Brussels, 17/04/2002 (Agence Europe) - The Eeuropean Commission has imposed a provisional countervailing duty on imports of sulphanilic acid originating in India and China. Over the next six months, the incriminated Indian traders will thus have to pay a countervailing duty of 9.2% and an anti-dumping duty of 20%, whereas Chinese deliveries will have an anti-dumping duty imposed on them of 21%, also provisionally.
In the anti-subsidy regulation published in the Official Journal No L87, the Commission explains its decision by the fact that the Indian export industry benefits from a series of unfair subsidies on the part of the public authorities, especially export processing zones,, a duty entitlement passbook scheme, and export promotion capital goods scheme, and income tax exemption scheme. In addition, it continues, "the verification visit led to the discovery of other schemes that were not raised in the complaint" lodged by Sorochimie Chimie Fine, but which conferred further countervailing measures" on Indian producers (advance licences, package scheme of incentives of the Government of Maharashtra). This support enabled them, it seems, to double the volume of their sales in Europe between January 1997 and June 2001 and increase their market share by some 50% over the same period, whereas prices tumbled (-8% in 1997-98). It is clear, says the Commission, that the volume and price of imports that were the subject of subsidies prevented the Community industry from making sufficient profits on its production activities, as shown by the fact that it registered losses throughout the period under analysis. Direct consequence of this situation, it was impossible for the industry to carry out its plans of expansion. Whence the "serious injury" that the Commission rightly invokes, and that is characterised by a depression and block on prices, prolonged losses, inadequate yield on investments and postponement of expansion plans. In addition, an anti-dumping enquiry, covering the same period, demonstrates that these imports were also the subject of heavy dumping, like those of Chinese origin, with "significant" margins, at, respectively 24.1 and 21% (OJ L87) and an increase in volume of over 150% on the European market. Sulphanilic acid is essentially used as raw material in the manufacture of additive for concrete, colouring for food and cloth.