Commission Implementing Regulation (EU) 2022/433 of 15 March 2022 imposing definitive countervailing duties on imports of stainless steel cold-rolled flat products originating in India and Indonesia and amending Implementing Regulation (EU) 2021/2012 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of stainless steel cold-rolled flat products originating in India and Indonesia

THE EUROPEAN COMMISSION,

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

Having regard to Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Articles 15 and 24(1) thereof,

Whereas:

(1) On 17 February 2021 the European Commission (‘the Commission’) initiated an anti-subsidy investigation with regard to imports of stainless steel cold-rolled flat products (‘SSCR’ or ‘the product under investigation’) originating in India and Indonesia (together referred to as ‘the countries concerned’). The Commission published a Notice of initiation in the Official Journal of the European Union (2) (‘the Notice of initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 4 January 2021 by the European Steel Association (‘EUROFER’ or ‘the complainant’) on behalf of the Union industry of stainless steel cold-rolled flat products in the sense of Article 10(6) of the basic Regulation. The complaint contained evidence of subsidisation and of a resulting injury that was sufficient to justify the initiation of the investigation.

(3) Prior to the initiation of the anti-subsidy investigation, the Commission notified the Government of India (‘GOI’) (3) and the Government of Indonesia (‘GOID’) (4) that it had received a properly documented complaint, and invited the GOI and GOID for consultations in accordance with Article 10(7) of the basic Regulation. Consultations were held on 10 February 2021 with the GOI and on 15 February 2021 with the GOID. However, no mutually agreed solution could be reached with either government.

(4) On 18 November 2021, the Commission imposed definitive anti-dumping duties and definitively collected provisional duties imposed on imports of the same product originating in India and Indonesia (5) (‘the anti-dumping Regulation’) in an investigation which had been initiated by a Notice of initiation published on 30 September 2020 (‘the separate anti-dumping investigation’) (6).

(5) The injury, causation and Union interest analyses performed in the present anti-subsidy investigation and the separate anti-dumping investigation are mutatis mutandis identical, since the definition of the Union industry, the sampled Union producers, the period considered and the investigation period are the same in both investigations.

(6) On 7 April 2021, the complainant filed a request for the registration of imports. The Commission analysed the request, but found that no massive imports in a relatively short period of a product benefiting from countervailable subsidies in the countries concerned had taken place. The imports of SSCR from India and Indonesia showed a decrease by 46 % in the seven months after initiation as compared to the imports during the investigation period. Therefore, the conditions to register imports according to Article 24(5) of the basic Regulation were not met and the Commission did not make imports of the product concerned subject to registration.

(7) The investigation of subsidies 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’). Both periods are identical to those in the separate anti-dumping investigation.

(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 complainant, the GOI, the GOID, known exporting producers in the countries concerned, known importers and users in the Union about the initiation of the investigation, and invited them to participate.

(9) Interested parties had the 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. Hearings were held with EUROFER and another company.

(10) In the Notice of initiation, the Commission also invited the authorities of the People’s Republic of China (‘GOC’) to participate in the investigation as an interested party. Additionally, the Commissioned informed the GOC about the initiation of the investigation and specifically referred to the invitation to participate as an interested party contained in the Notice of initiation. Subsequently, the GOC informed the Commission that it had registered as an interested party to this investigation.

(11) On 11 October 2021, the Commission sent a request for information to the GOC.

(12) The GOC did not reply to the request for information of the Commission and instead on 21 October 2021 submitted its comments on the request for information itself.

(13) In this submission, on the one side, the GOC stated that the Commission’s procedures may be in violation of WTO rules and EU law.

(14) First, the GOC stated that the Commission did not inform the GOC of the lodging of the complaint, did not hold pre-initiation consultations with the GOC, did not inform it about the initiation and did not invite it directly to become an interested party to the investigation. As the GOC is not an exporting country, the GOC is not an interested Member or party within the meaning of WTO rules and the invitation lacks legal basis and basic procedural requirements.

(15) The Commission noted that these allegations are factually incorrect. In fact, once the invitation to become an interested party was included in the Notice of initiation, which was published in the Official Journal of the European Union on 17 February 2021, the Commission sent the Notice of initiation to the GOC on the same day, expressly drawing its attention to the invitation. Initially, the GOC requested access to the open file by email of 19 February 2021. In reply to that email, on the same day, the Commission explicitly asked again to the GOC whether, by requesting access to the open file, it intended to register as an interested party. On the same day, the GOC confirmed that it had registered as an interested party. The whole email exchange is available in the open file. Therefore, the Commission informed directly the GOC of the Notice of initiation and invited it to become an interested party even twice. Moreover, the Commission did not invite the GOC to hold pre-initiation consultations since the Commission expected the GOID to clarify the involvement of the GOC in providing indirectly financial support to the exporting producers in Indonesia. Thus, since the Commission did not intend to investigate potential countervailable subsidies granted by the PRC, but only the subsidies provided by the GOID through the GOC’s financial support, there was no legal requirement to hold pre-initiation consultations with the GOC.

(16) Second, the GOC stated that it requested to follow the progress of the case out of concern that the Commission may violate WTO rules and EU law, but the GOC is not subject to this investigation and not obliged to provide any information in the investigation. In fact, according to the GOC, the Commission already violated the WTO Agreement on Subsidies and Countervailing Measures (‘SCM Agreement’) and the basic Regulation in the anti-subsidy investigation concerning imports of certain woven and/or stitched glass fibre fabrics originating in the People's Republic of China (‘PRC’ or ‘China’) and Egypt, initiated on 16 May 2019 (7) and resulted in the imposition of definitive countervailing duties published on 15 June 2020 (8) (‘the GFF anti-subsidy investigation’), by including the normal bilateral economic and trade cooperation between China and Egypt into the scope of the so-called cross-country subsidies.

(17) The Commission recalled that it was not the GOC which requested to follow the progress of the case, but it was the Commission itself which invited the GOC to register as an interested party in the Notice of initiation. As concerns the allegations on the GFF anti-subsidy investigation, the Commission considered them to be generic and unsubstantiated, and not the subject matter of this investigation anyway. In any event, the Commission noted that the financial support granted by the GOC, insofar such support is attributable to the GOID, falls under the scope of this investigation. Thus, the information about the financial support granted by the GOC is necessary in this context.

(18) Third, the GOC noted that the Commission did not send to it any request for information in the first eight months after initiation, contrary to the WTO’s requirement that investigating authorities should set out the information required from interested parties as soon as possible, and that the timeframe for the reply was 10 days instead of the 37 days provided by Art. 12.1.1 of the SCM Agreement and Art. 11(2) of the basic Regulation.

(19) The Commission noted that the timing for sending the request for information to the GOC was due to the development of the investigation. Elements asked to the GOC were not fully apparent at the beginning of the investigation and the information requested was based upon aspects that required further investigation after the first RCC session with Indonesian parties. In addition, the Commission replied that it had sent to the GOC a ‘request for information’, not a ‘questionnaire’. The timeframe requirements referred to by the GOC concern only questionnaires. The timeframe envisaged in the request for information was sufficient to provide the information requested. In any case, if the GOC had deemed the timeframe to be too stringent, the GOC could have requested a deadline extension, which it did not.

(20) The GOI did not submit written comments before or after pre-initiation consultations. However, during the consultation, the GOI argued that in general the complaint does not contain sufficient evidence of the existence of the alleged subsidy programmes.

(21) The Commission took into account the comments of the GOI. However, as detailed in the Memorandum on sufficiency of evidence (‘Memorandum’) (9), the Commission concluded after examination of the subsidy allegations, that the complaint, together with the evidence available to the Commission and listed in the Memorandum, contained sufficient evidence tending to show the existence of subsidisation for the product concerned originating in India.

(22) On 15 February 2021 the GOID submitted the written version of its statements delivered at the pre-initiation consultations held the same day. This submission argued that, in general, the complaint did not contain sufficient evidence of the existence of the alleged subsidy programmes.

(23) The Commission took into account this submission at the stage of drafting the Memorandum on sufficiency of evidence and respectfully disagreed with the GOID’s comments. Indeed, the Commission concluded that the complaint, together with the evidence available to the Commission and listed in the Memorandum on sufficiency of evidence, contained sufficient evidence tending to show the existence of subsidisation. In any event, particular attention was paid to the elements highlighted by the GOID during the investigation.

(24) In the Notice of initiation, the Commission stated that it might sample the interested parties in accordance with Article 27 of the basic Regulation.

(25) In the Notice of initiation, the Commission stated that it had decided to limit the investigation to a reasonable number of Union producers by applying sampling, and that it had provisionally selected a sample of Union producers. The Commission selected the provisional sample on the basis of production and Union sales volumes reported by the Union producers in the context of the pre-initiation standing assessment analysis, taking also into account their geographical location. The provisional sample thus established consisted of three Union producers accounting for more than 60 % of production and around 70 % of sales in the Union of the like product, and located in four different Member States. Details of this provisional sample were made available in the file for inspection by interested parties, with the possibility for them to make comments. No comments were made.

(26) Since no comments were received within the prescribed timeframe, the provisional sample of Union producers was confirmed. It consisted of Acciai Speciali Terni S.p.A., Aperam Stainless Europe and Outokumpu Stainless OY. The definitive sample is representative of the Union industry. This sample coincided with the sample of Union producers in the separate anti-dumping investigation.

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

(28) One unrelated importer made itself known as interested party and provided the requested information. In view of the low number of replies received, sampling was not necessary. No comments were made on this decision. This importer was invited to complete a questionnaire.

(29) In view of the potentially large number of exporting producers in the countries concerned, the Notice of initiation provided for sampling in India and Indonesia. Therefore, the Commission asked all known exporting producers in India and Indonesia to provide the information specified in the Notice of initiation to decide whether sampling was necessary and, if so, to select a sample.

(30) In addition, the Commission asked the Mission of India to the European Union and the Embassy of the Republic of Indonesia in Brussels to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(31) Two (groups of) Indian companies submitted a sampling reply within the time limit provided for. The two exporting producers in question: Chromeni Steels Private Limited (‘Chromeni’) and Jindal Group accounted for 100 % of the Indian export volume of SSCR from India to the Union during the investigation period. The Commission therefore abandoned sampling with regard to India.

(32) The part of the Jindal Group (India) which is involved in the production and sales of SSCR consists of two exporting producers, two traders, one service supplier and one raw-material supplier.

(33) Jindal Group is vertically integrated from the production of coke, gas and ferrochromium, through production of liquid stainless steel, slabs, hot-rolled coils, down to production of SSCR.

(34) Chromeni is not vertically integrated. It starts manufacturing SSCR from hot-rolled stainless steel coils.

(35) Three exporting producers or groups of exporting producers in Indonesia provided the requested information and agreed to be included in the sample. In accordance with Article 27(1) of the basic Regulation, the Commission selected a sample of two groups of exporting producers on the basis of the largest representative volume of exports from Indonesia to the Union during the investigation period, which could reasonably be investigated within the time available: PT. Indonesia Ruipu Nickel and Chrome Alloy (‘IRNC’) and PT. Jindal Stainless Indonesia (‘Jindal Indonesia’). The sampled groups of exporting producers accounted for 71 % of the estimated total export volume of SSCR from Indonesia to the Union during the investigation period.

(36) IRNC is a vertically integrated company. The company starts manufacturing SSCR from nickel ore and therefore it has its own smelters. Furthermore, IRNC is part of a group of companies that manufacture different type of steel products, which are also vertically integrated (they start from nickel ore and therefore have their own smelters) and provide upstream steel products to IRNC for the manufacturing of SSCR. These companies (together with IRNC, jointly referred to as ‘the IRNC Group’) are PT. Indonesia Guang Ching Nickel and Stainless Steel Industry (‘GCNS’), PT Indonesia Tsingshan Stainless Steel (‘ITSS’), PT. Sulawesi Mining Investment (‘SMI’) and PT. Tsingshan Steel Indonesia (‘TSI’). They are all located in the Morowali Industrial Park in Indonesia.

(37) Jindal Indonesia is not vertically integrated. It starts manufacturing SSCR from stainless steel coils.

(38) In accordance with Article 27(2) of the basic Regulation, the Commission consulted all known exporting producers concerned and the GOID on the selection of the sample. No comments were received and the sample was thus confirmed.

(39) The third Indonesian exporting producer that returned the sampling form informed the Commission that it did not intend to request individual examination under Article 27(3) of the basic Regulation. Nevertheless, the Commission informed this non-sampled exporting producer that it was required to provide a questionnaire reply if it wished to be examined individually. However, it did not provide a questionnaire reply. As a result, no individual examinations were possible.

(40) The Commission sent questionnaires to the three sampled Union producers, the complainant, the one unrelated importer that had made itself known, and the four exporting producers in the countries concerned. The same questionnaires had also been made available online (10) on the day of initiation.

(41) Questionnaire replies were received from the three sampled Union producers, the complainant, one unrelated importer, two exporting producers from India and the two sampled exporting producers from Indonesia.

(42) The Commission also sent a questionnaire to the GOI and the GOID.

(43) The questionnaire for GOI included specific questionnaires to (i) any financial institution that provided loans or export credits to the companies under investigation or to their buyers (in the context of export buyer credits), (ii) the top 10 producers and distributors of the input materials allegedly provided for less than adequate remuneration (chromium ore and iron ore) to the two Indian exporting producers, for the production of the product under investigation.

(44) The questionnaire to the GOID included a specific questionnaire for the Lembaga Pembiayaan Ekspor Indonesia (‘Indonesia Eximbank’). This financial institution had been specifically referred to in the complaint as a public body or body entrusted or directed by the GOID to grant subsidies. In addition, for administrative convenience, the GOID was asked to forward specific questionnaires to (i) any other financial institution that provided loans or export credits to the sampled companies or to the buyers of the sampled companies (in the context of export buyer credits) (11), (ii) the top 10 producers and distributors of the main input materials for the product under investigation, as well as to any other input producers and distributors of the materials in question, which have provided inputs to the two sampled companies, and (iii) PT. Asuransi Asei Indonesia (‘ASEI’), specifically referred to in the complaint as a provider of export credit insurance on concessional basis, potentially also to the producers of the product under investigation.