Commission Implementing Regulation (EU) 2022/1013 of 27 June 2022 imposing a definitive anti-dumping duty on imports of certain ring binder mechanisms originating in the People’s Republic of China and as extended to Vietnam and Lao People’s Democratic Republic 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) By Regulation (EC) No 119/97 (2), the Council imposed a definitive anti-dumping duty ranging from 32,5 % to 39,4 % on imports of certain ring binder mechanisms (‘RBM’) originating in the People’s Republic of China (the ‘PRC’ or ‘country concerned’) and a definitive anti-dumping duty of 10,5 % on imports originating in Malaysia. These duty rates were applicable to RBM other than those with 17 or 23 rings, while RBM with 17 and 23 rings were subject to a duty equal to the difference between the minimum import price (MIP of EUR 325 per 1 000 pieces) and the free-at-Community-frontier not cleared through customs price, whenever the latter was lower than the MIP.

(2) By Regulation (EC) No 2100/2000 (3), the Council increased the above mentioned duties for Chinese RBM other than those with 17 or 23 rings, following an anti-absorption investigation pursuant to Article 12 of the basic Regulation. The amended duties applicable to such imports from the PRC ranged from 51,2 % to 78,8 %.

(3) Following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, by Regulation (EC) No 1208/2004 (4), the Council extended the definitive anti-dumping measures to imports of certain RBM consigned from Vietnam, whether declared as originating in Vietnam or not.

(4) By Regulation (EC) No 2074/2004 (5) the Council extended the definitive anti-dumping measures on imports of RBM originating in the PRC following an expiry review. No request for an expiry review had been received concerning the measures applicable to Malaysia, which consequently expired in January 2002.

(5) Following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, by Regulation (EC) No 33/2006 (6), the Council extended the definitive anti-dumping measures to imports of certain RBM consigned from Lao People’s Democratic Republic (‘Laos’), whether declared as originating in Laos or not.

(6) By Regulation (EC) No 818/2008 (7) and as a result of an anti-circumvention investigation, the Council extended the scope of the measures to certain slightly modified RBM.

(7) Following an expiry review, the anti-dumping duties on imports of certain RBM were extended for five years in February 2010 by Implementing Regulation of the Council (EU) No 157/2010 (8), and following another expiry review, for another five years in May 2016 by Implementing Regulation of the Council (EU) 2016/703 (9) (the ‘measures in force’).

(8) The anti-dumping duties currently in force are 51,2 % for one exporting producer and 78,8 % for all other exporting producers.

(9) Following the publication of a Notice of impending expiry of the measures in force (10), the Commission received a request for the initiation of an expiry review pursuant to Article 11(2) of the basic Regulation.

(10) The request for review was lodged on 12 February 2021 by the Union producer Ring Alliance Ringbuchtechnik GmbH (‘the applicant’) representing more than 25 % of the total Union production of RBM. 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.

(11) 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, on 11 May 2021 the Commission initiated an expiry review with regard to imports of RBM originating in the People’s Republic of China and extended to Vietnam and Lao People’s Democratic Republic on the basis of Article 11(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (11) (‘the Notice of Initiation’).

(12) The investigation of continuation or recurrence of dumping covered the period from 1 January 2020 to 31 December 2020 (‘the review investigation period’ or ‘RIP’). The examination of trends relevant for the assessment the 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’).

(13) In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. In addition, the Commission specifically informed the applicant, other known Union producers, the known exporting producers and the PRC authorities, known importers, users, traders, as well as associations known to be concerned about the initiation of the expiry review and invited them to participate.

(14) 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. None of the interested parties requested a hearing.

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

(16) In the Notice of Initiation, the Commission stated that the three known Union producers, IML Industria Meccanica Lombarda SRL, Koloman Handler Fémárugyár Magyarország Kft and Ring Alliance Ringbuchtechnik GmbH., had to submit the completed questionnaire within 37 days of the date of publication of the Notice of Initiation. The Commission also invited other Union producers and representative associations, if any, to make themselves known and request a questionnaire. No other Union producer or representative association came forward.

(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. No unrelated importers submitted the requested information. Consequently, the Commission decided that sampling was not necessary.

(18) To decide whether sampling was 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 identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(19) No exporting producers from the PRC provided the requested information and/or agreed to be included in the sample. Therefore, there was no cooperation from the Chinese producers and the findings with regard to the imports from the PRC are made on the basis of the facts available pursuant to Article 18 of the basic Regulation.

(20) 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’).

(21) The Commission sent the questionnaire to Union producers, unrelated importers and exporting producers. The same questionnaires were made available on DG Trade’s website (12) on the day of initiation.

(22) Questionnaire replies were received from the Union producers Ring Alliance Ringbuchtechnik GmbH and Koloman Handler Kft., two parties belonging to the same group with one production facility and hereafter jointly referred to as ‘Ring Alliance Ringbuchtechnik GmbH’, and M.L. Industria Meccanica Lombarda S.r.l.

(23) The Commission sought and verified all the information deemed necessary for the determination of likelihood of continuation or recurrence of dumping and injury and of the Union interest. Verification visits pursuant to Article 16 of the basic Regulation were carried out at the premises of the following companies:

Union producers:

— Ring Alliance Ringbuchtechnik GmbH, Oroszlany, Hungary,

— I.M.L. Industria Meccanica Lombarda S.r.l., Offanengo, Italy.

(24) The product under review is the same as in the previous expiry review, namely, certain ring binder mechanisms originating in the PRC, consisting of two steel sheets or wires with at least four half-rings made of steel wire fixed on them and which are kept together by a steel cover. They can be opened either by pulling the half rings or with a small steel trigger mechanism fixed to the ring binder mechanism (the product under review). RBM are falling at the entry into force of Regulation (EU) 2016/703 under CN code ex 8305 10 00 (TARIC codes 8305100011, 8305100013, 8305100019, 8305100021, 8305100023, 8305100029, 8305100034 and 8305100035).

(25) RBM are used in a wide range of applications, for example, in the production of software manuals, catalogues and brochures, technical manuals, office files, as well as presentation and other bound files and photo and stamp albums.

(26) A large number of different types of RBM were sold in the Union during the review investigation period. The differences between these types were determined by the width of the base, the type of mechanism, the number of rings, the opening system, the nominal paper holding capacity, the ring diameter, the shape of the rings, the length and the ring spacing. Given the fact that all types have the same basic physical and technical characteristics and, within certain ranges, are interchangeable, it was established that all RBM constitute one single product for the purpose of the present proceeding. No comments were received in that regard.

(28) During the review investigation period, imports of the product under review from the PRC continued albeit at a much lower level than in the previous expiry review (i.e. from January 2014 to December 2014). According to Comext (Eurostat) imports of ring binder mechanisms from the PRC accounted for about 0,7 % of the Union market in the review investigation period compared to 2,3 % market share during the previous expiry review.

(29) As mentioned in recital (19), none of the exporters/producers from PRC cooperated in the investigation. Therefore, the Commission informed the GOC that due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to the People’s Republic of China. The Commission did not receive any comments or requests for an intervention of the Hearing Officer in this regard.

(30) Consequently, in accordance with Article 18 of the basic Regulation, the findings in relation to the likelihood of continuation or recurrence of dumping were based on facts available, in particular the information contained in the request for the expiry review, publicly available data for the two Turkish companies operating under NACE Rev2 code 2599, information provided by the applicant, information from the Turkish national statistics office, Eurostat’s Comext database, Global Trade Atlas, the OECD’s International Transport and Insurance Costs of Merchandise Trade (ITIC) website, the World Bank’s doing business website.

(31) Given the sufficient evidence available at the initiation of the investigation tending to show, with regard to the PRC, the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation, the Commission initiated the investigation on the basis of Article 2(6a) of the basic Regulation.

(32) 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, in 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 questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. 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 the significant distortions in the PRC.

(33) In point 5.3.2 of the Notice of Initiation, the Commission also specified that, in view of the evidence available, it may need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks. The Commission further stated that it would examine possible appropriate countries in accordance with the criteria set out in first indent of Article 2(6a) of the Basic regulation.

(34) On 20 October 2021, the Commission informed by a note (‘the First Note’) interested parties on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production (‘FOPs’) such as raw materials, labour and energy used in the production of the product under review. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified possible representative countries, namely Turkey as an appropriate representative country. The Commission received one comment from the applicant on the First Note.

(35) On 7 February 2022, the Commission informed by a second note (‘the Second Note’) interested parties on the relevant sources it intended to use for the determination of the normal value, with Turkey as the representative country. It also informed interested parties of its intention to use the two Turkish companies, (D S C Otomotiv and Samet Kalip ve Madeni) who operate under NACE Rev2 code 2599 and produce products in the same general category as ring binder mechanisms as a basis to establish the SG&A and profit to construct normal value.

(36) According to Article 2(1) of the basic Regulation, “the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country”.

(37) However, according to Article 2(6a)(a) of the basic Regulation, “in case it is determined [….] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks”, and “shall include an undistorted and reasonable amount for administrative, selling and general costs and for profits” (“administrative, selling and general costs” is refereed hereinafter as ‘SG&A’).

(38) As further explained below, the Commission concluded in the present investigation that, based on the evidence available and in view of the lack of cooperation of the GOC and the exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.

(39) In recent investigations concerning the steel sector in the PRC (14) – steel being the main factor of production for ring binder mechanisms – the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present. The Commission concluded in this investigation that, based on the evidence available, the application of Article 2(6a) of the basic Regulation was also appropriate.

(40) 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 (15). In particular, the Commission concluded that in the steel sector, which is the main raw material to produce the product under review, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation (16), 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 (17). 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 (18). 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 (19). In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation (20), 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 (21).

(41) The request contained information on the distortions in the steel sector, in particular it referred to the recent findings in the anti-dumping investigations lead by the European Commission which confirmed the existence of distortions in the steel sector. The request further contained information on distortions in the non-ferrous metal sector, in particular concerning nickel which is an important raw material for the manufacturing of the product under review. Moreover, the request referred to the Commission’s report on significant distortions in China (22) (‘Report’), emphasising in particular the distortions in the labour market and in access to finance.

(42) In the present investigation, the Commission examined 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 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.