As regards the serious prejudice, Article 6(3) of the ASCM, sets out a list of conditions under which it may arise. Amongst these, the investigation showed that the one mentioned under point c) of this Article is the provision relevant in the present investigation, i.e. "the effect of the subsidy is a significant price undercutting by the subsidised product as compared with the price of a like product of another Member in the same market or significant price suppression, price depression or lost sales in the same market"..

　

With regard to price undercutting and price depression an analysis has been carried out in the context of the injury assessment above. In view of the fact that the analysis above was made on the world shipbuilding market the assessment made is also valid in the context of serious prejudice.

　

Article 6.5 of the ASCM states that for the purpose of Article 6.3(c), price undercutting shall include any case in which such price undercutting has been demonstrated through a comparison of prices of the subsidized product with prices of a non-subsidized like product supplied to the same market. The comparison shall be made at the same level of trade and at comparable times, due account being taken of any other factor affecting price comparability. The price comparisons made above were made with regard to Community shipyards which had in some instances received operating aid. The impact of the aid, however, in view of it being granted proportionately to the contract price would have as an effect the decrease of the undercutting margin; in other words, any adjustment to reflect aid received would further increase the price undercutting established.

　

The investigation has also shown that, during the IP, for at least 24 vessels (seven containers, twelve ferries and five oil tankers) Community producers submitted offers to shipowners, but subsequently lost contracts to a Korean shipyard, due to a significantly lower Korean price offer. On average, these Korean contract prices were around 25% lower than the prices offered by European shipyards.

　

　

In some other cases, Community producers were discouraged even before the decision to submit an offer could be taken, so that they did therefore not participate in the bidding process.

　

On the basis of the above, there is evidence that, during the IP, the Community industry suffered adverse effects within the meaning of article 5 of the ASCM and Article 2(3) and Article 2(4) of the TBR.

　

In particular, Community industry has suffered injury within the meaning of Article 5(a) of the ASCM, namely, negative effects on market shares, capacity utilisation, profit, sales prices, direct employment and investments. Due to the nature of the product market it was shown that such injury was suffered with respect to the global shipbuilding market; the finding, therefore, can reasonably apply to the domestic Community market (although for the reasons explained above under C.2 it is not appropriate or indeed realistic to define a separate Community market).

Community industry has also suffered serious prejudice within the meaning of Article 5(c) of the ASCM, namely, significant price undercutting, price depression and lost sales.

　

By sector, considerable injury and serious prejudice was found in container ships and product and chemical tankers. Injury and serious prejudice was suffered also, albeit to a lesser extent in the bulk carrier and oil tanker sectors and passenger and RoRo ferries, while no injury or serious prejudice was found in the remaining sectors.

Finally, no threat of injury or of serious prejudice was established for cruise ships.