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1. Proceedings

1.1    ORIGINAL DETERMINATION

On 9 December 1991 the Minister of Commerce (hereinafter referred to as "the Minister") determined in terms of section 13 of the Dumping and Countervailing Duties Act 1988, (hereinafter referred to as "the Act") that lead acid batteries for passenger motor vehicles exported from Indonesia, Korea, Malaysia, Singapore and Taiwan and imported into New Zealand were goods in respect of which an anti-dumping duty could be imposed in accordance with section 14 of the Act in that the goods were dumped and had caused or were likely to cause material injury to an industry in New Zealand.

In the course of the investigation, model specific export prices had been agreed with the producers actually investigated. For other suppliers and models the Minister directed that origin, producer and battery specific ad valorem rates based on the dumping margin found during the investigation be paid on importations of those goods. A notice was issued by the Minister dated 9 December 1991 and published in the New Zealand Gazette of 12 December 1991.

On 13 February 1992 the Minister reassessed the level of anti-dumping duty for Global and Yuasa Battery Company, an exporter from Korea.

A full review of the continued need for the imposition of the anti-dumping duties on lead acid batteries for passenger motor vehicles exported from Indonesia, Korea, Malaysia, Singapore and Taiwan and a reassessment of the applicable anti-dumping duty rates was completed on 21 June 1994.

The current determination makes provision for individual producers in the subject countries of origin to request the calculation of model specific reference prices for their products. In terms of this provision, on 23 July 1992, the Minister reassessed the level of anti-dumping duty in respect of exports from Chloride Eastern Industries Limited, a Singaporean company. Reassessments of the level of anti-dumping duty in respect of exports from Delkor Corporation, a Korean company, and Automotive Battery Industries (Malaysia) Sdn. Bhd, a Malaysian company, were completed on 12 February 1998 and 2 July 1998 respectively.

A further reassessment of anti-dumping duties in respect of exports from GP Autobat Sdn Bhd, a Malaysian company, was initiated on 15 December 1998. This reassessment is continuing at this time.

On 28 May 1999 a request in terms of section 14(8) of the Act, was received from GNB Technologies (hereinafter referred to as "GNB"), for the initiation of a review of the continued need for the imposition of anti-dumping duties on lead acid batteries imported into New Zealand from Indonesia, Korea, Malaysia, Singapore and Taiwan.

Anti-Dumping Duty Collected

No information relating to anti-dumping duty collected on lead acid batteries is available from the New Zealand Customs Service (NZCS) for the calendar years 1993 and 1994.

Information received from the NZCS covering the period 1 January 1995 to 30 June 1999 shows a total anti-dumping duty collection of $______ in that period which related to 90 importations from Indonesia, Korea, Malaysia and Taiwan. There was no anti-dumping duty paid on battery imports from Singapore over the period.

Further analysis of the data shows that anti-dumping duty of $_____ was paid on _____ shipments from Indonesia, $_______ on __ shipments from Korea, $______ on ____ shipments from Malaysia and $_____ on __ shipment from Taiwan. The total quantity involved in these shipments was ________ units representing ___ percent of total imports from the named countries over the period.

Analysis of the import data covering the period of investigation (POI) shows that anti-dumping duty of $_____ was paid on ____ shipments from Indonesia and $_______ was paid on ___ shipments from Korea. There was no anti-dumping duty paid on shipments from Malaysia and there were no shipments from Singapore and Taiwan over the period. The total quantity involved in the shipments on which anti-dumping duty was paid was ____ units representing ____ percent of total imports from the named countries over the period.

The collection of anti-dumping duty on the basis of the existing remedy, which in most cases was last updated in June 1994, should not be taken as an indication of the likely outcome of this review or of any reassessment which may follow it.

It should be noted that total imports from named countries over the periods discussed in the above paragraphs are likely to include a small number of batteries not under review, as the review team does not have complete data from NZCS or importers sufficient to identify goods not subject to this review.

1.2    REVIEW

Section 14(8) of the Dumping and Countervailing Duties Act 1988 ("the Act") states:

The Secretary may, on his or her own initiative, and shall, where requested to do so by an interested party that submits positive evidence justifying the need for a review, initiate a review of the imposition of anti-dumping duty or countervailing duty in relation to goods and shall complete that review within 180 days of its initiation.

Section 14(9) of the Act states:

Anti-dumping duty or countervailing duty applying to any goods shall cease to be payable on those goods from the date that is five years after –

a    The date of the final determination made under section 13 of this Act in relation to those goods; or

b.    The date of notice of any reassessment of duty given under subsection (6) of this section, following a review carried out under subsection (8) of this section –

Whichever is the later, unless, at that date, the goods are subject to review under subsection (8) of this section.

In terms of section 14(9)(b) of the Act anti-dumping duties relating to the subject goods would, in the absence of a review, have ceased to apply as from 22 June 1999.

The provisions of section 14(9) of the Act give specific effect to Article 11 of the Agreement which provides additional guidance as follows;

11.1 An anti-dumping duty shall remain in force only as long and to the extent necessary to counteract dumping, which is causing injury.

11.2 The authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or, provided that a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty, upon request by any interested party which submits positive information substantiating the need for a review. Interested parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both. If, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately.

11.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping duty shall be terminated on a date no later than five years from its imposition (or from the date of the most recent review under paragraph 2 if that review has covered both dumping and injury, or under this paragraph), unless the authorities determine, in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable period of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. The duty may remain in force pending the outcome of such a review.

11.4 The provisions of article 6 regarding evidence and procedure shall apply to any review carried out under this article. Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review.

On 18 June 1999, being satisfied that positive evidence justifying the need for a review had been provided, the Secretary of Commerce initiated a review. A notice to this effect was published in the New Zealand Gazette of 24 June 1999. The existing anti-dumping duties have been continued pending the outcome of this review. As the current review has been conducted is in terms of Article 11.3 of the Agreement via section 14(9) of the Act, it is hereinafter referred to as a "sunset" review.

Interested parties to the original investigation, the previous review and holders of reference price schedules established since the original determination as well as suppliers and importers of the subject goods over the year ending 31 May 1999 who were not included in the above groupings were advised in writing of the initiation of this review and invited to make written submissions to the review team.

In accordance with Article 11 of the WTO Anti-Dumping Code, the purpose of the Ministry’s review was to examine whether the expiry of the anti-dumping duty would be likely to lead to the continuation or recurrence of dumping or injury.

Section 10a of the Act requires that, within 150 days of the initiation of an investigation, interested parties be given written advice of the essential facts and conclusions likely to form the basis of any final determination. While this section does not apply in the case of reviews, the Ministry endeavours to the extent possible to follow investigation practice.

On 11 November 1999 the parties to the review were provided with an Interim Report in the same form as is normally used to release essential facts and conclusions. This Final Report includes consideration of responses made by parties as a result of that advice.

Grounds for the Application

The review is to establish whether the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury.

The New Zealand industry in its submissions claims that it is threatened with material injury should the subject goods be imported into New Zealand without adequate anti-dumping duties. The industry claims that the imports of the subject goods are certain to increase significantly in volume with the removal of anti-dumping duties and that material injury to the industry is threatened through:

• price undercutting
• price depression
• price suppression,

and a consequent decline in

• sales volume,
• market share
• profits and profitability

resulting in a

• decline in utilisation of production capacity, and
• loss of employment.

1.3   INTERESTED PARTIES

New Zealand Industry

In the original investigation, GNB New Zealand Ltd and Yuasa JRA Batteries Ltd represented the New Zealand industry. These two companies were the only producers of automotive lead acid batteries in New Zealand. Company changes since the original investigation and in the case of Yuasa JRA Batteries Ltd, since the last review, have seen GNB New Zealand Ltd become GNB Technologies (GNB) and Yuasa JRA Batteries Ltd become Century Yuasa Batteries (NZ) Ltd (Century).

The application for a review of the continued necessity for the imposition of anti-dumping duties was made by GNB and had the written support of Century.

Blackburn Croft and Co Ltd. (Blackburn Croft) of Auckland has represented GNB in this review.

The review team has received various submissions from GNB throughout the course of the review as well as sales information from Century for the period January 1995 to June 1998.

Importers and Exporters

As noted above, importers and suppliers of the subject goods during the year ended 31 May 1999, plus all those importers and suppliers known to have an interest in the subject goods were contacted at the time of initiation and given the opportunity to provide written submissions to the review team.

The GNB application noted that it believed there was no longer a battery manufacturing industry operating in Singapore. GNB had been unable to verify this. The application also noted that there had been no imports from Taiwan since calendar year 1995, although this may have been due to the deterrent effect of the anti-dumping duties themselves.

Exporters and/or Manufacturers questionnaires were sent to the following companies:

Submissions were received from ABI, GYB and KSB.

Korea Storage Battery Ltd (KSB) was an exporter of batteries to New Zealand at the time of the last review and has a current schedule of reference prices for anti-dumping duty purposes. There have been no exports of the lead acid batteries under review by KSB to New Zealand during the POI of this review.

The review team visited KSB as part of this review in order to verify domestic price and cost information for like goods to those battery models that would be likely to be exported to New Zealand if the company decided to export batteries to New Zealand in the future. It was considered that this would allow the Ministry to establish normal values for the battery sizes concerned if the review found that there was a continued need for anti-dumping duties in respect of imports from Korea. The established normal value amounts would have been used to update the normal value (value for duty equivalent) (NV (VFDE)) amounts currently in place for the company. For this reason, the review team also sought and obtained updated export related costs.

AC Delco AU advised the review team that it would not be providing an answer to the questionnaires as the company was ____________ _______________________ for the range of batteries that it exported to New Zealand.

Submissions were not received from Century Batteries, Chloride, or Ztong Yee.

Late in the review process, following the release of the Interim Report, a submission was received from PT Nipress of Indonesia. The submission consisted only of the appendices to the Manufacturers Questionnaire. As it was a) incomplete, b) unable to be even partially verified and c) received after the due date for responses to the Interim Report, the submission has not been used in reaching the conclusions detailed in this report.

During the course of the review, a company called PT Trimitra Baterai Prakasa contacted the review team with the information that PT Gemala had ceased trading in April 1997. The review team understands that PT Trimetra Baterai Prakasa has taken over the business operations of PT Gemala. Although the opportunity was given, no submission was received from PT Trimetra Baterai Prakasa.

Watta informed the review team that it would not respond to the questionnaire with a submission, as none of its batteries had been exported to New Zealand since December 1991.

The review team has been advised by a number of other parties that Ztong Yee is no longer manufacturing automotive batteries.

Importers Questionnaires were sent to the following companies:

        HCB Technologies Ltd (HCB)

        ______ Ltd (______)

        Bay Batteries Ltd (Bay)

Submissions were received from HCB and ______.

Bay advised the review team that it _________________________________ ____, but that these were in abeyance pending __________________ ______________________________________. Bay further advised the review team that it had made a small number of importations in 1997 from Malaysia but had ceased importing after paying anti-dumping duties on the imports.

1.4    IMPORTED GOODS

The goods which are the subject of the application, hereinafter referred to as lead acid batteries or "subject goods", are:

Lead acid automotive replacement batteries for the passenger motor vehicle market and marine applications (excluding DIN batteries).

The New Zealand Customs Service (NZCS) has stated that lead acid batteries of the types subject to this review currently enter under the following tariff classification:

Applicable duty rates are:

Normal 10%
Australia Free
Canada Free
LDC 8%
LLDC Free
Pac Free

At some points in this report the subject goods may be referred to as Category I, II and III. These categories relate to the physical dimensions or "footprint" of the batteries concerned and are based on the statistical code separation shown above.

It should also be noted that the above tariff items and statistical keys may include a small proportion of goods not subject to this investigation. Whilst the review team does have relevant documentation for the imports made by some importers from the subject countries of origin, it has not been possible to fully isolate and quantify non-subject goods.

Transhipment of Goods

Section 3(6) of the Act provides as follows:

For the purposes of this Act, where, during the exportation of goods to New Zealand, the goods pass in transit from a country through another country, that other country shall be disregarded in ascertaining the country of export of the goods.

and section 5(5) provides:

Where—

(a) The actual country of export of goods imported or intended to be imported into New Zealand is not the country of origin of the goods; and

(b) The Secretary is of the opinion that the normal value of the goods should be ascertained for the purposes of this Act as if the country of origin were the country of export, —

the Secretary may direct that the normal value of the goods shall be so ascertained.

An analysis of data supplied by the NZCS and information supplied by interested parties to the review shows that in the period since the last review there have been a number of shipments of Malaysian batteries to New Zealand that have been exported from third countries.

The review team has been unable to verify what proportion of the shipments concerned were subject goods as in many cases the importers and/or exporters no longer exist

From the information available however, the review team is satisfied that the countries of transhipment for the shipments concerned, may be disregarded in ascertaining the country of export of the goods.

1.5   INVESTIGATION DETAILS

In this report, unless otherwise stated, years are calendar years and dollar values are NZ$. In tables, column totals may differ from individual figures because of rounding. The term VFD refers to value for duty for Customs purposes.

The Period Of Investigation (POI) is the time frame selected at the time of initiation for which imports into New Zealand have been assessed to determine whether and the extent (if any) to which importations from the named countries have been dumped. The POI for this review is 1 June 1998 to 31 May 1999 while the investigation of injury involves evaluation of data from the beginning of 1995 to 30 June 1999.

1.6    EXCHANGE RATES

Article 2.4.1 of the Agreement provides as follows:

When the comparison under paragraph 4 [of Article 2] requires a conversion of currencies, such conversion should be made using the rate of exchange on the date of sale8, provided that when a sale of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the authorities shall allow exporters at least 60 days to have adjusted their export prices to reflect sustained movements in exchange rates during the period of investigation.

8 Normally, the date of sale would be the date of contract, purchase order, order confirmation, or invoice, whichever establishes the material terms of sale.

In this report, when dealing with information provided by the Malaysian exporter, for the shipments in question the exchange rate used is based on information supplied by the exporter. In the case of the Korean and Indonesian exporters the exchange rates used for the shipments in question are based on interbank exchange rates from an online source, OANDA applying at the date of invoice.

In this Report, when dealing with Customs data, including VFD and CIF values in NZ$, the amounts are converted to foreign VFD and CIF values by use of the Customs exchange rate applicable to that shipment or in force at the time of the investigation. The rates are published each fortnight in the Customs Release.

On the bases outlined above, the applicable exchange rates used in this investigation are as follows:

Malaysia $US 1 to Malaysian Ringgit 3.80
Korea $US 1 to Korean Won 1,171 – 1,449
Indonesia $US 1 to Indonesian Rupiah 7,475 – 8,600

1.7    DISCLOSURE OF INFORMATION

The Ministry of Commerce makes available all non-confidential information to any interested party through its Public File system.

Article 6.7 of the Agreement provides as follows:

In order to verify information provided or to obtain further details, the authorities may carry out investigations in the territory of other Members as required, provided they obtain the agreement of the firms concerned and notify the representatives of the government of the Member in question, and unless that Member objects to the investigation. The procedures described in Annex I shall apply to investigations carried out in the territory of other Members. Subject to the requirement to protect confidential information, the authorities shall make the results of any such investigations available, or shall provide disclosure thereof pursuant to paragraph 9, to the firms to which they pertain and may make such results available to the applicants.

Verification visits were made to ABI in Malaysia and both KSB and GYB in Korea. Copies of Verification Reports were provided to the exporters visited, and non-confidential copies placed on the Public File.

Article 6.8 of the Agreement provides as follows:

In cases in which any interested party refuses access to, or otherwise does not provide necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph.

As stated earlier in this report, for varying reasons, AC Delco AU, Century Batteries, PT Gemala, and Watta did not supply submissions to this review in answer to the information that was sought by the review team.

In view of the failure to co-operate, information relating to those exporters is based on the facts available.

Likewise, for the reasons previously stated, the late submission received from PT Nipress has not been taken into consideration and comments in regard to this company are based on the best information available.

Article 11.4 of the Anti-Dumping Agreement states in part:

The provisions of Article 6 regarding evidence and procedure shall apply to any review carried out under this Article.

Article 6.9 of the Anti-Dumping Agreement states:

The authorities shall, before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures. Such disclosure should take place in sufficient time for the parties to defend their interests.

This provision does not apply in the case of reviews, however interested parties were provided with an Interim Report on 11 November 1999, being 146 days after the initiation of the review. Comments received from Blackburn Croft (representing GNB) and Trade Consultants Ltd (Trade Consultants) representing HCB were taken into account in the preparation of this Final Report.

2. NEW ZEALAND INDUSTRY

Section 3a provides the definition of "industry":

3a. Meaning of "industry"—For the purposes of this Act, the term ‘industry’, in relation to any goods, means—

(a) The New Zealand producers of like goods; or

(b) Such New Zealand producers of like goods whose collective output constitutes a major proportion of the New Zealand production of like goods.

"Like goods" is defined in section 3 of the Act:

"Like goods’, in relation to any goods, means—

(a) Other goods that are like those goods in all respects; or

(b) In the absence of goods referred to in paragraph (a) of this definition, goods which have characteristics closely resembling those goods:

2.1    LIKE GOODS

In order to establish the existence and extent of the New Zealand industry for the purposes of an investigation into injury, and having identified the subject goods, it is necessary to determine whether there are New Zealand producers of goods which are like those goods in all respects, and if not, whether there are New Zealand producers of other goods which have characteristics closely resembling the subject goods.

The subject goods have been identified in section 1.4 of this Report as:

Lead acid automotive replacement batteries for the passenger motor vehicle market and marine applications (excluding DIN batteries).

The original investigation determined that GNB was manufacturing like goods to those being imported from the cited countries and this was reconfirmed in the subsequent review completed in 1994. A new investigation relating to the alleged dumping of these same goods imported from the People’s Republic of China that was completed in June this year also considered that the New Zealand industry was producing like goods to those goods being imported. There has been no information provided to the review team to suggest that any change has taken place since that time.

On the basis of the information available, the review team considers that the lead acid batteries produced by the New Zealand industry, while not alike in all respects, have characteristics closely resembling the imported lead acid batteries and therefore continue to be like goods to the subject goods.

2.2    NEW ZEALAND INDUSTRY

The New Zealand producers of like goods by or on whose behalf the application was made are listed in paragraph 1.3.1 above. The investigation was initiated on the basis that the application met the requirements of section 10(3) with regard to required levels of support, and that the applicant had standing to make an application.

The Ministry considers that in investigating the likelihood of injury under section 8 of the Act, it should have regard to the effects of importations of dumped goods on the New Zealand industry as a whole, notwithstanding that an application has been accepted from producers responsible for a major proportion of domestic production of like goods. The use of the definition of industry to establish the standing of one or several producers or their representatives to lodge a complaint does not preclude the Ministry from looking wider in establishing whether and to what extent injury is likely to be caused to New Zealand producers as a result of dumping. However, this does not mean that all producers in the industry, or all of those investigated, must suffer material injury before any action is taken, but such injury must have been caused to at least those producers whose output constitutes a major proportion of production of like goods.

The information available to the review team shows that GNB’s production constitutes the majority of total New Zealand production. GNB has provided full injury information to the review team. Century has supplied the review team with sales data for the subject goods for most of the injury period and has said that it supports the GNB review application.

2.3    IMPORTS OF LEAD ACID BATTERIES

Table 2.1 below, based on NZCS import data sets out the imports into New Zealand of like goods falling within the tariff items and statistical keys cited above for the calendar years 1995 to 1998 and YTD June 1999. The figures in respect of Indonesia include only category III batteries. As noted in section 3.4 below, no anti-dumping duty rate is in place in respect of category I and II batteries from Indonesia, therefore these goods cannot be examined in the context of the current review. It should also be noted that the 1995 total import figure in the table differs somewhat from that provided by Blackburn Croft in a number of its submissions. While Blackburn Croft sourced its import figures from the INFOS database, the review team has preferred to use NZCS import figures in compiling the table below. In any event, because the difference is in respect of imports from sources other than the countries under review, and relates to the 1995 year, the review team does not consider the difference will impact on the outcome of the review.

The information shows that there have been no imports of the subject products from Taiwan and Singapore since 1996.

Applicability of Section 11(1) to a Review

The Ministry does not consider that the provisions of section 11(1) of the Act relating to negligibility apply in the case of a review. Therefore this review focuses in part on the likelihood of significant imports of lead acid batteries from the subject countries.

2.4    NEW ZEALAND MARKET

Market Size

The New Zealand market consists of sales made by the domestic industry, sales of imports of the subject goods from Indonesia, Korea, Malaysia, Singapore and Taiwan and sales of imports from other sources. The table below, based on Table 2.1 and information provided by both GNB and Century, shows the New Zealand market for the calendar years 1995 to 1998 plus YTD June 1999.

Domestic industry figures consist of GNB’s sales figures for the calendar years 1995 to 1997 supplied to the Ministry in the recently completed Chinese battery investigation plus information provided by Century over the same period. For the 1998 year, as Century has provided data only up until June, its full year figure has been estimated on the basis of its sales figures for the half-year period to June 1998. This has been combined with the GNB sales figure for the 1998 calendar year provided to the Ministry in an application made recently against imports of batteries from Thailand. For the 1999 YTD figure, Century’s January to June 1998 figure has been used and combined with information provided by GNB in relation to the current review.

This information shows that the total NZ market remained relatively static over the 1995 to 1996 calendar years, declined by ___ percent in the 1997 calendar year yet recovered by ___ percent in 1998. If the 1999-year to date market figure is extrapolated for the full calendar year it shows a ____ percent increase in market size over 1998 yet only a ____ percent increase in comparison with 1995.

3. DUMPING INVESTIGATION

Section 3(1) of the Act states:

"Dumping", in relation to goods, means the situation where the export price of goods imported into New Zealand or intended to be imported into New Zealand is less than the normal value of the goods as determined in accordance with the provisions of this Act, and ‘dumped’ has a corresponding meaning.

3.1    FINDINGS OF THE ORIGINAL INVESTIGATION

The original investigation concluded that certain models of batteries from Indonesia, Korea, Malaysia, Singapore and Taiwan were dumped at margins of between _____ and ____ percent.

3.2    FINDINGS OF THE 1994 REVIEW

The 1994 review found that dumping had continued on certain battery models and that weighted average dumping margins ranging from 3 to 46 percent were present.

3.3    DUMPING IN A REVIEW

The Ministry's sunset reviews are intended to determine whether the expiry of the existing anti-dumping duties after the five year period would be likely to lead to the continuation or recurrence of dumping and injury. Questions to be asked are whether the goods under review continue to be dumped and if so the extent of that dumping and, where imports of the goods subject to anti-dumping duty have ceased, whether there is a likelihood of imports being made at dumped prices and thereby causing injury if anti-dumping duties are removed. The likelihood of dumped imports causing material injury in the absence of anti-dumping duties is considered in section 4.

The outcome of the dumping review provides a basis for reassessing the extent to which any material injury, or the likelihood of a recurrence of material injury, can be attributed to dumping, and also provides a basis for assessing the extent to which anti-dumping duty has removed the effects of dumping. Finally, the review of dumping provides a basis for considering the extent to which any reassessment of anti-dumping duty might be required.

In order to assess the extent, to which the goods under review continue to be dumped, the review team has compared export prices and normal values for the period of review for dumping and has also taken into account whether or not anti-dumping duties continue to be collected.

The following sections summarise the review of export prices and normal values.

3.4    EXPORT PRICES

Export prices are determined in accordance with section 4 of the Act.

(1) Subject to this section, for the purposes of this Act, the export price of any goods imported or intended to be imported into New Zealand which have been purchased by the importer from the exporter shall be —

(a) Where the purchase of the goods by the importer was an arm's length transaction, the price paid or payable for the goods by the importer other than any part of that price that represents —

(i) Costs, charges, and expenses incurred in preparing the goods for shipment to New Zealand that are additional to those costs, charges, and expenses generally incurred on sales for home consumption; and

(ii) Any other costs, charges, and expenses resulting from the exportation of the goods, or arising after their shipment from the country of export;

Section 4(1)(b) of the Act provides as follows.

(b) Where the purchase of the goods by the importer was not an arm’s length transaction, and the goods are subsequently sold by the importer in the condition in which they were imported to a person who is not related to the importer, the price at which the goods were sold by the importer to that person less the sum of the following amounts:

(i) the amount of any duties and taxes imposed under any Act; and

(ii) the amount of any costs, charges, or expenses arising in relation to the goods after exportation; and

(iii) the amount of any profit, if any, on the sales by the importer or, where the Secretary so directs, an amount calculated in accordance with such rate as the Secretary determines as the rate of profit on the sale by the importer having regard to the rate of profit that would normally be realised on sales of goods of the same category by the importer where such sales exist;

or

(c) Where the purchase of the goods by the importer was not an arm’s length transaction, and the goods are subsequently sold by the importer in a condition different from the condition in which they were imported, a reasonable price determined by the Secretary in the circumstances of the case.

In relation to arm’s length transactions, section 3(2) and (3) of the Act provides as follows:

(2) For the purpose of this Act, a purchase or sale of goods shall not be treated as an arm’s length transaction if —

a.    There is any consideration payable for or in respect of the goods other than their price; or

b.    The price is influenced by a relationship between the buyer, or a related person, and the seller, or a related person;

c.    In the opinion of the Secretary, the buyer, or a person related to the buyer, will, directly or indirectly, be reimbursed, be compensated, or otherwise receive a benefit for, or in respect of, the whole or any part of the price.

(3) Where goods are imported into New Zealand and are purchased by the importer from the exporter (whether before or after exportation) for a particular price and the Secretary is satisfied, after having regard to —

(a)    The amount of the price paid or to be paid for the goods by the importer; and

(b)    Such other amounts as the Secretary determines to be costs necessarily incurred in the importation and sale of the goods; and

(c) The likelihood that the amounts referred to in paragraph (a) and paragraph (b) of this subsection will be able to be recovered within a reasonable time; and

(d) Such other matters as the Secretary considers relevant,—

that the importer, whether directly or through a related person, sells those goods in New Zealand (whether in the condition in which they were imported or otherwise) at a loss, the Secretary may treat the sale of those goods as indicating that the importer or a related person will, directly or indirectly, be reimbursed, be compensated, or otherwise receive a benefit for, or in respect of, the whole or any part of the price for the purposes of subsection (2) (c) of this section.

Sections 3(4) and (5) of the Act refer to relationships as follows:

(4) For the purposes of this Act, a person shall be deemed to be related to another person if-

(a) One of them directly or indirectly controls the other (within the meaning of subsection (5) of this section); or

(b) Both of them are directly or indirectly controlled by a third person (within that meaning); or

(c) Together they directly or indirectly control a third person (within that meaning).

(5) For the purposes of subsection (4) of this section, a person controls another person if the first-mentioned person is in a position, whether legally or operationally, to exercise restraint or direction over the other person.

In relation to the use of best information available in ascertaining export price and normal value, section 6 of the Act provides as follows:

Where the Secretary is satisfied that sufficient information has not been furnished or is not available to enable the export price of goods to be ascertained under section 4 of this Act, or the normal value of goods to be ascertained under section 5 of this Act, the normal value or export price, as the case may be, shall be such amount as is determined by the Secretary having regard to all available information.

For the purposes of subsection (1) of this section, the Secretary may disregard any information that the Secretary considers to be unreliable.

Singapore and Taiwan

As there have been no imports of the subject goods from either Singapore or Taiwan over the POI, export prices have not been established for these countries.

Malaysia

Automotive Battery Industries Sdn Bhd

ABI is a privately owned manufacturer of automotive and motorcycle batteries. The company sells to customers in numerous countries around the world and has a subsidiary company in Australia, ABI AU, which acts as its marketing arm for automotive batteries for the Australian and New Zealand markets.

A new shipper reassessment completed in July 1998 established a specific schedule of reference prices for ABI. The company began exporting to Hi-Tech Batteries Ltd (Hi-Tech) and ______ immediately afterward. The information that ABI supplied at the time of the new shipper reassessment was unverified. A full submission was received from ABI for this review in respect of its exports and domestic sales, including documentation relating to product exported to New Zealand.

One of ABI’s New Zealand customers Hi-Tech, was placed in receivership and subsequent liquidation shortly after commencing importing from ABI. In the POI, two shipments from ABI were imported by Hi-Tech with a third being ______________ when ABI realised the precarious financial situation that Hi-Tech was in. ABI has provided invoices for the shipments concerned.

During the POI, ABI made ___ shipments to _____ including the __________ __________ from Hi-Tech. Invoices for the shipments were provided by ABI.

ABI provided details of its ordering and distribution process which shows that in the case of New Zealand, battery orders are _____________________ ________________________________________. The batteries are normally shipped direct from Malaysia. After shipment to the New Zealand customer, ABI AU prepares and issues an invoice based on the pricing agreement with ______. The customer makes payment to ______________ _________________.

Base Prices

Sales to New Zealand are made on an ______ basis according to a price list associated with a _______________________ agreement. The verification team noted that ______ has not imported all of the batteries specified in the existing ABI schedule. It was explained that this was due to the schedule having been established prior to any shipments being made and in anticipation of the range of batteries required by the New Zealand market. It was decided therefore that all batteries offered by ABI for export and for which relevant information was available, should be specified in the schedule. Following discussion with ABI, it was agreed that this approach remained appropriate.

The review team was provided with copies of the ABI distributor price lists to both _____ and Hi-Tech. The prices shown were ___________ for each New Zealand customer and equated to the prices shown on the invoices provided by both ABI and ______. The verification team has therefore used the _____ invoice prices for each shipment as a basis for its export price calculations except in those cases where batteries on the ____ pricelist have not yet been exported to New Zealand. In this case the _____ selling prices from the ____ pricelist have been used.

Although invoices were not available from Hi-Tech for its imports, they were made available by ABI. The review team was satisfied that the basis for establishing base prices for _______ was also appropriate for export prices in respect of Hi-Tech.

The current ______ base prices for both ______ and Hi-Tech are as follows:

Adjustments

Credit

ABI claimed a credit adjustment on its export sales to New Zealand for the period between the date of shipment by ABI and the date of the invoice by ________ to _______/Hi-Tech.

An adjustment based on the average ABI bank interest rate and average interval period has been made in the transaction-to-transaction comparison. The adjustment amounts to between _____ and _____ US cents per battery.

Other Adjustments

Whereas adjustments for export packing, inland freight and insurance had been made in establishing the current NV (VFDE) schedule, ABI did not claim any adjustment for these factors and the verification team was satisfied on the evidence provided that _________________________________________ _________________.

Other Export Costs

The review team examined company documents in respect of storage and handling at the time of the verification visit and was satisfied, as was ABI, that these costs were _________________________________. No adjustments were therefore made for these factors.

Total Adjustments

The adjustments have been applied to the _____ base prices on a model by model basis.

Export Prices

Export prices have been established for each battery type available to be exported to New Zealand including all those exports of subject goods made to ______ and Hi-Tech in the POI.

Korea

Global and Yuasa Batteries

GYB is a publicly listed company that manufactures a wide range of lead acid automotive passenger, commercial and marine batteries for sale for both the replacement market and the original equipment market. GYB sells batteries on both the domestic market and to a number of export markets throughout the world.

GYB was an exporter to New Zealand at the time of the original investigation in 1991 and has continued to export the goods under review to New Zealand since that time. As a result of the original investigation an anti-dumping duty schedule for specific batteries and batteries not specified was established for GYB. This schedule was updated as a result of the 1994 review. HCB has been a GYB New Zealand customer since the time of the original investigation. GYB is unrelated to HCB and the review team is satisfied that transactions are conducted on an arm’s length basis. During the POI HCB was GYB’s only customer in New Zealand. A full submission was received from GYB to this review in respect of its exports and domestic sales, including documentation relating to product exported to New Zealand.

During the POI GYB made __ shipments of the eight different export models of batteries under review, to HCB in New Zealand. These ___ shipments consisted of ________ batteries. The review team sourced invoices for all the shipments.

Base Prices

All transactions between GYB and HCB were made in US dollars. The review team found that while the US prices for each model listed on GYB’s invoices were _____ values, each invoice included a separate amount for overseas freight. ____________________________________________________ ____________, the base export prices were considered to be ______ values.

GYB provided the review team with evidence for a number of shipments that showed that HCB payments corresponded with the ______ values of the shipments examined.

During the POI there have been a number of changes in the ______ prices to HCB due to GYB making price changes on particular batteries and due to changes in shipping charges to New Zealand. The table below reflects the highest and lowest ______ base price points by battery over the period.

The _____ base price ranges for batteries sold to HCB are as follows:

Adjustments

Preparation for Export

Section 4(1)(a)(i) of the Act states:

Costs, charges, and expenses incurred in preparing the goods for shipment to New Zealand that are additional to those costs, charges, and expenses generally incurred on sales for home consumption;

Inland Freight

The review team found that inland freight costs were incurred by GYB for transport of batteries from its factory to the Pusan port. An adjustment has been made using the weighted average inland freight costs determined for each export model shipped to New Zealand.

City Development Tax, Terminal Handling Costs, Wharfage and Brokerage Costs (CTWB)

The review team found that a City Development tax is incurred by GYB for passing the goods through the internal area of Pusan City to the port and that terminal handling and wharfage charges are also incurred for export sales. These charges are incurred on a shipment by shipment basis. GYB also incurred brokerage costs for the Customs export clearance ex-Pusan port based on the value of the shipment. The review team evidenced these costs from information supplied by the company and has allowed an adjustment based on the weighted average CTWB costs determined for each export model shipped to New Zealand.

Export Packing

The review team found that there was a difference in the packing materials used for domestic sales and sales to New Zealand. An adjustment based on this data has been made for each battery sold to New Zealand.

Fumigation Charges

GYB told the review team that the wooden pallets used to pack export goods to New Zealand require fumigation before shipping for which a charge is made. The review team derived a weighted average fumigation charge for each of the eight export models shipped, based on the verified data and an adjustment was made.

Cost of Credit

GYB provided the review team with evidence of its costs of credit on export sales. However, this was found to be insignificant in relation to the calculation of the export price and therefore no adjustment was made.

Other Export Costs.

Section 4(1)(a)(ii) of the Act provides as follows

Any other costs, charges, and expenses resulting from the exportation of the goods, or arising after their shipment from the country of export.

Overseas Freight

The review team verified amounts for ocean freight from invoices to HCB and noted that these amounts formed part of the _____ prices. The review team apportioned an amount of ocean freight to each of the battery models under review and in respect of each shipment over the POI.

Total Adjustments

The adjustments noted above have been applied to the ___ base prices on a model by model basis.

Export Prices

Weighted average export prices have been established for each battery type exported to New Zealand. A transaction-to-transaction comparison was also carried out.

Indonesia

Coverage of the review

The original investigation in 1991 did not consider whether or not lead acid batteries falling within categories I and II of the description of the subject goods and originating from Indonesia were being dumped.

This was due to the fact that at that time no batteries of these types were being exported to New Zealand. Therefore Category I and II batteries from Indonesia were not considered to fall within the scope of the investigation and as such, a rate of anti-dumping duty was not specified for those goods.

In terms of section 14(8) of the Act one of the criteria for a review is that an anti-dumping duty must have been imposed as a result of the original investigation. In the case of Category I and II lead acid batteries from Indonesia, this criteria is not fulfilled, therefore these goods cannot be examined in the context of the current review either in respect of dumping or of injury.

The question of the likelihood of the continuation or recurrence of dumping in respect of the subject goods from Indonesia is therefore restricted to lead acid batteries falling within Category III of the goods description. This approach is consistent with that taken at the time of the previous review in 1994.

PT Nipress TBK

PT Nipress was the only exporter of the subject goods from Indonesia whose goods were imported into New Zealand over the POI. The company exported two shipments of the subject goods to HCB .

PT Nipress did not provide a timely response to the manufacturer’s questionnaire sent to it by the Ministry. As such it provided no information on its export prices to New Zealand at the time of the Interim Report.

A partial submission was received from PT Nipress following the release of the Interim Report. As this submission was incomplete, unable to be verified and received after the due date for responses to the Interim Report, it has not been used in reaching the conclusions detailed in this report.

PT Central Surabaya Contact Battery Co

The Ministry sourced details of a further shipment of lead acid batteries from Indonesia, which was imported into New Zealand in June 1999. The goods were imported by Mainland Batteries Ltd from PT Central Surabaya Contact Battery Co., Indonesia. As this shipment did not include subject goods falling within Category III, it has not been further considered.

Calculation of Export Values

In the absence of information from PT Nipress to enable the establishment of export prices under section 4 of the Act, export prices were established under section 6, which provides as follows:

(1)    Where the Secretary is satisfied that sufficient information has not been furnished or is not available to enable the export price of goods to be ascertained under section 4 of this Act, or the normal value of goods to be ascertained under section 5 of this Act, the normal value or export price, as the case may be, shall be such amount as is determined by the Secretary having regard to all available information.

(2)    For the purposes of subsection (1) of this section, the Secretary may disregard any information that the Secretary considers to be unreliable.

Article 6.8 of the Anti-Dumping Agreement also provides that:

In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available.

Base Prices

The prices used as the basis for establishing export prices in respect of the two shipments of the subject goods exported by PT Nipress are the per unit FOB values in United States dollars, which were sourced from invoices supplied by HCB. The $US invoiced amounts were converted to Indonesian Rupiah amounts using the $US to Rupiah exchange rate prevalent at the date of sale. For the purpose of the exercise, the date of sale was determined to be the date the goods were invoiced. Exchange rate information was sourced from the Oanda on-line historical exchange rate service.

As PT Nipress is not related to HCB, the review team has considered that the purchase of the goods by HCB was at arm's length.

Adjustments for Export-Related Costs

PT Nipress supplied no information on costs, charges, and expenses incurred in preparing the goods for shipment to New Zealand or in respect of other costs resulting from the exportation of the goods. In the absence of this information, the review team has used information sourced from the 1994 review relating to such costs. It considers the use of this information to be appropriate in determining the export prices of the goods in accordance with section 6(1) and (2) of the Act above.

In the 1994 review, export related costs were sourced from the only Indonesian company that was exporting direct to New Zealand at the time. The name of this company was PT Gemala. Export related costs for PT Gemala’s shipments to New Zealand included inland freight, documentation, clearance fees, terminal handling charges, and bill of lading fees. These export-related costs were verified by Ministry officials and amounted to US$_____ for the category III model.

For the current review, the export-related costs established in the 1994 review, have been updated to reflect their current 1998/9 June year values. The costs have been updated to reflect price movements over the period using the same methodology that has been used to update the normal values established in the review (see paragraph 3.5.52 below). Again, the review team considers the methodology in determining the export prices of the goods to be in accordance with section 6(1) and (2) of the Act.

The following table shows the export prices determined for the goods under review exported by PT Nipress over the POI, using the methodology explained above:

(1) Refer section 3.4
(2) 1993 export-related costs updated to reflect Indonesian wholesale price index (WPI) price movements. WPI information was sourced from the IMF International Financial Statistics, September 1999 edition.

3.5    NORMAL VALUES

Normal values are determined in accordance with section 5 of the Act.

(1) Subject to this section, for the purposes of this Act, the normal value of any goods imported or intended to be imported into New Zealand shall be the price paid for like goods sold in the ordinary course of trade for home consumption in the country of export in sales that are arm's length transactions by the exporter or, if like goods are not so sold by the exporter, by other sellers of like goods.

(2) Where the Secretary is satisfied that the normal value of goods imported or intended to be imported into New Zealand cannot be determined under subsection (1) of this section because—

(a) There is an absence of sales that would be relevant for the purpose of determining a price under that subsection; or

(b) The situation in the relevant market is such that sales in that market that would otherwise be relevant for the purpose of determining a price under subsection (1) of this section are not suitable for use in determining such a price; or

(c) Like goods are not sold in the ordinary course of trade for home consumption in the country of export in sales that are arm's length transactions by the exporter and it is not practicable to obtain within a reasonable time information in relation to sales by other sellers of like goods that would be relevant for the purpose of determining a price under subsection (1) of this section,—

the Secretary may determine that the normal value, for the purposes of this Act, shall be either—

(d) The sum of—

(i) Such amount as is determined by the Secretary to be the cost of production or manufacture of the goods in the country of export; and

(ii) On the assumption that the goods, instead of being exported, had been sold for home consumption in the ordinary course of trade in the country of export,-

(A) Such amounts as the Secretary determines would be reasonable amounts for administrative and selling costs, delivery charges, and other charges incurred in the sale; and

(B) An amount calculated in accordance with such rate as the Secretary determines would be the rate of profit on that sale having regard to the rate of profit normally realised on sales of goods (where such sales exist) of the same general category in the domestic market of the country of export of the goods; or

(e) The price that is representative of the price paid for similar quantities of like goods sold at arm's length in the ordinary course of trade in the country of export for export to a third country.

(3) Where the normal value of goods imported or intended to be imported into New Zealand is the price paid for like goods, in order to effect a fair comparison for the purposes of this Act, the normal value and the export price shall be compared by the Secretary—

(a) At the same level of trade; and

(b) In respect of sales made at as nearly as possible the same time; and

(c) With due allowances made as appropriate for any differences in terms and conditions of sales, levels of trade, taxation, quantities, and physical characteristics, and any other differences that affect price comparability.

(4) Where the normal value of goods exported to New Zealand is to be ascertained in accordance with subsection (2) of this section, the Secretary shall make such adjustments as are necessary to ensure that the normal value so ascertained is properly comparable with the export price of those goods.

(5) Where —

(a) The actual country of export of goods imported or intended to be imported into New Zealand is not the county of origin of the goods; and

(b) The Secretary is of the opinion that the normal value of the goods should be ascertained for the purposes of this Act as if the country of origin were the country of export,—

the Secretary may direct that the normal value of the goods shall be so ascertained.

(6) Where the Secretary is satisfied, in relation to goods imported or intended to be imported into New Zealand, that —

(a) The price paid for like goods--

(i) Sold for home consumption in the country of export in sales that are arm's length transactions; or

(ii) Sold in the country of export to a third country in sales that are arm's length transactions, —

is, and has been for an extended period of time and in respect of a substantial quantity of like goods, less than the sum of —

(iii) Such amount as the Secretary determines to be the cost of production or manufacture of the like goods in the country of export; and

(iv) Such amounts as the Secretary determines to be reasonable amounts for administrative and selling costs, delivery charges, and other charges necessarily incurred in the sale of the like goods by the seller of the goods; and

(b) It is likely that the seller of those like goods will not be able to fully recover the amounts referred to in subparagraphs (iii) and (iv) of paragraph (a) of this subsection within a reasonable period of time, —

the price so paid for those like goods shall be deemed not to have been paid in the ordinary course of trade.

Singapore and Taiwan

Once again, in the absence of any imports over the POI, normal values have not been established for either of these countries of origin.

Malaysia

Automotive Battery Industries Sdn Bhd

Base Prices

At the time of negotiating prices for its New Zealand customers ABI established prices on the basis of _______________________________ ______________________________________________________________ _______. Although the volumes achieved to date are __________________, ABI said that it would _________________________ in the foreseeable future. The verification team therefore sought to identify domestic customers equating to this profile.

ABI nominated two customers as being suitable alternatives for the purpose of comparison with New Zealand, ____________________________ and _________________________________. Both are wholesale customers with ____________________________, which were sighted by the verification team. The verification team was satisfied that ABI has no corporate affiliations with either company and that sales were at arms-length.

ABI produced tables compiled from monthly sales reports showing quantities and values of purchases for ______ and ___________________ for the period January 1999 to August 1999. For _____ the tables showed _______ ___________ and purchase volumes approximating those on which New Zealand pricing was based. After verifying a random sample of the source material the verification team decided to use sales to _______ for comparison purposes. The review team considered that these sales were appropriate in determining normal values under section 5(1) of the Act.

Pricing to domestic customers such as ______ is incorporated in _________, ___________________, which are into customer’s store and sales tax inclusive.

The review team was advised by ABI that all its major customers, including ____________________________________________ where the ABI factory is also located. All deliveries are made to these distribution centres and the cost is recovered in the ______________________ price. The verification team sighted the _______ to _______ and obtained a copy of its current ABI pricelist.

During the POI there have been four pricelists in operation for _______. The table below reflects the highest and lowest free-into-store base prices by battery model over the period.

The list price relevant to each comparative sale has been used in establishing normal values

Adjustments

Terms and Conditions of Sale

Volume Discount

A volume discount was given to ______ in the form of ________________ _______________________ of the same type.

A due allowance of ____ percent off base price was made in order to account for the discount.

Taxation

Sales Tax

Prices to domestic customers were found to be inclusive of sales tax at a rate of 10 percent. An adjustment has been made to take account of this.

Physical Characteristics

The review team found that in the majority of cases, domestic market equivalent batteries had the same physical characteristics as those exported to New Zealand. In those cases where a direct comparison of a domestic battery was not possible, the primary difference was found to be lead content.

ABI provided the review team with information on this factor in respect of two battery models being exported to New Zealand for which a direct equivalent is not sold on the Malaysian market. A due allowance based on the extra lead content of the domestic batteries has been made to ensure comparability with the equivalent (New Zealand) batteries.

Other Differences Affecting Price Comparability

The review team was satisfied that there were no other differences affecting price comparability for which due allowances were required.

Other Costs

The review team was satisfied that no other allowances were necessary.

Total Adjustments

The adjustments have been applied to the _____ base prices on a model by model basis.

Normal Values

Normal values have been calculated for each battery model by deducting the verified adjustments noted above from the base prices.

Korea

Global and Yuasa Batteries Co Ltd

Comparison of Battery Types

GYB did not sell identical models in Korea to those exported to New Zealand. It therefore provided domestic market pricing information on those models that it considered most closely resembled the models exported to New Zealand, based on comparing the lead weight contained in each battery. The review team was satisfied that this was an appropriate basis for selection and has used the prices of these batteries in establishing normal values in accordance with section 5(1) of the Act.

Level of Trade

The review team found that there had been minimal change in the method of distribution since the 1994 review was conducted and that GYB still sold to unrelated semi-retailers, retailers and end users in Korea, through its eight regional sales offices.

The verification team considered that the appropriate level of trade for comparison with the export sales made to HCB was the semi-retailer level.

GYB noted that in both the original investigation and the 1994 review, a representative number of semi-retailers was chosen on which to base normal values. These were its 12 largest semi-retailer customers. The review team considered that it was appropriate that sales to this particular group should once again be used as the basis for determining the normal values. As GYB has no relationship with these particular customers the review team was satisfied that these sales were at arm’s length.

Base Prices

The review team used GYB’s free-into-store invoice prices to the 12 largest semi-retailers as base prices for its normal value calculations. Due to the fact that there had been price changes over this period, quarterly weighted average prices for each battery were calculated. Table 3.5 below shows the range of weighted average _____ base prices over the period.

Adjustments

Physical Characteristics

As was the case in 1994, the Ministry holds the view that any adjustment for physical difference between an export model and the equivalent domestic model should relate only to differences in materials, that is the difference in physical specifications. There are physical differences in plate configuration, weight of lead and number of polyethylene separators between the models of batteries exported to New Zealand and the models sold on the domestic market.

GYB provided evidence of the cost differences between export models and the chosen domestic equivalents arising from the physical differences identified and adjustments were calculated by the review team.

Terms and Conditions of Sale

Discounts and Rebates

GYB operates two volume rebate schemes for sales to its semi-retailers:

Volume Rebate1

This rebate, which is based on the value of purchases ranges from ___ to ___ percent.

Volume Rebate II (Cash Rebate)

Applied by discounting a percentage from cash prices, this rebate is applied only to cash transactions.

The review team verified payment amounts and purchase volumes for the selected semi-retailers from information supplied by GYB and calculated a percentage volume rebate amount for each battery model.

Inland Freight

GYB sells on an ____ basis, therefore inland freight is included in the company’s selling prices.

Evidence was provided which allowed the calculation of the percentage that total inland freight costs represented of total sales revenue. This rate was then applied as an adjustment to the selling price for each battery model sold on the domestic market.

Packaging

GYB provided evidence of costs for domestic packaging and the review team has made an adjustment for packaging costs.

Cost of Credit

An average collection period and average interest rate for domestic sales over the dumping review period was calculated from information supplied by GYB. The figure derived from this information enabled the review team to calculate a cost of credit adjustment for each battery model.

Taxation

VAT

There is a 10 percent value-added tax in Korea, which is applied to goods sold domestically. The invoiced selling prices used as the base prices for the determination of the normal values are exclusive of VAT, therefore no adjustment was required.

Duty Drawback

Customs duties that are levied on the material and components physically incorporated into the manufacture of the goods are refunded upon exportation of the finished goods to New Zealand, in accordance with the Customs Act of Korea. However, customs duties borne by goods sold to domestic customers are not refunded. As GYB’s domestic prices reflect customs duties paid on the imported raw material, an adjustment to these domestic prices is appropriate.

The review team evidenced the payment of duty drawbacks to GYB over the dumping review period and calculated the proportion of total export earnings that these payments represented. This proportion was then applied to the selling price of each battery model sold on the domestic market to derive an amount per battery. An adjustment reflecting these amounts has been made for each battery for the periods concerned.

Other Differences Affecting Price Comparability

Warranty and After Sales Service Costs

While GYB’s New Zealand customer assumes responsibility for warranty and after sales service, these costs are borne by GYB in Korea through its eight regional sales offices. GYB also maintains aftersales vehicles and aftersales staff to check and repair the batteries claimed to be deficient. GYB provided the review team with its warranty and after sales costs over the POI.

The percentage of total sales revenue represented by warranty and after sales service costs was calculated and then applied to the selling price for each battery model sold on the domestic market.

Salesmens’ Salaries and Direct Labour Costs

GYB operates separate sales departments for domestic and export sales and provided the review team with details of salesmen’s salaries and direct labour expenses for both departments. From the information supplied, the review team was satisfied that these differed between departments. An adjustment for these differences, but not overheads, has been allowed.

Advertising and Sales Promotion Expenses

GYB provided evidence to the review team showing that it had incurred promotional advertising expenses over the review period that were directly related to domestic sales of the batteries under review.

GYB provided the review team with evidence of the costs incurred, allowing the calculation of an adjustment for each battery model.

Warehousing Costs

GYB claimed an adjustment based on the fact that its domestic sales incur warehousing costs whereas the sales to export customers do not. It is the view of the Ministry that adjustments allowed are those directly related to the domestic sales under consideration and therefore the cost of warehousing has always been excluded, as it is part of the normal overhead costs of maintaining the domestic pipeline and would be incurred regardless of whether or not there is a sale of the particular goods under review. The review team therefore did not make an allowance for the domestic warehousing costs.

Other Costs

The review team was satisfied that no other allowances were necessary.

Total Adjustments

The adjustments outlined above have been applied to GYB’s ___ base prices on a model by model basis.

Normal Values

Weighted average normal values have been calculated by deducting the verified adjustments noted above from the base prices.

Indonesia

The Ministry sought to establish normal values at the ex-factory level by sending a questionnaire to PT Nipress, the only Indonesian exporter of subject goods into New Zealand over the POI. As explained in section 1.3 above, PT Nipress did not provide a timely response to the Ministry’s questionnaire. Therefore, normal values have not been determined in accordance with section 5 (1) or (2) of the Act above.

In certain circumstances, normal values can be established under sections 6(1) and (2) of the Act which state:

(1) Where the Secretary is satisfied that sufficient information has not been furnished or is not available to enable the export price of goods to be ascertained under section 4 of this Act, or the normal value of the goods to be ascertained under section 5 of this Act, the normal value or export price, as the case may be, shall be such amount as is determined by the Secretary having regard to all available information.

(2) For the purposes of subsection (1) of this section, the Secretary may disregard any information that the Secretary considers to be unreliable.

Article 6.8 of the Anti-Dumping Agreement also provides that:

In cases in which any interested party refuses access to, or otherwise does not provide necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available.

Accordingly, the normal values of lead acid automotive batteries from Indonesia have been based on the facts available. In the 1994 review, normal values were based on constructed normal values for the Indonesian producer PT Gemala. The normal values were constructed in accordance with then section 5(2)(c) and (d) of the Act.

The Ministry considers that the best information available on normal values in Indonesia for the present review, are the normal values established in the 1994 review, updated to reflect current values.

Calculation of Normal Values

In calculating normal values for the current review, the normal values established in the 1994 review (in $US) were converted to Indonesian Rupiah at the average $US to Rupiah exchange rate for the January – September 1993 period. The normal values for the 1994 review were established over this nine-month period. The 1993 $US to Rupiah exchange rate was sourced from the International Monetary Fund (IMF) International Financial Statistics, January 1994 edition.

The Indonesian Rupiah values of the category III battery models for which normal values were established in the 1994 review, were then uplifted by the percentage rate of increase in the Indonesian wholesale price index (WPI) from the 1993 calendar year to the 1998/9 June year. This has provided the review team with updated normal values (in Indonesian Rupiah) which reflect price movements at the ex-factory level. The review team considers this methodology in determining normal values of the goods to be in accordance with section 6(1) and (2) of the Act above.

Wholesale Price Index (WPI)

The WPI is designed to measure prices at an early stage of the distribution process (i.e. the first significant commercial transaction). In practice, the WPI covers a mix of agricultural and industrial goods at a variety of stages in production and distribution and includes imports and import duties (IMF International Financial Statistics, September 1999, pag