Commission Implementing Regulation (EU) 2024/1943 of 11 July 2024 imposing a provisional anti-dumping duty on imports of optical fibre cables originating in India

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 7 thereof,

After consulting the Member States,

Whereas:

(1) On 16 November 2023, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of optical fibre cables (‘OFC’) originating in India (‘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 October 2023 by Europacable (‘the complainant’). The complaint was made on behalf of the Union industry of optical fibre cables 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) Pursuant to Article 14(5a) of the basic Regulation, the Commission should register imports subject to an anti-dumping investigation during the period of pre-disclosure unless it has sufficient evidence within the meaning of Article 5 that the requirements either under point (c) or (d) of Article 10(4) are not met. One of these requirements, as indicated in Article 10(4)(d) of the basic Regulation, is that there is a further substantial rise in imports in addition to the level of imports which caused injury during the investigation period (i.e. 1 October 2022 to 30 September 2023).

(5) In the Notice of Initiation, the Commission invited interested parties to contact it in order to participate in the investigation. In addition, the Commission specifically informed the complainants, other known Union producers, the known exporting producers and the Indian authorities, known importers, users, and traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(6) Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

(7) The Commission received comments on initiation from the exporting producers Birla Cable Ltd (‘Birla’), HFCL Limited (‘HFCL’), Sterlite Technologies Limited (‘STL’), and the complainant.

(8) The exporting producers HFCL and STL claimed that no meaningful non-confidential summary of the calculations of the dumping margin, normal value, price undercutting and price underselling had been provided by the complainant and requested to be granted access to the requisite information. HFCL also requested disclosure of a meaningful non-confidential summary of the information provided by the complainant on pricing behaviour of the Indian exporting producers in tender procedures in the EU. HCFL further claimed that the summaries provided relating to tender procedures in several Member States and of the price offer made by an Indian producer on the spot market was not meaningful.

(9) The Commission assessed the claims but considered, with regard to the calculations of the dumping margin and normal value, that the non-confidential version of the complaint available in the file for inspection by interested parties contained all the essential evidence and non-confidential summaries of the confidential data allowing interested parties to properly exercise their rights of defence. In particular, the non-confidential summary contained information on the sources (export prices of cables containing 24 and 48 fibres – most representative OFC types – based on tenders that took place in three EU Member States) and dumping margins for the two most representative OFC types (plus the average dumping rate for both types). Therefore, these claims were rejected.

(10) Following the claims of STL and HFCL, the Commission reassessed the summaries of the undercutting and underselling calculations, as well as the aggregate data of the complainant’s figures available in the open file and decided to request the complainants to provide further details to the open version of the complaint. This additional non-confidential information was added to the file.

(11) With regard to the claim concerning tenders, the Commission decided to reject the claim because of the confidential nature of the information (the sensitive annexes contain specific price offers, negotiations and concrete information on tender submissions – the non-confidential summaries provided by the complainant were deemed appropriate).

(12) The exporting producer Birla claimed that the complaint relied on outdated figures, as it was lodged only in October 2023, i.e. more than six months after the end of the period of investigation used for the complaint (i.e. 31 March 2023).

(13) The complaint was delivered to the Commission on 2 October 2023 and, according to Article 5(1) of the basic Regulation was deemed to have been lodged on the first working day following its delivery to the Commission, i.e. 3 October 2023. The basic Regulation does not set any legal obligation that a complaint should not contain data older than six months prior to the submission of the complaint. However, the Commission uses the time mentioned in the basic Regulation, including Article 6(1), as guidance (4) to ensure that the complaints’ data is as up to date as possible. Even if Article 6(1) applied at the initiation stage, that article provides for some flexibility as it states that ‘an investigation period shall be selected which in the case of dumping shall, normally, cover a period of no less than six months immediately prior to the initiation of proceedings’. Birla’s claim is without legal basis and was therefore rejected.

(14) HFCL noted the difference between the data covered by the complaint (i.e. 1 April 2022 to 31 March 2023) and the investigation period (i.e. 1 October 2022 to 30 September 2023) and requested the complaint to be updated by the data pertaining to the investigation period. It claimed that not providing such data would prevent interested parties from providing meaningful comments in relation to the injurious situation of the Union industry during the investigation period of the investigation. HFCL pointed in particular to the Commission’s alleged request to interested parties to present their submissions on injury to the Union industry. It claimed that interested parties were therefore denied their legitimate rights of defence and due process.

(15) Europacable claimed that HFCL did not provide any legal basis in support of this claim. It noted that the period of investigation used for the purpose of the complaint is necessarily different from the one used in the proceeding itself, given the time lapse between the lodging of a complaint and the initiation of an investigation.

(16) The information provided in the complaint was the basis of which the Commission decided to initiate the present investigation. Therefore, the fact that the period of investigation covered by the complaint differs from the investigation period of the investigation does not prevent interested parties from providing meaningful comments on the complaint and the initiation of the investigation. The complaint was deemed as complete as regards its mandatory requirements, according to Article 5(2) of the basic Regulation. Moreover, the Commission, in its notice of initiation, invited parties to cooperate by filling in a sampling form (point 5.3.1 (a) of the Notice of Initiation), to provide comments on the initiation or the complaint (point 5.2 of the Notice of Initiation), to provide information concerning the assessment of Union interest (point 5.5 of the Notice of Initiation); and provided for the possibility to comment on other parties’ submission. Detailed findings regarding the investigation period of the investigation are disclosed to interested parties at a later stage and they are given the opportunity to comment at that stage of the investigation. These claims were therefore rejected.

(17) STL, HFCL and Birla claimed that the import data in the complaint were not accurate considering that it relied upon the full CN code 8544 70 00 which is broader than the product under investigation, rather than the TARIC code 8544700010 created in the previous investigation concerning the imports of OFC originating in China (5) (‘the China investigation’), which includes only the product concerned. These companies also contested the adjustments made to the import statistics on CN code basis by adding imports of OFC allegedly mis-declared as optical fibres under commodity code 9001 10. These parties claimed that no evidence was provided of misdeclarations. All these parties highlighted that commodity code 9001 10 referred to optical fibre cables, not made of individually sheathed fibres as ruled by Indian Courts, and thus not forming part of the scope of the investigation. STL also claimed that other third country imports of OFC may be mis-declared as optical fibres under commodity code 9001 10 as well, which was not taken into account by the complaint. Therefore, it was claimed that the import data in the complaint were over-estimated.

(18) The methodology, reasoning, and sources for the adjustments to estimate the import volume of OFC from India were explained in detail in the complaint and considered to be sufficiently supported by evidence within the meaning of Article 5(2) of the basic Regulation. The complaint outlines and provides evidence why the statistics under CN code 8544 70 00 are more meaningful in the specific case of India, and why adjustments to this data were nonetheless required and on which basis such adjustments were made. Specifically, the complainant argues that the use of the TARIC code is preferrable for China, which not only produces and exports to the Union the product concerned but also submarine cables and multi-mode cables, but not for India. The complainant explains that India does not produce any submarine cables and manufactures a marginal quantity of multi-mode cables and provides evidence that nearly all the volume of imports of OFC from India falling under CN code 8544 70 00 consists in the product concerned. The Commission reviewed the evidence presented in the complaint and deemed that the use of CN code 8544 70 00. was appropriate. With regard to the use of commodity code 9001 10, which covers OF only and not OFC, the Commission deemed that the evidence provided by the complainant (correspondence in which Indian producers state that OFC are imported into the EU under HS Code 9001 10, under Indian ‘custom guidelines’ applied also in exports to other exports regions) is also appropriate. The fact that according to Indian Courts CN code 9001 10 00 referred to optical fibre cables, not made of individually sheathed fibres, is irrelevant, given that the product considered is always sheathed, and therefore falls under a different CN code, which is CN code 8544 70 00.

(19) Furthermore, the exporting producers did not provide any evidence that the estimates made by the complainant were unreasonable or substantially wrong. Finally, there was no indication and there was no evidence available to the complainant that other third country imports were misdeclared under commodity code 9001 10 and that the import statistics of those countries should have been adjusted accordingly. These claims were therefore rejected.

(20) HFCL claimed that the dumping margin in the complaint could not be considered as representative as it was calculated based on prices for only certain types of OFC (containing 24 and 48 fibres), that did not form a significant part of Indian exports. HFCL argued further that no evidence was provided that the models on which normal value was based are the same than the ones used for the determination of the export price. Finally, they claimed that there are many characteristics that may have an impact on costs and prices and when not taken properly into consideration, these may inflate the dumping margin.

(21) In accordance with Article 5(2) of the basic Regulation the complaint should include evidence reasonably available to the complainant. Due to the confidential character of costs and prices the complainant could not have access to very detailed information in this regard and was therefore not required to provide such information. It was considered that the evidence provided with regard to the normal value and export price was sufficient and representative enough to justify the initiation of the investigation. The claim was therefore rejected.

(22) Birla, HFCL and STL claimed that no evidence was provided in the complaint regarding the undercutting and underselling calculations. Birla, in addition, claimed that the prices used were not representative for the Indian producers or for the Union industry, while STL claimed that they did not cover the entire scope of the product under investigation, but only a subset of it. In this regard, the types of OFC considered in the complaint (namely cables containing 24 and 48 fibres for the dumping calculations, and 12, 24, 48 and 72 fibres for undercutting and underselling calculations) represent the most sold OFC on the EU market and the types for which the complainants were able to collect evidence in relation to prices of the Indian imports. Birla claimed that the complainants’ analysis of the import prices is flawed, and imports trends as shown in the complaint did in any event not show the alleged price pressure on the Union market. Birla also claimed that a separate analysis for the tender and spot markets should have been carried out, while STL further claimed that the target profit that was established during the investigation on OFC originating in China should not be taken into consideration to calculate the underselling margins in the current investigation.

(23) As stated above, in accordance with Article 5(2) of the basic Regulation, the complainant is only required to provide evidence reasonably available to it. Thus, the complaint does not need to include data of all product types, or provide an analysis per market segment, in particular when such data is confidential and/or not publicly available. The Commission considered therefore that the evidence provided with regard to the undercutting and underselling calculations satisfied the threshold of Article 5(2) of the basic Regulation. Finally, the target profit used in the complaint for the calculation of the underselling margin was considered to be reasonable and STL could also not provide any convincing evidence at this stage of the proceeding that would show that its level was substantially erroneous or wrong. All claims with regard to the undercutting and underselling calculations were therefore rejected.

(24) STL, referring to publicly available annual/interim reports of Prysmian Group, Acome, Hextronic, and Tratos, claimed that the Union industry did not suffer material injury, but was healthy and thriving.

(25) The evidence in the complaint with regard to injury pertained to the development of injury indicators of the OFC business only and thus is considered more pertinent than publicly available information pertaining to companies at group level. This claim was therefore rejected.

(26) Birla, HFCL and STL disagreed with the analysis of several injury indicators described in the complaint and claimed that their development did not point to an injurious situation. They also argued that data of the complainants was mixed with data of all Union producers of OFC and thus selectively used. STL and HFCL argued that in particular the data on production, sales, market share, production capacity and capacity utilization showed positive trends and therefore did not show any material injury. STL argued that the complainants had a healthy profitability, and any negative impact was due to drastic increases in investments, capacity, and the accumulation of stocks.

(27) Overall, the trends of injury indicators in the complaint showed that the Union industry suffered material injury. Market share decreased from 2019 to 2022 and while regaining market share in the investigation period of the complaint, it remained below the levels of 2019. The same is true for the sales prices of the Union industry, i.e. they showed a decreasing trend, except in the investigation period of the complaint, where they increased albeit remaining largely below the sales prices in 2019. While production cost decreased, this was at a slower pace than the sales prices, with a negative effect on the Union industry’s profitability. The fact that other injury indicators such as sales volume and production volume as well as investments showed a positive trend has to be seen in the overall economic context and must also be balanced against the parallel development of the Union consumption that increased more than the Union industry’s sales volume. These positive developments as such do not mean that the Union industry did not suffer material injury. The fact that profitability increased at the end of the investigation period of the complaint does not contradict the significantly negative development since 2019 and the fact that the Union industry was not able to increase its sales prices in line with the increase of its cost. The Commission considered that the complainant provided sufficient evidence that the Union industry suffered material injury. The claims in this regard were therefore rejected.

(28) With regard to the claim that data on the injury indicators was selectively provided, the Commission notes that the complainant established data for macroeconomic indicators (such as sales volume, production volume and market share) based on information pertaining to all Union producers, while data for microeconomic indicators (such as profitability and sales prices) were provided based on data pertaining to the complainants. This is the same methodology the Commission applies in investigations where sampling is used and was therefore considered legitimate and reasonable. It cannot therefore be argued that such data were selectively used, and this claim was therefore rejected. Moreover, as noted in recital (10) above, the Commission added an open version to the file for inspection by interested parties providing aggregate data of the complainant’s figures.

(29) Birla, HFCL, and STL claimed that the complaint failed to establish a causal link between the Indian imports and the alleged injury to Union producers. They claimed that the complainant did not establish a correlation between the imports of OFC from India and the material injury and did not sufficiently consider other factors that could have caused the material injury suffered by the Union industry.