(1)

In 2006, the Council imposed, by means of Regulation (EC) No 130/2006 (2), a definitive anti-dumping duty on imports of tartaric acid originating in the People’s Republic of China (‘PRC’ or ‘the country concerned’) (‘the original anti-dumping measures’). This Regulation was amended by Council Regulation (EC) No 150/2008 (3). In 2012, the Council amended those measures by Implementing Regulation (EU) No 332/2012 (4) and extended them for a further five years by Implementing Regulation (EU) No 349/2012 (5).

(2)

A request for review was lodged by the following producers in the Union: Distillerie Bonollo SpA, Industria Chimica Valenzana SpA, Distillerie Mazzari SpA, Caviro Distillerie SRL and Comercial Quimica Sarasa SL (‘the applicants’).

(3)

The review request was limited in scope to the examination of dumping as far as two PRC exporting producers were concerned, namely Changmao Biochemical Engineering Co. Ltd, Changzhou, and Ninghai Organic Chemical Factory, Ninghai. The request alleged that the continued imposition of measures at the existing level, which was based on the level of dumping previously established, appeared to be no longer sufficient to counteract dumping, given that both companies should be denied market economy treatment (MET).

(4)

Having determined that the Commission had at its disposal sufficient prima facie evidence for the initiation of an interim review, and after consulting the Advisory Committee, the Commission announced on 29 July 2011, in a notice published in the Official Journal of the European Union (6) (‘the notice of initiation’), the initiation of an interim review limited to dumping pursuant to Article 11(3) of the basic Regulation.

(5)

The investigation concerning dumping covered the period from 1 July 2010 to 30 June 2011 (‘the review investigation period’ or ‘RIP’).

(6)

The Commission officially advised the two exporting producers in the country concerned and the authorities of the country concerned of the initiation of the interim review.

(7)

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.

(8)

The Commission sent questionnaires to the two exporting producers named in the request for review and to producers in the analogue country, Argentina.

(9)

Questionnaire replies were received from the two PRC exporting producers, and also from the cooperating producer in the analogue country.

(10)

In order to allow the two exporting producers in the PRC to submit a claim for market economy treatment (MET) or individual treatment (IT), if they so wished, the Commission sent claim forms for this purpose. Claims for MET, or for IT in case the investigation established that they do not meet the conditions for MET, were received from both of them.

(11)

The Commission sought and verified all the information deemed necessary for a determination of dumping and carried out verifications at the premises of the following companies:

(12)

The product concerned by this review is the same as the one in the original investigation, namely tartaric acid, excluding D-(-)- tartaric acid with a negative optical rotation of at least 12,0 degrees, measured in a water solution according to the method described in the European Pharmacopoeia, originating in the PRC, currently falling within CN code ex 2918 12 00 (‘the product concerned’).

(13)

The product concerned is used in wine, in beverage and food additives, as a retardant in plaster and in numerous other products. It can be obtained either from the by-products of winemaking, as is the case with production in the Union or via chemical synthesis from petrochemical compounds, as is the case with production in the PRC. Only L+ tartaric acid is manufactured from the by-products of winemaking. Synthetic production allows the manufacture of both L+ and DL tartaric acid. Both types are product concerned and have overlapping uses.

(14)

As in the previous investigation, it was considered that the tartaric acid produced in the PRC and exported to the Union, the tartaric acid produced and sold on the domestic market of the analogue country (Argentina) and the tartaric acid manufactured and sold in the Union by the Union producers have the same basic physical and chemical characteristics, and the same basic uses. They were therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

(15)

Both companies named in the request for review claimed market economy treatment. Pursuant to Article 2(7)(b) of the basic Regulation, in anti-dumping investigations concerning imports originating in the PRC, normal value is to be determined in accordance with paragraphs 1 to 6 of that Article for those producers which were found to meet the criteria laid down in Article 2(7)(c) of the basic Regulation.

(16)

Briefly, and for ease of reference only, the MET criteria are set out in summarised form below:

(17)

Both producers in the PRC requested MET pursuant to Article 2(7)(c) of the basic Regulation. Each MET application was analysed, and on-the-spot investigations were carried out at the premises of these cooperating companies.

(18)

For both companies, MET was denied under Criterion 1 of Article 2(7)(c) based on evidence that the price of the basic raw material, benzene, was distorted. A comparison of domestic prices in the PRC, using the purchase prices of one cooperating producer as a source, against prices in other market economy countries showed a price difference of between 19 % and 51 % during the investigation period. The PRC imposes an import tariff on benzene of 40 % (although this was not in fact in force during the RIP) and also does not refund any of the 17 % VAT levied on its export. Distortions were also found in the price of the intermediate raw material, maleic anhydride, purchased by the other cooperating producer using its purchases as a source.

(19)

MET was also denied to one company under Criteria 2 and 3 due to evidence of depressed land use right prices and also overvaluation of the company’s assets for the purpose of guaranteeing a loan from a State-owned bank.

(20)

Both companies disputed the findings of the Commission after they were disclosed to them. However neither company could explain the low price of benzene on the PRC market. The company referred to in recital 19 provided some documents to dispute the Commission’s findings regarding the land use right prices and the valuation of their assets. However as these documents were requested during the inspection and were not provided, it was therefore decided that this information could not be verified or relied upon.

(21)

MET is therefore denied to both companies.

(22)

However both companies meet the requirements set out in Article 9(5) of the basic Regulation and are therefore entitled to an individual anti-dumping duty using their own export prices.

(23)

Pursuant to Article 2(7)(a) of the basic Regulation, normal value was determined on the basis of the price or constructed value in an appropriate market economy third country (‘the analogue country’), or the price from the analogue country to other countries, including the Union, or, where those are not possible, on any other reasonable basis, including the price actually paid or payable in the Union for the like product, duly adjusted if necessary to include a reasonable profit margin.

(24)

As in the original investigation, Argentina was proposed in the notice of initiation as an appropriate analogue country for the purposes of establishing normal value pursuant to Article 2(7)(a) of the basic Regulation. Following the publication of the notice of initiation, one company in India and one company in Australia were identified as alternative possible producers in a market economy third country. However neither of the two companies responded to the questionnaire sent to them.

(25)

One producer of tartaric acid in Argentina cooperated with the investigation by replying to a questionnaire. The investigation showed that Argentina had a competitive market for tartaric acid with two competing local producers and imports from third countries. The production volume in Argentina constitutes more than 20 % of the volume of PRC exports of the product concerned to the Union. The Argentinian market was therefore deemed sufficiently representative for the determination of normal value for the PRC.

(26)

It is therefore concluded, as in the previous investigation, that Argentina constitutes an appropriate analogue country in accordance with Article 2(7)(a) of the basic Regulation.

(27)

Normal value was established on the basis of the information received from the cooperating producer in the analogue country. Although the analogue country producer had domestic sales of the product concerned, given the difference in the production method between Argentina and the PRC which has a significant impact on prices and costs, it was decided to construct normal value, rather than use these domestic sales prices. The cost of raw materials in Argentina was replaced by an average market price for benzene and an adjustment made to selling, general and administrative expenses (SG&A) in Argentina to better reflect the domestic market in the PRC.

(28)

Normal value for L+ tartaric acid (which is manufactured by the Argentinian producer) was therefore constructed from the cost of production in Argentina of L+ tartaric acid, taking into account the difference in production methods between Argentina and the PRC.

(29)

Given that the Argentinian producer did not manufacture DL tartaric acid, a normal value was also constructed using the difference in price found between the two product types.

(30)

Export prices were determined based on the actual price paid or payable by the first independent customer in the Union for both PRC exporting producers.

(31)

For the purposes of ensuring a fair comparison between the normal value and the export price in accordance with Article 2(10) of the basic Regulation, due allowance in the form of adjustments was made with regard to certain differences in transport, insurance and indirect taxation, where these were proven to affect prices and price comparability.

(32)

For both companies the weighted average normal value for each product was compared with the weighted average export price for the same product type, as provided for under Article 2(11) of the basic Regulation.

(33)

On this basis, the weighted average dumping margins expressed as a percentage of the cif Union frontier price duty unpaid are:

(34)

The request for review alleged that the two PRC exporting producers should no longer be granted MET and that this change was of a lasting nature. Given the reasons for denial of MET it can be considered that the conclusions of this review are of a lasting nature. Evidence shows that the distortion in the price of benzene in the PRC was in existence prior to the RIP and there is no evidence to show that the PRC government has, or will, remove such distortions.

(35)

For the company-specific reasons set out in recital 19 these are also of a lasting nature, as they affect the company’s costs and decisions over a significant period of time. They were not events that would have affected the original investigation in which MET was granted to this company.

(36)

In light of the above, it is considered that the present anti-dumping review should amend the level of the existing measures in force on imports of tartaric acid from the PRC.

(37)

All parties were informed of the essential facts and considerations on the basis of which it was intended to recommend that the existing measures be amended. They were also granted a period within which they could make representations subsequent to this disclosure.

(38)

One PRC company replied to the disclosure again disputing the findings regarding the denial of MET on the grounds of price distortion of the main raw material. However, it provided no new evidence to support its assertions and its arguments were therefore rejected. It also requested further information on the adjustments referred to in recital 27, but this had to be rejected as it would be impossible to do so without disclosing the production methods and costs of the sole producer in Argentina.

(39)

The Union industry responded to the disclosure by contesting the use of a constructed normal value rather than domestic sales prices in the analogue country, and also the adjustments referred to above to the constructed normal value to take account of the difference in raw materials and production processes between Argentina and the PRC.

(40)

As regards the use of a constructed normal value rather than prices from Argentina, this cannot be considered a change of methodology under Article 11(9) of the basic Regulation. In the original investigation both PRC companies were granted MET and therefore normal value was taken from their own domestic prices. Now that MET has been denied to both companies, the same methodology could no longer be used.

(41)

The Union industry further claimed that the Commission should have used the methodology set out in the original investigation to calculate the residual duty for the PRC to calculate the individual margins for the two exporters concerned by this review. This argument was rejected as the residual duty was calculated for companies that did not cooperate with the original investigation. It is therefore not comparable to calculating an individual duty for a cooperating exporter that has been denied MET.

(42)

As regards the adjustments made to the normal value referred to above, these were necessary to ensure a fair comparison between the export price of a synthetically produced tartaric acid, and a normal value based on a natural production process. Attempting the same calculation using domestic sales prices in Argentina and then adjusting the normal value and/or export price under Article 2(10) of the basic Regulation would not have provided for a fair comparison. These arguments were therefore rejected.

(43)

One exporting producer in the PRC offered a price undertaking in accordance with Article 8(1) of the basic Regulation. The product concerned is not suitable for a fixed price undertaking due to the volatility of the export price. In order to overcome this problem, the exporting producer offered an indexation clause, but without specifying how this indexation would be calculated. It also offered an indexation based on the distorted domestic benzene price in the PRC, which could not be accepted.

(44)

Moreover, that exporting producer produces different types of other chemical products and may sell these products to common customers in the European Union via related trading companies. This would create a serious risk of cross-compensation and would make effective monitoring extremely difficult.

(45)

Furthermore, there are different types of the product concerned which are not easily distinguishable and have a considerable difference in price. The different MIPs proposed by the exporting producer would therefore render monitoring impracticable. On the basis of the above, it was concluded that the undertaking offers cannot be accepted,

(1)

By Regulation (EC) No 1425/2006 (2), the Council imposed a definitive anti-dumping duty on imports of certain plastic sacks and bags, originating in the People’s Republic of China (PRC) and Thailand.

(2)

That Regulation was subsequently amended by Council Regulations (EC) No 1356/2007 (3), (EC) No 249/2008 (4) and (EC) No 189/2009 (5) and by Council Implementing Regulations (EU) No 474/2011 (6) and (EU) No 475/2011 (7).

(3)

On 18 May 2010, the Commission received a request for a partial interim review of Regulation (EC) No 1425/2006 from Greenwood Houseware (Zhuhai) Ltd, an exporting producer of certain plastic sacks and bags in the PRC (‘the applicant’).

(4)

Subsequently, following the publication of a notice of impending expiry of the definitive anti-dumping measures in force, the Commission received, pursuant to Article 11(2) of the basic Regulation, a request for an expiry review, lodged on 30 June 2011.

(5)

The request was lodged by 44 Union producers together, representing around 30 % of the total estimated Union production of certain plastic sacks and bags.

(6)

The request was based on the grounds that the expiry of the measures would be likely to result in a continuation of dumping and injury if measures were allowed to lapse.

(7)

Having determined, after consulting the Advisory Committee, that sufficient evidence existed for the initiation of the partial interim review and an expiry review, the Commission announced the initiation of the partial interim review pursuant to Article 11(3) of the basic Regulation and an expiry review pursuant to Article 11(2) of that Regulation by a notice published on 21 September 2010 and 27 September 2011 respectively in the Official Journal of the European Union.

(8)

The expiry review investigation of continuation or recurrence of dumping and injury covered the period from 1 July 2010 to 30 June 2011 (‘the review investigation period’ or ‘RIP’). The examination of the trends relevant for the assessment of a likelihood of a continuation or recurrence of injury covered the period from 1 January 2008 up to the end of the RIP (‘period considered’).

(9)

The review investigation period for the partial interim review limited in scope to the examination of dumping with regard to Greenwood Houseware (Zhuhai) Ltd covered the period from 1 April 2009 to 30 June 2010.

(10)

The product concerned in both investigations is plastic sacks and bags, containing at least 20 % by weight of polyethylene and of sheeting of a thickness not exceeding 100 micrometres (μm), originating in the PRC and Thailand (‘the product concerned’), currently falling within CN codes ex 3923 21 00 , ex 3923 29 10 and ex 3923 29 90 .

(11)

As far as the product produced and sold in the Union market is concerned, no conclusive findings could be made with regard to Article 1(4) of the basic Regulation, due to the insufficient cooperation of the Union industry in the expiry review (see Section B).

(12)

As far as the product produced and sold on the domestic market by the applicant of the interim review is concerned, as well as the product produced and sold in a potential analogue country in the framework of the interim review, it is noted that the investigation did not reach any conclusions given the termination of both current investigations and the repeal of the existing measures (see Section B).

(13)

The Commission officially advised Greenwood Houseware (Zhuhai) Ltd and the representatives of the PRC of the initiation of the partial interim review limited in scope to the examination of dumping. Both parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set out in the notice of initiation.

(14)

The Commission officially advised the Union producers who lodged the request for the expiry review, other known Union producers and associations of Union producers, exporting producers, importers and users known to be concerned as well as their associations. Producers in the possible analogue countries, i.e. India, Indonesia, Malaysia, Turkey and USA and the representatives of the PRC and Thailand were also informed of the initiation of the expiry review. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set out in the notice of initiation.

(15)

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

(16)

In view of the large number of Union producers involved in the expiry investigation, the application of sampling was envisaged in the relevant notice of initiation in accordance with Article 17 of the basic Regulation.

(17)

The sector of plastic sacks and bags production in the Union is highly fragmented with a very large number of producers of different sizes, including a large sector of small producers spread over several Member States.

(18)

The information provided at the initiation stage in the request indicated that large or medium-sized companies represented around 25 % of the cooperating producers and around 70 % of the cooperating Union production. Accordingly, small companies represented around 75 % of the cooperating producers and around 30 % of their production.

(19)

In addition, the information showed that the Union production is spread among several Member States, but largely concentrated in Germany, France, Spain and Italy.

(20)

Article 3(2) of the basic Regulation requires that a determination of injury shall be based on positive evidence and shall involve an objective determination of, inter alia, the impact of dumped imports on the Union industry. Any findings of injury and the information collected for that purpose would thus have to be representative of the entire Union industry.

(21)

It follows that the high level of fragmentation of the plastic sack and bags sector had to be taken into consideration in the sampling exercise. In order to be able to draw conclusions that would be representative of the entire Union industry, it was considered necessary to ensure that also the situation of the small companies was properly reflected.

(22)

Consequently, for the purpose of selecting a representative sample of Union producers, the cooperating Union producers were divided into two segments based on the volume of their yearly production: large or medium-sized companies with production above 15 000 tonnes on the one hand and small companies with production below 15 000 tonnes on the other hand. It was envisaged to sample the largest companies within each segment.

(23)

Furthermore, the producers’ geographical spread amongst Member States as described in recital 19 was also taken into consideration.

(24)

The procedure to obtain the information necessary for the selection of the sample of Union producers emanated from the information obtained at initiation stage. In addition, the relevant notice of initiation invited all other producers to make themselves known should they wish to be included in the sample. Following the publication of the notice of initiation, no company contacted the Commission requesting to be included in the sample.

(25)

As a result of the criteria explained in recitals 20 to 23, five Union producers operating in four Member States were selected to be in the sample. They were the largest producers of each of the two segments, taking into account size and geographical location. Three sampled companies belong to the segment of large or medium-sized companies, two to the segment of small companies.

(26)

The selected companies also reflected the geographical spread amongst Member States in terms of production, with Germany and France representing the companies operating in the large or medium-sized segment and Spain and Italy those companies operating in the small segment.

(27)

The sample thus selected represented 22,5 % of total production of plastic sacks and bags by the cooperating producers and 12,3 % of the total estimated Union production, based on the total Union production figures reported in the request.

(28)

At the initiation stage, all known Union producers were informed about the composition of the provisional sample and were given the possibility to comment. No comments were received.

(29)

It is recalled that the determination of injury must be an evidence-based assessment of the effect of the dumped imports on the Union industry.

(30)

The fragmentation of the industry therefore had to be taken into account in the sample and questionnaires requesting general data mainly regarding macroeconomic indicators per Member State were in addition sent to all known Union associations of producers in order to obtain the necessary information needed.

(31)

In terms of the sample of Union producers, the level of representativity was seriously affected by the fact that the largest sampled producer operating in the segment of large or medium-sized companies and one producer operating in the segment of small companies informed the Commission that they did not wish to respond to the questionnaire. This meant that only three out of the five sampled companies continued to cooperate and that no or only partial information would be provided for the identified segments and producing Member States.

(32)

Numerous attempts where therefore made to select a new representative sample that would respect the selection methodology outlined in recitals 17 to 28.

(33)

In this respect a total of six additional Union producers, that had expressed their willingness to be sampled, were identified as possible replacements for the two companies that had withdrawn the cooperation from the sample. These six additional companies were approached and requested to cooperate by filling out the Union producer’s questionnaire.

(34)

Out of these six additional Union producers approached, only one producer, representing the segment of large or medium-sized companies, eventually agreed to cooperate. No replacement was found to represent the production in Germany, one of the largest Member States in terms of production of plastic sacks and bags.

(35)

Therefore, it was not possible to select a new sample in accordance with Article 17(4) of the basic Regulation, as the requisite representativity in terms of the identified segments and producing Member States could not be reached.

(36)

Due to the low cooperation on the part of the sampled Union producers, it could not be reasonably concluded that the data compiled from the cooperating companies reflected the situation of the entire Union industry and therefore it was not possible to properly assess whether the conditions specified in Article 3(2) of the basic Regulation were met.

(37)

Following the attempts to select a new sample, one group of producers reiterated their commitment to taking an active part in the expiry review, restating the importance of maintaining the anti-dumping measures in force for the Union industry. This group of producers expressed regrets that only one amongst them was invited by the Commission to complete the questionnaire. In this context it should be noted that the willingness of these companies to cooperate was fully considered and they were all included in the group of companies that were taken into account for the selection of the new sample. It is recalled, however, that in order to ensure the required representativity, the selection method, as described in recitals 17 to 28 had to be respected also for the new sample. Since only one of the companies of this group fulfilled the criteria mentioned above, only that company could be invited to be part of the sample. The other companies were of a size or situated in Member States that were already sufficiently represented in the sample.

(38)

Certain information on country-wide production, sales figures and other key macro indicators were received from the national associations of the Netherlands, Spain, Italy and partially France. However, the European Plastics Converters Association (EuPC) did not provide the information requested in the specific questionnaire sent to them and therefore, no conclusive data could be collected on a macroeconomic level across the Union.

(39)

In light of the above and in accordance with Article 9 (2) of the basic Regulation, the expiry review concerning imports of plastic bags from the PRC and Thailand should be terminated.

(40)

The low level of cooperation of the Union producers and the lack of a representative sample has prevented the Commission from being able to assess whether the conditions specified in Article 3(2) and Article 11(2) of the basic Regulation are met. It can thus not be concluded whether the expiry of the measures in place would be likely to lead to a continuation or recurrence of injury and the investigation should be terminated on these grounds.

(41)

It follows from the above that the interim review is without purpose and should be terminated as well.

(42)

All parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the termination of the two investigations. They were also granted a period to submit comments subsequent to that disclosure. The submissions and comments were duly taken into consideration where warranted.

(43)

One interested party claimed that since it was proposed to terminate the review due to lack of cooperation of the Union producers, the anti-dumping measures should be repealed with retroactive effect, i.e. as of 30 September 2011, when the measures in force should have initially expired.

(44)

In this context it is recalled that the request for the review was made by Union producers representing more than 30 % of the total Union production in accordance with the basic Regulation. Moreover, Article 11(2) of the basic Regulation explicitly stipulates that measures shall remain in force pending the outcome of the review. The findings mentioned in recital 40, however, did not have an impact on the legality of the initiation of the review as such which means that the provisions in Article 11(2) stipulating that measures shall remain in force pending the outcome of the review continue to apply. This argument therefore had to be rejected.

(45)

A number of Union producers also responded to the disclosure by stating they were withdrawing as complaining producer. However, taking into account other Union producers maintained their position and given the fact that the standing requirements as described in recital 5 were fulfilled at the time of the initiation of the case, this would not have an impact on the procedure.

(46)

In view of the foregoing, none of the comments received were such as to alter the above conclusions. It is therefore concluded that the anti-dumping proceeding concerning imports into the Union of certain plastic sacks and bags originating in the PRC and Thailand should be terminated and measures be repealed. It follows that the ongoing interim review referred to in recital 3, will be terminated at the same time as this expiry review,