EUROPEAN COMMISSION

Brussels, 17.10.2017

SWD(2017) 342 final

COMMISSION STAFF WORKING DOCUMENT

Accompanying the document

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

35th Annual Report from the Commission to the Council and the European Parliament on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities (2016)

{COM(2017) 598 final}

COMMISSION STAFF WORKING DOCUMENT

Accompanying the document

REPORT FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT

35th Annual Report from the Commission to the Council and the European Parliament on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities (2016)

TABLE OF CONTENTS

Executive summary Executive summary

1. 1. Overview of the legislation

Anti-dumping and anti-subsidy Anti-dumping and anti-subsidy

1.1.1. 1.1.1. The international framework

1.1.2. 1.1.2. The EU legislation

Safeguards Safeguards

1.2.1. 1.2.1. The international framework

1.2.2. 1.2.2. The EU legislation

Anti-subsidy and unfair pricing instrument for airline services Anti-subsidy and unfair pricing instrument for airline services

2. 2. Basic concepts

2.1. 2.1. Anti-dumping and anti-subsidy

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

2.1.2. 2.1.2. Procedure

2.1.3. 2.1.3. Review of measures

2.1.4. 2.1.4. Judicial reviews

2.2. 2.2. Safeguards

2.2.1. 2.2.1. What are safeguard measures?

2.2.2. 2.2.2. Procedure

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

3.1. 3.1. Measures in place

3.2. 3.2. Review investigations

4. 4. Overview of activities in 2016

4.1. 4.1. New investigations

4.1.1. 4.1.1. Initiations

4.1.2. 4.1.2. Provisional measures

4.1.3. 4.1.3. Definitive measures

4.1.4. 4.1.4. Details on individual cases

4.1.5. 4.1.5. Investigations terminated without measures

4.1.6. 4.1.6. Details on some individual cases

4.2. 4.2. Review investigations

4.2.1. 4.2.1. Expiry reviews

4.2.2. 4.2.2. Interim reviews

4.2.3. 4.2.3. “Other” reviews

4.2.4. 4.2.4. New exporter reviews

4.2.5. 4.2.5. Absorption investigations

4.2.6. 4.2.6. Circumvention investigations

4.3. 4.3. Safeguard investigations

5. 5. Enforcement of anti-dumping/countervailing measures

5.1. 5.1. Follow-up of measures

5.2. 5.2. Monitoring of undertakings

6. 6. Refunds

7. 7. TDI Modernisation

8. 8. Legislative proposal to amend the EU's AD and AS legislation

9. 9. Country-wide market economy status (MES)

10. 10. Information and Communication activities / Bilateral contacts

9.1. 9.1. Small and medium sized enterprises (SMEs)

9.2. 9.2. Bilateral contacts/information activities – EU economic operators including their key stakeholder associations and third countries

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

11.1. 11.1. Overview of the judicial reviews in 2016.

11.2. 11.2. Cases pending

11.3. 11.3. New cases

11.4. 11.4. Judgments rendered by the General Court

11.5. 11.5. Judgments rendered by the Court of Justice

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

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

12.1.1. 12.1.1. Overview of the WTO dispute settlement procedure

13. 13. Conclusion

12.1. 12.1. LIST OF ANNEXES

12.1.1. 12.1.1. New investigations initiated during the period 1 January – 31 December 2016

12.1.2. 12.1.2. New investigations initiated by product/country 2012 – 2016 (excluding the reopenings)

12.1.3. 12.1.3. Imposition of provisional duties during the period 1 January – 31 December 2016

12.1.4. 12.1.4. New investigations - imposition of definitive duties during the period 1 January – 31 December 2016

12.1.5. 12.1.5. New investigations terminated without the imposition of measures during the period 1 January - 31 December 2016

12.1.6. 12.1.6. Expiry reviews initiated or concluded during the period 1 January - 31 December 2016

12.1.7. 12.1.7. Interim reviews initiated or concluded during the period 1 January - 31 December 2016

12.1.8. 12.1.8. Other reviews initiated or concluded during the period 1 January - 31 December 2016

12.1.9. 12.1.9. New exporter reviews initiated or concluded during the period 1 January - 31 December 2016

12.1.10. 12.1.10. Anti-absorption investigations initiated or concluded during the period 1 January - 31 December 2016

12.1.11. 12.1.11. Anti-circumvention investigations initiated or concluded during the period 1 January - 31 December 2016

12.1.12. 12.1.12. Safeguard investigations initiated and concluded during the period 1 January - 31 December 2016

12.1.13. 12.1.13. Undertakings accepted / repealed during the period 1 January - 31 December 2016

12.1.14. 12.1.14. Measures which expired / lapsed during the period 1 January - 31 December 2016

12.1.15. 12.1.15. Definitive anti-dumping measures in force on 31 December 2016

12.1.16. 12.1.16. Definitive anti-subsidy measures in force on 31 December 2016

12.1.17. 12.1.17. Undertakings in force on 31 December 2016

12.1.18. 12.1.18. Anti-dumping & anti-subsidy investigations pending on 31 December 2016

12.1.19. 12.1.19. Court cases

12.1.20. 12.1.20. Safeguard and surveillance measures in force on 31 December 2016

Executive summary

This report sets out the European Union's anti-dumping, anti-subsidy and safeguard activities during 2016.

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

The report also summarises the developments in general policy. In this respect, two important legislative files merit particular attention. In November 2016, the Commission adopted a proposal to amend the EU's anti-dumping and anti-subsidy legislation. This proposal introduces a new method for calculating dumping margins for countries which have significant distortions in the economy owing to state interference. It also proposes changes to strengthen the anti-subsidy legislation.

On the modernisation of the trade defence instruments, a file introduced by the Commission back in 2013, significant progress can be reported. After the file was idle for around two years, the steel crisis back in 2016, highlighted the continued need for this initiative. The Council reached a compromise position at the end of that year. This allowed the next stage of the legislative process to begin, i.e. trilogues.

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

The detailed annexes give a complete overview of all case-related activities carried out during 2016. These are broken down into various categories e.g. initiations, imposition of measures etc. and are designed to complement the narrative of this report by providing details of all cases including references to publications.

With regard to anti-dumping and anti-subsidy, the year 2016 saw a slight increase in the number of new cases initiated when compared to the previous year, 15 as compared to 14 in 2015. In 2016 the number of provisional measures imposed remained stable, 9 compared to 10 while the number of definitive measures imposed dropped, 7 compared to 12 the previous year. The number of investigations terminated without measures increased significantly (8 in 2016 compared to 3 in 2015).

As regards review investigations initiated, there was a drop from 33 in 2015 to 16 in 2016. These included 13 expiry reviews, 2 interim reviews, and 1 anti-circumvention investigation. In the period, 5 expiry reviews were concluded with confirmation of the measures and 4 interim reviews were concluded with the measures being confirmed or amended.

The complexity in particular of new cases concerning steel products was in many instances significant. These cases also covered considerable import volumes.

There was no safeguard investigation opened nor safeguard measures imposed during 2016.

As in previous years, this report provides an overview of the Court cases relating to the trade policy instruments. In 2016, the Court of Justice (COJ) and the General Court (GC) rendered 38 judgments in total relating to the areas of anti-dumping or anti-subsidy.

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

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

In short, the Commission's activity in this area faced considerable challenges.

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

This report is also available to the general public under the following link.

Internet Website : http://ec.europa.eu/trade/policy/accessing-markets/trade-defence/  

1.Overview of the legislation

Anti-dumping and anti-subsidy

1.1.1.The international framework

On an international level, unfair trading practices such as dumping and the granting of subsidies were identified as a threat to open markets as early as 1947, when the first GATT agreement was signed. The agreement contained specific provisions allowing GATT members to take action against these practices if they caused material injury to the domestic industry of a GATT member. Even though, the beginning of the disciplines dates back quite some time, the instruments are still relevant because the trade distortions that underlie the application of these instruments are widespread.

Since the beginning, 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 measures can be adopted. The EU played an active role in the negotiation of these relevant criteria which are reflected in its own legislation. The EU's role is the more so important today as a number of new users take action without the necessary rigor and restraint, affecting negatively also EU operators. The role the EU plays as a prudent user has therefore also an exemplary function at WTO level. Against this backdrop, the EU also continues to play an active role in the ogoing DDA negotiations.

1.1.2.The EU legislation

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

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

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

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

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

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

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

Safeguards

1.2.1.The international framework

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

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

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

1.2.2.The EU legislation

The above-mentioned principles are all reflected in the relevant EU regulations, except for the “unforeseen development requirement” (which is not explicitly in the EU legislation but has been confirmed as a self-standing condition by WTO jurisprudence). Additionally, the adoption of measures in the EU requires an analysis of all interests concerned, i.e. the impact of the measures on producers, users and consumers. In other words, safeguard action can only be taken when it is in the EU’s interest to do so. The current EU safeguard instruments are covered by the following regulations:

- Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports (codification) 3[1],

- Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (recast) 4[2] 

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

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

Anti-subsidy and unfair pricing instrument for airline services

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

2.Basic concepts

2.1.Anti-dumping and anti-subsidy

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

2.1.1.1.Dumping and subsidies

Dumping is traditionally defined as price discrimination between national markets, or as selling below cost of production, plus profit. The EU’s anti-dumping legislation defines anti-dumping as selling a product in the EU at a price below its “normal value”. This “normal value” is usually the actual sales price on the domestic market of the exporting country. Therefore, a country is selling at dumped prices if the prices in its home market are higher than its export prices (i.e. price discrimination).

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, plus profit. In the latter case, a company is selling at dumped prices if its export prices are below the cost of production, plus profit.

A certain segregation of the market, triggered by a variety of distortions, exists in the majority of the cases where dumping occurs on a more than an incidental basis. That segregation may be caused, amongst other reasons, by government intervention e.g. high customs duties. 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 in that they allow exporters to operate from a distorted home base. Subsidies involve a direct support from a government or a government-directed private body which has the effect of conferring a benefit to producers or exporters (e.g. grants, tax and duty exemptions, preferential loans at below commercial rates, export promotion schemes, etc.). This allows exporters to sell at low prices in the EU. Only subsidies which are “specific”, i.e. targeted at individual companies or certain sectors of the economy, can be subject to trade defence measures.

Both anti-dumping and anti-subsidy measures are thus only second-best solutions in the absence of internationally agreed and enforced rules that ensure full market integration (for instance like in the EU internal market).

2.1.1.2.Material injury and causation

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

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

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

2.1.1.3.EU interest

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

2.1.2.Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic Regulations. These rules guarantee a transparent, fair and objective proceeding by granting significant procedural rights to interested parties. In addition, the results of an investigation are published in the Official Journal, and the EU 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 any candidate countries. The rules relating to a new case are summarised below.

Initiation

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

The investigation up to the provisional measures

Following receipt of the replies to the questionnaire, 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, as well as for the EU interest analysis. The respective calculations and analysis often involve the processing of thousands of transactions, the complex examination of production costs and the assessment of the economic situation of numerous economic operators.

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

The investigation up to the definitive stage

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

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

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

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

Timing

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

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

2.1.3.Review of measures

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

The expiry review is initiated at the end of the five year life-time of the measures. Initiation of such a review requires a request by the EU industry evidencing that the expiry of the measures would lead to the likelihood of a continuation or recurrence of dumping and injury. Since the amendment to the basic Regulations, expiry reviews initiated after 20 March 2004 are subject to strict deadlines, i.e. they shall normally be concluded within 12 months of the date of initiation of the review, but in all cases be concluded within 15 months.

During the five year life-time of measures, 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. Since 20 March 2006, the deadline for concluding an interim review is set at 12 months, but no later than 15 months.

Finally, the basic Regulations provide that a review shall be carried out to determine individual margins for new exporters in the exporting country concerned. Since 20 March 2006, the deadline for conclusion of newcomer reviews is nine months.

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

2.1.4.Judicial reviews

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

2.2.Safeguards

2.2.1.What are safeguard measures?

Safeguard measures allow temporary protection against the adverse effects of import surges. Under the EU legislation 5 implementing the WTO Safeguards Agreement, they can be applied under the following conditions: if, as a result of unforeseen developments, a product is being imported into the EU in such increased quantities and/or on such terms and conditions as to cause, or threaten to cause, serious injury to EU producers of like or directly competitive products. Safeguard measures may only be imposed to the extent and for such time as may be necessary to prevent or remedy the injury.

2.2.2.Procedure

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

Initiation

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

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

Provisional measures

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

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

Definitive measures

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

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

Duration and review of the measures

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

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

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

The number of new investigations initiated in 2016 increased compared to the previous year, 15 compared to 14 – in addition there were 9 cases reopened to implement findings following judicial review. The number of definitive measures imposed decreased when compared to 2015 (7 as compared to 12) and the number of provisional measures imposed in 2016 also decreased from 10 in 2015 to 9. Below are details on new investigations and review investigations.

3.1.Measures in place

At the end of 2016, the EU had 90 definitive anti-dumping measures (which were extended in 31 cases) and 12 countervailing measures in force (which were extended in three cases) 6 . The anti-dumping measures covered 65 products and 15 countries (see Annex O); the countervailing measures covered 12 products and 4 countries (see Annex P). The large majority of measures was in the form of duties. However, in a number of cases, undertakings were accepted.

Of the 90 anti-dumping measures and 31 extensions in force at the end of 2016, the main countries affected were China (84), Russia (8), India (5), Indonesia and USA (4 each), Ukraine (3), Taiwan, Thailand, Malaysia and Republic of Korea (2 each) Argentina, Belarus, Japan, South Africa and Turkey (1 each). Of the 15 anti-subsidy measures in place the majority concern imports from China (7) and India (5), USA was subject to two measures and Turkey to one measure.

Regarding anti-dumping measures, one has to look at the trade volume of the products concerned, which varies considerably depending on the investigation concerned. It should be noted that in 2016, only 0,27% 7 of total imports into the EU was affected by anti-dumping or anti-subsidy measures. Table 1 below provides statistical information on the new investigations for the years 2012 – 2016. Although comprehensive data are not available, the expiry review investigations show, in many cases, that the imposition of measures leads to a significant reduction of the imports of the product concerned.

TABLE 1

Anti-dumping and anti-subsidy new investigations

during the period 1 January 2012 - 31 December 2016 8

3.2.Review investigations

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

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

These reviews continue to represent a major part of the work of the Commission's TDI services. In the period from 2012 to 2016, a total of 144 review investigations were initiated. These review investigations represented 66% of all investigations initiated in that period.

In 2016, 16 reviews were initiated. These comprised 13 expiry reviews, 2 interim reviews, and 1 anti-circumvention investigation.

An overview of the review investigations in 2016 can be found in Annexes F to K. Table 2 provides statistical information for the years 2012 – 2016.

TABLE 2

Reviews of anti-dumping and anti-subsidy investigations

during the period 1 January 2012 - 31 December 2016 10

4.Overview of activities in 2016

4.1.New investigations

4.1.1.Initiations

In 2016, 14 new anti-dumping investigations and 1 new anti-subsidy investigation were initiated. There was no safeguard investigation initiated. The anti-dumping investigations involved 9 different products from 9 different countries. Details of these investigations are given in Annex A. The country most affected by the anti-dumping investigations is the Peoples' Republic of China (China) with 5 investigations. The anti-subsidy investigation also concerned China. The main sector concerned by these new cases is Iron and steel.

In the five-year period from 2012 to 2016, 73 investigations were initiated on imports from 9 countries. The sectors concerned by the investigations are iron and steel – 40 investigations, chemical and allied – 10 investigations, other - 13 investigations, other metals – 3 investigations, textiles and allied - 3 investigations, electronics 2 investigations, and other mechanical engineering and wood and paper 1 investigation each. A breakdown of the product sectors is given in Annex B(A).

The breakdown of the countries concerned by initiations during the period from 2012 to 2016 include China - 31 investigations, India - 8, Indonesia, Turkey Russia - 4 Taiwan, Korea- 3 each, Argentina, Brazil, Ukraine - 2 each, Belarus, Iran, Georgia, Japan, the Former Yugoslav Republic of Macedonia, Mexico, Serbia, Thailand, USA and Vietnam - 1 each. A table showing all the investigations initiated over the last five years broken down by country of export is at Annex B(B).

The list of cases initiated in 2016 can be found below, together with the names of the complainants. More information can be obtained from the Official Journal to which reference is given in Annex A.

4.1.2.Provisional measures

In 2016, provisional duties were imposed in 9 anti-dumping investigations. No provisional measures were imposed in anti-subsidy investigations which typically run in parallel to anti-dumping investigation and were the provisional anti-dumping duty already provides relief to the Union industry.

The list of cases where provisional measures were imposed during 2016 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.

4.1.3.Definitive measures

During 2016, definitive duties were imposed in 6 anti-dumping investigations and in 1 anti-subsidy investigations. The list of cases where definitive measures were imposed during 2015 can be found below, together with the measure(s) imposed. More information can be obtained from the Official Journal to which reference is given in Annex D.

4.1.4.Details on individual cases 

Tubes and pipes of ductile cast iron from India (AD )

In December 2014, the Commission initiated an anti-dumping investigation on imports of tubes and pipes of ductile cast iron originating in India, following a complaint lodged by Saint-Gobain PAM Group, on behalf of producers representing more than 25% of the Union production of the product concerned. In March 2015, the Commission initiated an anti-subsidy investigation regarding imports of the same product from India on the basis of a complaint also lodged by Saint-Gobain PAM Group.

Product concerned and investigation period (IP)

The product concerned is tubes and pipes of ductile cast iron originating in India which fall under CN codes 73030010 and ex 7330090. The investigation period for dumping was from 1 October 2013 to 30 December 2014 and for injury covered the period from 1 January 2010 to the end of December 2014.

Dumping

The dumping margins ranged between 4,1% for Electrosteel Casting and 19,0% for Jindal Saw Ltd (which equals the country-wide margin).

Injury and causation

Most of the injury indicators showed a negative trend in the period considered. The Union consumption decreased by 7% during the period considered yet the Indian import volumes increased by more than 10% during the period, despite the shrinking market. In the same period, the Indian exporting producers market share increased by almost 18%. The market share of the Union industry decreased by 4%, while its sales in the Union market decreased by 11%. The EU capacity utilisation remained low throughout the whole investigation period slightly increasing near the end as compared to the beginning of the period considered. Even though the Union industry, to some extent, recovered during the investigation period from the negative results incurred in 2012 and 2013, its profitability overall decreased during the period considered and was, by the end of the investigation period only 1,5%-2,0%, well below the target profit, which was established at 5%.

The dumped imports from India undercut the Union industry prices by 30% during the investigation period. Indian exporters claimed that the injury to the Union industry was a result of the fall in consumption. However, even when consumption started to improve the Union industry was unable to benefit owing to the presence of increasing dumped imports from India. Hence, the Commission concluded that the material injury to the Union industry was caused by the dumped imports from India and that others factors did not break the causal link.

Union interest and definitive measures

The Commission examined if it was in the Union interest to adopt measures against India in this case and analysed the interests of the Union industry, importers, distributors, users and assessed potential competition policy issues. In this context concerns were expressed by interested parties regarding the alleged almost dominant position of the EU producer and the fact that it had production facilities in China. In particular, concerns were expressed that, if measures were imposed against Indian imports, these could be replaced by imports from the complainant's production in China thereby further strengthening its dominant position.

The investigation demonstrated that imports into the Union from the complainant's related Chinese facilities were insignificant during the investigation period. There were also no indications that the complainant would, in the future, use those Chinese production facilities to replace Indian imports should measures be imposed. Moreover, there are several producers located in third countries (China, Turkey, Russia, and Switzerland) who are already selling to the Union market with their sales volumes during the period low and declining. It was concluded that it was not against the Union interest to impose measures.

In view of the dumping margins found and the resulting injury caused to the Union industry, definitive anti-dumping duties of 14,1% on the product concerned were imposed in March 2016. A countervailing duty of 9% was imposed at the same time.

High fatigue performance steel concrete reinforcement bars from China (AD)

In April 2015, the Commission initiated an anti-dumping investigation on imports of high fatigue performance steel concrete reinforcement bars (‘HFP rebars’) originating in China on the basis of a complaint lodged by Eurofer on behalf of producers representing more than 25% of the total Union production of HFP rebars. In December 2015, the Commission, following a request by the complainant, the imports of HFP rebars from China were made subject to registration.

Product concerned and investigation period (IP)

The product concerned is high fatigue performance steel concrete reinforcement bars, currently falling within CN codes ex 7214 20 00, ex 7228 30 20, ex 7228 30 41, ex 7228 30 49, ex 7228 30 61, ex 7228 30 69, ex 7228 30 70 and ex 7228 30 89.

The investigation period for dumping was 1 April 2014 to 31 March 2015 and for injury from 1 January 2011 to the end of March 2015.

Dumping

None of the exporting producers claimed Market Economy Treatment (MET) pursuant to Article 2(7)(b) of the basic Regulation. Therefore, normal value for China was determined on the basis of the price or constructed value in an analogue country, namely South Africa, in accordance with Article 2(7)(a) of the basic Regulation. The Commission then compared the normal value and the export price on an ex-works basis. Adjustments were made where appropriate to ensure a fair comparison in accordance with Article 2(10) of the basic Regulation. The resulting dumping margins ranged between 48,1% and 62,1%.

Injury and causation

Despite the fact that there was an increase in consumption in the period considered, the Union industry did not benefit from this increase. From 2013 onwards, the economic situation of the Union industry deteriorated. Indicators such as production and sales volume of the Union industry stagnated despite a continued increase in Union consumption. The market share of the Union industry dropped significantly as the increased Union consumption was met by a rapid increase of Chinese imports. Profitability and cash flow of the Union industry were seriously affected with a drop by 4 percentage points in the former as a result of the price pressure which prevailed in the Union market. As a result of not being able to maintain profitable prices, the Union industry became loss-making as a consequence - average sales prices of the Union industry decreased by 16% from 2012 to the IP. Based on all this, it was concluded that the Union industry suffered material injury.

Regarding the causality analysis, it was found that there was a substantial increase in the volume and market share of the dumped imports from China in the period considered at prices which were undercutting the Union producers prices - undercutting margins ranged from 8,3% to 11,8%. The imports from China coincided with the deterioration of the financial situation of the Union industry as of 2013. Despite the recovery in consumption, the Union industry was unable to benefit. Other known factors which were examined were the effects of the economic crisis as well as claims by Chinese parties that prices of the main raw material used by Union producers (scrap rather than iron ore) were increasing. These proved not to be the case and the investigation confirmed that these other factors did not break the causal link established between the dumped imports from China and the injury suffered by the Union industry.

Union interest and definitive measures

The Commission examined whether it could clearly conclude that it was not in the Union interest to adopt measures in this case, despite the determination of injurious dumping.

Regarding the impact of measures on users, the investigation showed that, during the IP, the average profitability of the cooperating unrelated users on the sales incorporating the product concerned was 1% on turnover. The Commission examined the impact on users if they would continue purchasing from China and were unable to pass any price increase on to the distribution chain. It concluded that, in that scenario, given the high percentage of their turnover represented by imports of the product concerned they would ultimately become loss-making. However, it was found that there would be other sources of supply including from the Union industry who had spare capacity, as well as continued possibilities to import from China once the trade distorting effects of dumping were removed. In any event the duty rates proposed were moderate and were unlikely to completely eliminate imports from China, which could continue to enter the Union market at fair prices.

Some interested parties argued that the imposition of measures would have a negative impact on the importers. The importers would be unable to pass on price increases to customers, which would lead them to losses. Considering their narrow profit margins, they would risk going out of business. As with the case concerning users the investigation found that the importers would be able to continue their activity by importing from other sources of supply and also from China at non-injurious prices following the imposition of the duties.

One interested party claimed that imposing measures for the entire Union would be unnecessary since imports from China are directed only to UK and Ireland. However the Commission noted that even though the consumption is limited to UK and Ireland, the Union industry is located in several Member States and therefore the Union interest must be assessed concerning the entire Union. Given the intra-Union trade flows of the product concerned between UK, Ireland and the other Member States, measures must be imposed for the entire Union in order for them to be efficient.

In summary, none of the arguments put forward by the interested parties demonstrate that there were compelling reasons against the imposition of measures on imports of the product concerned from China. When considering the overall impact of the anti-dumping measures on the Union market, the positive effects, in particular on the Union industry, appeared to outweigh the potential negative impacts on the other interest groups.

As a result the investigation concluded that definitive anti-dumping measures should be imposed on the imports of the product concerned at the level of the injury margin, in accordance with the lesser duty rule. Consequently, the Commission imposed a definitive anti-dumping duty ranging from 18,4% to 22,5% for imports of HFP rebars originating in China

Aspartame (AD)

In May 2015, the Commission initiated an anti-dumping investigation on imports of aspartame originating in China, following a complaint lodged on 16 April 2015 by Ajinomoto Sweeteners Europe SAS (‘ASE’), the sole producer of aspartame in the Union.

Product concerned and investigation period (IP)

The product concerned is aspartame originating in China, currently falling within CN code ex 2924 29 98. The investigation of dumping covered the period form 1 April 2014 to 31 March 2015 and injury covered the period from 1 January 2011 to the end March 2015.

Dumping

Regarding China, one exporting producer claimed Market Economy Treatment ('MET') pursuant to Article 2(7)(b) of the basic Regulation but was refused as the applicant failed to demonstrate that it was not subject to significant distortions carried over from the non-market economy system. The investigation revealed that the company benefited from preferential tax regime(s), grants and preferential land-use right transfer price and therefore did not fulfil the requirements for MET. Therefore, normal value for China was determined on the basis of the price or constructed value in a market economy third country, namely Japan as the analogue country, and in particular the producer Ajinomoto Co., Japan (‘Ajinomoto Japan’), the parent company of the complainant. The Commission then compared the normal value and the export price on an ex-works basis. Adjustments were made where appropriate to ensure a fair comparison and the resulting dumping margins ranged between 121,4% und 126%.

Injury and causation

Most economic indicators (with the exception of market share and production capacity) showed a negative trend during the period considered. In particular, the investigation established that due to the high volumes of dumped Chinese imports that were significantly undercutting the Union prices (by 21,1% during the investigation period) the Union industry had no other choice than to decrease its sales prices despite its worsening cost situation, which had a direct negative impact on its profitability, cash-flow, investments and return on investment. The significant deterioration of those injury indicators was therefore a clear sign of material injury.

The investigation showed that the continuous price pressure of Chinese imports combined with their strong presence on the Union market caused material injury to the Union industry. The already low prices of Chinese imports decreased markedly during the period considered and this price decrease could only be in part explained by the trends in the raw material prices. The depressed prices had a direct negative impact on the Union industry's profitability and contributed to it becoming loss-making on the Union market. The Commission considered the effects of all other known factors that may have contributed to the injury suffered by the Union industry, including the decline in Union consumption as a result of health concerns and the replacement of the product with other sweeteners. However the investigation found that the Union industry adapted to the decrease in demand by adjusting its production process to a lower out-put rate. The export performance of the Union industry was also examined and while it contributed to the injury suffered it was not found to be such as to break the causal link. As a result it was concluded that the dumped imports had indeed caused injury to the EU industry.

Union interest and definitive measures

The Commission examined whether it could clearly conclude that it was in the Union interest to adopt measures in this case due to injurious dumping. The investigation analysed the interest of the Union industry, importers, distributors, users and assessed potential competition policy issues.

One interested party claimed that the imposition of measures would be against the Union interest as the proposed measures would effectively close the Union market from the Chinese exporting producers leaving users with a single source of supply (i.e. the Union industry). According to the interested party, this also meant that the measures would put the Union industry into a dominant market position which it would be able to take full advantage of. However, the Commission found that there are alternative sources available to the users including considerable production in Japan. The investigation found that if the dumping practices were allowed to continue unchecked, the Union industry, in all likelihood, would be forced to quit the market altogether leaving users with the only alternative of importation which was considered not to be in the Union interest. The maintenance of production in the Union was considered essential to ensure competition.

As a result the investigation concluded that there were no compelling reasons not to impose measures on imports of the product concerned originating in China. Consequently, the Commission imposed a definitive anti-dumping duty ranging from 55,4% to 59,4% for imports of aspartame originating in China in July 2016.

Cold-rolled flat steel products (AD)

In May 2014, the Commission initiated an anti-dumping investigation on imports into the Union of certain flat-rolled products of iron or non-alloy steel, originating in China and Russia, following a complaint by Eurofer on behalf of producers representing more than 25% of the total Union production of the product concerned. In February 2016, the Commission, following a request by the complainant, made imports of the product concerned from the countries concerned subject to registration.

Product concerned and investigation period (IP)

The product concerned is iron or non-alloy steel, or other alloy steel but excluding of stainless steel, currently falling within CN codes ex 7209 15 00, 7209 16 90, 7209 17 90, 7209 18 91, ex 7209 18 99, ex 7209 25 00, 7209 26 90, 7209 27 90, 7209 28 90, 7211 23 30, ex 7211 23 80, ex 7211 29 00, 7225 50 80, 7226 92 00. The investigation of dumping covered the period from 1 April 2014 to 31 March 2015 and for the assessment of injury covered the period from 1 January 2010 to the end of the investigation period.

Dumping

None of the exporting producers in China claimed Market Economy Treatment. Therefore normal value was determined for China on the basis of data from an analogue country, namely Canada.

Regarding Russia, the normal value was calculated on the basis of prices paid in Russia as well constructed in some instances. The export prices were established on the basis of prices actually paid or payable on the EU market. The Commission then compared the normal values and the export prices on an ex-works basis making adjustments where necessary. The resulting dumping margins ranged between 52,7% and 59,2% for CHINA and ranged between 18,7% and 38,9% for Russia.

Injury and causation

Most of the injury indicators of the Union industry showed a negative trend during the period considered. Production decreased by 5%, leading to a decrease in the capacity utilisation by 8%. Stable sales volumes in a growing market led to a decrease of market share of 5%. Employment decreased by 11% while labour costs increased by 8%. Investments decreased by 17% while return on investments remained negative throughout the period considered and showed a worsening trend. On the other hand, production capacity and productivity showed a slightly positive trend. In any event, this increase in production capacity was in line with the increase of consumption during the period considered.

The continuously lowering unit sales price of the dumped imports meant that the producers from the countries concerned were able to significantly increase their market share from 2011 (14,3%) to the investigation period (20,1%). These dumped imports were also found to have undercut the Union industry prices by between 9,6% and 11,3% during the investigation period. Other factors were examined in relation to causation including the economic crisis, allegations that the Union industry is not sufficiently competitive and/or efficient, the imports from third countries, the role of non-complainants, the export sales performance of the Union producers or the overcapacity of the Union industry. The investigation found that the crisis and the decrease in consumption as well as the rationalisation of the Union industry may have somewhat contributed to the injury. However it also found that the ever decreasing prices of dumped imports exacerbated the decline in the situation of the Union industry. In particular, sales prices would not have dropped to such low levels and better profitability would have been achieved in the absence of dumping.

In light of this, the Commission concluded that the material injury to the Union industry was caused by the dumped imports from the countries concerned and that other factors considered did not break the causal link.

Union interest and definitive measures

The Commission examined whether it was in the Union interest to adopt measures in this case, despite the determination of injurious dumping. The investigation analysed the interest of the Union industry, importers, distributers, users and assessed potential competition policy issues.

The majority of the Union industry supported the imposition of measures while the largest Union producer (Outokumpu) remained silent. Importers and distributors, including steel service centres, were very active in this investigation expressing opposition to the imposition of measures arguing that their possible sources of supply would be limited by the imposition of measures. However, the investigation found that all importers and distributors buy from multiple sources including the Union industry, the countries concerned and other third countries and as such would continue to have a choice of sources of supply. A number of exporting producers and distributors expressed concerns regarding possible negative effects of measures on users. However, users themselves did not share these concerns and the degree of participation of users in the case remained very low.

As a result the investigation concluded that there were no compelling Union interest reasons against the imposition of measures in this case and consequently, the Commission imposed definitive anti-dumping duties ranging from 19,7% to 22,1% for imports of the product concerned from China, and ranging from 18,7% to 36,1% on imports from Russia.

4.1.5.Investigations terminated without measures

In accordance with the provisions of the respective basic Regulations, investigations may be terminated without the imposition of measures if a complaint is withdrawn or if measures are unnecessary (i.e. no dumping/no subsidies, no injury resulting from dumped or subsidised imports, measures not in the interest of the Union). In 2016, 8 new proceedings (7 anti-dumping and 1 anti-subsidy) were terminated without measures, compared to 3 in 2015 and 4 in 2014.

The list of cases which were terminated without the imposition of measures during 2016 can be found in the following table. More information can be obtained from the Official Journal to which reference is given in Annex E.

4.1.6.Details on some individual cases

Silicon Manganese (AD)

In December 2014, the Commission initiated an anti-dumping investigation on imports of silico-manganese originating in India, following a complaint lodged by the Comité de Liaison des Industries de Ferro-Alliages (‘Euroalliages’ or ‘the complainant’) on behalf of three Union producers representing more than 25% of the total Union producers.

Product concerned and investigation period (IP)

The product concerned is silico-manganese (including ferro-silico-manganese) originating in India, currently falling within CN codes numbers ex 7202 30 00 and ex 8111 00 11. The investigation of dumping covered the period from 1 October 2013 to 30 September 2014 and injury covered the period from 1 January 2011 to the end of the September 2014.

Dumping

The Commission compared the normal value and the export price of the exporting producers on an ex-works basis making adjustments for differences affecting price comparability where necessary. The resulting dumping margins ranged between 3,4% and 25,1%.

Injury and causation

Factors such as the evolution of the production volume, the capacity utilisation as well as sales volume and price displayed a clear negative trend for the entire Union industry.

As regards the two cooperating Union producers, the indicators showed that they were loss-making throughout the period considered. While their sales price and volume of silico-manganese decreased constantly this was not sufficiently compensated by a reduction in the cost of production. Other indicators such as cash flow, return on investment were negative as well throughout the period or followed a downward trend. Even though not all economic sectors and indices showed negative trends, most of them showed a negative situation for the two cooperating union producers.

However, the investigation established that there was not the necessary correlation between the increase in volume of the dumped imports and the injury suffered by the two cooperating Union producers. In addition, the market share of the dumped imports increased in the period considered, but only from (18%/24%) to (23%/30%). The market share did not show a continuously increasing trend, and prices did not, or hardly, undercut the prices of the Union industry.

In view of the lack of coincidence in time between the deterioration in the economic situation of the cooperating Union producers and the trends of volume and market share of the dumped imports of silico-manganese from India, the Commission concluded that the dumped imports had not caused material injury to the Union industry. The investigation did not find that the volume and/or price levels of the Indian dumped imports were responsible for the injurious situation of the two cooperating producers, and hence no causal link between the dumped imports and the injurious situation of the Union industry could be established.

Union interest and definitive measures

Since the causal link between dumped imports from India and the injury suffered on by the Union industry was not established, the Union interest was not examined. Consequently, the Commission did not impose any measures and the proceeding was terminated in March 2016.

Manganese oxides (AD)

In December 2015, the Commission initiated an anti-dumping investigation on imports of certain manganese oxides originating in Brazil, Georgia, India and Mexico, following a complaint by Erachem Comilog, the sole producer of certain manganese oxides in the Union. Product concerned and investigation period (IP)

The product concerned is manganese oxides (chemical formula: MnO) with a purity in net weight of 50% and more, but less than 77% of manganese currently falling within CN codes ex 2820 90 90 and ex 2602 00 00.The investigation of dumping covered the period from 1 October 2014 to 30 September 2015, and injury covered the period from 1 January 2010 to the end of September 2015.

Withdrawal of the complaint and termination of proceedings

On 6 September 2016 the complainant addressed a letter to the Commission in order to withdraw its complaint. The investigation did not identify any issues showing that a termination of the case would not be in the Union interest. Interested parties were duly informed of the intention to terminate the case and no interested party objected. As a result, the Commission terminated the anti-dumping proceeding in December 2016 without the imposition of measures.

European sea bass and gilthead sea bream (AS)

In August 2015, the Commission initiated an anti-subsidy investigation on imports of sea bass and gilthead sea bream originating in Turkey, following a complaint lodged by Asociación Empresarial de Productores de Cultivos Marinos (‘Apromar’), on behalf of producers representing more than 25% of the total Union production of European sea bass and gilthead sea bream.

Product concerned and investigation period (IP)

The product concerned is sea bass and gilthead sea bream falling under CN codes 0302 84 10, 0302 85 30, 0303 84 10, 0303 89 55, ex 0304 49 90 and ex 0304 89 90. The investigation period for dumping was from 1 July 2014 to 30 June 2015, and for injury from 1 January 2012 to the end of June 2015.

Withdrawal of the complaint and termination of the proceeding

On 1 June 2016 the complainant addressed a letter to the Commission withdrawing the complaint. The investigation did not identify any issues showing that a termination of the case would not be in the Union interest. Interested parties were duly informed of the intention to terminate the case and no interested party objected. As a result the Commission terminated the anti-dumping proceeding in December 2016 without the imposition of measures.

4.2.Review investigations

4.2.1.Expiry reviews

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

In 2016, 5 anti-dumping measures and no anti-subsidy measures expired automatically. The references for these measures are set out in Annex N.

Since the expiry provision of the basic Regulations came into force in 1985, a total of 503 measures have expired automatically.

4.2.1.1.Initiations

During 2016, 11 expiry reviews were initiated of anti-dumping measures in place and 2 concerning anti-subsidy measures. The list of the expiry reviews initiated in 2016 can be found in the following table, together with the name of the complainant. It should be noted that some expiry reviews may be carried out in parallel with interim reviews. Where there are interim reviews and expiry reviews ongoing at the same time these are indiccted by an asterisk in the table below. More information can be obtained from the Official Journal to which reference is given in Annex F.    

4.2.1.2.Expiry reviews concluded with confirmation of duties

During 2016, 5 expiry reviews were concluded with confirmation of the duties for a further five years.

The list of the cases which were concluded with confirmation of duty during 2016, 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.

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

Silicon metal (silicon) (AD)

In May 2015, the Commission initiated an expiry review of the measures imposed on imports of silicon originating in China. The request was lodged by Euroalliages on behalf of producers representing 100% of the Union production of silicon. In September 2015, the Commission initiated a partial interim review, limited to injury, with regard to the same measures. The interim review was initiated following a request by the European Users of Silicon Metal ("Eusmet"), an association of Union chemical users of silicon created for this investigation.

Product concerned and IP

The product concerned by this review is silicon currently falling within CN code 2804 69 00 originating in China. The investigation of dumping and injury covered the period from 1 April 2014 to 31 March 2015.

Dumping

A sample of four out of ten exporting producers was selected.

For the purposes of establishing normal value the USA was selected as the analogue country. Despite arguments against this choice the Commission found that depite having only one producer selling onto the domestic US market, there are imports from many sources in the US (including Canada, South Africa, Australia and Norway), both with and without import duties. The US producer estimated that imports covered almost 60% of total US market and that therefore the domestic market was competitive and prices representative. As for export prices, three of the sampled exporting producers made export sales to the EU to a Chinese related company of the independent customer in the Union. Hence, there was no need to use constructed export prices.

The Commission compared the normal value of each type of the like product in the analogue country with the export prices on an ex-works basis. Where relevant, adjustments were made in respect of indirect taxes, transport, insurance, handling, loading and ancillary costs, and packing to ensure comparability. As a result, the Commission found dumping margins for the cooperating exporting producers, expressed as a percentage of the CIF Union frontier price duty unpaid, ranging between 20% and 30%.

Continuation of dumping

Regarding the trends in prices of imports from China the investigation showed that all of the sampled Chinese cooperating exporting producers were selling the product concerned to users in the Union, who were found to be using the inward processing procedure (‘IPP’) whereby duties are not collected on the import of raw materials when the finished product is exported. As a result the Commission found that the low export prices found during the review investigation period, were a good indicator of the price of imports of silicon from China in the absence of the anti-dumping duty in force. Furthermore the investigation found that the prices of the sampled exporting producers to export markets other than the Union were in line with the export price to the Union. As regards the export volumes, the investigation showed that the Chinese exporting producers have significant spare capacity larger than total Chinese consumption and larger than total consumption in the Union. There was no evidence found to suggest that this spare capacity would disappear or reduce dramatically in the near future. It was concluded that, given the tariff barriers in place in the USA and other markets that should the measures lapse, a part of this significant spare capacity would be likely to be exported to the Union. In addition it was concluded that the two anti-circumvention measures in force concerning the product were additional evidence of the attractiveness of the Union market. As a result the Commission concluded that the dumped exports to the Union would be likely to continue if the measures were repealed.

Injury and likelihood of recurrence of injury

Many injury indicators such as production, capacity and sales volume showed a mixed picture. While they indicated a positive trend in absolute terms, the increase was so low that it did not allow the Union industry to benefit from the growth in the market. Capacity utilisation and market share showed a negative trend. Employment increased by 4% during the period considered, while productivity remained stable. Net investments and average wages per employee showed also a negative trend. While trends of the financial indicators such as profitability, cash flow and return of investments were negative, their absolute levels did not show a sign of injury. As a result, the Commission concluded that the Union industry did not suffer material injury.

The trends concerning prices and volumes of imports of the product concerned showed that the Chinese exporting producers significantly increased their export volumes to the Union by 82% despite the measures in force, holding a market share of ranging between 17% and 22% during the review investigation period. Imports from China subject to duties increased at an even higher rate of 121%,. In the same period the production of the Union industry increased by 3% and sales by 5%. It was mainly imports from China and Norway, and not the Union industry that replaced decreasing imports from Brazil and led to the 9% increase in the Union consumption between 2011 and the review investigation period. Exporting producers in China have significant spare capacity to increase their exports very rapidly. In addition, the domestic prices in China and other third markets, for example Japan, are lower than prices on the Union market. Domestic prices in China and in Japan were more than 25% lower than in the Union during the review investigation period.

Given the spare capacity and low prices of dumped imports on the Union market, the attractiveness of the Union market and the fact that other markets such as Australia, Canada and the USA have imposed anti-dumping duties against Chinese silicon, it was concluded that significant Chinese quantities currently sold to these markets could also be redirected to the Union market should the anti-dumping measures be allowed to lapse. In addition, the price levels of the Chinese imports subject to anti-dumping duty were found to significantly undercut Union industry's prices by 13,6%, showing the price levels at which Chinese exporting producers would likely enter the Union market in the absence of measures. Therefore, the investigation concluded that there was a likelihood of a further significant increase of Chinese imports at dumped and injurious prices leading to a recurrence of injury should the measures be allowed to lapse.

Union interest

The Commission examined whether the continued imposition of anti-dumping measures on imports of silicon originating in China would not be in the interest of the Union as a whole. In this context the interests of the Union industry, importers and users were examined.

The investigation on injury showed that the Union industry operations are viable when not subject to unfair competition by dumped imports.

Only one unrelated importer submitted a sampling reply showing that the silicon trade constituted only around 10% of its total turnover. The importer neither opposed nor supported the measures and it was concluded that it was not against the interest of the unrelated imports to maintain the measures in force.

As regards the interests of users, the Commission examined information received from users in the chemical and aluminium industries. For the aluminium industry, silicon is only marginally needed for their products and the financial effect of the measures on these users is low, due to the relatively low importance of silicon in their cost structure. For users in the chemical industry the investigation found that silicon is of significant importance accounting for a large share of the raw materials cost. However, the investigation found that these users almost exclusively import silicon under IPP, thereby being exempted from the anti-dumping duty. As regards the security of supply it was concluded that the measures in force did not stop Chinese imports from entering the Union market. These, as well as imports from Norway, Brazil, Russia, Bosnia and Herzegovina, and a number of other countries would ensure supply where the Union industry would be unable to meet demand.

The lack of competition on the Union market was also examined given the fact that there were in fact only two company groups manufacturing the product in the EU. The investigation found that the companies only held a market share of 30%, while imports from a number of third countries have a market share of 70% giving users a choice between silicon metal produced by the Union industry and silicon metal from a variety of other third countries. The Commission concluded that it was in the Union interest to maintain the measures on imports of silicon originating in China.

In the context of the partial interim review the Commission examined the lasting nature of the changed circumstances relating mainly to the composition and the structure of the Union industry, to the silicon demand in the Union and to the Union supply pattern. The investigation did not reveal anything to suggest that the changed circumstances were not of a lasting nature.

New injury elimination level and definitive measures

The Commission established the injury elimination by first establishing the amount of duty necessary to avoid recurrence of injury to the Union industry. Given that the Commission found that the sales of the Union industry were profitable, the injury elimination level was established at the level of the sales price of the Union industry during the review investigation period. In comparing the price of imports the Commission only took account of the imports subject to duties and imports of silicon made under IPP. The injury elimination level found was 16,8%.

In view of the findings with regard to the expiry review, the Commission concluded that the anti-dumping measures applicable to imports of silicon originating in China should be maintained. In addition it was decided that the extension of measures for the product concerned originating in China to imports consigned from the Republic of Korea and from Taiwan following previous anti-circumvention investigations should also be maintained. In view of the findings in the interim review iit was concluded that the duties should be amended in accordance with the application of the lesser duty rule. As a result, definitive anti-dumping duties on imports of silicon ranging from 16,3% to 16,8% were imposed in July 2016.

4.2.1.4.Reviews concluded by termination

During 2016, two expiry reviews were concluded by termination.

4.2.2.Interim reviews

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

During 2016, 2 interim reviews were initiated (anti-dumping). There were 4 interim reviews concluded with amendment of the duties, 4 were concluded without amending the duties and no interim reviews led to the termination of the measures. The list of cases which were concluded during 2016 by amending the duties, 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.

4.2.2.1.Details on individual cases

Steel ropes and cables from Ukraine (AD)

In November 2014, the Commission initiated a partial interim review with regard to imports into the Union of steel ropes and cables originating in Ukraine. The review was initiated following a request by PJSC ‘PA’ ‘Stalkanat-Silur’, an exporting producer from Ukraine. The applicants provided prima facie evidence that the changes due to the merger of, inter alia, two unrelated exporting producers in Ukraine (only one of which was previously investigated individually), are of a lasting nature.

The applicant alleged that the dumping margin of the applicant was significantly lower than the current level of the measures and that, as a result, the continued imposition of the measures at the existing level was no longer necessary to offset the effects of injurious dumping.

Product concerned and IP

The product concerned by this review were steel ropes and cables, falling within CN code(s) ex 7312 10 81, ex 7312 10 83, ex 7312 10 85, ex 7312 10 89 and ex 7312 10 98. The investigation of dumping and injury covered the period from 1 July 2013 to 30 September 2014.

Dumping

Normal value was based on prices paid in the exporting country. However, following a claim by the applicant, sales to state owned enterprises (SOEs) were excluded. The investigation confirmed that the prices to SOEs were systematically higher than the prices charged to other customers on the domestic market due to a higher a risk of non- payment or significantly delayed payment, which was also reflected in the company's internal pricing policy. As regards exports, given that there were only two sales transactions of limited volume to only one EU customer with particular product specifications, the sales of the like product made by the applicant to third countries during the review investigation period were used as a basis for the calculation of the export price. The average normal value and the average export price were compared on an ex-works basis with adjustments made in respect of transport, credit costs and level of trade. This resulted in a dumping margin,expressed as a percentage of the net, free-at-Union frontier price of 10,5%.

Lasting nature of changed circumstances

The Commission examined whether the changed circumstances with regard to dumping could reasonably be considered to be of a lasting nature. Firstly given that Ukraine was considered an economy in transition during the original investigation the anti-dumping duty applicable to the applicant was calculated on the basis of prices paid in an analogue country market being a market economy country, i.e. Poland. In 2005, Ukraine was granted market economy status and therefore the provisions regarding economies in transition no longer applied to that country. As a result normal value could be based on its own verified data. Regarding the company structure, the investigation confirmed the changes which was the merger of two former unrelated exporting producers and a third entity responsible for sales and marketing, which took place in 2010. The change was considered to be of a lasting nature since the tasks previously carried out by the separate entities were effectively transferred to the applicant. The investigation dod not reveal any indications of possible future changes. On that basis the Commission concluded that the changes were of a lasting nature and that the application of the measures at its current level was no longer justified. In light of these findings, in January 2016 the Commission amended the level of the dumping margin in so far as it applied to the applicant to 10,5%, while the other dumping margins applicable to imports of the product concerned from Ukraine remained unchanged.

Solar panels (crystalline silicon photovoltaic modules and key components)

In May 2015, the Commission initiated a partial interim review of the anti-dumping and anti-subsidy measures in force on imports of crystalline silicon photovoltaic modules and key components (i.e. cells) originating in China. The interim review was limited to the benchmark used as a reference for the minimum import price ('MIP') adaptation mechanism set out in the undertaking. The review was initiated following a request from EU ProSun, an association of producers of modules and cells in the Union. The request was based on the grounds that the then existing benchmark was no longer representative of the development of module prices. The applicant provided evidence that the circumstances on which the then existing benchmark was accepted had changed and that these changes were of a lasting nature. The applicant requested that the existing benchmark for the MIP adaptation mechanism be replaced by the ‘International Average’ price sub-series published by Bloomberg, which excludes prices reported by Chinese respondents.

It is recalled that in December 2013, the Council imposed definitive anti-dumping and countervailing duties on imports into the Union of modules and cells originating in or consigned from China The exporting producers gave a mandate to China Chamber of Commerce for Import and Export of Machinery and Electronic Products (‘the CCCME’) to submit a price undertaking on their behalf to the Commission, which was accepted. The price undertaking constitutes a bundle of individual price undertakings for each exporting producer, which, for reasons of practicality, is coordinated by the CCCME. Under the price undertaking, the minimum import price is adjusted quarterly by reference to international spot prices of modules including Chinese prices as reported by the Bloomberg database (‘the existing benchmark’). The undertaking states also that ‘spot prices excluding Chinese prices may be used as a benchmark, if made available by the Bloomberg database’.

In the interim review the Commission investigated whether the existing benchmark was still representative of the price development of modules and therefore still fulfilled its objectives as set out in the measures in force.

The existing benchmark is the ‘Average all’ price series, which consists of reported worldwide module spot prices. Bloomberg also publishes two sub-series that were of relevance to the investigation i.e. the ‘Chinese Average’ - containing prices reported by Chinese respondents and the ‘International Average’ containing all other prices reported. The data are typically collected and published on a weekly basis in USD. Bloomberg calculates the average price per week provided they have received at least three quotes. Bloomberg clarifies with the suppliers quotes which are more than 20% above or below the average of the period selected.

The Commission examined whether the number of Chinese respondents in the existing benchmark had increased significantly since the acceptance of the undertaking, in particular since the beginning of 2014, as alleged by EU ProSun. The Commission found that the average number of Chinese respondents per quarter in the existing benchmark had increased by around 20 respondents (56%) between 2013 and 2014 coupled by a parallel drop in the average number of non-Chinese respondents per quarter by more than 100 respondents (– 46%) between 2013 and 2014. However, the Commission found that, in fact the increased proportion of the Chinese respondents better reflected the share of China in the worldwide solar market (estimated 78%). The investigation also showed that, in 2013 and 2014 both the ‘International Average’ price sub-series and the ‘Chinese Average’ price sub-series followed a similar trend with the Commission noting that the ‘Chinese Average’ price sub-series was historically below the ‘International Average’ price sub-series and that the ‘Chinese Average’ had not fallen faster than the ‘International Average’.

On the basis of these findings the Commission concluded that the existing benchmark remained representative of the development of worldwide module prices and therefore terminated the review.

4.2.3.“Other” reviews

There was 1 “Other” review, falling outside Article 11(3) or Article 19 of the basic Regulations concluded in the period with an amendment of the duty. There was 1 such review terminated with a repeal of the measures. These Court of Justice (CoJ) other" reviews focus on the implementation of Court rulings. A list of the cases concerned is given in Annex H. More information can be obtained from the Official Journal to which reference is given in the Annex.

Oxalic Acid

In April 2012, the Council imposed a definitive anti-dumping duty on imports of oxalic acid originating in India and China in the range of 14,6% to 52,2% following an anti-dumping investigation. On 20 May 2015, the General Court annulled the contested regulation for Yuanping Changyuan Chemicals Co. Ltd, a cooperating Chinese exporting producer on the basis that two issues in the determination of the injury elimination level did not comply with Article 296 of the Treaty of the Functioning of the European Union. Following the General Court's judgment, the Commission published a Notice informing that it had decided to resume the anti-dumping investigation concerning oxalic acid for the purposes of implementing the judgment in regard to Yuanping Changyuan Chemicals Co. Ltd.

Implementation

In order to implement the judgment of the Court in accordance with Article 266 TFEU, the Commission had to provide a statement of reasons in accordance with Article 296 TFEU, for those findings made in the original investigation and for which the Court found that the statement of reasons was insufficient. Accordingly, the Commission motivated those findings, e.g. the use of 8% as target profit, using only information that it had previously relied upon during the original investigation.

Following dicslosure, Yuanping alleged that, in implementing the Court judgment, the Commission conducted a post hoc analysis in order to justify the findings of the original investigation. Yuanping claimed that such a post hoc analysis could not be used to justify the original findings. This claim was not correct and it was rejected as the Commission motivated the findings, e.g. the use of 8% as target profit, using only information that it had previously relied upon during the original investigation. Yuanping also argued that an administrative procedure was not sufficient in order to correct the errors found by the Court. However, this argument was rejected as the Court had not established that the findings of the Commission were factually or substantially wrong. Rather, the Court established that in some instances, the contested regulation lacked sufficient reasoning. Therefore, providing an enhanced statement of reasons in this regulation, in accordance with Article 296 TFEU, was considered the appropriate means to comply with the Court judgment.

In the context of providing an adequate statement of reasons in the Court implementation investigation, the following issue had to be addressed. In the original investigation Yuanping Changyuan Chemicals Co. Ltd had claimed that the Commission had failed to include fully an allowance of 6,5% corresponding to the normal customs duty in the injury margin calculation. The Commission had found, in that investigation, that the claim was warranted and it had revised the calculations with regard to the injury margin as follows: the final weighted average import price was calculated by adding, to the weighted average CIF Union border export price of Yuanping Changyuan Chemicals Co. Ltd first, 6,5% for customs duties, and then, a fixed amount of 10 EUR/tonne for post-importation costs. This resulted in a reduction of the Yuanping Changyuan Chemicals Co. Ltd's injury margin to 18,7%. However, Yuanping claimed in the Court implentation investigation that the figure used by the Commission for post-importation costs, i.e. 10 EUR/tonne, was too low. To support this claim, Yuanping provided the Commission with evidence in the form of several invoices from 2016, where the post-importation costs were allegedly higher. The Commission rejected the claim citing that the figures for post-importation costs used by the Commission in the original investigation were the result of verified information from cooperating unrelated importers and Yuanping failed to substantiate why the Commission should recalculate this figure using unverified data from a period outside the original investigation period.

In November 2016, a definitive anti-dumping duty was imposed on imports of oxalic acid, originating in China, produced by Yuanping Changyuan Chemicals

4.2.4.New exporter reviews

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

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

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

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

In 2016, no new exporter reviews were initiated relating to anti-dumping measures. Since the Commission carried out the first reviews of this type in 1990, a total of 71 such investigations have been initiated so far. There were no new exporter reviews concluded or terminated during 2016.

4.2.5.Absorption investigations

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

In 2016, there were no anti-absorption investigations initiated nor concluded. – Annex J.

4.2.6.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 EU which stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. The duties may be extended to imports from third countries of like products, or parts thereof, if circumvention is taking place.

In 2016, 1 anti-circumvention investigation was initiated. There were 6 anti-circumvention investigations concluded with an extension of the duty (4 anti-dumping and 2 anti-subsidy). More information can be obtained from the Official Journal to which reference is given in Annex K.

4.2.6.1.Details on individual cases

Solar panels (crystalline silicon photovoltaic modules and key components) from China (extended to Malaysia and Taiwan)

In April 2015, the Commission initiated an investigation into the possible circumvention of the anti-dumping and anti-subsidy measures in force on crystalline silicon photovoltaic modules and key components from China. The investigation was initiated following a request by a Union producer of crystalline silicon photovoltaic, containing prima facie evidence that the measures in force involved a significant change in the pattern of trade. Furthermore, the request claimed that the measures in force were being undermined both in terms of quantity and quality. When initiating the case the Commission also made imports of solar panels consigned from Malaysia and Taiwan, whether declared as originating from those countries or not, subject to registration.

The original measures on crystalline silicon photovoltaic were imposed by the Council in 2013 and had since been extended following a number of investigations.

Product under investigation and reporting period

The product concerned by the possible circumvention were crystalline silicon photovoltaic modules and key components, falling within CN codes ex 8501 31 00, ex 8501 32 00, ex 8501 33 00, ex 8501 34 00, ex 8501 61 20, ex 8501 61 80, ex 8501 62 00, ex 8501 63 00, ex 8501 64 00 and ex 8541 40 90 and originating in or consigned fromChina – i.e. the same product as that covered by the measures in force. The investigation period covered the period from 1 January 2012 to 31 March 2015 and data was collected for the IP to investigate, inter alia, the alleged change in the pattern of trade. For the period 1 April 2014 to 31 March 2015 more detailed data were collected in order to examine the possible undermining of the remedial effect of the measures in force and existence of dumping.

In order to assess the existence of circumvention, the Commission analysed whether there was a change in the pattern of trade between third countries and the Union; if this change stemmed from a practice, process or work for which there was insufficient due cause or economic justification other than the imposition of the duty; if there was evidence of injury or that the remedial effects of the duty were being undermined in terms of the prices and/or quantities of the like product; and whether there was evidence of dumping in relation to the normal values previously established for the like product.

There was a low level of cooperation by producers/exporters in China, with only six exporters/producers submitting a questionnaire reply. This was an insufficient basis for findings. Therefore, findings in respect of exports of solar cells and modules from China to the Union, Malaysia and Taiwan had to be made on the basis of Comext database, data reported to the Commission by the Member States, Chinese, Malaysian and Taiwanese national statistics and the information submitted in the request.

Change in the pattern of trade

Malaysia

The investigation found evidence of the decrease in imports from China to the Union and the parallel increase in exports from China to Malaysia and of exports from Malaysia to the Union after the original investigation was launched in 2012 and the entry into force of measures in 2013. These changes in trade flows constituted a change in the pattern of trade between the above mentioned countries on the one hand and the Union on the other hand.

The Malaysian cooperating parties accounted for 100% of all exports of cells to the EU during the investigation and were found to be genuine producers. The imports of modules by the non-cooperating companies constituted 71% of total imports of modules from Malaysia in the same period. The modules are the final product and can be only imported into Malaysia for domestic consumption or transhipment. The investigation found that the high level of imports of modules into Malaysia from China exceeded the domestic consumption and the high level of non-cooperation by the Malaysian parties showed that a large proportion of modules consigned from China must have been transhipped via Malaysia to the Union. In addition it was also found that a number of the cooperating Malaysian producers provided misleading information, in particular regarding the relationship to Chinese manufacturers, imports of finished goods from China and the origin of exports of the product under investigation to the Union. Some of them were found to export Chinese origin crystalline silicon photovoltaic modules to the Union, some other companies were found to have fraudulently declared key components as solar glass and to have falsified the invoices. As a result transhipment of the product under investigation via Malaysia was confirmed.

Taiwan

The investigation found that imports of the product concerned from China to the Union dropped significantly subsequent to the imposition of the measures in force in December 2013 while on the other hand, the volume of imports of the product under investigation from Taiwan to the Union increased significantly (+ 30% increase) in the same period. In addition the parallel increase of exports from China to Taiwan after the original investigation was launched in 2012 and the measures in force were imposed in 2013 constituted a change in the pattern of trade between the above mentioned countries on the one hand and the Union on the other hand.

The Commission concluded that a large proportion of modules consigned form China must have been transhipped via Taiwan to the Union. The Taiwanese authorities also had carried out investigations into alleged circumvention practices at the same time and concluded that several companies, mainly traders, committed fraud by falsifying the origin of solar modules. As a result the Commission confirmed the existence of transhipment of the product under investigation via Taiwan.

Cause or justification for the changed pattern in trade

The investigation did not bring to light any due cause or economic justification for the transhipment operations other than the avoidance of the measures in force on solar cells and modules originating in China. Moreover, the investigation confirmed evidence of dumping, since the average Taiwanese and Malaysian export prices of solar cells and modules in the review period were far below the normal value as established in the original investigation.

Impact on the original measures

The investigation found that that the remedial effects of the measures in force were being undermined both in terms of quantities and prices. In this context the Commission used data concerning quantities and prices of exports from the cooperating exporting producers, Comext and Article 14(6) database were used as the best data available by non-cooperating companies. The increase of imports from Malaysia and Taiwan was considered to be significant in terms of quantities. The estimated Union consumption in the review period gave a similar indication about the significance of these imports. In terms of market share in the Union, the modules imported into the Union from non-cooperating companies and the companies that were found to be circumventing accounted for 9% from Malaysia and 7% from Taiwan. The cells that were imported into the Union from non-cooperating companies in Taiwan accounted for 3% of the EU consumption. The import prices from Malaysia and Taiwan were compared to the injury elimination level established for Union producers in the original investigation and significant underselling was found.

Extension of duties

It was concluded that the definitive anti-dumping duties imposed on imports of crystalline silicon photovoltaic modules or panels and cells of the type used in crystalline silicon photovoltaic modules or panels originating in China were circumvented by transhipment from Malaysia and Taiwan. As a result, in February 2016 the measures were extended to imports of the product consigned, directly or indirectly, from China, Malaysia and Taiwan whether declared as originating in those countries or not.

Exemptions

A number of companies on Malaysia and Taiwan applied for exemptions from any extension of the measures. Five Malaysian and 21 Taiwanese exporting producers were found not to be engaged in circumvention practices and therefore exemptions were granted to the modules and cells produced and exported by these companies. It was decided to put in place special measures in this case in order to ensure the proper application of any exemptions granted. These special measures require the presentation to the customs authorities of the Member States of a valid commercial invoice conforming to certain requirements set out in implementing Regulation. Imports not accompanied by such an invoice would be subject to the extended anti-dumping duty.

Hand pallet trucks and their essential parts from China

In November 2015, the Commission initiated an investigation into the possible circumvention of the anti-dumping measures in force on imports of hand pallet trucks and their essential parts from China, making imports of hand pallet trucks and their essential parts subject to registration. The investigation was lodged by BT Products AS, Lifter SRL and PR Industrial SRL, Union producers of hand pallet trucks.

The original measures on hand pallet trucks were imposed by the Council in 2005, and have since been reviewed a number of times. In 2009, the Council extended the definitive anti-dumping duty to hand pallet trucks consigned from Thailand following an anti-circumvention investigation.

Product under investigation and reporting period

The product concerned by the possible circumvention is hand pallet trucks and their essential parts, i.e. chassis and hydraulics, currently falling within CN codes ex 8427 90 00 and ex 8431 20 00 (TARIC codes 8427 90 00 19 and 8431 20 00 19). The product which was claimed to be circumventing is presented at importation with a so-called ‘weight indication system’ consisting of a weighing mechanism not integrated in the chassis. This weighing device has a margin of error exceeding 1%, i.e. a very high one. This product fallswithin the same CN codes as the product concerned but within different TARIC codes not covered by the measures (8427 90 00 30 and 8431 20 00 50) and originating in China. Moreover, the weighing mechanism of the product under investigation does not change the essential characteristics of the product under investigation, such as structure and use, in order to make it different from the product concerned.

The investigation period covered 1 January 2011 to 30 September 2015. Data were collected for the investigation period to investigate, inter alia, the alleged change in the pattern of trade. More detailed data were collected for the reporting period from 1 October 2014 to 30 September 2015 in order to examine if imports were undermining the remedial effect of the anti-dumping measures in force and existence of dumping. None of the known exporting producers established in China cooperated in the investigation.

Results of the investigation

The investigation first established a change in the pattern of trade, as total imports of hand pallet trucks from China decreased by more than 80% during the investigation period. By contrast, imports of ‘other trucks’ including the product under investigation increased in 2014 and in the reporting period by more than 50% as compared to the beginning of the investigation period. Two categories of these other trucks can be distinguished, i.e. the allegedly circumventing product with a weighing device and 'other trucks'. The investigation showed that importers increased the purchases of the allegedly circumventing product with a weighing device from China during the investigation period, while imports of classic hand pallet trucks decreased in parallel. In contrast, import volumes of ‘other trucks’ without this weighing device barely changed (by 3% during the investigation period) and their overall level in units remained very low in comparison to imports of the allegedly circumventing product under investigation with a weighing device.

The investigation established that the product under investigation is clearly distinguishable from 'real' weighing trucks with a much lower margin of error The applicants provided indications that the sole intent of the imports of the trucks with this weighing device was to avoid the duties. Indeed; one exporter offered the product under investigation in a brochure as ‘ADD free’ or another exporting producer recommended removing the weighing device after importation.

It was therefore concluded that the circumvention practice consisted of the imports of the product under investigation.

The investigation did not bring to light any due cause or economic justification other than the circumvention of the anti-dumping duty.

Impact of the circumvention practice on the measures in force

The investigation found that the imports of the product under investigation increased significantly by around 70% (110 000 units) between 2013 and 2014 and further increased between 2014 and the reporting period by by around 30%(80 000 units), They represented, in total, around 42% of the total trucks imported during the reporting period. The prices of these imports were found to be significantly underselling the Union industry non-injurious price as established in previous investigations. Therefore it was concluded that the remedial effects of the measures in force were being undermined both in terms of quantities and prices.

Dumping

In order to establish whether dumping existed during the reporting period, the average import prices of the product under investigation from the cooperating importers were compared to the normal value of the product concerned established in the last interim review. concluded in 2013. Import prices were adjusted to ex-works level based on information received from the cooperating importers. The import prices were also adjusted for differences in the physical characteristics, i.e. the weighing device incorporated in the hand pallet trucks. The comparison showed significant dumping.

The investigation concluded that the definitive anti-dumping duty imposed on hand pallet trucks originating in China were being circumvented by imports of slightly modified hand pallet trucks incorporating a weight indication system not integrated in the chassis (the forks) originating in China. As a result the anti-dumping measures in force ranging between 7,6% and 46,7% on imports of hand pallet trucks originating in China were extended to imports of hand pallet trucks equipped with ‘weight indication system’ consisting of a weighing mechanism not integrated in the chassis, originating in the PR in August 2016. There were no exemptions requested by exporters.

4.3.Safeguard investigations

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

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

There was no safeguard activitity by the EU in 2016 and no measures in place – Annex L.

5.Enforcement of anti-dumping/countervailing measures

Globalisation of trade led to greater possibilities for circumventing or otherwise reducing the effectiveness of anti-dumping and countervailing measures. To address this problem, throughout 2016 the TDI services continued their follow-up activities aimed at ensuring that measures were effectively enforced. In the framework of an integrated approach measures were considered in all their forms - duties and undertakings – and synergy was sought between the TDI services and enforcement-oriented services (OLAF, DG Taxud and customs authorities in Member States).

5.1.Follow-up of measures

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

5.2.Monitoring of undertakings

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

At the beginning of 2016, there were 122 undertakings in force. During 2016, the following changes to the portfolio of undertakings took place: The undertakings of 13 companies were withdrawn as it was established that breaches had occurred or that the monitoring of the undertakings became impracticable. 10 companies concern the case crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned from China, 1 company concerns the case ammonium nitrate originating in Russia and 2 companies concern the case citric acid originating in China. The undertakings of a further 7 companies were withdrawn as these companies had notified the Commission that they wished to withdraw from the undertaking. All these latter withdrawals concerned the case crystalline silicon photovoltaic modules and key components (i.e. cells) originating in or consigned fromChina. This brought the total number of undertakings in force at the end of 2016 to 102.

6.Refunds 

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

During 2016, 42 new refund requests were submitted. At the end of 2016, 4 refund investigations were on-going, covering 80 requests. In 2016, no Commission Decision granting full or partial refund or rejecting refund requests was adopted.

7.TDI Modernisation 

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

While the European Parliament largely supported the Commission proposal and voted a legislative resolution as early as April 2014, the Council was for a long period not able to find a compromise in order to start trilogues. The amendments voted by the Parliament were essentially in favour of the Union industry and a sustainable production in the EU. The Council on the other hand, was torn between those Member States favouring producing interests and those favouring importing interests.

However, against the backdrop of the steel crisis and the threat of growing steel overcapacity in China, voices in support of strengthening the EU’s TDI became more audible. Thus, in spring 2016, the modernisation file was put on the Council agenda again. Initially, discussions in the Council at a technical level did not show any real progress. When President Juncker, in his State of the Union address in September, called on Member States to swiftly conclude the modernisation file, which was followed by a similar appeal from the European Council in October, things started to move. The Slovak Presidency, in coordination with the Commission, spared no efforts in order to move the file forward and the Council finally endorsed a compromise on 13 December 2016.

The main elements of the Council compromise include an adaptation of the lesser duty rule and a pre-disclosure (the two main contentious elements). It further provides for the earlier imposition of provisional and definitive measures and the re-imbursement of duties in expiry reviews that are terminated without renewing measures.

The Commission welcomes the compromise achieved in the Council as it is fully in line with the goals of the original Commission proposal. If implemented it would strengthens the EU’s TDI in a balanced way and ensure their continued effectiveness. It also provides for the necessary leverage when confronted with unfair trade practices by third countries and sends an important signal to our trading partners: free trade must be fair and only fair trade can be free.

The Commission counts on the support and flexibility of the co-legislators in order to swiftly conclude the trilogues.

8.Legislative proposal to amend the EU's AD and AS legislation 

On 9 November 2016, the Commission adopted a proposal to change the EU's anti-dumping and anti-subsidy legislation. The main elements of the proposal are:

(a)    Introduction of a new anti-dumping methodology to capture market distortions linked to State intervention in third countries. These distortions can exist in a country as a whole or in a given sector. The purpose of the new methodology is to address any pervasive influence of a State over the economy and to address new economic realities. This new methodology would be country neutral and would be applied equally to all WTO countries. This would mean that in the future, there would no longer be a distinction between WTO Members that are market economy countries and WTO Members that are not. However, if a third country maintains State-induced distortions in its economy, the new methodology could apply.

In order to facilitate the application of this methodology, the Commission could – where appropriate – prepare reports setting out the distortions in an exporting country.

(b)    Remove all WTO Members from the scope of Article 2(7) of the basic anti-dumping Regulation that provides for the possibility to apply the analogue country methodology. The proposal also offers to introduce an orderly transitional period for existing measures.

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

The proposal fulfils the main objectives which the Commission pursues, namely to maintain efficient trade defence instrument while, at the same time, complying with EU's international obligations.

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

The proposal entered the first stages of the ordinary legislative procedure following its adoption and the Commission made presentations both to the Council and the European Parliament on the changes proposed and the legislative and implementation implications.

9.Country-wide market economy status (MES)

In an anti-dumping investigation, Commission services usually compare the export price of a product with its 'normal value', which is the price paid in the domestic market of the exporting country or a constructed normal value (Article 2(1) of the basic anti-dumping Regulation). However, this methodolgoy can only be used if costs and prices in the exporting country are reliable and the result of supply and demand. For the specific purpose of applying the EU basic anti-dumping regulation, the current practice is that a country can be considered a market economy if it fulfils five criteria. These criteria are:

i.    a low degree of government influence over the allocation of resources and decisions of enterprises, whether directly or indirectly (e.g. public bodies), for example through the use of State-fixed prices, or discrimination in the tax, trade or currency regimes;

ii.    an absence of State-induced distortions in the operation of enterprises linked to privatisation and the use of non-market trading or compensation system;

iii.    the existence and implementation of a transparent and non-discriminatory company law which ensures adequate corporate governance (application of international accounting standards, protection of shareholders, public availability of accurate company information);

iv.    the existence and implementation of a coherent, effective and transparent set of laws which ensure the respect of property rights and the operation of a functioning bankruptcy regime;

v.    the existence of a genuine financial sector which operates independently from the state and which in law and practice is subject to sufficient guarantee provisions and adequate supervision.

There are 6 countries which have requested country-wide MES: China, Vietnam, Armenia, Kazakhstan, Mongolia and Belarus. Companies from non-market economy countries which are members of the WTO have the possibility to request market economy treatment on an individual basis in the context of anti-dumping investigations.

During 2016, any analysis regarding the MES process for China, Vietnam, Armenia, Kazakhstan and Mongolia was put on hold while the Commission considered making changes to the EU's anti-dumping legislation which could impact on the legislative framework applicable to these countries.

In December 2016, following the adoption of the legislative proposal, Belarus signalled its intention to engage in the MES process. In this context, Belarus agreed to update the Commission on progress in relation to its ongoing WTO accession negotiations. This is relevant as the scope of Article 2(7) would change once the proposal is adopted. Indeed WTO Members would no longer be subject to that provision – for details see above.

10.Information and Communication activities / Bilateral contacts

9.1.Small and medium sized enterprises (SMEs)

During 2016, the SME helpdesk received and dealt with many requests for information, relating to specific cases as well as more broad raging queries addressing procedural and substantive elements of proceedings. The TDI website also specifically highlights SME's role in TDI proceedings and offers practical advice and help. The special helpdesk was set up to help SMEs deal with the specific challenges they face in TDI investigations due to their small size, resource limitations and their fragmentation.

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

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

Also in 2016, the Commission organized its yearly training seminar on trade defence for officials from third countries (participants from Egypt, Tunisia, Turkey, Vietnam, Thailand, Japan and the WTO secretariat). In addition, there were a number of other bilateral contacts dedicated to discussing various trade defence topics with a number of third countries including China, Japan, Australia, Brazil, Mexico, Turkey, USA, Russia, Indonesia, Thailand, Canada, India, Switzerland.

During 2016, the trade defence services participated in numerous meetings with practically all key stakeholder organisations affected by trade defence. The main issue which dominated these meetings was the possible changes to the EU's anti-dumping and anti-subsidy legislation described supra.

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

11.1.Overview of the judicial reviews in 2016.

In 2016, the General Court ('GC') and the Court of Justice ('CJ') rendered 38 judgments in total relating to the areas of anti-dumping or anti-subsidy. Out of them, 23 actions were brought before the GC. 17 The CJ issued 7 judgments following appeals against decisions of the GC and issued 8 preliminary rulings in the Trade Defence Instruments field.

11.2.Cases pending

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

the end of 2016 is given in Annex S (19 pending before the GC and 9 before the CJ).

11.3.New cases

34 new cases were lodged in 2016 (compared to 20 in 2015, 37 in 2014, 33 in 2013, 23 in 2012, 16 in 2011 and 13 in 2010). 20 of these were lodged before the GC (19 actions for annulment and 1 action for failure to act) and 14 before the CJ (12 appeals and two preliminary ruling).

11.4.Judgments rendered by the General Court

In 2016, the General Court (GC) rendered 23 judgments/orders relating to the area of anti-dumping policy. Details of some of the cases are set out below.

Cotton-type bed linen originating in Pakistan - T‑199/04 RENV - Gul Ahmed Textile Mills Ltd v Council – Judgment of 15 December 2016.

On 15 December 2016, the Court issued a ruling in the above mentioned case. Gul Ahmed Textile Mills Ltd (the applicant) had sought annulment of Council Regulation (EC) No 397/2004 imposing a definitive anti-dumping duty on imports of cotton-type bed linen originating in Pakistan. The General Court rendered this ruling as a result of a remand of this case by the Court of Justice back in 2013 (judgment of 14 November 2013, Council v Gul Ahmed Textile Mills - C638/11 P, EU:C:2013:732).

In March 2004, the Council imposed definitive anti-dumping duties of 13.1% on imports of cotton-type bed linen originating in Pakistan. In May 2006, following a partial interim review the rate of definitive anti-dumping duty applicable to the products was reduced to 5.6%. The applicant, a Pakistani company, manufactures and exports bed linen to the European Union. The company does not sell any bed linen on the Pakistani domestic market, although it does sell various commodities. In May 2004, the applicant sought the annulment of the contested regulation, in so far as it concerned the applicant itself. In September 2011, Gul Ahmed succeeded before the General Court. The judgement was appealed by the Council and the Court of Justice set aside the judgment of September 2011, Gul Ahmed Textile Mills v Council, (T199/04,), and referred the case back to the General Court.

Gul Ahmed’s pleas included inter alia; the initiation of the investigation; establishment of injury; and finding of causation between the dumped imports and the injury suffered by the Union industry.

As regards initiation the applicant claimed that the Commission disregarded the commitment made on 14 November 2001 during the WTO Ministerial Conference in Doha (Qatar) (‘the Doha decision’), according to which:

‘Investigating authorities shall examine with special care any application for the initiation of an anti-dumping investigation where an investigation of the same product from the same Member resulted in a negative finding within the 365 days prior to the filing of the application and that, unless this pre-initiation examination indicates that circumstances have changed, the investigation shall not proceed.’

In support of their claim, the applicant argued that following a complaint filed by Eurocoton, definitive anti-dumping duties were imposed on the Pakistani producers by Regulation No 2398/97. That proceeding was terminated on 30 January 2002 after being declared unlawful by the WTO Dispute Settlement Body. The present proceeding was initiated only ten months after the termination of the earlier proceeding.

The GC found that the Council was correct in claiming that the Commission was entitled to initiate the present proceedings in compliance with the Doha decision because prior to initiating the current at issue it had established that the circumstances had changed in comparison with the previous investigation.

As regards the claim by the applicant that there was not sufficient evidence to justify the initiation of the investigation the Court found that on the whole, the complaint was complete, including as regards the analysis the injury and causality.

The Court found that the Council correctly assessed the individual and collective impact of other known factors concerning the state of the EU industry. The Court considered that it was legitimate to sustain that the causal link between the material injury and the imports of the product concerned was not broken by the decision of the EU industry to move from the low-value segment to the high-value segment of the EU bed-linen market and by a fall in demand in that market. The Court recalled that institutions are under an obligation to consider whether the injury on which they intend to base their conclusions actually derives from the dumped imports and must disregard any injury deriving from other factors, particularly from the conduct of EU producers themselves. The Court found that that consumption of the product concerned rose over all ranges. The material injury suffered by the EU industry could not therefore be caused by the alleged stagnation of demand in the upper segment of the market, since that was not established. The Court also referred to the contested regulation which explained that, far from constituting an independent strategic decision, the shifting of the EU industry was merely the consequence of fierce competition in the low-end segment of the market caused, in particular, by imports from Pakistan. The Court also found that the Council managed to sufficiently assess the impact of imports from other countries in the context of examining other facts in the causation analysis as well as correctly assessing the collective impact of other factors causing injury to the EU industry.

The applicant also alleged that the Council erred in law by failing to examine whether the abolition of the previous anti-dumping duties on products from Pakistan, and the implementation of a generalised scheme of preferences at the start of 2002, had the effect of breaking the causal link between the injury suffered by the EU industry and the imports from Pakistan, as their immediate cumulative effect was to reduce the cost of those imports by approximately 20%. Given that the Court of Justice held in the judgment of 14 November 2013 that ‘the measures at issue which facilitate and promote imports are only indirect causes and cannot be regarded as ‘other factors’ within the meaning of Article 3(7) of the basic regulation, the plea was rejected.

The applicant also alleged that the Council infringed Article 3(7) of the basic anti-dumping Regulation, and Article 3.5 of the WTO Anti-Dumping Agreement, by failing to undertake an examination of the collective impact of other causal factors. Therefore, the investigating authority improperly attributed the effects of ‘other factors’ to the imports concerned. The court recalled the findings of the Appellate Body in ‘Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from Brazil’ where it interpreted Article 3.5 of the WTO Anti-Dumping Agreement as not requiring the authorities responsible for the investigation to examine the collective impact of other causal factors where they fulfil their obligation not to attribute to dumped imports the injuries caused by other causal factors.

In sum, the GC rules that the applicant had failed to prove that the EU had erred and dismissed the case.

Solar glass originating in China - T‑586/14 - Xinyi PV Products (Anhui) Holdings Ltd v Commission – Judgment of 16 March 2016

On 16 March 2016 Xinyi PV Products, (the applicant) sought the annulment of Commission Implementing Regulation (EU) No 470/2014 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of solar glass originating in China.

The applicant alleged an infringement of Article 2(7)(c), third indent of the basic anti-dumping Regulation when examining its application for Market Economy Treatment. According to the applicant, the Commission wrongly concluded that its production costs and financial situation were distorted.

In particular the case concerned the evaluation of the tax incentives that the exporting producer benefited from, and whether this tax incentive constituted a distortion in light of Article 2(7)(c), third indent. According to the applicant, the same tax incentives are used by several market economies in Europe in order to attract investments and support economic activities. Consequentially, it should not be concluded that, in relation to People's Republic of China, similar tax incentives are "carried over" from the non-market economy system of the country.

The General Court held that the Commission committed a manifest error of assessment in not granting market economy treatment to the exporting producer in question, disregarding the evidence presented that the costs of production and the financial situation of the undertaking were not distorted. In fact, according to the General Court, the Commission could not prove that the tax schemes at issue did not pursue legitimate objectives. Therefore, the support granted by China to the high-tech sector, constituted a legitimate objective in a normal market economy system. Furthermore, the objective of attracting foreign investments is also pursued by a good number of countries with a market economy, and thus does not per se belong to a non-market economy system. For these reasons, the General Court decided to annul the contested regulation.

The judgment is under appeal.

Biodiesel originating in Argentina and Indonesia - T‑112/14 to T‑116/14 and T‑119/14- Molinos Río de la Plata SA and others v Council – Judgment of 15 September 2016.

On 15 September 2016, several Indonesian and Argentinean exporters of biodiesel (the applicants) claimed, in Case T‑119/14, the annulment of Council Implementing Regulation (EU) No 1194/2013 imposing a definitive anti-dumping duty and collecting definitively the provisional duty imposed on imports of biodiesel originating in Argentina and Indonesia, and, in Cases T‑112/14 to T‑116/14, the annulment of that regulation in so far as it imposes an anti-dumping duty on the applicants.

The crucial claim presented by the applicants related to an alleged infringement of the first and second subparagraphs of Article 2(5) of the basic anti-dumping Regulation and an infringement of the WTO Anti-Dumping Agreement. The applicants claimed that the Council’s disregarded the costs of the main raw materials verified in the records of the exporting producers, considering it artificially low, because of distortions of prices due to the differential export tax (DET) system.

The General Court analysed the exception provided for in Article 2(5) of the anti-dumping Regulation. It affirmed that a measure issued by the public authorities of the exporting country can lead the European Institutions to not consider, when calculating the normal value, the prices of the raw materials provided during the investigation by the parties. This exception however should be strictly interpreted and it applies only when there is an appreciable distortion of the prices of the raw materials.

According to the General Court, the institutions explained the effects that the DET system had on the availability and prices of the raw materials in the domestic market. The Institutions also analysed and compared the relationship between the international prices and the domestic prices of the raw materials in question. However, according to the General Court, what the Institutions failed to do was to provide a specific explanation of the impact that this tax system had on the domestic prices of the raw material. Moreover, they did not sufficiently explain in what this system differed from a system without differential rates for export taxes, specifically in relation to the prices of the raw materials and biodiesel.

Hence, the General Court annulled the contested regulation because of an infringement of Article 2(5) of the anti-dumping Regulation. According to the Court, the Institutions failed to meet the legal standard when affirming that there was a distortion of the prices of the main raw materials attributable to the DET system, and consequentially, disregarded the prices of the raw material contained in the records of the exporting producer, considering it not reasonably reflected in the books.

These judgments are under appeal.

Hand pallet trucks and their essential parts originating in China - T‑351/13 - Crown Equipment (Suzhou) Co. Ltd v Council – Judgment of 18 October 2016.

On 18 October 2016, Crown Equipment (the applicant) sought annulment of Council Implementing Regulation (EU) No 372/2013 amending Implementing Regulation (EU) No 1008/2011 imposing a definitive anti-dumping duty on imports of hand pallet trucks and their essential parts originating in China following a partial interim review pursuant to Article 11(3) of the basic anti-dumping Regulation.

The applicant put forward three pleas in law. With the first plea it claimed that the Council made a manifest error of assessment and breached its obligation to state reasons when selecting Brazil as an analogue country. With the second plea, the applicant claimed that the Council failed to take into consideration the distorting effect caused by the 14% import duty in the analogue country in the adjustment of the normal value, and therefore, have breached its obligation to state reasons. Finally, with the last plea, the applicant claimed that the Council misapplied the lesser duty rule infringing Article 9(4) of the basic anti-dumping Regulation, when comparing the dumping margin in the contested regulation with the injury elimination level in the original investigation in 2005.

Commencing from the last plea, the General Court stated that when the scope of an interim review is limited to dumping, and hence a new dumping margin is determined, it is possible to rely on the "old" injury margin established in the original investigation and on that apply the lesser duty rule, as long as the margin established in the original investigation is still representative. The institutions started an interim review just in relation to the dumping, due to insufficient evidence justifying the initiation of a review regarding injury. However, the applicant could have requested a review also on the injury, but, failed to do so. Thus, the General Court rejected this plea based on the fact that the Institutions did not err in law and did not commit a manifest error of assessment when considering that the injury margin was still valid and representative at the time of the review of the dumping, and used the lesser duty rule based on these margins.

According to the first plea in law, the choice of Brazil as an analogue country, the General Court affirmed that notwithstanding the impact that a 14% import duty has on the price of the hand pallet trucks sold in Brazil, the imposition of such duty, could not automatically lead to the conclusion that the market related to the product concerned is not ruled by normal market conditions and forces. Consequently, the institutions could consider Brazil as an appropriate analogue country.

Finally, the General Court had to decide whether Article 2(7) of the basic anti-dumping Regulation was infringed when the Council did not take account of the effect of the 14% import duty imposed by the Brazilian authorities, when determining the normal value.

In this regard, the Court used the same of reasoning used in relation to the first plea to reject this claim. It was in fact apparent that if the institutions were entitled to consider there was genuine competition on the Brazilian market, it was also possible to correctly determine the normal value on the basis of the prices of that market.

For all the aforementioned reasons the Court dismissed the entire action.

11.5.Judgments rendered by the Court of Justice

In 2016, the Court of Justice (CJ) rendered 15 judgments relating to the area of anti-dumping. Of those judgments, 7 concerned appeals against the judgments of the General Court and 8 judgments were in reply to requests for a preliminary ruling. Details of some of the cases are set out below.

Citrus fruits originating in China - C283/14 and C284/14 - CM Eurologistik GmbH and Grünwald Logistik Service GmbH (GLS) (Preliminary Ruling) - Judgment of 28 January 2016.

On 28 January 2016, the parties requested a preliminary ruling concerning the validity of Council Implementing Regulation (EU) No 158/2013 re-imposing a definitive anti-dumping duty on imports of certain prepared or preserved citrus fruits originating in China. The measures were re-imposed as a result of an investigation implementing rulings of the Court of Justice. The preliminary ruling addresses fundamental points in relation to such proceedings.

The Court of Justice observed that, where an irregularity has been committed during an investigation, the institutions in question must be able to reopen the procedure at the stage of the investigation at which the irregularity was committed. Such reopening of the investigation is not subject to the 15 month deadline set out Article 6(9) of the basic anti-dumping Regulation. According to the Court, Article 6(9) covers only the initial procedures and not those procedures that have been reopened following a judgment of annulment or invalidity.

Furthermore, the Court of Justice stated that in circumstances when the institutions are required to act on the consequences of a ruling of invalidity in order to remedy to an irregularity, this affects only the procedural part undertaken and not also the data collected during the investigation, as long as, it remains sufficiently recent. This line of reasoning led to the conclusion that after the reopening of the procedure, the Council and the Commission could, without infringing Article 6(1) of the basic anti-dumping Regulation, refrain from relying on an updated reference period for the purposes of determining the normal value of the product concerned.

Certain seamless pipes and tubes of iron or steel originating in China - C-186/14 P and C-193/14 P - ArcelorMittal Tubular Products Ostrava and Others v Hubei Xinyegang Steel Co. Ltd. (Appeal) - Judgment of 7 April 2016.

On 7 April 2016, the Court of Justice (CJ)delivered its judgment in the above mentioned case. ArcelorMittal Tubular Products Ostrava and other Union producers (the appellants) had asked the COJ to set aside the judgment of the General Court of 29 January 2014 (T‑528/09) whereby the General Court (GC) annulled Council Regulation (EC) No 926/2009 imposing a definitive anti-dumping duty on imports of certain seamless pipes and tubes of iron or steel originating in China.

By way of background, in December 2009, a Chinese exporter, Hubei Xinyegang Steel Co. Ltd (‘Hubei’) had sought the annulment of the regulation concerned before the General Court.  The GC found that the Council had made a manifest error of assessment (i) in confirming the Commission’s finding that the EU industry was in a vulnerable state at the end of the investigation period and (ii) in holding that, in the case, there was a threat of injury. The GC therefore annulled the regulation at issue.

The appellants contested, in the context of the examination of the existence of a threat of injury, that the GC erred in law by ascribing to the concept of ‘vulnerability’ an independent meaning and importance that it does not have. The Council also maintained that the GC failed to take into account all the factors that had to be considered in order to establish the existence, not only of an injury, but also of a situation of vulnerability and in its assessment, distorted the evidence submitted to it.

According to the CJ, the GC found that the economic data on which the Council and the Commission had relied did not support their conclusion, but, on the contrary, as a whole, painted a picture of an industry in a situation of strength, not of fragility or vulnerability. The GC did not regard the vulnerability of the EU industry as a condition enabling a threat of injury to be found. The CJ also held that the GC's review of the evidence on which the EU institutions based their findings did not constitute a new assessment of the facts replacing that made by the institutions. Accordingly the claim was rejected.

In their second claim the appellants took issue with the GC for having held that, in order to determine whether there was a threat of injury, factors such as the contraction in demand must not be attributed to the dumped imports. In addition it was claimed that the GC committed an error of law by wrongly merging the analysis of the ‘threat of injury’ with that of the ‘causal link’, even though those two concepts are clearly distinguished in the basic regulation.

The CJ found that in line with Article 3(7) of the basic anti-dumping Regulation, known factors other than the dumped imports which at the same time are injuring the EU industry are to be examined to ensure that injury caused by these other factors is not attributed to the dumped imports. One of those factors mentioned in that provision is the contraction in demand. The Court also found that the GC had not committed an error of law by wrongly merging the analysis of the ‘threat of injury’ with that of the ‘causal link and that in fact the appellants' arguments were based on a misreading of the judgment under appeal.

In their third claim the appellants maintained that the GC infringed both Article 3(9) and Article 6(1) of basic anti-dumping Regulation by using the post-investigation period data arguing that it was not reliable.

However, the CJ confirmed that while, as a general rule, post-investigation period data are not to be taken into account for the purpose of the investigation of the dumping and the injury, in specific circumstances the EU institutions are entitled to use post-investigation period data. In fact, this is proven by using the adverb ‘normally’ in the provision, from which it is possible to entail that it was not intended to exclude entirely the consideration of such data. Thus the claim was also rejected.

All the appeals brought by the appellants were dismissed in their entirety and the appellants were ordered to pay the costs, with the Commission ordered to bear its own costs.

Ceramic tableware and kitchenware originating in China - C‑31/15 P - Photo USA Electronic Graphic Inc. (Appeal) – Judgment of 2 June 2016.

On 2 June 2016, the CJ delivered its judgment after a request by Photo USA to set aside the judgment of the General Court of the European Union of November 2014 (T-394/13), by which that court dismissed its application for annulment of Council Implementing Regulation (EU) No 412/2013 imposing a definitive anti-dumping duty on imports of ceramic tableware and kitchenware originating in China.

By way of background, Photo USA is a Chinese company which produces and exports plain polyester-coated ceramic mugs to the European Union. In the context of the original investigation Photo USA requested that the mugs they export be excluded from the products concerned by the investigation. This request was rejected and the mugs in question were subject to the measures imposed in May 2013. In August 2013, Photo USA brought an action for annulment of the contested regulation before the general court raising four pleas in law. The General Court rejected all those pleas in the judgment under appeal.

The appeal to the CJ was mainly based on four pleas.

In its first ground of appeal, Photo USA takes issue with the General Court for imposing on it an unreasonable burden of proof. The General Court had taken the view that, despite finding that the Council had misinterpreted one of the three factors deemed relevant for the inclusion of the mugs at issue in the definition of the goods concerned by the investigation, it was for the appellant to show that an error had been made in respect of all three of the factors identified. The CJ found that the GC did not err in law and did not impose an unreasonable burden of proof on the appellant when it held that the crucial issue was whether the product concerned (because of its characteristics and the perception which consumers have of it) was in competition with other goods of European Union.

In its second ground of appeal, Photo USA claimed that the General Court distorted the facts and evidence by asserting, that mugs of the kind at issue were produced in the European Union. According to Photo USA, there was nothing in the file submitted to the General Court to suggest that such goods are actually produced.

The CJ recalled that the General Court has exclusive jurisdiction, first, to find the facts, except where the substantive inaccuracy of its findings is apparent from the documents submitted to it, and, second, to assess those facts. The second plea was therefore rejected because it was not obvious from the arguments put forward that the facts and evidence were distorted.

In its third ground of appeal, the appellant claimed that the General Court erred in its interpretation of Article 3(2) and (7) of the basic anti-dumping Regulation. The General Court considered that the institutions were relieved of any obligation to analyse the impact of anti-competitive practices because, even though the German competition authority was conducting an investigation, it was common ground that that authority had not taken a final decision at the time the contested regulation was adopted.

The third ground of appeal was also rejected. At the time the contested regulation was adopted, the investigation of the German competition authority was still ongoing. Therefore, the Court found that the institutions were not obliged, when examining whether there was injury, to take into account future results of that investigation, which at the time was still pending. In this context the CoJ found the GC endorsed the institutions’ analysis as regards microeconomic and macroeconomic factors and did not have recourse to assumptions.

In the fourth ground of appeal, the appellant claimed a distortion of the facts and evidence insofar as the General Court carried out its review without knowing the identity of the EU producers that formed part of the sample taken into account in the anti-dumping investigation. Therefore, it was not able to verify whether some of those producers were also being investigated by the German competition authority.

The fourth plea was rejected. According to the CJ, the GC did not need to be aware of the identity of the EU producers forming part of the sample taken into account in the anti-dumping investigation in order to be in a position to ascertain whether some of those producers were also being investigated by the German competition authority. The CJ found that the General Court’s review was carried out on the basis of other aspects of the anti-dumping investigation, namely the microeconomic indicators. Therefore, the Court of Justice concluded that the alleged distortion of facts and evidence was unfounded.

The appeal was dismissed in its entirety and the appellant was ordered to pay the costs.

Certain fatty alcohols and their blends originating in India, Indonesia and Malaysia - C‑468/15 P - PT Perindustrian dan Perdagangan Musim Semi Mas (PT Musim Mas) v Council (Appeal) – Judgment of 26 October 2016.

On 26 October 2016, the CJ issued a judgment in the above case. PTMM, the appellant, seeks to have set aside the judgment of the General Court of the European Union T-26/12 by which that Court dismissed its action seeking the annulment of Council Implementing Regulation (EU) No 1138/2011 imposing a definitive anti-dumping duty on imports of certain fatty alcohols and their blends originating in India, Indonesia and Malaysia and of Council Implementing Regulation (EU) No 1241/2012 amending Implementing Regulation No 1138/2011. The duties applicable to PTMM amount to EUR 45.63 per tonne.

PTMM is a company established in Indonesia which produces, inter alia, fatty alcohols. It markets its products in the European Union through, on the one hand, two related companies established in Singapore and, on the other, a company established in Germany, ICOF Europe GmbH (‘ICOF E’). The companies in Singapore are Inter-Continental Oils & Fats Pte Ltd (‘ICOF S’) and Besdale Trading Pte Ltd. ICOF S is wholly controlled by shareholders which also control PTMM, ICOF S in turn controls ICOF E. 

In January 2012, PTMM brought an action for annulment of the contested regulations before the General Court, relying on four pleas in law which were dismissed in their entirety. PTMM's appeal to the Court of Justice was equally rejected.

The appellant put forward four grounds. The first three grounds of appeal related to a claim of an infringement of Article 2(10) of the basic anti-dumping Regulation, while the fourth ground of appeal was based on an alleged infringement of the principle of sound administration.

One of the main issues addressed was the concept of "single economic entity" (SEE) in the light of Article 2(10)(i) of the basic anti-dumping Regulation, which according to the appellant was wrongly applied by the General Court. In particular the central issue was the existence of a SEE and the adjustment for commission under Article 2(10)(i). The GC judgment had endorsed the Commission's/Council's finding that there was no SEE between the Indonesian exporting producer of fatty alcohols, PTMM, and its related trader, ICOF S, located in Singapore, as the functions of the ICOF S were not of an internal sales department of PTMM. Three factors were found important for this conclusion: a large proportion of the sales of the trader related to products from unrelated producers; existence of a written contract between PTMM and ICOF S; and a large proportion of sales were directly invoiced by the producer, PTMM. The CJ found that the GC did not err in law when, in assessing whether a SEE existed, it took into account the activities of the related trader relating to products other than the product concerned, as well as the proportion of sales made by that distributor that related to products from unrelated producers.

The second ground of appeal alleged a discriminatory and insufficient reasoning and the misuse of the evidence, as well as alleging breach of the rules pertaining to the burden of proof in the application of Article 2(10)(i) of the basic anti-dumping Regulation.

Regarding the argument that the reasoning in the judgment under appeal is discriminatory and insufficient, the CJ pointed out that, according to case-law, the GC is not required to provide an account that follows exhaustively and one by one all of the arguments articulated by the parties to the case. In this context the CJ found that the GC had, in its judgment, sufficiently reasoned its grounds for rejecting certain pleas. As a result, the appeal was rejected as unfounded. As regards the alleged misuse of evidence by the General Court, the CJ recalled that, according to case-law, save where evidence is distorted, the Court of Justice has no jurisdiction to establish the facts or, in principle, to examine the evidence which the General Court accepted in support of those facts.

The CJ rejected the hypothesis that there was a breach of the rules pertaining to the burden of proof in the application of Article 2(10)(i) of the basic regulation. In fact, the Court stated with clarity that no presumption exists, in the context of the application of Article 2(10)(i) that two related companies are not operated independently, and that they are tied together by compensatory arrangements. Consequentially there is no obligation for the EU institutions to demonstrate that the two entities are managed independently.

As regards the third ground of appeal PTMM took the view that the GC ignored unrebutted evidence produced during the anti-dumping investigation regarding certain costs relating to sales. The CJ found that the elements which PTMM contested fell within the scope of the General Court’s factual assessment. In accordance with relevant case-law, that assessment cannot be reviewed by the Court of Justice. Given that PTMM did not invoke any distortion of the facts or evidence, the third ground of appeal was rejected as inadmissible.

Regarding the fourth ground of appeal the appellant criticised the GC for not providing sufficient reasoning for paragraph 117 of the judgment under appeal. In particular the GC did not indicate to which documents it was referring when it stated that it was ‘apparent from the documents in the case that the Council found, during the administrative procedure, that the explanations put forward by [PTMM] were unsubstantiated and, in any event, irrelevant’. The CJ found that while the General Court did not indicate, in paragraph 117 of the judgment under appeal, the documents to which it was referring, it was nevertheless apparent from paragraphs 64 and 97 of the same judgment that the GC did explain the reasons why, and indicated the documents on the basis of which, it took the view that PTMM’s arguments were unsubstantiated. As a result the CJ rejected, as unfounded, the GC's alleged breach of the obligation to state reasons.

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

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

12.1.1.Overview of the WTO dispute settlement procedure

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

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

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

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

On 6 October 2016, the Appellate Body circulated its report in the case against the EU on Anti-Dumping Measures on Biodiesel from Argentina. In the case concerning Anti-Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia (DS442), the panel issued its report on 16 December 2016.

On 12 December 2016, China requested consultations with the EU on the provisions of the EU’s basic anti-dumping regulation which govern the establishment of normal value in relation to imports from China (DS516). In the second complaint by Russia against the EU's Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia (DS494), further consultations were held in 2016 and a panel was established 16 December 2016. All cases with the exception of the one lodged by Russia are described below.

12.1.2.    Dispute settlement procedures against the Union 

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

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

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

European Union — Anti-Dumping Measures on Biodiesel from Argentina (DS473)

On 6 October 2016, the Appellate Body circulated its report in DS473. The main issue at stake in that dispute concerned the second sentence of Article 2(5) of the basic anti-dumping EU regulation according to which "if costs associated with the production and sale of the product under investigation are not reasonably reflected in the records of the party concerned, they shall be adjusted or established on the costs of other producers or exporters in the same country or, where such information is not available or cannot be used, on any other reasonable basis, including information from other representative markets".

The Appellate Body confirmed the panel's findings that Article 2(5) of the basic anti-dumping EU regulation which is the provision used in the biodiesel case to adjust the costs of the Argentinian producers was WTO-consistent. It also confirmed all other findings of the panel and rejected all the appeals made by the European Union and Argentina. In particular, the EU did not succeed in its appeal on the panel's finding on the use of international prices in this case. However, it did not follow Argentina's argument that it was outright prohibited to use information or evidence from outside the country of origin in anti-dumping calculations. This being said, the AB confirmed that this information needs to be used to establish the cost of production in the country of origin, in this case Argentina. Pursuant to Article 21.3(b) of the Understanding on Rules and Procedures governing the Settlement of Disputes, the EU and Argentina agreed that the reasonable period of time to implement the recommendation and ruling of the Appellate Body would expire on 10 August 2017. On that basis, the Commission initiated on 20 December 2016 a review based on Articles 1(3) and 2(3) of the WTO enabling Regulation to bring the anti-dumping measures imposed on imports of biodiesel from Argentina into conformity with the above recommendations and rulings (OJ, C 476/3). The Commission considered that this review should also cover the situation of dumping in Indonesia because in the pending WTO dispute European Union — Anti-Dumping Measures on Biodiesel from Indonesia (DS480) essentially the same claims are raised.

European Union - Anti-Dumping Measures on Imports of Certain Fatty Alcohols from Indonesia (DS442)

The panel report was circulated on 16 December 2016.

The panel rejected Indonesia's claims concerning the consistency of the EU's analysis with WTO rules. These concerned the treatment of commissions paid by exporters to related traders in dumping calculations and the analysis of "other known factors" also causing injury to EU industry. However, the panel also considered that the EU authorities failed to properly make available or disclose the results of the verification visits to the Indonesian company. In relation to the Dispute Settlement Procedure, the panel rejected the EU request for a preliminary ruling that its authority had lapsed after the panel composition was suspended by Indonesia for more than 12 months.

On 10 February 2017, Indonesia appealed the findings of the panel before the Appellate Body. The Union subsequently notified a decision of further appeal.

It should be noted that the anti-dumping measures on imports of fatty alcohol from Indonesia expired on 12 November 2016.

European Union – Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia — (Second complaint) (DS494)

In DS494, further consultations were held in 2016. Subsequently, Russia requested the establishment of a panel which took place on 16 December 2016.

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

In DS486, the panel established in March 2015 continued its work in 2016. The EU and Pakistan exchanged their Second Written Submission and the Panel held two meetings with parties and third parties on 21 September and 29 November 2016 respectively.

This dispute concerns countervailing measures that expired on 30 September 2015. The panel circulated its report on 6 July 2017. The main finding concerned the disciplines in relation to duty drawback schemes and the benefit accruing therefrom. The panel found that the Commission acted inconsistently with Article 1.1(a)(1)(ii) of the SCM Agreement by failing to provide a reasoned and adequate explanation for why the entire amount of remitted duties was “in excess of those which have accrued” within the meaning of footnote 1 of the SCM Agreement. The Commission decided to appeal the findings.

12.2.    Other WTO activities

Discussions on fisheries subsidies were reinvigorated following the entry into force of a Sustainable Development Goal 14 target 6 ('SDG 14.6') on 1 January 2016. The EU has a clear interest in strengthening disciplines on fisheries subsidies in the WTO. Therefore, in October 2016 the European Union tabled, at the WTO, a concrete textual proposal aimed at implementing SDG 14.6, namely to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing (IUU) and refrain from introducing new such subsidies. The proposal also contains provisions on enhanced transparency as well as disciplines on special and differential treatment for developing and least developed countries. The EU is actively involved in WTO negotiations with the aim of achieving a multilateral agreement on fisheries subsidies at WTO Ministerial Conference 11 to be held in December 2017 in Buenos Aires.

In 2016, in line with its WTO obligations, the EU participated in the continuing review of the 2015 subsidy notification in the two special sessions of the Subsidies and Countervailing Committee which were held in April and October 2016. In addition the Commission services participated in the regular work of the WTO Anti-dumping, Subsidies and Countervailing and Safeguards Committees. In October 2016 the EU (along with Canada, Japan and the US) presented a paper in the WTO Subsidies and Countervailing Committee regarding the links between subsidies and the creation of excess capacity in various sectors of economic activity.

At meetings of the Implementation Group (a sub-group of the Anti-dumping Committee) in April and October 2016, members shared information on 'Gathering and compilation of injury data' and 'Treatment of confidential data in Anti-dumping investigations'. In this context, the EU presented information on the relevant rules and practice applicable for trade defence in the EU.

The Technical Group, a subgroup of the DDA Negotiating Group, was convened twice during the year. The group discussed a number of issues relating to the practical aspects of conducting anti-dumping investigations including product matching and adjustments and alternative methods for determining normal value.

13.Conclusion

The year 2016 saw a slight increase in the number of new investigations opened, on the backdrop of a prolonged crisis caused largely by industrial overcapacities in China, notably, but not limited to, the steel sector. This reflects the number of complaints received from industry that included sufficient evidence to support allegations of injurious dumping or subsidies from EU industry. There was a decrease in the numbers of provisional and definitive measures imposed, as well as in the number of review investigations initiated. As was the case with previous years, no safeguard action was taken by the EU.

2016 was marked by the preparation for, and adoption of, a legislative proposal in November to change the EU's trade defence legislation in order to ensure that the EU would be equipped with sufficiently robust instruments to deal with the challenges faced by industry. In this context the Commission conducted an Impact assessment as well as a public consultation and actively engaged with interested parties across the whole spectrum of economic interest in the EU and also from third countries.

At the same time, the Commission services very actively engaged with the Council in relation to the discussion on the Trade Defence Instruments Modernisation initiative. This effort finally culminated in the Council reaching a compromise position at the end of 2016 allowing the next legislative step, i.e. the trilogues, to start.

12.1.LIST OF ANNEXES

Annex A

12.1.1.New investigations initiated
during the period 1 January – 31 December 2016

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

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

Top List of Annexes

C.    Reopenings (chronological by date of publication)

Annex B

12.1.2.New investigations initiated by product/country 2012 – 2016 (excluding the reopenings)

Top List of Annexes

B.    New investigations initiated by country of export during the period 2012 – 2016 (excluding the reopenings)

Annex C

12.1.3.Imposition of provisional duties
during the period 1 January – 31 December 2016

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

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

Top List of Annexes

Annex D

12.1.4.New investigations - imposition of definitive duties
during the period 1 January – 31 December 2016

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

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

Top List of Annexes

Annex E

12.1.5.New investigations terminated without the imposition of measures
during the period 1 January - 31 December 2016

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

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

Top List of Annexes

Annex F

12.1.6.Expiry reviews initiated or concluded
during the period 1 January - 31 December 2016 

Top List of Annexes

Annex G

12.1.7.Interim reviews initiated or concluded
during the period 1 January - 31 December 2016

Top List of Annexes

ANNEX H

12.1.8. Other reviews initiated or concluded
during the period 1 January - 31 December 2016

Top List of Annexes

ANNEX I

12.1.9.New exporter reviews initiated or concluded
during the period 1 January - 31 December 2016

A.    Anti-dumping investigations

Top List of Annexes

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

Top List of Annexes

ANNEX J

12.1.10.Anti-absorption investigations initiated or concluded
during the period 1 January - 31 December 2016

Top List of Annexes

ANNEX K

12.1.11.Anti-circumvention investigations initiated or concluded
during the period 1 January - 31 December 2016

Top List of Annexes

ANNEX L

12.1.12.Safeguard investigations initiated and concluded
during the period 1 January - 31 December 2016

Top List of Annexes

ANNEX M

12.1.13.Undertakings accepted / repealed
during the period 1 January - 31 December 2016

Top List of Annexes

ANNEX N

12.1.14.Measures which expired / lapsed
during the period 1 January - 31 December 2016

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

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

Top List of Annexes
ANNEX O

12.1.15.Definitive anti-dumping measures in force on 31 December 2016 

A. Ranked by product (alphabetical)