G/ADP/Q1/EU/14  
G/SCM/Q1/EU/14  
 
30 October  2018 
(18-6802) Page: 1/3 
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 IONS1 POSED BY THE UNITED STATES  REGARDING  
THE NOTIFICATION OF THE EUROPEAN UNION2 
The following communication, dated 29 October 2018, is being circulated at the request of the 
delegation of the European Union . 
 
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Question 1  
 
In the amendment to Article 7, with regard to the determination of an injury margin 
calculated on the basis of a target price, the amended anti -dumping and countervailing 
duty regulations note that, "the target profit used shall be established taking into account 
factors such as the level of profitability before the increase of imports from the country 
under investigation, the level of profitability needed to cover full costs and investments, 
research and development (R&D) and innovation, and the level of profitability to be 
expected under normal conditions of competition. Such profit margin shall not be lower 
than 6%". Please explain how the minimum profit margin of 6% was established.  
 
Reply  
 
The 6% target profit was established on the basis of an analysis of the average profit of the 
manufacturing sector during the period 2004/2015, and excluding the crisis year of 2008  in The 
Bank for the Accounts of Companies Harmonized database (BACH). Based on this analysis the 
manufacturing sector has an average profit of 5,3% during that period. We also examined another 
data base which provided a higher average profit but it was limited to high performing enter prises. 
On that basis it was concluded that a 6% minimum profit was reasonable.  
 
Question 2  
 
The notification indicates that Articles 11(5) of the AD regulation and 18(1) of the 
Amended CVD  Regulation are amended to include a new subparagraph as follows:  
 
If, following an investigation pursuant to paragraph 2, the measure expires, 
any duties collected from the date of the initiation of such investigation on 
goods that were customs -cleared shall be repaid provided that this is 
requested from national custom s authorities and granted by those authorities 
in accordance with the applicable Union customs legislation concerning 
repayment and remission of duty. Such repayment shall not give rise to the 
payment of interest by the national customs authorities concern ed. 
Please explain whether national customs authorities have the right to refuse a request for 
refunds of duties as described in this provision or if they are required to grant all such 
                                                
1 G/ADP/Q1/EU/9 - G/SCM/Q1/EU/9 . 
2 G/ADP/N/1/EU/3/Suppl.3 -G/SCM/N/1/EU/2/Suppl.3 (dated 2 July 2018).  G/ADP/Q1/EU/14 • G/SCM/Q1/EU/14  
 
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  properly filed requests. Please also explain where interested parties can find the 
procedures for applying for such refunds from the relevant national customs authorities.  
 
Reply  
 
A Regulation terminating an expiry review without the continuation of measures, will give 
instructions to Customs authorities to repay any duties collected while that expiry review was 
ongoing.  
National customs authorities will have no right to refuse a r epayment/reimbursement of duties which 
have been paid under this provision, provided that it is requested from the relevant customs 
authorities (normally the one where the previous customs declaration has been made).  
 
Question 3  
 
Articles 14 of the Amended  AD Regulation and 24 of the Amended CVD Regulation state 
that, when initiating an investigation, the Commission shall create TARIC codes 
corresponding to the product under investigation, and that Member States shall use those 
TARIC codes in order to repor t on imports of the product under investigation as of the 
initiation of the investigation.  
 
Please explain whether these created TARIC codes are eliminated following the 
termination of an investigation or measure for which they were created. Please also 
explain whether these codes can be used for purposes other than the monthly report by 
Member States to the Commission on the import trade in products subject to investigation 
and the amount of AD duties collected. If so, please list those other purposes.  
 
Reply  
 
TARIC codes created for the purpose of an anti -dumping or anti -subsidy investigations or measures 
are eliminated once the investigation and/or measure is terminated.  Any information collected on 
imports under those TARIC codes may be used internall y only for statistical purposes.   The 
information is not public.  
 
Question 4  
 
New Articles 19a of the Amended AD Regulation and 29a of the Amended CVD Regulation 
describe the parties that may request information on the planned imposition of provisional 
duties three weeks prior to their imposition. The article also notes that due account shall 
be taken of the need to protect confidential information. Please explain whether 
information shared with interested parties regarding the planned imposition of 
provi sional duties that is not subject to confidential treatment is restricted under any 
other authority or if it may be released by the interested parties to other entities or the 
public.  
 
Reply  
 
The information to be given 3 weeks prior to the planned imposi tion of any provisional measures 
contains two parts:  
- A non -confidential information (also published on DG TRADE’s website) announcing the date 
measures will be applicable along with the duty rates for the co -operating interested parties 
concerned. This wi ll also contain the rates for any non -sampled but cooperating parties as 
well as the residual duty rate.  
- Interested parties concerned receive their detailed calculations of the duty rates to check for 
accuracy. So for instance an exporter will receive the  detailed calculations relating to their 
company etc.  
The Commission fully complies with the rules regarding the treatment of confidential data during 
this process.  
 G/ADP/Q1/EU/14 • G/SCM/Q1/EU/14  
 
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  Question 5  
 
A number of  amendments refer to the potential use of sampling when examining the 
domestic industry. What would the Commission consider to be a large enough portion of 
domestic producers to warrant the use of sampling?   
 
Question 6  
 
With regard to sampling, how will the Commission ensure that any sample of a domestic 
industry is representative of domestic producers as a whole if parties voluntarily opt out 
of the sample, by either not consenting to their inclusion, not making themselves known, 
or not making sufficient  information available within one week of initiation?  
 
Reply  
 
There is one reply to questions 5 and 6 as these are closely linked.    
 
To start with, the AD and the ASCM contain rules on sampling and these rules have been interpreted 
in DSB rulings. These rules are duly reflected in the EU’s basic anti -dumping and anti -subsidy 
legislation.  To recall, in cases of a large number of Union producers, exporters, importers, types of 
product or transactions, the investigation may be limited to a reasonable number  of parties, products 
or transactions by using samples. With regard to the domestic industry, the sample is selected to 
ensure it is the largest representative volume of production and/or sales.  
In selecting a sample of Union producers, consideration is gi ven to issues including production 
volume or volume of sales on the Union market; the company type or size (e.g. large companies/ 
SMEs, integrated/non -integrated production); types of product manufactured; geographical spread.  
 
The main purpose of the inf ormation collected from the domestic industry is to have data for injury 
analysis and the injury elimination level. In this context, the Commission collects macroeconomic 
elements (such as production, production capacity, sales volume, quantities sold, mar ket share and 
employment) as well as microeconomic elements (such as prices, stocks, investments and 
profitability). In case of sampling, macroeconomic data are collected for the industry as a whole 
while microeconomic data are collected fr om the companies  in the sample.   
The sample selected at the beginning of the investigation will normally remain unchanged throughout 
the investigation. However, where parties subsequently drop out of the sample the effect on the 
representativeness of the sample is conside red.  Normally the macroeconomic data will remain 
unchanged if a company drops out of the sample and the conclusions on injury will remain stable. 
There may, however, be an effect on the injury margin because the micro economic data will 
normally change fr om one company to another. In any event, where possible, and taking into 
account the timing in the investigation,  efforts will be made to add a company to the sample to 
ensure it remains representative.  
 
 
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