Commission Implementing Regulation (EU) 2023/1330 of 29 June 2023 imposing a definitive anti-dumping duty on imports of certain lightweight thermal paper originating in the Republic of Korea 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 Implementing Regulation (EU) 2017/763 (2), the European Commission ('the Commission') imposed anti-dumping duties on imports of certain lightweight thermal paper originating in the Republic of Korea (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’. The measures took the form of fixed duty rates at the level of EUR 104,46 per tonne net, for both the sole cooperating exporting group and for all other companies.

(2) The judgments in cases T-383/17 (3) and C-260/20 P (4) entailed the annulment of the measures for the sole cooperating exporting group. By Implementing Regulation (EU) 2023/593 (5), the European Commission re-imposed the anti-dumping duties on imports of certain lightweight thermal paper originating in the Republic of Korea at the revised level of EUR 103,16 per tonne net, for both the sole cooperating exporting group and for all other companies.

(3) Following the publication of a notice of impending expiry (6) the Commission received a request for a review pursuant to Article 11(2) of the basic Regulation.

(4) The request for review was submitted on 1 February 2022 by the European Thermal Paper Association (‘the applicant’) on behalf of the Union industry of certain lightweight thermal paper 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 or recurrence of dumping and continuation or recurrence of injury to the Union industry.

(5) 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 3 May 2022 the Commission initiated an expiry review with regard to imports into the Union of certain lightweight thermal paper originating in the Republic of Korea (‘the country concerned’) 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 (7) (‘the Notice of Initiation’).

(6) 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’).

(7) 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, the known producer in the Republic of Korea and the authorities of the Republic of Korea, known importers, users and traders, about the initiation of the expiry and invited them to participate.

(8) 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.

(9) The Commission received comments on initiation from Hansol Paper Co. Ltd. (‘Hansol Paper’). This party claimed that the data in the request do not show that the Union industry is suffering material injury.

(10) The Commission recalled that Hansol Paper had carried out an examination of the request in accordance with Article 11(2) and other relevant paragraphs of Article 11 of the basic Regulation, coming to the conclusion that the requirements for initiation of an investigation were met, i.e., that the adequacy and accuracy of the evidence presented by the applicants were sufficient evidence tending to show likelihood of continuation or recurrence of injurious dumping.

(11) In this respect, it also recalled that at the stage of the request it is not necessary that the Commission has before it the same evidence of likelihood of continuation or recurrence of dumping and injury of a quantity and quality that would be necessary for the extension of the measures. An anti-dumping investigation is a process where certainty on the existence of the elements necessary to adopt or prolong a measure or to terminate a proceeding is reached gradually as the investigation moves forward. Furthermore, it is not excluded that certain errors or inaccuracies may exist in the application. However, their existence does not necessarily have an impact on the overall conclusion that the request contains sufficient evidence of a likelihood of continuation or recurrence of injurious dumping, and that the file merits investigation.

(12) Furthermore, the legal standard of evidence required for a request (sufficient evidence) makes it clear that the quantity and quality of information in the request is not the same as the one available at the end of an investigation. It is not excluded that changes will occur between the stage of the request and the conclusion of the investigation. However, such changes do not necessarily have an impact on the overall conclusion that the file merits an investigation since there is sufficient evidence of likelihood of continuation or recurrence of injurious dumping.

(13) With regard to the claim that the data in the request would not show that the Union industry is suffering material injury, Hansol Paper submitted that the economic indicators provided in the request would show that imports from Korea are at non-injurious levels, Korea’s market share is negligible and the Union industry is performing well in terms of sales volume, market share, investments and operating efficiency. According to Hansol Paper, the request acknowledged that sales prices of the Union producers have declined over the period considered but submitted that this is due to other market-wide factors that have nothing to do with imports from Korea.

(14) The Commission clarified that in the request the applicant alleges the likelihood of continuation or recurrence of injury from the country concerned. The Commission indeed considered that, in the request, the applicant provided sufficient evidence demonstrating that, following an initial period of recovery, the Union industry was injured when the imports from the country concerned increased between 1 October 2020 until 30 September 2021. In this respect, it recalled that a finding of material injury requires an examination, inter alia, of the relevant factors as described in Article 5(2)(d) of the basic Regulation. Indeed, the wording of Article 5(2) of the basic Regulation states that the complaint shall contain the information on changes in the volume of the allegedly dumped imports, the effect of those imports on prices of the like product on the Union market and the consequent impact of the imports on the Union industry, as demonstrated by relevant (not necessarily all) factors and indices having a bearing on the state of the Union industry, such as those listed in Articles 3(3) and 3(5). This is applicable mutatis mutandis to the likelihood analysis in an expiry review. Equally, not all factors must show a deterioration in order for material injury (and hence, likelihood of continuation or recurrence thereof) to be established. Furthermore, the existence of other factors which may have an impact on the situation of the Union industry does not necessarily imply that the effect of dumped imports on this industry is not material (again, this is similarly applicable to the likelihood analysis). This is all the more true in the case of an expiry review where the focus lies on what would happen should measures be repealed. Moreover, in the case of expiry reviews, anti-dumping measures may have a certain positive effect even if injury continues overall. In any event, the Commission further noted that the request contained sufficient evidence on likelihood of recurrence of injury. In particular, it showed that the Korean market is characterised by significant production overcapacity. The Korean domestic market is unable to absorb this excess production. Therefore, the Union market, which is globally the largest thermal paper market is attractive to Korean exporters in terms of size. In addition, other export markets are difficult to access for several reasons (8). On this basis, the Commission was entitled to initiate the investigation.

(15) As to Hansol Paper allegations regarding the positive development of some injury indicators in the request, e.g., market share and sales volume, the Commission noted that anti-dumping measures often have a positive effect on the state of the Union industry — a factor which was of course taken into account in the Commission’s analysis.

(16) Regarding the comment on Union interest, the Commission has no legal obligation to examine Union interest at the initiation stage.

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

(18) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected a sample of three Union producers. The criteria used for the selection of the sample where the largest representative volume of sales and production of the like product in the EU between 1 January 2021 and 31 December 2021. The sampled Union producers accounted for 86 % of the estimated total volume of production and sales in the Union. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample. One comment was received from the Union association who supported the provisional sample. The sample was confirmed on 12 May 2022. The sample is representative of the Union industry.

(19) 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.

(20) The Commission invited the three sampled Union producers and the main known exporting producer in Korea to fill in the relevant questionnaires made available online (9) on the day of the initiation.

(21) Questionnaire replies were received from the three sampled Union producers, the main known exporting producer, Hansol Paper, and its related importers Hansol Europe B.V. and Hansol America Inc. Moreover, the applicant provided a questionnaire reply with macro-data.

(23) On 27 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. On 10 May 2023, the Commission sent an update of the undercutting calculation to Hansol Paper only. All parties were granted a period within which they could make comments on the disclosure. Comments were received from the applicants and Hansol Paper.

(24) The comments made by interested parties were considered by the Commission and taken into account, where appropriate. No parties requested a hearing.

(25) Given the limited number of parties that submitted data, some of the figures presented below had to be in the form of ranges in order to avoid confidentiality breaches. The data from the sole cooperating exporting producer are also given in ranges as it is the only company that cooperated.

(26) The product under review is the same as in the original investigation, namely certain lightweight thermal paper weighing 65 g/m2 or less; in rolls of a width of 20 cm or more, a weight of the roll (including the paper) of 50 kg or more and a diameter of the roll (including the paper) of 40 cm or more (‘jumbo rolls’); with or without a base coat on one or both sides; coated with a thermo-sensitive substance on one or both sides; and with or without a top coat (‘the product under review’), currently falling under CN codes ex 4809 90 00, ex 4811 90 00, ex 4816 90 00 and ex 4823 90 85 (TARIC codes: 4809900010, 4811900010, 4816900010, 4823908520).

(27) Lightweight thermal paper is a specialty paper. It has a thermal active coating which reacts to form an image when heat is applied by printers with thermal printheads. Lightweight thermal paper is used for point-of-sale applications such as the receipts issued by retail, but also for self-adhesive labels for e-commerce packaging, tickets and tags.

(28) Lightweight thermal paper can be produced with several types of chemical developers. All types are concerned by the present investigation.

(29) The product concerned by this investigation is the product under review originating in the Republic of Korea.

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

(32) In a submission of 1 July 2022, the exporting producer requested a clarification whether new product types produced by Union industry would be included or excluded from the scope of the expiry review. These new product types do not use any chemical developer and the image is released based on physics instead of a chemical process. A note to the file dated 19 September 2022 clarified the scope of the investigation in the sense that only lightweight thermal paper with a chemical developer is covered by the proceeding.

(33) During the review investigation period, imports of lightweight thermal paper from the Republic of Korea continued, albeit at lower levels than in the investigation period of the original investigation (i.e. from 1 January 2015 to 31 December 2015). According to table 2 below, imports of lightweight thermal paper from the Republic of Korea accounted for 2,7 % of the Union market in the review investigation period compared to 13,6 % market share during the original investigation.

(34) Hansol Paper cooperated with the investigation. It accounted for (close to) all imports of the product under review from the Republic of Korea. No other exporting producer came forward. The findings with regard to the continuation of dumping are based on the verified data of Hansol Paper.

(35) The Commission first examined whether the total volume of domestic sales of the cooperating exporting producer was representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales are representative if the total domestic sales volume of the like product to independent customers on the domestic market per exporting producer represented at least 5 % of its total export sales volume of the product under review to the Union during the review investigation period. On this basis, the total sales by the exporting producer of the like product on the domestic market were representative.

(36) The Commission subsequently identified the product types sold domestically that were identical or comparable with the product types sold for export to the Union for the exporting producer with representative domestic sales.

(37) The Commission then examined whether the domestic sales by the exporting producer on its domestic market for each product type that is identical or comparable with a product type sold for export to the Union were representative, in accordance with Article 2(2) of the basic Regulation. The domestic sales of a product type are representative if the total volume of domestic sales of that product type to independent customers during the review investigation period represents at least 5 % of the total volume of export sales of the identical or comparable product type to the Union. The Commission established that, for some product types that were exported to the Union during the review investigation period, there were no domestic sales and were thus not representative.

(38) The Commission next defined the proportion of profitable sales to independent customers on the domestic market for each product type during the review investigation period in order to decide whether to use actual domestic sales for the calculation of the normal value, in accordance with Article 2(4) of the basic Regulation.

(40) In this case, the normal value is the weighted average of the prices of all domestic sales of that product type during the review investigation period.

(42) The analysis of domestic sales showed that, depending on the product type, between 32 % and 100 % of all domestic sales volume were profitable and that the weighted average sales price of each product type was higher than the cost of production. Accordingly, depending on the product type, the normal value was calculated as a weighted average of the price of all domestic sales during the review investigation period or as a weighted average of the profitable sales only.

(43) Where a product type was not sold on the domestic market, and in the absence of a domestic sales price of such product type by any other exporting producer, the Commission constructed the normal value in accordance with Article 2(3) and (6) of the basic Regulation.

(45) Hansol Paper exported the product under review to the Union either directly to independent customers or through its related company Hansol Europe.

(46) For sales of the exporting producer directly to independent customers in the Union, the export price was the price actually paid or payable for the product under review when sold for export to the Union, in accordance with Article 2(8) of the basic Regulation.

(47) For sales of the exporting producer to the Union through Hansol Europe acting as an importer, the export price was established on the basis of the price at which the imported product was first resold to independent customers in the Union, in accordance with Article 2(9) of the basic Regulation. In this case, adjustments to the price were made for all costs incurred between importation and resale, including SG&A expenses, and for profits accruing.

(48) With respect to the profit margin used, in line with established case-law of Union courts, (10) the Commission did not use the profit margin of the related company as it is considered unreliable. In the absence of any other information, it resorted to the profit margin of 4,5 % which had also been used in the original investigation. (11)

(49) The Commission compared, per product type, the normal value and the export price of the exporting producer on an ex-works basis.