Commission Implementing Regulation (EU) 2024/357 of 23 January 2024 imposing a definitive anti-dumping duty on imports of certain open mesh fabrics of glass fibres originating in the People’s Republic of China as extended to imports consigned from India, Indonesia, Malaysia, Taiwan and Thailand following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and 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) Following an anti-dumping investigation (‘the original investigation’), by Regulation (EU) No 791/2011 (2), the Council imposed a definitive anti-dumping duty ranging between 48,4 % and 62,9 % on imports of certain open mesh fabrics of glass fibres (‘OMF’) originating in the People’s Republic of China (‘China’, ‘the PRC’ or ‘the country concerned’).

(2) In July 2012, following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, by Implementing Regulation (EU) No 672/2012 (3), the Council extended the measures in force to imports of the product concerned consigned from Malaysia, whether declared as originating in Malaysia or not.

(3) In January 2013, following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, by Implementing Regulation (EU) No 21/2013 (4), the Council extended the measures in force to imports of the product concerned consigned from Taiwan and Thailand, whether declared as originating in Taiwan and Thailand or not.

(4) In December 2013, following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, by Implementing Regulation (EU) No 1371/2013 (5), the Council further extended the measures in force to imports of the product concerned consigned from India and Indonesia, whether declared as originating in India and Indonesia or not.

(5) In September 2014, following an anti-circumvention investigation pursuant to Article 13 of the basic Regulation, by Implementing Regulation (EU) No 976/2014 (6), the Commission also extended the duties in force to certain slightly modified open mesh fabrics of glass fibres originating in the People’s Republic of China.

(6) In September 2015, following an investigation pursuant to Articles 11(3) and 13(4) of the basic Regulation, by Implementing Regulation (EU) 2015/1507 (7), the Commission exempted two Indian producers from the extension of the duty in recital (4).

(7) In November 2017, by Regulation (EU) 2017/1993 (8), the Commission prolonged for five years the original measures, as extended to the product concerned consigned from the countries mentioned in recitals (2) to (4), following an expiry review (the ‘first expiry review’) pursuant to Article 11(2) of the basic Regulation. These measures are ‘the measures in force’.

(8) In May 2018, following an investigation pursuant to Articles 11(4) and 13(4) of the basic Regulation, by Implementing Regulation (EU) 2018/788 (9), the Commission exempted one more Indian producer from the extension of the duty in recital (4).

(9) Finally in December 2022 the Commission exempted a further Indian producer from the extended duty in recital (4).

(11) Following the publication of a notice of impending expiry (10), the Commission received a request for a review pursuant to Article 11(2) of the basic Regulation.

(12) The request for review was submitted on 2 August 2022 by the association of the European technical textile producers Tech-Fab Europe (‘the applicant’) on behalf of the Union industry of OMF within the meaning 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.

(13) 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 4 November 2022 the Commission initiated an expiry review of the anti-dumping measures applicable to imports into the Union of OMF 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 (11) (‘the Notice of Initiation’).

(14) The investigation of continuation or recurrence of dumping covered the period from 1 July 2021 to 30 June 2022 (‘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 2019 to the end of the review investigation period (‘the period considered’).

(15) 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.

(16) 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.

(17) In the Notice of Initiation, the Commission stated that it might sample 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 the sample based on the largest representative volume of production and sales. This sample consisted of three Union producers. The sampled Union producers accounted for 72 % of the estimated total Union production volume and 71 % of the total estimated 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 and the sample was confirmed.

(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. Only one unrelated importer submitted the requested information. Consequently, the Commission decided that sampling was not necessary.

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

(21) No 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 set out in recital (35).

(22) 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’).

(23) 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 (12) on the day of initiation. During the investigation, the Commission sent a questionnaire to the applicant requesting macroeconomic data of the Union industry.

(24) Questionnaire replies were received from the three sampled Union producers, one unrelated importer and the applicant.

(25) 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.

(27) On 23 October 2023, the Commission disclosed the essential facts and considerations based on 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.

(28) The product under review is certain open mesh fabrics of glass fibres, of a cell size of more than 1,8 mm both in length and in width and weighing more than 35 g/m2, excluding fibreglass discs, currently falling under CN codes ex 7019 63 00, ex 7019 64 00, ex 7019 65 00, ex 7019 66 00 and ex 7019 69 90 (TARIC codes 7019630019, 7019640019, 7019650018, 7019660018 and 7019699019).

(29) Open mesh fabrics of glass fibres can be found in different cell sizes and weight per square metre and are mostly used as reinforcement material in the construction sector (external thermal insulation, floor reinforcement, and wall repair).

(30) The product concerned by this investigation is the product under review originating in the PRC.

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

(33) In accordance with Article 11(2) of the basic Regulation, the Commission examined whether the expiry of the measure in force would be likely to lead to a continuation or recurrence of dumping from the PRC.

(34) As mentioned in recital (21), no exporting producers from the PRC cooperated in the investigation. Therefore, on 16 December 2022, the Commission informed the authorities of the PRC that, due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to the PRC. No reply was received and therefore the Commission decided to apply Article 18.

(35) 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 provided in the request for review, information obtained from cooperating parties during the review investigation, namely the applicant and the sampled Union producers, import data and Global Trade Atlas (13) (‘GTA’) statistics.

(36) 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.

(37) 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.

(38) 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.

(39) 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. No comments were raised by the GOC in this regard.

(40) In point 5.3.2 of the Notice of Initiation, the Commission also specified that, in view of the evidence available, it might 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. According to the information available to the Commission, Russia and India were identified as the possible representative countries for the PRC.

(41) 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.

(42) On 10 February 2023, 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 India as representative country and outlined the relevant sources it intended to use for the determination of the normal value.

(43) It also informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on available information for two companies, namely Montex Glass Fibre Industries Private Limited and Pyrotek India Private Limited, producers of the product under review in India.

(44) The Commission received one comment from the Union industry supporting the Commission’s decision to use India as representative country.

(45) 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’.

(46) 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 referred hereinafter as ‘SG&A’).

(47) 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.

(49) 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.

(50) 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 provide 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.

(51) 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’.

(52) Pursuant to this provision, the Commission has issued a country report concerning the PRC (‘the Report’) (14), 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/complaint also contained some relevant evidence complementing the Report.

(53) The applicant alleged in its request that the Chinese OMF sector is distorted within the meaning of Article 2(6a)(b) of the basic Regulation. Among others, the request alleged that the OMF market is served to a significant extent by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the PRC. Moreover, the request explained that the main raw materials used in OMF production are glass fibre rovings and yarns.

(54) The request referred also to the Report and the distortions identified therein with respect to the chemical sector. Moreover, the request pointed, with reference to the Report, to existing distortions with respect to energy costs, in particular natural gas, and electricity. The request further noted the State interference with respect to the labour market, the land-use rights, as well as the fact that OMF producers benefitted from easy access to financial lending by Chinese (State-owned) banks.

(55) As indicated in recital (38), 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.

(56) No comments were received from interested parties, including exporting producers, on the existence of significant distortions and/or on the appropriateness of the application of Article 2(6a) of the basic Regulation.

(57) 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.

(58) 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.