Commission Implementing Regulation (EU) 2025/100 of 20 January 2025 imposing a definitive anti-dumping duty on imports of lever arch mechanisms originating in the People’s Republic of China following an expiry review pursuant to Article 11(2) of Regulation (EU) 2016/1036 of the European Parliament and of the Council

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 11(2) thereof,

Whereas:

(1) By Regulation (EC) No 1136/2006 (2), the Council imposed anti-dumping duties on imports of lever arch mechanisms (‘LAM) originating in the People’s Republic of China (‘the original measures’). The investigation that led to the imposition of the original measures will hereinafter be referred to as ‘the original investigation’.

(2) By Regulation (EU) No 796/2012 (3), the Council re-imposed the definitive anti-dumping measures on imports of lever arch mechanisms originating in the People’s Republic of China (‘China’) following an expiry review.

(3) By Regulation (EU) 2018/1684 (4), the European Commission, re-imposed the definitive anti-dumping measures on imports of lever arch mechanisms originating in the People’s Republic of China (‘China’) following an expiry review, (the ‘previous expiry review’).

(4) The anti-dumping duties currently in force are at 27,1 % on imports from the sampled exporting producer and a duty rate of 47,4 % on imports from all other companies from the People’s Republic of China.

(5) Following the publication of a notice of impending expiry (5) the European Commission (‘the Commission’) received a request for a review pursuant to Article 11(2) of the basic Regulation.

(6) The request for review was submitted on 8 August 2023 by the Lever Arch Mechanism Manufacturers Association (‘the applicant’) on behalf of the Union industry of lever arch mechanisms in the sense of Article 5(4) of the basic Regulation. The request for review was based on the grounds that the expiry of the measures would be likely to result in recurrence of dumping and recurrence of injury to the Union industry.

(7) Having determined, after consulting the Committee established by Article 15(1) of the basic Regulation, that sufficient evidence existed for the initiation of an expiry review, on 8 November 2023 the Commission initiated an expiry review with regard to imports into the Union of lever arch mechanisms originating in the People’s Republic of China (‘the country concerned’) on the basis of Article 11(2) of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (6) (‘the Notice of Initiation’).

(8) The investigation of continuation or recurrence of dumping covered the period from 1 October 2022 to 30 September 2023 (‘review investigation period’ or ‘RIP’). The examination of trends relevant for the assessment of the likelihood of a continuation or recurrence of injury covered the period from 1 January 2020 to the end of the review investigation period (‘the period considered’).

(9) In the Notice of Initiation, interested parties were invited to contact the Commission to participate in the investigation. In addition, the Commission specifically informed the applicant, the known producers in China, and the authorities of China, known importers and users about the initiation of the expiry and invited them to participate.

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

(11) In the Notice of Initiation, the Commission stated that it might sample the interested parties in accordance with Article 17 of the basic Regulation.

(12) In the Notice of Initiation, sampling of the Union producers was envisaged, however, after contacting all known producers of the like product in the Union, the Commission received information from two Union producers only. The Commission therefore invited both Union producers to complete the questionnaire for the Union producers.

(13) In the Notice of Initiation, sampling of the unrelated importers was envisaged, however, no unrelated importers provided sampling information within the deadline given in the Notice of Initiation. One unrelated importer/trader came forward as an interested party within the deadline. The Commission decided that sampling was not necessary and invited the only one unrelated importer/trader that came forward to complete the questionnaire for importers.

(14) To decide whether sampling was necessary and, if so, to select a sample, the Commission asked all exporting producers in China to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the People’s Republic of China to the European Union to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation. No replies were received.

(15) Questionnaires for Union producers, as well as those for importers, users and producers in China were made available online on the day of the initiation (7).

(16) The Commission sent a questionnaire concerning the existence of significant distortions in China within the meaning of Article 2(6a)(b) of the basic Regulation to the Government of the People’s Republic of China (‘GOC’).

(17) The Commission invited the two Union producers and one unrelated importer that came forward after the initiation to complete the questionnaires.

(18) Questionnaire replies were received from two Union producers. No questionnaire replies were received from unrelated importers/traders.

(19) Neither the GOC nor any producer in China provided a questionnaire reply.

(21) On 7 November 2024, the Commission disclosed the essential facts and considerations on the basis of which it intended to maintain the anti-dumping duties in force. All parties were granted a period within which they could make comments on the disclosure. No comments were received. No parties requested a hearing.

(22) The product under review is the same as in the original investigation and previous expiry review namely LAM generally used for archiving sheets and other documents in binders or files. These LAM consist of arched sturdy metal elements (normally two) on a back plate and having at least one opening trigger that permits inserting and filing of sheets and other documents (‘product under review’), currently falling under CN code ex 8305 10 00 (TARIC code 8305 10 00 50).

(23) The product concerned by this investigation is the product under review originating in China currently falling under CN code ex 8305 10 00 (TARIC code 8305 10 00 50).

(25) The Commission decided at this stage that those products are therefore like products within the meaning of Article 1(4) of the basic Regulation.

(26) In accordance with Article 11(2) of the basic Regulation, the Commission examined whether dumping was taking place during the review investigation period and whether dumping was likely to continue or recur upon a possible expiry of the measures in force.

(27) As mentioned in recital (19), none of the exporters/producers from China cooperated in the investigation. Therefore, the Commission informed the authorities of China that due to the absence of cooperation, the Commission might apply Article 18 of the basic Regulation concerning the findings with regard to China. The Commission did not receive any comments or requests for an intervention of the Hearing Officer in this regard.

(28) Consequently, in accordance with Article 18 of the basic Regulation, the findings in relation to the likelihood of continuation or recurrence of dumping were based on facts available, in particular information in the request for review, and information obtained from cooperating parties in the course of the review investigation (namely, the applicant) and information from other publicly available sources, in particular the Global Trade Atlas (‘GTA’) (8).

(29) According to Article 2(1) of the basic Regulation, ‘the normal value shall normally be based on the prices paid or payable, in the ordinary course of trade, by independent customers in the exporting country’.

(30) However, according to Article 2(6a)(a) of the basic Regulation, ‘in case it is determined […] that it is not appropriate to use domestic prices and costs in the exporting country due to the existence in that country of significant distortions within the meaning of point (b), the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks’, and ‘shall include an undistorted and reasonable amount of administrative, selling and general costs and for profits’ (‘administrative, selling and general costs’ is referred hereinafter as ‘SG&A’).

(31) As further explained below, the Commission concluded in the present investigation that, based on the evidence available, and in view of the lack of cooperation of the GOC and the exporting producers, the application of Article 2(6a) of the basic Regulation was appropriate.

(32) In recent investigations concerning the steel sector (9) in China (10), the Commission found that significant distortions in the sense of Article 2(6a)(b) of the basic Regulation were present.

(33) In those investigations, the Commission found that there is substantial government intervention in China resulting in a distortion of the effective allocation of resources in line with market principles (11). In particular, the Commission concluded that in the steel sector, which is the main raw material to produce lever arch mechanism, not only does a substantial degree of ownership by the GOC persist in the sense of Article 2(6a)(b), first indent of the basic Regulation (12), but the GOC is also in a position to interfere with prices and costs through State presence in firms in the sense of Article 2(6a)(b), second indent of the basic Regulation (13). The Commission further found that the State’s presence and intervention in the financial markets, as well as in the provision of raw materials and inputs have an additional distorting effect on the market. Indeed, overall, the system of planning in China results in resources being concentrated in sectors designated as strategic or otherwise politically important by the GOC, rather than being allocated in line with market forces (14). Moreover, the Commission concluded that the Chinese bankruptcy and property laws do not work properly in the sense of Article 2(6a)(b), fourth indent of the basic Regulation, thus generating distortions in particular when maintaining insolvent firms afloat and when allocating land use rights in China (15). In the same vein, the Commission found distortions of wage costs in the steel sector in the sense of Article 2(6a)(b), fifth indent of the basic Regulation (16), as well as distortions in the financial markets in the sense of Article 2(6a)(b), sixth indent of the basic Regulation, in particular concerning access to capital for corporate actors in China (17).

(34) Like in previous investigations concerning the steel sector in China, the Commission examined in the present investigation whether it was appropriate or not to use domestic prices and costs in China, due to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation. The Commission did so on the basis of the evidence available on the file, including the evidence contained in the request, and in the Commission Staff Working Document on Significant Distortions in the Economy of the People’s Republic of China for the Purposes of Trade Defence Investigations (18) (‘Report’) as well as in its updated version (‘updated Report’) (19), which relies on publicly available sources. That analysis covered the examination of the substantial government interventions in China’s economy in general, but also the specific market situation in the relevant sector including the product under review. The Commission further supplemented these evidentiary elements with its own research on the various criteria relevant to confirm the existence of significant distortions in China as also found by its previous investigations in this respect.

(35) The request alleged that the Chinese economy as a whole is widely influenced and affected by substantial governmental interventions, in view of which domestic prices and costs of the Chinese steel industry cannot be used in the present investigation. To support its position, the request referred to the Report, to Chinese legislation, to further reports, as well as to additional anecdotal evidence of distortions implemented during the RIP.

(36) More specifically, the request pointed out that against the background of the ‘socialist market economy’ doctrine enshrined in China Constitution, the omnipresence of the Chinese Communist Party (‘CCP’) and the government influence over the economy by means of strategic planning initiatives, the GOC’s interventionism takes various forms, namely administrative, financial and regulatory.

(38) The request further emphasised the systematic nature of the distortions. As a consequence, not only can the domestic sales prices of lever arch mechanisms not be used, but all the input costs such as raw materials including cold rolled steel strip nickel plated which constitutes about 50 % of the total cost of lever arch mechanisms and wire nickel plated which constitutes about 30 %; energy; land, financing, labour, etc. are also tainted because their price formation is affected by substantial government intervention.

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

(40) The GOC did not comment or provide evidence supporting or rebutting the existing evidence on the case file, including the (updated) Report and the additional evidence provided by the applicant, on the existence of significant distortions and/or appropriateness of the application of Article 2(6a) of the basic Regulation in the case at hand.

(41) Since there was no cooperation from Chinese exporters of the product under review, the exact ratio of the private and state-owned producers could not be determined. However, concerning the steel sector which is one of the main raw materials in the production of lever arch mechanism, several steel producers are directly controlled by the State. Examples entail the Baowu Steel Group – which is an SOE under the central SASAC (21) – and its subsidiaries Chongqing Iron & Steel Company Ltd. (22) and Maanshan Iron & Steel Company Limited (23); the Baotou Steel Group – an SOE held by the Inner Mongolian Government (24), the Angang Steel Group – an SOE under the central SASAC (25), as well as the Shougang Group – an SOE 100 % held by the Beijing State-Owned Asset Management Ltd. (26)

(42) Moreover, the investigation found that the industry national association representing the producers of stationery (office supplies) products, such as lever arch mechanisms, the China Stationery & Sporting Goods Association (‘CSSGA’) (27) adheres to the overall leadership of the Communist Party of China, carries out Party activities, and provides necessary conditions for the activities of party organisations (28). Moreover, the ‘registration and management authority of the Association is the Ministry of Civil Affairs, and the party building work organization is the Party Committee of the State-owned Assets Supervision and Administration Commission of the State Council. The conditions to be eligible as a representative of the Association include the adhesion to the leadership of the CCP, support socialism with Chinese characteristics, resolutely implement the Party’s line, principles, and policies, and possess good political qualities’ (29).

(43) Furthermore, at provincial level, the Ningbo Stationery Industry Association (30) explained in its website that the Association is an industry social organisation of Ningbo’s stationery industry and a bridge and link between enterprises and the government. In particular, in March 2020, the Association was awarded the honorary title of ‘Outstanding Group of Social Organizations in the City’ by the Ningbo Municipal CCP Committee and the Ningbo Municipal People’s Government. Moreover, the website states that the ‘association has always adhered to the purpose of being a government assistant, industry promoter, and enterprise helper, and has always adhered to the principle of what the government needs, what the enterprise hopes for, and what the association can do’.

(44) The investigation also found that one of the exporting producers, Anhui Qitian Stationery Mfg Co. Ltd. is located in the ‘Anhui Chaohu Economic Development Zone’ (31). There is evidence supporting the fact that the CCP interferes in this Economic Development Zone (32). In particular, the investigation found that the zone is ‘leading the city in economic growth next year and ranking among the first echelon of development zones in the province during the 14th Five-Year Plan period.’ The zone also offers preferential financial services and Anhui Qitian benefitted from this scheme, as explained during a meeting held on 24 September 2022, attended among others by a member of the Party Working Committee and the deputy director of the Management Committee of the zone and the Science and Technology Finance Special Team of the Provincial Branch of the Bank of Communications, representatives of the Chaohu Branch of the Bank of Communications, the Economic and Trade Bureau, the Finance Bureau, the Market Bureau, the Investment Promotion Bureau, the Taxation Bureau, representatives of Dongxin Group and the heads of 10 enterprises. At the meeting, the Bank of Communications Chaohu Branch introduced in detail the financial products and related support policies such as ‘industrial park loan’ (33), ‘technological special loan’ and ‘industrial base strengthening loan’ in response to the personalised financing needs of enterprises, and conducted in-depth exchanges with enterprises on increasing the guarantee of financing factors, simplifying the approval process, and lowering the guarantee threshold, so as to broaden the financing channels for the enterprises.