(1)

By Implementing Regulation (EU) No 1105/2010 (2) (‘the original Regulation’) the Council imposed a definitive anti-dumping duty on imports of high tenacity yarns of polyesters (‘HTY’) originating in the People's Republic of China (‘China’).

(2)

Following an expiry review (‘the expiry review’) based on Article 11(2) of the basic Regulation, the original measures were prolonged for 5 years by Commission Implementing Regulation (EU) 2017/325 (3) (‘the expiry review Regulation’).

(3)

The measures imposed took the form of an ad valorem duty with a residual rate set at 9,8 %, while the companies on which anti-dumping duties were imposed received an individual duty rate ranging from 5,1 % to 9,8 %. Two companies were found not to be dumping in the original investigation.

(4)

A Slovenian importer, A&E Europe (‘the applicant’), on 4 October 2016 lodged a request for a partial interim review pursuant to Article 11(3) of the basic Regulation. The applicant requested the exclusion of certain types of sewing thread (ST), namely greige sewing thread (‘GST’), from the scope of the measures in force on the basis of their allegedly different physical and technical characteristics.

(5)

Having determined, after informing the Member States, that sufficient evidence exists to justify the initiation of a partial interim review, the European Commission (‘the Commission’) announced by a notice (‘the Notice of Initiation’) published in the Official Journal of the European Union (4), the initiation of a partial interim review of the anti-dumping measures applicable to imports of HTY originating in China.

(6)

The current review was limited to the examination of the definition of the product scope in order to clarify whether certain types of ST, in particular GST, fall within the scope of the original measures, as prolonged.

(7)

The applicant's claim was explicitly supported by one of the Union producers of HTY (DuraFiber) which represented 49 % of the Union production of HTY in the expiry review investigation.

(8)

The representatives of the applicant were invited to present their case before the Commission. The meeting took place on 29 September 2016.

(9)

The four known Union producers of HTY, their association and the representative of the exporting country were informed by the Commission of the initiation of the review.

(10)

The Commission requested information from all the abovementioned parties and from those other parties who made themselves known within the time limit set in the Notice of Initiation. The Commission also gave interested parties the opportunity to make their views known in writing and to request a hearing.

(11)

None of the Chinese exporting producers or their association came forward in the proceedings.

(12)

No hearings were requested during the investigation by any of the parties.

(13)

Amann Group was the sole importer of GST and user of HTY that came forward as interested party for this investigation. The company came forward on its own initiative and supported the applicant's request for the exclusion of the GST from the product scope of the existing measures. The party also opposed the claims made from the association of the Union producers of HTY, presented below in recitals (15) to (20).

(14)

None of the Union producers of the product concerned came forward during the review.

(15)

The European Manmade Fibres Association (CIRFS) submitted comments opposing any change to the existing product definition. First, CIRFS claimed that the subject of the request would fall under the competence of the national Customs authorities in their role of implementing the basic Regulation, rather than giving rise to a product scope review.

(16)

However, it should be noted that anti-dumping measures are imposed on specific products and that therefore an adequate product definition is a crucial element for their correct application. Pursuant to Article 11(3) of the basic Regulation, the need for the continued imposition of the measures may be reviewed and in particular the product scope can be reassessed in order to clarify whether certain product types fall within the definition of the scope of an anti-dumping measure. The claim was therefore rejected.

(17)

Second, CIRFS claimed that the letter of support mentioned above in recital (7) came from DuraFiber, which is only one of the four complaining producers which requested the expiry review investigation. Allegedly, the other three producers would be opposed to the request for review. However, since no evidence or specific letters in this respect were provided by other producers, the claim was therefore rejected.

(18)

Third, CIRFS claimed that other users and/or importers could also take example from the request for partial interim review and also request the exclusion of other types of HTY with certain specific and particular characteristics. In the opinion of CIRFS, the possibilities in this respect are endless and the prefix ‘ex’ should not be put before the CN code in order to avoid its fragmenting. In this respect, in should be pointed out that the present review is limited to clarifying whether certain types of sewing thread (greige sewing thread) were part of the product scope. Any interested party has the right to request a clarification whether certain products fall or not under the product scope of anti-dumping measures. The Commission will assess the merits of each request on an individual basis and open a proceeding when warranted. The claim was therefore rejected.

(19)

Fourth, CIRFS further claimed that the level of expertise regarding fibres and textiles at Customs in different Member States is allegedly not consistent, which puts doubt on the correct implementation of the anti-dumping measures and the detection of possible circumvention. In this respect, it should be noted that all Customs officials in all Member States are bound by the same Union Customs framework. If any party has concerns regarding the existence of possible circumvention practices, it may request the Commission to initiate a circumvention investigation pursuant to Article 13(3) of the basic Regulation. Given that CIRFS did not make such request and did not substantiate its allegations, the claim was therefore rejected.

(20)

Fifth and finally, CIRFS claimed that the request was made at a very late stage and the support letter was drafted a few days after the opening of the expiry review. In this respect, it should be pointed out that the basic Regulation does not establish a time limit for requesting a review regarding the clarification of the product scope. Thus, the claim was rejected.

(21)

The product concerned, as defined in Article 1(1) of the expiry review Regulation, is high tenacity yarn of polyesters (other than sewing thread), not put up for retail sale, including monofilament of less than 67 decitex originating in the PRC (‘the product concerned’ or ‘HTY’) currently falling within CN code 5402 20 00.

(22)

Note 5 to Section XI of the Combined Nomenclature defines ‘sewing thread’ (ST) as follows:

‘… the expression “sewing thread” means multiple (folded) or cabled yarn:

(23)

In its request for review, the applicant claimed that ‘greige sewing thread’ (‘the product under review’ or ‘GST’), which is undyed and/or unfinished sewing thread in the state following final plying, should not fall within the scope of the measures.

(24)

The applicant explained that the Slovenian customs authorities could not accept declaring the product under review as ST, as the weight of the imported products exceeded the 1 000 g limit (including support) and would thus not meet the above mentioned (a) condition defined in Section XI — Note 5 from the Combined Nomenclature. The product under investigation is actually imported with a weight not exceeding 2 000 g (including support).

(25)

In order to assess whether GST was covered by the original measures, the Commission examined whether GST and HTY share the same basic physical, chemical and technical characteristics and end-uses. The interchangeability and competition between GST and HTY was also assessed. All information with respect to the scope of the existing anti-dumping measures was also collected and verified.

(26)

HTY is the basic material for the production of ST, which is therefore a downstream product of the product subject to measures. Consequently, the required machinery for the production of the product under review (GST) differs completely from that of the product concerned (HTY). This was confirmed during a verification visit to a European manufacturer, Amann Group, and during the verification visits to the Union producers of the product concerned in the context of the recent expiry review investigation of the measures in force.

(27)

Furthermore, the investigation revealed that GST, since it consists of HTY that has been ‘Z’ twisted in a certain way to form a sewing thread, it is no longer appropriate for the uses to which HTY is typically an input.

(28)

In fact, the product under review meets the requirements to be considered in substance as ST, a product excluded from the scope of the original measures, although it does not fulfil two conditions of the relevant section note of the Combined Nomenclature on ‘sewing thread’: (1) its weight exceeds 1 000 grams at importation when put up on a support — a plastic, perforated bobbin on which the product is loosely wound for purposes of later dyeing and dressing; and (2) it is not dressed for use as ‘sewing thread’.

(29)

However, unlike the above two conditions, Z-twisting is a determinant factor for the applications of the product. The manufacturing of GST requires that two or more HTY undergo a Z-twisting process that changes in an irreversible way the physical characteristics of the HTY to an extent that makes the twisted product inappropriate to be used in the place of a HTY. In fact, the Z-twisting in itself in essence transforms the HTY into a type (semi-finished) of sewing thread (GST) that is ready for its later colouring and/or lubrication. Once GST is manufactured, the process is irreversible. Thus, there is no interchangeability between HTY (the product concern) and GST (the product under review).

(30)

Accordingly, the above findings show that GST and HTY are two different products.

(31)

Furthermore, the Commission recalls that the present review investigation was limited to the clarification of the product scope and that it found that GST should not have been covered by the definition of scope in the original measured.

(32)

The review investigation has showed that the product concerned in the original investigation, HTY, and the product under review, GST, are two different products.

(33)

Furthermore, GST was never intended to be in the scope of the anti-dumping investigation on HTY and did not form part of the analysis on which the findings concerning dumping and injury were originally based.

(34)

The change in the definition of the product scope in the original Regulation proposed by the applicant, namely, to replace the general exclusion of ST in the product definition with that of GST, coupled with the introduction of a maximum bobbin weight of 2 kg cannot, however, be accepted. Such modification would artificially enlarge the scope of the original measures, since it would subject all ST other than GST to the duties. Furthermore, another importer that made itself known in the review proceedings suggested an even higher threshold of less than 2,5 kg because it imports on bobbins of that weight.

(35)

It is therefore appropriate to amend the wording of the product definition in the anti-dumping measures in force as to create clarity on the exclusion of both ST and GST, the latter being an intermediate product in the production process of ST. Moreover, in order to prevent any future claims with respect to the specific weight restriction of GST, the specific weight restriction should be removed from the definition of the product concerned.

(36)

On the basis of the above, the definition of the product concerned should be as follows:

The product concerned is high tenacity yarn of polyesters not put up for retail sale, including monofilament of less than 67 decitex (excluding sewing thread and ‘Z’-twisted multiple (folded) or cabled yarn, intended for the production of sewing threads, ready for dyeing and for receiving a finishing treatment, loosely wound on a plastic perforated tube), currently falling within CN Code ex 5402 20 00 (TARIC code 5402200010) and originating in the People's Republic of China.

(37)

Following definitive disclosure, the applicant made comments and suggestions on the proposed amended product definition. The applicant recalled its concern regarding the possible difficulties at practical implementation of measures by the national customs authorities as well the most adequate differentiator for excluding greige sewing thread from the product definition.

(38)

The investigation concluded that the term ‘ready for dyeing and for receiving a finishing treatment’ adequately describes the physical characteristics of the ‘“Z”-twisted multiple (folded) or cabled yarn’, clarifying that the multiple (folded) or cabled yarn is only ‘Z’-twisted but not dyed nor finished. The term ‘loosely wound on’ describes one of the two characteristics of the packaging type. The other characteristic of the packaging type is described by the term ‘a plastic perforated tube’.

(39)

Regarding the concerns that the applicant put forward with respect to the possible problems on the practical implementation of the amended product definition by the customs authorities, it should first be borne in mind that the product definition is clearly established by an EU act, a Commission implementing regulation. The term ‘loosely wound on’ is inserted into the product definition with a view of making it easier to differentiate loosely wound bobbins from densely wound bobbins of HTY, which is subject to measures. Second, even though there might be several degrees of looseness or tightness, the difference on the looseness or tightness of the winding between the loosely wound bobbins of the GST and the densely wound bobbins of HTY is so obvious in nature, that there is no risk it might mislead the customs authorities.

(40)

Finally, even though the applicant suggested that the insertion of a differentiator based on the weight restriction into the product definition might facilitate the implementation of the product definition by the customs authorities, it did not substantiate why limiting the threshold to 2,5 kg would be appropriate, without running the risk of discriminating producers importing similar products with a higher weight. For the above mentioned reasons, the additional suggestions that were put forward by the applicant were rejected and the definition spelled on recital (36) above was considered appropriate.

(41)

Since the present review investigation was limited to the clarification of the definition of the product scope and since GST should not have been covered by the original measures, in order to prevent any consequent prejudice to importers of the product under review, it is considered appropriate that the finding of this review be applied retroactively from the date of the entry into force of the original Regulation, including any imports subject to provisional duties between 1 June 2010 and 2 December 2010.

(42)

In the Notice of Initiation, the interested parties were explicitly invited to comment on a possible retroactive effect the conclusions might have. The applicant and one importer of GST expressed their support for retroactive application and none of the interested parties expressed opposition to the retroactive application of the results of the review.

(43)

Consequently, the provisional duties definitely collected and the definitive anti-dumping duties paid on imports of GST into the Union pursuant to Commission Regulation (EU) No 478/2010 (5) and the original Regulation on imports of high tenacity yarns of polyesters originating in the People's Republic of China, as prolonged by the expiry review Regulation, may be repaid or remitted by national customs authorities in accordance with applicable customs legislation. Where the time limit of 3 years provided for in Article 121(1)(a) of Regulation (EU) No 952/2013 of the European Parliament and Council (6) expired before or on the date of publication of this Regulation, or if they expire within 6 months after that date, it shall be prolonged for a period of 6 months after the date of publication of this Regulation pursuant to Article 121(1), second paragraph of Regulation (EU) No 952/2013.

(44)

This review does not affect the date on which the expiry review Regulation will expire pursuant to Article 11(2) of the basic Regulation.

(45)

All interested parties were informed of the essential facts and considerations leading to the above conclusions and were invited to comment. They were also granted a period to submit comments subsequent to the disclosure.

(46)

The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of Regulation (EU) 2016/1036,