G/ADP/Q1/EU/12  
G/SCM/Q1/EU/12  
 
9 October  2018 
(18-6250) Page: 1/11 
Committee on Anti -Dumping Practices  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 
NOTIFICATION OF LAWS  AND REGULATIONS UND ER 
ARTICLE S 18.5 AND 32.6 OF THE AGREEMENT S 
REPLIES TO QUEST IONS POSED BY THE RU SSIAN FEDERATION1 REGARDING  
THE NOTIFICATION OF THE EUROPEAN UNION2 
The following communication, dated 8 October  2018, is being circulated at the request of the 
Delegation of the European Union . 
 
_______________  
 
 
Question 1  
 
The text of the Regulation (EU) 2017/2321 covers targeted amendments to the Basic 
Regulation on anti -dumping with respect to the methodology of normal value 
determination.  
 
Please explain what are the reasons and intentions for changing the provisions of 
calculation of normal value.  
 
Reply  
 
The reasons for enacting the Regulation (EU) 2017/2321 ( "Regulation ") are clarified in particular in  
recitals 2 to 4 of the Regulation. Recital 3 points out that experience  gained in past proceedings has 
shown that it is appropriate to clarify the circumstances in which significant distortions affecting to 
a considerable extent free market forces may be deemed to exist. Recital 3 of the Regulation also 
recalls and exemplifies the circumstances which can affect to a considerable extent free market 
forces. Addressing such circumstances, that is situations of "significant distortions ", is the main 
objective of the Regulation. Moreover, Recital 4 of the Regulation addresses a number of related 
substantive and procedural issues, such as the production, publication and regular update of reports 
on significant distortions, describing the market circumstances in a  certain country or a certain 
sector.  
 
Question 2  
 
As it is stated in Recital (3) of the Regulation (EU) 2017/2321, "in light of experience  
gained in past proceedings, it is appropriate to clarify the circumstances in which 
significant distortions affecti ng to a considerable extent free market forces may be 
deemed to exist ". (emphasis added)  
 
2a. Please clarify what kind of experience was gained in past proceedings that 
made it necessary to introduce the amendments to the Basic Regulation on anti -
dumping e nvisaged in Regulation (EU) 2017/2321?  
 
2b. Please clarify whether the experience  referred to in Recital (3) of the 
Regulation  (EU)  2017/2321 was gained during the anti -dumping proceedings 
conducted by the European Commission?  
                                                
1 G/ADP/Q1/EU/7 -G/SCM/Q1/EU/7.  
2 G/ADP/N/1/EU/3/Suppl.2 -G/SCM/N/1/EU/2/Suppl.2.  G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  2c. If the answer to Question 2b is affirmative, please specify on the basis of which 
decisions on imposition of anti -dumping measures the provisions of Regulation 
(EU)  2017/2321 have been drafted? Will these decisions be taken into account when 
implementing A rticle 2(6a) of the Basic Regulation on anti -dumping as amended by 
the Regulation (EU) 2017/2321?  
 
Reply  
 
There is a multitude of sources on the basis of which the European Commission gains experience 
relevant for its trade remedy practice. This includes t he Commission 's own anti -dumping 
investigations and may therefore be reflected in the decisions on imposition of anti -dumping 
measures. However, all areas of engagement with trading partners, as well as day -to-day business 
practice of economic operators may inform the Commission 's experience.  
 
The Regulation is therefore not necessarily based only on experience originating in anti -dumping 
investigations or specific instances of case -law. 
 
Question 3  
 
As it is stated in Recital (4) of the Regulation (EU) 2 017/2321, "the Commission should 
produce, make public and regularly update reports on significant distortions, which could 
potentially result  in an anti -dumping investigation, describing the market circumstances 
concerning those instances in a certain coun try or a certain sector ". (emphasis added)  
 
Please explain what is meant by the phrase "potentially result  in an anti -dumping 
investigation "? 
 
Question 13  
 
As it is stated in the text of the introduced Article 2(6a)(e) of the Basic Regulation on anti -
dumpi ng, "where the Commission finds that there is sufficient evidence, pursuant to 
Article 5(9), of significant distortions within the meaning of point (b) of this paragraph 
and decides to initiate an investigation on that basis , the notice of initiation shall  specify 
that fact ". (emphasis added)  
Please clarify:  
 
a. what is the legal significance of the alleged "significant distortions within the 
meaning of point (b) " when deciding on initiation of an investigation;  
b. the meaning of the phrase "decides to initiate an investigation on that basis "; 
c. whether the existence of "significant distortions within the meaning of point (b) " 
is the only or key factor entitling the EU "to initiate an investigation "?   
Replies to Questions 3 and 13  
 
The EU 's Basic Anti -dumping  Regulation provides for a number of conditions which must be met for 
an anti -dumping investigation to be initiated. These are in line the WTO Agreement . In accordance 
with this legislation, investigations will be initiated when the European Commission is satisfied that 
it has sufficient evidence supporting allegations of injurious dumping . These conditions are not 
affected by the amendments under review today . The existence or absence of a report is irrelevant 
to the assessment of whether an anti -dumping i nvestigation should be initiated. The reports 
contemplated in the new legislation constitute only collections of factual information which may be 
considered relevant in any given investigation to assess the existence of significant distortions and 
hence th e dumping calculation method which may be applied. Thus, the documentation contained 
in the Commission report(s) foreseen under Art. 2(6a)(c) of the Regulation is not a reason to initiate 
an anti -dumping investigation. Recital 4 simply refers to the possib ility of producing reports on 
countries or sectors in relation to which an anti -dumping investigation might potentially be initiated. 
The choice of country on which a report may be prepared is determined by its relative weight in 
terms of the EU 's anti -dumping activity .  
 G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  Question 4  
 
As it is stated in Recital (4) of the Regulation (EU) 2017/2321, "when assessing the 
existence of significant distortions, relevant  international standards, including  core 
conventions of the International Labour Organisation (I LO) and relevant  multilateral 
environmental conventions, should be taken into account, where appropriate ". (emphasis 
added)  
 
Please explain:  
 
a. which conventions of the International Labour Organisation does the EU consider 
to be "core" and "relevant " when assessing the existence of significant 
distortions;  
b. which multilateral environmental conventions does the EU consider to be 
"relevant " when assessing the existence of significant distortions;  
c. which "relevant international standards " other than core conventions of the 
International Labour Organisation and multilateral environmental conventions 
does the EU consider to be relevant when assessing the existence of significant 
distortions?  
Reply  
 
Under the amended legislation, the issue of compliance with core social and environmental standards 
is relevant where there may be more than one appropriate representative country from which the 
Commission could source the undistorted benchmarks for calculating normal value . Where that is 
the case, the Commission w ill, where appropriate, give preference to a country with adequate social 
and environmental standards. The aim is to ensure that dumping calculations preferably rely on data 
from a country that abides by core labour and environmental standards, where that is possible.  
 
In this context, when assessing whether countries have an adequate level of social and 
environmental standards, regard will be paid to the ratification of and compliance with the core 
labour rights UN/ILO conventions such as:  
- Freedom of Association and Protection of the Right to Organise Convention, 1948  
- Right to Organise and Collective Bargaining Convention, 1949  
- Forced Labour Convention, 1930  
- Minimum Age Convention, 1973  
 
and environmental conventions, such as:  
 
- Montreal Protocol on Substances that Deplete the Ozone Layer (1987)  
- Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and 
Their Disposal (1989)  
- The United Nations Framework Convention on Climate Change (1992)  
- Kyoto Protocol to the United Nations Framework Convention on Climate Change (1998)  
 
Question 5  
 
As it is stated in Recital (5) of the Regulation (EU) 2017/2321, "where there are direct  or 
indirect  significant distortions in the exporting country with the consequence that costs 
reflected in the records of the party concerned are artificial ly low, such costs may be 
adjusted or established on any reasonable basis, including information from other 
representative markets or from international prices or benchmarks ". (emphasis added)  
 
5a. Please specify what is understood by the EU as "direct " and "indirect " 
significant distortions in the exporting country.  
 
5b. Are there any criteria envisaged by the EU authorities to be applied in order to 
determine "direct " significant distortions? In case of positive answer, please explain 
what are those cri teria.  
 G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  5c. Are there any criteria envisaged by the EU authorities to be applied in order to 
determine "indirect " significant distortions? In case of positive answer, please 
explain what are those criteria.  
 
Reply  
 
Recital 5 clarifies that costs affected by significant distortions may be adjusted or established on any 
reasonable basis, irrespective of whether the relevant distortio ns might be deemed direct 
(e.g. government administratively setting prices of relevant raw materials) or indirect (e.g. 
governm ent setting up industrial strategies resulting in resource allocation based on political 
priorities rather than free market forces). Consequently, the list of elements relevant for establishing 
significant distortions in Article 2(6a)(b) of the Regulation does not distinguish between direct and 
indirect distortions.  
 
Question 6  
 
As it is stated in Recital (5) of the Regulation (EU) 2017/2321, "domestic costs may also 
be used, but only to the extent that they are positively established not to be distorted , on 
the basis of accurate and appropriate evidence ". (emphasis added)  
 
Please specify the applicable standard(s) under which it can be "positively established " 
that domestic costs are not distorted.  
 
Reply  
 
Recital 5 needs to be read in connection with Article 2(6a)(a) of the Regulation which lists the sources 
the Commission may use in case it is determined that the use of domestic prices or costs is not 
appropriate due to existence of significant distortions. It is for the Commission to demonstrate this .  
 
However, once significant distortions are established, the Commission will determine the normal 
value on the basis of undistorted values. In relation to the use of domestic costs, it should be recalled 
that the application of the new rules is triggered  by a determination that significant distortions affect 
the reliability of domestic prices or costs. Hence, it was felt necessary to clarify that, in those 
circumstances, domestic costs could (and would) still be used if the Commission determines, based 
on the evidence on the file, that such domestic costs are undistorted. The Commission expects the 
exporting producers to be the primary source of information relevant for that assessment but 
evidently the Commission will consider all evidence available to it  for that purpose.  
 
Question 7  
 
Article 1 of the Regulation (EU) 2017/2321 introduces new Article 2(6a) into the text of 
the Basic Regulation on anti -dumping. As it is stated in Article 2(6a)(a) of the Basic 
Regulation on anti -dumping, "[i]n case it is det ermined, when applying this or any other 
relevant provision  of this Regulation, that it is not appropriate  to use domestic prices and 
costs in the exporting country due to the existence in that country of significant 
distortions within the meaning of point (b), the normal value shall be constructed 
exclusively  on the basis of costs of production and sale refle cting undistorted prices or 
benchmarks, subject to the following rules ". (emphasis added)  
 
Please explain:  
 
a. how exactly the phrase "it is not appropriate " should be understood within the 
context of this provision;  
b. the methodology and criteria envisaged by  the EU authorities to be applied in 
order to evaluate whether the use of domestic prices and costs in the exporting 
country is "appropriate "; 
c. how exactly the phrase "exclusively " should be understood within the context of 
this provision;  G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  d. which provisions  are covered by the phrase "any other relevant provision of this 
Regulation "; 
e. how do the amendments introduced by the Regulation (EU) 2017/2321 correlate 
with the second subparagraph of Article 2(3) of the Basic Regulation on anti -
dumping;  
f. how do the amen dments introduced by the Regulation (EU) 2017/2321 correlate 
with the first subparagraph of Article 2(5) of the Basic Regulation on anti -
dumping;  
g. how do the amendments introduced by the Regulation (EU) 2017/2321 correlate 
with the second subparagraph of A rticle 2(5) of the Basic Regulation on anti -
dumping.  
Reply  
 
Under the Regulation, whether it is or it is not appropriate to use domestic prices or costs, is 
dependent on the existence on significant distortions and their impact on prices or costs. If it is  
established that significant distortions pursuant to Article 2(6a)(b) exist and impact domestic prices 
and costs so that they will be considered by the Commission not to be appropriate for the calculation 
of normal value, normal value will therefore be co nstructed on the basis of costs of production and 
sale reflecting undistorted prices or benchmarks. The qualification "exclusively " requires that such 
constructed normal value be not contaminated by the inclusion of d istorted prices and costs, 
e.g. with re spect to some inputs used in the manufacturing of the product concerned.  
 
Russia also questions the existence of possible correlations between Article 2(6a) and other 
provisions of the Basic anti -dumping regulation. In this respect, Russia refers to the i ntroductory 
sentence "any other relevant provision of this regulation ". This introductory sentence simply caters 
for the overall harmonious application of the rules of the Basic Anti -Dumping Regulation . In any 
event, as mentioned earlier this is not the fo rum to enter into comprehensive legal discussion.  
 
Question 8  
 
As it is stated in the text of the introduced Article 2(6a)(a) of the Basic Regulation on 
anti-dumping,  
 
"[t]he sources the Commission may use include:  
 
- corresponding costs of production and sale in an appropriate representative country with 
a similar level of economic development as the exporting country, provided the relevant 
data are readily available; where there is more than one such country, prefere nce shall be 
given, where appropriate, to countries with an adequate level of social and environmental 
protection;  
- if it considers appropriate , undistorted international prices, costs, or benchmarks; or  
- domestic costs, but only to the extent that the y are positively established not to be 
distorted, on the basis of accurate and appropriate evidence, including in the framework 
of the provisions on interested parties in point (c) ". (emphasis added)  
 
Please explain:  
 
a. the methodology and criteria envisaged  by the EU in order to evaluate "a similar 
level of economic development " of an appropriate representative country;  
b. which criteria, standards or factors can the European Commission be guided by 
in order to decide not to use the sources mentioned in the fir st sub -paragraph 
above and to resort to the two remaining sources;  
c. which criteria, standards or factors can the European Commission be guided by 
when it decides whether to use the second or the third source indicated in the 
second and the third sub -paragra phs above;  G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  d. are there any decisive criteria or factors that would inevitably lead the European 
Commission to use the second source indicated in the second sub -paragraph 
above;  
e. are there any decisive criteria or factors that would inevitably lead the Europe an 
Commission to use the third source indicated in the third sub -paragraph above?  
Reply  
 
The choice of a country with a "similar level of economic development " will primarily be based on 
international statistics, in particular on the per capita gross natio nal income. However, other criteria 
may be taken into account, such as the overall recent economic development of the potentially 
representative third countries.  
 
Art. 2(6a)(a) of the Regulation introduces a list of sources which the Commission may use whe n 
constructing the normal value. The list is not closed and therefore other sources could be used. 
However, it is likely that in most cases, the Commission will rely on sources included in the list. The 
identification of the relevant source to be used in a ny given investigation will be decided on the basis 
of the assessment of the evidence on the file, including the facts and arguments presented to the 
Commission by interested parties in the course of any given investigation. The choice between 
sources fall ing under the first and second indent would in particular depend on the availability of 
relevant and reliable data meeting the conditions explained in the relevant provisions. Thus, for 
instance, if for any given case, there is no corresponding cost inform ation readily available in a third 
country presenting a similar level of economic development as the exporting country under 
investigation, the source identified in the first indent will not as a practical matter be available. In 
short, the analysis will b e case specific and there are no rules which apply a priori, irrespective of 
the circumstances prevailing in the particular case.  
 
Question 9  
 
As it is stated in the text of the introduced Article 2(6a)(a) of the Basic Regulatio n on 
anti-dumping, "[t]he constructed normal value shall include an undistorted and 
reasonable  amount for administrative, selling and general costs and for profits ". 
(emphasis added)  
 
Please clarify:  
 
a. the methodology and criteria envisaged by the EU in order to  evaluate that 
administrative, selling and general costs and for profits reported in the records 
kept by exporting producers are "distorted and unreasonable ";  
b. the methodology and criteria envisaged by the EU in order to determine the 
amount for administra tive, selling and general costs and for profits which is 
"undistorted and reasonable ";   
c. whether the words "undistorted " and "reasonable " are interchangeable here;  
d. if the words "undistorted " and "reasonable " are not interchangeable, what is the 
exact meani ng of each of these words in the context of this provision?   
Reply  
 
The references to "undistorted prices or benchmarks " as well as to an "undistorted amount for 
administrative, selling and general costs and for profit " should be read in the context of the entire 
text of Art. 2(6a) of the EU Basic Anti -dumping Regulation. This provision stipulates essentially that 
prices and costs affected by significant distortions are not appropriate for establishing the normal 
value. Applying the premise that the elements used for the construction of the normal value must 
be free of distortions, Art. 2(6a) consistently makes the use of v arious sources conditional 
upon absence of distortions (see the four instances in which the provisio n refers to absence of 
distortions  - "undistorted prices or benchmarks ", "undistorted international prices, costs, or 
benchmarks ", "domestic costs positively established not to be distorted " and "undistorted SGA & 
profit "). G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  The use of the words "undistorte d" and "reasonable " is not interchangeable. While "undistorted " is 
to be understood as free of distortions as explained earlier, "reasonable " represents a separate 
criterion. The notion of reasonableness informs many provisions of the anti -dumping agreemen t and 
should be understood as such .  
 
Question 10  
 
As it is stated in the text of the introduced Article 2(6a)(b) of the Basic Regulation on 
anti-dumping, "significant distortions  are those distortions which occur when reported 
prices or costs, including the costs of raw materials and energy, are not the result of free 
market forces because they are affected by substantial government intervention ". 
(emphasis added)  
 
a. Please clarify what is to be understood under the phrase "government 
intervention "; 
b. Please describe the methodology and criteria that are envisaged by the EU 
authorities in order to evaluate whether the " government intervention " is 
"substantial "; 
c. Please explain the meth odology and criteria that are envisaged by the EU 
authorities in order to determine the existence of "significant  distortions " and to 
evaluate whether the "distortions " are "significant ".  
Reply  
 
The terminology of Art. 2(6a)(b) of the EU Basic AD Regulati on takes into account the presence of 
various entities in the operation of a given economy. A system where economic competition between 
market operators prevails is likely to be driven by free market forces, and prices and costs are likely 
to be set at a c ompetitive level.  
 
At the same time, markets do not exist in a vacuum. There is always some degree of government 
intervention, e.g. by setting framework conditions or by interfering more directly into the market. 
Such interferences can take various forms (e.g. discriminatory taxation, administrative price setting, 
industrial policy setting, presence of government representatives in corporate bodies and their 
personal involvement in operational business decisions) and can disrupt the market forces to a 
higher or lower degree.  
 
Art. 2(6a)(b) reflects this interplay between the government intervention and the resulting 
distortions of free market forces by stressing that the government intervention must be "substantial " 
and the distortions "significant ". Consequently, the domestic prices or costs will not be considered 
appropriate for establishing the normal value only in those specific instances where the government 
intervention will reach a magnitude sufficiently great to distort the normal economic oper ations (and 
thus the prices or costs concerned) to a considerable extent and in a material way. Interventions 
falling short of these criteria will not render the domestic prices and costs inappropriate (see also 
reply to Question 11 by Russia concerning li st of elements to be considered distortions).  
 
Question 11  
 
As it is stated in the text of the introduced Article 2(6a)(b) of the Basic Regulation on 
anti-dumping,  
 
"Significant distortions are those distortions which occur when reported prices or costs, 
including the costs of raw materials and energy, are not the result of free market forces 
because they are affected by substantial government intervention. In assessin g the 
existence of significant distortions regard shall be had, inter alia, to the potential impact 
of one or more of the following elements:  
 
- the market in question being served to a significant extent by enterprises which operate 
under the ownership, c ontrol or policy supervision or guidance of the authorities of the 
exporting country;  
- state presence in firms allowing the state to interfere with respect to prices or costs;  G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  - public policies or measures discriminating in favour of domestic suppliers or otherwise 
influencing free market forces;  
- the lack, discriminatory application or inadequate enforcement of bankruptcy, corporate 
or property laws;  
- wage costs being distorted;  
- access to finance granted by institutions which implement public pol icy objectives or 
otherwise not acting independently of the state. "  
 
Question 11.1  is regarding the provision "the market in question being served to a 
significant extent by enterprises which operate under the ownership, control or policy 
supervision or g uidance of the authorities of the exporting country ". 
 
Please clarify:  
 
a. what criteria will the EU authorities use in their determination whether the 
market in question is being served by enterprises which operate under the 
ownership, control or policy supe rvision or guidance of the authorities of the 
exporting country to a significant  extent "; 
b. what are the quantitative and qualitative indicators of the term "significant 
extent " in this provision;  
c. what exactly should be understood by the term "control " in this provision;  
d. what exactly should be understood by the term "policy supervision " in this 
provision;  
e. what exactly should be understood by the term "guidance of the authorities "? 
Question 11.2 is regarding the provision "state presence in firms allowing the state to 
interfere wi th respect to prices or costs ". 
 
Please describe criteria that are envisaged by the EU authorities in order to evaluate 
whether state presence in firms allows the state "to interfere " with respect to prices or 
costs.  
 
Question 11.3 is regarding the provision "public policies or measures discriminating in 
favour of domestic suppliers or otherwise influencing  free market forces ".  
 
Please clarify:  
 
a. what exactly should be understood by the phrase "discriminating in favour of 
domestic suppliers "; 
b. what are the criteria for determination of the existence of such discrimination;  
c. what quantitative and qualitative criteria are envisaged by the EU authorities in 
order to evaluate that public policies or measures are "otherwise inf luencing free 
market forces "? 
Question 11.4 is regarding the provision "the lack, discriminatory application or 
inadequate enforcement of bankruptcy, corporate or property laws ".  
Please explain:  
 
a. what quantitative and qualitative criteria are envisaged by  the EU in order to 
evaluate whether application of bankruptcy, corporate or property laws is 
"discriminatory "; 
b. what quantitative and qualitative criteria are envisaged by the EU in order to 
evaluate whether enforcement of bankruptcy, corporate or property  laws is 
"inadequate "? G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  Question 11.5 is regarding the provision "wage costs being distorted ". 
Please clarify what quantitative and qualitative criteria are envisaged by the EU 
authorities in order to evaluate whether wage costs are "distorted ". 
 
Question 11.6 is regarding the provision "access to finance granted by institutions which 
implement public policy objectives or otherwise not acting independently of the state ".  
Please, clarify what quantitative and qualitative criteria are envisaged by t he EU 
authorities in order to evaluate whether institutions are acting "independently of the 
state ". 
 
Reply  
 
The provision of Article 2(6a)(b) of the Regulation reflects the fact that significant distortions can 
take various forms and can be caused by a nu mber of factors (see also reply to Question 10 by 
Russia). Therefore, Article 2(6a)(b) contains a non -exhaustive list of elements which can have 
relevant impact on the formation of prices and costs. Each of these elements can in turn occur in a 
variety of formats and as a result of a wider range of actions. The list in Article 2(6a)(b) enumerates 
some typical distortive elements (see also reply to Question 2 by Russia).  
 
As a matter of example, state influence on businesses can be exercised not only throug h formal 
channels, such as ownership or control of statutory bodies of an enterprise, but also by employing 
other, more indirect but equally relevant means (for example setting industrial policies which contain 
specific quantitative and qualitative objecti ves). Similarly, while the formal legal framework 
theoretically ensuring free play of market forces can be in place, e.g. with respect to bankruptcy or 
corporate law, the inadequate implementation of the relevant legislation may effectively result in 
significant market distortions (for instance by tolerating the market presence and continued 
operation of business entities which are insolvent under the applicable law).  
 
Given the multitude of elements which may result in significant distortions, as well as t he broad 
spectrum of forms in which these elements may occur, the importance of the distortive elements 
detected in each anti -dumping investigation will be assessed by the Commission on a case -by-case 
basis, taking due account to all relevant legal and fac tual elements. The legislation does not set up 
any numerical threshold.  
 
Question 12  
 
As it is stated in the text of the introduced Article 2(6a)(c) of the Basic Regulation on 
anti-dumping, "where the Commission has well-founded indications  of the possible 
existence of significant distortions as referred to in point (b) in a certain country or a 
certain sector in that country, and where appropriate for the effective application of this 
Regulation, the Commission shall produce, make public an d regularly update a report  
describing the market circumstances referred to in point (b) in that country or sector ". 
(emphasis added)  
 
12.1.  Please explain:  
 
a. what are the criteria to determine that there are "well-founded indications " of 
the possible exis tence of significant distortions;  
b. what is the purpose of introducing provisions enabling the Commission to issue 
such a report;  
c. what is the legal status of such report among other documents on the record of 
an anti -dumping investigation;  
d. can the EU authori ties draw conclusions other than those following from the 
report and, if so, under what circumstances;  
e. how would the EU authorities ensure unbiased and accurate assessment of 
evidence provided by the interested parties based on the report;  G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  f. whether, in cas e evidence provided within the framework of a specific 
investigation testifies the exact opposite of what is indicated in the report, the 
amendments will be made to the report;  
g. what is to be understood under the phrase "or a certain sector ". 
12.2.  Please e xplain whether the European Commission is going to produce reports on 
significant distortions for each country whose imports are or may be subject of an anti -
dumping investigation?  
 
12.3.  In case of negative answer to Question 12.2, and should it be the ca se that reports 
are going to be produced for a limited number of countries selected by the European 
Commission, please explain, how are the EU authorities going to ensure unbiased and 
non-discriminatory approach in application:  
 
a. of Articles 2(6a)(a) and 2( 6a)(b) of the Basic Regulation on anti -dumping;  
b. of Articles 2(6a)(d) and 2(6a)(e) of the Basic Regulation on anti -dumping?  
Reply  
 
It is not the existence of the reports but the fact that domestic prices or costs cannot be used for 
the calculation of normal  value, due to distortions affecting prices and costs, which triggers the 
application of the new rules. Therefore, the reports are one possible source of information which 
may be considered in investigating the existence of distortions in the country conce rned. Other 
evidence regarding the existence and impact of distortions that comes to light in the context of the 
initiation of a case or the subsequent investigation will also be taken into account, if relevant.  
 
The reports take the form of European Commission Staff working documents, meaning that they are 
of a technical nature .  When it comes to drafting these reports, the legislator did not provide for the 
possibility of consulting outside stakeholders. One of the reasons for this is that, in fact t here is no 
need for consulting stakeholders. The report does not have any separate and self -standing legal 
value – determinations on distortions affecting prices and costs will only be made in the context of 
a specific anti -dumping investigation where they  have been invoked.  
 
The reports set out the factual circumstances prevailing in a given country. In order to ensure that 
the reports are unbiased they are based on primary sources of information such as legislation, plans, 
policy documents etc. from which ever country is under review. This information is in turn 
supplemented with data and studies from reputed international institutions, e.g. OECD, World Bank 
etc.  
 
The reports will be placed on the file of any case for which this is pertinent, and will beco me part of 
the relevant evidence in the investigation . As is the case with any evidence in an anti -dumping 
investigation on which findings are based, interested parties may consult the information, provide 
comments, submit rebuttals or any additional mater ial and information which may be relevant in the 
context of exercising their rights. The decision will then be based on the totality of the evidence.  
 
Question 14  
 
It is stated in Commission declaration on transition, "the Commission recalls that the 
purpose of the new methodology  is to maintain the continued protection of the Union 
industry against unfair trade practices, in particular those arising from significant market 
distortions. In that respect, the Commission wi ll ensure that the Union industry incurs no 
additional burden when seeking protection under the anti -dumping instrument, in 
particular in the context of potential expiry reviews requests  lodged after the entry into 
force of the new methodology ". 
 
Please cl arify:  
 
a. given that Recital (3) of the Regulation (EU) 2017/2321 refers to "experience 
gained in past proceedings " what is the purpose of using the term "the new 
methodology "; G/ADP/Q1/EU/12 • G/SCM/Q1/EU/12  
 
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  b. what is meant by the term "methodology " in this declaration;  
c. what are the reasons  for specifying "in particular in the context of potential 
expiry reviews requests lodged after the entry into force of the new 
methodology "? 
Question 15  
 
It is stated in Commission declaration concerning the reports pursuant to Article 2(6a)(c) 
of the Bas ic Regulation on anti -dumping, "the Commission will swiftly make use of the 
possibility foreseen under Article 2(6a)c of the Basic Regulation on anti -dumping to 
produce reports on significant distortions, so that interested parties have those reports 
at th eir disposal when preparing submissions to which Article 2(6a) of the Basic 
Regulation may apply. It will provide guidance to interested parties on the use of those 
reports ". (emphasis added)  
 
Please explain what is the purpose for providing guidance to in terested parties on the use 
of those reports?  
 
Replies to Question s 14 and 15  
 
It is recalled that the statements referred to are political declarations and not legal text. These 
declarations aim to reassure the co -legislators that the Commission will suff iciently explain, by giving 
appropriate guidance, the operation of the new rules to interested parties. Guidance will be provided 
upon request. The Commission underlines that interested parties include not only Union producers, 
but also importers and expor ting producers: this commitment responds to the broader concerns of 
the co -legislators that participation in and use of trade defense instruments remain accessible, in 
particular to small and medium -sized enterprises.  
 
 
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