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

• (153) During the investigation period, the cooperating users had three main sources of supply of AHF that is the Union industry, Turkey and Russia. Three of the cooperating users purchased AHF mainly from the Union industry and imported it to a lesser extent; one of these three users did not import AHF from Russia, but only from Turkey. The fourth cooperating user purchased AHF mainly from Russia and sourced lesser quantities from the Union industry. All the cooperating companies imported AHF also from Turkey.

• (154) As rewinders are suppliers of a wide range of packaging products, for the three cooperating companies which purchased the product concerned from Russia, the activity incorporating AHF represented from less than one sixth to maximum one fourth of their total activity. For the company that did not purchase the product concerned from Russia the activity incorporating AHF represented less than one third of their total activity.

• (155) During the investigation period all cooperating companies reported to be overall profitable. Nevertheless, one company could not clearly allocate their SG&A costs to the activity incorporating AHF and therefore, no clear conclusion could be drawn for this company regarding its profitability.

• (156) Moreover, the investigation showed that there are multiple sources of supply and the rewinders are ready to change sources of supply if needed (see recitals from 165 to 168).

• (157) In addition, rewinders may still be able to pass the anti-dumping duty on to their customers, especially if prices of their main raw material continue the decreasing trend observed during the period considered.

• (158) On this basis, while it is not excluded that the rewinders' profitability might be negatively affected by the imposition of measures against Russia, the availability of other sources of supply, the possibility to pass on the duty to customers and in some cases the high profitability margins, would indicate that the possible impact of the measures on rewinders would be limited.

• (159) The exporting producer claimed that the imposition of anti-dumping duties will be detrimental for large retailers without however specifying this claim any further. In this regard, it should be noted that no large retailers came forward during the investigation.

• (160) Some interested parties also claimed that the imposition of measures would reduce the profitability of the rewinders. However, as already analysed in recitals from 153 to 160, the impact on the profitability of the rewinders is expected to be limited in particular when taking into consideration the various existing sources of supply and the possibility to pass on to their customers at least part of their cost increase from the imposition of duties.

• (161) In addition, as mentioned in recital 118, anti-dumping measures have been in place for the last 5 years against imports from China, Brazil and Armenia. During the investigation period of the investigation leading to these measures, the profitability of the rewinders was found to range between – 2 % and + 2 % ⁷. Despite the imposition of measures, rewinders remained viable and in some cases even increased their profits, as the current investigation showed that all cooperating rewinders were profitable. Therefore, this argument was rejected.

• (162) Moreover, it was claimed that there was strong competition in the downstream market from imports of consumer rolls. Some interested parties claimed that any imposition of the anti-dumping measures on AHF would penalise rewinders in the Union which would have to pay an anti-dumping duty on their raw material and would thus not be able anymore to compete with imports of the downstream products. It was further claimed that the imposition of measures on AHF would give rise to exports of consumer rolls from Russia. The rewind operation would then take place in Russia instead of the Union and the rewinders would be severely hurt, also because they will have to compete with the low priced imports of consumer rolls.. However, the risk that imports of the product concerned may be substituted by imports of the downstream products is not, in itself, a reason not to impose anti-dumping measures. In this regard, it should be noted that anti-dumping measures on imports of consumer rolls from China were imposed in 2013 ⁸ which has given the downstream industry relieve from dumped imports causing material injury. In addition, the investigation showed that imports of AFH from Russia cover only a part of the needs of the rewinders and that there are several other sources of supply with no anti-dumping measures. Therefore, these arguments were rejected.

• (163) In view of these findings, it is at this stage concluded that the impact on users would not be such that measures have to be considered to be against the overall Union interest.

5. Sources of supply

• (164) Several interested parties claimed that the imposition of anti-dumping duties against Russia may result in a shortage of supply in the Union market, as the Union industry has not sufficient capacity to cover the demand in the Union and, as mentioned above, rewinders would not have sufficient other sources of supply.

• (165) The investigation showed that the Union industry had excess capacity and is able to increase production and sales of AHF in the Union. Moreover, alternative sources of supply are available such as Turkey, Armenia and also South Africa and India, albeit to a lesser extent. In addition, the anti-dumping duties against China and Brazil are currently under review and findings will be published in January 2016 at the latest. Finally, anti-dumping measures aim to establish a level playing field in the Union and Russian imports will still be able to enter the Union market at fair price levels.

• (166) One interested party claimed that it is very likely that the Union industry will not increase its production and sales of AHF, but rather increase its activities in the ACF sector. This claim was based on the assumption that the Union industry increased its production of AHF due to the worldwide economic crisis and would resume production of ACF once the overall economic situation in the Union recovers. This party also noted that there was a parallel investigation concerning imports into the Union of ACF originating in China ongoing ⁹ and claimed that should this investigation result in the imposition of anti-dumping measures, the Union industry will likewise improve its economic situation with regard to ACF and as a consequence increase production of ACF to the detriment of an increase in production of AHF. However, as already analysed in recital 132, the investigation found no evidence to justify such claim. Moreover, the party did not provide any evidence regarding the link between the development of production of AHF and the economic crisis or the claim that the Union industry upon a possible imposition of measures against China will switch its production to ACF. Therefore, these arguments were at this stage rejected.

• (167) One interested party claimed that imports of AHF from Venezuela, Turkey and Armenia were not suitable to substitute imports of AHF from Russia as a number of key parameters such as production, technical specifications and supply availability would be different. The party concerned did not provide any evidence in support of this claim. Furthermore, the investigation did not bring into light any information which could have confirmed this claim. On the contrary, the investigation revealed that Turkey is a major supplier of the Union rewinders and therefore comparable in terms of availability and product specifications with Russian imports. Armenia is also a potential supplier for the Union market with no anti-dumping duties in place. Therefore, these arguments were at this stage rejected.

• (168) On the basis of the above, the claim that no alternative sources of supply existed, should be rejected.

6. Other arguments

• (169) The exporting producer claimed that the Union interest analysis should also take into account that the Union industry is protected by import duties of 7,5 % from Russia and the anti-dumping duties in force in relation of imports of the same product from China and Brazil.

• (170) It is noted that indeed, under the current Generalised Scheme of Preferences of the European Union (‘GSP’) which entered into force on 1 January 2014, Russia is no longer listed as a beneficiary country. Therefore, as of 1 January 2014, and until that situation persists, imports from Russia of AHF are subject to the import duty rate of 7,5 % (instead of the preferential duty rate of 4 % applicable until 31 December 2013).

• (171) Moreover, the anti-dumping measures against China and Brazil, which are currently under review, were imposed as a result of a separate proceeding which established injurious dumping with regard to these imports and which justified the imposition of the measures. Anti-dumping duties in place with regard to imports from other third countries cannot be considered per se as a valid reason not to impose anti-dumping duties with regard to imports from another third country. Indeed if following an anti-dumping investigation it is established that there is injurious dumping from this country's imports the imposition of such measures are justified, if there are no compelling reasons in terms of Union interest which would speak against such measures. In the current case, these conditions are at this stage fulfilled and this argument was therefore at this stage rejected.

• (172) The exporting producer finally claimed that as AHF and ACF are produced at the same production facilities, thus allegedly providing a high level of substitutability on the supply side, an additional anti-dumping duty on imports of AHF would create distortions in the market of ACF at the cost of the final customers in the Union. However, the exporting producer did not further specify this claim. As already explained in recitals 81 and 131 the largest producer in the sample did not produce at all ACF and the others who were producing ACF, had a stable ratio of production and sales between ACF and AHF. Therefore this argument should be rejected.

7. Conclusion on Union interest

• (173) On the basis of the above, the Commission concluded that there were no compelling reasons that it was not in the Union interest to impose measures on imports of AHF originating in Russia at this stage of the investigation.

G. PROVISIONAL ANTI-DUMPING MEASURES

• (174) On the basis of the conclusions reached by the Commission on dumping, injury, causation and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

1. Injury elimination level (Injury margin)

• (175) To determine the level of the measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry.

• (176) The injury would be eliminated if the Union industry was able to cover its costs of production and to obtain a profit before tax on sales of the like product in the Union market that could be reasonably achieved under normal conditions of competition by an industry of this type in the sector, namely in the absence of dumped imports. In this respect, a profit of 5 % was considered appropriate and confirmed during the investigation in view of the specific characteristics of this industrial sector. In addition, a profit of 5 % was also used in the proceeding which led to the parallel investigation against China and Brazil concerning the same product mentioned in recital 20 above. Furthermore, the Commission refers to recital 158 of Commission Regulation (EU) No 833/2012 which concerned a very similar product and where also a profit margin of 5 % was used.

• (177) On this basis, the Commission calculated a non-injurious price of the like product for the Union industry by adjusting the sales prices of the Union industry by deducting the amount of profit or adding the loss actually made during the investigation period and subsequently adding the above-mentioned profit margin of 5 %. The Commission then determined the injury elimination level on the basis of a comparison of the weighted average import price of the cooperating exporting producer in Russia, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

2. Provisional measures

• (178) Provisional anti-dumping measures should be imposed on imports of AHF originating in Russia, in accordance with the lesser duty rule in Article 7(2) of the basic Regulation. The Commission compared the injury margins and the dumping margins. The amount of the duties should be set at the level of the lower of the dumping and the injury margins.

• (179) On the basis of the above, the provisional anti-dumping duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

• (180) The individual company anti-dumping duty rate specified in this Regulation was established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to this company. This duty rate is exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entity. Imports of the product concerned produced by any other company not specifically mentioned with its name and address in the operative part of this Regulation, including entities related to that specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to any of the individual anti-dumping duty rates.

• (181) A company may request the application of this individual anti-dumping duty rates if it changes the name of its entity or sets up a new production or sales entity. The request must be addressed to the Commission ¹⁰. The request must contain all the relevant information, including: modification in the company's activities linked to production; domestic and export sales associated with, for example, the name change or the change in the production and sales entities. The Commission will update the list of companies with individual anti-dumping duties, if justified.

• (182) To ensure a proper enforcement of the anti-dumping duties, the anti-dumping duty for all other companies will apply not only to the non-cooperating exporting producers in this investigation, but to the producers which did not have exports to the Union during the investigation period.

H. FINAL PROVISIONS

• (183) The cooperating exporting producer claimed that they should have had access to the non-confidential file of the parallel on-going expiry review proceeding regarding the measures in force against imports of AHF originating in Brazil and China, mentioned in recital 3, on the grounds that for the purpose of the causation analysis in the current investigation the imports of AHF from Russia would be cumulated with imports of AHF from Brazil and China in order to investigate the impact of these imports on the situation of the Union industry. The exporting producer claimed that this would be a serious breach of its rights of defence and a breach of an essential procedural requirement which cannot be cured retroactively, as it affected the rights of defence in the period specified for comments, namely within 37 days of the date of publication of the notice in the Official Journal of the European Union. As a consequence the current investigation should be terminated. Alternatively, the exporting producer requested to be granted full access to the non-confidential file in the parallel expiry review proceeding.

• (184) The claim was based on the wrong assumption that imports from China and Brazil would be cumulated with imports from Russia. However, as described below, imports from China and Brazil were only taken into consideration in the causality analysis as ‘other factors’. Although the sampled Union producers provided only one questionnaire reply covering both proceedings, this concerned only the analysis of the economic situation of the Union industry as in both proceedings the Union producers were identical and data collected referred to the same investigation period and the same period considered. By official letter, the Commission already informed the exporting producer of its intention to reject the above mentioned claims and invited the exporting producer to request the intervention of the Hearing Officer in trade proceedings, if it considered necessary.

• (185) Regarding the access to the non-confidential file in the parallel expiry review proceeding, the exporting producer is not an interested party in that proceeding and, as a consequence, the access to the relevant non-confidential file cannot be granted. Therefore the claims regarding the breach of the rights of defence and the breach of an essential procedural requirement were rejected.

• (186) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.

• (187) The findings concerning the imposition of duties made for the purpose of this Regulation are provisional and may have to be reconsidered for the purpose of any definitive measures,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

• (a) request disclosure of the essential facts and considerations on the basis of which this Regulation was adopted;

• (b) submit their written comments to the Commission; and

• (c) request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

Article 3

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

Article 1 shall apply for a period of 6 months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 3 July 2015.

For the Commission

The President

Jean-Claude JUNCKER