Commission Implementing Regulation (EU) 2025/78 of 15 January 2025 imposing a provisional anti-dumping duty on imports of multilayered wood flooring originating in the People’s Republic of China

(242) The Commission noticed that the Chinese exporting producers sold to importers or wholesalers. The Union industry also sold to such customer types but in addition, they also sold to further downstream customer types such as retailers, do-it-yourself (‘DIY’) stores, to architects and other operators in the construction and renovation sector. The Commission, therefore, performed a second undercutting calculation by reducing the Union industry prices for sales to such downstream customers. This reduction took into account that agents for sales of MWF in certain Union countries typically charge a 5% commission to cover their costs and profit margin. Therefore, in this calculation, if the Union industry sales were made to customers other than traders and wholesalers, a 5% LoT reduction was made. Using this methodology the weighted average undercutting margins ranged from 28,8% to 34,0%.

(243) AUMI submitted that prices from a Union producer were significantly lower than those typically used by AUMI members, making impossible for them to compete. AUMI submitted that there were price differences of up to 40% between AUMI members who source from China and Union companies that do not engage in sourcing from China.

(244) The Commission assessed the evidence submitted by AUMI which related to a price offer of a limited number of product types outside the investigation period. Such evidence was considered anecdotal and did not overturn the comprehensive calculation carried out by the Commission which covered all the sales made during the investigation period to the Union by the sampled Union producers and exporting producers. This claim was therefore rejected.

(245) In accordance with Article 3(5) of the basic Regulation, the examination of the impact of the dumped imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

(246) As mentioned in recital (7), sampling was used for the determination of possible injury suffered by the Union industry.

(247) For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators on the basis of data contained in questionnaire response of FEP. The data related to all Union producers. The Commission evaluated the microeconomic indicators on the basis of data contained in the questionnaire replies from the sampled Union producers. Both sets of data were found to be representative of the economic situation of the Union industry.

(248) The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the dumping margin, and recovery from past dumping.

(249) The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

(251) Throughout the period considered the production volume of the Union industry decreased by 31%. A detailed analysis showed that this fall in production took place mainly in 2023.

(252) The Union production capacity was calculated on the basis of an achievable maximum production in the long-term, taking into account maintenance. During the period considered, Union production capacity decreased by 9%.

(253) During the period considered, despite a 9% reduction in production capacity, Union capacity utilisation fell by 24%.

(255) Total Union sales volume was relatively stable from 2020 to 2022. However, in 2023 Union sales fell to around 33,4 million square meters from 50,4 million square meters in 2022 which represented a fall of 35% as compared to 2020.

(256) All such sales were on the free market as there was no captive sales during the period considered. The captive data in Table 2 relates to captive use whereby no actual sale took place.

(257) In terms of market share, Union sales quantities decreased from 73,4% in 2020 to 65,5% in 2022, a decrease of 11%. However, in 2023 the market share of these sales increased to 67,1% which represented a decrease of 9% as compared to 2020.

(258) The large decrease in Union sales quantities of the Union industry over the period considered was due to the market penetration of the Chinese imports at prices which undercut the Union industry as shown in recitals (237) to (242) above. In addition, the large fall in sales in 2023 was among others due to a fall in demand in the construction industry.

(259) The development of the market share of the Union industry over the period considered was also due to these factors. The loss of market share reached 11% by 2022 but recovered slightly in the IP during the major problems in the construction sector at that time.

(260) Bearing in mind that the Union industry lost 9% of market share over the period considered, and its sales on the free market fell by 35%, it is clear that no growth took place, but rather it was a period of contraction in both absolute terms and in relation to the free market consumption.

(262) The Union industry employment fell by 14% over the period considered on a full time equivalent (FTE) basis.

(263) Productivity in terms of tonnes per employee fell by 20% over the period considered.

(264) All dumping margins were significantly above the de minimis level. The impact of the magnitude of the actual margins of dumping on the Union industry was substantial, given the volume and prices of imports from the country concerned.

(265) This is the first anti-dumping investigation regarding the product concerned. Therefore, no data were available to assess the effects of possible past dumping.

(267) The unit sales prices on the Union market to unrelated parties increased from 21,5 EUR/ square meter to 26,7 EUR/ square meter over the period considered, an increase of 24%. The main increase took place in 2022 when unit sales prices rose by 21%.

(268) This apparent positive trend should be seen in the context of important increases in raw material costs. During the investigation period, these costs represented more than 50% of the full unit production cost. This unit cost of production increased by 42% over the period considered, namely at a much higher rate than the average sales prices increase in the free Union market.

(269) The unit sales prices and unit costs both increased by 2% in 2021 as compared to 2020. However, in 2022 sales prices increased by 21% due to increases in raw material costs. Furthermore, as the increases in unit costs were much higher (29%), it was clear that prices were being suppressed. As reported in Table 4 above, Chinese import prices only increased by 20% in 2022.

(270) In 2023, unit costs increased to 25,2 EUR/ square meter mainly due to a big fall in sales quantities resulting from a fall in demand in the construction industry as shown in Table 6. However, the Union industry was unable to adjust to the new market situation and its market prices only rose by 1%. In 2023 Chinese prices fell by 13% putting enormous price pressure on the Union industry.

(272) The average labour costs per employee increased by 18% over the period considered. Developments in salaries were negotiated with labour unions and other employee related costs were set by national administrations and the period considered was a time of high inflation.

(274) The closing stocks of the sampled Union producers increased by 32% over the period considered. These stocks increased as a percentage of production by 65% over the period considered. Stocks are very important in the Union MWF industry as sales are usually made from stock and production to order is more of an exception to this practice. Stocks are therefore usually quite high as demonstrated by the percentages of production shown in Table 10. The increases in stock both in absolute terms and as a percentage of production resulted from a large fall in sales in 2023 as the Union industry tried to adjust its production levels in an efficient manner.

(276) The Commission established the profitability of the sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. The profitability of the sampled producers was above 7% in 2020 and 2021 but fell to 5,0% in 2022. This was due to price pressure of the increasing quantity of Chinese imports as explained at recital (269) above. In the investigation period, profitability decreased again, this time more significantly, it went below the break-even point to –3,9%. In the investigation period the Union industry continued to suffer price pressure from Chinese imports but also suffered from the fact that difficulties within the construction sector meant that demand for MWF decreased by 35% as shown in Table 3.

(277) The development of profitability, when seen together with the sales prices and production costs in Table 8 and the price development of the Chinese imports, showed evidence of significant price suppression. The Union industry was unable to raise its prices to sufficiently reflect cost increases in order to sell at reasonably profitable prices. This meant that the profitability of the Union industry fell below the break even point in the investigation period.

(278) The net cash flow reflects the ability of the Union producers to self-finance their activities. The trend in net cash flow developed in a similar manner to the return on turnover, first falling in 2022 and then becoming negative in the investigation period.

(279) The return on investments is the profit as a percentage of the net book value of investments. The trend in return on investments also developed in a similar manner to the return on turnover, first falling in 2022 but suffering a major fall in the investigation period as decreased from 30,7% in 2022 to –7,2% in the investigation period.

(280) The sampled Union producers continued to invest during the period considered as demonstrated by the investment figures above. Investments were between EUR 5 and 13 million per year and were mainly made in order to make efficiency gains and maintain existing facilities. The Union industry companies explained that such investments were the minimum needed to maintain efficiency. They represented less than 4% of turnover in each of the four years of the period considered. The Union industry explained that investments were restricted by a decreasing ability to raise capital. As mentioned at recital (338) one of the Union industry companies provided evidence to show that a EUR 10-15 million investment had been cancelled due to the poor situation on the market in 2022 and 2023. The reduction in the level of the return on investments jeopardises the future ability of the Union industry to raise capital and thus its survival in the medium and long term.

(281) The deterioration in the economic situation of the Union industry took place in a market with increasing demand up to 2022. However, in 2023 consumption declined by 35%. The Union industry market share declined by 9% over the period considered, from 73,4% in 2020 to 67,1% in the investigation period.

(282) The development of captive use showed a modest decrease in the period considered of 2%. The investigation showed that the captive use is not directly affected by the dumped imports This means that captive use was not a key factor in the injury analysis.

(283) The development in sales prices showed an apparently positive trend during the period considered. The investigation, however, showed that the positive development of sales prices was related to the development in raw material prices, which significantly increased in that period.

(284) Most indicators showed a decisively negative trend such as profitability, return on investment and cash flow which all went from positive figures in 2020 and 2021, reduced in 2022 and became negative in 2023. Closing stocks of finished goods increased which also had a negative impact on cash flow. These trends resulted from developments in the trends of sales prices and costs of production. Such factors, when examined together with the development of Chinese import prices in increasing quantities is a clear demonstration of price suppression. In 2022, the dumped imports increased in quantity and prices did not increase in line with raw material costs. In 2023, import prices fell and the Union industry was unable to set prices to a level that would allow it to cover its costs and, whereas in 2020 and 2021, it was able to make reasonable profits, in 2022 such profits fell below the target profit margin (7,3%) and in 2023 profitability became significantly negative.

(285) During the period considered the Union industry carried out investments to maintain efficiency. However, after 2021 there was evidence of a reducing ability to raise capital.

(286) Although, the injury in this investigation consisted mainly of price and performance indicators such as profitability and ability to raise capital, the Union industry also suffered a decline in the volume indicators. Production, capacity, capacity utilisation, sales volume and market share on the Union market all declined over the period considered. Furthermore, declines were also seen in employment and productivity, which were related to the lower levels of production and sales volume. The Chinese imports gained market share from 2020 to 2022 but lost some of its gains in the investigation period. However, in 2023 prices of the Chinese imports fell significantly and had a strong impact on the Union industry’s financial indicators with profitability, return on investment and cash flow all becoming negative.

(287) On the basis of the above, the Commission concluded at this stage that the Union industry suffered material injury within the meaning of Article 3(5) of the basic Regulation.

(288) In accordance with Article 3(6) of the basic Regulation, the Commission examined whether the dumped imports from the country concerned caused material injury to the Union industry. In accordance with Article 3(7) of the basic Regulation, the Commission also examined whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by factors other than the dumped imports from the country concerned was not attributed to the dumped imports. These factors are: the fall in consumption, imports from third countries, imports to the Union of companies related to the Union industry, the export performance of the Union industry and increases in costs including investments and captive use.

(289) As shown in Table 3, the volume of dumped imports from China increased from around 11,7 million square meters in 2020 to around 19,6 million square meters in 2022, an increase of 67%. In the investigation period, import quantities fell to 11,2 million square meters. In terms of market share, the dumped imports from China increased from 16,8% in 2020 to 25,4% in 2022, an increase of 51%. In the investigation period the market share decreased to 22,5%. Over the whole period considered Chinese imports increased in market share by 34%.

(290) These observations coincided with a 35% decrease in the Union industry sales on the free market and a fall of market share from 73,4% to 67,1%, a fall of 9%.

(291) As explained in recital (269) to (270), imports from China caused price suppression to the Union industry in 2022 and the investigation period. Such price suppression meant that, when the unit costs of the Union producers rose by 29% in 2022 (largely due to increases in raw material costs), Union producers were unable to adjust their sales prices in a way that would allow them to maintain their profitability levels. This situation worsened in the investigation period when costs rose further. In fact, in the investigation period the prices of the Chinese imports fell by 13%. As a result of this price suppression, the Union industry made losses of 3,9% in the investigation period.

(292) The penetration of Chinese imports over the period considered was possible because the product under investigation is usually sold from stock and price plays a major role in the decision making of customers. The coincidence in time between the deterioration in the economic situation of the Union industry and the significant presence of dumped imports from China, undercutting the Union industry’s prices, and supressing Union market price levels, confirms a causal link between the two.

(293) AUMI and CNFPIA claimed that if there was material injury, this was not caused by Chinese imports as the alleged material injury occurred when Chinese imports were at its lowest level.

(294) The Commission noted that this claim ignored two important factors relating to the injury suffered by the Union industry. Firstly, the injury suffered began in 2022 when profits fell from 7,9% to 5,0%, a fall of 36%. In addition, Table 11shows that cash flow fell by 17% in 2022 and return on investment by 14%. This deterioration was caused by the Union industry’s inability to increase its sales prices in line with its cost increases due to the price pressure which began in that year. The injury suffered by the Union industry in 2022 was not related to consumption which increased by 4% in that year.

(295) Secondly, as described in the section ‘Conclusion on injury’, the injury in this case related mainly to price suppression and its impact on the performance indicators of the Union industry. Therefore, it is not correct to claim that injury could not exist because import quantities fell in the investigation period. It was mainly the low prices of such imports, in combination with their quantities, which remained significant throughout the period considered, that caused material injury to the Union industry. This is evident from the analysis of costs and prices throughout the period considered. Indeed, while import prices from China were consistently lower than those of the Union industry, they remained above the latter’s costs in 2020 and 2021. However, in 2022, Chinese prices aligned with the Union industry’s costs and significantly went below them in 2023, causing material injury. This claim was therefore rejected.

(296) Based on the above, the Commission concluded that the dumped imports from China caused material injury to the Union industry.

(298) Imports from Ukraine were the largest of third country imports. Imports from Ukraine were mainly made by the Barlinek Group which represented between 70 -90% of imports from Ukraine in the period considered.

(299) Import quantities from Ukraine were relatively stable over the period 2020 to 2022 and fell by 29% in the investigation period. The market share of these imports was stable over the period considered. In fact, their market share was at the same level in the investigation period as in 2020 (5,6%).

(300) Average import prices from Ukraine increased by 41% over the period considered. The import prices were mainly transfer prices of the Barlinek Group and consisted of basic types of MWF to complement the Group production in the Union. The transfer prices did not include certain Group costs which would be added before resale in the Union. Therefore, it was clear that the prices of the Ukrainian imports were not injurious to the Union industry.

(301) Import quantities from other third countries decreased by 17% over the period considered. Throughout the period these imports remained below 5% of market share.

(302) The prices of imports from other third countries were at levels consistently higher than those of China.

(303) Therefore, the Commission concluded that the imports from third countries did not cause material injury to the Union industry or attenuate the causal link with respect to the imports from Indonesia.

(305) The export volume of the Union industry decreased by 24% over the period considered. The sales prices of these exports increased by 38% over the same period.

(306) Bearing in mind that export volumes represented only around 25% of Union sales volumes and that the trend of sales volumes and prices were similar to those observed for Union industry sales on the Union free market, it is evident that the export performance of the Union industry is not a key element in the overall assessment of the economic situation of the Union industry.

(307) Therefore, the Commission concluded that the export performance of the Union industry did not cause material injury to the Union industry or was able to attenuate the causal link with respect to Chinese imports.

(308) Developments in consumption were raised as a causation factor by AUMI, CNFPIA, Barth, Puderback, MEFO Floor and Thede &Witte in their various submissions.

(309) As shown in Table 2 consumption increased from 2020 to 2022 by 11% but decreased by 35% in the investigation period. This large fall was caused by developments in the construction industry. The Union industry responded by reducing production and sales quantities in the investigation period in order to adjust to the reduced size of the market.

(310) The fall in consumption also led to increases in unit costs in the investigation period as fixed costs were spread over reduced quantities of production. It was therefore clear that the Union industry was significantly affected by the fall in consumption in the investigation period.

(311) However, in 2022 consumption increased by 4% but the Union industry began to suffer injury and, in particular, experienced a fall in profitability of 36% from 7,9% in 2021 to 5,0%. Such a negative trend clearly did not result from developments in consumption.

(312) In addition, as Union industry costs increased by 8% in the investigation period, the Union industry was unable to raise prices commensurately. This resulted in a fall of profitability to below break-even levels (–3,9%). As explained in recitals (269) to (270) this development was caused by the price pressure exerted by the Chinese exporting producers.

(313) Consequently, it is clear that the injury suffered by the Union industry started in 2022, caused by Chinese price pressure, and continued and worsened in the investigation period, because of the fall in consumption and further price reductions of the Chinese imports. Whilst the decrease in consumption affected the volume of sales and the profitability of the Union industry the latter could have hold on to its market share and increase its prices to neutralise the impact of the increased costs, had it not been for the suppressive effect the price of dumped Chinese imports. In other words, whilst the decrease of consumption had an impact on the economic situation of the Union industry, that impact was not neutralised and therefore materialised because of the suppressive effect of the Chinese prices. In any event in Commission’s assessment that impact does not attenuate the causal link between Chinese prices and the material injury suffered by the Union industry.

(314) Increases in raw material and other costs were raised as a causation factor by AUMI and CNFPIA in their various submissions. The other cost increases mentioned were energy costs, inflation, environment and regulatory costs and costs related to investments. However, the Commission will deal with increased costs in general for which the unit cost data has already been shown in Table 8. This is because the other costs mentioned did not form a large proportion of Union industry costs and any increases in such costs would therefore have a negligible impact on the situation of the Union industry.

(315) The unit cost of production of the Union industry increased by 42% over the investigation period, however, the Union industry began to suffer injury in 2022 when costs rose by 29%. This was mainly due to increases in raw material costs which represented more than 50% of the full unit production costs.

(316) Increases in costs need to be passed on to customers at some stage in order for producers to remain viable. However, in 2022, unit costs increased by 29% whereas, sales prices increased by only 21%. Chinese import prices only increased by 20% in 2022.

(317) In the investigation period the unit costs of the Union industry increased by a further 8% but sales prices increases were restricted to 1%. Chinese prices fell by 13% in the investigation period. This led to the fall in profitability, return on investment and cash flow shown in Table 11.

(318) Consequently, it is clear that the increase in unit costs of the Union industry is only a contributory factor to the material injury suffered by the Union industry in 2022 and the investigation period. However, as explained in recital (313), the real cause of the material injury was Chinese price pressure, which did not permit the Union industry to adapt to the increased costs situation. Therefore, the impact of cost increases should not be regarded as a cause of injury, but rather as a normal business development which the industry was unable to fully react to due to Chinese price pressure.

(319) Captive use decreased by around 2% in absolute terms over the period considered and comprised just over 1% of total market consumption on average throughout the period considered as stated in Table 2. The Commission, therefore, considered that developments in captive use were stable in a very small sector of the total market.

(320) The development in captive use could therefore not have caused material injury to the Union industry or to have attenuated the causal link with respect to Chinese imports.

(321) AUMI claimed as a causation factor the alleged ‘self-inflicted injury’ of the Union industry. In particular, AUMI claimed that the Union industry refused to sell to some of its coalition members and that this constituted as a bad business practice which negatively affected the financial situation of the Union industry.

(322) The Commission noted that this claim was vague and ill-defined. Bearing in mind that this claim was totally unsubstantiated it could not be accepted as a meaningful causation factor.

(323) AUMI further submitted that several Union producers imported Chinese MWF which may have caused injury. Furthermore, AUMI stated that many Union producers have production sites outside the Union which have competitive advantages, such as lower wages and lower energy prices, and that whose MWF products are in competition with products sold by the Union industry.

(324) However, the investigation showed that imports of the Union industry were mainly sourced from Ukraine. Furthermore, the Commission pointed out that imports from production sites owned by the Union industry in third countries such as Ukraine have already been covered in this causation analysis in section 5.2.1. AUMI’s allegations concerning imports by the Kährs Group (from China to Sweden) were unsubstantiated as the allegations did not contain details of the quantities and prices involved. Nor did this claim explain how, and to what extent, such trade caused injury to the Union industry.

(325) Finally, AUMI claimed that low freight costs, which the complainant argued that had resulted in an increase in Chinese imports, was short lived as freight costs started to increase in September 2023.

(326) The Commission did not consider that freight costs per se were a major cause of injury but that they are simply part of the costs to bring exports to a CIF level. Therefore, this claim was rejected.

(327) The investigation showed that the presence of low priced dumped imports from China had the effect of suppressing prices in the Union market in 2022 and the investigation period. This meant that the price level of the Union industry could not increase to cover the raw material price increases in these years. Consequently, the profitability of the Union industry sales fell by 36% in 2022 and became negative in the investigation period. Such profitability was below the profits that the industry should obtain under normal conditions of competition and is clearly inadequate to ensure the industry’s long-term survival. Investment by the Union industry had to be made to maintain the existing facilities but the reduced ability to raise capital threatened investment levels.

(328) Significant quantities of Chinese low-priced dumped imports were present in the Union free market. Whilst their market share fell in the investigation period, they increased when compared to 2020 or 2021. As a result, they represented around two thirds of all imports to the Union market in the investigation period. The investigation showed that this market penetration also had negative consequences on the Union industry, in particular on production and sales volumes, which respectively decreased by 31% and 35% over the period considered.

(329) Other factors examined were imports from other sources, the export performance of the Union industry, developments in captive use, developments in consumption and increases in production costs of the Union industry.

(330) Therefore, the Commission has distinguished and separated the effects of all known factors affecting the situation of the Union industry from the injurious effects of the dumped imports. None of the factors, collectively or separately, were found to have a bearing on the situation of the Union industry sufficient to call into question the conclusion that the Chinese imports were causing material injury.

(331) The fall in consumption in the investigation period contributed to the injury suffered by the Union industry as did increases in unit costs in 2022 and 2023, although such issues were aggravating factors which have added to the injury suffered by the industry.

(332) On the basis of the above, the Commission concluded that the dumped imports from the country concerned caused material injury to the Union industry. The injury consists mainly of price suppression, profitability, return on investments, cash flow, ability to raise capital and increased stocks. However, in terms of volume indicators the Union industry suffered a loss of market share, and falls in production, productivity, sales volume and employment.

(333) To determine the level of the measures, the Commission examined whether a duty lower than the margin of dumping would be sufficient to remove the injury caused by dumped imports to the Union industry.

(334) In the present case, the complainants claimed the existence of raw material distortions within the meaning of Article 7(2a) of the basic Regulation. At this stage of the investigation, the Commission has not taken any decision regarding the raw material distortions which will be taken at the definitive stage of the investigation.

(335) The injury would be removed if the Union industry were able to obtain a target profit by selling at a target price in the sense of Articles 7(2c) and 7(2d) of the basic Regulation.

(336) In accordance with Article 7(2c) of the basic Regulation, for establishing the target profit, the Commission took into account the following factors: the level of profitability before the increase of imports from the country concerned, the level of profitability needed to cover full costs and investments, research and development (R&D) and innovation, and the level of profitability to be expected under normal conditions of competition. Such profit margin should not be lower than 6%.

(337) As a first step, the Commission established a basic profit covering full costs under normal conditions of competition. This basic profit was established based on the profitability of the Union industry in 2020 as shown at Table 11i.e. a year before the industry was subject to injurious dumping. Such profit margin was established at 7,15%.

(338) The Union Industry provided evidence that its level of investments, research and development (R&D) and innovation during the period considered would have been higher under normal conditions of competition. The Commission verified this information and identified one sampled producer which planned to invest in its MWF plant, but these investments were cancelled due to the poor economic conditions prevailing in the investigation period. Therefore, the claims of the Union industry were found to be warranted. To reflect this in the target profit, the Commission calculated the difference between investments, R&D and innovation ('IRI') expenses under normal conditions of competition as provided by the Union industry and verified by the Commission with actual IRI expenses over the period considered. The annualised value of the investments forgone expressed as a percentage of the turnover of the sampled Union industry was 0,19%.

(339) This percentage of 0,19% was added to the basic profit of 7,15% mentioned in the recital (337), leading to a target profit of 7,3%.

(340) On this basis, the Commission calculated a non-injurious price for the like product of the Union industry by applying the above-mentioned target profit margin to the cost of production of the sampled Union producers during the investigation period.

(341) The Commission then determined the injury margin level on the basis of a comparison of the weighted average import price of the sampled cooperating exporting producers in the country concerned, as established for the price undercutting calculations, with the weighted average non-injurious price of the like product sold by the sampled Union producers on the Union market during the investigation period. Any difference resulting from this comparison was expressed as a percentage of the weighted average import CIF value.

(343) As explained in the Notice of Initiation, the complainant provided the Commission sufficient evidence that there are raw material distortions in the country concerned regarding the product under investigation. Therefore, in accordance with Article 7(2a) of the basic Regulation, this investigation examined the alleged distortions to assess whether, if relevant, a duty lower than the margin of dumping would be sufficient to remove injury.

(344) The Commission will continue to investigate the alleged distortions to conduct the assessment on the appropriate level of measures in accordance with Article 7(2a) of the basic Regulation at the definitive stage of the investigation. Therefore, the Commission concluded to determine the amount of provisional duties in accordance with Article 7(2) of the basic Regulation.

(345) Following the above assessment the Commission concluded that it is appropriate to determine the amount of provisional duties in accordance with Article 7(2) of the basic Regulation.

(347) Having decided to apply Article 7(2) of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping, in accordance with Article 21 of the basic Regulation. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers, wholesalers, retailers, users, consumers and suppliers.

(348) There are around 200 companies producing MWF in the Union employing between 10 500 to 13 300 staff in the period considered. The producers are widely spread throughout the Union. The sampled Union industry representing over 25% of total production, co-operated with the investigation.

(349) The analysis in sections 4 and 5 of this Regulation confirmed that the Union industry suffered material injury and that dumped imports of the product concerned from Chinese exporting producers were a major cause of that injury. The injury suffered leaves the Union industry in a vulnerable situation. Its profitability had fallen from over 7% in 2020 and 2021 to –3,9% in 2023. This was caused by price pressure imposed by the Chinese producers in the context of rising costs and a falling demand.

(350) Given the finding of material injury to the Union industry, imposing measures would allow the Union industry to increase its sales prices and improve its profitability towards sustainable levels, increase investment, and thus maintain a competitive position in their core market. The Union industry would also be able to regain lost market share by increasing production and sales quantities on the Union market.

(351) The absence of measures is likely to have further significant negative effects on the Union industry in terms of lower sales and production volumes, further price suppression leading to further financial deterioration of its economic situation in terms of profitability and investment jeopardizing its future and employment.

(352) Barth notified the Commission that it has a Union producer of MWF within the Group in Sweden which manufactures products in the ‘upper price segment’. Without providing any details to support its claim, Barth stated that this company competed successfully on the Union market. However, this company was included in the macro indicators used to establish injury in this investigation but did not take part in the sampling process which led to the calculation of the micro indicators. Whilst the opinion of the Barth is duly noted, it does not override the general findings of injury, causation and Union interest for the Union industry in general.

(353) The imposition of measures on Chinese MWF is therefore clearly in the interest of the Union industry.

(354) The Commission sent questionnaires to 36 importers and traders at the beginning of the investigation. This list included the large importers which also act as wholesalers on the Union market.

(355) Only one importer cooperated with the investigation by completing a questionnaire response. This reply represented less than 6% of Chinese imports in the investigation period.

(356) In addition, a group of 12 importers and traders (AUMI) submitted comments opposing the imposition of measures. Of these 12 companies, only Lamett Europe N.V. (Lamett) submitted a questionnaire response. AUMI did not indicate their percentage of Union imports in the investigation period. Finally, in November 2024 a further five importers, including some of the largest importing companies, registered as interested parties and made submissions opposing the imposition of measures.

(357) AUMI, Barth, Floors 4Ever, Puderbach, MEFO Floor and Thede &Witte submitted that the measures would increase import costs of MWF and therefore would harm importers.

(358) The Commission did not have information to precisely establish the impact that the imposition of measures would have on the activities of the unrelated importers/traders. Based on the sole co-operating importer, the imposition of measures would have a certain impact on the importing sector as MWF was an important product for Lamett (but was less than 50% of its turnover). As other importers did not cooperate in the investigation, the Commission was not able to ascertain whether this situation was typical for the importing sector in general. Furthermore, the websites of the large importers suggest that they sell many other products than just MWF. In addition, Barth claimed that imports of MWF from China represented 50% of their business.

(359) Therefore, it could be expected that the imposition of measures on imports from China would have some impact on the importing sector as imports from China would be expected to fall once measures were imposed. However, to some extent importers would be able to source from third countries or the Union industry and, at probably lower quantities, from China.

(360) Barth and Floors 4Ever claimed that the imposition of anti-dumping measures on MWF may also result in increased imports of other flooring products such as vinyl.

(361) However, it was not clear how, and to what extent, this would affect importers as they already imported such products.

(362) In respect of prices of MWF, it is expected some importers would be able to pass on price increases (resulting from measures) to their customers, although such trade may generate lower profits. Information on the profitability of the importing sector was limited to the sole co-operating importer. However, bearing in mind the generally low import prices from China, as demonstrated by the large undercutting margins calculated at section 4.4.2, it was clear that the average importers’ profitability rate was positive, and much higher than those of the Union industry.

(363) Barth, Floors 4Ever and Thede &Witte claimed that the importers were supplying the Union market with MWF which the Union industry did not have the capacity to supply themselves.

(364) However, it was not expected that imports from China would cease completely, but rather the price of such imports would increase as a result of the measures imposed by this investigation. Furthermore, bearing in mind the figures presented at Table 3 and the many other sources of supply shown in Table 12, this comment was rejected.

(365) Therefore, based on the data available, the Commission concluded that the impact of measures would not be disproportionate for importers/traders.

(366) The user industry of MWF consists mainly of retailers, such as DIY stores and also of architects, entrepreneurs and other operators in the construction and renovation sector. No user cooperated in the investigation.

(367) Operators in the construction and renovation sectors would similarly not suffer from lack of supply and would be able to pass on price increases for MWF to their customers. Purchases of MWF would represent a very small part of their company turnover.

(368) It could be expected that retailers and DIY stores would not be disproportionately affected by the measures as they would not suffer from lack of supply as many other sources of supply exist. It would also be expected that Chinese imports would not cease on the imposition of measures, but rather they would have to raise prices to a less injurious level.

(369) Operators in the construction and renovation sectors would similarly not suffer from lack of supply and would be able to pass on price increases for MWF to their customers. Purchases of MWF would represent a very small part of their company turnover.

(370) The Union timber industry supply hardwood and softwood logs, usually from National Forest companies in various Member States. The timber industry also supplies hardwood and softwood sawn timber to Union producers of MWF which are less integrated. Such timber can also be supplied to the Chinese exporting producers of MWF.

(371) No cooperation was received from the Union timber industry.

(372) AUMI, Barth and Thede &Witte claimed that since Chinese producers import significant amounts of timber from the Union, the measures will also harm the Union timber industry.

(373) However, it can be expected that any fall in production of MWF in China, resulting from the measures imposed by this investigation, would be replaced by production in the Union or in third countries. Therefore, there is no evidence that the timber industry would be disproportionately affected by the measures. In fact, to the contrary, the measures are likely to support the Union MWF industry and therefore support the timber industry too.

(374) Barth, Floors 4Ever, Puderbach, MEFO Floor and Thede &Witte submitted that the measures would have an adverse impact on consumers as the duties would lead to higher prices for this sector.

(375) This claim was not substantiated as it was not explained if the duties at import level would be passed down in full to consumers. In addition, MWF is not a regular purchase for consumers and in fact MWF would not feature as an important element of most consumers budgets.

(376) Therefore, based on the data available, the Commission concluded that the impact of measures would not be disproportionate for consumers.

(377) On the basis of the above, the Commission concluded that there were no compelling reasons that it was not in the Union interest to impose measures on imports of MWF originating in the country concerned at this stage of the investigation.

(378) On the basis of the conclusions reached by the Commission on dumping, injury, causation, level of measures and Union interest, provisional measures should be imposed to prevent further injury being caused to the Union industry by the dumped imports.

(379) Provisional anti-dumping measures should be imposed on imports of MWF originating in China, in accordance with the lesser duty rule in Article 7(2) of the basic Regulation. The Commission compared the injury margins and the dumping margins recital (215) above. The amount of the duties was set at the level of the lower of the dumping and the injury margins.

(381) The individual company anti-dumping duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during this investigation with respect to these companies. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entities. Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other imports originating in China. They should not be subject to any of the individual anti-dumping duty rates.

(382) To minimise the risks of circumvention due to the difference in duty rates, special measures are needed to ensure the application of the individual anti-dumping duties. The application of individual anti-dumping duties is only applicable upon presentation of a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this regulation. Until such invoice is presented, imports should be subject to the anti-dumping duty applicable to ‘all other imports originating in China’.

(383) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of anti-dumping duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this regulation, the customs authorities of Member States must carry out their usual checks and may, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

(384) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 13(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a country-wide duty.

(385) The product concerned currently falls under the TARIC code 4418 75 00 . The Commission has evidence on the file that, when exported, the product concerned is sometimes declared wrongly under the Chinese customs code 4412 52 00 . This code refers to blockboards, laminboards and battenboards with at least one outer ply of non-coniferous wood other than tropical wood. Moreover, the Commission established that even though the product concerned was produced in China, when exported to destinations other than the Union, it was occasionally labelled as originating from another third country. Consequently, to minimise the risk of circumvention, the Commission considered appropriate to monitor imports from China of products declared under CN code 4412 52 00 and the imports of the product concerned originating or consigned from other third countries.

(386) As mentioned in recital (3), the Commission made imports of the product concerned subject to registration. Registration took place with a view to possibly collecting duties retroactively under Article 10(4) of the basic Regulation.

(387) In view of the findings at provisional stage, the registration of imports should be discontinued.

(388) No decision on a possible retroactive application of anti-dumping measures has been takenat this stage of the proceeding.

(389) In accordance with Article 19a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE's website. Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them.

(390) The Fusong group provided comments on the formula used for the calculation of the benchmarks for veneers. In view of these comments, the Commission revised its dumping calculations, in particular for the Fusong group and for the Forest group. The Fusong group provided comments also on methodological aspects of the dumping calculations. These comments will be addressed, where appropriate, in the definitive stage of the investigation. .

(391) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.

(392) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

— Panels of bamboo or with at least the top layer (wear layer) of bamboo, and panels for mosaic floors.

Article 2

Article 3

Article 4

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

Article 1 shall apply for a period of six months.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 15 January 2025

For the Commission The President Ursula VON DER LEYEN

(1) OJ L 176, 30.6.2016, p. 21.

(2) OJ C, C/2024/3186, 16.5.2024.

(3) Commission Implementing Regulation (EU) 2024/2733 of 24 October 2024 making imports of multilayered wood flooring originating in the People’s Republic of China subject to registration. OJ L, 2024/2733, 25.10.2024.

(4) https://tron.trade.ec.europa.eu/investigations/case-view?caseId=2728.

(5) During the investigation period the company was acting as Jilin Forest Industry Jinqiao Flooring Group Co., Ltd., Songjianghe Branch, Songjianghe, Jilin Province, PRC, however after the investigation period the company has been restructured and the branch activities have been transferred to the newly established company – Jilin Forest Industry New Jinqiao Songlin Flooring Co.,Ltd. Songjianghe, Jilin Province, PRC.

(6) Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the purposes of Trade Defence Investigations, 10 April 2024, SWD(2024) 91 final.

(7) Commission Implementing Regulation (EU) 2023/1159 of 13 June 2023 imposing a definitive anti-dumping duty on imports of okoumé plywood originating in the People’s Republic of China following an expiry review, OJ L 153, 14.6.2023, p. 3, rec. 83; http://data.europa.eu/eli/reg_impl/2023/1159/oj.

(8) Articles of Association of the China Forest Products Industry Association, adopted on 21 April 2009, see at: http://www.cnfpia.org/about-law.html (accessed on 25 October 2024).

(9) See at: http://www.jlsgjt.com/english/index.htm (accessed on 25 October 2024).

(10) Report, Chapter 2, p. 26.

(11) See at: https://www.made-in-china.com/showroom/yuhuatimber/ (accessed on 25 October 2024).

(12) The Commission reached a similar conclusion in the okoumé plywood case, see Regulation 2023/1159, rec. 59.

(13) Report, Chapter 7, pp. 167-168.

(14) Report, Chapter 8, pp. 169-170, 200-201.

(15) See Regulation 2023/1159, rec. 61.

(16) ‘ NFGA ’.

(17) See at: https://www.gov.cn/xinwen/2019-02/19/content_5366730.htm (accessed on 25 October 2024).

(18) See Commission Implementing Regulation (EU) 2020/492 of 1 April 2020 imposing definitive anti-dumping duties on imports of certain woven and/or stitched glass fibre fabrics originating in the People’s Republic of China and Egypt, rec. 139-141; http://data.europa.eu/eli/reg_impl/2020/492/oj.

(19) See Regulation 2023/1159, rec. 64.

(20) Food and Agriculture Organization, Country Report, “China”, 2020, see at: https://openknowledge.fao.org/server/api/core/bitstreams/8612fc97-9e62-460c-b57e-fdb7f6749772/content (accessed on 18 November 2024).

(21) See Regulation 2020/492, rec. 143.

(22) See Regulation 2020/492, rec. 143; Report, pp. 337-341; Regulation 2023/1159, rec. 67.

(23) Report, Chapter 6, pp. 120-135.

(24) Report, Chapter 6, p. 119.

(25) Report, Chapter 5, pp. 121-122, 126-128 and 133-135.

(26) See Regulation 2023/1159, rec. 74.

(27) Report, Chapter 2, p. 7.

(28) Report, Chapter 2, p. 7-8.

(29) Report, Chapter 2, pp. 10, 18.

(30) See at: http://www.npc.gov.cn/zgrdw/englishnpc/Constitution/node_2825.html (accessed on 21 October 2024).

(31) Report, Chapter 2, pp. 29-30.

(32) Report, Chapter 4, pp. 57, 92.

(33) Report, Chapter 6, pp. 149-150.

(34) Report, Chapter 6, pp. 153 -171.

(35) Report, Chapter 7, pp. 204-205.

(36) Report, Chapter 8, pp. 207-208, 242-243.

(37) Report, Chapter 2, p. 19-24, Chapter 4, p. 69, pp. 99-100, Chapter 5, pp. 130-131.

(38) See at: https://www.nature-cn.cn/about.html (accessed on 7 November 2024).

(39) See at: http://www.powerdekor-woodfloor.com/?c=12 (accessed on 7 November 2024).

(40) See at: https://www.der.com.cn/index.php/about.html (accessed on 7 November 2024).

(41) See at: http://cn.jinqiaoflooringgroup.com/ (accessed on 7 November 2024).

(42) See Art. 33 of the CCP Constitution, Article 19 of the Chinese Company Law. See also Report, Chapter 3, pp. 47-50.

(43) See Sec. I.1.39, p. 4, available at: https://www.gov.cn/xinwen/2019-11/06/5449193/files/26c9d25f713f4ed5b8dc51ae40ef37af.pdf, (accessed on 7 November 2024).

(44) See Sec. I.1.7, p. 11, available at:

https://www.ndrc.gov.cn/xxgk/zcfb/fzggwl/202312/P020231229700886191069.pdf, (accessed on 7 November 2024).

(45) See Sec. III.2, p. 4, available at: http://www.gov.cn/zhengce/zhengceku/2022-02/13/content_5673332.htm, (accessed on 7 November 2024).

(46) Report, Chapter 2, pp. 24-27.

(47) See at: http://www.cnfpia.org/about-law.html (accessed on 7 November 2024).

(48) See at: http://www.lcjzwl.com/dongtaifabu1/3248.html (accessed on 8 November 2024).

(49) See at: https://www.cnwood.org.cn/article/11_1102_0_0.html (accessed on 8 November 2024).

(50) See at: https://www.cnwood.org.cn/article/11_1101_0_0.html (accessed on 8 November 2024).

(51) See at: https://www.cnwood.org.cn/article/11_1151_0_0.html (accessed on 8 November 2024).

(52) Report, Chapter 3, p. 40.

(53) See for example: Blanchette, J. - Xi's Gamble: The Race to Consolidate Power and Stave off Disaster; Foreign Affairs, vol. 100, no. 4, July/August 2021, pp. 10-19.

(54) Report, Chapter 3, p. 41.

(55) See at: https://merics.org/en/comment/who-ccp-chinas-communist-party-infographics (accessed on 18 October 2024).

(56) General Office of CCP Central Committee’s Guidelines on stepping up the United Front work in the private sector for the new era, see at: www.gov.cn/zhengce/2020-09/15/content_5543685.htm (accessed on 21 October 2024).

(57) Financial Times (2020) - Chinese Communist Party asserts greater control over private enterprise, see at: https://on.ft.com/3mYxP4j (accessed on 21 October 2024).

(58) See at: http://static.cninfo.com.cn/finalpage/2024-04-20/1219691321.PDF, p. 45 (accessed on 8 November 2024).

(59) See at: http://www.menchuang.net/news/131307.html (accessed on 8 November 2024).

(60) See Power Dekor Sustainable Development Report 2023, p. 23, available at: https://powerdekor.com.cn/93/ (accessed on 8 November 2024).

(61) Report, Chapter 12.

(62) Report, Chapter 4, pp. 56-57, 99-100.

(63) See Sec. XI.1 and XV.3 of the plan; available at: https://www.ndrc.gov.cn/fggz/fzzlgh/dffzgh/202106/t20210617_1283435.html (accessed on 11 November 2024).

(64) See at: https://shyang.investchn.com/news/detail/id/512215.html (accessed on 11 November 2024).

(65) See at: https://www.sohu.com/a/423747078_120186115 (accessed on 12 November 2024).

(66) Report, Chapter 6, pp. 171-179.

(67) Report, Chapter 9, pp. 260-261.

(68) Report, Chapter 9, pp. 257-260.

(69) Report, Chapter 9, pp. 252-254.

(70) Report, Chapter 13, pp. 360-361, 364-370.

(71) Report, Chapter 13, p. 366.

(72) Report, Chapter 13, pp. 370-373.

(73) Report, Chapter 6, pp. 137-140.

(74) Report, Chapter 6, pp. 146-149.

(75) Report, Chapter 6, p. 149.

(76) See the Three-year action plan for improving corporate governance of the banking and insurance sectors (2020-2022) issued by the China Banking and Insurance Regulatory Commission (‘ CBIRC ’) on 28 August 2020; available at: http://www.cbirc.gov.cn/cn/view/pages/ItemDetail.html?docId=925393&itemId=928 (accessed on 21 October 2024). The Plan instructs to ‘ further implement the spirit embodied in General Secretary Xi Jinping’s keynote speech on advancing the reform of corporate governance of the financial sector ’. Moreover, the Plan’s section II aims at promoting the organic integration of the Party’s leadership into corporate governance: ‘we shall make the integration of the Party’s leadership into corporate governance more systematic, standardised and procedure-based […] Major operational and management issues must have been discussed by the Party Committee before being decided upon by the Board of Directors or the senior management ’.

(77) See the Notice on the Commercial banks performance evaluation method issued by the CBIRC on 15 December 2020, available at: http://jrs.mof.gov.cn/gongzuotongzhi/202101/t20210104_3638904.htm (accessed on 21 October 2024).

(78) Report, Chapter 6, pp. 157-158.

(79) Report, Chapter 6, pp. 150-152, 156-160, 165-171.

(80) OECD (2019), OECD Economic Surveys: China 2019, OECD Publishing, Paris, p. 29, see at: https://doi.org/10.1787/eco_surveys-chn-2019-en (accessed on 21 October 2024).

(81) See at: http://www.gov.cn/xinwen/2020-04/20/content_5504241.htm (accessed on 21 October 2024).

(82) Judgement of 11 July 2017, Viraj Profiles v Council, T-67/14, EU:T:2017:481, para. 98.

(83) World Bank Open Data – Upper Middle Income, https://data.worldbank.org/income-level/upper-middle-income.

(84) https://www.moodys.com/web/en/us/capabilities/company-reference-data/orbis.html.

(85) https://neighbourhood-enlargement.ec.europa.eu/turkiye-report-2023_en.

(86) As of November 2024, for Türkiye, Orbis database reports 136 companies active in the manufacture of assembled parquet floors (NACE code 1622). Even considering that only a fraction of this number corresponds to producers of the product under investigation, it would be still much higher than any plausible number of producers in Malaysia. Moreover, the Turkish Statistical Institute reports that in 2023 the production of assembled parquet floors (NACE code 1622 – including mosaic floors) has reached 114 198 274 m2. The Commission was not able to find any comparable production statistics for Malaysia.

(87) Based on GTA for HS Code 441875.

(88) Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (OJ L 123, 19.5.2015, p. 33). Article 2(7) of the basic Regulation considers that domestic prices in those countries cannot be used for the purpose of determining normal value.

(89) http://www.turkstat.gov.tr => Press releases => select Labour Cost Statistics.

(90) http://www.turkstat.gov.tr => Press releases => select Labour Cost index.

(91) EMRA | Energy Market Regulatory Authority (epdk.gov.tr)=> Press releases => select Electricity electricity market board decisions.

(92) http://www.turkstat.gov.tr => Press releases => select Producer Price Index.

(93) https://www1.eere.energy.gov/manufacturing/tech_assistance/pdfs/steam15_benchmark.pdf. The methodology refers to the cost of saturated steam for typical values of operating pressure and feedwater temperature. In the application of the methodology, an average of these typical values was used.

(94) https://www.invest.gov.tr/en/investmentguide/pages/cost-of-doing-business.aspx.

(95) FEP complaint Annex 4.