Council Implementing Regulation (EU) No 444/2011 of 5 May 2011 extending the definitive anti-dumping duty imposed by Regulation (EC) No 599/2009 on imports of biodiesel originating in the United States of America to imports of biodiesel consigned from Canada, whether declared as originating in Canada or not, and extending the definitive anti-dumping duty imposed by Regulation (EC) No 599/2009 to imports of biodiesel in a blend containing by weight 20 % or less of biodiesel originating in the United States of America, and terminating the investigation in respect of imports consigned from Singapore

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community (1) (the basic Regulation), and in particular Article 13(3) thereof,

Having regard to the proposal submitted by the European Commission after having consulted the Advisory Committee,

Whereas:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(46) This comparison showed the existence of dumping.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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