WORLD TRADE
ORGANIZATIONG/ADP/N/1/EEC/2/Suppl.3
14 November 2002
(02-6328)
Committee on Anti-dumping Practices Original:  English
NOTIFICATION OF LAWS AND REGULATIONS
UNDER ARTICLE 18.5 OF THE AGREEMENT
EUROPEAN COMMUNITIES
Supplement
The following communication, dated 11 November 2002, has been received from the
Permanent Delegation of the European Commission.
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Pursuant to Article 18(5) of the WTO Anti-Dumping Agreement, please find attached a copy
of Council Regulation (EC) No 1972/2002 of 5 November 2002, which amends Council Regulation
(EC) No 384/96 on protection against dumped imports  from countries not members of the European
Communities (Official Journal L 305 of 7 November 2002).G/ADP/N/1/EEC/2/Suppl.3
Page 2
COUNCIL REGULATION (EC)No 1972/2002
of 5 November 2002
amending Regulation (EC)No 384/96 on the protection against dumped 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 384/96
1, the Council adopted common rules for protection against
dumped imports from countries which are not members of the European Community.
(2) It is expedient to give guidance as to when pa rties may be considered as being related for the
purpose of determining dumping.  Article 143 of Commission Regulation (EEC)2454/93 of
2 July 1993 laying down provisions for the impl ementation of Council Regulation (EEC)No 2913/92
establishing the Community Customs Code2 contains such a definition which reflects the definition
set out in Article 15.4 of the Agreement on Implementation of Article VII of the General Agreement
on Tariffs and Trade 1994.3
(3) Article 2(3) of Regulation (EC)No 384/96 stipulates, inter alia  ,that where because of a
particular market situation sales of the like product do not permit a proper comparison, the normal
value is to be calculated on the basis of the cost of production in the country of origin plus a
reasonable amount for selling, general and administrative costs and for profits, or on the basis of the
export prices, in the ordinary course of trade, to an appropriate third country provided that those
prices are representative.  It is prudent to provide for a clarification as to what circumstances could be
considered as constituting a particular market situation in which sales of the like product do not
permit a proper comparison.  Such circumstances can, for example, occur because of the existence ofbarter-trade and other non-commercial processing ar rangements or other market impediments.  As a
result market signals may not properly reflect supply and demand which in turn may have an impact
on the relevant costs and prices and may also result in domestic prices being out of line with world-
market prices or prices in other representative markets.  Obviously, any clarification given in this
context cannot be of an exhaustive nature in view of the wide variety of possible particular marketsituations not permitting a proper comparison.
(4) It is considered appropriate to give some guidance as to what has to be done if, pursuant to
Article 2(5) of Regulation (EC)No  384/96,the records do not reasonably reflect the costs associated
with the production and sale of the product under consideration, in particular in situations wherebecause of a particular market situation sales of the like product do not permit a proper comparison.
In such circumstances, the relevant data should be obtained from sources which are unaffected by
such distortions.  Such sources can be the costs of other producers or exporters in the same country or,
                                                     
1 OJ L 56,6.3.1996, p.1.Regulation as last amended by Regulation (EC) No 2238/2000, OJ
L 257,11.10.2000, p.2.
2 OJ L 253,11.10.1993,p.1.Regulation as last amended by Commission Regulation (EC)
No 444/2002,OJ L 68,12.3.2002, p.11.
3 OJ L 336,23.12.1994, p.119.G/ADP/N/1/EEC/2/Suppl.3
Page 3
where such information is not available or cannot be used, any other reasonable basis, including
information from other representative markets.  The relevant data can be used either for adjusting
certain items of the records of the party under consideration or, where this is not possible, for
establishing the costs of the party under consideration.
(5) Article 2(7) of Regulation (EC)No 384/96, as amended in particular by Regulation
(EC)No 905/984 and Regulation (EC)No 2238/20005 provides, inter alia , that in case of imports from
the Russian Federation, normal value will be determ ined in accordance with the rules applicable in
market-economy countries for those producers which demonstrate that market conditions prevail in
respect of the manufacture and sale of the product concerned.  In view of the very significant progress
made by the Russian Federation towards the establishment of market economy conditions, as
recognised by the conclusions of the Russia-European Union Summit on 29 May 2002, it isappropriate to allow normal value for Russian exporters and producers to be established in accordance
with the provisions of Article 2(1) to (6) of Regulation (EC)No 384/96.
(6) Pursuant to Article 2(10)(i) of Regulation (EC)No 384/96,adjustments to normal value and
the export price are made when commissions are paid.  It is prudent to clarify, in line with theconsistent practice of the Commission and the Council, that such adjustments should also be made, if
the parties do not act on the basis of a principal —agent relationship, but achieve the same economic
result by acting as buyer and seller.
(7) Regulation (EC)No 384/96 does not indicate the criteria according to which an exporter for
which a normal value is established pursuant to Article 2(7)(a) may be assigned an individual rate of
duty calculated by comparing this normal value with the exporter's individual export prices.  It is
appropriate in the interests of transparency and legal certainty to lay down clear criteria for the
granting of such individual treatment.  Export prices of exporters falling under Article 2(7)(a) of
Regulation (EC)No 384/96 may therefore be taken into account where the export activities of thecompany are freely determined, where ownership and control of the company are sufficiently
independent and where State interference is not such as to permit circumvention of individual anti-
dumping measures.  Such indivi dual treatment may be granted to exporters for which it can be
demonstrated, on the basis of substantiated claims, that, in the case of wholly or partly foreign owned
firms or joint ventures, they are free to repatriate capital and profits; that export prices and quantities
and conditions and terms of sale are freely determined and that exchange rate conversions are carried
out at the market rate.  It should also be demonstrated that the majority of shares belong to privatepersons and that State officials appearing on the Board of Directors or holding key management
positions are either in a minority or that the company is sufficiently independent from State
interference.
(8) Article 18(5) of Regulation (EC)No 384/96 specifies that, in case of use of facts available, the
information used is 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.
(9) In the interests of legal certainty, it is necessary to provide that these amendments should
apply as soon as possible to all new investigations,
                                                     
4 OJ L 128,30.4.1998, p.18.
5 OJ L 257,11.10.2000, p.2G/ADP/N/1/EEC/2/Suppl.3
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HAS ADOPTED THIS REGULATION:
Article 1
Regulation (EC)No 384/96 is hereby amended as follows:1. in Article 2(1), the following sentence shall be added:
‘In order to determine whether two parties are associated account may be taken of the
definition of related parties set out in Article 143 of Commission Regulation
(EEC)2454/93 of 2 July 1993 laying down provisions for the implementation of
Council Regulation (EEC)No 2913/92 establishing the Community CustomsCode (*).
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(*) OJ L 253,11.10.1993,p.1.Regulation as last amended by Commission
Regulation (EC)No 444/2002 (OJ L 68, 12.3.2002,p.11).’;
2. in Article 2(3), the following sentence shall be added:
‘A particular market situation for the product concerned within the meaning of the
preceding sentence may be deemed to exist, inter alia , when prices are artificially
low, when there is significant barter trade, or when there are non-commercialprocessing arrangements ’;
3. in Article 2(5), the following sentence shall be inserted after the first sentence:
‘If costs associated with the production and sale of the product under investigation are
not reasonably reflected in the records of the party concerned, they shall be adjustedor established on the basis of the costs of other producers or exporters in the same
country or, where such information is not available or cannot be used, on any other
reasonable basis, including information from other representative markets.’;
4. in Article 2(7)(b) first sentence, the terms ‘the Russian Federation ’shall be deleted;
5. in Article 2(10)(i), the following sentence shall be added:
‘The term “commissions” shall be understood to include the mark-up received by a
trader of the product or the like product if the functions of such a trader are similar to
those of an agent working on a commission basis;’
6. Article 9(5) shall be replaced by the following:
‘5.  An anti-dumping duty shall be imposed in the appropriate amounts in each case,
on a non-discriminatory basis on imports of a product from all sources found to be
dumped and causing injury, except as to imports from those sources from which
undertakings under the terms of this Regulation have been accepted.  The Regulation
imposing the duty shall specify the duty for each supplier or, if that is impracticable,and in general where Article 2(7)(a) applies, the supplying country concerned.
Where Article 2(7)(a) applies, an individual duty shall, however, be specified for the
exporters which can demonstrate, on the basis of properly substantiated claims that:G/ADP/N/1/EEC/2/Suppl.3
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(a) in the case of wholly or partly foreign owned firms or joint ventures, exporters are
free to repatriate capital and profits;
(b) export prices and quantities, and conditions and terms of sale are freely determined;
(c) the majority of the shares belong to private persons.  State officials appearing on the
board of Directors or holding key management positions shall either be in minority or
it must be demonstrated that the company is nonetheless sufficiently independent
from State interference;
(d) exchange rate conversions are carried out at the market rate;  and
(e) State interference is not such as to permit circumvention of measures if individual
exporters are given different rates of duty.’;
7. in Article 18(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 384/96 after the
date of entry into force of this Regulation.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 5 November 2002. For the Council
 The President
T. PEDERSEN
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