(1)

The Commission, by Regulation (EC) No 194/2009 (2) imposed a provisional countervailing duty on imports of biodiesel originating in the United States of America(‘USA’).

(2)

By Regulation (EC) No 598/2009 (3) (the ‘definitive Regulation’), the Council imposed a definitive countervailing duty ranging from EUR 211,2 to EUR 237 per tonne on imports of biodiesel, as defined in Article 1(1) of the said Regulation (‘the product concerned’) originating in the USA (‘the existing measures’). The investigation leading to the adoption of the definitive Regulation is hereafter referred to as ‘the original investigation’.

(3)

It should also be noted that by Regulation (EC) No 599/2009 (4), the Council imposed a definitive anti-dumping duty ranging from EUR 0 to EUR 198 per tonne on imports of the product concerned.

(4)

On 30 June 2010, the Commission received a request pursuant to Article 23(4) of the basic Regulation to investigate the possible circumvention of the countervailing measures imposed on imports of the product concerned. The request was submitted by the European Biodiesel Board (‘EBB’) on behalf of the Union producers of biodiesel.

(5)

The request alleged that the countervailing measures on imports of the product concerned were being circumvented by means of transhipment via Canada and Singapore and by exports of biodiesel in a blend containing by weight 20 % or less of biodiesel.

(6)

The request alleged that a significant change in pattern of trade involving exports from the USA, Canada and Singapore has taken place following the imposition of measures on the product concerned, and that there is insufficient due cause or justification other than the imposition of the duty for this change. This change in pattern of trade stemmed allegedly from the transhipment of the product concerned via Canada and Singapore.

(7)

The request further alleged that following the imposition of the measures, exports of biodiesel in blends containing 20 % or less of biodiesel from the USA had begun to arrive in the Union, allegedly taking advantage of the biodiesel content threshold set in the description of the product concerned.

(8)

Furthermore, the request alleged that the remedial effects of the existing countervailing measures on the product concerned were being undermined both in terms of quantity and price. It was alleged that significant volumes of imports of biodiesel in pure form or in a blend containing by weight more than 20 % of biodiesel from Canada and Singapore and of biodiesel in blends containing 20 % or less of biodiesel, appeared to have replaced imports of the product concerned. In addition, there was sufficient evidence that this increased volume of imports were made at prices well below the non-injurious price established in the investigation that led to the existing measures.

(9)

Finally, the request alleged that the prices of the product concerned continue to be subsidised as previously established.

(10)

Having determined, after consulting the Advisory Committee, that sufficient prima facie evidence existed for the initiation of an investigation pursuant to Article 23 of the basic Regulation, the Commission initiated an investigation by Regulation (EU) No 721/2010 (5) (the ‘initiation Regulation’). Pursuant to Article 24(5) of the basic Regulation, the Commission, by the initiation Regulation, also directed the customs authorities to register imports consigned from Canada and Singapore as well as imports originating in the USA of biodiesel in a blend containing by weight 20 % or less of fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin.

(11)

The Commission also initiated a parallel investigation by Regulation (EU) No 720/2010 (6) concerning the possible circumvention of anti-dumping measures on imports of biodiesel originating in the USA by imports of biodiesel consigned from Canada and Singapore and by imports of biodiesel in a blend containing by weight 20 % or less of biodiesel originating in the USA.

(12)

The Commission officially advised the authorities of the USA, Canada and Singapore. Questionnaires were sent to known producers/exporters in the USA, Canada and Singapore. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set in the initiation Regulation.

(13)

The following companies submitted replies to the questionnaires and verification visits were subsequently carried out at their premises:

(14)

Moreover, visits were made to the relevant competent authorities of the Government of Canada and the Government of Singapore.

(15)

The investigation period covered the period from 1 April 2009 to 30 June 2010 (the ‘IP’). Data was collected for the period from 2008 up to the end of the IP to investigate the alleged change in the pattern of trade.

(16)

The product concerned by the possible circumvention, i.e. the product at issue in the original investigation, is fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as ‘biodiesel’, in pure form or in a blend containing by weight more than 20 % of fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin, currently falling within CN codes ex 1516 20 98, ex 1518 00 91, ex 1518 00 99, ex 2710 19 41, 3824 90 91, ex 3824 90 97, and originating in the USA.

(17)

The product forming the object of the circumvention investigation is twofold. Firstly, regarding the allegations of transhipment through Canada and Singapore, it is identical to the product at issue in the original investigation, as described in the previous paragraph. Regarding shipments directly from the USA, the product under investigation is biodiesel in a blend containing by weight 20 % or less of fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin, originating in the USA.

(18)

Following the imposition of provisional countervailing measures in March 2009, imports of the product concerned have practically ceased. The below table summarises the situation:

Imports of biodiesel and certain biodiesel blends into the European Union

under CN code 3824 90 91 (in tonnes)

(19)

The above Eurostat data cover all biodiesel containing 96,5 % or more of esters.

(20)

In comparison, the USA report exports of biodiesel and biodiesel blends under code HTS 3824 90 40 00 (mixtures of fatty substances, animal or vegetable origin) as follows:

US exports of biodiesel and biodiesel blends

under code HTS 3824 90 40 00 (in tonnes)

(21)

Comparing the two above tables leads to the conclusion that the 358 291 tonnes exported to the Union during the IP are blends with a biodiesel content of 96,5 % and below.

(22)

There was a high level of cooperation by producers/exporters in Canada. Two producers representing approximately 90 % of Canadian production of biodiesel submitted a questionnaire reply and fully cooperated with the investigation. Moreover, the Canadian Renewable Fuels Association and relevant authorities of the Government of Canada cooperated with the investigation.

(23)

In accordance with Article 23(3) of the basic Regulation, the assessment of the existence of circumvention should be made by analysing successively whether there was a change in the pattern of trade between USA, Canada and the Union, if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty, if there was evidence of injury or that the remedial effects of the duty were being undermined in terms of the prices and/or quantities of the like product, and that the imported like product still benefits from the subsidy.

(24)

Imports of biodiesel from the USA dropped from 1 487 790 tonnes in 2008, to 381 227 tonnes in 2009 and to close to zero during the IP.

(25)

On the other hand, according to Eurostat data total imports of biodiesel from Canada to the Union increased significantly between 2008 and the IP from 1 725 tonnes in 2008 to 140 043 tonnes in 2009 and 197 772 tonnes during the IP.

(26)

There are no customs duties applicable for sales of biodiesel between the USA and Canada or other kinds of imports restrictions.

(27)

According the USA statistics, exports of biodiesel from the USA to Canada increased from 967 tonnes in 2008 to 128 233 tonnes in 2009 and 161 841 tonnes during the IP.

(28)

A comparison of the export statistics provided by the US authorities with the import statistics provided on-spot by the Canadian authorities showed significant discrepancies on a monthly basis. According to the Canadian statistics, imports of US biodiesel increased from 11 757 tonnes in 2008 to 18 673 tonnes in 2009 and 174 574 tonnes during the IP.

(29)

According to the Canadian authorities, there is no specific code to declare biodiesel. They noted that Canada and the USA exchange import data for use as their respective export data. As such, at the six-digit level Canadian import data and US export data should match, which they do quite closely under HTS 38.24.90. However, beyond six digits they each have their own classification systems. Also it should be noted that the Canadian statistics only cover imports which have been customs cleared in Canada and not transhipped goods.

(30)

In conclusion, despite the discrepancies between the two data sources, it is clear that US export of biodiesel to Canada increased from 2008 to the IP, and in particular following the imposition of countervailing measures. The Canadian biodiesel market is currently not able to absorb such quantities of biodiesel. Genuine Canadian biodiesel producers are in fact export oriented.

(31)

The two cooperating producers in Canada did not purchase any biodiesel from the USA or from any other sources during the IP.

(32)

Production of biodiesel in Canada is an infant industry. Some six production facilities were in place during the IP, but the two facilities in Eastern Canada, which are in fact owned and run by the two cooperating producers, alone account for approximately 90 % of total production.

(33)

From the production volumes sold by the cooperating producers, sales where end-customers were certainly in North America, i.e. in the USA or Canada were determined. The remainder of the sales were sold to customers who either traded the goods and/or blended the goods with other biodiesel. The two companies did not know whether the customers sold the products to the Union as Canadian biodiesel, whether they blended it, or whether the biodiesel was sold to end customers in the USA or in Canada.

(34)

Even if in an extreme case it was assumed that all genuine Canadian biodiesel ended up in the Union, this would account for only 20 % of total imports into the Union from Canada during the IP.

(35)

The reconciliation of statistics with the data obtained from the cooperating producers showed that Canadian biodiesel producers could not have produced the volume exported from Canada into the Union. This therefore strongly suggests that the surge of imports from Canada into the Union relates to exports of US biodiesel consigned from Canada.

(36)

The overall decrease of US exports to the Union as from 2008 and the parallel increase of exports from Canada to the Union and of exports from the USA to Canada after the imposition of the original measures can thus be considered as a change in the pattern of trade.

(37)

The investigation did not bring to light any other due cause or economic justification for the transhipment than the avoidance of the payment of the countervailing duty in force on biodiesel originating in the USA.

(38)

Eurostat data was used to assess whether the imported products had, in terms of quantities, undermined the remedial effects of the countervailing measures in force on imports of biodiesel from the USA. The quantities and prices of exports from Canada were compared with the injury elimination level established in the original investigation.

(39)

As mentioned above, imports from Canada into the Union increased from 1 725 tonnes in 2008 to 197 772 tonnes during the IP, the latter representing a share of imports of 9,2 %. The increase of imports from Canada could not be considered to be insignificant bearing in mind the size of the Union market as determined in the original investigation. Considering the non-injurious price level established in the original investigation, Canadian imports into the Union during the IP showed underselling in the region of 50 %, while undercutting the Union producers’ sales prices by approximately 40 %.

(40)

It was therefore concluded that the measures are being undermined in terms of quantities and prices.

(41)

Regarding subsidisation, it should be noted that the US biodiesel tax credit, the main subsidy scheme found in the original investigation, was retroactively reinstated in December 2010. On this basis, it is concluded that the imported like product still benefited from subsidies during the IP.

(42)

The investigation concluded that the definitive countervailing duties imposed on imports of biodiesel originating in the USA were circumvented by transhipment via Canada pursuant to Article 23 of the basic Regulation.

(43)

Two traders located in Singapore cooperated with the investigation. In addition, cooperation was received from the relevant authorities of the Government of Singapore.

(44)

The criteria for the assessment of the existence of circumvention have been described in recital 23 above.

(45)

According to Eurostat figures total exports of biodiesel from Singapore to the Union increased from 179 tonnes in 2008 to 20 486 tonnes in 2009 and to 32 078 tonnes during the IP. Exports from the USA to Singapore have also increased over the same period.

(46)

According to the relevant authorities of the Government of Singapore the biodiesel produced locally is sold mostly within Singapore to cater to domestic demand. However, they do note a growing industry in Singapore with the recent construction of new production facilities.

(47)

Exports from Singapore have traditionally been low. Imports of biodiesel into the Union were closely examined in the Article 14(6) database and checked with the relevant national customs authorities. It appears that imports have arrived in a few spikes. The analysis showed that the majority of these imports were genuine Singaporean origin. However, not all imports could be accounted for.

(48)

Compared to the Union consumption established in the original investigation the import volumes from Singapore to the Union which could not be accounted for were found to be extremely low. Furthermore, their share of Union consumption, taking account of EBB’s estimation of the considerable increase in Union consumption since the original investigation, would be negligible.

(49)

In view of the above, it can be concluded that the remedial effects of the countervailing measures have not been undermined in terms of quantities from Singapore.

(50)

Regarding transhipment, it is well-known that Singapore is a huge shipping hub in Asia where regional ships arrive and unload goods which are later reloaded to ships sailing, among others, to Europe. In this investigation, one of the cooperating traders transhipped biodiesel with Malaysian or Indonesian origin through Singapore with a final destination in the Union. During the IP, this trader alone exported a significant quantity of biodiesel to the Union via transhipment in Singapore and customs cleared the biodiesel in the Union as Malaysian or Indonesian origin. The verification did not reveal indications to put in question the declared Indonesian or Malaysian origin.

(51)

In the light of the above, the investigation concerning the possible circumvention of countervailing measures by imports of biodiesel consigned from Singapore should be terminated.

(52)

Five US producers of biodiesel or biodiesel blends cooperated in the investigation, three of which were included in the sample of the original investigation. The US Government cooperated by providing exports statistics and their interpretation of the statistics.

(53)

All three producers which were included in the sample in the original investigation had stopped exporting biodiesel after the imposition of definitive measures.

(54)

Only one of the five cooperating companies, BP North America which did not cooperate in the original investigation, exported biodiesel blends containing by weight 20 % or less of biodiesel (‘B20 and below’) to the Union during the IP.

(55)

The National Biodiesel Board (‘NBB’) which represents the US biodiesel industry argued that a product which was according to them explicitly found to be outside of the product scope of the existing measures cannot become subject to countervailing measures without a de novo anti-subsidy investigation. NBB argued that the definitive Regulation in explicit terms established the ‘product concerned’ and ‘like product’ at the level of biodiesel or biodiesel in blends with biodiesel representing more than 20 %. According to NBB, this was not an artificial threshold but corresponded to the market reality found during the original investigation. It was, e.g. found that the threshold of 20 % was appropriate to allow a clear distinction between the various types of blends which were available on the US market.

(56)

In the view of NBB and other interested parties, an anti-circumvention investigation can only extend countervailing measures on a product concerned to a like product that is only a slightly modified product compared to the product concerned. Again, NBB argued that the Council itself in the definitive Regulation had established that biodiesel in blends with a volume of biodiesel of 20 % or less is not a like product. Therefore, according to NBB, in the structure of the provisions of the basic Regulation there is no other option but to initiate a new investigation in order to determine whether these blends should become subject to measures.

(57)

In reply to these arguments, it should first of all be noted that the purpose of the anti-circumvention provisions in Article 23 of the basic Regulation is to counteract any alleged attempts to evade the measures in force. If sufficient prima facie evidence exists showing that circumvention is taking place within the meaning of Article 23(3) of the basic Regulation, the Commission will initiate an investigation in order to determine whether circumvention takes place. In accordance with Article 23(3) of the basic Regulation, the assessment of the existence of circumvention should be made, e.g. by analysing successively whether there was a change in the pattern of trade between USA and the Union, if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty and if there was evidence of injury or that the remedial effects of the duty were being undermined in terms of the prices and/or quantities.

(58)

It should also be recalled that an anti-circumvention investigation is not a review of the product scope based on Article 19 of the basic Regulation and does not change the definition of the product concerned and the like product. The provisions under Article 23 of the basic Regulation provide for the relevant legal basis for an investigation of whether there is circumvention with regard to a product subject to measures.

(59)

In this respect, the request the Commission received pursuant to Article 23(4) of the basic Regulation alleged that following the imposition of the measures, exports of biodiesel in blends containing 20 % or less biodiesel from the USA had begun to arrive in the Union, allegedly taking advantage of the biodiesel content threshold set in the description of the product concerned and the like product. The investigation examined whether such practice could be considered as circumvention pursuant to the provisions of Article 23 of the basic Regulation. Finally, it should be noted that alleged circumvention practices can only be examined under Article 23 of the basic Regulation.

(60)

As mentioned above in recital 20, the US HTS code 3824 90 40 00 contains also blends with a biodiesel content of 96,5 % and below. According to the US export statistics a total quantity of 358 291 tonnes of this type of blend was exported to the Union during the IP.

(61)

BP Products North America (‘BPNA’) during the IP exported a significant proportion of the above-mentioned quantity.

(62)

BPNA did not participate in the original investigation because it started up its biodiesel activities only in the beginning of 2009 in anticipation of a growing biodiesel market in the future, in response to government mandates both in the USA and abroad. BPNA started to export to the Union in December 2009. In this respect it is recalled that definitive measures were imposed in July 2009.

(63)

In the Union, BP sold US origin biodiesel blend containing by weight 15 % or less of biodiesel (‘B15’) in the UK, France and the Netherlands. In all cases, the product is further blended in order to respect the relevant legislation in force in certain Member States to promote the consumption of biofuels at the pump because they are currently considered environmentally sustainable.

(64)

BPNA argued that blends less than 15 % are not a like product for the product concerned. The characteristics and market realities are very different. The logistics involved (including shipping restrictions) in the production and importing of lower blends are very different to those of higher grades. According to BPNA, when transporting blends less than 15 %, such products are classified as a petroleum product for shipping as opposed to a chemical product which makes the shipment less costly. BPNA also argued that there are differences in performance between higher and lower grade biodiesel blends when used in diesel engines.

(65)

The objective of a circumvention investigation is to establish whether biodiesel in a blend containing by weight 20 % or less of biodiesel has circumvented the measures in force. It may well be the case that lower blends attract lower shipping costs. However, it should be noted that a blend of B20 and below is effectively only a different composition of the blend, in comparison to the process of producing biodiesel in a blend above B20. It is a simple process to change the composition of a blend. Putting into existence B20 and below is considered to be merely a slight modification of the product concerned, the only difference being the biodiesel proportion in the blend. It should also be noted that the product concerned as well as B20 and below ultimately are destined for the same uses in the Union. Furthermore, biodiesel in blends of B20 and below as well as biodiesel in blends above B20 have the same essential characteristics.

(66)

Imports of the product concerned from the USA dropped from 1 487 790 tonnes in 2008 to 381 227 tonnes in 2009 and to close to zero during the IP.

(67)

In this regard, it should be noted that though there was mandatory blending of, e.g. B5 in the Union during the original investigation, exports of B20 and below from the USA to the Union only came into existence following the imposition of definitive measures. During the original investigation, mainly exports of B99,9 were exported to the Union according to the data obtained from the sampled cooperating exporting producers. The reason for this was that it maximised the subsidy on the exported goods (USD 1 biodiesel tax credit per gallon).

(68)

It is therefore difficult to see what the economic justification would be for starting to export B20 and below other than the avoidance of the countervailing measures in place.

(69)

The proportion of biodiesel in the blend is still subsidised and the importer avoids the payment of the countervailing duty due. In this respect, it should be noted that the countervailing duty on blends is applicable in proportion to the biodiesel in the blend, i.e. in the case of imports of B15 the countervailing duty not paid would be up to around EUR 35 per tonne.

(70)

According to BNPA, the creation of less than B15 biodiesel was not created specifically to avoid duties. The company argued that it did not participate in the original investigation because it started up its biodiesel activities beginning of 2009 in anticipation of a future active biodiesel market in response to government mandates, both in the USA and abroad. The specific structure of the company, its activity as a petroleum company and its logistic presence in the USA, made blending in the USA and exporting to the Union a logical commercial decision. The blend exported was always B15 and below, because of the less stringent security measures: up to B15 the blend is not considered a chemical product according to maritime regulations.

(71)

It is noted that this company’s activity in regard to exports to the Union only started after the imposition of measures. It is considered that there is insufficient due cause or economic justification other than the avoidance of the payment of the countervailing duty in force on biodiesel originating in the USA.

(72)

Considering the non-injurious price level of the original investigation, US imports of B20 and below into the Union during the IP showed both undercutting and underselling. The imports of B20 and below only came into existence following the imposition of definitive measures and the quantities involved are not insignificant.

(73)

It was therefore concluded that the measures are being undermined in terms of quantities and prices.

(74)

Regarding subsidisation, it should be noted that the US biodiesel tax credit, the main subsidy scheme found in the original investigation, was retroactively reinstated in December 2010. On this basis, it is concluded that the imported like product still benefited from subsidies during the IP.

(75)

The investigation concluded that the definitive countervailing duties imposed on imports of biodiesel originating in the USA were circumvented by imports into the Union of biodiesel in a blend containing by weight 20 % or less of biodiesel.

(76)

It was concluded that the only economic justification for exporting blends of B20 and below was prompted by the subsidisation in the USA on the one hand, and the avoidance of paying any countervailing duties when importing into the Union on the other hand.

(77)

BPNA requested an exemption from the possible extended measures. However, as the investigation clearly showed that imports of B20 and below were only done in order to circumvent the measures in force, such exemption cannot be granted. Pursuant to the provisions of Article 23(6) of the basic Regulation, exemptions may be granted to producers of the product concerned who can show that they are not related to any producer subject to measures and that they are found not to be engaged in circumvention practices. In these investigations, it was found that BPNA is involved in the circumvention practices by starting to export B20 and below after the imposition of anti-dumping and countervailing measures without sufficient due cause or economic justification other than the imposition of the measures. Moreover, there is evidence that the effects of the measures are being undermined in terms of prices and quantities, and the imported product is still being subsidised.

(78)

Some biodiesel producers cooperating in the original investigations requested exemptions from any extended measures due to circumvention. It was found that these US producers did not produce or sell B20 and below. Pursuant to Article 23(6) of the basic Regulation, only producers’ request for exemption can be considered in the course of an anti-circumvention investigation. However, it should be noted that Article 23 of the basic Regulation contains new-comer provisions.

(79)

Given the above, it was concluded that the definitive countervailing duty imposed on imports of biodiesel originating in the USA was circumvented by transhipment via Canada pursuant to Article 23 of the basic Regulation.

(80)

In accordance with the first sentence of Article 23(1) of the basic Regulation, the measures in force on imports of the product concerned originating in the USA, should be therefore extended to imports of the same product consigned from Canada, whether declared as originating in Canada or not.

(81)

In order to avoid evasion of the duty by unverifiable allegations that the product transhipped through Canada has been produced by a company subject to an individual duty in the definitive Regulation, the measure to be extended should be the one established for ‘All other companies’ in Article 1(2) of Regulation (EC) No 598/2009, which is a definitive countervailing duty of EUR 237 per tonne.

(82)

The countervailing duty on blends shall be applicable in proportion,in the blend, by weight, of the total content of fatty-acid mono alkyl esters and of paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin (biodiesel content).

(83)

In accordance with Articles 23(4) and 24(5) of the basic Regulation, which provide that any extended measure shall apply to imports which entered the Union under registration imposed by the initiation Regulation, duties should be collected on those registered imports of biodiesel consigned from Canada.

(84)

Given the above, it was concluded that the definitive countervailing duty imposed on imports of biodiesel originating in the USA was circumvented by imports into the Union of B20 and below pursuant to Article 23 of the basic Regulation.

(85)

In accordance with the first sentence of Article 23(1) of the basic Regulation, the measures in force on imports of the product concerned originating in the USA should therefore be extended to imports of B20 and below.

(86)

The measures to be extended should be those established in Article 1(2) of Regulation (EC) No 598/2009.

(87)

The extended countervailing duty on blends shall be applicable in proportion, in the blend, by weight, of the total content of fatty-acid mono alkyl esters and of paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin (biodiesel content).

(88)

In accordance with Articles 23(4) and 24(5) of the basic Regulation, which provides that any extended measure should apply to imports which entered the Union under registration imposed by the initiation Regulation, duties should be collected on those registered imports of B20 and below originating in the USA.

(89)

In view of the findings regarding Singapore, the investigation concerning the possible circumvention of countervailing measures by imports of biodiesel consigned from Singapore should be terminated and the registration of imports of biodiesel consigned from Singapore, introduced by the initiation Regulation, should be discontinued.

(90)

The two cooperating companies in Canada submitting a questionnaire reply requested an exemption from the possible extended measures in accordance with Article 23(6) of the basic Regulation.

(91)

It was found that the two cooperating Canadian producers were not engaged in the circumvention practices which are subject of this investigation. Furthermore, these producers could demonstrate that they are not related to any of US producers/exporters of biodiesel. Therefore, their requests for exemption can be granted.

(92)

It is considered that special measures are needed in this case in order to ensure the proper application of such exemptions. These special measures consist in the presentation to the Customs authorities of the Member States of a valid commercial invoice, which shall conform to the requirements set out in the Annex to this Regulation. Imports not accompanied by such an invoice shall be made subject to the extended countervailing duty.

(93)

One cooperating party in the USA that submitted a questionnaire reply also requested an exemption from the possible extended measures in accordance with Article 23(6) of the basic Regulation.

(94)

As explained in recital 77 above, the investigation clearly showed that this party was engaged in the circumvention practices by importing B20 and below. Consequently, such exemption cannot be granted.

(95)

However, it should be underlined that, should any exporting producer(s) concerned not be availing from subsidisation anymore, such parties can request a review pursuant to Article 19 of the basic Regulation.

(96)

All interested parties were informed of the essential facts and considerations leading to the above conclusions and were invited to comment. The oral and written comments submitted by the parties were considered,

(1)

The Commission, by Regulation (EC) No 193/2009 (2) imposed a provisional anti-dumping duty on imports of biodiesel originating in the United States of America (USA).

(2)

By Regulation (EC) No 599/2009 (3) (the definitive Regulation), the Council imposed a definitive anti-dumping duty ranging from EUR 0 to EUR 198 per tonne on imports of biodiesel, as defined in Article 1(1) of the said Regulation (the product concerned) originating in the USA (the existing measures). The investigation leading to the adoption of the definitive Regulation is hereafter referred to as ‘the original investigation’.

(3)

It should also be noted that by Regulation (EC) No 598/2009 (4), the Council imposed a definitive countervailing duty ranging from EUR 211,2 to EUR 237 per tonne on imports of the product concerned.

(4)

On 30 June 2010, the Commission received a request pursuant to Article 13(3) of the basic Regulation to investigate the possible circumvention of the anti-dumping measures imposed on imports of the product concerned. The request was submitted by the European Biodiesel Board (EBB) on behalf of the Union producers of biodiesel.

(5)

The request alleged that the anti-dumping measures on imports of the product concerned were being circumvented by means of transhipment via Canada and Singapore and by exports of biodiesel in a blend containing by weight 20 % or less of biodiesel.

(6)

The request alleged that a significant change in pattern of trade involving exports from the USA, Canada and Singapore has taken place following the imposition of measures on the product concerned, and that there is insufficient due cause or justification other than the imposition of the duty for this change. This change in pattern of trade stemmed allegedly from the transhipment of the product concerned via Canada and Singapore.

(7)

The request further alleged that following the imposition of the measures, exports of biodiesel in blends containing 20 % or less of biodiesel from the USA had begun to arrive in the Union, allegedly taking advantage of the biodiesel content threshold set in the description of the product concerned.

(8)

Furthermore, the request alleged that the remedial effects of the existing anti-dumping measures on the product concerned were being undermined both in terms of quantity and price. It was alleged that significant volumes of imports of biodiesel in pure form or in a blend containing by weight more than 20 % of biodiesel from Canada and Singapore and of biodiesel in blends containing 20 % or less of biodiesel, appeared to have replaced imports of the product concerned. In addition, there was sufficient evidence that this increased volume of imports were made at prices well below the non-injurious price established in the investigation that led to the existing measures.

(9)

Finally, the request alleged that the prices of the product concerned continued to be subsidised as previously established.

(10)

Having determined, after consulting the Advisory Committee, that sufficient prima facie evidence existed for the initiation of an investigation pursuant to Article 13 of the basic Regulation, the Commission initiated an investigation by Regulation (EU) No 720/2010 (5) (the initiation Regulation). Pursuant to Article 14(5) of the basic Regulation, the Commission, by the initiation Regulation, also directed the customs authorities to register imports consigned from Canada and Singapore as well as imports originating in the USA of biodiesel in a blend containing by weight 20 % or less of fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin.

(11)

The Commission also initiated a parallel investigation by Regulation (EU) No 721/2010 (6) concerning the possible circumvention of countervailing measures on imports of biodiesel originating in the USA by imports of biodiesel consigned from Canada and Singapore and by imports of biodiesel in a blend containing by weight 20 % or less of biodiesel originating in the USA.

(12)

The Commission officially advised the authorities of the USA, Canada and Singapore. Questionnaires were sent to known producers/exporters in USA, Canada and Singapore. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set in the initiation Regulation.

(13)

The following companies submitted replies to the questionnaires and verification visits were subsequently carried out at their premises:

(14)

Moreover, visits were made to the relevant competent authorities of the Government of Canada and the Government of Singapore.

(15)

The investigation period covered the period from 1 April 2009 to 30 June 2010 (the IP). Data was collected for the period from 2008 up to the end of the IP to investigate the alleged change in the pattern of trade.

(16)

The product concerned by the possible circumvention, i.e. the product at issue in the original investigation, is fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin, commonly known as ‘biodiesel’, in pure form or in a blend containing by weight more than 20 % of fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin, currently falling within CN codes ex 1516 20 98, ex 1518 00 91, ex 1518 00 99, ex 2710 19 41, 3824 90 91, ex 3824 90 97, and originating in the USA.

(17)

The product forming the object of the circumvention investigation is twofold. Firstly, regarding the allegations of transhipment through Canada and Singapore, it is identical to the product at issue in the original investigation, as described in the previous paragraph. Regarding shipments directly from the USA, the product under investigation is biodiesel in a blend containing by weight 20 % or less of fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin, originating in the USA.

(18)

Following the imposition of provisional anti-dumping measures in March 2009, imports of the product concerned have practically ceased. The below table summarises the situation:

Imports of biodiesel and certain biodiesel blends into the European Union

under code CN 3824 90 91 (in tonnes)

(19)

The above Eurostat data cover all biodiesel containing 96,5 % or more of esters.

(20)

In comparison, the USA report exports of biodiesel and biodiesel blends under code HTS 3824.90.40.00 (mixtures of fatty substances, animal or vegetable origin) as follows:

US exports of biodiesel and biodiesel blends

under code HTS 3824.90.40.00 (in tonnes)

(21)

Comparing the two above tables leads to the conclusion that the 358 291 tonnes exported to the Union during the IP are blends with a biodiesel content of 96,5 % and below.

(22)

There was a high level of cooperation by producers/exporters in Canada. Two producers representing approximately 90 % of Canadian production of biodiesel submitted a questionnaire reply and fully cooperated with the investigation. Moreover, the Canadian Renewable Fuels Association and relevant authorities of the Government of Canada cooperated with the investigation.

(23)

In accordance with Article 13(1) of the basic Regulation, the assessment of the existence of circumvention should be made by analysing successively whether there was a change in the pattern of trade between USA, Canada and the Union, if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty, if there was evidence of injury or that the remedial effects of the duty were being undermined in terms of the prices and/or quantities of the like product, and that there is evidence of dumping in relation to the normal values previously established for the like product.

(24)

Imports of biodiesel from the USA dropped from 1 487 790 tonnes in 2008, to 381 227 tonnes in 2009 and to close to zero during the IP.

(25)

On the other hand, according to Eurostat data total imports of biodiesel from Canada to the Union increased significantly between 2008 and the IP from 1 725 tonnes in 2008 to 140 043 tonnes in 2009 and 197 772 tonnes during the IP.

(26)

There are no customs duties applicable for sales of biodiesel between the USA and Canada or other kinds of imports restrictions.

(27)

According to the US statistics, exports of biodiesel from the USA to Canada increased from 967 tonnes in 2008 to 128 233 tonnes in 2009 and 161 841 tonnes during the IP.

(28)

A comparison of the export statistics provided by the US authorities with the import statistics provided on-spot by the Canadian authorities showed significant discrepancies on a monthly basis. According to the Canadian statistics, imports of US biodiesel increased from 11 757 tonnes in 2008 to 18 673 tonnes in 2009 and 174 574 tonnes during the IP.

(29)

According to the Canadian authorities, there is no specific code to declare biodiesel. They noted that Canada and the USA exchange import data for use as their respective export data. As such, at the six-digit level Canadian import data and US export data should match, which they do quite closely under HTS 3824.90. However, beyond six digits they each have their own classification systems. Also it should be noted that the Canadian statistics only cover imports which have been customs cleared in Canada and not transhipped goods.

(30)

In conclusion, despite the discrepancies between the two data sources, it is clear that US export of biodiesel to Canada increased from 2008 to the IP, and in particular following the imposition of anti-dumping measures. The Canadian biodiesel market is currently not able to absorb such quantities of biodiesel. Genuine Canadian biodiesel producers are in fact export oriented.

(31)

The two cooperating producers in Canada did not purchase any biodiesel from the USA or from any other sources during the IP.

(32)

Production of biodiesel in Canada is an infant industry. Some six production facilities were in place during the IP, but the two facilities in eastern Canada, which are in fact owned and run by the two cooperating producers, alone account for approximately 90 % of total production.

(33)

From the production volumes sold by the cooperating producers, sales where end-customers were certainly in North America, i.e. in the USA or Canada, were determined. The remainder of the sales were sold to customers who either traded the goods and/or blended the goods with other biodiesel. The two companies did not know whether the customers sold the products to the Union as Canadian biodiesel, whether they blended it, or whether the biodiesel was sold to end-customers in the USA or in Canada.

(34)

Even if in an extreme case it was assumed that all genuine Canadian biodiesel ended up in the Union, this would account for only 20 % of total imports into the Union from Canada during the IP.

(35)

The reconciliation of statistics with the data obtained from the cooperating producers showed that Canadian biodiesel producers could not have produced the volume exported from Canada into the Union. This therefore strongly suggests that the surge of imports from Canada to the Union market relates to exports of US biodiesel consigned from Canada.

(36)

The overall decrease of US exports to the Union as from 2008 and the parallel increase of exports from Canada to the Union and of exports from the USA to Canada after the imposition of the original measures can thus be considered as a change in the pattern of trade.

(37)

The investigation did not bring to light any other due cause or economic justification for the transhipment than the avoidance of the payment of the anti-dumping duty in force on biodiesel originating in the USA.

(38)

Eurostat data was used to assess whether the imported products had, in terms of quantities, undermined the remedial effects of the anti-dumping measures in force on imports of biodiesel from the USA. The quantities and prices of exports from Canada were compared with the injury elimination level established in the original investigation.

(39)

As mentioned above, imports from Canada into the Union increased from 1 725 tonnes in 2008 to 197 772 tonnes during the IP, the latter representing a share of imports of 9,2 %. The increase of imports from Canada could not be considered to be insignificant bearing in mind the size of the Union market as determined in the original investigation. Considering the non-injurious price level established in the original investigation, Canadian imports into the Union during the IP showed underselling in the region of 50 %, while undercutting the Union producers’ sales prices by approximately 40 %.

(40)

It was therefore concluded that the measures are being undermined in terms of quantities and prices.

(41)

In accordance with Article 13(1) and (2) of the basic Regulation it was examined whether there was evidence of dumping in relation to the normal value established in the original investigation.

(42)

In the original investigation normal value was established on the basis of domestic sales prices in the ordinary course of trade and constructed based on the cost of production plus a reasonable profit margin where there were no domestic sales or where they were not in the ordinary course of trade.

(43)

Export prices from Canada were established on the basis of the average import price of biodiesel during the IP as reported in Eurostat.

(44)

For the purpose of a fair comparison between the normal value and export price, due allowance, in the form of adjustments, was made for differences which affect prices and price comparability in accordance with Article 2(10) of the basic Regulation. Accordingly, in the absence of information relating to a number of costs items, only transport costs and insurance based on the observed average costs for ocean freight of biodiesel from the USA to the Union during the original investigation period, were deducted from the Eurostat CIF prices in order to arrive at the FOB prices at the Canadian border.

(45)

In accordance with Article 2(11) and (12) of the basic Regulation, dumping was calculated by comparing the weighted average normal value as established in the original investigation and the weighed average export prices during the IP, expressed as a percentage of the CIF price at the Union frontier duty unpaid.

(46)

This comparison showed the existence of dumping.

(47)

The investigation concluded that the definitive anti-dumping duties imposed on imports of biodiesel originating in the USA were circumvented by transhipment via Canada pursuant to Article 13 of the basic Regulation.

(48)

Two traders located in Singapore cooperated with the investigation. In addition, cooperation was received from the relevant authorities of the Government of Singapore.

(49)

The criteria for the assessment of the existence of circumvention have been described in recital 23 above.

(50)

According to Eurostat figures total exports of biodiesel from Singapore to the Union increased from 179 tonnes in 2008 to 20 486 tonnes in 2009 and to 32 078 tonnes during the IP. Exports from the USA to Singapore have also increased over the same period.

(51)

According to the relevant authorities of the Government of Singapore the biodiesel produced locally is sold mostly within Singapore to cater to domestic demand. However, they do note a growing industry in Singapore with the recent construction of new production facilities.

(52)

Exports from Singapore have traditionally been low. Imports of biodiesel into the Union were closely examined in the Article 14(6) database and checked with the relevant national customs authorities. It appears that imports have arrived in a few spikes. The analysis showed that the majority of these imports were of genuine Singaporean origin. However, not all imports could be accounted for.

(53)

Compared to the Union consumption established in the original investigation the import volumes from Singapore to the Union, which could not be accounted for, were found to be extremely low. Furthermore, their share of Union consumption, taking account of EBB’s estimation of the considerable increase in Union consumption since the original investigation, would be negligible.

(54)

In view of the above, it can be concluded that the remedial effects of the anti-dumping measures have not been undermined in terms of quantities consigned from Singapore.

(55)

Regarding transhipment, it is well known that Singapore is a huge shipping hub in Asia where regional ships arrive and unload goods which are later reloaded to ships sailing, among others, to Europe. In this investigation, one of the cooperating traders transhipped biodiesel with Malaysian or Indonesian origin through Singapore with a final destination in the Union. During the IP, this trader alone exported a significant quantity of biodiesel to the Union via transhipment in Singapore and customs cleared the biodiesel in the Union as Malaysian or Indonesian origin. The verification did not reveal indications to put in question the declared Indonesian or Malaysian origin.

(56)

In the light of the above, the investigation concerning the possible circumvention of anti-dumping measures by imports of biodiesel consigned from Singapore should be terminated.

(57)

Five US producers of biodiesel or biodiesel blends cooperated in the investigation, three of which were included in the sample of the original investigation. The US Government cooperated by providing exports statistics and their interpretation of the statistics.

(58)

All three producers which were included in the sample in the original investigation had stopped exporting biodiesel after the imposition of definitive measures.

(59)

Only one of the five cooperating companies, BP North America which did not cooperate in the original investigation, exported biodiesel blends containing by weight 20 % or less of biodiesel (B20 and below) to the Union during the IP.

(60)

The National Biodiesel Board (NBB) which represents the US biodiesel industry argued that a product which was according to them explicitly found to be outside of the product scope of the existing measures cannot become subject to anti-dumping measures without a de novo anti-dumping investigation. NBB argued that the definitive Regulation in explicit terms established the ‘product concerned’ and ‘like product’ at the level of biodiesel or biodiesel in blends with biodiesel representing more than 20 %. According to NBB, this was not an artificial threshold but corresponded to the market reality found during the original investigation. It was, for example, found that the threshold of 20 % was appropriate to allow a clear distinction between the various types of blends which were available on the US market.

(61)

In the view of NBB and other interested parties, an anti-circumvention investigation can only extend anti-dumping measures on a product concerned to a like product that is only a slightly modified product compared to the product concerned. Again, NBB argued that the Council itself, in the definitive Regulation, had established that biodiesel in blends with a volume of biodiesel of 20 % or less is not a like product. Therefore, according to NBB, in the structure of the provisions of the basic Regulation there is no other option but to initiate a new investigation in order to determine whether these blends should become subject to measures.

(62)

In reply to these arguments, it should first of all be noted that the purpose of the anti-circumvention provisions in Article 13 of the basic Regulation is to counteract any alleged attempts to evade the measures in force. If sufficient prima facie evidence exists showing that circumvention is taking place within the meaning of Article 13(1) of the basic Regulation, the Commission will initiate an investigation in order to determine whether circumvention takes place. In accordance with Article 13(1) of the basic Regulation, the assessment of the existence of circumvention should be made, for example, by analysing successively whether there was a change in the pattern of trade between USA and the Union, if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty and if there was evidence of injury or that the remedial effects of the duty were being undermined in terms of the prices and/or quantities.

(63)

It should also be recalled that an anti-circumvention investigation is not a review of the product scope based on Article 11(3) of the basic Regulation and does not change the definition of the product concerned and the like product. The provisions under Article 13 of the basic Regulation provide for the relevant legal basis for an investigation of whether there is circumvention with regard to a product subject to measures.

(64)

In this respect, the request the Commission received pursuant to Article 13(3) of the basic Regulation alleged that, following the imposition of the measures, exports of biodiesel in blends containing 20 % or less biodiesel from the USA had begun to arrive in the Union, allegedly taking advantage of the biodiesel content threshold set in the description of the product concerned and the like product. The investigation examined whether such practice could be considered as circumvention pursuant to the provisions of Article 13 of the basic Regulation. Finally, it should be noted that alleged circumvention practices can only be examined under Article 13 of the basic Regulation.

(65)

As mentioned above in recital 20, the US HTS code 3824.90.40.00 contains also blends with a biodiesel content of 96,5 % and below. According to the US export statistics a total quantity of 358 291 tonnes of this type of blend was exported to the Union during the IP.

(66)

BP Products North America (BPNA) during the IP exported a significant proportion of the abovementioned quantity.

(67)

BPNA did not participate in the original investigation because it started up its biodiesel activities only in the beginning of 2009 in anticipation of a growing biodiesel market in the future, in response to government mandates both in the USA and abroad. BPNA started to export to the Union in December 2009. In this respect it is recalled that definitive measures were imposed in July 2009.

(68)

In the Union, BP sold US origin biodiesel blend containing by weight 15 % or less of biodiesel (B15) in the UK, France and the Netherlands. In all cases, the product is further blended in order to respect the relevant legislation in force in certain Member States to promote the consumption of biofuels at the pump because they are currently considered environmentally sustainable.

(69)

BPNA argued that blends less than 15 % are not a like product for the product concerned. The characteristics and market realities are very different. The logistics involved (including shipping restrictions) in the production and importing of lower blends are very different to those of higher grades. According to BPNA, when transporting blends less than 15 %, such products are classified as a petroleum product for shipping as opposed to a chemical product which makes the shipment less costly. BPNA also argued that there are differences in performance between higher and lower grade biodiesel blends when used in diesel engines.

(70)

The objective of a circumvention investigation is to establish whether biodiesel in a blend containing by weight 20 % and less of biodiesel has circumvented the measures in force. It may well be the case that lower blends attract lower shipping costs. However, it should be noted that a blend of B20 and below is effectively only a different composition of the blend, in comparison to the process of producing biodiesel in a blend above B20. It is a simple process to change the composition of a blend. Putting into existence B20 and below is considered to be merely a slight modification of the product concerned, the only difference being the biodiesel proportion in the blend. It should also be noted that the product concerned, as well as B20 and below, ultimately are destined for the same uses in the Union. Furthermore, biodiesel in blends of B20 and below as well as biodiesel in blends above B20 have the same essential characteristics.

(71)

Imports of the product concerned from the USA dropped from 1 487 790 tonnes in 2008 to 381 227 tonnes in 2009 and to close to zero during the IP.

(72)

In this regard, it should be noted that though there was mandatory blending of, for example, B5 in the Union during the original investigation, exports of B20 or below from the USA to the Union only came into existence following the imposition of definitive measures. During the original investigation, mainly exports of B99,9 were exported to the Union according to the data obtained from the sampled cooperating exporting producers. The reason for this was that it maximised the subsidy on the exported goods (USD 1 biodiesel tax credit per gallon).

(73)

It is therefore difficult to see what the economic justification would be for starting to export B20 and below other than the avoidance of the anti-dumping measures in place.

(74)

The proportion of biodiesel in the blend is still subsidised and the importer avoids the payment of the anti-dumping duty due. In this respect, it should be noted that the anti-dumping duty on blends is applicable in proportion to the biodiesel in the blend, i.e. in the case of imports of B15 the anti-dumping duty not paid would be up to around EUR 26 per tonne.

(75)

According to BNPA, the creation of less than B15 biodiesel was not created specifically to avoid duties. The company argued that it did not participate in the original investigation because it started up its biodiesel activities beginning of 2009 in anticipation of a future active biodiesel market in response to government mandates, both in the USA and abroad. The specific structure of the company, its activity as a petroleum company and its logistic presence in the USA, made blending in the USA and exporting to the Union a logical commercial decision. The blend exported was always B15 or below, because of the less stringent security measures: up to B15 the blend is not considered a chemical product according to maritime regulations.

(76)

It is noted that this company’s activity in regard to exports to the Union only started after the imposition of measures. It is considered that there is insufficient due cause or economic justification other than the avoidance of the payment of the anti-dumping duty in force on biodiesel originating in the USA.

(77)

Considering the non-injurious price level of the original investigation, US imports of B20 and below into the Union during the IP showed both undercutting and underselling. The imports of B20 and below only came into existence following the imposition of definitive measures and the quantities involved are not insignificant.

(78)

It was therefore concluded that the measures are being undermined in terms of quantities and prices.

(79)

In accordance with Article 13(1) and (2) of the basic Regulation it was examined whether there was evidence of dumping in relation to the normal value established in the original investigation. The comparison of the weighted average normal value and the weighted average export price showed the existence of dumping.

(80)

The investigation concluded that the definitive anti-dumping duties imposed on imports of biodiesel originating in the USA were circumvented by imports into the Union of biodiesel in a blend containing by weight 20 % or less of biodiesel.

(81)

It was concluded that the only economic justification for exporting blends of B20 and below was prompted by the subsidisation in the USA on the one hand, and the avoidance of paying any anti-dumping duties when importing into the Union on the other hand.

(82)

BPNA requested an exemption from the possible extended measures. However, as the investigation clearly showed that imports of B20 and below were only done in order to circumvent the measures in force, such exemption cannot be granted. Pursuant to the provisions of Article 13(4) of the basic Regulation, exemptions may be granted to producers of the product concerned who can show that they are not related to any producer subject to measures and that they are found not to be engaged in circumvention practices. In these investigations, it was found that BPNA is involved in the circumvention practices by starting to export B20 and below after the imposition of anti-dumping and countervailing measures without sufficient due course or economic justification other than the imposition of the measures. Moreover, there is evidence that the effects of the measures are being undermined in terms of prices and quantities, and that dumping in relation to the normal values previously established exists.

(83)

Some biodiesel producers cooperating in the original investigations requested exemptions from any extended measures due to circumvention. It was found that these US producers did not produce or sell biodiesel B20 and below. Pursuant to Article 13(4) of the basic Regulation, only producers’ request for exemption can be considered in the course of an anti-circumvention investigation. However, it should be noted that Article 13 of the basic Regulation contains newcomer provisions.

(84)

Given the above, it was concluded that the definitive anti-dumping duty imposed on imports of biodiesel originating in the USA was circumvented by transhipment via Canada pursuant to Article 13 of the basic Regulation.

(85)

In accordance with the first sentence of Article 13(1) of the basic Regulation, the measures in force on imports of the product concerned originating in the USA, should therefore be extended to imports of the same product consigned from Canada, whether declared as originating in Canada or not.

(86)

In order to avoid evasion of the duty by unverifiable allegations that the product transhipped through Canada has been produced by a company subject to an individual duty in the definitive Regulation, the measure to be extended should be the one established for ‘All other companies’ in Article 1(2) of Regulation (EC) No 599/2009, which is a definitive anti-dumping duty of EUR 172,2 per tonne.

(87)

The anti-dumping duty on blends shall be applicable in proportion in the blend, by weight, of the total content of fatty-acid mono alkyl esters and of paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin (biodiesel content).

(88)

In accordance with Articles 13(3) and 14(5) of the basic Regulation, which provides that any extended measure should apply to imports which entered the Union under registration imposed by the initiation Regulation, duties should be collected on those registered imports of biodiesel consigned from Canada.

(89)

Given the above, it was concluded that the definitive anti-dumping duty imposed on imports of biodiesel originating in the USA was circumvented by imports into the Union of B20 and below pursuant to Article 13 of the basic Regulation.

(90)

In accordance with the first sentence of Article 13(1) of the basic Regulation, the measures in force on imports of the product concerned originating in the USA, should therefore be extended to imports of B20 and below.

(91)

The measures to be extended shall be those established in Article 1(2) of Regulation (EC) No 599/2009.

(92)

The extended anti-dumping duty on blends shall be applicable in proportion in the blend, by weight, of the total content of fatty-acid mono alkyl esters and of paraffinic gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin (biodiesel content).

(93)

In accordance with Articles 13(3) and 14(5) of the basic Regulation, which provides that any extended measure should apply to imports which entered the Union under registration imposed by the initiation Regulation, duties should be collected on those registered imports of B20 and below originating in the USA.

(94)

In view of the findings regarding Singapore, the investigation concerning the possible circumvention of anti-dumping measures by imports of biodiesel consigned from Singapore should be terminated and the registration of imports of biodiesel consigned from Singapore, introduced by the initiation Regulation, should be discontinued.

(95)

The two cooperating companies in Canada submitting a questionnaire reply requested an exemption from the possible extended measures in accordance with Article 13(4) of the basic Regulation.

(96)

It was found that the two cooperating Canadian producers were not engaged in the circumvention practices which are the subject of this investigation. Furthermore, these producers could demonstrate that they are not related to any of US producers/exporters of biodiesel. Therefore, their requests for exemption can be granted.

(97)

It is considered that special measures are needed in this case in order to ensure the proper application of such exemptions. These special measures consist in the presentation to the Customs authorities of the Member States of a valid commercial invoice, which shall conform to the requirements set out in the Annex to this Regulation. Imports not accompanied by such an invoice shall be made subject to the extended anti-dumping duty.

(98)

One cooperating party in the USA submitting a questionnaire reply requested an exemption from the possible extended measures in accordance with Article 13(4) of the basic Regulation.

(99)

As explained in recital 82 above, the investigation clearly showed this party was engaged in the circumvention practices by importing B20 and below. Consequently, such exemption cannot be granted.

(100)

However, it should be underlined that, should any exporting producer(s) concerned not be dumping anymore, such parties can request a review pursuant to Article 11(3) of the basic Regulation.

(101)

All interested parties were informed of the essential facts and considerations leading to the above conclusions and were invited to comment. The oral and written comments submitted by the parties were considered,

(1)

On 13 August 2010, the European Commission (the Commission) announced, by a notice published in the Official Journal of the European Union (2) (Notice of initiation), the initiation of an anti-dumping proceeding with regard to imports into the Union of certain fatty alcohols and their blends (the product investigated) originating in India, Indonesia, and Malaysia (the countries concerned).

(2)

The anti-dumping proceeding was initiated following a complaint lodged on 30 June 2010 by two Union producers, Cognis GmbH and Sasol Olefins & Surfactants GmbH (the complainants). Both these companies are incorporated under German law, with production sites in Germany, France and Italy. These two companies represent a major proportion, in this case more than 25 % of total Union production of the product investigated. The complaint contained prima facie evidence of dumping of the said product originating in the countries concerned and of material injury resulting therefrom, which was considered sufficient to justify the initiation of a proceeding.

(3)

The Commission officially advised the complainants, other known Union producers, importers/traders and users known to be concerned, the known exporting producers and representatives of the exporting countries concerned of the initiation of the proceeding. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set in the Notice of initiation.

(4)

All interested parties, who so requested and showed that there were particular reasons why they should be heard, were granted a hearing.

(5)

In view of the large number of importers identified from the complaint, sampling was envisaged for importers in the Notice of initiation in accordance with Article 17(1) of the basic Regulation. Four importers provided the requested information and agreed to be included in the sample within the deadline set in the Notice of initiation. Given this low number of importers who made themselves known, it was decided not to apply sampling.

(6)

The Commission sent questionnaires to exporting producers, Union producers, importers and to all users and suppliers known to be concerned as well as to all other parties who requested so within the deadlines set out in the Notice of initiation.

(7)

Questionnaire replies were received from 5 Union producers, 2 importers, 21 users in the Union, 2 exporting producer in India, 2 exporting producers in Indonesia and their related traders, and 3 exporting producers in Malaysia and their related traders.

(8)

The Commission sought and verified all the information deemed necessary for a preliminary determination of dumping, resulting injury and Union interest. Verification visits were carried out at the premises of the following companies:

(9)

The investigation of dumping and injury covered the period from 1 July 2009 to 30 June 2010 (‘the investigation period’ or ‘IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2007 to the end of the investigation period (period considered).

(10)

The product concerned is saturated fatty alcohols with a carbon chain length of C8, C10, C12, C14, C16 or C18 (not including branched isomers) including single saturated fatty alcohols (also referred to as ‘single cuts’) and blends predominantly containing a combination of carbon chain lengths C6-C8, C6-C10, C8-C10, C10-C12 (commonly categorised as C8-C10), blends predominantly containing a combination of carbon chain lengths C12-C14, C12-C16, C12-C18, C14-C16 (commonly categorised as C12-C14) and blends predominantly containing a combination of carbon chain lengths C16-C18, originating in India, Indonesia, and Malaysia (the product concerned), currently falling within CN codes ex 2905 16 85, 2905 17 00, ex 2905 19 00 and ex 3823 70 00.

(11)

The product investigated is an intermediary product produced from natural (oleo-chemical) or synthetic (petrochemical) sources, such as natural fats and oils, crude oil, natural gas, natural gas liquids and coal. It is mainly used as an input material for the production of fatty alcohol sulphates, fatty alcohol ethoxylates and fatty alcohol ether sulphates (so-called surfactants). Surfactants are used to produce detergents, household, cleaning and personal care products.

(12)

The product exported to the Union from India, Indonesia and Malaysia, and the product produced and sold domestically in these countries and also the one manufactured and sold in the Union by the Union producers were found to have the same basic physical and technical characteristics as well as the same uses. They are therefore provisionally considered as alike within the meaning of Article 1(4) of the basic Regulation.

(13)

During the course of the investigation, certain parties claimed that one of the complainants produced, in one of its production sites, a product which includes branched isomer molecules, not covered by the product scope definition, and that therefore such production should not be considered as falling within the like product. It is provisionally determined that this claim is warranted, and therefore the data pertaining to this producer have not been used in the injury analysis. It should be noted that two other companies, one of them cooperating in the investigation, were excluded from the definition of the Union industry for the same reason.

(14)

For the determination of normal value, it was first established for each exporting producer whether its total volume of domestic sales of the like product to independent customers was representative in comparison with its total volume of export sales to the Union. In accordance with Article 2(2) of the basic Regulation domestic sales are considered to be representative when the total domestic sales volume is at least 5 % of the total volume of sales of the product concerned to the Union. It was found that the overall sales by each exporting producer of the like product on the domestic market were representative.

(15)

For each product type sold by an exporting producer on its domestic market and found to be directly comparable with the product type sold for export to the Union, it was established whether domestic sales were sufficiently representative for the purposes of Article 2(2) of the basic Regulation. Domestic sales of a particular product type were considered sufficiently representative when the total volume of that product type sold by the exporting producer concerned on the domestic market to independent customers during the IP represented at least 5 % of its total sales volume of the comparable product type exported to the Union.

(16)

It was also examined whether the domestic sales of each product type could be regarded as being made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. This was done by establishing the proportion of domestic sales to independent customers on the domestic market which were profitable for each exported type of the product concerned during the IP.

(17)

For those product types where more than 80 % by volume of sales on the domestic market of the product type were above cost and the weighted average sales price of that type was equal to or above the unit cost of production, normal value, by product type, was calculated as the weighted average of the actual domestic prices of all sales of the type in question, irrespective of whether those sales were profitable or not.

(18)

Where the volume of profitable sales of a product type represented 80 % or less of the total sales volume of that type, or where the weighted average price of that type was below the unit cost of production, normal value was based on the actual domestic price, which was calculated as a weighted average price of only the profitable domestic sales of that type made during the IP.

(19)

Both exporting producers in India exported the product concerned directly to independent customers in the Union. Export prices were therefore established on the basis of the prices actually paid or payable by these independent customers for the product concerned, in accordance with Article 2(8) of the basic Regulation.

(20)

The normal value and the export price of the exporting producers were compared on an ex-works basis.

(21)

For the purpose of ensuring a fair comparison between the normal value and export price, due allowance in the form of adjustments was made for differences affecting prices and price comparability in accordance with Article 2(10) of the basic Regulation. On this basis, adjustments for differences in indirect taxes, transport, insurance, handling, loading and ancillary costs, packing costs, credit costs, and commissions have been made where applicable and justified.

(22)

Both exporting producers claimed that their sales made to one of the complainants in the Union during the IP should be ignored when calculating the dumping margin since these sales were made in significant quantities and at strongly negotiated prices. However, there is no legal reason why such exports of the product concerned should be ignored when calculating dumping. The claims by both exporting producers are therefore rejected.

(23)

Both exporting producers claimed an adjustment for currency conversion arguing that there was a sustained appreciation of the Indian Rupee (INR) against the Euro (EUR) as from November 2009 which would have a distorting effect on the dumping calculations. The claim related to sales made in EUR from January 2010 onwards and consisted of a request that, for the purposes of converting the value of those sales into INR, the exchange rate of the month in which the sales were made be substituted by the exchange rate of 2 months earlier. Article 2(10)(j) indeed provides for an adjustment for currency conversions under certain circumstances. However, it is noted that the appreciation of the INR only occurred during the second half of the IP. Furthermore, it is noted that both Indian companies frequently increased their prices to their main customers in the Union during that period following a fairly regular pattern, and that the prices made in the Union by the complainants were also steadily increasing during the second half of the IP. There is therefore no clear evidence that the appreciation of the INR was not timely reflected in the prices charged by the Indian exporting producers to their customers in the EU or had an undue penalising effect in the dumping calculations. The claims by both companies were therefore rejected.

(24)

In accordance with Article 2(11) and (12) of the basic Regulation, the dumping margins for the cooperating Indian exporting producers were established on the basis of a comparison of the weighted average normal value with the weighted average export price.

(25)

Based on information available from the complaint and the cooperating Indian exporting producers, and considering the statistical information available, there are no other producers of the product concerned in India. Therefore, the country-wide dumping margin to be established for India was set at the same level as the highest margin found for a cooperating exporting producer.

(26)

On this basis, the provisional dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

(27)

For the determination of normal value, it was first established for each exporting producer whether its total volume of domestic sales of the like product to independent customers was representative in comparison with its total volume of export sales to the Union. In accordance with Article 2(2) of the basic Regulation domestic sales are considered to be representative when the total domestic sales volume is at least 5 % of the total volume of sales of the product concerned to the Union. It was found that the overall sales by each exporting producer of the like product on the domestic market were representative.

(28)

For each product type sold by an exporting producer on its domestic market and found to be directly comparable with the product type sold for export to the Union, it was established whether domestic sales were sufficiently representative for the purposes of Article 2(2) of the basic Regulation. Domestic sales of a particular product type were considered sufficiently representative when the total volume of that product type sold by the exporting producer concerned on the domestic market to independent customers during the IP represented at least 5 % of its total sales volume of the comparable product type exported to the Union.

(29)

It was also examined whether the domestic sales of each product type could be regarded as being made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. This was done by establishing the proportion of domestic sales to independent customers on the domestic market which were profitable for each exported type of the product concerned during the IP.

(30)

For those product types where more than 80 % by volume of sales on the domestic market of the product type were above cost and the weighted average sales price of that type was equal to or above the unit cost of production, normal value, by product type, was calculated as the weighted average of the actual domestic prices of all sales of the type in question, irrespective of whether those sales were profitable or not.

(31)

Where the volume of profitable sales of a product type represented 80 % or less of the total sales volume of that type, or where the weighted average price of that type was below the unit cost of production, normal value was based on the actual domestic price, which was calculated as a weighted average price of only the profitable domestic sales of that type made during the IP.

(32)

Wherever there were no domestic sales of a particular product type by an exporting producer, the normal value was constructed in accordance with Article 2(3) of the basic Regulation.

(33)

When constructing normal value pursuant to Article 2(3) of the basic Regulation, the amounts for selling, general and administrative costs and for profits have been based, pursuant to Article 2(6) chapeau of the basic Regulation, on the actual data pertaining to the production and sales, in the ordinary course of trade, of the like product, by the exporting producer.

(34)

The exporting producers made export sales to the Union either directly to independent customers or through related trading companies located in Singapore and in the Union.

(35)

Where export sales to the Union were made either directly to independent customers in the Union or through related trading companies located in Singapore, export prices were established on the basis of the prices actually paid or payable for the product concerned in accordance with Article 2(8) of the basic Regulation.

(36)

Where export sales to the Union were made through related trading companies located in the Union, export prices were established on the basis of the first resale prices of these related traders to independent customers in the Union, pursuant to Article 2(9) of the basic Regulation.

(37)

The normal value and the export price of the exporting producers were compared on an ex-works basis.

(38)

For the purpose of ensuring a fair comparison between the normal value and export price, due allowance in the form of adjustments was made for differences affecting prices and price comparability in accordance with Article 2(10) of the basic Regulation. On this basis, adjustments for differences in indirect taxes, transport, insurance, handling, loading and ancillary costs, packing costs, credit costs, and commissions have been made where applicable and justified.

(39)

One company claimed an adjustment for differences in physical characteristics on the basis that it exports the product investigated in both liquid and solid form to the EU whilst it only sells it in solid form on the domestic market and that the prices for the liquid form are lower than those for the solid form of the product investigated. However, the company did not provide a quantification of such adjustment. A simple comparison of export prices of solid and liquid forms of the product investigated cannot constitute a basis for granting an adjustment for differences in physical characteristics. Moreover, the accounting system of the company does not allow for a proper segregation of the cost differences between the solid and liquid product. Therefore, there was no reliable way to calculate a potential adjustment and the claim had to be rejected.

(40)

The complainants submitted a claim that the cost of energy in Indonesia is distorted due to very cheap and subsidised energy prices. However, they have not submitted any substantiated information on how such distortion of the cost of energy used for domestic and export production would affect the dumping calculations. The claim was therefore rejected.

(41)

In accordance with Article 2(11) and (12) of the basic Regulation, the dumping margins for the cooperating Indonesian exporting producers were established on the basis of a comparison of the weighted average normal value with the weighted average export price.

(42)

Based on information available from the complaint and the cooperating Indonesian exporting producers, and considering the statistical information available, there are no other producers of the product concerned in Indonesia. Therefore, the country-wide dumping margin to be established for Indonesia was set at the same level as the highest margin found for a cooperating exporting producer.

(43)

On this basis, the provisional dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are:

(44)

For the determination of normal value, it was first established for each exporting producer whether its total volume of domestic sales of the like product to independent customers was representative in comparison with its total volume of export sales to the Union. In accordance with Article 2(2) of the basic Regulation domestic sales are considered to be representative when the total domestic sales volume is at least 5 % of the total volume of sales of the product concerned to the Union. For two of the cooperating exporting producers it was found that the overall sales by the exporting producers of the like product on the domestic market were representative. For the remaining cooperating exporting producer no independent domestic sales were found in the IP.

(45)

For each product type sold by an exporting producer on its domestic market and found to be directly comparable with the product type sold for export to the Union, it was established whether domestic sales were sufficiently representative for the purposes of Article 2(2) of the basic Regulation. Domestic sales of a particular product type were considered sufficiently representative when the total volume of that product type sold by the exporting producer concerned on the domestic market to independent customers during the IP represented at least 5 % of its total sales volume of the comparable product type exported to the Union.

(46)

It was also examined whether the domestic sales of each product type could be regarded as being made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. This was done by establishing the proportion of domestic sales to independent customers on the domestic market which were profitable for each exported type of the product concerned during the IP.

(47)

For those product types where more than 80 % by volume of sales on the domestic market of the product type were above cost and the weighted average sales price of that type was equal to or above the unit cost of production, normal value, by product type, was calculated as the weighted average of the actual domestic prices of all sales of the type in question, irrespective of whether those sales were profitable or not.

(48)

Where the volume of profitable sales of a product type represented 80 % or less of the total sales volume of that type, or where the weighted average price of that type was below the unit cost of production, normal value was based on the actual domestic price, which was calculated as a weighted average price of only the profitable domestic sales of that type made during the IP.

(49)

Wherever there were no domestic sales of a particular product type by an exporting producer, the normal value was constructed in accordance with Article 2(3) of the basic Regulation.

(50)

When constructing normal value pursuant to Article 2(3) of the basic Regulation, the amounts for selling, general and administrative costs and for profits have been based, pursuant to Article 2(6) chapeau of the basic Regulation, on the actual data pertaining to the production and sales, in the ordinary course of trade, of the like product, by the exporting producer.

(51)

For the exporting producer with no domestic sales in the IP, the amounts for selling, general and administrative costs and for profits have been based, pursuant to Article 2(6)(a) of the basic Regulation, on the weighted average of the actual amounts determined for the two other exporting producers subject to investigation in respect of production and sales of the like product in the Malaysian market.

(52)

The exporting producers made export sales to the Union either directly to independent customers or through related companies located in the Union.

(53)

Where export sales to the Union were made directly to independent customers in the Union, export prices were established on the basis of the prices actually paid or payable for the product concerned in accordance with Article 2(8) of the basic Regulation.

(54)

Where export sales to the Union were made through related companies located in the Union, export prices were established on the basis of the first resale prices of these related companies to independent customers in the Union, pursuant to Article 2(9) of the basic Regulation.

(55)

The normal value and the export price of the exporting producers were compared on an ex-works basis.

(56)

For the purpose of ensuring a fair comparison between the normal value and export price, due allowance in the form of adjustments was made for differences affecting prices and price comparability in accordance with Article 2(10) of the basic Regulation. On this basis, adjustments for, transport, insurance, handling, loading and ancillary costs, packing costs, and credit costs have been made where applicable and justified.

(57)

One Malaysian exporting producer claimed that its related company in the Union is, in fact, the export department of the manufacturer. On this basis, the company claimed that there would be excessive deductions in establishing the ex-works price if full adjustments for selling, general and administration costs and profits, pursuant to Article 2(9) of the basic Regulation, were made. In this regard, it was found that invoices were issued by the related company to customers in the Union and that payments were received by the related company from customers in the Union. Furthermore, it is to be noted that the sales made by the related company included a mark-up. Also, the financial accounts of the trader showed that it bore normal selling, general and administrative costs incurred between importation and resale. It would therefore appear that the related company indeed performs the typical functions of an importer. On this basis, the company’s claim was rejected.

(58)

The complainants submitted in respect of Malaysia the same claim concerning energy costs mentioned at recital (40) for Indonesia. This claim also was rejected for the same reasons.

(59)

In accordance with Article 2(11) and (12) of the basic Regulation, the dumping margins for the cooperating Malaysian exporting producers were established on the basis of a comparison of the weighted average normal value with the weighted average export price.

(60)

Based on information available from the complaint and the cooperating Malaysian exporting producers, and considering the statistical information available, there are no other producers of the product concerned in Malaysia. Therefore, the country-wide dumping margin to be established for Malaysia was set at the same level as the highest margin found for a cooperating exporting producer.

(61)

On this basis, the provisional dumping margins expressed as a percentage of the CIF Union frontier price, duty unpaid, are:

(62)

During the IP, the like product was manufactured by two known and some other very small producers in the Union. All available information concerning Union producers, including information provided in the complaint and data collected from Union producers before and after the initiation of the investigation, was used in order to establish the total Union production. On this basis, the total Union production was estimated to be between 400 000 and 500 000 tonnes during the IP. The Union producers accounting for the total Union production constitute the Union industry within the meaning of Article 4(1) of the basic Regulation.

(63)

Some interested parties claimed that one of the complainants should not be considered part of the Union industry, because this company imported the product concerned during the IP. It was however verified that the percentage of product imported by this company from the countries concerned during the IP was relatively low, and thus not substantial in comparison with its production of the like product. Furthermore, these imports were mainly of a temporary nature. It can therefore be confirmed that the core activity of this company is production and sales of the product investigated in the EU and its main interest is that of a Union producer. In consequence, it is provisionally determined that this claim is not warranted.

(64)

Consumption was established on the basis of the total sales on the Union market of the Union industry, the captive use, and the total imports (derived from Eurostat). Since the Eurostat data include also some products other than the product concerned, appropriate adjustments were made. The information is given in index numbers (2007 = 100) to preserve confidentiality.

(65)

During the period considered, Union consumption increased slightly by 2 %. First, from 2007 to 2008, consumption increased by 2,2 %, followed by a decrease from 2008 to 2009 by 4,8 %. From 2009 to the end of the IP, consumption recovered by 4,6 %.

(66)

The economic downturn has contributed to the decrease in consumption from 2008, during which users of the product concerned experienced a drop in demand for their products. At the start of the IP, the market situation started to improve slightly, resulting in an increase in demand for the product concerned compared to the first half of 2009.

(67)

The Commission considered whether the effects of dumped imports from the countries concerned should be assessed cumulatively, on the basis of the criteria set out in Article 3(4) of the basic Regulation. This Article provides that the effects of imports from two or more countries simultaneously subject to anti-dumping investigations shall be assessed cumulatively only if it is determined that (a) the margin of dumping established in relation to the imports from each country is more than de minimis as defined in Article 9(3) of the basic Regulation and that the volume of imports of each country is not negligible and (b) a cumulative assessment of the effects of the imports is appropriate in the light of the conditions of competition between imported products and the conditions of competition between the imported products and the like Community product.

(68)

The margins of dumping established in relation to the imports from each country concerned are more than de minimis as defined in Article 9(3) of the basic Regulation, i.e. 2 % of the export prices, and the volume of imports from each country concerned is above the threshold of 1 % market share set by Article 5(7) of the basic Regulation.

(69)

The investigation further showed that the conditions of competition both between the dumped imports and between the dumped imports and the like product were similar. It was found that average import prices from all countries concerned dropped over the period considered, and followed the same trend. Furthermore, the product investigated imported from the countries concerned was alike in all respects, it is interchangeable and is marketed in the Union through comparable sales channels and under similar commercial conditions, thus competing with each other and with the product investigated produced in the Union.

(70)

On this basis, it is provisionally concluded that all conditions of cumulation are met and that accordingly the effects of the dumped imports originating in the countries concerned should be assessed jointly for the purpose of the injury analysis.

(71)

The volume of imports from the countries concerned increased significantly by 57 % during the period considered. The biggest increase took place between 2007 and 2008 when imports increased by 58 %. Imports then decreased slightly in 2009 to increase again to the 2008 level during the IP.

(72)

Average prices of imports from the countries concerned fluctuated heavily during the period considered, reflecting an overall 6 % decrease. Throughout the period considered, average prices of the imports from the countries concerned were always lower than those set by the rest of the world and by the Union Industry, thus resulting in an increase in the market share of the countries concerned.

(73)

The market share of the countries concerned increased significantly, by 54 %, during the period considered. The biggest increase took place between 2007 and 2008. There was a slight decrease of imports during the economic crisis, which reduced the market share of the countries concerned by 2 %, between 2008 and 2009, but then they recovered again this market share by the end of the period considered.

(74)

For the purposes of analysing price undercutting, the weighted average sales prices per product type of the Union industry to unrelated customers on the Union market, adjusted to an ex-works level, were compared to the corresponding weighted average prices of the imports from the countries concerned to the first independent customer on the Union market, established on a CIF basis, with appropriate adjustments for the existing customs duties and post-importation costs. This price comparison was made for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. The results of the comparison, when expressed as a percentage of the Union industry’s sales prices during the investigation period, showed significant price undercutting margins (up to 16 %). These price undercutting margins indicate price pressure exerted by the imports from the countries concerned on the Union market.

(75)

Per country concerned the undercutting margins were as follows:

(76)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators for an assessment of the state of the Union industry from 2007 to the end of the IP.

(77)

From 2007 to 2009, Union production decreased significantly by 23 % to improve slightly between 2009 and the end of the IP, resulting in an overall decrease of 17 % over the period considered. It should be noted that although Union consumption reduced by around 5 % between 2008 and 2009, the production of the Union industry fell much more, by 15 %, and that it failed to benefit from the recovery of the Union consumption experienced in the IP.

(78)

The production capacity of the Union industry decreased by around 2 % over the period considered. After increasing around 9 % in 2008, capacity was downsized in the following years, to result in an overall 2 % reduction over the period considered.

(79)

However, in line with the decreasing production volumes, the utilisation of the available capacity decreased by 15 % over the period considered. The main decrease occurred in 2009, during the general economic crisis, and improved slightly during the IP.

(80)

The sales figures in the table below relate to the sales volume and value to the first unrelated customer on the Union market.

(81)

Sales volumes and market share declined between 2007 and the IP, by 18 % and 12 % respectively. At the beginning of the period considered, from 2007 to 2008, despite an increase in Union consumption, the sales volume of the Union industry decreased by 15 % and they lost 12 % of market share. In 2009, Union consumption contracted, resulting in a further loss in sales volume of 6,5 % for the Union industry. In the IP, in line with the increased Union consumption, Union sales increased slightly. Market share however, remained stable from 2008 to the end of the IP.

(82)

Prices increased significantly from 2007 to 2008, by 20 %. It has to be noted that the exporting producers also raised their prices during this period, although by much less than the Union industry.

(83)

In 2009 the Union industry had to reduce prices, in order to respond to the pressure of the increased imports from the countries concerned. In 2008 imports from these countries had grown by 57 % and their prices were significantly lower than the Union industry’s. However, the Union industry was not able to reduce its prices to the same level as the exporting producers.

(84)

During the IP, the Union industry kept the 2009 price level, resulting in an overall price increase during the period considered of 7 %.

(85)

Stock levels of the Union industry decreased by 33 % during the period considered. In particular between 2008 and the IP stock levels decreased significantly by 51 %.

(86)

Due to the downsizing activities of the Union industry, the number of employees was reduced accordingly during the period considered, by 13 %. Labour costs per employee increased slightly over the period considered, by 6 %. This is considered a natural increase and is less than the inflation rate over the period considered.

(87)

Profitability of the Union industry was established by expressing the pre-tax net profit (in this case loss) of the sales of the like product as a percentage of the turnover of these sales. It was established that the profitability of the Union industry has been negative since the beginning of the period concerned in 2007 and during the period considered the losses increased significantly. After a reduction in losses in 2008, they increased again significantly in 2009, at the time of the general economic crisis. The economic recovery felt during the IP, however, allowed the Union industry to reduce its losses with respect to turnover, but it remained still far away from returning to positive profit levels.

(88)

The trend shown by the cash flow, which is the ability of the industry to self-finance its activities, reflects to a large extent the trend of profitability. The cash flow was negative in 2007 and shows a substantial decrease during the period considered. The same comments can be made about the return on investments, which showed a similar negative development in line with the negative results achieved by the Union industry over the period considered.

(89)

Following the above, the ability of the Union industry to invest became limited as the cash flow significantly deteriorated during the period considered. As a consequence, the investments dropped by about 35 % during the period considered.

(90)

The Union consumption remained fairly stable during the period considered. Sales volume and market share of the Union industry however, decreased during this period with 18 % and 12 % respectively.

(91)

Given the volume, market share and prices of the dumped imports from the countries concerned, the impact on the Union industry of the actual dumping margins cannot be considered negligible.

(92)

The investigation has shown that most of the injury indicators such as production (– 17 %), capacity utilisation (– 13 %), sales volume (– 18 %), market share (– 12 %) and employment (– 14 %) deteriorated during the period considered. In addition, the injury indicators related to the financial performance of the Union industry such as cash flow and profitability were seriously affected. This means that the ability of the Union industry to raise capital was undermined, in particular during the IP.

(93)

In the light of the foregoing, it was concluded that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.