Commission Implementing Regulation (EU) 2023/99 of 11 January 2023 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of certain aluminium road wheels originating in Morocco

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 17 November 2021, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of certain aluminium road wheels (‘ARW’) originating in Morocco (‘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 (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 4 October 2021 by the Association of European Wheel Manufacturers (‘the complainant’ or ‘EUWA’). The complaint was made on behalf of the Union industry 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) On 17 June 2022, in accordance with Article 19a of the basic Regulation, the Commission provided parties with a summary of the proposed duties and details about the calculation of the dumping margins and the margins adequate to remove the injury to the Union industry. Interested parties were invited to comment on the accuracy of the calculations within three working days. No comments on the accuracy of the calculations were made.

(4) On 15 July 2022 the Commission published in the Official Journal of the European Union Commission Implementing Regulation (EU) 2022/1221 (3) imposing provisional anti-dumping duties on imports of certain aluminium road wheels originating in Morocco (‘the provisional Regulation’).

(5) Following the disclosure of the essential facts and considerations on the basis of which a provisional anti-dumping duty was imposed (‘provisional disclosure’), Dika Morocco Africa S.A.R.L (‘Dika’), Hands 8 S.A. (‘Hands’), the European Automobile Manufacturers’ Association (‘ACEA’) and EUWA filed written submissions making their views known on the provisional findings within the deadline provided by Article 2(1) of the provisional Regulation. In addition, after the expiry of the deadline for submitting comments on the provisional disclosure, the Government of Morocco provided a submission supporting the claims made by other parties on dumping and injury.

(6) The parties who so requested were granted an opportunity to be heard. Hearings took place with Dika, Hands, ACEA and EUWA. Additionally, further to the request of Dika, a hearing was held with the Hearing Officer in trade proceedings on 7 July 2022.

(7) The Commission continued to seek and verify all the information it deemed necessary for its definitive findings. One verification visit was held on the premises of a user. When reaching its definitive findings, the Commission considered the comments submitted by interested parties and revised its provisional conclusions when appropriate.

(8) The Commission informed, on 17 October 2022, 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 certain aluminium road wheels originating in Morocco (‘final disclosure’). All parties were granted a period within which they could make comments on the final disclosure.

(9) Following final disclosure, ACEA, Dika, EUWA, Hands and the Government of Morocco submitted comments.

(10) On 21 November 2022, the Commission sent an additional final disclosure to Hands regarding certain corrections and clarifications made with regard to its dumping calculations (‘additional final disclosure’) and granted a period within which the company could make comments. In addition, all interested parties received a clarification of the basis for the amounts of SG&A costs used in the construction of the normal value for Hands. Hands submitted comments which were addressed in the Regulation.

(11) Parties who so requested were also granted an opportunity to be heard. Hearings took place with ACEA, Dika, EUWA and Hands.

(12) Following provisional disclosure no interested party submitted any claims or comments other than those referred to in Section 1.4 of the provisional Regulation. The Commission therefore confirmed its findings and conclusions as set out in recitals 6 to 28 in the provisional Regulation.

(13) No comments were made in respect of the sampling. The Commission therefore confirmed recitals 29 to 34 of the provisional Regulation.

(14) As set out in recitals 35 of the provisional Regulation, the Commission sent questionnaires to three Union producers, the complainant, the two known users and the two exporting producers in the country concerned.

(15) As explained in recitals 36 and 37 of the provisional Regulation, questionnaire responses where either cross-checked or verified at the premises of the responding party.

(16) Verification visit pursuant to Article 16 of the basic Regulation was carried out at the premises of one user. The name of this user is not disclosed for confidential reasons in accordance with recital 5 of the provisional Regulation.

(17) As stated in recital 38 of the provisional Regulation, the investigation of dumping and injury covered the period from 1 October 2020 to 30 September 2021 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2018 to the end of the investigation period (‘the period considered’).

(18) The Commission made imports of the product concerned subject to registration by Commission Implementing Regulation (EU) 2022/934 (4) (‘the registration Regulation’).

(19) Hands claimed that the decision for registration of imports was unfounded, as the conditions were not met pursuant to Article 14(5) of the basic Regulation.

(20) The Commission recalled that the legal basis for registration is Article 14(5a) of the basic Regulation, according to which, the Commission shall register the imports of the product concerned during the period of pre-disclosure pursuant to Article 19a of the basic Regulation, unless there is sufficient evidence that the requirements of Article 10(4)(c) and (d) are not met. In this respect, the Commission established that there was no conclusive evidence showing that the registration of imports of the product concerned during the period of the pre-disclosure was not warranted in this case. Indeed, since the publication of the notice of initiation, when exporting producers were aware or should have been aware of the alleged dumping and injury, imports of the product concerned have further increased in a manner which may seriously undermine the remedial effect of the anti-dumping duties also during the pre-disclosure period. Therefore, the Commission rejected the claims.

(21) Hands claimed that by publishing the registration Regulation the Commission violated the principle of sound administration. According to the party no information regarding the Commission’s intention to make imports of the product under investigation subject to registration has been communicated to them before the registration Regulation was published and the import registration came into force, whereas such registration measure does potentially adversely affect its interests. Absence of communicating necessary information about possibly making imports subject to registration to Hands in a timely, effectively and personal manner before adopting such registration measure and allowing Hands to present its views and to be heard, while Hands is directly affected by that measure, the Commission is in violation of Hands’ fundamental right of defence. Consequently, the Registration Regulation is invalid and should be repealed.

(22) The Commission considered that registration is only a preparatory administrative step that may or may not lead to the retroactive imposition of duties at definitive stage. Registration in itself does not produce any adverse effect on importers and cannot be said to affect their interests (5). Hands itself did not point to any concrete adverse effects referring merely to ‘potential’ effects. The only effect of registration is that the Commission instructs the national customs authorities to register the imports into the Union of the product under investigation. Furthermore, there is no procedural requirement in Article 14(5a) or elsewhere in the basic Regulation to consult importers or other parties before registration takes place. The requirement laid down in Article 10(4)(b) of the basic Regulation that parties be given an opportunity to comment only applies when there is a decision to collect duties retroactively after registering, but not for the registration itself. This is clearly from the fact that Article 14(5a) of the basic Regulation only refers to points (c) and (d) of Article 10(4) that need to be fulfilled for registration under this provision, but it deliberately does not refer to point (b) of Article 10(4). This is in line with the effect of such registration discussed above. Therefore, the Commission is not under the obligation to give the importers an opportunity to comment before instructing customs authorities to register imports. Therefore, the claim was rejected.

(23) The Commission recalled that, as set out in recital 39 of the provisional Regulation the product concerned is aluminium road wheels of the motor vehicles of HS headings 8701 to 8705 whether or not with their accessories and whether or not fitted with tyres, originating in Morocco, currently falling under CN codes ex 8708 70 10 and ex 8708 70 50 (TARIC codes: 8708701015, 8708701050, 8708705015 and 8708705050) (‘the product concerned’).

(24) Aluminium road wheels are traditionally sold in the Union via two distribution sales channels: to the Original Equipment Manufacturers (‘OEM’), which are mainly car manufacturers, and to the Aftermarkets (or ‘AM’), which includes for example distributors, retailers, repair shops, etcetera. The product concerned from Morocco was exclusively sold through the OEM channel during the period considered. In the OEM distribution channel, car manufacturers organise tender procedures for ARW and are often involved in the process of developing a new wheel, which is associated with their brand. Both Union producers and Moroccan exporters can compete in the same tenders.

(25) In the absence of comments, the conclusions in recitals 39 to 42 of the provisional Regulation were confirmed.

(26) As explained in recitals 43 to 51 of the provisional Regulation, the Commission considered that Dika had not cooperated with the Commission in this investigation and provisionally determined its dumping margin on the basis of facts available in accordance with Article 18 of the basic Regulation.

(27) Following provisional disclosure Dika maintained that it had fully cooperated with the Commission and that it should receive an individually calculated dumping margin. It set forward the following arguments.

(28) First, Dika reiterated that it believes that the sales listings contained no errors, since the total values of the sales listings could be reconciled with the company’s accounting system. In addition, the sales were listed in accordance with international financial reporting standards (‘IFRS’). Moreover, Dika argued that the Commission had plenty of time to cross-check the revised sales listings provided by its related company CITIC Dicastal Co., Ltd (‘CITIC’) and could still do so before the imposition of definitive anti-dumping measures.

(29) The claim made by Dika was similar to that made at the provisional stage, while no new information was provided. At provisional stage the Commission had concluded that the sales listings were not provided on an invoice basis, that the difference between the invoice value and the amount actually received was not systematically reflected in the company’s sales listings and that the revised listings could not be cross-checked. The fact that the company’s sales were listed in accordance with IFRS standards did not change the fact the company did not provide the information requested by the Commission.

(30) Moreover, CITIC had provided several (at least four) different and incomplete versions of its sales listings in the course of the investigation. The last version, provided together with Dika’s reply to the Commission’s Article 18 letter of 5 May 2022, was still incomplete and contained a number of transactions where either the amount received was left empty with the note ‘AR outstanding to date’, or where there remained a mismatch between the amount invoiced and the amount received. Such incomplete data cannot be a reliable basis for cross-checking or verification. In addition, as also stated in recital 48 of the provisional Regulation, an additional remote cross-check (‘RCC’) should not be used as a way to remedy the lack of timeliness or errors established during the RCC that already took place within the set time limits. The Commission therefore rejected this claim.

(31) Second, Dika claimed that the transaction specific data on dates and amounts of payments requested by the Commission did not qualify as ‘necessary information’ in the sense of Article 18(1) of the basic Regulation, Article 6.8 and Annex II of the WTO Antidumping Agreement (6). According to Dika, the Commission did not request this information in the questionnaire or deficiency letters, nor was such information required for the dumping margin calculation. In addition, Dika claimed that in the provisional Regulation a different basis for the application of facts available was used than the one set out in the Commission’s letter on the application of Article 18 dated 5 May 2022 (‘Article 18 letter’).

(32) The Commission disagreed with this claim. From the outset, it had asked the company to provide transaction specific data based on the invoice date. For example, section E of the anti-dumping questionnaire sent to Dika and its related company CITIC stated in the very first section that respondents should ‘use invoice date as the date of sale’. However, the issue at hand is not (only) the date on which the sale took place, but rather the amount that was actually paid to the company by its clients. This is the issue which was explained in the Article 18 letter and which was set out in the provisional Regulation. Dika’s assertion that the reasons set out in the letter were ‘totally different’ from those in the basic Regulation could not be accepted. In both cases the Commission explained that it considered the sales listings unreliable since they contained a number of mistakes and discrepancies.

(33) The sales data originally provided by the company did not correspond to the amounts actually received as payments. In addition, CITIC had clarified during the RCC that the difference between the invoice amount and the amount actually received is normally recorded in the sales listings as a discount, a rebate, a credit note or otherwise. As indicated in recital 47 of the provisional Regulation, and in recital 29 above, this was however not systematically done by the company. The sales listings could therefore not be used a reliable source to establish a normal value or export price under Articles 2(1) and 2(8) of the basic Regulation which states that the normal value ‘shall normally be based on the prices paid or payable’. It logically follows that since a normal value or export price for Dika could not be established on the basis of the company’s own data, a dumping margin could not be calculated either. The sales listings were therefore not only necessary, but fundamental to the investigation. Without reliable sales listings (including a full list of transactions of all product types sold and their prices), the Commission cannot arrive at a reasonably accurate finding with regard to dumping.

(34) After final disclosure, Dika reiterated its claim that since their sales listings were in accordance with IFRS standards, the Commission could not claim that the listings were incomplete and could not be verified. In addition, Dika claimed that since Article 2(8) of the basic Regulation refers to the export price being normally based on the ‘prices paid or payable’, the sales listings were correct since they reflected the prices payable. Finally, Dika reiterated its claim that data on payments did not qualify as ‘necessary’ under Article 18(1) of the basic Regulation.

(35) Whether or not the sales listings were overall reported in line with IFRS standards was irrelevant for the problems found with the reported prices. As the Commission has pointed out at several instances, the problem with the EU and domestic sales listings existed on a transaction basis. As stated by Dika during the hearing after the provisional measures and reiterated in their comments on final disclosure, in around 20 % of the transactions in the EU sales listings the payment amount did not match the reported invoice amount. The term ‘price payable’ refers to the total payment made or to be made by the buyer to the seller, including situations where for instance the goods have been sold, but the customer has not yet paid. This was not the case for most of the transactions in the EU sales listing. In fact, the price that was already paid by the customer, in these cases, was different from the price which was recorded as payable at the time of invoicing.

(36) As Dika and its related company stated during the RCC, the on-spot verification and the reply to the Article 18 letter, these differences would normally be recorded in the sales listings as a discount, a rebate, a credit note or otherwise, as also stated in recital 33. This was done for many transactions in the sales listings, but not systematically for all transactions. The fact that this is normally done, means that normally the price recorded as payable would become equal to the price finally paid after certain actions are performed related to the aforementioned credit notes, rebates, etc. This is how Dika itself explained it and how corrections were made in the company’s SAP system after payments were made. However, in some cases the prices recorded in the domestic and EU sales listings were corrected in this manner, but in other cases they were not. The difference between the prices finally paid and the prices recorded as payable went both ways and were not accounted for, meaning in some cases the company received more than was invoiced, and in other cases less.

(37) Reliable sales listings (thereby including a full list of transactions of all product types sold as well as their prices) containing accurate and verifiable data are fundamental to establish a dumping margin and hence qualify as necessary information under Article 18(1) of the basic Regulation. Since the difference between prices actually paid and recorded as payable affected a significant number of the transactions in the EU sales listing, this listing could not be used to establish a reliable export price on a transaction or product type basis. The Commission therefore rejected these claims.