WORLD TRADE  
ORGANIZATION  G/ADP/Q1/EEC/24 
G/SCM/Q1/EEC/24 
4 November 2004 
 (04-4685) 
Committee on Anti-Dumping Practices 
Committee on Subsidies and Countervailing Measures Original:   English 
 
 
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER 
ARTICLES 18.5 AND 32.6 OF THE AGREEMENTS 
 
Replies to the Questions Posed by the UNITED STATES1 
Regarding the Notification of the EUROPEAN COMMUNITIES2 
 
  The following communication, dated 2 November 2004, is being circulated at the request of the Delegation of the European Commission.  
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Q1.  Please clarify whether a change in the pattern of trade between individual companies in 
a third country and the Community could also be  defined as circumvention for the purposes of 
revised Article 13(1). 
 
Reply
 
  A change in pattern of trade between individu al companies in a third country subject to AD 
and/or CVD measures and the Community could lead to the conclusion that circumvention is taking 
place, provided that the other 3 criteria of Article 13 (1) are met: (i) insufficient  due cause or 
economic justification for the change in pattern of tr ade, (ii) evidence of injury or that the remedial 
effects of the duty are being undermined in terms of the prices and/or quantities of the like product, 
and (iii) evidence of dumping in relation to the normal values previously established for the like 
product. A situation where circumvention stems from a change in the pattern of trade between an 
individual company and the Community could e.g. arise if the main exporter from the third country 
subject to measures is found to be circumventing the measures, while other producers (not exporting 
or exporting only insignificant volumes) are not.  
Q2.  The new Regulation adds a new paragraph (7) to Article 14 of the Dumping Regulation 
and to Article 24 of the Regulation on protection against subsidised import
3 (the "Subsidies 
Regulation") whereby "the Commission may request  Member States, on a case by case basis, to 
supply information necessary to monitor e fficiently the application of measures."  
 
General comment :  The need for the provisions of Articles 14(6) and 14(7) of the Dumping 
Regulation and Articles 24(6) and 24(7) of the Subsidies Regulation stem from the particular 
institutional structure of the Community, in which di fferent institutions are responsible for, on the one 
hand, carrying out the investigations and monito ring the effectiveness of measures (the Commission) 
                                                      
1 G/ADP/Q1/EEC/23-G/SCM/Q1/EEC/23 
2 G/ADP/N/1/EEC/2/Suppl.5-G/SCM/N/1/EEC/2/Suppl.5 (28 April 2004), attaching Council 
Regulation (EC) No. 461/2004 (the "new Regulation"). 
3 Council Regulation (EC) 2026/97. G/ADP/Q1/EEC/24 
G/SCM/Q1/EEC/24 Page 2 
 
 and, on the other hand, applying the measures (Member States through their respective customs authorities). 
 
• Does this new paragraph apply only when pr ice undertakings are in effect, as may be 
inferred from paragraph (27) of the preamble? 
 
Reply  
 
 No.  The new paragraph covers the informa tion needs for the efficient monitoring of the 
application of measures.  Measures include bot h duties and undertakings. In  the same sense, 
recital 27 refers to information to be used, not only for monitoring price undertakings, but also for 
“verifying the level of effectiveness of the measures in force”.  • Please clarify the difference, if any, between Article 14(6) and new Article 14(7) of the 
Dumping Regulation and between Article 24(6) and new Article 24(7) of the Subsidies Regulation.  In particular: 
  (a)  What is the difference between a "report", per Article 14(6)/Article 24(6), and 
"information necessary to monitor" in Article 14(7)/Article 24(7)?  
 
Reply
 
  The “report” referred to in Article 14(6) cons ists of a periodic and structured set of data 
corresponding to all importations into the Community of any product subject to AD measures.  
Article 14(7) deals with specific requests for add itional information that the Commission may address 
to Member States on a case-by-case basis (therefore, this corresponds to non-periodic information).  
For instance, the Commission may request one or sev eral Member States to submit copies of the 
customs clearance documents for a handful of import transactions in order to cross-check information 
with other sources of data.  The same applies with respect to Articles 24(6) and 24(7) of the Subsidies 
Regulation. 
 
 (b)  Would a Member State be required only to supply the information, which the 
Commission would then use for monitoring purposes?  
 
Reply
 
 
 Any Member State is free to analyse any info rmation it gathered in the framework of the 
application of a measure, without prejudice to th e analysis that the Commission may make of the 
same data, whether or not in combination with  data submitted by another Member State.  
 
 (c)  If not, would a Member State actually engage in monitoring the application of 
measures and then supply information to the Commission in order to explain its 
conclusions? 
 
Reply  
 
 As explained above, while the Commission is  generally responsible for monitoring the 
application of measures, Member States are free to analyse data and submit the result of the analysis 
to the Commission.   
 (d) In connection with the monitoring  activities described in the referenced 
paragraphs, does the Commission have the right to direct a request for 
information only to Member State custom s authorities or does the Commission  G/ADP/Q1/EEC/24 
 G/SCM/Q1/EEC/24 
 Page 3 
 
 
also have the authority to request information from other Member State 
administrative authorities (e.g., tax, corporate, etc.)? 
 
Reply  
 
 The Commission may request information “necessary to monitor efficiently the application of 
measures”.  Such requests are in principle directed to the Member States, which are then responsible 
for determining the relevant authorities for providing the information.  As the information requested is 
normally customs related, requests are in practice often directly addressed to the customs authorities, 
with the agreement of the Member States.  Any in formation obtained is covered by the confidentiality 
provisions of Article 19(6)/Article 24(6). 
 
Q3. Regulation 461/2004 adds an additional sentence to Article 19(6) of the Dumping 
Regulation and Article 29(6) of the Subsidies Regulation regarding use of information received 
by the Commission:  "This provision shall not preclude the use of information received in the 
context of one investigation for the purpose of in itiating other investigations within the same 
proceeding in relation to the product concerned."  • Please explain how "other investigations" can be initiated "within the same 
proceeding".  
 
Reply
 
  In the EC, for the purpose of AD/CVD, the notion of proceeding is wider than the term “investigation”.  The proceeding c overs the original investigation and also all subsequent accessory 
procedures regarding the originally imposed measures (in particular re views).  Several investigations 
can thus be carried out within one proceeding.   
 (a)   Are these "other investigations" limit ed only to anti-circumvention and duty 
absorption investigations?  
 Reply
 
  As said above, the notion of “other investig ations” also extends to reviews covered by 
Article 11 of the Dumping Regulation and Artic les 18 and 19 of the Subsidies Regulation. 
  (b)  If not, would the Commission also have discretion to use the information in a 
different type of investigation of the same product; e.g.
 if the Commission 
obtained information in an anti-dumping investigation indicating that the foreign producers had received actionable  government subsidies, would the 
Commission be authorized to use such information to self-initiate a countervailing duty investigation of that same product/country? 
 
Reply
 
  No.  The initiation of a new anti-subsidy inves tigation on the basis of information requested 
and obtained within the framework of an anti-dumpi ng investigation (or vice versa) would amount to 
the initiation of a new proceeding and be precluded by Article 19(6) of the Dumping Regulation and 
Article 29(6) of the Subsidies Regulation.  The s ituation is different, howev er, if the information 
gathered is within the public domain, as it may of ten be the case with regard  to subsidy schemes, as 
this would not expressly be covered by  Article 19( 6) of the Dumping Regulation and Article 29(6) of 
the Subsidies Regulation.  
 G/ADP/Q1/EEC/24 
G/SCM/Q1/EEC/24 Page 4 
 
 
 (c)  Can the information be used only by the Directorate-General for Trade, or could 
it be shared with tax, competition, or other Commission or Member State authorities? 
 Reply
 
  Article 19(6)/Article 24(6) clearly state that  the information “shall be used only for the 
purpose for which it was requested”.  This exclud es its use for the adoption of measures under tax, 
competition or other regulatory provisions.  
 
 (d)  Please confirm that the provisions of  Article 19(5) of the Dumping Regulation 
and Article 29(5) of the Subsidies Regulation will remain in full force and effect, so that any confidential information used  pursuant to Articles 1(15) and 2(11) of 
the new Regulation will not be disclosed by officials of the Community or any 
Member State without the specific permission of the supplier of such 
information. 
 
Reply
 
  We confirm that Article 19(5) of the Dumpi ng Regulation and Article 29(5) of the Subsidies 
Regulation remain in effect and that the confidentiality rules are respected. 
 
Q4.   The new regulations amend Article 11(5) with respect to deadlines for conducting 
various types of reviews, and also specify the result if the review ("investigation") is not 
completed within the new deadlines.  This provision  provides in part that: "[i]f the investigation 
is not completed within the above deadlines, the measures shall [. . .] remain unchanged in 
investigations pursuant to paragraphs 3 and 4 of this Article."  Please clarify how the interests of exporters and importers will be protected in situations where the Commission is unable to 
complete reviews they have requested within the stated deadlines.    
 
Reply
 
 
 The rationale of this provision is to provide legal certainty as regards the consequences of the 
introduction of mandatory deadlines for review inv estigations.  Unlike for “new investigations”, 
where the consequences of missing mandatory dead lines are clear (i.e. non-imposition of measures), 
the lapse of a mandatory deadline in a review inv estigation concerning an existing measure is not so 
clear cut.  In order to provide for legal certainty for economic operators involved, it is therefore 
considered appropriate to clarify the legal c onsequences of missing such mandatory deadline.  
  In general terms, if a mandatory review dead line is missed, the proceeding falls back to the 
stage as if no review investigation had been initiated in the first place.  Consequently, for example, in 
case of not meeting the deadline in an expiry review, the measures lapse.  In interim reviews pursuant 
to paragraph 3 of the new regulations, in the absen ce of a completed investigation with new findings, 
the result of missing the deadline (regardless of  whether requested by the domestic industry, 
exporters, or other interested parties), can only be that the measures remain unchanged.  
  This does not mean, however, that the investigating authority would not bound by the 
mandatory deadline.  To the contra ry, the deadlines are not discretionary, and the EC is confident that 
they will be respected.  Moreover, non-adherence to the deadlines may be subject to judicial review. 
 
In particular: 
  G/ADP/Q1/EEC/24 
 G/SCM/Q1/EEC/24 
 Page 5 
 
 
• Does the phrase "the measures shall [. . .] remain unchanged" indicate that the review 
under Article 11(3) or 11(4) will be terminated as of the deadline date?  Alternatively, does the phrase simply mean that the me asure in question will remain unchanged 
pending completion of the review, at which ti me it may be changed, as appropriate, in 
accordance with the results of the review? 
 
Reply
 
  If a review investigation pursuant to Article 11( 3) or 11(4) is not completed by the deadline, 
the legal consequence is that measures remain unc hanged.  Hence, there is no formal “termination” 
nor a continuation of the investigation beyond the ma ndatory deadline.  Indeed, if the review could 
still be completed after the deadline, the latter woul d be merely indicative and not achieve the purpose 
of providing legal certainty.  
• If Article 11(5) requires termination of a review which cannot be completed within the 
deadlines, will exporters and importers be perm itted to re-file their requests for review?  
 
Reply
 
  Yes, subject to the normal conditions for initiation of reviews.  
 
• In the case of a review under Article 11(3) or 11(4) requested by an exporter or 
importer, does the result specified in Arti cle 11(5) for failure to complete the review 
within the deadlines only apply if the delay is caused by the actions of the exporter or importer?  
 
Reply
 
  No.  Missing the mandatory deadline is an ob jective fact, the consequences of which do not 
depend on any intentional or non-inte ntional behaviour of a party.  In this respect it should also be 
noted that this is not a provision which provides fo r a “penalty” on interested parties but merely for 
the procedural consequences in a particular situation.   It therefore applies equally for all interested 
parties and all types of reviews, including reviews requested by domestic industry. 
 • In the case of a "newcomer" (a.k.a. "new  shipper" or "new exporter") review under 
Article 11(4), if the review cannot be comp leted within the deadlines and thus the 
measure "remain[s] unchanged" under the rule of revised Article 11(5), will 
antidumping duties be levied against subsequent imports from the new exporter?  If so, how will the rate of duty be determined?  
 
Reply
 
 
 Yes, should such situation arise, the newcomer will be subject to the original rate applicable 
without initiation of the newcomer review.  However, in this respect, it may also be recalled that in 
the EC missing a mandatory deadline may be subject to judicial review.  
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