Commission Implementing Regulation (EU) 2024/1287 of 13 May 2024 extending the definitive anti-dumping duty imposed by Implementing Regulation (EU) 2021/1930 on imports of birch plywood originating in Russia to imports of birch plywood consigned from Türkiye and Kazakhstan, whether declared as originating in Türkiye and Kazakhstan or not

Image omitted; see official source	Official Journal of the European Union	EN L series
---	---	---
	2024/1287	14.5.2024

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 13 thereof,

Whereas:

1. PROCEDURE

1.1.   Existing measures

• (1) In November 2021, by Implementing Regulation (EU) 2021/1930 ², the European Commission (‘the Commission’) imposed a definitive anti-dumping duty on imports of birch plywood originating in Russia (‘the original Regulation). The measures took the form of an ad valorem duty ranging between 14,4 % and 15,8 %, with a residual duty of 15,8 % for non-cooperating Russian companies. The investigation that led to these duties (‘the original investigation’) was initiated in October 2020 ³.

1.2.   Request

• (2) The Commission received a request pursuant to Articles 13(3) and 14(5) of the basic Regulation to investigate the possible circumvention of the anti-dumping measures imposed on imports of birch plywood originating in Russia by imports of birch plywood consigned from Türkiye and Kazakhstan, whether or not declared as originating in Türkiye and Kazakhstan and to make such imports subject to registration (‘Request’).

• (3) The request was lodged on 10 July 2023 by the Woodstock Consortium (‘the applicant’).

• (4) The request contained sufficient evidence of a change in the pattern of trade involving exports from Russia, Türkiye and Kazakhstan to the Union that took place following the imposition of measures on birch plywood from Russia. This change appeared to stem from the consignment of birch plywood via Türkiye and Kazakhstan to the Union, a practice for which there was insufficient due cause or economic justification other than the imposition of the duty.

• (5) Furthermore, the request contained sufficient evidence that the practice described above was undermining the remedial effects of the existing anti-dumping measures both in terms of quantity and prices. Significant volumes of imports of birch plywood entered the Union market. In addition, there was sufficient evidence that the imports of birch plywood were made at injurious prices. Finally, there was sufficient evidence that the prices of birch plywood consigned from Türkiye and Kazakhstan were dumped in relation to the normal value established for birch plywood.

1.3.   Product concerned and product under investigation

• (6) The product concerned by the possible circumvention is plywood consisting solely of sheets of wood, each ply not exceeding 6 mm thickness, with outer plies of wood specified under subheading 4412 33, with at least one outer ply of birch wood, whether or not coated, classified on the date of entry into force of the original Regulation under CN code ex 4412 33 00 (TARIC code 4412330010) and originating in Russia (‘the product concerned’). This is the product to which the measures are currently apply.

• (7) The product under investigation is the same as that defined in the previous recital, currently falling under CN code 4412 33 10 ⁴ but consigned from Türkiye and Kazakhstan, whether declared as originating in Türkiye and Kazakhstan (TARIC codes 4412331010 and 4412331020) (‘the product under investigation’).

• (8) The investigation showed that birch plywood exported from Russia and birch plywood consigned from Kazakhstan and Türkiye, whether originating in Kazakhstan and Türkiye, have the same basic physical and chemical characteristics and have the same uses, and are therefore considered as like products within the meaning of Article 1(4) of the basic Regulation.

1.4.   Initiation

• (9) Having determined, after informing the Member States, that sufficient evidence existed for the initiation of an investigation pursuant to Article 13(3) of the basic Regulation, the Commission initiated, on 21 August 2023, the investigation by Commission Implementing Regulation (EU) 2023/1649 ⁵ (‘the initiating Regulation’) and made imports of birch plywood consigned from Kazakhstan and Türkiye, whether declared as originating in Kazakhstan and Türkiye or not, subject to registration.

1.5.   Comments on initiation

• (10) After initiation, the Kazakh authorities provided a list of companies producing birch plywood and requested that these companies were exempted from the scope of the measures, since they exported birch plywood produced in Kazakhstan. They submitted that certificates of origin in Kazakhstan complied with international standards and as well with all EU requirements and rules regarding the origin of the goods, and that this was controlled by the Ministry of Trade and Integration. Thus, they requested the Commission not to extend the anti-dumping duties to Kazakhstan, since the companies could not be involved in the circumvention of the measures.

• (11) The Commission recalled that the exemption requests (assessed in Section 4) were considered in the light of Article 13 of the basic Regulation and that the certificates of origin were not thus the only criteria for the assessment.

• (12) After disclosure, both Favorit and Severnyi Fanernyi Kombinat LLP (‘SFK’) considered that the initiation of the investigation was contrary to Article 5.2 of the WTO Anti-Dumping Agreement (‘AD Agreement’) because the complaint did not include evidence on dumping, on injury, and on causal link between the dumped imports and the alleged injury, and that the Commission had failed in its duty to examine the accuracy and adequacy of the evidence provided in the application to determine whether there is sufficient evidence to justify the initiation of an investigation.

• (13) The Commission disagreed. At the outset, the Commission notes that the AD Agreement does not include any anti-circumvention provision. Morover, as confirmed by the Court of Justice in Kolachi Raj, since Article 13 of the basic Regulation does not implement the provisions of the AD Agreement, the wording of Article 13 cannot be interpreted in the light of the provisions of the basic regulation which implement the provisions of that Agreement ⁶. Article 13(3) of the basic Regulation provides that an anti-circumvention investigation can be initiated on the basis of sufficient evidence regarding the factors set out in Article 13(1). The Commission considered that the request contained sufficient evidence of the factors set out in Article 13(1). In particular, the request contained sufficient evidence of a change in the pattern of trade between Russia Kazakhstan and Türkiye, which was stemming from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty. Furthermore, the request contained sufficient evidence of dumping in relation to the normal values previously established for the like product. Lastly, the Commission noted that Article 13 of the basic Regulation does not foresee an analysis of injury or causal link. The provision requires more broadly to show evidence of injury or that the remedial effects of the duty are being undermined in terms of the prices and/or quantities of the like product. In this respect, the request contained sufficient evidence. The fact that imports caused injury to the Union industry and that there was a causal link between these imports and the injury was already established in the original Regulation. Therefore, the Commission concluded that the request contained sufficient evidence and, hence, found that the initiation of the investigation was justified.

1.6.   Investigation period and reporting period

• (14) The investigation period covered the period from 1 January 2019 to 30 June 2023 (‘the investigation period’ or ‘IP’). Data were collected for the investigation period to investigate, inter alia, the alleged change in the pattern of trade following the imposition of measures on the product concerned, and the existence of a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty. More detailed data were collected for the period from 1 July 2022 to 30 June 2023 (‘the reporting period’ or ‘RP’) in order to examine if imports were undermining the remedial effect of the measures in force in terms of prices and/or quantities and the existence of dumping.

1.7.   Investigation

• (15) The Commission officially informed the authorities of Russia, Kazakhstan and Türkiye, the known exporting producers in those countries, the Union industry and the President of the EU-Türkiye Association Council of the initiation of the investigation.

• (16) In addition, the Commission asked the Mission of the Republic of Kazakhstan to the European Union and the Permanent Delegation of Türkiye to the European Union to provide it with the names and addresses of exporting producers and/or representative associations that could be interested in participating in the investigation in addition to the Turkish and Kazakh exporting producers, which had been identified in the request by the applicant. The Kazakh authorities provided a list of producers of birch plywood, that the Commission contacted.

• (17) Exemption claims forms for the producers/exporters in Kazakhstan and Türkiye and questionnaires for importers in the Union were made available on DG TRADE’s website.

• (18) The following five companies in Kazakhstan submitted exemption claim forms:

• — Favorit LLP

• — QazFanCom LLP

• — Semipalatinsk Wood Processing LLP

• — Severnyi Fanernyi Kombinat LLP (‘SFK’)

• — VFP LLP.

• (19) The following four companies in Türkiye submitted exemption claim forms:

• — Intur Construction Tourism and Forest

• — Murat Şahin Orman Ürünleri

• — Petek Kontrplak San ve Tic A.Ş.

• — Saglamlar Orman Tarim Urunleri San. Ve. Tic. AS.

• (20) In addition, the following unrelated importers submitted a questionnaire reply:

• — Aschiero Wood Import SPA

• — FOREST TRAFIC

• — CASTELLANA LEGNAMI SNC

• — IMOLALEGNO spa

• — Orlimex CZ s.r.o.

• (21) Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set in the initiating Regulation. All parties were informed that the non-submission of all relevant information or the submission of incomplete, false or misleading information might lead to the application of Article 18 of the basic Regulation and to findings based on the facts available. At the request of the companies, hearings with Favorit and SFK were held on 8 February 2024 with the Commission services and subsequently on 14 February 2024 with the Hearing Officer. The Hearing Officer concluded that the issues raised by the two companies did not concern procedural rights as defined by the terms of reference of the Hearing Officer for trade proceedings but concerned the substantive issues of the case, and no specific recommendation was issued.

2. RESULTS OF THE INVESTIGATION

2.1.   Level of cooperation

• (22) As stated in recitals (18) to (19) five companies established in Kazakhstan and four companies established Türkiye provided exemption claim forms, and requested to be exempted from duties, if measures were to be extended to Kazakhstan and Türkiye.

• (23) However, two companies in Kazakhstan (QazFanCom and VFP LPP), and three companies in Türkiye (Murat Şahin Orman Ürünleri, Petek Kontrplak San ve Tic A.Ş. and Saglamlar Orman Tarim Urunleri San. Ve. Tic. AS) provided highly deficient exemption claim forms. Therefore, by letter of 13 October 2023 to VFP LLP and the three Turkish companies, and by letter of 17 November 2023 to QazFanCom, the Commission informed these companies that it intended to apply facts available in accordance with Article 18(1) of the basic Regulation, because these companies had not provided, within the time limits provided for, the necessary information for the Commission to determine whether they were or not involved in the circumvention practices (‘Article 18 letter’). The companies were given the opportunity to comment. The company QazFanCom submitted comments. No other company provided comments.

• (24) In response to the Article 18 letter, QazFanCom submitted that, contrary to what was mentioned in the Article 18 letter, it cooperated with the investigation since the information it had submitted involved a big amount of work. It also considered that to provide and translate the information into English was time consuming and that the extension to deadlines to provide a reply was too short, given that the procedure lasted nine months. The company also considered that the basic Regulation did not provide the maximum deadline for extension of deadlines.

• (25) QazFanCom further submitted that, in its opinion, all the information that the Commission asked to be provided was sensitive and, therefore, could not be provided. At the same time, it alleged that the Commission leaked a confidential information and violated Article 19 of the basic Regulation since its trade partners knew about the fact that the exemption request submitted by QazFanCom would be rejected, already before QazFanCom received the Article 18 letter from the Commission.

• (26) The Commission recalled that the deadline of 37 days to provide the exemption claim form was set out in Article 3(2) of the initiating Regulation and it was in line with a general deadline of at least 30 days mentioned in Article 6(2) of the basic Regulation. Extensions may be granted, due account being taken of the time limits of the investigation, provided that the party shows due cause for such an extension in terms of its particular circumstances. In the present case, the Commission granted an extension of seven days which was the maximum it could give in view of the time limits of the investigation. The Commission thus rejected the claim that more time to provide the exemption claim form could be given in the present case.

• (27) The Commission further considered that detailed instructions on how to provide the non-confidential version of the exemption claim form were provided to QazFanCom together with the exemption claim form. The information that was sent described in detail how data can be presented to ensure that confidentiality is respected but also preserve the rights of defence of other interested parties. The Commission thus rejected the claim that no information could be provided because of its confidential nature.

• (28) Furthermore, with regard to the claim on the alleged breach of confidentiality, QazFanCom did not substantiate the claim; it did not point out to any information published in the open file that would contain information about the status of the exemption request of QazFanCom prior to the Article 18 letter, therefore, the Commission rejected the claim.

• (29) Based on the above, the Commission concluded that two companies in Kazakhstan (QazFanCom and VFP LPP), and three companies in Türkiye (Murat Şahin Orman Ürünleri, Petek Kontrplak San ve Tic A.Ş. and Saglamlar Orman Tarim Urunleri San. Ve. Tic. AS) failed to cooperate within the meaning of Article 18 of the basic Regulation and consequently did not demonstrate that they are not engaged in circumvention activities. Therefore, their exemption requests were rejected.

• (30) Following disclosure, Qazfancom argued that the Commission had taken an unaccommodating and unconstructive approach regarding the cooperation of Qazfancom and, on strictly procedural grounds, refused to consider the documents presented. Qazfancom requested the Commission to consider documents submitted in December 2023 since, according to Qazfancom, the Commission had sufficient time to do so, as the deadline for taking a final decision was only May 2024. Furthermore, Qazfancom asked for the hearing with the Commission services as well as a hearing with the Hearing Officer. The hearing request with the Commission services, though requested outside the deadline that was given in the disclosure document, was accepted. The hearing with the Hearing Officer took place on 2 April 2024 and on 3 April 2024 during which Hearing Officer concluded that the issues raised by the interested party did not concern procedural rights as defined by the terms of reference of the Hearing Officer for trade proceedings but concerned clarifications regarding application of Article 18(1), and no specific follow-up was recommended.

• (31) As explained in recital (26) above, the Commission granted Qazfancom several deadline extensions to submit all the required information in accordance with the Article 3(2) of the initiating Regulation and Article 6(2) of the basic Regulation, as set out in detail in the Article 18 letter of 17 November 2024. Any information provided after these deadlines could no longer be considered by the Commission given the time limits of the investigation and the fact that Qazfancom had not submitted, within the time limits provided for, the necessary information for the Commission to determine whether the company was involved in circumvention practices.

• (32) The Commission held a hearing with Qazfancom representatives on 20 March 2024 during which Qazfancom further elaborated on their comments upon disclosure. However, Qazfancom did not put forward any new substantiated claim and mainly repeated that it had cooperated to the best of its abilities. Therefore, the Commission confirmed its conclusion as set out in recital (29) above.

• (33) Following disclosure, Saglamlar Orman Tarim Urunleri San. Ve. Tic. AS claimed that it provided a lot of information in October 2023, and the information they did not provide was information that the management considered to be confidential.

• (34) As explained in recital (27), the Commission considered that detailed instructions on how to provide the non-confidential version of the exemption claim form were provided to all known exporting producers of birch plywood established in Kazakhstan and in Türkiye. The Commission thus rejected the claim that no information could be provided because of its confidential nature.

• (35) The Commission carried out the verification visits on the premises of the following companies:

• — Favorit LLP (Kazakhstan)

• — Semipalatinsk Wood Processing LLP (Kazakhstan)

• — Severnyi Fanernyi Kombinat LLP (Kazakhstan)

• — Intur Construction Tourism and Forest (Türkiye).

• (36) The Commission also analysed the information in the questionnaire replies of the cooperating importers to crosscheck with the information collected during the verification.

• (37) After the on-the spot verifications, the Commission decided to base the findings with regard to the exemption requests of the Kazakh companies Favorit LLP, Semipalatinsk Wood Processing LLP, and Severnyi Fanernyi Kombinat LLP on best facts available, of which the companies were informed on respectively 22 January 2024, 26 January 2024, and 22 January 2024, based on Article 18 of the basic Regulation. A detailed analysis, as well as the assessment of the Turkish company Intur Construction Tourism and Forest is to be found in Section 4 below.

• (38) In view of the above ⁷, the Commission considered that the cooperation in both countries was low, and that the findings for both countries had to be based on Statistics.

2.2.   General considerations

• (39) In accordance with Article 13(1) of the basic Regulation, the Commission must analyse whether the following conditions are met:

• — whether there was a change in the pattern of trade between Russia, Kazakhstan, Türkiye and the Union,

• — if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the anti-dumping measures in force,

• — if there is evidence of injury or the remedial effects of the anti-dumping measures in force were being undermined in terms of the prices and/or quantities of the product under investigation, and

• — whether there is evidence of dumping in relation to the normal values previously established for the product concerned.

• (40) In addition to the circumvention practices consisting in transhipment of plywood via Kazakhstan and Türkiye, the Commission also investigated whether the anti-dumping measures were circumvented via practices involving assembly/completion operations. It considered that practices such as producing birch plywood from Russian inputs (birch logs and veneer) constituted assembly or completion operations within the meaning of Article 13(2). The Commission therefore specifically analysed the criteria set out in Article 13(2), in particular:

• — whether the assembly/completion operation started or substantially increased since, or just prior to, the initiation of the anti-dumping investigation and whether the parts concerned are from the country subject to measures, and

• — whether the parts constitute 60 % or more of the total value of the parts of the assembled product and whether the value added to the parts brought in, during the assembly or completion operation, was greater than 25 % of the manufacturing costs.

2.3.   Change in the pattern of trade

2.3.1.   Change in the pattern of trade between the Union, Russia, and Türkiye

• (41) Table 1 shows the development of imports of birch plywood into the Union in the IP:

Table 1

Imports of birch plywood from Russia, Kazakhstan and Türkiye into the Union (m³)

	2019	2020	2021	2022	RP
Russia	809 267	763 783	959 000	503 140	51 398
Index (base = 2019)	100	94	119	62	6
Market share	44,2  %	41,7  %	52,4  %	31,8  %	4,2  %
Kazakhstan	0	0	0	29 225	97 068
Index (base = 2022)				100	332
Market share	0	0	0	1,8  %	7,9  %
Türkiye	4 094	3 001	1 536	15 619	33 832
Index (base = 2019)	100	73	38	381	826
Market share	0,2  %	0,2  %	0,1  %	1,0  %	2,8  %
Source: Comext, complainant’s estimates for EU sales.	Source: Comext, complainant’s estimates for EU sales.	Source: Comext, complainant’s estimates for EU sales.	Source: Comext, complainant’s estimates for EU sales.	Source: Comext, complainant’s estimates for EU sales.	Source: Comext, complainant’s estimates for EU sales.

• (42) Table 1 shows that in 2022, after imposition of the anti-dumping duties on imports of birch plywood from Russia in November 2021, the imports from Russia to the Union decreased by almost 40 %, compared to 2019, the period before the start of the original investigation. In the RP, the imports further decreased by 94 % compared to 2019.

• (43) In 2019, 2020 and in 2021, there were no imports to the Union of birch plywood from Kazakhstan. The imports to the Union only started in April 2022, after the imposition of the anti-dumping duties on Russia in November 2021. In the RP, the imports more than tripled compared to 2022 and achieved over 97 thousand m³.

• (44) In 2019, imports from Türkiye were only around 4 000 m³. Between 2019 and 2021, the volume of imports decreased by more than 60 %. In 2022, after the imposition of anti-dumping duties on Russia in November 2021, the imports increased almost four times compared to 2019, and, in the RP, more than eight times.

2.3.2.   The change of the pattern of trade between Russia and Kazakhstan

• (45) Table 2 shows the development of imports of birch plywood, logs and veneer from Russia to Kazakhstan in the IP (m³):

Table 2

	2019	2020	2021	2022	RP
Birch plywood	0	0	0	171 277	275 899
Index				100	161
Logs	0	0	0	11 120	27 202
Index				100	245
Veneers	0	0	0	4 480	16 686
Index				100	372
Source: Global Trade Atlas.	Source: Global Trade Atlas.	Source: Global Trade Atlas.	Source: Global Trade Atlas.	Source: Global Trade Atlas.	Source: Global Trade Atlas.

• (46) Table 2 shows that imports from Russia to Kazakhstan of birch plywood, and of logs and veneers (main input materials to produce birch plywood) only started in 2022.

• (47) In the RP, imports of birch plywood increased more than 60 %. Between 2022 and the RP, also the imports of logs and veneer increased considerably, in case of veneers almost four times.

2.3.3.   The change of the pattern of trade between Russia and Türkiye

• (48) Table 3 shows the development of imports of birch plywood, logs and veneer from Russia to Türkiye in the IP (m³):

Table 3

	2019	2020	2021	2022	RP
Birch plywood	14 749	21 600	21 620	60 231	120 073
Index	100	146	147	408	814
Logs			1 752	2 012
Index			100	115
Veneer	10 462	23 260	40 096	71 672	109 977
Index	100	222	383	685	1 051
Source: Global Trade Atlas	Source: Global Trade Atlas	Source: Global Trade Atlas	Source: Global Trade Atlas	Source: Global Trade Atlas	Source: Global Trade Atlas

• (49) Table 3 shows that birch plywood started to be imported from Russia to Türkiye already in 2019, but in relatively low quantities. Between 2021 in 2022, the imports tripled. The most significant increase took place between 2022 and the RP, when the imports doubled and achieved more than 120 thousand m³. In terms of volume, compared to 2021 (the period before the imposition of the measures), the imports of plywood increased six times.

• (50) In parallel, compared to 2019, imports of logs and veneer also increased. While for logs there was no increase between 2021 and the RP, the imports of veneer increased more than 10 times between 2019 and the RP. In the RP, imports of veneer increased by 2,5 times compared to 2021.

2.3.4.   Conclusion

• (51) The above evolution of imports from Russia, Kazakhstan and Türkiye clearly shows a change in the pattern of trade after the measures on imports of birch plywood were imposed. While the imports from Russia almost disappeared, imports from both Kazakhstan and Türkiye considerably increased. At the same time, trade flows of birch plywood, logs and veneer between Russia and Kazakhstan and Russia and Türkiye substantially increased.

• (52) The Commission thus concluded that decrease of Russian imports, the parallel increase on imports from Kazakhstan and Türkiye, constitute a change of pattern of trade between the above-mentioned countries within the meaning of Article 13(1) of the basic Regulation.

2.4.   Nature of the circumvention practices

• (53) Article 13(1) of the basic Regulation requires that the change in the pattern of trade stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. The practice, process of work includes, inter alia, the consignment of the product subject to the existing measures via third countries, and the assembly of parts/completion operations in a third country in accordance with Article 13(2) of the basic Regulation.

• (54) As concluded in Section 2.1.4 above, because of the low cooperation, findings in respect of the existence and nature of the circumventing practices had to be based on facts available pursuant to Article 18 of the basic Regulation.

• (55) The evidence in the request and confirmed by the Commission during the investigation, showed that birch plywood produced in Russia was exported to Türkiye or Kazakhstan. An intermediary party in Türkiye or Kazakhstan re-exported birch plywood to the Union either as a stand-alone batch or by mixing it with locally produced plywood of birch or other wood species. In addition, some of the companies both in Kazakhstan and Türkiye circumvented the anti-dumping measures on birch plywood from Russia, by producing birch plywood out of inputs from Russia which, within the meaning of the conditions of Article 13(2) of the basic Regulation, was found to constitute an assembly/completion operation (see Section 2.7 below) ⁸.

• (56) Furthermore, the volume of imports into the Union from both Türkiye and Kazakhstan in the RP exceeded the production in both countries, estimated in the RP to be about 17 to 20 thousand m³, and around 69 thousand m³ respectively ⁹. These imports could thus not be entirely constituted of birch plywood of Kazakh or Turkish origin ¹⁰.

• (57) Transhipment practices of Russian plywood in the RP through Türkiye and Kazakhstan were further evidenced by numerous emails and prices offers by importers and traders ¹¹. The information submitted by the cooperating importers also proved that plywood from Russia was sold on the Union market, and that the sales were done via a chain of numerous traders ¹².

• (58) In Kazakhstan, circumvention practices were facilitated by the geographical proximity to Russia, and the fact that companies had links to Russian producers of birch plywood or of the input materials. In addition, Kazakh certificates of origin were, according to two exporting producers, traded and misused for the plywood of Russian origin.

2.5.   Insufficient due cause or economic justification

• (59) In addition to the increased transport costs linked to transhipment of birch plywood through Kazakhstan and Türkiye, imports of birch plywood from Russia into Türkiye in the RP were subject to the conventional customs duty of 7 % and, since 2018, to an additional 20 % duty rate. Therefore, transhipping plywood through the two countries involved additional costs, and no economic justification for the change of the pattern of trade and the practices was found to exist.

• (60) Both Favorit and SFK considered that the Commission did not establish that the circumvention stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty, and it argued that imports from Kazakhstan started arriving into the Union only following imposition of sanctions on Russian plywood which is the only cause or economic justification for the increased imports ¹³.

• (61) The Commission considered that the sanctions were imposed less than 8 months after the imposition of the anti-dumping duties and that the start of the change in the pattern of trade could already be observed before the sanctions were imposed. Imports from Kazakhstan (and Türkiye) started before the sanctions were imposed. In addition, the investigation revealed that SFK set up a related importer in the Union in April 2022 just after the imposition of the anti-dumping duties, and before the sanctions entered into force (10 July 2022).

• (62) The Commission thus concluded that there was no other due cause or an economic justification of the consignment of birch plywood via Kazakhstan and Türkiye, other than the circumvention of the duties.

2.6.   Start or substantial increase of practices defined in Article 13(2)

• (63) Article 13(2) of the basic Regulation requires the assembly/completion operation to have started or substantially increased since, or just prior to, the initiation of the anti-dumping investigation, while the parts concerned are from the country subject to anti-dumping measures.

• (64) In view of the low cooperation in both countries, the Commission based its findings about the start or substantial increase of the practices identified as assembly or completion operation, based on best facts available within the meaning of Article 18 of the basic Regulation.

• (65) The statistical data, as summarized in Section 2.3 above clearly showed that the assembly and completion operations and subsequent imports into the Union started after the imposition of the anti-dumping duties in November 2021. Therefore, the Commission concluded that the assembly operation started after the imposition of the anti-dumping duties.

2.7.   Value of parts and value added

• (66) Article 13(2)(b) of the basic Regulation states that, as far as assembly operations are concerned, another condition to establish circumvention is that the parts (from Kazakhstan and Türkiye, in this case) constitute 60 % or more of the total value of the parts of the assembled product and that the added value of the parts brought in, during the assembly or completion operation, is less than 25 % of the manufacturing cost.

• (67) Some Kazakh and Turkish producers bought in the RP the main input materials from Russia (birch logs, or birch veneer produced from logs, and resin). As logs, veneer and resin constitute 100 % of the input material, value of the input material (parts brought in) exceeded the 60 % threshold.

• (68) This was confirmed by the findings on the cooperating Turkish producer, producing birch plywood from Russian veneer (for details, see Section 4 below). The findings for this company further showed that the value added was below the 25 % threshold set by Article 13(2)(b) of the basic Regulation. It was therefore concluded that the second criterion set out in Article 13(2)(b) of the basic Regulation was also met.

• (69) SFK argued that the present investigation was only initiated on the basis of allegedly sufficient evidence regarding the transhipment of Russian origin plywood but there was no evidence in the file that would with regard to change in the pattern of trade stem from an assembly or completion operation. SFK considered that the Commission had no choice but to rely on SFK’s data as facts available, which in its view demonstrated that the value added was significantly above 25 % of the total costs of manufacturing.

• (70) The Commission considered that, as set out in the initiating Regulation (Section D), it could also investigate other circumvention practices, should they be identified during the investigation. In this case, and as mentioned in Section 2.2 above, the Commission also investigated assembly/completion operations and concluded that the measures on imports from Russia were, amongst others, circumvented by assembly or completion operations both in Kazakhstan and in Türkiye.

2.8.   Undermining of the remedial effect of the anti-dumping duty

• (71) In accordance with Article 13(1) of the basic Regulation, the Commission examined whether the imports of the product under investigation, both in terms of quantities and prices, undermined the remedial effects of the measures currently in force.

• (72) Regarding quantities, the market share of the imports from Kazakhstan represented around 7,9 % of the Union consumption during the RP while there were no imports in the original investigation period ¹⁴. For Türkiye, the market share increased from 0,2 % in the original investigation period to 2,8 % in the RP. The Commission considered that the volume of imports was significant.

• (73) Regarding prices, the Commission compared the average non-injurious price as established in the original investigation, adjusted for cost increase between the original investigation period and the RP, with the weighted average export CIF prices determined on the basis of the information provided in Eurostat statistics, duly adjusted to include conventional customs duties (7 % for Kazakhstan and none for Türkiye) and post clearance costs, estimated at 5 % ¹⁵. This price comparison showed the existence of underselling of 66,4 % for Kazakhstan and of 18,9 % for Türkiye.

• (74) The Commission also compared the prices of imports as established above with the prices of the Union industry. This price comparison showed undercutting of 36,7 % for Kazakhstan, and of 14,6 % for Türkiye ¹⁶.

• (75) The Commission concluded that in the RP the existing measures were undermined in terms of quantities and prices by the imports from Kazakhstan and Türkiye.

• (76) Both Favorit and SFK submitted that, contrary to Articles 3.1 to 3.5 of the AD Agreement, the Commission did not determine material injury or threat of material injury to the Union industry.

• (77) The Commission considered that Article 13(1) of the basic Regulation requires an analysis as to whether the imports undermine the remedial effects of the duty, and not to re-establish injury. As mentioned in recital (13), the fact that these imports caused injury to the Union industry and that there was a causal link between these imports and the injury was already established in the original Regulation. Therefore, in an anti-circumvention investigation, the analysis of injury, threat of injury and of the causal link was not necessary. The Commission thus rejected the claim.

2.9.   Evidence of dumping

• (78) In accordance with Article 13(1) of the basic Regulation, the Commission also examined whether there was evidence of dumping in relation to the normal values previously established for the like product.

• (79) To this end, export prices were determined based on data in Eurostat and brought ex works and compared to the normal values established during the original investigation, duly adjusted for inflation.

• (80) The comparison of normal values previously established for the like product and export prices showed evidence of dumping for imports from both Kazakhstan and Türkiye.

• (81) After disclosure, both Favorit and SFK referred to the first sentence of the cover letter to the General Disclosure Document, which mentioned the proposal to ‘impose definitive anti-dumping measures on imports of birch plywood consigned from Kazakhstan’. On this basis, these companies submitted that the dumping determination was illegal, because the dumping margin had to be calculated by comparing the normal value established in Kazakhstan with export prices from Kazakhstan. They also argued that the Commission compared the normal values and export prices determined at different periods. In their view, the adjustment to the normal value for inflation was made by reference to publications on birch plywood prices in a third country, namely in Russia, and it did not thus reflect market conditions in Kazakhstan. Both companies also argued that the Commission compared normal values and export prices at a different level of trade. Finally they argued that the Commission disregarded Product Control Numbers (‘PCN’) in its dumping calculations.

• (82) The Commission clarified that indeed the cover letter erroneously mentioned ‘impose’ instead of ‘extend’. However, this was a mere clerical mistake. From the disclosure document itself, it was clear that it concerned findings on the basis of which the Commission intended to extend the anti-dumping duties imposed on imports from Russia to imports from Kazakhstan and Türkiye, and not to impose new anti-dumping duties. As set out in Article 13(1) of the basic Regulation, the basic condition is that there should be evidence of dumping in relation to the normal values previously established for the like product. On this basis, the normal value was based on the normal value established in the original investigation concerning imports from Russia, duly adjusted for inflation, which was compared with export prices from Kazakhstan, adjusted to ex-works level. This was done at country-wide level. There is no requirement in Article 13 of the basic Regulation to conduct such comparison at the level of individual product types. The Commission thus rejected the claims.

3. MEASURES

• (83) Based on the above findings, the Commission concluded that the anti-dumping measures imposed on imports of plywood originating in Russia are being circumvented by imports of the product under investigation consigned from Kazakhstan and Türkiye.

• (84) Therefore, in accordance with Article 13(1) of the basic Regulation, the anti-dumping measures in force should be extended to imports of the product under investigation.

• (85) Pursuant to Article 13(1), second paragraph of the basic Regulation, the measure to be extended should be the one established in Article 1(2) of Implementing Regulation (EU) 2021/1930 for ‘all other companies’, which is a definitive anti-dumping duty of 15,8 % applicable to the net, free-at-Union-frontier price, before customs duty.

• (86) Pursuant to Article 13(3) of the basic Regulation, which provide that any extended measure should apply to imports that entered the Union under registration imposed by the initiating Regulation, duties are to be collected on those registered imports of the product under investigation.

• (87) Both Favorit and SFK requested that any Regulation extending the duties should specifically mention that any facts of circumvention as established in the framework of this investigation should not be understood or suggest any finding of circumvention within the meaning of EU restrictive measures in view of Russia’s invasion of Ukraine.

• (88) The Commission confirmed that the legal basis for the investigation was the basic Regulation, in particular Article 13 thereof, and that the findings detailed in this regulation related to circumvention of the anti-dumping duties imposed on imports of birch plywood from Russia in November 2021.

4. REQUESTS FOR EXEMPTION

• (89) As mentioned in Section 1.7 above, the Commission assessed exemption requests of the exporting producers in Kazakhstan and in Türkiye.

4.1.   Kazakhstan

4.1.1.   Findings with regard to Favorit

• (90) At the verification visit at the premises of Favorit and its related companies, the Commission services found that the accounting records of Favorit were not reliable since their veracity could not be confirmed by any independently audited document. As a result, the Commission could not reliably establish the scope of the business of Favorit against any official document, also in the absence of independently audited financial statements. The accounting records did not allow the Commission to reliably establish the total purchases of input materials, the total purchases of the finished product, the total production and total sales volumes. All of this information is necessary in order to assess an application for an exemption under Article 13(4) of the basic Regulation. The information which could not be verified concerned a major part of the purchases of the input material and of the product concerned, including quantities and values of purchases and resales of Russian birch plywood and veneer, as well as information related to costs and sales. Consequently, the Commission could not establish and confirm the completeness of the data concerning the volume and source of the birch plywood exported to the Union and therefore, to confirm whether all birch plywood purchased by Favorit in Russia was resold exclusively on the domestic market, as claimed by Favorit.

• (91) The Commission then analysed whether it was possible to use some of the information of Favorit, based on Article 18(3) of the basic Regulation. Article 18(3) of the basic Regulation provides that, where the information submitted by an interested party is not ideal in all respects, it should nevertheless not be disregarded, provided that any deficiencies are not such as to cause undue difficulty in arriving at a reasonably accurate finding and that the information is appropriately submitted in good time and is verifiable, and that the party has acted to the best of its ability. Pursuant to settled case-law, it is evident from the wording of that provision that the four conditions are to be applied cumulatively. Accordingly, if just one of them is not satisfied, that provision cannot be applied and the information in question cannot be taken into account ¹⁷.

• (92) In the case at hand, the Commission considered that the entirety of the information submitted by Favorit could not be considered as verifiable. In the absence of reliable accounting, the volume and source of the plywood sold by Favorit on the Union market could not be reliably established. Therefore, using only partially the information submitted by Favorit did not allow arriving at a reasonably accurate finding on whether Favorit was not reselling the birch plywood it purchased in Russia to the Union market.

• (93) The Commission considered as well other factors, such as the absence of separate warehouses, or at least clearly distinguished spaces and/or labelling of the finished product, for own-produced and purchased birch plywood, and the fact that birch plywood destined for the domestic market did not have labels at all, and the absence of verifiable records on stock movement in its warehouses. The company purchased most of the Russian birch plywood through domestic traders and therefore, its volume could not be reliably established since these purchases were not recorded in any official document. Resales were done through three traders, two in Kazakhstan, and one outside Kazakhstan. The trader outside Kazakhstan, which resold the birch plywood it purchased from Favorit to the Union did allegedly not have audited accounts and therefore, the information on the volumes and specificities of the resold products could not be verified against any official document. Because of the combination of all these factors, the Commission considered that all the information provided by Favorit had to be rejected.

• (94) On this basis, the Commission services informed Favorit of their intention to apply Article 18(1) of the basic Regulation, and make its findings based on ‘facts available’ used for the country as a whole, summarised in Section 2.

• (95) Favorit disagreed with these findings. It considered that there was no basis to apply either Article 18(1) or Article 18(3) of the basic Regulation, since it fully cooperated with the investigation and since it provided all the necessary data that the Commission requested, and it successfully demonstrated that it did not tranship Russian origin birch plywood to the Union.

• (96) Favorit argued that it was a genuine producer and that the company invested a lot of efforts in preparing the questionnaire reply, which was complicated by the fact that it did not have financial statements, and because its accounting system had limitations.

• (97) After disclosure, Favorit resubmitted that the Commission disregarded the fact that it faced difficulties, because it was a small company with a limited number of staff, and made allegedly unrealistic requirements, such as for audited financial statements, within 37 days following the initiation.

• (98) Favorit further pointed to the fact it was not required under Kazakh legislation to have financial statements and that the Commission was aware of the difficulties Favorit had regarding its accounting, and that it nevertheless proceeded with the investigation and conducted the on-the spot verification. Favorit argued that, when analysing the data, the Commission should apply an objective standard of establishing a reliability of the accounting information, and it referred to Article 15 of the AD Agreement that provides that a special regard must be given to developing country WTO members, and therefore that the Commission cannot apply IFRS or other global standards. It referred to a case of an Algerian producer for which the Commission applied this Article due to the fact it did not have accounting records for half of the investigation period ¹⁸.

• (99) The Commission did not question the fact that Favorit also produced its own birch plywood, but the application of Article 18 was based on a combination of factors, as detailed above in recitals (90) to (93). The purpose of the on-the-spot verification was not only to look into the reliability of the accounting data, but also to verify other information that could only be verified on the spot, such as, among others, an existence of a genuine production, stock of the input material, records that may only exist on paper form, physical location of the stock of birch plywood, and separation between the own production and birch plywood purchased in Russia. The Commission further stressed that the fact that the verification visit took place did not mean that data were to be accepted. The Commission thus disagreed that the fact that data were not rejected from the start meant that the Commission had to accept these data.

• (100) The Commission further noted that it did not require companies to provide financial statements if these did not exist and when national legislation did not require to prepare these, nor did it require that the information which was to be provided complied with IFRS or other accounting standards, in situations where it was not required by national legislation of the country in question. Therefore, the reason for the application of Article 18 was not the non-compliance of the accounting of Favorit with accounting standards, but rather the fact that the accounting records kept by Favorit were unreliable and made it impossible to verify the veracity of information that Favorit submitted with its request for an exemption. As a result, Favorit could not demonstrate that it was not involved in circumvention practices.

• (101) Without prejudice to the principle that the legality of anti-dumping measures should be assessed by reference to the applicable law, and not by reference to the alleged past administrative practice, the Commission further noted that in the case of the Algerian producer, it decided ‘to use data from the company where it was considered to be sufficiently reliable, and in so far as it did not materially affect the outcome’ ¹⁹. The conclusion for data of Favorit was contrary to the situation of the Algerian producer – the Commission did not consider the data of Favorit for any part of the investigation period as sufficiently reliable, and their veracity had a direct impact on the outcome. Therefore, the Commission found the argument of Favorit unsubstantiated.

• (102) Favorit also considered that the Article 18 letter did not specify what exactly triggered the application of Article 18(1) and 18(3) of the basic Regulation. It argued that it provided all the requested information, and therefore, that Article 18(1) did not apply. Also, it considered that the Commission could not apply Article 18(3) of the basic Regulation only because Favorit’s data was not ideal in all respects. Finally, the Commission was wrong to the extent that Article 18(1) applied because conditions of Article 18(3) were not fulfilled. It considered that Article 18(1) and 18(3) address different situations and their application is not contingent one on another.

• (103) Furthermore, Favorit argued that the Commission’s intent to disregard Favorit’s data in its entirety is manifestly contrary to paragraph 3 of Annex II to the AD Agreement. It referred to the report of Appellate Body in US – Hot-Rolled Steel ²⁰, which specified that according to paragraph 3 of Annex II, investigating authorities are directed to use information if three conditions are satisfied, namely that such information is verifiable, appropriately submitted so that it can be used in the investigation without undue difficulties, and is supplied in a timely fashion. It follows that if these conditions are met, investigating authorities are not entitled to reject information submitted, when making a determination. Favorit argued that these conditions were met in this case since the Commission verified several documents that pointed to the absence of circumvention. Because the Commission asked to reconcile information to the trial balance and Favorit and its related companies did that, it was obliged to take such information into account, before resorting to any facts available. Favorit reiterated similar arguments after disclosure.

• (104) The Commission reiterated that the reasons to apply Article 18 of the basic Regulation were detailed in the Article 18 letter. In addition, the information collected during the verification visit was mentioned in the mission report shared with the company after the verification visit. As the information provided was clearly not verifiable, as detailed in recitals (90) to (93) above, the Commission concluded that the conditions to use Article 18(3) were not fulfilled ²¹ and the Commission based its findings solely on Article 18(1) of the basic Regulation, not on both articles (Article 18(1) and 18(3)), as alleged by Favorit.

• (105) Favorit further argued that it sufficiently demonstrated that it was not engaged in circumvention, which the Commission could have verified. All the information matched to the company’s ERP system ²², which could not be, in Favorit’s view, changed retroactively. It further considered that the Commission could also visually confirm that what was loaded for the Union market was the same as what was seen in the company’s warehouse in Uralsk. Favorit reiterated similar arguments after disclosure.

• (106) The Commission considered that information submitted by parties must be verifiable, reliable and therefore usable, and presented in a way that it can be checked against audited books and records of the company submitting it, or any other official documents. However, in case of Favorit it was found that the information was unverifiable, unreliable, and unusable and it could not be proven to be accurate. The Commission thus disagreed that Favorit demonstrated that it was not involved in the circumvention practices and namely in that it was not reselling Russian birch plywood to the Union.

• (107) The Commission further noted that the quantity of Russian birch plywood, purchased by Favorit, was significant and represented [10-40] % of its sales and was close to the quantity that Favorit exported to the Union. However, as explained above, the absence of reliable and verifiable accounts recording the resales did not allow the Commission to confirm neither the quantities nor the destination of Russian birch plywood. Favorit resold the plywood through traders in Kazakhstan and a trader outside Kazakhstan for which Favorit claimed that officially audited accounts were not required. As explained during the verification visit, these sales channels through traders made it possible for Favorit to export to the Union. Likewise, purchases of Russian inputs to produce plywood and sales of birch plywood when done via traders could not be verified against any official or independently audited document.

• (108) The records in the accounts of Favorit were therefore not complete and could not be verified. The Commission also noted that the argument that the ERP system could not be retroactively changed was not based on any concrete evidence but was rather a statement of the company that could not be verified. In any event, the Commission was not able to verify that what was in the ERP system concerned the totality of the transactions of Favorit.

• (109) Furthermore, the Commission noted that no records or other evidence allowed to confirm, at the visit of the warehouse in Zubovsk, at the company’s premises and in the warehouse in Uralsk, that birch plywood destined for the Union and birch plywood destined for the domestic market was kept separately. At the time of the visit, very little stock was kept, and only some of it was labelled. Neither in Zubovsk, nor in the warehouse in Uralsk the company could show records for stock movements tracing the origin and destination of the birch plywood. To the contrary, in Zubovsk, it was argued that the (only) employee working at the warehouse had the knowledge of the birch plywood to be loaded, therefore no records or labelling on the birch plywood ready to be sold was needed. In Uralsk, even though the warehouse was shared with other companies, no records were allegedly kept either. The Commission thus disagreed with the argument of Favorit that the fact that packages labelled as being for the Union were similar to those the Commission could see at the warehouse in Uralsk constituted evidence that the plywood sold to the Union market was produced by Favorit. To the contrary, since allegedly no records were kept in either warehouse, and there was not a separate space for the production of Favorit and Russian plywood, the company could not show that what was exported to the Union was solely its own production.

• (110) Favorit further argued that it had only one set of accounts that is issued for all the purposes, including for the tax accounting. It argued that all the purchases were recorded in Favorit’s accounting system and reported in the tax accounting. Furthermore, Favorit argued that the deficiencies in its accounting related to the reliability and verifiability of the data were irrelevant to assess its exemption request. Favorit argued that according to the Court of Justice in Maxcom ²³, exemption requests should be granted if they are supported by evidence and if such evidence demonstrates that exporters submitting a request have not engaged in circumvention practices. It argued that the Court of Justice did not limit the notion of evidence to be submitted in order to meet the relevant legal standard to a specific type. In particular, there was not a requirement in its view for the applicants to have financial statements, audited financial statements, ‘official accounts’, and that any evidence in principle would suffice.

• (111) The Commission disagreed that only one set of accounts was kept. To the contrary, Favorit’s accounts used for tax accounting were not complete. Since the accounts should normally include purchases and resales of Russian birch plywood, the Commission disagreed that their reliability was irrelevant to assess its exemption request. The Commission recalled that its conclusion to apply Article 18 was based on a number of factors, detailed in recitals (90) to (93) and not on one piece of a specific evidence. It thus rejected the claim that the deficiencies in its accounting were irrelevant.

• (112) Favorit also argued that the questionnaire and pre-verification letter required to make all reconciliations to the trial balance and to electronic records, which Favorit did. It considered that the Commission failed to ‘specify in detail’ that Favorit was supposed in addition to tie the data to some ‘official accounts’. It also argued that the Commission also failed to articulate the way that information was to be structured. In its view, the Commission thus failed to take account of genuine difficulties that Favorit had experienced (such as lack of financial statements) and that it had made known to the Commission. In its view, the Commission could not then fault Favorit for its alleged lack of cooperation.

• (113) The Commission disagreed. It specified in detail the information it required and the way that information should be structured in the questionnaire. It was also in line with its standard practice to verify the veracity of the information by crosschecking it with, among others, official accounts, tax declarations, or records kept in factory. However, Favorit could not provide the reconciliation with any official or independently audited documents. The Commission also reiterated that the reason to apply Article 18 was not that Favorit refused to provide any requested information, but rather due to the facts explained in detail in recitals (90) to (93). The Commission thus rejected the claim.

• (114) Favorit argued that during the verification visit, it made a reconciliation of the revenue in its tax accounting module to revenue in VAT declarations and that it also reconciled revenue to the management and tax accounting module. This reconciliation showed that both sets of data came from the same accounts and were thus reliable, accurate and verifiable. The Article 18 letter was thus manifestly wrong and unreasoned by alleging that there was any issue regarding the reconciliation and was also contrary to paragraph 1 of Annex II to the AD Agreement.

• (115) The Commission noted that only part of the accounts reconciled to official documents which could not thus constitute evidence that the company reported all the rest of the information correctly. The Commission thus disagreed that because part of the operation matched the official accounts, data had to be accepted. As explained above, the fact that all data could not be reconciled put in question all the information Favorit submitted. It thus rejected the claim.

• (116) Favorit further argued that the Article 18 letter did not explain which facts available it intended to apply and whether such facts available were based on Favorit’s data or anything else. Nothing on the record pointed to involvement of Favorit in transhipment or other circumvention practices. Even if Article 18(1) applied, the only facts reasonably replacing the missing information would be the data that Favorit has provided. An extrapolation of country-wide circumvention findings to Favorit was in its view unreasonable as such selection of facts would clearly aim at punishing a non-cooperating party, which was not the case of Favorit.

• (117) Favorit also considered that any attempt to draw adverse inferences from the alleged non-cooperation was illegal under Article 6.8 of the AD Agreement, as well as Article 48 of the Charter of Fundamental rights. It argued that in line with the ruling in Mexico-Anti-dumping Measures on Rice, and Panel Report, China-GOES, the Commission must find ‘best information available’ which has to be not simply correct or useful per se but ‘the most fitting’ or ‘most appropriate’, and that the non-cooperation does not justify the drawing of adverse consequences ²⁴. Favorit repeated the same argument after disclosure.

• (118) The Commission reiterated that the data of Favorit could not be used as a basis for its findings. As explained above, the data supplied by the company was unverifiable and as such it could not be used even under Article 18(3) of the basic Regulation. As confirmed by the Court of Justice, it is for each individual producer-exporter to show that its particular situation justifies an exemption pursuant to Article 13(4) of the basic Regulation ²⁵. Accordingly, the Commission concluded that Favorit had not demonstrated that it was a genuine producer not engaged in circumvention activities. In those circumstances, in line with its past practice, the Commission had no choice but to base itself on country-wide circumvention findings. Also, Article 18(6) of the basic Regulation provides that when a party has failed to cooperate partially or entirely, the result ‘may be less favourable ... than if it had cooperated’. Accordingly, the fact that the application on Favorit of the country-wide findings were to be less favourable for Favorit did not aim at punishing Favorit but was the only option and the consequence of the fact that its data could not be used.

• (119) Favorit further argued that it provided the profit and loss statement of the traders in Kazakhstan through which it exported and therefore, the Commission could carry out a full verification and reconciliation. Also, it argued that these traders had no obligation to provide audited accounts. Favorit also submitted that the Commission was wrong when it considered that it did not provide a profit and loss statement of the trader outside Kazakhstan. It also repeated that the trader outside Kazakhstan was not required to have audited accounts.

• (120) The Commission noted that profit and loss statements of the traders only reflected part of the business of Favorit and therefore, did not constitute evidence that all data provided by Favorit were correct. Similarly, the accounts of the trader outside Kazakhstan only captured part of the sales of Favorit and could not be used to establish the veracity of accounts of Favorit. It thus rejected the claim.

• (121) Favorit further argued that based on consistent Commission’s practice, non-cooperation with the anti-circumvention did not automatically lead to either the finding of circumvention by default or to the total disregard of the data submitted. It referred to the investigation relating to Glass Fiber Fabric from Morocco in which a producer was found non cooperating based on seven issues, but the Commission accepted its data ²⁶, and an investigation on Coumarin from India ²⁷, where a company misled the Commission with regard to its affiliation to its trading companies but where no Article 18 of the basic Regulation was applied. Therefore, it considered that the intention of the Commission to apply facts available and its intention to reject its data was a violation of the principle of non-discrimination that obliges to treat similar situations in the same manner. Favorit further argued that its situation was similar to that at issue in the Maxcom judgement, and therefore, no findings of circumvention by Favorit could be found by reference to the country wide circumvention. Favorit considered that it provided evidence that it did not circumvent and that therefore, the Commission could not apply the country-wide findings to its situation.

• (122) The Commission noted that findings are made on a case-by-case basis, and in this case, as extensively explained above, due consideration was given as to whether the entire data set could not be used or only a specific information, as to whether the missing information had a substantial impact on the outcome of the investigation, and as to whether without the information the Commission could arrive to a reasonable finding. Furthermore, the facts of the cases mentioned by Favorit were completely different in many respects. In particular, in the other cases the business model of the concerned companies was different and there was no issue with the absence of audited financial statements. Therefore, the Commission did not agree that because the data were not entirely rejected in the above cases, the same approach had to be taken at the case at hand. It thus found the claim unsubstantiated. Also, the Commission disagreed that there was verified evidence that Favorit did not circumvent – the absence of reliable and verifiable data did not allow the company to demonstrate the absence of circumvention practices.

• (123) Based on the above, the Commission concluded that findings on Favorit had to be based on facts available in the sense of Article 18 of the basic Regulation and that Favorit did not demonstrate that it was a producer not engaged in circumvention activities in the sense of Article 13(4) of the basic Regulation. The Commission therefore rejected its exemption request.

• (124) After disclosure, Favorit reiterated the same claims. It repeated that it had demonstrated that it did not tranship Russian birch plywood, and that the Commission acted in breach of AD Agreement and of the basic Regulation. It mainly argued that it had a reliable accounting, that the information it submitted was verifiable, that its stocks clearly distinguished its own production from production of third parties, and that it had only one set of accounts. It resubmitted that the Commission verified all the information.

• (125) Favorit further argued that the Commission failed to take into account the difficulties that it faced being a small company, situated in a developing country. It also repeated that the use of the facts available had an adverse effect on Favorit, in breach of Article 6.8 of the AD Agreement.

• (126) The Commission considered that all the arguments raised by Favorit were already addressed in detail in recitals (91) to (122). Since no new comments of substance were brought forward, the conclusion in recital (123) was confirmed.

4.1.2.   Findings with regard to Semipalatinsk

• (127) In the questionnaire reply Semipalatinsk reported all pressed wood input material to be non-Russian. However, during the verification visit the Commission discovered that the pressed wood from one supplier was from Russia while for the purchases made from Semipalatinsk’s biggest supplier the origin could not be established. This information was necessary to establish, based on Article 13 of the basic Regulation, what is the percentage that the Russian origin input material constituted in the production of birch plywood and thus necessary to assess the application for exemption.

• (128) In addition, labour costs for the calculation of the added value as required by Article 13 of the basic Regulation could not be established by the Commission services because Semipalatinsk did not include all employees in the table on cost of manufacturing as they were paid in cash, i.e. not present in the official accounts.