The regulation is based on the principle that a harmful pricing charge may be levied on the builder of an injuriously priced2 vessel whose sale to a buyer outside the country in which the vessel originates causes injury to EU industry. This means that an assessment needs to be made of the capability in the EU to produce a like vessel (i.e. of the same type, purpose and approximate size as the vessel under consideration and possessing characteristics closely resembling it).
The regulation applies to all self-propelled sea-going vessels of 100 gross tonnes and above, used for transportation of goods or passengers or for the performance of a specialised service (for example, ice breakers and dredgers). It also covers tugboats of 365 kW and above.
The regulation lays down:
detailed rules on how to calculate normal value;
guidance as to the possible relevant factors to determine whether the injuriously priced sale has caused material injury or is threatening to cause injury. EU market conditions need to be taken into account in order to demonstrate that the price level of the sale concerned is responsible for injury sustained by the EU industry;
conditions — both procedural and substantive — for an EU shipbuilder to lodge a complaint against injurious pricing, including the extent to which it should be supported by the EU shipbuilding industry;
procedures for the European Commission to reject complaints or initiate proceedings;
rules and procedures governing the Commission’s investigation, such as:
how interested parties should make themselves known,
present their views and submit information within specified time limits, if such views and information are to be taken into account;
rules on the termination of cases. Whether or not an injurious pricing charge is imposed on a shipbuilder, an investigation should be terminated no later than 1 year from the date of its initiation or the date of delivery of the vessel, whichever is the later. The investigation may be terminated without imposing an injurious pricing charge if the sale of the injuriously priced vessel is definitively and unconditionally voided or if an alternative equivalent remedy is accepted;
rules preventing vessels built by shipbuilders who are subject to sanctions from loading and unloading in EU ports;
rules allowing the Commission to carry out visits to verify information about injurious pricing and injury;
rules on confidentiality to ensure that parties’ business secrets are not divulged in the course of the investigation.
FROM WHEN DOES THE REGULATION APPLY?
It applies from the date on which the Shipbuilding Agreement enters into force.
BACKGROUND
The goal of the Shipbuilding Agreement is to establish, in a legally binding manner, normal, i.e. subsidy and dumping-free, competitive conditions in the shipbuilding industries of OECD countries. The agreement has not, as yet, come into force.
Normal value: the price paid or payable, in the ordinary course of trade, for a like vessel by an independent buyer in the exporting country. When there are no sales of like vessels in the ordinary course of trade, or where, because of the particular market situation, such sales do not permit a proper comparison, the normal value of the like vessel is calculated on the basis of the export price of a like vessel, in the ordinary course of trade, to an appropriate non-EU country, provided that this price is representative. If such sales to any appropriate non-EU country do not exist or do not permit a proper comparison, the normal value of the like vessels are calculated on the basis of the cost of production in the country of origin plus a reasonable amount for selling, general and administrative costs and for profits.
Injuriously priced: where the export price of the vessel sold is less than a comparable price for a like vessel, when sold to a buyer of the exporting country under normal trading conditions.
MAIN DOCUMENT
Regulation (EU) 2016/1035 of the European Parliament and of the Council of on protection against injurious pricing of vessels (OJ L 176, , pp. 1-20)