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

• (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.

6.2.3.   Union interest under Article 7(2b) of the basic Regulation

6.2.3.1.   Spare capacities in the exporting country

• (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.

6.2.3.2.   Competition for raw materials

• (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.

6.2.3.3.   Effect on supply chains for Union companies

• (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.

6.2.3.4.   Comments on the provisional conclusion with regard to the Union interest test under Article 7(2b)

• (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.

• (293) Moreover, Eurofer claimed that the Commission did not assess nor account for the other ‘pertinent information’ having a bearing on the conclusion under Article 7(2b), such as:

• (a) the particularly high level of distortion of nickel ore, in particular in Indonesia,;

• (b) the fact that, for some Chinese SSHR producers, the criteria set in Article 7(2a) of the basic Regulation were met not only for one raw material, but for at least two of them, meaning that at least 34 % (almost twice in reality) of raw materials used as inputs were distorted;

• (c) the fact that, beside the raw material meeting the requirements of Article 7(2a), a significant number of other factors of production used directly or indirectly in the production of SSHR, both in China and Indonesia, were affected by distortions as documented by the OECD database on industrial raw material restriction and the complaint;

• (d) the fact that the raw material distortions found to exist were not only of a lasting measure, but are also, as far as Indonesia is concerned, worsening after the investigation period with the implementation of a full export ban on nickel ore instead of a prohibition of exporting ore with a nickel content above 1,7 %;

• (e) the fact that the Indonesian government appears to have been at the origin of a destabilisation of the LME nickel market – on which the inputs of Union producers are indexed – further increasing the benefits of the Indonesian and Chinese distortions on nickel.

• (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.

6.2.3.5.   Conclusion

• (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.

7. UNION INTEREST

7.1.   Interest of the Union industry

• (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.

7.2.   Interest of unrelated importers

• (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.

7.3.   Interest of users

• (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.

7.4.   Other comments

• (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.

7.5.   Conclusion on Union interest

• (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.

8. DEFINITIVE ANTI-DUMPING MEASURES

8.1.   Currently applicable safeguard measures

• (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.

8.2.   Definitive measures

• (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.

• (313) On the basis of the above, the rates at which such duties will be imposed are set as follows:

Country of origin	Company	Dumping margin (%)	Injury elimination level (%)	Anti-dumping duty (%)
Indonesia	PT Indonesia Guang Ching Nickel and Stainless Steel Industry	17,7	17,3	17,3
Indonesia	PT Indonesia Tsingshan Stainless Steel	17,7	17,3	17,3
Indonesia	All other companies	17,7	17,3	17,3
China	Shanxi Taigang Stainless Steel Co., Ltd	106,5	19,0	19,0
China	Taiyuan Taigang Daming Metal Products	106,5	19,0	19,0
China	Tisco Guangdong Stainless Steel Service Center Co., Ltd	106,5	19,0	19,0
China	Tianjin TISCO & TPCO Stainless Steel Co. Ltd	106,5	19,0	19,0
China	Fujian Fuxin Special Steel Co., Ltd	57,1	14,6	14,6
China	Zhenshi Group Eastern Special Steel Co., Ltd	71,7	9,2	9,2
China	Xiangshui Defeng Metals Co., Ltd	87,3	17,5	17,5
China	Fujian Dingxin Technology Co., Ltd	87,3	17,5	17,5
China	All other companies	106,5	19,0	19,0
Taiwan	Yieh United Steel Co.	4,1	24,2	4,1
Taiwan	Tang Eng Iron Works Co. Ltd	4,1	24,2	4,1
Taiwan	Walsin Lihwa Co.	7,5	18,4	7,5
Taiwan	All other companies	7,5	24,2	7,5

• (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.

8.3.   Definitive collection of the provisional duties

• (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.

8.4.   Retroactivity

• (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.

• (323) The Commission’s analysis showed no further substantial rise in imports in addition to the level of imports which caused injury during the investigation period, as prescribed by Article 10(4d) of the basic Regulation. For this analysis, the Commission compared the monthly average import volumes of the product concerned during the investigation period with the monthly average import volumes during the period from the month following the initiation of this investigation until the last full month preceding the imposition of provisional measures. Also when comparing the monthly average import volumes of the product concerned during the investigation period with the monthly average import volumes during the period from the month following the initiation of this investigation up to and including the month in which provisional measures were imposed, no further substantial increase could be observed:

SSHR Imports	IP	IP	September 2019 to March 2020	September 2019 to March 2020	September 2019 to April 2020	September 2019 to April 2020
	tons	tons/month	tons	tons/month	tons	tons/month
PRC	222 802	18 567	163 424	23 346	170 743	21 343
Indonesia	111 512	9 293	12 252	1 750	12 300	1 538
Taiwan	36 910	3 076	16 335	2 334	16 870	2 109
Total	371 224	30 935	192 011	27 430	199 913	24 989
Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat	Source: Eurostat

• (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.

9. UNDERTAKING OFFER

• (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.

10. FINAL PROVISION

• (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

Country	Company	Duty rate (%)	TARIC additional code
Indonesia	PT Indonesia Guang Ching Nickel and Stainless Steel Industry	17,3	C541
Indonesia	PT Indonesia Tsingshan Stainless Steel	17,3	C547
Indonesia	All other companies	17,3	C999
The People’s Republic of China	Shanxi Taigang Stainless Steel Co., Ltd	19,0	C163
The People’s Republic of China	Taiyuan Taigang Daming Metal Products	19,0	C542
The People’s Republic of China	Tisco Guangdong Stainless Steel Service Center Co., Ltd	19,0	C543
The People’s Republic of China	Tianjin TISCO & TPCO Stainless Steel Co. Ltd	19,0	C025
The People’s Republic of China	Fujian Fuxin Special Steel Co., Ltd	14,6	C544
The People’s Republic of China	Zhenshi Group Eastern Special Steel Co., Ltd	9,2	C558
The People’s Republic of China	Xiangshui Defeng Metals Co., Ltd	17,5	C545
The People’s Republic of China	Fujian Dingxin Technology Co., Ltd	17,5	C546
The People’s Republic of China	All other companies	19,0	C999
Taiwan	Yieh United Steel Co.	4,1	C032
Taiwan	Tang Eng Iron Works Co. Ltd	4,1	C031
Taiwan	Walsin Lihwa Co.	7,5	C548
Taiwan	All other companies	7,5	C999

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