18.9.2007   

EN

Official Journal of the European Union

L 243/1

(1)

Regulation (EC) No 3223/94 lays down, pursuant to the outcome of the Uruguay Round multilateral trade negotiations, the criteria whereby the Commission fixes the standard values for imports from third countries, in respect of the products and periods stipulated in the Annex thereto.

(2)

In compliance with the above criteria, the standard import values must be fixed at the levels set out in the Annex to this Regulation,

18.9.2007   

EN

Official Journal of the European Union

L 243/3

(1)

All pharmacologically active substances used in the Community in veterinary medicinal products intended for food-producing animals should be evaluated in accordance with Regulation (EEC) No 2377/90.

(2)

An application for establishing maximum residue limits for Avilamycin, an antibiotic belonging to the group of orthosomycins, has been submitted to the European Medicines Agency. On the basis of the recommendation of the Committee for Medicinal Products for Veterinary Use, this substance should be added in Annex I to Regulation (EEC) No 2377/90 for porcine species (muscle, skin plus fat, liver and kidney), rabbit (muscle, fat, liver and kidney) and poultry (muscle, skin plus fat, liver and kidney) provided that, for the latter, the substance Avilamycin is not used in poultry species from which eggs are produced for human consumption.

(3)

Regulation (EEC) No 2377/90 should therefore be amended accordingly.

(4)

An adequate period should be allowed before the applicability of this Regulation in order to enable Member States to make any adjustment which may be necessary in the light of this Regulation to the authorisations to place the veterinary medicinal products concerned on the market which have been granted in accordance with Directive 2001/82/EC of the European Parliament and of the Council of 6 November 2001 on the Community code relating to veterinary medicinal products (2) to take account of the provisions of this Regulation.

(5)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Veterinary Medicinal Products,

18.9.2007   

EN

Official Journal of the European Union

L 243/6

(1)

Article 3 of Commission Regulation (EC) No 493/2006 of 27 March 2006 laying down transitional measures within the framework of the reform of the common organisation of the markets in the sugar sector, and amending Regulations (EC) No 1265/2001 and (EC) No 314/2002 (2), provides for preventive withdrawal. As a result, above a certain threshold, the production under quota of each undertaking is considered withdrawn within the meaning of Article 19 of Regulation (EC) No 318/2006 or, if so requested by the undertaking before 31 January 2007, as produced in excess of the quota within the meaning of Article 12 of that Regulation.

(2)

On the deadline of 31 January 2007 isoglucose producers were not, unlike sugar producers, in a position to make such a request due to the continuous, year-round nature of their production. In the interests of fairness this deadline should, for isoglucose producers, be postponed to the end of the 2006/2007 marketing year to enable them to take their decision and make their request in full knowledge of the facts.

(3)

Regulation (EC) No 493/2006 should be amended accordingly.

(4)

The measures provided for in this Regulation are in accordance with the opinion of the Management Committee for sugar,

18.9.2007   

EN

Official Journal of the European Union

L 243/7

(1)

On 10 November 2006 the Commission received a complaint lodged pursuant to Article 5 of the basic Regulation by Tosoh Hellas AIC (the complainant) representing a major proportion, in this case more than 50 %, of the total Community production of certain manganese dioxides.

(2)

This complaint contained evidence of dumping and of material injury resulting therefrom, which was considered sufficient to justify the opening of a proceeding.

(3)

On 21 December 2006 the proceeding was initiated by the publication of a notice of initiation in the Official Journal of the European Union  (2).

(4)

The Commission officially advised the complainant, the other Community producer, the exporting producer, the importer, users known to be concerned and representatives of South Africa of the initiation of the proceeding. Interested parties were given an opportunity to make their views known in writing and to request a hearing within the time limit set in the notice of initiation.

(5)

The complainant producer, the exporting producer, the importer and users made their views known. All interested parties who so requested and showed that there were particular reasons why they should be heard were granted a hearing.

(6)

Questionnaires were sent to all parties known to be concerned and to all other companies that made themselves known within the deadlines set out in the notice of initiation. Replies were received from the exporting producer in South Africa, the complainant producer, the importer of the product concerned from South Africa and four users of the product concerned.

(7)

The Commission sought and verified all the information deemed necessary for a provisional determination of dumping, resulting injury and Community interest and carried out verifications at the premises of the following companies:

(8)

The investigation of dumping and injury covered the period from 1 October 2005 to 30 September 2006 (investigation period or IP). The examination of the trends relevant for the assessment of injury covered the period from 1 January 2002 to the end of the investigation period (period considered).

(9)

The product concerned is manganese dioxides manufactured in an electrolytic process, which have not been heattreated after the electrolytic process (EMD), originating in South Africa. It is normally declared within CN code ex 2820 10 00.

(10)

The product concerned comprises two main types: carbon-zinc grade EMD and alkaline grade EMD. Both types are produced through an electrolytic process, with an adaptation of certain parameters in the process to obtain either carbon-zinc grade EMD or alkaline grade EMD. They both normally have a high purity of manganese and are generally used as intermediate products in the production of drycell consumer batteries.

(11)

The investigation has shown that, despite some differences in terms of certain specific physical and chemical characteristics such as density, mean particle size, Brunauer-Emmet-Teller (BET) surface area and alkaline potential, both types of the product concerned share the same basic physical, chemical and technical characteristics and are used for the same purposes. They are therefore considered to constitute a single product for the purpose of this proceeding.

(12)

It should be noted that there exist other types of manganese dioxides which do not have the same basic physical, chemical and/or technical characteristics as EMD and have essentially different usages. They do not therefore form part of the product concerned. These distinct products include: (i) natural manganese dioxides which contain significant impurities and are normally classified under a different CN code, i.e. 2602 00 00; (ii) chemical manganese dioxides which are produced through a chemical process and have a significantly lower density as well as a significantly higher BET surface area than EMD; and (iii) heat-treated electrolytic manganese dioxides which, despite being manufactured through an electrolytic process like EMD, differ from EMD by a number of essential characteristics such as moisture content, crystal structure and alkaline potential, making them suitable for application in lithium batteries, which are based on non-aqueous systems and have lithium metal as the anode, but not in carbon-zinc or alkaline batteries, which are based on aqueous systems and have zinc metal as the anode, like EMD.

(13)

It should also be noted that none of the interested parties has contested the above definition or the distinction between the two main types of the product concerned.

(14)

The investigation showed that the EMD produced and sold by the Community industry in the Community and that produced and sold on the South African domestic market and/or imported into the Community from South Africa share the same basic physical, chemical and technical characteristics, and have the same uses.

(15)

It was therefore provisionally concluded that these products are alike within the meaning of Article 1(4) of the basic Regulation.

(16)

As far as the determination of normal value is concerned, the Commission first established whether Delta’s total domestic sales of EMD were representative in relation to its total export sales to the Community. In accordance with Article 2(2) of the basic Regulation, domestic sales were considered representative, as the total domestic sales volume of the exporting producer was more than 5 % of its total export sales volume to the Community.

(17)

The Commission subsequently identified those product types sold domestically, having overall representative domestic sales, which were identical or directly comparable with the types sold for export to the Community.

(18)

Domestic sales of a particular product type were considered to be sufficiently representative when the volume of that product type sold on the domestic market to independent customers during the investigation period represented 5 % or more of the total volume of the comparable product type sold for export to the Community.

(19)

For all the product types sold for export to the Community, no product type identical or directly comparable and sold on the domestic market in representative quantities was found. Therefore, the normal value had to be constructed for all exported product types in accordance with Article 2(3) of the basic Regulation.

(20)

Normal value was constructed by adding to the exporter’s manufacturing costs of the exported types, adjusted where necessary, a reasonable amount for selling, general and administrative costs (SG&A) and a reasonable amount for profit. The SG&A and the profit were established pursuant to the methods set out in Article 2(6) of the basic Regulation. To this end, the Commission examined whether the SG&A costs incurred and the profit realised by Delta on its domestic market constituted reliable data.

(21)

Actual domestic SG&A costs were considered reliable since the total domestic sales volume of the company concerned was representative when compared with the volume of export sales to the Community, as mentioned above.

(22)

In order to assess whether the profit made by Delta on its domestic market constituted reliable data, the Commission first examined whether the domestic sales of each type of the product concerned sold domestically in representative quantities could be regarded as having been made in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. This was done by establishing the proportion of profitable sales to independent customers on the domestic market of the type in question.

(23)

As there was no type for which the volume of profitable sales represented more than 10 % of the total sales volume of that type on the domestic market, it was considered that domestic prices could not provide an appropriate basis for the establishment of the profit margin to be used in the construction of the normal value.

(24)

As Delta is the only known producer of EMD in South Africa, the reasonable profit needed to construct the normal value could not be based on actual profits determined for other exporters or producers subject to investigation in respect of production and sales of the like product on the domestic market as described in Article 2(6)(a) of the basic Regulation.

(25)

Furthermore, as EMD is the only product made and sold by Delta, the reasonable profit needed to construct the normal value could not be based on actual profits applicable to production and sales, in the ordinary course of trade, of the same general category of products for the exporting producer in question as described in Article 2(6)(b) of the basic Regulation.

(26)

The reasonable profit needed to construct the normal value was thus determined in accordance with Article 2(6)(c) of the basic Regulation.

(27)

In this respect, information has been gathered on the profitability of all other known producers of EMD in other countries. Information was found from publicly available sources for one producer located in India, two in Japan and two in the USA. However, for one producer in the USA and for the two Japanese producers no information was available on profitability for EMD or for a division of the company where EMD would be significant.

(28)

An average profit margin for the IP was calculated based on the publicly available sources for one Indian producer and the remaining producer in the USA as well as the information provided by Delta regarding the profitability of its related company Delta EMD Australia Proprietary Ltd, located in Australia, on its domestic market. The average profit margin calculated amounted to 9,2 %. The methodology, given the information available, was considered reasonable within the meaning of Article 2(6)(c) of the basic Regulation and the result conservative. Publicly available information showed that this profit margin was not exceeding the profit made by other known producers of the same general category of products (i.e. specialty chemicals) in South Africa during the IP.

(29)

Delta made export sales to the Community exclusively through an independent agent, Traxys France SAS.

(30)

The export prices were based on the prices actually paid or payable for the product concerned when sold for export from South Africa to the Community, in accordance with Article 2(8) of the basic Regulation.

(31)

The normal value and export prices were compared on an ex-works basis. For the purpose of ensuring a fair comparison between the normal value and the 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. Appropriate adjustments concerning commissions, transport, insurance, handling and ancillary costs, packing, credit and bank charges were granted in all cases where they were found to be reasonable, accurate and supported by verified evidence.

(32)

The weighted average normal value of the product concerned exported to the Community was compared with the weighted average export price of the corresponding type of the product concerned, as provided for in Article 2(11) and (12) of the basic Regulation.

(33)

On this basis, the provisional weighted average dumping margin expressed as a percentage of the cif Community frontier price, duty unpaid, is:

(34)

As regards the countrywide dumping margin applicable to all other exporters in South Africa, the Commission first established the level of cooperation. A comparison was made between Eurostat data and the questionnaire reply received from the cooperating exporting producer in South Africa. This comparison showed that, from the information available, Delta’s exports to the Community represented 100 % of the exports of the product concerned from South Africa. The level of cooperation found was thus very high and the countrywide dumping margin was set at the same level as the dumping margin calculated for Delta.

(35)

The investigation established that in the beginning of the period considered the like product was manufactured by three producers in the Community. However, one of the producers ceased production in 2003; thus, in the IP, there were only two producers in the Community.

(36)

The complaint was only lodged by one producer, which cooperated fully with the investigation. Although the other producer did not cooperate, it did not oppose the complaint either. Due to the fact that only one company submitted a full reply to the questionnaire, all data referring to the Community industry are either presented in index form or given as ranges in order to protect confidentiality.

(37)

Hence, the volume of Community production for the purpose of Article 4(1) of the basic Regulation has been provisionally calculated by adding the production of the only cooperating Community producer to the volume of production of the other producer on the basis of the data supplied in the complaint. Total Community production in the IP was in the range of 20 to 30 thousand tonnes.

(38)

The production of the cooperating Community producer represented more than 50 % of the EMD produced in the Community. It is therefore considered that this company constitutes the Community industry within the meaning of Articles 4(1) and 5(4) of the basic Regulation.

(39)

The apparent Community consumption was established on the basis of the sales volume on the EC market of the complainant producer, sales of the other Community producers established on the basis of the purchases reported by users and imports from the country concerned based on the verified reply to the questionnaire and other third countries obtained from Eurostat.

(40)

On this basis, Community consumption decreased by 7 % over the period considered. A particularly steep increase occurred in 2003 and 2004, coinciding with the strongest increase in volume at very low prices (– 35 %) of EMD imported from South Africa and with the closure of a major Community producer. In 2005 consumption returned to its previous level and another significant decrease occurred in the IP. The trend in consumption seems to have been influenced by the closure in 2003 of a major producer accounting for one third of Community production.

(41)

The volume of imports from South Africa was based on verified figures supplied by the only exporting producer. As mentioned above, for reasons of confidentiality, as the analysis concerns a single company, most indicators are presented in index form or in ranges.

(42)

In terms of volume and market share the evolution of imports has been the following:

(43)

While consumption of EMD decreased by 7 % during the period considered, imports from the country concerned rose by 69 % during the same period. Consequently, the South African market share increased dramatically during the period considered by around 81 % from a range of 30 to 40 % to a range of 60 to 70 %.

(44)

Over the period considered the average import prices fell by 31 %, despite the increase in the price of the main raw material.

(45)

For the determination of price undercutting during the IP, the relevant sales prices of the Community industry were net prices to independent customers, adjusted where necessary to an ex-works level, i.e. excluding freight costs in the Community and after deduction of discounts and rebates. These prices were compared with the sales prices charged by the South African exporting producer, net of discounts and adjusted, where necessary, to cif Community frontier prices with an appropriate adjustment for customs clearance costs and post-importation costs.

(46)

The comparison showed that during the IP the weighted average price undercutting margin, expressed as a percentage of the Community industry’s sales prices, was in the range of 11 to 14 %. There were even higher levels of underselling because the Community industry was suffering substantial losses during the IP.

(47)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports from South Africa on the Community industry included an analysis of all economic factors and indices having a bearing on the state of the industry from 2002 to the IP. As mentioned above, for reasons of confidentiality, as the analysis concerns a single company, most indicators are presented in index form or in ranges.

(48)

The evolution of production, production capacity and capacity utilisation for the Community industry was as follows:

(49)

Over the period considered, Community production increased by 30 %. However, the production capacity remained stable throughout the whole period considered. The level of production reached a peak in 2005 after a strong increase in consumption on the EC market in 2004, which was combined with the liquidation of a major producer and the increase in demand on the export market of the Community industry. From 2004 to the IP, when the raw material prices doubled, the Community industry attempted to achieve economies of scale and reduce the unit cost of production in the IP.

(50)

Stocks increased by 32 % during the period considered, reflecting the Community industry’s increasing difficulty in selling its products on the Community market due to the competition with dumped imports.

(51)

The figures below represent the Community industry’s sales to independent customers in the Community.

(52)

Against the background of the 7 % decrease in EC consumption, the market share of the Community industry decreased by 3 %. In addition, in absolute terms, its overall sales volumes on the EC market declined significantly by 9 % during the period considered, with a particularly sharp decrease of 22 percentage points in the IP.

(53)

While in 2004 the Community industry was able to benefit briefly from the increase in consumption by increasing its sales volume by 52 % and market share by 35 % compared to 2002, in the following years its participation in the market decreased in parallel to the sharp increase in the volume of dumped imports from South Africa.

(54)

There was a downward trend in average sales prices to unrelated buyers on the Community market until 2004. This illustrates the Community industry’s attempts to compete with the dumped imports and stay in the market. In 2004, however, prices reached an unsustainable low point. They then increased by four percentage points in 2005. However, despite this small increase in prices in 2005, which was confirmed in the IP, the Community industry was unable to reflect in its prices the development in the price of manganese ore, the main raw material, which rose sharply, by almost 100 %, between 2004 and 2005.

(55)

The levels of profits and cash flow from the sale of EMD by the Community industry were strongly negative.

(56)

Profitability deteriorated significantly by minus 172 % over the period considered. It reached its lowest level in 2003 at the time of the strongest decrease in the prices of imports (– 30 %). It improved in 2004 and 2005, with an increase in quantities sold. In the IP profitability fell back to its lowest level due to price pressure and increasing cost of raw materials.

(57)

Cash flow also deteriorated over the period considered, in line with the decrease in profitability.

(58)

Investments increased by 7 % over the period considered. In the middle of this period the Community industry recorded a certain amount of investment in order to reduce the cost of production and for the maintenance of new machinery. In the following years investments continued but at a lesser level.

(59)

The return on investment from the production and sales of the like product followed the sales and profitability trend and was negative in 2003 and at the end of the period considered.

(60)

The Community industry’s ability to raise capital was not found to be significantly affected during the period considered, given the size of investments, which were sufficient to cover the necessary capital investments.

(61)

The evolution of employment, productivity and labour costs in the Community industry were as follows:

(62)

The number of employees decreased by 33 % between 2002 and the IP. This was the result of both a decline in sales and the efforts by the Community industry to improve productivity. Indeed, the result of this rationalisation process within the Community industry was reflected in the rate of productivity, which showed a considerable upward trend during the period considered.

(63)

The total labour costs were reduced significantly, by 18 %. The average cost per employee increased relatively, taking into account the development of inflation. However, on the whole, the share of labour costs in total production costs was significantly reduced showing a clear improvement in efficiency.

(64)

The dumping margin is specified above in the dumping section. This margin is clearly above de minimis. Furthermore, given the volume and the price of the dumped imports, the impact of the actual margin of dumping cannot be considered negligible.

(65)

There is no indication that the Community is recovering from the effects of past dumping or subsidisation.

(66)

It is recalled that imports from South Africa increased considerably, both in absolute terms and in terms of market share. Indeed, over the period concerned the imports increased by 69 % in absolute terms and by around 81 % relative to Community consumption, reaching a market share of 60 to 70 %.

(67)

Moreover, in the IP, the sales prices of the Community industry were substantially undercut by those of the dumped imports of the product concerned. On a weighted average basis, price undercutting during the IP was in the range of 11 to 14 %.

(68)

While over the period considered the Community consumption decreased by 7 %, the sales volume of the Community industry decreased by 9 % and the market share by 3 %. A dramatic deterioration in these indicators occurred in the IP, with a fall of 22 percentage points in sales and 13 percentage points in market share compared with 2005.

(69)

With falling sales volume, market share and prices, the Community industry was unable to pass on the global increase in raw material prices to its customers. This resulted in a very negative profitability situation (loss).

(70)

Notwithstanding the Community industry’s considerable investments during the period considered together with its continuing efforts to increase productivity and competitiveness, its profitability, cash flow and return on investment declined sharply, reaching strongly negative levels.

(71)

The deteriorating situation of the Community industry in the period considered is also confirmed by the negative development of employment.

(72)

In the light of the foregoing, it is provisionally concluded that the Community industry suffered material injury within the meaning of Article 3 of the basic Regulation.

(73)

In accordance with Article 3(6) and (7) of the basic Regulation it was examined whether there was a causal link between the dumped imports from South Africa and the material injury suffered by the Community industry. Known factors other than the dumped imports, which could at the same time have injured the Community industry, were also examined to ensure that the possible injury caused by these other factors was not attributed to the dumped imports.

(74)

As established in recitals 43 and 44, the imports increased steadily and significantly during the period considered, by 69 % in terms of volume and by 81 % in terms of market share. The unit selling price of the imports from South Africa decreased by 31 % over the period considered. In the IP the prices of the imports originating in South Africa undercut Community industry prices by 11 to 14 %.

(75)

The effects of dumped imports are clearly illustrated by the decision of several major users representing more than 60 % of total consumption, to switch their purchases from the Community industry to the South African product. While at the beginning of the period considered these users purchased only marginal quantities from South Africa, by the end of the period considered and in the IP, they were purchasing up to 70 to 100 % of their needs from South Africa.

(76)

At the same time, the Community industry had to drastically reduce its prices in order to keep its sales contracts with other users.

(77)

The Community industry’s decreasing market share in the period considered has to be seen in correlation with the increase in volume and market share of the imports from South Africa. Moreover, in 2005 and the IP, when Community consumption fell by 18 % compared with its sharp rise in 2004, the imports from South Africa increased by 8 % in absolute terms and by around 31 % in market share. At the same time, the Community industry lost 28 % of market share and 40 % of sales.

(78)

It is therefore provisionally concluded that the pressure exerted by the dumped imports, which dramatically increased their volume and market share from 2002 onwards, and which were made at dumped prices and at significant levels of undercutting and underselling, played a determining role in the fall of the Community industry’s sales and consequently in its profitability, cash flow development and negative situation in return on investment, employment and increase in stocks.

(79)

The development of imports from other third countries according to Eurostat data was as follows:

(80)

At the beginning of the period considered EMD imports from other third countries represented 15 % of market share. In the following years these imports decreased significantly, representing only 8 % of market share by the end of the IP. The prices of those imports remained largely at a higher level than the South African prices and even increased by 1 %.

(81)

Several submissions have alleged that the imports of EMD from China, which is not a country concerned by the investigation, have contributed significantly to the injury suffered by the Community producer. However, the imports from China in the IP, although at average prices lower than the South African product, represented only 0,6 % of all imports from third countries and can therefore not be considered to break the causal link between the dumped imports and the material injury suffered by the Community industry.

(82)

It was also examined whether or not the exports to non-EU countries may have contributed to the injury suffered during the period considered.

(83)

It was found that the export volumes of the Community industry increased by 9 % over the period considered, and though the export price decreased by 14 %, it was well above the unit cost of production. Therefore, the export performance of the Community industry could not have contributed to the injury during this period.

(84)

As mentioned above, there were two other producers in the Community at the beginning of the period considered.

(85)

One of the producers, located in Ireland, ceased production in 2003, because of financial difficulties due to important decrease in sales under strong price pressure from dumped imports. The other one, located in Spain, did not cooperate in the proceeding. As a result of this lack of cooperation, data on the sales by other producers on the Community market was obtained from user questionnaires. According to the findings of the investigation, the latter company was involved both in battery and EMD production. The majority of the EMD produced by this company was apparently used in its own battery production. However, this company played an increasing role on the Community EMD market as well.

(86)

It is clear that the general picture of other EC producers is influenced by the fact that one ceased its activities in 2003 and the other did not sell any substantial quantities on the EC market during the period considered. However, from the data obtained in the investigation it may be concluded that these Community producers were also affected by the pressure exerted on prices by South African imports and the developments on the market, since their market share decreased from a range of 10 to 25 % to a range of 4 to 10 %. Consequently, the sales of other Community producers cannot have been responsible for the injury suffered by the Community industry.

(87)

It was also examined whether or not the contraction in demand on the Community market may have contributed to the injury suffered during the period considered. This was not found to be the case. As established in recitals 52 and 77, the Community industry’s sales decreased by more than the total Community consumption while the corresponding market share held by the South African imports increased significantly.

(88)

It was argued that injury had been caused mainly by the worldwide increase in the price of the basic raw material: manganese ore. Manganese ore prices which remained stable until 2004 suddenly doubled in 2005 and decreased slightly during the IP. This increased the Community industry’s unit cost of production by 19 %.

(89)

However, as the prices of imports from South Africa only increased by one percentage point during the same period (2004/05), the Community industry, which attempted to compete with dumped imports and stay in the market, could not pass on the total cost increase to downstream users. The Community industry was only able to increase its prices by four percentage points, which thus remained below the cost of production.

(90)

In these circumstances, it was considered that the cost increase was not per se the factor causing injury but the fact that the Community industry was not able to pass on the cost increases to its customers due to the downward price pressure exerted by the dumped imports from South Africa, which did not reflect the rise in prices of raw materials. Therefore, this claim had to be rejected.

(91)

It was argued by some parties that the global oversupply of EMD caused by the increased production capacity in China has depressed EMD prices and is thus the cause of the injury to the Community industry.

(92)

However, given the low volume of imports from China and despite their relatively low prices in the period considered, this allegation was found not to be valid.

(93)

It was further argued by some parties that the decrease in the Community industry’s sales prices of EMD was the result of increasing competition among battery producers and the price pressure suffered by them rather than of dumped imports from South Africa.

(94)

The investigation showed that indeed battery producers in the EC were subject to price pressure resulting from global increase in the costs of raw materials and increased competition. However, it was found that given the low number of EMD producers operating on the Community market, they had a significant power to negotiate the prices of the product concerned with the battery producers. It is therefore considered that the decrease in the Community sales prices of EMD directly derives from the dumped imports and the undercutting practised by the South African exporting producer from the beginning of the period considered and not from the alleged price pressure exerted by the battery producers. In light of the above, it was provisionally concluded that the increasing competition among battery producers did not break the causal link between dumped imports from South Africa and the injury suffered by the Community industry.

(95)

The above analysis shows that there was a dramatic increase in the volume and market share of the imports originating in South Africa over the whole period considered, together with a considerable decrease in their prices coupled with a significant price undercutting during the IP. This increase in the market share of the dumped imports coincided with a significant decrease in the sales volume and market share of the Community industry. This, together with downward pressure on prices, resulted, inter alia, in substantial losses to the Community industry during the IP.

(96)

Furthermore, an examination of the other factors which could have injured the Community industry revealed that none of these could have had such a significant negative impact on the industry as the dumped imports from South Africa.

(97)

Based on the above, it is provisionally concluded that the dumped imports caused material injury to the Community industry in the meaning of Article 3(6) of the basic Regulation.

(98)

Pursuant to Article 21 of the basic Regulation, it has been examined whether, despite the conclusions on dumping, injury and causal link, compelling reasons exist that would lead to the conclusion that it is not in the Community interest to impose anti-dumping measures on imports from the country concerned.

(99)

The Commission sent a questionnaire to the sole importer of EMD from South Africa and all industrial users known or likely to be concerned by the measures. Replies to the questionnaire were received from the importer and from four major users of the product concerned in the Community.

(100)

It is recalled that the Community industry consists of one producer with production facilities in Greece, whose sales and profitability deteriorated significantly during the period considered, with a consequent negative impact on its market share, employment, return on investment and cash flow.

(101)

If measures are not imposed it is likely that, as a result of the price pressure from the dumped imports, the lack of profitability will force the Community industry to cease production of EMD in the Community. It is recalled that one of the Community producers ceased production during the period considered. This coincided with increased pressure from South African imports on the Community market. Moreover, the complainant Community producer was forced to temporarily cease production for one month in 2003, and has informed the Commission of a similar situation for a longer period in 2007.

(102)

It is noted that, like the South African exporting producer, the Community industry produces only EMD and the production lines cannot be used to produce any other products.

(103)

However, following the imposition of anti-dumping measures, it is expected that the sales volumes and prices of the Community industry on the Community market will rise, thus improving profitability of the Community industry and preventing closure.

(104)

It is therefore clear that anti-dumping measures would be in the interests of the Community industry.

(105)

The only industry that uses EMD is primary cell alkaline and carbon-zinc battery producers.

(106)

As mentioned above, questionnaires were sent to all known battery producers in the Community. Replies were received from four companies representing 93 % of the Community consumption; three of the replies were verified on the spot.

(107)

As mentioned above, it was found that the battery producers in the EC were under considerable pressure resulting from global increases in prices of raw materials (zinc, nickel, copper and steel) and increased global competition on the battery market. They submitted that the imposition of anti-dumping measures on imports from South Africa would increase the existing price pressure and cause losses, since they would not be in a position to pass any price increases on to their clients. However, it was found that they were generally still in a good financial situation, with substantial pre-tax profits in the IP and they had increased their sales volume over the period considered thanks to the positive public image of their brands. Based on the information received, it was possible to verify that the cost of EMD for producing batteries can vary between 10 and 15 % (depending on the size of the battery) of the total costs and it was possible to estimate that the imposition of the anti-dumping duty at the proposed level should not increase the estimated level of the battery price by more than EUR 0,01 to EUR 0,02. The increase in battery prices which may result from the imposition of anti-dumping duties was obtained by applying the proposed level of duty to the costs of production for different sizes of batteries.

(108)

While generally opposing the imposition of measures, several users admitted that disappearance of the Community industry would probably have a negative effect on their situation and competition on the EC market, as the Community industry is a producer of high quality EMD suitable for high-end battery production. Thus, if the Community industry were to disappear, users would run the risk of becoming dependent on EMD from South Africa alone.

(109)

In the light of the above, it may be provisionally concluded that the imposition of any anti-dumping measures are unlikely to affect seriously the situation of the user industry.

(110)

The sole Community importer of EMD from South Africa cooperated in the investigation. On the basis of the information submitted, it was found that this importer was Delta’s exclusive and independent agent. All imports of EMD from South Africa were sold in the Community through this company. Its trading activities represented less than 20 % of its turnover. This importer expressed concerns about the possible imposition of measures. However, even if its sales decreased after the imposition of measures and the agent’s commissions were reduced, it is expected to remain financially healthy and it is unlikely that the importer would be significantly affected by the measures. Thus, it is clear that the impact of the anti-dumping duty would be borne by the users.

(111)

On this basis, it has been provisionally concluded that the imposition of anti-dumping measures is not likely to have a serious negative effect on the situation of importers in the Community.

(112)

The effects of the imposition of measures can be expected to enable the Community industry to regain lost sales and market shares and to improve its profitability. In view of the deteriorating situation of the Community industry, there is a considerable risk that, in the absence of measures, the Community industry might have to close down its production facilities and layoff its workers.

(113)

Given the use of the product concerned in battery production, where the cost of EMD is not significant when compared with the value of the endproducts the impact for the users should not be significant, as explained in recital 107 above.

(114)

In view of the above, it is provisionally concluded that there are no compelling reasons not to impose anti-dumping duties on imports of certain manganese dioxides originating in South Africa.

(115)

In view of the conclusions reached with regard to dumping, resulting injury, causation and Community interest, provisional measures should be imposed in order to prevent further injury being caused to the Community industry by the dumped imports.

(116)

The measures should be imposed at a level sufficient to eliminate the injury caused to the Community industry by these imports without exceeding the dumping margin found. When calculating the amount of duty necessary to remove the effects of the injurious dumping, it was considered that any measures should allow the Community industry to cover its costs of production and obtain an overall profit on sales of the like product in the Community before tax that could be reasonably achieved by this industry under normal conditions of competition, i.e. in the absence of dumped imports. The pre-tax profit margin used for this calculation corresponded to the profit achieved by the Community industry at the beginning of the period considered, at a time when EMD prices from South Africa were at the same level as that of the like product sold by the Community industry.

(117)

The necessary price increase was then determined on the basis of a comparison of the weighted average import price, as established for the price undercutting calculations (see recital 45), with the non-injurious price of the like product sold by the Community industry on the Community market. The non-injurious price has been obtained by adjusting the sales price of the Community industry by the actual loss/profit made during the IP and by adding the above mentioned profit margin. Any difference resulting from this comparison was then expressed as a percentage of the total cif import value.

(118)

The injury margin was significantly higher than the dumping margin found.

(119)

In the light of the foregoing, it is considered that in accordance with Article 7(2) of the basic Regulation, a provisional anti-dumping duty should be imposed at the level of the dumping margin since it is lower than the injury margin calculated above.

(120)

On the basis of the above, the proposed provisional duty rates are:

(121)

In the interest of sound administration a period should be fixed within which the interested parties which made themselves known within the time limit specified in the notice of initiation may make their views known in writing and request a hearing. Furthermore, it should be stated that the findings concerning the imposition of anti-dumping duties made for the purposes of this Regulation are provisional and may have to be reconsidered for the purpose of any definitive measures,

18.9.2007   

EN

Official Journal of the European Union

L 243/21

(1)

In accordance with the first subparagraph of Article 6(2) of Regulation (EC) No 510/2006 and pursuant to Article 17(2) thereof, the United Kingdom’s application to register the name ‘Staffordshire Cheese’ has been published in the Official Journal of the European Union  (2).

(2)

A statement of objection was lodged with the Commission in accordance with Article 7 of Regulation (EC) No 510/2006. This statement of objection having subsequently been withdrawn, the name should be registered,

18.9.2007   

EN

Official Journal of the European Union

L 243/22

(1)

By virtue of the first subparagraph of Article 9(1) and having regard to Article 17(2) of Regulation (EC) No 510/2006, the Commission has examined Spain's application for approval of an amendment to the specification for the protected designation of origin ‘Queso de Cantabria’ registered under Commission Regulation (EC) No 1107/96 (2).

(2)

Since the amendment in question is not minor within the meaning of Article 9 of Regulation (EC) No 510/2006, the Commission published the amendment application in the Official Journal of the European Union as required by Article 6 of that Regulation (3). As no statement of objection within the meaning of Article 7 of Regulation (EC) No 510/2006 has been sent to the Commission, the amendment should be approved,

18.9.2007   

EN

Official Journal of the European Union

L 243/23

(1)

On 19 December 2006, pursuant to Article 5 of the basic Regulation, the Commission announced by a notice (notice of initiation) published in the Official Journal of the European Union  (2), the initiation of an anti-dumping proceeding with regard to imports into the Community of polyvinyl alcohol (PVA), originating in the People's Republic of China (PRC) and Taiwan (the countries concerned).

(2)

The proceeding was initiated following a complaint lodged on 6 November 2006 by Kuraray Specialties Europe GmbH (the complainant), since January 2007 referred to as Kuraray Europe GmbH, representing a major proportion, in this case more than 25 %, of the total Community production of polyvinyl alcohol (PVA). The complaint contained prima facie evidence of dumping of PVA 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 complainant producer and other known Community producers, exporting producers in the countries concerned, importer/traders and users known to be concerned and the 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. All interested parties, who so requested and showed that there were particular reasons why they should be heard, were granted a hearing.

(4)

In order to allow 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 to the exporting producers known to be concerned as well as to the authorities of the PRC. One exporting producer in the PRC claimed MET pursuant to Article 2(7)(b) of the basic Regulation, or IT should the investigation establish that they did not meet the conditions for MET.

(5)

In view of the apparent large number of exporting producers in the PRC and importers in the Community, sampling for those parties was envisaged in the notice of initiation for the determination of dumping and injury, in accordance with Article 17 of the basic Regulation.

(6)

However, as far as the exporting producers in the PRC are concerned, given that only three exporting producers cooperated, it was subsequently decided that sampling would not be necessary.

(7)

As concerns the importers of PVA, the Commission requested all known importers to provide information concerning imports and sales of the product concerned. On the basis of the information received from 14 cooperating importers, the Commission selected a sample of five importers, of which two were based in Germany, one in Italy, one in the Netherlands and one in the United States of America. These importers represented the largest representative volume of sales in the Community (around 80 %) of the cooperating importers, which could be reasonably investigated within the time available.

(8)

The Commission sent questionnaires to all parties known to be concerned and to all other companies that made themselves known within the deadlines set out in the notice of initiation. Questionnaire replies were received from two Community producers, three exporting producers in the PRC, one exporting producer in Taiwan, the five sampled importers and seven users in the Community.

(9)

As concerns the questionnaire replies received from users, two of those were incomplete and therefore had to be disregarded. In addition, several users submitted comments without replying to the questionnaire.

(10)

One of the sampled importers cancelled twice at a very late stage an agreed verification visit. As a consequence, the data submitted by this company could not be verified and it provisionally had to be disregarded.

(11)

The Commission sought and verified all the information it deemed necessary for the purpose of MET/IT in the case of the PRC and for a preliminary determination of dumping, resulting injury and Community interest for both countries concerned. Verification visits were carried out at the premises of the following companies:

(12)

In light of the need to establish a normal value for the exporting producers in the PRC which did not request MET or to which MET might not be granted, a verification to establish normal value on the basis of data from the analogue country envisaged in the notice of initiation, Japan, took place at the premises of the following producer:

(13)

The investigation of dumping and injury covered the period from 1 October 2005 to 30 September 2006 (the investigation period or IP). The examination of trends relevant for the assessment of injury covered the period from 1 January 2003 to the end of the investigation period (period considered).

(14)

The product concerned is certain polyvinyl alcohols (PVA) in the form of homopolymer resins with a viscosity (measured in 4 % solution) of 3 mPas or more but not exceeding 61 mPas and a degree of hydrolysis of 84,0 mol % or more but not exceeding 99,9 mol % originating in the People's Republic of China and Taiwan (‘the product concerned’), normally declared within CN code ex 3905 30 00.

(15)

PVA is produced by the hydrolysis of polyvinyl acetate which is manufactured by the polymerisation of vinyl acetate monomer (the latter being produced from, mainly, ethylene and acetic acid). PVA has a wide variety of applications. In the Community, it is mainly used for the production of polyvinyl butyral (PVB) (25 %-29 % of consumption), polymerisation aids (21 %-25 %), paper coatings (17 %-21 %), adhesives (13 %-17 %) and for textile sizing (8 %-12 %).

(16)

One Community user claimed that a specific product it purchased from the PRC should not be considered as the product concerned, as (i) it is not a standard PVA model and has different and very specific chemical and physical characteristics; and (ii) it has different uses or applications from commodity PVA.

(17)

As concerns the first argument, it was found that this model falls within the product description as described in recital 14 and that it shares its basic physical and technical characteristics with the other models falling within the product definition. As concerns the second argument, this particular PVA model was used for the production of PVB, which is not only, as indicated in recital 15, the most important application but also the fastest growing market for PVA in the Community. It would be unrealistic to characterise such a market as not standard. Moreover, it was found that the average prices paid for PVA for the different applications were within the same range. In view of all these findings, it was considered that there were no grounds to exclude this model from the product definition and therefore the claim was dismissed.

(18)

The investigation showed that PVA produced and sold in the Community by the Community industry, PVA produced and sold on the domestic markets of Taiwan and the PRC, and PVA produced in the PRC and Taiwan and exported to the Community, as well as that produced and sold in Japan, have essentially the same basic chemical and physical characteristics and the same basic uses. They are therefore considered to be alike within the meaning of Article 1(4) of the basic Regulation.

(19)

For the determination of normal value, it was first established whether domestic sales of the like product to independent customers of the sole exporting producer in Taiwan were representative, i.e. whether the total volume of such sales represented at least 5 % of its total export sales volume of the product concerned to the Community, in accordance with Article 2(2) of the basic Regulation.

(20)

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

(21)

The Commission subsequently examined whether the domestic sales of each product type sold domestically in representative quantities could be regarded as being sold in the ordinary course of trade pursuant to Article 2(4) of the basic Regulation. This was done by establishing for each exported product type the proportion of profitable domestic sales to independent customers during the IP.

(22)

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

(23)

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 cost of production, normal value was based on the actual domestic price, calculated as a weighted average of profitable sales of that type only, provided that these sales represented 10 % or more of the total sales volume of that type.

(24)

Where the volume of profitable sales of any product type represented less than 10 % of the total sales volume of that type, it was considered that this particular type was sold in insufficient quantities for the domestic price to provide an appropriate basis for the establishment of the normal value.

(25)

Wherever domestic prices of a particular product type sold by the exporting producer could not be used in order to establish normal value, the normal value was constructed in accordance with Article 2(3) of the basic Regulation.

(26)

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) 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 under investigation.

(27)

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

(28)

The normal values and the export prices of the sole exporting producer were compared on an ex-works basis. For the purpose of ensuring a fair comparison between the normal value and export prices, due allowance in the form of adjustments was made for differences in transport and insurance costs, handling, loading and ancillary costs, packing costs, credit costs, after sales costs (warranty and guarantee) and other factors (bank charges) where applicable and justified, in accordance with Article 2(10) of the basic Regulation.

(29)

The comparison of the normal values with the export prices showed a dumping margin of – 2,30 % for the sole Taiwanese exporting producer, Chang Chun Petrochemical Co. Ltd., during the IP.

(30)

Considering that the sole cooperating company is the only exporting producer of the product concerned in Taiwan and that it accounts for 100 % of Taiwanese exports to the EC during the IP, it was concluded that no dumping was found for Taiwan.

(31)

Pursuant to Article 2(7)(b) of the basic Regulation, in anti-dumping investigations concerning imports originating in the PRC, normal value shall be determined in accordance with paragraphs 1 to 6 of Article 2 for those producers which have shown that they meet the criteria laid down in Article 2(7)(c) of the basic Regulation, i.e. where it is demonstrated by such exporting producers that market economy conditions prevail in respect of the manufacture and sale of the like product. Briefly, and for ease of reference only, these criteria are set out in summarised form below:

(32)

One Chinese exporting producer and its related trading company requested MET pursuant to Article 2(7)(b) of the basic Regulation and replied to the MET claim form for exporting producers within the given deadlines. The producer manufactures the product concerned, while its related trading company is involved in the export sales of the product concerned. Indeed, it is the Commission’s consistent practice to examine whether a group of related companies as a whole fulfils the conditions for MET.

(33)

For the exporting producer and its trading company claiming MET, the Commission sought all information deemed necessary and verified the information submitted in the MET claim at the premises of the companies in question as deemed necessary.

(34)

The investigation revealed that MET could not be granted to the Chinese exporting producer as it did not meet criterion 1 set out in Article 2(7)(c) of the basic Regulation.

(35)

The exporting producer, as well as its related trading company, was found to be controlled by fully State-owned companies which were represented by a decisive majority of the members of the Board of Directors at a ratio which was disproportionate to their shareholding. In addition, the majority of the shares were owned ultimately by the State during the IP. As the companies concerned failed to present evidence that could be considered sufficient to remove doubts of significant State interference in management decisions, it was determined that this group of companies was under significant State control and interference. The interested parties were given an opportunity to comment on the above findings. The comments received were not of a nature to change the conclusions.

(36)

On the basis of the above, the Chinese exporting producer and its related trading company have not shown that they fulfil all the criteria set out in Article 2(7)(c) of the basic Regulation and, thus, could not be granted MET.

(37)

Pursuant to Article 2(7)(a) of the basic Regulation, a countrywide duty, if any, is established for countries falling under that Article, except in those cases where companies are able to demonstrate that they meet all criteria set out in Article 9(5) of the basic Regulation.

(38)

As far as the PRC is concerned, the sole exporting producer and its related trading company, who requested MET, also claimed IT in the event that they would not be granted MET.

(39)

On the basis of the information available, it was found that the exporting producer and its trading company failed to demonstrate that they cumulatively met all the requirements for IT as set forth in Article 9(5) of the basic Regulation. Namely, it was established that the exporting producer and its trading company failed to meet the criterion stipulated in Article 9(5)(c) of the basic Regulation that the majority of the shares belong to private persons and that state officials appearing on the Board of Directors or holding key management positions shall either be in the minority or it must be demonstrated that the company is nonetheless sufficiently independent from State interference, for the reasons explained in recital 35.

(40)

According to Article 2(7)(a) of the basic Regulation, normal value for the exporting producers not granted MET has to be established on the basis of the prices or constructed value in an analogue country.

(41)

In the notice of initiation, the Commission indicated that it envisaged using Japan as an appropriate analogue country for the purpose of establishing normal value for the PRC and interested parties were invited to comment on this. Some of the interested parties objected to this proposal and proposed the use of India or Taiwan instead.

(42)

In India, there was no significant production of the like product. Taiwan was subject to the investigation and thus data in that country might be distorted by dumping. Therefore, the parties were informed that Japan was selected as analogue country because it was not subject to the investigation, there was representative production of the like product and the conditions of competition seemed appropriate.

(43)

The Commission sought cooperation from four known producers in Japan and sent the relevant questionnaire to them. Two of the four Japanese producers replied to the questionnaire. However, one of them did not submit complete data and did not accept a verification visit. The data submitted by the sole fully cooperating Japanese producer were verified on the spot.

(44)

However, after the verification visit at the exporting producer in Taiwan, it was found that Taiwan was not dumping during the IP. The question of the choice of analogue country was therefore reconsidered.

(45)

In this regard, it was found that the production volume in Taiwan constitutes more than 100 % of the volume of Chinese exports of the product concerned to the Community. Moreover, the Taiwanese market can be characterised as open, given that the import duty level is low (MFN duty of 5 %). The investigation also showed that there were significant domestic sales of the like product in Taiwan and that there were sufficient imports into the Taiwanese market. Therefore, Taiwan was deemed a competitive market and sufficiently representative for the determination of normal value for the PRC.

(46)

In addition, imports of PVA into Taiwan represent around 15 % of domestic consumption compared to only around 3 % in the case of Japan, indicating that the Japanese market is less appropriate than Taiwan in terms of competition from imports. In view of the above, it was provisionally decided that Taiwan be used as analogue country, as it constitutes the most appropriate analogue country within the meaning of Article 2(7)(a) of the basic Regulation.

(47)

Following the choice of Taiwan as analogue country as indicated in recital 46, and pursuant to Article 2(7)(a) of the basic Regulation, the normal value established for Taiwan in recitals 19 to 26 was used in the dumping calculation for the PRC.

(48)

Since the three Chinese cooperating exporting producers accounted together for almost the totality of the exports of the product concerned to the Community during the IP, their own export data were used to establish the export price. The reliability of the information provided was nevertheless cross-checked with Eurostat import data which showed reasonable agreement.

(49)

The three cooperating exporting producers in the PRC made export sales to the Community either directly to independent customers in the Community or through their related trading companies located in the exporting country.

(50)

For all export sales, export prices were established on the basis of the prices actually paid or payable, in accordance with Article 2(8) of the basic Regulation.

(51)

The normal values of the sole producer in the analogue country, Taiwan and the export prices of the three cooperating Chinese exporting producers were compared on an ex-works basis. For the purpose of ensuring a fair comparison between the normal value and export prices, due allowance in the form of adjustments was made for differences in transport and insurance costs, handling, loading and ancillary costs, packing costs, credit costs and commissions where applicable and justified, in accordance with Article 2(10) of the basic Regulation.

(52)

In the absence of MET or IT being granted to any of the cooperating Chinese exporting producers, a countrywide dumping margin was calculated for the whole of the PRC using the weighted average of the ex-works export prices of the three cooperating exporting producers.

(53)

The comparison of the weighted average Chinese export price and the weighted average normal value of the analogue country showed a dumping margin of 10,06 %.

(54)

Within the Community, the like product is manufactured for sale by three companies: Kuraray Europe GmbH (KEG) in Germany, Celanese Ibérica Chemicals (Celanese) in Spain and a third producer which produces very limited volumes but did not cooperate in the investigation. KEG and Celanese fully cooperated in the investigation.

(55)

In addition to the production mentioned above, three Community producers produce the like product for captive use only. Two of these companies cooperated in the investigation as a user as they also purchased significant quantities of the product concerned for the production of their downstream products.

(56)

As the two cooperating producers mentioned in recital 54 accounted for 80 % of the total (captive and non-captive) Community production during the IP, it is considered that they account for a major proportion of the total Community production of the like product. They are therefore deemed to constitute the Community industry within the meaning of Article 4(1) and Article 5(4) of the basic Regulation and will hereinafter be referred to as the ‘Community industry’.

(57)

Given that the Community industry comprises only two producers, data relating to the Community industry had to be indexed in order to preserve confidentiality pursuant to Article 19 of the basic Regulation.

(58)

In order to establish whether or not the Community industry suffered injury and to determine consumption and the various economic indicators relating to the situation of the Community industry, it was examined whether and to what extent the subsequent use of the Community industry’s production of the like product had to be taken into account in the analysis.

(59)

PVA is used as an intermediate material for a variety of other products. In the Community, it is often consumed in the production of polyvinyl butyral (PVB), used as an adhesive, for paper coating, as a polymerisation aid and for textile sizing. It was found in the investigation that one of the Community producers, which sold most of its own-produced PVA on the open market, also used significant volumes of its produced PVA for further downstream processing within the same company. Such situation is referred to as captive use. As explained in recital 55, three other companies in the Community produced PVA for captive use only and in addition to this production for captive use, at least two of them also purchased significant volumes of PVA on the market as a user for further downstream processing.

(60)

It was found that the quantities used for captive use, by the companies concerned in the Community, could in principle be substituted by purchased PVA, e.g. if market circumstances and/or financial considerations would trigger such a change. They have therefore been included in the Community market analysis.

(61)

Community consumption was established on the basis of the free market sales volumes of the Community industry’s own production on the Community market, the captive use of the Community industry, the production quantities of the other (smaller) Community producers as obtained from the most widely used database in this particular business, the captive use of the two users referred to in recital 55, the verified import volumes of the sole Taiwanese producer, and Community import volumes data concerning all other countries obtained from Eurostat.

(62)

Regarding the Community import volumes data obtained from Eurostat, as mentioned in recital 14, the product concerned is presently declared within CN code ex 3905 30 00. The Eurostat data concerning this ex CN code also include certain niche products not covered by the product scope. As it was not possible to retrieve from the broader category of products the data for the product concerned only, they were therefore adjusted based on information on imports of these niche products provided in the complaint.

(63)

Also with regard to the Eurostat data it is to be noted that certain imports of the product concerned were reported under ‘secret extra’ and, therefore, no details on origin were available in the public database. Details on the countries of origin of the imports declared as such have been acquired from the relevant customs authorities and they therefore have been included in all relevant tables and analyses.

(64)

On the basis of the above, it was found that the consumption of PVA has increased strongly during the period considered and especially between 2004 and 2005. Over the period considered, the consumption increase was 14 % which was mainly due to a fast growing demand for PVA as raw material for the production of polyvinyl butyral (PVB), which is used for the production of PVB film or sheets. PVB film is used as an interlayer in the production of laminated safety glass, in automotive and architectural markets, which is a strongly growing market in the Community.

(65)

As the dumping margin found for Taiwan is below de minimis, imports originating in this country should be provisionally excluded from the injury assessment.

(66)

The volumes of imports of the product concerned decreased by 39 percentage points between 2003 and 2004, then increased by 29 percentage points in 2005 after which they went slightly down, resulting in a decrease of 11 % during the IP as compared to 2003.

(67)

The market share held by imports from the PRC also first sharply decreased and then went up. During 2005 and the IP imports from the PRC accounted for 13 % of the whole Community market.

(68)

Between 2003 and the IP, the average price of imports of the product concerned originating in the PRC decreased by two percentage points.

(69)

For the determination of price undercutting the price data referring to the IP were analysed. The relevant sales prices of the Community industry were net prices after deduction of discounts and rebates. Where necessary, these prices were adjusted to an ex-works level, i.e. excluding freight cost in the Community. The import prices of the PRC were also net of discounts and rebates and were adjusted where necessary to cif Community frontier with an appropriate adjustment for the customs duties (6,5 %) and post-importation costs, as incurred by importers in the Community.

(70)

The Community industry's sales prices and the import prices of the PRC were compared at the same level of trade, namely to independent customers within the Community market. As it was considered that the comparison per model had to be meaningful and fair, and, therefore, no comparison between a standard grade and a special grade falling within the product definition should be allowed, it was considered appropriate to exclude a limited number of models from the comparison. These models represented 35 % of imports from the PRC but only a very small quantity of Community industry sales on the Community market.

(71)

During the IP, the weighted average price undercutting margin thus calculated, expressed as a percentage of the Community industry's sales prices, was 3,3 % for the PRC.

(72)

In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Community industry included an evaluation of all economic factors having a bearing on the state of the Community industry during the period considered. For confidentiality reasons, given that the analysis concerns only two companies, most indicators are presented in indexed form or ranges are given.

(73)

The Community industry’s production increased by 26 % during the period considered. The significant increase in production capacity, notably in 2005, was triggered by the increasing demand on the Community market.

(74)

Between 2003 and the IP, additional production capacity was installed by the Community industry. During the same period, capacity utilisation decreased by 6 %.

(75)

The table below shows the Community industry's performance in relation to its sales to independent customers in the Community:

(76)

Sales volumes of the Community industry to independent customers in the Community went up by 22 % from 2003 to the IP. This has to be seen in the light of an increasing consumption in the Community.

(77)

The market share of the Community industry increased in 2004, then decreased sharply in 2005 and during the IP it was four percentage points higher than in 2003.

(78)

The main raw material used for the production of PVA is vinyl acetate monomer or VAM. VAM is a commodity product and, as such, prices of VAM are determined based on the balance in the market between demand and supply. Moreover, the market price of VAM is heavily influenced by the development of the oil and gas prices as the major inputs for the production of VAM are acetic acid (the production of which is natural gas intensive) and ethylene (produced from distillation of hydrocarbons). In addition, energy is also a major cost in producing PVA from VAM. The total weight of energy cost in the production of PVA subsequently amounts to 50 % to 60 % and therefore, in normal circumstances, a significant change in the oil and gas prices can be expected to have a direct impact on the PVA sales price.

(79)

It was found that world market prices of these raw materials went up significantly between 2003 and the IP. During this period VAM prices increased by 20 % to 30 % and the increase in energy prices was even much higher. However, this dramatic price evolution of the main raw materials cost was not reflected in higher sales prices of the Community industry: sales prices of the Community industry decreased during the same period by 5 %, with a particularly bad year in 2004 (– 7 %). Thus, instead of passing on the overall cost increase to their customers, the Community industry had to decrease prices in order not to lose customers.

(80)

The figures below represent the volumes of stocks at the end of each period.

(81)

The level of stocks remained rather stable overall. It decreased by 13 % between 2003 and 2004, subsequently increased by nine percentage points until the end of 2005 and then decreased again by nine percentage points.

(82)

Investments peaked in 2004 and 2005, when the production capacity of the Community industry was increased following the increasing demand on the market. During the investigation it was found that investments in buildings, plants and machinery in 2003 as well as during the IP were mainly to maintain the production capacity.

(83)

The investigation showed that the financial performance of the Community industry deteriorated but it did not reveal that its ability to raise capital was seriously affected yet during the period considered.

(84)

In view of very high and distorting extraordinary costs incurred by the main Community producer during the period considered, it was not considered reasonable to establish the profitability on the basis of the pre-tax net profit. These extraordinary costs were related to the change of ownership of the main Community producer in 2001. Therefore, the profitability of the Community industry was established by expressing the operating profit on the sales of the like product to unrelated customers as a percentage of the turnover of these sales.

(85)

The decline in sales prices between 2003 and the IP significantly affected the profitability achieved by the Community industry. This profitability dropped by more than 10 percentage points during the period considered. The return on total investments was calculated by expressing the operating profit of the like product as a percentage of the net book value of fixed assets allocated to the like product. This indicator followed a similar trend as profitability, decreasing significantly over the period considered. With regard to the cash flow generated by the Community industry, a similar negative trend was found, resulting in a dramatic overall deterioration of the Community industry's financial situation in the IP.

(86)

Due to serious efforts to cut costs, the number of personnel employed by the Community industry declined by 4 % since 2004. From 2003 to the IP, the Community industry managed to increase the productivity per employee by 32 %. During the same period the average labour cost per employee decreased by 5 %. It can therefore be concluded that, during the period considered, the Community industry made very significant progress in terms of cost efficiency.

(87)

Given the volume and the price of the dumped imports, the impact of the actual margins of dumping cannot be considered negligible.

(88)

In the absence of any information on the existence of dumping prior to the situation assessed in the present proceeding, this issue is considered irrelevant.

(89)

The investigation showed that during the period considered the Community industry increased its Community market share with 1 % to 2 %.

(90)

Between 2003 and the IP, a number of injury indicators developed positively: the Community industry managed to increase its sales volumes and market share, and it invested significantly in additional production capacity.

(91)

However, its financial indicators developed dramatically: the reasonable profit margin achieved in 2003 decreased very rapidly and continuously as from 2004 to the end of the IP. Return of investment and cash flow situation developed exponentially negative. The reason for this development is that the steep increase in raw material prices could not be reflected in the sales prices of the like product. Whereas, in view of the increase of raw material prices, in a normal market situation an increase of the PVA sales price by 10 % to 20 % could have been expected, the sales prices of the like product produced by the Community industry decreased by 5 %, to the detriment of its profitability. Still, during the IP, the prices of the imports from the PRC undercut those of the Community industry, on a weighted average basis by 3,3 %.

(92)

In the light of the foregoing, it is provisionally concluded that the Community industry has suffered material injury within the meaning of Article 3(5) of the basic Regulation.

(93)

In accordance with Article 3(6) and (7) of the basic Regulation, the Commission has examined whether dumped imports of the product concerned originating in the PRC have caused injury to the Community industry to a degree that may be considered material. Known factors other than the dumped imports, which could at the same time have injured the Community industry, were also examined to ensure that possible injury caused by these other factors was not attributed to the dumped imports.

(94)

Imports from the PRC were at significant levels during the period considered, i.e. constantly representing 10 % market share or more. At the same time, average prices of all exporting producers in the PRC decreased by 2 % and they undercut the average Community industry prices by 3,3 % in the IP. The Community industry, in order to assure its presence on its home market and due to the very low market prices set by imports from the PRC, felt obliged to decrease its sales prices by 5 % during the period considered.

(95)

Therefore, the effect of this unfair pricing behaviour of the dumped imports from the PRC was that the Community industry's prices were suppressed and that they could not cover the substantial increase of cost of raw materials. This was confirmed by the significant reduction in profitability by the Community industry.

(96)

Based on the above considerations, it was found that the low-priced imports from the PRC which significantly undercut the prices of the Community industry have had a determining role in the deterioration of the situation of the Community industry, which is reflected in the sharp decrease of profitability and strong deterioration of the other financial indicators.

(97)

According to Eurostat and the information collected during the investigation, the main third countries from which PVA is imported are the USA, Japan and Taiwan.

Imports originating in other third countries (quantity)

Imports originating in other third countries (average price)

Market shares

(98)

Imports from the USA have strongly increased since 2003 and during the IP they had amounted to more than 22 000 tonnes, accounting for almost 14 % of the total (captive and non-captive) Community market. The investigation showed that the bulk of these sales concerned sales between related parties and that the average unit prices of these transfer sales were, throughout the period considered, between 15 % and 20 % above the average cif prices of Chinese imports. Moreover, it was established that the quantities were resold to independent customers at prices 10 %-20 % higher than these aforementioned transfer import prices. As the market prices of PVA originating in the USA were consequently in the same ballpark as sales prices of PVA produced by the Community industry, they did not play a role in the price depression observed during the period considered. It is therefore concluded that these imports did not have a significant effect on the situation of the Community industry.

(99)

During the period considered there were also significant imports from Japan, accounting for almost 9 % of the Community market during the IP. After Japanese imports had dropped in 2004, they increased again as from 2005 and they were 3 % higher during the IP as compared to 2003. However, analysis of the sales prices of these imports showed that the average import prices of these imports were above the prices that the Community industry could obtain and they therefore have not contributed to the negative price trend which led to the serious deterioration of the Community industry's situation.

(100)

Imports from Taiwan are from one producer only which fully cooperated with the investigation. These figures were found to be more reliable than Eurostat data given that the CN code covers other products than the product concerned. They are for confidentiality reasons presented in indexes or ranges. Taiwanese imports, after a sharp increase in 2004, decreased gradually and accounted for 6 % to 7 % of the entire Community market during the IP (around half of the market share of imports from the PRC). During the same period, average prices of these imports increased by 8 % which is opposite to the price trend observed as regards imports from the PRC. Consequently, the price difference between PVA imported from the PRC and PVA imported from Taiwan increased from 12 % to 18 % during the IP. In view of these findings, it is provisionally concluded that these imports did not have a significant impact on the state of the Community industry.

(101)

Further to the imports from the USA, Japan and Taiwan, there are no significant imports from other countries. On the basis of the findings with regard to these imports, as described under recitals 97 to 100, it can thus provisionally be concluded that imports other than from the PRC did not contribute to the material injury suffered by the Community industry.

(102)

As stipulated in recitals 54 and 55, apart from the two producers comprising the Community industry, in the Community there are known to be four more companies producing the product concerned. Three of them, out of which two cooperated with the investigation as a user, consume all their own produced PVA in the manufacturing of downstream products. The fourth one is producing very limited quantities only. In view of the above, the other Community producers are deemed to have played no role in the price depression on the market and the subsequent injury suffered by the Community industry.

(103)

Several interested parties claimed that any injury suffered by the Community industry was linked to the fact that the Community industry had not managed to stay cost competitive and that it had taken unreasonable investment decisions. In this respect, as described under recital 86, the investigation has shown that the Community industry, during the period considered, has significantly increased its productivity, due to an increase in production output and a decrease in workforce. It was further established that the investments involved with the increase in production capacity (see recital 73) did not significantly influence the dramatically negative trend observed in the development of the financial position of the Community industry.

(104)

The sole factor significantly affecting in a negative way the cost of production of the like product during the period considered, therefore, was the steep rise in the main raw material prices used for the production of the like product, as explained in recitals 78 and 79. The investigation showed that the development of the Community industry's purchase prices of VAM and energy was proportional to the development of these raw material prices on the global market and they therefore cannot be attributed to the way the Community industry purchased these. The argument is therefore dismissed.

(105)

An important user of PVA submitted that it would be normal, for this particular sector, for the increase in VAM purchase price not to have yet led to an upward adjustment of the PVA sales price. This would be explained by the fact that long-term contracts are standard in the sector and, therefore, a significant time lag would be a normal phenomenon. In this respect, whilst it is recognised that certain sales of the Community industry are done via long-term agreements, it is not common that such agreements include a fixed price for a period of more than one year. Within these agreements, therefore, prices are renegotiated after a certain period or if raw material prices have changed significantly. Therefore, this argument is dismissed.

(106)

In conclusion, the above analysis has demonstrated that imports from the PRC during the period considered provoked a substantial price depression on the Community market throughout that period. During the IP, import prices from the PRC significantly undercut the Community industry prices.

(107)

This price depression led to a considerable decrease in the sales prices of the Community industry, which in its turn coincided with a strong drop in the Community industry’s profitability, its return on investments and its cash flow from operating activities.

(108)

On the other hand, the examination of the other factors which could have injured the Community industry revealed that none of these could have had a significant negative impact.

(109)

Based on the above analysis which has properly distinguished and separated the effects of all known factors on the situation of the Community industry from the injurious effects of the dumped imports, it is provisionally concluded that the dumped imports originating in the country concerned have caused material injury to the Community industry within the meaning of Article 3(6) of the basic Regulation.

(110)

The Commission examined whether, despite the conclusions on dumping, injury and causation, compelling reasons existed which would lead to the conclusion that it is not in the Community interest to adopt measures in this particular case. For this purpose, and pursuant to Article 21 of the basic Regulation, the Commission considered the likely impact of measures for all parties concerned.

(111)

As indicated in recital 56, the Community industry is composed of two companies, with production facilities in Germany and Spain, which employs in the range of 200 to 300 persons directly involved in the production, sales and administration of the like product. If measures are imposed, it is expected that the price depression on the Community market will come to an end and that sales prices of the Community industry will start to recover, as a consequence of which the financial situation of the Community industry will improve.

(112)

On the other hand, should anti-dumping measures not be imposed, it is likely that the negative trend in the development of the Community industry's financial indicators, and notably its profitability, will continue. The Community industry will then lose significant market share as it will no longer be able to follow the market prices set by imports from the PRC. At worst, the Community industry would be forced to step out of the free market and continue production of PVA for captive use only. In both cases, cuts in production and investments, closure of certain production capacities and job reductions in the Community will be a likely result.

(113)

In conclusion, the imposition of anti-dumping measures would allow the Community industry to recover from the effects of injurious dumping found.

(114)

As described in recital 8, five sampled importers sent questionnaire replies and they accounted for around 80 % of Community imports of the product concerned during the IP. The information submitted by one of the sampled importers had to disregarded at this stage as it cancelled twice an agreed verification visit. Three of the questionnaire replies were verified on the spot.

(115)

The overall weight represented by PVA in the total turnover of these importers' activities was very small. On an average basis, 3 % to 4 % of these importers' activities could be linked to imports of PVA from the PRC. The importers have a much broader field of activities which can also include general trading and distribution. Certain importers purchase the product under investigation not only from the PRC but also from other sources in and outside the Community, including from the Community industry. The average profit margin attained by the sampled importers, on their trading of PVA, is around 5 %.

(116)

Importers in the Community are not in favour of the imposition of measures. The cooperating importers argued that the imposition of measures would seriously harm their operations, as they would not be able to pass on the price increase to users. In this respect, the imposition of an anti-dumping duty on imports from the PRC, as explained in recital 111, will most likely lead to a slightly upwards correction of market prices. Therefore, it can be expected that importers which buy the product concerned from the PRC will be able to pass on these duty costs to the final customer. The significant undercutting still found after adjustment of the cif Community border prices for post-importation costs also suggests that there is room for a price increase. In any event, in view of the limited weight of sales of this product in the importers' activities, and the profit margin currently attained both overall and in view of their sales of PVA only, it is expected that the duty as provisionally established will not affect the financial situation of these economic operators to a significant extent.

(117)

Although importers/distributors are not in favour of measures, it can be concluded on the basis of the information available that any advantage they may gain from not having anti-dumping measures imposed is outweighed by the interest of the Community industry in having the effect of unfair and injurious trading practices from the PRC neutralised.

(118)

Seven users filled in a users' questionnaire. The replies of two of these companies were incomplete and they therefore could not be included in the analysis. The five remaining companies were using PVA for a variety of applications: for the production of adhesives, the production of industrial powders, the production of PVB, textile sizing and finishing, and resin production.

(119)

Further to information on purchases reported in their responses to the questionnaires, the purchases during the IP of the five cooperating users represented about 19 % of total Community consumption of PVA and their Chinese imports represented about 22 % of total imports from the PRC. It is important to note that imports from the PRC represent, overall, the minor part of their purchases, i.e. 15 %. However, this picture is very mixed: one of the cooperating users did not import at all from the PRC during the IP whereas another cooperating user sourced its PVA exclusively from the PRC.

(120)

The cooperating users have raised a number of arguments against the imposition of duties.

(121)

Two companies used PVA for the production of adhesives. It was established that, for the production of such adhesives, PVA was a major cost input which, depending on the composition of the blend, could account for up to 80 % of the manufacturing cost. The companies argued that, in view of the significant weight of PVA in the production cost and the profit margins attained on the sales of adhesives, an anti-dumping duty might lead to bankruptcy or force them to relocate production outside the Community. These companies expressed very strong doubts as to whether their customers would be willing to pay an eventual price increase caused by duties. In this respect, whilst it is acknowledged that the profit margins achieved in this particular sector are modest, it should also be noted that the measures proposed are directly affecting purchase prices of PVA with Chinese origin only, which is one source of supply, and these prices significantly undercut the Community industry's prices during the investigation period. Therefore, the impact of the duty on these companies' production cost of adhesives is not insignificant but, also in view of the proposed duty level, there appear to be no reasons as to why their customers would not be willing to bear at least a good part of this cost increase.

(122)

Two other companies used PVA for the production of PVB. In the case of the production of PVB also, PVA is a major cost driver. One of these companies, which would subsequently use the PVB for the production of PVB film, suggested that eventual measures could trigger the company to move their production of PVB out of the Community. This company also submitted that, in view of the time it would take to qualify PVA for this application, it was complicated and burdensome for them to change supplier. The other PVB producer cooperating as a user, which used PVA not only for the production of PVB but mostly for the production of industrial powders, also pointed to the difficult and lengthy process of changing supplier and further expressed concerns about the increased costs that measures might result in.

(123)

It is acknowledged that an increase in the purchase cost of PVA will reflect in a higher manufacturing cost of PVB. At the same time, however, as imports from the PRC account for 13 % of the Community market, 87 % of the PVA consumed in the Community will not be directly affected by these measures. Moreover, the proposed duty rate is moderate. In view of the above and taking into account the good market conditions for PVB, the effect of such a duty is considered bearable.

(124)

As concerns the qualification procedure, it is recognised that, in particular applications, the characteristics of PVA can indeed be very demanding and tailor-made, resulting in a lengthy qualification process which includes intensive testing. However, it should be recalled that anti-dumping measures are not meant to deny certain suppliers access to the Community market. Any measure proposed is only meant to restore fair trade and correct a distorted market situation. Therefore, and even more in view of the level of the duty rate proposed, there is no reason why certain users would be obliged to change supplier once measures are put in place.

(125)

One cooperating user, a manufacturer of polyester/cotton and cotton fabrics, which used PVA in the sizing and finishing of greige fabrics, indicated that measures might force the company to shift its spinning and weaving activities outside the Community. In this respect, it was established that the cost share of PVA in this company's products manufacturing cost was rather limited, i.e. between 0,2 % and 0,8 %. In light of the duty rate proposed, it is therefore considered that the impact of such a duty is not significant.

(126)

Finally, the complainant, KEG, submitted that the non-imposition of measures would be against the interest of users, as the poor financial results on its PVA activities might trigger KEG to step out of the merchant market and focus on the downstream markets. It argued that if that were to happen, the user industry would be short of supplies as KEG is a large and reliable supplier. Although this argument has not explicitly been supported by the users concerned, it is indeed confirmed that three of the five users concerned do purchase significant quantities of PVA from KEG and that this company can be considered as the most important supplier on the Community market. Therefore, if for whatever reason, KEG would step out of the market, it cannot be excluded that the user industry would be confronted with serious supply problems.

(127)

The effects of the imposition of measures can be expected to enable the Community industry to improve its profitability. In view of the unfavourable financial situation of the Community industry, there is a real risk that, in the absence of measures, the Community industry may close down production facilities and lay off workforce. In general, the users in the Community would also benefit from the imposition of measures, as the supply of sufficient volumes of PVA will not be jeopardised whilst the overall increase in purchase price of PVA will be moderate. In light of the above, it is provisionally concluded that no compelling reasons exist for not imposing measures in the present case on Community interest grounds.

(128)

In view of the conclusions reached with regard to dumping, injury, causation and Community interest, provisional measures should be imposed on imports of the product concerned originating in the PRC in order to prevent further injury to the Community industry by the dumped imports.

(129)

As far as imports of the product concerned originating in Taiwan are concerned, no dumping was provisionally found, as indicated at recital 30 above. Consequently, no provisional measures should be imposed. In view of the timing of this determination, it was considered appropriate to give a period of one month to interested parties to comment on this provisional finding, with a view to possibly terminating the proceeding in respect of imports of the product concerned originating in Taiwan thereafter.

(130)

The provisional measures on imports originating in the PRC should be imposed at a level sufficient to eliminate the injurious effect caused to the Community industry by the dumped imports, without exceeding the dumping margin found. When calculating the amount of duty necessary to remove the effects of the injurious dumping, it was considered that any measures should allow the Community industry to cover its costs and obtain overall a profit before tax that could be reasonably achieved under normal conditions of competition, i.e. in the absence of dumped imports.

(131)

It is considered that in 2003 there was a normal competitive situation on the Community market where the Community industry, in the absence of injurious dumping, made a normal profit within the range as described in recital 84 above. Consequently, on the basis of the information available, it was preliminarily found that a profit margin corresponding to that level could be regarded as an appropriate level which the Community industry could be expected to obtain in the absence of injurious dumping.

(132)

The required price increase was then determined on the basis of a comparison, at the same level of trade, of the weighted average import price, as established for the price undercutting calculations, with the non-injurious price of products sold by the Community industry on the Community market. The non-injurious price was obtained by adjusting the sales price of each Community industry producer to a break-even point and by adding the above mentioned profit margin. Any difference resulting from this comparison was then expressed as a percentage of the total cif import value. Given that none of the cooperating Chinese producers was granted MET or IT, and in view of the high level of cooperation, the provisional single countrywide injury elimination level was calculated as a weighted average of the injury margins of all three cooperating Chinese exporting producers.

(133)

The injury margin thus established for the PRC was significantly higher than the dumping margin found.

(134)

In the light of the foregoing and pursuant to Article 7(2) of the basic Regulation, it is considered that a provisional anti-dumping duty should be imposed on imports of the product concerned originating in the PRC at the level of the lowest of the dumping and injury margins found, in accordance with the lesser duty rule.

(135)

On the basis of the above, the proposed duty rate for the product concerned originating in the PRC is 10,0 %.

(136)

In the interest of sound administration, a period should be fixed within which the interested parties which made themselves known within the time limit specified in the notice of initiation may make their views known in writing and request a hearing. Furthermore, it should be stated that the findings concerning the imposition of duties made for the purposes of this Regulation are provisional and may have to be reconsidered for the purpose of any definitive measures,

18.9.2007   

EN

Official Journal of the European Union

L 243/41

(1)

The Commission was informed that for azinphos-methyl current MRLs may need to be revised in the light of the availability of new information on the toxicology and consumer intake. The Commission has asked the Member State which acted as rapporteur for azinphos-methyl under Council Directive 91/414/EEC (5), to make a proposal for the review of Community MRLs. Such a proposal was submitted to the Commission.

(2)

Community MRLs and the levels recommended by the Codex Alimentarius are fixed and evaluated following similar procedures. There are a number of Codex MRLs for azinphos-methyl. The Community MRLs based on Codex MRLs have also been evaluated by the Rapporteur Member State in the light of the new information on the risks for the consumers.

(3)

The lifetime and short-term exposure of consumers to the azinphos-methyl via food products has been reassessed and evaluated in accordance with Community procedures and practices, taking account of guidelines published by the World Health Organisation (6). On that basis, it is appropriate to fix new MRLs, which will ensure that there is no unacceptable consumer exposure.

(4)

In order to ensure that the consumer is adequately protected from exposure to residues resulting from unauthorised uses of plant protection products, MRLs should be set for the relevant product/pesticide combinations at the lower limit of analytical determination.

(5)

It is therefore necessary to modify the MRLs set out in the Annexes to Directives 76/895/EEC, 86/362/EEC, 86/363/EEC and 90/642/EEC to allow for proper surveillance and control of the prohibition of their uses and to protect the consumer.

(6)

Through the World Trade Organisation, the Community’s trading partners have been informed about the new MRLs and their comments on these levels will be taken into account.

(7)

Directives 76/895/EEC, 86/362/EEC, 86/363/EEC and 90/642/EEC should therefore be amended accordingly.

(8)

The measures provided for in this Directive are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health,

18.9.2007   

EN

Official Journal of the European Union

L 243/50

(1)

In accordance with Directive 91/414/EEC, authorisations of plant protection products for use on specific crops are the responsibility of the Member States. Such authorisations have to be based on the evaluation of effects on human and animal health and influence on the environment. Elements to be taken into account in such evaluations include operator and bystander exposure and impact on the terrestrial, aquatic and aerial environments, as well as impact on humans and animals through consumption of residues on treated crops.

(2)

Maximum residue levels (MRLs) reflect the use of minimum quantities of pesticides to achieve effective protection of plants, applied in such a manner that the amount of residue is the smallest practicable and is toxicologically acceptable, in particular in terms of estimated dietary intake.

(3)

MRLs for pesticides covered by Directive 90/642/EEC are to be kept under review and may be modified to take account of new or changed uses. Information about new or changed uses has been communicated to the Commission which should lead to changes in the residue levels of azoxystrobin, chlorothalonil, ioxynil and quinoxyfen.

(4)

For hexachlorobenzene information has been communicated to the Commission that this pesticide, due to environmental contamination, can occur in pumpkin seed, a commodity that is consumed as a food in several Member States, at levels higher than the limit of analytical determination. The insertion of ‘pumpkin seed’ in Annex I to Directive 90/642/EEC and setting of MRLs for pumpkin seed are therefore necessary to protect consumers from excess hexachlorobenzene residues.

(5)

For oxamyl temporary MRLs have been set in Directive 90/642/EEC by Commission Directive 2006/59/EC (5), pending submission of trial data. Trial data for oxamyl have been consequently submitted and evaluated. As a result, the temporary MRLs for oxamyl can be confirmed.

(6)

For deltamethrin also temporary MRLs have been set in Directives 86/362/EEC, 86/363/EEC and 90/642/EEC by Directive 2006/59/EC, pending review of the Annex III dossier under Directive 91/414/EEC and re-registration of deltamethrin formulations at Member State level. Upon further examination, it appeared that more time should be allowed to ensure proper consideration of the uses of deltamethrin authorised at Member State level. It is therefore appropriate to prolong the validity of the temporary MRLs for deltamethrin.

(7)

The lifetime exposure of consumers to those pesticides via food products that may contain residues of those pesticides has been assessed and evaluated in accordance with the procedures and practices used within the Community, taking account of guidelines published by the World Health Organisation (6). Based on those assessments and evaluations, the MRLs for those pesticides should be set so as to ensure that the acceptable daily intake is not exceeded.

(8)

In the case of chlorothalonil and ioxynil, for which an acute reference dose (ARfD) exists, the acute exposure of consumers via each of the food products that may contain residues of these pesticides has been assessed and evaluated in accordance with the procedures and practices currently used within the Community, taking account of guidelines published by the World Health Organisation. The opinions of the Scientific Committee on Plants (SCP), in particular advice and recommendations concerning the protection of consumers of food products treated with pesticides (7), have been taken into account. Based on the dietary intake assessment, the MRLs for those pesticides should be fixed so as to ensure that the ARfD will not be exceeded. In the case of the other substances, an assessment of the available information has shown that no ARfD is required and that therefore a short-term assessment is not needed.

(9)

Where authorised uses of plant protection products do not result in detectable levels of pesticide residues in or on the food product, or where there are no authorised uses, or where uses which have been authorised by Member States have not been supported by the necessary data, or where uses in third countries resulting in residues in or on food products which may enter into circulation in the Community market have not been supported with such necessary data, MRLs should be fixed at the lower limit of analytical determination.

(10)

The setting or modification at Community level of provisional MRLs does not prevent the Member States from establishing provisional MRLs for ioxynil and quinoxyfen in accordance with Article 4(1)(f) of Directive 91/414/EEC and Annex VI to that Directive. It is considered that a period of four years is sufficient to permit further uses of these substances. The provisional Community MRLs should then become definitive.

(11)

It is therefore necessary to modify the MRLs set out in Directives 86/362/EEC, 86/363/EEC and 90/642/EEC, to allow proper surveillance and control of the uses of the plant protection products concerned and to protect the consumer. Where MRLs have already been defined in the Annexes to those Directives, it is appropriate to amend them. Where MRLs have not yet been defined, it is appropriate to set them for the first time.

(12)

Directives 86/362/EEC, 86/363/EEC and 90/642/EEC should therefore be amended accordingly.

(13)

The measures provided for in this Directive are in accordance with the opinion of the Standing Committee on the Food Chain and Animal Health,

1.

in Annex I, in group ‘4 Oilseeds’, the entry ‘Pumpkin seed’ is added.

2.

Annex II is amended in accordance with Annex III to this Directive.