Commission Implementing Regulation (EU) 2015/1081 of 3 July 2015 imposing a provisional anti-dumping duty on imports of certain aluminium foils originating in Russia

THE EUROPEAN COMMISSION,

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 7(4) thereof,

After consulting the Member States,

Whereas:

(1) On 8 October 2014, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports into the Union of certain aluminium foils originating in Russia (‘Russia’ or ‘the country concerned’). It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The proceeding was initiated following a complaint lodged on 25 August 2014 by AFM Aluminiumfolie Merseburg GmbH, Alcomet AD, Eurofoil Luxembourg SA, Hydro Aluminium Rolled Products GmbH and Impol d.o.o. (‘the complainants’) on behalf of producers representing more than 25 % of the total Union production of aluminium foils. The complaint contained prima facie evidence of dumping of the said product and of resulting material injury that was considered sufficient to justify the initiation of the investigation.

(3) On 4 October 2014, the Commission announced the initiation of an expiry review pursuant to Article 11(2) of Regulation (EC) No 1225/2009 (‘the basic Regulation’) concerning definitive anti-dumping measures in force on imports of certain aluminium foils originating in the People's Republic of China (‘China’) and Brazil, by a Notice published in the Official Journal of the European Union (3).

(4) In the Notice of Initiation, the Commission invited all interested parties to contact it in order to participate in the investigation. In addition, the Commission officially advised the complainants, the known exporting producer and the Russian authorities, known importers, users and traders known to be concerned of the initiation of the investigation and invited them to participate.

(5) Interested parties were given an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(6) Interested parties were also given the opportunity to make their views known in writing and request a hearing within the time limit set in the Notice of Initiation. None of the interested parties requested a hearing before the Commission services and/or the Hearing Officer in trade proceedings.

(7) In its Notice of Initiation, the Commission announced that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

Sampling of exporting producers in Russia

(8) Due to the fact that all the production of the product concerned in Russia is done by one group of companies, the Rusal group, no sampling was foreseen in the Notice of Initiation with regard to exporting producers.

Sampling of Union producers

(9) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. In accordance with Article 17(1) of the basic Regulation, the Commission selected the sample on the basis of the largest representative volume of sales and production. The sample consisted of six Union producers and their related companies, as the internal structure of the Groups was unclear at the beginning of the investigation as far as it concerns the functions of producing and reselling the product in question. The sampled Union producers accounted for over 70 % of total Union production. The Commission invited interested parties to comment on the provisional sample. No comments were received within the deadline and the provisional sample was thus confirmed. The sample is considered representative of the Union industry.

Sampling of unrelated importers

(10) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all unrelated importers to provide the information specified in the Notice of Initiation.

(11) Fourteen known importers/users were contacted at the initiation stage and were invited to explain their activity and to fill in the sampling form attached to the Notice of Initiation, if applicable.

(12) Three companies replied to the sampling form. They were, however, rewinders, i.e. industrial users which were importing the product concerned for further processing before re-selling it. No traders came forward. Therefore, sampling is not warranted.

(13) Four other companies came forward and declared that they either did not import the product concerned from Russia or they were rewinders. A users' questionnaire was sent to all seven companies that came forward.

Replies to the questionnaire and cooperation

(14) The Commission sent questionnaires to the six sampled Union producers and its related companies, one exporting producer group, and the seven users identified in the Union.

(15) Questionnaire replies were received from all sampled Union producers, from the exporting producer group (which consists of two exporting producers, four related traders and eight related raw material suppliers all located in Russia with the exception of two traders, registered in Jersey and Switzerland,) and from four users. Following the request of the Commission revised questionnaire tables from Rusal group were received at a later stage.

Verification visits

(16) The Commission sought and verified all the information deemed necessary for the purpose of a provisional determination of dumping, resulting injury and Union interest.

(17) As one of the sampled companies produced during the period considered small quantities solely destined for captive use no verification visit was deemed necessary.

(19) The investigation of dumping and injury covered the period from 1 October 2013 to 30 September 2014 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 2011 to the end of the investigation period (‘the period considered’).

(20) The product concerned is aluminium foil of a thickness of not less than 0,008 mm and not more than 0,018 mm, not backed, not further worked than rolled, in rolls of a width not exceeding 650 mm and of a weight exceeding 10 kg (‘jumbo rolls’) originating in Russia, currently falling within CN code ex 7607 11 19 (TARIC code 7607 11 19 10) (‘the product concerned’). The product concerned is commonly known as aluminium household foil (‘AHF’).

(21) AHF is manufactured on the basis of pure aluminium, which is firstly cast into thick strips (of a thickness of several mm, i.e. up to 1 000 times thicker than the product concerned) and subsequently rolled in different stages into the desired thickness. Once rolled, the foil is annealed by a thermal process and is finally presented on reels (rolls).

(22) These reels of AHF are further rewound into smaller rolls by downstream processors so-called rewinders. The obtained product (i.e. consumer rolls which is not product concerned) is used in multi-purpose short-life wrapping, mostly in households, catering, food and floristry retail business.

(23) The investigation showed that the product concerned, the product produced and sold on the Russian domestic market and the product produced and sold in the Union by the Union industry have the same basic physical, chemical and technical characteristics as well as the same basic uses.

(24) The Commission therefore concluded at this stage that these products are alike within the meaning of Article 1(4) of the basic Regulation.

(25) An importer claimed that the product scope should include AHF weighing 10 kg or less (so called ‘consumer rolls’). This importer claimed that there were no differences in the physical, chemical and technical characteristics between consumer rolls and jumbo rolls. The importer further claimed that if anti-dumping duties were imposed only on jumbo rolls, this could give rise to exports of consumer rolls without anti-dumping duties from Russia.

(26) The physical characteristic distinguishing the jumbo rolls on the one hand and consumer rolls on the other hand is the weight. In addition, this also corresponds to the CN code. Moreover, the Union industry as defined in recital 53 only produces jumbo rolls and does not produce consumer rolls. Jumbo rolls are bought and further processed into consumer rolls by rewinders that in turn resell the product to retailers and end users. Jumbo rolls and consumer rolls have therefore different physical characteristic, are not produced by the same producers, do not compete with each other and are not traded on the same market.

(27) Therefore, the claim that consumer rolls should be included in the product scope of this investigation was rejected.

(28) Regarding the effect of any anti-dumping duties on jumbo rolls on the downstream industry, this is addressed below in recitals 151 to 163 concerning the Union interest.

(29) The Commission first examined whether the total volume of domestic sales of each exporting producer was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales are representative if the total domestic sales volume of the like product to independent customers on the domestic market per exporting producer represented at least 5 % of its total export sales volume of the product concerned to the Union during the investigation period.

(30) On this basis the total sales of one exporting producer were found to be not representative. For this cooperating exporting producer as the like product was not sold in representative quantities on the domestic market, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.

(32) With regard to the other exporting producer, it was found that its total domestic sales were representative in accordance with Article 2(2) of the basic Regulation (see recital 29 above).

(33) The Commission subsequently identified the product types sold domestically that were identical or comparable with the product types sold for export to the Union. The Commission examined whether the domestic sales of this other exporting producer on its domestic market for each product type that is identical or comparable with a product type sold for export to the Union were representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales of a product type are representative if the total volume of domestic sales of that product type to independent customers during the investigation period represents at least 5 % of the total volume of export sales of the identical or comparable product type to the Union. The Commission established that in case of 5 product types out of 14 the exported product types matched with representative domestic sales.

(34) Wherever there were no domestic sales of a particular product type and for product types where the volume of domestic sales was insufficient, the normal value was constructed in accordance with Article 2(3) and (6) of the basic Regulation, as described in recital 31 above.

(35) The Commission next defined the proportion of profitable sales to independent customers on the domestic market for each product type during the investigation period in order to decide whether to use actual domestic sales for the calculation of the normal value, in accordance with Article 2(4) of the basic Regulation.

(37) In this case, the normal value is the weighted average of the prices of all domestic sales of that product type during the investigation period.

(38) The analysis of domestic sales showed that over 90 % of domestic sales were profitable and that the weighted average sales price was higher than the cost of production. Accordingly, the normal value was calculated as a weighted average of the prices of the domestic sales during the investigation period for the five product types with representative domestic sales.

(39) The cooperating exporting producers exported to the Union via a related trader RTI Ltd (‘RTI’) with corporate seat in Jersey. This trader buys the product concerned from the producers via two Moscow based related agents. Afterwards, it re-sells the product concerned to the final customers via another agent based in Switzerland. All three related agents carry out sales activities in the name of the producers or the related trader and are remunerated by monthly commission payments.

(40) In accordance with Article 2(9) of the basic Regulation, the export price was established on the basis of the price at which the imported product was first resold to independent customers in the Union. In this case, adjustments to the price were made for all costs incurred between importation and resale (namely transportation and insurance costs, credit costs, customs duties and customs administration fees) and including the corresponding SG&A expenses of the trader as well as a reasonable profit margin.

(41) Indeed, with regard to SG&A expenses, the Commission, on the basis of the data submitted by Rusal group for its sales of the product concerned into the Union market, took the corresponding actual SG&A expenses amount. This was an amount that the related trader had already identified and allocated to the import activities for the product concerned to the Union, according to its own calculations and allocation principles. The Commission also ensured that there was no double counting of expenses and any costs not related to the importation of the product concerned were not included in that amount. Therefore, the amount for SG&A expenses, used by the Commission in the construction of the reliable export price, strictly related to the costs incurred between importation and resale of the product concerned into the Union as required by Article 2(9) of the basic Regulation.

(42) With regard to profit, the profit realised by the related trader was regarded as unreliable because of the association with the exporting producers, as the price itself between them was not reliable. In the absence of information from independent importers in this investigation, a reasonable profit margin of 2 % used in the previous investigation covering the same product was used (4).

(43) With regard to these deductions for SG&A expense and profit, the Rusal group claimed that the related trader (RTI) should be treated as an internal export department of its exporting producers, as they all act as single economic entity (SEE) despite being separate legal entities. As a consequence, Rusal group claimed that no deduction should have been made for RTI's SG&A and profit.

(44) However, it is considered that, where there is an association between the exporting producer and the importer or a third party, the export price is regarded as unreliable and a reliable one has to be constructed. For the construction of a reliable export price Article 2(9) of the basic Regulation clearly prescribes adjustments for all costs incurred between importation and resale and for profits accruing. These costs include the SG&A expenses. The rationale and the purpose of the adjustments is namely to render the export price reliable. Therefore, this claim had to be rejected.

(45) The Commission compared the normal value and the export price of the two cooperating exporting producers on an ex-works basis.

(46) Where justified by the need to ensure a fair comparison, the Commission adjusted the normal value and/or the export price for differences affecting prices and price comparability, in accordance with Article 2(10) of the basic Regulation.

(47) As regards export prices, adjustments were made for transport, insurance, handling, packing, export taxes and commissions. Concerning domestic prices, adjustments were made for domestic transportation costs, packing costs, credit costs, handling and commissions.

(48) For the two cooperating exporting producers, the Commission compared the weighted average normal value of each type of the like product with the weighted average export price of the corresponding type of the product concerned, on an ex-works basis, in accordance with Article 2(11) and (12) of the basic Regulation.

(49) As these two cooperating producers are related, a single dumping margin was established for the two companies on the basis of the weighted average of their individual dumping margins.

(51) The level of cooperation in this case is high since the sole existing producer of AHF in Russia responsible for 100 % of imports into the Union during the investigation period cooperated in the investigation. On this basis, the Commission decided to base the residual dumping margin at the level of the individual dumping margin established for the cooperating company.

(53) The like product was manufactured by 12 known Union producers during the investigation period. They constitute the ‘Union industry’ within the meaning of Article 4(1) of the basic Regulation.

(54) The total Union production during the investigation period was estimated at 47 349 tonnes. The Commission established the figure on the basis of Eurostat statistics, the verified questionnaire replies of the sampled Union producers and the estimated data related to the non-sampled producers and provided by the complainants. As indicated in recital 9, the Union producers selected in the sample represented over 70 % of the total Union production of the like product.

(55) The exporting producer claimed that not all the complainants were active in the production of AHF. However, the investigation showed that all complainants and their related companies produced indeed, even in small quantities, the product in question and this claim was therefore rejected.

(56) Data on production, production capacity, sales volume, employment and export volume relating to the whole Union industry for the period considered was provided by the complainants. The data were estimated and provided on a maximum and minimum range basis, broken down in two categories: sampled Union producers and non-sampled Union producers. For the sampled Union producers, the Commission used the actual verified data provided by these companies in their questionnaire replies. For the non-sampled Union producers, the figures provided by the complainants were used. These estimates were made available for comments to the interested parties. No comments were, however, received.

(57) The Commission established the Union consumption on the basis of total estimated sales volume of the Union industry on the Union market and the total import volume based on Eurostat and corrected, where necessary, by the verified data provided by the exporting producer and the questionnaire replies submitted by the sampled Union producers.

(58) As there is only one exporting producer in the country concerned, all figures related to it had to be given in a range for reasons of confidentiality.

(60) Union consumption increased between 2011 and 2013 but decreased between 2013 and the investigation period. Overall, consumption increased between 17 % and 28 % during the period considered. The increase in consumption between 2011 and the investigation period mainly reflects the increase of imports from Russia and other third countries, while the sales of the Union industry on the Union market only slightly increased (see recital 82).

Volume and market share of the imports from the country concerned