Council Implementing Regulation (EU) No 260/2013 of 18 March 2013 extending the definitive anti-dumping duty imposed by Regulation (EC) No 1458/2007 on imports of gas-fuelled, non-refillable pocket flint lighters originating in the People’s Republic of China to imports of gas-fuelled, non-refillable pocket flint lighters consigned from the Socialist Republic of Vietnam, whether declared as originating in the Socialist Republic of Vietnam or not

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), and in particular Article 13 thereof,

Having regard to the proposal from the European Commission after consulting the Advisory Committee,

Whereas:

(1) In 1991, the Council, by Regulation (EEC) No 3433/91 (2), imposed a definitive anti-dumping duty of 16,9 % on imports of gas-fuelled, non-refillable pocket flint lighters originating, inter alia, in the People’s Republic of China (‘PRC’) (the product under investigation).

(2) In 1995, by Council Regulation (EC) No 1006/95 (3) the original ad valorem duty was replaced by a specific duty of ECU 0,065 per lighter.

(3) Further to an investigation, undertaken in accordance with Article 13 of Regulation (EC) No 1225/2009 (the ‘basic Regulation’), the above measures were extended by Council Regulation (EC) No 192/1999 (4) to (1) imports of gas-fuelled, non-refillable pocket flint lighters consigned from or originating in Taiwan and (2) imports of certain refillable lighters originating in the PRC or consigned from or originating in Taiwan with a free-at-Community frontier, duty unpaid value per piece below EUR 0,15.

(4) In 2001, the Council, by Regulation (EC) No 1824/2001 (5), confirmed the definitive anti-dumping duties imposed by Regulation (EC) No 1006/95 as extended by Regulation (EC) No 192/1999 (‘existing measures’) pursuant to Article 11(2) of the basic Regulation.

(5) In 2007, the Council, by Regulation (EC) No 1458/2007 (6) (‘the original Regulation’), confirmed the definitive anti-dumping duty imposed by Regulation (EC) No 1824/2001 pursuant to Article 11(2) of the basic Regulation. These measures will hereinafter be referred to as ‘the original measures’ and the investigation that led to the measures imposed by the original Regulation will be hereinafter referred to as ‘the original investigation’.

(6) The Commission, on 12 December 2012 (7), published a notice of expiry of the anti-dumping measures.

(7) With the expiry of the measures on 13 December 2012, by Commission Regulation (EU) No 1192/2012 (8), the registration of imports of gas-fuelled, non-refillable pocket flint lighters consigned from Vietnam, whether declared as originating in Vietnam or not, was therefore discontinued from the same date (see also recital 14).

(8) On 17 April 2012, the Commission received a request pursuant to Articles 13(3) and 14(5) of the basic Regulation (‘the request’) to investigate the possible circumvention of the anti-dumping measures imposed on imports of gas-fuelled, non-refillable pocket flint lighters originating in the PRC and to make imports of gas-fuelled, non-refillable pocket flint lighters consigned from the Socialist Republic of Vietnam (‘Vietnam’), whether declared as originating in Vietnam or not, subject to registration.

(9) The request was lodged by Société BIC, a Union producer of gas-fuelled, non-refillable pocket flint lighters.

(10) The request contained sufficient prima facie evidence that the original measures were being circumvented by means of assembly operations in Vietnam.

(11) The request showed that following the imposition of the original measures, a significant change in the pattern of trade involving exports from the PRC and Vietnam to the Union occurred, for which there was insufficient due cause or economic justification other than the imposition of the original measures. This change in the pattern of trade stemmed allegedly from the assembly operations of lighters in Vietnam using parts originating in the PRC.

(12) Furthermore, the prima facie evidence pointed to the fact that the remedial effects of the original measures were being undermined both in terms of quantity and price. The evidence showed in particular that the increased imports from Vietnam were made at prices below the non-injurious price established in the original investigation.

(13) Finally, there was also sufficient prima facie evidence that prices of gas-fuelled, non-refillable pocket flint lighters consigned from Vietnam were dumped in relation to the normal value established during the original investigation.

(14) 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 Commission Regulation (EU) No 548/2012 (9) (‘the initiating Regulation’). Pursuant to Articles 13(3) and 14(5) of the basic Regulation, the Commission, by the initiating Regulation, also directed the customs authorities to register imports of gas-fuelled, non-refillable pocket flint lighters consigned from Vietnam, whether declared as originating in Vietnam or not.

(15) The Commission officially advised the authorities of the PRC and Vietnam, the exporting producers in those countries, the importers in the Union known to be concerned and Société BIC (the applicant), a Union producer representing more than 75 % of the production of gas-fuelled, non-refillable pocket flint lighters in the European Union, of the initiation of the investigation.

(16) Questionnaires were sent to 70 exporting producers in the PRC and 15 exporting producers in Vietnam known to the Commission from the request. Questionnaires were also sent to 59 importers in the Union named in the request. 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 initiating Regulation. All parties were informed that non-cooperation might lead to the application of Article 18 of the basic Regulation and to findings being based on the facts available.

(17) Eight out of the 15 known exporting producers in Vietnam came forward, one of which claimed that it did not want to be considered as an interested party as it did not produce the product under investigation and did not export to the Union.

(19) None of the known exporting producers in the PRC came forward or submitted a questionnaire reply.

(20) As regards importers, eight submitted a questionnaire reply, whereas six companies came forward and claimed that they did not want to be considered as interested parties as they did not import gas-fuelled, non-refillable pocket flint lighters from Vietnam (the product under investigation) in the Union. The remaining known companies did not come forward at all.

(21) Following the initiation of the investigation, two importers requested and were granted a hearing which was held during September 2012. The importers also submitted their observations in writing. Their observations questioned the grounds of the initiation of the investigation as regards the product scope, import volumes, economic justification for the changes in the pattern of trade, the motivations behind the request and the financial situation of the Union prducer having made the request. In the opinion of the two importers, there were insufficient grounds to initiate an investigation.

(22) The Commission provided a detailed reply to the observations and gave the parties an opportunity to comment. The Commission outlined why it considered that the request contained sufficient prima facie evidence to justify the initiation of the investigation. The comments made by the two importers did not demonstrate that there would not have been sufficient prima facie evidence to justify the initiation of the investigation.

(23) The investigation period covered the period from 1 January 2008 to 31 March 2012 (‘the IP’). Data were collected for the IP to investigate, inter alia, the alleged change in the pattern of trade. More detailed data were collected for the reporting period from 1 April 2011 to 31 March 2012 (‘the RP’) in order to examine the possible undermining of the remedial effect of the measures and the existence of dumping.

(24) In accordance with Article 13(1) of the basic Regulation, the assessment of the existence of circumvention was made by analysing successively whether there was a change in the pattern of trade between the PRC, Vietnam and the Union; if this change resulted 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 product under investigation; and whether there was evidence of dumping in relation to the normal values previously established in the original investigation, if necessary in accordance with Article 2 of the basic Regulation.

(25) The product concerned is as defined in the original investigation: gas-fuelled, non-refillable pocket flint lighters currently falling within CN code ex 9613 10 00 and originating in the People’s Republic of China (‘the product concerned’).

(26) The product under investigation is the same as that defined in the previous recital, but consigned from Vietnam, whether declared as originating in Vietnam or not, currently falling within the same CN code as the product concerned (‘the product under investigation’).

(27) The investigation showed that gas-fuelled, non-refillable pocket flint lighters, as defined above, exported from the PRC to the Union and those consigned from Vietnam to the Union have the same basic physical and technical characteristics and have the same uses, and are therefore to be considered as like products within the meaning of Article 1(4) of the basic Regulation.

Vietnam

(28) As stated in recital 18, seven companies submitted questionnaire replies. For the RP, the total volume of lighters reported as sold to the Union according to these replies represented more than 100 % of the total volume of lighters reported as imported into the Union according to the Eurostat Comext database. Despite the fact that the information regarding sales volumes in the replies was considered to be unreliable as explained in recital 29 below, it is considered that this still gives an indication that cooperation was high and that the companies investigated are representative.

(29) During the verification visits carried-out at the premises of the seven Vietnamese exporting producers, it was found that they had each submitted information which could not be considered to be reliable for the purpose of establishing the findings relevant to the investigation. In particular, the seven companies were found to have wrongly stated their production volumes, imports of lighter parts and total sales. It was also found that part of the business relating to the product under investigation was not included in the official acounts and that certain assembly operations were carried out by unofficial subcontractors. Moreover, quantities of imports of parts from the PRC were not declared or wrongly stated, and part of the sales were not accounted for in the accounts of the companies. As a result, it has not been possible to reliably establish, in particular, the total production and total sales volumes of the companies concerned, or to reconcile the actual sale prices of the product under investigation and the costs relating to key input materials such as gas with the data provided in the replies to the questionnaire.

(30) In view of the situation described in recital 29, the exporting producers were informed that pursuant to Article 18 of the basic Regulation it was envisaged to base the findings and conclusions of the investigation on the best facts available. Parties were given an opportunity to comment and were granted a hearing when requested. Each party received an individual letter outlining the specific and detailed findings which led to the conclusion that the data provided could not be considered to be reliable and was not suitable to establish the facts necessary for the investigation.

(31) Two exporting producers did not provide any comments on the intention to apply Article 18 of the basic Regulation. The other five exporting producers, composed of two individual companies and one group of three companies, requested and were granted a hearing which was held during November 2012. These exporting producers also provided their observations in writing. They disputed the Commission’s intention to disregard the data they provided and the possible conclusion of the existence of circumvention based on the application of the best facts available.

(32) Four of the exporting producers did not contest the fact that the information they provided was not complete or reliable and admitted the discrepancies in their accounting and the fact that not all operations were disclosed or recorded in their books. However, they claimed that these differences only concerned their domestic sales and did not have any effect on their export sales. One party claimed that its records had been destroyed by a fire, which explained the incompleteness of the information available. They further claimed that the quantity of gas contained in the lighters was wrongly estimated by the Commission and that therefore the findings regarding the production volumes were not correct. One company claimed that a discrepancy concerning gas consumption was explained by intentional releases of gas during the warmer months. These parties could not, however, provide any substantiated evidence to support these claims.

(33) The companies also stated that they were fully cooperative and were not withholding any information concerning their business. They admitted to have provided deficient replies, but strongly contested having submitted false or misleading information. In their view, undisclosed and unverifiable data does not, of itself, consitute a proof of circumvention and according to them, the Commission had not demonstrated, on the basis of on positive evidence, that circumvention was taking place.

(34) Although the companies have not themselves provided complete and accurate records of their activities, the Commission has used alternative methods, such as the consumption of raw materials, to reconcile the key data provided in the questionnaire replies with the information provided and discovered on spot. Such alternative methods, even if inevitably less precise than actual records, showed that the data provided was not reliable. For instance, the outcome concerning production volume showed that the production quantities declared by the companies did not match with their consumption of raw materials.

(35) The Commission considers that the absence of reliable records, the withholding of information which is relevant to the investigation and the submission of false or misleading information rendered the data unreliable following a verification process.

(36) Given the above, findings in respect of imports of gas-fuelled, non-refillable pocket flint lighters from Vietnam into the Union had to be made on the basis of the facts available in accordance with Article 18(1) of the basic Regulation. As a consequence, in order to ensure that the failure of the parties to provide the information does not hinder the investigation, the Commission has replaced the unverifiable data provided by the Vietnamese producers with other available data, such as the Eurostat Comext database to determine the overall import volumes from Vietnam into the Union, and cost data provided in the request to determine the share of Chinese parts (see recital 50 below).

The People’s Republic of China

(37) There was no cooperation from the Chinese exporting producers. Therefore, findings in respect of imports of the product concerned into the Union and exports of gas-fuelled, non-refillable pocket flint lighters from the PRC to Vietnam had to be made on the basis of the facts available in accordance with Article 18(1) of the basic Regulation. UN Comtrade statistics provided in the request were used for the determination of the overall exports from the PRC to Vietnam.

Imports of gas-fuelled, non-refillable pocket flint lighters into the Union

(38) Imports of the product concerned from the PRC dropped in 1991 when the measures were first introduced. The imports have remained small throughout the successive modifications and extensions of the measures in 1995, 1999, 2001 and 2007.

(39) Imports of lighters from the PRC between 1 January 2008 and 31 March 2012 were relatively stable in terms of volume, around 50 million pieces for 2008 and 2009, 70 million pieces in 2010 and 60 million in 2011 and the RP. However, they consisted only of refillable models and electrical piezo lighters which were not subject to the measures.

(40) The imports of the product under investigation from Vietnam have increased over time. While in 1997 there were practically no imports into the Union of the product under investigation from Vietnam, since 2007 there has been a rapid increase in the import volume of the product under investigation.

Exports of lighter parts from the PRC to Vietnam

(42) Flint lighter parts were exported from the PRC to Vietnam during the IP. Vietnam is the most important export destination of flint lighter parts from the PRC. According to the statistics provided in the request, exports of lighter parts from the PRC to Vietnam have increased significantly since 1999. In 1999, exports of lighter parts from the PRC to Vietnam were less than 3 % of total exports, whereas in 2010 Vietnam became the first export destination of lighter parts with a share of 26 % of imports. In volumes, this would correspond to an increase from less than 50 million to 200 million finished lighters.

Production volumes of gas-fuelled, non-refillable pocket flint lighters in Vietnam

(43) As the information provided by the Vietnamese producers had to be disregarded, no verifiable information could be obtained on the possible levels of the genuine production of gas-fuelled, non-refillable pocket flint lighters.

(44) The overall decrease in exports from the PRC to the Union and the increase in exports from Vietnam to the Union since 2007 and the significant increase in exports of lighter parts from the PRC to Vietnam since 1999 constituted a change in the pattern of trade between the PRC and Vietnam, on the one hand, and the Union, on the other.

(45) Article 13(1) of the basic Regulation requires that the change in the pattern of trade stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. The practice, process or work includes, inter alia, the assembly of parts by an assembly operation in a third country. For this purpose the existence of assembly operations is determined in accordance with Article 13(2) of the basic Regulation.

Assembly operations

(46) As mentioned above, the absence of reliable records and the witholding of information which was relevant for the investigation has led to the application of Article 18 of the basic Regulation. Whether or not an assembly operation in Vietnam could be considered to circumvent the measures had to be based on the facts available.