Commission Regulation (EC) No 1833/98 of 25 August 1998 imposing a provisional anti-dumping duty on imports of bicycles originating in Taiwan
L 238/10 EN Official Journal of the European Communities 26. 8. 98 COMMISSION REGULATION (EC) No 1833/98 of 25 August 1998 imposing a provisional anti-dumping duty on imports of bicycles originating in Taiwan THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Union (1), as amended by Regulation (EC) No 905/98 (2), and in partic- ular Article 7 thereof, After consulting the Advisory Committee, Whereas: A. PROCEDURE (6) (7) (8) (1) (2) (3) (4) (5) 1997, 26 November the European Communities (3) On the Commission announced by a notice published in the Official the Journal of initiation of an anti-dumping proceeding with regard to imports into the Community of bicycles originating in Taiwan and commenced an invest- igation. The proceeding was initiated as a result of a complaint lodged in October 1997 by the Euro- pean Bicycle Manufacturers’ Association (EBMA) representing a major on behalf of producers proportion of the Community production of bicycles. The complaint contained evidence of dumping of the said product and of material injury resulting therefrom, which was considered suffi- cient to justify the initiation of a proceeding. The Commission officially advised the exporting producers and importers known to be concerned as the representatives of well as their associations, Taiwan and the complainant Community produ- cers about the initiation of the proceeding. Interested parties were given the opportunity to make their views known in writing and to request a hearing. A number of exporting producers in Taiwan, as well as complainant Community produ- cers, importers, traders and consumer organisations made their views known in writing. All parties who so requested were granted a hearing. In view of the large number of Community produ- cers the Commission decided to make use of sampling expressly supporting the complaint, (1) OJ L 56, 6. 3. 1996, p. 1. (2) OJ L 128, 30. 4. 1998, p. 18. (3) OJ C 360, 26. 11. 1997, p. 5. techniques and sent questionnaires to and received detailed information from a representative sample of complainant Community producers, as set out in recitals 46 to 47. In view of the large number of exporting producers in Taiwan, sampling was also used with regard to them and the Commission sent questionnaires to and received detailed information from a represent- ative sample of exporting producers, as set out in recitals 21 to 25. The Commission also sent questionnaires importers known to be concerned. to The Commission sought and verified all the infor- mation it deemed necessary for the purpose of a preliminary determination of dumping and injury, including the carrying out of verification visits at the premises of the following sampled companies: (a) Community producers ü Cycleturope International SA. , Romilly sur Seine, ü Derby Cycle Werke GmbH, Cloppernberg, ü Kynast AG, Quakenbrück, ü Tunturypyora OY, Turku, ü Bianchi FIV SPA, Treviglio, ü Batavus BV, Heerenveen, ü Monarch Crescent AB, Varberg, ü BH SA/BIALSA SA, Vitoria, ü Raleigh Industries Ltd, Nottingham; (b) Exporting producers in Taiwan ü Fritz Jou Manufacturing Co. , Ltd, Taichung, ü Giant Manufacturing Co. , Ltd, Taichung, ü Merida Industry Co. , Ltd, Yuanlin, ü Ming Cycle Industrial Co. , Ltd, Taichung, ü Overlord Industries Corp. , Tainan; (c) Related importers in the Community ü Giant Europe B. V, Lelystad, ü Giant Deutschland GmbH, Düsseldorf, ü Giant Holland B. V, Lelystad, ü Merida-Fahrrad-Vertriebs GmbH, Engels- kirchen. 26. 8. 98 EN Official Journal of the European Communities L 238/11 (9) (10) (11) (12) (13) The investigation of dumping covered the period from 1 November 1996 to 31 October 1997 (here- inafter referred to as ‘the investigation period'). The examination of injury covered the period from 1 January 1994 up to the end of the investigation period. B. PREVIOUS PROCEEDINGS In October 1991, an anti-dumping investigation was already initiated against imports of bicycles originating in Taiwan and the People’s Republic of China which resulted in the imposition of a defin- itive anti-dumping duty of 30,6 % against imports from China (1). As the dumping margin for imports of bicycles originating in Taiwan was found to be de minimis, the proceeding concerning these imports was terminated (2). In April 1996, the Commission initiated an invest- igation into the circumvention of the anti-dumping duty imposed on imports of bicycles originating in China, as a result of which in January 1997 the Council extended the definitive anti-dumping duty imposed on Chinese bicycles to imports of certain bicycle parts from China (3). In February 1994, another anti-dumping invest- igation had been initiated against imports of bicycles originating in Indonesia, Malaysia and Thailand which resulted in the imposition of defin- itive anti-dumping duties of up to 29,1 % for Indo- nesia, 39,4 % for Malaysia and 39,2 % for Thai- land (4). C. PRODUCT UNDER CONSIDERATION AND LIKE PRODUCT 1. Product under consideration The present proceeding, as the previous proceed- ings mentioned above, covers all types of bicycles and other cycles (including delivery cycles) not motorised, with or without ball bearings (herein- after referred to as ‘bicycles'). The investigation has shown that several hundred models of bicycles produced in Taiwan were sold in both the Tai- and the Community markets. Their wanese number depends on the specific features that producers combine in assembling their bicycles. Despite variations stemming from such combina- tions, it should be noted that all different models of bicycles available on both markets were found to have the same basic physical and technical charac- teristics and uses. (1) OJ L 228, 9. 9. 1993, p. 1. (2) OJ L 227, 8. 9. 1993, p. 21. (3) OJ L 16, 18. 1. 1997, p. 55. (4) OJ L 91, 12. 4. 1996, p. 1. (14) For the purpose of the analysis carried out in the present investigation, the above defined bicycles were classified in four basic categories, mainly according to their use: (A) all terrain bicycles or ATB, sometimes also called mountain bicycles or MTB; (B) trekking, city, hybrid and touring bicycles; (C) junior action and children’s bicycles; (D) other bicycles (including racing bicycles and all other cycles). (15) It should be noted that there are no clear dividing lines between the various categories above as they overlap. In a number of cases, one bicycle type can be classified in two or more categories. In other cases, the addition of one or more features could change the classification of a bicycle from one category to another. In addition, consumers will regularly use a bicycle classified in a particular category for a variety of different purposes. They were, therefore, regarded as forming one single product for the purpose of this proceeding. 2. Like product by produced (16) Due to the high number of models, it is rare that identical models can be found when comparing bicycles produced in Taiwan and exported to the Community, with those produced and sold in Taiwan and with those the Community industry and sold on the Community market. Even though these bicycles are rarely iden- tical, they share the same basic technical and phys- ical characteristics. In any event the investigation has shown that any differences in the product concerned cannot lead to the conclusion that the product produced and sold by the Community industry in the Community market or the product produced by the exporting producers and sold on their domestic market cannot be considered as a like product to the product concerned. (17) Comments made by Taiwanese exporting produ- cers were rather contradictory as to whether their exports to the Community and bicycles produced and sold by the Community industry were like products. Some stated that the bicycles they export to the Community were of lower quality than those produced by the Community industry. Whereas the investigation has confirmed that some bicycles imported from Taiwan are not in the high quality range, some Community producers were also producing and selling bicycles of the same range. it has also revealed that L 238/12 EN Official Journal of the European Communities 26. 8. 98 (18) and not ones By contrast, other exporting producers in Taiwan claimed that their bicycles were not interchange- comparable with able therefore Community produced the because advanced technology used in their production. As an example it was mentioned that aluminium frame bicycles were hardly ever produced by Community producers, aluminium being consid- ered a high-tech material. Therefore, they claimed that their product is not a like product to the one of the Community industry. of The investigation has shown that Community producers do produce aluminium bicycle frames although in the last few years aluminium frames have been mainly imported from Asian countries such as China because the import price of these frames is lower than the respective cost of produc- tion in the Community. Nevertheless, bicycles with aluminium frames the are Community industry. produced by (19) On the basis of the above information, and in the absence of evidence which would demonstrate that Taiwanese bicycles are not interchangeable and comparable with Community produced ones, the Commission considers the above claims to be unfounded. It is therefore concluded that bicycles produced in Taiwan and sold on its domestic market and bicycles produced and sold by the Community industry on the Community market, and bicycles exported to the Community from Taiwan are like products, in accordance with Article 1(4) of Regulation (EC) No 384/96 (herein- after referred to as the ‘Basic Regulation'). D. SAMPLING OF EXPORTING PRODUCERS IN TAIWAN 1. General (20) In view of the large number of exporting producers in Taiwan, the Commission decided to apply sampling techniques in accordance with Article 17 of the Basic Regulation. sector. The authorities of Taiwan were in this context also contacted by the Commission. 2. Pre-selection of the sample (21) 37 companies in Taiwan came forward and provided the requested information within the time period set. However, only 31 of them were exporting producers, the rest being traders. Those companies, which sold for export own produced bicycles to the Community during the invest- igation period and expressed a wish to participate in the sample, were considered as cooperating and were taken into account in the selection of the sample. They represented around 85 % of total import volume from Taiwan into the Community. (22) The cooperating companies which were not finally retained in the sample, were informed that any anti-dumping duty on their exports would be calculated in accordance with the provisions of Article 9(6) of the Basic Regulation. (23) Companies which did not make themselves known within the time period set were considered as non cooperating companies. 3. Selection of the sample (24) (25) The choice of the sample was made in agreement with the exporting producers and their association concerned. The Taiwanese authorities were kept informed. The five companies selected in the sample and which fully cooperated with the invest- igation were attributed their own dumping margin and individual duty rate. The Commission also selected a reserve company which, though having to reply to the questionnaire, would only be investigated in the event that companies in the main sample would subsequently refuse to cooperate. This company was also informed that any anti-dumping duty on its exports would be calculated in accordance with the provi- sions of Article 9(6) of the Basic Regulation, unless it was selected to replace a company in the original sample in which case it would have its own dumping margin and individual duty rate. In order to enable the Commission to select a sample, exporting producers were, pursuant to Article 17(2) of the Basic Regulation, requested to make themselves known within three weeks of the initiation of the proceeding and to provide basic information on their export and domestic sales, the stages of production performed and the names and activities of all related companies in the bicycle 4. Individual examination of companies not selected in the sample (26) The Commission received from two companies not selected in the sample requests individual examination. However, both requests were not for 26. 8. 98 EN Official Journal of the European Communities L 238/13 accompanied by a reply to the questionnaire within the deadline set for this purpose, as required by Article 17(3) of the Basic Regulation. Therefore, the requests were rejected and the companies in ques- tion were informed accordingly. E. DUMPING 1. Normal value (a) Global representativeness (27) In accordance with Article 2(2) of the Basic Regula- tion, the Commission first examined whether the domestic sales of bicycles by each exporting producer were representative, i. e. whether the total volume of such sales was greater than or equal to 5 % of the corresponding export sales to the Community. the total volume of This assessment three exporting revealed that producers had representative sales of bicycles on the domestic market during the investigation period. Two exporting producers had minor domestic sales which were less than 5 % of the corresponding export sales to the Community. For these two exporting producers normal value was constructed in accordance with Article 2(3) of the Basic Regulation. (b) Product type comparability (28) As in previous anti-dumping proceedings concerning bicycles, the Commission found that the comparison of domestic and export models of bicycles was extremely difficult due to the exis- tence of a considerable variety of combinations of features. Under these conditions and in order to avoid numerous adjustments, most of which would have had to be based on estimations, it was provi- sionally decided to establish normal value for the three exporting producers with representative domestic sales on the basis of constructed values in accordance with Article 2(3) of the Basic Regula- tion. The use of constructed value, relying on production costs of takes account of all combinations of features mentioned above. the exported models, (c) Normal value based on constructed value (29) The constructed value was determined by adding to the manufacturing cost of the exported models of each exporting producer, a reasonable amount for selling, general and administrative expenses (here- inafter referred to as ‘SG & A') and a reasonable amount for profit. (30) The Commission subsequently examined whether the domestic sales of each of the three exporting producers with representative domestic sales could be considered as being made in the ordinary course of trade pursuant to Article 2(4) of the Basic Regu- lation. (31) (32) (33) It was found that all three exporting producers in question had sold during the investigation period more than 20 % but less than 90 % of their sales in the domestic market at a loss, i. e. at prices below manufacturing cost plus SG & A. Therefore, it was considered that in establishing constructed normal value the weighted average profit released by each of the three exporting producers on their profitable domestic sales only should be used. For the three exporting producers with represent- ative domestic sales the amount for SG & A and profit used were those respectively incurred and realised by these companies. For the two exporting producers without representative domestic sales, the weighted average of the actual amounts for SG & A and profit determined for the three exporting producers with representative domestic sales were used in accordance with Article 2(6)(a) of the Basic Regulation. 2. Export price selected In general, sales of bicycles made by the exporting producers on the in the Community market were made to independent customers. Consequently the export price was established by reference to the prices actually paid or payable in accordance with Article 2(8) of the Basic Regulation. sample Two exporting producers sold significant volumes of bicycles in the Community market through related importers located in different Member States. For these transactions the export price was constructed on the basis of the price at which the imported products were first resold to an inde- pendent buyer in accordance with Article 2(9) of the Basic Regulation. In constructing the export price, the Commission took account of all costs, incurred between including duties and taxes, importation and resale to the first independent buyer and of profits normally accruing, so that a reliable export price could be established at the Community frontier level. The profits used were established on the basis of information obtained from co-operating unrelated importers. L 238/14 EN Official Journal of the European Communities 26. 8. 98 3. Comparison (34) For the purpose of ensuring a fair comparison between normal value and export price, due allow- ances in the form of adjustments were made where applicable and justified for differences affecting price comparability in accordance with Article 2(10) of the Basic Regulation. for differences Adjustments were made in discounts, rebates, transport, handling, loading and ancillary costs, ocean freight, ocean freight, ocean insurance, credit, after-sales costs, commissions and, as described in detail below, for differences in levels of trade. (35) Four exporting producers requested an adjustment to normal value for differences in levels of trade including differences arising in OEM (original equipment manufacturer) sales. The investigation has shown that exporting produ- cers confused export sales to OEM customers with sales of non-branded products to distributors and that the requested adjustment referred to sales of non-branded versus branded products rather than to OEM sales versus sales through other channels. (36) could The Commission first examined whether such an adjustment under Article 2(10)(d)(i) of the Basic Regulation. Only two of the exporting producers who requested such an adjust- ment had representative domestic sales. granted be One company, with representative domestic sales which requested a level of trade adjustment, had domestic sales of branded products made to distrib- utors and retailers and exports of branded and non- branded products made to distributors. The company based its request on an overall difference in prices between domestic sales to distributors and to retailers. However, the company failed to show any consistent and distinct difference in functions and prices of the seller for the different levels of trade in the domestic market as required under Article 2(10)(d)(i) of the Basic Regulation. There- fore, the adjustment for differences in levels of trade, as requested, was not considered justified as far as it was based on the ground that export sales were made to distributors while domestic sales were made to both distributors and retailers, without consistent and distinct difference in functions and prices. (38) This company had only sold branded products in the domestic market mainly to retailers and had made exports of branded and non-branded prod- ucts to distributors. The company quantified the alleged differences in levels of trade by claiming an adjustment corresponding to the expenses incurred in the domestic market sales promotion, warehousing sales/marketing personnel salaries. It should be noted that adjust- ments claimed on the basis of the abovementioned expenses are not by themselves sufficient to justify differences in functions related to the particular levels of trade. Therefore, no adjustment could be made on this basis. for advertising, and investigation showed however, The that one exporting producer, who had not requested a level of trade adjustment, sold only non-branded prod- ucts both to distributors in the domestic market and to distributors in the export market. The exis- tence of the same level of trade in the domestic market for non-branded products, as in the export market, allowed the Commission to quantify an adjustment for level of trade pursuant to Article 2(10)(d)(i) of the Basic Regulation. The amount of the adjustment was based on the difference between the gross margin realised by the company with domestic sales of non-branded products to distributors and the gross margins realised by the other companies with representative domestic sales of branded products. For the companies without representative domestic sales, the amount of the adjustment was based on the average adjustment granted to the companies with representative domestic sales. This was because in the construc- tion of normal value for the companies without representative domestic sales, the SG & A and the profits of companies with representative the domestic sales were used. 4. Dumping margins (a) Methodology (39) The weighted average constructed normal value by model, as determined in recitals 29 to 31 above, was compared on an ex-factory basis with the weighted average export price by model, as deter- mined in recitals 32 and 33 above. (b) Dumping margins for companies in the sample (37) The other company with representative domestic sales claimed that the relevant levels of trade were absent in the domestic market. (40) The comparison, as described in recitals 34 to 39 above, showed the existence of dumping in respect of all companies which fully cooperated in the 26. 8. 98 EN Official Journal of the European Communities L 238/15 investigation. The dumping margins thus estab- lished vary and, therefore, the Commission calcu- lated a weighted average dumping margin for each exporting producer. The provisional dumping margins expressed as a percentage of the cif import price at the Community frontier duty unpaid are the following: ü Fritz Jou Manufacturing Co. Ltd 10,2 % ü Giant Manufacturing Co. Ltd ü Merida Industry Co. Ltd ü Ming Cycle Industrial Co. Ltd ü Overlord Industries Corp. 2,4 % 2,5 % 2,5 % 18,2 %. (c) Dumping margin for cooperating companies not in the sample (41) Cooperating companies not selected in the sample (see recitals 22, 25 and 26 above) were attributed the average dumping margin of the companies in the sample, weighted on the basis of their export a volume percentage of the Community frontier duty unpaid, this provisional dumping margin is 5,4 %. to the Community. Expressed as import price the cif at (42) (d) Dumping margin for non-cooperating com- panies For non-cooperating companies a dumping margin was determined on the basis of the facts available in accordance with Article 18 of the Basic Regula- tion. Since the level of cooperationg was high (see recital 21 above), it is considered appropriate to set the dumping margin for non-cooperating com- panies at the level of the highest dumping margin established for a company in the sample. Indeed, it would constitute a bonus for non-cooperation and the circumvention to assume encourage dumping margin attributable to non-cooperating export producers is lower than that found for a cooperating export producer. that (44) (45) (46) This provisional dumping margin expressed as a percentage of the the Community frontier duty unpaid, therefore 18,2 %. import price is cif at F. COMMUNITY INDUSTRY 1. Representativeness (43) Before the initiation of the investigation and in order to confirm the necessary support for the complaint, the Commission requested all known producers in the Community to submit basic infor- mation as to their respective production volume and to clarify their position with regard to the rep- complaing lodged. Community producers resenting around 60 % of the total Community production expressly supported this complaint. By virtue of Article 4(1) of the Basic Regulation, the Commission investigated whether or not producers supporting themselves imported some of the allegedly dumped bicycles from Taiwan, should be excluded from the deter- mination of Community production. complaint, who the those imports were relatively It was found that in relation to the total production in the small Community of the said producers and that their core interests were thus considered to be in the Community. It was established that the limited imports made by the said producers were a de- fensive reaction against low priced imports from Taiwan and not made because these producers were not able to produce the types of bicycles imported. On this basis, it was decided that such producers should not be exluded in determining the Community production. Data relating to these imports were disregarded when the injury factors pertinent the Community industry were established. to the situation of It follows that in accordance with Articles 4(1) and 5(4) of the Basic Regulation the Community produ- cers the supporting the their collective output Community industry as represents a major proportion of total Community production the ‘Community industry'). (hereinafter complaint constitute referred to as 2. Sampling and selection of the sample In view of the large number of Community produ- cers expressly supporting the complaint, the invest- igation into the situation of the Community industry as such was, by using sampling, limited to a reasonable number of parties belonging to this industry. In accordance with the provisions of Article 17 of the Basic Regulation, the Commission selected a sample of Community producers (here- inafter referred to as ‘the sample') covering a repres- entative variety of company sizes, integration of production and product mix, as well as a large volume of production. For the selection, account was also taken of the importance of imports of Taiwanese bicycles in the various Member States with the aim of covering as large a part as possible of the whole Community territory. Such sample, selected from a significantly larger group of complaining companies, therefore considered to be representative of the Community industry. is L 238/16 EN Official Journal of the European Communities 26. 8. 98 (47) Questionnaires were sent to 12 Community produ- cers of which 10 were originally intended to be part of the sample and two were considered as reserves. Due to the bad situation in the bicycle business in the Community, one of the selected producers had to close down and another, who was close to bank- ruptcy, was obliged to completely reorganize its activities in January 1997 and was thus not in a position to complete the Commission question- naire. One relatively small producer who was also in the process of internal restructuring did not have sufficient staff to allow them to cooperate with the Commission. As the remaining nine companies, including those initially selected as reserves, were considered to the constitute still a representative sample of Community industry (around 40 % of its total volume of operations in eight Member States), it was not considered necessary to include any other companies in the sample. G. INJURY (48) The injury situation of the Community industry has been assessed on the basis of two categories of information. capacity, The first category of information relates to global injury indicators such as consumption, imports as well as Community industry’s sales, market share, production, capacity utilisation and employment. These data were collected from the Member States, the national bicycle associations, the complaining Community producers and from the Community wide databases (Comext and Euro- stat). As far as data stemming from the complaining companies are concerned, they were cross-checked, as far as possible, at the level of the national bicycle associations and Member States. information relates to The second category of i. e. certain performance-related injury indicators, profitability, prices and their evolution, price undercutting and price underselling. They were collected at individual Community the level of producers in the sample. 2. Imports of dumped bicycles from Taiwan (a) Volume, value and relative market share of Taiwanese imports (50) On the basis of the statistics available, between 1994 and the investigation period, the volume of imports of bicycles originating in Taiwan increased by 25 % and their value increased by 1 %. This indicates a negative average trend in the import price. The main increases in volume occurred in 1996 (+286 000 units) and during the investigation period (+261 000 units). The increase in Tai- wanese imports fully covers the slight improvement in consumption between 1996 and the invest- igation period as well as the decreases in imports from China (–63 000 units), after the imposition of anti-dumping measures at the end of 1993, and in imports from Malaysia, Indonesia and Thailand (–496 000 units), after measures were imposed at the end of 1995. (51) Analysis of the data collected at the level of the sampled Taiwanese exporters showed that 60 % of imports are MTB (category A), 13 % are city, trek- king or hybrid bicycles (category B), 23 % are children’s bicycles (category C) and 4 % are all other types of bicycles (category D). (52) During the whole period under analysis, market share increased by 50 % in terms of volume and by 14 % in terms of value, i. e. from 11,7 % to 17,5 % and from 10,8 % to 12,3 % respectively. The evolution of Taiwanese imports indicates that their market share in terms of volume is linked to the degree of decrease in their average prices indicated below. in 1995, when import prices decreased by 8 %, the market share of the imports in terms of volume increased by 6 %. In 1996, when import prices decreased by 9 %, as compared to 1995, the market share increased by 30 %. During the investigation period, when import prices decreased by another 2 %, as compared to 1996, the market share of the imports increased by 14 %. Indeed, 1. Consumption in the Community (49) For the purpose of the present investigation, total consumption in the Community was established on the basis of the total sales made by complainant and non-complainant Community producers and assemblers of bicycles in the Community market and total imports of bicycles into the Community. From 1994 to the investigation period consump- tion in the Community decreased by 16 % in terms of volume and by 11 % in terms of value. (b) Average import price of bicycles from Taiwan (53) On the basis of Eurostat information available, the development of the average import price for all Taiwanese imports from 1994 to the investigation period indicates a significant decrease of 19 % at the end of the investigation period. This import price decrease has been confirmed by the detailed analysis of the sampled Taiwanese companies’ sales prices over this time period. 26. 8. 98 EN Official Journal of the European Communities L 238/17 received from the Based on the replies to the Commission’s question- naire sampled Taiwanese exporting producers, from 1995 up to the invest- igation period the average sales prices for bicycles sold to independent customers decreased by 13 % confirming the negative trend in import prices during the whole period under examination. (c) Price undercutting (56) On this basis, around 100 different models rep- resenting around 600 000 units sold in the Community market, namely over 60 % of the sales made by the sampled Taiwanese exporters, could be directly compared with Community produced bicycles. In order to evaluate any possible price undercutting, prices of comparable bicycles were compared under sales conditions. Any differences in sales conditions or levels of trade having a direct impact on price comparison were considered and where necessary Taiwanese ex- porters’ sales prices were adjusted accordingly, based on the evidence available. similar (54) The investigation has shown that sales of Tai- wanese bicycles in the Community market were made: (57) ü either directly to unrelated customers (distribu- tors, wholesalers, department stores, etc. ), or ü indirectly via related sales companies which subsequently same kind of sold to the customers including retailers. Sales were made both of branded and non-branded products. In the latter case, American or European brand names were given to bicycles made in Taiwan. The investigation has shown that similar types of sales to similar types of customers were also made by the sampled Community producers, namely stores and distributors, wholesalers, department retailers. (58) to both questionnaires (55) As far as the product under investigation itself is concerned, detailed specifications were requested in the sampled sent Community producers and sampled Taiwanese exporters. On the basis of such information, the Commission was in a position to identify the similar or comparable models produced and sold by both Community and Taiwanese producers in the Community market and thus carried out the price comparison exercice on a model by model basis. The information collected during the investigation confirmed that when the main features of a bicycle are of a similar aspect and/or of comparable quality, the possible variations in the other minor features are not such as to substantially differentiate between one bicycle and another. The main features are considered to be the frame and fork, the gearing system, namely including the front and rear derailleur, the freewheel and the number of sprockets, and the braking system. price period as The price comparison showed that for the invest- undercutting margins, igation the expressed relative range from Community industry’s 11,6 % to 28,7 % depending on the sampled Taiwanese exporter and were found to be 15 % on average. sales price, percentage of a 3. Situation of the Community industry (a) Production From 1994 up to the investigation period, Community industry production decreased by 20 %. That poor performance indicates that this industry was facing difficulties during the period under examination. The investigation has revealed that the decrease in production was the result of several bankruptcies and company closures in the Community due to the prevailing difficult situation in the market. Several Community producers, in order to survive, switched from the complete cycle of production into assembling or sub-assembling importing the main bicycles parts operations, (frame, fork, handle bars etc. ) from countries such as Taiwan, China, India. (59) Analysis of the production figures showed that in 1994 production of category A bicycles, i. e. MTBs, was the main production segment and accounted for 45,8 % of total Community production. During the investigation period a switch occurred. Produc- tion in category B (trekking, city, hybrid bicycles) increased and became the most important segment of production of the Community industry. Between 1994 up to the investigation period, the loss in production mainly occurred in category A where the decrease was over 1,5 million units. Production in children’s bicycles also decreased but the share in the mix of production did not change much. L 238/18 EN Official Journal of the European Communities 26. 8. 98 (b) Capacity and capacity utilisation of the Community industry (60) As far as production is concerned, the bicycle activity in Europe can be considered as a seasonal activity. Basically, in most of the Member States the season starts in March and finishes in September each year. Bicycle collections for the next season are presented in September to the business profes- sionals (dealers, agents, retailers etc. ). This implies that production is very intensive during certain months of the year (January to March), capacity utilisation peaks at around 85 %, and in other months (June, July and December) capacity is below 40 %. Even though the shifts are extended and temporary personnel may be employed, the Community producers’ require a high capacity as it should be sufficient enough to meet the demand during the peak months. This explains, to a certain extent, why the average rate of capacity utilisation is rather low. (61) From 1994 to the investigation period, due to the same reasons as those responsible for the decrease in production as well as the restructuring under- taken by the Community industry’s capacity was significantly reduced by 18 %. certain Community producers, (62) Nowadays there are three major groups in the Community market holding around 28 % of the whole Community-wide market share (1). However, contrary to the allegation made by some Taiwanese exporters and some importers, this does not consti- tute a risk of a monopolistic situation being created in the Community market. Indeed, there is a large number of independent producers. (63) Despite the cut in capacity of 18 %, the capacity utilisation rate was 58 % in 1994 and decreased by 3 % during the entire period under examination indicating a reduced level of activity by the Community industry. Taking into account the actual situation of the bicycle business in Europe, it is considered that a rate of utilisation of around 70 % would be necessary in this type of industry to produce positive effects in costs and profitability. (c) Stocks (64) In 1994, the volume in stocks represented between six to nine weeks’ delivery whereas it only rep- resented four to seven weeks during the invest- igation period. Several factors such as the restruc- turing of the production activities operated by certain Community producers and the necessity to change the marketing strategy for meeting the requirements of the market while limiting the risks (1) These groups are Cycleurope, Derby and Atag. in production, can explain this trend. On the other hand, the fact that the bicycle business is a seasonal activity in the Community implies that a certain level of stocks should always be kept available in order to meet the expected or unexpected require- ments of the market. The investigation has shown that the need for stock has changed over the last few years. The bicycle market has become more fashion-driven and customers do not order large quantities in advance. This mainly explains why stocks could decrease. (d) Sales in the Community market (65) unrelated From 1994 to the investigation period, sales volume made by the Community industry in the customers to Community market decreased by 22 % (around 1,4 million units). As in production, the decreases occurred in category A (MTB) and C (children’s bicycles). MTBs sold to independent customers decreased from 3,5 million units in 1994 to 2,1 million during the invest- igation period. 1,9 million children’s bicycles were sold in 1994, but only 1,5 million during the investigation period. (66) Sales value decreased by 14 %, namely less than the decrease in sales volume, indicating that average sales prices developed positively. However, from 1996 to the investigation period, both the volume and value of sales decreased by 2 %. (67) (68) (69) (e) Average sales price and price evolution Between 1994 and the investigation period, the development in sales prices was positive. The increase in average sales prices also reflects a change in the product mix (see recital 60 above). Being faced with extensive competition from dumped imports from Taiwan, especially in the low and medium segments of the MTB market, the Community industry concentrated on higher range products and on certain categories of bicycles. Indeed, price analyses carried out in specific Member States and separately for each category of bicycle have shown that the trend in sales price was less the United Kingdom, France and Germany, where most imports came from Taiwan. favourable in Member States such as In addition, the price evolution on a category-per- category basis for homogeneous models has shown that average prices decreased from 5 to 15 % in category A depending on the Member State, whereas prices developed more favourably for the categories where imports from Taiwan were more limited (categories B and D). 26. 8. 98 EN Official Journal of the European Communities L 238/19 (f) Profitability 4. Conclusion on injury (70) (71) The average return on sales made by the sampled Community producers for the product concerned has been negative from 1995 up to the invest- igation period. From a minor positive result in 1994, profitability has become negative despite the efforts made by the sampled Community producers to restructure and reduce costs. In this respect, production capacity was reduced and people had to be laid off. The investigation has shown that even though average sales prices increased sales volume dropped considerably (–22 %) between 1994 and the investigation period. (g) Market share that share shows trend in market The the Community industry continually lost shares of the market, in particular to the benefit of Taiwanese imports. Between 1994 and the investigation period, the Community industry lost 7 % of the share of the market measured in volume and 4 % the market measured in value. In terms of of volume the above decrease in market share repres- ents a loss of over 450 000 units in sales. In 1995, the market then continued to decrease until the end of the invest- igation period. In terms of value the evolution of the market share followed the same trend as in terms of volume. share increased by 4 % but (h) Investments (72) Direct investments were mainly made in ma- chinery with the aim of increasing efficiency and automation in the production process. The invest- igation has shown that investments in the bicycle business were very limited (around 2 % of the net turnover made with unrelated customers in the Community). Consumption has been decreasing and the actual capacity of the Community produ- cers taken alone is large enough to cover 80 % of the total Community consumption during the investigation period. There is therefore no need to invest in order to increase production capacity given the situation in the market. (74) The imposition of anti-dumping duties on dumped imported bicycles orginating in China, Malaysia, Thailand and Indonesia allowed a substantial decrease into the in these dumped imports Community and restored fair trade conditions in the market. This should have led to a recovery in the situation of the Community industry in 1994 and 1996. (75) Despite these positive effects on the Community market, from 1994 to the investigation period, the main injury indicators related to the Community industry, namely production, capacity and capacity utilisation, sales in terms of volume and value, market share, profitability, employment and invest- ments decreased. Production decreased by 20 % and capacity utilisa- tion by 3 % despite reduced production capacity (–18 %). Sales volume decreased by 22 % and sales value by 14 %. During that period of time 4 % of the value and 7 % of the volume of the market were lost. Profitability remained negative despite restructuring efforts, the level of investment decreased by 11 % and employment was reduced by 15 %. (76) Indonesia The analysis within the period under examination indicated that despite a positive development in consumption between 1996 and the investigation period and despite anti-dumping duties imposed on Malaysia, the Community industry’s production decreased by 3 % and sales volume by 2 %. As a result the additional losses in market share both in volume (–3 %) and value terms (–2 %) prevented any improvement of the situation in that industry. Prof- itability remained negative and financial losses added to those already made in the past. and Thailand, (77) In view of the negative developments of the above injury indicators during the whole period under examination, it is considered that this industry has injury within the meaning of suffered material Article 3 of the Basic Regulation. H. CAUSATION 1. Introduction (i) Employment (73) The number of personnel employed decreased by 15 %. Over 2 400 people were laid off during the whole period under examination. (78) In order to reach its conclusions on the cause of the injury suffered by the Community industry, the Commission examined the impact of other known factors and their consequences on the situation in that industry. Such analysis ensures that any injury caused by these latter factors is not attributed to the dumped imports. L 238/20 EN Official Journal of the European Communities 26. 8. 98 Other known factors such as the development of consumption, the other imports of bicycles into the Community, competition from other Community producers in the market and the export perform- the Community industry, are analysed ances of below. 2. Dumped imports from Taiwan (83) the bicycles (79) Available information has shown that imports of Community, into Taiwanese throughout the period, were very high. In 1994 over 2 million units, namely over 39 % of total imports, were imported from Taiwan. At the end of the investigation period, after the considerable drop in imports from other countries, Taiwan became the major importer, covering 55 % of all imports into the Community. In actual terms, from 1994 up to the end of the investigation period, imports of bicycles from Taiwan increased by 25 % in terms of volume and by 1 % in terms of value. The average sales prices of Taiwanese bicycles in the Community market decreased on average by 19 %. As a consequence of the above, during that period of time the market share held by Taiwanese ex- porters increased by 50 % in terms of volume and by 14 % in terms of value. Community market. From 1994 to the invest- igation period, it was found that prices charged by Taiwanese exporters in the Community market had decreased by 19 %. In these circumstances the mere presence of the high volume of dumped low- priced bicycles imported from Taiwan must have had a significant impact on that market. The analysis of the Community industry’s price evolution also showed that average sales prices of mountain bicycles decreased by 12 % in those Community Member States where imports of Taiwanese bicycles were concentrated, namely the United Kingdom, France and Germany. On the other hand, price evolution in categories B and D, where imports from Taiwan were limited to 13 % and 4 % respectively, were less negative. Despite the above finding on the reduction of prices by the Community industry, imports from Taiwan were still found to significantly undercut sales prices of the Community industry. As shown in recital 57, undercutting margins were calculated at a level ranging from 11,6 % to 28,7 %. 3. Impact of other factors (a) Development of consumption (80) At the same time, as indicated above, an overall worsening of the situation of the Community was in production found with major (–20 %), value (–14 %), resulting in a negative profitability since 1995. (–22 %), decreases volume sales sales (81) (82) In order to further show the causal link between low-priced, dumped the increasing volume of Taiwanese imports and the deterioration of the situation of the Community industry, an analysis within the various categories of bicycles has been made. This analysis has shown that the major loss in the Community industry’s production volume occurred segment in the mountain bicycle (category A). This segment constitutes about 60 % of total imports from Taiwan. From 1994 to the investigation period, the investigation has shown that the Community industry had to cut its moun- tain bicycle production by 38 %, representing a loss in sales of 1,4 million units largely covered by Taiwanese imports. In addition, it was also established that bicycles imported from Taiwan and those produced in the Community are like products, offered through similar sales channels in the Community market. Furthermore, the market is transparent and the low prices offered for Taiwanese bicycles are well in the known to bicycle professionals all (84) From 1994 to the investigation period, consump- tion in the Community market decreased by 16 % in volume terms and by 11 % in value terms in- dicating a downturn in the bicycle business. An the volume of analysis of consumption indicates the main decrease (–17 %) occurred between 1994 and 1996 and that the trend became positive between 1996 and the investigation period (+1 %). the development of that (85) During the time period, Community industry’s sales volume decreased by 20 % and sales value by 12 %, namely more than the actual decrease in consumption, which was translated into a loss of market share. Overall, although sales prices devel- oped positively, sales prices of mountain bicycles (MTBs), which is the main type of bicycles imported from Taiwan, decreased significantly in the Member States where Taiwanese imports are mainly present. (86) From 1996 up to the investigation period, the volume of imports from Taiwan increased again by 12 %, but relative value increased only by 7 %. Sales prices further decreased by 2 % and the share increased by 14 % in terms of market volume and 9 % in terms of value. The above performances were thus reached when the volume of consumption increased only slightly. 26. 8. 98 EN Official Journal of the European Communities L 238/21 (b) Imports of bicycles from countries other than Taiwan (87) (88) Total imports of bicycles into the Community from countries other than Taiwan decreased by 32 % in terms of volume and by 20 % in terms of value. The number of bicycles imported into the Community decreased by over 1 million units. The fact that the decrease in volume is higher than that in value indicates that the trend in average sales prices was largely positive during the period under examination. The main decrease in these imports took place in the years 1995 and 1996 following the negative development in consumption. The share lost by these countries is however higher than the decrease in consumption. Import volumes and value recov- ered somewhat between 1996 and the investigation period following the positive trend in consumption at that particular period of time. (89) During the period under examination, imports from countries to anti-dumping duties (China, Indonesia, Malaysia and Thailand) signi- ficantly decreased and imports from China prac- tically disappeared. subject (90) After the major decrease in dumped imports from China, Malaysia, Indonesia, and Thailand during the period under examination, Poland, the Czech Republic, India and the USA became the major exporters of bicycles to the Community. Imports from these countries cover around 25 % of all the other imports into the Community or 70 % of imports when excluding those from Taiwan. The fact that imports from these countries increased by 77 000 units during the whole period under exam- ination, whereas imports from Taiwan increased by over 545 000 units indicates that the impact of the these imports was very limited as volume of compared to the impact of Taiwan. Moreover, an analysis of in the indicative import price of these imports reveals that they did not add weight to the pressure exerted on prices in the Community, the information available showing an average price increase. the development (c) Other producers in the Community (91) (92) In 1996, other producers in the Community rep- resented around 40 % of total Community produc- tion. Even though they did not expressly support the complaint, none of them expressly opposed it. From 1994 to the investigation period, these non- complaining producers lost 16 % of production, 14 % of sales volume and 6 % of sales value. Although their market share increased by 2 % in terms of volume and 5 % in terms of value during that period, they did however incur net losses in sales volume (– 695 000 units) and in production (– 837 000 units). This demonstrates that they were also suffering injury and were facing difficul- ties similar to those of the Community industry. (93) injury Some exporters and importers of dumped Tai- in the claimed that wanese bicycles Community is to a substantial extent caused by the behaviour of non-participating Italian producers present in the major Community Member States. It was stated that these producers’ prices were very low and that they were undercutting prices in the Community market. (94) Again, the Commission was not provided with conclusive evidence that the behaviour of some producers in the Community might have been such as to injure the rest of the industry. It was therefore not possible to assess the impact of any on the Community such alleged behaviour industry. Furthermore, the available information indicates that between 1994 and 1996, production in Italy decreased by over 1,6 million units. This decrease represents over 60 % of the total loss in production incurred by all the producers in the Community during the whole period under exam- ination. (95) it appears Rather than causing injury to the Community industry, Italian producers not that supporting the complaint themselves have suffered injury during the period under examination. The allegation made by the above parties is therefore rejected. (d) Export activity and other activities of the Community industry (96) Exports to third countries have always represented a minor activity for the Community industry. From 1994 up to the investigation period, they repres- ented around 2 % of total sales with a minor decrease toward the end of this period. The general downturn in the bicycle business, combined with the fact that the main European exporting com- panies are more and more supplying the export markets with local production can explain to a certain extent from the Community industry. The minor decrease in export sales, however, can certainly not justify or explain the material the Community industry. In any event the negative development of the injury indicators sales, sales the drop in exports suffered by injury L 238/22 EN Official Journal of the European Communities 26. 8. 98 prices, market share and profitability cannot be explained by any change in the export activity of the Community industry, as these indicators were all established for the activity of the Community industry in the Community alone. I. COMMUNITY INTEREST 1. Preliminary remarks (97) Operators in the Community market claimed that the other business activities of some complainant Community producers, have been extremely diffi- cult over the last few years, one particular company having lost 50 % of its export business. This resulted in high losses and therefore in injury, which cannot be attributed to Taiwanese exports. (98) As far as this claim is concerned, it should first be recalled that there are only a limited number of Community producers having a substantial activity other than producing and selling bicycles. Two of them are included in the sample of Community producers. The above situation concerns only one Community producer in particular. (99) (100) In an anti-dumping investigation, the Commission exclusively analyses injury indicators referring to the activity related to the product concerned in the Community. As a result, the possible impact of items generated by another activity, not related or linked to the product concerned, are systematically excluded from the findings of the investigation. It follows that the findings leading to the conclusion that suffering material injury relate only to the bicycle activity and that therefore the above claim is irrelevant. the Community industry was 4. Conclusion on causation factors other than It cannot be excluded that dumped imports from Taiwan, in particular the decrease in consumption, contributed to the diffi- cult state of the Community industry. However, the substantial increase in import volume from Taiwan, the increase in market share, the considerable degree of price decreases and price undercutting by these imports had material negative consequences on the situation of the Community industry at a time when a positive development could be expected after the imposition of anti-dumping measures on imports from China as well as Indo- nesia, Malaysia and Thailand. therefore concluded that these imports, taken in isolation, have caused material injury to the Community industry and injury caused by other factors was not such as to break this causal link. It was (101) The purpose of anti-dumping measures to remedy dumped imports having an injurious effect on a Community industry. This should result in the re-establishment of a situation of effective competition on the Community market. is Having reached a positive conclusion on dumping, injury and the cause of this injury, the Commission examined whether any compelling reasons existed which would have led to the conclusion that it is not in the Community interest to impose measures in this particular case. For this purpose, and pursuant to Article 21(1) of the Basic Regulation, the impact of possible measures on all parties and proceeding involved the also taking measures taking or not consequences of were considered on the basis of the evidence avail- able at the provisional stage. in the (102) It should also be recalled that in the anti-dumping proceedings concerning imports of bicycles origin- ating in China, and in Malaysia, Indonesia and Thailand, under similar conditions, it was consid- ered to be in the interest of the Community to impose anti-dumping measures. 2. Interest of the Community industry and related activity (103) In general, the interest of an industry is that ef- fective competitive conditions are restored and that prices reflecting fair trading conditions are quoted in the market. Since 1988, Community bicycle manufacturers, mostly made up of small and medium-sized enterprises, are facing competition from dumped imports. This has led to a serious degree of vulnerability in the industry, as a result of which rationalisation and restructuring efforts are still going on today demonstrating the industry’s adaptability, competitiveness and viability. in force and an (104) With anti-dumping measures in consumption, expected positive development employment, which decreased by over 2 400 people during the whole period under exmination, would also be preserved. With an average anti- dumping duty of 6,5 % imposed on bicycles imported from Taiwan, the Community industry could complete its restructuring and recover finan- cially, thus benefiting from the re-establishing of effective competition in the market. 26. 8. 98 EN Official Journal of the European Communities L 238/23 (105) In view of the material injury suffered over the last few years, it is highly probable that, in the absence of any measures to correct the negative effects of dumped imports from Taiwan, its precarious finan- cial situation will deteriorate further. This may ulti- mately lead to further company bankruptcies or closures in the market and therefore jeopardise thousands of other jobs all over the Community. The above negative consequences for the bicycle industry would be amplified due to repercussions in the European parts industry and other activities linked to the bicycle business. 3. Interest of importers in the Community (106) On the basis of the information received from the administrations in Member States, a considerable number of importers are importing bicycles into the Community but it has not been possible to identify how many were directly concerned by this proceeding. (107) taking measures, In order to evaluate the impact on importers of taking measures or not the Commission sent questionnaires to the known importers in the Community. A sample of im- porters may be selected after the publication of the provisional findings and on-the-spot investigations may take place in order to verify the information submitted. (108) Some importers not known to the Commission made themselves known within the time limit, requested a questionnaire and submitted a reply. Certain importers also submitted written comments on the proceeding. Out of the 64 importers who replied to the Commission’s questionnaire or submitted information to the Commission only six replies were considered to be meaningful in order to assess the impact of anti-dumping measures on their activities. (109) They commented on the dynamic effect of the innovation stemming from Taiwanese exporting producers on the Community market and on the negative effects of anti-dumping measures on their business in general, on employment and on the final choice of consumers. (110) The imposition of anti-dumping measures will not put importers of Taiwanese bicycles in a disadvan- tageous position as compared to other importers of bicycles in the Community. It will simply correct the distorting effects of injurious dumping and restore fair trade competition conditions among all the operators in the Community. could (111) On the basis of the meaningful information made available by some importers, it is considered that an average anti-dumping duty of 6,5 % on bicycles imported from Taiwan may cause an increase of around 3,3 % in the overall cost of sales of the importers. This extra cost, or at least part of this cost, subsequent purchasers, namely wholesalers or retailers already enjoying relatively high profit margins on the in the resale Community. The Commission therefore considers that the level of the measures proposed is not such as to prevent importers from importing Taiwanese bicycles these bicycles will always be present in the Community market. of Taiwanese bicycles charged so that price the be to (112) Based on the foregoing, it is considered that any negative effects on importers of taking measures against imports from Taiwan cannot outweigh the positive effects of taking measures for the other operators in the Community. 4. Interest of consumers (113) The Commission comments from received consumers’ associations in the Community indi- cating these associations’ concerns that sales prices of Taiwanese bicycles may increase as a result of the imposition of anti-dumping measures. A claim was also made as to the need for consumers to preserve a wide choice when buying a bicycle. (114) As has already been mentioned above, the level of the measures proposed is not such as to foreclose the Community market to Taiwanese bicycles and the consumer’s choice will always be preserved. In addition, as far as a possible sales price increase is concerned, it should be mentioned that Taiwanese bicycles are not imported directly by consumers. Bicycles pass through one or more levels of trade before they are offered to the public. The import price on which anti-dumping duties will be levied represents on average 40 % of the total resale price the bicycle. Considering an average anti- of dumping duty of 6,5 % on imports of bicycles from Taiwan, the direct impact, if any, of the duties on the resale price to the consumer is already limited to 2,6 %. trade (115) However, it should be borne in mind that with effective the Community market, competition will continue to have beneficial effects for the consumer as far as the price level is concerned. Moreover, given the high number of competitors in the market, it is conditions restored in L 238/24 EN Official Journal of the European Communities 26. 8. 98 importers, wholesalers, considered that price increases, if any, should not be automatic. They should depend on competition and consumer behaviour. It is considered likely that retailers and other selling Taiwanese bicycles may also operators decide, if justified, to decrease their relative profit margins so that no price increase will occur in the resale price of Taiwanese bicycles to consumers. J. PROVISIONAL DUTY (121) In order to prevent further injury being caused by the dumped imports concerned before the end of the investigation, provisional anti-dumping meas- ures should be adopted. These measures should take the form of a provisional anti-dumping duty. Given the wide variety of bicycles exported from Taiwan, an ad valorem duty was considered the most appropriate form of measure. 5. Consequences on competition in the Community market (116) Some parties claimed that anti-dumping measures may encourage the creation of a monopolistic situation, in the Community market as big groups such as Derby, Cycleurope and Atag, increased in size by purchasing smaller companies. (122) (117) There is a high number of producers in exporting countries such as USA, Turkey, Poland, the Czech Republic, India and Taiwan exporting to the Community and there is a large number of opera- tors and a large number of producers in the Community. Therefore, there is no risk of creating a monopolistic situation in the bicycle market. For the purpose of establishing the level of the provisional duty, account was taken of the level of dumping found and the amount of duty necessary to eliminate the injury suffered by the Community industry. It was considered that the amount of duty neces- sary to remove the effects of injurious dumping should allow the Community industry to cover its costs of production and obtain a reasonable profit on sales. In this respect it was found that a profit margin of 8 % on turnover could be considered to be an appropriate basis, regard being given to the need for long-term investments allowing a contin- uous product development, etc. It was also consid- ered that the Community industry could reason- ably expect such a rate of return in the absence of injurious dumping. (118) Moreover, the level of the measures proposed is not such as, from an economic point of view, to fore- close the Community market to the Taiwanese exporting producers and therefore it will ensure the continued presence of their products in the market. Measures, effective competition conditions for all the operators in the market be restored and that this would stimulate the presence of competitive forces in the market. therefore, ensure that 6. Conclusion on the Community interest (119) Having examined the various interests involved in the present proceeding, no compelling reasons were found to exist not to impose anti-dumping measures. On the contrary, the imposition of anti- dumping measures is necessary to prevent further aggravation of the injury already suffered by the Community industry and to preserve employment in the business. (120) The Commission also considers that the imposi- tion of provisional measures in the present case will re-establish effective competition conditions for all operators in the Community. Consumers’ choice will not be unduly affected and they will continue to enjoy the presence of a high number of competitors in the market preventing any unjusti- fied increase in the resale prices. (123) Accordingly, injury margins were determined on a model-by-model basis as the difference between the cost of production of the Community industry, increased by the abovementioned profit margin on the one hand, and the actual net sales price of the comparable imported models used for the under- cutting calculation on the other hand. This differ- ence was then expressed as a percentage of the cif import price at the Community frontier customs duty unpaid. (124) Since for all exporting producers in the sample the dumping margin has been found to be lower than the injury margin, the provisional duty to be imposed should correspond to the dumping margin established, in conformity with Article 7(2) of the Basis Regulation. (125) The provisional anti-dumping duty for companies which cooperated in the investigation but were not included in the sample equals the average dumping margin for the sample, weighted on the basis of export volume to the Community. This was lower than the amount of duty necessary to eliminate the injury in all cases. The provisional anti-dumping duty for non-cooperating companies is based on the dumping margin calculated for those com- panies as explained in recital 42 because the amount of duty necessary to eliminate the injury exceeded in all cases the dumping margin estab- lished. 26. 8. 98 EN Official Journal of the European Communities L 238/25 K. FINAL PROVISIONS (126) In the interest of sound administration, a period should be fixed in which the parties concerned should make known their views in writing and request a hearing. Furthermore, it should be stated that all findings made for the purpose of this Regu- lation are provisional and may have to be reconsid- ered for the purpose of any definitive duty which the Commission may propose. HAS ADOPTED THIS REGULATION: Article 1 1. A provisional anti-dumping duty is hereby imposed on importers of bicycles and other cycles (including delivery tricycles), not motorised, with or without ball bearings, falling within CN codes 8712 00 10, 8712 00 30 and 8712 00 80, originating in Taiwan. The rate of the provisional anti-dumping duty 2. applicable to the net, free-at-Community-frontier price, before duty, shall, subject to paragraphs 3 and 4, be 18,2 % (TARIC additional code 8900). 3. Products manufactured and sold for export by the exporting producers listed in the Annex shall be subject to a provisional anti-dumping duty rate of 5,4 % (TARIC additional code 8548). 4. Products manufactured and sold for export by the companies listed below shall be subject to the following provisional anti-dumping duty rates. Manufacturer Rate of duty Fritz Jou Manufacturing Co. , Ltd 10,2 % Giant Manufacturing Co. , Ltd Merida Industry Co. , Ltd Ming Cycle Industrial Co. , Ltd 2,4 % 2,5 % 2,5 % Overlord Industries Corp. 18,2 % TARIC additional code 8698 8699 8700 8701 8702 5. Unless otherwise specified, the provisions in force concerning customs duties shall apply. 6. The release for free circulation in the Community of the product referred to in paragraph 1 shall be subject to the provision of a security, equivalent to the amount of the provisional duty. Article 2 Pursuant to Article 20(1) of Regulation (EC) No 384/96, the parties concerned may make their views known in writing and apply to be heard orally by the Commission within 15 days of the date of entry into force of this Regulation. Pursuant to Article 21(4) of Regulation (EC) No 384/96, the parties concerned may comment on the application of this Regulation within one month of the date of its entry into force. Article 3 This Regulation shall enter into force on the day of its publication in the Official Journal of the European Communities. Article 1 of this Regulation 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, 25 August 1998. For the Commission Leon BRITTAN Vice-President L 238/26 EN Official Journal of the European Communities 26. 8. 98 ANNEX Acetrikes Industrial Co. , Ltd, Changhua Asahi Enterprises Corporation, Taipei Century Manufacturing Co. , Ltd, Taichung Dahon Inc. , Taipei Dodsun Bicycle & Machinery Manufacturers, Tao Yuan Fairly Bike Manufacturing Co. , Ltd, Taipei Formosan I Shin Enterprise Ltd, Tainan Golden Cycle Corp. , Taipei Ideal Bike Corporation, Taichung Kenstone Metal Co. , Ltd, Taichung Liyang Industrial Co. , Ltd, Taipei MT Racing Inc. , Taichung Pretty Wheel Industrial Co. , Ltd, Taichung Rockman Taiwan Bicycle Mfg. Inc. , Taichung San Ground Co. , Ltd, Taichung Sanfa Bicycle Industrial Co. , Ltd, Taichung Sheng Fa Industries Co. , Ltd, Taipei Southern Cross International Co. , Ltd, Nantou Speedstar Industries Co. , Ltd, Kaohsiung Taioku Manufacturing Co. , Ltd, Nantou Taiwan Hodaka Industrial Co. , Ltd, Taipei United Engineering Corp. , Taoyuan Wai I Industry Co. , Ltd, Chia-Yi Wheeler Industrial Co. , Ltd, Taichung Willing Industry Co. , Ltd, Taichung Yuh Jiun Industrial Co. , Ltd, Tainan