Commission Implementing Regulation (EU) 2022/402 of 9 March 2022 imposing a definitive anti-dumping duty on imports of certain aluminium foil originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

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 11(2) thereof,

Whereas:

(1) Following an anti-dumping investigation, the Council with Regulation (EC) No 925/2009 (2), imposed anti-dumping duty on certain aluminium foils originating in Armenia, Brazil and China (‘the original investigation’). Further to an expiry review pursuant to Article 11(2) of the basic Regulation, the European Commission (‘Commission’) with Implementing Regulation (EU) 2015/2384 (3) extended the measures on 17 December 2015 for exports from China and terminated the measures for Brazil (‘the previous expiry review investigation’). The anti-dumping measures against imports originating in Armenia expired on 7 October 2014.

(2) As a result of an anti-circumvention investigation in accordance with Article 13 of the basic Regulation, the Commission with Implementing Regulation (EU) 2017/271 (4) extended the anti-dumping duty imposed on imports of certain aluminium foils originating in the People’s Republic of China to imports of slightly modified certain aluminium foil.

(3) With Implementing Regulation (EU) 2021/1474 (5) the Commission, following a second anti-circumvention investigation in accordance with Article 13 of the basic Regulation, extended the 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.

(4) Following the publication of a Notice of impending expiry (6), the Commission received a request for a review pursuant to Article 11(2) of the basic Regulation.

(5) The request for review was lodged on 10 September 2020 by Union producers, representing around 90 % of the total Union production of certain aluminium foil (‘the applicants’). The request for review was based on the grounds that the expiry of the measures would be likely to result in continuation or recurrence of dumping and injury to the Union industry.

(6) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, the Commission, on 17 December 2020, by Notice, published in the Official Journal of the European Union (7) (‘the Notice of Initiation’), initiated an expiry review with regard to imports of certain aluminium foil originating in the People’s Republic of China (‘PRC’ or ‘the country concerned’) on the basis of Article 11(2) of the basic Regulation.

(7) The investigation of a likelihood of continuation or recurrence of dumping covered the period from 1 October 2019 to 30 September 2020 (‘the review investigation period’ or ‘RIP’). The examination of trends relevant for the assessment of a likelihood of continuation or recurrence of injury covered the period from 1 January 2017 to the end of the review investigation period (‘the period considered’).

(8) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the applicants, other known Union producers, the known exporting producers and the Chinese authorities, known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(9) 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.

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

(11) 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 production and sales volumes of the like product in the Union. This sample consisted of three Union producers. The sampled Union producers accounted for around 77 % of the estimated total Union production and 75 % of the estimated sales volume of the like product in the Union. The Commission invited interested parties to comment on the provisional sample. The Commission received no comments. The sample was therefore considered representative of the Union industry.

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

(13) Only one unrelated importer provided the requested information and agreed to be included in the sample. Therefore, sampling was not necessary.

(14) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in the PRC 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 the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(15) Two exporting producers in the country concerned came forward and provided the requested information. However, one of them declared it did not produce nor export the product under review during the review investigation period and therefore it did not wish to cooperate with the investigation. In view of the low number of replies, the Commission decided that sampling was not necessary.

(16) The Commission sent a questionnaire concerning the existence of significant distortions in the PRC within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’).

(17) At the initiation the questionnaire was made available in the file for inspection by interested parties and on DG Trade’s website (8).

(18) Questionnaire replies were received from the three sampled Union producers. The exporting producer that came forward during the sampling did not provide a questionnaire reply. No reply was received from any of the unrelated importers. None of the users provided a questionnaire or came forward during the investigation. The GOC did also not provide a questionnaire reply.

(19) Because there was no cooperation from the Chinese exporting producers or the GOC, the findings with regard to dumping and injury were made on the basis of facts available pursuant to Article 18 of the basic Regulation. The Mission of the People’s Republic of China to the European Union was informed accordingly. No comments were received.

(20) The Commission sought all the information deemed necessary for the investigation. In accordance with the Notice on the consequences of the COVID-19 outbreak on anti-dumping and anti-subsidy investigations (9), remote crosschecking (‘RCC’) processes by videoconference were carried out with the following companies:

Union producers

— Alcomet AD, Shumen, Bulgaria

— Slim Aluminium SpA, Cisterna di Latina, Italy

— Symetal, Athens, Greece

(21) The product under review 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 and originating in the People’s Republic of China, currently falling under CN code ex 7607 11 19 (TARIC code 7607111910) (‘the product under review’, ‘aluminium household foil’ or ‘AHF’).

(22) The product under review is used for multi-purpose short-life wrapping in households, catering business, foodstuff industry and floristry retail business.

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

(25) In accordance with Article 11(2) of the basic Regulation, the Commission examined whether the expiry of the measure in force would be likely to lead to a continuation or recurrence of dumping from the PRC.

(26) During the review investigation period, although imports of the product under review from the PRC continued, they only reached 1 588 tonnes, representing 2 % of the market share of the Union consumption. Most of these exports were made under the inward processing regime (10) and hence were subject to neither anti-dumping nor customs duty. The Commission concluded that the volume of imports was sufficiently representative to examine whether dumping continued during the review investigation period.

(27) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to the PRC, the Commission initiated the investigation with regard to the exporting producers from this country on the basis of Article 2(6a) of the basic Regulation.

(28) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, the Commission invited in the Notice of Initiation all producers in the PRC to provide information regarding the inputs used for producing the product under review. No producer submitted this information.

(29) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, under point 5.3.2 of the Notice of Initiation the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding 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. No submissions were received.

(30) No questionnaire reply was received from the GOC. 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 significant distortions in the PRC. The Commission informed that if findings are based on facts available in accordance with Article 18, the result may be less favourable to the party than if it had cooperated. No comments were received from the GOC.

(31) In point 5.3.2 of the Notice of Initiation, the Commission specified that, in view of the evidence available at that stage of the investigation, possible representative countries for the purpose of determining the normal value based on undistorted prices or benchmarks pursuant to Article 2(6a)(a) of the basic Regulation for the PRC were Brazil and Turkey. The Commission further stated that it would examine other possibly appropriate representative countries in accordance with the criteria set out in Article 2(6a)(a) first indent of the basic Regulation.

(32) On 29 January 2021, the Commission issued a first note for the file (‘the First FoP Note’) and informed interested parties on the relevant sources it intended to use for the determination of the normal value. In the First Note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of the product under review, based on the request of review and a submission from the applicants. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission at that stage of the investigation identified three possible representative countries, namely Brazil, the Russian Federation (‘Russia’) and Turkey. The Commission invited interested parties to submit comments. No comments on the First Note were received.

(33) On 28 May 2021, the Commission issued a second note for the file (‘the Second FoP Note’). In this note the Commission established the list of factors of production and informed interested parties on the relevant sources it intended to use for the determination of the normal value. The Commission selected Turkey as a representative country. In the absence of an appropriate representative producer of the product under review in any of the possible representative countries, the Commission considered that data of companies producing a product in the same general category as the product under review could be appropriate to source the financial data (selling, general and administrative costs (SG&A) and profits). Therefore, the Commission informed interested parties that it would establish (‘SG&A’) and profits based on financial information from five Turkish companies producing aluminium extrusion products. The Commission considered that aluminium extrusions are products having technical characteristics closely resembling those of the product under review, and they also share a similar source material composition. These products are often produced by the same companies as the product under review or within the same group. Given the similarities between the product under review and aluminium extrusion products, as well as the fact that profitable producers of aluminium extrusions have been identified, such data is deemed representative of the situation of companies producing the product under review and hence adequate for establishing normal value in accordance with Article 2(6a)(a) of the basic regulation.

(34) The Commission invited interested parties to comment, but it received no comments on the Second Note.

(35) In recent investigations concerning the aluminium sector in the PRC (11), the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

(36) In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles (12). In particular, the Commission concluded that in the aluminium sector not only does a substantial degree of ownership by the GOC persists in the sense of Article 2(6a)(b), first indent of the basic Regulation (13) but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation (14). The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs, have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces (15). Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC (16). In the same vein, the Commission found distortions of wage costs in the aluminium sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation (17), as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRC (18).

(37) Like in previous investigations concerning the aluminium sector in the PRC, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in the PRC, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the request, as well as in the Commission Staff Working document on significant distortions in the economy of the People’s Republic of China for the purposes of trade defence investigations (19) (‘the Report’), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in the PRC’s economy in general, but also the specific market situation in the relevant sector including the product under review. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in the PRC as also found by its previous investigations in this respect.

(38) The request in this case referred to the Report, in particular to the sections concerning the aluminium sector and state-owned enterprises, as well as to previous Commission investigations of downstream products (20). Moreover, the request referred to independent studies which conclude that the Chinese aluminium market is distorted due to substantial subsidization, such as the 2019 OECD study “Measuring distortions in international markets: the aluminium value chain” (21) and the 2017 report of the German non-ferrous metals industry association WVMetalle (22). These studies were placed in the investigation file at the initiation stage. No comments on the studies were provided by any interested party. The request emphasized that those studies document the significant presence of SOEs in the Chinese aluminium sector, provision of cheap raw material inputs to aluminium producers, as well as the existence of a taxation regime which effectively distorts the market. Referring again to the Report and to previous Commission investigation, the request further pointed out that Chinese authorities set prices for coal, electricity, natural gas and oil, which distorts the energy prices in the aluminium sector. In the same vein, the request referred to distortions of wages in the aluminium sector. Moreover, the request alleged distortions of machinery costs, in particular given that the aluminium sector is considered an “encouraged sector” by the Chinese authorities and is as such listed in the Chinese Government’s Guidance Catalogue for the Industrial Structure Adjustment, including its latest 2019 iteration (23). The request further pointed to distortions of financial costs due to the overall set-up of the Chinese banking system, as well as due to a number of policy documents – such as national and sectoral five years plans or policies calling on the financial institutions to support the aluminium industry. Finally, the request listed distortions originating from additional government measures, such as the export seller’s credit scheme, an income tax deduction for research and development expenses or VAT rebates on domestically produced equipment. The request referred in this connection to the 2018 United States Department of Commerce subsidy investigation of the Chinese aluminium foil sector (24).