Commission Implementing Regulation (EU) 2021/1474 of 14 September 2021 extending the definitive anti-dumping duty imposed by Implementing Regulation (EU) 2015/2384 and Implementing Regulation (EU) 2017/271 on imports of certain aluminium foil originating in the People’s Republic of China to imports of certain aluminium foil consigned from Thailand, whether declared as originating in Thailand or not

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 13 thereof,

Whereas:

(1) In October 2009, by Council Regulation (EC) No 925/2009, (2) the Council imposed a definitive anti-dumping duty on imports of certain aluminium foil (‘jumbo rolls’) originating in, amongst others, the People’s Republic of China (‘PRC’) following an anti-dumping investigation (‘the original investigation’). The measures took the form of an ad valorem duty ranging between 6,4 % and 30,0 %.

(2) In December 2015, by Implementing Regulation (EU) 2015/2384, (3) the European Commission (‘the Commission’) maintained the definitive measures (‘the measures in force’) on imports from the PRC following an expiry review pursuant to Article 11(2) of the basic Regulation (‘the review investigation’).

(3) In February 2017, by Implementing Regulation (EU) 2017/271, (4) the Commission extended the measures in force to imports of slightly modified certain aluminium foil from the PRC, following an anti-circumvention investigation pursuant to Article 13(3) of the basic Regulation (‘the previous anti-circumvention investigation’).

(4) The Commission received a request pursuant to Articles 13(3) and 14(5) of the basic Regulation to investigate the possible circumvention of the anti-dumping measures imposed on imports of certain aluminium foil originating in the PRC by imports consigned from Thailand, whether declared as originating in Thailand or not, and to make such imports subject to registration.

(5) The request was lodged on 9 November 2020. The applicant requested anonymity both at application stage and for the duration of the investigation. The applicant duly substantiated its request, which was accepted by the Commission as it considered there were sufficient grounds to grant confidentiality of its identity.

(6) The request contained sufficient evidence of a change in the pattern of trade involving exports from the PRC and Thailand to the Union that had taken place following the imposition of measures on jumbo rolls. This change appeared to stem from the consignment of jumbo rolls via Thailand to the Union after having undergone assembly operations in Thailand. The request also contained sufficient evidence showing that such assembly operations constituted circumvention as Chinese parts accounted for more than 60 % of the total value of the assembled product, while the value added during the assembly operation was lower than 25 % of the manufacturing cost.

(7) Furthermore, the request contained sufficient evidence that the practice described above was undermining the remedial effects of the existing anti-dumping measures in terms of quantities and prices. In addition, there was sufficient evidence that the prices of jumbo rolls consigned from Thailand were dumped in relation to the normal value previously established for jumbo rolls.

(8) The product concerned is aluminium foil of a thickness of not less than 0,008 mm and not more than 0,018 mm, not backed, not further worked than rolled, in rolls of a width not exceeding 650 mm and of a weight exceeding 10 kg, classified on the date of entry into force of Implementing Regulation (EU) 2015/2384 under CN code ex 7607 11 19 (TARIC code 7607111910), aluminium foil of a thickness of not less than 0,007 mm and less than 0,008 mm, regardless of the width of the rolls, whether or not annealed, classified on the date of entry into force of Implementing Regulation (EU) 2017/271 under CN code ex 7607 11 19 (TARIC code 7607111930), aluminium foil of a thickness of not less than 0,008 mm and not more than 0,018 mm and in rolls of a width exceeding 650 mm, whether or not annealed, classified on the date of entry into force of Implementing Regulation (EU) 2017/271 under CN code ex 7607 11 19 (TARIC code 7607111940), aluminium foil of a thickness of more than 0,018 mm and less than 0,021 mm, regardless of the width of the rolls, whether or not annealed, classified on the date of entry into force of Implementing Regulation (EU) 2017/271 under CN code ex 7607 11 19 (TARIC code 7607111950), and/or aluminium foil of a thickness of not less than 0,021 mm and not more than 0,045 mm, when presented with at least two layers, regardless of the width of the rolls, whether or not annealed, classified on the date of entry into force of Implementing Regulation (EU) 2017/271 under CN code ex 7607 11 90 (TARIC codes 7607119045 and 7607119080) and originating in the People’s Republic of China (‘the product concerned’). This is the product to which the measures in force currently apply.

(9) The product under investigation is the same as that defined in the preceding recital, currently falling under CN codes ex 7607 11 19 (TARIC codes 7607111910, 7607111930, 7607111940, 7607111950) and ex 7607 11 90 (TARIC codes 7607119044, 7607119046, 7607119071, 7607119072), but consigned from Thailand, whether declared as originating in Thailand or not (TARIC additional code C601), (‘the product under investigation’).

(10) The investigation showed that jumbo rolls exported from the PRC to the Union and jumbo rolls consigned from Thailand, whether originating in Thailand or not, have the same basic physical and chemical characteristics and have the same uses, and are therefore to be considered as like products within the meaning of Article 1(4) of the basic Regulation.

(11) Having determined, after having informed the Member States, that sufficient evidence existed for the initiation of an investigation pursuant to Article 13(3) of the basic Regulation, the Commission initiated an investigation by Commission Implementing Regulation (EU) 2020/2162 on 21 December 2020 (5) (‘the initiating Regulation’) and made imports of jumbo rolls consigned from Thailand, whether declared as originating in Thailand or not, subject to registration in accordance with Article 14(5) of the basic Regulation.

(12) After initiation, Dingheng New Materials Co., Ltd, Thai Ding Li New Materials Co., Ltd and their related companies (together ‘the Dingsheng Group’) argued that the initiation of the investigation was unwarranted. (6)

(13) According to the Dingsheng Group, the request leading to the opening of the investigation did not contain the required prima facie evidence. It claimed that the information in the request was outdated, as it was based on a period until December 2019, while the investigation was initiated in December 2020. The Dingsheng Group argued that this is in contrast with Article 6(1) of the basic Regulation, which states that the investigation period ‘shall, normally, cover a period of no less than six months immediately prior to the initiation of proceedings’.

(14) In addition, the Dingsheng Group claimed that the export statistics reported in the request were inaccurate and unreliable. These statistics were based on CN codes and HS codes (7), which include a number of different products other than those relevant to the investigation and thus cannot be considered sufficient evidence.

(15) The Commission disagreed. With regard to the reference period used in the request, Article 6(1) of the basic Regulation concerns the investigation period to be used during the investigation, not the period on which the request is based. The Dingsheng Group has not argued that the use of more recent data would have led to a different conclusion with regard to the alleged circumvention practices. With regard to the customs statistics on which the request was based, the applicant provided those statistics that were reasonably available to it for the purpose of the request, as required by Article 5(2) of the basic Regulation. In any case, when analysing the request, the Commission cross-checked the data provided by the applicant against statistics at 10-digit TARIC level and including data until September 2020. This analysis confirmed the allegations in the request.

(16) Following disclosure the Dingsheng Group reiterated its claim that the request was based on outdated information and that Article 6(1) in conjunction with Article 13(3) of the basic Regulation requires the Commission to carry out an overall examination of the accuracy of the request, including whether the information contained therein is up-to-date. Therefore, according to the Dingsheng Group, the Commission should have requested the applicant to update the figures contained in the request with more recent information. Otherwise, ‘applicants requesting the initiation of an anti-circumvention investigation would be free to base the request on the period that suits better to them, without any limitation’.

(17) In addition, the Dingsheng Group claimed that, although the Commission cross-checked the information provided by the applicant with more recent TARIC level data, there is no trace in the file of such cross-check, nor is it mentioned in the initiating Regulation, which refers only to the evidence provided in the request. According to the Dingsheng Group the fact that the use of more recent data would have led to the same conclusion is irrelevant for the determination of whether the request satisfied the standard of evidence requested by the law to initiate the proceeding.

(18) As explained in recital (15) above, the reference to Article 6(1) of the basic Regulation is irrelevant for the data used in the request, since it refers to the period used during the investigation, not the request. Furthermore, Article 13(3) of the basic Regulation requires that the initiation of the investigation is based on ‘sufficient evidence’, the determination of which leaves a certain level of discretion to the Commission. In any event, as explained above in recitals (6)-(7), this criteria was fulfilled. Article 5(2) of the basic Regulation requires an applicant to base the request on those statistics reasonably available to the applicant. This does not open the door for applicants to pick and choose the most convenient period, as suggested by the Dingsheng Group. The cross-check of slightly more recent and specific data carried out by the Commission before initiation showed that there were no indications that the information used in the request was outdated, rather the contrary since using more recent data would have shown similar trends and would have led to the same conclusions. The Commission therefore rejected these claims.

(19) The Dingsheng Group also claimed that the available evidence was not sufficient to demonstrate the existence of circumvention. Due to the alleged unreliability of the statistics mentioned in recital (14), the Dingsheng Group claimed that these statistics cannot constitute evidence of the change in the pattern of trade as required by Article 13(1) of the basic Regulation. In addition, it was argued that the requirement of the existence of injury in terms of both quantities and prices undermining the remedial effects of the original anti-dumping investigation was not fulfilled since the underlying analysis was based on the abovementioned allegedly unreliable data and therefore inconclusive. In addition, the calculations in the request were based on only one of the two relevant CN codes. Finally, the injury margin calculated in the request was negligible, according to the Dingsheng Group, and thus not convincing evidence of any undermining of the effects of the measures in force. The additional evidence provided by the applicant in the request, such as quotes from EU producers, was claimed to be an invalid basis for the injury calculations in the request.

(20) The Commission disagreed. Regarding the alleged unreliability of the data used for the analysis, the applicant based its analysis on the data that was reasonably available to it, as set out in recital (15), and the evidence thus provided was considered sufficient to initiate the investigation. The fact that calculations were based on only one of the CN codes (7607 11 19) did not undermine the accuracy of the request. As pointed out by the applicant in its rebuttal of Dingsheng Group’s submission, the General Court held that ‘the basic regulation does not require, where the product concerned contains several types of products, as in the present case, that the complaint should provide information on all those product types’. (8) It was not contested by the Dingsheng Group that this particular CN code covered the most representative product types. In fact, import data from Comext at 10-digit TARIC level showed that during the investigation period there were no imports at all of the products falling under the other CN code (7607 11 90). Therefore, including that CN code would not have changed the outcome of the analysis in the request.

(21) With regard to the level of the injury margin, the margin found by the applicant of 3,2 % was considered sufficient to conclude at initiation that the remedial effects of the duty are being undermined in terms of the prices of the like product. As the applicant set out in its comments to Dingsheng Group’s submission, the product under investigation is very price sensitive, with competition largely based on price. In such a context, an injury margin of 3,2 % can be considered to undermine the remedial effect of the duties in terms of prices, in particular in a situation where the quantities of the imports increased significantly.

(22) Concerning the data used for the undercutting calculations, the applicant based its calculations on the information that was reasonably available to it, which in this case were several quotes from suppliers in combination with London Metal Exchange (‘LME’) prices. In its submission, the Dingsheng Group did not put forward a more reasonable methodology for performing the calculations, which could have been available to the applicant. The Commission therefore considered that the methodology used was sufficiently reliable to perform the necessary calculations in the request.

(23) Following disclosure, the Dingsheng Group claimed that the Commission, by stating that ‘the Dingsheng Group did not put forward a more reasonable methodology for performing the calculations’, tried to reverse the burden of proof onto the interested parties. Instead of examining the accuracy and adequacy of the information provided by the applicant, the Commission ‘seemingly accepted the data provided in the request at face value, without any further examination’.

(24) The Commission rejected these claims. As with all requests for initiation of an investigation, the Commission thoroughly examined all data and other evidence provided by the applicant and considered that the data used was reasonable and sufficiently accurate to justify the initiation of the investigation. Moreover, the Commission objected to the inference made by the Dingsheng Group that it had tried to reverse the burden of proof. The Commission had simply taken note of the fact that the Dingsheng Group did not put forward an alternative method to substantiate its claim that the methodology used by the applicant had been unreliable.

(25) The Dingsheng Group also argued that the normal value was calculated using the normal value of the review investigation, thus not taking into account the extended product scope of the previous anti-circumvention investigation. In addition, it stated that the export price used by the applicant in the request was based on Eurostat statistics for a CN code that did not concern jumbo rolls, but rather small rolls (9). The Dingsheng Group thus claimed that the dumping margin in the request was unreliable as it was based on incorrect figures.

(26) The Commission disagreed. To determine the existence of dumping, Article 13(1) of the basic Regulation requires a comparison with the normal value previously established for the like product. In accordance with this provision, the applicant used the normal value as established in the review investigation. Moreover, the inclusion of the normal values of the previous anti-circumvention investigation as well would only have increased the dumping margin, since these normal values were higher than the ones applied in the review investigation. Accordingly, the Commission considered the use of the normal value as established in the review investigation a conservative estimate for the calculation of the dumping margin.

(27) After disclosure, the Dingsheng Group repeated its claim that the extended product scope should have been taken into account in the calculation of the normal value in the request, since Article 13(1) of the basic Regulation requires considering all normal values previously established, not only those of the last review investigation. However, Article 13(1) of the basic Regulation refers to ‘the normal values previously established for the like product’. There is no requirement that all normal values from all previous investigations need to be taken into account. In any event, as stated in recital (26), there was sufficient evidence based on the normal values from the review investigation alone, which represent the majority of imports (see recital (20)) to justify the initiation of the investigation. The Commission therefore rejected this claim.

(28) The claim of the Dingsheng Group about the use of Eurostat statistics for small rolls to calculate the export price of jumbo rolls was factually incorrect. Indeed the applicant mistakenly referred to the CN code for small rolls in Annex 10 to the request, but a closer look at the Eurostat extraction that was part of the request in Annex 3 showed that the export price used was correctly based on the extraction for CN code 7607 11 19, which is jumbo rolls. As stated in recital (20) above, this code includes the most representative product types.

(29) Based on the reasoning set out in recitals (12)-(28) above, the Commission rejected the arguments put forward by the Dingsheng Group and considered that the request contained sufficient evidence to warrant the initiation of the investigation.

(30) The investigation period covered the period from 1 January 2016 to 30 June 2020 (‘the investigation period’ or ‘IP’). Data were collected for the IP to investigate, inter alia, the alleged change in the pattern of trade following the imposition of the measures on the product concerned as well as the extension of the measures to the slightly modified product by Implementing Regulation (EU) 2017/271, and the existence of a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty. More detailed data were collected for the period from 1 July 2019 to 30 June 2020 (‘the reporting period’ or ‘RP’) in order to examine if imports were undermining the remedial effect of the measures in force in terms of prices and/or quantities and the existence of dumping.