Council Regulation (EC) No 74/2004 of 13 January 2004 imposing a definitive countervailing duty on imports of cotton-type bedlinen originating in India

• (140) Community consumption was established on the basis of production volumes of the Community producers according to Eurocoton, minus exports based on Eurostat data, plus imports from India and the other third countries, also based on Eurostat. Between 1999 and the IP, the apparent Community consumption increased steadily from 173 651 tonnes to 199 881 tonnes, i.e. by 15 %.

Imports from the country concernedVolume and market share

• (141) Imports of cotton-type bedlinen from India into the Community decreased in volume from 15 700 tonnes in 1999 to 14 300 tonnes in the IP, i.e. by 9 % over the period considered. After a slight increase between 1999 and 2000, imports went down in 2001. The corresponding market share decreased from 9,1 % in 1999 to 7,2 % in the IP.

• (142) While it is true that imports from India lost market share throughout the period considered, the level of these imports is substantially above the levels set out in Article 10(11) of the basic Regulation. The significance of these imports is also illustrated by comparing them to the market share of the Community industry. The market share held by the imports originating in India amounts to more than one third of the Community industry's market share. It is also worth noting additionally that in the first nine months of 2003 import volumes have increased by more than 11 % on a year-on-year basis.

Prices

• (143) Average prices from India remained stable during 1999 and 2000 at around EUR 5,65/kg. In 2001 they rose to around EUR 5,80/kg and dropped subsequently in the IP to around EUR 5,50/kg, i.e. by 5 %.

Price undercutting

• (144) For the purposes of analysing price undercutting, the weighted average sales prices per product type of the Community industry to unrelated customers on the Community market were compared to the corresponding weighted average export prices of the imports concerned. The comparison was made after deduction of rebates and discounts. The prices of the Community industry were adjusted to an ex-works basis. The prices of the imports concerned were determined on a cif basis with an appropriate adjustment for the customs duties and post-importation costs.

• (145) This comparison showed that during the IP the products concerned originating in India were sold in the Community at prices which undercut the Community industry's prices, when expressed as a percentage of the latter, by between 26 and 77 %. In more than 75 % of the cases, undercutting margins amounted to between 60 and 70 %.

Situation of the Community industry

• (146) It was analysed whether the Community industry was still in the process of recovering from the effects of past subsidisation or dumping, but no evidence was found that this should be the case.

• (147) It was submitted that the Community industry did not suffer material injury as it was protected by the presence of quotas. It is indeed true that during the IP there were quotas in force. Under international law, these quotas have their legal basis in the WTO Agreement on Textiles and Clothing. They will be phased out by 31 December 2004. It should be noted that these quotas have not been fully used during the IP. The quantities which can be imported under the quotas correspond to substantial shares of the Community market. Indeed, on the basis of consumption figures in the IP the annual 2002 quota corresponds in the case of India to a market share of around 12 %. It should also be noted that the determination of the level of these textile quotas is the result of straightforward negotiations which are outside the analytical framework provided for under the basic Regulation. Whilst it cannot be excluded that quotas might have an effect on the situation of the Community industry, the mere presence of quotas does not prevent the Community industry from suffering injury. The analysis of the figures in the present case shows that the Community industry suffered material injury during the IP despite the presence of the quotas. In fact, the situation of the Community industry deteriorated even though the Indian exporters did not fully exploit their allocated quota during the IP. The submission is therefore rejected.

Data relating to the Community industry as a whole

Production, employment and productivity

• (148) The production volume of the Community industry increased slightly between 1999 and the IP, from 37 700 tonnes to 39 500 tonnes, i.e. by 5 %.

• (149) Employment remained basically stable around 5 500 employees. Therefore, productivity increased from 6,8 tonnes/employee in 1999 to 7,2 tonnes/employee during the IP, i.e. by 6 % over the period considered.

Sales volume and market share

• (150) Over the period considered, the sales volume of the Community industry rose by 4 %, from 36 200 tonnes in 1999 to 37 800 tonnes during the IP. It had increased to 38 300 tonnes in 2001, but decreased in the IP. The turnover generated by these sales increased from EUR 410 million in 1999 to EUR 441 million in 2001 but subsequently decreased by 5 percentage points to EUR 420 million during the IP.

• (151) Despite the fact that consumption in the Community market increased by 15 % during the same period, the Community industry's market share actually declined from 20,8 % to 18,9 % during the IP. The market share fluctuated around 20 % between 1999 and 2001 and decreased by 1,5 percentage points between 2001 and the IP.

Growth

• (152) While Community consumption grew by 15 % between 1999 and the IP, the sales volume of the Community industry rose by only 4 %. On the other hand, the volume of total imports rose by 35 % over the same period, with the most significant increase from 120 000 tonnes in 2001 to 139 000 tonnes during the IP. While the market share of all imports increased by more than 10 percentage points, the market share of the Community industry dropped from 20,8 % to 18,9 %. This means that the Community industry could not participate adequately in the growth of the market between 1999 and the IP.

Data relating to the sampled Community producers

Stocks, capacity and capacity utilisation

• (153) As far as stocks are concerned, they fluctuate considerably because most of the production is made in response to orders, thus reducing the possibility to produce purely for stocks. Whilst an increase in stocks was observed at the sampled Community producers, it was considered that in this case stocks were not a relevant indicator of injury due to the industry specific high fluctuations of stocks.

• (154) The production capacity was difficult to establish in nearly all sampled Community producers because the production process of the like product is individualised, requiring different combinations of machinery usage. Therefore it is impossible to draw an overall conclusion from the capacity of individual machines concerning the capacity relating to the like product. In addition, part of the production process is subcontracted in some of the sampled Community producers.

• (155) However, for those products that go through a printing process, the printing department was considered to be the factor determining the capacity relating to the printed bedlinen in all sampled Community producers. It was found that the capacity utilisation in the printing department decreased steadily from 90 to 82 %.

• (156) It was submitted that the evolution of production capacity and capacity utilisation cannot be regarded as supporting a finding of injury. In this respect, and as in previous investigations concerning the same product, it is recognised that it was not possible to draw an overall conclusion concerning the capacity of individual machines. Nevertheless, the analysis of the printing capacity was one of the indications, albeit limited to a part of the like product only, which suggested that there was injury.

Prices

• (157) Average prices per kg of the sampled producers increased gradually from EUR 13,3 to EUR 14,2 over the period considered. This should be seen in the light of the fact that this average price covers both high-value and low-value items of the product concerned and that the Community industry has been forced to shift to more sales of higher-value niche products as their sales in the high-volume mass market were taken over by imports from low-price countries. On the other hand, average sales prices per kg of the Community industry overall went up marginally from EUR 11,3 in 1999 to EUR 11,5 in 2001 but dropped subsequently to EUR 11,1 during the IP.

• (158) It was submitted that the development of prices cannot be regarded as supporting a finding of injury. This allegation was only based on the fact that sales prices of the sampled companies slightly increased, for which an explanation was, however, provided in recital 157. Furthermore, the price development is only one factor to be analysed. In addition, total unit costs also increased and as the Community industry increasingly moved to the production of high added-value niche products, this commanded a higher price. An increasing average price does therefore not necessarily support a finding of no injury. The submission is therefore rejected.

Investments and ability to raise capital

• (159) Between 1999 and 2001, investments were reduced significantly from EUR 7 million to EUR 2,5 million. Between 2001 and the IP, investments remained rather stable and accounted during the IP for only 41 % of the amount invested in 1999.

• (160) There was no claim from the Community industry nor indication that the Community industry encountered problems in raising capital for its activity.

Profitability, return on investment and cash flow

• (161) Over the period considered, the profitability of the sampled Community producers dropped significantly from 7,7 % in 1999 to 4,4 % in the IP, i.e. by 42 %. The return on investment followed the same trend, falling from 10,5 % in 1999 to 5,9 % during the IP, a reduction by 44 %.

• (162) It was submitted that an average profitability of over 5 % in the period considered cannot be considered to support a finding of injury. In this respect, injury has to be established mainly in relation to the IP. During the IP, the profitability was only at 4,4 %. Moreover, profitability had reached 7,7 % in 1999, a year in which the Community industry did not suffer the competition of subsidised imports, and then decreased by 43 % over the period considered, i.e. there was an important decrease over the period considered, due to fierce competition from subsidised imports. As a result, the profitability in the IP fell short of the profitability that could have been reached in the absence of subsidised imports, i.e. 6,5 %.

• (163) It was submitted that the decrease in profitability of the sampled companies cannot be attributed to subsidised imports, but to an increase in labour costs and decreased investments. Average labour costs of the sample increased only by 4,2 % in the period considered, hence, this does not explain the profitability decrease. Furthermore, a decrease in investments does not necessarily entail a decrease in profitability. The submission is therefore rejected.

• (164) It was submitted that the decrease in the return on investment is a mere reflection of the decrease in investment. However, the return on investment is defined as profits in relation to the value of total assets. Therefore, the decrease in investments would contribute to a decrease in the value of total assets and therefore to an increase in the return on investment. The submission is therefore dismissed.

• (165) The cash flow generated by the like product diminished considerably from EUR 16,8 million in 1999 to EUR 11,3 million during the IP. The most significant reduction occurred in 2000, when the cash flow decreased by 27 %. Between 2000 and the IP, it fell by another 5 %.

• (166) It was submitted that the Commission considered cash flow as a non-significant indicator. In this respect, it is to be noted that cash flow is indeed influenced by stock variations and therefore an indicator with a limited relevance. Nevertheless, is should be noted that the negative development of cash flow over the period considered is in line with other indicators, confirming the negative evolution of the Community industry, and should not be qualified as insignificant.

Wages

• (167) Labour costs increased by 3,3 % over the period considered, from EUR 35,2 million in 1999 to EUR 36,3 million during the IP. As the number of employees remained basically stable, average labour costs also increased, from EUR 29 100 to EUR 30 300. These increases are nominal increases and are considerably below the increase in consumer prices of more than 7,8 % over the period considered.

• (168) It was submitted that wage increases do not point to injury. It is noted, in this respect, that average labour costs of the sampled companies have increased in nominal terms by only 4,2 % throughout the period considered, which, taking the increase in consumer prices into account, means that they decreased in real terms by around 3,6 %.

Magnitude of the amount of countervailable subsidies

• (169) Given the volume and the price of the subsidised imports, the impact of the actual margin of subsidy, which is also significant, cannot be considered negligible.

Relevance of indicators

• (170) It was submitted that output, productivity and sales volume were increasing and employment was stable, which does not confirm injury. It was also submitted that the analysis of stocks and the ability to raise capital did not confirm injury and that it was therefore meaningless to comment this factor. In this respect it should be noted that injury has to be established on the basis of an examination of numerous factors and that, according to Article 8(5) of the basic Regulation, any one or more of these can necessarily give decisive guidance. The argument is not convincing, as no single indicator is relevant on its own and other indicators show a negative trend. The argument is therefore rejected.

Conclusion on injury

• (171) The examination of the abovementioned factors shows that between 1999 and the IP the situation of the Community industry deteriorated. The profitability fell significantly over the period considered and the Community industry's market share decreased during the period considered by 9,1 %. Several other injury indicators such as capacity utilisation, cash flow, return on investment and investments also developed negatively. For the sampled Community producers investments were significantly reduced and also the return on investment decreased considerably. Employment remained basically stable. Some indicators showed a positive trend: over the period considered, turnover and sales volumes of the Community industry increased slightly. Productivity and wages increased marginally. As regards average sales prices of the sampled producers, they showed an upward trend over the period considered, which is, however, partly a result of a shift to more sales of higher-value niche products. However, it should be noted that during the same period the Community consumption grew by 15 % whilst the Community industry's share declined by 9,1 %. Moreover, the average sales prices of the Community industry decreased over the period considered.

• (172) In the light of the foregoing it is concluded that the Community industry has suffered material injury within the meaning of Article 8 of the basic Regulation.

CAUSATIONIntroduction

• (173) In accordance with Article 8(6) of the basic Regulation, the Commission examined whether the subsidised imports originating in India have caused injury to the Community industry to a degree that enables it to be classified as material. Known factors other than the subsidised 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 subsidised imports.

Effect of the subsidised imports

• (174) Imports of cotton-type bedlinen from India into the Community decreased overall in volume from 15 700 tonnes in 1999 to 14 300 tonnes, i.e. by 9 %, in the IP. After a slight increase between 1999 and 2000, imports went down in 2001 and remained stable in the IP. The corresponding market share decreased from 9,1 % in 1999 to 7,2 % in the IP, which is still substantial.

• (175) Average prices from India dropped slightly over the period considered. First, they remained stable during 1999 and 2000 at around EUR 5,65/kg. In 2001 they rose to around EUR 5,80/kg but then dropped subsequently in the IP to around EUR 5,50/kg, i.e. by 5 %.

• (176) In the analysis of the effect of the subsidised imports, it was found that price is the main element of competition. Indeed it is the buyers who determine themselves the quality and design of the product which they intend to order. It appears from the analysis of the selling-buying process in this case that the importers and traders, before passing an order to an exporting producer in India, specify all the characteristics of the product (design, colour, quality, sizes, etc.) to be delivered, and thus compare the different producers' offers mainly on the basis of price as all other differentiating elements are predetermined in the call for offers, or subsequently result from the importer's own efforts in respect of similar goods (e.g. branding). With respect to prices it was found that the prices of subsidised imports were considerably below those of the Community industry as well as below those of other third-country exporters, and even continued to decrease during the IP. Moreover, it was also found that the Community industry had to withdraw largely from the low-priced market segments, where imports from India are strong, this also underlining the causal link between the subsidised Indian imports and injury suffered by the Community industry.

• (177) It was submitted that imports originating in India decreased in absolute and relative terms in a situation without duties, and that they represented a relatively small market share and did therefore not cause injury.

• (178) Imports originating in India indeed decreased. Nevertheless, several factors play a role for causation: first, during the IP these imports were subject to a customs duty of 10,2 % (until December 2001) and 9,6 % (from January 2002), while imports originating in Pakistan, the largest supplier, were exempt from that duty from January 2002. Second, as to the size of the market share, the decisive question is not whether a market share is relatively small or not, but whether it is large enough to be able to cause material injury. In this respect, it is noted that the imports were substantial and made at low and subsidised prices undercutting those of the Community industry. It was also found that there was a coincidence in time between these imports and the injury suffered by the Community industry. All these elements played an important role in the conclusion of this chapter, i.e. that the imports have caused material injury.

• (179) Given the weight of the imports from India in the Community market, both in terms of volume and in terms of prices, these imports exerted a significant downward pressure on the Community industry in terms of its sales volumes and prices. The lack of sales volume in the low-priced market segments for the Community industry could not be compensated by sales of high-profit niche products, thus resulting in notably reducing market share, investments, profitability and return on investment of the Community industry.

• (180) The market share held by the Indian importers during the IP is substantial and well above de minimis levels. The moderate decrease in volume was not such as to lead to a suggestion that Indian exporters were degraded to a peripheral status and on the verge of being eliminated from the Community market. It is therefore concluded that the subsidised imports from India, taken in isolation, caused material injury to the Community industry. Moreover, for illustration purposes only, it appears that the imports from India have increased again by more than 8 % during the first six months of 2003 when compared to the first semester of 2002, indicating that the apparent downward trend is probably not of a lasting nature.

• (181) It was submitted that average subsidisation was 8 % and average undercutting was much higher, while prices charged by the sampled producers increased.

• (182) In this respect, it should be noted that the export prices did, in many instances, not include any costs for the design and marketing of the bedlinen, as these services were supplied by the importer in the Community. These costs cannot be reasonably estimated for the like product overall, but taking into account any such costs would result in lower undercutting margins. Also, Community industry prices relate in some instances to branded products, which command a higher price. In addition, Article 8(6) of the basic Regulation specifies that the examination shall entail a demonstration that the volume and/or price levels of the subsidised imports are responsible for the impact on the Community industry. Thus, it is not the undercutting which matters ultimately in this context but the price level of the imports. Therefore, it cannot be concluded that the subsidised imports do not cause material injury.

Effects of other factorsAllegedly dumped imports originating in Pakistan

• (183) Pakistan constantly increased its market share from 20,8 % in 1999 to 24,7 % in the IP, from 36 000 tonnes in 1999 to 49 400 tonnes during the IP. Given the fact that the average export prices from Pakistan are in the same range as those from India, it must be assumed that Pakistani exports have also caused injury to the Community industry. In this context, it is worth noting that parallel to this anti-subsidy investigation, an anti-dumping investigation has been initiated against the same product originating in Pakistan, which is currently ongoing and which is based on the allegation that Pakistani exports increased their market share by dumping the product concerned into the Community and therefore caused injury to the Community industry. If this is confirmed by the ongoing investigation, appropriate action will be taken in due course.

• (184) It is therefore concluded that imports originating in Pakistan are likely to have contributed to the material injury suffered by the Community industry. However, whilst Pakistani imports may also have caused injury, this is not to deny that Indian imports equally caused material injury by themselves.

Imports originating in third countries other than India and Pakistan

• (185) Imports originating in third countries other than India and Pakistan increased from 51 400 tonnes in 1999 to 75 300 tonnes during the IP. Their market share increased from 29,6 % in 1999 to 37,7 %. The largest part of imports in that group of countries originated in Turkey. Given the corporate links between Turkish and Community companies, there is a certain market integration in the form of inter-company trade between Turkish exporting producers and Community operators that suggests that the decision to import from that country is not only linked to the price. This is confirmed by the average prices of the product concerned originating in Turkey during the IP, which were higher by almost 45 % than those of India and by 34 % than those of Pakistan. It is therefore unlikely that imports originating in Turkey broke the causal link between the subsidised imports from India and the injury suffered by the Community industry.

• (186) The market shares of the remaining countries individually are significantly lower and do not exceed 3,9 %, and it is thus unlikely that any material injury is to be attributed to those imports from those countries.

• (187) The average price of imports originating in countries other than India and Pakistan increased from EUR 7,18/kg in 1999 to EUR 7,47/kg in 2001 and decreased slightly to EUR 7,40/kg during the IP. Nevertheless, during the IP, these prices were around 34 % higher than the prices of imports from India. Consequently, imports from other third countries did not exert a price pressure on the Community industry to the extent that imports from India did. Also the market share of any individual country in that group was below 4 %. It is therefore concluded that imports from other third countries did not break the causal link between the subsidised imports from India and the injury suffered by the Community industry.

Contraction of demand

• (188) It was claimed that the demand for bedlinen produced by the Community industry has diminished in volume terms as it focused on the upper end of the market, where less sales volume is made. However, as pointed out before, the total EU consumption of bedlinen did not decrease, but rather increased over the period considered. Most of the Community producers have different product lines for different market segments. The upmarket brands generate high margins but are only sold in very small quantities. In order to maximise the capacity utilisation and to cover the fixed costs of production, the Community industry needs sales of lower-priced market segment in big volumes as well. There is no indication that demand has decreased in that market segment. This segment is on the other hand increasingly taken over by low-priced imports, which cause injury to the Community industry. Given the overall increase in consumption, which is not limited to a particular market segment, the demand situation in the Community can therefore not be seen to break the causal link between the subsidised imports from India and the injury suffered by the Community industry.

Imports by the Community industry

• (189) It was submitted that the Community industry imported cotton-type bedlinen from India and thereby contributed to the injury suffered. However, only one of the sampled Community producers actually imported bedlinen from India during the IP and the sales of these imports generated only a small part of total turnover by this producer (around 10 %). Therefore, imports by the Community industry of the product concerned from India cannot be seen to break the causal link between the subsidised imports from India and the material injury suffered by the Community industry as a whole.

Export performance by the Community industry

• (190) Exports of the sampled Community producers represented only around 0,5 % of their total sales. Given the negligible part of exports in total activity, this factor cannot have contributed to the injury suffered.

Productivity of the Community industry

• (191) The development in productivity has been identified in the injury part of this Regulation. Since productivity increased from 6,8 tonnes/employee in 1999 to 7,2 tonnes/employee in the IP, i.e. by around 6 %, this factor cannot have contributed to the injury suffered.

CONCLUSION

• (192) With a market share of 7,2 % in the IP, the subsidised imports originating in India were substantial and have been made at low and falling prices during a period in which the Community industry suffered material injury in terms of falling market shares, capacity utilisation, investments, profitability, return on investment and cash flow.

• (193) Imports from Pakistan are likely to have also caused injury to the Community industry. However, this fact does not suggest that the injury inflicted by imports from India becomes immaterial. The remaining possible other injury causes, i.e. imports from countries other than India and Pakistan, the demand situation, imports made by the Community industry as well as the export and productivity performance were analysed, but found not to break the causal link between the Indian imports and the injury suffered by the Community industry. The substantial volume and the aggressively low prices of the Indian exports taken in isolation are an independent cause of the material injury suffered by the Community industry. Therefore, none of the other potential injury causes are such as to reverse the fact that there is a genuine and substantial causal link between the subsidised imports and the material injury.

• (194) 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 subsidised imports, it is concluded that the imports from India have caused material injury to the Community within the meaning of Article 8(6) of the basic Regulation.

COMMUNITY INTERESTGeneral remarks

• (195) It was examined whether, despite the conclusion on injurious subsidisation, compelling reasons existed that could lead to the conclusion that it was not in the Community interest to adopt measures in this particular case. For this purpose and in accordance with Article 31(1) of the basic Regulation, the impact of possible measures on all parties involved in this proceeding and also the consequences of not taking measures were considered.

Community industry

• (196) The Community industry suffered material injury. It proved to be a viable industry that was able to compete under fair market conditions. The injurious situation of the Community industry resulted from its difficulty to compete with the low-priced, subsidised imports. The pressure of the subsidised imports has also forced a number of Community producers to cease production of cotton-type bedlinen.

• (197) It is considered that the imposition of measures will restore fair competition to the market. The Community industry should then be able to increase the volume and prices of its sales, thereby generating the necessary profit level to justify continued investment in its production facilities.

• (198) Should measures not be imposed, the deterioration of the situation of the Community industry would continue. It would not be able to invest in new production capacity and compete effectively with imports from third countries. Some companies would have to cease production and lay off their employees.

• (199) It is therefore concluded that the imposition of countervailing measures is in the interest of the Community industry.

Importers and users

• (200) Importers and users mentioned in the complaint as well as all known associations were sent a questionnaire. The Commission received only one questionnaire reply from an unrelated importer of the product concerned into the Community.

• (201) Sales of the product concerned with origin in India constitute less than 20 % of the total turnover of this company. The total profitability of the company is around 10 %. Given the fact that only little information was available, it was not possible to analyse the likely effect of proposed measures on importers and users as a whole. However, taking into account that only moderate duties are envisaged and many countries are not concerned by either anti-dumping duties or countervailing duties, the impact of the imposition of countervailing duties can be considered as minor.

• (202) The Commission received no questionnaire replies from users but some arguments were raised in a submission by Ikea and by the Foreign Trade Association.

• (203) It was submitted that the Community industry is not in a position to satisfy the whole demand for bedlinen in the Community. It has to be recalled that measures are not intended to prevent imports into the Community but to ensure that they are not made at injurious subsidised prices. Imports from various origins will continue to satisfy a significant part of the Community demand. As only moderate countervailing duties are envisaged and many countries are not concerned by anti-dumping duties or countervailing duties, no shortage of supply is expected.

• (204) It was claimed that cheap imports of bedlinen are necessary for the final consumer as well as ‘institutional’ users such as hotels, hospitals, etc., as products at the cheaper end of the range are not produced by the Community producers. The investigation showed that the five sampled Community producers still produce these products. There was no technical reason why the production of these products in the Community could not be increased. In addition, only moderate countervailing duties are envisaged and many countries are not concerned by anti-dumping duties or countervailing duties, which means that alternative sources of supply will still be available.

Conclusion on Community interest

• (205) On the basis of the above, it is concluded that there are no compelling reasons on the grounds of Community interest why countervailing duties should not be imposed in the present case.

COUNTERVAILING MEASURESInjury elimination level

• (206) In order to prevent further injury being caused by the subsidised imports, it is considered appropriate to adopt countervailing measures.

• (207) For the purpose of determining the level of these duties, account was taken of the subsidy margins found and the amount of duty necessary to eliminate the injury sustained by the Community industry.

• (208) Taking into account the average level of profitability obtained by the Community industry in the years 1999 and 2000, it was found that a profit margin of 6,5 % of turnover could be regarded as an appropriate minimum which the Community industry could have expected to obtain in the absence of injurious subsidisation. 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, with the non-injurious price of products 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 abovementioned profit margin. Any difference resulting from this comparison was then expressed as a percentage of the total cif import value.

Definitive measures

• (209) As the injury elimination level was higher than the countervailing margins established, the definitive measures should be based on the latter. Given that the level of the overall cooperation for India was high (above 90 %), the residual subsidy margin for all other companies was set at the level for the company with the highest individual margin, i.e. 10,4 %.

• (210) It was established that two of the companies in the sample, Texcellence Overseas and Jindal Worldwide, are related parties. The investigation revealed that these companies have common shareholders. These two companies should therefore be considered as a single entity for duty collection purposes, and hence, be submitted to the same countervailing duty. Export quantities of the product concerned during the IP to the Community of both companies were used in order to ensure a proper weighting. The weighted average countervailing duty for these two companies amounts to 7,8 %.

• (211) The following duties therefore apply:

• (212) The individual company countervailing duty rates specified in this Regulation were established on the basis of the findings of the present investigation. Therefore, they reflect the situation found during that investigation with respect to these companies. These duty rates (as opposed to the country-wide duty applicable to ‘all other companies’) are thus exclusively applicable to imports of products originating in the country concerned and produced by the companies and thus by the specific legal entities mentioned. Imported products produced by any other company not specifically mentioned in the operative part of this Regulation with its name and address, including entities related to those specifically mentioned, cannot benefit from these rates and shall be subject to the duty rate applicable to ‘all other companies’.

• (213) Any claim requesting the application of these individual company countervailing duty rates (e.g. following a change in the name of the entity or following the setting up of new production or sales entities) should be addressed to the Commission forthwith with all relevant information, in particular any modification in the company's activities linked to production, domestic and export sales associated with e.g. that name change or that change in the production and sales entities. If appropriate, this Regulation will then be amended accordingly by updating the list of companies benefiting from individual duty rates as well as those specified in the Annex to the operative part of this Regulation,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

Where any new exporting producer in India provides sufficient evidence to the Commission that

• —it did not export to the Community the products described in Article 1(1) during the investigation period (1 October 2001 to 30 September 2002) and

• —it is not related to any of the exporters or producers in India which are subject to the anti-subsidy measures imposed by this Regulation and

• —it has actually exported to the Community the products concerned after the investigation period on which the measures are based, or it has entered into an irrevocable contractual obligation to export a significant quantity to the Community,

then the Council, acting by simple majority on a proposal submitted by the Commission after consulting the Advisory Committee, may amend Article 1(3) by adding that new exporting producer to the list in the Annex.

Article 3

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

ANNEX

[^E0001]: OJ L 288, 21.10.1997, p. 1. Regulation as last amended by Regulation (EC) No 1973/2002 (OJ L 305, 7.11.2002, p. 4).

[^E0002]: OJ C 316, 18.12.2002, p. 10.

[^E0003]: The fact that the DFRC may not be considered as a substitution drawback scheme according to the basic Regulation (i.e. the Indian legislation does not ensure that it will operate as a proper drawback scheme) does not preclude the possibility that individual exporters may use DFRC as a drawback scheme.