Commission Implementing Regulation (EU) 2020/1408 of 6 October 2020 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of certain hot rolled stainless steel sheets and coils originating in Indonesia, the People’s Republic of China and Taiwan

(213) With reference to table 13 of the provisional Regulation, the GOI claimed that the decrease in inventory between 2018 and the investigation period pointed at a positive sales performance of the Union industry. The same claim was reiterated following final disclosure. This claim was rejected. Sales on the free Union market decreased by 13 % over the period considered, as shown in table 8 of the provisional Regulation. The small decrease in inventory in that period, as claimed by Indonesia, was not representative and is not apt to question the observed sales trend.

(214) The GOI claimed, with reference to table 14 of the provisional Regulation, that the injury suffered by the Union industry was caused by a high level of investments in 2017, which constituted a financial burden in the period thereafter, i.e. in 2018 and the investigation period. The same claim was reiterated following final disclosure. This claim was rejected. Investments are typically funded from retained cash or loans. In terms of costs and the impact on profits, such investments are depreciated over a long period of at least five years. As a consequence, a profit decrease of more than EUR 50 million, as observed from 2017 to 2018, or even more than EUR 80 million, as it occurred between 2017 and the end of the investigation period, cannot be ascribed to the investments made in 2017, which amounted as a whole to EUR 48 million but which were depreciated over at least five years.

(215) The Chinese exporting producer STSS claimed that a capacity utilisation of ca. 70 % was not a sign of injury, as this was similar to the overall average capacity established in all steel categories in the steel safeguard investigation. This claim was rejected. First, the Commission pointed out that the capacity utilisation rate of the Union industry decreased over the period considered from 69 % to 66 %. Second, anti-dumping and safeguard investigations are subject to different legal frameworks. Any observations or conclusions made in a safeguard investigation can therefore not be transposed into an anti-dumping investigation. The Commission must assess all relevant economic factors and indices having a bearing on the state of the industry in accordance with Article 3(5) of the basic Regulation, and while no any one or more indicators can necessarily give decisive guidance, in the current investigation the evolution as well as the level of capacity utilisation point at injury caused by the dumped imports.

(216) In the absence of any other comments with respect to the microeconomic indicators, the Commission confirmed its conclusions set out in recitals (297) to (306) of the provisional Regulation.

(217) In the absence of any other comments with respect to the conclusion on injury, the Commission confirmed its conclusions set out in recitals (307) to (310) of the provisional Regulation.

(218) Further to the claim referred to under recital (189) above, the exporting producer FSS claimed that the decrease in Union industry’s sales (–94 000 MT) and market share (– 7,3 %) was most pronounced in 2017. However, the Union industry was not injured in that year but made exceptional profits. In FSS’s view, it was because of the voluntary withdrawal of sales by the Union industry from the Union free market (driven by increased focus on downstream) that the imports in question increased. This claim was rejected. It cannot be held that the Union industry was under any pressure to withhold sales from the free market. By contrast, the Union industry had throughout the period considered ample spare capacities to sell larger quantities on the free market than it actually did (see recitals (283) to (285) and table 7 of the provisional Regulation).

(219) With reference to table 7 of the provisional Regulation, the GOI claimed that the increase in imports from the countries concerned had no significant effect on the production of the Union industry as that decreased by 3 % only over the period considered. The same claim was reiterated following final disclosure. The Commission noted that a 3 % decrease is not insignificant although other injury factors showed an even more deteriorating trend over the period considered and refers in that regard to recitals (307) to (311) of the provisional Regulation.

(220) With reference to table 8 of the provisional Regulation, the GOI claimed that the Union industry’s free market sales stabilised after 2017 and increased from 2018 to the investigation period, which would show that the imports of the product under investigation had no impact on the Union industry sales. The same claim was reiterated following final disclosure. The Commission noted that the market share of the Union industry fell from 71,2 % to 63,9 % between 2016 and 2017, and that the decrease between 2017 and the investigation period from 63,9 % to 61,9 % was less pronounced. Even though the overall decrease was indeed more important in the first part of the period considered, it cannot be held that the market share of the Union industry returned to a healthy level, as overall there was a decrease from 71,2 % to 61,9 %. The claim was therefore rejected.

(221) The Chinese exporting producers FSS and STSS claimed that imports from China did not cause injury to the Union producers but imports from Indonesia did so. They argued that profits of the Union producers were not affected by Chinese imports, because the profit fell from 10,2 % to 5,1 % between 2017 and 2018, which coincided with the surge of imports from Indonesia, whereas in the same timespan Chinese imports decreased. These claims were rejected. As set out in recitals (263) to (270) of the provisional Regulation, the conditions for a cumulative assessment were met. Therefore imports from China cannot be regarded in isolation from imports from Indonesia, or Taiwan.

(222) In the absence of any other comments with respect to attribution of the injury found to the subject imports, the Commission confirmed its conclusions set out in recital (312) of the provisional Regulation.

(223) With reference to table 11 of the provisional Regulation, STSS claimed that the cost of production incurred by the Union industry increased by 20 % over the period considered, alleging that this increase was responsible for the injury suffered by the Union industry. This claim was rejected. In recital (319) of the provisional Regulation, it was already explained that, at some point, the Union industry was not anymore able to pass on the global increase in raw material costs to its sales prices due to the price pressure exerted by the dumped imports. Therefore, what caused injury was not the increase in the cost of production as such, but the inability to pass it on due to the dumped imports.

(224) The GOI claimed that the captive market development caused injury, not the free market development. The same claim was reiterated following final disclosure. This claim was rejected. The development of the captive market did not attenuate the causal link between the dumped imports and the injury suffered by the Union industry. Free market sales decreased by 13 % (– 150 000 tons) over the period considered whereas captive consumption was relatively stable (–20 000 tons).

(225) The GOI further claimed that the Commission did not address the internal sales prices by the Union industry, as they should have caused the injury. The same claim was reiterated following final disclosure. This claim was rejected. The Commission has established that the internal sales were not made on an arm’s length basis and therefore they have not been taken into account for the sake of assessing injury.

(226) The exporting producer STSS claimed that, subsequent to the imposition of anti-dumping duties, different sources of imports are likely to emerge, e.g. the Republic of Korea. However, as average import prices from the Republic of Korea have constantly been significantly lower than those from China, Union producers would be even more harmed by these imports, rather than by imports from China. This claim was rejected. First, there is not sufficient evidence of injurious dumping with regard to these imports which, as this investigation has evidenced, is different with regard to imports from China. Secondly, although average SSHR import prices from China were higher than prices from the Republic of Korea throughout the period considered, Chinese imports nevertheless constantly undercut Union industry sales. These undercutting calculations, which have not been contested by any interested party, have been made by comparing similar product types which cannot be done on the basis of the statistical data in Eurostat – and the South Korean prices referred to are Eurostat prices. Thirdly, the injury was also caused by the Chinese imports due to their volume, which increased by 14 % over the period considered whereas the volume of imports from the Republic of Korea decreased by 49 % over the same period. Moreover, the volume of Chinese imports was about three times higher in 2016 and about seven times higher in the investigation period as compared to the volume of imports from the Republic of Korea.

(227) The exporting producer STSS reiterated the claim that overcapacity in the Union was a cause of injury to the Union industry. This claim was rejected for the reasons set out in recital (322) of the provisional Regulation.

(228) In the absence of any other comments with respect to the attribution of the injury found to factors other than the subject imports, the Commission confirmed its conclusions set out in recitals (319) to (325) of the provisional Regulation.

(229) On the basis of the above and in the absence of any other comments, the Commission concluded that none of the other factors examined at provisional stage as well as at definitive stage was capable of having any relevant impact on the injurious situation of the Union industry. Thus, none of the factors, analysed either individually or collectively, attenuated the causal link between the dumped imports and the injury suffered by the Union industry to the effect that such link would no longer be genuine and substantial, confirming the conclusion in recitals (326) and (327) of the provisional Regulation.

(230) The Chinese exporter FSS claimed that the target price computed for the sake of assessing the underselling margins was inflated by subsidies that the Union producers received. In view of the subsidies received, there was no reason to add an amount for future compliance costs. Likewise, the research and development expenses and labour costs should be reduced to the extent of the subsidies received in the investigation period. Failing this would amount to giving a double benefit to the sampled companies.

(231) This claim was rejected. First, it was not substantiated by appropriate evidence. Second, there is no double-counting because the verified cost of production data for the Union industry in the investigation period already takes account of any subsidies received by Union producers as well as of their current compliance costs, while any addition only concerns future compliance costs in the sense of Article 7(2d) of the basic Regulation, that will be incurred in a different time period. In line with this, the Commission deducted, where necessary, current costs already taken into consideration to arrive at the future cost.

(232) After provisional disclosure and again after final disclosure, several parties questioned the application of a target profit of 8,7 %, which was the average of the profit margins achieved by the Union industry in 2016 (7,2 %) and 2017 (10,2 %). The parties argued in particular that the Commission had stated that 2017 was an exceptional year for the Union industry and the profitability of that year was therefore likely to be tainted. The same had also been stated in the Regulation imposing definitive safeguard measures on steel products. Moreover, the market share of imports from the countries concerned in 2017 was already 25 % while in 2016 the market share of those imports was considerably lower than in 2017 (18,3 %). Therefore, the Commission should only use a profit margin of 6 %, or the profit margin achieved in 2016 instead. By contrast, Eurofer stipulated that the Union industry lost in 2017 significant market share (7,3 percentage points) as compared to 2016 in view of the increased level of imports, and that the profitability of 10,2 % achieved in that year was therefore not exceptionally high and should be used as target profit.

(233) The Commission confirmed that the use of a target profit of 8,7 % is justified for the reasons set out in recital (331) of the provisional Regulation. As provided for in Article 7(2c) of the basic Regulation, the target profit used shall be established taking into account factors such as the level of profitability before the increase of imports from the countries concerned, the level of profitability needed to cover full costs and investments, research and development (R&D) and innovation, and the level of profitability to be expected under normal conditions of competition. Even though imports from the PRC and Taiwan were already manifestly present, in 2017 imports from Indonesia were still at a very low level (24) and, therefore, the 2017 profit figure reflects the level of profitability before the increase of imports from all countries concerned. Moreover, the combined market share of imports from the countries concerned was in 2017 at 25 %, which indeed is already significant, and therefore the profit margin achieved by the Union industry in that year is likely to be depressed, which could make it an unsuitable year for establishing an appropriate target profit. However, as explained in recital (331) of the provisional Regulation, 2017 was an exceptional year and thus even if the Union industry’s profit margin was depressed, it was still at a sufficiently high level, even if it is derived from a year which does not fully reflect normal conditions of competition. Therefore the Commission confirmed that including 2017 in the equation and establishing the target profit on the basis of an average of the profits of 2016 and 2017 fully complies with the requirements of Article 7(2c) of the basic Regulation.

(234) Moreover, further to final disclosure, Marcegaglia claimed that the Commission should have set the target price of black SSHR based on a lower target profit reflecting the specific features of semi-finished black SSHR as opposed to finished white SSHR.

(235) This claim was rejected. As provided for in recital (30) above and recital (46) of the provisional Regulation, black and white coils share the same basic physical and chemical characteristics and both are therefore considered product concerned. The target profit used by the Commission is therefore based on profit data for both and thus reflects the specific features of semi-finished black SSHR as opposed to finished white SSHR.

(236) Eurofer claimed that the injury margins established in the provisional Regulation were underestimated. Specifically, Eurofer submitted new evidence that should justify an increase in the adjustments made under Articles 7(2c) and 7(2d) of the basic Regulation, with reference to recitals (332) and (333) of the provisional Regulation. These claims were partly accepted. As a result, the adjustments were corrected upwards with regard to investments foregone (Article 7(2c)) for one Union producer, and also with regard to future compliance costs (Article 7(2d)) for two Union producers. After final disclosure, two claims with regard to one of the sampled producers were reiterated but no further adjustments could be accepted.

(237) Following final disclosure, Eurofer reiterated its claim that the adjustments to the Union industry’s target price made by the Commission under Articles 7(2c) and 7(2d) of the basic Regulation were insufficient. In its view, the Commission should remain flexible and allow companies to present additional evidence supporting their claims, even after on-spot verifications when such information cannot be anymore verified.

(238) This claim was rejected. The majority of those claims (excluding the claims that were found to be justified and partly accepted and for which an adjustment was granted, as explained in recital (236) above) was raised for the very first time only after provisional disclosure, as the sampled producers had not replied to the relevant questions in the questionnaire, nor raised such claims during on-spot verifications, and no objective reason was provided for the inability to submit this information in a timely manner. Therefore, the Commission considered that the very late submission of information by the sampled producers, consisting in many cases of completely new figures and claims which were impossible to verify at that stage of the investigation, was unjustified.

(239) As regards to adjustments under Article 7(2d) of the basic Regulation on future social and environmental costs, Eurofer accused the Commission of adopting a discriminatory approach against the Union industry, as the Commission refused to extrapolate data from one sampled producer and to apply it to the other two sampled producers, whereas the Commission had calculated an individual dumping margin for the Chinese exporting producer Zhenshi by using information available from other exporting producers in the PRC.

(240) This claim was rejected. Eurofer is referring to two different situations – the calculation of an exporting producer’s dumping margin under the framework of Article 18(3) and the calculation of an individual company-specific target price – that are therefore not comparable. As explained in recitals (87) to (92) above, the calculation of Zhenshi’s normal value was made in accordance with Article 18(3) of the basic Regulation using facts available only for some data, whereas regarding the target price of Union producers there was no issue of non-cooperation and the Commission had all the facts to establish its findings. Moreover, the future environmental investments and operational costs at issue here were of a company-specific nature thus rendering any extrapolation to the other companies of the sample inadequate.

(241) Eurofer further claimed that the situation of injury further aggravated after 30 June 2019, i.e. after the end of the investigation period, and that the Commission should take account of this aggravation when deciding on the level of definitive measures. In this respect, Eurofer referred to Articles 14(5), 9(4) and 7(2c) and (2d) of the basic Regulation. The Commission noted that adjustments under Article 7(2c) and (2d) were granted as set out under recital (236) above and recital (330) to (334) of the provisional Regulation. Moreover, imports were registered but the conditions for a retroactive collection were not met (see recitals (321) to (325)). Also, the Commission found that no further substantial rise in imports subject to the investigation occurs during the period of pre-disclosure in light of Article 9(4), which if complied, would have called for reflecting the additional injury resulting from such increase in the determination of the injury margin. The claim was therefore considered groundless.

(243) In the absence of any other comments with respect to the examination of the margin adequate to remove the injury to the Union industry for Taiwan, the Commission confirmed its conclusions set out in recitals (330) to (336) of the provisional Regulation.

(244) With reference to the judgement of the General Court of 10 April 2019 in Case T-301/16 Jindal Saw Ltd and Jindal Saw Italia S.p.A. v European Commission (‘Jindal Saw’) (25), the Chinese exporter FSS claimed that the comparison between export prices and Union industry sales prices might not have been made at the same level of trade, as Union producers typically sold through subsidiaries (i.e. related undertakings). In this respect, FSS requested to disclose further details on the injury margin calculation. With regard to this claim, the Commission clarifies that for the sake of computing undercutting margins, only Union producers’ sales to unrelated undertakings were taken into account. With regard to the underselling calculations, the sales prices of the Union industry have not been used as the target prices were based on the sampled producers’ cost of production. Moreover, no other information on file pointed to the need of applying any level of trade adjustment. Last, the Commission must not disclose the underlying data obtained from the Union producers as these data are confidential within the meaning of Article 19 of the basic Regulation.

(245) Further to the provisional disclosure and after final disclosure, STSS claimed that in comparing its sales prices with the sales prices of the Union industry the Commission should not have deducted SG&A and profit of its related importer, as that would be in violation of Jindal Saw, as confirmed by the Judgment of the General Court of 2 April 2020 in Case T-383/17 Hansol Paper Co. Ltd v European Commission (‘Hansol Paper’) (26).

(246) The Commission rejected this claim. When it comes to the elements taken into account for calculation of undercutting (in particular the export price), the Commission has to identify the first point at which competition takes (or may take) place with Union producers in the Union market. This point is in fact the purchasing price of the first unrelated importer because that company has in principle the choice to source either from the Union industry or from overseas suppliers.

(247) In this case, the import price for some of the export sales cannot be taken at face value because the exporting producer and the importer are related. Therefore, in order to establish a reliable import price at arm’s length basis, such price has to be constructed by using the resale price of the related importer to the first independent customer as a starting point. In order to carry out this reconstruction, the rules on the construction of the export price as contained in Article 2(9) of the basic Regulation are pertinent, and are applied by analogy, just as they are pertinent for the determination of the export price for dumping purposes. The application by analogy of Article 2(9) of the basic Regulation allows arriving at a price that is fully comparable to the price that is used when examining sales made to unrelated customers and also comparable to the sales price of the Union industry.

(248) Therefore, in order to allow for a fair comparison, a deduction of SG&A and profit from the resale price to unrelated customers made by the related importer is warranted in order to arrive to a reliable price. (27)

(249) Such deduction must also be applied to the calculation of underselling. Indeed, the target price of the Union industry is based on its cost of production plus the target profit, without taking into consideration whether it is then sold in the Union to related or unrelated customers, and therefore it must be compared to the CIF (landed) price of the exports, which does not include by definition the SG&A and profit of related importers in the Union.

(250) Further to the provisional disclosure, FSS submitted that as 32 % of its exported volumes constituted PCNs which were not sold by the sampled Union producers and they were therefore not accounted for in the undercutting and underselling calculations, these calculations would be in violation of the judgement of the General Court of 24 September 2019 in Case T-500/17 Hubei Xinyegang Special Tube Co. Ltd v European Commission (‘Hubei Xinyegang’), para. 74 (28). STSS made a similar claim with regard to 8 % of its Union sales volumes. These claims were reiterated after final disclosure.

(251) The Commission rejected these claims. First, Hubei Xinyegang is under appeal before the Court of Justice. Therefore, the findings of the judgment regarding the issue subject to the claim are not final. Second, the Commission noted that when assessing undercutting and underselling margins, the models exported to the Union from the countries concerned constitute the reference for comparison. It lies in the nature of comparing export sales of exporting producers with sales of the Union industry that not all models exported were sold by the Union industry. In the current case, the matching rate was 84 % for all investigated Chinese exporting producers, which the Commission considered sufficient to ensure a broad and fair comparison of the exported models and those sold by the Union industry. Third, the basic Regulation does not require the Commission to carry out the price analysis for each product type separately. Rather, the legal requirement is a determination at the level of the like product. Finally, the Commission concluded that all PCNs were part of the product concerned and competed with each other, at least to a certain extent. Therefore, the percentage of the exports of the sampled exporting producers not sold by the Union industry does not constitute a separate category of the product concerned but competes in full with the remaining grades for which a matching was found.

(252) Referring to para. 71 of Hubei Xinyegang, STSS observed that the Union industry sample’s sales volumes used for the undercutting and underselling calculations did not constitute the total Union industry sales of the like product by the sampled parties. It claimed that this would not be allowed according to para. 71 of that judgement. As mentioned in recital (250) above, this judgement is under appeal. On substance, the Commission noted that it cannot add to the comparison Union industry sales of certain PCNs which are not sold by the exporting producers. Indeed, in order to ensure a fair comparison, the Commission compared like with like and thus did not account for models falling under the product definition and sold by the Union industry, but which were not exported by STSS. Second, as mentioned in the previous recital, the basic Regulation does not require the Commission to carry out the price analysis for each product type separately. Rather, the legal requirement is a determination at the level of the like product. While PCNs are used as the starting point for such assessment, it does not mean that different PCNs are not in competition. Thus, the fact that certain PCNs of the Union industry were not compared to imports into the Union from STSS does not mean that they do not suffer price pressure from these imports. Third, the Commission further underlined that the Union industry sales volumes of the matching PCNs which are used in the calculations with regard to STSS represented approximately two times the sales volume of STSS on the Union market and it is therefore largely representative. The claim was therefore rejected.

(253) The GOI questioned whether import prices and Union industry sales prices were comparable in terms of product mix. The Commission clarified that the calculations of undercutting and underselling margins were based on a comparison that takes into account the PCNs, which ensures that only like products within the meaning of Article 1(4) of the basic Regulation are compared with each other. In any event, the imports from the countries concerned compete with all products sold by the Union industry, and there is no evidence showing that the minor part of total imports which cannot be directly compared to product types sold by the sampled Union producers is not capable of exercising competitive pressure on the Union industry.

(255) In the absence of comments concerning the existence of raw material distortions in Indonesia and the share of the distorted raw material on the costs of production of the product under investigation, the Commission confirmed its conclusions set out in recitals (342) to (346) of the provisional Regulation.

(256) Following disclosure of provisional findings, two Chinese exporting producers submitted claims with regard to the Commission’s application and findings under Article 7(2a) of the basic Regulation. The Commission accepted one claim and rejected the rest, as explained in the following recitals. In addition, the Commission corrected a clerical error affecting one Chinese exporting producer, which nevertheless had no impact on the findings (29).

(257) One Chinese exporting producer claimed that, when comparing the price difference between the benchmark price and the actual purchase price of the distorted raw material by this company (as mandated by Article 7(2a) second paragraph), the Commission had compared these prices on different delivery terms resulting in an artificially higher difference between the two prices.

(258) The Commission agreed with this claim, and revised the calculation accordingly. The Commission provided a revised calculation in the specific disclosure to the company concerned. This change however did not alter the finding that the price of the raw material was significantly lower as compared to the undistorted benchmark price.

(259) Two Chinese exporting producers claimed that, in calculating the weight of one of the raw materials over its total cost of production, to establish whether the 17 % threshold is reached, the Commission did not choose an appropriate denominator. These companies claimed that the Commission excluded from the cost of production the selling, general and administrative costs (SG&A), thus artificially inflating the weight of this raw material over the companies’ cost of production. These companies argued that instead the Commission should have added the SG&A to the denominator.

(260) The Commission noted that it is undisputed that Article 7(2a) refers to the cost of production of the product concerned as the value that must be used in the calculation (as denominator). The Commission also recalled that the notion of cost of production in the basic Regulation does not include SG&A. This is supported by the reading of Article 2(3) of the basic Regulation, which states that ‘the normal value of the like product shall be calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs (…)’.

(261) Therefore, in the Commission’s view it is clear that the denominator used in the application of the provisions of Article 7(2a), i.e. the cost of production, should not include SG&A. The Commission accordingly rejected this claim.

(262) Second, the two exporting producers contested the fact that the Commission had used the undistorted cost of a given raw material as the numerator (multiplied by the quantity consumed) on the one hand, and the actual cost of production as the denominator on the other hand. These companies thus argued that this approach skewed the calculation and thus requested that the Commission revised this aspect of the calculation accordingly, by comparing undistorted values both as numerator and as denominator.

(263) In this respect the Commission observed that the wording of the relevant legal provision is clear: ‘For the purpose of this Regulation, a single raw material, whether unprocessed or processed, including energy, for which a distortion is found, must account for not less than 17 % of the cost of production of the product concerned. For the purpose of this calculation, an undistorted price of the raw material as established in representative international markets shall be used.’

(264) Therefore the Commission, by using an undistorted value for the raw material(s) in question as numerator, and by using the companies’ actual cost of production as denominator, applied properly this provision of the basic Regulation.

(265) The two sampled Chinese exporting producers made additional claims on the application of Article 7(2a), pertaining to company-specific issues. Accordingly, and to preserve the confidentiality of their data, the Commission addressed their claims in detail in the framework of the individual disclosure. In any event, these additional comments were rejected.

(266) Lastly, the Commission assessed the specific situation of the Chinese exporting producer for which, due to the lack of sufficient cooperation, it could not verify the relevant information necessary to perform a proper assessment under Article 7(2a) (30). Against this background, the Commission resorted to the application of Article 18 of the basic Regulation. Accordingly, the Commission considered that the findings made with respect to the two sampled Chinese exporting producers, i.e. the existence of raw material distortions in accordance with the provisions of Article 7(2a), which were based on verified information, should also apply to this company.

(267) In the absence of additional comments concerning the existence of raw material distortions in the PRC and the share of the distorted raw material on the costs of production of the product under investigation, the Commission confirmed its conclusions set out in recitals (347) to (350) of the provisional Regulation.

(268) In the absence of any comments concerning the existence of spare capacities in the PRC and Indonesia, the Commission confirmed its conclusions set out in recitals (352) and (353) of the provisional Regulation.

(269) In the absence of any comments concerning the competition for raw materials, the Commission confirmed its conclusions set out in recitals (354) to (357) of the provisional Regulation.

(270) After provisional disclosure, Eurofer submitted that the Commission had failed to provide a coherent explanation for its conclusion as it had carried out the 'Effect on supply chains for Union companies' test under the heading of the 'Interest of user' test, thereby committing an error of law. Eurofer further alleged that the Commission conflated two tests of the Union's interest: the Union interest test under Article 7(2b) and the test under Article 21 of the basic Regulation. Eurofer reiterated this claim after final disclosure, arguing that the Commission wrongfully conducted the Union interest test of Article 21 before that of Article 7(2b).

(271) These allegations were found groundless. Article 7(2b) of the basic Regulation provides that ‘Where the Commission, on the basis of all the information submitted, can clearly conclude that it is in the Union’s interest to determine the amount of the provisional duties in accordance with paragraph 2a of this Article, paragraph 2 of this Article shall not apply. The Commission shall actively seek information from interested parties enabling it to determine whether paragraph 2 or 2a of this Article shall apply. In this regard, the Commission shall examine all pertinent information such as spare capacities in the exporting country, competition for raw materials and the effect on supply chains for Union companies. In the absence of cooperation the Commission may conclude that it is in accordance with the Union interest to apply paragraph 2a of this Article. When carrying out the Union-interest test in accordance with Article 21, special consideration shall be given to this matter’.

(272) The last sentence of that provision contains a specific reference to Article 21 of the basic Regulation. Under the respective assessment of the Union interest under Article 21 of the basic Regulation undertaken in the provisional Regulation, it was established that the main effect on supply chains would be felt at the level of users. As set out in recital (358) of the provisional Regulation, the possible effect on supply chains for Union companies, stipulated under Article 7(2b) of the basic Regulation, was, in view of the important difference between the dumping and injury margins for exporting countries, assessed in the context of the Union interest test pursuant to Article 21 of the basic Regulation. The Commission did in any event not conflate the two tests. Rather, the analysis of the effect on supply chains under 7(2b) of the basic Regulation necessarily takes into consideration the information submitted by users that is also normally used within the framework of the Union interest under Article 21 of the basic Regulation. The Commission therefore rejected the comments made by Eurofer and confirmed that the respective Union interest tests were correctly applied under both Article 7(2b) as well as Article 21 of the basic Regulation.

(273) On substance, Eurofer claimed that the concerned user on which the analysis was built could replace imports from China by imports from many other sources, including from Indonesia and Taiwan, if the duty on Chinese imports at the level of dumping would be prohibitive.

(274) The Commission assessed this claim and found that, at face value, this user could indeed replace its imports from China with purchases from [1-2] (31) Union producers. Other Union producers also had significant spare capacities but they had hardly supplied the concerned user over the period considered. Based on import flows during the period considered, there might also be sourcing opportunities in other third countries, in particular the Republic of Korea and South Africa. However, on that basis, potential import volumes from those countries were limited and, at present, at least imports from the Republic of Korea are restricted by the currently applicable safeguard measures (32). As far as imports from Indonesia and Taiwan are concerned, the Commission noted that the important user indeed sourced not only from China but also from Indonesia. However, that does not mean that a switch from one source to another is simple and straightforward. The Commission noted that the product concerned consists of many different PCNs. Moreover, the need for this user to reorganise value chains in order to fend off the impact of measures based on the injury margin and given the likely impact on profitability of these measures, the Commission did not find it warranted to expose this user to further uncertainties by imposing measures at the level of the dumping margins. The concerned user is therefore likely to be able to diversify and adjust its sourcing only to a limited extent. Under such circumstances, the Commission could not reasonably argue that duties at the higher level would not unduly hurt this user since such duties are likely to make the user’s business activities unviable.

(275) After final disclosure, Eurofer recalled that South Africa has not been subject to safeguard measures since 15 November 2018, and from 1 July 2020 there has no longer been any country-quota for SSHR but rather a global quota, allowing importers to source significant volumes from countries not affected by individual measures. This adjustment would ensure that Union users had enough flexibility for switching supplying origins, should that be necessary. The Commission agreed on the fact, which however is not apt to alter the results of the above analysis, which is based on the actual data stemming from the investigation period, additionally taking into account the levels of the duties imposed under the present Regulation.

(276) Eurofer repeatedly criticised what is in its view an overly simplistic Commission’s assessment of the impact of measures at the user’s financial situation because it was made at constant sources, volumes and price, and it assumed a situation where the user would maintain its supply chains unchanged despite product being available from multiple other sources, including from Union producers at lower prices, and without transferring any part of the cost increase to its downstream customers. This was, in Eurofer’s view, not the purpose of the Union interest test.

(277) The Commission clarified that the analysis it made, which it had described itself as a worst case scenario in the provisional Regulation (recital 373), is the most reasonable approach in the given situation. To be reliable such assessment must be made based on the actual data stemming from the investigation period, additionally taking into account the levels of the duties imposed under the present Regulation. Indeed, as Eurofer pointed out, it is normally to be expected that part of a cost increase is passed on to customers – thus, the impact appears to be overrated. Unknown is, however, how much of the cost increase can be transferred to that level. In the current situation, a large pass on is certainly questionable as the user’s main competitors are the same Union producers of SSHR. Where the static analysis might overrate the impact of duty as it does not anticipate any increase in turnover, as explained, it might at the same time underestimate the negative impact of the duty as the Commission’s static assumptions also implied that no increase was anticipated for the cost of purchases from the Union industry, which in this case is a major supplier to the user concerned. The Commission further clarified that making assumptions with regard to changing sourcing patterns is also inappropriate in the case at hand, since, as explained in recital (274) above, the user in question is for a variety of reasons likely to be limited in its options in that regard. Any deviation from the methodology applied by the Commission under these circumstances would therefore render the analysis more speculative.

(278) Therefore, on balance, the Commission considered that the safest approach to estimate the impact of the measures on the user concerned was not anticipating changes either on the turnover side or on the cost side with regard to purchases from countries not subject to the measures.

(279) Finally, with regard to Eurofer’s request to disclose the essential facts underlying the assessment carried out regarding the profitability situation of the user in question, the Commission found that such disclosure could not be granted as the underlying data are by nature confidential within the meaning of Article 19 of the basic Regulation. However, after final disclosure, the Commission provided Eurofer with a non-confidential summary of the impact analysis of the proposed measures pursuant to Article 7(2) of the basic Regulation. As that disclosure only concerned the impact of the measures at the proposed level, Eurofer responded to that disclosure by concluding that the Commission had thus not analysed the impact of measures pursuant to Article 7(2a) of the basic Regulation. That allegation was firmly rejected by the Commission. The Commission had indeed concluded that measures at levels higher than pursuant to Article 7(2) would not be in accordance with the Union interest under Article 7(2b) in view of the already serious consequences of measures with the application of the lesser duty rule as summarized under recital (274) above. Therefore, it considered not relevant to disclose the calculation it had indeed made of the impact of measures under Article 7(2a). Moreover, whilst the applicable rates for the PRC and Indonesia changed in line with the disclosed dumping margins, that calculation followed the same methodology as the disclosed file.

(280) Eurofer further claimed that the impact on the single user’s profitability would be less negative than assumed by the Commission, but in any case less serious than the impact of lower anti-dumping duties on the whole Union industry. Eurofer specified that the concerned user should be able to deal with a cost increase and that its activities with regard to the product concerned were only a small part of its business and that it would therefore not be unduly affected if measures would be set in accordance with Article 7(2a). To substantiate the claim, Eurofer calculated that if Article 7(2a) was applied, the impact on that user’s costs would be ‘marginal’ and ‘less than 2 %’. Eurofer claimed that the carbon steel division of that user significantly outweighed (by 9 times) its stainless steel division and submitted that only operations related to the production of cold-rolled material (and downstream products of the stainless steel division) should be taken into account in the Union interest test. The concerned user is a diversified company whose financial viability did not rely solely on the production of downstream SSHR products. As the added value of that user's stainless steel operations was low, the company had to extensively rely on cheapest possible inputs (black coils) in order to earn a profit. With reference to recital (377) of the provisional Regulation, Eurofer also requested the Commission to disclose the essential facts underlying the assessment carried out regarding the profitability situation of that user.

(281) These claims were rejected. The Commission found that Eurofer’s calculations were flawed and established that the respective user company accounted for [20 to 30] % (33) of the turnover made by the whole group it belonged to. Based on verified information, the Commission established that this user’s profit in the investigation period on products incorporating SSHR was at [1 to 4] % (34). Provided that all relevant factors (in particular sources, volumes and prices before duties of purchases, and turnover achieved on downstream products) would remain unchanged as compared to the investigation period, the imposition of definitive duties at the level of the lesser duty would bring the user’s operational result (which also included carbon steel-based products) close to break-even (and [– 2 to – 5] % (35) on products incorporating SSHR).

(282) The Commission did not rule out that the user concerned, which employs [500 – 700] (36) FTE’s in the SSHR product segment, will be able to diversify and adjust its sourcing and use its market power and that, therefore, such impact of the lesser duty is likely to be partly mitigated. But the Commission concluded that, in line with the above analysis, duties at a level higher than the underselling margin would unduly hurt this important user.

(283) Further to the additional final disclosure, Eurofer also claimed that the Commission should disclose the precise product types included in the assessment of the profitability of the SSHR product group. According to Eurofer, as the user published catalogues of its products, that information would have no confidential nature. It would allow Eurofer to assess whether all products taken into consideration were relevant for the assessment, if such product prices were directly affected by costs of SSHR and if the proposed measures would not result in additional revenues for these products. The Commission concluded that Eurofer’s claim was unwarranted and could reveal some confidential data as regards the user. First, the Commission underlined that the additional disclosure clearly displayed that only the additional costs incurred by the proposed duties on the SSHR purchases of the user, as per the methodology explained under recital (371) of the provisional Regulation and recital (277) above and which was visualized in the additional disclosure, were added to the costs of the products in that product group. Therefore, there cannot be any overestimation of additional costs (and, thus, the negative effect on the profitability) if the Commission would have included products not made from SSHR in that segment. Second, the Commission clarified that the assessment at issue was made in the most comprehensive manner, i.e. it only included sales of all downstream products made from SSHR by the concerned user. The turnover generated by these products represented the bulk of the turnover of the user concerned (not of the group to which it belonged). Product specific information related to the user, including its downstream products made from SSHR, is available through open sources, including published catalogues. The Commission concluded therefore that Eurofer was provided with all the relevant information about how the Commission estimated the impact of the measures on the profitability of the user as regards the SSHR product group. The request was hence rejected.

(284) Furthermore, Eurofer claimed that the disclosure did not contain any indication of the level of the overall profit of the user without duties (‘profit user concerned was (%)’). That information would however be instrumental to allow assessing the impact of the duties on the user. As for the other actual or theoretical profit information, it could be provided under the form of a range to preserve the confidentiality of data. Absent that information, the complainant suspected that the impact of the duties on the ‘SSHR product group’ on the overall profit of the user could be negligible.

(285) This claim had to be rejected. The Commission recalled that the principle of protecting the confidentiality of information provided by parties in trade defence proceedings must not be compromised. In the current case, the disclosure of a profit margin of the user (which also competes with the Union industry in the downstream markets), even if expressed in a range, could harm the legitimate business interests of the user.

(286) With regard to the effect on supply chains, Eurofer also claimed that the business model of the concerned user, which is based on purchases from low cost (often polluting) countries with limited added value, should not be promoted. In this regard, the Commission underlined that under the basic Regulation the ecological footprint of imports of the product under investigation can only be addressed to a limited extent, in particular by adjusting the Union industry’s target price under Article 7(2d) of the basic Regulation. Such adjustments were granted in the current investigation, as explained under recital (333) of the provisional Regulation and confirmed in recital (236) above. With regard to the user’s business model, the Commission also noted that the user is sourcing a variety of products in large volumes from producers in the Union and that is also the case for SSHR. Moreover, it has an important role to play on the SSHR downstream markets, where it is the only significant non-integrated European producer.

(287) Eurofer finally submitted that the Commission cannot limit its conclusion of the effect on the supply chains to the impact of a single user, but that it should make its assessment on all users taken as a whole, regardless of whether or not they import the product concerned or purchase the like product domestically. The Commission rejected the claim. The user concerned alone accounted for [30 to 40] % (37) of consumption on the SSHR free market during the investigation period, whereas the sole other cooperating user accounted for less than 10 % of consumption. Given the importance of the user concerned and its singular position as part of the user industry, the Commission therefore maintained that determining the duties in accordance with Article 7(2a) of the basic Regulation would have a clearly negative effect overall on supply chains for Union companies.

(288) After final disclosure, Eurofer claimed that the Commission had failed to demonstrate that the findings with respect to the user concerned could be extended to the non-cooperating users. However, as mentioned in recital (287) above, the user in question accounted for [30 to 40] % (38) of the SSHR consumption on the free market. It also accounted for [60 to 70] % (39) of imports of SSHR from the countries concerned. Therefore, it is legitimate to attribute a considerable weight to the findings with regard to this user in the analysis of the effect of the higher duties on the supply chain, even if it is only one party.

(289) In the provisional Regulation, the Commission concluded that it is not in the interest of the Union to set the level of the measures at the level of dumping in view of the disproportionally negative effect this is likely to have on supply chains for Union companies.

(290) Subsequent to the provisional disclosure, Eurofer claimed that the Commission should not apply the lesser duty rule and act in accordance with Article 7(2a) of the basic Regulation. Eurofer invoked that under the Union interest test, the interest of all Union producers should outweigh the interest of a single user. It claimed that two substantial raw material distortions in China and five in Indonesia justified setting the duty at the level of the dumping margins. It also mentioned significant spare capacities in the exporting countries, and that in Indonesia alone, so Eurofer estimated, the total stainless steel capacity (i.e. not only the product under investigation) would exceed 10 million tons by 2025, surpassing by almost one third the production capacity of the Union. According to Eurofer, the effect on the user’s supply chain within the meaning of Article 7(2b) of the basic Regulation has to be weighed against the effects of the distortions, the existence of spare capacities and competition for raw materials. Eurofer added that the non-application of the lesser duty rule was also necessary where the Union had challenged the distortions found in Indonesia at the World Trade Organisation (WTO) (40).

(291) Subsequent to the final disclosure, Eurofer reiterated the claim already addressed in recitals (270) to (272) above that the Commission wrongfully conducted the Union interest test of Article 21 before that of Article 7(2b) of the basic Regulation. In that regard, Eurofer also referred to recital 21 of Regulation (EU) 2018/825 of the European Parliament and of the Council of 30 May 2018 amending Regulation (EU) 2016/1036 on protection against dumped imports from countries not members of the European Union and Regulation (EU) 2016/1037 on protection against subsidised imports from countries not members of the European Union. According to Eurofer, the Commission artificially extended the Union interest test to replace the binary question of the Union interest test of Article 21 – ‘is it in the interest or not of the Union to impose measures?’ – by a more open question – ‘at which level is it in the interest of the Union to impose measures?’ – not provided under the basic Regulation.

(292) In the same context, Eurofer claimed that the Commission accounted for the ‘supply chain’ criteria disproportionately in the test of Article 7(2b). In its hearing submission of 12 August 2020, it asked the questions of what level of spare capacities would be significant enough to tip the balance in favour of not applying the lesser duty rule and what kind of comparative disadvantage caused by distortions would tip the balance in favour of not applying the lesser duty rule.

(294) Furthermore, Eurofer claimed that the Commission committed manifest errors in the assessment of the disproportionality of duties set at the dumping margin. With regard to the duties applicable to Indonesia, Eurofer argued that duties at the level of the dumping margin of 17,7 %, instead of the injury margin of 17,3 %, would have almost no additional financial impact on the main user, and could not be found to disproportionally affect that user. Fair competition would, therefore, be restored at no expense for the user. With regard to the duties applicable to China, Eurofer argued that imports from China exhibit variable but significant differences between the injury and the dumping margin (from 87,5 % for Tisco to 4 % for Fujian Fuxin Special Steel). That difference and the high dumping margins highlight the significant ability of the Chinese producers to cause harm to the Union industry.

(295) These claims had to be rejected. The Commission acknowledged and confirmed that there are significant spare capacities in China and Indonesia and that the Union industry is at a comparative disadvantage compared to the Chinese and Indonesian exporting producers with regard to access to raw materials. As a consequence, two out of three criteria that are specifically provided by Article 7(2b) of the basic Regulation for assessing whether setting the duty pursuant to Article 7(2a) of the basic Regulation is appropriate indeed call for applying Article 7(2a).

(296) The fact that only one of the three elements explicitly listed in Article 7(2b) of the basic Regulation would speak against setting the duty pursuant to Article 7(2a) of the basic Regulation and the fact that the complainant, in addition, had identified other non-listed elements which would also call for applying Article 7(2a) cannot be held to invoke that a disproportionate weight was attributed to the third criterion, i.e. the effect on supply chains. If Article 7(2a) would be applied, an analysis of the third criterion, the effect on supply chains, revealed disproportionate repercussions for the user industry, as outlined in recitals (370) to (377) of the provisional Regulation and confirmed in recitals (270) to (287) above. Indeed, if the duties would be based on dumping margins, the user’s overall operational result and even more that of its SSHR product group would potentially deteriorate dramatically below the levels indicated in recital (281) above. Therefore, under these circumstances where one user, which provides significant employment in the Union, which accounts for most of the imports and a very significant share of consumption and which will clearly be seriously affected by duties if they would be established on the basis of Article 7(2a), the importance of the findings in the analysis of the effect on the supply chains for companies in the Union leads to the conclusion that it is not in the Union interest to apply Article 7(2a). The fact that other elements, such as the two others explicitly listed under Article 7(2b) and analysed by the Commission but also those invoked by Eurofer as mentioned in recital (291) above, would call for not applying Article 7(2), does not change that conclusion.

(297) As regards the differences between dumping and injury margins, it cannot be inferred that because the difference in the case of one of the two countries concerned, i.e. Indonesia, is only 0,4 percentage points, the imposition of duties at the level of the dumping margin would be proportionate. Similar as for China, the Commission had to assess comprehensively the impact of a duty at the level of the dumping margin against the criteria stipulated in Article 7(2b) of the basic Regulation. Moreover, as the concerned user’s profit margin is already relatively small with a duty set at the level of the injury margin, a 0,4 percentage points higher duty would further exacerbate this situation.

(298) The Commission agreed with Eurofer that other ‘pertinent information’, as indicated in recital (287) above, is available. That information does not however alter the result of the above analysis. Indeed, the ‘pertinent information’ relates to the raw material distortions under article 7(2a) of the basic Regulation and their magnitude and effects, and the Commission has confirmed the existence of such distortions. Given the positive findings, the Commission then carried out the analysis of the Union interest under Article 7(2b) of the basic Regulation. None of the facts outlined by Eurofer as ‘pertinent information’ has an impact on the Commission’s analysis on the effect of applying Article 7(2a) on the supply chains for companies in the Union and therefore does not alter the conclusion of the Commission that it is not in accordance with the Union interest to apply Article 7(2a).

(299) For these reasons, the Commission concluded that the assessment made pursuant to Article 7(2b) of the basic Regulation was proportionate and adequate.

(300) On that basis, the Commission did carefully weigh all the elements and could not clearly conclude that it is in the Union’s interest to determine the amount of duties in accordance with Article 7(2a), and therefore it confirmed that the measures should be set in accordance with Article 7(2) of the basic Regulation. The Commission also clarified that this conclusion is based solely on the evidence and facts gathered for this investigation and without any prejudice to the respective consultations at the WTO.

(301) On the basis of the above and in the absence of any other comments, the Commission therefore confirmed that it is not in the interest of the Union to set the level of the measures at the level of dumping in view of the disproportionally negative effect this is likely to have on supply chains for Union companies, as set out in recital (360) of the provisional Regulation.

(302) In the absence of any comments regarding the interest of the Union industry, the conclusions set out in recitals (362) to (364) of the provisional Regulation were confirmed.

(303) In the absence of any comments regarding the interest of unrelated importers, the conclusions set out in recitals (365) to (367) of the provisional Regulation were confirmed.

(304) Marcegaglia claimed that the imposition of anti-dumping measures on black coils was not in the interest of independent users because the applicable safeguard measures already limited the presence of imports. Following the imposition of anti-dumping duties, prices by Union producers are likely to increase further. If the Commission were to follow Marcegaglia’s claim to exclude black coils from the application of the measures, Union producers would be forced to compete on the black coils market segment with imports at injuriously dumped prices. As set out under Section 2 of the present Regulation, black coils clearly form part of the product concerned and the unfair competition with regard to this product type cannot be left unaddressed. Moreover, black coils are widely available from a variety of sources. Therefore, this claim was rejected.

(305) In the absence of any other comments regarding the interest of users, the conclusions set out in recitals (368) to (377) of the provisional Regulation were confirmed. Comments that concern the interest of users in the context of the effect on supply chains for Union companies within the meaning of Article 7(2b) of the basic Regulation are addressed under Section 6 of the present Regulation.

(306) The Chinese exporting producer STSS claimed that imposing anti-dumping duties was not in the Union’s interest, as the Union market is already dominated by Union producers. There is a risk of loss of competition and excessive concentration of Union producers in the Union market.

(307) The Commission recalls that the objective of anti-dumping measures is exactly to restore fair trade and, thus, competition on the Union market. The claim is therefore rejected.

(308) On the basis of the above and in the absence of any other comments, the conclusions set out in recital (378) of the provisional Regulation were confirmed.

(309) After provisional disclosure, several parties claimed that imposing anti-dumping duties would result in overprotection of the Union industry as the Union industry of SSHR was already protected against imports through safeguard measures. The Taiwanese exporting producer Walsin requested the amendment of Implementing Regulation (EU) 2019/1382 (41), which amended certain Regulations imposing anti-dumping or anti-subsidy measures on steel products subject to safeguard measures in order to avoid a double remedy due to the combined effect of the safeguard measures and the anti-dumping duties imposed on stainless steel hot-rolled flat products from Taiwan. Furthermore, it also requested merging the tariff rate quotas for category 8 of Implementing Regulation (EU) 2019/1382 for Taiwan and China.

(310) First, the Commission wishes to clarify that there is no double remedy in this case. The product under investigation is indeed subject to the steel safeguard measures (product category 8) with country specific quotas for the PRC, the Republic of Korea, Taiwan and the USA, and a quota basket for all other countries. These measures are in place until 30 June 2021. On 3 September 2019, the Commission published Implementing Regulation (EU) 2019/1382 listing all anti-dumping and anti-subsidy measures on products which were also subject to the safeguard measures and specifying that in each of those cases, the anti-dumping and/or anti-subsidy duty applies within the quota and once the quota is exhausted, the higher of the anti-subsidy and/or anti-dumping duty, on the one hand, and the 25 % out of the quota safeguard duty, on the other hand, applies. This principle also applies to the present anti-dumping measures and, consequently, there is no double remedy.

(311) With regard to the request to merge the tariff rate quotas for Taiwan and China for category 8 of Implementing Regulation (EU) 2019/1382, such request can only be submitted in the framework of the safeguard investigation and is therefore rejected.

(312) In view of the conclusions reached with regard to dumping, injury, causation and Union interest, and in accordance with Article 9(4) of the basic Regulation, definitive anti-dumping measures should be imposed in order to prevent further injury being caused to the Union industry by the dumped imports of the product concerned. For the reasons set out in Section 6, and in particular sub-section 6.2.3.4. of this Regulation, anti-dumping duties should be set in accordance with the lesser duty rule.

(314) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation in respect to these companies. These duty rates are thus exclusively applicable to imports of the product under investigation originating in the countries concerned and produced by the named legal entities. Imports of the product concerned manufactured by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, cannot benefit from these rates and should be subject to the duty rate applicable to ‘all other companies’.

(315) A company may request the application of its individual anti-dumping duty rate if it changes subsequently the name of its entity. The request must be addressed to the Commission (42). The request must contain all the relevant information to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it.

(316) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the proper application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘all other companies’.

(317) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States should carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the rate of duty is justified, in compliance with customs law.

(318) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume, in particular after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances, an anti-circumvention investigation may be initiated, provided that the conditions for so doing are met. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

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

(320) In view of the dumping margins found and given the level of the injury caused to the Union industry, the amounts secured by way of the provisional anti-dumping duty, imposed by the provisional Regulation, should be definitively collected up to the levels established under the present Regulation.

(321) As mentioned in section 1.2 above, the Commission made, following a request by the complainant, imports of certain hot rolled stainless steel sheets and coils subject to registration pursuant to Article 14(5) of the basic Regulation.

(322) During the definitive stage of the investigation, the data collected in the context of the registration were assessed. The Commission analysed whether the criteria under Article 10(4) of the basic Regulation were met for the retroactive collection of definitive duties.

(324) Therefore, the condition under Article 10(4d) of the basic Regulation is not met.

(325) On that basis, the Commission concluded that the retroactive collection of the definitive duties for the period during which imports were registered was not justified in this case.

(326) Following final disclosure, two Chinese exporting producers submitted a price undertaking offer in accordance with Article 8 of the basic Regulation.

(327) The Commission evaluated these offers and concluded that the acceptance of such undertakings would be impractical within the meaning of Article 8 of the basic Regulation. This is mainly so for the reasons of the multitude of indistinguishable product types covered by the offers, which vary significantly in price, the limitations of the proposed indexation system to take into account price fluctuations, and, in the case of one of the companies, the complex company group structure.

(328) The high number of product types for which an undertaking was offered entails a high risk of cross-compensation with the more expensive product types possibly being sold below the proposed minimum import price (‘MIP’) and being declared as cheaper product types also subject to the undertaking.

(329) There are also serious monitoring and cross compensation risks related to the structure of Taiyuan Iron and Steel Group Co., Ltd (‘TISCO’) to which STSS belongs. TISCO is a large iron and steel group, active in iron ore mining, steel production and processing, as well as goods distribution and trading. Given the nature of the products, it cannot be excluded that the group sells or will be selling different products, including the product concerned, to the same clients. Such transactions cannot be monitored by the Commission to ensure that the MIP is respected for the product concerned and that the undertaking is effectively implemented.

(330) Furthermore, both companies proposed in their undertaking offer a quarterly indexation which refers to price quotations of the finished product instead of the raw material. The suggested indexation was not considered appropriate, and taking into account a number of different types of products, its monitoring will also be burdensome if not impracticable.

(331) The Commission sent both applicants a letter, setting out the reasons to reject their respective undertaking offer and giving the applicants the opportunity to comment.

(332) The Commission received a reply from STSS, in which the company revised certain elements of the undertaking offer, including the level of the proposed MIP. However, this revised undertaking offer was submitted after the legal deadline foreseen in Article 8 of the basic Regulation. While the company could have submitted an undertaking since the imposition of provisional measures, it only did so on the last day of the statutory deadline, i.e. 5 days prior to the deadline for comments on final disclosure. As mentioned above, STSS submitted a revised version of the undertaking offer outside the applicable deadline and this was disregarded.

(333) Furthermore, despite the efforts of the company to simplify its original undertaking offer in terms of number of MIPs and certain commitments offered with regard to sales channels and Union sales of other products by the companies of the TISCO group, the very complex company group structure and the level of the MIP would increase the likelihood of cross-compensation if an undertaking would be accepted. Therefore, the Commission maintained its findings that the effective monitoring of the undertaking would be impracticable.

(334) Therefore, for the reasons set out in recitals (327) to (333), both price undertaking offers were rejected.

(335) In view of Article 109 of Regulation 2018/1046 (43), when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

(336) The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of Regulation (EU) 2016/1036,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

The amounts secured by way of the provisional anti-dumping duty under Implementing Regulation (EU) 2020/508 shall be definitively collected. The amounts secured in excess of the definitive rates of the anti-dumping duty shall be released.

Article 3

No definitive anti-dumping duty will be levied retroactively for registered imports. Data collected in accordance with Article 1 of Implementing Regulation (EU) 2020/104 shall no longer be kept.

Article 4

Article 1 (2) may be amended to add new exporting producers from the People’s Republic of China and make them subject to the appropriate weighted average anti-dumping duty rate for cooperating companies not included in the sample. A new exporting producer shall provide evidence that:

(a) it did not export the goods described in Article 1(1) originating in the People’s Republic of China during the period of investigation (1 July 2018 to 30 June 2019);

(b) it is not related to an exporter or producer subject to the measures imposed by this Regulation; and

(c) it has either actually exported the product concerned or has entered into an irrevocable contractual obligation to export a significant quantity to the Union after the end of the period of investigation.

Article 5

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

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

Done at Brussels, 6 October 2020.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) Notice of initiation of an anti-dumping proceeding concerning imports of certain hot rolled stainless steel sheets and coils originating in the People's Republic of China, Taiwan and Indonesia (OJ C 269 I, 12.8.2019. p. 1).

(3) Commission Implementing Regulation (EU) 2020/104 of 23 January 2020 making imports of certain hot rolled stainless steel sheets and coils originating in the People’s Republic of China, Taiwan and Indonesia subject to registration (OJ L 19, 24.1.2020, p. 5).

(4) Commission Implementing Regulation (EU) 2020/508 of 7 April 2020 imposing a provisional anti-dumping duty on imports of certain hot rolled stainless steel sheets and coils originating in Indonesia, the People’s Republic of China and Taiwan (OJ L 110, 8.4.2020, p. 3).

(5) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(6) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(7) Judgment of the General Court of 22 May 2014, Guangdong Kito Ceramics and Others v Council of European Union, Case T-633/11, in particular para. 100 and 111.

(8) Appellate Body Report, United States – Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, in particular para. 102.

(9) Commission implementing Regulation (EU) 2019/576 of 10 April 2019 imposing a provisional anti-dumping duty on imports of mixtures of urea and ammonium nitrate originating in Russia, Trinidad and Tobago and the United States of America (OJ L 100, 11.4.2019, p. 7).

(10) Appellate Body Report, Ukraine – Anti-Dumping Measures on Ammonium Nitrate, WT/DS493/AB/R, in particular para. 6.85 and 6.105.

(11) Appellate Body Report, Ukraine – Anti-Dumping Measures on Ammonium Nitrate, WT/DS493/AB/R, para 6.105.

(12) SWD(2017) 483 final/2 of 20 December 2017.

(13) Notice of initiation of an anti-dumping proceeding concerning imports of certain hot rolled stainless steel sheets and coils originating in the People’s Republic of China, Taiwan and Indonesia (OJ C 269 I, 12.8.2019, p. 1).

(14) Note of 9 September 2019 and Note of 10 October 2019 on the sources for the determination of the normal value.

(15) Available at https://stats.oecd.org/Index.aspx?DataSetCode=CIF_FOB_ITIC (last viewed 3 June 2020).

(16) As explained in recital (192) point (a) of the provisional Regulation, the London Metal Exchange was used as the basis for this undistorted value, corrected for the nickel content of the raw material. As the nickel content varied between the sampled companies, the exact undistorted value is given in the company-specific disclosure.

(17) Cases C-191/09 P and C-200/09 P: Council and Commission v Interpipe Niko Tube and Interpipe NTRP, paragraph 55.

(18) Case C-468/15 P: PT Perindustrian dan Perdagangan Musim Semi Mas (PT Musim Mas) v Council of the European Union; paragraph 43.

(19) Further details, of confidential nature, are provided in the specific disclosure.

(20) Due to the confidentiality issues more detailed explanations are provided in the specific disclosure.

(21) Due to the confidentiality issues more detailed explanations are provided in the specific disclosure.

(22) Judgment of 16 December 2011, Case T-423/09, Dashiqiao v Council, ECLI:EU:T:2011:764, paras 34 to 50.

(23) The margin applies to all other Chinese producers of the product under investigation of the TISCO group as listed in the operative part of the Regulation.

(24) Indonesia had a 0,0014 % market share in 2017 but a 3,7 % market share in 2018.

(25) http://curia.europa.eu/juris/document/document_print.jsf?docid=212842&text=&dir=&doclang=EN&part=1&occ=first&mode=lst&pageIndex=0&cid=593705

(26) http://curia.europa.eu/juris/document/document.jsf?text=&docid=224910&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=14412714

(27) In any event, the amount of sales made by STSS through its related importer was very small so that the impact of adjusting the export price in accordance with Article 2(9) on the undercutting margin would be negligible.

(28) http://curia.europa.eu/juris/document/document.jsf?text=&docid=218162&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=14413842

(29) The Commission explained the details of this clerical error in the specific disclosure document to the exporting producer concerned.

(30) The Commission could not verify essential data to perform a proper analysis. The unverified data, resulting from lack of cooperation included, inter alia, manufacturing overheads and thus total cost of production.

(31) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(32) South Africa was excluded from the scope of the steel safeguard as from 15 November 2018 according to Commission Implementing Regulation (EU) 2018/1712 of 13 November 2018 amending Implementing Regulation (EU) 2018/1013 imposing provisional safeguard measures with regard to imports of certain steel products (OJ L 286, 14.11.2018, p. 17).

(33) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(34) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(35) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(36) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(37) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(38) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(39) Precise figures cannot be given without disclosing confidential information. The range is considered accurate in the light of the information provided by interested parties in this investigation.

(40) WTO, Indonesia – Measures relating to raw materials, DS592, Request for consultations by the European Union, 22 November 2019.

(41) Commission Implementing Regulation (EU) 2019/1382 of 2 September 2019 amending certain Regulations imposing anti-dumping or anti-subsidy measures on certain steel products subject to safeguard measures (OJ L 227, 3.9.2019, p. 1).

(42) European Commission, Directorate-General for Trade, Directorate G, Rue de la Loi 170, 1040 Brussels, Belgium.

(43) Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council of 18 July 2018 on the financial rules applicable to the general budget of the Union, amending Regulations (EU) No 1296/2013, (EU) No 1301/2013, (EU) No 1303/2013, (EU) No 1304/2013, (EU) No 1309/2013, (EU) No 1316/2013, (EU) No 223/2014, (EU) No 283/2014, and Decision No 541/2014/EU and repealing Regulation (EU, Euratom) No 966/2012 (OJ L 193, 30.7.2018, p. 1).