Commission Implementing Regulation (EU) 2023/1159 of 13 June 2023 imposing a definitive anti-dumping duty on imports of okoumé plywood originating in the People’s Republic of China 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 1942/2004 (2), the Council imposed anti-dumping duties on imports of okoumé plywood originating in the People’s Republic of China (‘the PRC’ or ‘China’ or ‘country concerned’) (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’.

(2) By Regulation (EU) No 82/2011 (3), the Council prolonged the original measures following an expiry review (the ‘first expiry review’) for five years. By Regulation (EU) 2017/648 (4), the European Commission (‘the Commission’) prolonged the original measures for another five years following a second expiry review (the ‘second expiry review’).

(3) The anti-dumping duties currently in force are at rates ranging between 6,5 % and 23,5 % on imports from four exporting producers and at a rate of 66,7 % on imports from all other companies.

(4) Following the publication of a notice of impending expiry (5), the Commission received a request for a review pursuant to Article 11(2) of the basic Regulation.

(5) The request for review was submitted on 16 December 2021 by the European Panel Federation (‘the applicant’) on behalf of the Union industry of okoumé plywood in the sense of Article 5(4) of the basic Regulation. The request for review was based on the grounds that the expiry of the measures would be likely to result in continuation and/or recurrence of dumping and recurrence of injury to the Union industry.

(6) 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 5 April 2022 the Commission initiated an expiry review of the anti-dumping measures applicable to imports into the Union of okoumé plywood originating in the PRC 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 (6) (‘the Notice of Initiation’).

(7) The investigation of continuation or recurrence of dumping covered the period from 1 January 2021 to 31 December 2021 (‘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 2018 to the end of the review investigation period (‘the period considered’).

(8) 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 in the PRC, 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.

(9) 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.

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

Sampling of Union producers

(11) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the largest representative volume of production and sales, taking also into account geographical spread. This sample consisted of three Union producers. The sampled Union producers accounted for 40 % of the estimated total Union production and 41 % of the total Union industry sales volume. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample. No comments were received. The sample was considered representative of the Union industry.

Sampling of importers

(12) 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.

Sampling of producers in the PRC

(13) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all known producers/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 producers/exporting producers, if any, that could be interested in participating in the investigation.

(14) No producers/exporting producers from the PRC provided the requested information within the deadline 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 were made on the basis of the facts available pursuant to Article 18 of the basic Regulation. The sources used are detailed in recital (28).

(15) 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’).

(16) The Commission sent questionnaires to the sampled Union producers. The same questionnaires, as well as questionnaires for unrelated importers, users and Chinese exporters had also been made available online (7) on the day of initiation. In the course of the investigation, the Commission sent a questionnaire to the applicant requesting macroeconomic data of the Union industry.

(17) Questionnaire replies were received from the three sampled Union producers and the applicant.

(18) 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.

(20) On 5 April 2023, 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. No parties made any comments.

(21) The product under review is the same as in the original investigation and previous expiry reviews, namely okoumé plywood, defined as plywood consisting solely of sheets of wood, each ply not exceeding 6 mm thickness, with at least one outer ply of okoumé not coated by a permanent film of other materials, currently falling under CN code ex 4412 31 10 (TARIC code 4412311010) (‘the product under review’).

(22) There are two main types of okoumé plywood, plywood made solely with okoumé (‘full okoumé’) and plywood with at least one of the outer faces made of okoumé, the rest being made of other wood (‘faced okoumé’) (the latter can also be referred to as ‘combi’ or ‘twin’). Both main types of okoumé plywood have the same external appearance. Despite differences in mechanical properties, they all share the same basic physical and technical characteristics, and are used for the same basic purposes.

(23) Okoumé plywood is used in a wide range of applications, for example in the building industry in exterior joinery and carpentry applications for boarding, shutter boards, exterior basements and balustrades and riverside panelling. It is also used for more decorative purposes in, inter alia, road transports (e.g. cars, coaches, caravans, camping cars), maritime transport (yachts), furniture industry and doors.

(24) The product concerned by this investigation is the product under review originating in the People’s Republic of China.

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

(27) During the review investigation period, imports of okoumé plywood originating in the PRC virtually disappeared from the Union market. According to Eurostat imports of okoumé plywood from the PRC accounted for about 0,04 % of the Union market. The situation was similar in the previous expiry review. In absolute terms, imports of okoumé plywood originating in the PRC amounted to 74 m3 in the review investigation period, as compared to 83 606 m3 in the original investigation, 12 620 m3 in the first expiry review and no imports in the second expiry review.

(28) As mentioned in recital (14), none of the producers/exporting producers from the PRC cooperated in the investigation. Therefore, the Commission informed the authorities of the PRC that, due to the absence of cooperation, it might apply Article 18 of the basic Regulation concerning the findings with regard to the PRC. The Commission did not receive any comments, or requests for an intervention of the Hearing Officer, in this regard.

(29) 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 information contained in the request for review, publicly available data for a Turkish okoumé plywood producer, information provided by the applicant and the sampled Union producers, information from the Turkish national statistics office, Eurostat’s Comext database, Global Trade Atlas (‘GTA’), the International Trade Centre’s market access map, and the Food and Agriculture Organisation of the United Nations (‘FAO’).

(30) Given that sufficient evidence had been 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.

(31) 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 significant distortions in the PRC.

(32) 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 possibly appropriate countries in accordance with the criteria set out in the first indent of Article 2(6a) of the basic Regulation.

(33) On 24 August 2022, the Commission issued a Note for the file on the sources for the determination of the normal value (‘Note on sources’). By the Note on sources, the Commission informed interested parties that it intended to use Türkiye as representative country, and on the relevant sources it intended to use for the determination of the normal value with Türkiye as the representative country. It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on available information for the company Eksioglu Orman Urunleri, a producer in Türkiye.

(34) By the Note on sources, the Commission also invited interested parties to comment on the sources and the appropriateness of Türkiye as a representative country and also suggest other countries, provided they submitted sufficient information on the relevant criteria. No comments were received.

(35) 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’.

(36) 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 of administrative, selling and general costs and for profits’ (‘administrative, selling and general costs’ is refereed hereinafter as ‘SG&A’).

(37) 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 or producers, the application of Article 2(6a) of the basic Regulation was appropriate.

(39) As the list in Article 2(6a)(b) of the basic Regulation is non-cumulative, not all the elements need to be given regard to for a finding of significant distortions. Moreover, the same factual circumstances may be used to demonstrate the existence of one or more of the elements of the list. However, any conclusion on significant distortions within the meaning of Article 2(6a)(a) must be made on the basis of all the evidence at hand. The overall assessment on the existence of distortions may also take into account the general context and situation in the exporting country, in particular where the fundamental elements of the exporting country’s economic and administrative set-up provides the government with substantial powers to intervene in the economy in such a way that prices and costs are not the result of the free development of market forces.

(40) Article 2(6a)(c) of the basic Regulation provides that ‘[w]here the Commission has well-founded indications of the possible existence of significant distortions as referred to in point (b) in a certain country or a certain sector in that country, and where appropriate for the effective application of this Regulation, the Commission shall produce, make public and regularly update a report describing the market circumstances referred to in point (b) in that country or sector’.

(41) Pursuant to this provision, the Commission has issued a country report concerning the PRC (‘the Report’) (8), showing the existence of substantial government intervention at many levels of the economy, including specific distortions in many key factors of production (such as land, energy, capital, raw materials and labour) as well as in specific sectors (such as steel and chemicals). Interested parties were invited to rebut, comment or supplement the evidence contained in the investigation file at the time of initiation. The Report was placed in the investigation file at the initiation stage. The request also contained some relevant evidence complementing the Report.

(42) More specifically, the request, referring to the Report, indicated that structural distortions in many Chinese industrial sectors have contributed to the overcapacity in Chinese plywood sector, including okoumé plywood. Moreover, the request pointed out that policies of GOC, such as those detailed in the 13th Five-Year Plan (‘FYP’) on Forestry, have fostered the use of wood as a raw material through State intervention. In the subsequent 14th FYP, covering the years 2021-2026, the GOC stated its intention to ‘improve the infrastructure of state-owned forest farms and forest zones’. In addition, referring back to the Report, the request noted the existence of distortions in the access to capital, chemical and labour sectors, as well as distortions in the energy markets. According to the request, those distortions are likely to have a material impact on the okoumé plywood industry. Furthermore, the request recalled that, in 2017, the US authorities imposed anti-dumping and countervailing duties on certain hardwood plywood imports into the USA from China following a conclusion that the GOC’s interventions through various state programs, subsidies, policy loans at preferential terms etc., directly favoured the Chinese producers and exporters of certain hardwood plywood products.

(43) The GOC did not comment or provide evidence supporting or rebutting the existing evidence on the case file, including the Report and the additional evidence provided by the applicant, on the existence of significant distortions and/or on the appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand. Nor has the Commission received any comments from the Chinese exporting producers.

(44) 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.