Council Implementing Regulation (EU) No 1342/2013 of 12 December 2013 repealing the anti-dumping measures on imports of certain iron or steel ropes and cables originating in the Russian Federation following an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009

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 Articles 9(2) and 11(2) thereof,

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

Whereas:

(1) By Regulation (EC) No 1601/2001 (2) the Council imposed a definitive anti-dumping duty on imports of certain iron or steel ropes and cables (SWR) originating in the Russian Federation, Turkey, Thailand, and the Czech Republic. Those measures will hereinafter be referred to as ‘the original measures’ and the investigation that led to those measures will hereinafter be referred to as ‘the original investigation’.

(2) The Commission had accepted in August 2001 a price undertaking offer by a Russian producer (JSC Severstal-Metiz). That undertaking agreement was repealed in October 2007 (3) because it was considered unworkable due to difficulties in the proper classification of the large number of product types exported by the company.

(3) By Regulation (EC) No 1279/2007 (4) the Council, following partial interim and expiry reviews, maintained the original measures for the Russian Federation in accordance with Article 11(2) of the basic Regulation. Those measures will hereinafter be referred to as ‘the measures in force’ and the expiry review investigation will hereinafter be referred to as ‘the last investigation’. Regulation (EC) No 1279/2007 also terminated the measures concerning imports of steel ropes and cables originating in Turkey and Thailand.

(4) Currently (5), there are also measures in force against SWR from Ukraine and the People’s Republic of China, which were extended to imports of SWR consigned from Morocco, Moldova and the Republic of Korea.

(5) On 27 October 2012, the Commission announced by a notice published in the Official Journal of the European Union the initiation of an expiry review (‘notice of initiation’) (6) of the anti-dumping measures applicable to imports of SWR originating in the Russian Federation pursuant to Article 11(2) of the basic Regulation.

(6) The review was initiated following a substantiated request lodged by the Liaison Committee of European Union Wire Rope Industries (hereafter referred to as ‘EWRIS’ or ‘the applicant’) on behalf of Union producers representing more than 50 % of the total Union production of certain iron or steel ropes and cables. The request was based on the grounds that the expiry of the measures would be likely to result in continuation of dumping and recurrence of injury to the Union Industry (‘UI’).

(7) The investigation of continuation or recurrence of dumping and injury covered the period from 1 October 2011 to 30 September 2012 (the ‘RIP’). The examination of the trends relevant for the assessment of a likelihood of a continuation or recurrence of injury covered the period from 1 January 2009 until the end of the RIP (period considered).

(8) The Commission officially advised the exporting producers, Union producers, importers and users known to it, as well as the applicant and the authorities of the exporting country. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set out in the notice of initiation.

(9) In view of the potentially large number of exporting producers in the Russian Federation involved in the investigation, sampling was initially envisaged in the notice of initiation in accordance with Article 17 of the basic Regulation. In order to enable the Commission to decide whether sampling would indeed be necessary and, if so, to select a sample, exporting producers from the Russian Federation were requested to make themselves known within 15 days from the initiation of the proceeding and to provide the Commission with the information requested in the notice of initiation.

(10) Given that only two exporting producers in the Russian Federation provided the information requested in the notice of initiation and expressed their willingness to further cooperate with the Commission, it was decided not to apply sampling for exporting producers.

(11) The Commission announced in the notice of initiation that it had provisionally selected a sample of Union producers and invited interested parties to comment thereupon within a deadline provided for in the notice of initiation. The provisional sample consisted of five Union producers that were found to be representative of the Union industry in terms of volume of production and sales of the like product in the Union.

(12) In the absence of any comments, the proposed companies were selected to be included in the final sample and interested parties were accordingly informed. However, one of the finally selected companies subsequently withdrew from the sample. The Commission therefore decided to reduce the sample to the four remaining companies, which were still found to be representative of the Union industry in terms of volume of production (29,3 %) and sales (20,9 %) of the like product in the Union.

(13) Although sampling was envisaged in the notice of initiation of unrelated importers, neither any unrelated importer nor any user came forward. Therefore, sampling was not applied to unrelated importers.

(14) Questionnaires were sent to the four sampled Union producers, the two exporting producers in the Russian Federation, and the related importer.

(15) Replies to the questionnaires were received from the four sampled Union producers, from the related importer and from one exporting producer from the Russian Federation.

(16) Although two exporting producers from the Russian Federation had originally come forward, only one of them provided a reply to the questionnaire and is considered to be cooperating in the investigation. The cooperating exporting producer has a wholly owned subsidiary based in Italy, which also produces SWR and imports the product concerned from the Russian Federation. The other exporting producer provided a submission at the time of the initiation of the investigation and although it was invited to fill in a questionnaire, failed to do so. It is therefore considered that the second exporting producer did not cooperate in the investigation.

(18) The product concerned is the same as that in the original investigation and in the last investigation, which led to the imposition of measures currently in force, i.e. iron and steel ropes and cables, including locked coil ropes, excluding ropes and cables of stainless steel, with a maximum cross-sectional dimension exceeding 3 mm, with fittings attached or not (in industry terminology often referred to as ‘SWR’), currently falling within CN codes ex 7312 10 81 , ex 7312 10 83 , ex 7312 10 85 , ex 7312 10 89 and ex 7312 10 98 (the ‘product concerned’).

(19) The current expiry review investigation confirmed that SWR produced in the Russian Federation and exported to the Union, and SWR produced and sold in the Union by the Union producers have the same basic physical and technical characteristics and end uses and are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.

(20) In accordance with Article 11(2) of the basic Regulation, it was examined whether dumping was currently taking place and whether the expiry of the existing measures would be likely to lead to a continuation or recurrence of dumping.

(21) As explained above in recital 10, it was not necessary to select a sample of exporting producers in the Russian Federation. The cooperating exporting producer accounted for 99 % of the exports of the product concerned from the Russian Federation to the Union during the RIP. On this basis, it was concluded that cooperation was high.

(22) Since two other known producers in the Russian Federation did not cooperate in the investigation, the findings on the likelihood of continuation or recurrence of dumping set out below had to be based on the best available facts including Eurostat data, the Russian official statistics and limited data obtained from a second producer.

(23) According to the request for review, the exports from the Russian Federation into the Union were allegedly dumped at an average margin of 130,8 %. As mentioned in the notice of initiation (paragraph 4.1), the applicant compared the export prices from the Russian Federation to the Union (at ex-works level) with the domestic prices in the Russian Federation.

(24) In accordance with Article 2(2) of the basic Regulation, it was first established for the cooperating exporting producer whether its total domestic sales of the like product to independent customers in the Russian domestic market were representative, i.e. whether the total volume of such sales was equal to at least 5 % of the total volume of the corresponding export sales to the Union. The domestic sales of the like product by the cooperating exporting producer were found to be overall representative.

(25) Subsequently, the Commission identified those types of the like product sold domestically by the exporting producer which were identical or directly comparable to the types sold for export to the Union.

(26) It was further examined whether the domestic sales of the cooperating exporting producer were representative for each product type, i.e. whether domestic sales of each product type constituted at least 5 % of the sales volume of the same product type to the Union. For the product types sold in representative quantities it was then examined whether such sales were made in the ordinary course of trade (‘OCOT’), in accordance with Article 2(4) of the basic Regulation.

(27) The examination as to whether the domestic sales of each product type, sold domestically in representative quantities, could be regarded as having been made in the OCOT was made by establishing the proportion of the profitable sales to independent customers of the type in question. In all cases where the domestic sales of the particular product type were made in sufficient quantities and in the OCOT, normal value was based on the actual domestic price, calculated as a weighted average of all the domestic sales of that type made during the RIP.

(28) For the remaining product types where domestic sales were not representative or not sold in the OCOT, normal value was constructed in accordance with Article 2(3) of the basic Regulation. Normal value was constructed by adding to the manufacturing costs of the exported types, adjusted where necessary, a reasonable percentage for selling, general and administrative expenses and a reasonable margin for profit, on the basis of actual data pertaining to the production and sales of the like product in the OCOT, in accordance with the first sentence of Article 2(6) of the basic Regulation.

(29) For export sales to the Union market of the cooperating Russian exporting producer made directly to the independent customers, the export price was established on the basis of the prices actually paid or payable for the product concerned in accordance with Article 2(8) of the basic Regulation.

(30) For the export transaction where the export to the Union was made through a related trading company, the export price was established on the basis of the first resale price of the related trader to independent customers in the Union, pursuant to Article 2(9) of the basic Regulation. Adjustments were made to take account of all the costs incurred between the importation and resale, and for profit, to establish a reliable export price. In the absence of information from independent importers concerning the level of profits accrued during the RIP, an average profit margin of 5 % was used.

(31) The comparison between the weighted average normal value and the weighted average export price was made on an ex-works basis and at the same level of trade.

(32) In order to ensure a fair comparison between normal value and the export price, account was taken, in accordance with Article 2(10) of the basic Regulation, of differences in factors which were demonstrated to affect prices and price comparability. For this purpose, due allowance in the form of adjustments was made for differences in transport, insurance, handling, loading and ancillary costs, financial costs, packing costs, commissions and rebates where applicable and justified.

(33) As provided for under Article 2(11) of the basic Regulation, the weighted average normal value by type was compared with the weighted average export price of the corresponding type of the product concerned. This comparison showed the existence of dumping which amounted to 4,7 % for the exporting producer.

(34) Further to the analysis of the existence of dumping during the RIP, the likelihood of the continuation of dumping should measures be repealed was also investigated. In this respect the following elements were analysed: the volume and prices of dumped imports from the Russian Federation, the attractiveness of the Union market and other third country markets, production capacity and excess capacity for exports in the Russian Federation.

(35) According to Eurostat, during the period considered, the imports from the Russian Federation increased from 2 005 tonnes in 2009 to 2 343 tonnes in the RIP representing around 1 % of the Union consumption in the RIP and in the period considered. As mentioned above in recital 33, the imports from the cooperating exporting producer were made at dumped prices (4,7 %) despite the anti-dumping duty in force.

(36) The exports to the Union constituted 3 % of the total sales of the cooperating producer, while the majority of the sales (85 %) were made on the Russian domestic market. The domestic market grew by 38 % in the period considered (7) and may further grow should the GDP of the Russian Federation continue to grow, as forecasted by publically available sources specialising on economic analysis. Moreover, the information gathered during the investigation revealed that the cooperating producer does not produce all types of the product concerned and therefore its competitive pressure on the Union producers is limited. This is likely to be the case also for the two other producers in view of no available information on the investments in new machinery, which could for instance allow the production of the product concerned of a bigger diameter. Furthermore, the limited competitive pressure of the exporting producers from the Russian Federation seems also to be confirmed by the presence of the Union producers on the Russian market. According to the official Russian customs statistics the Union producers’ exports of the like product to the Russian Federation represented 30 % of all imports of the like product to the Russian market in RIP, making of the Union producers the largest exporter on the Russian market.

(37) In reply to the final disclosure the applicant argued that the projected GDP growth of Russia (in the range of 3 %) is rather moderate and will not allow for further development of the Russian SWR market. Consequently, the Russian market might not be able to absorb additional volumes of the like product. In this respect it is noted that the Russian GDP growth during the period considered, i.e. from 2009 to the end of the IP, was lower than the forecasted growth for the year 2014 and nevertheless allowed for the growth of the SWR market in Russia by 38 %. Therefore the argument has been rejected.

(38) The same party also pointed to the new types of products that the cooperating exporting producer has recently developed (in cooperation with its subsidiary based in the Union) and claimed that this confirms the investments made by this producer in the period considered. This fact however does not contradict the finding on the cooperating producer’s inability to produce all type of ropes (especially SWR in the high end of the market). Therefore the argument has been rejected.

(39) The attractiveness of the Union market should also be seen in the context of some acquisitions of Union producers by the Russians exporting producers. Indeed, two Russian producers currently own subsidiaries based in the Union. The verification visit to the EU based subsidiary of the cooperating exporter revealed that its sales were concluded mainly on the European market and that the related sales between the cooperating producer and this subsidiary remained limited in RIP.

(40) On the basis of the data of the cooperating exporter, it has to be noted that the Russian export volume of the product concerned to third countries exceeded four times the export volume to the Union in RIP. The export prices of the cooperating exporting producer to third countries were found to be on average lower than its domestic sales price in the Russian Federation, but on average at higher levels than the export prices to the Union market. This allows a conclusion that the export sales to third countries’ markets are more attractive than the sales to the Union market. In this context, the existence of long established sales channels with the Commonwealth of Independent States’ (CIS) markets is also noted.

(41) In reply to the final disclosure the applicant argued that the export prices of the Russian producers to the third markets are in fact lower than the export prices to the Union. A comparison between average export prices to Ukraine and some European countries based allegedly on the Russian customs statistics was evoked. No original data underlying the comparison was submitted. In this respect it is noted that the comparison of the price difference between Russian export prices to the Union and to third markets carried out in the investigation was based on the verified questionnaire data of the cooperating exporting producer. Such price comparison was made at ex-works level taking into account the differences between the product types and the level of trade. The average prices submitted by the applicant do not reflect the complexity of the price components and ranges existing in the SWR market and resulting from a significant number of different products and different level of trade. Therefore the argument has been rejected.