G/ADP/Q1/EU/7  
G/SCM/Q1/EU/7  
 
5 April 2018  
(18-2098) Page: 1/7 
Committee on Anti -Dumping Practices  
Committee on Subsidies and Countervailing Measures  Original: English  
 
NOTIFICATION OF LAWS  AND REGULATIONS UNDE R 
ARTICLE S 18.5 AND 32.6 OF THE AGREEMENT S 
QUEST IONS POSED BY THE RU SSIAN FEDERATION REG ARDING  
THE NOTIFICATION OF THE EUROPEAN UNION1 
The following communication, dated 3 April 2018 , is being circulated at the request of the 
Delegation of the Russian Federation.  
 
_______________  
 
 
The Russian Federation kindly asks the European Union to provide responses to the following 
questions concerning the Regulation (EU) 2017/2321 of the European Parliament and the Counci l 
of 12 December 2017 (hereinafter – "Regulation (EU) 2017/2321"), amending Council Regulation 
(EC) No 2016/1036 on protection against dumped imports from countries not members of the 
European Union2 (hereinafter – Basic Regulation on anti -dumping).  
 
Ques tion 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 provis ions of calculation of 
normal value.  
 
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 
affectin g 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 en visaged 
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?  
 
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 Article 2(6a) of the Basic  Regulation on anti -dumping as amended by the 
Regulation (EU) 2017/2321?  
 
                                                
1 G/ADP/N/1/EU/3/Suppl.2 -G/SCM/N/1/EU/2/Suppl.2.  
2 Council Regulation (EC) No 2016/1036 on protection against dumped imports from countries not 
members of the European Community (OJL 176, 30.6.2016, p. 21).  G/ADP/Q1/EU/7 • G/SCM/Q1/EU/7  
 
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  2d. Please clarify whether the experience referred to in Recital (3) of the Regulation 
(EU) 2017/2321 is based on or takes into account the case law of EU judiciary system?  
 
2e. If the answer to Question 2d is affirmative, please specify the exact provisions of the 
EU case law on the basis of which the provisions of Regulation (EU) 2017/2321 have been 
drafted. Will this case -law be taken into account when implementing Article 2(6a) o f the 
Basic Regulation on anti -dumping as amended by the Regulation (EU) 2017/2321?  
 
Question 3  
 
As it is stated in Recital (4) of the Regulation (EU) 2017/2321, "the Commission should produce, 
make public and regularly update reports on significant distor tions, which could potentially result  
in an anti -dumping investigation, describing the market circumstances concerning those instances 
in a certain country or a certain sector". (emphasis added)  
 
Please explain what is meant by the phrase " potentially resu lt in an anti -dumping investigation"?  
 
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 (ILO) 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 as sessing 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 th e existence of significant distortions?  
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 artificially 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 wh at 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 a nswer, please explain what are 
those criteria.  
 
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.  
 
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)  
 G/ADP/Q1/EU/7 • G/SCM/Q1/EU/7  
 
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  Please specify the applicable standard(s) under which it can be " positively established " that 
domestic costs are not distorted.  
 
Question 7  
 
Article 1 of the Regulation (EU) 2017/2321 introduces new Article 2(6a) into the text of the Basic 
Regulation on an ti-dumping. As it is stated in Article 2(6a)(a) of the Basic Regulation on 
anti-dumping, "[i]n case it is determined, 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 reflecting 
undistorted prices or benchmarks, s ubject 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 orde r 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;  
d. which provisions are covered by the phrase "any other rel evant 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 amendments 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 Article 2(5) of the Basic Regulation on a nti-dumping.  
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;  G/ADP/Q1/EU/7 • G/SCM/Q1/EU/7  
 
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  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;  
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?  
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 undistort ed 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 
administrative, selling and general costs and for profits which is " undistorted an d 
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 
meaning of each of these words in the context of this provision?   
Question 1 0 
 
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 th e 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 methodology and criteria that are envisaged by the EU authorities in 
order to determine the existence of " significant  distortio ns" and to evaluate whether the 
"distortions" are " significant ".  
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 assessing the existence of significant 
distortions regard shall be had, inter a lia, 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, control or policy supervision or guidance of the authorities of the expo rting 
country;  G/ADP/Q1/EU/7 • G/SCM/Q1/EU/7  
 
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  - state presence in firms allowing the state to interfere with respect to prices or costs;  
- public policies or measures discriminating in favour of domestic suppliers or otherwise influencing 
free market forces;  
- the lack, discriminator y application or inadequate enforcement of bankruptcy, corporate or 
property laws;  
- wage costs being distorted;  
- access to finance granted by institutions which implement public policy 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 guidance 
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 supervision 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 sup ervision" 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 
with 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 suc h discrimination;  
c. what quantitative and qualitative criteria are envisaged by the EU authorities in order to 
evaluate that public policies or measures are "otherwise influencing free market forces"?  
Question 11.4  is regarding the provision "the lack, discr iminatory 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 l aws 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 "? 
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".  G/ADP/Q1/EU/7 • G/SCM/Q1/EU/7  
 
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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 the EU authori ties in 
order to evaluate whether institutions are acting " independently of the state ". 
 
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 existence 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 aut horities 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;  
f. whether, in  case 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 explain 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 th e case 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) an d 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?  
Question 13  
 
As it is stated in the text of the introduced Article 2(6a)(e) of the Basic Regulation on anti -
dumping, "where the C ommission 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 fa ct". (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;  G/ADP/Q1/EU/7 • G/SCM/Q1/EU/7  
 
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  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 "?   
Question 14  
 
It is stated in Commission declaration on transition, "the Commissi on 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 will ensure th at 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 clarify:  
 
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";  
b. what is meant by the term " methodology " in this declaration;  
c. what are the reasons for spe cifying "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 
Basic Regul ation 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 their disp osal 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 interested  parties on the use of those 
reports?  
 
__________