Commission Implementing Regulation (EU) 2024/770 of 4 March 2024 imposing a definitive anti-dumping duty on imports of certain cast iron articles 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 (EU) 2018/140 of 29 January 2018 (2), the European Commission imposed anti-dumping duties on imports of certain cast iron articles originating in the People’s Republic of China (‘the PRC’, ‘China’ or ‘the country concerned’) (‘the original measures’).

(2) These measures were amended by Commission Implementing Regulation (EU) 2019/261 (3) on 14 February 2019. The anti-dumping duties currently in force are at rates ranging from 15,5 % to 38,1 %.

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

(4) The request was submitted on 28 October 2022 by Eurofonte (‘the applicant’) on behalf of seven Union producers representing more than 70 % of the Union industry of certain cast iron articles 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 of dumping and 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 27 January 2023 the Commission initiated an expiry review with regard to imports into the Union of certain cast iron articles originating in the People’s Republic of China 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 (5) (‘the Notice of Initiation’).

(6) The investigation of continuation or recurrence of dumping covered the period from 1 January 2022 to 31 December 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’).

(7) In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. The Commission specifically informed the applicant, all known Union producers, the known producers in the People’s Republic of China and the authorities of the People’s Republic of China as well as known importers, users and traders about the initiation of the expiry review and invited them to participate in the investigation.

(8) Among the interested parties that came forward was the China Chamber of Commerce for Import & Export of Machinery & Electronic Products (‘CCCME’). Following the judgment of the Court in case C-478/21P (6), the Commission decided on 6 November 2023 to request CCCME to provide a Power of Attorney for one or more of the Chinese exporting producers it claimed to represent in order to confirm its status as a representative association of exporters of the dumped product. The CCCME did not provide such Power of Attorney, so the Commission rejected it as an interested party. CCCME did not comment on the rejection of its interested party status either.

(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.

(10) In the Notice of Initiation, the Commission stated that it might sample the 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 volume of production and sales of the like product in the Union in 2022, as well as the sales geographical coverage. This sample consisted of three Union producers. The sampled Union producers accounted for 46 % of the total Union production of the like product. In accordance with Article 17(2) of the basic Regulation, the Commission invited interested parties to comment on the provisional sample, but no comments were received. The Commission thus confirmed the provisionally selected sample as the definitive sample.

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.

(13) Two unrelated importers provided the requested information and agreed to be included in the sample.

Sampling of exporting producers in the PRC

(14) 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.

(15) Nine exporting producers in the country concerned provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two exporting producers on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned and the authorities of the country concerned, were consulted on the selection of the sample. No comments were made.

(16) However, following the request to complete the questionnaire for exporting producers one of the sampled companies informed the Commission of their intention not to cooperate. Accordingly, the Commission selected a new sample of exporting producers, but again one of the sampled companies informed the Commission that it would not cooperate. In this manner the Commission amended the sample three different times and invited a total of five exporting producers to complete the questionnaire. None of these companies provided a questionnaire reply.

(17) 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’).

(18) The Commission sent questionnaires to all sampled companies, to the European association Eurofonte a.s.b.l. and to five exporting producers. The same questionnaires had also been made available online (7) on the day of initiation.

(19) Questionnaire replies were received from the three sampled Union producers, from the European association Eurofonte a.s.b.l. and from two unrelated importers, Fundición Dúctil para Obras Publicas S.A. and Capa – Engenharia e Construções Metalomecânicas S.A. None of the users provided a questionnaire or came forward during the investigation.

(20) Because there was no cooperation from the Chinese exporting producers or the GOC, the findings with regard to the likelihood of dumping and injury were made on the basis of facts available pursuant to Article 18 of the basic Regulation. The Mission of the People’s Republic of China to the European Union was informed accordingly. No comments were received.

(21) The Commission sought and verified the information made available by the cooperating parties for the determination of likelihood of continuation or recurrence of dumping and injury and of the Union interest.

(23) On 18 December 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.

(24) The comments made by interested parties were considered by the Commission and taken into account, where appropriate. Eurofonte was the only part filing comments that supported the Commission’s findings. No hearings were requested.

(26) The articles may be machined, coated, painted and/or fitted with other materials such as but not limited to concrete, paving slabs, or tiles (‘the product under review’).

(28) The product concerned by the expiry review investigation is the product under review originating in the PRC currently falling under CN codes ex 7325 10 00 and ex 7325 99 10 (TARIC codes 7325100031 and 7325991060).

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

(31) During the review investigation period, imports of certain cast iron articles from the PRC continued albeit at lower levels than in the investigation period of the original investigation (i.e. from 1 October 2015 to 30 September 2016). According to Eurostat, imports of cast iron products from the PRC accounted for about 4,7 % of the Union market in the review investigation period, compared to 27,3 % market share during the original investigation. In absolute terms the volume of imports from the PRC went down from 147 186 tonnes in the original investigation period to 22 146 tonnes during the review investigation period.

(32) As mentioned in recital 20, none of the exporters/producers from the PRC cooperated in the investigation. Therefore, 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. The Commission did not receive any comments or requests for an intervention of the Hearing Officer in this regard.

(33) 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 submitted with the request for review and information obtained from cooperating parties in the course of the review investigation (namely, the applicant and the sampled Union producers).

(34) Given the sufficient evidence 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.

(35) 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 the significant distortions in the PRC.

(36) 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 possible appropriate countries in accordance with the criteria set out in the first indent of Article 2(6a) of the Basic regulation.

(37) On 31 May 2023, the Commission informed interested parties by a note to the file of the relevant sources it intended to use for the determination of the normal value, with Türkiye as the representative country. In that note, the Commission provided a list of all factors of production such as raw materials, labour and energy used in the production of certain cast iron articles. In addition, the Commission informed interested parties that it would establish selling, general and administrative costs (‘SG&A’) and profits based on aggregated financial statements from Company Accounts Statistics (8) for 892 profitable companies active in the Statistical Classification of Economic Activities, commonly referred to as NACE, category 24.5 ‘cast iron articles of metals’, producers in the representative country, compiled by the Central Bank of Türkiye and the Turkish Statistical Institute. No comments were received.

(38) 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’.

(39) 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’).

(40) 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, the application of Article 2(6a) of the basic Regulation was appropriate.

(41) In recent investigations concerning the steel sector in the PRC (9), the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

(42) In those investigations, the Commission found that there is substantial government intervention in the PRC resulting in a distortion of the effective allocation of resources in line with market principles (10). In particular, the Commission concluded that in the steel sector, which is the main raw material to produce the product under review, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation (11), but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation (12). The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs have an additional distorting effect on the market. Indeed, overall, the system of planning in the PRC results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces (13). Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in the PRC (14). In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation (15), as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in the PRC (16).

(43) Like in previous investigations concerning the iron and steel sector in the PRC, the Commission examined in the present investigation 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 request, as well as in the Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the Purposes of Trade Defence Investigations (17) (‘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 as also found by its previous investigations in this respect.

(44) The request alleged that the Chinese economy, as a whole, is widely influenced and affected by substantial governmental interventions, in view of which domestic prices and costs of the Chinese steel industry cannot be used in the present investigation.

(45) More specifically, the request pointed out that against the background of the ‘socialist market economy’ doctrine enshrined in the PRC Constitution, the omnipresence of the Chinese Communist Party (‘CCP’) and the government influence over the economy by means of strategic planning initiatives, the GOC’s interventionism takes various forms, namely administrative, financial and regulatory. As a consequence, the request concluded that not only the domestic sales prices of cast iron are not appropriate for use within the meaning of Article 2(6a)(a) of the basic Regulation, but all the input costs, including raw materials, energy, land, financing or labour, are also distorted because their price formation is affected by substantial government intervention.

(47) In conclusion, the request took the position that prices or costs, including the costs of raw materials, energy and labour, are not the result of free market forces because they are affected by substantial government intervention within the meaning of Article 2(6a)(b) of the Basic Regulation. On that basis, according to the request, it is not appropriate to use domestic prices and costs to establish normal value in this case.

(48) 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 appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand.