Commission Implementing Regulation (EU) 2023/825 of 17 April 2023 extending the anti-dumping duty imposed by Implementing Regulation (EU) 2020/1408 on imports of certain hot rolled stainless steel sheets and coils originating in Indonesia to imports of certain hot rolled stainless steel sheets and coils consigned from Türkiye, whether declared as originating in Türkiye or not

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 13 thereof,

Whereas:

(1) In October 2020, by Implementing Regulation (EU) 2020/1408 (2) the European Commission (‘the Commission’) imposed a definitive anti-dumping duty on imports of certain hot rolled stainless steel sheets and coils (‘SSHR’) originating in Indonesia, the People’s Republic of China (‘PRC’) and Taiwan. The anti-dumping duties in force range between 9,2 % and 19 % for imports originating in the PRC, between 4,1 % and 7,5 % for imports originating in Taiwan and were set at 17,3 % for imports originating in Indonesia. The investigation that led to these duties (‘the original investigation’) was initiated in August 2019 (3).

(2) On 17 June 2022, the Commission received a request pursuant to Articles 13(3) and 14(5) of the basic Regulation, to investigate the possible circumvention of the anti-dumping measures in force and to make imports of SSHR consigned from the Republic of Türkiye (‘Türkiye’), whether declared as originating in Türkiye or not, subject to registration.

(3) The request was lodged by the European Steel Association ‘EUROFER’ (‘the applicant’).

(4) The request contained sufficient evidence of a change in the pattern of trade involving exports from Indonesia and Türkiye to the Union, which has taken place following the imposition of measures on SSHR. The data provided in the request showed a significant change in the pattern of trade including a significant increase in exports of stainless steel slabs, the main raw material for the production of SSHR, from Indonesia to Türkiye and a significant increase in exports of SSHR from Türkiye to the Union. This change appeared to stem from the consignment of SSHR from Türkiye to the Union, after having undergone assembly or completion operations in Türkiye. The evidence showed that such assembly or completion operations started at the time of the initiation of the anti-dumping investigation that led to the duties in force, and that there was insufficient due cause or economic justification other than the imposition of the duty for the practice in question.

(5) Moreover, the request contained sufficient evidence showing that the stainless steel slabs originating in Indonesia constituted more than 60 % of the total value of the parts of SSHR, and that the value added to the parts during the assembly or the completion operations was lower than 25 % of the manufacturing cost.

(6) Furthermore, the request contained sufficient evidence showing that the practice, process or work was undermining the remedial effects of the anti-dumping duties in force in terms of quantity and prices. Significant volumes of imports of SSHR appeared to have entered the Union market. In addition, there was sufficient evidence tending to show that imports of SSHR were made at injurious prices.

(7) Finally, the request contained sufficient evidence that imports of SSHR were made at dumped prices in relation to the normal value previously established.

(8) The product concerned by the possible circumvention is flat-rolled products of stainless steel, whether or not in coils (including products cut-to-length and narrow strip), not further worked than hot-rolled and excluding products, not in coils, of a width of 600 mm or more and of a thickness exceeding 10 mm, classified on the date of entry into force of Implementing Regulation (EU) 2020/1408 under HS codes 7219 11, 7219 12, 7219 13, 7219 14, 7219 22, 7219 23, 7219 24, 7220 11 and 7220 12 and originating in Indonesia (‘the product concerned’). This is the product to which the measures that are currently in force apply.

(9) The product under investigation is the same as that defined in the previous recital, currently falling under HS codes 7219 11, 7219 12, 7219 13, 7219 14, 7219 22, 7219 23, 7219 24, 7220 11 and 7220 12, but consigned from Türkiye, whether declared as originating in Türkiye or not (TARIC codes 7219110010, 7219121010, 7219129010, 7219131010, 7219139010, 7219141010, 7219149010, 7219221010, 7219229010, 7219230010, 7219240010, 7220110010, and 7220120010) (‘the product under investigation’).

(10) The investigation showed that SSHR exported from Indonesia to the Union and SSHR consigned from Türkiye, whether originating in Türkiye or not, have the same basic physical and chemical characteristics and have the same uses, and are therefore considered as like products within the meaning of Article 1(4) of the basic Regulation.

(11) Following disclosure, Marcegaglia Specialties S.P.A. (‘Marcegaglia’), a European SSHR importer and user, claimed that all its Turkish SSHR imports made from Indonesian slabs were black SSHR coils for which there was almost no free market in the Union. The company distinguished between white SSHR and black SSHR within the product concerned. Black SSHR coils need to be pickled and annealed before further processing, limiting their use exclusively to re-rollers. Marcegaglia claimed that they are the only independent, non-vertically integrated, re-roller in the Union. Thus, since the product imported from Türkiye was limited to black SSHR coils, there was no competition with white SSHR manufactured and sold by Union producers on the free market.

(12) The Commission recalled that the purpose of this investigation was to determine whether there was circumvention. There was no legal basis to revise the product scope of the measures in the context of this investigation. The product scope was established in the original investigation and all SSHR coils within the product definition were included. Specifically, in the original investigation it was concluded that black and white coils share the same basic physical and chemical characteristics, that they are interchangeable and fall within the product scope (4). Therefore, the claim was rejected.

(13) Following disclosure, Çolakoğlu Metalurji A.Ş. (‘Çolakoğlu’), a Turkish exporting producer, and the Government of the Republic of Türkiye claimed that the Commission should have extended the scope of the investigation to include the processing of Indonesian stainless steel slabs into SSHR in the Union.

(14) As explained in recital (31), the Commission recalled that, while this practice was out of the scope of this investigation, it took note of the claim and will further analyse whether this practice, if confirmed, should require further action from the Commission.

(15) Having determined, after having informed the Member States, that sufficient evidence existed for the initiation of an investigation pursuant to Article 13(3) of the basic Regulation, the Commission initiated the investigation and made imports of SSHR consigned from Türkiye, whether declared as originating in Türkiye or not, subject to registration, by Commission Implementing Regulation (EU) 2022/1310 (5) (‘the initiating Regulation’).

(16) Çolakoğlu argued that the initiation of the investigation was not justified due to a lack of sufficient evidence, and the investigation should therefore be terminated.

(17) Çolakoğlu claimed that there is a lack of change in the pattern of trade since, in the absence of a decrease in imports of SSHR from Indonesia, the increase in imports of SSHR from Türkiye, in itself, which could not possibly substitute the imports from Indonesia, did not demonstrate the existence of a change in the pattern of trade.

(18) It also argued that the practice, process or work taking place in Türkiye did not fall within any of the categories of the fourth subparagraph of Article 13(1) of the basic Regulation. In particular, there was no positive evidence that consignment of SSHR originating in Indonesia via Türkiye to the Union took place, neither evidence of reorganisation of the patterns and channels of sales. Moreover, the practice, process or work could not be qualified as a slight modification, as the product under investigation is a downstream product and, as such, a different product than its input materials or an assembly operation, in particular since the product under investigation and the stainless steel slabs are not classified under the same tariff headings.

(19) Çolakoğlu claimed that there was an economic justification to invest in stainless steel making capacities given the demand for stainless steel products in Türkiye.

(20) Çolakoğlu also argued the absence of injury and that the remedial effects were not being undermined since (i) with a market share of 1 %, the Turkish imports were not significant to undermine the remedial effect of the duty; and (ii) should the remedial effects of the duty be undermined, this would not be because of SSHR imports from Türkiye but rather because of the imports of SSHR from Indonesia, which continued after the imposition of the measures, and SSHR processed by the Union producers from steel slabs imported from Indonesia.

(21) In addition, Çolakoğlu argued that extending the measures to Türkiye would be against the Union interest, as this would lead to a further increase of prices, which would ultimately affect negatively the end users and consumers.

(22) Finally, Çolakoğlu claimed that Union producers performed the same operations, that is the processing of Indonesian stainless steel slabs into SSHR in the Union, even at a larger extent than the operations taking place in Türkiye. Therefore, it requested to terminate the investigation or, alternatively, to expand the scope of the investigation to include the processing of Indonesian stainless steel slabs into SSHR in the Union.

(23) Similar comments were received from Marcegaglia, and from the Government of the Republic of Türkiye.

(24) In addition, Marcegaglia claimed that the import of stainless steel slabs from Indonesia for further processing in Türkiye constituted an economically justified operation aimed at diversifying its sources of supply.

(25) The Commission considered that the request contained sufficient evidence that a change in the pattern of trade involving exports from Indonesia and Türkiye to the Union took place following the initiation of the original investigation and the imposition of measures. Specifically, the request contained data showing a change in the pattern of trade involving a significant increase in exports of stainless steel slabs, the main raw material for the production of SSHR, from Indonesia to Türkiye and a significant increase in exports of SSHR from Türkiye to the Union.

(26) Concerning the practice, process or work taking place in Türkiye, the Commission considered that the request contained sufficient evidence of the existence of assembly/completion operations, one of the practices specifically mentioned in Article 13(2) of the basic Regulation, in Türkiye, and that these operations were based on the use of stainless steel slabs, the main input material, from Indonesia. The tariff classification of the product under investigation and of its main input materials, or the change thereof, is irrelevant for determining whether an assembly/completion operation constitutes circumvention.

(27) In addition, the request provided sufficient evidence regarding the apparent lack of economic justification other than the imposition of the duties, in particular as the operations led to an increase in the complexity of logistical operations costs and service fees. The claims made by Çolakoğlu and Marcegaglia were further analysed during the investigation and addressed in Section 2.4 below.

(28) The Commission considered that the request also provided sufficient evidence suggesting that due to these practices, the remedial effects of the existing anti-dumping measures on SSHR were being undermined both in terms of quantity and prices. In particular, the request provided sufficient evidence that imports of SSHR were made at prices below the non-injurious price established in the original investigation. These claims, including the arguments concerning the share of Turkish imports, were further analysed during the investigation.

(29) Concerning Union interest claims, the Commission recalled that the Union interest is not a consideration for initiations under Article 13 of the basic Regulation.

(30) In view of the above, the Commission rejected the claims that the request did not contain sufficient evidence to warrant the initiation of the investigation.

(31) Concerning Çolakoğlu’s comments that imports of Indonesian slabs into the Union might be processed into SSHR within the Union, the Commission noted that this practice fell out of the scope of this investigation. Indeed, the initiation Regulation limited the investigation to imports of SSHR into the Union from Türkiye and the processing operations taking place in Türkiye. However, the Commission took note of the claim provided by Çolakoğlu, and will further analyse whether imports of stainless steel slabs from Indonesia into the Union could be an element of a distinct circumvention practices. The Commission started monitoring the imports of stainless steel slabs from Indonesia into the Union and, according to Eurostat, these imports ceased in October 2022.

(32) Following disclosure, Çolakoğlu claimed that the Commission violated its right of defence pursuant to Article 6(7) of the basic Regulation, Article 296 TFEU as well as its right to sound administration in accordance with Article 41 of the Charter of the Fundamental Rights of the European Union, by failing to consider many of the arguments that were submitted in the course of the investigation. In particular, Çolakoğlu considered that its right to sound administration was violated because the Commission did not expand the scope of the investigation to include stainless steel slabs from Indonesia imported directly into the Union.

(33) The Commission recalled that, on 30 January 2023, it disclosed to the interested parties the essential facts and considerations on the basis of which its conclusions were based. All parties were given 15 days to comment. All arguments made by Çolakoğlu and other interested parties were considered, but this does not mean that every single argument submitted needed to be addressed explicitly in the disclosure document. (6) The Commission needs to duly justify and explain in detail its findings and conclusions, as it did in the disclosure document. Following disclosure, Çolakoğlu submitted comments and was granted a hearing. The Commission duly considered all comments made, as specified below. With respect to the imports of Indonesian stainless steel slabs into the Union, the Commission recalled that it duly explained in the disclosure, mirrored in recital (31) above, the reasons why this alleged practice fell outside the scope of the investigation at hand. Also, contrary to what Çolakoğlu claimed, the Commission did not exercise any discretion as the initiation Regulation only allowed it to investigate other possible circumvention practices taking place outside the Union, in particular in Türkiye. Therefore, the Commission considered that Çolakoğlu’s rights of defence were fully respected and rejected the claim.

(34) The investigation period covered the period from 1 January 2018 to 30 June 2022 (‘the investigation period’ or ‘IP’). Data were collected for the investigation period to investigate, inter alia, the alleged change in the pattern of trade following the imposition of measures on the product concerned, and the existence of a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty. More detailed data were collected for the period from 1 July 2021 to 30 June 2022 (‘the reporting period’ or ‘RP’) in order to examine if imports were undermining the remedial effect of the measures in force in terms of prices and/or quantities and the existence of dumping.

(35) The Commission officially informed the authorities of Indonesia and Türkiye, the known exporting producers in those countries, the Union industry and the President of the EU- Türkiye Association Council of the initiation of the investigation.

(36) In addition, the Commission asked the Mission of Türkiye to the European Union to provide it with the names and addresses of exporting producers and/or representative associations that could be interested in participating in the investigation in addition to the Turkish exporting producers, which had been identified in the request by the applicant.

(37) Exemption claim forms for the producers/exporters in Türkiye, questionnaires for the producers/exporters in Indonesia, and for importers in the Union were made available on DG TRADE’s website.

(39) In addition, a Union importer and user, Marcegaglia, submitted a questionnaire reply.

(40) Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set in the initiating Regulation. All parties were informed that the non-submission of all relevant information or the submission of incomplete, false or misleading information might lead to the application of Article 18 of the basic Regulation and to findings being based on the facts available.

(41) A hearing with Marcegaglia was held on 4 October 2022.

(42) Following disclosure on 30 January 2023, hearings were held with Marcegaglia on 8 February 2023 and with Çolakoğlu on 10 February 2023.

(45) As stated in recital (38), five companies established in Türkiye requested to be exempted from the measures, if extended to Türkiye.

(46) Three of them, Saritas, UCAS and AST, were considered not to be exporting producers. Following the analysis of the information provided in their respective requests, the Commission concluded that, while the companies were involved in the purchase and resale of the product under investigation, they did not produce or manufacture it. The product under investigation was purchased from other entities, which were the actual producers. These companies, consequently, could not be classified as producers. Article 13(4) of the basic Regulation provides the possibility only for producers to apply for exemption from the extension of anti-dumping duties. This was echoed in recital (27) of the initiation Regulation, which explicitly specified that exemptions can be granted only to producers of the product under investigation in Türkiye. Since these companies were found not to be producers, they were therefore not entitled to apply for an exemption.