# EUR-Lex - 52012PC0041 - EN

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# 52012PC0041

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community /* COM/2012/041 final - 2012/0019 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

On 28 July 2011, the Dispute Settlement
Body of the World Trade Organisation ('DSB') adopted the Appellate Body Report
and the Panel Report as modified by the Appellate Body Report in the case
‘European Communities — Definitive Anti-Dumping Measures on Certain Iron or
Steel Fasteners from China'[1]
(‘Reports’).

In the Reports, it was found, inter alia,
that Article 9(5) of Council Regulation (EC) No 1225/2009 of 30 November 2009
on protection against dumped imports from countries not members of the European
Community ('the Basic Anti-Dumping Regulation')[2]
was inconsistent with Articles 6.10, 9.2 and 18.4 of the WTO Anti-Dumping
Agreement and Article XVI:4 of the WTO Agreement. Article 9(5) of the Basic Anti-Dumping
Regulation provides that individual exporting producers in non-market economy
countries which do not receive market economy treatment pursuant to Article
2(7)(c) of the Basic Anti-Dumping Regulation will be subject to a countrywide
duty rate unless such exporters can demonstrate that they meet the conditions
for individual treatment laid out in Article 9(5) of the Basic Anti-Dumping Regulation
('the DSB finding on Article 9(5) of the Basic Anti-Dumping Regulation').

On 18 August 2011 the European Union
notified the DSB that it intends to implement the recommendations and rulings
of the DSB in this dispute in a manner that respects its WTO obligations.

On 19 January 2012 the European Union and
China agreed that the reasonable period of time for implementing the DSB
recommendations and rulings would be 14 months and two weeks from the date the
DSB adopted the Reports. The reasonable period of time will therefore expire on
12 October 2012.

The purpose of this legislative proposal is
to implement the DSB recommendations and rulings on Article 9(5) of the Basic
Anti-Dumping Regulation.

2.           RESULTS OF CONSULTATIONS
WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

Not applicable.

3.           LEGAL ELEMENTS OF THE
PROPOSAL

·
Legal basis

The legal basis for this proposal is
Article 207(2) of the Treaty on the Functioning of the European Union, in
accordance to which the European Parliament and the Council, acting by means of
regulations in accordance with the ordinary legislative procedure, shall adopt
the measures defining the framework for implementing the common commercial
policy.

This proposal amends Council Regulation
(EC) No 1225/2009 the Basic Anti-Dumping Regulation, which was based on the
equivalent provision of the Treaty establishing the European Community, i.e.
Article 133.

·
Subsidiarity Principle

Pursuant to Article 3(1)(e) of the Treaty
on the Functioning of the European Union, the proposal falls under exclusive
competence of the Union. The subsidiarity principle therefore does not apply.

·
Proportionality Principle

The proposal complies with the
proportionality principle.

·
Choice of instruments

Proposed instrument: Regulation of the
European Parliament and of the Council.

Other means would not be adequate for the
following reason: a Regulation must be amended by a Regulation.

4.           BUDGETARY IMPLICATION

Not applicable.

5.           OPTIONAL ELEMENTS

Not applicable.

2012/0019 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

amending Council Regulation (EC) No
1225/2009 of 30 November 2009 on protection against dumped imports from
countries not members of the European Community

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 207 thereof,

Having regard to Council Regulation (EC) No
1515/2001 on the measures that may be taken by the Community following a report
adopted by the WTO Dispute Settlement Body concerning anti-dumping and
anti-subsidy matters,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
On 28 July 2011, the Dispute Settlement Body of
the World Trade Organisation ('DSB') adopted the Appellate Body Report and the
Panel Report as modified by the Appellate Body Report in the case ‘European
Communities — Definitive Anti-Dumping Measures on Certain Iron or Steel
Fasteners from China'[3]
(‘Reports’).

(2)
In the Reports, it was found, inter alia, that
Article 9(5) of Council Regulation (EC) No 1225/2009[4] of 30 November 2009 on
protection against dumped imports from countries not members of the European
Community ('the Basic Anti-Dumping Regulation') was inconsistent with Articles
6.10, 9.2 and 18.4 of the WTO Anti-Dumping Agreement and Article XVI:4 of the
WTO Agreement ('the DSB finding on Article 9(5) of the Basic Regulation').
Article 9(5) of the Basic Anti-Dumping Regulation provides that individual
exporting producers in non-market economy countries which do not receive market
economy treatment pursuant to Article 2(7)(c) of the Basic Anti-Dumping Regulation
will be subject to a countrywide duty rate unless such exporters can
demonstrate that they meet the conditions for individual treatment ('IT') laid
out in Article 9(5) of the Basic Anti-Dumping Regulation.

(3)
The Appellate Body found that Article 9(5) of
the Basic Anti-Dumping Regulation established a presumption that exporting
producers operating in non-market economy countries are not entitled to
individual treatment but, in order to qualify for such treatment, they bear the
burden to demonstrate that they satisfy the criteria of the IT test. According
to the Appellate Body, no legal basis for such a presumption is provided for in
the WTO covered agreements.

(4)
However, the Appellate Body clarified that
whether determining a single dumping margin and a single anti-dumping duty for
a number of exporters is inconsistent with Articles 6.10 and 9.2 of the WTO
Anti-Dumping Agreement will depend on the existence of a number of situations,
which would signal that, albeit legally distinct, two or more exporters are in
such a relationship that they should be treated as a single entity. These
situations may include: (i) the existence of corporate and structural links
between the exporters, such as common control, shareholding and management;
(ii) the existence of corporate and structural links between the State and the
exporters, such as common control, shareholding and management; and (iii) control
or material influence by the State in respect of pricing and output. In this
regard, the terms in the proposed amendments reflecting these situations should
be applied in the light of the Appellate Body's clarifications without
prejudice to terms using the same or similar wording in other provisions of the
Basic Anti-dumping Regulation.

(5)
On 18 August 2011 the European Union notified
the DSB that it intends to implement the recommendations and rulings of the DSB
in this dispute in a manner that respects its WTO obligations.

(6)
For that purpose, it is necessary to amend the
provisions of Article 9(5) of the Basic Anti-Dumping Regulation,

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1225/2009 is hereby
amended as follows:

1. Article 9 paragraph 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 for imports from those sources from which undertakings under the terms
of this Regulation have been accepted.

The Regulation imposing anti-dumping measures
shall specify the duty for each supplier or, if that is impracticable, the
supplying country concerned. Suppliers which are legally distinct from other suppliers
or which are legally distinct from the State may nevertheless be considered as
a single entity for the purpose of specifying the duty. For the application of
this paragraph, account may be taken of factors such as the existence of
structural or corporate links between the suppliers and the State or between
suppliers, the control or material influence by the State in respect of pricing
and output, or the economic structure of the supplying country."

Article 2

This Regulation shall enter into force on
the [...] day following that of its publication in the Official Journal of the
European Union.

It shall apply to all investigations
initiated pursuant to Regulation (EC) No 1225/2009 following the entry into
force of this Regulation.

This Regulation shall be binding
in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

[1]               WTO, Report of the Appellate Body, AB-2011-2,         
WT/DS397/AB/R, 15 July 2011. WTO, Report of the Panel,        
WT/DS397/R, 29 September 2010. The reports can be downloaded from the WTO's
website (http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds397_e.htm)

[2]               OJ L 343, 22.12.2009, p. 51.

[3]               WTO, Report of the Appellate Body, AB-2011-2,         
WT/DS397/AB/R, 15 July 2011. WTO, Report of the Panel,        
WT/DS397/R, 29 September 2010. The reports can be downloaded from the WTO's
website (http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds397_e.htm)

[4]               OJ L 343, 22.12.2009, p. 51.