REPORT FROM THE COMMISSION - TWENTIETH ANNUAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT ON THE COMMUNITY'S ANTI-DUMPING AND ANTI-SUBSIDY ACTIVITIES - OVERVIEW OF THE MONITORING OF THIRD COUNTRY ANTI-DUMPING, ANTI-SUBSIDY AND SAFEGUARD CASES (2001)

REPORT FROM THE COMMISSION - TWENTIETH ANNUAL REPORT FROM THE COMMISSION [1] TO THE EUROPEAN PARLIAMENT ON THE COMMUNITY'S ANTI-DUMPING AND ANTI-SUBSIDY ACTIVITIES - OVERVIEW OF THE MONITORING OF THIRD COUNTRY ANTI-DUMPING, ANTI-SUBSIDY AND SAFEGUARD CASES (2001)

[1] Previous reports were given in COM(83)519 final/2; COM(84)721 final; COM(86)308 final; COM(87)178; COM(88)92 final; COM(89)106; COM(90)229 final; SEC(91)92 final; SEC(91)974 final; SEC(92)716 final; COM(93)516 final; COM(95)16 final; COM(95)309 final; COM(96)146 final; COM(97)428 final, COM(98)482 final, COM(1999)411 final, COM(2000)440 final and COM(2001)571 final.

(20th Annual report to the Parliament - 2001)

CONTENTS

Purpose and aim

1. Overview of the legislation and basic concepts

1.1. Anti-dumping and anti-subsidy

1.1.1. The applicable law

1.1.1.1. The international framework

1.1.1.2. The Community legislation

1.1.2. What is dumping and what are countervailable subsidies - the material conditions

for the imposition of duties

1.1.2.1. Dumping and subsidies

1.1.2.2. Material injury and causation

1.1.2.3. Community interest

1.1.3. Procedure

1.1.4. The anti-dumping and anti-subsidy services in the Commission

1.2. Safeguards

1.2.1. The legal framework

1.3. Changes to the Community legislation in 2001

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

2.1. New investigations

2.2. Review investigations

3. Overview of activities in 2001

3.1. New investigations

3.1.1. Initiations

3.1.2. Provisional measures

3.1.3. Definitive measures

3.1.3.1. Overview

3.1.3.2. Details on some individual cases (in chronological order)

3.1.4. Investigations terminated without measures

3.1.4.1. Details on some individual cases (in chronological order)

3.2. Review investigations

3.2.1. Expiry reviews

3.2.1.1. Initiations

3.2.1.2. Reviews concluded with confirmation of duty(ies)

3.2.1.3. Reviews concluded by termination

3.2.2. Interim reviews

3.2.3. Other" interim" reviews

3.2.4. New exporter reviews

3.2.5. Absorption investigations

3.2.6. Circumvention investigations

3.3. Safeguards

4. Monitoring of undertakings

5. Refunds

6. Judicial review : decisions by the Court of Justice / Court of First Instance

6.1. Overview of the judicial reviews in 2001

6.2. Cases pending

6.3. New cases

6.4. Judgments rendered by the Court of First Instance

6.4.1. Gas-fuelled, non-refillable pocket flint lighters originating, inter alia, in Japan.

6.4.2. Ferro-silicon originating in Egypt and Poland

6.4.3. Stainless steel bars originating in India

6.5. Orders rendered by the Court of First Instance and by the Court of Justice

6.5.1. Ferro-silicon originating in China, Kazakhstan, Russia and Ukraine

6.6. Judgments rendered by the Court of Justice

6.6.1. Appeal against CFI Judgment of 18 December 1997 in cases T-159&160/94

6.6.2. Preliminary ruling : Reference to the Court under Article 234 EC by the Finanzgericht Düsseldorf (Germany) for a preliminary ruling - Implementation of

the Judgment in case C-245/95

7. Anti-dumping and anti-subsidy investigations of third countries concerning imports

from the Community or its Member States

7.1. Anti-dumping cases against the Community or its Member States

7.1.1. Overview

7.1.2. Details on some individual cases

7.1.2.1. Low enriched uranium from France, Germany, the Netherlands and the UK

7.1.2.2. Hot-rolled steel products from the Netherlands

7.1.2.3. Stainless steel bars from France, Germany, Italy, Luxembourg and the UK

7.1.2.4. Structural steel beams from Germany, Italy, Luxembourg and Spain

7.1.2.5. Cold rolled flat products of stainless steel from the Community

7.1.2.6. Wheat flour from the Community

7.1.2.7. Polyvinyl chloride from Belgium, Germany, Finland, Greece, Italy and

the Netherlands

7.2. Anti-subsidy cases against the Community or its Member States

7.2.1. Overview

7.2.2. Details on some individual cases

7.2.2.1. Low enriched uranium from France, Germany, the Netherlands and the UK

7.2.2.2. Stainless steel bars from Italy

7.2.2.3. Canned peaches from Greece

7.2.2.4. Canned tomatoes from Italy

8. Safeguard measures concerning the Community

8.1. Overview

8.2. Details on some individual cases

8.2.1. Steel imports

8.2.2. Canned peaches

8.2.3. Toys

8.2.4. Steel pipes

8.2.5. Textiles

8.2.6. Nitrates of potassium

8.2.7. Sugar confectionery (caramels)

8.2.8. Magnesium fire-resistant materials

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

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

9.1.1. Overview of the WTO dispute settlement procedure

9.1.2. Dispute settlement procedures initiated by the Community

9.1.2.1. USA - Privatisation methodology (countervailing duties)

9.1.2.2. USA - Countervailing measures on corrosion-resistant carbon steel flat products from Germany

9.1.2.3. USA - The Dumping and Subsidisation Offset Act

9.1.2.4. Argentina - ceramic floor tiles

9.1.2.5. USA - steel imports

9.1.2.6. Argentina - canned peaches

9.1.3. Dispute settlement procedures initiated by third countries against the Community.

9.1.3.1. India - anti-dumping duties on imports of cotton-type bed linen

9.1.3.2. Brazil - anti-dumping duties on malleable cast iron tube or pipe fittings

9.2. Other WTO activities

10. Conclusion

LIST OF ANNEXES

ANNEXES : SUMMARY

ANNEX A // New investigations initiated during the period 1 January - 31 December 2001

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX B // New investigations initiated

A. by product sector during the period 1997 - 2001 (31 December)

B. by country of export during the period 1997 - 2001 (31 December)

ANNEX C // New investigations concluded by the imposition of provisional duties during the period 1 January - 31 December 2001

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX D // New investigations concluded by the imposition of definitive duties during the period 1 January - 31 December 2001

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX E // New investigations terminated without imposition of measures during the period 1 January - 31 December 2001

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX F // Expiry reviews initiated or concluded during the period 1 January - 31 December 2001

ANNEX G // Interim reviews initiated or concluded during the period 1 January - 31 December 2001

ANNEX H // Other reviews concluded during the period 1 January - 31 December 2001

ANNEX I // New exporter reviews initiated or concluded during the period 1 January - 31 December 2001

ANNEX J // Anti-absorption investigations initiated or concluded during the period 1 January - 31 December 2001

ANNEX K // Anti-circumvention investigations initiated or concluded during the period 1 January 31 December 2001

ANNEX L // Accelerated review investigations (anti-subsidy) initiated or concluded during the period 1 January - 31 December 2001

ANNEX M // Undertakings accepted or repealed during the period 1 January - 31 December 2001

ANNEX N // Measures which expired during the period 1 January - 31 December 2001

ANNEX O // Definitive anti-dumping measures in force on 31 December 2001

A. Ranked by product

B. Ranked by country

ANNEX P // Definitive anti-subsidy measures in force on 31 December 2001

A. Ranked by product

B. Ranked by country

ANNEX Q // Undertakings in force on 31 December 2001

A. Ranked by product

B. Ranked by country

ANNEX R // Anti-dumping & anti-subsidy investigations pending on 31 December 2001 :

A. New investigations (ranked by product)

B. Review investigations (ranked by product)

C. Ranked by country (new & review investigations)

ANNEX S // Refunds during the period 1 January - 31 December 2001

ANNEX T // Court cases

A. Court cases pending before the Court of Justice and the Court of First Instance of the European Communities on 31 December 2001

B. Judgments, orders and other decisions rendered by the Court of Justice and the Court of First Instance of the European Communities during 2001

ANNEX U // Anti-dumping and anti-subsidy investigations of third countries concerning imports from the Community or its Member States

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX V // Third country safeguard actions during 2001

Purpose and aim

This report is submitted to the European Parliament following its resolution of 16 December 1981 on the Community's anti-dumping activities [2], and the report of the European Parliament's Committee on industry, external trade, research and energy [3].

[2] OJC 11, 18.1.1982, p.37

[3] PE 141.178/fin of 30.11.1990, reporter Mr Gijs DE VRIES.

This report summarises the developments in general policy. However, contrary to the previous years, the report no longer contains a commentary on each individual case. In order to avoid duplication of information which has already been published in the Official Journal of the European Communities, it was decided to only give an overview of the investigations together with the most essential information, such as for instance the duty imposed. In turn, cases which merit some special attention are treated in more detail. Consequently, the report is more factual and condensed and covers the essential facts of the year. The detailed annexes which cover all cases ensure that the factual content of the report remains meaningful and sufficient to understand the activity in 2001. Finally, this new shorter format will also allow to deal with the practical consequences of the enlargement of the European Union in the future, bearing in mind issues such as, inter alia, translations.

As last year, this issue continues to provide an overview on the Court cases relating to the trade policy instruments. It also includes an overview of the activities in relation to anti-dumping, anti-subsidy and safeguard measures adopted by third countries, as well as actions under the dispute settlement understanding of the World Trade Organisation by and against the Community.

The year 2001 can be described as a return to normality with regard to the initiations of investigations and the impositions of measures, in comparison with the years 1999 and 2000. These latter years showed an exceptional increase in the number of new investigations initiated and in the number of provisional/definitive measures imposed.

In 2001, 10 countries initiated a total of 25 anti-dumping and anti-subsidy investigations against imports from Community Member States. The Commission provided assistance to Community companies in a large number of these cases and intervened vis-à-vis third country investigating bodies as well as in the WTO context.

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

This report is also available to the general public. The 2000 version was released in more or less 500 copies. (Internet Website http://europa.eu.int/comm/trade/policy/dumping/reports.htm)

1. Overview of the legislation and basic concepts

1.1. Anti-dumping and anti-subsidy

1.1.1. The applicable law

1.1.1.1. 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.

Since that time considerable efforts have been made to harmonise the rules relating to trade 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 protective measures can be adopted. The Community played an active role in the negotiation of these relevant criteria which are reflected in its own legislation.

1.1.1.2. The Community legislation

The Community's anti-dumping and anti-subsidy legislation was first enacted in 1968 and has since been modified several times. The current basic texts (EC and ECSC), which form the legal basis of anti-dumping and anti-subsidy investigations in the Community, entered into force between March 1996 and April 1998. These are in line with the Anti-Dumping and Anti-Subsidy Agreements adopted during the GATT/WTO negotiations. The basic texts are :

-Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community [4]

[4] OJ L 56, 6.3.1996, p. 1, as last amended by Council Regulation (EC) No 2238/2000 (OJ L 257, 11.10.2000, p. 2)

-Council Regulation (EC) No 2026/97 of 6 October 1997 on protection against subsidized imports from countries not members of the European Community [5]

[5] OJ L 288, 21.10.1997, p. 1

-Commission Decision No 2277/96/ECSC of 28 November 1996 on protection against dumped imports from countries not members of the European Coal and Steel Community [6]

[6] OJ L 308, 29.11.1996, p. 11, as last amended by Commission Decision No 435/2001/ECSC (OJ L 63, 3.3.2001, p. 14)

-Commission Decision No 1889/98/ECSC of 3 September 1998 on protection against subsidized imports from countries not members of the European Coal and Steel Community [7]

[7] OJ L 245, 4.9.1998, p. 3

These regulations and decisions will overall be referred to as the "basic Regulation(s)".

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

The Community interest test is a public interest clause and states that measures can only be taken if they are not contrary to the overall interest of the Community. This requires an analysis of all the economic interests involved, including those of the domestic industry, users, consumers and intermediaries.

The lesser duty rule requires the measures imposed by the Community to be lower than the dumping or subsidy margin, if such lower duty rate is sufficient to remove the injury suffered by the Community industry.

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

1.1.2.1. Dumping and subsidies

Dumping is traditionally defined as price discrimination between national markets, or as selling below cost of production. The Community's anti-dumping legislation defines anti-dumping as selling a product in the Community 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) .

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 sales prices of other producers on the domestic market or the cost of production. In the latter case, a company is selling at dumped prices if its export prices are below the cost of production.

A certain segregation of the market exists in the majority of the cases where dumping occurs on a more than incidental basis. That segregation may be caused, amongst other reasons, by government regulation or consumer preferences. As a result, exporters are shielded, at least to a certain degree, from international competition on their domestic market.

Subsidies can have similar effects to sales at dumped prices. They involve a direct support from a government which has the effect of conferring a benefit to producers or exporters (e.g. grants, tax and duty exemptions, preferential loans at below commercial rates, export promotion schemes, etc.), all aimed at allowing the exporters to sell at low prices in the Community.

1.1.2.2. 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 Community at dumped or subsidised prices. Measures can only be taken if these exports cause material injury to Community producers, who cannot compete on an equal footing with exporters.

Typical injury indicators are that the dumped and/or subsidised import volumes increase over a certain period and import prices undercut the sales prices of the Community 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 Community producers by using a predatory pricing strategy. In any event, the injury analysis requires that all relevant factors be taken into account before deciding whether the Community industry is in fact suffering "material injury".

A further condition for the imposition of measures is the need for "causality": the injury must be caused by the dumping or the subsidy. This condition is fulfilled when the injury to the Community 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.

1.1.2.3. Community interest

Finally, it has to be established that the application of measures would not be contrary to the overall interest of the Community. 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.

1.1.3. 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, and the Community is obliged to justify its decisions in this publication. Finally, it is ensured that 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 Central and Eastern European Countries and Turkey. The rules relating to a new case are summarised below.

Initiation

A case normally starts with a sufficiently substantiated complaint from the Community industry manufacturing the same or a similar product to the one referred to in the complaint. After receipt of this complaint, 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 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 and in the Community, traders (in particular importers) and other interested parties, such as users. These 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, investigations 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. These calculations often involve the processing of thousands of transactions, and require a complex analysis of production costs.

The results of the calculations and other findings are summarised in a working document, on the basis of which it is decided - after consultation of the Member States in the Advisory Committee - whether to impose provisional measures or to terminate the proceedings. In either eventuality, at this stage 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 verify the Commission's calculations and to submit comments. Comments can also be made at a hearing. These provisional submissions and comments are taken into account when a second, definitive, working document is prepared by the Commission.

After final disclosure and consultation of the Member States on the basis of the second working document, the Commission makes a proposal to the Council whether or not to confirm the provisional measures and impose definitive measures. Another possibility is that the Commission accepts 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 Council decides on the adoption of the Commission proposal by simple majority vote, i.e. at least eight Member States have to be in favour of the Commission proposal. The regulation imposing definitive duties, and deciding on the collection of the provisional duties, is published in the Official Journal.

In view of the findings made, it may also be decided to terminate a case without the imposition of measures. The same procedure (disclosure, comments, hearing, working document) as described above applies. The termination of the case would generally be made by a Commission Decision after consultation of the Member States.

Timing

The procedure described above is subject to strict statutory time limits. Thus, 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 (13 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 Community 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 given criteria.

The basic Regulations provide for administrative reviews and distinguish between interim reviews, newcomer reviews and expiry reviews. Those procedures are initiated normally only on the basis of substantiated evidence and will normally not exceed 12 months in length.

The expiry review is intended to determine if the expiry of the measures would lead to continuation or recurrence of dumping and injury. During the five year period, the Commission may perform an interim review. Under the latter procedure, the Commission will consider whether the circumstances with regard to subsidy/dumping and injury have changed significantly or whether existing measures are achieving the intended results in removing the injury. Finally, the basic Regulations provide that a review shall be carried out to determine individual margins for new exporters in the exporting country concerned.

Judicial reviews

The procedural rights of the parties, including hearings and access to non-confidential files, are 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 Court of First Instance and the Court of Justice in Luxembourg. Furthermore, the possibility of recourse to the WTO dispute settlement mechanism exists for WTO members.

1.1.4. The anti-dumping and anti-subsidy services in the Commission

During 2001, anti-dumping and anti-subsidy investigations were still carried out, among other responsibilities, by Directorates B and C of Directorate General Trade in charge of external commercial policy. Whilst Directorate C dealt with the dumping and subsidy aspects of investigations, Directorate B covered the areas of injury and Community interest. In addition, Unit 1 in Directorate B was in charge of policy aspects for both Directorates and Unit 1 in Directorate C monitored the activity of third countries on anti-dumping, anti-subsidy and safeguards. A restructuring took place in April 2002, which resulted in the creation of one Directorate covering all Trade Defence Instruments.

1.2. Safeguards

1.2.1. The legal 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. The GATT 1947 and the WTO Agreement imposed strict conditions for the application of this "escape clause". As they stand, Article XIX GATT 1994 and the WTO Agreement on Safeguards not only set out rules and criteria, 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 short-term temporary defence measure that applies to all imports of the product covered by a measure, irrespective of origin [8].

[8] However, as regards non-WTO members, safeguard measures may be selective and apply to products originating in a specific country.

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 domestic producers and d) a causal link between the imports and the injury. Ultimately, the adoption of measures in the Community requires an analysis of all interests concerned, i.e. the impact of the measures on producers, users and consumers. These principles are reflected in the relevant Community regulations [9], as well as a provision requiring that safeguard action is only taken when it is in the Community's interest to do so.

[9] Council Regulations (EC) No 3285/94 on common rules for imports, No 519/94 on common rules for imports from certain third countries and No 517/94 on common rules for imports of textile products from certain third countries.

1.3. Changes to the Community legislation in 2001

In 2000, the Council adopted Regulation (EC) No 2238/2000 [10] amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community. The amendment consisted of :

[10] OJ L 257, 11.10.2000, p. 2

-maintaining the market economy regime applicable to China and Russia since 1998 [11] if it is shown that market economy conditions prevail;

[11] Council Regulation (EC) No 905/98 (OJ L 128, 30.04.1998)

-extending that market economy regime to Ukraine, Vietnam and Kazakhstan;

-and extending this benefit to any other non-market economy countries as soon as they become a member of the WTO.

In order to align both the EC and the ECSC regimes in this respect, the Commission adopted on 2 March 2001, Decision No 435/2001/ECSC [12] amending Decision No 2277/96/ECSC on protection against dumped imports from countries not members of the European Coal and Steel Community.

[12] OJ L 63, 3.3.2001, p. 14

Furthermore, the Community has adopted legislation that allows it to adapt, when necessary, anti-dumping and anti-subsidy measures as a result of WTO-panel decisions. As such, on 23 July 2001, the Council adopted Regulation (EC) No 1515/2001 on the measures that may be taken by the Community following a report adopted by the WTO Dispute Settlement Body concerning anti-dumping and anti-subsidy measures [13]. This Regulation introduces specific provisions in order to permit the Community to bring a measure taken under Regulation (EC) No 384/96 or Regulation (EC) No 2026/97 into conformity with the recommendations and rulings contained in a report adopted by the Dispute Settlement Body (DSB) of the WTO. These provisions can consist of :

[13] OJ L 201, 26.7.2001, p. 10

-repealing, suspending or amending the disputed measure with or without a review, and/or;

-adopt any other special measures which are deemed to be appropriate in the circumstances.

In order to fully take into account the legal interpretations made in a report adopted by the DSB, the above provisions, if necessary, can also be invoked for non-disputed measures.

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

2.1. New investigations

At the end of 2001, the Community had 175 anti-dumping measures [14] and 16 countervailing measures in force. The anti-dumping measures covered 68 products and 36 countries (see Annex O); the countervailing measures covered 11 products and 8 countries (see Annex P). Of the measures, the large majority was in the form of duties; however, in a significant number of cases, undertakings were accepted.

[14] The measures are counted per product and country concerned.

Of the measures in force at the end of 2001, 34 concerned China, 20 India, 11 the Republic of Korea, 11 Russia, 9 Indonesia, 8 Japan and 11 measures applied to non-market-economy countries, including Ukraine with 8 measures and Belarus with 3 measures. Twenty-four measures concerned one or more of the 10 Central and Eastern European Countries (CEEC) [15].

[15] These countries are : Romania, Bulgaria, Slovak Republic, Czech Republic, Slovenia, Hungary, Poland, Latvia, Lithuania and Estonia.

For a more realistic view of the impact of anti-dumping measures, however, one has to look at the trade volume of the products concerned, which varies considerably depending on the product sector. The biggest trade volumes are often generated by high technology, such as electronics, which are high-value products. It should be noted that in 2001, only 0,5% [16] of total imports into the Community was affected by anti-dumping or anti-subsidy measures.

[16] Source Comext.

TABLE 1

Anti-dumping and anti-subsidy new investigations

during the period 1 January 1997 - 31 December 2001 [17]

[17] The initiation of a case concerning several countries is accounted as separate investigations/proceedings per country involved.

>TABLE POSITION>

2.2. Review investigations

Anti-dumping measures, including price undertakings, may be subject, under the basic 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 circumvention investigations (Article 13).

Also anti-subsidy measures may be subject, under the basic 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 circumvention investigations (Article 23).

These reviews continue to represent a major part of the work of the Commission's anti-dumping services. In the period from 1997 to 2001, a total of 161 review investigations were initiated. These review investigations represented almost 42% of all investigations.

In 2001, 29 reviews were initiated. Of these, 12 were expiry reviews, 14 interim reviews, 2 newcomer review and 1 circumvention review.

An overview of the review investigations in 2001 can be found in Annexes F to L. Table 2 provides statistical information for the years 1997 - 2001.

TABLE 2

Reviews of anti-dumping and anti-subsidy investigations

during the period 1 January 1997 - 31 December 2001 [18]

[18] The initiation of a case concerning several countries is accounted as separate investigations/proceedings per country involved.

>TABLE POSITION>

Details on the conclusions can be found under heading 3.2.

3. Overview of activities in 2001

3.1. New investigations

3.1.1. Initiations

In 2001, 33 investigations were initiated. Six of them concerned anti-subsidy investigations. They involved 10 different products from 19 different countries. Details of these investigations are given in Annex A. Most affected country is India with 8 investigations, followed by Indonesia with 3 investigations. As to the products, the most affected is the iron and steel sector.

In comparing with 2000 (31 initiations), the number of new investigations confirms a return to the normal situation which has existed throughout the nineties.

In the five-year period from 1997 to 2001, 224 investigations were initiated on imports from 40 countries. The main sectors concerned by the investigations were iron and steel with 16 investigations, chemical and allied with 5 investigations and textiles and allied also with 5 investigations. A breakdown of the product sectors is given in Annex B(A).

The main countries concerned during the period from 1997 to 2001 were India with 31 investigations, the People's Republic of China with 25 investigations, Korea with 22 investigations and Taiwan with 17 investigations. The investigations initiated over the last five years are broken down by country of export in Annex B(B).

The alphabetical list of cases initiated in 2001 can be found below, together with the name of the complainant. More information can be obtained from the Official Journal to which reference is given in Annex A.

>TABLE POSITION>

>TABLE POSITION>

3.1.2. Provisional measures

In 2001, provisional duties were imposed in 18 proceedings involving imports from 16 different countries. As shown in Table 1 (see point 2.1), this figure compares to 48 in 2000 and 17 in 1999.

The alphabetical list of cases where provisional measures were imposed during 2001 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 C.

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3.1.3. Definitive measures

3.1.3.1. Overview

During 2001, definitive duties were imposed in 12 cases involving imports from 10 different countries and covering 6 products. The People's Republic of China and Russia featured with 2 investigations each. Poland, Ukraine, the Czech Republic, Thailand, Turkey, India, Korea and Japan feature with one investigation each.

The alphabetical list of cases where definitive measures were imposed during 2001 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. Annex D also gives some additional information on import and consumption volumes.

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3.1.3.2. Details on some individual cases (in chronological order)

1. Aluminium foil from the People's Republic of China and Russia

The total Community consumption of aluminium foil (commonly known as aluminium household foil) in the investigation period amounted to 86.117 tonnes at a value of EUR 191 million. The value of the total imports originating in the countries concerned amounted to EUR 35 million.

This was not a straightforward case since the Commission, after nine months of investigation, was still not ready to take a decision. Indeed, certain aspects of dumping and causation needed to be investigated further before a decision could be taken. However, definitive anti-dumping measures were eventually imposed by the Council on 17 May 2001.

The duties imposed for the two countries concerned were not very different, i.e. 15,0% in the case of China and 14,9% in the case of Russia but they were established on a different basis. Indeed, in application of the "lesser duty rule" [19], the duty for China was based on the level of injury, while the duty for Russia was based on the level of dumping found. The Russian exporting producer, when informed of the conclusions of the investigation, offered to increase its export prices to a non-dumped level and offered an undertaking to that effect. This undertaking was accepted by the Commission and no duty was subsequently imposed on aluminium foil produced by this exporter.

[19] This rule requires that either the level of dumping or the level of injury, whichever is the lower, constitutes the level of the duty.

It should be noted that this was the first time that a producer in Russia was granted Market Economy Treatment (MET), which meant that domestic prices and costs were used as a basis to establish normal value. The request for MET of the producer in China was rejected on the grounds that this company did not operate under market economy conditions. For this exporter normal value had to be established on prices in an analogue country, in this case the USA.

The investigation also showed that two events coincided at exactly the same time frame (1996 until 1999). On the one hand, the imports from the two countries concerned increased by 18 percentage points in terms of market share (from 1% to 19%), while on the other hand the Community lost 17 percentage points.

This was clearly reflected in the situation of the Community industry which lost 8% in terms of production and sales, while suffering a massive 14% price depression which in turn led to losses of 7%. There was consequently no doubt that Community producers suffered material injury caused by the dumped imports.

Given that no compelling reasons were found not to take action against the imports in question, the Council accepted the Commission's proposal to impose definitive anti-dumping duties while the Commission accepted the price undertaking from the sole Russian exporter.

2. Integrated electronic compact fluorescent lamps (CFL-i) from the People's Republic of China

Definitive anti-dumping measures were imposed by the Council on 19 July 2001 at the level of the dumping margins found, except for one exporting producer (Philips & Yaming) for which the injury margin was lower. The rate of duties ranged from 0% to 59,5%. The country-wide duty was 66,1%.

The economic interest of the case was fairly average, with total Community consumption in the investigation period amounting to around EUR 555 million and to around 123 million units. The value of the total imports originating in China during the same period amounted to around EUR 69 million. Nevertheless, the proceeding presented several particularly interesting aspects.

Firstly, even though China was not a WTO member, for definitive duties the dumping margins were recalculated to take account of the conclusions of the WTO panel and Appellate Body recommendations in the case brought by India against the Community concerning cotton-type bed linen. These recommendations no longer allow the practice of "zeroing" in the calculation of the average dumping margins by model. As a consequence, the dumping margins which are the basis for the duties decreased by 1 to 2 percentage points.

Secondly, another controversial issue was the choice of Mexico as an appropriate analogue country, since the company which was ready to co-operate in the analogue country was related to the complainant that had brought the anti-dumping case. The Commission itself sought to avoid having to have recourse to Mexico. However, in application of the basic Regulation the Commission had no other choice because none of the several companies contacted all over the world were ready to co-operate. Therefore no alternative to Mexico was available.

Thirdly, the case was controversial because a number of parties claimed that anti-dumping duties would be contrary to the Community interest as a whole. They reasoned that a duty on imports would lead to price increases for the energy saving lamps, thereby contradicting the overall Community philosophy to encourage energy saving. This matter was investigated with particular thoroughness. On the basis of the results of the investigation, it was considered unlikely that the price for CFL-i would increase significantly following the imposition of measures. This assessment was based on the fact that for some Chinese exporting producers no or low duties (so for the largest Chinese exporter) were imposed, that importers practised considerable mark-ups and that alternative sources of supply from other third countries with no duties were available. It was also concluded that measures would not be contrary to the Community energy saving policies and that the Community industry could not be expected to bear the costs of the Community energy and environmental policies through suffering from unfair trade practices.

3. Internal gear hubs (IGH) from Japan

Definitive anti-dumping measures were imposed by the Council on 26 October 2001. The proceeding had been initiated in July 2000, following a complaint lodged by SRAM Deutschland GmbH (SRAM), representing a major proportion of the Community production of internal gear hubs.

The case presented several particularities: it concerned only two players, one small to medium-sized Community producer of (almost only) internal gear hubs for use in bicycles (IGH) and one world-wide Japanese player (Shimano) marketing not only IGH, but also numerous other bicycle components and accessories. According to press reports, Shimano has spent between 1 and 2 million USD on lobbying costs in this proceeding.

Dumping

The dumping margin was established at 36,6 % for the sole exporting producer in Japan.

Injury and causation of injury

The investigation determined that there was suppression of the Community industry's prices during the investigation period, and that these prices had been undercut by the dumped imports from Japan. One interesting factor was that the price comparisons on the basis of list prices showed small differences while the prices actually charged and verified both for SRAM and Shimano (taking into account rebates etc.) showed a much higher price undercutting.

Over several years, imports on to the Community market from Japan had increased significantly, whilst at the same time the main injury indicators (profitability, market share etc.) for the Community industry followed negative trends.

This was particularly evident between 1998 and the investigation period, when Community consumption fell 1%, whilst Japanese imports increased 43%. At the same time, the Community industry experienced price pressure leading to financial losses.

Community interest

Another interesting aspect in this case was the fact that numerous submissions, protesting against possible duties, were submitted to the Commission services by bicycle producers, importers and specialised shops. The Commission services undertook on-spot investigations with the (much smaller) number of companies that were willing to co-operate in the investigation. In fact, the overall verified maximum impact of the duty, of around 0,5% increase in costs for Community bicycle manufacturers, was much smaller than had been estimated by these companies.

The second issue examined under this heading, was that of competition. The question was raised by many parties as to whether duties would lead to a dominant position of SRAM on the Community market. However, given the well established position of Shimano on the Community market (39%), their strong presence in other bicycle-related sectors and the relatively moderate rate of the duty, it was concluded, on the contrary, that duties were likely to ensure effective competition on the Community market since they would put SRAM on an equal footing with Shimano. Nevertheless, the Commission will continue to monitor market developments so as to be able to act should there be any signs of possible distortions of competition in the future.

Measures

In view of the conclusions reached with regard to dumping, injury, causation and Community interest, definitive anti-dumping measures were imposed in accordance with the lesser duty rule at the level of the injury margin of 11,3%.

3.1.4. 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 therefrom, measures not in the interest of the Community).

In 2001, 12 new proceedings were concluded without measures, compared to 32 in 2000 and 22 in 1999.

The alphabetical list of cases which were terminated without the imposition of measures during 2001 can be found below. More information can be obtained from the Official Journal to which reference is given in Annex E.

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3.1.4.1. Details on some individual cases (in chronological order)

1. Steel ropes and cables from the Republic of Korea and Malaysia

The proceeding which concerned steel ropes and cables originating in the Czech Republic, the Republic of Korea, Malaysia, Russia, Thailand and Turkey, was initiated on 5 May 2000, following a complaint lodged by the Liaison Committee of European Union Wire Rope Industries (EWRIS) on behalf of the Community industry.

The proceeding concerning the Republic of Korea and Malaysia was terminated on 4 August 2001 due to the fact that the dumping margins found were de minimis.

2. Colour television receivers (CTVs) from Turkey

The proceeding was initiated on 15 July 2000. The main issue was examination of origin. CTVs frequently incorporate components originating in countries other than the country of manufacture or assembly of the finished product, with the result that CTVs may be considered as originating in a country other than the country of manufacture or assembly.

In accordance with the Community's consistent practice the examination of the origin of the CTVs exported from Turkey formed part of the anti-dumping investigation. It was established that in this particular case the origin of the cathode-ray colour television picture tube (CPT) virtually determined the origin of the CTVs. Accordingly, the origin examination concluded that the CTVs exported from Turkey during the investigation period were not of Turkish origin.

In view of the above findings, the proceeding was terminated without imposition of anti-dumping measures by a decision published on 13 October 2001.

3.2. Review investigations

3.2.1. Expiry reviews

Article 11(2) and Article 18 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 2001, 8 measures were allowed to expire automatically. The references for these measures are set out in Annex N.

Since the expiry (or "sunset") provision of the basic Regulations came into force in 1985, a total of 313 measures have been allowed to expire automatically.

3.2.1.1. Initiations

During 2001, 12 expiry review investigations were initiated.

The alphabetical list of these cases can be found below, together with the name of the complainant. It should be noted that some expiry reviews are carried out in parallel with interim reviews, which allow the amendment of the duty rates. These reviews are marked with an asterisk. More information can be obtained from the Official Journal to which reference is given in Annex F.

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3.2.1.2. Reviews concluded with confirmation of duty(ies)

During 2001, 6 expiry reviews were concluded with confirmation of duty. It should be noted that some expiry reviews are carried out in parallel with interim reviews, which allow the amendment of the duty rates. These reviews are marked with an asterisk.

The alphabetical list of the cases which were concluded with confirmation of duty during 2001, together with the result of the investigation, can be found below. More information can be obtained from the Official Journal to which reference is given in Annex F.

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Two expiry reviews were concluded concerning electronic weighing scales. One review concerning Japan was initiated a few months before another one concerning Singapore.

1. Electronic weighing scales from Japan

An expiry review was initiated in April 1998 concerning measures initially imposed in April 1993. On 9 March 2001 the Council concluded that the measures should be maintained in their initial form i.e. ad valorem duties ranging from 15.3% to 31.6%.

The evidence available to the Commission, and the low level of co-operation from exporting producers (only 4% of exports in the investigation period were covered by answers to the Commission's questionnaire), strongly suggested that imports would continue to be made at dumped prices for the foreseeable future and in increased quantities if measures were removed, since there were spare capacities in Japan.

The Community industry benefited from a short-term boost to sales resulting from the introduction of the Euro and its incidence on the need to renew the weighing scales park, profits increased to high levels but this was considered to be on a temporary basis. Despite these good results, market share fell.

In view of the important quantities of weighing scales that could be exported from Japan to the Community at dumped prices, should the measures lapse, it was considered likely that the Community industry would, in such a case, be injured again.

2. Electronic weighing scales from Singapore

An expiry review was initiated in October 1998 concerning measures initially imposed in October 1993. On 9 March 2001 the Council concluded that the measures should be maintained in their initial form and level i.e. an ad valorem duty of 15.4% for the company that co-operated in the investigation and 31% for all others.

One company representing 70% of exports from Singapore co-operated in this investigation, and it was found that a significant dumping of 12%, was still taking place in the exports of this company to the Community. Such dumping is likely to continue for the foreseeable future as the Community market is large and attractive with prices slightly higher than in other third markets to which the Singaporean exporter sell. In view of such circumstances, in case measures would expire, it was considered likely that quantities of dumped imports would increase.

The Community industry was found to be in the same situation as in the investigation regarding Japan. In view of the conclusion of regarding the likelihood of a continuation of dumping on increased quantities, it was concluded that injury would recur should the measures expire. Further details on both investigations can be found below.

3.2.1.3. Reviews concluded by termination

During 2001, the following expiry review concerning 6 countries was terminated without the continuation of measures:

Ferro-silicon (FeSi) from Brazil, the People's Republic of China, Kazakhstan, Russia, Ukraine and Venezuela

The expiry review was initiated on 9 December 1998, and concerned definitive measures imposed in December 1993 against the listed countries. These measures were repealed on 23 March 2001.

It was found that important spare capacities existed in the People's Republic of China, Kazakhstan, Russia and Ukraine and that it was likely that important quantities of dumped imports could be directed to the Community market should the measures expire. In respect of Brazil and Venezuela, changes in the structure of the companies and in their markets made it unlikely that injurious dumping would recur.

The Community industry had benefited from a rise in its unit prices of ferro-silicon (FeSi) from 1994 to 1996 but in 1998, a fall in prices began to squeeze margins. Although demand in the Community increased over the analysis period, due to developments in the steel industry, this was mainly taken up by increased imports from third countries. The Community industry had to reduce prices from 1997 to the end of 1998 in order to try and maintain its market share, which was nonetheless slightly eroded. It was thus concluded that important quantities of dumped imports originating in the People's Republic of China, Kazakhstan, Russia or Ukraine could enter the market as soon as measures would expire and injure the Community industry.

However, anti-dumping measures had been in effect on imports of FeSi since a long time (Venezuela 1983, Brazil, Kazakhstan, Russia and Ukraine 1987) but at the same time, the situation of the Community industry continued to deteriorate. Since 1987, production levels declined by around 50% and market share fell from over 30% to 17%. After 1993, even though measures nearly stopped the imports from the countries concerned, the Community industry continued to lose market share to imports from other third countries, especially to Norway. It was, therefore, concluded that the Community industry had not been able to sufficiently benefit from the measures in place and that it was not justified to impose for a further period an undue burden on downstream industries.

3.2.2. 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 elapsed since the imposition of the definitive measure, following a request containing sufficient evidence by an exporter, an importer or by the Community producers. In carrying out the investigations, it is being considered, inter alia, whether the circumstances with regard to dumping and injury have changed significantly. Reviews can be limited to dumping/subsidization or injury aspects.

During 2001, 14 interim reviews were initiated, 6 were concluded with confirmation or amendment of duty and 1 was terminated.

The alphabetical list of cases which were concluded during 2001, together with the result of the investigation, can be found below. More information can be obtained from the Official Journal to which reference is given in Annex G.

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3.2.3. Other" interim" reviews

A series of other reviews, not falling under Article 11(3) or Article 19 of the basic Regulations or for which no notice of initiation was published in the Official Journal, were concluded during 2001.

They more specifically concern :

-investigations which were conducted and concluded under the specific provisions of the Regulation imposing the original measures when sampling was used (television camera systems, salmon, flat pallets of wood, hardboard);

-amendment of measures following a Judgment of the Court of First Instance (handbags)

-investigations carried out following applications to the Court of First Instance seeking annulment of the Regulation imposing the definitive duties (synthetic fibres of polyester)

-investigations carried out following an Appellate Body report and a panel report adopted by the Dispute Settlement Body of the World Trade Organisation (bed linen).

More information can be obtained from the Official Journal to which reference is given in Annex H.

3.2.4. New exporter reviews

As far as the 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 Community following the investigation period, or that they have entered into an irrevocable contractual obligation to export a significant quantity to the Community.

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 2001, 2 new exporter reviews and no accelerated reviews were initiated. Since the Commission carried out the first reviews of this type in 1990, a total of 34 investigations have been initiated.

As to the investigations concluded, they concern one new exporter review (with imposition/amendment of duty) and three accelerated review (one with imposition/amendment of duty and two by termination).

More information can be obtained from the Official Journal to which reference is given in Annexes I and L.

3.2.5. Absorption investigations

The possibility of "absorption" reviews, which deal with situations where the exporters directly or indirectly bear the cost of the duty and thereby increase the dumping margin without leading to sufficient movement in resale prices, is included in Article 12 and Article 19(3) of basic Regulations.

In 2001, there were no such investigations initiated but one was concluded with increase of duty.

More information can be obtained from the Official Journal to which reference is given in Annex J.

3.2.6. 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 Community 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.

In 2001, one investigation was initiated. More information can be obtained from the Official Journal to which reference is given in Annex K.

3.3. Safeguards

The Community has seldom made use of safeguard measures and none have been adopted since the entry into force of the 1994 WTO Agreement.

As a matter of principle, the Commission considers that safeguard measures should only be used as an exceptional tool in emergency situations. This position is shared by the WTO Dispute Settlement Body.

The Commission expects the Community'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 Community producers, if necessary at WTO level (see heading 9.1.2).

As regards conventional trade regimes, the Commission has agreed within the various bilateral agreements to which it is a party (Europe Agreements, Agreements with Mediterranean countries, FTAs with South Africa and Mexico, etc..) to introduce special safeguard clauses, which apply to cases, which arise between the partners. These clauses normally entail rights and obligations additional to those arising under WTO safeguard rules (in particular special notification and consultation procedures). In this regard, the Commission carefully monitors any cases, which are initiated by partners with which it has a preferential trade agreement.

4. Monitoring of undertakings

Undertakings are a form of anti-dumping or countervailing measure. They are accepted by the Commission if it is satisfied that they can effectively eliminate the injurious effects of dumping or subsidisation. To achieve this goal, exporters normally pledge to raise their prices. The necessary price increase stems from the findings of the investigation and directly depends on the level of dumping or subsidisation found, or on the injury elimination level, whichever is the lower.

To enable the Commission to monitor whether or not the undertakings are being respected, the parties concerned have to submit regular sales reports, normally every quarter. They also have to provide the Commission with any other information that is considered necessary, and to allow verification of such data and information by the Commission at their premises, even at short notice. In case of breach or withdrawal of undertakings, a duty is imposed.

At the beginning of 2001, there were undertakings in force accepted from 266 companies, covering 19 products originating in 21 different countries.

During 2001, definitive anti-dumping and/or countervailing duties were imposed on 8 companies following breaches of their undertakings (farmed Atlantic salmon originating in Norway - 3 companies; flat pallets of wood originating in Poland - 5 companies). In addition, 5 companies voluntarily withdrew their undertakings (flat pallets of wood originating in Poland - 1 company; farmed Atlantic salmon originating in Norway - 3 companies, hardboard originating in Latvia - 1 company). The undertakings on tube and pipe fittings originating in Croatia (1 company) and on unwrought pure magnesium originating in Russia and Ukraine expired (3 companies). In view of the findings of a review investigation, the undertaking of one other company was no longer considered necessary (lighters, non refillable originating in Thailand).

Price undertakings were also accepted from a further 12 companies in 4 new cases (steel ropes and cables originating in Czech Republic, Turkey, Russia and Thailand - 5 companies; urea originating in Bulgaria - 1 company; polyethylene terephthalate film originating in India - 5 companies; aluminium foil originating in Russia - 1 company) and from 8 new exporters in existing cases (farmed Atlantic salmon originating in Norway - 2 companies; wooden pallets from Poland - 5 companies; certain flat-rolled products of non-alloy steel originating in India - 1 company).

This brings the total number of undertakings in force at the end of 2001 to 271. Details concerning the above can be found in Annex M and an overview of all undertakings in force can be found in Annex Q.

Due to the ever-increasing number of undertakings and to their complexity , the Commission has continued to allocate additional resources to the monitoring of undertakings.

As undertakings have to provide the same remedial effect as the imposition of duties would do in the alternative, the examination, adaptation, and drafting of undertaking offers has to be based on a double assessment of risk and effectiveness. This has led to situations in which undertakings were not considered to be acceptable, notably where an exporter did not provide sufficient co-operation and accurate data during an investigation, or where the trading patterns of the company allow too much scope for cross-compensation between products, not all of which are subject to the undertaking, when they are being sold to the same customer in the Community.

Once undertakings are accepted, continued contacts with the Community industry remain essential to ensure that the necessary feedback is received on the effects of the undertakings on the market. In this way, the Commission can focus its monitoring activities more effectively.

5. Refunds

Article 11(8) of the basic anti-dumping Regulation allows importers to request the reimbursement of anti-dumping duties collected where it is shown that the dumping margin, on the basis of which duties were paid, has been eliminated, or reduced to a level below the duty in force.

The Commission continued to deal with a mixture of outstanding refund requests and new applications. In so doing, the Commission has sought to structure the various investigations in such a way as to best utilise its resources. During the year 2001, 3 decisions were adopted relating to separate applications. Of these decisions, 2 granted partial refunds of duties paid and 1 decision rejected an application as the applicant deigned to support his case with the requisite evidence. Applications in respect of 4 further claims were eventually withdrawn voluntarily by the applicants when it became evident that they would not receive the co-operation of their exporting producers.

The merits of a further 7 refund cases were also under consideration as the year closed. 7 new refund requests were also lodged during the year, for 3 of which an analysis of the merits will shortly be undertaken.

Further details can be found in Annex S.

6. Judicial review : decisions by the Court of Justice / Court of First Instance

6.1. Overview of the judicial reviews in 2001

In 2001, four Judgments or Orders related to anti-dumping or anti-subsidy were rendered by the Court of First Instance (CFI) and three by the Court of Justice. In one other technical decision , which had no consequences on the substance of the matter or the policy followed by the Institutions, the CFI considered that there was no need to adjudicate.

6.2. Cases pending

A list of the anti-dumping/anti-subsidy cases before the CFI and the Court of Justice still pending at the end of 2001 is given in Annex T (10 before the CFI and 3 before the Court of Justice).

6.3. New cases

Six new cases were lodged in 2001 (compared to 6 in 1999 and 7 in 2000), four before the CFI and two appeals before the Court of Justice. Therefore, the amount of new cases remains stable over the last three years.

Cases brought to the CFI in 2001 dealt in particular with the following items:

-determination of Market Economy Status [20];

[20] T-35/01, Shanghai Teraoka v. Council, OJ C 118 of 21.4.2001, p. 41

-examination and appraisal of injury factors [21];

[21] T-35/01, Shanghai Teraoka v. Council, OJ C 118 of 21.4.2001, p. 41

-adequate disclosure [22];

[22] T-35/01, Shanghai Teraoka v. Council, OJ C 118 of 21.4.2001, p. 41

-determination of material injury [23];

[23] T-35/01, Shanghai Teraoka v. Council, OJ C 118 of 21.4.2001, p. 41

-evaluation of the Community interest [24];

[24] T-132/01, Euroalliages v. Commission, OJ C 227 of 11.8.2001, p. 32

-Request for interim measures [25];

[25] T-132/01 R, Euroalliages v. Commission

-Annulation of the Commission decision to terminate an expiry review without measure [26];

[26] T-132/01, Euroalliages v. Commission, OJ C 227 of 11.8.2001, p. 32

-choice of the analogue country/producer [27].

[27] T-255/01, Changzhou Hailong Electronics & Yankon v Council, OJ C 3 of 5.1.2002, p.37

6.4. Judgments rendered by the Court of First Instance

The following summaries only focus on the most important points of the Judgments and do not deal with all questions raised in these Judgments.

6.4.1. Gas-fuelled, non-refillable pocket flint lighters originating, inter alia, in Japan.

-Cases T-82/00 - BIC et al. v. Council : Judgment of 5 April 2001 (ECR 2001 Page II-01241)

As a result of an expiry and interim review investigation of Council Regulation (EEC) No 3433/91 imposing definitive measures on imports of gas-fuelled, non-refillable pocket flint lighters originating, inter alia, in Japan, the Commission concluded that if the measures were allowed to expire, the Community industry was likely to suffer injury again. However, within the Council, the necessary simple majority for the adoption of two successive Commission proposals was not achieved.

In order to avoid both undue duration of the review and maintaining the measures in force for an unlimited period of time, the Commission considered that the definitive measures should be repealed. It consequently submitted a proposal to the Council which foresaw the repeal of the measures. The proposal was finally adopted by the Council. Subsequently, the Community industry contested the Regulation stating that the Council had failed to state an adequate reasoning for the repeal.

The CFI dismissed the application. For the Court, the reasoning from the Institution was clear and univocal. It recalled that it is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons is sufficiently detailed must be assessed with regard, not only to its wording, but also to its context and to all the legal rules governing the matter in question.

Moreover, the CFI contended that the contested Regulation showed without ambiguity that the Council clearly did not associate itself with the findings of the Commission to maintain measures.

6.4.2. Ferro-silicon originating in Egypt and Poland

-Case T-188/1999- Euroalliages v. Commission : Judgment of 20 June 2001 (ECR 2001 Page II-01757)

In 1992, the Council imposed definitive measures on imports of Ferro-silicon (FeSi) originating in Egypt and Poland. The Commission terminated in 1999 an expiry review without imposition of measures. The basis of the Decision was the absence of likelihood of continuation or recurrence of injury.

The Community industry (the Applicant) lodged an application before the CFI, mainly based on an alleged violation of Article 11(2) of the basic Regulation.

The CFI dismissed the Application.

Firstly, the CFI recalled that, contrary to the Applicant's allegations, Article 11(2) does not require to prove the continuation or the recurrence of injury. A finding of likelihood, however not the mere possibility of it, is sufficient. Secondly, the CFI stated that Article 11(2), subparagraph 2, provides for the conditions to open an expiry review, not for the conditions to maintain measures. According to the CFI, the 3 criteria included in this paragraph are nothing but examples and must be regarded as alternative and not cumulative. Therefore, the conditions to open an expiry review must not be confused with the conditions of maintaining measures. Third, the CFI held that from the foregoing and pursuant to the basic Regulation and the Anti-Dumping Agreement of the WTO, the continuation of measures after 5 years depends on very strict conditions and requires positive evidence of the likelihood of recurrence of dumping and injury. In the present case, the CFI considered that the Commission verified correctly that dumping continued and that the injury was eliminated. But the Commission could not prove that evidence existed showing a likelihood of injurious dumping, by reference to the circumstances of the exporters, or market conditions. In the absence of such objective evidence, the Court concluded that the Commission was correct in deciding not to maintain measures.

Finally, the CFI had to judge the treatment of information subsequent to the investigation period. In this respect, the CFI recalled that the provisions of Article 6 of the basic Regulation governing the procedure of the investigation applied to expiry reviews, notably the rule stating that "(...) Information relating to a period subsequent to the investigation period shall, normally, not be taken into account". According to the Court, in the case of expiry reviews, the reference in Article 11(2) paragraph 3 to "all relevant and duly documented evidence presented" only relates to the elements of evidence collected and duly verified during the investigation period in accordance with the provisions of Article 6 of the basic Regulation.

6.4.3. Stainless steel bars originating in India

-Case T-58/99 - Mukand et al. v. Council - Judgment of 19 September 2001 (ECR 2001 Page II-02521)

In 1998, the Council adopted Regulation (EC) No 2450/98 imposing a definitive countervailing duty on imports of stainless steel bars (hereinafter SSBBs) originating in India.

During the administrative proceeding, by a decision closing an antitrust investigation, the Commission found that several Community producers of stainless steel flat products, an upstream product to SSBB, infringed competition law by modifying and applying in a concerted manner the reference values for the formula for calculating an alloy surcharge (a component of the basic price).

After the contested Regulation was adopted, the Commission (DG Competition) initiated a further antitrust investigation, this time into an alleged concerted practice in respect of the alloy surcharge in the SSBB market.

The Applicants brought the action before the CFI before they were informed of the findings of the above-mentioned antitrust procedure, which found that there was no anti-competitive behaviour by Community producers. They argued that any injury caused by other factors, in particular by anti-competitive conduct by the Community industry itself must not be attributed to the imports in question.

Taking into account the decision by which the Commission closed the antitrust procedure, the Applicants maintained that the mere fact that they were simply affected by the anti-competitive behaviour of Community producers of flat products was sufficient to conclude that the Community SSBBs price was not reliable.

The CFI annulled the contested Regulation with respect to imports from the Applicants.

The CFI condemned the Institutions for dismissing out of hand the possibility that the concerted practice on the upstream flat products market might have affected the reliability of prices on the SSBBs market. The CFI concluded that, effectively, the Community SSBBs price was artificially inflated due to the indirect effect of anti-competitive practices imputed to Community producers of flat products. Had the Institutions properly assessed the reliability of the SSBBs price in the Community market, they would have established that the SSBBs price was artificially inflated.

6.5. Orders rendered by the Court of First Instance and by the Court of Justice

6.5.1. Ferro-silicon originating in China, Kazakhstan, Russia and Ukraine

-Case T-132/01R - Euroalliages et al. v Commission : Order of 1 August 2001 and 27 February 2002, and Case C-404/01P (R) - Appeal against Order of 1 August 2001 : Order of 14 December 2001

Definitive anti-dumping measures were imposed on imports of ferro-silicon (FeSi) originating in several countries in 1993 and 1994. Following an expiry review, the Commission adopted the contested Decision terminating the anti-dumping proceeding without maintaining measures on imports of FeSi from China, Kazakhstan, Russia and Ukraine. The Commission concluded that the measures would be likely to lead to the continuation or recurrence of dumping and injury but did not consider that it was in the interest of the Community to maintain them (see also heading 3.2.1.3).

Euroalliages and others brought a main action against the Commission before the CFI seeking the annulment (Court Case T-132/01) and in parallel, the Applicants lodged a request before the CFI for interim measures (Court Case T132/01R).

In Court Case T132/01R, the President of the CFI firstly considered the injury suffered by the Community industry, and qualified as material injury, as a synonym for serious injury. Secondly, given the specific circumstances of the present case, he concluded that the injury suffered by the Applicants would not disappear simply as a result of a judgment annulling the contested Decision. Thirdly, in the President's view, the contested Decision was characterised by effects (likelihood of continuation or recurrence of injury and dumping) not inherent to any decision terminating an expiry review of anti-dumping measures. Finally, due to the fact that it was not certain that the Applicants would subsequently be compensated for the Community's hypothetical liability, the President of the CFI concluded that the damage was also irreparable in nature.

Therefore, the CFI concluded that there was urgency and declared that the imports of FeSi from the countries concerned should be subject to registration without provision of security by importers.

An appeal was lodged by the Commission before the Court of Justice against the Order of the President of the CFI.

In substance, in its Order the President of the Court of Justice mainly considered that the Order of the President of the CFI was based on the fact that it considered the injury as not inherent to this kind of decision and as irreparable exclusively because the compensation for damages under the second paragraph of Article 288 EC was hazardous.

Firstly, according to the Court of Justice, the injury that the Applicants might suffer is obviously inherent to a decision to terminate a proceeding in the Community interest. Secondly, the uncertainty linked to the result of an action for damages cannot qualify the injury as irreparable in nature.

Therefore, the President of the Court of Justice annulled the Order of the President of the CFI and referred the case back to the CFI.

In its Order, the President of the CFI finally followed the findings of the Order of the President of the Court of Justice of 14 December 2001; i.e. the uncertainty linked to the result of an action for damages cannot be regarded as irreparable. As a result of this lack of urgency, the President of the CFI dismissed definitely the claim for interim measures.

6.6. Judgments rendered by the Court of Justice

6.6.1. Appeal against CFI Judgment of 18 December 1997 in cases T-159&160/94

-Case C-76&77/98P - Nutrasweet/Ajinomoto & Council : Judgment of 3 May 2001

By Regulation (EEC) No 1391/91, the Council imposed definitive anti-dumping duties on aspartame originating in Japan and the USA pursuant to the basic Regulation in force at that time, Council Regulation (EEC) No 2423/88 (the Basic Regulation). Nutrasweet was the sole producer in the USA, and had obtained the use of patents for aspartame in the USA until 1991, i.e. after the end of the investigation period. Ajinomoto was the sole producer in Japan. It did not export directly to the EC but via transhipment through the USA.

On 18 December 1997, the CFI dismissed the Application brought by Nutrasweet and Ajinomoto (the Appellants). See also 16th Annual Report from the Commission to the European Parliament (1997) - heading 11.4.2.4.

First, in the present appeal, the Appellants contented that the existence of a patent only on the exporter's domestic market prevented, in the determination of normal value, the prices in that market from being comparable with the export prices.

Second, the appellants contented that the CFI erred in law by failing entirely in its duty to address in its judgment a fundamental principle of Community law, i.e. the right to a fair hearing, permitting exporters to be heard before a provisional anti-dumping duty is imposed.

The Court of Justice dismissed the appeal in its entirety.

As far as the determination of the normal value is concerned, the Court first stated that the principle of Article 2(3)(a) of the basic Regulation, i.e. normal value based on prices, can be derogated from by application of Article 2(3)(b) only when there are no sales of the like product in the ordinary course of trade, or when such sales do not permit a proper comparison, i.e. those sales are not sufficiently representative. For the Court, these two foregoing situations are exhaustive in nature and both relate to the characteristics of the sales effected rather than to the price of the product. In the view of the Court, the Appellants introduced a new situation that the basic Regulation has not envisaged in Article 2(3)(b), i.e. the comparability of the domestic and export prices. The existence of a patent protecting sales of the product on the domestic market of the export country is not a factor which falls within the scope of one of the two derogations provided for by Article 2(3)(b) of the basic Regulation.

As far as the infringement of the right to a fair hearing is concerned, the Court stated again that the legality of a definitive regulation providing for the collection of the provisional anti-dumping duty may be affected by any illegality of the provisional Regulation only in so far as that illegality is reflected in the definitive Regulation.

6.6.2. Preliminary ruling : Reference to the Court under Article 234 EC by the Finanzgericht Düsseldorf (Germany) for a preliminary ruling - Implementation of the Judgment in case C-245/95

-Case C-239/99 - Nachi Europe v Hauptzollamt Krefeld : Judgment of 15 February 2001

By judgment of 2 May 1995 in joined cases T-163&165/94 (NTN Corporation and Koyo Seiko v Council), the CFI annulled Article 1 of Regulation No 2849/92 [28] (the contested Regulation) in so far as it imposed an anti-dumping duty on the Applicants. The ensuring appeal from the Commission was dismissed by the Court of Justice.

[28] Council Regulation (EEC) No 2849/92 of 28 September 1992 modifying the definitive anti-dumping duty on imports of ball bearings with a greatest external diameter exceeding 30 mm originating in Japan.

Drawing the consequences from these two judgments, the Commission published a Notice which stated that importers could request reimbursement from national customs authorities with regard to products manufactured (ball bearings) by the Applicants only (Koyo Seiko and NTN).

A German company, imported ball bearings manufactured by its mother company in Japan and requested reimbursement from the German authority of the anti-dumping duties which it had paid. The request was rejected and therefore the German company brought an action before the competent authority which decided to stay the proceedings and to refer the question to the Court of Justice for a preliminary ruling.

The Court first recalled the settled case-law according to which, despite their legislative nature, anti-dumping regulations may be of direct and individual concern to certain persons. It also recalled that the scope of a pronouncement of annulment may not go further than that sought by the applicant itself.

In light of this, the Court concluded that the CFI was right to annul Article 1 of the contested Regulation, only in so far as it imposed anti-dumping duties on the applicants. The Court then added that the German company who had a right to challenge the contested Regulation directly before the CFI but failed to do so within the applicable time-limits, could no longer seek to do so before national courts.

7. Anti-dumping and anti-subsidy investigations of third countries concerning imports from the Community or its Member States

At the beginning of 2001, 17 countries had a total of 117 anti-dumping and anti-subsidy measures in force against imports from the Community or its Member States. During 2001, a further 15 measures were imposed. At the end of 2001, an additional 25 new investigations were in progress.

The Commission now has a "pro-active" approach in these cases. In selected cases, there is increasing intervention vis-à-vis the investigating authorities of the third countries at various stages of the domestic proceedings, as well as at WTO level. A continuing problem in these cases is that many Community exporters do not co-operate in these investigations with the inevitable result that measures are normally imposed. Any significant non-co-operation, of course, reduces the capacity of the Commission to intervene and therefore one of the aims of the Commission in this area is to encourage Community exporters to co-operate fully with the investigating authority of the third country.

The Commission is ready to assist Member States and companies, which are involved, in these investigations. Nevertheless, it is the companies themselves who should take the primary role in defending their own interests by co-operating and, if necessary, appointing legal representation.

7.1. Anti-dumping cases against the Community or its Member States

7.1.1. Overview

The table below provides a record of the anti-dumping action taken by third countries against the Community or its Member States in 2001. It gives the position at the beginning of the year, during the year, and at the end of the year, in terms of measures in force and cases initiated. A more detailed picture is provided in Annex U, Section A.

TABLE 3

Anti-dumping investigations against the Community or its Member States during 2001

>TABLE POSITION>

In 2001, Germany is the Member State most affected by definitive anti-dumping measures (29), followed by France (28) and Italy (23). In addition, the EU, as a whole, is affected by another 15 definitive anti-dumping measures.

7.1.2. Details on some individual cases

This chapter identifies some of the anti-dumping actions taken in 2000 by third countries which merit special attention.

7.1.2.1. Low enriched uranium from France, Germany, the Netherlands and the UK

In December 2000, the USA opened a highly controversial anti-dumping case against low enriched uranium from France, Germany, Netherlands and the UK. The Commission considers that this investigation should never have been initiated since the petitioner USEC does not have "standing" to lodge a complaint. In fact, it is merely a sub-contractor which does not even own the product. The owner is in fact against the case.

Despite numerous interventions and several rounds of consultations by the Commission, the USA adopted provisional anti-dumping measures (17,52% for France and 3,35% for Germany, the Netherlands and the UK).

Besides "standing", the Commission also criticised the provisional measures on other grounds. As regards France, there appeared to be double counting of anti-dumping and a parallel countervailing provisional measure. On the one hand, the USA considered that prices between two state-owned firms were too high and constituted a subsidy. Yet, for the anti-dumping case, they constructed what was supposed to be a reasonable price between the two at approximately the same levels - i.e. the same level which they considered constituted a subsidy. Both cannot be correct.

The preliminary injury argument was also very weak. In fact, any injury to USEC seems to be due to its own inefficiency and to the impact of Russian imports.

On 14 December 2001, the US investigating authority (DOC) released its definitive findings. It found a dumping margin of 19,57% for France and a de minimis margin for the Urenco companies. By changing its subsidy calculation, the DOC had apparently eliminated the "double counting" problem, but had clearly created a dumping margin by imputing an artificially high electricity cost.

The definitive US International Trade Commission findings (on injury) for uranium are scheduled to be issued in 2002.

7.1.2.2. Hot-rolled steel products from the Netherlands

On 3 May 2001, the USA imposed a preliminary anti-dumping duty of 2,44% on the above-mentioned imports from Corus (formerly Hoogovens) in the Netherlands. In establishing the dumping margin, the USA used the practice of "zeroing" i.e. they calculated dumping margins for each model and put all negative dumping margins for individual models at zero. On this basis, they found a weighted-average dumping margin of 2,44%. Without zeroing, there would not have been any dumping and the case would have been terminated.

It appears that the USA has employed virtually the same methodology as the Community used in the case "Bed linen from India". This was found to be WTO-inconsistent by the WTO Appellate Body, and consequently was abandoned. It is important to note that the practice involved is systematic zeroing by model, and not zeroing in cases where there are significant differences in export prices among different purchasers, regions or time periods ("targeting"), which would seem to be permitted by Article 2.4.2 of the Anti-Dumping Agreement.

On 15 September 2001, the USA confirmed the findings and imposed a definitive duty of 3,06%. There would still have been no dumping in the absence of zeroing. The Commission services are examining the US practice in this field and may, at a later stage, envisage WTO action.

7.1.2.3. Stainless steel bars from France, Germany, Italy, Luxembourg and the UK

On 24 January 2001, the USA initiated an anti-dumping investigation against imports of stainless steel bars from France, Germany, Italy, Luxembourg and the UK.

On 26 July 2001, the USA issued its preliminary determination in the case and imposed provisional anti-dumping duties ranging from 4,3 to 28,07% for France, from 6,48 to 21,03% for Germany, from de minimis to 33% for Italy, and from 6,85 to 125,77% for the UK.

The principal European stainless steel bars producers have not been too punished by these preliminary findings. In fact, the anti-dumping margin for the French company Ugine (Usinor Group) is only 4,30%, for the Anglo-Dutch company Corus 6,85% and for the Italian producer Valbruna de minimis (1,85%). The quite high level of dumping for the Italian company Cogne (the first largest producer of the subject merchandise in Italy) can be explained by the fact that the company decided not to co-operate with the US investigating authority.

Three of the four German producers received a quite high anti-dumping margin (average rate varies from 17,07 to 21,03%). Finally, the USA imposed a preliminary margin of 125,77% ad valorem to the UK firm Firth Rixson Specialty Steel.

Member States as well as the companies were contacted in order to be sure that no further legitimate claims were rejected by the US investigating authority. However, the main concern of the Commission services were, once again, the issue of "zeroing", which has been described above in the US investigation on hot-rolled steel products.

The final determination in this case is expected in 2002.

7.1.2.4. Structural steel beams from Germany, Italy, Luxembourg and Spain

On 24 May 2001, the USA filed a complaint regarding structural steel beams from Germany, Italy, Luxembourg and Spain.

On 19 December 2001, the USA issued its preliminary determination in this case and imposed provisional duties of 6,5% to 35,7% on Germany and 2,4% on Luxembourg. Spain and Italy were found to be de minimis. It would seem that it is only the application of zeroing that took Luxembourg above de minimis.

7.1.2.5. Cold rolled flat products of stainless steel from the Community

On 29 November 2001, India imposed provisional duties ranging from 50 to 90% on imports of cold rolled flat products of stainless steel from the Community. This was in fact done only 3 months after initiation of the case. Unlike the Community, India imposes provisional measures without first carrying out verification visits; these are made following provisional measures.

The first problem encountered by Community exporters in selling to India is the high ordinary import tariffs that are paid on importation. In this case, these approximated 40%. In selling to such a market it is almost impossible not to dump because the export price has to be low enough to take account of the fact that a cost of 40% is added upon importation.

In a dumping investigation, however, injury also has to be established and it is in this regard that Indian investigations may be difficult to reconcile with international rules. In contrast to the position when establishing dumping, when high import tariffs can create dumping, these same import tariffs should make it very difficult to establish injury. For example, in this particular steel case, undercutting was alleged despite the existence of the 40% import tariffs. This inevitably means Indian domestic prices must be very high and this must raise questions on their level of efficiency. In addition, the Indian investigation has made no attempt to identify whether factors other than imports are causing injury.

And, most important of all, there is no clear evidence to justify that extra anti-dumping duties averaging over 50% are necessary to remove injury, i.e. current import prices plus 40% ordinary customs duties plus 50% anti-dumping duties.

The Commission will continue to monitor this case.

7.1.2.6. Wheat flour from the Community

On 22 March 2000, Indonesia initiated an anti-dumping investigation concerning imports of wheat flour originating in Australia, the United Arab Emirates and the European Community. This followed a complaint lodged by the most important Indonesian producer of wheat flour.

On 22 June 2001, the Indonesian Government published a disclosure document setting out the terms of the likely final determination in this case. Provisional measures were imposed in accordance with these findings: 21,3 to 35,93% for the Community.

The Commission, as well as Euroflour, acting on behalf of European exporters, was watching the case very carefully as it was controversial in a number of respects. In fact, the main reason for increased imports of wheat flour in Indonesia was the opening of the Indonesian market to imports, which was an obligation they took on in return for an IMF loan. Prior to this, the sole Indonesian complainant had a monopoly on the sale of wheat flour on the Indonesian market. Thereafter, it was only to be expected that imports would rise and prices fall.

This market opening occurred in the middle of 1998, only a few months before the investigation period used by the Indonesian authorities, i.e. the year 1999. They compared events in first half of 1999 to events in the second half of 1999. In view of the Community, imports were bound to increase in 1999 given that deregulation had only taken place a short time earlier.

Moreover, the complainant was making profits exceeding 20% even in the second half of investigation period and it still held 75% of the market - all this happened in a growing market as consumption increased by over 20% in 1999. The complainant actually increased sales though it lost market share.

After a number of interventions by the Commission, it appears that Indonesia will not impose measures, though no formal announcement of this has been made despite the WTO time limit of 18 months.

7.1.2.7. Polyvinyl chloride from Belgium, Germany, Finland, Greece, Italy and the Netherlands

Turkey has an on-going anti-dumping investigation which was initiated in December 2001 concerning polyvinyl chloride originating Belgium, Germany, Finland, Greece, Italy and the Netherlands. The Community exports targeted by this proceeding amounted in 2000 to EUR 97 million.

As regards procedural requirements, Turkey has so far complied with its multilateral and bilateral obligations. The Commission services are following this case attentively and will take action wherever appropriate.

7.2. Anti-subsidy cases against the Community or its Member States

7.2.1. Overview

The table below provides a record of the anti-subsidy action taken by third countries against the Community or its Member States in 2001. It gives the position at the beginning of the year, during the year, and at the end of the year, in terms of measures in force and cases initiated. A more detailed picture is provided in Annex U, Section B.

TABLE 4

Anti-subsidy investigations against the Community or its Member States during 2001

>TABLE POSITION>

In 2001, Italy is the Member State most affected by definitive countervailing measures (10), followed by France (7). In addition, the EU, as a whole, is affected by another 10 definitive countervailing measures.

7.2.2. Details on some individual cases

This chapter identifies some of the anti-subsidy actions taken in 2000 actions by third countries which merit special attention.

7.2.2.1. Low enriched uranium from France, Germany, the Netherlands and the UK

The USA opened a highly controversial countervailing case on low enriched uranium from France, Germany, the Netherlands and the UK. The Commission considers that this investigation should never been initiated since the petitioner USEC does not have "standing" to lodge a complaint. In fact, it merely provides a servicing or processing service and does not even own the product. The owner is in fact against the case.

Despite numerous interventions and several rounds of consultations by the Commission, the USA adopted provisional countervailing measures of 3,72% for Germany, the Netherlands and the UK and 13,94% for France.

Besides "standing", the provisional measures could be criticised on several grounds. (See the "double-counting" issue described under anti-dumping). As regards France, there appears to be double-counting of countervailing and anti-dumping measures. On the one hand, the USA considered that prices between two state-owned French firms were too high and constituted a subsidy. Yet, for the anti-dumping case, they constructed what was supposed to be a reasonable price between the two at approximately the same levels - i.e. the same level which they considered constituted a subsidy. Both cannot be correct and the Commission will strongly fight this "double-counting" aspect.

On 14 December 2001, the US investigating authority (DOC) issued its definitive countervailing findings and imposed countervailing measures of 2,23% (Urenco companies) and 13,21% (Eurodif from France). For France, the Commission considers that DOC wrongly included non-existent costs for electricity, thereby artificially creating the subsidy margin. As regards Urenco, the application of the international consortium provision and contingent liability may run counter to the SCM Agreement. The injury findings, particularly as regards causality, are extremely weak.

The definitive US International Trade Commission findings (on injury) for uranium are scheduled to be given early in 2002.

7.2.2.2. Stainless steel bars from Italy

On 31 May 2001, the USA issued its preliminary determination in the case of stainless steel bars from Italy. With the exception of one ex-Ilva firm privatised in 1994 (Cogne), for which the countervailing duty is 12,6%, the countervailing rate of all the companies under investigation was determined to be either zero or de minimis. Since the "subsidies" for Cogne are based on the discredited "new methodology" on privatisation and therefore non-existent, the USA indirectly acknowledges that subsidies are no longer benefiting the European Steel industry.

This result is not surprising. Since more than five years, the European Steel sector has been almost completely privatised and, under the watchful eye of the Commission, any further state aid has been monitored and authorised only when in line with the Community's competition law.

Furthermore, these findings are important because they clearly demonstrate that the US steel industry's requests for protection based on alleged unfair practices are no longer justified as regards the Community. It seems that, if Community imports do cause a problem for the US industry, it is due only to competitive advantage brought about by efficient methods and better technology.

The only way in which the USA can find some subsidization, and has done for one exporter in this case (Cogne), is by using its discredited privatisation methodology. In this case, it has applied the so-called "same person" approach, developed by the USA in substitution of the previous change-in-ownership methodology ("Gamma methodology"), found to be inconsistent with the US' international commitments by the WTO Panel and Appellate Body in the British Steel case. As has been explained before, this "new" methodology, which uses self-serving criteria to determine if a company remains the same after its privatisation, is not only WTO incompatible but also has begun to represent a deterrent to the participation in investigations of companies which have been privatised.

In other words, these companies, particularly those which have been investigated before, know very well that, under the current US methodology, they have no chance to rebut the US presumptions introduced with the new methodology. They therefore decide not to take part to the investigation, in order to save at least legal expenses which are in these proceedings very high. This is exactly what happened to the Italian firm Cogne Acciai Speciali S.p.A. in the course of the current investigation.

This situation is highly prejudicial for a number of European steel companies which have been privatised during recent years. For this reason, the Community has challenged the DOC's "same person" methodology before a WTO panel.

The final determination in this case is expected mid January 2002.

7.2.2.3. Canned peaches from Greece

Australia initiated this sunset review. The measures (against production aid only) are due to expire on 18 February 2002. The Commission made several submissions to the Australian investigating authority in connection with the above-mentioned proceeding.

The Commission argued that the production aid is no longer paid to producers of canned peaches. It is now paid to peach growers, who obviously do not produce canned peaches. Therefore, Australia is required to positively demonstrate that the aid has benefited the canners, not the peach growers.

The Commission stated that, absent a positive demonstration of an upstream benefit to the canners, Australia should conclude that there is no subsidy to the imported product under the new Community aid regime, and that there can be no continuation or recurrence of subsidy; consequently, the countervailing duty proceeding should be terminated in accordance with Article 21.3 of the SCM Agreement.

A statement of essential facts was made publicly available on 26 October 2001. The Australian investigating authority concluded that "a countervailable subsidy continues to be provided by the Community - albeit indirectly - for the processing of peaches". In turn, this provided assistance to the processors of peaches in Greece. As a result, any canned peaches exported to Australia would be at subsidised prices. It was furthermore considered that exports of canned peaches from Greece continue to be subsidised; that there is likely to be a recurrence of material injury to the Australian peach canning industry in the absence of the current countervailing measures; and that the material injury could be linked with exports of canned peaches at subsidised prices from Greece.

The Commission made a further submission the 15 November 2001 arguing that "it is very unlikely there would be a recurrence of injury in this case. The Community has considerably reduced the amount of aid. The exporters of canned peaches no longer receive a subsidy and the new aid regime will apply for the future. The Australian domestic industry is in a healthy situation, and it has the perspective to become even stronger given the dominant position on the Australian market".

However, the Australian investigating authorities maintained their position, and continuation of the countervailing measures for a further five years is expected to be announced shortly.

7.2.2.4. Canned tomatoes from Italy

Australia initiated this sunset review. The measures are due to expire on 28 April 2002. The Commission has made several submissions to the Australian investigating authority in connection with the above-mentioned proceeding.

The issue is essentially the same as in the review on canned peaches. However, exports of canned tomatoes receive export restitution. The Commission argued that the export restitution has been reduced in compliance with the Uruguay Agreement.

Notwithstanding the issue of export restitution, the Commission argued that "the Australian domestic industry is not suffering material injury from imports of canned tomatoes from Italy. The processors/exporters of canned tomatoes no longer receive any production aid whatsoever, and subsidy and injury could simply not recur if the countervailing duty is allowed to expire".

A statement of essential facts will be made publicly available on 21 January 2002.

8. Safeguard measures concerning the Community

8.1. Overview

In 2001, 9 countries initiated a total of 12 safeguard investigations affecting imports from the Community and its Member States.

The Commission is increasing its interventions vis-à-vis third-country investigating bodies as well as within the WTO framework. The Commission has voiced its concerns on several safeguard cases at the regular meetings of the WTO Committee on Safeguards in Geneva and in various occasions, it has requested consultations with countries adopting safeguard measures pursuant to Article 12 of the Agreement on Safeguards.

The table below gives the number of investigations initiated by third countries, as well as the number of measures, which were imposed on Community exports during the same year.

TABLE 5

Safeguard investigations by third countries during 2001

>TABLE POSITION>

Annex V provides a more detailed breakdown and picture of these cases.

8.2. Details on some individual cases

This section sets out some cases, which merit special mention.

8.2.1. Steel imports

At least in terms of the trade volume, the most important trade defence investigation initiated by the USA was the safeguard case opened against steel imports. The initiation covered approximately US$ 17 billion of imports of which US$ 5-6 billion originated in the Community.

On 22 October 2001, the US International Trade Commission (ITC) found serious injury for 16 of the 33 products originally included in the investigation. On 7 December 2001, ITC announced its recommendations and views on remedy. The ITC recommended substantial tariffs on 55% of all the US imports of steel with tariffs of 20 percent proposed for some of the products.

The Community set out in detail its concerns about this investigation. Particular concern was voiced about the scope of the investigation in terms of identification of the products and US domestic industries involved. A clear product scope should always be fixed at the initiation of a proceeding, and not at the end as was done by the ITC in this case; otherwise the rights of defence of interested parties are adversely affected.

It was also pointed out that many of the products subject to this safeguard proceeding were already subject to anti-dumping or countervailing measures. It appears very doubtful whether it is legitimate to include any products that are already covered by such measures, and whose injurious effects are therefore already remedied. At the very least, the ITC should have addressed the existence of these measures in its proposals on remedy.

The Community also doubts that the current position of the US industry was caused by "unforeseen developments" as required under WTO rules. For the last decade or longer, most US steel producers have failed to restructure and lost their competitive edge. The consequences of this inaction therefore cannot be described as "unforeseen" and in fact the present US problems on steel have been widely predicted for some years.

The most substantial weakness of this case can however be seen from an examination of import statistics. These can not be interpreted as showing sudden, recent, sharp and significant increases, as required by current safeguard jurisprudence. Imports of almost all steel products have continued to decrease since the last months of 2000 and throughout 2001. Moreover, it is well known that not all US producers are suffering injury. Indeed, the so-called mini-mills, which represent almost 40% of US industry, have been doing very well in recent years.

At the end of 2001, there were indications that the USA would impose some form of measures. Indeed, this was confirmed in early 2002. On 5 March 2002, by Presidential Proclamation No 7529, the USA decided to impose safeguard measures which became effective as from 20 March 2002. For almost 70% of the Community exports to the USA, these measures take the form of a tariff increase of 30% and consequently imply a substantial closing of the US steel market. The Community has initiated WTO dispute settlement proceedings against the US measures (case WT/DS248). A panel was established on 3 June 2002.

8.2.2. Canned peaches

In August 2001, Argentina imposed a definitive safeguard measures of US$ 0,50 per kg, a rate equivalent to approximately 85% ad valorem against imports of canned peaches. Moreover, Argentina has had definitive countervailing duties in force against these imports from the Community and other sources since January 1996 at the level of 18,12% (Italy), 12,55% (Spain) and 12,15% (other Member States). The Community is the most important producer and exporter of canned peaches world-wide. Greece, in particular, is said to account for over 50% of world exports. Italy, Spain and France hold lower but still significant market share.

In January 2002, countervailing duties were extended for a further five year period as a result of a review initiated at the beginning of 2001 (at the level of US$ 44,35 per ton, equivalent to approximately 10,5% ad valorem).

Throughout both proceedings, the Commission has intervened at various stages emphasising its concerns on the substance of the procedures.

The Commission criticised in particular the weak injury findings in both proceedings, the overestimation of the subsidy amount, and on a more general basis the classification of the subsidies in question as being specific subsidies and therefore in breach of WTO rules. Furthermore, the Commission opposed the parallel imposition of countervailing duties and safeguard measures, because both measures aim to offset the "same" injury.

In addition, it should be noted that Argentina recently raised its customs tariffs applicable to up to 35%. These three measures can be considered as "triple protection" to remedy one and the same injury, which is not allowed under WTO rules.

In December 2001, Chile requested the establishment of a panel concerning the definitive safeguard measures imposed. Chile are contesting the measure on a number of points, most of which are in line with the views of the Community. For example, the lack of a finding of an emergency arising from "unforeseen developments", the lack of an increase in imports as well as deficiencies in the investigation with regard to injury and causality. Furthermore, Chile contested the level of the measure on the grounds that it would exceed the level necessary to prevent or remedy the alleged serious injury.

Chile is the second biggest exporter of canned peaches to Argentina after the Community, and also a target of the Argentinean safeguard measure in force. However, it argued repeatedly that the source of the Argentinean problem is the Community aid regime for canned peaches which enables Community producers to export at extremely low prices.

In order to defend its legitimate interests in this case the Community has registered as a third party in this panel proceeding.

8.2.3. Toys

In 1996, Brazil imposed a safeguard measure against imports of all type of toys originating in the Community. These measures, which were supposed to expire on 31 December 1999, were extended until December 2002.

Though this is not a case where measures were imposed in 2001, it is an important case to highlight for a number of reasons, not in the least because Brazil treated all toys as like or directly competitive products. The Community takes the view this is far too broad a definition and could lead to abuse of the safeguard instrument. It may be that some toys are directly competitive products and that low prices could lead to some customers switching from one type of toy to another. But, this must be shown to be the case and a simple assumption should not suffice.

In fact, Brazil imposed measures on all kinds of imported toys without regard to price, target customers or even application. Brazilian authorities justified this decision by simply stating that directly competitive products included those that disputed the same market and were near substitutes for each other. But these assertions were not backed up by evidence and in the view of the Community each toy cannot be viewed as a potential substitute for any other toy.

8.2.4. Steel pipes

The Czech authorities initiated the preliminary investigation on 27 June 2001. The Community seems to be the main importer with a trade interest of EUR 53 million in the year 2000. The Czech authorities have not presented any conclusions so far, however it is suspected that the initiation of the case is linked to an Community anti-dumping investigation into imports of steel tubes and pipes originating, inter alia, in the Czech Republic, which started on 1 June 2001.

8.2.5. Textiles

The preliminary investigation was initiated by the Czech authorities in June 2001 and aims to cover the entirety of clothing imports (HS chapters 61 and 62). In consultations held with the Czech authorities before initiation of the case, the Commission warned of the difficulty of carrying out an investigation into such a wide number of products and expressed the view that the injury test would be difficult to pass. The Commission also addressed a letter to the Czech Mission pointing out that these products benefit from a fully liberalised regime applied by the Community towards the Czech Republic (no tariffs and no quotas) and have allowed for an important increase of Czech exports to the Community. The Czech authorities were therefore requested to exclude the Community from any safeguard measure.

8.2.6. Nitrates of potassium

Poland initiated this case on 22 December 2000 and notified the WTO on 5 January 2001. Consultations were held between the Commission and the Polish authorities in February 2001 within the framework of the Europe Agreement. The Poles have announced their intention to apply measures sometime in the future in view of the alleged serious injury suffered by their industry, but have not yet presented the Commission with final conclusions on this case.

8.2.7. Sugar confectionery (caramels)

Russia initiated this case in February 2001 and imposed provisional measures in May 2001. Definitive measures are announced for January 2002. The measure consists of a 21% duty, though not less than EUR 0,18 per kg, to remain in force for a period of 2,5 years. In terms of trade interest, this is the most important measure in force, where the Community trade interest was EUR 25 million in the year 2000.

The Commission considers that the imposition of measures against the Community was not justified in this case since there was no clear increase in imports from the Community, the level of imports in the year 2000 being roughly the same as in 1997. Furthermore, there was no evidence of price undercutting on the part of the EC and substantial injury to the Russian industry had not been demonstrated. Consultations took place in Moscow in September 2001 concerning the imposition of the provisional measures and again in December 2001 with respect to the planned imposition of definitive measures. In our view, the correct measure, if any, would have been tariff quota which would have affected Ukraine, whose exports had sharply increased.

There has been disagreement about the correct application of the terms of Article 17 of the EU-Russia Partnership and Co-operation Agreement (PCA). Most importantly, Russia has not provided all relevant information and has not always provided for 30 days of consultations before the imposition of measures. However, there has been some improvement recently in this respect.

8.2.8. Magnesium fire-resistant materials

With respect to Ukraine, the investigation concerning imports of magnesium fire-resistant materials originating, inter alia, in Germany was initiated in September 2000. In April 2001, the imposition of measures in the form of quota was announced, applicable for a period of 4 years.

Consultations took place in Kiev in May 2001 to discuss the proposed imposition of safeguard measures on this product. During these consultations, the Commission services explained that the imposition of measures was not warranted in this case. In particular, the level of imports from the Community (Germany) was low, it was sold at high prices and there was no evidence of substantial injury to the domestic producers. In August 2001, Ukraine announced the decision to conclude this investigation without the imposition of measures.

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

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

9.1.1. Overview of the WTO dispute settlement procedure

In line with the conclusions of the Uruguay Round, the WTO provides for a procedure for the settlement of disputes between WTO Members on the application of the WTO agreements. This was a major development for international trade law. The procedure is divided into two stages. The first stage is at the level of the WTO Members and consists of a bilateral consultation. Upon failure of the consultation, the second stage can be opened by requesting the establishment of a special group ("panel"). The panel will issue a report, which can be appealed before the Appellate Body (each appeal being heard by three members of a permanent seven-member body set up by the Dispute Settlement Body). Both the panel report and the report by the Appellate Body are deemed to be adopted by the Dispute Settlement Body unless the latter rejects the report by unanimity.

Anti-dumping, anti-subsidy and safeguards are among the most popular subject matters in WTO dispute settlement. Out of the 56 panel reports adopted between 1 January 1995 and 31 December 2001, 19 cases referred to the aforementioned areas.

9.1.2. Dispute settlement procedures initiated by the Community

9.1.2.1. USA - Privatisation methodology (countervailing duties)

In May 2000, the WTO Appellate Body confirmed a panel's finding that countervailing duties imposed by the US Department of Commerce (DOC) on British Steel's exports of Lead and Bismuth steel from the UK were in breach of the WTO Subsidies Agreement.

The US took the view that the ruling only applied to the British Steel case, and therefore had no impact on a number of other DOC measures against privatised Community steel companies. On all these outstanding cases, WTO consultations were held on 7 December 2000 and 3 April 2001, but did not lead to any progress.

In fact, the US reaction was to introduce another methodology that they pretended was WTO compatible. But, this so-called new methodology is still clearly at odds with the findings of the Dispute settlement Body. Consequently, the Commission had little alternative but to challenge it before the WTO. The challenge in fact covers both the old (which applies to 11 outstanding measures) and the new methodology (which involves one measure). A panel was established on 10 September 2001

9.1.2.2. USA - Countervailing measures on corrosion-resistant carbon steel flat products from Germany

In 1992, the USA imposed a definitive countervailing duty of 0,6% on the above-mentioned imports. Following a sunset review, the USA, on 2 August 2000, issued a determination that the revocation of the countervailing duty order would be likely to lead to recurrence of subsidisation and imposed a duty of 0,54%. This is below the de minimis levels that apply in new investigations.

Though the WTO Agreement does not specify a de minimis threshold under which measures should not be re-imposed in sunset cases, logic would indicate that in some reviews they should. In this particular sunset case, the question being addressed is whether the subsidy would continue or recur should the measures be removed. Though the answer in this case is in the affirmative, it would only be at de minimis levels which, the subsidy being non-recurring, could never increase beyond that level. In these circumstances, the only fair thing to do would be to terminate the case.

As this problem can potentially affect all non-recurring subsidy cases, dispute settlement consultations were held in December 2000 and February 2001 and a panel was established on 10 September 2001.

9.1.2.3. USA - The Dumping and Subsidisation Offset Act

On 28 October 2000, the US Congress enacted the Dumping and Offset Act (the so-called Byrd Amendment). According to this legislation, proceeds of anti-dumping and countervailing orders are redistributed to the domestic petitioners. The Community, with a large number of other WTO members, considers that this legislation is incompatible with Article 18(1) of the Anti-dumping Agreement and with Article 32(1) of the Agreement on Subsidies and Countervailing measures, since it constitutes a specific action against dumping or subsidisation which is not foreseen by the WTO agreements.

This interpretation was reinforced by the Appelate Body findings in United States - 1916 Anti-Dumping Act. Furthermore, the Community finds that the Byrd Amendment influences the determination of the standing of petitioners and makes the acceptance of undertakings more difficult.

Besides the legal aspects of this case, there are other reasons for fighting this new US law, not in the least the fact that it would be likely to result in many more anti-dumping and anti-subsidy cases being filed. Successful cases could lead to hundreds of million of dollars being distributed to complainants, e.g. the lumber cases which the USA has recently opened against Canada.

In February 2001, dispute settlement consultations were held in Geneva without result. The Dispute Settlement Body established a panel in August 2001.

9.1.2.4. Argentina - ceramic floor tiles

On 12 November 1999, Argentina imposed a minimum price duty against imports of ceramic floor tiles from the Community. Even a cursory examination of this case was sufficient to show that Argentina had acted inconsistently with WTO rules and the Community referred the matter to a panel. This panel upheld all the claims submitted by the Community and the Dispute Settlement Body report was adopted on 5 November 2001, as Argentina did not appeal.

The panel ruled against Argentina on four main grounds : for disregarding information supplied by Community exporters on normal value and exports without having demonstrated legitimate reasons for the rejection of the information; for not determining an individual rate of duty for each exporter within the sample; for failing to make the necessary adjustments to the export price and the normal value; and, for not making disclosure to the exporters concerned.

This was an important case for the Community, not because of the trade volume involved, but because it clarified a number of issues relating to the standards of an investigation. In particular, the findings will have an impact on new users of commercial defence instruments whose standards do not always meet those required by the WTO Agreements.

Argentina was required to comply with the panel findings by 5 April 2002. The Community has taken the position that the only possible way for Argentina to comply with the panel ruling is removal of the measures.

9.1.2.5. USA - steel imports

On 5 March 2002, by Presidential Proclamation No 7529, the USA decided to impose safeguard measures which became effective as from 20 March 2002. For almost 70% of the Community exports to the USA, these measures take the form of a tariff increase of 30% and consequently imply a substantial closing of the US steel market. The Community has initiated WTO dispute settlement proceedings against the US measures (case WT/DS248). A panel was established on 3 June 2002. (See also point 8.2.1)

9.1.2.6. Argentina - canned peaches

In August 2001, Argentina imposed a definitive safeguard measure on imports of canned peaches.

In December 2001, Chile requested the establishment of a panel concerning the definitive safeguard measures imposed. Chile are contesting the measure on a number of points, most of which are in line with the views of the Community. For example, the lack of a finding of an emergency arising from "unforeseen developments", the lack of an increase in imports as well as deficiencies in the investigation with regard to injury and causality. Furthermore, Chile contested the level of the measure on the grounds that it would exceed the level necessary to prevent or remedy the alleged serious injury.

Chile is the second biggest exporter of canned peaches to Argentina after the Community, and also a target of the Argentinean safeguard measure in force. However, it argued repeatedly that the source of the Argentinean problem is the Community aid regime for canned peaches which enables Community producers to export at extremely low prices.

In order to defend its legitimate interests in this case the Community has registered as a third party in this panel proceeding. (see also point 8.2.2)

9.1.3. Dispute settlement procedures initiated by third countries against the Community.

9.1.3.1. India - anti-dumping duties on imports of cotton-type bed linen

By Council Regulation (EC) No 2398/97 [29], the Community imposed anti-dumping measures on cotton-type bed linen originating, inter alia, from India. After consultations, India requested the establishment of a WTO panel. In its report released on 30 October 2000, the panel ruled in favour of the Community on 13 issues and against the Community on four points.

[29] OJ L 332, 4.12.1997, p. 1. Regulation as last amended by Regulation (EC) No 554/2000 (OJ L 68, 16.3.2000, p. 1)

On appeal by both the Community and India, the Appellate Body issued a report on 1 March 2001 which upheld the Panel's finding on the inconsistency with the WTO Anti-dumping Agreement of the EC's practice of "zeroing" and reversed the Panel's favourable decision on two aspects of the Community's construction of normal value.

As a reaction to these decisions, the Commission clarified [30] that it would not only simply and fully implement these decisions with respect to the Indian bed linen case, but would also follow the same legal interpretations in all other of its proceedings or investigations (see e.g. lamps: heading 3.1.3.2 - point 2). Moreover, the Commission stated that it would also expect third countries to reflect these decisions in their investigations.

[30] See press statement IP/01/351 of 12 March 2001 on Europa web site

As concerns the bed linen case, the Community subsequently suspended the application of the anti-dumping measures against India by Council Regulation (EC) No 1644/2001 [31].

[31] OJ L 219, 14.08.2001, p.1

Furthermore, in early 2002, the Council terminated the measures with regard to Pakistan and suspended the measures with regard to Egypt. The latter were allowed to expire automatically at the end of February 2002.

9.1.3.2. Brazil - anti-dumping duties on malleable cast iron tube or pipe fittings

By Council Regulation (EC) No 1748/2000 [32], the Community imposed definitive anti-dumping duties on imports of certain malleable cast iron tube or pipe fittings originating, inter alia, in Brazil. After consultations a panel was established on 26 July 2001 following a request by Brazil. No panel report has been issued so far.

[32] OJ L 208, 18.08.2000, p.8

9.2. Other WTO activities

The year 2001 was dominated by the intense preparatory work towards a comprehensive negotiating agenda and the successful conclusion at the 4th Ministerial Conference in Doha, Qatar. The work on so-called "implementation issues" figured prominently in this run-up for Doha. Under this heading, developing countries put forward numerous proposals on changes with regard to rules and practices in the anti-dumping and subsidy areas. These issues were first discussed in the forum of the General Council for Trade in Goods and then some of them were referred to the specialised Committees for further examination.

Concerning subsidies, a number of issues were examined by the Committee on Subsidies and Countervailing Measures. The preparatory work in the Committee then allowed the Ministerial Conference at Doha to actually take decisions on some of these issues, notably the extension of the grace period for export subsidies for small developing countries.

The Doha Development Agenda provides for a mandate for negotiations on rules, specifically the Anti-dumping Agreement, the Subsidies and Countervailing Measures Agreement (including subsidies for fisheries) and regional trade agreements. Additionally, a separate decision on implementation related issues contains decisions on anti-dumping and subsidies, i.e. the referral of several issues to the Anti-dumping and Subsidies and Countervailing Measures Committees for further examination and decisions with immediate effect (e.g. particular consideration in back-to-back investigations in anti-dumping proceedings).

In parallel, the regular work of the Anti-dumping, Subsidies and Countervailing Measures and Safeguard Committees was on-going. The Committees met twice (in spring and in autumn) to review notifications and raise issue of special interest.

10. Conclusion

As regards the Community's anti-dumping and anti-subsidy activities, the year 2001 can be described as a return to normality with regard to initiations of investigations and imposition of measures, in comparison with the years 1999 and 2000 which showed an exceptional increase in the number of new investigations initiated and in the number of provisional/definitive measures imposed.

As regards measures imposed by third countries, the increasing trend of investigations targeting the Community as a whole rather than individual Member States has again been confirmed in 2001. Of the total measures in force targeting the Community or its Member States (both anti-dumping and countervailing), almost 30% were imposed by the USA. The Community is now second only to China as most affected territory by third country anti-dumping and anti-subsidy actions.

The Commission has also continued its efforts in order to have measures imposed by third countries comply with WTO agreements. In a number of cases, it initiated successful dispute settlement procedures.

The Doha Development Agenda calls for negotiations aimed at strengthening the provisions of the relevant Agreements, a cause of action which the Community shares and is fully committed to.

Annex

Summary

1. General trends for 2001

The year 2001 can be described as a return to normality with regard to initiations of investigations and imposition of measures, in comparison with the years 1999 and 2000 which showed an exceptional increase in the number of new investigations initiated and in the number of provisional/ definitive measures imposed.

On 31 December 2001, there were 175 anti-dumping and 16 countervailing measures in force. This compares to 175 anti-dumping and 17 countervailing measures in force at the end of the year 2000.

2. Main features

2.1. Initiations

A total of 62 investigations were initiated, split up as follows :

-33 new investigations, of which 6 anti-subsidy (see Annex A)

-12 expiry reviews (when a measure is about to expire, a review can be initiated on the request by the Community producers. The measure remains in force pending the outcome of such a review.) (see Annex F)

-14 interim reviews (the need for the continued imposition of measures may be reviewed on the initiative of the Commission, at the request of a Member State or upon request by any exporter or importer or Community producer, when circumstances have substantially changed) (see Annex G)

-2 new exporter reviews (see Annex I)

-1 anti-circumvention investigation (see Annex K)

2.2. Measures

-18 provisional measures were imposed (all anti-dumping), involving imports from 16 different countries and covering 7 products (see Annex C)

-12 definitive measures were imposed (all anti-dumping), involving imports from 10 different countries and covering 6 products (see Annex D)

-the Commission accepted undertakings offered by exporters in 10 cases (see Annex M)

-of the expiry reviews, 6 reviews were concluded with confirmation of duty (see Annex F)

-of the interim reviews, 6 reviews were concluded with confirmation/ amendment of duty (see Annex G)

-of the other reviews, 6 investigations were concluded under the specific provisions of the Regulation imposing the original measures, 1 investigation was concluded following judgment of the CFI and 2 investigations were concluded following an applications to the CFI (see Annex H)

-of the new exporter reviews, one was concluded with imposition/amendment of duty (see Annex I)

-of the anti-absorption investigations, one was concluded with increase of duty (see Annex J)

-of the accelerated reviews, one was concluded with imposition/amendment of duty (see Annex L)

2.3. Terminations

-12 new investigations (all anti-dumping) were terminated without the imposition of measures (see Annex E)

-of the expiry reviews, 6 were terminated (see Annex F)

-of the interim reviews, one investigation was concluded by termination (see Annex G)

-of the other reviews, one was terminated following an application to the CFI seeking annulment; in another case, the measures were suspended following reports adopted by the Dispute Settlement Body of the WTO (see Annex H)

-of the accelerated reviews, 2 were concluded by termination (see Annex L)

-8 measures expired automatically after their 5-year period of imposition (Annex N).

Please note that those statistics are also available on the following Internet Website : http://europa.eu.int/comm/trade/policy/dumping/reports.htm.

ANNEX A

New investigations initiated

during the period 1 January - 31 December 2001

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

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

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ANNEX B

A) New investigations initiated by product sector during the period 1997 - 2001 (31 December)

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B) New investigations initiated by country of export during the period 1997 - 2001 (31 December)

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ANNEX C

New investigations concluded by the imposition of provisional duties

during the period 1 January - 31 December 2001

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

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

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ANNEX D

New investigations concluded by the imposition of definitive duties

during the period 1 January - 31 December 2001

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

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

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ANNEX E

New investigations terminated without the imposition of measures

during the period 1 January - 31 December 2001

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

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

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ANNEX F

Expiry reviews initiated or concluded

during the period 1 January - 31 December 2001

(chronological by date of publication)

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ANNEX G

Interim reviews initiated or concluded

during the period 1 January - 31 December 2001

(chronological by date of publication)

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ANNEX H

Other reviews concluded

during the period 1 January - 31 December 2001

(chronological by date of publication)

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ANNEX I

New exporter reviews initiated or concluded

during the period 1 January - 31 December 2001

(chronological by date of publication)

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ANNEX J

Anti-absorption investigations initiated or concluded

during the period 1 January - 31 December 2001

(chronological by date of publication)

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ANNEX K

Anti-circumvention investigations initiated or concluded

during the period 1 January - 31 December 2001

(chronological by date of publication)

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>TABLE POSITION>

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ANNEX L

Accelerated review investigations (anti-subsidy) initiated or concluded

during the period 1 January - 31 December 2001

(chronological by date of publication)

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>TABLE POSITION>

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ANNEX M

Undertakings accepted or repealed

during the period 1 January - 31 December 2001

(chronological by date of publication)

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ANNEX N

Measures which expired

during the period 1 January - 31 December 2001

(chronological by date of publication)

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ANNEX O

Definitive anti-dumping measures in force on 31 December 2001

A. Ranked by product (alphabetical)

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B. Ranked by country (alphabetical)

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>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

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ANNEX P

Definitive anti-subsidy measures in force on 31 December 2001

A. Ranked by product (alphabetical)

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B. Ranked by country (alphabetical)

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ANNEX Q

Undertakings in force on 31 December 2001

A. Ranked by product (alphabetical)

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>TABLE POSITION>

B. Ranked by country (alphabetical)

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ANNEX R

Anti-dumping & anti-subsidy investigations pending

on 31 December 2001

A. New investigations (ranked by product - in alphabetical order)

>TABLE POSITION>

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B. Review investigations (ranked by product - in alphabetical order)

>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

C. Ranked by country (new and review investigations) (alphabetical)

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>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

ANNEX S

Refunds during the period 1 January - 31 December 2001

>TABLE POSITION>

>TABLE POSITION>

>TABLE POSITION>

ANNEX T

Court cases

A. Court cases pending before the Court of Justice and the Court of First Instance of the European Communities on 31 December 2001

Court of Justice

Case C-76/00P // Petrotub and Republic & Council (Appeal T-33 & 34/98)

Case C-472/00P // Fresh Marine v. Commission (Appeal T-178/98)

Case C-76/01P // Eurocoton & Council (Appeal T-213/97)

Court of First Instance

Case T-598/97 // British Shoe v. Council

Case T-88/98 // Kundan Industries Ltd. and Tata International Ltd. v. Council

Case T-192/98 // EUROCOTON v. Council

Case T-195/98 // Ettlin Spinnerei AG v. Council

Case T-340/99 // Arne Mathisen AS v. Council

Case T-89/00 // Europe ChemiCon GmbH v. Council

Case T-177/00 // Philips v. Council

Case T-35/01 // Shanghai Teraoka v. Council

Case T-132/01 // Euroalliages v. Commission

Case T-255/01 // Changzhou Hailong Electronics & Yankon v. Council

B. Judgments, orders and other decisions rendered by the Court of Justice and the Court of First Instance of the European Communities during 2001

Court of Justice

Case C-239/99 // Nachi Europe v. Hauptzollamt Krefeld (Preliminary ruling)

Case C-76/98 & C-77/98P // Nutrasweet/Ajinomoto & Council (Appeal T-159 & 160/94)

Case C-404/01P // Euroalliages v. Commission (Appeal T-132/01R)

Court of First Instance

Case T-188/99 // Euroalliages v. Commission

Case T-82/00 // Bic SA, Flamagaz SA, Swedish Match SA v. Council

Case T-58/99 // Munkand v. Council

Case T-132/01 R // Euroalliages v. Commission

Case T-226/00 & 227/00 // Far Eastern Textiles Ltd. & Nan Ya Plastics Corp. v. Council

ANNEX U

Anti-dumping and anti-subsidy investigations of third countries

concerning imports from the Community or its Member States

A. Anti-dumping investigations (sorted by date of imposition))

>TABLE POSITION>

>TABLE POSITION>

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>TABLE POSITION>

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B. Anti-subsidy investigations (sorted by date of imposition)

>TABLE POSITION>

>TABLE POSITION>

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ANNEX V

Third country safeguard actions during 2001 (sorted by date of imposition)

>TABLE POSITION>

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