Fastener+Fixing Magazine Report

The European Commission launched a formal investigation of possible circumvention of anti-dumping measures imposed at the beginning of 2010 on a range of carbon steel fasteners from China via Malaysia.

The EU published Regulation 966/2010 on October 28, 2010, initiating the investigation.

The announcement of the investigation has been expected since September when Fastener+Fixing Magazine first reported that the European Commission was seeking approval from EU member states to start an investigation under its own initiative rather than as a result of an external complaint.
The investigation process is based on the provisions of Council Regulation 1225/2009, the most recent version of EU legislation covering protection against dumped imports.

In January last year the Commission imposed controversially stringent anti dumping duties, ranging up to 85% on an extensive range of carbon steel fasteners produced in China, including bolts, socket screws, screws, and washers.

Following the application of high tariffs, concerns rapidly grew amongst both European fastener manufacturers and distributors over the volume of explicit offers of circumvention coming from Chinese exporters.

As the market recovered, inventories reduced and import traffic recovered there were growing indications that significant volumes of fasteners were being routed into the EU via Malaysia, where they were transhipped and re-exported using documentation stating they were manufactured in Malaysia.

The European Union’s investigatory body, OLAF, was active in Malaysia during the first half of 2010, although its investigations were not confined solely to fastener products.

OLAF did identify a number of companies to Malaysian authorities as potentially involved in fastener circumvention activities. It was also evident that European Customs authorities had stepped up scrutiny of fastener consignments from Malaysia.

The Commission now says it has prima facie evidence of circumvention, meeting the requirements set out in Article 13 of the Anti Dumping Regulation. The evidence includes a significant change in the pattern of trade involving exports from China and Malaysia to the EU following the imposition of the anti dumping measures.

Malaysian Imports Increase

Imports from Malaysia of products in the cited tariff codes increased by the end of 2009 to 32,734 tons compared with 13,716 tons imported during 2008. The trend continued into 2010 with more than 21,000 tons originating from Malaysia in the first quarter.

The Commission has also identified that exports from China to Malaysia increased sharply between 2008 and 2009. Chinese export statistics, confirmed by Malaysian import data, show this increase to have been in excess of 45,000 tons, with first quarter 2010 flow greater than 23,000 tons.

In initiating the investigation the Commission says it has evidence that the “remedial effects” of the existing anti dumping measures are being undermined both in terms of quantity and price. It is also known to have collated substantial evidence of explicit offers from Chinese exporters to arrange transhipment via Malaysia in order to circumvent the tariffs. 

The Commission has nine months to conduct its investigation during which EU Customs authorities are required to ‘register’ imports of the products “in order to ensure that, should the investigation result in findings of circumvention, anti-dumping duties of an appropriate amount can be levied retroactively from the date of registration.”

The regulation does not state the earliest point at which the Commission might announce decisions but it does set up timescales for interested parties to maker representations to the investigation.

Questionnaires will be sent to known exporters/producers in Malaysia, to their known associates in China, to known exports in China, and to known importers in the European Union. Questionnaire replies must be received by the Commission within 37 days from the publication date of the investigation.

Producers in Malaysia also have 37 days in which to request for exemption from registration of imports or measures supported by detailed evidence. This will be crucial if legitimate exporters in Malaysia are to demonstrate that they should not be subject to tariffs.

The regulation makes clear that non-cooperation with the investigation will lead to it making decisions based on the facts it has available. It also notes that false or misleading information will be disregarded and that “results may be less favorable to that party than had it cooperated”.

The full text of the Regulation may be downloaded from the EU Official Journal, Reference L282 dated 28 October 2010 – go to www.eur-lex.europa.eu/ and select language. ©2010 GlobalFastenerNews.com and Fastener+Fixing.

Related Stories:

• EC Sets Exemption Deadline for Malaysian Fastener Producers