Commission Implementing Regulation (EU) 2023/100 of 11 January 2023 imposing a provisional anti-dumping duty on imports of stainless steel refillable kegs originating in the People’s Republic of China

(217) On the basis of the above, the Commission concluded that the dumped imports from the country concerned caused material injury to the Union industry and that the other factors, considered individually or collectively, did not attenuate the causal link between the dumped imports and the material injury.

(218) To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

(219) The injury would be removed if the Union Industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic regulation.

(220) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission considered the following factors: the level of profitability before the increase of imports from the country concerned, the level of profitability needed to cover full costs and investments, research and development (R&D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6 %.

(221) The sampled Union producers proposed in their questionnaire replies that the target profit should be set between 12 % and 20 % as, in their view, this is the level needed to finance the necessary investments in processes and products and to ensure the long term viability of the Union industry. The industry also showed that in the years in which there were normal conditions of competition their average profitability was 15 %.

(222) In light of this evidence, the Commission provisionally decided to use the profit margin of 12 %, which is at the low end of the range of the figures as detailed in the previous recital, thus adopting a very conservative approach.

(223) In view of the above considerations, the profit margin was provisionally established at 12 % in accordance with the provision of Article 7(2c).

(224) As regards the level of investments, research and development (R&D) and innovation during the period considered, the Commission verified the information provided and concluded that the difference between investments, R&D and innovation ('IRI') expenses under normal conditions of competition as provided by the EU Industry and verified by the Commission was already included in the target profit of 12 %.

(225) On this basis, the Commission calculated a non-injurious price per piece for the like product of the Union industry by applying the above-mentioned target profit margin (see recital (223)) to the cost of production of the sampled Union producers during the investigation period on a type-by-type basis.

(226) The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the sampled cooperating exporting producers in the country concerned, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

(229) Having decided to apply Article 7(2) of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers and users.

(230) There are eight companies producing kegs in the Union. They employ over 400 workers directly (they were more than 800 in 2018), located in Austria, Czechia, Germany, Italy and Spain.

(231) The imposition of measures would allow the Union industry to maintain its market share, increase capacity utilisation, increase prices to sustainable levels and improve profitability to levels to be expected under normal conditions of competition.

(232) The non-imposition of measures would likely lead to further deterioration of profitability, which was already negative. The non-imposition of measures could lead to the closure of production facilities and dismissals thus endangering the viability of the Union industry.

(233) The Commission therefore provisionally concluded that the imposition of provisional measures is in the interest of the Union industry.

(234) One unrelated importer, representing 1,6 % in volume of Chinese imports, submitted a sampling form and replied to the questionnaire. The average profit of the cooperating importer during the investigation period was 16 %.

(235) This importer was against the imposition of measures. It claimed that, in the light of increasing price of stainless steel and shipping, the imposition of measures would have a further negative impact on its profitability, resulting in liquidation of the company. The company also stressed that it made significant R&D investments from its own resources over the past years to develop new intellectual property, as well as investments to develop new solutions in keg production which could benefit the Union users and that the imposition of measures may end this project.

(236) The Commission concluded that it is likely the importer can pass part of the anti-dumping duty to the final users. The good profit level of the importer also mitigates the impact of the duty on the importer’s viability. On balance, the very limited cooperation of only one importer in this investigation suggests the measures will not have a highly negative impact on importers overall and would thus not outweigh the positive effect of measures on Union producers.

(237) The traders/service providers that are in the business of personalisation and customisation of kegs will be able to continue this business, competing on the merits and not with the dumped imports.

(238) At initiation two users, Appie and Carlsberg, came forward but provided only limited information in their questionnaire replies. Another user, AB InBev, registered as interested party and provided comments but did not provide a questionnaire reply. These users represent breweries or brewing conglomerates.

(239) At a later stage, as explained above in section 4.3.1, the Commission contacted again the major users requesting data on their suppliers and purchase volumes. Three users (AB InBev, Asahi, and Molson Coors) provided some data, but did not provide the key questionnaire narrative.

(241) As regards the first claim, the information collected during the investigation showed that the HORECA sector do not buy kegs from the beer producers, they just buy its content (i.e. the beer). Pubs and bars pay a deposit for the kegs which is refunded when empty and returned to the beer producers. Therefore the impact of the cost of kegs on the profitability of the HORECA sector is expected to be limited.

(242) As regards the second claim, the Union industry appears to have sufficient spare capacity. At its peak, in 2018, the Union consumption was around 3,2 million kegs while the Union industry has a total production capacity of almost 6,8 million kegs. Even considering the export sales, the Union industry has still almost 2 million kegs of spare capacity.

(243) Given the long lifetime (typically 30 years) and its refillable nature, the cost impact of kegs on the beverage industry is minimal.

(244) The Commission therefore provisionally concluded that negative impacts of measures on users are expected to be limited and not to outweigh the positive effect of measures on Union producers.

(245) On the basis of the above, the Commission concluded that there were no compelling reasons to suggest that it was not in the Union interest to impose measures on imports of stainless steel refillable kegs originating in the People’s Republic of China at this stage of the investigation.

(246) Based on the conclusions reached by the Commission on dumping, injury, causation, level of measures and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

(247) Provisional anti-dumping measures should be imposed on imports of stainless steel refillable kegs originating in the People’s Republic of China in accordance with the lesser duty rule in Article 7(2) of the basic Regulation. The Commission compared the injury margins and the dumping margins. The amount of the duties was set at the level of the lower of the dumping and the injury margins.

(249) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to these companies. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entities. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to any of the individual anti-dumping duty rates.

(250) To ensure a proper enforcement of the anti-dumping duties, the anti-dumping duty for all other companies should apply not only to the non-cooperating exporting producers in this investigation, but to the producers which did not have exports to the Union during the investigation period.

(251) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The companies with individual anti-dumping duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the anti-dumping duty applicable to ‘all other companies’.

(252) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

(253) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

(254) Statistics of stainless steel refillable kegs are frequently expressed in number of pieces. However, there is no such supplementary unit for stainless steel refillable kegs specified in the Combined Nomenclature laid down in Annex I to Council Regulation (EEC) No 2658/87 (53). It is therefore necessary to provide that not only the weight in kg or tonnes but also the number of pieces for the imports of the product concerned must be entered in the declaration for release for free circulation. Pieces should be indicated for TARIC codes 7310100010 and 7310299010, provided this indication is compatible with Annex I to Regulation (EEC) No 2658/87.

(255) As mentioned in recital (3), the Commission did not make imports of the product concerned subject to registration.

(256) In accordance with Article 19a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE's website. Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them.

(257) Ningbo Major and Penglai Jinfu jointly submitted comments on the pre-disclosure, where they requested the Commission to refrain from applying the provisional measures. They highlighted that the target prices of some product types did not reflect the expected target prices according to their knowledge. They also claimed some product types were not part of the injury margin calculation and that a heading of a disclosure table was not properly annotated.

(258) The Commission examined the comments in detail and considered that none of them concerned the accuracy of the calculations, therefore it will consider them, together with all other submissions after the publication of the provisional measures.

(259) Regarding the units used in the disclosure table, as the exporting producers rightly noted, these are indeed pieces rather than tonnes. Moreover, some product types were not included in the injury margin calculation, because the Union industry did not produce the corresponding product types and therefore were not relevant to calculate the underselling margin.

(260) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.

(261) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

Article 3

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 1 shall apply for a period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 11 January 2023.

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) OJ C 195, 13.5.2022, p. 24.

(3) https://tron.trade.ec.europa.eu/investigations/case-view?caseId=2602

(4) Commission Implementing Regulation (EU) 2022/191 of 16 February 2022 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China (OJ L 36, 17.2.2022, p. 1); Commission Implementing Regulation (EU) 2022/95 of 24 January 2022 imposing a definitive anti-dumping duty on imports of certain tube and pipe fittings, of iron or steel, originating in the People’s Republic of China, as extended to imports of certain tube and pipe fittings, of iron or steel consigned from Taiwan, Indonesia, Sri Lanka and the Philippines, whether declared as originating in these countries or not, following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (OJ L 16, 25.1.2022, p. 36); Commission Implementing Regulation (EU) 2021/2239 of 15 December 2021 imposing a definitive anti-dumping duty on imports of certain utility scale steel wind towers originating in the People’s Republic of China (OJ L 450, 16.12.2021, p. 59); Commission Implementing Regulation (EU) 2021/635 of 16 April 2021 imposing a definitive anti-dumping duty on imports of certain welded pipes and tubes of iron or non-alloyed steel originating in Belarus, the People’s Republic of China and Russia following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council (OJ L 132, 19.4.2021, p. 145).

(5) See Implementing Regulation (EU) 2022/191 recital 208, Implementing Regulation (EU) 2022/95 recital 59, Implementing Regulation (EU) 2021/2239 recitals 67-74 and Implementing Regulation (EU) 2021/635 recitals 149-150.

(6) See Implementing Regulation (EU) 2022/191 recital 192, Implementing Regulation (EU) 2022/95 recital 46, Implementing Regulation (EU) 2021/2239 recitals 67-74 and Implementing Regulation (EU) 2021/635 recitals 115-118.

(7) See Implementing Regulation (EU) 2022/191 recitals 193-194, Implementing Regulation (EU) 2022/95 recital 47, Implementing Regulation (EU) 2021/2239 recitals 67-74, and Implementing Regulation (EU) 2021/635 recitals 119-122. While the right to appoint and to remove key management personnel in SOEs by the relevant State authorities, as provided for in the Chinese legislation, can be considered to reflect the corresponding ownership rights, CCP cells in enterprises, state owned and private alike, represent another important channel through which the State can interfere with business decisions. According to the China’s company law, a CCP organisation is to be established in every company (with at least three CCP members as specified in the CCP Constitution) and the company shall provide the necessary conditions for the activities of the party organisation. In the past, this requirement appears not to have always been followed or strictly enforced. However, since at least 2016 the CCP has reinforced its claims to control business decisions in SOEs as a matter of political principle. The CCP is also reported to exercise pressure on private companies to put ‘patriotism’ first and to follow party discipline. In 2017, it was reported that party cells existed in 70 % of some 1,86 million privately owned companies, with growing pressure for the CCP organisations to have a final say over the business decisions within their respective companies. These rules are of general application throughout the Chinese economy, across all sectors, including to the producers of the product under investigation and the suppliers of their inputs.

(8) See Implementing Regulation (EU) 2022/191 recitals 195-201, Implementing Regulation (EU) 2022/95 recitals 48-52, Implementing Regulation (EU) 2021/2239 recitals 67-74, and Implementing Regulation (EU) 2021/635 recitals 123-129.

(9) See Implementing Regulation (EU) 2022/191 recital 202, Implementing Regulation (EU) 2022/95 recital 53, Implementing Regulation (EU) 2021/2239 recitals 67-74, and Implementing Regulation (EU) 2021/635 recitals 130-133.

(10) See Implementing Regulation (EU) 2022/191 recital 203, Implementing Regulation (EU) 2022/95 recital 54, Implementing Regulation (EU) 2021/2239 recitals 67-74, and Implementing Regulation (EU) 2021/635 recitals 134-135.

(11) See Implementing Regulation (EU) 2022/191 recital 204, Implementing Regulation (EU) 2022/95 recital 55, Implementing Regulation (EU) 2021/2239 recitals 67-74, and Implementing Regulation (EU) 2021/635 recitals 136-145.

(12) Commission staff working document SWD(2017) 483 final/2, 20.12.2017, available at: https://trade.ec.europa.eu/doclib/docs/2017/december/tradoc_156474.pdf

(13) European Union Chamber of Commerce in China, Overcapacity in China : an impediment to the Party’s reform agenda, available at: https://www.europeanchamber.com.cn/en/publications-overcapacity-in-china (accessed on 16 November 2022).

(14) Implementing Regulation (EU) 2021/635 and Commission Implementing Regulation (EU) 2020/508 of 7 April 2020 imposing a provisional anti-dumping duty on imports of certain hot rolled stainless steel sheets and coils originating in Indonesia, the People’s Republic of China and Taiwan (OJ L 110, 8.4.2020, p. 3).

(15) Global Forum on steel excess capacity, Ministerial Report, 20 September 2018.

(16) Report – Chapter 14, p. 358: 51% private and 49% SOEs in terms of production and 44% SOEs and 56% private companies in terms of capacity.

(17) Available at: www.gov.cn/zhengce/content/2016-02/04/content_5039353.htm; https://policycn.com/policy_ticker/higher-expectations-for-large-scale-steel-enterprise/?iframe=1&secret=c8uthafuthefra4e, and www.xinhuanet.com/english/2019-04/23/c_138001574.htm (accessed on 28 October 2022).

(18) Available at http://www.jjckb.cn/2019-04/23/c_137999653.htm (accessed on 28 October 2022).

(19) As was the case of the acquired majority stake of China Baowu Steel Group in Magang Steel in June 2019, see https://www.ft.com/content/a7c93fae-85bc-11e9-a028-86cea8523dc2 (accessed on 28 October 2022).

(20) See: https://www.miit.gov.cn/gzcy/yjzj/art/2020/art_af1bef04b9624997956b2bff6cdb7383.html (accessed on 16 November 2022).

(21) See Section IV, Subsection 3 of the Plan, available at: https://www.miit.gov.cn/zwgk/zcwj/wjfb/tz/art/2021/art_2960538d19e34c66a5eb8d01b74cbb20.html (accessed on 16 November 2022).

(22) See the 14th Five-Years Plan on the Steel Industry development, Foreword.

(23) See the group’s website, available at: http://www.baowugroup.com/about/board_of_directors (accessed on 7 September 2022).

(24) See the company’s website, available at: https://www.baosteel.com/about/manager (accessed on 7 September 2022).

(25) Shandong Gold Group conveys, learns and implements the spirit of the 20th National Congress of the Communist Party of China (original text in Chinese), press article available on China Gold News’ website: https://www.gold.org.cn/ky1227/kydj/202210/t20221028_193328.html (accessed on 17 November 2022).

(26) Report, Part III, Chapter 14, p. 346 ff.

(27) See People's Republic of China 14th Five-Year Plan for National Economic and Social Development and Long-Range Objectives for 2035, Part III, Article VIII, available at: https://cset.georgetown.edu/publication/china-14th-five-year-plan/ (accessed on 28 October 2022).

(28) See in particular Sections I and II of the Plan.

(29) The provisions of this section are very detailed and set out strict targets for the future: ‘For iron and steel enterprises that plan to relocate or renovate in different places, the governments of the places where they move in and move out should strengthen communication and coordination, and transfer relevant energy consumption and coal consumption indicators through the energy use rights trading market to achieve win-win cooperation and ensure the smooth and orderly progress of the project. Build 6 characteristic steel production bases in Anyang, Jiyuan, Pingdingshan, Xinyang, Shangqiu, Zhoukou, etc., and improve the scale, intensification, specialisation and distinction of the industry. Among them, by 2025, the production capacity of pig iron in Anyang City will be controlled to stay below 14 million tonnes, and the production capacity of crude steel will be controlled within 15 million tonnes and an 8,5 million-tonnes production centre of high-quality special steel will be formed in Anyang Base of Anyang Iron and Steel Group Co., Ltd.; support Henan Jiyuan Iron and Steel (Group) Co., Ltd. to build a production base for excellent and special steel bars and wires and a regional processing centre; to support Angang Group Xinyang Iron and Steel Co., Ltd., Minyuan Iron and Steel Group Co., Ltd., and Henan Angang Zhoukou Iron and Steel Co., Ltd. to build regional iron and steel complexes.’

(30) See points 2, 8 and 16, respectively, of the Hebei Province’s Three year action plan on cluster development in the steel industry chain 2020 2022.

(31) Guiding Catalogue for Industry Restructuring (2019 Version), approved by Decree of the National Development and Reform Commission of the People's Republic of China No. 29 of 27 August 2019; available at: http://www.gov.cn/xinwen/2019-11/06/5449193/files/26c9d25f713f4ed5b8dc51ae40ef37af.pdf ( accessed on 28 October 2022).

(32) See Implementing Regulation (EU) 2021/635, recitals 134-135 and Implementing Regulation (EU) 2020/508, recitals 143-144.

(33) World Bank Open Data – Upper Middle Income, https://data.worldbank.org/income-level/upper-middle-income.

(34) bvdinfo.com

(35) https://www.globaltradealert.org/data_extraction

(36) NACE code is the standard European nomenclature of productive economic activities. Following codes were researched: 2591 (steel drums and similar containers), 2592 (light metal packing), 2599 (other fabricated metal products), 2829 (general purpose machinery), 2893 (machinery for food, beverage and tobacco processing).

(37) Orbis database, provided by Bureau Van Dijk (https://orbis.bvdinfo.com).

(38) https://www.mococa.com

(39) https://ilostat.ilo.org/

(40) https://www.globalpetrolprices.com/Brazil/

(41) Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (OJ L 123, 19.5.2015, p. 33).

(42) https://ilostat.ilo.org/data/data-catalogue/

(43) Duly adjusted for statutory time not worked, such as vacation and national holidays.

(44) https://establishbrazil.com/articles/whats-real-cost-employee ;

https://ccbc.org.br/en/publicacoes/artigos-ccbc-en/how-much-do-your-employees-in-brazil-really-cost/ ; https://bpc-partners.com/inss-brazilian-salaries-benefits/

(45) https://www.globalpetrolprices.com/Brazil/

(46) https://www.edp.com.br/tarifas-vigentes/

(47) https://www.gov.br/mme/pt-br/assuntos/secretarias/energia-eletrica/publicacoes/informativo-gestao-setor-eletrico

(48) The peak and off-peak hours and the various additional cost applicable during the period.

(49) https://www.gov.br/mme/pt-br/assuntos/secretarias/energia-eletrica/publicacoes/informativo-gestao-setor-eletrico/informativo-gestao-setor-eletrico-ano-2021.pdf/view

(50) Since the only available unit of quantity in Comext and Commission Surveillance databases is weight, the conversion of quantities from tonnes/kilograms into units (number of kegs) has been done throughout the investigation under the formula 1 keg=10 kg when relying on those databases. This was the conversion rate used in the complaint and the Commission further analysis confirmed that 10 kg is approximately the average weight of a keg on the market.

(51) The upper figure for the year 2 018 differs from the value found in the Note to the File from 2 September 2022. This is due to the clerical error identified in aggregation of data from customs authorities that was subsequently corrected.

(52) EXW price including transport related costs and import duties applicable on the US market

(53) Council Regulation (EEC) No 2658/87 of 23 July 1987 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 256, 7.9.1987, p. 1) as amended by Commission implementing regulation (EU) 2022/1998 of 20 September 2022 amending Annex I to Council Regulation (EEC) No 2658/87 on the tariff and statistical nomenclature and on the Common Customs Tariff (OJ L 282, 31.10.2022, p. 1).