Commission Implementing Regulation (EU) 2020/1428 of 12 October 2020 imposing a provisional anti-dumping duty on imports of aluminium extrusions originating in the People’s Republic of China

THE EUROPEAN COMMISSION,

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

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

After consulting the Member States,

Whereas:

(1) On 14 February 2020, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports into the Union of aluminium extrusions originating in the People’s Republic of China (‘China’ or the ‘country concerned’) on the basis of Article 5 of the basic Regulation.

(2) The Commission initiated the investigation following a complaint lodged on 3 January 2020 (the ‘complaint’) by the association European Aluminium (the ‘complainant’). The complainant represented more than 25 % of the total Union production of aluminium extrusions. The complaint contained evidence of dumping and of resulting material injury.

(3) On this basis, the Commission considered that the complaint contained sufficient evidence to justify the initiation of the investigation.

(4) Following a request from the complainant supported by the required evidence, the Commission made imports of the product concerned subject to registration under Article 14(5) of the basic Regulation by Commission Implementing Regulation (EU) 2020/1215 (2).

(5) In the Notice of Initiation (3), the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainant, the known Union producers, the national aluminium associations of the Union, the known exporting producers, the authorities of China, the known importers, the known traders and users about the initiation of the investigation and invited them to participate.

(6) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. The parties who so requested were granted an opportunity to be heard.

(7) The Commission received comments from two importers (Airoldi and Kastens and Knauer) on initiation. The Commission considered all comments and addressed them in the sections below.

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

(9) In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the largest representative quantity of production and sales on the Union market which could be investigated within the time available. This sample consisted of the four largest Union producers in terms of production and sales. The selected sample produced and sold a very wide range of products, including the four basic product types (bars and rods, solid profiles, hollow profiles, pipes and tubes) and accounted for just under 10 % of production and sales on the Union market. The Commission invited interested parties to comment on the provisional sample.

(10) European Aluminium submitted that by basing the sample on the largest producers the full extent of the injury might not be identified. This claim was based on the fact that smaller producers represented the largest quantity of production and sales and these companies did not benefit from economies of scale like the largest producers. European Aluminium proposed two additional companies to be included in the sample, which it also claimed enabled a larger coverage of end-user markets.

(11) The Commission assessed the claim and decided to maintain its original sample. Although a few companies which could fulfil the legal criteria to be considered SMEs provided sampling information, they represented only a marginal proportion of production and sale in the Union. The smaller producers mentioned by European Aluminium were in fact too large to qualify as SMEs. Thus, the Commission had no objective reason to revise the sample or to include the two companies proposed by European Aluminium.

(12) Thus, the Commission considered that the sample was representative of the Union industry based on the information available on the case file.

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

(14) Six unrelated importers provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two importers on the basis of the largest representative volume of sales of products under investigation originating from the People’s Republic of China during the investigation period. In accordance with Article 17(2) of the basic Regulation, all known importers concerned were consulted on the selection of the sample. The Commission received no comments in this respect.

(15) One importer (Airoldi Metalli S.p.A.) submitted that major importers, particularly from Germany, were not taking part in the investigation, which would mean that the market analysis performed by the Commission both concerning injury and dumping would not correspond to the economic reality of the industry.

(16) All importers were informed of the initiation of the investigation by the Notice of initiation published in the Official Journal of the European Union and were given the opportunity to cooperate and be sampled. Furthermore, although the cooperation of importers was low, there was co-operation from Germany, including one of the sampled importers.

(17) Therefore, the Commission considered that the sample was representative based on the sampling information available on the case file.

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

(19) Thirty-seven exporting producers in China provided the requested information and agreed to be included in the sample within the stipulated deadline. Two of those exporting producers provided the requested information after the stated deadline. Their replies were taken into account, but not included in the sample at the later stage, as they were not among the largest with regard to volume of exports. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of three cooperating groups of exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available, representing 28,1 % of total exports.

(20) In accordance with Article 17(2) of the basic Regulation, the Commission consulted all known exporting producers of aluminium extrusions, and the authorities of China on the selection of the sample. The Commission did not receive any comment on its preliminary selection.

(21) Twenty-two exporting producers in China indicated their intention to request individual examination under Article 17(3) of the basic Regulation. However, only two exporting producers submitted completed questionnaires within the stipulated deadline. At this stage, given the time constraints, the Commission has not been able to consider those requests. Thus, it will decide whether to grant individual examination at the definitive stage of the investigation.

(23) The Commission received questionnaire replies from the four sampled Union producers, the Union producers’ association, the two sampled unrelated importers, one user (Alstom Holdings), and two groups of exporting producers: the Haomei Group and the Press Metal Group.

(24) The Liaoning Zhongwang Group did not submit any reply to the questionnaire. In light of the above, on 1 April 2020, the Commission informed the Liaoning Zhongwang Group that it intended to apply the provision of Article 18 of the basic Regulation to it. In that letter, the Commission asked the Liaoning Zhongwang Group to submit its comments on the application of Article 18 no later than 13 April 2020. The Liaoning Zhongwang Group did not submit any comments. The sample was reduced to two groups of exporting producers representing 20,9 % of total exports.

(25) In view of the outbreak of COVID-19 and the confinement measures put in place by various Member States as well as by various third countries, the Commission could not carry out verification visits pursuant to Article 16 of the basic Regulation at provisional stage.

(27) Airoldi requested that, because of the COVID-19 outbreak, the investigation should be suspended until the situation had improved, as the confinement measures negatively impacted their rights of defence (for instance because they could not have access to their own records, or could not hold hearings with the Commission).

(28) This request could not be accepted. In particular, there is no legal basis in the basic Regulation allowing the Commission to suspend the investigation. In fact, the Commission is subject to binding deadlines to complete the investigation. Therefore, the Commission has no discretion to take such a decision. Recognising the serious difficulties faced by certain co-operating companies, the Commission issued a Notice on the consequences of the COVID-19 outbreak which provides for as much additional flexibility as possible on deadline extensions, taking into account the legal constraints and the need to comply with the applicable deadlines. Moreover, as described in the previous paragraph, the Commission remotely cross-checked the information provided by parties or held videoconference hearings with interested parties in a satisfactory manner. All these measures ensured that parties, including Airoldi, were able to fully exercise their right of defence and participate in the investigation.

(29) The investigation of dumping and injury covered the period from 1 January 2019 to 31 December 2019 (the ‘investigation period’ or the ‘IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2016 to the end of the investigation period (the ‘period considered’).

(30) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions in China within the meaning of point (b) of Article 2(6a) of the basic Regulation, the Commission considered it appropriate to initiate the investigation having regard to Article 2(6a) of the basic Regulation.

(31) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in China to provide the information requested in Annex III to the Notice of the Initiation regarding the inputs used for producing aluminium extrusions. Thirty-three Chinese exporting producers submitted the relevant information.

(32) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation, the Commission also sent a questionnaire to the Government of the People’s Republic of China (the ‘GOC’). The GOC however did not reply to that questionnaire. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in China.

(33) In the Notice of Initiation, the Commission also invited all interested parties to make their views known, submit information and provide supporting evidence regarding the appropriateness of the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union. Two exporting producers made comments on the existence of significant distortions. These comments are analysed in detail in recitals (74) to (89) below.

(34) In the Notice of Initiation, the Commission also specified that, in view of the evidence available, it might need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks.

(35) On 16 March 2020, the Commission published a first note to the file on the sources for the determination of the normal value (‘the Note of 16 March 2020’) seeking the views of the interested parties on the relevant sources that the Commission might use for the determination of the normal value, in accordance with Article 2(6a)(e) second paragraph of the basic Regulation. In that note, the Commission provided a list of all factors of production such as materials, energy and labour used in the production of the product concerned by the exporting producers. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified at that stage the following as possible representative countries: Brazil, Colombia, Ecuador, Islamic Republic of Iran, Kazakhstan, Malaysia, Mauritius, Mexico, Montenegro, Russian Federation, Serbia, Sri Lanka, Thailand and Turkey.

(36) The Commission gave all interested parties the opportunity to comment. The Commission received comments from two Chinese exporting producers, the complainant and an importer. The GOC did not provide any comments.

(37) The Commission addressed the comments received on the Note of 16 of March in the Second Note on the Sources for the Determination of the Normal Value of 25 June 2020 (‘the Note of 25 June 2020’). The Commission also established a provisional list of factors of production and concluded that, at that stage, it intended to use Turkey as the representative country under Article 2(6a)(a), first indent of the basic Regulation. The Commission invited interested parties to comment and it received comments from the complainant, one exporting producer group and an importer. These comments are analysed in detail in recitals (169) to (173).

(38) The product under investigation is bars, rods, profiles (whether or not hollow), tubes, pipes; unassembled; whether or not prepared for use in structures (e.g. cut-to-length, drilled, bent, chamfered, threaded); made from aluminium, whether or not alloyed, containing not more than 99,3 % of aluminium.

(39) The product under investigation, originating in China, is currently falling under CN codes ex 7604 10 10, ex 7604 10 90, 7604 21 00, 7604 29 10, 7604 29 90, ex 7608 10 00, 7608 20 81, 7608 20 89 and ex 7610 90 90 (TARIC codes 7604101011, 7604109011, 7604109025, 7604109080, 7608100011, 7608100080, 7610909010) (‘the product concerned’). These CN and TARIC codes are given for information only and have no binding effect on the classification of the product.

(40) The product concerned is commonly referred to as ‘aluminium extrusions’, referring to its most common manufacturing process even if it can also be produced by other production processes such as rolling, forging or casting.

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

(45) The Union market for the product under investigation consists of bars and rods, tubes, and solid and hollow profiles manufactured from various aluminium alloys. These products have various dimensions and some products are finished using several methods such as drawing, cutting, shaping etc. These products are all sold into various user industries. This main user industries are building and construction (around 50 %), transport (around 30 %), engineering (around 12 %) and consumer products (around 8 %). The products are either directly sold to the end-user industries, or via distributors.

(46) Imports from the country concerned also consists of the same basic product types, were made of a similar variety of aluminium alloys, dimensions and types of finishing. Price comparisons of the imported product types with those sold by the sampled Union producers showed that over 95 % of imported product types had a direct match to sales by the Union industry. It was therefore clear that competition between imported and Union industry sales was very high.

(47) Many imported and Union industry sales were made to individual specifications of the customer. However, although these products can be considered as bespoke, they all shared the same basic physical, technical and chemical characteristics and should be considered as one product for the present investigation.

(49) The product under investigation has been defined based on physical, technical and chemical characteristics. The definition clearly states that all bars, rods, profiles tubes and pipes containing not more than 99,3 % aluminium are within the scope of the investigation.

(50) The Commission confirms that, contrary to the understanding of certain interested parties, the definition of the product under investigation was not based on production methods. While extrusion is indeed the most common production method, the products meeting the physical, technical and chemical characteristics of the product definition are covered irrespective of the production method.

(51) As regards the alleged extension of the product definition by the term ‘made from aluminium’, this stemmed from an incomplete reading of the product definition. Indeed, the relevant term reads ‘made from aluminium, whether or not alloyed’. This is merely a clarification of the condition ‘containing not more than 99,3 % of aluminium’, that products from both unalloyed aluminium and aluminium alloys are covered, as long as they contain not more than 99,3 % aluminium.

(52) As regards the fact that CN codes are given ‘for information only’ in the Notice of Initiation, the party claimed that inserting such imprecise definition into the provisional or final version of the regulation imposing duties would constitute a breach of general principles of EU law. According to this party, the interpretation of CN codes is not binding and such a general reference would impair the legal certainty concerning the product scope. In this respect, the Commission noted that in the Notice of Initiation the reference to ‘for information only’ was inserted to ensure that the product under investigation is defined in accordance with the product definition contained in the Notice of Initiation, as opposed to the definition contained in the CN codes. Pursuant to Article 14(6) of the basic Regulation, the Commission created a number of TARIC codes on initiation of this investigation, where the CN codes indicated had a wider scope than the product concerned. These TARIC codes, which can be seen in recital (39), identify the product concerned in the operative part of this provisional Regulation.