Commission Implementing Regulation (EU) 2022/927 of 15 June 2022 imposing a definitive countervailing duty on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron) originating in India following an expiry review pursuant to Article 18 of Regulation (EU) 2016/1037 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) 2016/1037 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 (‘the basic Regulation’) (1), and in particular Article 18 thereof,

Whereas:

(1) By Regulation (EU) 2016/387 (2) (‘the original Regulation’), the European Commission (‘the Commission’) imposed a countervailing duty on imports of tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron), originating in India (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’.

(2) The countervailing duty imposed ranged from 8,7 % for Jindal Saw Limited to 9 % for Electrosteel Castings Ltd and ‘all other companies’.

(3) By Regulation (EU) 2016/388 (3), the Commission also imposed a definitive anti-dumping duty on the same product. The anti-dumping duty imposed ranged from 0 % for Electrosteel Castings Ltd to 14,1 % for Jindal Saw Limited and ‘all other companies’.

(4) Following the judgments of the General Court in T-300/16 and T-301/16 (4), the Commission corrected mistakes found by the General Court when calculating the anti-dumping and countervailing duty for Jindal Saw Limited. By Regulations (EU) 2020/526 (5) and (EU) 2020/527 (6), the Commission re-imposed a new definitive anti-dumping and countervailing duty for Jindal Saw Limited, at the rates of 3 % and 6 % respectively.

(5) The countervailing duties currently in force are 6 % for Jindal Saw Limited and 9 % for Electrosteel Castings Ltd and ‘all other companies’. The anti-dumping duties currently in force are at rates ranging between 0 % for Electrosteel Castings Ltd, 3 % for Jindal and 14,1 % for ‘all other companies’.

(6) Following the publication of a notice of impending expiry (7), the Commission received a request for a review pursuant to Article 18 of the basic Regulation.

(7) The request for expiry review was lodged on 21 December 2020 by Saint-Gobain PAM, Saint-Gobain PAM Deutschland GmbH and Saint-Gobain PAM España S.A. (‘the applicants’), on behalf of Union producers representing more than 50 % of the total Union production of tubes and pipes of ductile cast iron. 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 subsidisation and continuation or recurrence of injury to the Union industry.

(8) In accordance with Article 10(7) the basic Regulation, the Commission notified the Government of India (‘GOI’) prior to the initiation of the proceeding that it had received a properly documented review request. The Commission invited India for consultations with the aim of clarifying the situation as regards the contents of the review request and arriving at a mutually agreed solution. The GOI accepted the offer of consultations that were subsequently held on 10 March 2021. During the consultations, no mutually agreed solution could be arrived at.

(9) Having determined, after consulting the Committee established by Article 15(1) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (8), that sufficient evidence existed for the initiation of an expiry review the Commission initiated, on 17 March 2021, an expiry review with regard to imports to the Union of tubes and pipes of ductile cast iron originating in India (‘the country concerned’) on the basis of Article 18(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (9) (‘the Notice of Initiation’).

(10) On the same date, the Commission initiated an expiry review of the anti-dumping measures with regards the imports of the same product (10).

(11) The investigation of continuation or recurrence of subsidisation and injury covered the period from 1 January 2020 to 31 December 2020 (‘the review investigation period’). The examination of trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2017 to the end of the review investigation period (‘the period considered’).

(12) 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 Union producers, known producers in India and the authorities of India, known importers, users as well as associations known to be concerned about the initiation of the expiry review and invited them to participate.

(13) Interested parties had an opportunity to comment on the initiation of the expiry review and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. No interested party requested a hearing.

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

Sampling of Union producers

(15) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of three Union producers. These Union producers are part of the same group of companies. The Commission selected the sample on the basis of volume of production and sales of the like product in the Union during the review investigation period, i.e. between 1 January 2020 and 31 December 2020. The definitive sample of Union producers accounted for [70-85] % of estimated total Union production and [70-85] % of estimated total Union sales volume of the like product, and it also ensured a good geographical spread.

(16) In accordance with Article 27(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample, but did not receive any comments. The provisional sample was therefore confirmed and was considered representative of the Union industry.

Sampling of importers

(17) 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. However, as no unrelated importers came forward, sampling was not necessary.

Sampling of producers in India

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

(19) As only three producers provided a sampling reply within the time limit provided for, the Commission decided that sampling was not necessary.

(20) The Commission sent questionnaires to the GOI, the group of the three sampled Union producers and the three exporting producers that had provided a sampling reply. The same questionnaires had also been made available online (11) on the day of initiation.

(21) The Commission received questionnaire replies from the three Union producers, the GOI and from only one of the producers in India, Tata Metaliks Limited (‘TML’). Though having submitted sampling replies, the other two producers in India subsequently did not submit a questionnaire reply and, hence, did not cooperate with the investigation.

(24) On 18 March 2022, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure.

(25) Only Tata Metaliks Limited submitted comments within the deadline. The comments made by Tata Metaliks Limited were considered by the Commission and taken into account, where appropriate. Also the GOI submitted comments, but these were submitted more than 10 days after the deadline for comments had expired.

(26) In order to complete the investigation within the mandatory deadlines, point 7 of the Notice of Initiation stipulates that the Commission will not accept submissions from interested parties after the deadline to provide comments on the final disclosure. Accordingly, the Commission could not take into account the comments of the GOI. It noted nevertheless that its submission did not bring forward any new elements that the Commission had not considered during the investigation. No party requested a hearing.

(27) One user, i.e. Hydro Mat Benelux, and one exporting producer, i.e. Tata Metaliks Limited, submitted comments on initiation.

(28) The Commission noted that Tata Metaliks Limited submitted its comments on initiation on 17 February 2022, more than nine months after the deadline of 37 days after the date of publication of the Notice of Initiation as defined in point 5.2 of the Notice of Initiation. Therefore, the Commission did not take into consideration this submission.

(29) The Commission noted that while submitting comments on the initiation, Hydro Mat Benelux did not fully cooperate with the investigation. In particular, the company did not fill in the questionnaire set for users which could have been used for cross-checking some of the statements listed below, i.e. for example the selling prices of the exporting producers or documents related to public procurement.

(30) First, Hydro Mat Benelux claimed that the proceeding should be terminated as the request was not lodged within three months prior to the date of expiry, mentioned in the Notice of impending expiry (13).

(31) The Commission clarified that the submission date mentioned in the Notice of Initiation did not correspond to the date on which the request was submitted. As it can be seen in the open version of the request for review, available in the non-confidential file since 17 March 2021 and accessible by all interested parties, the request was duly submitted on 18 December 2020, that is within the time period provided for in Article 18(4) of the basic Regulation. Therefore, the claim was rejected.

(32) Second, Hydro Mat Benelux claimed that there is an excessive use of confidentiality in the request. In particular, the Union industry indexed all the indicators concerning its economic performance. The party referred to Implementing Regulation (EU) 2020/1336 (14) where the Commission disclosed the microeconomic data of a single Union producer.

(33) The Commission noted that in the Implementing Regulation (EU) 2020/1336 all micro indicators (sales prices and volumes, unit cost of production, labour costs, closing stocks, profitability, etc.) were provided in ranges or indexes.

(34) In addition, the Commission considered that the version of the expiry review request that was placed on the file for inspection by interested parties contained all the essential evidence and non-confidential summaries of data marked as confidential in order for interested parties to make meaningful comments and exercise their right of defence throughout the proceeding.

(35) In this respect, the Commission further recalled that Article 29 of the basic Regulation allows for the safeguarding of confidential information in circumstances where disclosure would be of significant competitive advantage to a competitor or would have a significant adverse effect upon a person supplying the information or upon a person from whom that person has acquired the information. Consequently, these claims were rejected.

(36) Third, Hydro Mat Benelux claimed that the first half of 2020 did not reflect normal economic circumstances and considered that period was not representative for making a forward-looking assessment of the consequences of the expiry of the measures under discussion. Hydro Mat Benelux claimed that the negative performance of the Union industry in the first half of 2020 was caused by the negative economic impacts due to COVID-19 and by the increase in cost of raw materials on world markets which could not be passed on to downstream consumers. Moreover, it claimed that for the period 2017-2019 the main indicators did not demonstrate vulnerability but rather a healthy Union industry, in particular when analysing the production, the production capacity, the inventories, the investments, the sales prices and the profitability.

(37) The Commission recalled that Article 18 of the basic Regulation requires that the expiry review request shall contain sufficient evidence that the expiry of the measures would likely result in a continuation or recurrence of injury. In the present case, the specific injury analysis in the expiry review request contained evidence pointing to a significant penetration of the Union market by Indian imports made at prices that substantially undercut and undersell the Union industry’s prices. Accordingly, the Commission considered that the expiry review request contained sufficient evidence of continuation of injury and rejected the claim.

(38) Fourth, Hydro Mat Benelux analysed the period 2017-2020 and argued that the available import data did not support the claim of likelihood of recurrence of injury. Moreover, Hydro Mat Benelux claimed that the Indian export prices, the undercutting and underselling margins calculated by the applicant were not reliable as the export prices reflected the transfer price between related parties, i.e. the Indian producers and their related subsidiaries. Finally, Hydro Mat Benelux claimed that the Indian producers have increased their production capacity in order to cope with the growing Indian domestic market and that the main Indian exporting producers did not plan to extend their production capacity.

(39) The Commission considered that none of the allegations disproved the conclusion that there was sufficient evidence for the initiation of an anti-subsidy review investigation. Indeed, the expiry review request contained sufficient evidence that subsidised imports had a materially injurious impact on the state of the Union industry. In particular, the applicants provided not only undercutting calculations at Union border level but also at the level of the delivery to customer premises showing an undercutting of no less than 14,9 %. The specific injury analysis of the expiry review request showed increased penetration of the Union market (both in absolute and relative terms) by imports from India made at prices that substantially undercut the Union industry’s prices. This appears to have caused injury to the Union industry, shown for example by decreases in sales and market share and by a deterioration of financial results. Therefore, the claim was rejected.

(40) Regarding the claim that the increase of the Indian production will be directed only to the Indian market, Hydro Mat Benelux did not provide any evidence. Consequently, the claim was rejected.

(41) Fifth, Hydro Mat Benelux claimed that general competitiveness issues should not justify a finding of continuation or recurrence of injury. Hydro Mat Benelux listed various items such as the fact that Union consumption fell since Eurozone crisis with a decrease of public spending, and thus had a negative impact on the Union industry’s competitiveness, the competition of plastic pipes, the difficulty attracting employment, the maintenance of dominant position, the pressure of cheaper Chinese imports on tender process.

(42) This claim is addressed below in recital (256).

(43) After disclosure, Tata Metaliks Limited submitted that the data in the review request relating to the Union industry’s data and the imports covered the period of July 2019 to June 2020. However, the Notice of Initiation defined the review investigation period to be January 2020 to December 2020. In the company’s view, the applicants should have updated the expiry review request based on the review investigation period defined in the Notice of Initiation, and these data should have been made available to parties. By not circulating such updated review request to the parties, the Commission violated in its view Article 12.1.2 and Article 12.1.3 of the WTO Agreement on Subsidies and Countervailing Measures (‘SCM Agreement’).

(44) First, it is the Commission’s common practice to base its findings on the most recent available data. Such data may not necessarily correspond to the period defined in the expiry review request since it may not have been available at the time when the request for review was lodged. The SCM Agreement does not contain any provision requiring the Commission to base its findings on the same period as defined in the expiry review request. Second, all the parties had the possibility to comment on the findings and evidence that related to the review investigation period defined in the Notice of Initiation during the investigation. Therefore, the Commission considered that it did not breach any procedural rights or violated the SCM Agreement and rejected the claim.

(45) Tata Metaliks Limited also referred to the fact that the Commission rejected its comments on initiation because they came after the deadline provided for in the Notice of Initiation (see recital (28). In its view the deadline would only apply after reception of the revised data by the applicants that would relate to the review investigation period as defined in the Notice of Initiation. Tata Metaliks Limited also argued that it is ‘a settled principle of natural justice’ and ‘a settled position of law across all jurisdictions’ that submissions regarding questions of law can be raised beyond deadlines.

(46) As explained in the recital (44), the review investigation period related to the most recent period for which data was available, and this period does not always correspond to the preliminary assessment of the review request. Furthermore, the deadline in the Notice of Initiation related explicitly to the date of publication of the Notice, and not to any other date such as submission of any information by a party. The deadline in the Notice of Initiation does not distinguish between questions of law and of fact and applies equally to both. The Commission thus rejected the claim.

(47) The product concerned is the same as in in the original investigation namely tubes and pipes of ductile cast iron (also known as spheroidal graphite cast iron) (‘ductile pipes’), with the exclusion of tubes and pipes of ductile cast iron without internal and external coating (‘bare pipes’), originating in India, currently falling under CN codes ex 7303 00 10 (TARIC code 7303001010) and ex 7303 00 90 (TARIC code 7303009010) (‘the product concerned’).

(48) Ductile pipes are used for drinking water supply, sewage disposal and irrigation of agricultural land. The transportation of water through ductile pipes may be based on pressure or solely on gravity. The pipes range between 60 mm and 2 000 mm and are 5,5, 6,7 or 8 meters long. They are normally lined with cement or other materials and externally zinc-coated, painted or tape wrapped. The main final users are public utility companies.

(50) These products are therefore considered to be like products within the meaning of Article 1(4) of the basic Regulation.