EUROPEAN COMMISSION

Brussels, 31.7.2018

SWD(2018) 392 final

COMMISSION STAFF WORKING DOCUMENT

Accompanying the document

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

36th Annual Report from the Commission to the European Parliament and the Council on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities (2017)

{COM(2018) 561 final}

COMMISSION STAFF WORKING DOCUMENT

Accompanying the document

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

36th Annual Report from the Commission to the European Parliament and the Council on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities (2017)

Table of Contents

Executive summary

1. Overview of the legislation

Anti-dumping and anti-subsidy

1.1.1.The international framework

1.1.2.The EU legislation

Safeguards

1.2.1.The international framework

1.2.2.The EU legislation

Anti-subsidy and unfair pricing instrument for airline services

2. Basic concepts

2.1.Anti-dumping and anti-subsidy

2.1.1.What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties?

2.1.2.Procedure

2.1.3.Review of measures

2.1.4.Judicial reviews

2.2.Safeguards

2.2.1.What are safeguard measures?

2.2.2.Procedure

3. General overview of anti-dumping and anti-subsidy investigations and measures

3.1.Measures in place

3.2.Review investigations

4. Overview of activities in 2017

4.1.New investigations

4.1.1.Initiations

4.1.2.Provisional measures

4.1.3.Definitive measures

4.1.4.Details on individual cases with application of new provisional or definitive duties

4.1.5.Investigations terminated without measures

4.1.6.Details on some individual cases of termination without measures

4.2.Review investigations

4.2.1.Expiry reviews

4.2.2.Interim reviews

4.2.3.“Other” reviews

4.2.4.New exporter reviews

4.2.5.Absorption investigations

4.2.6.Anti-circumvention investigations

4.3.Safeguard investigations

5. Enforcement of anti-dumping/countervailing measures

5.1.Follow-up of measures

5.2.Monitoring of undertakings

6. Refunds

7. TDI Modernisation

8. Amendment of the EU's AD and AS legislation in 2017

Report on market distortions in the Chinese economy

9.  Market economy status (MES)

10. Information and Communication activities / Bilateral contacts

10.1.Small and medium sized enterprises (SMEs)56

10.2.Bilateral contacts/information activities – EU economic operators including their key stakeholder associations and third countries56

11. Judicial review: decisions given by the Court of Justice and the General Court56

11.1.Overview of the judicial reviews in 2017.56

11.2.Cases pending56

11.3.New cases56

11.4.Judgments rendered by the General Court57

11.5.Judgments rendered by the Court of Justice63

12. Activities in the framework of the World Trade Organization (WTO)69

12.1.Dispute settlement in the field of anti-dumping, anti-subsidy and safeguards69

12.1.1.Overview of the WTO dispute settlement procedure69

12.1.2.Dispute settlement procedures against the Union70

12.2.Other WTO activities71

13. Conclusion72

LIST OF ANNEXES73

ANNEX A74

ANNEX B75

ANNEX C77

ANNEX D78

ANNEX E79

ANNEX F80

ANNEX G82

ANNEX H84

ANNEX I85

ANNEX J87

ANNEX K88

ANNEX L89

ANNEX M90

ANNEX N91

ANNEX O92

ANNEX P104

ANNEX R107

ANNEX S110

ANNEX T113

Executive summary

This report describes the European Union's anti-dumping, anti-subsidy and safeguard activities during 2017, pursuant to Article 23 of Regulation (EU) 2016/1036 (‘basic anti-dumping Regulation’) and Article 34 of Regulation (EU) 2016/1037 (‘basic anti-subsidy Regulation’).

The report, as in previous years, gives an overview of the EU legislation in force with regard to the trade defence instruments: anti-dumping, anti-subsidy and safeguards.

The report also summarises the developments in general policy. In this respect, two important legislative files merit particular attention. In December 2017, the European Parliament and the Council adopted a regulation introducing a new methodology for calculating dumping margins for countries in which significant distortions occur in the economy owing to state interference. It also introduces changes to strengthen the anti-subsidy legislation.

A breakthrough has also been achieved regarding the modernisation of the trade defence instruments, a file introduced by the Commission back in 2013. After a complex legislative process, the European Parliament and the Council reached in December 2017 a compromise, which paved the way for the entry into force of the new rules in June 2018.

It should be noted that the reporting provisions in Article 23 and Article 34 of the basic anti-dumping and basic anti-subsidy Regulations respectively were modified in December 2017 as part of substantive changes to those regulations (described in detail under Section 8 below). Given that none of the EUs anti-dumping and anti-subsidy proceedings in 2017 were affected by the changes, this report provides no information in that regard. Worth noting is that the Commission's reporting obligations have been further changed as from 8 June 2018 following the entry into force of the amendments of the basic Regulation modernising trade defence rules.

The report also gives an overview of all investigations together with the most essential information such as, for instance, the rate of individual duties imposed. Cases which merit special attention are treated in more detail. Consequently, the report covers the essential facts pertaining to the activity in 2017.

The detailed annexes give a complete overview of all case-related information for the past year. These are broken down into various categories e.g. initiations, imposition of measures etc. and are designed to complement the narrative of this report by providing details of all cases including references to publications.

With regard to anti-dumping and anti-subsidy, the year 2017 saw a slight decrease in the number of new cases initiated when compared to the previous year (11, as compared to 15 in 2016). However, while only two provisional measures were imposed compared to nine last year, the number of definitive measures imposed reached 12 compared to seven in 2016. Only two investigations were terminated without measures (compared to eight in 2016).

As regards review investigations initiated, there was a significant increase in number - from 16 in 2016 to 28 in 2017. These included nine expiry reviews, ten interim reviews, six new exporter reviews and three anti-circumvention investigations. During 2017, 19 expiry reviews were concluded with confirmation of the measures and one interim review was concluded with the measures being amended. One anti-circumvention investigation was concluded with an extension of duty.

In short, while the focus of the investigative work may shift somewhat from one year to another, the aforementioned figures show the overall importance and intensity of the Commission's trade defence activity. Moreover, the reality of trade defence work goes beyond a simple comparison of yearly figures. Indeed, some of the investigations such as on tyres and electric bikes from China are technically very complex and affect a wide array of economic interests.

As in previous years, this report provides an overview of the Court cases relating to the trade defence policy instruments. In 2017, the Court of Justice and the General Court rendered 29 judgments in total relating to the areas of anti-dumping or anti-subsidy.

The relevant activities in the framework of the World Trade Organisation (WTO) are also reported, including dispute settlement procedures initiated against the EU.

In general terms, therefore, the year 2017 has again been a very challenging as well as particularly intense year in the trade defence area.

As in previous years, the European Parliament's INTA Committee continued to be informed about major developments in the EU's trade defence activities.

The annexes to this report provide easy access to the case information in table form.

This report is also available to the general public under the following link.: http://ec.europa.eu/trade/policy/accessing-markets/trade-defence/  

1.Overview of the legislation

Anti-dumping and anti-subsidy

1.1.1.The international framework

On an international level, unfair trading practices such as dumping and the granting of subsidies were identified as a threat to open markets as early as 1947, when the first GATT agreement was signed. The agreement contained specific provisions allowing GATT members to take action against these practices if they caused material injury to the domestic industry of a GATT member. Today's globalised trade environment is characterized by quicker and cheaper communication and transportation, as well as the coexistence of different models of economic governance. In such a world, trade defence instruments are more relevant than ever. Indeed, trade distortions that underlie the application of these instruments are widespread.

Since the beginning of the GATT in 1947, considerable efforts have been made to harmonise the rules relating to trade defence instruments. During the last GATT round (the « Uruguay Round »), which led to the creation of the WTO and the detailed Anti-Dumping and Anti-Subsidy Agreements, much of the attention was focused on the procedural and material conditions to be fulfilled before measures can be adopted. The EU played an active role in the negotiation of these agreements, which are reflected in its own legislation. The EU applies its anti-dumping and anti-subsidy legislation with rigour and consistency. Unfortunately, many WTO Members lack this type of restraint, thereby affecting negatively also EU operators. The role that the EU plays as a prudent user has therefore also an exemplary function at WTO level. Against this backdrop, the EU also continues to play a leading active role in any efforts to update the WTO rulebook.

1.1.2.The EU legislation

The EU’s anti-dumping and anti-subsidy legislation was first enacted in 1968 and has since been modified several times. The current basic texts, which form the legal basis of anti-dumping and anti-subsidy investigations in the EU, entered into force in March 1996 and October 1997 respectively. These are in line with the Anti-Dumping and Anti-Subsidy Agreements adopted during the GATT/WTO negotiations. These texts were codified in 2016 to reflect changes previously made. The basic texts are:

–Regulation (EU) 2016/1036 of the European Parliament and of the Council on protection against dumped imports from countries not members of the European Union – Codified Version 1

–Regulation (EU) 2016/1037 of the European Parliament and of the Council on protection against subsidised imports from countries not members of the European Union – Codified Version. 2

These regulations will overall be referred to as the "basic Regulation(s)". Both regulations were recently modified by Regulation (EU) 2017/2321 of 12 December 2017 3 and Regulation (EU) 2018/825 of 30 May 2018. 4

The EU's legislation contains a number of provisions aimed at ensuring a balanced application of the EU’s Anti-Dumping and Anti-Subsidy rules on all interested parties. These provisions include the “EU interest test” and the “lesser duty rule”, which go beyond the Union's WTO obligations.

The EU interest test is a public interest clause and provides that measures can only be taken if they are not contrary to the overall interest of the EU. This requires an analysis of all the economic interests involved, including those of the EU industry and its suppliers, downstream users, consumers and traders of the product concerned.

The lesser duty rule requires the measures imposed by the EU to be lower than the dumping or subsidy margin, if such lower duty rate is sufficient to remove the injury suffered by the EU industry. Such a “no-injury” rate is usually determined by using the cost of production of the EU industry and a reasonable profit margin. In almost half of the cases the anti-dumping measures for individual exporting companies are set at the level of the injury margin instead of the higher dumping margin. The EU is one of the few investigating authorities on a world-wide level that applies the lesser duty rule in such a coherent and comprehensive way.

Safeguards

1.2.1.The international framework

The principle of liberalisation of imports was set under the GATT 1947 and strengthened under the 1994 WTO Agreements. As safeguard measures consist of the unilateral withdrawal or suspension of a tariff concession or of other trade liberalisation obligations formerly agreed, they have to be considered as an exception to this principle. Article XIX GATT 1994 and the WTO Agreement on Safeguards do not only impose strict conditions for the application of this "escape clause”, but also put in place a multilateral control mechanism under the WTO Committee on Safeguards.

Under WTO rules, safeguard action has to be viewed as a temporary defence measure that applies to all imports of the product covered by a measure, irrespective of origin. As regards non-WTO members, safeguard measures may be selective and apply to products originating in a specific country. WTO Accession Protocols may also provide for such selective safeguard mechanisms as was the case in China's Protocol of Accession, although the provision has now expired.

WTO safeguards should only be adopted after a comprehensive investigation which provides evidence of the existence of a) unforeseen developments leading to b) increased imports, c) the existence of a serious injury for EU producers and d) a causal link between the imports and the injury.

1.2.2.The EU legislation

The above-mentioned principles are all reflected in the relevant EU regulations, except for the “unforeseen development requirement” (which is not found explicitly in the EU legislation nor in the WTO Agreement on Safeguards but has been confirmed as a self-standing condition by WTO jurisprudence). Additionally, the adoption of measures in the EU requires an analysis of all interests concerned, i.e. the impact of the measures on producers, users and consumers. In other words, safeguard action can only be taken when it is in the EU’s interest to do so. The current EU safeguard instruments are covered by the following regulations:

- Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports (codification), 5  

- Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (recast), 6

- Regulation (EU) 2015/936 on common rules for imports of textile products from certain third countries not covered by bilateral agreements, protocols or other arrangements, or by other specific EU import rules (recast).

The first two regulations are referred to as the "basic safeguard Regulation(s)".

Anti-subsidy and unfair pricing instrument for airline services

Regulation No 868/2004 dealing with the effect of subsidisation and unfair pricing for air services from third countries was adopted by the EP and the Council in 2004. However, the Regulation has never been used in practice. Therefore, following public consultations in 2013 and a study the following year, the Commission presented, in June 2017, a proposal for a new regulation, aiming at addressing, in a more effective way, practices affecting competition on air transport market. The Commission proposal is now under discussion by the Council and the Parliament as co-legislators.

2.Basic concepts

2.1.Anti-dumping and anti-subsidy

2.1.1.What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties?

2.1.1.1.Dumping and subsidies

Dumping is traditionally defined as selling below cost of production, plus profit. The EU’s anti-dumping legislation (mirroring relevant WTO rules) defines anti-dumping as selling a product in the EU at a price below its “normal value”. This “normal value” is usually the actual sales price on the domestic market of the exporting country. Therefore, a country is selling at dumped prices if the prices in its home market are higher than its export prices (i.e. price discrimination). This price discrimination can have many different causes and is normally only possible if the domestic market of the exporting producer is in some way segregated from its overseas market, e.g. by the existence of high import duties into the country of origin or non-tariff barriers. As a result, exporters are shielded, at least to a certain extent, from international competition on their home market and can hence charge higher prices.

Another case in point is the existence of state-induced distortions of the cost of production through the main production factors, i.e. the cost of capital, raw materials, labour or energy, or other kinds of intervention into the operation of market forces, such as the lack of appropriate enforcement of bankruptcy procedures. These distortions have the potential to alter cost and price structures and therefore make it impossible to establish in a meaningful manner the normal value on the domestic market and justify the use of out-of-country benchmarks to establish the normal value.

Where sales in the domestic market are not representative, for instance, because they have only been made in small quantities, the normal value may then be established on another basis, such as the cost of production, plus profit. In the latter case, a company is selling at dumped prices if its export prices are below the cost of production, plus profit.

Subsidies can have similar effects to sales at dumped prices in that they allow exporters to operate from a distorted home base. Subsidies involve a direct support from a government or a government-directed private body which has the effect of conferring a benefit to producers or exporters (e.g. grants, tax and duty exemptions/reductions, preferential loans at below commercial rates, export promotion schemes, etc.). This allows exporters to sell at low prices in the EU. Only subsidies which are “specific”, i.e. targeted at individual companies or certain sectors of the economy, can be subject to trade defence measures.

Both anti-dumping and anti-subsidy measures are only second-best solutions in the absence of internationally agreed and enforced rules that ensure full market integration (for instance like in the EU internal market). Indeed, while such measures can re-establish a level playing field on the EU market, they leave the unfair competition unaddressed in the exporter's home country market and third country markets.

2.1.1.2.Material injury and causation

For measures to be taken against these unfair trading practices, it is not sufficient that companies are exporting their products to the EU at dumped or subsidised prices. Measures can only be taken if these exports cause material injury to EU producers.

Typical indicators of injury are that the dumped and/or subsidised import volumes increase over a certain period and import prices undercut the sales prices of the EU industry. As a consequence, the latter is forced to decrease production volumes and sales prices thus losing market shares, making losses or having to make employees redundant. In extreme cases, exporters may try to eliminate viable EU producers by using a predatory, below cost, pricing strategy. In any event, the injury analysis requires that all relevant factors be taken into account before deciding whether the EU industry is in fact suffering “material injury”.

A further condition for the imposition of measures is the need for “a causal link”: the injury must be caused by the dumping or the subsidy. This condition is often fulfilled when the injury to the EU industry coincides with the increase in dumped and subsidised imports. It is important to note that the dumped or subsidised imports do not have to be the only cause of the injury.

2.1.1.3.EU interest

Finally, it has to be established whether there are compelling reasons according to which measures would be contrary to the overall interest of the EU. In this respect, the interests of all relevant economic operators which might be affected by the outcome of the investigation must be taken into account. These interests typically include those of the EU industry and their suppliers, industrial users, consumers and traders of the product concerned and the analysis assesses the positive impact measures will have on some operators as opposed to the negative impact on others. Measures should not be imposed only if it can be clearly concluded that their negative impact would be disproportionate.

2.1.2.Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic Regulations. These rules guarantee a transparent, fair and objective proceeding by granting significant procedural rights to interested parties. In addition, the results of an investigation are published in the Official Journal of the European Union (hereafter “Official Journal”), and the EU is obliged to justify its decisions in this publication. Each case is decided on its merits and the Commission does not hesitate to terminate a case if the conditions to impose measures are not met.

Whereas each investigation is different depending on the products and countries involved, all cases follow the same procedural rules. However, certain preferential rules apply to candidate countries, such as Turkey. The rules relating to a new case (as opposed to a review investigation) are summarised below.

Initiation

A case normally starts with a sufficiently substantiated complaint from the EU industry manufacturing the same or a similar product to the one referred to in the complaint. Then, the Commission assesses whether the complaint contains sufficient evidence to allow for the initiation of the case. A case is opened by a notice of initiation published in the Official Journal. In this notice, all interested parties, including users, exporting country authorities in anti-subsidy investigations in particular and, where appropriate, consumer organisations are invited to participate and co-operate in the proceedings. Detailed questionnaires are sent to producers in the exporting countries, in anti-subsidy investigations also to the exporting country authorities, and in the EU to the producers, traders (in particular importers) and other interested parties, such as users. These questionnaires cover all different conditions to be fulfilled, i.e. dumping/subsidy, injury, causation and EU interest. The parties are also informed that they can request a hearing and ask for access to the non-confidential files which will help them defend their case.

The investigation up to the provisional measures

Following receipt of the replies to the questionnaire, on-spot verifications are carried out by Commission officials at the premises of the co-operating parties.

The main purpose of these visits is to verify whether the information given in the questionnaires is reliable. The verified information is subsequently used to calculate or determine the dumping margin and the injury factors, in particular the price undercutting margin and injury elimination level, as well as for the EU interest analysis. The respective calculations and analysis often involve the processing of thousands of transactions, the complex examination of production costs and the assessment of the economic situation of numerous economic operators.

The results of the calculations and other findings are summarised in a draft implementing act, on the basis of which it is decided whether to impose provisional measures, whether to continue the investigation without proposing duties or whether to terminate the proceedings. In either eventuality the decision is the Commission's responsibility.

The investigation up to the definitive stage

Following the publication in the Official Journal of a Commission regulation imposing provisional duties, interested parties, which so request, receive a full disclosure which allows them to review the Commission’s findings and to submit comments. Comments can also be made at a hearing. Any submissions and comments in reaction to provisional disclosure are taken into account in a second, so-called final disclosure.

After final disclosure, the Commission assesses the comments of interested parties and subsequently sends a draft implementing act to Member States. After receiving the opinion of the Member States via the Trade Defence Instruments Committee, the Commission decides whether or not to adopt definitive measures. At definitive stage, Member States can block the adoption of a draft implementing act by qualified majority. The Commission may also accept undertakings offered by exporters, which undertake to respect minimum prices. In the latter case, no duties are generally imposed on the companies from which undertakings are accepted. The Commission regulation imposing definitive duties/accepting undertakings, and deciding on the collection of the provisional duties, is published in the Official Journal.

As set out above, throughout the process and at various specific steps, the procedure - consisting e.g. of requests for information, hearings, access to the file and disclosure - ensures that the rights of defence of interested parties are fully respected in this quasi-judicial process. In this regard it is important to note that the interested parties can avail themselves of a Hearing Officer for trade proceedings. This official, independent from the investigating service, can hear the parties, verify that their procedural rights have been respected and issue recommendations to the investigating service.

If one or more of the conditions for imposing measures are not met, the Commission will decide to terminate a case without the imposition of measures. The same procedure (disclosure, comments, hearing, draft implementing act) as described above applies. The termination of the case is made by a Commission Decision after consultation of the Member States.

Timing

The procedure described above is subject to strict statutory time limits. A decision to impose provisional duties must be taken within nine months of the initiation and the total duration of an investigation is limited to fifteen months in anti-dumping cases and to thirteen months in anti-subsidy cases. This leads to significant time constraints, taking into account, inter alia, internal consultations and the necessity to publish regulations and decisions in all EU languages at the same time.

Anti-dumping or countervailing measures will normally remain in force for five years, and may consist of duties or undertakings concluded with exporters. Measures are taken on a countrywide basis, but individual treatment, i.e. the application of a company-specific duty, can be granted to exporters which have co-operated throughout the investigation. During the five-year period, interested parties may, under certain conditions, request a review of measures or the refund of anti-dumping duties paid. Measures may also be suspended for a certain period, subject to criteria set out in the basic Regulations.

2.1.3.Review of measures

The basic Regulations provide for administrative reviews and distinguish between interim reviews, newcomer reviews and expiry reviews.

The expiry review can be initiated at the end of the five year life-time of the measures. Initiation of such a review requires a request by the EU industry evidencing that the expiry of the measures would lead to the likelihood of a continuation or recurrence of dumping and injury. Expiry reviews are subject to strict deadlines, i.e. they should normally be concluded within 12 months of the date of initiation of the review, but in all cases not later than within 15 months.

During the five year life-time of measures, the Commission may conduct an interim review. In such procedure, the Commission will consider whether the circumstances with regard to subsidy/dumping and/or injury have changed significantly or whether existing measures are achieving the intended results in removing the injury. The deadline for concluding an interim review is set at 12 months, but no later than 15 months.

Finally, the basic Regulations provide that a review shall be carried out to determine individual margins for new exporters in the exporting country concerned. The deadline for conclusion of newcomer reviews is nine months.

Last but not least, anti-absorption and anti-circumvention investigations need to be mentioned here as they are special types of reviews.

During these reviews, the main procedural rules outlined in chapter 2.1.2 are also applicable. However, in reviews there is no provisional stage.

2.1.4.Judicial reviews

The procedural rights of the parties, including hearings and access to non-confidential files, as well as the substantive rules, are to be respected in the course of the proceeding, and a system of judicial review is in place to ensure their correct implementation. The competence to review anti-dumping and anti-subsidy cases lies with the General Court ('GC') and the Court of Justice ('CJ') in Luxembourg. Furthermore, WTO members may have recourse to the WTO dispute settlement mechanism.

2.2.Safeguards

2.2.1.What are safeguard measures?

Safeguard measures allow temporary protection against the adverse effects of import surges. Under the EU legislation 7 implementing the WTO Safeguards Agreement, they can be applied under the following conditions: if, as a result of unforeseen developments, a product is being imported into the EU in such increased quantities and/or on such terms and conditions as to cause, or threaten to cause, serious injury to EU producers of like or directly competitive products. Safeguard measures may only be imposed to the extent and for such time as may be necessary to prevent or remedy the injury.

2.2.2.Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic safeguard Regulations. These rules guarantee a transparent, fair and objective proceeding. In addition, the results of safeguard investigations are published in the Official Journal, and the EU is obliged to justify its decisions in this publication.

Initiation

One or more Member States should inform the Commission if trends in imports of a certain product appear to call for safeguard measures. This information must contain evidence available, of the following criteria: a) the volume of imports, b) the price of imports, c) trends in certain economic factors of the Union industry such as production, capacity utilisation, stocks, sales, market share, prices, profits, employment, etc. Where there is a threat of serious injury, the Commission must also examine whether it is clearly foreseeable that a particular situation is likely to develop into actual serious injury.

This information is passed on by the Commission to all other Member States. If there is sufficient evidence to justify an investigation, the Commission publishes a notice of initiation in the Official Journal within one month of receipt of the information and commences the investigation, acting in co-operation with the Member States.

Provisional measures

Provisional measures may be imposed at any stage of the investigation. They shall be applied in critical circumstances where delay would cause damage which would be difficult to repair, making immediate action necessary, and where a preliminary determination provides clear evidence that increased imports have caused, or are threatening to cause, serious injury.

The duration of the provisional measures can, however, not exceed 200 days (i.e. slightly more than six months).

Definitive measures

If, at the end of the investigation, the Commission considers that definitive safeguard measures are necessary, it will take the necessary decisions no later than nine months from the initiation of the investigation, at which stage the results of the investigation are published in the Official Journal. In exceptional circumstances, this time limit may be extended by a further maximum period of two months.

Safeguard measures shall be applied only to the extent to prevent or remedy serious injury, thereby maintaining as far as possible traditional trade flows. As to the form of the measures, the EU will choose the measures most suitable in order to achieve these objectives. These measures could consist of quantitative quotas, tariff quotas, duties, etc.

Duration and review of the measures

The duration of safeguard measures must be limited to the period of time necessary to prevent or remedy serious injury and to facilitate adjustments on the part of the EU producers, but should not exceed four years, including the duration of the provisional measures, if any. Under certain circumstances, extensions may be necessary but the total period of application of safeguard measures should not exceed eight years (including provisional measures).

If the duration of the measures exceeds one year, the measures must be progressively liberalised at regular intervals during the period of application. If the duration of the measures exceeds three years, the Commission will examine, mid-way through their duration, the appropriateness of further liberalisation and necessity for their continued application. This will be done either on the Commission's own initiative or at the request of a Member State. Where the Commission considers that the application of the measure is still necessary, it shall inform the Member States accordingly. Where the Commission considers that any surveillance or safeguard measure should be revoked or amended, it shall do so after having received the approval of the Member States.

3.General overview of anti-dumping and anti-subsidy investigations and measures

The number of new investigations initiated in 2017 somewhat decreased compared to the previous year, with 11 initiations compared to 15. In addition, however, the Commission reopened two cases to implement findings following judicial review (see "Other reviews"). The number of definitive measures imposed in 2017 increased substantially when compared to 2016 (12 as compared to seven). Two provisional measures were imposed. In other words, in 2017 an important number of investigations have come to a conclusion. Below are details on new investigations and review investigations.

3.1.Measures in place

At the end of 2017, the EU had 97 definitive anti-dumping measures (which were extended 8 in 29 cases) and 13 countervailing measures in force (which were extended in three cases). 9  

The anti-dumping measures covered 67 products and 17 countries (see Annex O); the countervailing measures covered 13 products and four countries (see Annex P). The large majority of measures was in the form of duties. However, in a number of cases, undertakings were in place.

Of the 97 anti-dumping measures and 29 extensions in force at the end of 2017, the main countries affected were China (85), Russia (nine), India (five), Indonesia and USA (four each), Republic of Korea (three), Belarus, Taiwan, Thailand, Malaysia and Ukraine (two each), Argentina, Brazil, Iran, Japan, South Africa and Turkey (one each).

Of the 13 anti-subsidy measures and three extensions in place, half concerned imports from China (eight) whereas India was subject to five measures, USA to two measures and Turkey to one measure.

Information about the number of measures becomes more meaningful if it is complemented by the total trade volume of the products subject to measures. It should be noted that in 2017, 0.31% 10 of total imports into the EU was affected by anti-dumping or anti-subsidy measures. It should also be noted that the trade volume can vary considerably from one measure to another. This is not, however, a criterion which is taken into account when assessing cases – all decisions on cases are exclusively based on the compliance with substantive and procedural conditions. Although comprehensive data are not available, the expiry review investigations show in many cases that the imposition of measures leads to a significant reduction of the imports of the product concerned.

3.2.Review investigations

Anti-dumping measures, including price undertakings, may be subject, under the basic anti-dumping Regulation, to five different types of reviews: expiry reviews (Article 11(2)), interim reviews (Article 11(3)), newcomer investigations (Article 11(4)), absorption investigations (Article 12) and anti-circumvention investigations (Article 13).

Also anti-subsidy measures may be subject, under the basic anti-subsidy Regulation, to five different types of reviews: expiry reviews (Article 18), interim reviews (Article 19), absorption investigations (Article 19(3)), accelerated reviews (Article 20) and anti-circumvention investigations (Article 23).

These reviews continue to represent a major part of the work of the Commission's TDI services. In the period from 2013 to 2017, a total of 135 review investigations were initiated. These review investigations represented 64% of all investigations initiated in that period.

In 2017, 28 reviews were initiated. These comprised nine expiry reviews, ten interim reviews, six new exporter reviews and three anti-circumvention investigations.

An overview of the review investigations in 2017 can be found in Annexes F to K. Table 1 below provides statistical information for the years 2013 – 2017.

TABLE 1

Reviews of anti-dumping and anti-subsidy investigations

during the period 1 January 2013 - 31 December 2017 11

4.Overview of activities in 2017

4.1.New investigations

4.1.1.Initiations

In 2017, nine new anti-dumping investigations and two new anti-subsidy investigations were initiated. The anti-dumping investigations involved five different products (most of which were related to chemicals and allied sectors) from seven different countries. Details of these investigations are given in Annex A. The country most affected by the anti-dumping investigations was China, with three investigations. The anti-subsidy investigations also concerned China. The most noteworthy cases against imports from China were related to transport equipment, with one case on tyres and one case on electric bikes. No safeguard investigation was initiated in 2017.

In the five-year period from 2013 to 2017, 65 new investigations were initiated on imports from 19 countries. The sectors concerned by the investigations were: 'iron and steel' – 29 investigations, 'chemical and allied industries' – 15 investigations, 'other metal products' – five investigations, 'textiles and allied industries' – three investigations, the 'mechanical engineering' sector and the 'wood and paper' sector – one investigation each, and finally 'other products' – 11 investigations. A breakdown of the product sectors is available in Annex B(A).

The breakdown of the countries concerned by initiations during the period from 2013 to 2017 include China – 29 investigations, India – six, Russia – five, Turkey – four, Brazil and Korea – three each, Taiwan and Ukraine – two each, Belarus, Bosnia and Herzegovina, Egypt, Iran, Georgia, Indonesia, Japan, Mexico, Serbia, USA and Vietnam – one each. A table showing all the investigations initiated over the last five years broken down by country of export is available at Annex B(B).

Table 2 below provides statistical information on the developments regarding new investigations for the years 2013 – 2017.

TABLE 2

Evolution of new anti-dumping and anti-subsidy investigations

during the period 1 January 2013 - 31 December 2017 13

The list of cases initiated in 2017 can be found below, together with the names of the complainants. More information can be obtained from the Official Journal publications to which reference is given in Annex A.

4.1.2.Provisional measures

In 2017, provisional duties were imposed in two anti-dumping investigations. No provisional measures were imposed in anti-subsidy investigations. It has to be noted that the latter run often in parallel to anti-dumping investigations, where the provisional anti-dumping duty already provides some relief to the Union industry.

The list of cases where provisional measures were imposed during 2017 can be found below, together with the measures imposed. More information can be obtained from the Official Journal publications to which reference is given in Annex C.

4.1.3.Definitive measures

During 2017, definitive duties were imposed in 11 anti-dumping investigations and in one anti-subsidy investigation. The list of cases where definitive measures were imposed during 2017 can be found below, together with the measure(s) imposed. More information can be obtained from the Official Journal to which reference is given in Annex D.

4.1.4.Details on individual cases with application of new provisional or definitive duties

Hot-rolled flat products from China (AD)

In February 2016, the Commission initiated an anti-dumping investigation on imports of certain hot-rolled flat products of iron, non-alloy or other alloy originating in China, following a complaint lodged by the European Steel Association (Eurofer) on behalf of producers representing more than 90 % of the total Union production of the product concerned. In October 2016 the Commission imposed a provisional anti-dumping duty on the product. In the further course of 2016, the Commission also initiated the following two investigations on the basis of a complaint lodged by Eurofer: 1) an anti-subsidy investigation on imports of the same product originating in China 17 ; 2) an anti-dumping investigation on imports of the same product originating in Brazil, Iran, Russia, Serbia and Ukraine (see below).

Dumping

As no market economy treatment claim was introduced, the normal value for China was determined on the basis of the price or constructed value in an analogue country, namely the US, in accordance with Article 2(7)(a) of the basic Regulation. The Commission then compared the normal value and the export price (adjusted to ensure fair comparison). The definitive dumping margins are as follows: a) Bengang Steel Plates Co., Ltd: 97,3%; b) Hesteel Group Co., Ltd: 95,5 %; c) Jiangsu Shagang Group: 106,9 %, d) Other cooperating companies: 100,5 %; e) All other companies: 106,9 %.

Threat of Injury and causation

On the basis of the analysis of the relevant economic parameters 18 the Commission concluded that the Union industry was in a weak situation at the end of the investigation period but not to the extent that the Union industry has suffered material injury. In these circumstances, the Commission then examined whether a threat of material injury was present. While the Union industry was recovering during 2014 and the first two quarters of 2015, almost all injury indicators started to fall dramatically during the second half of 2015. This negative trend continued during the first half of 2016. As a result, all factors assessed, in particular the significant rate of increase of dumped imports in 2015 at further decreasing prices, the huge excess capacity in China and the negative developments in profitability of the Union industry pointed to the conclusion that there was a threat of a clearly foreseeable and imminent injury to the Union industry at the end of the investigation period.

Regarding the causality analysis, it was found that despite the relatively small market share of the Chinese imports, a causal link existed between the Chinese dumped imports and the threat of material injury of the Union industry. The Commission distinguished and separated the effects of all known factors on the situation of the Union industry from the injurious effects of the dumped imports. The other identified factors 19 were not found to break the causal link between the threat of material injury and the Chinese dumped imports.

Union interest and definitive measures

The Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case. The determination of the Union interest was based on an appreciation of all the various interests involved, including those of the Union industry, importers, and users.

The Union industry underwent already significant restructuring in the (recent) past. If no measures were imposed, the threat of imminent injury at the end of the investigation period was likely to materialise. Some Union producers might have to close down/reduce their hot-rolled flat steel products activities, dismiss employees and leave many Union users with limited sources of supply.

As regards the interest of unrelated importers and users, the Commission concluded that the imposition of measures would have only a limited impact. More specifically, the prices, their profitability and the employment in the user's industry would not be disproportionately affected. Hence, the imposition of measures at the proposed level would only have a limited impact on the prices of the supply chain and the performance of users. The level of measures would lead to a level playing field but still allow for imports from the country concerned, at fair prices.

Weighing and balancing the strong interests of an important Union industry to be protected against unfair practices, on the one hand, and the limited likely effects of measures on unrelated importers and users, which continue to benefit from a wide array of supply in the Union, the Commission concluded that there were no compelling reasons not to impose measures on imports from China.

Hot-rolled flat products from Brazil, Iran, Russia and Ukraine (AD)

In July 2016, the Commission initiated an anti-dumping investigation with regard to imports into the Union of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Brazil, Iran, Russia, Serbia and Ukraine, following a complaint lodged by the European Steel Association (Eurofer) on behalf of more than 90 % of the total Union production of the product concerned. In February 2016, the Commission already initiated an anti-dumping investigation on imports of the same product originating in China on the basis of a complaint lodged by Eurofer.

Registration of imports

The complainant submitted a request for registration of imports of the product concerned. Accordingly, on 6 January 2017, the Commission made the imports originating in Brazil and Russia (the only countries for which the conditions for registration were fulfilled) subject to registration as of 6 January 2017 onwards.

Dumping

The normal value was determined on the basis of the sales done on the domestic market or when there were no or insufficient sales of a product type of the like product in the ordinary course of trade or where a product type was not sold in representative quantities on the domestic market, the Commission constructed the normal value in accordance with the provisions of the basic Regulation. Then the Commission compared the normal value and the export price of the exporting producers on an ex-works basis. On this basis the following dumping margins were calculated: a) Brazil: between 16,3% and 73%; b) Iran: 17,9%; c) Russia: between 5,3% and 33%; d) Serbia: 38,7%; e) Ukraine: 19,4%.

Injury and causation

The injurious effect of imports from Brazil, Iran, Russia and Ukraine was examined cumulatively for the purposes of the injury determination. By contrast, it was found that the Serbian exports to the Union were negligible. In addition, the analysis of the price setting, combined with the negligible volume, suggested that the Serbian exporting producer is rather a price follower than a price setter for the product concerned. Therefore, the Commission concluded that the imports from Serbia should not be cumulatively assessed with the imports from the four other countries. In addition and as a consequence of the finding that imports from Serbia were negligible, protective measures were considered unnecessary. Thus, the proceeding was terminated with regard to the imports from Serbia.

Regarding the injury analysis related to the remaining four countries concerned (Brazil, Iran, Russia and Ukraine), their imports increased significantly during the period considered, while the average unit price of the dumped imports decreased by 27%. At the same time, the Union industry's economic indicators declined. These developments coincided in time with an increase of consumption and increasing dumped imports in the Union market, which highlighted the deterioration of the competitive position of the Union steel producers. Despite the concrete actions by the Union industry to improve efficiency, its economic situation deteriorated significantly: losses increased during the investigation period and despite a 5% increase in the Union consumption, the sales volumes of the Union industry decreased, its market share went down by more than 8%, sales unit prices dropped by more than 20%, and production decreased by 2%. As a consequence, also the other injury indicators developed negatively. The Commission concluded that the Union industry suffered material injury.

The Commission then examined whether the injury to the Union industry was caused by the dumped imports from Brazil, Iran, Russia and Ukraine and also whether other known factors could at the same time have injured the Union industry. The Commission ensured that any possible injury caused by other factors was not attributed to the dumped imports. It was found that the increasing volumes and the sharp decrease in the prices of imports from the countries concerned caused injury to the Union industry. This is because, faced with the aggressive pricing strategy of the exporting producers, Union producers had no choice but to also decrease prices and to sell at a loss (or otherwise lose even more sales) which impacted their profitability. The other factors considered by the Commission for the assessment of the causality were: the economic crisis, Union producers not being sufficiently competitive, imports from third countries, the export sales performance of the Union producers, the "overcapacity" of the European steel industry, and the correlation between the prices in the Union market, on the one hand, and raw material and the product concerned prices worldwide, on the other hand. The Commission concluded that these factors combined or separately could not break the causal link between dumped imports and the material injury found to the Union industry and that the dumped imports from the countries concerned remained the main cause of injury 20 .

With regard to the imports from China 21 , the Commission concluded that it is likely that the imports from China have contributed to the material injury suffered by the Union industry. However, it did not break the causal link between the injury caused to the Union industry and the dumped imports of the four other countries because of their significant volumes and comparatively low prices.

Union interest and definitive measures

The specific circumstances of this case (steep increase of prices of the product concerned and a shortage on the market of certain product types) explain the Commission's decision to, exceptionally, investigate post-IP developments in the context of its assessment of Union interest.

The most important consumption/uses of the product concerned relate to the following segments: the steel tube industry (32 %), construction (20 %), automotive (15 %) and mechanical engineering (15%). Given that the profitability of the users in the steel tube businesses was modest during and after the investigation period the Commission concluded that there was a considerable risk that duties in the form of ad-valorem duties would drive the steel tube sector into losses while the impact on other sectors would be less significant. After a careful analysis the Commission considered it in line with the Union interest to change the form of the measures to adequately strike the balance between the interests of Union producers and users in this particular case. Therefore, the Commission decided to impose ad valorem duties, capped by a Minimum Import Price (MIP) which takes into account the rise in raw material prices after the investigation period. In view of the dumping margins found and the resulting injury, definitive anti-dumping duties ranging between 17,6% and 96,5% were imposed. The MIP was fixed at 472,27euro/tonne. The anti-dumping proceeding concerning imports into the Union of the product concerned originating in Serbia was terminated as these imports were considered negligible.

As all the necessary conditions were not met, the Commission Implementing Regulation (EU) 2017/5 of 5 January 2017 making imports of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in Russia and Brazil subject to registration was definitively repealed without the retroactive collection of duties.

Lightweight thermal paper from the Republic of Korea (AD)

The investigation was initiated in February 2016 following a complaint lodged by the European Thermal Paper Association (ETPA) on behalf of producers representing more than 25% of the total Union production of certain lightweight thermal paper (LWTP). In November 2016, the Commission imposed a provisional anti-dumping duty on imports originating in the Republic of Korea.

Dumping

For one of the exporting producers the normal value was based on its domestic sales while for the second one the normal value was calculated on the basis of its cost of production as there were product types with no or unrepresentative domestic sales. The dumping margin established for the exporting producers was a weighted average of the dumping margins established for the sales of different types of rolls. The weighting was based on the exporting producer's Union sales volume to related and unrelated customers during the investigation period. The definitive weighted average dumping margin was 10,3 %. The residual dumping margin was set at the same level.

Injury and causation

The Union producers experienced a deterioration of their economic situation that coincided in time with the surge of imports from the Republic of Korea. The Union industry sales volume on the Union market remained relatively stable, but since this occurred in the context of a significant increase in the Union consumption, the Union producers' market share was actually declining. The volume of imports from the country concerned during the investigation period was well above negligible levels and their market share increased from 0,7 % in 2012 to 13,6 % in the investigation period. The Commission concluded that over the period considered, the Union industry's injury was material. Due to the drop in selling prices, concrete actions to improve efficiency and a tight grip on costs could not prevent Union producers from becoming loss-making in the investigation period.

The Commission examined and concluded that the dumped imports from the country concerned caused material injury to the Union industry. The effects of all known factors on the situation of the Union industry were distinguished and separated from the injurious effects of the dumped imports. The other identified factors such as the export performance of Union producers, the anti-dumping duties in the USA, higher costs and a series of rationalisation processes were carefully analysed. The Commission concluded that the material injury to the Union industry was caused by the dumped imports from the country concerned and the other factors considered individually or collectively, did not break the causal link.

Union interest and definitive measures

The Government of Korea claimed that measures are not in the Union interest on the grounds that many European converters and importers expressed their objections at the hearing in September 2016 to imposition of measures. However, the investigation did not find that there is a majority of converters and importers in the Union against measures. Hansol Group (an exporting producer) claimed that the Union downstream industries are almost unanimously against the imposition of measures and that at least 36 unrelated converters and end-users expressed their strong opposition. The claim was rejected as many Union downstream industries remained silent during the investigation and no downstream industry made any representation following provisional or definitive disclosure. The investigation also revealed that in terms of purchase volume of the product concerned the converters that came forward and expressed to be in favour of measures represented a larger consumption of the product concerned than the ones that did not express views or were opposing the measures. The Hansol Group claimed also that the measures are against the interest of European businesses because the Union market can be defined as a "duopoly/oligopoly" and competition should be promoted. The claim was rejected as the mere existence of a few producers in the Union is irrelevant, there is no evidence on file of any anti-competitive practices and there are several sources of supply inside and outside the Union.

Therefore, after analysis of the different interests at stake, the Commission concluded that the impact of anti-dumping duties on the parties opposing measures did not outweigh the positive effect of measures to the Union industry. Hence, there were no compelling reasons that it was not in the Union interest to impose measures on imports of the concerned product originating in the Republic of Korea.

The Commission concluded that it would be more appropriate that the anti-dumping duty should be imposed as a fixed amount per tonne instead of an ad valorem duty as provisionally imposed. The definitive fixed anti-dumping duty was 104,46 euro per tonne.

Rebars from Belarus (AD)

In March 2016, the Commission initiated an investigation following a complaint lodged by the European Steel Association (EUROFER) on behalf of producers representing more than 25 % of the total Union production of rebars. In December 2016, the Commission imposed a provisional anti-dumping duty on imports of certain concrete reinforcement bars and rods originating in the Republic of Belarus

Sampling

It was considered necessary to sample Union producers and unrelated importers. The first sample consisted of five Union producers accounting for 22,4 % of the total Union production of the product concerned. The sampled companies are located in France, Germany, Italy, Poland and Spain, covering a broad geographic variety. With regard to unrelated importers, a sample of three operators was selected on the basis of the largest volume of imports into the Union representing 80 % of the unrelated imports of the product concerned originating in Belarus.

Dumping

According to Article 2(7)(a) of the basic anti-dumping Regulation, Belarus is not considered as a market-economy country. Therefore, the normal value in respect of Belarusian exports to the Union was determined on the basis of data obtained from a producer in a market-economy third country. The Commission concluded that the USA is an appropriate analogue country for this investigation. The only known Belarusian manufacturer cooperated with the investigation and replied to the questionnaire.

The Commission compared the normal value and the export price of the exporting producer on an ex-works basis. The resulting level of definitive dumping margin is 58,4%.

Injury and causation

Import volumes from Belarus almost tripled over the investigation period for injury and their market share increased from 1,8 % in 2012 to 5 % in 2015. During the investigation period the prices of imports from Belarus were lower than prices of the Union producers and average prices of imports from any of the other major third countries present on the Union market.

The Commission considered that the data of one of the sampled Union producers is not reliable for the purpose of the injury analysis as a result of price-fixing (the product concerned was subject to an antitrust investigation on the Italian market). As a result, the Commission excluded the data pertaining to the Italian market from its investigation.

The investigation showed that the Union industry did not benefit from the increase in consumption, but to the contrary, suffered a drop in its sales volumes and market share. At the same time the volume of Belarusian imports and their market share increased rapidly. The Union production volume also decreased. The costs of the Union industry decreased by 20% which however was less than the decrease in prices during the same period. As a result, over the period considered profitability of the Union industry deteriorated. These trends correlate with the highest volumes of the imports from Belarus and its lowest price level. On this basis it was concluded that the Union industry suffered material injury caused by the dumped imports from Belarus within the meaning of the basic Regulation.

The Commission has found that the only other factor that may have had an impact on the situation of the Union industry was imports from third countries. However, the Commission concluded that those imports could not break the causal link between Belarusian dumped imports and the material injury found to the Union industry because the individual market shares of the other third countries increased only marginally with the exception of Ukraine where the increase in market share was substantial in relative terms but in absolute terms remained negligible. In addition, the prices of imports from third countries other than Belarus were on average always higher than the prices of the Union industry. The only exporting country with lower average prices than the Union industry was Belarus. Therefore, the Commission concluded that the dumped imports from Belarus remained the main cause of injury.

Union interest and definitive measures

The Commission concluded that there are no compelling reasons against the imposition of measures on imports of the product concerned from Belarus. Any potential negative effects on the unrelated users and importers are mitigated by the availability of alternative sources of supply. When considering the overall impact of the anti-dumping measures on the Union market, the positive effects, in particular on the Union industry, appeared to outweigh the potential negative impacts on the other interest groups.

Therefore, a definitive anti-dumping duty of 10,6% was imposed.

Hot-rolled flat products from China (AS)

In May 2016, the Commission initiated an anti-subsidy investigation with regard to imports into the Union of certain hot-rolled flat products of iron, non-alloy or other alloy steel originating in the China. The Commission initiated the investigation following a complaint lodged by the European Steel Association (Eurofer) on behalf of Union producers representing more than 90 % of the total Union production. In February 2016 the Commission had already initiated an anti-dumping investigation on imports of the same product originating in China (the parallel anti-dumping investigation) and in April 2017 a definitive anti-dumping duty was imposed. In July 2016, the Commission also initiated , an anti-dumping investigation on imports of the same product originating in Brazil, Iran, Russia, Serbia and Ukraine.

Sampling

The final sample of Union producers consisted of six operators located in five different Member States. It accounted for over 45 % of Union production. The Commission selected a sample of four groups of exporting producers on the basis of the largest representative volume of exports to the Union, which could reasonably be investigated within the time available. The sampled companies represented 68% of the total imports of the product concerned to the Union.

Subsidisation

The following subsidies and subsidy programmes were investigated: 1) Preferential policy loans, credit lines, other financing, and guarantees; 2) De facto guarantee on the continuity of operations for companies in the hot rolled flat steel industry that face difficulties to repay loans; 3) Grant Programmes; 4) Direct Tax Exemption and Reduction programmes; 5) Indirect Tax and Import Tariff Programmes; 6) Government provision of goods and services for less than adequate remuneration; 7) "Foreign Trade Transformation and Upgrading Demonstration Bases" and "Common Service Platforms"; 8) Subsidisation of the provision of hot-rolled flat products to the EU during the investigation period. Given the partial non-cooperation from the Government of China and the sampled exporting producers the Commission had to use the best facts available in relation to Government preferential lending and grants.

The investigation showed that the following subsidies and subsidy programmes were countervailable subsidies: 1) preferential lending: all sampled exporting producers benefited from it during the investigation period; 2) land provision and acquisition in China: the situation is non-transparent and the prices are arbitrarily set by the authorities. There is no functioning market for land and the use of an external benchmark demonstrates that the amount paid for land-use rights by the sampled exporting producers was well below the normal market rate; 3) Enterprise Income Tax (EIT) privileges: allows companies to deduct the income earned from manufacturing from its taxable income; 4) EIT offset for research and development expenses: entitles companies to preferential tax treatment for their R&D activities in certain high technology priority areas determined by the State and when certain thresholds for R&D spending are met; 5) Land use tax: two of the sampled companies benefited from rebates or exemptions, even though they did not fall under any of the exempted categories; 6) VAT exemptions and import tariff rebates: equipment imported in order to develop domestic or foreign investment projects in line with the policy of encouraging foreign or domestic investment projects may be exempted from payment of the VAT and/or import duty. Some of the sampled companies were found to benefit from these exemptions; 7) Tax exemption for policy-based relocation: some sampled companies benefited from this scheme as they relocated for environmental reasons; 8) Grant programmes: some of the sampled companies were found to benefit from energy saving and conservation programmes and from grants related to technological upgrading or transformation.

Threat of injury and causation

A detailed description of the situation in terms of threat of injury and causation could be found above, under the section dealing with the anti-dumping investigation into hot-rolled flat products from China.

Union interest and definitive measures

Weighing and balancing the strong interests of an important Union industry to be protected against unfair practices, on the one hand, and the limited likely effects of measures on unrelated importers and users, which continue to benefit from a wide array of supply in the Union, the Commission concluded that there were no compelling reasons that it was not in the Union interest to impose measures on subsidised imports of the product concerned.

The definitive countervailing duty rates ranged between 4,6% and 35,9%. As the anti-subsidy investigation was carried out in parallel with an anti-dumping investigation and in view of the use of the lesser duty rule, the Commission amended the definitive anti-dumping duty up to the relevant injury elimination level 22 .

4.1.5.Investigations terminated without measures

In accordance with the provisions of the respective basic Regulations, investigations may be terminated without the imposition of measures if a complaint is withdrawn or if measures are unnecessary (i.e. no dumping/no subsidies, no injury resulting from dumped or subsidised imports, measures not in the interest of the Union). In 2017, two new proceedings (both were anti-dumping investigations) were terminated without measures, as compared to eight in 2016.

The list of cases which were terminated without the imposition of measures during 2017 can be found in the following table. More information can be obtained from the Official Journal publications to which reference is given in Annex E.

4.1.6.Details on some individual cases of termination without measures

Hot-rolled flat products from Serbia (AD)

Regulation 2017/1795 has already been discussed above under chapter 4.1.4.

4.2.Review investigations

4.2.1.Expiry reviews

Article 11(2) and Article 18 respectively of the basic Regulations provide for the expiry of measures after five years, unless an expiry review demonstrates that they should be maintained in their original form.

In 2017, five anti-dumping measures (and no anti-subsidy measure) expired automatically. The references for these measures are available in Annex N.

Since the expiry provision of the basic Regulations came into force in 1985, a total of 508 measures have expired automatically.

4.2.1.1.Initiations

During 2017, nine expiry reviews of anti-dumping measures in place were initiated (none concerning anti-subsidy measures). The list of the expiry reviews initiated in 2017 can be found in the following table, together with the name of the complainant. It should be noted that some expiry reviews may be carried out in parallel with interim reviews. Where there are interim reviews and expiry reviews ongoing at the same time, these are indicated by an asterisk in the table below. More information can be obtained from the Official Journal to which reference is available in Annex F.    

4.2.1.2.Expiry reviews concluded with confirmation of duties

During 2017, 19 expiry reviews were concluded with confirmation of the duties for a further period of five years.

The list of the measures which were renewed during 2017, together with the results of the investigations, can be found below. More information can be obtained from the Official Journal publications to which reference is given in Annex F.

4.2.1.3.Details on some individual cases concluded by confirmation of duty

Aluminium road wheels from China (AD)

Following an anti-dumping investigation (the original investigation), the Council imposed, by means of Implementing Regulation (EU) No 964/2010 25 a definitive anti-dumping duty on imports of certain aluminium wheels originating in China. In October 2015, the Commission initiated an expiry review of the measures imposed. The request was lodged by Association of European Wheels Manufacturers (EUWA) on behalf of producers representing more than 25 % of the total Union production.

Sampling

The Commission selected a sample of four groups of exporting producers on the basis of the largest declared production and sales volume which cover around 40% of the total Chinese exports to the Union. With regard to Union producers, the Commission selected a sample of seven operators on the basis of the largest representative volume of sales and production, taking also into account the geographical spread. The sample accounted for over 30 % of total Union production.

Dumping and continuation of dumping

As no market economy treatment claim was introduced, the normal value for China was determined on the basis of the price or constructed value in an analogue country, namely Turkey 26 , in accordance with Article 2(7)(a) of the basic Regulation. Turkey has the second largest production volume of aluminium wheels among the potential analogue countries identified by the Commission (Turkey, Thailand, Indonesia, Taiwan, Korea and Malaysia) and has a satisfactory level of competition on its domestic market. Two Turkish exporting producers offered cooperation.

The Commission found dumping margins ranging between 8,9% and 25,9%.

The Commission further analysed whether there was a likelihood of continuation of dumping should the measures lapse. All four sampled Chinese exporting producers were found to be dumping during the review investigation period. Moreover, given the significant spare capacities 27 found in China as well as the attractiveness of the Union market compared to some of the third markets and the domestic market it was considered likely that Chinese exporting producers would (re)enter the Union market with significant quantities of aluminium wheels at dumped prices in case the measures would be allowed to lapse.

Injury and likelihood of recurrence of injury

In a context of an increasing consumption, the Union industry was able to recover from the past dumping thanks to the anti-dumping measures in place. During the investigation almost all injury indicators showed a positive trend. The Union industry increased its sales volumes, production volumes, sales prices and improved its profitability. On this basis, the Commission concluded that the Union industry did not suffer material injury during the investigation period. Therefore it was assessed whether there would be a likelihood of recurrence of injury should the measures against China be allowed to lapse.

The Chinese prices to the other third country markets were on average around 30% lower than the Union industry prices in the Union market. As mentioned above, there are large spare capacities in China of the product concerned which cannot be absorbed by the Chinese domestic market. Trade defence measures for Chinese aluminium wheel imports had already been imposed in other important markets (Australia, India). Therefore, the Union market without measures would be an attractive target of Chinese exports because it would yield high profits due to higher prices than elsewhere combined with possible large sales volumes. In short, the incentive to re-direct these exports to the Union market should measures be repealed was high. On this basis the Commission concluded that the repeal of the measures would in all likelihood result in a recurrence of injury to the Union.

Union interest and definitive measures

With regard to the interest of importers, the investigation showed that countries other than China delivered aluminium wheels to the Union market and it was considered that there were no indications that maintaining the measures would have a significant negative impact on the importers. After careful analysis, it was also concluded that maintaining the measures would not have any significant negative impact on the situation of users. As a consequence, the Commission concluded that there were no compelling reasons that it was not in the Union interest to maintain measures on imports of aluminium wheels originating in China.

Therefore, the anti-dumping measures applicable to imports of certain aluminium wheels originating in China, imposed by Implementing Regulation (EU) No 964/2010 were maintained. The rate of the definitive anti-dumping duty applicable to the net, free-at-Union-frontier price before duty, remained at 22,3%.

Solar panels (crystalline silicon photovoltaic modules and key components) from China (AD)

Following an anti-dumping investigation (the original investigation), the Council imposed in December 2013 by Implementing Regulation (EU) No 1238/2013 a definitive anti-dumping duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from China. The measures took the form of an ad valorem duty ranging between 27,3 % and 64,9 %. In December 2015, the Commission initiated an expiry review of the anti-dumping measures requested by EU ProSun on behalf of Union producers representing more than 25 % of the total Union production. The request was ultimately supported by Union producers whose collective output constituted more than 50 % of the total production. At the same time, the Commission initiated ex officio a partial interim review limited to the examination of whether or not it is in the Union interest to maintain measures currently in force on cells of the type used in crystalline silicon photovoltaic module or panels.

Sampling

A sample of eight Union producers was selected, accounting for 38,8% of the total EU sales and 55% of total Union production of modules and for 76,6% of the total EU sales volume and 77% of the total Union production of cells. The identity and location of some sampled producers were not revealed for reason of confidentiality. With regard to exporting producers, the Commission selected a sample of three groups on the basis of the largest representative volume of exports to the Union. One interested party argued that the sample of the exporting producers is inappropriate as it differs significantly from the sample of Union producers in terms of the sampled companies' production and production capacity. According to Article 17 of the basic Regulation, the sample used is to be statistically valid on the basis of information available at the time of the selection, or include the largest representative volume of production, sales or exports which can reasonably be investigated within the time available. Therefore, the sample of exporting producers is to be representative of the exporting producers and not of their Union counterparts. As confirmed by the jurisprudence of the CJ, the sample of exporting producers does not have to mirror that of Union producers.

Dumping and likelihood of continuation of dumping

As no market economy treatment claim was introduced, the normal value for China was determined on the basis of the price or constructed value in an analogue country. The Commission compared the normal value with the average export price for the sampled exporting producers and the dumping margin so established ranged from 23,5 % to 31,5%. In light of the estimated significant spare capacity in China, combined with the attractiveness of the Union market in terms of size and sales price, in particular with regard to the price level of the Chinese exports to third countries, and the records of past circumvention practices, the Commission concluded that there is a strong likelihood that the repeal of the anti-dumping measures would result in continuation of dumping.

Injury and likelihood of continuation of injury

In overall terms, the Union industry continued to suffer from injury during the investigation period given the short period after the imposition of the original measures and the magnitude of dumping and the level of injury found in the previous investigation. In addition, the circumvention practices found have also contributed to the continuation of injury. However, from mid-2013 (the provisional measures entered into force on 6 June 2013), and especially during 2014 (the first full year with anti-dumping measures in force) and during the investigation period the Union industry started gradually to recover from the past dumping by the Chinese exporters. However, this recovery was only partial, despite the efforts made and all the positive trends that resulted therefrom.

The Commission found that there was significant spare capacity in China for both modules and cells, that the Union market remains attractive in terms of size and sales price, particularly in comparison with the price level of the Chinese exports to third countries, further proven by the records of past circumvention practices. Consequently, the Commission found that there was a strong likelihood that the repeal of the anti-dumping measures would lead to the continuation of dumping resulting in the continuation of injury of the Union industry.

Causation

Several interested parties claimed that the injury suffered by the Union industry was caused by several other factors: 1) the abolition of the incentive schemes by many of the Member States, 2) the fact that the Union industry has not achieved yet economies of scale in order to be economically viable and to have an impact on the global market, 3) the injury is caused by imports from other countries as their prices were 25 % lower than the Chinese import prices, 4) the injury is caused by the fact that the prices of modules of the Union producers are constantly lower than the import prices of the Chinese producers.

The Commission established that these claims were factually incorrect or unsubstantiated and these factors did not break the causal link between the injury and the Chinese imports.

Union interest

Weighing and balancing the competing interests, the Commission analysed whether the negative effect on unrelated importers, upstream and downstream industries and other effects would be disproportionate when compared to the positive effect on the Union manufactures of the product under review. The key consideration was to assess the likely impact of continued measures on the future of Union demand for solar modules. If the measures would significantly curb demand, it could be argued that protecting a relatively small Union industry might disproportionally affect significantly larger downstream and upstream industries. However, it was concluded that the measures had only a limited impact on the Union demand for solar modules. The Commission considered, on the basis of the evidence available, that when balancing the likely negative effects on the upstream and downstream industry as well as the consumers against the benefits which Union industry would derive from the measures, a prolongation of the measures to 18 months constituted an appropriate resolution between the competing interests. Overall, the Commission concluded that there are no compelling reasons to terminate the measures on Union interest grounds.

Definitive measures

In view of the conclusions reached with regard to the likelihood of continuation of dumping and continuation of injury, it was concluded that the measures in force should be maintained.

In view of the conclusions reached that there are no compelling reasons to terminate the measures on cells on Union interest grounds, the partial interim review initiated pursuant to Article 11(3) of the basic Regulation was terminated.

As the measures may have more impact on the demand in the future, once the transition of renewable support policies will be completed, the fiscal situation of self-consumption clarified and grid parity will be achieved across wider parts of Europe. This justified that the measures were exceptionally prolonged for 18 months only.

Partial interim review regarding to maintaining cells in the product scope

On the date of initiation of the present expiry review, the Commission initiated ex officio a partial interim review pursuant to Article 11(3) of the basic Regulation limited to the examination of whether or not it is in the Union interest to maintain measures currently in force on cells of the type used in crystalline silicon photovoltaic modules or panels.

The review was opened as there was prima facie evidence that the circumstances on the basis of which the original measures were imposed had changed. The interests of the cell manufacturers, importers, and downstream industry were analysed. The Commission concluded that there are no compelling reasons to terminate the measures on cells on Union interest grounds. In particular, it found that the measures were effective in retaining and to some extent restoring cell production in the Union.

Partial interim review regarding the form and the adjustment of the evel of measures

During this investigation it was concluded that it is also appropriate to open an ex officio interim review on the form of the measure and the adjustment mechanism associated with it.

In March 2017, the Commission initiated an interim review 28 in order to examine whether the level of the measures should be gradually decreased.

The original form of the measures was an ad valorem anti-dumping and countervailing duty. A price undertaking was offered by a group of cooperating exporting producers and accepted by the Commission. One of the core elements of the undertaking was a MIP which is subject to a quarterly adjustment mechanism. Under the price undertaking accepted by the Commission, the MIP for the modules and cells was adjusted quarterly by reference to international spot prices of modules including Chinese prices as reported by the Bloomberg database.

However, when reviewing the interests of unrelated importers and non-vertically integrated Union module manufactures in the expiry review investigation, the Commission received complaints about the heavy administrative burden put on them, while the Union producers complained about ongoing circumvention. The Commission accepted these points and considered that a variable duty in the form of a MIP (‘variable duty MIP’) is a more appropriate form of measures than the previous ad valorem duty coupled with the price undertaking (‘undertaking MIP). The variable duty MIP means that eligible imports with a declared value at, or above, the MIP would not be subject to duties and customs authorities will levy duties immediately if the product is imported at a price below the MIP.

Graphite electrode systems from India (AD)

The Council, following an anti-dumping investigation, by Regulation (EC) No 1629/2004, imposed a definitive anti-dumping duty on imports of certain graphite electrodes systems originating in India. In December 2015, the Commission initiated an expiry review of the anti-dumping measures applicable to these imports. The request was lodged by SGL Carbon GmbH, TOKAI Erftcarbon GmbH and GrafTech Switzerland SA representing more than 25 % of the total Union production.

Sampling

The Commission selected a sample of four Union producers on the basis of the largest representative volume of sales which could reasonably be investigated within the time available, considering also the geographical location. The sampled Union producers accounted for more than 80 % of the total Union production.

Dumping and likelihood of continuation of dumping

The expiry review investigation showed that (i) Indian imports continued to enter the Union market at significant dumped prices and in significant quantities; (ii) both 29 Indian producers are export-oriented and have spare capacity which could be used to increase export volumes to the Union at dumped prices; (iii) consumption worldwide is following a decreasing trend, thus reducing the possibilities of Indian exporters to other third markets; (iv) the introduction of anti-dumping measures in Russia against Indian graphite electrode systems further restricts the export possibilities. As a consequence, it was concluded that there is a likelihood of continuation of dumping should the measures be repealed.

Injury and likelihood of recurrence of injury

The investigation showed that despite the measures in force most of the injury indicators developed negatively and the economic and financial situation of the Union industry deteriorated. While these negative developments may in part be explained by the decrease in consumption, Indian imports were still strongly present on the Union market at prices 30 lower than the Union industry's prices. The Commission concluded that the Union industry was in an extremely fragile situation.

To establish the likelihood of recurrence of injury, the following elements were analysed: the production capacity and spare capacity in India, the exports from India to other third countries and the attractiveness of the Union market. The Indian spare capacity was estimated to be between 29% and 36% of the Union consumption. The access to Russia (the third main export market) for Indian exporting producers was restricted via the imposition of anti-dumping measures. The attractiveness of the Union market was demonstrated by the fact that despite the anti-dumping and countervailing duties in force, Indian graphite electrode systems continued to enter the Union market. Therefore, should measures in the Union be repealed it is indeed likely that a large part of the available spare capacity will be used for export to the Union market. This would further deteriorate the economic situation of the Union industry. Based on the above, the Commission concluded that that there is a strong likelihood of recurrence of injury caused by dumped imports from India should the measures be repealed.

Union interest and definitive measures

The Commission analysis showed that the Union industry would be likely to experience a deterioration of its situation in case the measures were allowed to lapse. Therefore, it was concluded that the continuation of the measures would benefit the Union industry. As no importers cooperated or made themselves known in the current investigation, there were no indications that maintaining measures would have a negative impact on the importers outweighing the positive impact of the measures. The users did not submit any information showing that there have been difficulties in finding the necessary supply and none of them put forward any argument against maintaining of the measures. On this basis the Commission concluded that there are no compelling reasons of Union interest against the extension of the current anti-dumping measures.

A definitive anti-dumping duty (between 0% and 9,4%) was hereby imposed on imports of graphite electrodes imported from India.

Filament glass fibre products from China (AD)

In 2011, by Council Implementing Regulation (EU) No 248/2011, the Council imposed a definitive anti-dumping duty on imports of certain continuous filament glass fibre products originating in China. In March 2016 the Commission initiated an expiry review of the anti-dumping measures applicable to these imports. The request was lodged by the European Glass Fibre Producers Association (‘APFE’) on behalf of producers representing more than 25 % of the total Union production.

Sampling

The Commission sampled three exporting producers, based on the largest volume of exports. The Commission also sampled three company groups of Union producers representing around 74% of the total sales on the Union market. A sample of three importers was selected on the basis of the largest volume of imports into the Union.

Dumping

The Commission examined whether dumping was currently taking place and whether dumping was likely to continue or recur upon a possible expiry of the measures. As no market economy treatment claim was introduced and according to Article 2(7)(a) of the basic Regulation, normal value was determined on the basis of the price or constructed value in a market economy third country. For this purpose, the Commission selected Japan. The Commission did not receive a reply to the questionnaire from any of the sampled exporting producers in China. As a consequence of non-cooperation, pursuant to Article 18(1) of the basic Regulation, the Commission established the export price on Eurostat imports statistics (COMEXT) and compared it with the normal value established in Japan. On this basis, the Commission found a dumping margin of above 70%.

The excess capacity in China during the review investigation period was estimated at around 150 thousand metric tonnes (more than 15 % of the total Union consumption). The level of prices on the Union market and its importance for exports from China allowed the Commission to conclude that the Union market is attractive for the Chinese producers. In addition, India and Turkey extended their anti-dumping duties on imports of glass fibre from China. The Commission considered the existence of anti-dumping measures in other third countries to be an additional indication of dumping practices by the Chinese exporting producers.

On this basis, the Commission concluded that the Chinese dumped exports would resume in larger volumes and exercise increased price pressure on the Union market should the current measures be repealed, i.e. that there was a likelihood of a continuation of dumping should measures be repealed.

Injury and likelihood of recurrence of injury

The investigation established a dumping margin of more than 70%. The Union industry started to benefit more fully from the anti-dumping measures since they were increased in 2014 31 . As a result of the measures 32 , Chinese imports stabilised and enabled the Union industry to maintain its market share. However, prices of the Union industry remained low. On this basis the Commission concluded that the Union industry, following the increase of measures in 2014 partially recovered from the injury caused by the past dumping and did not suffer material injury in the review investigation period. However, its situation remained vulnerable and is characterised by a persistence of depressed prices, volatile costs of production and high capital requirements. On this basis, should the anti-dumping measures be repealed and countervailing duty remains at a level which already proved ineffective to restrict the arrival of large quantities of imports at undercutting prices, the Commission concluded that there is a likelihood of recurrence of injury.

Union interest and definitive measures

The Commission examined the different interests at stake and concluded that it is in the interest of the Union industry to maintain the measures. The importers and traders have access to a large number of supply sources inside and outside the Union. The Commission's analysis also showed that the renewal of the measures would only have a limited impact on the situation of the users. The Commission concluded that on balance, no compelling reasons existed against the continuation of the current anti-dumping measures. Therefore the anti-dumping measures were maintained.

Coated fine paper originating from China (AD)

In 2011, following an anti-dumping investigation (the original investigation), by Implementing Regulation (EU) No 451/2011, the Council imposed a definitive anti-dumping duty on imports of certain coated fine paper originating in China. In May 2016, the Commission initiated an expiry review of these measures. The request was lodged by five Union producers (Arctic Paper Grycksbo AB, Burgo Group SpA, Fedrigoni SpA, Lecta Group and Sappi Europe SA), representing more than 25 % of the total Union production of coated fine paper.

Sampling

There was no cooperation from the exporting Chinese producers. With regard to the Union producers the Commission selected three operators (with the biggest volume of sales and production), accounting for over 30 % of the total Union production.

Dumping and likelihood of recurrence of dumping

The Commission examined whether dumping was currently taking place and whether or not the expiry of the existing measures would be likely to lead to a continuation or recurrence of dumping. As no Chinese exporting producer cooperated in the investigation, the Commission resorted to the use of facts available. For the investigation period, the data showed that only negligible volumes were imported into the Union from China. The Commission concluded that these quantities were not representative as they represented less than 1% of the total imports of the product concerned. Therefore no meaningful analysis of dumping based on the Chinese imports to the Union during the investigation period could be made. The investigation focused on the likelihood of a recurrence of dumping.

As no market economy treatment claim was introduced, normal value was determined, in accordance with the basic Regulation, on the basis of the price or constructed value in a market economy third country. The USA was selected for this purpose. In the absence of any cooperation from the Chinese exporting producers, the export price was based on facts available in accordance with the basic Regulation. After a comparison of the normal value and export price the average dumping margin expressed as a percentage of the CIF Union frontier price was 58%.

The Chinese spare capacity of the product concerned was found to be around 13% of total Union consumption while Chinese domestic demand is expected to decrease by more than 10% until 2021. The investigation has demonstrated that Union demand remained substantial and the Union market remains the largest market in the world, accounting for 25%-30% of global demand. Based on facts available, Chinese export prices to the third countries close to the Union were on average 7% lower than the prices in the Union during the review investigation period. Such a difference of price is significant. On this basis, the Commission concluded that shall the measures laps there is likelihood of recurrence of dumping.

Injury and likelihood of recurrence of injury

During the period under investigation, injury indicators showed a mixed picture. While financial performance indicators, such as profitability, cash flow and return on investment, improved, volume indicators, such as production and sales, continued to decline. The improvement of financial performance indicators was the result of both the drop in raw materials prices in 2014 and the Union producers' restructuring efforts. The negative trends in production and sales volumes were the result of the continuously falling demand.

The foreseen further decrease in demand in the next 5-10 years supported the conclusion that the situation of the Union industry will remain challenging. The investigation confirmed that the measures imposed by the original investigation have had a positive impact on the Union industry, which regained its market share.

On the basis of the above, the Commission considered that the Union industry did not suffer material injury during the investigation, nevertheless, it was in a vulnerable situation. Therefore, it was concluded that the repeal of the measures would in all likelihood result in a recurrence of injury.

Union interest and definitive measures

After a careful analysis of the different interests at stake the Commission concluded that the continuation of the anti-dumping measures in force would be in the interest of the Union industry while their impact on the importers/traders and users will be limited. On this basis, the Commission concluded that there are no compelling reasons of Union interest against the extension of the current anti-dumping measures. Therefore the anti-dumping measures applicable to imports of certain coated fine paper originating in China imposed by Regulation (EU) No 451/2011 were maintained.

Ceramic tiles from China (AD)

Following an anti-dumping investigation (the original investigation), the Council imposed, by means of Implementing Regulation (EU) No 917/2011, a definitive anti-dumping duty on imports of ceramic tiles originating in China. In September 2016, the Commission initiated an expiry review. The request was lodged by the European Ceramic Tile Manufacturers' Federation on behalf of producers representing more than 25 % of the total Union production of ceramic tiles.

Sampling

The Commission sampled four groups of exporting producers on the basis of their declared volume of exports to the Union and production capacity. The sample covered around 8% of the total Chinese exports to the Union according to Eurostat. The Commission selected a sample of nine Union producers on the basis of the largest representative volume of sales and production, taking into account geographical spread and also the high fragmentation of the ceramic tiles industry. The sampled Union producers accounted for over 7,7% of total estimated Union production in 2015. The final sample of the unrelated importers consisted of three unrelated importers, accounting for around 6 % of total imports from China.

Dumping and likelihood of continuation of dumping

The Commission examined whether the expiry of the existing measures would be likely to lead to a continuation or recurrence of dumping. As no market economy treatment claim was introduced, normal value was determined on the basis of the prices paid or payable on the domestic market or constructed value in an appropriate market economy third country (also referred to as "analogue country"). After having contacted the official representations and/or producers located in several possible analogue countries the Commission selected the US as appropriate analogue country. The weighted average dumping margins were found to be between 66% and 231%.

The Commission found that Chinese exporting producers continued to export ceramic tiles to the Union at dumped prices during the review investigation period.

China has a large spare capacity available and thus the ability to increase its production volumes at short notice. There were no indications that the Chinese domestic consumption would be able to absorb the enormous quantities produced and in stocks. Chinese export prices to the Union were significantly higher compared to the other main export markets. In other words, the Union market is more attractive for Chinese exporting producers than their other main export destinations. On that basis, the Commission considered it is likely that significant volumes of Chinese ceramic tiles would be exported to the Union at dumped prices in case the measures were allowed to lapse.

Injury and likelihood of recurrence of injury

The Union industry was able to recover from the past dumping. Its economic situation improved during the investigation period. The measures in force allowed the Union producers to maintain the market share, which had a positive impact on the economic development of the Union industry. All the injury indicators showed a positive trend: the production and the sales increased, the sales price remained relatively stable and they had a positive impact on the profitability of the Union industry. On this basis the Commission concluded that the Union industry did not suffer material injury during the investigation period.

Since the Union industry did no longer suffer material injury the Commission assessed whether there was be a likelihood of recurrence of injury should the measures be allowed to lapse. There were high spare capacities of ceramic tiles in China. In addition, during the investigation period the average price of the Chinese exports to the Union market was on average 30% - 40% lower than the average price in the Union market. And as mentioned above, Chinese export prices to other destinations were even lower. On the basis of the above considerations, the Commission concluded that the repeal of the measures would in all likelihood result in a recurrence of injury to the Union industry.

Union interest and definitive measures

In weighing and balancing the competing interests, the Commission gave special consideration to the need to eliminate the trade distorting effects of injurious dumping and to restore effective competition. While the continuation of measures would protect an important Union industry, including many small and medium enterprises, against a likely recurrence of injury, the rather low cooperation of the importers and users suggests that the continuation of measures would not have a disproportionate negative impact on them. On this basis the Commission concluded that there were no compelling reasons that it was not in the Union interest to maintain measures. Therefore, the anti-dumping measures applicable to imports of ceramic tiles originating in China were maintained (the rate is between 13,9% and 69,7%).

4.2.1.4.Reviews concluded by termination

In 2017, one expiry review was concluded by the termination of measures in force.

4.2.2.Interim reviews

Article 11(3) and Article 19 of the basic Regulations provide for the review of measures during their period of validity on the initiative of the Commission, at the request of a Member State or, provided that at least one year has lapsed since the imposition of the definitive measure, following a request containing sufficient evidence by an exporter, an importer or by the EU producers. In carrying out the investigations, it will be examined, inter alia, whether the circumstances with regard to dumping/subsidization and injury have changed significantly and whether these changes are of a lasting nature. Reviews can be limited to dumping/subsidization or injury aspects.

During 2017, ten interim reviews were initiated (six anti-dumping and four anti-subsidy). Two interim reviews were concluded during the same period, one by amending the duties and another by confirming the duties unchanged. The details of the case which was concluded during 2017 by amending the duties can be found below. More information can be obtained from the Official Journal publications to which reference is given in Annex G.

4.2.2.1.Details on individual cases

Stainless steel wires from India (AD)

In 2013, by Implementing Regulation (EU) No 1106/2013 the Council imposed a definitive anti-dumping duty on imports of certain stainless steel wires originating in India. In December 2015 the Commission initiated a partial interim review of these measures, limited in scope to the examination of dumping. The Commission had received two requests from two Indian exporting producers (Venus and Garg) claiming that the circumstances on the basis of which anti-dumping measures were imposed have changed, that these changes are of a lasting nature and the continued imposition of the measures at the current level were no longer necessary to offset injurious dumping. After an analysis, the Commission concluded that the change in circumstances claimed by the two Indian exporting producers was of a lasting nature.

Dumping

The normal value for each of the applicants was calculated as a weighted average of their profitable sales on the Indian market, or, where a product type was not sold at all or not in representative quantities on the domestic market, the Commission constructed the normal value. On this basis, the weighted average dumping margin of Venus was found to be 9,9 % and of Garg 19,2%.

Definitive measures

Following the initial investigation 34 in 2013, a definitive anti-dumping duties of 8,6% and 8,4% were imposed respectively to Venus and Grag – two Indian exporting producers. In 2015 the two producers introduced requests for review. In their requests, the applicants claimed that the circumstances on the basis of which anti-dumping measures were imposed have changed and that these changes are of a lasting nature. The applicants provided prima facie evidence that the continued imposition of the measures at the current level was no longer necessary to offset injurious dumping.

Following the review investigation, the revised anti-dumping duty rates that would be applicable to imports of the product concerned manufactured by Venus amounts to 6,9% (a decrease compared to the initial investigation) and the revised anti-dumping duty applicable to Garg amounts to 10,3 % (an increase compared to the initial investigation). The dumping margin and duty rate for all other non-cooperating companies in the original investigation was not revised.

Solar Panels (crystalline silicon photovoltaic modules and key components) from China (AD)

This review was described in detail above under the section on expiry reviews.

4.2.3.“Other” reviews

The Commission initiated in 2017 two "other reviews" i.e. reviews falling outside Article 11(3) or Article 19 of the basic Regulations. These investogations focus on the implementation of court rulings. In 2017, five “other” reviews were concluded with a confirmation or amendment of the duty. More detilas are to be found below. No "other" review was terminated with a repeal of the measures. A list of the cases concerned is given in Annex H. More information can be obtained from the Official Journal publications to which reference is given in that Annex.

Footwear from China and Vietnam (AD)

The following is a presentation of the following three regulations ('regulations at issue') that were adopted in 2017 in order to implement the CJ ruling annulling the Council Regulation (EC) 1472/2006: 1) Commission Implementing Regulation (EU) 2017/423, 2) Commission Implementing Regulation 2017/1982 and 3) Commission Implementing Regulation 2017/2232.

By adopting the regulations at issue the Commission assessed the Market Economy Treatment and Individual Treatment ('MET' / 'IT') claims for the exporting producers falling under Council Regulation (EC) 1472/2006.

Regulation 1472/2006 was adopted in October 2006 by the Council and imposed definitive anti-dumping duties ranging from 9,7 % to 16,5 % on imports of certain footwear with uppers of leather originating in Vietnam and in the People's Republic of China ('China') ('contested regulation'). The contested regulation and its subsequent regulations 35 were challenged by inter alia several Chinese exporters ('applicants'). The CJ annulled these regulations on the basis that the Commission did not examine the substantiated claims submitted by the applicants pursuant to Article 2(7)(b) and (c) of the basic Regulation for the purpose of claiming (MET). 36  

By way of implementing the above mentioned CJ judgment, the Commission first adopted Implementing Regulation (EU) 2016/223. By this regulation, the Commission instructed the national customs authorities, which have to decide on an application for re-imbursement of anti-dumping duties, to forward requests for re-imbursements of paid duties under the annulled regulations to the Commission and await the Commission's assessment of the MET and IT claims and of the re-imposition of the anti-dumping duty at the appropriate rate before proceeding with re-imbursement. Subsequently, the Commission adopted the three regulations at issue in which it assessed the MET and IT claims from these exporting producers.

Implementation

By adopting the Implementing Regulations (EU) 2017/423, 2017/1982 and 2017/2232 the Commission assessed the MET/IT claims for the concerned companies. 37

MET Claims

The burden of proof lies with the exporter claiming MET treatment under Article 2(7)(c) of the basic anti-dumping Regulation. In order for a MET claim to be successful, the exporter needs to show that all five criteria listed in Article 2(7)(c) are met.

The Commission found that none of the companies in the regulations at issue were able to demonstrate that they met criterion 1 (business decisions). The Commission found that certain exporting producers could not freely determine their sales quantities for domestic and export markets. Furthermore, certain companies did not provide sufficient information to demonstrate that their business decisions were taken in accordance with market signals without significant State interference.

Since the failure to meet at least one criterion under Article 2(7)(c) results in rejection of a MET claim, the Commission rejected the companies' MET requests.

IT Claims

The burden of proof lies with the exporting producer wishing to claim IT under Article 9(5) of the basic Regulation. The exporting producer's claim needs to be properly substantiated and show that all five criteria listed in the article, prior to its amendment, are met. 38 The failure to meet at least one of the criterions is enough to reject the IT claim.

The Commission found that certain companies failed to prove that business decisions, such as export prices and quantities and conditions and terms of sale, were freely determined in response to market signals (criterion 2). The Commission also found that certain companies failed to provide the necessary information to demonstrate that they were sufficiently independent from State interference (criterion 3).

In essence, the Commission found that none of the companies concerned were able to show that all of the conditions in Article 9(5) of the basic anti-dumping Regulations were met. Consequently, the Commission also rejected the IT claim.

Conclusion

Having taken account of the comments made by the interested parties, the Commission concluded that the residual anti-dumping duty applicable to imports from China and Vietnam, i.e. 16,5% and 10% respectively, should be re-imposed to the concerned exporting producers for the period of application of the contested regulation.

Biodiesel from Argentina and Indonesia (AD)

In November 2013, the Council imposed by Regulation (EU) No 1197/2013 a definitive anti-dumping duty on imports of biodiesel originating in Argentina and Indonesia ('the definitive Regulation'). The product concerned is fatty-acid mono-alkyl esters and/or paraffinic gasoils obtained from synthesis and/or hydro-treatment, of non-fossil origin, in pure form or as included in a blend originating in Argentina and Indonesia.

Argentina claimed the measures to be inconsistent with several provisions of the Anti-Dumping Agreement of the WTO. The Appellate Body found, inter alia, that the European Union had acted inconsistently with Article 2.2 of the WTO Anti-Dumping Agreement (‘ADA’) by failing to calculate the cost of production of the product under investigation on the basis of the records kept by the producers. In addition, the Panel found, inter alia, that the European Union had acted inconsistently with Articles 3.1 and 3.4 of the ADA in its examination of the impact of the dumped imports on the domestic industry, insofar as the examination related to production capacity and capacity utilisation is concerned. On 20 December 2016, the Commission initiated a review under Article 1(3) of the Regulation (EU) 2015/476 ('WTO enabling Regulation') in order to bring the measures into conformity with the above ruling.

Determination of the normal value and calculation of the dumping margins

In order to implement the findings of the Reports (both the reports by the Panel and the Appellate Body are collectively referred to as the 'Reports'), the Commission recalculated the normal value for exporting producers in Argentina based on the costs of the main raw material (soybean oil and soybeans) as reported in the records of those exporting producers.

The Commission acknowledged that the Appellate Body did not preclude, per se, the possibility that an investigating authority could, in certain specific circumstances, depart from recorded costs if the investigation would demonstrate that costs had been, e.g. over- or understated or if non-arm length transactions or other practices had affected the reliability of the reported costs (para. 6.41 of the Appellate Body report). However, the Appellate Body also stated that the Argentine export tax system was not, in itself, a sufficient basis for concluding that the producers' records did not reasonably reflect the costs of raw material associated with the production and sale of biodiesel, or for disregarding the relevant costs in those records when constructing the normal value of biodiesel (paragraph 6.55 of the Appellate Body report). The Commission therefore rejected the European Biodiesel Board's ('EBB') claim during the investigation that the Reports do not preclude the Commission from making in these circumstances an adjustment to the raw material costs when constructing the normal value claim, since accepting it would not be in line with the findings of the Reports.

The revised duty rates in respect of all Argentine exporters in light of the findings and recommendation in the WTO reports, expressed on the CIF Union border price, customs duty unpaid, ranged between 4,5% and 8,1%.

Revised injury findings based on the reports

In the Reports, it was found, inter alia, that the EU acted inconsistently with Articles 3.1 and 3.4 of the ADA in its examination of the impact of the dumped imports on the domestic industry, insofar as it relates to production capacity and capacity utilisation. The Reports did not, however, invalidate the conclusion that the Union Industry suffered material injury during the period considered. The Panel found that the EU authorities acted inconsistently with Articles 3.1 and 3.4 of the ADA by accepting revised data submitted by the EU domestic industry at a late stage of the investigation without assuring themselves of its accuracy and reliability (paragraph 7.395 of the Panel report). The revised data concerned ‘idle capacity’. At the same time, the Panel stated that the revised data did not have a significant role in the EU authorities' conclusion in the definitive Regulation on overcapacity as an ‘other factor’ causing injury (confirmed in paragraph 6.147 of the Appellate Body report).

In order to implement the findings of the Reports, the Commission sent out a questionnaire to the EBB requesting explanations as to (i) which methodology was applied to calculate both production capacity and capacity utilisation of the Union industry during the period considered, and (ii) why in the course of the original investigation this data was revised and on what basis the new figures were produced. The Commission also asked the EBB to explain what their understanding of ‘idle capacity’ was; why in their view it had to be excluded from the total production capacity of the Union industry for the period considered and how the idle capacity was calculated for the non-EBB members. The Commission received the questionnaire reply, analysed it and subsequently carried out a verification visit at the premises of the EBB. The Commission verified the supporting documents, cross-checked the reported data for the period considered at their source and was able to reconcile the information in the management and accounting records with the revised data submitted in the original investigation on production capacity and capacity utilization covering the period from 1 January 2009 to the end of the investigation period.

On the basis of the above reassessment, the Commission concluded that the injurious dumping determined in the original investigation is confirmed.

Inclusion of Indonesia

Not only Argentina but also Indonesia had also claimed the measures to be inconsistent with several provisions of the Anti-Dumping Agreement of the WTO and has brought the case to the WTO. Some claims made by Indonesia are similar to those made by Argentina in particular as far as the cost adjustment is concerned. The dispute brought by Indonesia was still ongoing at the time this review was concluded.

The Commission therefore proposed to examine also the anti-dumping measures imposed on imports of biodiesel from Indonesia in a concurrent review conducted under Article 2(1) of the WTO enabling Regulation, in particular as far as the definitive Regulation was found inconsistent with Article 2.2.1.1 of the ADA.

After the Commission has disclosed its finding, interested parties submitted comments questioning the Commission's analysis with regard to Indonesia, challenging, inter alia, the applicability of the Appellate Body's interpretation as well as the Commission's authority to act ex officio on that interpretation under the WTO enabling Regulation while the dispute is still ongoing. In light of the comments received, the Commission decided not to terminate the review concerning Indonesia at that point in time, but instead to continue its analysis because it considered that it needed more time in analysing the applicability of the findings of the WTO Dispute Settlement Body insofar as it concerns Indonesia. The review initiated under Article 2(1) of the WTO enabling Regulation therefore remained open insofar as it concerns Indonesia.

4.2.4.New exporter reviews

As far as anti-dumping measures are concerned, Article 11(4) of the basic Regulation allows for a review ("newcomer" review) to be carried out in order to determine individual margins of dumping for new exporters located in the exporting country in question which did not export the product during the investigation period.

Such parties have to show that they are genuine new exporters, i.e. that they are not related to any of the exporters or producers in the exporting country, which are subject to the anti-dumping measures, and that they have actually started to export to the EU following the investigation period, or that they have entered into an irrevocable contractual obligation to export a significant quantity to the EU.

When a review for a new exporter is initiated, the duties are repealed with regard to that exporter, though its imports are made subject to registration under Article 14(5) of the basic Regulation in order to ensure that, should the review result in a determination of dumping in respect of such an exporter, anti-dumping duties may be levied retroactively to the date of the initiation of the review.

As far as anti-subsidy measures are concerned, Article 20 of the basic Regulation allows for a review (accelerated review) to be carried out in order to establish promptly an individual countervailing duty. Any exporter whose exports are subject to a definitive countervailing duty but who was not individually investigated during the original investigation for reasons other than a refusal to co-operate with the Commission can request such review.

In 2017, four new exporter reviews were initiated relating to anti-dumping measures and two accelerated reviews, i.e. relating to anti-subsidy measures. Since the Commission carried out the first reviews of this type in 1990, a total of 77 such investigations have been initiated so far. There were no new exporter reviews concluded or terminated during 2017.

4.2.5.Absorption investigations

Where there is sufficient information showing that, after the original investigation period and prior to or following the imposition of measures, export prices have decreased or that there has been no or insufficient movement in the resale prices or subsequent selling prices of the imported product in the EU, an absorption review may be opened to examine whether the measure has had effects on the above-mentioned prices. The duty may be increased to take account of such lower export prices. The possibility of absorption reviews is included in Articles 12 and 19(3) of the basic Regulations.

In 2017, one anti-absorption investigation was terminated without increase of duties (Annex J).

4.2.6.Anti-circumvention investigations

The possibility of investigations being re-opened in circumstances where evidence is brought to show that measures are being circumvented was introduced by Article 13 and Article 23 of the basic Regulations.

Circumvention is defined as a change in the pattern of trade between third countries and the EU which stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. The duties may be extended to imports from third countries of like products, or parts thereof, if circumvention is taking place. Duties may also be extended to imports of a slightly modified like product from the country subject to current measures.

In 2017, three anti-circumvention investigations were initiated. One anti-circumvention investigation was concluded with an extension of the anti-dumping duty, and one terminated without extension. More information can be obtained from the Official Journal publications to which reference is given in Annex K.

4.3.Safeguard investigations

Safeguard measures have always been and remain an instrument which the Commission would only apply in truly exceptional circumstances. Indeed, they are only used where it is clear that, applying the highest standards, such measures are necessary and justified because, due to unforeseen circumstances, there has been a surge in imports and this has caused or threatens to cause serious damage to the EU industry.

The Commission expects the EU’s commercial partners to follow a similarly strict approach. However, more and more countries are adopting safeguard measures, often in circumstances which do not appear to be entirely in line with Article XIX of the GATT 1994, the WTO Agreement on Safeguards and other WTO rules. Consequently, the activities of the Commission in relation to safeguards is more and more driven towards the defence of the export interests of EU producers, if necessary at WTO level.

There was no safeguard activity by the EU in 2017 and no measures in place (Annex L).

5.Enforcement of anti-dumping/countervailing measures

Globalisation of trade led to greater possibilities for circumventing or otherwise reducing the effectiveness of anti-dumping and countervailing measures. To address this problem, throughout 2017 the TDI services continued their follow-up activities aimed at ensuring that measures were effectively enforced. In the framework of an integrated approach measures were considered in all their forms - duties and undertakings – and synergy was sought between the TDI services and enforcement-oriented services (OLAF, DG Taxud and customs authorities in Member States).

5.1.Follow-up of measures

The follow-up activities concerning measures in force are centred on four main areas: (1) to pre-empt fraud, by defining risk-related areas, alerting customs authorities and assessing the feedback from customs and economic operators; (2) to monitor trade flows and market developments; (3) to improve the effectiveness with the appropriate instruments (new investigation, interim review, newcomer review, contact with national administrations) and (4) to react to irregular practices by enhancing the co-operation with enforcement-related services (OLAF and national customs) and by initiating anti-absorption or anti-circumvention investigations.

5.2.Monitoring of undertakings

Monitoring of undertakings forms part of the enforcement activities, given that undertakings are a form of AD or AS measures. They are accepted by the Commission if it is satisfied that they can effectively eliminate the injurious effects of dumping or subsidisation.

At the beginning of 2017, there were 102 undertakings in force. During 2017, the following changes to the portfolio of undertakings took place: The undertakings of five companies were withdrawn as it was established that breaches had occurred or that the monitoring of the undertakings became impracticable. The undertakings of seven companies were withdrawn as these companies had notified the Commission that they wished to withdraw from the undertaking. The undertakings of 87 companies were repealed. No new undertaking was accepted. This brought the total number of undertakings in force at the end of 2017 to three. More information is available in Annexes M and Q.

6.Refunds 

Articles 11(8) and 21(1) of the basic Regulations allow importers to request the reimbursement of the relevant collected duties where it is shown that the dumping/subsidy margin, on the basis of which duties were paid, has been eliminated or reduced to a level below that of the duty in force.

During 2017, 75 new refund requests were submitted. At the end of 2017, four refund investigations were on-going, covering 61 requests. In 2017, 26 Commission Implementing Decisions granting partial refund or rejecting refund requests were adopted.

7.TDI Modernisation 

In April 2013, the Commission adopted a proposal and a communication in order to modernise the EU’s trade defence instruments (‘TDI’). The aim of the proposal was to enhance the efficiency and effectiveness of the EU’s TDI for the benefit of all stakeholders, including producers, importers or users. Increasing transparency, finding practical solutions to real problems and making the TDI more accessible, so that these instruments would provide a more adequate response to the proliferating unfair trade practices, was at the heart of the proposal.

The European Parliament largely supported the Commission proposal and voted a legislative resolution as early as April 2014. The amendments voted by the Parliament were essentially in favour of the Union industry and a sustainable production in the EU.

In the Council discussions were lengthy but a mandate was finally adopted by the end of 2016. The legislative procedure then entered in trilogue mode.

On 5 December 2017, the Council and the European Parliament reached an agreement on the Commission's proposal. Following the formal approval in the Council and the European Parliament's plenary vote, the modernisation legislation will enter into force on the 8 June 2018. Together with the new anti-dumping calculation methodology (see below), this is the first major overhaul of the EUs anti-dumping and anti-subsidy instruments since 1995.

The compromise found in trilogues represents a balanced result, taking into account the interests of EU producers, users and importers alike. When the corresponding legislative changes enter into force, the EU's trade defence instruments will be more effective, transparent and more adapted to face the challenges of the global economy. At the same time, the modernisation brings these instruments closer to the needs of small and medium sized companies ('SME'). Finally, trade unions that represent workers whose jobs are at stake due to unfair competition can also now fully participate in investigations, including as co-complainants together with the Union industry.

The overhaul covers a broad range of aspects relating to the way the Commission carries out trade defence investigations. The changes deliver concrete solutions to practical problems raised by businesses. They benefit EU industry but also importers and downstream users who depend on imports.

Amongst the most important changes to the modernised EU's anti-dumping and anti-subsidy legislation are:

·An improved injury margin calculation method will be applied: the new rules concerning the non-injurious price for the EU industry are better adapted to economic reality. They now allow reflecting the profitability needed to cover full costs and investments, research as well as development and innovation. Moreover, the injury margin will include future expenses related to social and environmental standards, for example under the Emissions Trading System, if the Union industry presents sufficient evidence to this effect.

·More certainty will be achieved: in the future, the non-injurious price will include a minimum profit of 6%. However, higher profit margins are always possible on a case-by-case basis. This ensures a better recovery of the industry from unfair trade.

·Anti-dumping investigations will become even more efficient: provisional measures will be imposed within 7 to 8 months, in comparison to the current 9 months.

·More transparency and predictability will be ensured towards economic operators: the Commission will be issuing an early warning on the imposition of provisional anti-dumping and anti-subsidy measures. This will include a grace period of three weeks during which provisional duties will not be applied. This will allow all operators to adapt to the new situation. After two years, the Commission will review the three weeks early warning system with the option to go up to 4 weeks or down to 2 weeks of such pre-disclosure. The non-imposition of provisional measures will also be signalled ahead.

·Additional support will be granted for EU small and medium-sized enterprises (SMEs): an SME helpdesk as well as streamlined procedures will make it easier for SMEs to participate in trade defence investigations.

·The EU will better respond to raw material distortions or subsidisation in exporting countries: the EU's "lesser duty rule" will be adapted so as to take into account the existence of serious distortions regarding raw materials with the imposition of duties reflecting the full amount of dumping in such cases. Measures against unfair subsidies will be based on the subsidy margin. The new disciplines will be subject to a Union interest test

·Social and environmental aspects will now have a role in trade defence proceedings: As mentioned above, the future higher costs of EU industry for complying with EU social and environmental standards will be taken into account. Furthermore, the EU will normally not accept price undertakings from third countries with an insufficient implementation record of key International Labour Organisation (ILO) conventions and multilateral environmental agreements. The Commission also intends to review the measures in place in case of changed circumstances concerning social and environmental standards. This increased activity on Social and Environmental Standards will also have a dedicated part in the Commission's annual report on trade defence instruments.

8.    amendment of the EU's AD and AS legislation in 2017

On 9 November 2016, the Commission adopted a proposal to change the EU's anti-dumping and anti-subsidy legislation with the aim to introduce a new anti-dumping methodology to capture State-induced market distortions in third countries and to strengthen the anti-subsidy instrument.

The proposal followed an Impact Assessment and included an online public consultation and a dedicated public event in March 2016 on the matter. All parties affected by trade defence investigations were invited to participate. There was active engagement from parties representing industry, trade, users and third countries at every level from individuals to representative associations. The social partners (representatives of trade unions and employer's organisations) were also consulted.

The amendments to the EU's basic anti-dumping and anti-subsidy Regulations entered into force on 20 December 2017. On the same day, DG Trade published on its website a report on market distortions in the Chinese economy. The Commission also announced that the next country report will concern Russia.

Main changes

·The main changes to the legislation are:

(a)    The introduction of a new dumping calculation methodology to capture market distortions linked to State intervention in third countries. These distortions can exist in a country as a whole or in a given sector. The purpose of the new methodology is to address any pervasive influence of a State over the economy and to address new economic realities. This new methodology is country-neutral and is applicable equally to all WTO countries. The legislation makes it clear that the adoption of a new dumping methodology is without prejudice to the treatment of any country as a non-market economy. Where it will be established that it is not appropriate to use domestic prices or costs due to significant State-induced distortions, the new methodology would apply.

(b)    A clear timeframe for the application of the new methodology to requests for reviews to ensuring a smooth transition to the new methodology for measures already in place.

(c)    The strengthening of the anti-subsidy instrument to increase the Union's ability to capture the full magnitude of subsidisation by making it possible to address also subsidies which were identified only in the course of an investigation.

·In order to 'trigger' the application of the new methodology it must be established that it is not appropriate to use domestic prices or costs due to significant distortions. In determining the existence of distortions, several criteria will be considered, such as: whether "the market in question being served to a significant extent by enterprises which operate under the ownership, control or policy supervision or guidance of the authorities of the exporting country", whether there is "state presence in firms allowing the state to interfere with respect to prices or costs", whether "public policies or measures [are] discriminating in favour of domestic suppliers or otherwise influencing free market forces", whether there is "lack, discriminatory application or inadequate enforcement of bankruptcy, corporate or property laws", or whether "wage costs [are] being distorted", or "access to finance [is] granted by institutions which implement public policy objectives or otherwise not acting independently of the state".

·The Commission as an investigating authority is responsible for establishing whether significant distortions exist in a particular country. The legislation safeguards all the rights of defence of the interested parties, including the possibility to demonstrate the existence or absence of distortions. The Commission may rely on any information regarding distortions brought by industry or which comes to light in the context of an investigation. In addition, the Commission will be entitled to prepare and issue reports describing the specific circumstances of the market in any given country or sector (see following two points). Any information concerning distortions in an exporting country will be part of the evidence on file in the anti-dumping investigation concerned.

·Reports prepared by the Commission on countries/sectors where distortions are identified may be used by the EU industry, which will be able to rely on the evidence contained in these reports to make their case concerning cases where prices or costs are distorted. The Commission selects the countries for report scrutiny by reference to their relative importance in the EU's overall anti-dumping activity as well as indications that significant distortions may exist. In this context, China was chosen for the first report, with Russia being second.

·The country reports are technical, fact-based documents which draw on many sources, in particular official public records in the countries concerned. Information from international organisations is also included e.g. IMF, OECD. The reports, which are Commission Staff Working Documents, are descriptive in nature and do not pass judgement on the economies in question.

·Where it is not appropriate to use domestic prices and costs due to significant distortions, the normal value will be based on "out-of-country" undistorted costs of production, instead of being based on domestic prices and costs in the exporting country.

·The new rules apply to all new cases initiated after 20 December 2017. In these investigations, if the Commission finds that it is not appropriate to use domestic prices and costs due to significant distortions in the country/sector concerned by the case, the new methodology will apply. The legislation provides for a transition period, i.e. the new methodology will be applied to all new investigations and expiry reviews initiated after 20 December 2017. Interim reviews initiated after that date will be based on the new methodology if the measure itself is based on the new methodology. If the measure subject to review is still based on the old methodology, that methodology will continue to apply to any interim review initiated after 20 December 2017 until the initiation of the first expiry review.

·The new dumping methodology allows for social and environmental standards to be taken into account in a trade defence context. Indeed, in choosing undistorted benchmarks to establish normal value preference will normally be given to countries which adhere to these standards.

Report on market distortions in the Chinese economy

The report examined the existence of significant distortions in the People's Republic of China (PRC) from three different angles, i.e. a macro-economic description of the Chinese economy; the main production factors used in all manufacturing processes and a description of four sectors of the Chinese economy. The report consists of three main sections, each covering one angle, all developed in a number of subsections.

Summary of the report:

Section 1 - Core features of Chinese economy:

Section 1 examined the Chinese economy's core features (all closely interlinked), including: the concept of a ‘socialist market economy’; the role of the Chinese Communist Party (‘CCP’), in relation to the economy; the extensive system of plans issued and followed up by various levels of government under the leadership of the CCP; the extensive State-owned sector including the various supervision and control mechanisms; the financial market, the procurement market and the system of investment screening:

·The unique economic system grants the State, as well as the CCP, a decisive role in the economy.

·The leadership role of the CCP which sets the economic agenda and controls all aspects of its implementation is inherent in China's official designation as a socialist market economy.

·The competence of the CCP goes far beyond a macroeconomic control, extending to the level of business decisions of individual enterprises, both SOEs and – at times – privately owned companies.

·The basic features of the PRC socialist market economy are a dominant state-ownership, which the State and the CCP wish to further strengthen and expand, an interventionist government policy in the economy in order to implement plans e.g. 13th Five Year Plan (FYP) by using a broad array of tools, including guiding catalogues, investment screening, financial incentives, etc.

·Business decisions are very much influenced by the various public policy objectives pursued by the State and the CCP, often resulting in non-market based resource allocations and to the creation of overcapacities in many sectors.

Section 2 – Factors of production

Section 2 examined the allocation of various factors of production, in general, in PRC covering land, energy, capital, material inputs (e.g. raw materials) and labour:

·Land: All land is owned by the State and allocation of land use rights is solely dependent on the state, which may pursue specific political goals rather than free market principles. The rules on land provision and acquisition in the PRC are often unclear and not transparent. Prices are often set by the authorities on the basis of non-market considerations. Many buyers (in particular SOEs) received their land for free or obtain land use rights at a very low price. There are also significant discrepancies between different regions and individual cases.

·Energy: China is currently the world's largest power producer with 50% of the generation capacity as well as 100% of the entire transmission grid being state-owned. Prices are differentiated for different industries and appear to favour certain industries which seems to be aimed at reducing the electricity costs of certain sectors (e.g. non-ferrous metals).

·Capital: Access to capital for corporate actors in China is subject to various distortions including a bias for lending to SOEs, large well-connected private firms and firms active in key industrial sectors. This implies that the availability and cost of capital is not equal for all players in the market. The formal financial system is characterised by a strong State presence and regulatory controls. This is compounded by artificially low borrowing costs, which are not proportionate in comparison with actual returns and risk. Policy considerations concerning strategic sectors also play a role with Government directing investment into key projects and industries by, inter alia, offering loan interest subsidies, loan guarantees and other means of reducing capital costs. While nominal interest rate liberalization was achieved in October 2015, interest rates are still influenced by government-induced factors. Indeed, the share of lending at or below the benchmark rate still represents 45% of all lending. Non-performing loans have increased rapidly in recent years. Faced with a situation of increasing debt-at-risk, the Chinese government has opted to avoid defaults, by heavily influencing bankruptcy procedures. The problem of bad debt has been handled by rolling over more debt, resulting in the creation of so-called ‘zombie’ companies, or by transferring debts ownership (e.g. via mergers or debt-to-equity swaps), without necessarily removing the overall debt problem or addressing its root causes.

·Material inputs: The extensive planning including at the sectoral, provincial and municipal levels regulates basically every aspect of the Chinese economy including many key raw materials and - to some extent - other material inputs. The distortions found in relation to the allocation of raw materials include: plans setting very specific and detailed targets of production thereby influencing the level of supply of specific raw materials on the market; influencing supply and prices by introducing export restrictions; setting prices of certain goods centrally in cases where the prices run against government policies; stockpiling impacting domestic and global prices (e.g. metals, including copper, nickel and tungsten, as well as cotton and agricultural commodities); and finally the State guidance of investments in certain sectors. All this allows the government to artificially influence the supply of specific goods.

·Labour: Chinese workers have no possibility to freely choose or establish a trade union as there is only one legally recognized trade union, the ACFTU, which is closely intertwined with the CCP and the State. Senior positions in ACFTU are occupied by senior Party figures in SOEs or by managers in non-state enterprises hampering their ability to represent workers' interests independently. There is no official national-level right to strike. The Chinese workforce is impacted by the hukou household registration system. Only hukou holders have access to the full range of social security and public welfare benefits. While collective bargaining of wages exists, it is not well developed.

Section 3 – Distortions in selected sectors

Section 3 examined a number of sectors looking at the specific rules and policy dynamics applicable. The sectors, selected because they have featured most in the EU’s trade defence investigations, are steel, aluminium, chemicals and ceramics.

·Steel: Numerous plans, directives and other documents focus on steel, which are issued at national, regional and municipal level. Through them, the government intervenes to shape the development of the sector through a broad range of policy tools and directives related, inter alia, to: market composition and restructuring, raw materials, access to finance and investment, capacity elimination, product ranges, relocation, technical upgrading, etc. The government seeks to promote the creation of ever-larger steel producers ('national champions'). Financial institutions, in particular those that are state-owned, play a key role in channelling to Chinese steel producers' benefits from a wide array of State support measures. Other market distortive practices, such as export restrictions affecting raw materials and inputs and or the inadequate application of bankruptcy rules, exacerbate the phenomenon of State intervention into the sector. This has led to the current problem of overcapacity causing a depression of steel prices globally and a negative impact on, inter alia, the financial situation of steel producers worldwide. As a result the number of trade defence investigations against Chinese steel imports in different jurisdictions has increased.

·Aluminium: China is the largest aluminium producer in the world. Its domestic market is served significantly by large SOEs, which account for a dominant share of Chinese aluminium production and production capacity. As in the case of the steel sector there are numerous plans, directives and other documents pertaining to aluminium, issued at the national, regional and municipal level, showing the high degree of intervention of the Chinese government in the market. Through these and other instruments, the government directs and controls virtually every aspect of the development and functioning of the sector. SOEs are a primary vehicle for implementing these government policies. Government intervention in the sector includes, inter alia, export-related measures, including export duties, export quotas, export performance requirements, minimum export price requirements on different raw materials for aluminium production, as well as VAT rebate policies and export taxes on aluminium products (e.g. primary aluminium and scrap). The Chinese government also consistently granted different types of State support measures to aluminium producers. The extensive intervention of the State in the sector has also led to overcapacity and the consequential negative effects that this brings for the Chinese and global economy.

·Chemicals: Intervention in this sector is also carried out in a top-down manner through sequences of sectoral chemical plans at the central, provincial, local, even municipal levels across a broad geographical setting, as chemical companies of all sizes are located in virtually the whole country. The State influence is more pronounced as the chemical sector's top players are predominantly SOEs, and while their overall sectoral share has decreased somewhat in recent years, this still gives authorities direct control over significant parts of the market. The State and the CCP seek to manage, in detail, not only production methods (as to achieve environmental and innovation goals) but also production capacity (and therefore market supply). At the same time, Chinese authorities manipulate the industrial fabric's structure and geographical location, and influence the product portfolio of companies. Intervention occurs through direct requirements or regulations (e.g. relocation requests, production targets or restraints) or specific support instruments, in most cases of a financial, fiscal or cost-reducing nature. The latter include grants, preferential loans, tax rebates, land-use permits, energy price rebates or special access to inputs.

·Ceramics: As in the case of other key sectors, State involvement in this traditional sector of the Chinese industry is visible through the ladder of planning documents issued at all levels – from national to municipal. Due to its labour-intensive character and traditional role, the State has been closely overseeing, steering and managing its development. The government's intervention into the sector aims, among others, at managing the excess production capacity of certain sub-sectors. This often translates into government requirements to develop large competitive conglomerates, which would also allow greater control of the sector in order to implement government policies. The sector is openly supported by the State, in the form of innovation funds, preferential loans, export incentives, financial transfers, tax relieves, land-use cost relief and employment-stabilisation schemes, among others. These have direct and indirect consequences on the cost structures of companies and product prices.

9.Market economy status (MES)

In an anti-dumping investigation, Commission services usually compare the export price of a product with its 'normal value', which is the price paid in the domestic market of the exporting country or a constructed normal value (Article 2(1) of the basic anti-dumping Regulation). However, this methodology can only be used if costs and prices in the exporting country are reliable and essentially the result of the play of supply and demand, i.e. set according to market economy rules. For TDI cases initiated before 20 December 2017, for the specific purpose of applying the EU basic anti-dumping Regulation, the practice was that a country could be considered a market economy if it fulfilled five specific criteria.

As from 20 December 2017, in the case of countries which are non-WTO members and feature on Annex 1 of EU Regulation 2015/755, the normal value will be calculated on the basis of costs and prices found in an appropriate market-economy third country, selected according to the same criteria as applied prior to the entry into force of the new rules on 20 December 2017. Today, these countries are: Azerbaijan, Belarus, North Korea, Turkmenistan and Uzbekistan.

10.Information and Communication activities / Bilateral contacts

10.1.Small and medium sized enterprises (SMEs)

During 2017, the SME helpdesk received and dealt with many requests for information, relating to specific cases as well as broader queries addressing procedural and substantive elements of proceedings. The TDI website also specifically highlights the SME's role in TDI proceedings and offers practical advice and help. The special helpdesk was set up in 2004 to help SMEs deal with the specific challenges they face in TDI investigations due to their small size, resource limitations and their fragmentation.

10.2.Bilateral contacts/information activities – EU economic operators including their key stakeholder associations and third countries

Explaining the legislation and practice of the EU's trade defence activity and exchanging views on third country practices continues to be an important part of the work of the TDI services.

The Commission organises one week seminars for TDI officials from third countries. As an example, 20 officials from 6 different countries (Egypt, Japan, Thailand, Tunisia, Turkey and Vietnam) and representatives from the WTO secretariat participated in the latest such seminar organised in November 2016. Given that this seminar was organised in late 2016, no such seminar was organised in 2017. In addition, bilateral meetings to exchange best practices with TDI officials from the US, China, Japan and Korea took place in 2017.

During 2017, the trade defence services continued to entertain contacts with practically all key stakeholder organisations affected by trade defence. One of the key topics of these meetings was the legislative changes concerning TDI described above.

11.Judicial review: decisions given by the Court of Justice and the General Court

11.1.Overview of the judicial reviews in 2017.

In 2017, the GC and the CJ rendered 29 judgments in the areas of anti-dumping or anti-subsidy. 15 judgments were handed down by the GC. 12 concerned appeals of GC rulings which were decided by the CJ. Last but not least, the CJ also rendered two preliminary rulings in the TDI field.

11.2.Cases pending

A list of the anti-dumping/anti-subsidy cases before the GC and the CJ still pending at

the end of 2017 is given in Annex S (34 pending before the GC and 22 before the CJ).

11.3.New cases

Twenty new cases were lodged in 2017 (compared to 34 in 2016, 20 in 2015, 37 in 2014, 33 in 2013, 23 in 2012, and 16 in 2011). Eleven of these were lodged before the GC (ten actions for annulment and one application for taxation of costs) and nine before the CJ (six appeals and three preliminary rulings).

11.4.Judgments rendered by the General Court

Imports of certain polyethylene terephthalate('PET') originating in India, Taiwan and Thailand - T422/13 - Committee of Polyethylene Terephthalate Manufacturers in Europe v Council – Judgment of 5 April 2017.

Anti-dumping duties have been imposed on PET originating from Indian, Taiwan and Thailand since 2000. Following an expiry review, the Council in the contested decision rejected the Commission's proposal for a Regulation maintaining the anti-dumping measures on imports of PET originating in India, Taiwan and Thailand for another five-year period. Contrary to the Commission, the Council found that it was unlikely that the removal of anti-dumping measures would lead to the continuation or recurrence of injurious dumping and injury, and that it was against the Union interest to impose anti-dumping measures because the cost to the imports, users and consumers were disproportionate to the benefits for the Union industry. Consequently, by Implementing Decision 2013/226/EU, the Council rejected the Commission proposal for prolonging the definitive anti-dumping duty on imports of certain polyethylene terephthalate originating in India, Taiwan and Thailand ('contested decision').

The Committee of Polyethylene Terephthalate Manufacturers in Europe (the applicant) lodged an application at the GC for the annulment of Council Implementing Decision 2013/226/EU. The applicant also claimed that the GC should order the Council to compensate them for the damage suffered as a result of the contested decision.

The applicant claimed, essentially, that the Council infringed Article 11(2) and Article 21(1) of the basic anti-dumping Regulation by making manifest errors of assessment when it concluded, first that the expiry of the measures was unlikely to lead to the recurrence of material injury and second that the extension of anti-dumping duties was clearly not in the Union interest. The applicant argued that these conclusions were based on considerations that reflected a partial and distorted selection of the facts established by the Commission's investigation, and on other unsubstantiated and clearly erroneous assertions.

The GC examined whether the considerations that were relied on in the contested decision made it possible to conclude, without making a manifest error of assessment, that it had not been demonstrated that the expiry of the anti-dumping duties would result in the recurrence of injury. The GC found that the Council failed to mention economic data that was relevant and identified by the Commission in its analysis. Furthermore, the GC found that the Council had drawn economic conclusions on market developments without giving adequate reasons for them. The GC also found that the Council had made findings that were not relevant to its analysis, and that it had drawn conclusions from the Commission's analysis that contradicted the Commission's conclusions without providing any explanation or reason. Therefore the GC found that the Council's analysis in the contested decision was vitiated by manifest errors of assessment and in certain respects by a lack of reasoning and contradictory reasons. Since the Council's conclusion on the Union interest was based on the unlikely recurrence of injurious dumping, the defects with regard to a recurrence of injury also affected the Council's conclusion on the Union interest. In conclusion, the GC annulled the contested decision.

Lastly, the GC rejected the applicant's claim for damages. The GC found that the applicant failed to establish a direct and sufficient causal link to make the EU liable. More specifically, the GC found that the applicants failed to make a distinction, in the reduction of their earnings before interests, taxes, depreciation and amortization, between the part which would be caused by the increase in imports at low prices and that resulting from other factors likely to cause or lead to a decrease in that single economic indicator.

Imports of crystalline silicon photovoltaic modules and key components (cells) originating in or consigned from China – T783/14 – SolarWorld AG vs Commission – Judgment of 16 February 2017.

SolarWorld AG (the applicant) sought annulment of the Commission's decision, contained in a letter of 15 September 2014 addressed to the Chinese Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME) on the downward adjustment of the minimum import price for imports of photovoltaic modules and cells manufactured by Chinese exporting producers subject to a price undertaking with effect from 1 October 2014 for the last quarter of 2014 (the contested decision).

In June 2013 the Commission imposed a provisional anti-dumping duty on imports of crystalline silicon photovoltaic modules and key components (i.e. cells and wafers) originating in or consigned from the People's Republic of China. In conjunction with the Regulation, the Commission adopted a decision accepting an undertaking by a group of Chinese companies. The Commission could not establish a correlation between prices of raw materials and those of final products manufactured in the EU. Therefore, it was examined whether an alternative methodology could be established in the undertaking in order to address changes in price levels on the market. The solution found was that the Commission, on its own initiative or that of the CCCME, shall adapt Minimum Import Prices (MIP) if there is an average price difference between the quarter preceding the given quarter as reported by the Bloomberg database (see Clause 3.5 of the undertaking).

By the contested decision, the Commission approved a downward adjustment of the MIP pursuant to Clause 3.5 of the undertaking. The applicant submitted that the contested decision infringed Article 8(1) of the basic anti-dumping Regulation. The applicant claimed that both the initial MIP and the adjusted MIPs must be set at levels that are such as to remove the injurious effects of the dumping and subsidies. According to the applicant, the methodology under Clause 3.5 did not allow for a prior assessment as to whether the adjusted MIP would remove the injurious effects of the dumping and subsidies, which is allegedly contrary to Article 8(1).

The GC did not accept the applicant's point of vue. It found that the wording of Clause 3.5 provides that it is an automatic adjustment of the MIP, leaving no room for a systematic verification of the elimination of the injurious effects of the dumping prior to the adjustment of the MIP. According to the GC, Article 8(1) of the basic anti-dumping Regulation does not require the Commission to conduct systematic monitoring of the elimination of the injurious effects of the dumping prior to every application of Clause 3.5 leading to adaptation of the MIP.

Furthermore, the GC found that the Commission concluded, by accepting the undertaking in its entirety in Decision 2013/707, that both the initial MIP and the adaptation mechanism ensured that the MIP were always at a level sufficient to eliminate the injurious effects of the dumping. It was therefore for the applicant to show that the adjustment mechanism did not allow for the objective pursued by Article 8(1) to be attained.

According to the GC, the applicant did not provide any evidence or argumentation capable of showing that the adjustment mechanism under Clause 3.5 was manifestly inappropriate for ensuring that the adjustment of the MIP would be sufficient to eliminate the injury caused by the dumped imports. Therefore, the applicant failed to show that the contested decision, which is based on the adjustment mechanism under Clause 3.5, is illegal. Accordingly, the GC dismissed the action as lacking any foundation in law.

Imports of crystalline silicon photovoltaic modules and key components (cells) originating in or consigned from China – cases T-162/14, T-160/14, T-157/14 and the joined cases T-158/14, T-161/14 and T-163/14 – Judgments rendered on 28 February 2017.

The following summaries are judgments rendered in annulment proceedings relating to Council Implementing Regulation (EU) No 1238/2013 of 2 December 2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China ('contested regulation').

The applicants in these six cases sought the annulment of the contested regulation and raised more or less the same pleas in law. Only in case T-160/14, an additional argument was made. Therefore, this section describes case T-162/14 in detail and subsequently also describes the notable exception raised in case T-160/14.

Note that the GC rejected all pleas and dismissed all of the actions brought by the applicants in all of the cases. The cases are summarized below. The following judgments were all delivered on 28 February 2017.

Imports of crystalline silicon photovoltaic modules and key components (cells) originating in or consigned from China – T-162/14 – Canadian Solar Emea GmbH and others v Council – Judgment of 28 February 2017.

Canadian Solar Emea GmbH and four other companies established in China; Canadian Solar Manufacturing (Changshu), Canadian Solar Manufacturing (Luoyang) Inc, Csi Cells Co. Ltd (Suzhou) and Csi Solar Power (Suzhou) (the applicants) brought the present action. The applicants sought the annulment of the contested regulation, in so far as it applied to the applicants.

The applicants claimed that the institutions infringed several provisions of the basic anti-dumping Regulation. Essentially, the applicants claimed that the contested regulation was adopted in breach of Article 2(7)(a), in so far normal value was calculated on the basis of the non-market economy methodology on products from market economies. Furthermore, the applicants claimed that the institutions made an ill-defined definition of the products and thus violated Article 1(4). Moreover, the applicants claimed that the Commission infringed Article 2(7)(c) (as it provided at the material time) by exceeding the three month deadline for Market Economy Treatment ('MET') determination. Lastly, the applicants claimed that the institutions infringed Article 3 and 9(4) by not examining the injury caused by the dumped imports and by other known factors separately, and that the level of duty imposed exceeded what was necessary to remove the injury caused by dumped imports.

The GC noted it was common ground that the institutions only used the methodology under Article 2(7)(a) to establish normal value for all the categories of the product concerned, since the applicants claimed that they were exporting different kinds of products to the EU. According to the GC, Article 2(7)(a) must be interpreted in accordance with Article 1(3) of the basic anti-dumping Regulation and "exporting country" could be both the country of origin and the intermediate country. The GC considered that the EU legislature has not provided a rule in Article 1(3) that the exporting country must be defined in the same way for all categories of the product concerned, irrespective of their origin. In the absence of this intention the institutions enjoy a wide margin of discretion. The GC therefore found that it is not contrary to Article 1(3) of the basic anti-dumping Regulation to regard the country of origin as the exporting country for some products and the intermediate country as the exporting country for others. The GC also rejected the applicants' argument that Article 2(7) of the basic anti-dumping Regulation has to follow the specific case law of the WTO Dispute Settlement Body, since according to the GC it cannot be established that it was the EU legislature's intention to implement particular obligations by Article 2 of the GATT by adopting Article 2(7).

Furthermore, the GC noted that the institutions applied the basic criterion to define the product concerned in a consistent manner, and that the applicants failed to show that the institutions committed any manifest error of assessment of the factors which they applied. Consequently, the GC found that the applicants were not successful in showing that the institutions had made an error of assessment with regard to the factors they decided were relevant for the definition of the product concerned. Furthermore, the GC found that the institutions evaluated the criteria raised by the interested parties, but concluded that they did not impact the definition of the product concerned.

The GC also noted that the institutions had established a causal link between the injury suffered by the EU industry and the dumped imports from China. The GC considered that the institutions had assessed in a detailed and comprehensive manner the other possible causes of injury, such as imports from third countries and overcapacity, but concluded that their impact is only limited and none of them was breaking the causal link mentioned above.

Consequently, having rejected all of the applicants' claims, the GC dismissed the action.

The below cases follow the same reasoning as case T-162/14:

Imports of crystalline silicon photovoltaic modules and key components (cells) originating in or consigned from China – T-157/14 – JingAo Solar Co. Ltd and others v Council – Judgment of 28 February 2017.

Imports of crystalline silicon photovoltaic modules and key components (cells) originating in or consigned from China – Joined cases T-158/14, T-161/14 and T-163/14 - JingAo Solar Co. Ltd and Others v Council – Judgment of 28 February 2017.

However, further aspects were dealt with in the following case:

Imports of crystalline silicon photovoltaic modules and key components (cells) originating in or consigned from China – T-160/14 – Yingli Energy and others v. Council – Judgment of 28 February 2017.

Yingli Energy (China) Co. Ltd and others (the applicants) claimed in addition to the points described above that the Commission infringed Article 20(3) of the basic anti-dumping Regulation by not supplying them with enough information on the increased injury margin and the exports in the final disclosure.

The GC found that the applicants were able to identify these factors by the information sent to them by the Commission in the administrative procedure, which the applicants actually acknowledged at the hearing. Thus, the GC concluded that the institutions had not infringed the obligation to disclose information in the final disclosure under Article 20(3).

In conclusion, the GC dismissed the action.

Imports of tartaric acid originating in China – T-442/12 – Changmao Biochemical Engineering Co.Ltd v Council – Judgment of 1 June 2017.

Changmao Biochemical Engineering Co. Ltd. sought the annulment of Council Implementing Regulation (EU) No 626/2012 of 26 June 2012 amending Implementing Regulation (EU) No 349/2012 imposing a definitive anti-dumping duty on imports of tartaric acid originating in the People's Republic of China (the 'contested regulation').

In June 2006, the Council imposed definitive anti-dumping measures against China on tartaric acid. The measures were extended in April 2012 following an expiry review. Following an application for a partial interim review concerning the applicant and another exporting producer, the Council adopted the contested regulation in June 2012. In the contested regulation, the Council refused to grant Market Economy Treatment ('MET') to the applicant and the anti-dumping duty on the applicant's exports to the Union was increased to 13.1%. Normal value was constructed on the basis of information received from a cooperating producer in the analogue country Argentina. Since the Argentinian producer did not manufacture one type of tartaric acid produced by Changmao, normal value of that type was constructed using the difference in price between the two tartaric types. However, when the applicant requested information on the method of calculating normal value, in particular the source of the prices of the two different tartaric types and the factors affecting the price comparison, the institutions refused its request because it constituted confidential information.

The GC recalled that the obligation to provide information, which is incumbent in anti-dumping measures, must be reconciled with the obligation to respect confidential information. According to the GC however, the obligation to respect confidential information cannot deprive the applicant's right to defence of its substance.

According to the GC the contested regulation makes no reference to any valid justification warranting the refusal to communicate the information relating to the price difference between the two acids, and the difference was fundamental to the calculation of the normal value of DL tartaric acid. According to the GC the applicant would have been better able to defend itself in the absence of that procedural error.

In sum, the GC found that the applicant's right of defence and Article 20(2) were infringed when the institutions, without a valid reason, refused to grant it access to the information it requested on the price difference between the two acids. Consequently the GC annulled the contested regulation in so far it applied to the applicant.

Bicycles consigned from Pakistan - T435/15 - Kolachi Raj Industrial (Private) Ltd v Commission – Judgment of 10 October 2017 

In this judgment, the GC annulled Commission Implementing Regulation (EU) 2015/776 of 18 May 2015 (the 'contested regulation') extending the definitive anti-dumping duty imposed by Council Regulation (EU) No 502/2013., to the extent that it applied to Kolachi Raj Industrial (Private) Ltd, the single exporter of bicycles from Pakistan.

The contested regulation extended the duty of 48,5% on imports of bicycles from China to imports of bicycles consigned from Pakistan after an anti-circumvention investigation. Kolachi, was found to be circumventing the duties via assembly operations within the meaning of Article 13(2) of the basic Regulation.

Kolachi claimed that the Commission failed to prove that the parts of the assembled product were "from" the People's Republic of China (the country subject to measures) in the meaning of Article 13(2) of the basic anti-dumping Regulation

The issue at stake was the determination of where the parts used in the assembly of bicycles (frames, forks, alloy rims and plastic wheels) are from. Under Article 13(2)(b) an assembly operation in a third country is to be regarded as circumventing the measures in force where the parts constituting 60% or more of the total value of the parts of the assembled product are from countries subject to measures. Kolachi claimed that the parts it used for assembly in Pakistan were manufactured in Sri Lanka so they could not be considered as being from China. It relied on certificates of origin issued by the Department of Commerce in the Democratic Socialist Republic of Sri Lanka to prove origin of the parts.

The Commission found that the certificates were insufficient to prove the origin for various reasons. For instance, the certificates were issued not on the basis of manufacturing costs but on the basis of a mere projection of manufacturing costs for the future, valid for one year. Also, supporting cost statements were missing for some parts. On the basis of additional information regarding the manufacturing costs of all the parts (frames, forks, alloy rims and plastic wheels) in Sri Lanka the Commission calculated that more than 65% of the total raw materials used for the manufacture of bicycles parts in Sri Lanka came from China and less than 25% Sri Lankan value was added to those raw materials in the manufacturing process for those parts in Sri Lanka. Thus, by applying by analogy Article 13(2)(b) to the parts, the Commission concluded that the parts originate in China.

The Court stated that under Article 13(2) it would be sufficient to refer simply to where the parts are from without the need to prove that those parts also originate in that country. The Court pointed out however that it may be necessary in case of doubt to verify whether the parts from a third country originate in another country. The Court held that in this case it was established that the parts came from Sri Lanka but that there was doubt whether the parts originate in this country indeed.

The Court found that the Commission was right in the circumstances of this case to consider that the certificates did not constitute sufficient evidence to demonstrate the Sri Lankan origin of the bicycles parts and a sufficient statement of reasons was present. However, it disagreed with the application by analogy of Article 13(2)(b) to the manufacturing of the parts in Sri Lanka. It held that the provision could not establish origin and that its application to manufacture in Sri Lanka is outside the scope of the anti-circumvention investigation concerning Pakistan. Only on that basis the Court annulled the Commission Implementing Regulation (EU) 2015/776 for Kolachi.

The judgment is under appeal.

11.5.Judgments rendered by the Court of Justice

Bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in Indonesia, Malaysia, Sri Lanka and Tunisia or not – C-248/15 P, C-254/15 P and C-260/15 P – Maxcom v City Cycle Industries (Appeal) - Judgment of 26 January 2017.

Maxcom Ltd, the Council and the European Commission ('appellants') sought to set aside the judgment of the GC of 19 march 2015, City Cycle Industries v. Council (T-413/13) in which the GC annulled Regulation (EU) No 501/2013 of 29 May 2013 in so far as it extended the definitive anti-dumping duty imposed by Implementing Regulation (EU) No 990/2011 on imports of bicycles originating in China to imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia ('regulation at issue').

This case essentially concerned the burden of proof and the standard of proof required to establish circumvention in circumstances where some of the producer-exports insufficiently cooperated in the investigation. In essence, the appellants argued that the Council was entitled to conclude in the regulation at issue that City Cycle was not a genuine Sri Lankan producer of bicycles and was not involved in assembly operations exceeding the thresholds laid down in Article 13(2) of the basic Regulation. City Cycle is a company based in Sri Lanka which exports bicycles to the EU. Furthermore, the appellants argued that the burden of proof should lie with the individual exporting-producers to establish that they were not engaging in transhipment practices. According to the appellants, the GC reversed the burden of proof in this aspect with its judgment.

The CJ recalled that there is no provision in the basic anti-dumping Regulation preventing the EU institutions from, when there is sufficient evidence, establishing the existence of circumvention practices when producer-exporters accounting for a significant part of the imports of the concerned product to the EU have not cooperated sufficiently with the investigation. The CJ stated that the evidence establishing circumvention under these circumstances must nonetheless fulfil the four criteria under Article 13 of the basic anti-dumping Regulation. According to the CJ, there is no legal presumption that would infer directly from an interested party's failure to cooperate that circumvention practices exist.

In the regulation at issue, the Council's conclusion was based on two findings, i.e. that there had been a change in the pattern of trade and that some of the producer-exporters had failed to cooperate. The CJ found that this was not enough to constitute sufficient evidence to conclude under Article 13 that City Cycle engaged in transhipment operations. According to the CJ, the EU institutions must have in their possession evidence to show that the change in the pattern of trade stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty.

The CJ thus found that the GC did not reverse the burden of proof under Article 13(1) of the basic anti-dumping Regulation. The GC merely found that it was not possible based on the available information to the Council to conclude that transhipment operations were being engaged at a national level and did not constitute a factual basis for suggesting that City Cycle was involved in such operations.

In essence, the CJ rejected the appellants' claims and dismissed the action.

Bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, whether declared as originating in Indonesia, Malaysia, Sri Lanka and Tunisia or not – C-247/15 P, C-253/15 P and C-259/15 P – Maxcom v Chin Haur Indonesia (Appeal) - Judgment of 26 January 2017.

Maxcom Ltd, the Council of the European Union and the European Commission (the appellants) sought to set aside the judgment of the GC of 19 March 2015, Chin Haur Indonesia v Council (T412/13) by which the GC annulled Regulation (EU) No 501/2013 of 29 May 2013 insofar as it extended the definitive anti-dumping duty imposed by Implementing Regulation (EU) No 990/2011 on imports of bicycles originating in China to imports of bicycles consigned from Indonesia, Malaysia, Sri Lanka and Tunisia ('regulation at issue').

This case essentially concerns the burden of proof and the standard of proof required to establish circumvention in circumstances where some of the producer-exports insufficiently cooperated in the investigation. The GC had essentially found that there had been insufficient evidence to conclude that Chin Haur engaged in transhipment and that the mere lack of cooperation could not establish the existence of such practices. In essence, the appellants argued that the Council was entitled to conclude in the regulation at issue that City Cycle was not a genuine Indonesian producer of bicycles and was not involved in assembly operations exceeding the thresholds laid down in Article 13(2) of the basic Regulation. Furthermore, the appellants argued that the burden of proof should lie with the individual exporting-producers to establish that they were not engaging in transhipment practices. According to the appellants, the GC reversed the burden of proof in this aspect with its judgment.

The CJ recalled that there is no provision in the basic anti-dumping Regulation preventing the EU institutions from, when there is sufficient evidence, establishing the existence of circumvention practices when producer-exporters accounting for a significant part of the imports of the concerned product to the EU have not cooperated sufficiently with the investigation. The CJ stated that the evidence establishing circumvention under these circumstances must nonetheless fulfil the four criteria under Article 13 of the basic anti-dumping Regulation. According to the CJ, there is no legal presumption that would infer directly from an interested party's failure to cooperate that circumvention practices exist.

The CJ also held that the EU institutions must have evidence to show that the change in the pattern of trade stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. It does not follow from the simple fact that Chin Haur failed to provide evidence that it was in fact an Indonesian bicycle producer or that it met the criteria laid down in Article 13(2) of the basic Regulation that that company was engaged in transhipment operations. Therefore, the CJ found that the GC's finding was not vitiated by an error of law.

As it was common ground that Chin Haur did not cooperate sufficiently in the investigation, the Council was entitled to rely on a body of consistent evidence in concluding that that company had circumvented anti-dumping measures. Indeed the Council relied on a certain amount of factual evidence gathered by the Commission’s agents in the course of the verification visit at Chin Haur’s premises, i.e. that Chin Haur did not have the machinery to produce the parts in the volumes that it was claiming to produce. The GC found that the evidence did not prove that Chin Haur was engaged in transhipment operations, even though it acknowledged that some of the evidence, i.e. the fact that Chin Haur’s Chinese supplier was not mentioned anywhere or that certain boxes were filled with frames bearing no origin contributed to uncertainty as to that company's actual activities. Additionally, Chin Haur failed to justify the figures provided in the exemption forms.

According to the CJ, the GC denied the Council by its judgment the possibility of basing its conclusion on a body of consistent evidence and required that institution to furnish direct evidence that Chin Haur was in fact engaged in transhipment operations, at odds with the standard of proof required to show circumvention where cooperation is not forthcoming from producer-exporters.

It thus followed that the GC erred in the application of Article 13(1) in finding that the Council was not entitled to conclude that Chin Haur was engaged in transhipment. The CJ therefore set aside the judgment of the GC and gave a judgment itself in the matter, in which it found that the Council had established a causal link between the transhipment operations and the change in the pattern of trade between Indonesia and EU. Consequently, the CJ sided with Maxcom, the Council and the Commission and reversed the judgment of the GC and dismissed the action for annulment brought by of Chin Haur.

Imports of certain iron or steel fasteners originating in the People’s Republic of China– C376/15 P and C377/15 P – Changshu City Standard Parts Factory v Council of the European Union (Appeal) - Judgment of 5 April 2017.

By their appeals, Changshu City Standard Parts Factory and Ningbo Jinding Fastener Co. Ltd (the appellants) sought to set aside the judgment of the GC of 29 April 2015, Changshu City Standard Parts Factory and Ningbo Jinding Fastener v Council (T558/12 and T559/12), by which the GC dismissed the appellants' actions for annulment of Council Implementing Regulation (EU) No 924/2012 of 4 October 2012 amending Regulation (EC) No 91/2009 imposing a definitive anti-dumping duty on imports of certain iron or steel fasteners originating in the People’s Republic of China.

The appellant's crucial ground of appeal concerned the Council's exclusion of certain export transactions for the purpose of calculating the dumping margin. According to the appellants, the GC's reasoning was vitiated by an error of law and a misinterpretation of Article 2(11) of the basic anti-dumping Regulation. The GC had reached the conclusion that the Council had not committed a manifest error of assessment by excluding from the calculation of the dumping margin the product types that did not match any of the products produced and sold by an Indian producer and therefore had not infringed Article 2(11). According to the GC, the EU institutions were justified in doing this since there was an absence of comparable prices. The GC found that the EU institutions were right to take this approach since no other method would have allowed for a fairer comparison, as long as the calculation was made on the basis of a significant representation of the product types under considerations. The appellants disputed this finding and claimed that all export sales of the product under consideration are to be included in the comparison for the purpose of calculating the dumping margin under Article 2(11) of the basic anti-dumping Regulation.

The CJ found that the wording of Article 2(11) refers to "all export transactions to the Union" and that the objective pursued by Article 2(11) of the basic Regulation is to reflect the full degree of dumping being practiced. Furthermore, with regards to the context of Article 2(11) and in light of Articles 1(2) and 1(4), the dumping margin is to be calculated on the basis of the definition of "the product under consideration", as put forward by the EU institutions at the time of the investigations is initiated.

Consequently, the CJ found, in light of the wording, objective and context, Article 2(11) could not be interpreted as allowing the exclusion of export transactions relating to certain types of the product under consideration from the calculation of the dumping margin. On the contrary, according to the CJ all transactions have to be taken into account for the purposes of the calculation.

Essentially, in the light of the foregoing the CJ held that the GC had wrongly found that the EU institutions were entitled to exclude export transactions relating to certain types of the product under consideration because there were no "comparable prices" for those product types. Thus, the CJ annulled the contested regulation in so far it applied to the appellants.

Imports of ferrosilicon originating in Russia – C-239/15 P – RFA International LP v European Commission (Appeal) - Judgment of 4 May 2017.

By its appeal, RFA International LP (RFA) sought to have set aside the judgment of the GC of 17 March 2015, RFA International v Commission (T466/12), by which the GC dismissed its action for partial annulment of Commission Decisions concerning its applications for a refund of anti-dumping duties paid on imports of ferrosilicon originating in Russia.

RFA essentially submitted that the GC erred in law as regards the allocation of the burden of proof concerning the adjustments for calculating the export price under Article 2(9) of the basic anti-dumping Regulation.

The CJ stated that it is for the EU institutions to make the adjustments provided for by Article 2(9) if the requirements for the application of that provision are met. However, it is for the appellant to furnish evidence in support of its claim that the adjustments that have been established are incorrect. RFA did not dispute before the GC that the requirements for the application of Article 2(9) were met. Therefore, since the said article is applicable, the GC did not err in law in finding that it was for RFA to submit detailed evidence to show that the level of adjustments made was excessive.

Furthermore, RFA argued that it should be accepted that the allocation of the burden of proof established in the judgment of 16 February 2012, Council and Commission v Interpipe Niko Tube and Interpipe NTRP (C191/09 P and C200/09 P) in relation to Article 2(10) is applicable by analogy. The CJ affirmed that it is true, according to that judgment, that when the EU institutions consider that it is appropriate to apply a downward adjustment of the export price, on the ground that a sales company affiliated to a producer carries out functions comparable to those of an agent working on a commission basis, it is the responsibility of the EU institutions to adduce at the very least consistent evidence showing that that condition is fulfilled.

Nonetheless, in view of the differences between the adjustments made in connection with the construction of the export price under Article 2(9) and those made in the context of Article 2(10) of the basic anti-dumping Regulation, RFA’s argument concerning the application, by analogy, of the allocation of the burden of proof established in the judgment of 16 February 2012, Council and Commission v Interpipe Niko Tube and Interpipe NTRP (C191/09 P and C200/09 P) could not call into question the conclusion that the GC did not err in law in finding that it was for RFA to submit detailed evidence to show that the level of adjustments made was excessive.

In conclusion, the CJ dismissed the action for annulment brought by RFA.

Imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from China – C-204/16 P and C-205/16 P – SolarWorld AG v. Council (Appeal) – Judgment of 9 November 2017.

This is a summary of the cases C-204/16 P and C-205/16 P. The disputes have the same parties and concern essentially the same issues, with the former case concernining anti-dumping measures and the latter case concerning anti-subsidy measures. By its appeal, SolarWorld AG (the applicant) sought to set aside the order of the GC of 1 February 2016 (SolarWorld and Others vs Council in T-141/14) in so far it dismissed the action as inadmissible. The appplicant and Others sought the annulment of Article 3 of Council Implementing Regulation (EU) No 1238/2013 of 2 December 2013 imposing anti-dumping duties and collecting definitively the provisional duties imposed on import sof crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from the People's Republic of China ('regulation at issue').

In June 2013, the Commission imposed provisional anti-dumping duties on the concerned products. The Commission adopted a decision in August 2013 accepting an undertaking offered by a group of cooperating Chinese exporting producers. Subject to certain requirements, these companies were exempted from the anti-dumping duties under Article 3 of the regulation at issue, which was adopted in December 2013. The applicant and others challenged Article 3 of the regulation at issue, claiming inter alia that there had been a manifest errors of assessment since the GC had found that Article 3 of the regulation as issue, which was the sole provision challenged, was not severable from the other provisions of that regulation. Thus, the GC dismissed the action as inadmissible.

The applicant raised two grounds of appeal. The first alleged that the GC erred in finding that Article 3 of the regulation at issue is not severable from the remainder of that regulation. The second alleged infringement of essentially the right to an effective remedy under Article 47 of the Charter of Fundamental Rights of the European Union (the Charter).

The CJ recalled that the partial annulment of an EU act is only possible if the elements whose annulment is sought may be severed from the remainder of the act. In that regard, the CJ has previously held that the requirement of severability is not satisfied in the case where the partial annulment of an act would have the effect of altering its substance.

The CJ stated that EU legislature adopted trade defence measures constituting a set or a package when adopting the regulation at issue. According to the CJ the purpose was to remove the injurious effects on the EU industry while safeguarding the interests of that industry. The EU legislature concluded that the Minimum Import Price (MIP) in the undertaking would have a positive impact on the European market for the products at issue, which according to the CJ appears to have had a significant and separate effect from that of the imposition of the duty. In essence, the CJ found that both the imposition of anti-dumping duty and the undertaking were key means of achieving the objective pursued by the regulation in issue. The annulment of the undertaking would therefore necessarily affect the substance of the regulation at issue, according to the CJ. In essense, this ground of appeal was therefore rejected.

Lastly, the CJ essentially found that the fact that the applicant cannot bring an action only against a part of the regulation at issue, which cannot be severed, does not infringe its rights under Article 47 of the Charter in so far the applicant can challenge the regulation at issue in its entirety before the GC.

Consequently, the CJ dismissed the appeal.

Bicycles originating in China - C61/16 P - European Bicycle Manufacturers Association v Giant (Appeal) - Judgment of 14 December 2017.

The CJ dismissed the appeal brought by the Union industry (EBMA) against the judgment of the GC of 26 November 2015 Giant (China) v Council (T-425/13). The GC annulled Council Regulation (EU) No 502/2013 of 29 May 2013 imposing a definitive anti-dumping duty on imports of bicycles originating in China following an interim review pursuant to Article 11(3) of the basic Regulation ('regulation at issue') as far as the applicant, the Chinese exporting producer Giant Co. Ltd. (Giant), was concerned.

This case essentially concerned two issues, namely the interpretation of the term 'necessary information' under Article 18(1) of the basic anti-dumping Regulation and if the GC erred in law when it found that the Council had been incorrect to rely on the facts available in calculating the export price by applying the said article.

Definitive anti-dumping duties of 30,6% on imports of bicycles originating in China have been in place since 1993. In March 2012 the Commission initiated a full interim review of the anti-dumping measures. Giant submitted a Market Economy Treatment (MET) claim form for its group companies. The Commission concluded that the Giant group was related to two Chinese companies, S.G. and Jinshan Development and Construction (Jinshan), and that Giant therefore need to return a MET claim for Jinshan and all companies belonging to that company. Giant argued that, since it was only very indirectly related to Jinshan through a joint venture and Jinshan was not a producer of the product concerned, it was not required to submit a MET claim for that company. Without those forms, the Commission indicated that it could draw conclusions on the basis of the facts available, in accordance with Article 18 of the basic anti-dumping Regulation. In June 2013 the Council adopted the regulation at issue in which it found, by applying Article 18(1) of the basic anti-dumping Regulation, that it was impossible to determine an individual margin of dumping for the Giant group.

The GC upheld Giant's action for annulment of the regulation at issue by finding essentially that the EU Institutions failed to make a link between the information that had not been provided by Giant, namely an MET claim for the Jinshan Group, and its relevance to calculate the export price for the Giant group. EBMA appealed the judgment and relied on two grounds. Essentially, EBMA alleged misinterpretation and misapplication of Article 18 of the basic anti-dumping Regulation. Article 18 provides that the EU institutions may rely on available facts to make findings inter alia when an interested party does not provide necessary information within the time limits provided in the Regulation.

The CJ found that it follows from the wording, context and objective of Article 18(1) that the term 'necessary information' refers to information held by the interested parties that the EU institutions ask them to provide in order to reach the appropriate findings in an anti-dumping investigation.

Furthermore, the CJ stated that the GC verified whether the information relating to the Jinshan group companies which the EU institutions wished to obtain in order, inter alia, to determine Giant's export price, was likely to influence that determination. The GC concluded that the information was irrelevant to the calculation of the export price. Thus, under these circumstances and in light of the definition of 'necessary information' above, the CJ concluded that the GC did not err in law by finding that the Council infringed Article 18(1) when it relied on the facts available to calculate the export price.

Essentially for these reasons, the CJ dismissed the appeal in its entirety.

12.Activities in the framework of the World Trade Organization (WTO)

12.1.Dispute settlement in the field of anti-dumping, anti-subsidy and safeguards

12.1.1.Overview of the WTO dispute settlement procedure

The WTO provides for a rigorous procedure for the settlement of disputes between WTO Members concerning the application of the WTO agreements. The procedure is divided into two main stages. The first stage, at the level of the WTO Members concerned, consists of a bilateral consultation. Upon failure of the consultation to settle the dispute, the second stage can be opened by requesting the WTO Dispute Settlement Body to establish a panel. WTO Members, other than the complaining and defending party, with an interest in a given case, can intervene as 'third parties' before the panel. The panel issues a report, which can be appealed before the Appellate Body ('AB') (each appeal being heard by three members of a permanent seven-member body set up by the Dispute Settlement Understanding (DSU)). Both the panel report and the report by the Appellate Body are adopted by the Dispute Settlement Body ('DSB') unless the latter rejects the report by unanimity.

The findings of a panel or Appellate Body report have to be implemented by the WTO Member whose measures have been found to be inconsistent with the relevant WTO Agreements. If the complaining WTO Member is not satisfied with the way the reports are implemented, it can ask for the establishment of a so-called 'implementation panel'. Here too, an appeal against the findings of the panel is possible.

It should be noted that the anti-dumping, anti-subsidy and safeguards measures are among the most common subject matters in WTO dispute settlement.

Regarding the dispute settlement cases against the EU the main developments were the following:

On 5 September 2017, the Appellate Body circulated its report in the case against the EU on Anti-Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia (DS442). The Appellate Body essentially upheld the Panel's finding that Indonesia had failed to demonstrate that the EU acted inconsistently with Article 2.4 of the ADA.

On 6 July 2017, the Panel issued its report in the case against the EU concerning Countervailing Measures on Certain Polyethylene Terephthalate from Pakistan (DS486). The Panel essentially found that the EU, by finding that the entire amount of the remitted duties was a countervailable subsidy under the SCM agreement, acted inconsistently with Article 3.1(a) of the SCM agreement.

On 12 December 2016, the People's Republic of China requested consultations with the EU on the provisions of the EU basic anti-dumping Regulation which govern the establishment of normal value in relation to imports from China (DS516). A first round of consultations was held on 23 January 2017 and the panel was subsequently established on 3 April 2017.

There were no developments concering Russia's complaint against the EU's Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia (DS494).

The first 3 cases mentioned are described below.

12.1.2.    Dispute settlement procedures against the Union

European Union – Anti-dumping measures on Imports of Certain Fatty Alcohols from Indonesia (DS442)

The Appellate Body (AB) report was circulated on 5 September 2017.

The AB upheld the Panel's report which essentially found that Indonesia had not demonstrated that the EU acted inconsistently with Article 2.4 of the Anti-dumping agreement ('ADA'). The dispute concerned anti-dumping duties on imports of certain fatty alcohols and their blends originating in Indonesia imposed originally by Council Implementing Regulation (EU) No 1138/2011. The duties expired in November 2016, but Indonesia nevertheless chose to file the appeal. The core issue of the dispute was whether the EU infringed Article 2.4 of the ADA by treating a mark-up paid by an Indonesian producer and exporter to its related trading company in Singapore as difference affecting price comparability, and therefore making a downward adjustment to the export price. The EU had found that the mark-up represented a payment for a service for which there was no corresponding pricing component on the domestic side. Thus, the EU characterized the mark-up as a commission paid in respect of export sales to the EU. Indonesia argued in essence that the mark-up was a simple transfer of profits between related parties within a single economic entity ('SEE'). According to Indonesia, the existence of such economic entity precludes the EU from making the adjustment by. The AB found that there are no differences affecting price comparability that are precluded under Article 2.4 of the ADA. Instead, the AB found that the need to make due allowances must be assessed in light of the specific circumstances of each case. According to the AB, the affiliation between related parties, whether SEE or something else, is not capable in principle of precluding adjustments under Article 2.4 of the ADA. The AB thus concluded that the EU had sufficient evidentiary basis to treat the mark-up as a difference affecting the price comparability.

European Union – Countervailing Measures on Imports of PET from Pakistan (DS486)

The panel report was circulated on 6 July 2017.

The Panel found that the EU acted inconsistently with several provisions of the Agreement on Subsidies and Countervailing Measures ('SCM Agreement'). The dispute concerned countervailing measures by the EU on imports of Certain Polyethylene Terephthalate from Pakistan. The Panel found inter alia that the EU acted inconsistent with Article 1.1(a)(1)(ii) of the SCM Agreement by failing to provide a reasoned and adequate explanation for why it found that the entire amount of remitted duties under the Pakistani Manufacturing Bond Scheme, which it found to be the financial contribution, was in excess of those which have accrued. The Panel found that the EU had not provided any basis upon which to depart from the Excess Remissions Principle. Therefore, the Panel found that EU acted inconsistently with Article 3.1(a) of the SCM agreement by finding the existence of a subsidy that was contingent on export performance. The EU had found that Pakistan, by providing loans through pre-approved banks, which were not allowed to charge interested rates above a specified level, conferred a countervailable 'benefit' to the exporter. The Panel found that the EU acted inconsistently with Article 14(b) of the SCM Agreement by failing to properly identify what the exporter would have paid on a comparable commercial loan in calculating the benefit conferred.

The EU notified the Dispute Settlement Body on 30 August 2017 of its decision to appeal the Panel's report to the Appellate Body.

European Union – Measures related to Price Comparison Methodologies (DS516)

On 12 December 2016, China requested consultations with the EU on the provisions of the EU’s basic anti-dumping Regulation which govern the establishment of normal value in relation to imports from China (DS516). In its request, China argued that when it acceded to the WTO, China and other WTO Members agreed that, for a transitional period of fifteen years, China-specific treaty provisions would apply to the determination by other Members of certain elements of "price comparability" in anti-dumping proceedings involving Chinese imports. Specifically, under paragraph 15(a)(ii) of the Protocol on the Accession of China, importing WTO Members are, subject to certain conditions, exceptionally permitted to use a methodology not based on a strict comparison with domestic prices or costs in China. China argues that, from the date of expiry of paragraph 15(a)(ii) on 11 December 2016, the European Union is no longer entitled to determine normal value on the basis of a special calculation methodology. A first round of consultations was held on 23 January 2017. The panel was subsequently established on 3 April 2017. The panel members were appointed by the Director General of the WTO on 10 July 2017. On 8 December 2017, the Chair of the panel informed that the beginning of the panel's work had been delayed as a result of a lack of available lawyers in the Secretariat. The panel also informed that it expected to issue its final report to the parties not before the second half of 2018.

It should be noted that, on 12 December 2016, China also requested consultations with the USA on the continued application by the US of non-market economy dumping calculation methodology in relation to imports from China (DS515).

12.2.    Other WTO activities

In the course of 2017, intensive negotiations on the fisheries subsidies file were conducted in Geneva. These negotiations culminated at the 11th WTO Ministerial Conference that took place in December 2017 in Buenos Aires. However, no substantive outcome was achieved there. At the same time, WTO members agreed on a work programme that will form a basis for further negotiations in view of adopting a comprehensive agreement at the next Ministerial Conference in 2019. Members also committed to fully respect their notification obligations in the area of fisheries subsidies.

In 2017, the EU submitted a new notification of subsidies in line with its WTO obligations covering the years 2015 and 2016. The notification included all subsidies granted at EU level as well as subsidies granted by each of the Member States. In October 2017, a review of the submission began in the special session of the Subsidies and Countervailing Committee which will continue into 2018. In the special Committee, the EU also participated in the continued review of the 2015 subsidy notification at the meetings held in April and October 2017.

In addition, the EU participated in the work of the regular Subsidies and Countervailing and Safeguards Committees in April and October 2017. In April, the EU (along with Canada, Japan and the US) presented a paper in the WTO Subsidies and Countervailing Committee regarding the role of subsidies as a contributor to excess capacity in various sectors of economic activity. The EU also organized a seminar on the same issue in October 2017 at the WTO and presented the main conclusions of that seminar at the October session of the Committee. In addition to these discussions, the problem of poor transparency on subsidies by many WTO members was also addressed.

Moreover, the EU participated actively in the regular work of the WTO Anti-Dumping and Safeguards Committees answering questions on EU cases and raising issues of concern on trade defence activity by other countries which affect EU exporters.

In the Informal Group on Anti-Circumvention, in April 2017, the EU made a presentation on the EU's legislation and practice in dealing with the circumvention of anti-dumping measures. The EU also actively participated in both sessions of the Anti-dumping Working Group on Implementation (WGI) which discussed standards for initiation, the standing test and ensuring effective participation in anti-dumping investigations (April 2017) and injury-related issues, as well as the analysis of the effects of imports on domestic industry prices and the methodology for analysing imports by the domestic industry (October 2017).  For the October session of the WGI, the discussant was Mr. Wolfgang Mueller, from the EU's trade defence services.

13.Conclusion

2017 was a year with intensive trade defence work. The number of investigations remained at a high level. The pressure related to industrial overcapacities in China was persisting. This reflects again the number of complaints received from EU industry that included sufficient evidence to support allegations of injurious dumping or subsidies. At the same time, the number of provisional and definitive measures imposed remained at the same demanding level as compared to 2016. A further feature of the trade defence activity in 2017 is that the vast majority of the new investigations that came up at definitive stage in that year resulted in the imposition of definitive measures. Indeed, the number of proceedings terminated without the imposition of measures was particularly low. Additionally, the number of review investigations initiated increased substantially, by 75% over the previous year. As was the case with previous years, the EU took no safeguard action.

2017 stood out in terms of legislative activity. It led to the introduction of a new anti-dumping methodology for calculating normal value in investigations relating to countries where serious market distortions occur, as well as a strengthened anti-subsidy instrument. The new regulation was accompanied by the publication of a report on state-induced market distortions existing in China. Last but not least, 2017 paved the way for the modernisation of EU trade defence instruments. Taken together, these amendments to the basic Regulations constitute a major overhaul of the EU's trade defence policy and instruments for the benefit of its stakeholders. This has served to ensure that the EU is equipped with sufficiently robust trade defence instruments to deal with distortions in the global economy.

LIST OF ANNEXES

ANNEX A

New investigations initiated
during the period 1 January – 31 December 2017

A.    Anti-dumping investigations (chronological by date of publication)

B.    Anti-subsidy investigations (chronological by date of publication)

C.    Reopenings (chronological by date of publication)

ANNEX B

A.    New investigations initiated by product sector during the period 2013 – 2017 (excluding the reopenings)

B.    New investigations initiated by country of export during the period 2013 – 2017 (excluding the reopenings)

ANNEX C

Imposition of provisional duties in the course of new investigations
during the period 1 January – 31 December 2017

A.    Anti-dumping investigations (chronological by date of publication)

B.    Anti-subsidy investigations (chronological by date of publication)

ANNEX D

New investigations concluded by the imposition of definitive duties
during the period 1 January – 31 December 2017

A.    Anti-dumping investigations (chronological by date of publication)

B.    Anti-subsidy investigations (chronological by date of publication)

ANNEX E

New investigations terminated without the imposition of measures
during the period 1 January - 31 December 2017

A.    Anti-dumping investigations (chronological by date of publication)

B.    Anti-subsidy investigations (chronological by date of publication)

ANNEX F

Expiry reviews initiated or concluded
during the period 1 January - 31 December 2017
(chronological by date of publication)

ANNEX G

Interim reviews initiated or concluded
during the period 1 January - 31 December 2017
(chronological by date of publication)

ANNEX H

Other reviews initiated or concluded
during the period 1 January - 31 December 2017
(chronological by date of publication)

ANNEX I

New exporter reviews initiated or concluded
during the period 1 January - 31 December 2017
(chronological by date of publication)

A.    Anti-dumping investigations

B.    Anti-subsidy investigations ("accelerated" investigations)

ANNEX J

Anti-absorption investigations initiated or concluded
during the period 1 January - 31 December 2017
(chronological by date of publication)

ANNEX K

Anti-circumvention investigations initiated or concluded
during the period 1 January - 31 December 2017
(chronological by date of publication)

ANNEX L

Safeguard investigations initiated and concluded
during the period 1 January - 31 December 2017
(chronological by date of publication)

ANNEX M

Undertakings accepted or repealed
during the period 1 January - 31 December 2017
(chronological by date of publication)

ANNEX N

Measures which expired / lapsed
during the period 1 January - 31 December 2017
(chronological by date of publication)

A.    Anti-dumping investigations (chronological by date of publication)

B.    Anti-subsidy investigations (chronological by date of publication)

ANNEX O

Definitive anti-dumping measures in force on 31 December 2017

a. Ranked by product (alphabetical)