Commission Implementing Regulation (EU) 2024/844 of 13 March 2024 imposing a definitive anti-dumping duty and definitively collecting the provisional duty imposed on imports of electrolytic manganese dioxides originating in the People’s Republic of China

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 9(4) thereof,

Whereas:

(1) On 16 February 2023, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of electrolytic manganese dioxides (‘EMD’) originating in the People’s Republic of China (‘China’, or ‘the country concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 3 January 2023 by Autlan EMD SL (‘the complainant’ or ‘Autlan’). The complaint was supported by Tosoh Hellas Single Member S.A. (‘Tosoh’). The Commission found that the complaint was made by the Union industry of EMD in the sense of Article 5(4) of the basic Regulation. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of the investigation.

(3) On 7 September 2023, the complainant made a request in accordance with Article 7(2a) of the basic Regulation to include the examination of alleged raw material distortions in the country concerned regarding the product under investigation to assess whether, if relevant, a duty lower than the margin of dumping would be sufficient to remove injury. The complainant provided sufficient evidence that there are no value added tax (‘VAT’) refunds on exports of manganese ore in the country concerned. VAT refund reduction or withdrawal is explicitly mentioned in Article 7(2a), second subparagraph, as a distortion on raw materials.

(4) To examine the raw material distortions and to assess whether a duty lower than the margin of dumping would be sufficient to remove injury at the definitive stage, the Commission amended the Notice of Initiation of 16 February 2023 pursuant to Article 7(2a) of the basic Regulation in order to examine the raw material distortions and to assess whether, if relevant, a duty lower than the margin of dumping would be sufficient to remove injury. The Notice amending the Notice of initiation was published on 13 September 2023 (3) (‘amending Notice’).

(5) Further to the amendment, the Commission invited the interested parties and, where relevant, sent questionnaires to them, requesting the parties to provide information about spare capacities in the country concerned, competition for raw materials and the effect on supply chains for companies in the Union. The Commission also sent to the Government of the People's Republic of China (‘GOC’) a questionnaire concerning raw material distortions within the meaning of Articles 7(2a) and 7(2b) of the basic Regulation.

(6) Two cooperating users (Duracell International Operations Sàrl (‘Duracell’) and VARTA Consumer Batteries GmbH & Co. KGaA (‘Varta’)) replied to the relevant parts of the questionnaire. The two Union producers (Tosoh and Autlan), sampled exporting producers (Guangxi Guiliu New Material Co., Ltd (‘Guiliu’), Xiangtan Electrochemical Scientific Ltd (‘Xiangtan’) and Guangxi Daxin Huiyuan New Energy Technology Co., Ltd (‘Daxin’)), and the associations China Chamber of Commerce for Metals, Minerals and Chemicals Importers and Exporters (‘CCCMC’) and the Guanxi Manganese Industry Association (‘GMIA’) provided their comments. The Commission considered the information and comments submitted by interested parties and revised its provisional conclusions where appropriate, as explained in the relevant sections below.

(7) In the absence of any comments, recitals (3) to (4) of the provisional Regulation are confirmed.

(8) In accordance with Article 19a of the basic Regulation, on 15 September 2023, the Commission provided parties with a summary of the proposed duties and details about the calculation of the dumping margins and the margins adequate to remove the injury to the Union industry. Interested parties were invited to comment on the accuracy of the calculations within three working days. Comments from one of the sampled exporting producers and from the two Union producers were received on 20 September 2023.

(9) The exporting producer Daxin claimed that the dumping margin should be calculated by using export sale prices and normal value without VAT. Tosoh, a Union producer, raised a point concerning the calculation of the target profit. Autlan, the complainant, requested to review and confirm the accuracy of the Daxin’s dumping margin calculation and requested the disclosure of the three exporters’ data marked as sensitive in the disclosure. As the comments did not concern the accuracy of the calculations, the Commission concluded that it would examine them with all other submissions after the publication of the provisional measures.

(10) On 13 October 2023, the Commission imposed provisional anti-dumping duties on imports of EMD originating in China by Commission Implementing Regulation (EU) 2023/2120 (4) (‘the provisional Regulation’).

(11) Following the disclosure of the essential facts and considerations, on the basis of which a provisional anti-dumping duty was imposed (‘provisional disclosure’), the three sampled exporting producers and the associations, CCCMC and GMIA, the two Union producers and one of the users, Duracell, filed written submissions making their views known on the provisional findings within the deadline provided by Article 2(1) of the provisional Regulation.

(12) Parties who so requested were also granted an opportunity to be heard. The following hearings took place: with Duracell on 23 June and 28 November 2023; with Autlan on 30 June 2023; with Varta on 4 July 2023; with Xiangtan on 25 October 2023; with CCCMC on 16 November 2023; and a jointly with Autlan and Tosoh on 15 November 2023.

(13) The Commission continued to seek and verify all the information it deemed necessary for its definitive findings. When reaching its definitive findings, the Commission considered the comments submitted by interested parties and revised its provisional conclusions when appropriate.

(14) The Commission informed all interested parties of the essential facts and considerations on the basis of which it intended to impose a definitive anti-dumping duty on imports of EMD originating in China (‘final disclosure’). All parties were granted a period within which they could make comments on the final disclosure. Autlan, Tosoh, CCCMC and GMIA (jointly), Xiangtan, and Daxin submitted comments within the deadline.

(15) In the absence of any comments, recitals (1) to (2) of the provisional Regulation are confirmed.

(16) CCCMC and GMIA objected to the stated 15 days deadline for all parties to submit comments on the assessment of the Union interest in the amending Notice (5), since the economic and supply chain issues raised by the new investigations were complex and required research and exchanges of information with the companies concerned. Both requested the Commission to again amend the Notice of initiation and grant interested parties at least 30 days to submit comments.

(17) The Commission noted that all parties requesting extension of deadlines and providing specific reasons for it were granted such extensions. It also highlighted that the Notice of initiation (6) of 16 February 2023 still gave parties a possibility to comment on the information provided by the other interested parties within 7 days from the deadline to comment, thus all parties could use this option, when necessary. In view of this, the Commission considered that the time allotted to interested parties to make comments and provide their views on this matter was appropriate.

(18) Guiliu claimed that a new allegation brought by the complainant seven months after the initiation of investigation (and not ‘at initiation’) derogated interested parties’ right of defence. Guiliu further claimed that the Commission should follow its past practice (7), where the complainant’s claim of applying Article 7(2a) of the basic Regulation was rejected, because the complaint had failed to provide evidence of the existence of any of the measures listed in the second subparagraph of Article 7(2a) of the basic Regulation at initiation, and no such evidence had been found to exist by the Commission at the stage of initiation either. In addition, Guiliu mentioned that the complainant impeded the investigation by filing the new allegations late in the proceeding.

(19) The Commission first observed that in the case referred to by Guiliu the request was made after definitive disclosure. In the case at hand the request containing sufficient evidence on the alleged raw material distortions was made in a timely manner, before the imposition of provisional measures, thereby allowing the Commission sufficient time to effectively investigate the matter in the course of the investigation. Furthermore, the Commission considered that the rights of defence of the parties were fully respected. Indeed, Section 5.5.1 of the Notice of Initiation, as modified by the amending Notice, informed all the economic operators concerned of their procedural rights and obligations and described the process that the Commission intended to follow to collect the information necessary for its findings and to reach its conclusions on the matter of alleged raw material distortions. Interested parties had the opportunity to comment on the evidence provided in the request submitted by complainant regarding the alleged existence of raw material distortions and on any other aspects regarding the investigation on the raw material distortions allegations. Guiliu’s claims were therefore dismissed. Finally, in view of the foregoing, it is unclear how the investigation was allegedly impeded by the complaint. Guiliu failed to explain this. The Commission considered that the request in accordance with Article 7(2a) of the basic Regulation to include the examination of alleged raw material distortions was timely and did not prevent the Commission to conduct a proper examination on this matter.

(20) Duracell claimed that the Commission cannot introduce a new legal basis in the framework of ongoing investigation and to amend the methodological scope of such investigation, as there is nothing in the basic Regulation entitling it to consider supplemental evidence, which did not exist at the time of initiation. The party referred by analogy to the Court ruling in T-126/21, Azot v Commission (8), where the Court held that the condition relating to the sufficiency of the evidence contained in a request for a review made by or on behalf of Union producers, within the meaning of the second subparagraph of Article 11(2) of the basic Regulation, is satisfied where such evidence is submitted within the time limit. In addition, Duracell claimed that the Commission rejected similar requests in its own practice and the same reasoning should be applied by analogy (9).

(21) The Commission initiated the investigation in accordance with Article 7(2a) of the basic Regulation to include the examination of alleged raw material distortions in accordance with the legal standard applicable to the request made by or on behalf of Union producers, on the basis of Article 5 of the basic Regulation. The complainant provided sufficient evidence pursuant to Article 5 of the existence of raw material distortions as defined in Article 7(2a) of the basic Regulation and therefore the Commission amended the original Notice of initiation so that, as required by the basic Regulation, the investigation covered also those raw material distortions. Therefore, the Commission did not breach any identified legal standards when initiating the investigation. Furthermore, concerning the reference to the Court ruling in T-126/21 mentioned by Duracell, the Commission observed that that ruling is not final as it was under appeal. In any case, the ruling relates to an expiry review pursuant to Article 11(2) of the basic Regulation, and the information necessary to initiate it. The ruling does not cover the use of Article 7(2a) of the basic Regulation, which concerns an element of an investigation rather than its raison d’être. Moreover, even following the reasoning in T-126/21, unlike Article 11(2), Article 5 does not contain any particular limitation as to when the Union producers can request the initiation of an investigation. Thus, the analogy raised by Duracell does not arise. Duracell’s claims were therefore rejected.

(22) In the absence of any comments, recital (8) to (15) of the provisional Regulation are confirmed.

(23) As envisaged in recital (16) of the provisional Regulation, the Commission considered the request to grant individual examination for one exporting producer in China. The request for individual examination was highly deficient. It follows that the requestor did not ‘submit the necessary information within the time limits provided for in the [basic Regulation]’ within the meaning of Article 17(3) of that Regulation. In any event, the information provided revealed that several additional companies would have to be investigated which ‘would be unduly burdensome and taken into account the complexity of the case at hand would prevent completion of the investigation in good time’ (10). Therefore, the request was rejected.

(24) In the absence of any comments, recitals (17) to (21) of the provisional Regulation are confirmed.

(25) In the absence of any comments, recital (22) of the provisional Regulation is confirmed.

(26) In the absence of any comments, the Commission confirmed its conclusions set out in recitals (23) to (36) of the provisional Regulation.

(27) Following provisional disclosure, CCCMC, the cooperating exporting producers and the cooperating Union producers commented on the provisional dumping findings.

(28) In the absence of any comments, recitals (37) to (43) of the provisional Regulation are confirmed.

(29) After provisional disclosure, Daxin, Xiangtan CCCMC, and GMIA submitted a number of comments concerning the existence of significant distortions.

(30) First, Daxin, CCCMC and GMIA, claimed that that the Report is no longer up to date, in particular given the substantial economic developments both in the EU and in China since its publication, including the provision of subsidies to EU industries to promote their adherence to new EU industrial policy objectives or intervention in corporate investment and decision-making. Moreover, Daxin, CCCMC and GMIA claimed that the Commission replaces investigations with reports and that by relying on the Report, the Commission continued arguing in a circular manner where exporters need to disprove allegations made in the Report. Daxin, CCCMC and GMIA therefore recalled that the burden of proof rests with the investigating authority.

(31) The argument concerning the Report being allegedly outdated was rejected. The Commission noted that the Report is a comprehensive document based on extensive objective evidence, including legislation, regulations and other official policy documents published by the Chinese authorities, third party reports from international organisations, academic studies and articles by scholars, and other reliable independent sources. Even though the Report was made publicly available in December 2017, the Report’s findings remain largely valid and they were in any event complemented by additional evidence collected in the present investigation as laid out in Section 3.2.1 of the provisional Regulation. Moreover, any interested party had ample opportunity to rebut, supplement or comment on the Report and the evidence on which it is based, and no parties have submitted arguments or evidence rebutting the sources and information included in the Report. As to the arguments concerning EU industrial policies and subsidies, the Commission noted that pursuant to Article 2(6a)(b) of the basic Regulation, the potential impact of one or more of the distortive elements listed in that provision is analysed with regard to prices and costs in the exporting country. The cost structure and price formation mechanisms in other markets, such as in the EU, do not bear any relevance whatsoever in the context of the determination of the normal value. Therefore, also this argument was rejected.

(32) Regarding the argument suggesting that issuing a country report replaced the actual investigation, the Commission recalled that, according to Article 2(6a)(e) of the basic Regulation, if the Commission deems the evidence submitted by the complainant on the significant distortions sufficient, it can initiate the investigation on this basis. However, the determination on the actual existence and impact of significant distortions and the consequent use of the methodology prescribed by Article 2(6a)(a) of the basic Regulation occurs at the time of the provisional and/or definitive disclosure as result of an investigation. In this investigation, the Report, including the evidence contained therein, is part of the evidence on file justifying the application of Article 2(6a) of the basic Regulation. The Commission recalled that Section 3.2.1 of the provisional Regulation contains the Commission’s full assessment concerning the existence of significant distortions. The Commission has used substantial additional evidence specific to the investigation and the claims put forward by the parties not included in the Report. What counts for the application of the methodology under Article 2(6a) of the basic Regulation are the findings that the significant distortions are relevant in the case at hand, as is the case in this investigation (11). Therefore, this claim was rejected.

(33) Second, Daxin, CCCMC and GMIA argued that the Commission wrongly interpreted the nature of China’s socialist market economy doctrine, failing also to conduct a comprehensive analysis concerning the structure of the Chinese economy, as well as the relationship between the free market and the Chinese Communist Party (‘CCP’) leadership. Daxin, CCCMC and GMIA backed their argument by claiming that the May 2020 Opinion of the CCP Central Committee and the State Council on Accelerating the Improvement of the Socialist Market Economy System in the New Era reiterated, inter alia, that the reform of the socialist market economy should show great respect for the general rule of market economy, minimize governmental direct allocation of market resources as well as direct intervention in microeconomic activities, fully leverage the decisive role of the market in resource allocation and enhance government’s role in effectively addressing the market failure.