(1)

In October 2008, definitive anti-dumping measures were reimposed by Council Regulation (EC) No 1001/2008 (2) on imports of certain tube and pipe fittings (‘TPFs’ or the ‘product concerned’) originating, inter alia, in Malaysia following an expiry review pursuant to Article 11(2) of the basic Regulation. The anti-dumping duties in force for Malaysia are 59,2 % for Anggerik Laksana Sdn Bhd and 75 % for all other companies.

(2)

The Commission has received an application to initiate a ‘new exporter’ review pursuant to Article 11(4) of the basic Regulation. The application was lodged by Pantech Steel Industries Sdn Bhd (the applicant), an exporting producer in Malaysia (the country concerned).

(3)

The applicant alleged that it did not export the product concerned to the Union during the period of investigation on which the anti-dumping measures were based, i.e. the period from 1 April 2000 to 31 March 2001 (the original investigation period) and that it is not related to any of the exporting producers of the product concerned which are subject to the anti-dumping measures described in recital 1.

(4)

The applicant further alleged that it had entered into an irrevocable contractual obligation to export the product concerned to the Union in the near future.

(5)

The Commission examined the prima facie evidence submitted by the applicant and considered it sufficient to justify the initiation of a review in accordance with Article 11(4) of the basic Regulation. After consultation of the Advisory Committee, and after the Union industry concerned had been given the opportunity to comment, the Commission initiated, by Regulation (EC) No 692/2009 (3), a review of Regulation (EC) No 1001/2008 with regard to the applicant.

(6)

Pursuant to Regulation (EC) No 692/2009, the anti-dumping duty of 75 % imposed by Regulation (EC) No 1001/2008 was repealed with regard to imports of the product concerned produced and sold for exports to the Union by the applicant. Simultaneously, pursuant to Article 14(5) of the basic Regulation, customs authorities were directed to take appropriate steps to register such imports.

(7)

Regulation (EC) No 692/2009 determined that if the investigation showed that the applicant fulfilled the requirements to have an individual duty established, it may be necessary to amend the rate of duty currently applicable to imports of the product concerned from companies not individually mentioned in Article 1 of Regulation (EC) No 1001/2008.

(8)

The product under review is tube and pipe fittings (other than cast fittings, flanges and threaded fittings), of iron or steel (not including stainless steel), with a greatest external diameter not exceeding 609,6 mm, of a kind used for butt-welding or other purposes, originating in Malaysia (the product concerned), currently falling within CN codes ex 7307 93 11, ex 7307 93 19, ex 7307 99 30 and ex 7307 99 90.

(9)

The Commission officially advised the Union industry, the applicant and the representatives of the exporting country of the initiation of the review. Interested parties were given the opportunity to make their views known in writing and to be heard.

(10)

The Defence Committee of the steel butt-welding fittings industry of the European Union representing the Union industry (the Union industry) made its views know in writing to the Commission services. The Defence Committee challenged the reliability of the basis for the export price. Documents were also provided allegedly showing attempts to circumvent the measures and information was given about the level of price of the product concerned available for EU importers.

(11)

The Commission sent an anti-dumping questionnaire to the applicant and its related companies and received a reply within the deadline set for that purpose.

(12)

The Commission also sent anti-dumping questionnaires to unrelated importers located in the European Union but no cooperation was obtained.

(13)

The Commission sought to verify all the information it deemed necessary for the determination of the new exporter status and dumping, and verification visits were carried out at the premises of the applicant and a related company in Malaysia:

(14)

The review investigation period of dumping covered the period from 1 July 2008 to 30 June 2009 (‘review investigation period’ or ‘RIP’).

(15)

The investigation confirmed that the company had not exported the product concerned during the original period of investigation and that it had started to export to the European Union after this period. The company entered into an irrevocable contractual obligation to export during the RIP. This took the form of three orders from the same importing group in the EU.

(16)

These orders were, after the RIP, completed by export transactions under approximately the same conditions with negligible differences in price and quantities. While the quantities involved were limited, they were nevertheless found sufficient to establish a reliable dumping margin. This is because the levels of prices charged were further supported by other information at the Commission services’ disposal, including export prices of the exporter concerned to third countries, which confirmed the pattern of behaviour found in the transactions under scrutiny.

(17)

As concerns the other conditions for the recognition of a new exporter status, the company was able to demonstrate that it did not have any links, direct or indirect, with any of the Malaysian exporting producers subject to the anti-dumping measures in force with regard to the product concerned.

(18)

Accordingly, it is confirmed that the company should be considered a ‘new exporter’ in accordance with Article 11(4) of the basic Regulation, and thus an individual margin should be determined for it.

(19)

The applicant produces the fittings and sells the product concerned domestically and on export markets. The investigation revealed a complex sales organisation on the domestic market involving unrelated distributors and related trading companies, whereby unrelated distributors purchase the product concerned from the producer and then resell it to the related traders that then sell the goods onwards to unrelated customers on the domestic market. De facto, the unrelated distributors act as agents for the applicant.

(20)

Based on the above, and taking into account the fact that the sales of the related trading companies can be linked back to the applicant, the prices charged to the final consumer by these related trading companies are considered as the first price in the ordinary course of trade and therefore form the basis for the normal value determination.

(21)

In accordance with Article 2(2) of the basic Regulation, domestic sales were considered representative when the total domestic sales volume was at least 5 % of the total export sales volume to the Union. The Commission established that tube and pipe fittings were sold domestically by the applicant in overall representative volumes.

(22)

The Commission then identified those product types of tube and pipe fittings sold domestically by the trading companies which were identical or directly comparable to the types sold for export to the European Union.

(23)

An examination was also made by the Commission as to whether the sales of tube and pipe fittings 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 domestic sales to independent customers. As it was found that there were sufficient sales in the ordinary course of trade, normal value was based on the actual domestic price.

(24)

In the few cases where the type of product concerned was not sold on the domestic market during the RIP, the normal value was constructed by adding to the exporter’s manufacturing costs of the exported types, a reasonable amount for selling, general and administrative expenses (SG&A) and a reasonable profit margin.

(25)

The product concerned was exported directly to independent customers in the Union. Therefore, the export price was established in accordance with Article 2(8) of the basic Regulation, i.e. on the basis of export prices actually paid or payable as referred to in recital 16.

(26)

The normal value and the export prices were compared on an ex-works basis.

(27)

For the purpose of ensuring a fair comparison between normal value and export price, due allowance in the form of adjustments was made for differences affecting price comparability in accordance with Article 2(10) of the basic Regulation. Adjustments for insurance, handling, loading and ancillary expenses, and credit costs were granted in all cases where they were found to be reasonable, accurate and supported by verified evidence.

(28)

The applicant claimed that if the Commission would use the normal value based on the domestic sales of the related trading companies, an adjustment for differences in level of trade should be granted between the domestic market and the EU market. It further argued that sales to the EU market were done at distributor level whereas, in the domestic market, the applicant used to sell an important part of the tube and pipe fittings as part of larger consignments in oil and gas project markets where fittings often play an ancillary role only to that of the main pipes, valves and other major components, and that this market was at a different level of trade.

(29)

After having analysed the sales conditions on the domestic market and in particular the sales price patterns, the investigation showed that the applicant did not demonstrate, in accordance with Article 2(10) of the basic Regulation, a consistent and distinct difference in functions and prices for the different levels of trade in the domestic market of the exporting country. Therefore no adjustment was taken into account.

(30)

In accordance with Article 2(11) of the basic Regulation, and taking into account that there were only three orders at virtually the same point in time during the RIP and that the price of the raw material, which accounts for most of the cost of manufacturing, varied significantly during the RIP, the dumping margin was established on the basis of a comparison on a transaction to transaction basis between the normal value and the export price.

(31)

The comparison showed the existence of dumping at a level of 49,9 %, expressed as a percentage of the CIF Union-frontier price.

(32)

In addition, the investigation confirmed that the export prices of the applicant to other third countries with important quantities are significantly lower than those to the European Union, suggesting the existence of dumping on third markets.

(33)

In the light of the results of the investigation, it is considered that a definitive anti-dumping duty should be imposed at the level of the dumping margin found.

(34)

The dumping margin, established for the RIP, of 49,9 % is below the country-wide injury elimination level of 75 % which was established for Malaysia in the original investigation. It is therefore proposed that a duty which is based on the dumping margin of 49,9 % be imposed and that Regulation (EC) No 1001/2008 be accordingly amended.

(35)

In the light of the above findings, the anti-dumping duty applicable to the applicant shall be levied retroactively on imports of the product concerned which have been made subject to registration pursuant to Article 3 of Regulation (EC) No 692/2009.

(36)

It should be noted that the companies concerned have a complex system of distribution which also involves importing the product concerned from other countries under measures. In addition, there is a certain risk of duty avoidance due to the high difference in the duty rates between the different exporting companies inside Malaysia. Therefore, special measures are needed to ensure the proper application of the anti-dumping duties.

(37)

These special measures consist of the presentation to the customs authorities of the Member States of a valid commercial invoice which shall conform to the requirements set out in the Annex to this Regulation. Imports not accompanied by such an invoice shall be made subject to the residual anti-dumping duty applicable to all other exporters.

(38)

Furthermore, the Council notes that the Commission has informed it that it will invite the company concerned to submit regular reports to the Commission in order to ensure proper follow up of their sales of the product concerned to the Union and the price and other conditions related thereto, as well as information regarding developments in the company’s domestic sales prices. The Council notes that, in particular, if such reports are not submitted, or where such reports disclose that measures may not be adequate to eliminate the effects of injurious dumping, it may be necessary to initiate an interim review in accordance with Article 11(3) of the basic Regulation. The Council also notes that the Commission has the possibility to ex officio initiate an interim review pursuant to Article 11(3) of the basic Regulation, in particular once one year has passed after the entry into force of this Regulation (although a previous review may also be warranted). It is noted that at this point in time, the Commission expects that it will be appropriate to conduct such a review after one year given the circumstances of this case. In this context, it is important to note that the duty established for the company concerned by this Regulation is based on only a limited number of orders.

(39)

The parties concerned were informed of the essential facts and considerations on the basis of which it was intended to impose on imports of tube and pipe fittings from the applicant an amended definitive anti-dumping duty and to levy this duty retroactively on imports made subject to registration. Their comments were considered and taken into account, where appropriate.

(40)

This review does not affect the date on which the measures imposed by Regulation (EC) No 1001/2008 will expire pursuant to Article 11(2) of the basic Regulation,

(1)

By Regulation (EC) No 1487/2005, the Council imposed a definitive anti-dumping duty on imports into the European Union of woven fabrics of synthetic filament yarn containing 85 % or more by weight of textured and/or non-textured polyester filament, dyed (including dyed white) or printed, originating in the People’s Republic of China, currently falling within CN codes ex 5407 51 00, 5407 52 00, 5407 54 00, ex 5407 61 10, 5407 61 30, 5407 61 90, ex 5407 69 10 and ex 5407 69 90 (‘the product concerned’).

(2)

Given the large number of cooperating parties, a sample of Chinese exporting producers was selected during the investigation which led to the imposition of the measures.

(3)

The sampled companies were attributed the individual duty rates established during the investigation. The cooperating non-sampled companies which were granted market economy treatment (MET), in accordance with the provisions of Article 2(7)(c) of Council Regulation (EC) No 384/96 (3), were attributed the weighted average duty of 14,1 % which was established for the sampled companies which were granted MET. The cooperating non-sampled companies which were granted individual treatment (IT), in accordance with the provisions of Article 9(5) of the same Regulation, received the weighted average duty of 37,1 % established for the sampled companies that were granted IT. A countrywide duty of 56,2 % was imposed on all other companies.

(4)

Following an anti-absorption reinvestigation pursuant to Article 12 of Regulation (EC) No 384/96, the Council, by Regulation (EC) No 1087/2007 (4) increased the countrywide duty to 74,8 %. In addition, Chinese exporting producers with individual duty rates that did not cooperate in the reinvestigation were attributed higher anti-dumping duties in accordance with the provisions of Article 12(3) of Regulation (EC) No 384/96.

(5)

Article 2 of Regulation (EC) No 1487/2005 gives the possibility to Chinese exporting producers which meet the four criteria set out in that Article to be granted the same treatment as the one set out in recital 3 for the cooperating companies not included in the sample (‘New Exporting Producer Treatment’ or ‘NEPT’).

(6)

One group of companies consisting of two related companies, namely AlbaChiara Printing and Dyeing (Jiaxing) Co. Ltd, and Jiaxing E. Boselli Textile Trading Co. Ltd (‘the applicant’), requested to be granted NEPT.

(7)

An examination has been carried out to determine whether the applicant fulfils the criteria for being granted NEPT as set out in Article 2 of Regulation (EC) No 1487/2005, by verifying that:

(8)

Questionnaires were sent to the applicant asking it to supply evidence to demonstrate that it met the first, second and third criteria.

(9)

Since the fourth criterion implies that the applicants submit a claim for MET and/or IT, the Commission sent MET and IT claim forms to the applicant. The applicant requested MET pursuant to Article 2(7) of the basic Regulation.

(10)

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

(11)

Exporting producers fulfilling the criteria mentioned in recital 7 may, pursuant to Article 2 of Regulation (EC) No 1487/2005, be granted either the 14,1 % duty rate applicable to companies to which MET was granted in accordance with Article 2(7)(c) of Regulation (EC) No 384/96, or the weighted average duty rate of 37,1 % applicable to companies to which IT was granted in accordance with Article 9(5) of the same Regulation.

(12)

The European Commission sought and verified all information it deemed necessary for the purpose of determining whether the four criteria set out in Article 2 of Regulation (EC) No 1487/2005 had been fulfilled. Verification visits were carried out at the premises of the following companies:

(13)

The applicant has provided sufficient evidence to prove that it meets the four criteria mentioned in recital 7. The applicant in fact could prove that (i) it did not export the product concerned to the European Union during the period 1 April 2003 to 31 March 2004, (ii) it is not related to any of the exporters or producers in the People’s Republic of China which are subject to the anti-dumping measures imposed by Regulation (EC) No 1487/2005, (iii) it actually exported a significant quantity of the product concerned to the European Union starting from the year 2008, (iv) it fulfils all the requirements for MET and can therefore be granted an individual duty in accordance with Article 2(7)(c) of the basic Regulation. Therefore, the applicant could be granted the weighted average duty rate applicable to cooperating companies not included in the sample which have been granted MET (i.e. 14,1 %) in accordance with Article 2 of Regulation (EC) No 1487/2005, and should be added to the list of exporting producers in Article 1(2) of that Regulation.

(14)

In consideration of the findings of the investigation as indicated in recital 13, it is concluded that the companies AlbaChiara Printing and Dyeing (Jiaxing) Co. Ltd, and Jiaxing E. Boselli Textile Trading Co. Ltd should be added to the list of individual companies mentioned under Article 1(2) of Regulation (EC) No 1487/2005 with a duty rate of 14,1 %.

(15)

The applicant and the Union industry have been informed of the findings of the investigation and have had the opportunity to submit their comments. No additional information was brought forward permitting to lead to any different conclusion for the applicant,