On 25 February 2013, the European Commission (‘the Commission’) received a request under Articles 13(3) and 14(5) of the basic Regulation to investigate the possible circumvention of the anti-dumping measures imposed on imports of certain open mesh fabrics of glass fibres originating in the PRC and to make imports of certain open mesh fabrics of glass fibres consigned from India and Indonesia, whether declared as originating in India and Indonesia or not, subject to registration.

The request was lodged by Saint-Gobain Adfors CZ s.r.o., Tolnatext Fonalfeldolgozo es Muszakiszovet-gyarto Bt., Valmieras ‘Stikla Skiedra’ AS and Vitrulan Technical Textiles GmbH, four Union producers of certain open mesh fabrics of glass fibres.

The request contained sufficient prima facie evidence that following the imposition of the measures in force, a significant change in the pattern of trade involving exports from the PRC, India and Indonesia to the Union occurred, for which there was insufficient due cause or economic justification other than the imposition of the measures in force. This change in the pattern of trade stemmed allegedly from consignment of certain open mesh fabrics of glass fibres originating in the PRC via India and Indonesia and/or false declaration of origin of the Chinese products.

Furthermore, the evidence pointed to the fact that the remedial effects of the measures in force were being undermined both in terms of quantity and price. The evidence showed that the increased imports from India and Indonesia were made at prices below the non-injurious price established in the original investigation.

Finally, there was evidence that prices of certain open mesh fabrics of glass fibres consigned from India and Indonesia were dumped in relation to the normal value established for the like product during the original investigation.

The Commission officially advised the authorities of the PRC, India and Indonesia, the producers/exporters in those countries, the importers in the Union known to be concerned and the Union industry of the initiation of the investigation. Questionnaires were sent to the producers/exporters in the PRC, India and Indonesia known to the Commission or which made themselves known within the deadlines specified in recital 15 of the initiating Regulation. Questionnaires were also sent to importers in the Union. Interested parties were given the opportunity to make their views known in writing and to request a hearing within the time limit set in the initiating Regulation. All parties were informed that non-cooperation might lead to the application of Article 18 of the basic Regulation and to findings being based on the facts available.

• Montex Glass Fibre Industries Pvt.Ltd. (‘Montex’), and

• Urja Products Pvt.Ltd.

Subsequently, Urja Products Pvt.Ltd. informed the Commission that it does not produce the product under investigation and its products have different technical characteristics and different use (falling within other CN codes). Therefore, a verification visit was carried out only at the premises of Montex.

The investigation period covered the period from 1 April 2009 to 31 March 2013 (‘the IP’). Data were collected for the IP to investigate, inter alia, the alleged change in the pattern of trade. More detailed data were collected for the reporting period from 1 April 2012 to 31 March 2013 (‘the RP’) in order to examine the possible undermining of the remedial effect of the measures in force and existence of dumping.

In accordance with Article 13(1) of the basic Regulation, the assessment of the existence of circumvention was made by analysing successively whether there was a change in the pattern of trade between the PRC, India, Indonesia and the Union; if that change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty; if there was evidence of injury or that the remedial effects of the duty were being undermined in terms of the prices and/or quantities of the product under investigation; and whether there was evidence of dumping in relation to the normal values previously established for the product concerned, if necessary in accordance with the provisions of Article 2 of the basic Regulation.

The product concerned is as defined in the original investigation: Open mesh fabrics of glass fibres, of a cell size of more than 1,8 mm both in length and in width and weighing more than 35 g/m², excluding fibreglass discs, originating in the PRC, currently falling within CN codes ex 7019 51 00 and ex 7019 59 00.

The product under investigation is the same as that defined in the previous recital, but consigned from India and Indonesia, whether declared as originating in India and Indonesia or not.

The investigation showed that open mesh fabrics of glass fibres, as defined above, exported from the PRC to the Union and those consigned from India and Indonesia to the Union have the same basic physical and technical characteristics and have the same uses, and are therefore to be considered as like products within the meaning of Article 1(4) of the basic Regulation.

To determine whether there was a change in the pattern of trade, imports of the product under investigation from India and Indonesia into the Union and exports of the product under investigation from the PRC to India and Indonesia were assessed. Those imports were established on the basis of facts available under Article 18(1) of the basic Regulation given the relatively low or no cooperation of Indian, Indonesian and Chinese companies (see Section 2.3 above).

The import volume recorded in COMEXT statistics covers a larger product group than the product concerned and the product under investigation. However, based on estimates provided by the Union industry, it could be established that a significant part of that import volume covered the product concerned and the product under investigation. Accordingly, those data could be used to establish a change in the pattern of trade.

Article 13(1) of the basic Regulation requires that the change in the pattern of trade stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. The practice, process or work includes, inter alia, the consignment of the product subject to measures in force via third countries in accordance with Article 13(2) of the basic Regulation.

During the investigation, evidence was found of transhipment practices via Indonesia and India and/or incorrect certificates of origin. For instance, some of the imports of the product concerned to the Union were transhipped through Dubai or Singapore with certificates of origin of Indonesia/India and a part of the imports to the Union was transhipped through an Indian company which did not cooperate in the investigation. The lack of cooperation by any of the producers of the product under investigation, except Montex, is also an indication that there is no genuine production in Indonesia and India that could justify the export levels from Indonesia and India to the Union. It is reasonable to expect that if there are genuine producers, they would try to distinguish themselves from circumvention practices by participating in this investigation in the first place. In addition, the investigation did not reveal evidence of genuine production in the two contries concerned, other than that of Montex. Furthermore, the surge in imports from those two countries indicates that the Chinese products are transhipped to the Union through India and Indonesia and/or with incorrect certificates of origin.

The existence of transhipment of Chinese-origin products via India and Indonesia is therefore confirmed.

The investigation did not bring to light any due cause or economic justification for the transhipment other than the avoidance of the measures in force on the product concerned. No elements were found, other than the duty, which could be considered as a compensation for the costs of transhipment, in particular regarding transport and reloading, of certain open mesh fabrics of glass fibres originating in the PRC from the PRC via India and Indonesia.

Next, it was assessed whether the imports of the product under investigation into the Union had undermined the remedial effects of the measures in force in terms of quantities and prices. COMEXT data was used as the best data available concerning quantities and prices of exports by the non-cooperating companies in India and Indonesia. The prices so determined were compared to the injury elimination level established for the Union industry in recital (74) of the original Regulation.

The increase of imports from India to the Union from 0,35 million m² in 2009/2010 to 13,10 million m² in the RP was significant in terms of quantities, compared to (very low) volumes of imports from India before the imposition of the provisional measures in 2009/2010. Also, the increase of imports from Indonesia to the Union from 0,04 m² in 2009/2010 to 33,31 million m² in the RP was considered to be substantial in terms of quantities, compared to (very low) volumes of imports from Indonesia before the imposition of the provisionnal measures in 2009/2010.

To assess whether the remedial effects of the measures in force are undermined in terms of prices, the prices of the imports from Indonesia and India were compared with the injury elimination level as established in the original Regulation. The injury elimination level as established in the original Regulation was adjusted for inflation. The weighted average export price of exports from India and Indonesia was adjusted for post importation costs and quality adjustments as established in the original investigation for imports from PRC. The comparison showed significantly lower export prices for exports from the countries concerned to the Union. It was therefore concluded that the remedial effects of the measures in force are also being undermined in terms of both quantities and prices.

Finally, in accordance with Article 13(1) of the basic Regulation it was examined whether there was evidence of dumping.

In the original Regulation the normal value was established on the basis of prices in Canada, which in that investigation was found to be an appropriate market economy analogue country for the PRC. In line with Article 13(1) of the basic Regulation the normal value as established in the original investigation was used.

The export prices from India and Indonesia were based on facts available under Article 18 of the basic Regulation. The export price was the average export price of certain open mesh fabrics of glass fibres from each of the two contries concerned during the RP as reported in COMEXT. The exports of the Indian company Montex were not reflected in the statistics due to the misclassification of their products (see recital 25 above), and were not used for the calculation of the dumping margin.

For the purpose of a fair comparison between the normal value and the export price, due allowance, in the form of adjustments, was made for differences which affect prices and price comparability in accordance with Article 2(10) of the basic Regulation. Accordingly, adjustments were made for differences in transport, insurance and packing costs. Given that data available did not allow to establish the level of the adjustments to be made, the adjustments had to be established on the basis of the best facts available. Thus, the adjustment for these allowances was based on a percentage calculated as the proportion of the total transport, insurance and packing costs over the value of the Union sales transactions with CIF delivery terms provided by the cooperating Chinese exporting producers in the original investigation.

In accordance with Articles 2(11) and 2(12) of the basic Regulation, dumping was calculated by comparing the weighted average normal value as established in the original Regulation and the corresponding weighted average export prices of the two countries concerned during this investigation's RP, expressed as a percentage of the CIF price at the Union frontier duty unpaid.

The comparison of the weighted average normal value and the weighted average export price as established showed dumping.

As stated in recital (10) two exporting producers came forward following initiation and submitted questionnaire replies and requested exemption in accordance with Article 13(4) of the basic Regulation – Montex and Urja Products.

As stated in recital (11), it was found that one of the two companies, Urja Products does not produce the product under investigation. The exemption under Article 13(4) of the basic Regulation is not applicable to that company.

Montex was found not to be engaged in the circumvention practices subject to this investigation. The company demostrated that it is a genuine producer whose production capacity exceeds the volume of exports of the product under investigation to the Union. The company submitted a complete set of data and was verified on the spot. The verified data relating to the setting-up of the company, purchase of machinery, production process, capacity, stocks, purchases of raw material and cost of production support this conclusion. Furthermore, this producer could demonstrate that it is not related to any of the Chinese producers/exporters subject to the existing measures or to companies involved in the circumvention practices. Therefore, the exemption from the extended duties could be granted to this company.

As stated in recital (10) no exporting producer in Indonesia submitted a request for exemption under Article 13(4) of the basic Regulation. The investigation did not reveal any genuine producer of the product under investigation in Indonesia.

Producers in India and Indonesia which did not participate in this investigation and/or did not export the product under investigation to the Union in the RP may request an exemption from the extended anti-dumping duty under Articles 11(3), 11(4) and 13(4) of the basic Regulation. They will be asked to complete a questionnaire in order to enable the Commission to determine whether an exemption may be warranted. Such exemption may be granted after the assessment of the market situation of the product concerned, production capacity and capacity utilisation, procurement and sales and the likelihood of a continuation of practices for which there is insufficient due cause or economic justification and the evidence of dumping. The Commission would normally also carry out an on-the-spot verification visit. The request should be addressed to the Commission, with all relevant information, in particular any modification in the company's activities linked to the production and sales.

Where an exemption is warranted, the Commission will, after consultation of the Advisory Committee, propose the amendment of the extended measures in force accordingly. Subsequently, any exemption granted will be monitored to ensure compliance with the conditions.