Commission Implementing Regulation (EU) 2021/1930 of 8 November 2021 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of birch plywood originating in Russia

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 9(4) thereof,

Whereas:

(1) On 14 October 2020, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of birch plywood originating in Russia (‘the country concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 31 August 2020 by the Woodstock Consortium (‘the complainant’). The complaint was made by the Union industry of birch plywood in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(3) The Notice of Initiation inadvertently omitted a section concerning the procedure for the assessment of Union interest. While this omission did not affect interested parties’ right to make submissions regarding the Union interest, it was considered appropriate to address this omission as a matter of procedural transparency. It was therefore amended on 11 December 2020 (2).

(4) Since the conditions laid down in Article 14(5a) of the basic Regulation were not met, imports of the product concerned were not made subject to registration. No party made any comments on this point.

(5) In accordance with Article 19a of the basic Regulation, on 12 May 2021 the Commission provided parties with a summary of the proposed provisional duties and details about the calculation of the dumping margins and the margins adequate to remove the injury to the Union industry. One party submitted valid comments which were taken into account.

(6) On 11 June 2021, the Commission imposed a provisional anti-dumping duty on imports of birch plywood originating in Russia by Commission Implementing Regulation (EU) 2021/940 (3) (‘the provisional Regulation’).

(7) The investigation of dumping and injury covered the period from 1 July 2019 to 30 June 2020 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2017 to the end of the investigation period (‘the period considered’).

(8) Following the disclosure of the essential facts and considerations on the basis of which a provisional anti-dumping duty was imposed (‘the provisional disclosure’), the complainants, other Union producers, the sampled exporting producers, two non-sampled exporting producers, and numerous other interested parties made written submissions making their views known on the provisional findings.

(9) The parties who so requested were granted an opportunity to be heard. Hearings took place with the three sampled exporting producers, two non-sampled exporting producers, a non-sampled Union producer, the complainants and seventeen importers and users.

(10) After provisional disclosure, Sveza Group made a request for additional disclosure arguing that the provisional disclosure was not sufficiently detailed and lacked explanations on a number of points regarding the calculation of the dumping margin and import statistics. Contrary to the allegations in the request and as explained in its reply dated 21 June 2021, the Commission considered that the provisional disclosure, including the company specific pre-disclosure, provided a complete set of information allowing the company to comment on the provisional disclosure as well as to exercise its rights of defence.

(11) The Commission continued to seek and verify all the information it deemed necessary for its final findings. When reaching its definitive findings, the Commission considered the comments submitted by interested parties and revised its provisional conclusions where appropriate.

(12) The Commission informed all interested parties of the essential facts and considerations on the basis of which it intended to impose a definitive anti-dumping duty on imports of birch plywood originating in Russia (‘final disclosure’). All parties were granted a period within which they could make comments on the final disclosure.

(13) The comments submitted by the interested parties were considered and taken into account where appropriate in this regulation.

(14) After final disclosure, Sveza Group reiterated its claims that its rights of defence had not been observed at provisional stage as the calculation of the provisional anti-dumping duty lacked sufficient reasoning. The Commission considered that the company was able to fully exercise its rights of defence on the basis of the information it had received in the provisional disclosure, coupled with the pre-disclosure. In any case, the company had ample opportunities to comment on the pre-disclosure, provisional and definitive disclosures and in all of these occasions it submitted comments which were duly addressed in this regulation. Consequently, the claim was rejected.

(15) Following final disclosure several interested parties requested the suspension of the anti-dumping measures pursuant Article 14(4) of the basic Regulation alleging market changes after the end of the investigation period.

(16) In this respect, the Commission noted that it had already prior to the final disclosure, on 18 August 2021, on its own initiative requested post-IP information from the Union industry and other interested parties. The Commission noted that the decision whether a suspension of measures under Article 14(4) is warranted or not will be taken in due course.

(17) Following the final disclosure, Emiliana Imballagi, No-Nail Boxes and Industria Compensati Moglia, users and importers of birch plywood, requested the Commission to apply Article 10(2) of the basic Regulation and not to collect provisional duties for imports of square shaped plywood due to the lack of capacity of the Union’s industry to supply square shaped plywood. The request of Industria Compensati Moglia included all types of birch plywood due to the general lack of capacity of the Union industry to satisfy Union’s consumption.

(18) With regard to the alleged lack of supply, the Commission noted, as established in recital (224), that the Union market can be sufficiently supplied from various sources including union industry and Russian imposts. Therefore, in view of the established material injury caused by Russian dumped imports, the conclusions set out in section 4.5, the Commission determined that provisional duties were to be collected in full and, therefore, the request was rejected.

(19) In the absence of comments concerning sampling, recitals (12) to (23) of the provisional Regulation were confirmed.

(20) Regarding the individual examination requests as mentioned in recital (24) of the provisional Regulation, one exporting producer reiterated that the Commission can carry out the individual examination or as a last option establish an individual injury margin. (4) The resources required for such an assessment would be limited: the verification would be limited to export prices and the analysis is not the same as the analysis of the dumping margin. This party also claimed that the Commission has the obligation to carry out the individual examination.

(21) In this respect, the Commission noted that Article 17(3) of the basic Regulation does not provide for individual injury margin calculations as it states that “an individual margin of dumping shall (…) be calculated for any exporter or producer” [emphasis added].

(22) As explained in recital (24) of the provisional Regulation, the Commission received three complete replies within the deadline of companies that requested individual examination. However, the Commission concluded that the examination of these requests, also at definitive stage, of the investigation would have been unduly burdensome, in view of the several exporting producers already included in the sample, and would prevent the proper completion of the investigation in good time. Therefore, the Commission decided not to grant individual examination to any of the companies in question.

(23) In the absence of comments concerning the investigation period ('IP') and the period considered, recital (28) of the provisional Regulation was confirmed.

(24) As explained in recital (38) and (39) of the provisional Regulation, a Russian producer, Segezha, claimed that the product scope should be extended to include not only birch plywood but also pine, poplar, okoumé and beech plywood. It was argued that there is direct competition and interchangeability between the said woods, plywood and birch plywood. Following provisional disclosure, the same party reiterated its request and claimed that the Commission failed to analysis available information, submitted by national plywood associations of other types of wood, concerning the degree of substitution.

(25) The Commission recalled, as already mentioned in recital (201) of the provisional Regulation, that the national associations (of France, Italy and Spain) representing plywood producers of poplar, pine and other types of wood, in their submissions emphasize that plywood made of different woods are different products, which cannot be considered or grouped as a single product.

(26) Similarly, the Commission reiterated its position and rejected the claim given that pine, poplar, okoumé and beech plywood do not share the same basic physical, technical and chemical characteristics with birch plywood. The fact that in some applications, alternative products and materials could be used, with an undetermined degree of substitution capacity, does not change the nature of the physical, technical and chemical differences between the product concerned and the said products.

(27) At provisional stage, one user, Emiliana Imballaggi S.p.A., and two Russian exporting producers, Sveza Group and Vlas Truda, requested the exclusion of square-shaped birch plywood with the length and width of five feet (1 525 × 1 525 mm). The Commission, rejected the exclusion requests as explained in recital (37) of the provisional Regulation.

(28) Following provisional disclosure, further comments were received concerning the decision of rejecting the exclusion request. Specifically it was argued that i) a difference in shape is already a difference in physical and technical characteristics, ii) square-shaped plywood and rectangular-shape plywood are not interchangeable since square-shaped cannot be used for applications where rectangular shaped is needed and square-shaped cannot be processed into rectangular-shaped and iii) Union producers do not manufacture square-shaped plywood. These arguments were repeated by several parties after the final disclosure. Emiliana Imballagi and No-Nail Boxes, users of birch plywood, also claimed the Union interest as basis for the exclusion, without which the viability of user’s businesses (eg. foldable wooden boxes and crates producers) would not be guaranteed.

(29) The Commission confirmed its decision that square-shaped plywood cannot be excluded from the product scope since it, notwithstanding a difference in dimensions and shape, shares the same basic physical, technical and chemical characteristics with the rectangular shaped plywood. As regards the use, while for certain specific applications there is no immediate interchangeability, there are many other applications in which square and rectangular plywood is further cut and thus the original shape is modified, where there is a degree of substitutability in which square-shape exercises competitive pressure on rectangular-shaped birch plywood. Finally, the investigation confirmed that the Union industry does manufacture and sell square-shaped plywood, albeit in relatively small volumes and generally not as a commodity but rather as a niche product on specific orders. Given these findings, the Commission concluded that the claim that the exclusion would be in interest of the Union was without merit. Therefore, the Commission rejected this claim.

(30) In the absence of any other comments with respect to the product scope, the Commission confirmed the conclusions set out in recitals (32) to (33) of the provisional Regulation.

(31) Following provisional disclosure, the Commission received written comments from the three sampled exporting producers and from the complainant on the provisional dumping findings.

(32) The details of the calculation of the normal value were set out in recitals (44) to (57) of the provisional Regulation. In the absence of any comments with respect to this section, the Commission confirmed its provisional conclusions.

(33) The details of the calculation of the export price were set out in recitals (58) and (60) of the provisional Regulation. In the absence of any comments with respect to this section, the Commission confirmed its provisional conclusions.

(34) The details concerning the comparison of the normal value and the export price were set out in recitals (61) to (71) of the provisional Regulation.

(35) The exporting producer UPG reiterated its claim for an adjustment increasing the export price in order to reflect the amounts reimbursed under the Scheme described in recital (63) of the provisional Regulation.

(36) The Commission concluded that, since the party did not provide any new evidence substantiating their claim that would change the Commission’s assessment, the provisional findings set out in recital (64) of the provisional Regulation were confirmed and the claim was rejected.

(37) Following final disclosure, the exporting producer reiterated the claim that the transport costs reimbursed under the Scheme should have been considered when adjusting the export price under Article 2(10)(e) of the basic Regulation.

(38) The Commission considered that it complied with the provisions of Article 2(10)(e) of the basic Regulation as it deducted, among others, directly related transport costs incurred when delivering the product concerned to the first independent customer. Whether those costs were subsequently reimbursed or not does not fall within the scope of Article 2(10)(e) of the basic Regulation. Therefore, the claim was rejected.

(39) The exporting producer further argued that Article 2(10)(k) of the basic Regulation does not preclude the Commission from taking into consideration an export subsidy. The exporting producer reiterated that pricing decisions on the export markets and the profitability of those sales were impacted by the subsidy. Therefore, the Commission allegedly committed a manifest error of assessment and acted in breach of Article 2(10)(k) of the basic Regulation.

(40) The Commission noted that the party did not provide any new evidence substantiating its claim. In any case, the Commission re-examined carefully the file and it did not find any evidence showing that the exporting producer’s customers consistently paid different prices on the domestic market because of the alleged difference in reimbursement of transport costs by the Government of the Russian Federation between domestic and export sales, in accordance with Article 2(10)(k) of the basic Regulation.

(41) Furthermore, the Commission did not address the issue of the subsidy as such but considered whether the scheme impacted the comparability between export and domestic prices in a way that the domestic price should be adjusted. Therefore, the Commission rejected the claim that the reimbursement of transport costs of the export prices should be considered for comparison purposes.

(42) Moreover, the same exporting producer assumed that the Commission accepted its claim by not removing the reimbursement of transportation costs from table G of the anti-dumping questionnaire (i.e. the profit and loss table).

(43) The Commission considered that, irrespective of the removal of the reimbursement of transportation costs in the relevant tables that were submitted by UPG, the rejection of the claim was clearly explained both in the specific company disclosure and in recital (64) of the provisional Regulation. Therefore, the claim was rejected.

(44) Following final disclosure, the exporting producer claimed that the Commission incorrectly adjusted table G of the anti-dumping questionnaire. The party reiterated that the reimbursement of transport costs on exports should be allocated to the export sales as it is conditional upon incurring transport costs when exporting.

(45) As described in recital (43) above, the purpose of table G is to establish the profitability for each market segment. However, for this issue there is no direct link between table G and the assessment made under Article 2(10)(e) and (k) of the basic Regulation. As described in recitals (38)-(41) above, the Commission did not consider that the adjustment was warranted. Therefore, the fact that the subsidy is reported or not in Table G for export sales has no bearing. Therefore, the claim was rejected.

(46) UPG also claimed that the Commission made a manifest error by allocating the commission paid to its related trader to the actual services provided (i.e. the related trader claimed that its tasks concerned all type of sales and not only domestic sales). The Commission should have allocated the commission only to the domestic sales in accordance with the commission agreement.

(47) The Commission took into consideration the factual situation between the two related parties. The commission paid concerned all type of sales. Since the party did not provide any new evidence substantiating its claim, the provisional findings set out in recital (65) of the provisional Regulation were confirmed.

(48) Finally, UPG claimed in case the Commission would maintain its decision to allocate the amount of commissions paid to both domestic and export sales, also the sales to third countries and not only the sales to the EU should be used for the allocation of the commissions. The Commission accepted that claim and allocated the commissions paid to all sales, including the sales to third countries.

(49) Following final disclosure, UPG reiterated the claim that the re-allocation of commissions paid to a related party distorted the facts. Moreover, UPG claimed that the Commission did not substantiate its allegation with evidence.

(50) With regard to the evidence, the Commission referred to two submissions made by UPG where it was stated that a significant proportion of the EU sales (between 75 and 95 %) were made through a related party, which however received no commission for such sales, though it had the same selling functions on the domestic and EU markets. (5) Moreover, following final disclosure, UPG reiterated that the commissions received based on domestic sales were sufficient to cover all functions carried out by the related party on the domestic and export markets. The Commission thus considered that the functions of the related party covered not only the domestic sales but also export sales. Therefore, the commissions paid were rightly re-allocated to all type of sales. On that basis, the claim was rejected.