(1)

An anti-dumping duty (‘the extended duty’) currently applies on imports into the Union of essential bicycle parts originating in the People’s Republic of China (‘the PRC’) as a result of the extension by Regulation (EC) No 71/97.

(2)

Pursuant to Article 3 of Regulation (EC) No 71/97 an exemption scheme should be established in order to authorise the exemption of imports of essential bicycle parts which do not circumvent the anti-dumping duty (‘the Exemption Scheme’). That Exemption Scheme is governed by Article 13(4) of the basic Regulation. The Exemption Scheme exempts assemblers that are found not to be engaged in practices circumventing the anti-dumping measure on bicycles to import Chinese bicycle parts free of anti-dumping duty.

(3)

The legal framework for operating the Exemption Scheme was provided for in Commission Regulation (EC) No 88/97 (3) (‘the Exemption Regulation’) as amended by Regulation (EU) No 512/2013 (4), Implementing Regulation (EU) 2015/831 (5) and Implementing Regulation (EU) 2020/1296 (6).

(4)

As provided for in recital (44) of Regulation (EC) No 71/97, the Commission keeps the exemption system constantly under review so that it can be adapted where necessary to take account of the experience acquired through the operation of that system.

(5)

The purpose of this Commission Implementing Regulation amending the Exemption Regulation is to adapt and improve the latter based on the most recent experiences and developments that occurred subsequent to the latest amendment by Implementing Regulation (EU) 2020/1296.

(6)

In order to enhance legal certainty and transparency, the definition of ‘assembler’ should be added and other formal adjustments should be introduced to streamline the wording of the Exemption Regulation and update the references to other acts of the Union to their latest version, including the TARIC structure set out in Annex III.

(7)

Moreover, Annex I listing parties under examination pursuant to Article 6 of the exemption Regulation and Annex II listing parties exempted pursuant to Article 7 of the exemption Regulation should be updated. However, at the moment of the adoption of this Regulation the parties listed under TARIC additional code 8605, A576 and C009 are subject to re-assessment of the exemption authorisation granted to them respectively. The outcome of this re-assessment will be subject to a separate legal act.

(8)

Under the Exemption Scheme, as set out in Article 5(2) of the Exemption Regulation, the competent authorities of the Member States may make the suspension of payment of the extended duty subject to the provision of a guarantee of the extended duty. However, this provision is not compulsory and from the experience acquired through the implementation of the Exemption Scheme, the Commission notes that this creates potential problems of discrimination and gaps as regards enforcement of the provisions of the Exemption Regulation.

(9)

Against this background, the Commission considers it necessary to introduce a compulsory provision of a guarantee in case a suspension is granted ensuring equal treatment and proper enforcement.

(10)

Furthermore, when the applicant withdraws the request for exemption (‘the request’), or the request is subsequently held inadmissible or rejected, the extended duty subject to suspension may not be recovered. In particular, the effects of the withdrawal of the request are not specifically regulated in the Exemption Regulation as amended. The Commission considers that the compulsory provision of the guarantee should ensure the recovery of the extended duty also in cases of subsequent inadmissibility, rejection and withdrawal of the request.

(11)

Moreover, the Commission considers it appropriate to regulate expressly the effects of the withdrawal of the request. Therefore, in case of withdrawal, the request should be considered not to have been lodged and the suspension of the payment of the extended duty should be lifted. This approach would be similar to Article 5(8) of the basic Regulation.

(12)

In conjunction therewith, the Commission further considers it appropriate to underline the provisional effects of the suspension, compared to the longer-term effects of the exemption. To this end, references to exemption should be coupled or replaced by references to suspension, where needed.

(13)

Having reviewed the experience acquired in operating the Exemption Scheme, the Commission considers it necessary to introduce certain amendments to ensure its proper functioning and enforcement.

(14)

Firstly, the Commission notes that the Exemption Regulation provides for the possibility to apply again for the Exemption Scheme after 12 months from the rejection of a request or from the revocation of the exemption. This timeframe is not long enough to align the assembly operation with the conditions to benefit from the Exemption Scheme, notably those listed in Articles 4, 5 and 8.

(15)

Therefore, the Exemption Regulation should provide for a longer timeframe of at least 36 months before an applicant can re-submit a request for exemption. Moreover, the 36-month foreclosure period should apply also in respect to requests rejected at the admissibility stage.

(16)

Furthermore, the Commission notes that it is essential to have the possibility to verify that exempted parties comply with anti-circumvention rules with respect to imports of essential bicycle parts.

(17)

Therefore, the Exemption Regulation should oblige exempted parties or parties under examination to keep record of the essential bicycle parts delivered to them, and of the use made of those parts, for a period longer than the 3 years currently provided, corresponding to at least 5 years. This timeframe would encompass the duration of anti-circumvention investigations and other proceedings in different policy areas, such as customs or anti-fraud proceedings.

(18)

With respect to enforcement, the Commission notes that, when a review of the exempted party is initiated, the exemption remains in place during the review proceedings. In case the exemption is revoked, the extended duty which has not been paid during the review cannot be recovered.

(19)

Therefore, in such a case, the Exemption Regulation should specify that the imports of essential bicycle parts of the parties under review should be subject to registration during the period the review investigation is carried out, pending the results of that review, to ensure that, should the review result in a revocation of the exemption, measures may subsequently be applied against those imports from the date of such registration.

(20)

The Commission further notes that, when an exempted party is found to be misdeclaring the Chinese origin of products, this has a direct impact on the compliance with the obligations of exempted parties, notably the obligations under Article 8 of the Exemption Regulation.

(21)

Therefore, in such instances, the Exemption Scheme should provide for the initiation of a review of the exemption granted to a party found to have misdeclared the Chinese origin of imported bicycle parts.

(22)

In addition, repeated customs misdeclarations of any bicycle parts by an exempted party should result in the revocation of the exemption.

(23)

An exemption should also be revoked when an exempted party is found to engage in practices circumventing the extended duty, inter alia, by undermining the remedial effects of the duty by importing significant quantities. Article 14(c) of the Exemption Regulation implies that the remedial effects of the duty will be undermined when 300 or more units per type of essential bicycle parts are either declared for free circulation by a party or are delivered to it.

(24)

To ensure legal certainty and transparency, this threshold should be made explicit in the Exemption Regulation.

(25)

The Commission further considers it appropriate to clarify the interpretation of the threshold established in Article 14(c). In this respect, the threshold of less than 300 units per type of essential bicycle parts on a monthly basis should refer to the monthly average of units per type of essential bicycle parts during periods of 12 months starting from the date of entry into force of the relevant end-use authorisation. In any case, the total of one or more periods cannot be longer than the validity period of the relevant end-use authorisation.

(26)

In relation to end-use authorisations granted by the relevant authorities of the Member States, the Commission notes that an exempted party which does not reach the threshold for the application of the Exemption Scheme mentioned above would still benefit from the exemption granted, despite not meeting one of the requirements for the admissibility of the request.

(27)

Therefore, the Exemption Regulation should allow for the revocation of exemptions for parties whose imports are below the threshold indicated in Article 14(c) of the Exemption Regulation.

(28)

Moreover, a party under examination can under the current rules apply for an end-use authorisation and benefit from both statuses, despite the fact that the two tools are mutually exclusive.

(29)

Therefore, the category of parties eligible for an end-use authorisation should exclude both an exempted party and a party under examination under the Exemption Scheme.

(30)

The Commission further considers it useful to recall that Regulation (EU) No 512/2013 as referred to in recital (3) clarified that bicycle parts used for the assembly of bicycles fitted with an auxiliary motor are subject neither to the anti-dumping duty nor to the extended anti-dumping duty and therefore, the assembly operations of such bicycles remain outside the scope of Regulation (EC) No 71/97 and consequently of the Exemption Regulation.

(31)

For reasons of legal certainty and in accordance with the procedures regulating implementing acts, including in trade defence proceedings, the Exemption Regulation should state that the decision concluding the review investigation should be a Commission regulation adopted in accordance with the examination procedure referred to in Article 5 of Regulation (EU) No 182/2011 of the European Parliament and of the Council (7).

(32)

In accordance with the principle of sound administration, the amendments to the Exemption Regulation provided for in this Regulation are to apply as soon as possible to all new and to all pending investigations.

(33)

Regulation (EC) No 88/97 should therefore be amended accordingly.

(34)

The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of the basic Regulation,

(1)

in Article 1, the definitions of ‘extended duty’, ‘assembly operation’ and ‘exempted party’ are replaced by the following respectively:

(*1)  Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union (OJ L 176, 30.6.2016, p. 21).’ "

(2)

the definition of ‘assembler’ is added to Article 1 as follows:

(3)

the definition of ‘the remedial effect of measures’ is added to Article 1 as follows:

(4)

the title of Article 2 is replaced by the following:

(5)

Article 2(2) is replaced by the following:

(6)

the address indicated in Article 3(1) is replaced by the following:

(7)

Article 3(2) is replaced by the following:

(8)

Article 4(1)(b) is replaced by the following:

(9)

Article 4(1)(c) is replaced by the following:

(10)

Article 4(4) is replaced by the following:

(11)

Article 5 is replaced by the following:

(*2)  Regulation (EU) No 952/2013 of the European Parliament and of the Council of 9 October 2013 laying down the Union Customs Code (OJ L 269, 10.10.2013, p. 1).’;"

(12)

Article 6(2) is replaced by the following:

(13)

Article 7 is replaced by the following:

(14)

Article 8(1)(a) is replaced by the following:

(15)

Article 8(2) is replaced by the following:

(16)

Article 9 is replaced by the following:

(17)

Article 10 is replaced by the following:

(18)

Article 13 is replaced by the following:

(19)

the first paragraph of Article 14 is replaced by the following:

‘Where imports of essential bicycle parts are declared for free circulation by a person other than an exempted party or a party under examination pursuant to Article 5, as from the date of entry into force of the Reference Regulation, they shall be exempted from the application of the extended duty if declared in accordance with the TARIC structure in Annex III and subject to the conditions laid down in Article 254 of the Union Customs Code, which shall be applicable mutatis mutandis, where:’;

(20)

Article 14(b) is replaced by the following:

(21)

the first sentence of Article 14(c) is replaced by the following:

‘on a monthly basis, less than 300 units per type of essential bicycle parts are, on average, either declared for free circulation by a party or are delivered to it. The time limit to calculate that average will not exceed 12 months, whereby the first period starts from the date of entry into force of the concerned end-use authorisation, and will in no case exceed its period of validity.’;

(22)

Article 15(2) is replaced by the following:

(23)

in Article 15(3) the word ‘may’ is replaced by ‘shall’;

(24)

in Article 18 the word ‘Communities’ is replaced by ‘Union’;

(25)

Annexes I, II and III are replaced by Annexes I, II and III to this Regulation;

(26)

Annex IV is repealed.