Commission Implementing Regulation (EU) 2025/291 of 13 February 2025 imposing a provisional anti-dumping duty on imports of decor paper originating in the People’s Republic of China

THE EUROPEAN COMMISSION,

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

Having regard to Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Article 7 thereof,

After consulting the Member States,

Whereas:

(1) On 14 June 2024, the European Commission (‘the Commission’) initiated an anti-dumping investigation with regard to imports of decor paper originating in the People’s Republic of China (‘PRC’ or ‘the country concerned’) on the basis of Article 5 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (2) (‘the Notice of Initiation’).

(2) The Commission initiated the investigation following a complaint lodged on 2 May 2024 by four Union producers of decor paper (‘the complainants’). The complaint was made by the Union industry of decor paper 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) The Commission made imports of the product concerned subject to registration by Commission Implementing Regulation (EU) 2024/2718 (‘the registration Regulation’) (3) .

(4) 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 Chinese authorities, known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

(5) 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.

(6) Hearings took place with the complainants (Felix Schoeller, Koehler Paper, Malta Decor & Munksjö Paper), LamiGraf S.A. and Interprint GmbH.

(7) The China National Forest Products Industry Association (CNFPIA) LamiGraf S.A., Kastomonu Italia S.p.a., Kastamonu Romania S.A., and Kastamonu Bulgaria AD (herein referred as the ‘Kastamonu Group’) and Marburger Tapetenfabrik, submitted comments on initiation. These concerned the standing of the complainants, the application of Article 2(6a) of the basic Regulation and evidence of significant distortions, the choice of representative country in the complaint, raw material distortions, the injury indicators, causation, and the Union interest. All those comments are addressed below in the relevant sections of this Regulation.

(8) After initiation, the CNFPIA submitted that Felix Schoeller and Munksjö, two of the four complainants, were related to Chinese companies, and that one of the two also had imports from China from their related company. The CNFPIA argued that, based on the provisions of Article 4(1) of the basic Regulation, the two companies should thus have been excluded from the Union industry. In light of this, the CNFPIA added that the standing requirements set out in Article 5(4) of the basic Regulation might not be met.

(9) According to the wording of Article 4(1)(i), as confirmed by the Court of Justice, it is for the Commission, in the exercise of its discretion, to determine whether it should exclude from the ‘Union industry’ producers which are related to exporters or importers or are themselves importers of the dumped product. The discretion must be exercised on a case-by-case basis, by reference to all the relevant facts. (4) Given that both related companies in the PRC mostly served their domestic market, and that quantities imported by the Union producers from their related companies in the PRC, if any, were negligible, the Commission considered that the exclusion of Felix Schoeller and Munksjö from the definition of the Union industry was unwarranted. Therefore, these claims were dismissed.

(10) The CNFPIA submitted that the conditions set out in Article 3 of the basic Regulation for the determination of injury had not been met, arguing that during the period considered, there was no evidence of material injury to the Union industry.

(11) The Commission recalled that in accordance with Article 5(3) of the basic Regulation, an investigation shall be initiated where the complaint contains sufficient evidence to justify the initiation of an investigation. In the complaint, the complainant argued that dumped imports of decor paper from the PRC have caused material injury to the Union industry. To support its argument, the complainant used Thailand as representative country to calculate a weighted average dumping margin in the range of [35-45 %], and analysed the Union industry consumption, profitability, sales and market share, production volume and production cost. The Commission considered that these were relevant elements for its assessment of the merits of the file, and that together with other information provided by the complainant, constituted sufficient evidence, meeting the requirements of Article 5(3) for the initiation of the investigation. Therefore, the claim by the CNFPIA was rejected.

(12) LamiGraf submitted similar arguments on the injury trends, arguing that broader economic factors, such as the COVID-19 pandemic, geopolitical instability and energy crisis significantly impacted the industry’s financial performance, and thus injury could not have been mainly attributed to Chinese imports. LamiGraf added that the fluctuations in Union consumption can be attributed to the pandemic-led ‘stay-at-home’ economy followed by a market correction, and cannot be attributed to Chinese imports, and that overall sales and export sales of the complainants have been severely affected by the sanctions against Russia. The conditions in 2021 led to a growth in decor paper demand, which entailed diversification resulting in a rise in imports from China. The competitiveness of Chinese prices stems from the use of cost-efficient equipment, contrary to the complaining producers. Yet, at the same time, LamiGraf submitted that the heavy investments undertaken by the complainants do not indicate material injury.

(13) The Commission considered that the complaint contained sufficient evidence of injury caused by dumped imports from China, including assessments of the effects of the COVID-19 pandemic on Union consumption, the impact of the energy crisis and the rising cost of raw materials, as well as Russia’s invasion of Ukraine and subsequent trade sanctions. Therefore, these claims were rejected.

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

Sampling of Union producers

(15) In the Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of volume of production and sales of the like product in the EU between 1 April 2023 to 31 March 2024 and the geographic location. This sample consisted of three Union producers. The sampled Union producers accounted for 60 % of the estimated total volume of production and 61 % of sales of the like product in the Union. The Commission invited interested parties to comment on the provisional sample. No comments on the provisional sample were received. The sample was considered representative of the Union industry.

Sampling of unrelated importers

(16) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

(17) Two unrelated importers provided the requested information and agreed to be included in the sample. In view of the low number of replies, the Commission decided that sampling was not necessary.

Sampling of exporting producers in the PRC

(18) To decide whether sampling is necessary and, if so, to select a sample, the Commission asked all exporting producers in the PRC to provide the information specified in the Notice of Initiation. In addition, the Commission asked the Mission of the PRC to the EU to identify and/or contact other exporting producers, if any, that could be interested in participating in the investigation.

(19) Five exporting producers in the country concerned provided the requested information and agreed to be included in the sample. In accordance with Article 17(1) of the basic Regulation, the Commission selected a sample of two on the basis of the largest representative volume of exports to the Union which could reasonably be investigated within the time available. In accordance with Article 17(2) of the basic Regulation, all known exporting producers concerned, and the authorities of the country concerned were consulted on the selection of the sample. No comments were received.

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

(21) Furthermore, the complainant provided in the complaint sufficient prima facie evidence of raw material distortions in the PRC regarding the product concerned. Therefore, as announced in the Notice of Initiation, the investigation covered those raw material distortions to determine whether to apply the provisions of Article 7(2a) and 7(2b) of the basic Regulation with regard to the PRC. For this reason, the Commission sent an additional questionnaire in this regard to the GOC.

(22) The Commission sent questionnaires to the sampled Union producers, the sampled exporting producers in China, the known importers and users. The same questionnaires were made available online (5) on the day of initiation.

(24) The investigation of dumping and injury covered the period from 1 April 2023 to 31 March 2024 (‘the investigation period’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2020 to the end of the investigation period (‘the period considered’).

(27) Decor paper is used as a surface material for decorative applications. Decor paper’s end use is mainly in the furniture, interior-design and construction and renovation industries as a laminate on a backing material.

(28) The product concerned is decor paper originating in the People’s Republic of China, currently falling under CN codes ex 4802 54 00 , ex 4802 55 , ex 4805 91 00 and ex 4811 60 00 (TARIC codes 4802 54 00 10, 4802 55 15 10, 4802 55 25 10, 4802 55 30 10, 4802 55 90 10, 4805 91 00 10, and 4811 60 00 10) (‘the product under investigation’).

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

(31) In view of the sufficient evidence available at the initiation of the investigation pointing to the existence of significant distortions within the meaning of point (b) of Article 2(6a) of the basic Regulation with regard to the PRC, the Commission considered it appropriate to initiate the investigation with regard to the exporting producers from this country having regard to Article 2(6a) of the basic Regulation.

(32) Consequently, in order to collect the necessary data for the eventual application of Article 2(6a) of the basic Regulation, in the Notice of Initiation the Commission invited all exporting producers in the PRC to provide information regarding the inputs used for producing decor paper. Two exporting producers submitted the relevant information.

(33) In order to obtain information it deemed necessary for its investigation with regard to the alleged significant distortions, the Commission sent a questionnaire to the GOC. In addition, in point 5.3.2 of the Notice of Initiation, the Commission invited all interested parties to make their views known, submit information and provide supporting evidence regarding the application of Article 2(6a) of the basic Regulation within 37 days of the date of publication of the Notice of Initiation in the Official Journal of the European Union.

(34) No questionnaire reply was received from the GOC and no submission on the application of Article 2(6a) of the basic Regulation was received within the deadline. Subsequently, the Commission informed the GOC that it would use facts available within the meaning of Article 18 of the basic Regulation for the determination of the existence of the significant distortions in the PRC.

(35) In the Notice of Initiation, the Commission also specified that, in view of the evidence available, it may need to select an appropriate representative country pursuant to Article 2(6a)(a) of the basic Regulation for the purpose of determining the normal value based on undistorted prices or benchmarks.

(36) On 2 October 2024, the Commission informed by a First Note (‘the First Note’ or ‘1st FOP Note’) interested parties on the relevant sources it intended to use for the determination of the normal value. In that note, the Commission provided a list of all factors of production (‘FOP’) such as raw materials, labour and energy used in the production of decor paper. In addition, based on the criteria guiding the choice of undistorted prices or benchmarks, the Commission identified possible representative countries, namely Thailand as an appropriate representative country.

(37) CNFPIA made the following general comments, in response to the ‘1st FOP Note’: (1) ‘Significant distortions with respect to the product concerned in China do not exist and have not been proved by the Commission in China.’ (2) ‘Only those factors of production proven to be distorted should be replaced.’ (3) ‘The application of Article 2(6a) of the Basic Regulation in the case and its resulting methodology is inconsistent with the WTO [Anti-dumping Agreement (‘ADA’)].’ No other parties submitted comments on the 1st FOP Note. The comment on the existence of significant distortions, is addressed in Section 3.2.1. below where the Commission described the relevant significant distortions. Concerning the comment regarding the factors of production, the Commission recalled that, according to Article 2(6a)(a) of the basic Regulation, once the Commission found that significant distortions exist, domestic costs may be used but only to the extent that they are positively established not to be distorted, on the basis of accurate and appropriate evidence Finally, with regard to the alleged inconsistency of Article 2(6a) of the Basic Regulation in the case and its resulting methodology with the WTO ADA, the Commission refers to Sections 3.2.1.9 and 3.2.1.10 below.

(38) On 6 December 2024, the Commission informed the interested parties by a Second Note (‘the Second Note’) on the relevant sources it intended to use for the determination of the normal value, with Thailand as the representative country. It also informed interested parties that it would establish selling, general and administrative (‘SG&A’) costs and profits based on four companies SIAM KRAFT INDUSTRY CO LTD, DOUBLE A (1991) PUBLIC COMPANY, THAI CONTAINERS GROUP CO LTD and SIG COMBIBLOC CO LTD. No comments were received to the Second Note within the deadline.

(39) 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’.

(40) 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’).

(41) 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, the application of Article 2(6a) of the basic Regulation was appropriate.

(43) As the list in Article 2(6a)(b) of the basic Regulation is non-cumulative, not all the elements need to be given for a finding of significant distortions. Moreover, the same factual circumstances may be used to demonstrate the existence of one or more of the elements of the list.

(44) However, any conclusion on significant distortions within the meaning of Article 2(6a)(a) of the basic Regulation must be made on the basis of all the evidence at hand. The overall assessment on the existence of distortions may also take into account the general context and situation in the exporting country, in particular where the fundamental elements of the exporting country’s economic and administrative set-up provide the government with substantial powers to intervene in the economy in such a way that prices and costs are not the result of the free development of market forces.

(45) Article 2(6a)(c) of the basic Regulation provides that ‘[w]here the Commission has well-founded indications of the possible existence of significant distortions as referred to in point (b) in a certain country or a certain sector in that country, and where appropriate for the effective application of this Regulation, the Commission shall produce, make public and regularly update a report describing the market circumstances referred to in point (b) in that country or sector’.

(46) Pursuant to this provision, the Commission issued a country report concerning China (‘the Report’) (6), which contains evidence of the existence of substantial government intervention at many levels of the economy, including specific distortions in many key factors of production (such as land, energy, capital, raw materials, and labour), as well as selected sectors (such as the wood-based products sector). Interested parties were invited to rebut, comment, or supplement the evidence contained in the investigation file at the time of initiation. The Report (7) was placed on the investigation file at initiation. The complaint also contained some relevant evidence complementing the Report.

(47) More specifically, the complainant relied on the evidence contained in the Report, to stress the presence of systemic significant distortions in the economy of the PRC, a ‘socialist market economy’ where the Chinese Communist Party (‘CCP’) guides both the public and private sector.