WORLD TRADE
ORGANIZATIONG/SCM/N/1/EEC/2/Suppl.3
18 November 2002
(02-6370)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
NOTIFICATION OF LAWS AND REGULATIONS
UNDER ARTICLE 32.6 OF THE AGREEMENT
EUROPEAN COMMUNITIES
Supplement
The following communication, dated 11 November 2002, has been received from the
Permanent Delegation of the European Commission.
_______________
Pursuant to Article 32(6) of the WTO Agreement on Subsidies and Countervailing Measures,
please find attached a copy of Council Regula tion (EC) No 1973/2002 of 5 November 2002, which
amends Council Regulation (EC) No 2026/97 on protection against subsidized imports from countries
not members of the European Communities (Official Journal L 305 of 7 November 2002).G/SCM/N/1/EEC/2/Suppl.3
Page 2
COUNCIL REGULATION (EC)No 1973/2002
of 5 November 2002
amending Regulation (EC)No 2026/97 on th e protection against subsidised imports from
countries not members of the European Community
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community, and in particular Article 133
thereof,
Having regard to the proposal from the Commission,Whereas:(1) By Regulation (EC) No 2026/97
1, the Council adopted common rules for protection against
subsidised imports from countries which are not members of the European Community.
(2) Article 6 of Regulation (EC) No 2026/97 sets forth certain guidelines for the calculation of
the benefit to the recipient, including the market benchmark against which the amount of
benefit is measured.  It is prudent to provide for a clarification as to what rules should be
followed in cases where a market benchmark does not exist in the country concerned.  In sucha situation the benchmark should be determined by adjusting the terms and conditions
prevailing in the country concerned on the basis of actual factors available in that country.  If
this is not practicable because, inter alia , such prices or costs do no exist or are unreliable,
then the appropriate benchmark should be determined by resorting to terms and conditions in
other markets.
(3) Article 4 of Regulation (EC)No 2026/97 provides that certain subsidies for environment,
research and regional development are non-countervailable.  Furthermore, Article 10(5)and
(6) of that Regulation state that investigations may be initiated in order to determine whether
subsidies have such non-countervailable status, and that investigations are not to be initiated
if they relate to certain non-countervailable subsidies.  The corresponding provisions in the
WTO Agreement on Subsidies and Countervailing Measures were due to expire on31 December 1999 unless the Members of the WTO decided otherwise.  No such decision has
been taken and therefore the relevant provisio ns do not apply anymore.  Accordingly, it is
necessary to assess whether the provisions on non-countervailable subsidies in Regulation
(EC) No 2026/97 should be maintained.  In this respect, major trading partners of the
Community no longer apply these provisions in their countervailing investigations.  In viewof this, and in order to maintain the balance of rights and obligations under the said WTO
Agreement, it is considered appropriate to repeal the provisions of Regulation (EC) No
2026/97 relating to non-countervailable subsidies.
(4) Article 28(5)of Regulation (EC)No 2026/97 specifies that, in case of use of facts available,
the information used are to be checked by reference to information from a number of sources.
It is considered useful to specify that such sources can, where appropriate, also pertain to data
concerning the world market or other representative markets.
(5) It is considered appropriate in the interests of  legal certainty to provide that these amendments
should apply as soon as possible to all new investigations,
                                                     
1 OJ L 288, 21.10.1997, p.1G/SCM/N/1/EEC/2/Suppl.3
Page 3
HAS ADOPTED THIS REGULATION:
Article 1
Regulation (EC) No 2026/97 is hereby amended as follows:1. In Article 6(d), the following text shall be added:
‘If there are no such prevailing market terms and conditions for the product or service in
question in the country of provision or purchase which can be used as appropriate
benchmarks, the following rules shall apply:
(i) the terms and conditions prevailing in the country concerned shall be adjusted, on the
basis of actual costs, prices and other factors available in that country, by an
appropriate amount which reflects normal market terms and conditions;  or
(ii) when appropriate, the terms and conditions prevailing in the market of another
country or on the world market which are available to the recipient shall be used.’
2. Article 4 and Article 10(5) and (6) shall be repealed.3. In Article 28(5), the following sentence shall be added:
‘Such information may include relevant data pertaining to the world market or other
representative markets, where appropriate.’
Article 2
This Regulation shall enter into force on the day following that of its publication in the Official
Journal of the European Communities .
It shall apply to all investigations initiated pursuant to Regulation (EC) No 2026/97 after the date of
entry into force of this Regulation.
This Regulation shall be binding in its entirety and directly applicable to all Member States.Done at Brussels, 5 November 2002.
For the Council
The President
T. PEDERSEN
__________