Commission Implementing Regulation (EU) 2018/1012 of 17 July 2018 imposing a provisional anti-dumping duty on imports of electric bicycles originating in the People's Republic of China and amending Implementing Regulation (EU) 2018/671

THE EUROPEAN COMMISSION,

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

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 20 October 2017, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports into the Union of cycles, with pedal assistance, with an auxiliary electric motor (‘electric bicycles’) originating in the People's Republic of China (‘the PRC’) on the basis of Article 5 of the basic Regulation.

(2) The Commission published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(3) The Commission initiated the investigation following a complaint lodged on 8 September 2017 by the European Bicycle Manufacturers Association (‘the complainant’ or ‘EBMA’). The complainant represents more than 25 % of the total Union production of electric bicycles. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(4) On 21 December 2017, the Commission initiated an anti-subsidy investigation with regard to imports into the Union of electric bicycles originating in the PRC and started a separate investigation. It published a Notice of Initiation in the Official Journal of the European Union (3).

(5) On 31 January 2018, the complainant submitted a request for registration of imports of electric bicycles from the PRC under Article 14(5) of the basic Regulation. On 3 May 2018, the Commission published Implementing Regulation (EU) 2018/671 (4) (‘the registration Regulation’) making imports of electric bicycles from the PRC subject to registration as of 4 May 2018 onwards.

(6) Responding to the request for registration, interested parties submitted comments that were addressed in the registration Regulation. The Commission confirms that the complainants submitted sufficient evidence justifying the need to register imports. Imports and market shares from the PRC had sharply increased. The comments were therefore rejected.

(7) The investigation of dumping and injury covered the period from 1 October 2016 to 30 September 2017 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2014 to the end of the investigation period (‘the period considered’).

(8) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainants, other known Union producers, the known exporting producers and the authorities of the PRC, and known importers about the initiation of the investigation and invited them to participate.

(9) Interested parties had 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.

(10) In the Notice of Initiation, the Commission informed interested parties that it had provisionally chosen Switzerland as a market economy third country (‘analogue country’) within the meaning of Article 2(7)(a) of the basic Regulation. Interested parties had an opportunity to comment and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(11) Some of the interested parties supporting the complaint requested confidential treatment of their identities in fear of retaliation, as they purchase certain parts of their electric bicycles in the PRC. The Commission granted their requests after an assessment of the arguments brought forward.

(12) The China Chamber of Commerce for Import and Export of Machinery and Electronic products (‘CCCME’), and the Collective of European Importers of Electric Bicycles (‘CEIEB’), both representing several interested parties, submitted comments after the initiation of the proceeding.

(13) The CCCME argued that the reasons for which the Commission granted confidential treatment to the identity of some of the interested parties supporting the complaint were both insufficient and unfounded. According to the CCCME, some of the members of the Union Industry import complete electric bicycles from the PRC and thus, in light of Article 4(1)(a) of the basic Regulation, may be precluded from being considered as members of the Union Industry. The CCCME pointed out that confidential treatment of the identity of some of the interested parties precludes the exporting producers from properly examining the standing in this case.

(14) In a similar vein, the CEIEB argued that the complaint does neither contain a list of all known Union producers of the like product, nor the volume and value produced by these producers. The Commission rejected this claim. The complaint contained a list of known producers in the Union (5), as well as their total production volume (6). The CEIEB was, accordingly, able to assess the list of known Union producers of the like product.

(15) This information allowed the CEIEB to identify that two companies listed as Union producers are also importing the product under investigation from the country concerned. It is therefore clear that the CEIEB could fully exercise their rights of defence in this respect. The claims were therefore rejected.

(16) The CCCME further argued that the complaint lacked the necessary level of sufficient evidence to result in the initiation of an investigation. The CCCME gave four reasons for this.

(17) First, the import data, based on Chinese export statistics obtained from Chinese customs, together with the adjustments made to it to filter out the product subject to this investigation, should not be kept confidential and its source should be duly examined by the Commission.

(18) Second, certain information in the complaint such as, for instance, the alleged overcapacity in the relevant sector in the PRC, would be misleading as they relate not only to the electric bicycles sector but electric bicycles and bicycles together. Similarly, the value of the Union's electric bicycles market would be overestimated as it covers all light electric vehicles and not only electric bicycles.

(19) Third, subsidisation claims made in the complaint would be unfounded and would merit their own anti-subsidy investigation.

(20) Fourth, according to the CCCME, the complaint made a series of unjustified claims that are harmful to the electric bicycles industry in the PRC, alleging that it is the Union producers who drive the innovation in this business and that the Chinese producers are merely replicating the status quo of the Union-developed electric bicycles technology.

(21) The Commission carried out an examination of the complaint in accordance with Article 5 of the basic Regulation, coming to the conclusion that the requirements for initiation of an investigation were met, i.e. that the adequacy and accuracy of the evidence presented by the complainant was sufficient. According to Article 5(2) of the basic Regulation, a complaint shall contain such information as is reasonably available to the complainant on the factors indicated therein. On the basis of the evidence provided, the Commission deemed that requirement satisfied.

(22) Regarding the Chinese import data argument, the Commission refers to section 3.2 of the registration Regulation and to section 4.3 of this Regulation, where that argument is sufficiently addressed.

(23) Regarding the overcapacity argument, it is indeed relevant to examine overcapacities for electric bicycles and bicycles together, since production capacity for bicycles can be converted to electric bicycles with little cost or effort (see recital 172), and there is evidence on record that this is indeed regularly done by companies producing both products.

(24) Regarding the comments on alleged subsidisation on the Chinese market, on 21 December 2017, the Commission initiated an anti-subsidy investigation with regard to imports into the Union of electric bicycles originating in the PRC and commenced a separate investigation. That investigation is still on-going.

(25) Finally, regarding the innovation and replication arguments, the accuracy of the allegations mentioned in point four had no weight on the Commission's assessment underlying the initiation of this case, as they do not fall within the factors considered for this purpose.

(26) The Commission therefore concluded that the complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(27) In the Notice of Initiation, the Commission stated that it might sample exporting producers, Union producers and unrelated importers in accordance with Article 17 of the basic Regulation.

(28) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the highest representative sales volumes of the like product in the investigation period whilst ensuring a spread in product types and a geographical spread.

(29) This sample consisted of four Union producers. The sampled Union producers accounted for 60 % of the total production volume and 58 % of total sales of the Union industry. The Commission invited interested parties to comment on the provisional sample.

(30) The EBMA claimed that the sample was overly focused on the Dutch market, and does not give appropriate weight to French producers.

(31) The Commission noted that the sample included the largest markets for the product under investigation and the largest producers in terms of volume and sales on the Union market which could reasonably be investigated within the time available.

(32) The Commission also noted that the production of the French producers only account for a minor part of the production of electric bicycles in the Union. It is therefore not necessary to include a French producer to ensure representativity of the sample.

(33) One interested party suggested adding a German manufacturer to the sample. However, the company in question was not cooperating and the comment had therefore to be disregarded. This did not affect the representativity of the sample, since the sample covered 60 % of the production volume, and did include a German manufacturer.

(34) In light of the above, the Commission confirmed that the sample is representative of the Union industry.

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

(36) Twenty-one unrelated importers provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of five unrelated importers on the basis of the largest volume of imports into the Union. In accordance with Article 17(2) of the basic Regulation, all known importers concerned were consulted on the selection of the sample.

(37) One interested party commented that the sample of importers is not representative, since it does not cover importers from Denmark, Germany, Italy and the UK, and overly focused on importers buying city electric bicycles.

(38) However, the cooperating importers from Denmark, Germany and the UK were much smaller than the sampled importers, and no importers from Italy cooperated. Also, the sampled importers imported a wide range of products, including city electric bicycles, trekking electric bicycles, mountain electric bicycles and folding electric bicycles.

(39) The Commission also notes that the sample included the largest import volume which could reasonably be investigated within the time available.

(40) In light of the above, the Commission confirmed that the sample is representative of the cooperating importers.

(41) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the People's Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(42) Ninety-six exporting producers in the PRC provided the requested information and agreed to be included in the sample. One producer reported no exports of the electric bicycles to the Union during the investigation period and therefore was not considered admissible to the sample. The Commission provisionally selected a sample of four cooperating producer groups on the basis of the largest representative volume of exports to the Union.

(43) In accordance with Article 17(2) of the basic Regulation, all known exporting producers of electric bicycles, and the authorities of the PRC, were consulted on the selected sample.

(44) Three non-sampled cooperating exporting producers argued that they should be included in the sample due to allegedly particular features of their production or sales, which distinguish them from some or all sampled exporting producers.

(45) These features are not relevant from the point of view of Article 17(1) of the basic Regulation, on the basis of which the sample is to be selected. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample on the basis of the largest representative volume of exports to the Union, which can reasonably be investigated within the time available. None of the three non-sampled exporting producers contested that they qualified for the sample according to this criterion, and none of them argued that the criterion for selecting the sample should be changed. Therefore, the three requests were rejected.

(46) After the expiry of the deadline for sampling responses and after the sample was selected and questionnaires have already been sent, one exporting producer came forward and requested to be considered as cooperating, as it had responded in due time to the sampling exercise in the parallel anti-subsidy investigation. The request was denied as the company did not come forward in the due time in the present investigation.

(47) Six non-sampled exporting producers formally requested individual examination under Article 17(3) of the basic Regulation. Two of them requested market economy treatment, which makes for two additional market economy treatment claim forms to be analysed and verified. Furthermore, three of the companies that formally requested individual examination are groups of companies with a total of six related traders. Their replies to the relevant part of the anti-dumping questionnaire would also have to be analysed and verified by the case teams. The examination of such a high number of requests would be unduly burdensome and cannot be reasonably expected during the time available for this investigation. The Commission therefore decided not to grant any requests for individual examination.

(48) For the purposes of Article 2(7)(b) of the basic Regulation, the Commission sent MET claim forms to all cooperating exporting producers in the PRC selected to be in the sample and to the non-sampled cooperating exporting producers that wished to apply for an individual dumping margin. Only one of the exporting producer groups in the PRC selected in the sample submitted an MET claim form, which was assessed by the Commission.

(49) The Commission sent questionnaires to all sampled companies, to all exporting producers intending to ask individual examination and to 27 potential analogue country producers in Australia, Japan, Mexico, South Korea, Switzerland, Taiwan, Thailand, Turkey and the USA.

(50) The Commission received complete questionnaire replies from all sampled Union producers, all sampled unrelated importers, the sampled exporting producers in the PRC, the exporting producers in the PRC requesting individual examination and one analogue country producer from Switzerland.

(52) The investigation of dumping and injury covered the period from 1 October 2016 to 30 September 2017 (‘the investigation period’ or ‘IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2014 to the end of the investigation period (‘the period considered’).

(53) The product concerned is cycles, with pedal assistance, with an auxiliary electric motor, originating in the PRC, currently falling within CN codes 8711 60 10 and ex 8711 60 90 (TARIC code 8711609010) (‘the product concerned’).

(54) This definition covers various types of electric bicycles.

(56) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

(57) In their comments after the initiation of the investigation, the CCCME contested the Commission's intention to group all electric bicycles as one single product. In particular, they argued that speed electric bicycles (electric bicycles with a speed of more than 25 km/h and up to 45 km/h) should be excluded from the scope of the investigation. While the engine of standard electric bicycles has a maximum power (7) of 250 W, the engine of speed electric bicycles can have a higher power of typically 350 – 500 W.

(58) The CCCME argued that these bicycles have significantly different characteristics and intended uses, and also significantly different prices. From the consumers' perspective speed electric bicycles are not interchangeable with all the other electric bicycles covered by this investigation.

(59) According to CCCME, there are several reasons for which speed electric bicycles are different from other electric bicycles. First, the raw materials and components are different. For instance, the engine for speed electric bicycles has a higher power rating and the materials for electric bicycles have higher strength and quality.

(60) Second, the costs and prices would be significantly different. Since there are stricter requirements for the quality and strength of the parts used to produce speed electric bicycles, the cost of producing speed electric bicycles is higher than that of ordinary electric bicycles, which in turn causes a final higher sales price.

(61) Third, the CN codes would be different. Since 1 January 2017, ordinary electric bicycles have been classified under CN code 8711 60 10 and speed electric bicycles under CN code 8711 60 90. Before 2017, ordinary electric bicycles were classified under (ex) CN code 8711 90 10 and speed electric bicycles under (ex) CN code 8711 90 90.

(62) Fourth, speed electric bicycles are regarded as motor vehicles (vehicle category L1e-B), so drivers are required to have a licence and to wear helmets. There are no such requirements for ordinary electric bicycles. These requirements will substantially constrain who can purchase and operate the speed electric bicycles.