expiry of the measures, the Commission considered it appropriate to initiate a review pursuant to Article 11(2) and (3) of the basic Regulation. 7.2.1.2. Fluorspar from the People's Republic of China The notice of initiation of the expiry review was published on 4 March 1999. The expiry review was initiated following a request lodged by Eurométaux on behalf of the Community industry. The complainant alleged that if the measures were to expire, the already low prices of Chinese exports would be likely to fall further and to have an additional negative impact on the Community industry's prices and profits given that fluorspar is a commodity product. The Commission also decided to initiate, ex officio, an interim review limited to the form of the measures. 7.2.1.3. Potassium chloride from Belarus, Russia and Ukraine The notice of initiation of the expiry review was published on 23 March 1999. The proceeding was initiated following a request lodged by the European Association of Potash Producers (APEP) on behalf of the Community industry. The complaint was supported by all four Community potash producers. The Commission also decided, on its own initiative, to initiate an interim review, limited to the form of the measures in view of the specific form of the existing measures i.e. a combination of a minimum price and a fixed duty. The review request contained evidence that the expiry of the existing measures would lead to the continuation or recurrence of injurious dumping. It was alleged that potash from the concerned countries was being sold for inward processing, which is not subject to anti-dumping measures, at dumped prices in the Community and at very low prices in neighbouring countries. The supporting evidence also showed the existence of a large spare capacity in the relevant countries that risked being sold on the Community market at dumped prices. The applicant also provided evidence in support of the allegation that the continuation or recurrence of dumping would result in price erosion and cause injury to a Community industry with a precarious profit situation that has recently invested heavily. 7.2.1.4. Silicon carbide from the People's Republic of China, Russia and Ukraine The notice of initiation of the expiry review was published on 10 April 1999. The proceeding was initiated following a request lodged by CEFIC (Conseil européen des fédérations de l'industrie chimique) on behalf of Community producers representing the totality of Community production of silicon carbide. The request was based on the grounds that the expiry of the measures would be likely to result in the continuation or recurrence of dumping and injury to the Community industry. First, imports in the Community of silicon carbide originating in the People's Republic of China, the Russian Federation and the Ukraine would appear to have remained at dumped prices, in spite of the measures in force. Moreover, exports to other unprotected markets, such as the United States of America and the Czech Republic, were also alleged to have been made at dumped prices, with even higher dumping margins. It was further alleged that the production capacity would largely exceed the domestic demand, which would have a downward effect on prices to the Community if measures were allowed to expire. Finally, the applicant submitted that the combination of dumped prices with an increase in import volumes due to the unused domestic production capacity, would inevitably lead to a recurrence of injury and thus threaten the continuation of the production activity of the remaining Community industry. 7.2.1.5. Television camera systems from Japan The notice of initiation of the expiry review was published on 30 April 1999. The proceeding was initiated following a request lodged by Philips Digital Video Systems and Thomson Broadcast Systems, representing 100% of the Community production of television camera systems. The request was based on the grounds that the expiry of the measures would be likely to result in the continuation or recurrence of dumping and injury to the Community industry. The applicant Community industry pointed out that during the period of imposition of the measures, Japanese producers tried constantly to circumvent the measures by absorption practices, by assembly operations in the European Community and by exporting at dumped prices from other locations, and thus to maintain or increase their market share. Therefore, it was most likely that dumping in the European market should be to recur, should measures in force expire. Furthermore, during the investigation in the above-mentioned circumvention investigation, it was found enough evidence that imports of Japan are still dumped, which led to the initiation of an investigation concerning the imports of television camera system parts and elements. It was also likely that, should the measures lapse, the current import levels from Japan would rise considerably. As regards the recurrence of injury, the Community industry claims that although its situation stabilised after imposition of the measures, this stabilisation has only taken place at a level which allows the industry to recover its cost, due to the pressure from absorption and circumvention practices. The present situation of the Community industry could only be maintained as a result of anti-dumping measures in force against Japan, which are currently subject to other anti-dumping investigations. This argument was reinforced by the fact that the Community industry lost 20% of its market share between 1994 and 1998, while imports of television camera systems from the USA produced by a related company to a major Japanese producer raised from 0 to 30% during the same period. Finally, the applicant stated that the Community industry needs to at least maintain its current market share in order to survive, due to the fact that production volume has an important effect on the cost. 7.2.1.6. Magnetic disks (3,5" microdisks) from Hong Kong and the Republic of Korea The notice of initiation of the expiry review was published on 9 September 1999. The proceeding was initiated following a request lodged by the Committee of European Diskette Manufacturers (Diskma) on behalf of the Community industry. The complaint was supported by a total of five companies. By Council Regulation (EC) No 2199/94 of 9 September 1994, a definitive anti-dumping duty was imposed on imports of microdisks originating in Hong Kong and the Republic of Korea. Imports of microdisks originating in the Republic of Korea became subject to an anti-dumping duty of 8,1%. Duties ranging between 6,7% and 27,4% were imposed on imports from Hong Kong. The request alleged that imports from Hong Kong and the Republic of Korea were being made at significantly dumped prices, based on a comparison of constructed normal values in these two countries with the constructed export prices to the Community of the product concerned, and that they would continue to be dumped, should the measures be repealed. With regard to injury, it was alleged that production, which was relocated after the imposition of the anti-dumping duties, could easily be shifted back to Hong Kong and the Republic of Korea. It was further alleged that the export prices from the two countries were below the price level in the Community and that there was widespread overcapacity in Hong Kong and the Republic of Korea. Therefore, should the measures be allowed to lapse, this would lead to increased exports at dumped prices, thereby depressing price levels in the Community and worsening the situation of the Community industry. 7.2.1.7. Potassium permanganate from the People's Republic of China The notice of initiation of the expiry review was published on 11 November 1999. The review was initiated following a request lodged by the European Chemical Industry Council (CEFIC) on behalf of the Community industry. The request was supported by producers representing the totality of Community production of potassium permanganate. The request was based on the grounds that the expiry of the measures would be likely to result in the continuation or recurrence of dumping and injury to the Community industry. The applicant alleged that Chinese exports to other third countries have continued to be made at substantial dumping margins and that the reduction of Chinese exports to the Community following the introduction of the existing measures is corroborating the fact that these exports are not able to penetrate the Community market at non-dumped prices. In view of the fact that normal value for the People's Republic of China will be examined on the basis of the rules set out in Article 2(7)(a) of the basic Regulation, the complainant proposed to base the calculation of dumping on a comparison of a constructed normal value in the USA with the respective export prices to the Community. The applicant further claimed that the expiry of the measures would be likely to result in renewed injury given the existence of spare Chinese capacity which, with other markets subject to import duties, including anti-dumping measures, would most likely be channelled to the Community. Moreover, it was alleged that any recurrence of substantial imports from China would impair the process of recovery of the Community industry which has been generated by the measures imposed with respect to India and Ukraine. 7.2.1.8. Urea ammonium nitrate solution (UAN) from Poland The notice of initiation of the expiry review was published on 21 December 1999. The proceeding was initiated following a request from the European Fertiliser Manufacturers Association (EFMA) on behalf of producers representing a major proportion of the Community industry. By Council Regulation (EC) No 3319/94 of 22 December 1994, a definitive anti-dumping duty was imposed on imports of urea ammonium nitrate solution (UAN) originating, inter alia, in Poland. The duty took the form of a minimum import price or a specific duty. The request for the review alleged that, although imports from Poland had practically ceased, Polish exports to third countries appeared to be substantially dumped. This, in conjunction with significant unutilised production capacity (representing almost 30% of the entire Community consumption), suggested that there was a strong likelihood of dumping recurring should the measures be repealed. At the same time, the Commission also opened ex officio an interim review. 7.2.2. Expiry reviews concluded 7.2.2.1. Magnesium oxide from the People's Republic of China On 21 June 1999, the Council imposed a definitive anti-dumping duty on imports of magnesium oxide originating in the People's Republic of China. This followed an investigation that had been initiated following a request lodged by Eurometaux on behalf of the Community Industry to review the measures in force pursuant to Article 11(2) of the basic Regulation. Accordingly, the investigation examined whether there were grounds for concluding that, in the absence of measures, there was a likelihood of a continuation or recurrence of dumping and injury. The investigation showed that the price of the Chinese magnesium oxide, which continued to be imported in substantial volumes in the Community, was still dumped and at a level lower than the Community industry prices. The existence of huge raw material reserves in the exporting country and the big capacity to exploit these reserves suggested that the volume of imports was likely to increase should the measures be allowed to lapse. Furthermore, Chinese export prices to the Community, were close to the minimum price based duties, suggesting that these had had an effect on the price behaviour of the exporters, whilst export prices to other major markets i.e. the USA where no anti-dumping measures existed, were considerably lower. Furthermore, the investigation confirmed that in view of the levy of a significant export tax, Chinese exporters potentially export at prices, which are significantly lower than the minimum price variable duties. As far as the Community industry is concerned, the continued price pressure exerted by the dumped imports had prevented it from fully recovering from the previous injury, although its economic situation had improved in some areas. Nevertheless, it was considered still vulnerable to injurious dumping. Furthermore, the Community interest investigation suggested that the negative impact on magnesium oxide users was rather limited. From the above, it was concluded that if measures were allowed to lapse, dumping and injury were likely to continue and recur and therefore measures should be maintained. 7.2.2.2. Synthetic fibres of polyester from Taiwan On 29 July 1999, the Council imposed a definitive anti-dumping duty on imports of synthetic fibres of polyester originating in Taiwan. The investigation was initiated on 22 October 1997, following a request by the "International Rayon and Synthetic Fibres Committee" on behalf of the Community industry to review the measures in force, pursuant to Article 11(2) of the basic Regulation. The request was based on the grounds that the expiry of the measures was likely to result in the continuation or recurrence of dumping and injury. Two exporting Taiwanese producers covered virtually the total of Taiwanese exports to the Community and were found to import at significant dumping margins. On the basis of their pricing policy, it was concluded that dumping would continue or even increase if the measures were removed. A similar conclusion was arrived at for two Taiwanese companies for which exports to third countries were the majority of their sales volume and which were found to make those exports at dumped prices. Despite a certain upward price pressure of the anti-dumping measures in force, the exporting producers' price undercutting level remained important, while the volume of imports and the Taiwanese market share increased significantly. The Community industry suffered significant price pressure and its financial results showed a downward trend coinciding with the increased presence of imports from Taiwan, which filled the vacuum left by imports from Belarus on which definitive anti-dumping measures were imposed in 1996. During the Community interest investigation, no arguments were submitted by interested parties which would lead to the conclusion that there were compelling reasons not to maintain the measures in force. It was therefore concluded that if measures were allowed to lapse, dumping and injury were likely to continue and to recur and that measures should be maintained. 7.2.3. Expiry reviews terminated 7.2.3.1. Ferro-silicon from Egypt and Poland By Council Regulation (EEC) No 3642/92, anti-dumping duties of 32% on imports of ferro-silicon originating in Egypt and Poland had been imposed. In April 1997, the complainant in the original investigation, the Liaison Committee of the Ferro-Alloy industry (Euroalliages) requested an expiry review under Article 11(2) of the basic Regulation. The notice of initiation was published on 4 July 1997. An investigation was carried out covering the period 1 July 1996 to 30 June 1997. Other measures concerning imports of ferro-silicon originating in Kazakhstan, Russia, Ukraine, Norway, Iceland, Brazil, Venezuela, China and South Africa were in force during the investigation period. Dumping In view of the findings below on the likelihood of a recurrence of injury, no formal finding on dumping was made. Community industry The investigation has shown that the product concerned had not changed. Due to the measures in force, the situation of the Community industry had recovered: the market share of the Community industry was 16,1% in the investigation period compared to 13,6% in 1993, the Community industry's prices had increased by 28%, and turnover by 53% while the average profitability level was 12,2%. It was concluded that the Community industry was no longer suffering injury. It was also established that imports from Egypt and Poland taken together remained significant and were made at prices slightly undercutting those of the Community industry during the investigation period, but were well above the non injurious prices established in the original investigation. Recurrence of injury Because the Community industry was not suffering injury during the investigation period, no dumping finding was made. The possible recurrence of injury was examined. As regards Egypt, it was assessed that capacity utilisation was very high, that the Community share of Egyptian exports had fallen from 68% in 1995 to 45% and that the market share of Egyptian imports was small (1,8% in the investigation period). As there was no plans to expand capacity in Egypt, the threat of recurrence of injury from Egyptian exports was judged minor. In Poland, there was one exporting producer whose capacity utilisation was 93% during the investigation period. The Community represented 45% of its sales (i.e. 4,8% of all Community imports of ferro-silicon). The Commission examined the possibility of a change in the distribution of the Polish exporting producer and especially a possible collapse in domestic demand due to the restructuring of the Polish steel industry prior to any accession to the EU. It was found that this was not expected to happen, because production statistics were showing a steady rise in steel production in Poland. Neither was it expected that exports to non-Community countries would be redirected to the Community market in the absence of measures because they were done at prices slightly above prices to the Community. It was concluded that Polish exports to the Community were not expected to further increase in the near future. It was therefore concluded that it was unlikely that the Community market for ferro-silicon would be affected by exports from Egypt and Poland to an extent that injury would re-occur and therefore measures against imports from these countries were allowed to elapse. 7.2.3.2. Synthetic fibres of polyester from the Republic of Korea On 29 July 1999, the Council terminated the proceeding in respect of imports of synthetic fibres of polyester originating in the Republic of Korea. The investigation was initiated on 22 October 1997, following a request by the "International Rayon and Synthetic Fibres Committee" on behalf of the Community industry to review the measures in force, pursuant to Article 11(2) of the basic Regulation. The request was based on the grounds that the expiry of the measures was likely to result in the continuation or recurrence of dumping and injury. The measures under review were based on dumping margins established in the previous investigation which, at the exception of the residual dumping margin, would be considered de minimis under the current basic Regulation. The level of the original margins was low and that situation did not change. Indeed, in the current investigation, the weighted average dumping margin, expressed as a percentage of the CIF Community frontier import price, was 1,8%. No indication was found that the removal of the measures in force would lead to a change in this situation and it was concluded that there was no likelihood of recurrence of dumping. Since a continuation of protective measures was considered unnecessary, the proceeding was terminated. 7.3. Interim reviews Article 11(3) of the basic Regulation provides for the review of measures during their period of validity on the initiative of the Commission, at the request of a Member State or, provided that at least one year has elapsed since the imposition of the definitive measure, following a request containing sufficient evidence by an exporter, an importer or by the Community producers. In carrying out the investigation, it is being considered, inter alia, whether the circumstances with regard to dumping and injury have changed significantly. Reviews can be limited to dumping or injury aspects. In 1999, 15 interim reviews were initiated under Article 11(3) of Council Regulation (EC) No 384/96. An overview of these reviews can be found in Annex H. This section of the report gives a summary of each of these cases. 7.3.1. Interim reviews initiated 7.3.1.1. Ethanolamine from the USA The notice of initiation of the interim review was published on 2 February 1999, in parallel with the initiation of an expiry review. The review was initiated following a request lodged by the European Chemical Industry Council (CEFIC) on behalf of the Community industry. The request was supported by producers representing a major proportion of the total Community production of ethanolamine. The grounds for the interim review were based on the producers' allegation of changed circumstances whereby the expiry of the measures would result in increased dumping and injury. Further details on the investigation can be found under 7.2.1.1. 7.3.1.2. Fluorspar from the People's Republic of China The notice of initiation of the interim review was published on 4 March 1999. At the same time, the Commission initiated an expiry review following a request lodged by Eurométaux on behalf of the Community industry (see point 7.2.1.2.). The grounds for the interim review were based on the applicant's allegation that the effectiveness of the measures to remove injury could also be due to the form of the duty, i.e. the minimum import price. The interim review was limited to the issue of whether the form of the duties should be adapted in order to ensure the effectiveness of the measures. 7.3.1.3. Personal fax machines from Japan and Singapore The notice of initiation of the interim review was published on 6 March 1999. The decision to initiate this review was based on a Commission declaration before the Council, made during the discussion regarding the approval of the definitive measures. In this declaration, the Commission pledged to re-examine the existing measures concerning Japan and Singapore if the exporters concerned would submit evidence showing that the volume of the imports concerned into the Community was not such as to contribute substantially to the injury suffered by the Community industry. On the basis of preliminary information received from several producers/exporters in the countries concerned, the Commission considered that there were sufficient grounds to exceptionally warrant the initiation of an early interim review of the existing measures concerning Japan and Singapore. 7.3.1.4. Seamless pipes and tubes of iron or non-alloy steel from Russia The notice of initiation of the interim review was published on 13 March 1999. The proceeding was initiated following a request from Russian exporters of seamless pipes and tubes for the Commission to accept an offer of an undertaking from them. By Council Regulation (EC) No 2320/97 of 17 November 1997, a definitive anti-dumping duty of 26,8% ad valorem was imposed on imports of certain seamless pipes of iron or non-alloy steel originating, inter alia, in Russia. At the time of the original investigation, some Russian exporters had offered an undertaking that was not accepted by the Commission as it did not contain the necessary guarantees on the part of the Russian authorities to allow adequate monitoring. However, the above-mentioned regulation provided for the anti-dumping measures in respect of Russia to be modified if ever there were a change in circumstances such that the conditions for the acceptance of an undertaking were met. The Russian authorities subsequently came forward and provided the Commission with what appeared to be sufficient guarantees to allow for the adequate monitoring of an undertaking. Consequently, the Russian exporters requested the Commission to accept such an undertaking, and a review, limited in scope to the examination of the acceptability of an undertaking from the Russian exporters concerned, was opened accordingly. 7.3.1.5. Potassium chloride from Belarus, Russia and Ukraine The notice of initiation of the interim review was published on 23 March 1999. It was initiated on the Commission's own initiative and is limited to the form of the measures in view of the specific form of the existing measures i.e. a combination of a minimum price and a fixed duty. An expiry review proceeding was initiated in parallel following a request lodged by the European Association of Potash Producers (APEP) on behalf of the Community industry. Further details can be found under 7.2.1.3. 7.3.1.6. Polyester textured filament yarn (PTY) from Taiwan The notice of initiation of the interim review was published on 21 May 1999. The interim review of the definitive anti-dumping duty imposed by Council Regulation (EEC) No 3905/88 as amended by Regulation (EC) No 1074/96 on imports of PTY originating, inter alia, in Taiwan was initiated following a request by LeaLea Enterprise Co., Ltd. a Taiwanese exporting producer of PTY subject to the anti-dumping measures in force. The request is limited in scope to the examination of dumping as far as the applicant is concerned. The applicant's request was based on the grounds that a review of the measures would be likely to result in a repeal or a reduction of the current anti-dumping duty applicable to it. The applicant's request contained sufficient prima facie evidence showing that circumstances, on the basis of which the measures in force were established, have changed and that this change is ongoing. The applicant alleged that these changed circumstances have led to a considerable reduction of its normal value and an increase of its export price so that the continued imposition of the measures to it is no longer necessary to counteract dumping. 7.3.1.7. Microwave ovens from the Republic of Korea The notice of initiation of the partial interim review of the anti-dumping measures applicable to imports of microwave ovens originating in the Republic of Korea was published on 15 June 1999 following a satisfactory request made pursuant to Article 11(3) of the basic Regulation by the Korean exporting producer, LG Electronics Inc. The request was limited in scope to an examination of whether the continued imposition of the duty at its current level was necessary to offset dumping for the company concerned. The notice initiating the review investigation also invited other exporting producers in Korea that wished to have their rates of anti-dumping duty reviewed to contact the Commission and provide sufficient evidence that the continued imposition of the measure imposed against them at the current level was no longer necessary to offset dumping. In this regard, only one other Korean company, namely Daewoo Electronics Co. Ltd, requested to be included in the review and provided sufficient prima facie evidence of changed circumstances. Accordingly, the company was admitted to the review proceeding. The investigation is ongoing. 7.3.1.8. Magnetic disks (3,5" microdisks) from Taiwan The notice of initiation of the interim review was published on 26 June 1999. The proceeding was initiated following a request from CIS Technology Inc., a Taiwanese company which said it produced and sold for export to the Community the product concerned. The request contained sufficient prima facie evidence that a significant change in circumstances had taken place, the alleged effect of which was that the applicant's exports to the Community were no longer made at dumped prices. It was argued that, since the original period of investigation, structural changes had occurred in the Taiwanese market for the product concerned, resulting in a considerable growth of domestic demand and supply, increased competition, and substantial depression of domestic market prices, and that these changes are of a lasting nature. In this context, the applicant claimed to have considerably increased its domestic sales of the product concerned and to have eliminated the differential between its domestic and export prices. As the applicant did not submit any request concerning changed circumstances with regard to injury, the review is limited to dumping. 7.3.1.9. Tube or pipe fittings, of iron or steel from Thailand The notice of initiation of the interim review was published on 22 July 1999. The review was initiated following a request made by BKL Fittings Ltd. an importer, and by its related Thai supplier, Thai Benkan Co., LTD. The applicant claimed and provided evidence of changed circumstances resulting in a reduction of his normal value and an increased its export price to the extent that the continued imposition of the measures to counteract dumping is no longer necessary. The request is limited in scope to the examination of dumping. 7.3.1.10. Polyester textured filament yarn (PTY) from Malaysia The notice of initiation of the interim review was published on 30 July 1999. The interim review was initiated following a request by Hualon Corporation (M) Sdn.Bhd., a Malaysian exporting producer of PTY subject to the anti-dumping measures in force. The request is limited in scope to the examination of dumping as far as the applicant is concerned. The applicant's request was based on the grounds that a review of the measures would be likely to result in a repeal or a reduction of the current anti-dumping duty applicable to it. The applicant in its request for an interim review submitted sufficient prima facie evidence showing that circumstances on the basis of which the measures in force were established have changed and that these changes are of a lasting nature. The applicant alleged that these changed circumstances have led to a stable or slightly reduced normal value for the product concerned and a considerable increase of its export price so that the continued imposition of the measures to it is no longer necessary to counteract dumping. 7.3.1.11. Bicycle parts from the People's Republic of China Regulation (EEC) No 2474/93 imposed definitive anti-dumping duties on bicycles originating in the People's Republic of China. Following an anti-circumvention investigation, the Council extended, by Regulation (EC) No 71/97 the anti-dumping duty on imports of bicycles originating in China to imports of, inter alia, bicycle frames, forks and complete wheels originating in China. On 5 November 1999, three proceedings were initiated concerning imports of frames, forks and complete wheels of bicycles originating, inter alia, in the People's Republic of China. An interim review was opened at the same time because, in the event of measures being imposed on bicycle frames, forks and complete wheels, the continued extension of the measures imposed by Regulation (EEC) No 2474/93 to the above bicycle parts would no longer be appropriate, and Regulation (EC) No 71/97 would have to be amended or repealed accordingly. 7.3.1.12. Urea ammonium nitrate solution from Poland By Council Regulation (EC) No 3319/94 of 22 December 1994, a definitive anti-dumping duty was imposed on imports of urea ammonium nitrate solution originating, inter alia, in Poland. The duty took the form of a minimum import price or a specific duty. A notice of initiation of an expiry review was published on 21 December 1999 (see point 7.2.1.8). At the same time, the Commission also opened ex officio an interim review, limited to the form of the measures, in order to allow their possible adaptation in the event of a concurrent anti-dumping case concerning imports of urea ammonium nitrate originating in Algeria, Belarus, Lithuania, Russia, the Slovak Republic and Ukraine resulting in a form of measures different from the one currently in force in respect of Polish imports. 7.3.2. Interim reviews concluded 7.3.2.1. Calcium metal from the People's Republic of China and Russia On 5 January 1996, the Commission initiated an interim review of the definitive anti-dumping measures imposed by Council Regulation (EC) No 2557/94 of 21 October 1994. The reasons for the interim review were that the Council considered it appropriate that the Commission should undertake a review after one year in view of the specific circumstances of the market for calcium metal and in particular to examine the effects of the measures in force on the general development of the market. After the investigation, the Commission services found that continuation of the imposition of measures was warranted in view of the general development of the market for calcium metal. On 9 April 1999, the Council imposed reduced anti-dumping duties of 59,6% for China and 59,5% for Russia through the publication of Council Regulation (EC) No 733/99. The decrease in duty rate is due to a downward adjustment resultinf from a fall in production costs of the Community industry. 7.3.2.2. Salmon (AD/AS) from Norway On 22 December 1998, the Commission initiated, ex officio, an interim review of the form of the anti-dumping and countervailing duties imposed on imports of farmed Atlantic salmon. The investigation confirmed that the downward market price pressure towards an injurious level, which had been noted by the Commission, was caused, to a large extent, by Norwegian exporters that were not bound by price undertakings. It was established that these exporters had started to sell salmon to the Community during the second semester of 1998 at prices below the non-injurious price level, even after payment of the anti-dumping and countervailing duties. To maintain their market share, other exporters bound by undertakings (and accounting for more than 80% of exports) would have had to lower their prices to compete with these cheap imports and consequently violate their undertakings. This situation consequently gave an unfair advantage to those exporters which had not offered undertakings, or whose undertakings had previously been withdrawn. The Community industry, the Norwegian Government and the Norwegian producers and exporters associations all shared this assessment and by and large agreed that the measures in place at that time should be reinforced to ensure that salmon could not be sold at an injurious price level. Council Regulation (EC) No 772/1999 was therefore published which combined the existing specific and ad valorem duties with minimum prices for the respective presentations of salmon (e.g. gutted head-on, gutted head-off etc) thus ensuring that non-injurious price levels would have to be respected by all imports. 7.3.2.3. Personal fax machines from Japan and Singapore By Regulation (EC) No 904/98, the Council imposed a definitive anti-dumping duty on imports of personal fax machines originating, inter alia, in Japan and Singapore. On 6 March 1999, the Commission decided on its own initiative to initiate an interim review pursuant to Article 11(3) of the basic Regulation. The decision to initiate the review followed a declaration made by the Commission and annexed to the Minutes of the Council session of 27 April 1998. The reason for the declaration was that the investigation showed (respectively) zero or low levels of price undercutting for Japan and Singapore, and that the market shares of the two countries had to be assessed on the basis of estimates, due to the absence of sufficient co-operation. The review has been limited to the issues of the import volumes and market shares on the Community market. However, the limited information submitted by the interested parties in the course of the investigation was not such as to provide evidence for the Commission to depart from the findings of the original anti-dumping investigation regarding import volumes and market share for Japan and Singapore. Under these circumstances, the Commission decided to terminate the anti-dumping review. The above-mentioned anti-dumping measures remain in force. 7.3.2.4. Ferro-chrome (low carbon) from Kazakhstan, Russia and Ukraine By Regulation (EEC) No 2717/93, the Council imposed a definitive anti-dumping duty on imports of ferro-chrome with a carbon content by weight of maximum 0,5% originating in Kazakhstan, Russia and Ukraine. On 2 October 1998, the Commission initiated, on its own initiative, a review pursuant to Article 11(3) of the basic Regulation, together with an expiry review (see point 7.2.1.following a request of the Community industry. The interim review was limited to the clarification of the product coverage of the measures, as they did not specify the minimum chromium content of the product investigated. In application of notes 1(c) and 1(g) of Chapter 72 of the Combined Nomenclature, certain products having a chromium content of more than 10% are also classifiable in CN codes 7202 49 10 and 7202 49 50 and are, hence, subject to the above-mentioned anti-dumping duty. However, in the course of the interim review investigation, it was established that low carbon ferro-chrome obtained from alloy steel scrap with a chromium content up to 30% differs significantly from the product investigated in several respects. These differences are, in particular, that the low chromium product is obtained from different ingredients, that its chromium content as well as its price is considerably lower than that of the product investigated, and that it can only be used in the first stage of stainless steel production, i.e. for the preparation of the primary crude alloy steel melt. It was therefore concluded that imports of ferro-chrome with a carbon content by weight of maximum 0,5% with a chromium content lower than 30% should not be included in the product covered by the measures. In other words, the product covered by the definitive anti-dumping measures against imports originating in Kazakhstan, Russia and Ukraine is ferro-chrome with a carbon content of maximum 0,5% and a chromium content by weight of 30% and more. It was also considered appropriate that the findings be applied from the date of the entry into force of the definitive Regulation, i.e. 2 October 1993. The review, however, does not affect the date on which Regulation (EC) No 2717/93 will expire. 7.3.2.5. Magnetic disks (3,5" microdisks) from Japan, Taiwan, the People's Republic of China, Hong Kong, the Republic of Korea, Malaysia, Mexico, U.S.A. and Indonesia A request for an interim review of Regulation (EEC) No 2861/93 by which the Council imposed definitive anti-dumping duties on imports of certain magnetic disks (3,5" microdisks) originating, inter alia, in Japan was received from Sony Corporation and Fuji Photo Film Co Ltd. The review was initiated on 17 December 1998. The request claimed that the new generation of 3,5" microdisks with storage capacities of more than 120 megabytes, and based on different technologies, could not be considered to form a single product with conventional 3,5" microdisks. Several measures were currently in force imposing definitive anti-dumping duties on 3,5" magnetic disks originating in Japan, Taiwan, the People's Republic of China, Hong Kong, the Republic of Korea, Malaysia, Mexico, the United States of America and Indonesia. All these measures were taken into account for the review. The investigation showed that a clear dividing line exists in term of physical and technical characteristics between conventional and higher capacity 3,5" microdisks. The latter represent a leap in technology, their physical characteristics are different as well as the equipment needed to use them being different from those of conventional 3,5" microdisks. It was concluded that all 3,5" microdisks with capacities of 120 Megabytes or more and which incorporate either the magnetic servo tracking technology or the optically continuous servo tracking technology should be excluded from the scope of the measures in force with effect from the date of publication of the notice of initiation of the review. The Regulations (EEC) No 2861/93, (EC) No 2199/94, (EC) 663/96, (EC) 1821/98 and (EC) No 1335/1999 imposing definitive measures were amended accordingly. 7.3.2.6. Furfuraldehyde from the People's Republic of China A request for an interim review of the measures imposed by Council Regulation (EC) No 95/95 on imports of furfuraldehyde originating in the People's Republic of China was lodged by a Chinese exporter, the China National Chemical Import and Export Corp. (Sinochem) pursuant to Article 11(3) of the basic Regulation. The review was initiated on 24 July 1997. The main grounds for the review application were based on the allegations that, due to the increase in prices of imports originating in China, an anti-dumping duty was no longer necessary to offset dumping. Furthermore, a substantial change in the structure of the Community industry had occurred as a result of the appearance (after the accession of Austria) of a new Community producer, which improved the overall situation of the Community industry. The investigation showed that the alleged changes in circumstances of dumping and injury were not supported by the findings. It was therefore concluded by Council Regulation (EC) No 2722/1999 of 17 December 1999 that measures should be maintained in their present form and at their present level. It was considered, however, that the duration of the reviewed measures should be limited to four years, taking into account the fact that the normal twelve-month period for completion of the investigation was exceeded due to the numerous difficulties encountered in establishing the findings. 7.4. Newcomer reviews Article 11(4) of the basic Regulation allows for a review to be carried out in order to determine individual margins of dumping for new exporters in the exporting country in question which did not export the product during the investigation period. Such parties have to show that they are genuine new exporters, i.e. that they are not related to any of the exporters or producers in the exporting country, which are subject to the anti-dumping measures, and that they have actually exported to the Community following the investigation period, or that they have entered into an irrevocable contractual obligation to export a significant quantity to the Community (newcomer or new exporter review). When a review for a new exporter is initiated, the duties are repealed with regard to that exporter, though its imports are made subject to registration under Article 14(5) in order to ensure that, should the review result in a determination of dumping in respect of such an exporter, anti-dumping duties may be levied retroactively to the date of the initiation of the review. An overview of these reviews can be found in Annex I. This section of the report gives a summary of each of these cases. In 1999, 1 newcomer review was initiated. Since the Commission carried out the first review of this type in 1990, a total of 22 investigations have been initiated. 7.4.1. New exporter reviews initiated 7.4.1.1. Handbags (leather) from the People's Republic of China A Commission Regulation initiating a review of the anti-dumping measures applicable to imports of leather handbags originating in the People's Republic of China in respect of five new exporters was published on 23 January 1999. 7.4.2. New exporter reviews concluded 7.4.2.1. Polyethylene/polypropylene sacks and bags from India By Regulation (EC) No 1950/97, the Council imposed, inter alia, a definitive anti-dumping duty of 36,0% on imports of sacks and bags made of polyethylene or polypropylene originating in India. On 17 April 1998, the Commission initiated a new exporter review following the receipt of applications from 4 Indian exporters. The review was limited to the scope of dumping. Based on the findings of the investigation, the Commission considered that imports into the Community of sacks and bags produced and exported by the companies concerned should not be subject to an anti-dumping duty. The above-mentioned regulations was amended accordingly. 7.4.2.2. Magnetic disks (3,5" microdisks) from Indonesia This newcomer review was initiated in October 1998 by Commission Regulation (EC) No 2152/98. Because of the company's lack of co-operation, the Commission was unable to establish whether the company was indeed a newcomer or to calculate the level of dumping, and findings were therefore made in accordance with Article 18(1) of the basic Regulation. Accordingly, it was concluded that imports into the Community of certain magnetic disks (3,5" microdisks) produced and exported by the company PT Betadiskindo Binatama should be subject to the country-wide duty (41,1%) imposed by Council Regulation (EC) No 1821/98 and that that rate of duty should therefore be re-imposed. The review was terminated by Council Regulation 1335/1999 of 21 June 1999. 7.5. Absorption investigations The possibility of "absorption" reviews, which deal with situations where the exporters directly or indirectly bear the cost of the duty and thereby increase the dumping margin without leading to sufficient movement in resale prices, was incorporated into the basic Regulation of 1988 under Article 13(11), and is now included in Article 12 of Regulation (EC) No 384/96. In 1999, 4 new investigations were initiated. An overview of these investigations can be found in Annex J. This section of the report gives a summary of each of these cases. 7.5.1. Anti-absorption investigations initiated 7.5.1.1. Ring-binder mechanisms from the People's Republic of China The notice of initiation of the anti-absorption investigation was published on 19 January 1999. The review was initiated following a request lodged on behalf of Community producers whose collective output of ring-binder mechanisms constitutes a major proportion of the total Community production of that product. The request was based on the grounds that the resale and subsequent selling prices in the European Community of the product under consideration do not adequately reflect the level of the anti-dumping measures imposed. It was also argued that in major Community markets, exporters discounted their prices immediately after the imposition of measures by 15% to 30% compared to the prices prevailing during the period of the original investigation. It was further alleged that the insufficient movement of resale and subsequent selling prices after the imposition of measures has led to the continued erosion of prices obtained by the Community industry. In view of the above allegations, the Commission considered that there was sufficient information to justify the initiation of a review pursuant to Article 12 of the basic Regulation. 7.5.1.2. Stainless steel fasteners & parts thereof from Malaysia and Thailand The notice of initiation of the anti-absorption investigation was published on 6 May 1999. The proceeding was initiated following a request lodged by the European Industrial Fasteners Institute (EIFI), on behalf of Bulnava srl., Inox Viti snc di Cattinori Enrico e Bruno, Trafilerie e Viterie Italiane (Tevi) srl, Tornillería del Besos (Torbesa) SA and Ugivis SA, whose combined output constitutes a major proportion of the Community production of the product concerned. The complainant submitted sufficient information showing that the anti-dumping duties imposed on stainless steel fasteners and parts thereof originating in Malaysia and Thailand have led to no movement, or insufficient movement, in resale prices or subsequent selling prices in the Community, and that this indicated that the anti-dumping duties have been borne, wholly or partly, by the respective producers/exporters. The information supplied indicated that the average import price level either did not change in any significant manner (Thailand), or in some cases, even decreased (Malaysia), notwithstanding the imposition of the anti-dumping duties. In addition, it was alleged that the volume of imports into the Community of the product concerned originating in Malaysia and Thailand increased despite the imposition of the anti-dumping duties. 7.5.1.3. Magnesium (unwrought, unalloyed) from the People's Republic of China A notice of initiation of the anti-absorption investigation was published on 4 September 1999. The proceeding was initiated following a request lodged by the Comité de Liaison des Industries de Ferro-Alliages (Euro Alliages) on behalf of the sole known Community producer of unwrought unalloyed magnesium (Pechiney Electrometallurgie). The applicant submitted sufficient information showing that the anti-dumping duties imposed have led to no movement, or insufficient movement, in resale prices or subsequent selling prices in the Community, and that this indicates that the anti-dumping duties have been borne, wholly or partly, by the respective producers/ exporters. The request contained evidence that the resale and subsequent selling prices in the Community of the product concerned do not adequately reflect the level of the anti-dumping measures imposed. In addition, it is claimed that following the imposition of measures, exporters related to Community importers have discounted their prices to those importers to such an extent that, even after payment of the ad valorem duty, import prices have remained below the level of the minimum import price, thereby resulting in continued injury to the Community industry. 7.6. Circumvention investigations The possibility of investigations being re-opened in circumstances where evidence is brought to show that anti-dumping measures are being circumvented was introduced by Article 13 of the basic Regulation. Circumvention is defined as a change in the pattern of trade between third countries and the Community which stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. Assembly operations, whether in the Community or a third country, may fall under this definition, as stipulated in Article 13. According to this article, anti-dumping duties may be extended to imports from third countries of like products, or parts thereof, if circumvention is taking place. In 1999, the Commission initiated 3 new anti-circumvention investigations. An overview of these investigations are given in Annex K. This section of the report gives a summary of each of these cases. 7.6.1. Anti-circumvention investigations initiated 7.6.1.1. Magnetic disks (3,5" microdisks) from the People's Republic of China and Taiwan This investigation was initiated on 28 July 1999, following a request lodged by the Committee of European Diskette Manufacturers (Diskma). The applicant had provided sufficient prima facie evidence that at least one assembly operation using parts from the People's Republic of China and/or Taiwan had started or substantially increased after to the imposition of the measures, the value of the Taiwanese and Chinese parts was alleged to constitute 60% or more of the total value of the parts of the assembled product, and the value added to the parts brought in, during the assembly or completion operation in the Community, was claimed to be not greater than 25% of the manufacturing cost. Moreover, it was alleged that the prices at which microdisks assembled from Chinese and Taiwanese parts were sold in the Community were lower than the non-dumped level of the export price and that the circumvention was severely undermining the remedial effects of the existing anti-dumping duties in terms of the quantities and prices of the assembled like product. 7.6.1.2. Tube and pipe fittings of iron or steel from the People's Republic of China This investigation was initiated on 30 July 1999, following a request lodged by the Defence Committee of the EEC steel butt-welding fittings industrie on behalf of producers representing approximately 90% of the Community production. The request contained sufficent prima facie evidence that the anti-dumping measures on imports of tube and pipe fittings of iron or steel originating in the People's Republic of China are being circumvented by imports of the same tube and pipe fittings transhipped through Taiwan. 7.6.2. Anti-circumvention investigations concluded 7.6.2.1. Lighters (refillable and non-refillable) from the People's Republic of China This proceeding was initiated on 8 May 1998, following a request lodged by the European Federation of Lighter Manufacturers on 24 March 1998. Firstly, with regard to imports of disposable, non-refillable flint lighters originating in the People's Republic of China, which, after having been the subject of slight modifications were declared as refillable or reflintable flint lighters although in practical terms they were not, it was found that there had been a change in the pattern of trade stemming from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the existing duty. Furthermore, there was evidence that the remedial effects of the duty were being undermined and there was evidence of dumping in relation to the normal values previously established. Secondly, with regard to imports of disposable, non-refillable flint lighters originating in the People's Republic of China, transhipped via Hong Kong, Macao and Taiwan respectively, it was found that: (i) the undermining, if any, of the remedial effects of the existing measures was not considered to be significant for imports from Hong Kong and (ii) for the sole producer in Macao, the parts from the People's Republic of China constituted less than 60% of the parts of the assembled product, however, (iii) for Taiwan, there had been a change in the pattern of trade stemming from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the existing duty. Furthermore, there was evidence that the remedial effects of the duty were being undermined and there was evidence of dumping in relation to the normal values previously established. As a result, on 25 January 1999, the Council extended the definitive anti-dumping duty, imposed by Regulation (EEC) No 3433/91 on imports of gas-fuelled, non-refillable pocket flint lighters originating in the People's Republic of China to imports of certain disposable refillable pocket flint lighters originating in the People's Republic of China or consigned from or originating in Taiwan and to imports of non-refillable lighters consigned from or originating in Taiwan. The proceeding was terminated on the same date with regard to imports of non-refillable lighters consigned from Hong Kong and Macao. 7.6.2.2. Television camera systems from Japan This proceeding was initiated on 5 June 1998, following a request lodged by Philips Broadcast Television Systems bv. In the course of the investigation, by letter dated 17 December 1998, Philips Broadcast Television Systems bv. formally withdrew the complaint. The investigation had not brought to light any considerations showing that such termination would not be in the Community interest and no comments were received from interested parties indicating that such termination would not be in the Community interest. In these circumstances, the proceeding was terminated without imposition of provisional measures on 12 February 1999. 7.7. Accelerated review investigations Article 20 of Council Regulation (EC) No 2026/97 on protection against subsidised imports from countries not members of the European Community stipulates that any exporter which was not individually investigated during the original investigation for reasons other than a refusal to co-operate with the Commission, can request an accelerated review. This enables the Commission to promptly establish an individual countervailing duty rate for that exporter. The Advisory Committee is consulted and Community producers are given an opportunity to comment. An overview of these investigations is given in Annex L. This section of the report gives a summary of each of these cases. 7.7.1. Accelerated review investigations initiated 7.7.1.1. Stainless steel bars from India Subsequent to the imposition of definitive anti-subsidy measures in November 1998, the Commission received requests for the initiation of an accelerated review of Regulation (EC) No 2450/98, pursuant to Article 20 of the basic Regulation, from two Indian producers, Sindia Steels Ltd. and Meltroll Engineering Pvt. Ltd., both located in Bombay. The investigation was initiated on 23 January 1999. The companies concerned claimed that they were not related to any other exporters of the stainless steel bars in India. Furthermore, they claimed that they had not exported the product concerned during the original period of investigation (l July 1996 to 30 June 1997), but had exported the product concerned to the Community since then. 7.7.1.2. Stainless steel wire with a diameter of less than 1 mm from India Subsequent to the imposition of definitive anti-subsidy measures in July 1999, the Commission received a request for the initiation of an accelerated review of Regulation (EC) No 1601/99, pursuant to Article 20 of the basic Regulation, from one Indian producer, Nevatia Steel Ltd., Bombay. The investigation was initiated on 15 September 1999. The companies concerned claimed that they were not related to any other exporters of the stainless steel wire in India. Furthermore, they claimed that they had not exported the product concerned during the original period of investigation (l April 1997 to 31 March 1998), but had exported the product concerned to the Community since then. 7.7.1.3. Stainless steel wire with a diameter of 1 mm or more from India Subsequent to the imposition of definitive anti-subsidy measures in July 1999, the Commission received requests for the initiation of an accelerated review of Regulation (EC) No 1599/99, pursuant to Article 20 of the basic Regulation, from two Indian producers, Sindia Steels Ltd. and Nevatia Steel Ltd., both located in Bombay. The investigation was initiated on 9 October 1999. The companies concerned claimed that they were not related to any other exporters of the stainless steel wire in India. Furthermore, they claimed that they had not exported the product concerned during the original period of investigation (l April 1997 to 31 March 1998), but had exported the product concerned to the Community since then. 7.7.1.4. Stainless steel bars from India Following the imposition of definitive anti-subsidy measures in November 1998, the Commission received a request for the initiation of an accelerated review of Regulation (EC) No 2450/98 from one Indian producer, Hindustan Stainless Ltd. in Bombay. The investigation was initiated on 29 October 1999. This company claimed that it was not related to any other exporters of the stainless steel bars in India. Furthermore, it claimed that they had not exported the product concerned during the original period of investigation (l July 1996 to 30 June 1997), but had exported the product concerned to the Community since then. 7.7.2. Accelerated review investigations concluded 7.7.2.1. Stainless steel bars from India Subsequent to the imposition of definitive anti-subsidy measures in November 1998, the Commission received requests for the initiation of an accelerated review of Regulation (EC) No 2450/98, pursuant to Article 20 of the basic Regulation, from two Indian producers, Sindia Steels Ltd. and Meltroll Engineering Pvt. Ltd., both located in Bombay. A review was opened on 23 January 1999. The companies concerned claimed that they were not related to any other exporters of the stainless steel bars in India. Furthermore, they claimed that they had not exported the product concerned during the original period of investigation (l July 1996 to 30 June 1997), but had exported the product concerned to the Community since then. This was confirmed by the investigation. It was concluded that the companies concerned should be considered as new exporters in accordance with Article 20 of Regulation (CE) No 2026/97 and thus individual amounts of subsidy were determined for them. Regulation (EC) No 2450/98 was therefore amended, and the (reduced) duty rates for Sindia Steels Ltd. and Meltroll Engineering Pvt. Ltd of 12% and 5,5% respectively were confirmed and published on 30 September 1999. 8. Monitoring of undertakings Undertakings are a form of anti-dumping or countervailing measures that the Commission accepts if it is satisfied that they can effectively eliminate the injurious effects of dumping or subsidisation. To achieve this goal, exporters normally pledge to raise their prices. The price increase necessary results from the investigation's findings and directly depends on the level of dumping or subsidisation found, or on the injury elimination level, whichever is the lower. To enable the Commission to monitor that undertakings are properly respected, parties to undertakings have to submit regular sales reports, normally every quarter. They also have to provide the Commission with any other information that is considered necessary, and to allow verification of such data and information at their premises, even at short notice. At the beginning of 1999, undertakings accepted from 231 companies were in effect, covering 15 products originating in 16 different countries. Provisional duties were in force against 9 exporters which, the Commission had reason to believe, had violated their undertakings. In 1999, definitive anti-dumping and/or countervailing duties were imposed on 22 companies following breaches of their undertakings. All these cases related to imports of farmed Atlantic salmon originating in Norway. Over the same period, undertakings accepted from 4 companies in 3 cases expired (ammonium nitrate from Lithuania - 1 company; ferro-silicon from Egypt and Poland - 2 companies; urea ammonium nitrate solution from Bulgaria - 1 company). During the course of the year, price undertakings have been accepted from a further 8 companies in 2 new cases (polypropylene binder and baler twine from Poland - 1 company; steel ropes and cables from Hungary, India, Mexico, Poland, South Africa and Ukraine), and from 12 new exporters in 2 existing cases (farmed Atlantic salmon originating in Norway - 7 companies; wooden pallets from Poland - 5 companies). One case in which an undertaking has been accepted from 1 company was under a "sunset-review" (silicon carbide from Russia). This brings the total number of undertakings in force at the end of 1999 to 234. Apart from the significant number of undertakings that the Commission has to monitor, undertakings accepted over recent years have tended to be more complex in nature than before. The number of parties can also be very significant, as can the number of product models or types. In addition, although the current Community legislation retains the possibility of accepting quantitative undertakings (which are easier to monitor than price undertakings), in practice, purely volume based undertakings are no longer accepted. The Commission has, however, taken account of these trends, and allocated additional resources to the monitoring of undertakings for which it is responsible. The aim of the Commission's monitoring is to ensure that the undertakings have the necessary remedial effect and eliminate the injurious dumping and/or subsidisation. The drafting and negotiation of undertakings is geared to this goal. Contacts with the Community industry are actively sought in order to generate the necessary feed back from the market, which helps focus the direction monitoring activities take. In this context, it is considered that whilst the acceptance of an undertaking may have negative implications for the Community budget, because the imports covered by undertakings are exempted from anti-dumping/anti-subsidy duties, it is not the objective of trade policy measures to generate revenue. The potential impact on the Community's own resources cannot, therefore, be a decisive factor either for the acceptance, refusal or withdrawal of undertakings. In 1999, the Commission again conducted numerous verification visits to parties with undertakings or importers in the Community, and took action in 22 cases of breach of undertakings. These increased levels of activity led to two cases being brought before the Court of First Instance (Case T-178/98, Fresh Marine/Commission; Case T-340/99 Arne Mathisen/Council). The Commission also took preventive action to counter an unsatisfactory situation found on the salmon market at the end of 1998 and, by means of an interim review, the form of the duties which underpin the undertakings was significantly strengthened. Finally, it should be emphasised that, to ensure their continued effectiveness, undertakings require constant policing, an activity, however, which does not necessarily lead to formal action being taken and published in the Official Journal. Details can be found in Annex M and an overview of all undertakings in force can be found in Annex P. 9. Refunds Article 11(8) of the basic Regulation allows importers to request the reimbursement of anti-dumping duties collected where it is shown that the dumping margin, on the basis of which duties were paid, has been eliminated, or reduced to a level below the duty in force. The Commission continued to reduce the large portfolio of outstanding refund requests whilst simultaneously dealing with new requests. During 1999, 10 decisions were adopted covering 21 different applications. Of these decisions, one granted the complete refund of duties collected, eight granted partial refunds of duties paid and one decision rejected 12 requests on the grounds that the dumping margin had not been reduced. A further three requests which had been suspended over a long period were withdrawn by the applicants following a satisfactory outcome in the national Courts. One decision was published in the Official Journal of the European Communities as it dealt with a specific policy issue. The admissibility and merits of a further 11 refund cases were also under consideration as the year closed. Two additional refund requests were lodged during the year. Further details can be found in Annex R. 10. Judicial review : Decisions by the Court of Justice/Court of First Instance 10.1. Overview of the judicial reviews in 1999 In 1999, four judgments related to anti-dumping were rendered by the Court of First Instance (CFI) and none by the Court of Justice. All the judgments were in favour of the Community Institutions and confirmed the soundness of the practice in the field of anti-dumping. In addition, as a result of withdrawals, two procedures before the CFI were closed without judgment. Six new cases were lodged in 1999 (12 in 1998), five before the CFI and one before the Court of Justice (Preliminary ruling). One of the cases deals with an anti-subsidy matter. This decrease in the number of cases can be interpreted as a sign that the Community institutions comply not only with the basic Regulations as regards the interested parties' rights, but also with the principles asserted by the case law of the Court of Justice and the CFI. 10.2. Cases pending A list of the anti-dumping / anti-subsidy cases before the Court of Justice and the CFI still pending at the end of 1999 is given in Annex S (20 before the CFI and 4 before the Court of Justice.). Of these, only one concerns anti-subsidy. 10.3. New cases Cases initiated in 1999 deal in particular with the following items: - The retroactive effect of a regulation following a review [12]; [12] T-7/99, Medici Grimm KG v. Council. - The establishment of the existence of material injury and a causal link [13]; [13] T-58/99, Mukand v. Council ; T-104/99, AS Bolderaja & Co v. Council. - The allegedly illegal termination of an expiry review [14]; [14] T-188/99, Euroalliages v. Commission. - Determination of the likely recurrence of an injury [15]; [15] T-188/99, Euroalliages v. Commission. - Reimbursement of anti-dumping duties (Preliminary ruling [16]); [16] C-239/99 ; Nachi Europe v. Hauptzollamt Krefeld. - The assessment of the like product [17]; [17] T-104/99, AS Bolderaja & Co v. Council. - The application of the anti-dumping provisions of a Europe Agreement [18]; [18] T-104/99, AS Bolderaja & Co v. Council. - The assessment of the violation of an undertaking [19]; [19] T-340/99, Arn Mathisen v. Council. 10.4. Judgments rendered by the Court of First Instance 10.4.1. Microwave ovens originating, inter alia, in Thailand - Case T-48/96- ACME Industry & Co. Ltd (Acme) v Council: Judgment of 12 October 1999 By Regulation (EC) No 5/96 of 22 December 1995, the Council imposed definitive anti-dumping duties on imports of microwave ovens originating, inter alia, in Thailand. ACME, the applicant, is a producer of the product concerned and is incorporated under Thai law. Its products are mainly exported through a related Japanese company. The Court dismissed all pleas in law contained in ACME's application. The main arguments of the applicant were all related to the assessment of the normal value: (a) the use of the method described in Article 2(3)(b)(ii) of the basic Regulation [20]; [20] Basic Regulation (EC) No 2423/1988. (b) the incorporation of a 35% import duty in the calculation of the normal value. Concerning the argument in (a), the Court first recalled the method provided by Article 2(3)(b)(ii) and used to determine the constructed normal value. Under this article, the constructed normal value shall include a reasonable amount for selling, general and administrative expenses (SG&A). The basic Regulation enumerates data which must be alternatively used for the calculation of SG&A and concludes that when none of them is available, the calculation shall be made on "any other reasonable basis". In the present case, the Council applied the latter method while the applicant alleged that SG&A should have been assessed on the basis of the expenses and profit incurred by the exporter in Japan. In its judgment, the Court found that the Community Institutions had not committed any manifest error of appreciation in deciding first, that information concerning the exporter was not reliable and second, that the SG&A should be assessed "on any reasonable basis". Concerning the argument in (b), the Court rejected the applicant's claim that it was ill founded to first raise the Thai manufacturing costs by an added 35% import tax on raw materials and to subsequently calculate the Korean mark-up (the choice of Korea in this purpose was also contested by the applicant) on that aggregate basis. In the opinion of the Court, it was justified to calculate the mark-up on the manufacturing costs including the import tax, and, moreover, it was not necessary to neutralise the corresponding increase in the mark-up by the deduction of an amount higher than the actual value of the import tax. 10.4.2. Gas-fuelled, non refillable pocket flint lighters originating in, inter alia, the Philippines - Case T-171/97-Swedish Match Philippines Inc. v. Council: Judgment of 20 October 1999 On 3 March 1997, by Regulation (EC) No 423/97, the Council imposed definitive anti-dumping duties on imports of gas-fuelled, non-refillable pocket flint lighters originating in, inter alia, the Philippines. The Court dismissed all of the Applicant's arguments which alleged breaches of Article 1(1), 3(2), (6) and 20(4) of the basic Regulation. 10.4.3. Ammonium nitrate originating in Russia - Case T-210/95 - European Fertiliser Manufacturers' Association (EFMA) v. Council: Judgment of 28 October 1999 By Regulation (EC) No 2022/95 of 16 August 1995, the Council imposed a definitive anti-dumping duty on imports of ammonium nitrate originating in Russia. EFMA, the representative of the European fertilizer industry, lodged an application for annulment of the regulation on the ground that the choice of a 5% profit margin in calculating the target price was a manifest error of the appraisal of the facts while it had been found it appropriate to use a profit margin of 10% in a previous regional case [21] concerning the same product. [21] Proceedings related to imports of ammonium nitrate from Russia and Lithuania into the UK, Commission Decision (EC) 94/293). The Court of First Instance dismissed the applicant's claim in all aspects. In the substance, the Court found that it would have been incompatible with the former basic Regulation, in particular with Articles 4(1) and 13(3), to assess the profit margin by reference to the margin necessary to ensure the survival of the Community industry and/or adequate return on capital. The Court also concluded that the decision adopted in the regional proceeding was irrelevant in this case on the ground inter alia that although the product at stake was the same, the period of investigation and the production costs differed in those two proceedings. 10.4.4. Certain seamless pipes and tubes of Iron or non-alloy steel originating in Hungary, Poland, Russia, the Czech Republic, Romania and the Slovak Republic - Case T-33 & 34/98-Petrotub & Republica v. Council: Judgment of 15 December 1999 By Regulation (EC) No 2320/97, the Council imposed anti-dumping duties of 9,8% on imports of certain pipes and tubes and non-alloy steel manufactured and exported to the Community by two Romanian exporters, Petrotub and Republica (the applicants). The Court dismissed the application on all grounds as either unfounded or inadmissible. In doing so, it confirmed the practices of the Institutions concerning the implementation of Articles 2 and 3 of the basic Regulation, relating respectively to the calculation of the dumping and the assessment of the injury. The applicants invoked another plea concerning the interpretation of provisions of the Europe Agreement in the context of anti-dumping proceedings. It was argued that the procedure infringed Article 34 of the Europe Agreement with Romania [22]. In the applicants' view, the wording of Article 34(3)(b) [23] would impose on the Institutions the strict obligation to inform first the Association Council at the initiation stage and to refer to it a second time at the provisional stage when the imposition of anti-dumping duty is planned. [22] OJ L 357, 31.12.1994, p1. [23] Article 34(3)(b): the Association Council shall be informed of the dumping case as soon as the authorities of the importing party have initiated an investigation. When no end has been put to the dumping or no other satisfactory solution has been reached within 30 days of the matter being referred to the Association Council, the importing party may adopt the appropriate measures. The Court confirmed the Commission's practice stating that, under the Europe Agreement, there is no obligation, in the sense of its Article 34, on the part of the Commission to make two formal disclosures to the Association Council before the imposition of provisional measures. According to the Court, it suffices to inform the Association Council as soon as the procedure is initiated and to disclose the relevant facts to it in due time to enable it to seek an acceptable solution for both sides. The Court found that this requirement was met if the second formal disclosure to the Association Council occurred no later than 30 days before the adoption of the final regulation. This finding corresponds to the Commission's practice so far. The Court also found that under Article 20 of the basic Regulation, exporters are entitled to be informed of the assessment made in relation to Community interest. In the present case, the Court acknowledged that no mention had been made of the Community interest in the final disclosure to the exporter. However, the Court considered that the Commission had informed the exporter on the Community interest through a disclosure at the stage of the provisional measures. As the assessment of Community interest was unchanged in the definitive regulation, the incompleteness of the final disclosure as regards the Community interest, did not render the definitive regulation unlawful in this case. 11. Anti-dumping and anti-subsidy investigations of third countries concerning imports from EU Member States In 1999, fifteen third countries initiated a total of 31 anti-dumping and anti-subsidy investigations against imports from EU Member States. The Commission's "pro-active" approach in these cases has led to increasing intervention vis-à-vis third-country national investigating bodies. Furthermore, the Commission will continue to pursue violations of the WTO Agreements. However, many EU companies, not used to being involved in investigations, do not always seem to understand the benefits of co-operating with the investigating authorities. It is very difficult for the Commission to intervene in cases of non-co-operation and companies which find themselves subject to investigation therefore need to be encouraged to co-operate fully with the investigating authority of the third country. The Commission is ready to assist Member States and companies, which are involved in an investigation. Nevertheless, it is for companies to defend their own interests by co-operating and, if necessary, appointing legal representation. The benefits of such co-operation can be seen from the cases described in this report. 11.1. Anti-dumping cases against EU Member States The table below gives the number of investigations against EU Member States initiated, on-going and terminated in 1999, as well as the number of measures which were imposed on Community exports during the same year. TABLE 3 Anti-dumping investigations against EU Member States during 1999 >TABLE POSITION> Of the 26 investigations opened against imports originating in the European Union, 10 included the EU as a whole. This is a new trend: in 1998 only two cases (one by Mexico and one by Egypt) were directed against the EU. This transition creates some uncertainty as to the course of action adopted by third countries. Thus, India decided on two occasions to open cases against the EU and some Member States cumulatively, while the Czech Republic initiated a procedure against "the EU namely Germany". The Commission has been advocating a more consistent approach and considers that investigations should be opened either against the EU as a whole or one or more individual Member States, but not both at the same time. Among the 16 remaining investigations, of those which do not cover the whole EU, Germany was the Member State most often affected by anti-dumping proceedings (8), followed by France and Spain (4) and then Italy, the Netherlands, Finland and Austria (2 each). As for the sectors concerned, it is worth noting that an agricultural product (milk) was the target of an anti-dumping proceeding in 1999, by Brazil. Developing countries have become the main users of anti-dumping proceedings against Community products. 11.1.1. Initiations (still at initiation stage) 11.1.1.1. Supertension cable from Germany On 5 February 1999, South Africa initiated an anti-dumping investigation concerning imports of supertension cable from Germany. The preliminary determination issued on 20 August 1999 recommends that the investigation be terminated due to lack of dumping. 11.1.1.2. Sterile synthetic absorbable surgical sutures from Germany On 5 February 1999, South Africa initiated an anti-dumping investigation concerning imports of sterile synthetic absorbable surgical sutures from Germany. 11.1.1.3. X-ray film from Germany On 15 March 1999, Poland initiated an anti-dumping investigation concerning imports of "Retina" X-ray films from Germany. 11.1.1.4. Pure terephtalic acid from Spain On 22 April 1999, India initiated an anti-dumping investigation concerning pure terephtalic acid from Spain. On 22 October 1999, India decided not to impose provisional measures although it was found that pure terephtalic acid had been imported from Spain below normal value and that the Indian industry had suffered injury. The Indian authorities considered that there was inconclusive evidence of a causal link between dumping and injury. Final findings are waited. 11.1.1.5. Pre-sensitised printing plates from the Netherlands On 24 April 1999, the Republic of Korea initiated an anti-dumping investigation concerning pre-sensitised printing plates from the Netherlands. It is interesting to note that the complaint was lodged by Agfa Korea against Fuji Netherlands. On 27 August 1999, the Commission was informed that no provisional measures were taken at this stage. The investigation is on-going. 11.1.1.6. Over-headed aluminium stranded wire or cable with steel core from France On 30 April 1999, South Africa initiated an anti-dumping investigation concerning imports of over-headed aluminium stranded wire or cable with steel core from France. 11.1.1.7. Tin from the Netherlands On 14 May 1999, Colombia initiated an anti-dumping investigation concerning imports of tin from the Netherlands. 11.1.1.8. Structural steel beams from Germany and Spain On 12 July 1999, the USA initiated an anti-dumping investigation on structural steel beams from Germany and Spain. 11.1.1.9. Carton-board from Austria, Spain, Italy and Sweden On 29 July 1999, Argentina initiated an anti-dumping investigation concerning imports of carton-board from Austria, Spain, Italy and Sweden. 11.1.1.10. Oxo alcohol from, inter alia, the European Union On 30 July 1999, India initiated an anti-dumping investigation concerning Oxo alcohol from the European Union. 11.1.1.11. Vitamin-C from the European Union On 10 August 1999, India initiated an anti-dumping investigation concerning Vitamin-C from the European Union upon complaint by India's sole producer of Vitamin-C. The complaint identified exporters in Germany and UK. 11.1.1.12. Insulin products from France and Denmark On 10 August 1999, Brazil initiated an anti-dumping investigation concerning insulin products from France and Denmark. 11.1.1.13. Cars from, inter alia, the European Union On 20 August 1999, Ukraine initiated an anti-dumping investigation concerning imports of passenger cars from, inter alia, the European Union. 11.1.1.14. Milk from, inter alia, the European Union On 25 August 1999, Brazil opened an anti-dumping investigation on milk imports from, inter alia, the European Union. 11.1.1.15. Photographic paper from the UK and France On 27 August 1999, India initiated an anti-dumping investigation concerning photographic paper from the UK and France. 11.1.1.16. Salt from the European Union On 1 September 1999, the Czech Republic initiated an anti-dumping investigation concerning imports of salt for human consumption from the European Union (namely Germany). 11.1.1.17. D-Glucitol (Sorbitol) from the European Union On 13 September 1999, Indonesia opened an investigation into imports of D- Glucitol from the European Union. The complaint identified producers in France, Germany, Belgium and the UK. 11.1.1.18. Methyl methacrylate from Germany, Spain, United Kingdom & France On 14 September 1999, Brazil opened an anti-dumping investigation in relation to methyl methacrylate from Germany, Spain, United Kingdom and France. 11.1.1.19. Polyurethane products from, inter alia, the European Union On 27 September 1999, Ukraine initiated an anti-dumping investigation concerning imports of polyurethane slabs, sheets, films and plates from, inter alia, the European Union. 11.1.1.20. Certain hot-rolled carbon steel plate from, inter alia, Finland On 13 October 1999, Canada initiated an anti-dumping investigation concerning imports of certain hot-rolled carbon steel plate from, inter alia, Finland. 11.1.1.21. Glass microspheres from, inter alia, France and Germany On 29 October 1999, South Africa initiated an anti-dumping investigation concerning imports of glass microspheres from, inter alia, France and Germany. 11.1.2. Provisional measures 11.1.2.1. Cut-to-length steel plate from France and Italy On 29 July 1999, the USA imposed provisional anti-dumping duties, ranging from 3,7% to 29,9%, on cut-to-length steel plate from France and Italy. This investigation was initiated on 16 March 1999. 11.1.2.2. Thermal sensitive paper from Finland, Germany and the European Union On 18 August 1999, India imposed provisional anti-dumping duties at the level of 5,84 and 6,53 Rs/sq.m on imports from Germany. The investigation was initiated on 9 March 1999. 11.1.2.3. Insecticide from Denmark On 15 September 1999, Mexico imposed provisional anti-dumping duties on imports of insecticide from Denmark (39%). This investigation was initiated on 9 February 1999. 11.1.2.4. Sodium cyanide from Germany and the European Union On 20 October 1999, India decided to impose provisional duties of 3.339 Rupees per MT on all exports of sodium cyanide from the European Union (except for one company which had co-operated in the investigation). The investigation was initiated on 8 March 1999. 11.1.2.5. Seamless tubes from Austria On 10 November 1999, India decided to impose provisional duties of 6.876 Rs/MT on imports of seamless tubes from Austria. The investigation was initiated on 21 May 1999. 11.1.3. Definitive measures 11.1.3.1. Acrylic fibre from Spain, Italy and Portugal On 24 December 1998, India imposed definitive anti-dumping duties in the form of minimum prices (74 to 82 Rs/sq.m.) on imports of acrylic fibre from Spain, Portugal and Italy. The investigation was initiated on 7 January 1998. Provisional measures were imposed on 20 October 1998. 11.1.3.2. Filter tipped cigarette tubes from France and Germany On 18 January 1999, Canada imposed definitive anti-dumping measures on filter tipped cigarette tubes from France (average dumping margin 25,1%) and terminated the investigation concerning Germany without measures because of negligible import volume. On 12 April 1999, the French exporter accepted an undertaking. The investigation was initiated on 19 October 1998. 11.1.3.3. Uncoated white cut ream copy papers from Finland On 20 February 1999, Australia imposed anti-dumping measures on uncoated white cut ream A4 copy paper from Finland (until 2004 - except for one company that gave price undertakings), but decided to take no action on A3 paper. The investigation was initiated on 26 August 1998. Please note that, under Australian practice, the level of anti-dumping measures is not made available to other than interested parties as the information is treated as commercial-in-confidence. 11.1.3.4. Cartonboard from Germany On 26 February 1999, Argentina imposed definitive anti-dumping measures on imports of cartonboard from Germany consisting of a minimum price of USD 630 per ton. This investigation was initiated on 27 August 1997. 11.1.3.5. Hypodermic needles from Belgium, Germany, Ireland and Spain On 7 March 1999, South Africa imposed definitive anti-dumping duties of 26,2% on imports of hypodermic needles from Germany and 5,4% on imports from Belgium, Ireland and Spain. The investigation was initiated on 16 January 1998. Provisional measures were imposed on 31 July 1998. 11.1.3.6. Stainless steel plate in coils from Belgium and Italy On 12 May 1999, the USA imposed definitive anti-dumping measures between 9,9 and 45,1% on imports of stainless steel plate in coils from Belgium and Italy. The investigation was initiated on 27 April 1998. 11.1.3.7. Acetaminophenol from France On 18 June 1999, South Africa imposed definitive anti-dumping measures in the form of a minimum price of 58 c/Kg on imports of acetaminophenol from France. This investigation was initiated on 24 July 1998. Provisional measures were imposed on 28 December 1998. 11.1.3.8. Flat hot-rolled carbon and alloy sheet and strip from France On 2 July 1999, Canada imposed definitive anti-dumping measures on imports of flat hot-rolled carbon and alloy sheet and strip from France. The level of the duties varies between 11 and 43%. The investigation was initiated on 3 December 1998. 11.1.3.9. Stainless steel sheet and strip in coils from France, Germany, Italy and the UK On 7 July 1999, the USA imposed definitive anti-dumping measures between 10,6 and 25,6% on imports of stainless steel sheet and strip in coils from France, Germany, Italy and the UK. The investigation was initiated on 30 June 1998. 11.1.3.10. Polycarbonates from Germany On 22 July 1999, Brazil imposed a definitive anti-dumping duty of 9% on imports of polycarbonates from Germany. This investigation was initiated on 12 February 1998. 11.1.3.11. Cold-rolled steel sheet from Belgium and Spain On 27 August 1999, Canada imposed a definitive anti-dumping duty ranging between 7 and 29% on imports of cold-rolled steel sheet from Belgium. The investigation was terminated without measures as regards Spain, because of lack of injury or threat of injury. The investigation was initiated on 29 January 1999. 11.1.3.12. Tyres from France and the EU On 4 October 1999, Egypt imposed definitive anti-dumping duties ranging from 4,4 to 13% for the co-operating exporter and from 16 to 86% for the others. The investigation was opened on 5 September 1998. 11.1.3.13. Thermal sensitive paper from Finland, Germany and the European Union On 11 October 1999, India imposed definitive anti-dumping duties on imports of thermal sensitive paper from Germany (5,84 Rs./sq.m. for Stora GmbH and 6,34 Rs./sq.m. for other German exporters). No duties were levied on imports from "Finland and the EU cumulatively". The investigation was initiated on 9 March 1999. A provisional anti-dumping duty was imposed on imports from Germany on 18 August 1999. 11.1.3.14. Floor tiles from Italy On 12 November 1999, Argentina imposed definitive anti-dumping measures in the form of minimum prices of 7,80 USD/m (tiles of 20x20cm), 9 USD/m (tiles of 30x30cm) and 10,9 USD/m (tiles of 40x40cm). This investigation was initiated on 25 September 1998. 11.1.3.15. Woven pile weather stripping from Spain and the UK On 18 November 1999, Israel decided to impose anti-dumping duties on imports of woven pile weather stripping from Spain (12% ad valorem duty) and the UK (20,7% duty). The case was initiated on 26 May 1998. A provisional security (set at non-injurious price level) was imposed on 15 November 1998. 11.1.3.16. Wound skin and closure strips from France and Germany On 17 December 1998, Australia imposed definitive anti-dumping measures on wound skin and closure strips from France (until 2003). No measures were taken against German imports. The investigation was initiated on 3 April 1998. 11.1.4. Investigations terminated without measures 11.1.4.1. Polymeric plasticisers from the UK In January 1999, Australia decided to take no further action concerning imports of polymeric plasticisers from the UK because there was no current or potential threat of injury. The case was initiated on 6 April 1997. Provisional measures were adopted on 30 June 1998. 11.1.4.2. Styrene butane rubber from Germany and France On 22 June 1999, India terminated its investigation into styrene butane rubber from Germany and France without taking measures, because of a lack of evidence of injury. The investigation was initiated on 7 April 1998. Due to lack of evidence, provisional duties had not been imposed. 11.1.4.3. Industrial sewing machine needles from Germany On 12 April 1999, India terminated its investigation into industrial sewing machine needles from Germany without taking measures because it was found that the petitioner did not satisfy the definition of "domestic industry" for the purpose of filing an anti-dumping petition. The investigation was initiated on 16 January 1998. 11.1.4.4. Stainless steel round wire from, inter alia, Spain On 19 May 1999, the USA terminated the investigation without measures because of lack of injury. The investigation was initiated on 12 May 1998. 11.1.4.5. Glass containers from Germany, Italy, Portugal and Spain On 6 July 1999, Israel terminated the anti-dumping investigation into glass containers from Germany, Italy, Portugal and Spain without taking measures because the complaint had been withdrawn. The investigation was initiated on 10 August 1998. In January 1999, a temporary deposit of 5,2% (CIF) had been imposed on imports of 1 litre glass citrus jars produced in Spain, by way of provisional measures. 11.1.4.6. Infant milk formula from Denmark and the Netherlands On 20 August 1999, the Czech Republic terminated the anti-dumping investigation on imports of infant milk formula from Denmark and the Netherlands as the petitioner stopped its production of infant milk formula in the Czech Republic. This investigation was initiated on 2 September 1998. 11.1.4.7. Structural steel beams from Germany and Spain On 23 August 1999, the USA terminated this investigation without measures, following a negative preliminary determination of injury. The investigation was initiated on 12 July 1999. 11.1.4.8. Inhibitors from Germany On 30 August 1999, New Zealand terminated the anti-dumping investigation into ACE Inhibitors from Germany without imposing measures, following withdrawal of the original complaint by the Australian producers on behalf of which Australia had requested the investigation. The case was initiated on 8 April 1999, following an Australian request under Article 14 of the WTO Anti-dumping Agreement. It was one of the rare cases in which anti-dumping action was requested by a third country (in casu Australia). In such cases, the adoption of measures is subject to approval, by consensus, of such measures by the WTO Council for Trade in Goods (which would require approval of the EC and Switzerland). The Commission had warned New Zealand that the final measures could be opposed in the Council for Trade in Goods. 11.1.4.9. Acrylic Fibre from, inter alia, the European Union On 13 October 1999, India decided to exclude imports of acrylic fibre from the European Union from the anti-dumping investigation concerning acrylic fibre from the European Union, Turkey and Hungary, because no sufficient time had elapsed to warrant a review of duties that are currently in force against imports from Spain, Portugal and Italy. This decision followed consultations between India and the European Commission concerning this investigation. 11.1.5. Pending investigations initiated before 1999 11.1.5.1. Coated paperboard from Austria, Germany, the Netherlands and Spain On 20 March 1997, South Africa initiated an anti-dumping investigation concerning imports of coated paperboard from Austria, Germany, the Netherlands and Spain. On 31 October 1997, the preliminary determination suggested to terminate the case, as the dumped imports were not causing the injury suffered by the domestic industry. The Commission has asked South Africa to terminate the investigation, as it hampers Community exports to South Africa and has, by far, exceeded the 18 month period provided for by Article 5(10) of the WTO Anti-dumping Agreement. 11.1.5.2. Rock wool from the Netherlands On 15 May 1998, South Africa initiated an anti-dumping investigation concerning imports of rock wool from the Netherlands. The preliminary determination recommends the termination of the investigation (in the absence of material injury in respect of the products concerned). 11.1.5.3. Crystal polystyrene from the European Union On 10 June 1998, Mexico initiated an anti-dumping investigation on imports of crystal polystyrene from the European Union. A preliminary resolution was published on 17 February 1999, by which Mexico decided to continue the investigation without imposing any provisional measures. 11.1.5.4. Woven polypropylene carpet from, inter alia, Belgium and the UK On 9 July 1998, Australia initiated an anti-dumping investigation concerning imports of woven polypropylene primary carpet backing fabric from Belgium, the UK, Colombia, Saudi Arabia and the USA. The Report to the Minister, issued on 18 December 1998, recommended anti-dumping action to be taken but the proceeding was suspended as the Belgian party to the case appealed the Australian Customs Services' recommendation to the Minister (who has yet to take a decision). 11.1.5.5. Bolts and nuts from, inter alia, Spain On 24 July 1998, South Africa initiated an anti-dumping investigation concerning imports of bolt and nuts from, inter alia, Spain. No preliminary determination has yet been notified. However, South Africa confirmed that the investigation in respect of products from Spain will be terminated as the imports were considered to be de minimis. 11.1.5.6. Hydroethylcellulose from, inter alia, the Netherlands On 16 October 1998, Brazil initiated an anti-dumping investigation concerning imports of hydroethylcellulose from, inter alia, the Netherlands. As of 19 October 1999, the Brazilian authorities extended the investigation for a further six months. 11.1.5.7. Hot and cold-rolled stainless steel from France, Germany, Italy and Spain On 19 October 1998, Brazil initiated an anti-dumping investigation concerning imports of hot and cold-rolled stainless steel from France, Germany, Italy and Spain. On 22 November 1999, this investigation was extended for 6 months. 11.1.6. Sunset review investigations having led to a change in the imposed duties 11.1.6.1. Stainless steel bars from France, Germany, Italy, Spain, Sweden, United Kingdom On 4 March 1999, Canada confirmed anti-dumping duties up to 110% after a review of dumping margins initiated on 9 October 1998, just one month after the imposition of definitive measures. The review investigation worsened the position of some EU exporters who had co-operated in the original investigation, and were considered as non co-operating in the review, with the imposition of the maximum dumping margin found. 11.1.6.2. Refined sugar from Belgium, Denmark, Germany, The Netherlands On 24 May 1999, New Zealand removed the anti-dumping duties on refined sugar from Belgium, Denmark, Germany and the Netherlands (with effect from 3 November 1998, being the date the duties would have ceased to apply in the absence of a review investigation). Duties were in force since 1990. 11.1.6.3. Certain coated papers from Austria and Finland On 29 October 1999, Australia opened a re-examination procedure into the anti-dumping measures imposed in 1998 on imports into Australia of coated paper produced by the Austrian company Sappi Gratkom GmbH and to examine whether the price undertaking with a Finnish company was set at an appropriate price-level. This re-examination is the indirect result of a Federal Court decision that annulled anti-dumping measures imposed on exports of coated paper from a German company. In 1998, Australia had also imposed anti-dumping measures on imports of coated paper from Belgium, Finland, Italy, the Netherlands and Sweden. These remain unaffected. 11.2. Anti-subsidy cases against EU Member States The table below gives the number of anti-subsidy investigations against EU Member States initiated, on-going and terminated in 1999, as well as the number of measures which were imposed on Community exports during the same year. TABLE 4 Anti-subsidy investigations against EU Member States during 1999 >TABLE POSITION> Of the 12 cases active during 1999, 8 cases relate to steel and the other 4 to agricultural products. The USA continues to be the most frequent user. 11.2.1. Initiations (still at initiation stage) 11.2.1.1. Brandy from France On 9 August 1999, Australia initiated an expiry review of the countervailing measures concerning brandy from France. The Commission services are currently preparing information relating to the subsidy programmes in question, and it is understood that the French industry will also make a submission. The deadline for submission is 4 October 1999; the expiry date is 27 February 2000. 11.2.1.2. Canned ham and canned pork luncheon meat from Denmark and the Netherlands The countervailing duties on canned ham and canned pork luncheon meat from Denmark and the Netherlands is due to expirte on 20 March 2000. The domestic industry requested an expiry review and the Canada (CITT) initiated an expiry review on 3 September 1999. The Commission will co-operate fully in the expiry review. 11.2.2. Provisional measures 11.2.2.1. Cut-to-length carbon steel plate from Italy and France On 16 March 1999, the USA initiated a countervailing duty investigation concerning imports of cut-to-length carbon steel plate from, inter alia, Italy and France. The main concern was the "pass through" issue and also the apparent lack of evidence in the complaint. In particular, the Commission held various rounds of consultations with the DOC in Washington and Geneva to address the issue of lack of evidence as well as the issue of initiation against programmes which have repeatedly been found not to exist (especially in the case against Italy). The Commission, the Italian and French governments and the exporters concerned replied fully to all DOC's questionnaires. Verification will take place in September/October 1999. In July 1999, the USA (DOC) imposed provisional duties of 23,2% on Italy and 3,7-5,4% on France. 11.2.2.2. Milk powder from the European Community A complaint was submitted by the Federacion Nacional de Productores de Leche against imports of milk powder from the European Community. Pre-initiation consultations under Article 13.1 of the WTO Subsidies Agreement were organised. In October 1999, Chile initiated the countervailing duty investigation. On 29 December 1999, Chile imposed a provisional countervailing duty of 21% on imports of milk powder from the European Community. 11.2.3. Definitive measures 11.2.3.1. Stainless steel plate in coils from Italy and Belgium On 28 April 1998, the USA (DOC) initiated a countervailing duty investigation concerning imports of stainless steel plate in coils from, inter alia, Italy and Belgium. The main concern was the "pass through" issue and also the apparent lack of evidence in the complaint. The Commission, the Italian and Belgian governments and the exporters concerned replied fully to all DOC's questionnaires. Verification took place in November 1998. The DOC definitive finding was published on 31 March 1999. For Belgium, the only exporter (ALZ) obtained a duty of 2%. In the case of Italy, the only exporter (AST) obtained a duty of 15,16%. In the Italian case, the Commission managed to prove that the Community THERMIE programme was not countervailable as not being specific (i.e. that it was available to all industrial sectors indiscriminately). Furthermore, the Commission managed to prove that the ESF was not de jure specific as the DOC had established in previous investigations. 11.2.3.2. Cut-to-length carbon steel plate from Belgium In April 1998, the USA (DOC) initiated an administrative review (covering the calendar year 1996). The Commission, the Belgian Government and the only exporter concerned (Fabrique de Fer Charleroi) have replied to the DOC questionnaire. The DOC verification took place in November 1998. On 13 April 1999, DOC imposed definitive duties at the level of 0,69%. 11.2.3.3. Stainless steel sheet and strip from Italy and France On 13 July 1998, the USA (DOC) initiated a countervailing duty investigation concerning imports of stainless steel sheet and strip from, inter alia, Italy and France. The main concern was again the "pass through" issue and also the apparent lack of evidence in the complaint. The Commission, the Italian and Belgian governments and the exporters concerned replied fully to all DOC's questionnaires Verification took place in November 1998. DOC's definitive finding was made on 8 June 1999. For France, the only exporter (Usinor) obtained a duty of 5,38%. In the case of Italy, the main exporter (AST) obtained a duty of 12,22% and Arinox a duty of 1,03%. In the Italian case, the Commission managed to prove that the Community THERMIE programme was not countervailable as not being specific (i.e. that it was available to all industrial sectors indiscriminately). Furthermore, in both the French and Italian cases, the Commission managed to prove that the ESF was not de jure specific as the DOC had established in previous investigations. 11.2.3.4. Lead and bismuth steel from the UK On 2 December 1997, following an administrative review initiated in May 1997, the USA (DOC) established a preliminary countervailing duty rate of 5,28% for British Steel. This rate was confirmed in a definitive finding of 15 April 1998. In this review, the Commission had requested green-light treatment for the BRITE-EURAM R&D programme. DOC, apparently unable to find a reason to reject the claim, has instead chosen to dismiss the benefit from the programme as de minimis. During this proceeding, British Steel has continued to dispute the DOC's assertion that pre-privatisation subsidies are "passed through" to the new owners of the company. Following a request from the UK, the Commission has initiated a dispute settlement procedure against the US. In the WTO procedure, Mexico and Brazil have intervened in favour of the EC. On 9 October 1999, a WTO Panel accepted the main arguments put forward by the Community. It concluded that the USA had violated Article 10 of the Subsidy and Countervailing Measures Agreement. On 31 March 1998, British Steel requested a further administrative review for the calendar year 1997, which was duly initiated in April 1998. The Commission has supplied a response to the DOC questionnaire. Preliminary findings were made on 3 March 1999; British Steel's countervailing duty rate was set at 4,64%. This rate was confirmed in the definitive findings of 11 August 1999. On 3 May 1999, a further administrative review for the calendar year 1998 was duly initiated. The Commission has made a submission in the line of the arguments explained above. 11.2.4. Investigations terminated without measures 11.2.4.1. Sugar from the European Community On 27 August 1998, Egypt initiated a countervailing investigation into sugar from the EC. The Commission held bilateral consultations with the Egyptian authorities on 15 October 1998. The subsidy allegations concern the export restitutions provided to sugar exporters as well as the storage costs. The Commission has co-operated with the Egyptian authorities in their investigation and has responded to the relevant questionnaire. In July 1999, Egypt terminated the investigations without measures. 11.2.4.2. Lead and Bismuth Steel from Germany In April 1998, the USA initiated an administrative review (covering the calendar year 1997). The Commission, the German Government and the German exporter concerned (Saarstahl) have replied to the DOC questionnaire. On 6 April 1999, DOC imposed preliminary duties at the level of 12,31%. The DOC verification took place in June 1999. On 15 August 1999, the review was terminated, the verification having determined that Saarstahl had made no exports in the review period. 11.2.4.3. Leaded billets from UK and Germany On 19 June 1997, the USA (DOC) initiated an investigation into the alleged circumvention of anti-dumping and countervailing measures on leaded bars by exports of leaded billets from the UK and Germany. Billets are rolled into bars by means of a process carried out in the US. This case was disturbing from a number of viewpoints. Firstly, no pre-consultations were offered on the countervailing duty aspects. Secondly, it was established in the original ITC hearing on leaded bars that billets were not causing injury to US producers. Thirdly, some exporters sold billets to unrelated processors, which then sold the bars in direct competition with the bars sold by the same exporters in the US. DOC made a negative preliminary finding of circumvention on 1 May 1998. The investigation was terminated in October 1999. 11.2.5. Review investigations having led to a change in the imposed duties 11.2.5.1. Pasta from Italy In August 1998, the USA (DOC) concluded the first administrative review of the countervailing duties imposed in July 1996 on pasta from Italy covering the period 17.10.95 - 31.12.96. Duties for the exporters concerned ranged from 0 to 5%. In September 1998, the second administrative review was initiated (covering the calendar year 1997). The Commission, the Italian Government and the Italian exporters that requested the review have replied to the DOC questionnaire. In April 1999, the DOC verified the responses of the Italian exporters concerned, and on 16 August 1999, the final findings were published (CVD rates of 0,49-4,05%). 12. Safeguard measures 12.1. Legal framework The principle of liberalisation of imports was set under the GATT 1947 and strengthened under the 1994 WTO Agreement on Safeguards. As they consist of the unilateral withdrawal of a commercial concession on liberalisation of trade formerly agreed, safeguard measures have to be considered as an exception to this principle. The GATT 1947 and the WTO Agreements imposed strict conditions for the application of this escape clause. As it stands, Article XIX GATT 1994 and the WTO Agreement on Safeguards not only set out rules and criteria, but also put in place a multilateral control under the WTO Committee on Safeguards. The principle of liberalisation was the starting point of the Community rules of imports and the requirements to adopt safeguard measures correspond to those of the GATT 1994 and WTO Agreements. Under the relevant Community regulations, safeguard measures affecting WTO members can only be applied when a product is imported (i) under such greatly increased quantities, and (ii) on such terms or conditions as to cause or threaten to cause serious injury to Community producers [24], provided that it is in the Community's interest to apply such measures [25]. [24] Council Regulation (EC) No 3285/94, Article 16, 1st indent. As regards non WTO members those two conditions shall be understood alternatively. [25] Council Regulation (EC) No 517/94 on common rules on imports of textile products from certain third countries ; Council Regulation No 519/94 on common rules on imports from certain third countries; Council Regulation No 3285/94 on common rules for imports. Safeguard measures have a temporary nature and apply to all imports of the product in question, irrespective of its origin [26]. They can only be adopted after a comprehensive investigation which provides evidence of the existence of a) increased imports b) the existence of a serious injury for Community producers and c) the causal link between the imports and the injury. Ultimately, the adoption of measures requires an analysis of all interests concerned, i.e. the impact of the measures on producers, users and consumers. [26] However, as regards non WTO members, safeguard measures may be selective and apply to products originating in a specific country. 12.2. The Community's activities in the field of safeguards The Community has seldom made use of safeguard measures and no measures have been adopted since the entry into force of the WTO 1994 Agreement. The relevant Community legislation strictly interprets the WTO Agreement on Safeguards, in particular the provisions relating to the conditions necessary for the adoption of a safeguard measure. As a matter of principle, Community institutions consider that safeguard measures should only be used as an exceptional tool in emergency situations. This position is shared by the WTO Dispute Settlement Body, which has recently emphasised that the use of safeguard clauses must be limited to severe circumstances [27]. [27] See Infra, point 13.4.1 and 13.4.2 (Appellate Body Report on Argentina - Footwear; Appellate Body Report on Korea - Dairy products). The Community expects its commercial partners to follow a similarly strict approach. However, more and more countries are adopting safeguard measures, often in circumstances which may not be entirely in line with Article XIX GATT 1994 and the WTO Agreement on Safeguards. Consequently, the activity of the Community in relation to safeguards is more and more driven towards the defence of the export interests of Community producers, if necessary before the WTO Institutions. 12.3. Overview of the recent main third country safeguard cases 12.3.1. Brazil 12.3.1.1. Toys On 18 June 1996, Brazil initiated a safeguard investigation on imports of toys originating in all third countries. On 1 January 1997, definitive safeguard measures were imposed on imports of all types of toys in the form of an additional duty on top of the regular tariff rate of 20%, which decreases progressively until 1999: 43% in 1997, 29% in 1998 and 15% in 1999. On 7 April 1999, Brazil notified, in conformity with article 7(4) of the Safeguard Agreement, the result of the mid-term review, concluding that the domestic injury was still suffering injury in form of decreased production, domestic sales and prices, and profitability. Thus, safeguard measures were maintained according to the original schedule. On 29 November 1999, Brazil notified to the WTO Committee on Safeguards its intention to extend the measure for a period of 4 years and offered the holding of consultations on the basis of Article 12(3) of the Safeguard Agreement. Therefore, the Commission held consultations with the Brazilian authorities in Geneva on 15 December 1999. Despite these consultations, Brazil extended on 22 December 1999 its safeguard measures on toys as previously notified to the WTO. The Commission will examine whether compensation under the Safeguards Agreement or the suspension of equivalent concessions would be appropriate. 12.3.2. Chile 12.3.2.1. Wheat, wheat flour, sugar and edible vegetable oils On 2 November 1999, Chile notified to the WTO that it had initiated ex officio a safeguard investigation on 30 September 1999 covering the above-mentioned products. EC trade in 1998 regarding edible oils was EUR4,6m, concerning wheat flour EUR3,7m and for sugar EUR0,9m. On 26 November 1999, Chile announced that it had imposed provisional measures on all above products by raising the ad valorem tariff up to the level bound in the WTO. 12.3.3. Czech Republic 12.3.3.1. Sugar The investigation was initiated on 3 March 1999. Provisional measures were imposed on 12 March 1999 in the form of an additional duty of 80% on imports of all sources except from the Slovak Republic. During two rounds of consultations held on 8 April and 17 May 1999, the EC stated that the imposition of measures without prior consultation was in violation of Article 34 of the Czech-EU Europe Agreement. Furthermore, there was no proof that imports from the EC caused serious injury as required under Article 31 of that Agreement, in particular since there was a steady decrease of imports from the EC since 1995. On 21 May 1999, in the context of the Czech-EU Association Committee, the Czech Republic gave a commitment to conclude the investigation by the end of June 1999 and to exempt EC imports from the measure. On 15 September 1999, the Czech Republic imposed definitive safeguard measures in the form of tariff rate quotas for imports originating in the EU, Poland and other countries (except the Slovak Republic) on the basis of imports of the product concerned during the last three years. The measures will progressively be liberalised and will be in force until 11 March 2003. 12.3.4. Egypt 12.3.4.1. Safety wooden matches On 6 August 1998, Egypt published in its Official Gazette a notice concerning the initiation of a safeguard investigation into imports of safety wooden matches (boxes) into Egypt, including the imposition of provisional safeguard measures as of that date. A definitive safeguard measure was introduced on 19 February 1999 for a period of three years in the form of a tariff at a level decreasing from 34% to 11%. The Commission has actively participated in the proceedings expressing its serious concern as to the legality of these measures in several instances, including the holding of consultations on 10 February 1999. 12.3.4.2. Fluorescent lamps On 19 September 1999, Egypt decided to initiate a safeguard investigation into imports of common fluorescent lamps from 18 watts to 40 watts into Egypt. According to Eurostat data under CN 8539 31 10, Community exports to Egypt reached ECU 0,16 million in 1997, while they were negligible in the years 1995, 1996 and 1998. 12.3.5. India 12.3.5.1. Phenol On 2 February 1999, India initiated a safeguard investigation concerning imports of phenol. On the basis of a positive injury determination dated 12 May 1999, India imposed on 30 June 1999 definitive safeguard measures for a period of two years in the form of a tariff which decreases from 22% to 15%. 12.3.5.2. Acetone On 16 June 1999, India initiated a safeguard investigation concerning imports of acetone. On 8 October 1999, the investigation was completed and the Indian government was recommended to impose for a period of 30 months safeguard duties of 28% (first year), 21% (second year) and 9% (last 6 months). The EC's share of the imports submitted to the measures would be approximately 15%. Germany and the Netherlands are the main EC exporters, followed by the UK, Finland and France. 12.3.5.3. White/yellow phophorus On 15 September 1999, India initiated a safeguard investigation concerning imports of white/yellow phosphorus. According to the Indian authorities, the EC's share of total imports into India amounts to less than 1%. Main EC exporters are Germany and the Netherlands. 12.3.6. Latvia 12.3.6.1. Swine meat On 21 May 1999, Latvia informed the EC of the decision to initiate a safeguard investigation under the WTO Agreement on Safeguards and to propose the imposition of provisional measures. Consultations were held on 26 May 1999 in Brussels in the framework of Articles 30 and 33 of the EU-Latvia Europe Agreement. The EC demanded additional information and clarification of evidence provided by Latvia. As of 1 June 1999, provisional measures in the form of 70% additional duty (with a minimum of 0,34LVL/kg) were imposed on imports of swine. Imports from the EC were approximately 500 t in 1998. Further rounds of technical consultations were conducted on 15 June, 12 October and 23 November 1999. As of 18 December 1999, Latvia imposed definitive measures on imports of swine meat in the form of a minimum price of 1,05 LVL/kg, disregarding the Community' claim that Latvia had not complied with its procedural and substantive obligations under the Europe Agreement. 12.3.7. Poland 12.3.7.1. Flat steel products In a Note Verbale dated 23 June 1999, Poland informed the EC that the Minister of Economy had received an application for the initiation of safeguard proceedings against imports of certain flat-rolled products of iron or non-alloy steel. The Note stated that it was intended to formally initiate the proceedings soon. The EC's reply of 2 July 1999 stated that all relevant information needed to be supplied, in order to allow for the matter to be referred to the Poland-EU Association Council under Article 33 of the Poland-EU Europe Agreement to put an end to any difficulties. 12.3.7.2. Tractors Poland informed the EC in a Note Verbale of 28 June 1999 of the receipt of a safeguard complaint concerning imports of agriculture and forestry tractors. The EC replied along the same lines as in the reply of 2 July 1999 in the case concerning flat steel products. 12.3.7.3. Yoghurt On 24 March 1999, Poland informed the EC of it intention to impose safeguard measures on imports of yoghurt originating in the EC based on Article 30 of the EU/Poland Europe Agreement. In various rounds of consultations, the EC expressed its disagreement with the proposed measures in the form a tariff increase from the preferential tariff for these products from 9% to 38%. On 17 September 1999, Poland imposed measures in the form of a (still preferential) tariff of 29% which applies only to imports from the EC which are in excess of average imports volumes for 1996-98 (for which the tariff preference of 9% remains). These measures will be in force for a period of two years. According to the Polish authorities, imports of yoghurt from the Community raised sharply from 556 tonnes in 1996 to 30.900 tonnes in 1998. 12.3.8. Slovenia 12.3.8.1. Swine meat The safeguard investigation based on the WTO Agreement on Safeguards was initiated 15 October 1998. Provisional measures were imposed on 21 November 1998 in the form of an additional import duty of 68-110 SIT/kg (1 Euro=187 SIT) for 200 days. The EC's trade interest was 15,73 Mio Euro in 1997 and 19,49 Mio Euro in 1998 (Jan-Oct). On 15/16 December 1998, consultations under Article 28 of the Slovenia-EU Europe Agreement were held. On 16 January 1999, Slovenia repealed the provisional measures stating that "critical circumstances" were no longer present and terminated the investigation. 12.3.9. Slovakia 12.3.9.1. Swine meat Two rounds of consultations were held under Article 34 of the EU-Slovakia Europe Agreement on 20 April and 3 May 1999 in Brussels after the Slovak Republic had informed the EC of its intention to initiate an investigation based on the WTO Agreement on Safeguards. The investigation was initiated on 5 May 1999. Imports from the EC represented 5,5% of total imports (valued at approximately 4 million Euro in 1998). As of 21 May 1999, Slovakia imposed a provisional safeguard measure in the form of an additional import duty of 43,7% on all imports of swine meat except on imports from the Czech Republic. The investigation is currently on going. 12.3.10. USA 12.3.10.1. Wheat gluten US gluten producers decided on 19 September 1997 to request a Section 202 safeguard action. On 15 January 1998, the US International Trade Commission made a positive finding of serious injury and recommended to the President to impose a quantitative restriction for four years. The EC expressed its concerns about the recommendation. On 1 June 1998, the US President decided to impose a quantitative restriction for three years based on imports during the period of July 1992 until June 1995 to be increased by 6% annually. The quota shares are allocated to importing countries with respect to the shares in imports during that period, resulting in a quota for the EC of 24.513 tons (41.415 tons in 1997). On 14 August 1998, the EC withdrew "substantially equivalent concessions" by imposing a tariff quota on imports of corn gluten feed from the US effective 1 June 2001 or upon the declaration of a WTO panel that the US measures are not in compliance with WTO rules. The Commission's concern relates notably to the deficiencies of the serious injury investigation conducted by the US International Trade Commission. Furthermore, the measure imposed appears discriminatory (i.e. while Australia's quota allowed it to maintain its trade flow at 1997 levels, the Community by comparison has its 1997 level cut almost by half), unjustified (i.e. serious injury was not established and no causal link between the imports and the situation of the US industry was shown) and overly restrictive. During consultations with the US under Article 12(3) of the Safeguards Agreement on 24 April and 22 May 1998 and formal dispute settlement consultations on 3 May 1999, the US did not provide an adequate justification of the measures. As a result, the EC requested the establishment of a WTO panel, which took place on 26 July 1999 and is currently underway. 12.3.10.2. Steel wire rod On 12 January 1999, the USA initiated a safeguard investigation concerning imports of steel wire rod. The Commission filed an "entry of appearance" with the International Trade Commission (ITC) on this case and has actively participated in the procedure, including the presentation of a submission explaining why in the Commission's view no safeguard measures are warranted in this case. On 12 May 1999, the ITC took a 3:3 decision in the injury phase (i.e. three Commissioners voted that no serious injury or threat thereof existed, but the remaining three Commissioners found that such injury or threat thereof existed). The ITC submitted its final Report to the President in July 1999, including its views on possible measures to be taken. In these circumstances, it is the US President's decision whether to impose safeguard measures on imports of this product. Despite indication that the President would decide in September 1999, by the end of 1999 no decision had been forthcoming. 12.3.10.3. Welded line pipe On 30 June 1999, eight producers of welded line pipe and the United Steelworkers of America filed a safeguard petition against imports of this product into the United States. On the basis of this petition, a safeguard procedure was initiated and an injury finding was made on 28 October 1999. In December 1999, the US ITC recommended to the President the adoption of safeguard measures for a period of four years either as a tariff quota (increasing each year by 10%) with over quota imports subject to a 30% duty or as a tariff of 12,5%, to be progressively decreased to 8% in the fourth year. The Commission actively participated in this procedure and made its view known to the US authorities that safeguard measures do not appear warranted in this case, notably with respect to speciality products (High Frequency Induction Welding Line Pipe) originating in the Community. The major EC exporter is Germany; other exporters include the United Kingdom, France and Greece. 12.3.10.4. Lamb The US initiated this investigation on 7 October 1998. The main suppliers are Australia and New Zealand. The EC's trade interest is small (i.e. EUR 6.000 in 1997 and EUR 30.000 in 1998, Jan-Oct). On 15 April 1999, the US notified a positive finding of serious injury to the WTO. On 7 July 1999, the US President decided to impose a tariff quota of 31.851 tons for a period of three years (to be increased annually by 857 tons). Imports within the quota will be subject to a 9% duty in the first year, 6% in the second and 3% in the last year. Rates for imports for out-of-quota imports are 40% in the first, 32% in the second and 24% in the last year. Australia and New Zealand have requested the establishment of Panels on these US measures. The Community has requested third party status in these Panel procedures. 12.4. Appellate body reports on safeguard measures On 14 December 1999, the WTO Appellate Body (AB) issued the reports on the cases brought by the European Community against Argentina - Safeguard measures on footwear and Korea - Safeguard measures on Dairy Products. In summary, both reports uphold the Community's position in these cases and reject Argentina's and Korea's appeals against the Panels' findings of WTO-incompatibility of these countries' safeguard measures. From a general perspective, it is worth noting, that whilst the AB was not called upon to decide on the "philosophy" of the Safeguard Agreement, it expressly notes that: - "it is essential to keep in mind that a safeguard action is a 'fair' trade remedy", - "safeguard measures were intended by the drafters of the GATT to be matters out of the ordinary, to be matters of urgency, to be, in short, 'emergency actions'", and - "the import restrictions that are imposed on products of exporting Members when a safeguard action is taken must be seen, as we have said, as extraordinary". The Community has always defended this approach and, although these statements would seem to state the obvious, many third countries would appear to apply methods to the contrary. The number of safeguard measures imposed by third countries is rapidly increasing and presently affects EC exports valued at several hundred million Euros. These reports are of particular importance since they confirm the high standards of fact and proof required as regards the increased imports, serious injury and causation determinations which have to be satisfied prior to adopting safeguard measures. This is reinforced by the finding of the AB that, in addition to those determinations, on the basis of Article XIX of GATT 1994, there has to be a pre-requisite that the increased imports are the "result of unforeseen developments and of the effect of the obligations incurred by a Member under this Agreement, including tariffs concessions". 12.4.1. Appellate Body Report on Argentina Footwear Background In February 1997, Argentina initiated a safeguard procedure and imposed a provisional measure on imports of footwear. In September 1997, Argentina imposed definitive safeguard measures on imports of this product. Following consultations with Argentina which did not lead to a solution, the EC requested the establishment of a Panel. On 4 June 1999, the final report of the Panel was circulated to the Parties. In summary, the Panel found that the definitive safeguard measure on footwear based on Argentina's investigation and determination is inconsistent with Articles 2 and 4 of the Agreement on Safeguards (S.A.). On 15 October 1999, Argentina appealed the Panel's findings and, on 30 October 1999, the Community filed a cross-appeal. The Appellate Body upheld the conclusions of the Panel report. Appellate Body main Findings The AB considers that the terms "as a result of unforeseen developments and of the effect of the obligations incurred by a Member under this Agreement, including tariffs concession", which are contained in Article XIX GATT, describe "certain circumstances which must be demonstrated as a matter of fact in order for a safeguard measure to be applied consistently with the provisions of Article XIX of the GATT 1994". In addition, as regards the imposition of safeguard measures by a customs union, the AB recalls its report on Turkey - Restrictions on Imports of Textile and Clothing Products, where it confirmed that under certain conditions, «Article XXIV may justify a measure which is inconsistent with certain other GATT provisions». However, the AB clearly rejects the interpretation which would extend the scope of footnote 1 to Article 2 of the S.A. to situations not covered by that footnote, such as the application of safeguard measures by members of customs unions or free trade areas on their own behalf (as was the case in this procedure and in virtually all other safeguard procedures presently in place). As regards the increased imports, the AB makes clear that "it is not enough for an investigation to show simply that imports were more than last year - or five years ago". Moreover, it concludes that Article 2(1) of the S.A. and Article XIX GATT require "that the increase in imports must have been recent enough, sudden enough, sharp enough, and significant enough, both quantitatively and qualitatively, to cause or threaten to cause 'serious injury'". Furthermore, the AB confirms that Article 4(2)(a) of the S.A. requires a demonstration that the competent authorities "evaluated, as a minimum, each of the factors listed in Article 4(2)(a) as well as all other factors that are relevant to the situation of the industry concerned". On causation, the AB agrees with the Panel in that "it is the relationship between the movements in imports (volume and market share) and the movements in injury factors that must be central to a causation analysis and determination". In addition, the AB upholds the Panel's interpretation that the term "under such conditions" in Article 2(1) of the S.A. require an analysis of the "conditions of competition" between the imports and the domestic product and that other possible causation factors have to be sufficiently evaluated. 12.4.2. Appellate Body Report on Korea - Dairy Products Background On 7 March 1997 Korea imposed definitive safeguard measures in the form of a quota on imports of certain dairy products (milk powder blends). The EC, being the main supplier of the product in Korea (trade in 1996: EUR 75 million), was severely affected by the measures which cut its exports by almost 40%. After several rounds of consultations and unsuccessful informal settlement negotiations, the EC requested a WTO panel. In the Panel report which was circulated on 21 June 1999, it was concluded that the Korean measure was inconsistent with Korea's obligation under Article 4(2)(a) of the S.A. (serious injury was not established in an investigation covering all injury factors listed in that provision), Article 5 of the S.A. (inappropriate determination of the form of the measure) and Article 12 of the S.A. (WTO notifications not timely). The Panel rejected the EC's claims regarding Article XIX of GATT 1994 ("unforeseen developments"), Article 2(1) of the S.A. ("under such conditions" means requirement for price analysis) and Article 12 of the S.A. (content of WTO notifications incomplete). Korea appealed against the report mainly on procedural grounds. It did not appeal the substantive finding of the Panel that the serious injury investigation was inconsistent with Article 4(2)(a) of the S.A.. The EC cross-appealed the findings on Article XIX GATT 1994 and the completeness of notifications. Appellate Body main Findings The Appellate Body confirmed EC's cross-appeal on all counts. It was held that Article XIX GATT 1994 does establish "circumstances" which must be present in addition to the requirements set forth in the S.A., i.e. that increased imports must be due to "unforeseen developments" and "obligations under GATT 1994, including tariff concessions". The AB held that the Panel did not err in stating that Article 5(1) of the S.A. requires that a safeguard measure must not be more restrictive than necessary to prevent or remedy serious injury and to facilitate adjustment. However, it reversed the Panel's broad finding that a Member must explain in detail why it chose a particular measure (this is only required if the measure takes the form of a quota which is not based on the imports during the last three representative years). 13. The Trade Barriers Regulation (TBR) The Trade Barriers Regulation (TBR) is a commercial policy instrument of an offensive rather than defensive nature. 13.1. Background and objectives The Trade Barriers Regulation [28] was adopted to replace the New Commercial Policy Instrument [29] (NCPI) to take account of the conclusions of the Uruguay Round negotiations. It is an instrument mainly designed to assist industry when confronted with access problems on third country markets. The TBR's objective therefore is to give industry the opportunity to act when encountering trade barriers that restrict their access to third country markets. To this end, the rights acquired by the Community under international agreements can be enforced by the use of the TBR in cases where third countries adopt or maintain barriers to trade which violate international, mainly WTO, agreements. The TBR gives industry the right effectively to oblige the Commission to initiate an investigating procedure which could lead to recourse to the dispute settlement procedures of the WTO. [28] Regulation (EC) No 3286/94, OJ L 349, 22.12.94, p. 71. [29] Regulation (EC) No 2641/84, OJ L 252, 20.09.84, p. 1. 13.2. Legal framework of the TBR 13.2.1. Applicability The Trade Barriers Regulation lays down several conditions for applicability. First, in the third country concerned, a barrier to trade must exist that is contrary to an international agreement to which that country and the Community is a signatory, generally the WTO agreements but also any other international agreement. Second, the alleged obstacle to trade must result in an adverse trade effect for the Community enterprise or industry concerned. Third, it must be in the Community's interests to take action under the TBR. 13.2.2. Procedure A complaint concerning an alleged trade barrier is lodged with the Commission. If this is deemed admissible, within 45 days, an investigation procedure is initiated and a notice is published in the Official Journal. The Commission services then gather all the necessary information from the industry concerned, the authorities of the third country involved and from any other interested parties or parties that may be able to provide relevant information. Provisions exist for the treatment of confidential information supplied during the investigation. The investigation is carried out within a 7 months period, at the end of which a report on the investigation's findings is submitted to the Member States. 13.2.3. Action under the TBR During the investigation, discussions are usually held with third country authorities on the alleged trade barrier and will encompass options to remedy the barrier to trade. If, at the end of the investigation, the Commission concludes that a barrier to trade does exist, it may proceed in a number of ways. The Commission may decide: (i) to terminate the procedure because the third country has withdrawn the barrier to trade, (ii) to suspend the proceedings because the third country is in the process of taking action to remove the barrier to trade, (iii) to suspend the proceedings because an appropriate settlement has been agreed with the Community. Where no appropriate action is taken by the third country to remedy a barrier to trade confirmed by an investigation that is causing adverse effects within the Community, the Commission may decide, if appropriate, to seek dispute settlement (generally within the WTO). If such dispute settlement is successful but the third country does not take action to end the practice concerned, the Council may adopt commercial policy measures within thirty working days on the basis of a Commission proposal. Since its entry into force, 16 cases have been brought under the Trade Barriers Regulation: 4 against NAFTA countries (3 USA, 1 Canada), 8 against Latin American countries (5 Brazil, 2 Argentina, and 1 Chile) and 4 against Asian countries (1 Japan, 2 Republic of Korea, and 1 Thailand). Among those cases, 4 were initiated in 1999. 13.2.3.1. Procedures initiated in 1999 (1) Brazil - export subsidies granted by the Brazilian export-financing programme "PROEX" to purchasers of the Brazilian 30-seat regional jet Embraer ERJ-135 (notice of initiation published 17 April 1999): A TBR investigation found that the favourable interest rates offered to purchasers of regional aircraft by the Brazilian authorities constitute a prohibited export subsidy contrary to the WTO Agreement on Subsidies and Countervailing Measures and that this was causing adverse trade effects for the Community industry. During the investigation period, a WTO Panel, confirmed by an Appellate Body decision established at the request of Canada, found against the "PROEX" programme and recommended that Brazil abolish it by 18 November 1999. At the Dispute Settlement Body meeting of 19 November, Canada declared that it was not satisfied with the measures announced by Brazil to remedy the situation and the matter is currently under arbitration. Consequently, the Commission has deferred any action pending the results of the arbitration. (2) Canada - lack of protection of the geographical indication of "Prosciutto di Parma" (notice of initiation published 22 June 1999): A complaint was made to the Commission alleging the absence of appropriate legal remedies to effectively redress the unfair competition generated by the use of the trademark "Parma" by Canadian producers of ham and a TBR investigation was initiated on 22 June 1999. A report on the investigation's findings is due to be submitted to Member States early 2000. (3) Republic of Korea - discrimination in rules and practices concerning pricing and reimbursement of pharmaceutical products affecting trade of Community pharmaceutical products in the Korean market (notice of initiation published 30 July 1999): A TBR investigation is currently in progress and a report on the investigation is due to be presented to Member States by the end of February 2000. (4) Argentina - measures affecting import of textile and clothing products: repetition of pre-shipment controls and customs valuation which penalise imports; excessive requirements concerning certificates of origin which impede trans-shipment of goods together with excessive customs documentation and labelling (notice of initiation published 27 November 1999): A TBR investigation procedure has recently been initiated and a report on the investigation is expected to be presented to Member States by mid 2000. 13.2.3.2. Overview of the application of the TBR since its entry into force (1) Thailand - legislation and enforcement of legislation concerning the protection of intellectual property rights against piracy (notice of initiation published 20 July 1991 under the New Commercial Policy Instrument): This investigation is now administered under the Trade Barriers Regulation. The investigation procedure was suspended on 20 December 1995 following the entry into force of new copyright legislation in Thailand and the creation of a court specialised in intellectual proporty infringements. The Commission services continue to monitor the situation in conjunction with the Thai authorities and the industry. (2) USA rules of origin for textile products (notice of initiation published 22 November 1996): In 1996, the US changed its origin rules for textile products with the result that cotton, silk and man-made fibres fabrics imported into the Community at loom state to be dyed and printed no longer qualify as of EC origin. A TBR investigation found that the new rules constituted a barrier to trade contrary to several WTO agreement provisions. An agreement was reached with the US but the latter failed to implement the agreement. The Commission decided to initiate WTO dispute settlement proceedings. During consultations in that context, a new agreement was reached further to which a Bill has been introduced in the US Congress and approved by the Senate in November 1999 that will implement the agreement. Congress is expected to act on the draft law by mid-2000. (3) US (Antidumping Act of 1916) (notice of initiation published 25 February 1997): A trade defence instrument prohibiting importers to import or sell articles from any foreign country at a price substantially less than the market value or wholesale price of such articles, at the time of importation, in the country of production or other foreign countries to which they are commonly exported. Lawsuits were initiated under the 1916 Act against a subsidiary of an EC company, disrupting its activities and threatening its viability. As a result of these lawsuits, EC steel exporters can no longer fully rely on their long established distribution network in the US and can no longer guarantee regular supply of the US market and other companies could also become the target of further action by US competitors. A TBR investigation found that the 1916 Act is inconsistent with the US obligations under the WTO Agreement and its annexes. Having failed to reach a solution in informal consultations, the Commission initiated WTO dispute settlement proceedings and, in February 1999, the interested parties received a copy of the definitive report of the WTO panel whose findings were in favour of the Community. The official panel report is due to be circulated in March/April 2000. (4) Argentina - tacit ban on exports of raw and semi-tanned bovine hides and discriminatory internal taxes on imports of finished leather (additional VAT and advance payment of income tax) (notice of initiation published 26 February 1997): These practices are seriously impeding trade flows in raw hides and consequently the Community tanning industry's security of supply in such products and artificially insulating the Argentinean leather market providing an unfair competitive advantage to Argentinean tanners. Following the failure of bilateral contacts, the Commission requested WTO dispute settlement procedures. WTO consultations took place on 5 February 1999 but no result was achieved. A panel was finally established on 26 July 1999; the WTO procedure is still pending. (5) Brazil - lack of protection of Cognac appellation of origin and geographic indications (notice of initiation published 2 April 1997): An investigation found infringements of several bilateral or international agreements related to the protection of intellectual and industrial property rights. The investigation also found that this lack of protection is adversely affecting trade of Cognac in favour of Brazilian producers of spirits with similar appellation. Following bilateral contacts, the Brazilian authorities published on 11 May 1999 the registration of the geographical indication "Cognac". The Bureau National Interprofessionnel du Cognac should receive the registration certificate confirming it as sole user of the "Cognac" name by mid-2000. (6) Japan - Restrictions on imports of finished leather that adversely affect Community exports (notice of initiation published 9 April 1997): A TBR investigation found that the Japanese management of the three tariff quotas for leather appears contrary to the WTO Agreement on Import Licensing Procedures and causes adverse trade effects to the Community leather industry. In addition, a large amount of subsidies seems to be granted in this sector in contradiction with the Agreement on Subsidies and Countervailing Measures. Bilateral discussions have been held with the Japanese authorities before and after WTO consultations that took place on 26 November 1998. The Commission is currently examining whether to pursue WTO action on the issues involved. (7) US legislation on copyright and related rights (notice of initiation published 11 June 1997): Legislation exists in the US which exempts restaurants, bars, shops or any other public venue from the obligation to obtain licences for the broadcast of music works by radio or TV, provided certain conditions are met in terms of surface and number of audio-visual devices. A TBR investigation found that the existence of this legislation is in contravention of the TRIPs Agreement and the Berne Convention and confirmed that a substantial loss of income had been caused to Community right holders by the above-mentioned exemption. Informal consultations failed to arrive at a solution and, in fact, on 7 October 1998 the US Congress adopted an extension of the exemption. The Commission initiated WTO dispute settlement proceedings and the results of a panel are due in April 2000. (8) Brazil - non-automatic import licensing system applied to stainless steel flat products and operating through compulsory payment terms (notice of initiation published 27 June 1997): Shortly after the opening of the TBR procedure, the Brazilian authorities issued a decree removing the products in the complaint from the list of products subject to the non-automatic licensing system. The TBR procedure was therefore terminated. (9) Brazil - non-automatic import licensing system applied to textile products and operating through compulsory payment terms and minimum prices (notice of initiation published 27 February 1998): The investigation showed that the sector of home textiles, particularly in Belgium and Spain, suffered from the import licensing system. Following bilateral contacts, the Brazilian authorities agreed to exclude from the import licensing system all textile products covered by the investigation. However, it appeared that minimum prices continued to be imposed, notably at the customs clearance stage, so the Commission decided to proceed to a WTO dispute settlement procedure. WTO consultations took place on 19 November 1999 (see also below, the case on Brazil - Sorbitol and CMC). Following consultations, Brazil agreed to enquire into the issue; the Commission is currently monitoring changes to the Brazilian measures. (10) Republic of Korea - Korean standards and other requirements that adversely affect the import and marketing of Community cosmetic products in Korea (notice of initiation published 19 May 1998): A TBR investigation found the alleged practice to infringe the WTO Agreement on Technical Barriers. Bilateral discussions took place and by exchange of letters on 29-30 July 1999, the Korean authorities agreed to amend the Korean regime. The new regime is due to be fully implemented by 15 January 2000 and is monitored by the Commission services. (11) Chile - prohibition on the transit and transhipment of swordfish in Chilean ports (notice of initiation published 10 July 1998): The TBR investigation confirmed that the alleged barrier to trade caused adverse trade effects to an industry and to a region of the Community (Galicia, Spain) in breach of WTO law. No solution was found during the bilateral discussions and the Commission services are currently evaluating other options, such as WTO action or action within the framework of the Convention on the Law of the Sea. (12) Brazil - non-automatic import licensing system applied to Sorbitol and Carboxymethylcellulose (CMC) and operating through compulsory minimum prices (notice of initiation published 24 November 1998): The investigation found that the barrier to trade impeded Community exports of sorbitol and CMC, causing adverse trade effects to the Community industry. WTO consultations with Brazil were held on 19 November 1999. (see above the case on Brazil - textile products). ANNEXES : SUMMARY 1. General trends for 1999 - The number of new investigations initiated (86) increased significantly in comparison with the previous years (29 in 1998 and 45 in 1997). - The ratio between the number of new investigations concluded without the imposition of definitive duties (22) and the number of new investigations concluded by the imposition of definitive duties (21) remained stable. The number of anti-circumvention and anti-absorption investigations increased, which shows that the Community industry is closely following the anti-dumping and anti-subsidy measures. - The number of undertakings accepted in form of minimum prices (from 16 countries) has also increased, in line with the recommendations of the Essen summit of Heads of States concerning the CEECs (preference given to undertakings in place of duties) and Article 15 of the WTO Anti-dumping Agreement, which invites to consider the particular situation of a developing country involved in a proceeding. 2. Main features 2.1. Initiations A total of 102 anti-dumping and 24 anti-subsidy investigations were initiated, split up as follows : - 86 new investigations (of which 66 anti-dumping and 20 anti-subsidy), involving imports from 29 different countries and covering 32 products (see Annex A) - 13 expiry reviews (when a measure is about to expire, a review can be initiated on the request by the Community producers. The measure remains in force pending the outcome of such a review.) (see Annex G) - 15 interim reviews (the need for the continued imposition of measures may be reviewed on the initiative of the Commission, at the request of a Member State or upon request by any exporter or importer or Community producer, when circumstances have substantially changed) (see Annex H) - 1 new exporter review (see Annex I) - 4 anti-absorption investigations (see Annex J) - 3 anti-circumvention investigations (see Annex K) - 4 accelerated reviews (anti-subsidy) (see Annex L) 2.2. Measures - 17 provisional measures (of which 12 anti-dumping and 5 anti-subsidy) were imposed, involving imports from 10 different countries and covering 8 products (see Annex D) - 21 definitive measures were imposed (of which 18 anti-dumping and 3 anti-subsidy), involving imports from 14 different countries and covering 8 products (see Annex E) - the Commission accepted undertakings offered by exporters from 16 third countries; in the salmon case, an undertaking was reinstated and a number of undertakings were repealed either with the imposition of provisional measures or with the imposition of definitive measures (see Annex M) - of the expiry reviews, 2 reviews were concluded with confirmation of duty (see Annex G) - of the interim reviews, 18 reviews were concluded with confirmation/ amendment of duty (see Annex H) - of the new exporter reviews, 2 were concluded with imposition/ amendment of duty (see Annex I) - of the anti-circumvention investigations, 3 were concluded with extension of duty (see Annex K) - of the accelerated reviews (AS), one was concluded (see Annex L). 2.3. Terminations - 22 new investigations (of which 17 anti-dumping and 5 anti-subsidy) were terminated without the imposition of measures (see Annex F) - of the expiry reviews, 3 were terminated (see Annex G). - of the anti-circumvention investigations, 3 were terminated without extension of duty (see Annex K) - in 7 cases, the measures expired after the 5-year imposition period (see Annex N) Please note that those statistics are also available on the following Internet Website : http://europa.eu.int/comm/dg01/trade10.htm. ANNEX A New investigations initiated during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX B New investigations initiated by country of export during the period 1995 - 1999 (31 December) >TABLE POSITION> >TABLE POSITION> ANNEX C New investigations initiated by product sector during the period 1995 - 1999 (31 December) >TABLE POSITION> ANNEX D New investigations concluded by the imposition of provisional duties during the period 1 January - 31 December 1999 >TABLE POSITION> ANNEX E New investigations concluded by the imposition of definitive duties during the period 1 January - 31 December 1999 >TABLE POSITION> ANNEX F New investigations terminated without the imposition of measures during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> ANNEX G Expiry reviews initiated or concluded during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX H Interim reviews initiated or concluded during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX I New exporter reviews initiated or concluded during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX J Anti-absorption investigations initiated or concluded during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX K Anti-circumvention investigations initiated or concluded during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX L Accelerated review investigations (anti-subsidy) initiated or concluded during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> ANNEX M Undertakings accepted or repealed during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX N Measures which expired during the period 1 January - 31 December 1999 >TABLE POSITION> ANNEX O Definitive measures in force on 31 December 1999 A. Ranked by product >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> B. Ranked by country >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX P Undertakings in force on 31 December 1999 A. Ranked by product >TABLE POSITION> >TABLE POSITION> B. Ranked by country >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX Q Anti-dumping & anti-subsidy investigations pending on 31 December 1999 A. New investigations (ranked by product) >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> B. Review investigations (ranked by product) >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> C. Ranked by country (new and review investigations) >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX R Refunds during the period 1 January - 31 December 1999 >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> >TABLE POSITION> ANNEX S Court cases A. Court cases pending before the Court of Justice and the Court of First Instance of the European Communities on 31 December 1999 Court of Justice Case C-46/98P // EFMA & Council Case C-76/98 & C-77/98P // Nutrasweet/Ajinomoto & Council Case C-458/98P // IPS & Council Case C-239/99 // Nachi Europe v. Hauptzollamt Krefeld Court of First Instance Case T-51/96 // MIWON v. Council Case T-74/97 // Buchel & Co. v. Council Case T-75/97 // Buchel & Co v. Commission Case T-80/97 // Starway v. Council Case T-213/97 // Eurocoton v. Council Case T-256/97 // BEUC v. Commission Case T-597/97 // Euromin S.A. v. Council Case T-598/97 // British Shoe Corp. and others v. Council Case T-37/98 // FTA v. Council Case T-87/98 // International Potash v. Council Case T-88/98 // Kundan Industries Ltd. And Tata International Ltd. v. Council Case T-96/98 // BEUC v. Commission Case T-178/98 // Fresh Marine Company v. Commission Case T-192/98 // EUROCOTON v. Council Case T-195/98 // Ettlin Spinnerei AG v. Council Case T-7/99 // Medici Grimm KG v. Council Case T-58/99 // Munkand v. Council Case T-104/99 // AS Bolderaja v. Council Case T-188/99 // Euroalliages v. Commission Case T-340/99 // Arne Mathisen AS v. Council B. Judgments and orders rendered by the Court of Justice and the Court of First Instance of the European Communities during 1999 Court of Justice // None Court of First Instance Case T-48/96 // ACME v. Council Case T-171/97 // Swedish Match Philippines v. Council Case T-210/95 // EFMA v. Council Case T-33/98 // Petrotub v. Council Case T-34/98 // Republica v. Council