# Official Journal L 69/2020

| | ISSN 1977-0677 |
| --- | --- |
| Official Journal
  of the European Union | L 69 |
| | |
| English edition | Legislation | Volume 636 March 2020 |

ISSN 1977-0677

Official Journal

of the European Union

L 69

English edition

Legislation

Volume 636 March 2020

---

| Contents | | II   Non-legislative acts | page |
| --- | --- | --- | --- |
| | | REGULATIONS |
| | * | Commission Implementing Regulation (EU) 2020/375 of 2 March 2020 approving amendments to the specification for a Protected Designation of Origin or a Protected Geographical Indication Priorat/Priorato (PDO) | 1 |
| | * | Commission Implementing Regulation (EU) 2020/376 of 5 March 2020 concerning the authorisation of Norbixin (annatto F) as a feed additive for cats and dogs (
  1
  ) | 3 |
| | * | Commission Implementing Regulation (EU) 2020/377 of 5 March 2020 concerning the authorisation of sodium selenate as a feed additive for ruminants (
  1
  ) | 6 |
| | * | Commission Implementing Regulation (EU) 2020/378 of 5 March 2020 concerning the authorisation of L-leucine as a feed additive for all animal species (
  1
  ) | 9 |
| | * | Commission Implementing Regulation (EU) 2020/379 of 5 March 2020 imposing a provisional countervailing duty on imports of continuous filament glass fibre products originating in Egypt | 14 |
| | | DECISIONS |
| | * | Decision (EU) 2020/380 of the European Central Bank of 18 February 2020 amending Decision (EU) 2016/245 laying down the rules on procurement (ECB/2020/10) | 41 |
| | | GUIDELINES |
| | * | Guideline (EU) 2020/381. of the European Central Bank of 21 February 2020 amending Guideline (EU) 2017/2335 on the procedures for the collection of granular credit and credit risk data (ECB/2020/11) | 46 |

Contents

II   Non-legislative acts

page

REGULATIONS

*

Commission Implementing Regulation (EU) 2020/375 of 2 March 2020 approving amendments to the specification for a Protected Designation of Origin or a Protected Geographical Indication Priorat/Priorato (PDO)

1

*

Commission Implementing Regulation (EU) 2020/376 of 5 March 2020 concerning the authorisation of Norbixin (annatto F) as a feed additive for cats and dogs (
  1
  )

1

3

*

Commission Implementing Regulation (EU) 2020/377 of 5 March 2020 concerning the authorisation of sodium selenate as a feed additive for ruminants (
  1
  )

1

6

*

Commission Implementing Regulation (EU) 2020/378 of 5 March 2020 concerning the authorisation of L-leucine as a feed additive for all animal species (
  1
  )

1

9

*

Commission Implementing Regulation (EU) 2020/379 of 5 March 2020 imposing a provisional countervailing duty on imports of continuous filament glass fibre products originating in Egypt

14

DECISIONS

*

Decision (EU) 2020/380 of the European Central Bank of 18 February 2020 amending Decision (EU) 2016/245 laying down the rules on procurement (ECB/2020/10)

41

GUIDELINES

*

Guideline (EU) 2020/381. of the European Central Bank of 21 February 2020 amending Guideline (EU) 2017/2335 on the procedures for the collection of granular credit and credit risk data (ECB/2020/11)

46

| | | Corrigenda |
| --- | --- | --- |
| | * | Corrigendum to Decision No 1/2018 of the ECAA Joint Committee of 3 May 2018 with regard to the adoption of its rules of procedure 2019/1802 ( OJ L 274, 28.10.2019 ) | 58 |

Corrigenda

*

Corrigendum to Decision No 1/2018 of the ECAA Joint Committee of 3 May 2018 with regard to the adoption of its rules of procedure 2019/1802 ( OJ L 274, 28.10.2019 )

( OJ L 274, 28.10.2019 )

58

| | |
| --- | --- |
| | (1)   Text with EEA relevance. |

---

(1)   Text with EEA relevance.

1

| EN | Acts whose titles are printed in light type are those relating to day-to-day management of agricultural matters, and are generally valid for a limited period.
  The titles of all other Acts are printed in bold type and preceded by an asterisk. |
| --- | --- |

EN

Acts whose titles are printed in light type are those relating to day-to-day management of agricultural matters, and are generally valid for a limited period.

The titles of all other Acts are printed in bold type and preceded by an asterisk.

---

II Non-legislative acts

REGULATIONS

| 6.3.2020 | EN | Official Journal of the European Union | L 69/1 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/1

---

COMMISSION IMPLEMENTING REGULATION (EU) 2020/375

of 2 March 2020

approving amendments to the specification for a Protected Designation of Origin or a Protected Geographical Indication ‘Priorat/Priorato’ (PDO)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (1), and in particular Article 99 thereof,

Whereas:

| (1) | The Commission has examined the application for the approval of amendments to the specification for the Protected Designation of Origin ‘Priorat/Priorato’, sent by Spain in accordance with Article 105 of Regulation (EU) No 1308/2013. |
| --- | --- |

(1)

The Commission has examined the application for the approval of amendments to the specification for the Protected Designation of Origin ‘Priorat/Priorato’, sent by Spain in accordance with Article 105 of Regulation (EU) No 1308/2013.

| (2) | The Commission has published the application for the approval of the amendments to the specification in the Official Journal of the European Union, as required by Article 97(3) of Regulation (EU) No 1308/2013 (2). |
| --- | --- |

(2)

The Commission has published the application for the approval of the amendments to the specification in the Official Journal of the European Union, as required by Article 97(3) of Regulation (EU) No 1308/2013 (2).

| (3) | No statement of objection has been received by the Commission under Article 98 of Regulation (EU) No 1308/2013. |
| --- | --- |

(3)

No statement of objection has been received by the Commission under Article 98 of Regulation (EU) No 1308/2013.

| (4) | The amendments to the specification should therefore be approved in accordance with Article 99 of Regulation (EU) No 1308/2013. |
| --- | --- |

(4)

The amendments to the specification should therefore be approved in accordance with Article 99 of Regulation (EU) No 1308/2013.

| (5) | The measures provided for in this Regulation are in accordance with the opinion of the Committee for the Common Organisation of the Agricultural Markets, |
| --- | --- |

(5)

The measures provided for in this Regulation are in accordance with the opinion of the Committee for the Common Organisation of the Agricultural Markets,

HAS ADOPTED THIS REGULATION:

Article 1

The amendments to the specification published in the Official Journal of the European Union regarding the name ‘Priorat/Priorato’ (PDO) are hereby approved.

Article 2

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

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

Done at Brussels, 2 March 2020.

For the Commission,

On behalf of the President,

Janusz WOJCIECHOWSKI

Member of the Commission

---

(1)  
  OJ L 347, 20.12.2013, p. 671.

1

(2)  
  OJ C 316, 20.9.2019, p. 10.

2

---

| 6.3.2020 | EN | Official Journal of the European Union | L 69/3 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/3

---

COMMISSION IMPLEMENTING REGULATION (EU) 2020/376

of 5 March 2020

concerning the authorisation of Norbixin (annatto F) as a feed additive for cats and dogs

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1831/2003 of the European Parliament and of the Council of 22 September 2003 on additives for use in animal nutrition (1), and in particular Article 9(2) thereof,

Whereas:

| (1) | Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting such authorisation. Article 10(2) of Regulation (EC) No 1831/2003 provides for the re-evaluation of additives authorised pursuant to Council Directive 70/524/EEC (2). |
| --- | --- |

(1)

Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting such authorisation. Article 10(2) of Regulation (EC) No 1831/2003 provides for the re-evaluation of additives authorised pursuant to Council Directive 70/524/EEC (2).

| (2) | Norbixin (annatto F) was authorised without a time limit in accordance with Directive 70/524/EEC as a feed additive for dogs and cats belonging to the group ‘colourants, including pigments’, under the heading ‘colouring agents authorised for colouring foodstuffs by Community rules other than Patent blue V, Acid brilliant green BS, and Canthaxanthin’. This colourant was not specifically authorised but entered in this generic entry. The additive was subsequently entered in the Register of feed additives as an existing product, in accordance with Article 10(1)(b) of Regulation (EC) No 1831/2003. |
| --- | --- |

(2)

Norbixin (annatto F) was authorised without a time limit in accordance with Directive 70/524/EEC as a feed additive for dogs and cats belonging to the group ‘colourants, including pigments’, under the heading ‘colouring agents authorised for colouring foodstuffs by Community rules other than Patent blue V, Acid brilliant green BS, and Canthaxanthin’. This colourant was not specifically authorised but entered in this generic entry. The additive was subsequently entered in the Register of feed additives as an existing product, in accordance with Article 10(1)(b) of Regulation (EC) No 1831/2003.

| (3) | In accordance with Article 10(2) of Regulation (EC) No 1831/2003 in conjunction with Article 7 thereof, an application was submitted for the re-evaluation of Norbixin (annatto F) as a feed additive for dogs and cats. The applicant requested the additive to be classified in the additive category ‘sensory additives’ and in the functional group ‘colourants’. The application was accompanied by the particulars and documents required under Article 7(3) of Regulation (EC) No 1831/2003. |
| --- | --- |

(3)

In accordance with Article 10(2) of Regulation (EC) No 1831/2003 in conjunction with Article 7 thereof, an application was submitted for the re-evaluation of Norbixin (annatto F) as a feed additive for dogs and cats. The applicant requested the additive to be classified in the additive category ‘sensory additives’ and in the functional group ‘colourants’. The application was accompanied by the particulars and documents required under Article 7(3) of Regulation (EC) No 1831/2003.

| (4) | The European Food Safety Authority (‘the Authority’) concluded in its opinion of 22 March 2017 (3) that, under the proposed conditions of use, Norbixin (annatto F) does not have an adverse effect on animal health. It also concluded that the substance is a strong alkaline solution that makes it corrosive and therefore harmful for the user. Therefore, the Commission considers that appropriate protective measures should be taken to prevent adverse effects on human health, in particular as regards the users of the additive. In accordance with Commission Regulation (EC) No 429/2008 (4), phase I of the environmental risk assessment has determined that Norbixin (annatto F), as an additive intended for non-food producing animals, is exempted from further assessment due to the unlikelihood of a significant environmental effect, there being no scientifically-based evidence for concern having been identified by the Authority in its above-mentioned opinion. The Authority further concluded that the additive concerned is effective in adding colour to feedingstuffs. The Authority does not consider that there is a need for specific requirements of post-market monitoring. It also verified the report on the method of analysis of the feed additive in feed submitted by the European Union Reference Laboratory set up by Regulation (EC) No 1831/2003. The report of the European Union Reference Laboratory for Feed Additives (EURL-FA) showed that the applicant did not submit any experimental data for the quantification of Norbixin (annatto F) in feedingstuffs. The applicant was requested to provide such data and the method was validated and included in an addendum of the EURL-FA report. |
| --- | --- |

(4)

The European Food Safety Authority (‘the Authority’) concluded in its opinion of 22 March 2017 (3) that, under the proposed conditions of use, Norbixin (annatto F) does not have an adverse effect on animal health. It also concluded that the substance is a strong alkaline solution that makes it corrosive and therefore harmful for the user. Therefore, the Commission considers that appropriate protective measures should be taken to prevent adverse effects on human health, in particular as regards the users of the additive. In accordance with Commission Regulation (EC) No 429/2008 (4), phase I of the environmental risk assessment has determined that Norbixin (annatto F), as an additive intended for non-food producing animals, is exempted from further assessment due to the unlikelihood of a significant environmental effect, there being no scientifically-based evidence for concern having been identified by the Authority in its above-mentioned opinion. The Authority further concluded that the additive concerned is effective in adding colour to feedingstuffs. The Authority does not consider that there is a need for specific requirements of post-market monitoring. It also verified the report on the method of analysis of the feed additive in feed submitted by the European Union Reference Laboratory set up by Regulation (EC) No 1831/2003. The report of the European Union Reference Laboratory for Feed Additives (EURL-FA) showed that the applicant did not submit any experimental data for the quantification of Norbixin (annatto F) in feedingstuffs. The applicant was requested to provide such data and the method was validated and included in an addendum of the EURL-FA report.

| (5) | The assessment of Norbixin (annatto F) shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are satisfied. Accordingly, the use of that additive should be authorised as specified in the Annex to this Regulation. |
| --- | --- |

(5)

The assessment of Norbixin (annatto F) shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are satisfied. Accordingly, the use of that additive should be authorised as specified in the Annex to this Regulation.

| (6) | Since safety reasons do not require the immediate application of the modifications to the conditions of authorisation of the substance concerned, it is appropriate to allow a transitional period for interested parties to prepare themselves to meet the new requirements resulting from the authorisation. |
| --- | --- |

(6)

Since safety reasons do not require the immediate application of the modifications to the conditions of authorisation of the substance concerned, it is appropriate to allow a transitional period for interested parties to prepare themselves to meet the new requirements resulting from the authorisation.

| (7) | The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed, |
| --- | --- |

(7)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

HAS ADOPTED THIS REGULATION:

Article 1

Authorisation

The substance specified in the Annex, belonging to the additive category ‘sensory additives’ and to the functional group ‘colourants’, is authorised as an additive in animal nutrition, subject to the conditions laid down in that Annex.

Article 2

Transitional measures

1.   The substance specified in the Annex and premixtures containing that substance, which are produced and labelled before 26 September 2020 in accordance with the rules applicable before 26 March 2020 may continue to be placed on the market and used until the existing stocks are exhausted.

2.   Feed materials and compound feed containing the substance specified in the Annex which are produced and labelled before 26 March 2022 in accordance with the rules applicable before 26 March 2020 may continue to be placed on the market and used until the existing stocks are exhausted.

Article 3

Entry into force

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

Official Journal of the European Union

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

Done at Brussels, 5 March 2020.

For the Commission

The President

Ursula VON DER LEYEN

---

(1)  
  OJ L 268, 18.10.2003, p. 29.

1

(2)  Council Directive 70/524/EEC of 23 November 1970 concerning additives in feedingstuffs (OJ L 270, 14.12.1970, p. 1).

2

(3)  EFSA Journal 2017; 15(4):4764.

3

(4)  Commission Regulation (EC) No 429/2008 of 25 April 2008 on detailed rules for the implementation of Regulation (EC) No 1831/2003 of the European Parliament and of the Council as regards the preparation and the presentation of applications and the assessment and the authorisation of feed additives (OJ L 133, 22.5.2008, p. 1).

4

---

ANNEX

| Identification number of the additive | Additive | Composition, chemical formula, description, analytical method | Species or category of animal | Maximum age | Minimum content | Maximum content | Other provisions | End of period of authorisation |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| mg of active substance/kg of complete feedingstuff with a moisture content of 12 % |
| Category: Sensory additives. Functional group: Colourants. (i) substances that add or restore colour in feedingstuffs |
| 2a160b | Norbixin (annatto F) | Additive composition:

  Liquid preparation of annatto F containing 2,3-2,7 % norbixin potassium salt

  Characterisation of the active substance:

  Alkali processed norbixin,acid precipitated (annatto F) is described as the potassium salt of norbixin (dipotassium 6,6’-diapo-psi,psi-carotenedioate);
  It is a carotenoid derivative prepared by removal of the outer coating of the seeds of the annatto tree (Bixa orellana L) and further chemical processing.
  Solid form
  Chemical formula: C24H26K2O4
  CAS number 33261-80-2

  Analytical method
   (1)

  For the quantification of norbixin potassium in the feed additive:






  — | Spectrophotometry at 482 nm (JECFA monograph on Annatto extracts (alkali processed norbixin, acid-precipitated) |

Identification number of the additive

Additive

Composition, chemical formula, description, analytical method

Species or category of animal

Maximum age

Minimum content

Maximum content

Other provisions

End of period of authorisation

mg of active substance/kg of complete feedingstuff with a moisture content of 12 %

Category: Sensory additives. Functional group: Colourants. (i) substances that add or restore colour in feedingstuffs

2a160b

Norbixin (annatto F)

Additive composition:

Liquid preparation of annatto F containing 2,3-2,7 % norbixin potassium salt

Characterisation of the active substance:

Alkali processed norbixin,acid precipitated (annatto F) is described as the potassium salt of norbixin (dipotassium 6,6’-diapo-psi,psi-carotenedioate);

It is a carotenoid derivative prepared by removal of the outer coating of the seeds of the annatto tree (Bixa orellana L) and further chemical processing.

Solid form

Chemical formula: C24H26K2O4

CAS number 33261-80-2

Analytical method
   (1)

For the quantification of norbixin potassium in the feed additive:

—

Spectrophotometry at 482 nm (JECFA monograph on Annatto extracts (alkali processed norbixin, acid-precipitated)

For the quantification of norbixin potassium in feedingstuffs:

| — | Reversed phase high performance liquid chromatography coupled to diode array detection (RP-HPLC-DAD) |
| --- | --- |

—

Reversed phase high performance liquid chromatography coupled to diode array detection (RP-HPLC-DAD)

Cats

Dogs

-

-

13

16

| 1. | In the directions for use of the additive and premixture, the storage conditions and stability to heat treatment shall be indicated. |
| --- | --- |

1.

In the directions for use of the additive and premixture, the storage conditions and stability to heat treatment shall be indicated.

| 2. | For users of the additive and premixtures, feed business operators shall establish operational procedures and organisational measures to address potential risks resulting from its use. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixtures shall be used with personal protective equipment, including eye and skin protection. |
| --- | --- |

2.

For users of the additive and premixtures, feed business operators shall establish operational procedures and organisational measures to address potential risks resulting from its use. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixtures shall be used with personal protective equipment, including eye and skin protection.

26.3.2030

---

(1)  Details of the analytical methods are available at the following address of the Reference Laboratory: https://ec.europa.eu/jrc/en/eurl/feed-additives/evaluation-reports

---

| 6.3.2020 | EN | Official Journal of the European Union | L 69/6 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/6

---

COMMISSION IMPLEMENTING REGULATION (EU) 2020/377

of 5 March 2020

concerning the authorisation of sodium selenate as a feed additive for ruminants

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1831/2003 of the European Parliament and of the Council of 22 September 2003 on additives for use in animal nutrition (1), and in particular Article 9(2) thereof,

Whereas:

| (1) | Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting such authorisation. |
| --- | --- |

(1)

Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting such authorisation.

| (2) | In accordance with Article 7 of Regulation (EC) No 1831/2003 an application was submitted for the authorisation of sodium selenate as a feed additive for ruminants. |
| --- | --- |

(2)

In accordance with Article 7 of Regulation (EC) No 1831/2003 an application was submitted for the authorisation of sodium selenate as a feed additive for ruminants.

| (3) | The applicant requested sodium selenate to be classified in the additive category ‘nutritional additives’. The application was accompanied by the particulars and documents required under Article 7(3) of Regulation (EC) No 1831/2003. |
| --- | --- |

(3)

The applicant requested sodium selenate to be classified in the additive category ‘nutritional additives’. The application was accompanied by the particulars and documents required under Article 7(3) of Regulation (EC) No 1831/2003.

| (4) | The European Food Safety Authority (‘the Authority’) concluded in its opinion of 3 July 2019 (2) that, under the proposed conditions of use, sodium selenate does not have adverse effects on animal health, consumer safety or the environment. It also concluded that the additive is considered a skin and eye irritant and a skin and respiratory sensitiser. Therefore, the Commission considers that appropriate protective measures should be taken to prevent adverse effects on human health, in particular as regards the users of the additive. The Authority also concluded that the additive is an efficacious source of selenium for ruminants. The Authority does not consider that there is a need for specific requirements of post-market monitoring. It also verified the reports on the method of analysis of the feed additives in feed submitted by the Reference Laboratory set up by Article 21 of Regulation (EC) No 1831/2003. |
| --- | --- |

(4)

The European Food Safety Authority (‘the Authority’) concluded in its opinion of 3 July 2019 (2) that, under the proposed conditions of use, sodium selenate does not have adverse effects on animal health, consumer safety or the environment. It also concluded that the additive is considered a skin and eye irritant and a skin and respiratory sensitiser. Therefore, the Commission considers that appropriate protective measures should be taken to prevent adverse effects on human health, in particular as regards the users of the additive. The Authority also concluded that the additive is an efficacious source of selenium for ruminants. The Authority does not consider that there is a need for specific requirements of post-market monitoring. It also verified the reports on the method of analysis of the feed additives in feed submitted by the Reference Laboratory set up by Article 21 of Regulation (EC) No 1831/2003.

| (5) | The assessment of sodium selenate shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are satisfied. Accordingly, the use of this additive should be authorised as specified in the Annex to this Regulation. |
| --- | --- |

(5)

The assessment of sodium selenate shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are satisfied. Accordingly, the use of this additive should be authorised as specified in the Annex to this Regulation.

| (6) | The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed, |
| --- | --- |

(6)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

HAS ADOPTED THIS REGULATION:

Article 1

The substance specified in the Annex, belonging to the additive category ‘nutritional additives’ and to the functional group ‘compounds of trace elements’, is authorised as an additive in animal nutrition, subject to the conditions laid down in that Annex.

Article 2

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

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

Done at Brussels, 5 March 2020.

For the Commission

The President

Ursula VON DER LEYEN

---

(1)  
  OJ L 268, 18.10.2003, p. 29.

1

(2)  
  EFSA Journal 2019;17(7):5788.

2

EFSA Journal

---

ANNEX

| Identification number of the additive | Name of the holder of authorisation | Additive | Composition, chemical formula, description, analytical method. | Species or category of animal | Maximum age | Minimum content | Maximum content | Other provisions | End of period of authorisation |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Selenium in mg/kg of complete feed with a moisture content of 12 % |
| Category of nutritional additives. Functional group: compounds of trace elements |
| 3b803 | | Sodium selenate | Characterisation of the additive

  Sodium selenate, as a powder, with a minimum content of 41 % selenium

  Characterisation of the active substance

  Disodium selenate
  Chemical formula: Na2SeO4

  CAS number 13410-01-0

  Analytical method
   (1)

  For the quantification of total selenium in the feed additive:






  — | Titration |

Identification number of the additive

Name of the holder of authorisation

Additive

Composition, chemical formula, description, analytical method.

Species or category of animal

Maximum age

Minimum content

Maximum content

Other provisions

End of period of authorisation

Selenium in mg/kg of complete feed with a moisture content of 12 %

Category of nutritional additives. Functional group: compounds of trace elements

3b803

Sodium selenate

Characterisation of the additive

Sodium selenate, as a powder, with a minimum content of 41 % selenium

Characterisation of the active substance

Disodium selenate

Chemical formula: Na2SeO4

CAS number 13410-01-0

Analytical method
   (1)

For the quantification of total selenium in the feed additive:

—

Titration

For the quantification of total sodium in sodium selenate:

| — | Atomic Absorption Spectrometry (AAS) – EN ISO 6869:2000; or |
| --- | --- |

—

Atomic Absorption Spectrometry (AAS) – EN ISO 6869:2000; or

| — | Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES) – EN 15510:2007 |
| --- | --- |

—

Inductively Coupled Plasma Atomic Emission Spectrometry (ICP-AES) – EN 15510:2007

For the quantification of total selenium in premixtures, feed materials and compound feed:

| — | Hydride Generation Atomic Absorption Spectrometry (HGAAS) after microwave digestion – EN 16159:2012 |
| --- | --- |

—

Hydride Generation Atomic Absorption Spectrometry (HGAAS) after microwave digestion – EN 16159:2012

Ruminants

—

0,50 (total)

| 1. | Sodium selenate may be placed on the market and used as an additive consisting of a preparation. |
| --- | --- |

1.

Sodium selenate may be placed on the market and used as an additive consisting of a preparation.

| 2. | The additive shall be incorporated into feed in the form of a premixture. |
| --- | --- |

2.

The additive shall be incorporated into feed in the form of a premixture.

| 3. | For users of the additive and premixture, feed business operators shall establish operational procedures and organisational measures to address potential risks by inhalation, dermal contact or eye contact. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixture shall be used with appropriate personal protective equipment. |
| --- | --- |

3.

For users of the additive and premixture, feed business operators shall establish operational procedures and organisational measures to address potential risks by inhalation, dermal contact or eye contact. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixture shall be used with appropriate personal protective equipment.

26 March 2030

---

(1)  Details of the analytical methods are available at the following address of the Reference Laboratory: https://ec.europa.eu/jrc/en/eurl/feed-additives/evaluation-reports

---

| 6.3.2020 | EN | Official Journal of the European Union | L 69/9 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/9

---

COMMISSION IMPLEMENTING REGULATION (EU) 2020/378

of 5 March 2020

concerning the authorisation of L-leucine as a feed additive for all animal species

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1831/2003 of the European Parliament and of the Council of 22 September 2003 on additives for use in animal nutrition (1), and in particular Article 9(2) thereof,

Whereas:

| (1) | Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting such authorisation. |
| --- | --- |

(1)

Regulation (EC) No 1831/2003 provides for the authorisation of additives for use in animal nutrition and for the grounds and procedures for granting such authorisation.

| (2) | In accordance with Article 7(1) of Regulation (EC) No 1831/2003, an application was submitted for the authorisation of L-leucine produced by Escherichia coli NITE BP-02351 as a nutritional feed additive for use in feed and in water for drinking and as sensory feed additive for use in feed for all animal species. This application was accompanied by the particulars and documents required under Article 7(3) of Regulation (EC) No 1831/2003. |
| --- | --- |

(2)

In accordance with Article 7(1) of Regulation (EC) No 1831/2003, an application was submitted for the authorisation of L-leucine produced by Escherichia coli NITE BP-02351 as a nutritional feed additive for use in feed and in water for drinking and as sensory feed additive for use in feed for all animal species. This application was accompanied by the particulars and documents required under Article 7(3) of Regulation (EC) No 1831/2003.

| (3) | This application concerns the authorisation of L-leucine produced by Escherichia coli NITE BP-02351 as a feed additive for all animal species to be classified in the additive category ‘nutritional additives’ (functional group ‘amino acids, their salts and analogues’) and in the additive category ‘sensory additives’ (functional group ‘flavouring compounds’). |
| --- | --- |

(3)

This application concerns the authorisation of L-leucine produced by Escherichia coli NITE BP-02351 as a feed additive for all animal species to be classified in the additive category ‘nutritional additives’ (functional group ‘amino acids, their salts and analogues’) and in the additive category ‘sensory additives’ (functional group ‘flavouring compounds’).

| (4) | The European Food Safety Authority (‘the Authority’) concluded in its opinion of 2 April 2019 (2) that, under the proposed conditions of use, L-leucine produced by Escherichia coli NITE BP-02351 does not have an adverse effect on animal health, consumer health or the environment. It also stated that L-leucine produced by Escherichia coli NITE BP-02351 could pose an inhalation risk for the users of the additive. Therefore, appropriate protective measures should be taken to prevent adverse effects on human health, in particular as regards the users of the additive. |
| --- | --- |

(4)

The European Food Safety Authority (‘the Authority’) concluded in its opinion of 2 April 2019 (2) that, under the proposed conditions of use, L-leucine produced by Escherichia coli NITE BP-02351 does not have an adverse effect on animal health, consumer health or the environment. It also stated that L-leucine produced by Escherichia coli NITE BP-02351 could pose an inhalation risk for the users of the additive. Therefore, appropriate protective measures should be taken to prevent adverse effects on human health, in particular as regards the users of the additive.

| (5) | The Authority concluded that it is an effective source of the amino acid L-leucine for all animal species. For the supplemental L-leucine to be fully efficacious in ruminants, it should be protected against degradation in the rumen. The Authority expressed in a previous statement a concern over potential nutritional imbalances for amino acids, when they are administered via water for drinking. However, the Authority did not propose a maximum content for L-leucine. Thus, it is appropriate to indicate on the label of the additive, and premixtures containing it, an alert to take into account the dietary supply with all the essential and conditionally essential amino acids, particularly in the case of supplementation with L-leucine as amino acid via water for drinking. |
| --- | --- |

(5)

The Authority concluded that it is an effective source of the amino acid L-leucine for all animal species. For the supplemental L-leucine to be fully efficacious in ruminants, it should be protected against degradation in the rumen. The Authority expressed in a previous statement a concern over potential nutritional imbalances for amino acids, when they are administered via water for drinking. However, the Authority did not propose a maximum content for L-leucine. Thus, it is appropriate to indicate on the label of the additive, and premixtures containing it, an alert to take into account the dietary supply with all the essential and conditionally essential amino acids, particularly in the case of supplementation with L-leucine as amino acid via water for drinking.

| (6) | As regards the use of L-leucine as a flavouring, the Authority states that no further demonstration of efficacy is necessary when the substance is used at the recommended dose level. The use of L-leucine as a flavouring compound is not authorised in water for drinking. At the recommended dose, L-leucine as flavouring compound is not likely to pose any concern for the dietary supply with all the essential and conditionally essential amino acids. |
| --- | --- |

(6)

As regards the use of L-leucine as a flavouring, the Authority states that no further demonstration of efficacy is necessary when the substance is used at the recommended dose level. The use of L-leucine as a flavouring compound is not authorised in water for drinking. At the recommended dose, L-leucine as flavouring compound is not likely to pose any concern for the dietary supply with all the essential and conditionally essential amino acids.

| (7) | The Authority does not consider that there is a need for specific requirements of post-market monitoring. It also verified the reports on the method of analysis of the feed additive in feed submitted by the Reference Laboratory set up by Regulation (EC) No 1831/2003. |
| --- | --- |

(7)

The Authority does not consider that there is a need for specific requirements of post-market monitoring. It also verified the reports on the method of analysis of the feed additive in feed submitted by the Reference Laboratory set up by Regulation (EC) No 1831/2003.

| (8) | The assessment of L-leucine shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are satisfied. Accordingly, the use of this additive should be authorised as specified in the Annex to this Regulation. |
| --- | --- |

(8)

The assessment of L-leucine shows that the conditions for authorisation, as provided for in Article 5 of Regulation (EC) No 1831/2003, are satisfied. Accordingly, the use of this additive should be authorised as specified in the Annex to this Regulation.

| (9) | The fact that the use of the L-leucine is not authorised for use as a flavouring in water for drinking, does not preclude its use in compound feed, which is administered via water. |
| --- | --- |

(9)

The fact that the use of the L-leucine is not authorised for use as a flavouring in water for drinking, does not preclude its use in compound feed, which is administered via water.

| (10) | The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed, |
| --- | --- |

(10)

The measures provided for in this Regulation are in accordance with the opinion of the Standing Committee on Plants, Animals, Food and Feed,

HAS ADOPTED THIS REGULATION:

Article 1

L-leucine produced by Escherichia coli NITE BP-02351, specified in the Annex, is authorised as a feed additive in animal nutrition in the additive category ‘nutritional additives’, functional group ‘amino acids, their salts and analogues’, and in the additive category ‘sensory additives’, functional group ‘flavouring compounds’, subject to the conditions laid down in that Annex.

Article 2

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

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

Done at Brussels, 5 March 2020.

For the Commission

The President

Ursula VON DER LEYEN

---

(1)  
  OJ L 268, 18.10.2003, p. 29.

1

(2)  EFSA Journal 2019;17(5):5689.

2

---

ANNEX

| Identification number of the additive | Name of the holder of authorisation | Additive | Composition, chemical formula, description, analytical method. | Species or category of animal | Maximum age | Minimum content | Maximum content | Other provisions | End of period of authorisation |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| mg/kg of complete feed with a moisture content of 12 % |
| Category of nutritional additives. Functional group: amino acids, their salts and analogues. |
| 3c382 | - | L-leucine | Additive composition:

  Powder with a minimum content of L-leucine of 98 % (on a dry matter basis) and a maximum content of 1,5 % water | All animal species | | | | 1. | L-leucine may be placed on the market and used as an additive consisting of a preparation. |

Identification number of the additive

Name of the holder of authorisation

Additive

Composition, chemical formula, description, analytical method.

Species or category of animal

Maximum age

Minimum content

Maximum content

Other provisions

End of period of authorisation

mg/kg of complete feed with a moisture content of 12 %

Category of nutritional additives. Functional group: amino acids, their salts and analogues.

3c382

-

L-leucine

Additive composition:

Powder with a minimum content of L-leucine of 98 % (on a dry matter basis) and a maximum content of 1,5 % water

All animal species

1.

L-leucine may be placed on the market and used as an additive consisting of a preparation.

| 2. | The additive can be also used via water for drinking. |
| --- | --- |

2.

The additive can be also used via water for drinking.

| 3. | In the directions for use of the additive and premixture, the storage conditions, the stability to heat treatment and the stability in water for drinking shall be indicated. |
| --- | --- |

3.

In the directions for use of the additive and premixture, the storage conditions, the stability to heat treatment and the stability in water for drinking shall be indicated.

| 4. | For users of the additive and premixture, feed business operators shall establish operational procedures and organisational measures to address potential risks by inhalation. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixture shall be used with personal protective equipment, including breathing protection. |
| --- | --- |

4.

For users of the additive and premixture, feed business operators shall establish operational procedures and organisational measures to address potential risks by inhalation. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixture shall be used with personal protective equipment, including breathing protection.

| 5. | The endotoxin content of the additive and its dusting potential shall ensure a maximal endotoxin exposure of 1600 IU endotoxins/m3 air (2). |
| --- | --- |

5.

The endotoxin content of the additive and its dusting potential shall ensure a maximal endotoxin exposure of 1600 IU endotoxins/m3 air (2).

| 6. | Declaration to be made: ‘The supplementation with L-leucine, in particular via water for drinking, should take into account all essential and conditional essential amino acids in order to avoid imbalances’. |
| --- | --- |

6.

Declaration to be made: ‘The supplementation with L-leucine, in particular via water for drinking, should take into account all essential and conditional essential amino acids in order to avoid imbalances’.

26.3.2030

Characterisation of the active substance:

L-leucine produced by fermentation with Escherichia coli NITE BP-02351.

Chemical formula: C6H13NO2

CAS number: 61-90-5

Analytical method
   (1):

For the identification of L-leucine in the feed additive:

| — | Food Chemical Codex ‘L-leucine monohydrochloride monograph’ |
| --- | --- |

—

Food Chemical Codex ‘L-leucine monohydrochloride monograph’

For the quantification of leucine in the feed additive:

| — | ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD) |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD)

For the quantification of leucine in premixtures:

| — | ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD) or |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD) or

| — | ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS) – Commission Regulation (EC) No 152/2009 |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS) – Commission Regulation (EC) No 152/2009

For the quantification of leucine in compound feed and feed materials:

| — | ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS) – Commission Regulation (EC) No 152/2009 |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS) – Commission Regulation (EC) No 152/2009

For the quantification of leucine in water:

| — | ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS) |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS)

Category: Sensory additives. Functional group: Flavouring compounds

3c382

-

L-leucine

Additive composition:

Powder with a minimum content of L-leucine of 98 % (on a dry matter basis) and a maximum content of 1,5 % water

All animal species

-

-

-

| 1. | L-leucine may be placed on the market and used as an additive consisting of a preparation. |
| --- | --- |

1.

L-leucine may be placed on the market and used as an additive consisting of a preparation.

| 2. | The additive shall be incorporated into the feed in the form of a premixture. |
| --- | --- |

2.

The additive shall be incorporated into the feed in the form of a premixture.

| 3. | In the directions for use of the additive and premixture, the storage conditions and the stability to heat treatment shall be indicated. |
| --- | --- |

3.

In the directions for use of the additive and premixture, the storage conditions and the stability to heat treatment shall be indicated.

| 4. | On the label of the additive the following shall be indicated:
  ‘Recommended maximum content of the active substance of complete feedingstuff with a moisture content of 12 %: 25 mg/kg.’ |
| --- | --- |

4.

On the label of the additive the following shall be indicated:

‘Recommended maximum content of the active substance of complete feedingstuff with a moisture content of 12 %: 25 mg/kg.’

| 5. | The functional group, the identification number, the name and the added amount of the active substance shall be indicated on the label of the premixtures, if the following content of the active substance in complete feedingstuff with a moisture content of 12 % is exceeded: 25 mg/kg. |
| --- | --- |

5.

The functional group, the identification number, the name and the added amount of the active substance shall be indicated on the label of the premixtures, if the following content of the active substance in complete feedingstuff with a moisture content of 12 % is exceeded: 25 mg/kg.

| 6. | For users of the additive and premixture, feed business operators shall establish operational procedures and organisational measures to address potential risks by inhalation. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixture shall be used with personal protective equipment, including breathing protection. |
| --- | --- |

6.

For users of the additive and premixture, feed business operators shall establish operational procedures and organisational measures to address potential risks by inhalation. Where those risks cannot be eliminated or reduced to a minimum by such procedures and measures, the additive and premixture shall be used with personal protective equipment, including breathing protection.

| 7. | The endotoxin content of the additive and its dusting potential shall ensure a maximal endotoxin exposure of 1600 IU endotoxins/m3 air (2). |
| --- | --- |

7.

The endotoxin content of the additive and its dusting potential shall ensure a maximal endotoxin exposure of 1600 IU endotoxins/m3 air (2).

26.3.2030

Characterisation of the active substance:

L-leucine produced by fermentation with Escherichia coli NITE BP-02351

Chemical formula: C6H13NO2

CAS number: 61-90-5

FLAVIS No 17.012

Method of analysis
   (1):

For the identification of L-leucine in the feed additive:

| — | Food Chemical Codex ‘L-leucine monohydrochloride monograph’ |
| --- | --- |

—

Food Chemical Codex ‘L-leucine monohydrochloride monograph’

For the quantification of leucine in the feed additive:

| — | ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD) |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD)

For the quantification of leucine in premixtures:

| — | ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD) or |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and optical detection (IEC-VIS/FLD) or

| — | ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS) – Commission Regulation (EC) No 152/2009 |
| --- | --- |

—

ion exchange chromatography coupled with post-column derivatisation and photometric detection (IEC-VIS) – Commission Regulation (EC) No 152/2009

---

(1)  Details of the analytical methods are available at the following address of the Reference Laboratory: https://ec.europa.eu/jrc/en/eurl/feed-additives/evaluation-reports

(2)  Exposure calculated based on the endotoxin level and the dusting potential of the additive according to the method used by EFSA (EFSA Journal 2019;17(5):5689); analytical method: European Pharmacopoeia 2.6.14 (bacterial endotoxins).

---

| 6.3.2020 | EN | Official Journal of the European Union | L 69/14 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/14

---

COMMISSION IMPLEMENTING REGULATION (EU) 2020/379

of 5 March 2020

imposing a provisional countervailing duty on imports of continuous filament glass fibre products originating in Egypt

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (1) (‘the basic Regulation’), and in particular Articles 12 and 24(1) thereof,

After consulting the Member States,

Whereas:

1.   PROCEDURE

PROCEDURE

1.1.   Initiation

Initiation

| (1) | On 7 June 2019, the European Commission (the ‘Commission’) initiated an anti-subsidy investigation with regard to imports into the European Union (the ‘Union’) of continuous filament glass fibre products (‘GFR’) originating in Egypt (or the ‘country concerned’) pursuant to Article 10 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (2) (the ‘Notice of Initiation’). |
| --- | --- |

(1)

On 7 June 2019, the European Commission (the ‘Commission’) initiated an anti-subsidy investigation with regard to imports into the European Union (the ‘Union’) of continuous filament glass fibre products (‘GFR’) originating in Egypt (or the ‘country concerned’) pursuant to Article 10 of the basic Regulation. It published a Notice of Initiation in the Official Journal of the European Union (2) (the ‘Notice of Initiation’).

Official Journal of the European Union

2

| (2) | The Commission initiated the investigation following a complaint lodged on 24 April 2019 by the European Glass Fibre Producers Association (‘the complainant’ or ‘APFE’) on behalf of producers representing more than 25 % of total Union production. Producers representing 71 % of the total Union production of continuous filament glass fibre products supported the complaint. |
| --- | --- |

(2)

The Commission initiated the investigation following a complaint lodged on 24 April 2019 by the European Glass Fibre Producers Association (‘the complainant’ or ‘APFE’) on behalf of producers representing more than 25 % of total Union production. Producers representing 71 % of the total Union production of continuous filament glass fibre products supported the complaint.

| (3) | Prior to the initiation of the anti-subsidy investigation, the Commission notified the Government of Egypt (‘GOE’) that it had received a properly documented complaint, and invited the GOE for consultations in accordance with Article 10(7) of the basic Regulation. The GOE refused the offer for consultations, which were not held but submitted two set of comments concerning the initiation of the investigation, one before the publication of the Notice of Initiation and one after. |
| --- | --- |

(3)

Prior to the initiation of the anti-subsidy investigation, the Commission notified the Government of Egypt (‘GOE’) that it had received a properly documented complaint, and invited the GOE for consultations in accordance with Article 10(7) of the basic Regulation. The GOE refused the offer for consultations, which were not held but submitted two set of comments concerning the initiation of the investigation, one before the publication of the Notice of Initiation and one after.

| (4) | On 3 May 2019 the Commission initiated a separate anti-dumping investigation with regard to imports into the Union of the same continuous filament glass fibre products originating in Egypt and Bahrain (3). The Commission notified all interested parties on 12 December 2019 that the investigation would continue without imposition of provisional anti-dumping duties. |
| --- | --- |

(4)

On 3 May 2019 the Commission initiated a separate anti-dumping investigation with regard to imports into the Union of the same continuous filament glass fibre products originating in Egypt and Bahrain (3). The Commission notified all interested parties on 12 December 2019 that the investigation would continue without imposition of provisional anti-dumping duties.

3

| (5) | Prior to the initiation of the investigation the GOE submitted that the complaint did not include sufficient evidence of subsidisation or injury to warrant an opening of a proceeding. Their comments regarding subsidisation were dealt with in the memorandum on sufficiency of evidence which was placed on the open file, and their comments regarding injury are dealt with below. |
| --- | --- |

(5)

Prior to the initiation of the investigation the GOE submitted that the complaint did not include sufficient evidence of subsidisation or injury to warrant an opening of a proceeding. Their comments regarding subsidisation were dealt with in the memorandum on sufficiency of evidence which was placed on the open file, and their comments regarding injury are dealt with below.

| (6) | Following initiation the Commission received further comments from the GOE, again noting their comments on subsidy, but also making a submission regarding the allegations of injury caused by imports from Egypt that were set out in the complaint. |
| --- | --- |

(6)

Following initiation the Commission received further comments from the GOE, again noting their comments on subsidy, but also making a submission regarding the allegations of injury caused by imports from Egypt that were set out in the complaint.

| (7) | The GOE first analysed the data in the complaint showing prices on the Union market in 2017 and 2018, and noted that EU sales prices did not fall, and import prices from Egypt only dropped by 2 %. |
| --- | --- |

(7)

The GOE first analysed the data in the complaint showing prices on the Union market in 2017 and 2018, and noted that EU sales prices did not fall, and import prices from Egypt only dropped by 2 %.

| (8) | This price analysis, however, only compared two years out of the period considered and thus did not take into account the full set of data in the complaint showing the full evolution of import prices and EU sales prices that show falling import prices and stagnant EU sales prices. |
| --- | --- |

(8)

This price analysis, however, only compared two years out of the period considered and thus did not take into account the full set of data in the complaint showing the full evolution of import prices and EU sales prices that show falling import prices and stagnant EU sales prices.

| (9) | The Commission also noted the data shown in recitals (84) to (91) below on price trends and the Commission’s conclusions based on the whole dataset. |
| --- | --- |

(9)

The Commission also noted the data shown in recitals (84) to (91) below on price trends and the Commission’s conclusions based on the whole dataset.

| (10) | The GOE analysed the economic indicators set out in the complaint and concluded that they did not show material injury. This is not the Commission’s analysis of the data provided in the complaint which clearly shows injury on the basis of steeply declining profits from 2016 to 2018. |
| --- | --- |

(10)

The GOE analysed the economic indicators set out in the complaint and concluded that they did not show material injury. This is not the Commission’s analysis of the data provided in the complaint which clearly shows injury on the basis of steeply declining profits from 2016 to 2018.

| (11) | The Commission’s analysis of the indicators, both macroeconomic and microeconomic, is set out in detail in the whole of Section 4.4 below. |
| --- | --- |

(11)

The Commission’s analysis of the indicators, both macroeconomic and microeconomic, is set out in detail in the whole of Section 4.4 below.

| (12) | The GOE then posited other causes of material injury, should the Commission find evidence of it. They allege that injury would be caused by lack of technological development, insufficient production capacity, a contraction in demand, increased costs and imports from other countries. |
| --- | --- |

(12)

The GOE then posited other causes of material injury, should the Commission find evidence of it. They allege that injury would be caused by lack of technological development, insufficient production capacity, a contraction in demand, increased costs and imports from other countries.

| (13) | The complaint already addresses these factors, and provides evidence that the Union industry has invested in their facilities and also that there is no causal link between imports from other countries and the injury suffered by the Union industry. |
| --- | --- |

(13)

The complaint already addresses these factors, and provides evidence that the Union industry has invested in their facilities and also that there is no causal link between imports from other countries and the injury suffered by the Union industry.

| (14) | All of these factors have been investigated and the Commission’s provisional findings are set out in the whole of Section 5 below. |
| --- | --- |

(14)

All of these factors have been investigated and the Commission’s provisional findings are set out in the whole of Section 5 below.

| (15) | The Commission also received a submission regarding the allegations of injury caused by imports from Egypt from a group of users of GFR in the Union. |
| --- | --- |

(15)

The Commission also received a submission regarding the allegations of injury caused by imports from Egypt from a group of users of GFR in the Union.

| (16) | The group of users, who wished to remain anonymous, commented on the absence of injury in 2015; the volume of imports from Egypt; that the volume of imports was not likely to increase further; and the economic indicators set out in the complaint. |
| --- | --- |

(16)

The group of users, who wished to remain anonymous, commented on the absence of injury in 2015; the volume of imports from Egypt; that the volume of imports was not likely to increase further; and the economic indicators set out in the complaint.

| (17) | Again all of these factors have been investigated and the Commission’s provisional findings are set out in the whole of Section 4 below. The Commission confirmed that, at the initiation stage, the complaint contained sufficient evidence of injurious subsidisation. |
| --- | --- |

(17)

Again all of these factors have been investigated and the Commission’s provisional findings are set out in the whole of Section 4 below. The Commission confirmed that, at the initiation stage, the complaint contained sufficient evidence of injurious subsidisation.

| (18) | The GOE and Jushi Egypt also stated that the remission of import duties on raw materials is not a subsidy to the extent that these imported products are re-exported as such or as processed into a downstream product. |
| --- | --- |

(18)

The GOE and Jushi Egypt also stated that the remission of import duties on raw materials is not a subsidy to the extent that these imported products are re-exported as such or as processed into a downstream product.

| (19) | The Commission acknowledged that in particular when the conditions of Article 3(1)(a)(ii) of the basic Regulation and Annexes I, II and III referred to therein are met, only the excess remission of import duties on raw materials constitutes a countervailable subsidy, and paid particular attention to this during the investigation. |
| --- | --- |

(19)

The Commission acknowledged that in particular when the conditions of Article 3(1)(a)(ii) of the basic Regulation and Annexes I, II and III referred to therein are met, only the excess remission of import duties on raw materials constitutes a countervailable subsidy, and paid particular attention to this during the investigation.

| (20) | The Commission further noted that the GOE’s comment did not concern import duty exemptions with respect to production equipment. |
| --- | --- |

(20)

The Commission further noted that the GOE’s comment did not concern import duty exemptions with respect to production equipment.

1.2.   Amendment to the Notice of Initiation

Amendment to the Notice of Initiation

| (21) | On 12 February 2020, the Commission published a Notice amending the Notice of Initiation in the Official Journal of the European Union (4). |
| --- | --- |

(21)

On 12 February 2020, the Commission published a Notice amending the Notice of Initiation in the Official Journal of the European Union (4).

Official Journal of the European Union

4

| (22) | During the investigation, the Commission found additional evidence of relevant subsidies, which were not fully included in the Notice of Initiation of 7 June 2019. |
| --- | --- |

(22)

During the investigation, the Commission found additional evidence of relevant subsidies, which were not fully included in the Notice of Initiation of 7 June 2019.

| (23) | In particular, the Commission identified additional evidence of preferential policy loans by Chinese State-owned or State-controlled entities, granted directly to Jushi Egypt and indirectly via the parent company of Jushi Egypt in the People’s Republic of China. |
| --- | --- |

(23)

In particular, the Commission identified additional evidence of preferential policy loans by Chinese State-owned or State-controlled entities, granted directly to Jushi Egypt and indirectly via the parent company of Jushi Egypt in the People’s Republic of China.

| (24) | With respect to these loans, the Commission found evidence that they involve a financial contribution that may be attributable to the Government of Egypt and confer a benefit to the exporting producer of the product concerned. |
| --- | --- |

(24)

With respect to these loans, the Commission found evidence that they involve a financial contribution that may be attributable to the Government of Egypt and confer a benefit to the exporting producer of the product concerned.

| (25) | In the course of the investigation, the Commission also identified other elements in the cooperation between Egypt and the People’s Republic of China which may be relevant for the examination of other subsidy practices already mentioned in the Notice of Initiation, such as the provision of land for less than adequate remuneration. |
| --- | --- |

(25)

In the course of the investigation, the Commission also identified other elements in the cooperation between Egypt and the People’s Republic of China which may be relevant for the examination of other subsidy practices already mentioned in the Notice of Initiation, such as the provision of land for less than adequate remuneration.

| (26) | Therefore, the Commission decided in accordance with Article 10(7) of the basic Regulation to include these subsidies within the scope of the current investigation and to amend accordingly the Notice of 7 June 2019. A note to the file was added in this respect and the GOE was invited to hold consultations on those additional subsidies. |
| --- | --- |

(26)

Therefore, the Commission decided in accordance with Article 10(7) of the basic Regulation to include these subsidies within the scope of the current investigation and to amend accordingly the Notice of 7 June 2019. A note to the file was added in this respect and the GOE was invited to hold consultations on those additional subsidies.

1.3.   Investigation period and period considered

Investigation period and period considered

| (27) | The investigation of subsidisation and injury covered the period from 1 April 2018 to 31 March 2019 (the ‘investigation period’ or the ‘IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2016 to the end of the investigation period (the ‘period considered’). Where appropriate, the Commission also examined post-IP data. |
| --- | --- |

(27)

The investigation of subsidisation and injury covered the period from 1 April 2018 to 31 March 2019 (the ‘investigation period’ or the ‘IP’). The examination of trends relevant for the assessment of injury covered the period from 1 January 2016 to the end of the investigation period (the ‘period considered’). Where appropriate, the Commission also examined post-IP data.

1.4.   Registration

Registration

| (28) | The Commission made imports of the product concerned subject to registration for the three-week period of pre-disclosure under Article 24(5a) of the basic Regulation by Commission Implementing Regulation (EU) 2020/199 (5) (‘the registration Regulation’). |
| --- | --- |

(28)

The Commission made imports of the product concerned subject to registration for the three-week period of pre-disclosure under Article 24(5a) of the basic Regulation by Commission Implementing Regulation (EU) 2020/199 (5) (‘the registration Regulation’).

5

1.5.   Interested parties

Interested parties

| (29) | In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers and the GOE, the known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate. |
| --- | --- |

(29)

In the Notice of Initiation, interested parties were invited to contact the Commission in order to participate in the investigation. In addition, the Commission specifically informed the complainant, other known Union producers, the known exporting producers and the GOE, the known importers, suppliers and users, traders, as well as associations known to be concerned about the initiation of the investigation and invited them to participate.

| (30) | Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings. |
| --- | --- |

(30)

Interested parties had an opportunity to comment on the initiation of the investigation and to request a hearing with the Commission and/or the Hearing Officer in trade proceedings.

| (31) | Interested parties that had already cooperated in the separate anti-dumping investigation were invited to state that they were cooperating in both investigations, and were considered to be interested parties in both when they had done so. That being said, the Commission considered the anti-dumping and anti-subsidy investigations as two separate proceedings and requested interested parties to clearly specify in their submissions whether they referred to the anti-dumping investigation, the anti-subsidy investigation or both. |
| --- | --- |

(31)

Interested parties that had already cooperated in the separate anti-dumping investigation were invited to state that they were cooperating in both investigations, and were considered to be interested parties in both when they had done so. That being said, the Commission considered the anti-dumping and anti-subsidy investigations as two separate proceedings and requested interested parties to clearly specify in their submissions whether they referred to the anti-dumping investigation, the anti-subsidy investigation or both.

1.6.   Sampling

Sampling

| (32) | In its Notice of Initiation, the Commission stated that it might sample interested parties in accordance with Article 27 of the basic Regulation. |
| --- | --- |

(32)

In its Notice of Initiation, the Commission stated that it might sample interested parties in accordance with Article 27 of the basic Regulation.

1.6.1.   Sampling of Union producers

Sampling of Union producers

| (33) | In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the highest representative quantity of production which could reasonably be investigated within the time available. The sample originally selected was the same as for the separate anti-dumping investigation concerning the same product originating in Egypt and Bahrain. |
| --- | --- |

(33)

In its Notice of Initiation, the Commission stated that it had provisionally selected a sample of Union producers. The Commission selected the sample on the basis of the highest representative quantity of production which could reasonably be investigated within the time available. The sample originally selected was the same as for the separate anti-dumping investigation concerning the same product originating in Egypt and Bahrain.

| (34) | No comments on the sample selection were received. |
| --- | --- |

(34)

No comments on the sample selection were received.

1.6.2.   Sampling of importers

Sampling of importers

| (35) | To decide whether sampling was necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation. |
| --- | --- |

(35)

To decide whether sampling was necessary and, if so, to select a sample, the Commission asked unrelated importers to provide the information specified in the Notice of Initiation.

| (36) | Given that only two unrelated importers provided completed sampling forms, sampling was not applied. |
| --- | --- |

(36)

Given that only two unrelated importers provided completed sampling forms, sampling was not applied.

| (37) | The two unrelated importers were also selected for inspection in the separate anti-dumping investigation. |
| --- | --- |

(37)

The two unrelated importers were also selected for inspection in the separate anti-dumping investigation.

1.6.3.   Sampling of exporting producers in Egypt

Sampling of exporting producers in Egypt

| (38) | The Commission did not resort to sampling in relation to exporting producers in Egypt as the Jushi Group is the only exporting producer of the product concerned in Egypt. |
| --- | --- |

(38)

The Commission did not resort to sampling in relation to exporting producers in Egypt as the Jushi Group is the only exporting producer of the product concerned in Egypt.

1.6.4.   Questionnaire replies and verification visits

Questionnaire replies and verification visits

| (39) | The Commission sent questionnaires to the GOE, to the exporting producer, to the three sampled Union producers, and to two unrelated importers. A questionnaire was provided for users to complete, if they so wished, rather than making a submission. |
| --- | --- |

(39)

The Commission sent questionnaires to the GOE, to the exporting producer, to the three sampled Union producers, and to two unrelated importers. A questionnaire was provided for users to complete, if they so wished, rather than making a submission.

| (40) | The Commission received questionnaire replies from the GOE, the exporting producer, all sampled Union producers and both unrelated importers. Two completed user questionnaires were also received. |
| --- | --- |

(40)

The Commission received questionnaire replies from the GOE, the exporting producer, all sampled Union producers and both unrelated importers. Two completed user questionnaires were also received.

| (41) | The Commission sought and verified all the information deemed necessary for a determination of subsidy, resulting injury and Union interest. A verification visit took place at the premises of the GOE, the General Authority for the Suez Economic Zone and the General Authority for Investment and Free Zones, during which officials from other relevant ministries also participated. |
| --- | --- |

(41)

The Commission sought and verified all the information deemed necessary for a determination of subsidy, resulting injury and Union interest. A verification visit took place at the premises of the GOE, the General Authority for the Suez Economic Zone and the General Authority for Investment and Free Zones, during which officials from other relevant ministries also participated.

| (42) | The methodology and correctness of the data gathered by the complainants for the purposes of the macroeconomic indicators was subject to a verification visit under Article 26 of the basic Regulation carried out at the premises of the lawyers of the complainants. |
| --- | --- |

(42)

The methodology and correctness of the data gathered by the complainants for the purposes of the macroeconomic indicators was subject to a verification visit under Article 26 of the basic Regulation carried out at the premises of the lawyers of the complainants.

| (43) | Verification visits under Article 26 of the basic Regulation were carried out at the premises of the following companies: | Union producers and related companies








  — | 3B Fibreglass, Battice, Belgium, |
| --- | --- | --- | --- |

(43)

Verification visits under Article 26 of the basic Regulation were carried out at the premises of the following companies:

Union producers and related companies

Union producers and related companies

—

3B Fibreglass, Battice, Belgium,

| — | Johns Manville Slovakia a.s., Trnava, Slovak Republic, |
| --- | --- |

—

Johns Manville Slovakia a.s., Trnava, Slovak Republic,

| — | European Owens Corning Fibreglass SPRL, Watermael-Boitsfort, Belgium |
| --- | --- |

—

European Owens Corning Fibreglass SPRL, Watermael-Boitsfort, Belgium

| | Unrelated importers in the European Union








  — | Euroresins UK Limited, Ellesmere Port, UK, |
| --- | --- | --- |

Unrelated importers in the European Union

Unrelated importers in the European Union

—

Euroresins UK Limited, Ellesmere Port, UK,

| — | Helm AG, Hamburg, Germany |
| --- | --- |

—

Helm AG, Hamburg, Germany

| | Unrelated users in the European Union








  — | Polykemi, Ystad, Sweden, |
| --- | --- | --- |

Unrelated users in the European Union

Unrelated users in the European Union

—

Polykemi, Ystad, Sweden,

| — | Company A (6) |
| --- | --- |

—

Company A (6)

6

| | Exporting producer in Egypt and related companies








  — | Jushi Group:






  — | Jushi Egypt for Fiberglass Industry S.A.E., Egypt, |
| --- | --- | --- | --- |

Exporting producer in Egypt and related companies

Exporting producer in Egypt and related companies

—

Jushi Group:

—

Jushi Egypt for Fiberglass Industry S.A.E., Egypt,

| — | Jushi France SAS, France, |
| --- | --- |

—

Jushi France SAS, France,

| — | Jushi Italia srl, Italy, |
| --- | --- |

—

Jushi Italia srl, Italy,

| — | Jushi Spain SA, Spain. |
| --- | --- |

—

Jushi Spain SA, Spain.

2.   PRODUCT CONCERNED AND LIKE PRODUCT

PRODUCT CONCERNED AND LIKE PRODUCT

2.1.   Product under investigation

Product under investigation

| (44) | The product subject to this investigation is chopped glass fibre strands, of a length of not more than 50 mm (‘chopped strands’); glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887) (‘rovings’); and mats made of glass fibre filaments excluding mats of glass wool (‘mats’) (‘the product under investigation’). The product under investigation is known as ‘glass fibre reinforcements’ or ‘GFR’. |
| --- | --- |

(44)

The product subject to this investigation is chopped glass fibre strands, of a length of not more than 50 mm (‘chopped strands’); glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887) (‘rovings’); and mats made of glass fibre filaments excluding mats of glass wool (‘mats’) (‘the product under investigation’). The product under investigation is known as ‘glass fibre reinforcements’ or ‘GFR’.

| (45) | The product concerned is the product under investigation originating in Egypt. |
| --- | --- |

(45)

The product concerned is the product under investigation originating in Egypt.

| (46) | The product concerned is currently falling under CN codes 7019 11 00, ex 7019 12 00, 7019 31 00 (TARIC codes 7019120022, 7019120025, 7019120026 and 7019120039). |
| --- | --- |

(46)

The product concerned is currently falling under CN codes 7019 11 00, ex 7019 12 00, 7019 31 00 (TARIC codes 7019120022, 7019120025, 7019120026 and 7019120039).

2.2.   Like product

Like product

| (47) | The investigation showed that the following products have the same basic physical, chemical, and technical characteristics as well as the same basic uses:






  (a) | the product concerned; |
| --- | --- | --- |

(47)

The investigation showed that the following products have the same basic physical, chemical, and technical characteristics as well as the same basic uses:

(a)

the product concerned;

| (b) | the product produced and sold on the domestic market of Egypt; |
| --- | --- |

(b)

the product produced and sold on the domestic market of Egypt;

| (c) | the product produced and sold in the Union by the Union industry. |
| --- | --- |

(c)

the product produced and sold in the Union by the Union industry.

| (48) | The Commission decided that, for the purpose of this investigation, those products are therefore like products within the meaning of Article 2(c) of the basic Regulation. |
| --- | --- |

(48)

The Commission decided that, for the purpose of this investigation, those products are therefore like products within the meaning of Article 2(c) of the basic Regulation.

3.   SUBSIDISATION

SUBSIDISATION

3.1.   Subsidies and subsidy programmes within the scope of the current investigation

Subsidies and subsidy programmes within the scope of the current investigation

| (49) | On the basis of the information available, including information contained in the complaint, the Notice of Initiation and the replies to the Commission’s questionnaire, the Commission investigated the alleged subsidisation by the GOE through the following subsidies:






  — | Preferential policy loans, credit lines, other financing, insurance and guarantees, |
| --- | --- | --- |

(49)

On the basis of the information available, including information contained in the complaint, the Notice of Initiation and the replies to the Commission’s questionnaire, the Commission investigated the alleged subsidisation by the GOE through the following subsidies:

—

Preferential policy loans, credit lines, other financing, insurance and guarantees,

| — | Revenue foregone through Direct Tax Exemption and Reduction programmes:






  — | Income tax privileges for Enterprises located in a Special Economic Zone, |
| --- | --- | --- |

—

Revenue foregone through Direct Tax Exemption and Reduction programmes:

—

Income tax privileges for Enterprises located in a Special Economic Zone,

| — | Revenue foregone through Indirect Tax and Import Tariff Programmes:






  — | Value Added Tax (‘VAT’) exemptions and import tariff rebates for the use of imported equipment, |
| --- | --- | --- |

—

Revenue foregone through Indirect Tax and Import Tariff Programmes:

—

Value Added Tax (‘VAT’) exemptions and import tariff rebates for the use of imported equipment,

| — | VAT exemptions and import tariff waivers for imported input materials used in exported finished goods, |
| --- | --- |

—

VAT exemptions and import tariff waivers for imported input materials used in exported finished goods,

| — | Government provision of goods and services for less than adequate remuneration (‘LTAR’):






  — | Government provision of power for less than adequate remuneration, |
| --- | --- | --- |

—

Government provision of goods and services for less than adequate remuneration (‘LTAR’):

—

Government provision of power for less than adequate remuneration,

| — | Government provision of land for less than adequate remuneration. |
| --- | --- |

—

Government provision of land for less than adequate remuneration.

3.2.   Introduction

Introduction

| (50) | The alleged subsidisation in Egypt concerns Jushi Egypt for Fiberglass Industry S.A.E. (‘Jushi Egypt’), a company located in the China-Egypt Suez Economic and Trade Cooperation Zone (‘SETC-Zone’). The zone covers an area of 7,34 km2, which is divided into a starting area of 1,34 km2 and an expansion area of 6 km2. |
| --- | --- |

(50)

The alleged subsidisation in Egypt concerns Jushi Egypt for Fiberglass Industry S.A.E. (‘Jushi Egypt’), a company located in the China-Egypt Suez Economic and Trade Cooperation Zone (‘SETC-Zone’). The zone covers an area of 7,34 km2, which is divided into a starting area of 1,34 km2 and an expansion area of 6 km2.

2

2

2

| (51) | In 2002, the wider area of 20 km2 in which the SETC-Zone was located, the Northwest Gulf of Suez Economic Zone, was officially classified as a special economic zone (‘SEZone’) by the GOE (7). As such, the provisions of the Egyptian Law No 83/2002 on Economic Zones of a Special Nature (‘Law 83/2002’) were now also applicable to the SETC-Zone. |
| --- | --- |

(51)

In 2002, the wider area of 20 km2 in which the SETC-Zone was located, the Northwest Gulf of Suez Economic Zone, was officially classified as a special economic zone (‘SEZone’) by the GOE (7). As such, the provisions of the Egyptian Law No 83/2002 on Economic Zones of a Special Nature (‘Law 83/2002’) were now also applicable to the SETC-Zone.

2

7

| (52) | In 2014, Egypt launched the ‘Suez Canal Corridor Development Plan’. In the context of this Plan, the SE Zone was officially incorporated in to the wider Suez Canal Economic Zone (‘SCZone’) in 2015, comprising the whole area around the Suez Canal of 461 km2. The entire area is now considered as an ‘economic area of special nature’ in accordance with Law 83/2002 and amendments thereof (8). As a special area, companies located therein benefit from preferential treatment as outlined in the subsidy programmes mentioned below. |
| --- | --- |

(52)

In 2014, Egypt launched the ‘Suez Canal Corridor Development Plan’. In the context of this Plan, the SE Zone was officially incorporated in to the wider Suez Canal Economic Zone (‘SCZone’) in 2015, comprising the whole area around the Suez Canal of 461 km2. The entire area is now considered as an ‘economic area of special nature’ in accordance with Law 83/2002 and amendments thereof (8). As a special area, companies located therein benefit from preferential treatment as outlined in the subsidy programmes mentioned below.

2

8

3.3.   VAT exemptions and import tariff rebates for imported equipment

VAT exemptions and import tariff rebates for imported equipment

| (53) | This programme provides an exemption from VAT and import tariffs for imports of equipment used in the production process of the companies located in the SCZone. |
| --- | --- |

(53)

This programme provides an exemption from VAT and import tariffs for imports of equipment used in the production process of the companies located in the SCZone.

3.3.1.   Analysis

Analysis

| (54) | The legal bases of this programme are:






  (a) | Law No 83/2002 on Economic Zones of a Special Nature (‘Law 83/2002’); |
| --- | --- | --- |

(54)

The legal bases of this programme are:

(a)

Law No 83/2002 on Economic Zones of a Special Nature (‘Law 83/2002’);

| (b) | Decree of the President of the Arab Republic of Egypt on Law No 27/2015 Amending some Provisions of Law of Economic Zone of Special Nature issued by Law No 83/2002 (‘Law 27/2015’); |
| --- | --- |

(b)

Decree of the President of the Arab Republic of Egypt on Law No 27/2015 Amending some Provisions of Law of Economic Zone of Special Nature issued by Law No 83/2002 (‘Law 27/2015’);

| (c) | Investment Law as Enacted by Law No 72 of 2017; |
| --- | --- |

(c)

Investment Law as Enacted by Law No 72 of 2017;

| (d) | The Prime Minister’s Draft Resolution No (2310) of 2017 Concerning issuing the Executive Regulations of Investment Law Issued by virtue of Law No 72 of 2017; |
| --- | --- |

(d)

The Prime Minister’s Draft Resolution No (2310) of 2017 Concerning issuing the Executive Regulations of Investment Law Issued by virtue of Law No 72 of 2017;

| (e) | VAT Law as Enacted by Law No 67 of 2016; |
| --- | --- |

(e)

VAT Law as Enacted by Law No 67 of 2016;

| (f) | Executive Regulations of the VAT Law, Decree of the Ministry of Finance No 66/2017. |
| --- | --- |

(f)

Executive Regulations of the VAT Law, Decree of the Ministry of Finance No 66/2017.

3.3.2.   Findings of the investigation

Findings of the investigation

| (55) | According to Article 22 of Law 83/2002, as amended by Law 27/2015, the SCZone is part of a separate customs area by virtue of a decree issued by the Minister of Finance. This separate customs area functions under the supervision of a supreme customs committee, established by the Chairman of the Authority of the zone. |
| --- | --- |

(55)

According to Article 22 of Law 83/2002, as amended by Law 27/2015, the SCZone is part of a separate customs area by virtue of a decree issued by the Minister of Finance. This separate customs area functions under the supervision of a supreme customs committee, established by the Chairman of the Authority of the zone.

| (56) | Furthermore, according to Article 42 of Law 83/2002, imported equipment, tools, or apparatus shall be exempted from taxes and duties as long as they are allocated to produced goods or services for the licensed activity within the SCZone. On the other hand, as the SCZone is not an export only zone, all taxes and duties need to be paid for any products released into the domestic market outside of the zone. |
| --- | --- |

(56)

Furthermore, according to Article 42 of Law 83/2002, imported equipment, tools, or apparatus shall be exempted from taxes and duties as long as they are allocated to produced goods or services for the licensed activity within the SCZone. On the other hand, as the SCZone is not an export only zone, all taxes and duties need to be paid for any products released into the domestic market outside of the zone.

| (57) | Finally, according to the relevant laws, companies located outside of the SCZone pay import VAT upfront and net it against the VAT on their domestic sales or, if applicable, refunded when finished goods are exported. |
| --- | --- |

(57)

Finally, according to the relevant laws, companies located outside of the SCZone pay import VAT upfront and net it against the VAT on their domestic sales or, if applicable, refunded when finished goods are exported.

| (58) | For companies located in the SCZone, import VAT is initially not charged in accordance with a letter of understanding on this point between the Ministry of Finance and the General Authority of the SCZone. |
| --- | --- |

(58)

For companies located in the SCZone, import VAT is initially not charged in accordance with a letter of understanding on this point between the Ministry of Finance and the General Authority of the SCZone.

| (59) | The Commission found that Jushi Egypt’s VAT and import duties on imported equipment had indeed been withheld since 2017 and throughout the investigation period. Before 2017, the company actually paid its import duties and VAT/general sales tax (‘GST’) (9) on imported equipment since it had not yet entered the SCZone. However, through the 2017 opt-in of the company to the SCZone’s tax and administrative regime, Jushi Egypt benefits from the preferential tax treatments within the zone, including the VAT and tariff exemptions. |
| --- | --- |

(59)

The Commission found that Jushi Egypt’s VAT and import duties on imported equipment had indeed been withheld since 2017 and throughout the investigation period. Before 2017, the company actually paid its import duties and VAT/general sales tax (‘GST’) (9) on imported equipment since it had not yet entered the SCZone. However, through the 2017 opt-in of the company to the SCZone’s tax and administrative regime, Jushi Egypt benefits from the preferential tax treatments within the zone, including the VAT and tariff exemptions.

9

| (60) | As a general rule in Egypt, companies buying machines subject to the 5 % VAT rate should utilize the amounts as a credit against future payments (10). However, where the credit balance is retained for more than 6 consecutive tax periods (months), which is the case of companies heavily engaging in exports that cannot offset any input VAT as a credit against future payments, the registered person shall apply in writing, showing the amount of the credit balance. The Egyptian Tax Authority should check the correctness of the balance and refund within 45 days of the date of submitting the application. |
| --- | --- |

(60)

As a general rule in Egypt, companies buying machines subject to the 5 % VAT rate should utilize the amounts as a credit against future payments (10). However, where the credit balance is retained for more than 6 consecutive tax periods (months), which is the case of companies heavily engaging in exports that cannot offset any input VAT as a credit against future payments, the registered person shall apply in writing, showing the amount of the credit balance. The Egyptian Tax Authority should check the correctness of the balance and refund within 45 days of the date of submitting the application.

10

| (61) | However, the investigation revealed that in practice, the GOE does not reimburse the VAT paid upfront so that the tax constitutes an actual cost for such companies. Indeed, an analysis of the GST/VAT credits of Jushi Egypt listed in the 2016-2018 Annual Reports showed that amounts due by the GOE to Jushi Egypt were still outstanding after several years (11) and Jushi Egypt confirmed that it did not expect to receive the reimbursements (12). |
| --- | --- |

(61)

However, the investigation revealed that in practice, the GOE does not reimburse the VAT paid upfront so that the tax constitutes an actual cost for such companies. Indeed, an analysis of the GST/VAT credits of Jushi Egypt listed in the 2016-2018 Annual Reports showed that amounts due by the GOE to Jushi Egypt were still outstanding after several years (11) and Jushi Egypt confirmed that it did not expect to receive the reimbursements (12).

11

12

| (62) | It also needs to be considered that since equipment used in the manufacturing of products, including the product under investigation, will in all likelihood be used for its entire useful life within the Egyptian territory without being re-exported or sold domestically, there is no rationale for granting an exemption from customs duties and VAT on its purchase, other than benefiting the companies located in the SCZone. This therefore constitutes revenue foregone in the form of customs duties and VAT not payable without any justification, as this equipment is used for the local production of the product under investigation on which customs duty and VAT are normally due for producers located outside of the SCZone. |
| --- | --- |

(62)

It also needs to be considered that since equipment used in the manufacturing of products, including the product under investigation, will in all likelihood be used for its entire useful life within the Egyptian territory without being re-exported or sold domestically, there is no rationale for granting an exemption from customs duties and VAT on its purchase, other than benefiting the companies located in the SCZone. This therefore constitutes revenue foregone in the form of customs duties and VAT not payable without any justification, as this equipment is used for the local production of the product under investigation on which customs duty and VAT are normally due for producers located outside of the SCZone.

| (63) | Therefore, since Jushi Egypt became subject to the preferential treatment under the legal regime of the SCZone in 2017, it benefitted from a de facto VAT exemption on the import of machinery. This exemption constitutes revenue foregone because, as stated in the preceding paragraphs, even though VAT should eventually be refunded, in essence there is no evidence that the GOE reimbursed Jushi Egypt the VAT paid on machinery in the past. The evidence available indeed showed that Jushi Egypt was not obtaining those refunds when it was located outside the zone. |
| --- | --- |

(63)

Therefore, since Jushi Egypt became subject to the preferential treatment under the legal regime of the SCZone in 2017, it benefitted from a de facto VAT exemption on the import of machinery. This exemption constitutes revenue foregone because, as stated in the preceding paragraphs, even though VAT should eventually be refunded, in essence there is no evidence that the GOE reimbursed Jushi Egypt the VAT paid on machinery in the past. The evidence available indeed showed that Jushi Egypt was not obtaining those refunds when it was located outside the zone.

de facto

| (64) | Companies located in the SCZone, which do not have to pay VAT upfront, receive a de facto VAT exemption that saves them from incurring an actual cost in addition to saving the administrative burden of having to claim VAT reimbursements or offsetting VAT credits. The same conclusion applies even more clearly with respect to the exemption of paying import tariffs on imported equipment. |
| --- | --- |

(64)

Companies located in the SCZone, which do not have to pay VAT upfront, receive a de facto VAT exemption that saves them from incurring an actual cost in addition to saving the administrative burden of having to claim VAT reimbursements or offsetting VAT credits. The same conclusion applies even more clearly with respect to the exemption of paying import tariffs on imported equipment.

de facto

3.3.3.   Conclusion

Conclusion

| (65) | In light of the above, the Commission provisionally concluded that this programme provides a financial contribution in the form of revenue forgone by the GOE within the meaning of Article 3(1)(a)(ii) of the basic Regulation as eligible enterprises are relieved from payment of VAT and/or tariffs which would be otherwise due. It also confers a benefit on the recipient companies in the sense of Article 3(2) of the basic Regulation since they are placed in a better financial position than they would be absent the scheme. In fact, without the scheme they would have paid the VAT and import tariffs upon importation of the equipment. |
| --- | --- |

(65)

In light of the above, the Commission provisionally concluded that this programme provides a financial contribution in the form of revenue forgone by the GOE within the meaning of Article 3(1)(a)(ii) of the basic Regulation as eligible enterprises are relieved from payment of VAT and/or tariffs which would be otherwise due. It also confers a benefit on the recipient companies in the sense of Article 3(2) of the basic Regulation since they are placed in a better financial position than they would be absent the scheme. In fact, without the scheme they would have paid the VAT and import tariffs upon importation of the equipment.

| (66) | The programme is specific within the meaning of Article 4(2)(a) of the basic Regulation as it is not generally applicable in Egypt, and applies only to the companies located in Economic Zones of a Special Nature, such as the SCZone. The legislation pursuant to which the granting authority operates limits its access to enterprises that are located within such Economic Zones of a Special Nature. |
| --- | --- |

(66)

The programme is specific within the meaning of Article 4(2)(a) of the basic Regulation as it is not generally applicable in Egypt, and applies only to the companies located in Economic Zones of a Special Nature, such as the SCZone. The legislation pursuant to which the granting authority operates limits its access to enterprises that are located within such Economic Zones of a Special Nature.

3.3.4.   Calculation of the subsidy amount

Calculation of the subsidy amount

| (67) | The amount of this countervailable subsidy is calculated in terms of the benefit conferred on the recipient, which is found to exist during the investigation period. The benefit conferred on the recipient is considered to be:






  (a) | the amount of customs duties exempted on the imported equipment purchased since 2017. In order to ensure that the countervailable amount only covered the investigation period, the benefit received was amortized over the useful life of the equipment according the company’s normal accounting procedures, except for one of the asset categories, where the amortization period was adapted to better reflect the actual useful life, as verified by the Commission services. |
| --- | --- | --- |

(67)

The amount of this countervailable subsidy is calculated in terms of the benefit conferred on the recipient, which is found to exist during the investigation period. The benefit conferred on the recipient is considered to be:

(a)

the amount of customs duties exempted on the imported equipment purchased since 2017. In order to ensure that the countervailable amount only covered the investigation period, the benefit received was amortized over the useful life of the equipment according the company’s normal accounting procedures, except for one of the asset categories, where the amortization period was adapted to better reflect the actual useful life, as verified by the Commission services.

| (b) | Concerning the revenue foregone in the form of a de facto VAT exemption, the benefit was calculated by taking the full amount of VAT normally payable but not paid during the investigation period on the purchases of imported equipment (during the IP). |
| --- | --- |

(b)

Concerning the revenue foregone in the form of a de facto VAT exemption, the benefit was calculated by taking the full amount of VAT normally payable but not paid during the investigation period on the purchases of imported equipment (during the IP).

de facto

| (68) | The amount of subsidy provisionally established with regard to this type of subsidies during the investigation period for the exporting producer was 0,78 %. |
| --- | --- |

(68)

The amount of subsidy provisionally established with regard to this type of subsidies during the investigation period for the exporting producer was 0,78 %.

3.4.   VAT exemptions and import tariff rebates for imported materials

VAT exemptions and import tariff rebates for imported materials

| (69) | Pursuant to Law 83/2002, entities operating in a Special Economic Zone are allowed to import materials without paying any customs duties, sales taxes or any other taxes or duties, which would otherwise be due, to the extent that these imported materials are re-exported as such or as processed into a downstream product which is then exported. |
| --- | --- |

(69)

Pursuant to Law 83/2002, entities operating in a Special Economic Zone are allowed to import materials without paying any customs duties, sales taxes or any other taxes or duties, which would otherwise be due, to the extent that these imported materials are re-exported as such or as processed into a downstream product which is then exported.

3.4.1.   Legal basis

Legal basis

| (70) | The legal bases of this programme are:






  — | Law No 83/2002 on Economic Zones of a Special Nature (‘Law 83/2002’), |
| --- | --- | --- |

(70)

The legal bases of this programme are:

—

Law No 83/2002 on Economic Zones of a Special Nature (‘Law 83/2002’),

| — | Prime Ministerial Decree No 1625 of 2002 Issuing The Executive Regulations for the Law of Economic Zones of a Special Nature, |
| --- | --- |

—

Prime Ministerial Decree No 1625 of 2002 Issuing The Executive Regulations for the Law of Economic Zones of a Special Nature,

| — | Decree of the President of the Arab Republic of Egypt on Law No 27/2015 Amending some Provisions of Law of Economic Zone of Special Nature issued by Law No 83/2002 (‘Law 27/2015’), |
| --- | --- |

—

Decree of the President of the Arab Republic of Egypt on Law No 27/2015 Amending some Provisions of Law of Economic Zone of Special Nature issued by Law No 83/2002 (‘Law 27/2015’),

| — | Investment Law as Enacted by Law No 72 of 2017, |
| --- | --- |

—

Investment Law as Enacted by Law No 72 of 2017,

| — | The Prime Minister’s Draft Resolution No (2310) of 2017 Concerning issuing the Executive Regulations of Investment Law Issued by virtue of Law No 72 of 2017, |
| --- | --- |

—

The Prime Minister’s Draft Resolution No (2310) of 2017 Concerning issuing the Executive Regulations of Investment Law Issued by virtue of Law No 72 of 2017,

| — | VAT Law as Enacted by Law No 67 of 2016, |
| --- | --- |

—

VAT Law as Enacted by Law No 67 of 2016,

| — | Executive Regulations of the VAT Law, Decree of the Ministry of Finance No 66/2017. |
| --- | --- |

—

Executive Regulations of the VAT Law, Decree of the Ministry of Finance No 66/2017.

3.4.2.   Findings of the investigation

Findings of the investigation

| (71) | As mentioned in recital (46) above, the SCZone is part of a separate customs area. According to Article 42 of Law 83/2002, imported raw materials, supplies, spare parts, and any other material or components imported from overseas shall be exempted from taxes and duties as long as they are allocated to produced goods or services for the licensed activity within the SCZone. On the other hand, all taxes and duties need to be paid for any products released into the domestic market outside of the SCZone. |
| --- | --- |

(71)

As mentioned in recital (46) above, the SCZone is part of a separate customs area. According to Article 42 of Law 83/2002, imported raw materials, supplies, spare parts, and any other material or components imported from overseas shall be exempted from taxes and duties as long as they are allocated to produced goods or services for the licensed activity within the SCZone. On the other hand, all taxes and duties need to be paid for any products released into the domestic market outside of the SCZone.

| (72) | During the investigation, the Commission found that, in line with the provisions of the above-mentioned article of Law 83/2002, Jushi Egypt had received waivers of VAT and import duties on imports of input materials used in the production of exported finished goods (and in particular, the product concerned). |
| --- | --- |

(72)

During the investigation, the Commission found that, in line with the provisions of the above-mentioned article of Law 83/2002, Jushi Egypt had received waivers of VAT and import duties on imports of input materials used in the production of exported finished goods (and in particular, the product concerned).

| (73) | Concerning the waiver for import duties, such a setup would seem to correspond to a duty drawback scheme as described in Annex I(i) of the basic Regulation. Pursuant to point (i) of Annex I, substitution drawback systems can constitute an export subsidy to the extent that they result in an excess drawback of the import charges levied initially on the imported inputs for which drawback is being claimed. |
| --- | --- |

(73)

Concerning the waiver for import duties, such a setup would seem to correspond to a duty drawback scheme as described in Annex I(i) of the basic Regulation. Pursuant to point (i) of Annex I, substitution drawback systems can constitute an export subsidy to the extent that they result in an excess drawback of the import charges levied initially on the imported inputs for which drawback is being claimed.

| (74) | In order to determine whether such excess remission existed, in accordance with Annex III, point II of the basic Regulation, the Commission requested additional information from the GOE on the duty drawback scheme in general, and more specifically on the existence and effective application of the accompanying monitoring and verification procedures. |
| --- | --- |

(74)

In order to determine whether such excess remission existed, in accordance with Annex III, point II of the basic Regulation, the Commission requested additional information from the GOE on the duty drawback scheme in general, and more specifically on the existence and effective application of the accompanying monitoring and verification procedures.

| (75) | Based on the information initially received, it appeared the GOE had put a legislative framework in place for monitoring the duty drawback system, including where applicable the refund of import duties paid. However, during the verification visits at Jushi Egypt, it was found out that this framework was not effectively applied in practice. |
| --- | --- |

(75)

Based on the information initially received, it appeared the GOE had put a legislative framework in place for monitoring the duty drawback system, including where applicable the refund of import duties paid. However, during the verification visits at Jushi Egypt, it was found out that this framework was not effectively applied in practice.

| (76) | Jushi Egypt did not pay any import duties (or VAT) on any of their material purchases in the investigation period, be they used for domestic or for export sales of finished goods. Normally, a deposit needs to be made on a blocked account of the customs authorities, from which duties can be collected periodically. However, during the investigation period, no deposit was made, and no amounts were collected by the authorities. |
| --- | --- |

(76)

Jushi Egypt did not pay any import duties (or VAT) on any of their material purchases in the investigation period, be they used for domestic or for export sales of finished goods. Normally, a deposit needs to be made on a blocked account of the customs authorities, from which duties can be collected periodically. However, during the investigation period, no deposit was made, and no amounts were collected by the authorities.

| (77) | After the investigation period, Jushi Egypt made a small payment to the Egyptian authorities, allegedly to cover excess remission for domestic sales. However, no evidence was provided that this payment was indeed made for excess remission of domestic sales, or related to domestic sales made during the investigation period. Yet, there was also evidence that Jushi Egypt received reimbursement of import duties paid in previous periods, before obtaining a waiver for import duties. |
| --- | --- |

(77)

After the investigation period, Jushi Egypt made a small payment to the Egyptian authorities, allegedly to cover excess remission for domestic sales. However, no evidence was provided that this payment was indeed made for excess remission of domestic sales, or related to domestic sales made during the investigation period. Yet, there was also evidence that Jushi Egypt received reimbursement of import duties paid in previous periods, before obtaining a waiver for import duties.

| (78) | After further exchanges with the GOE, additional information was received, showing that in fact the monitoring and verification framework for the collection of customs duties in the SCZone was still under construction during the investigation period. For example, the Committee for the Adjustment of Import Duties Balances was only established in 2019 according to the Decree of the Head of Customs Authority No 158, the setup of a customs inspection committee was still ongoing in 2019, and executive procedures had not been issued yet. Thus, the Commission provisionally concluded that there was no effective and proper duty drawback system in place. |
| --- | --- |

(78)

After further exchanges with the GOE, additional information was received, showing that in fact the monitoring and verification framework for the collection of customs duties in the SCZone was still under construction during the investigation period. For example, the Committee for the Adjustment of Import Duties Balances was only established in 2019 according to the Decree of the Head of Customs Authority No 158, the setup of a customs inspection committee was still ongoing in 2019, and executive procedures had not been issued yet. Thus, the Commission provisionally concluded that there was no effective and proper duty drawback system in place.

| (79) | In addition, as mentioned in recital (50) above, VAT on imported goods is withheld instead of paid upfront in the SCZone. Tax authorities only retain a right to reclaim VAT afterwards. |
| --- | --- |

(79)

In addition, as mentioned in recital (50) above, VAT on imported goods is withheld instead of paid upfront in the SCZone. Tax authorities only retain a right to reclaim VAT afterwards.

| (80) | The investigation also revealed that for certain inputs that Jushi Egypt used in the production process from Egyptian based suppliers, VAT was charged at the standard rate regardless of the fact that the company was based in the special zone where VAT was not normally due. These transactions did give rise to a VAT credit for Jushi Egypt. Conversely, sales of inputs between companies located within the special zone were not subject to domestic VAT regardless of whether the goods produced with such inputs would be exported or sold domestically. Jushi Egypt was not able to show which inputs (sourced domestically or imported) were used or consumed into products exported or sold domestically. |
| --- | --- |

(80)

The investigation also revealed that for certain inputs that Jushi Egypt used in the production process from Egyptian based suppliers, VAT was charged at the standard rate regardless of the fact that the company was based in the special zone where VAT was not normally due. These transactions did give rise to a VAT credit for Jushi Egypt. Conversely, sales of inputs between companies located within the special zone were not subject to domestic VAT regardless of whether the goods produced with such inputs would be exported or sold domestically. Jushi Egypt was not able to show which inputs (sourced domestically or imported) were used or consumed into products exported or sold domestically.

| (81) | All these elements show that this special zone is not a classical export processing zone, and is also different from other special free zones existing within Egypt, but it is a unique and hybrid kind of special zone with several specific features that distinguish it from other zones. The applicable laws and regulations do not appear to be applied in practice in the zone, so the Commission provisionally based its findings on its understanding of how operations in the zone work in practice. |
| --- | --- |

(81)

All these elements show that this special zone is not a classical export processing zone, and is also different from other special free zones existing within Egypt, but it is a unique and hybrid kind of special zone with several specific features that distinguish it from other zones. The applicable laws and regulations do not appear to be applied in practice in the zone, so the Commission provisionally based its findings on its understanding of how operations in the zone work in practice.

| (82) | In addition and importantly, the absence of administrative authorities in charge of the administration, monitoring and enforcement of the tax system and any of the tax obligations relating to the special tax system applicable in the zone make it a unique area where the companies established therein are entirely free to follow or dodge the tax rules without any possible consequence whatsoever. Therefore, in view of the special circumstances of this zone, and on the basis of the information available, the Commission provisionally decided to consider the VAT exemptions on imported inputs as a de facto exemption to pay such VAT, regardless of whether the inputs are later on incorporated into finished products exported or sold domestically. |
| --- | --- |

(82)

In addition and importantly, the absence of administrative authorities in charge of the administration, monitoring and enforcement of the tax system and any of the tax obligations relating to the special tax system applicable in the zone make it a unique area where the companies established therein are entirely free to follow or dodge the tax rules without any possible consequence whatsoever. Therefore, in view of the special circumstances of this zone, and on the basis of the information available, the Commission provisionally decided to consider the VAT exemptions on imported inputs as a de facto exemption to pay such VAT, regardless of whether the inputs are later on incorporated into finished products exported or sold domestically.

de facto

3.4.3.   Conclusion

Conclusion

| (83) | The Commission thus provisionally concluded that the GOE’s duty drawback monitoring system was not effectively applied and could not be qualified as such for all the reasons explained in the previous section and summarised at recital (73). In fact, as explained in at recitals (68) and (70), the investigation showed that the GOE had not even set up an authority in charge of administering and enforcing any tax obligation for entities located in the zone, including customs duties and VAT due on imported materials. |
| --- | --- |

(83)

The Commission thus provisionally concluded that the GOE’s duty drawback monitoring system was not effectively applied and could not be qualified as such for all the reasons explained in the previous section and summarised at recital (73). In fact, as explained in at recitals (68) and (70), the investigation showed that the GOE had not even set up an authority in charge of administering and enforcing any tax obligation for entities located in the zone, including customs duties and VAT due on imported materials.

| (84) | Furthermore, the Commission determined that the purported duty drawback system for inputs used in exported finished goods led to revenue forgone, which constitute a countervailable subsidy within the meaning of Article 3(1)(a)(ii) of the basic Regulation, as they result in an excess drawback of the import charges levied initially on the imported inputs for which drawback is being claimed. The GOE did not provide a further examination of the transactions at issue either. |
| --- | --- |

(84)

Furthermore, the Commission determined that the purported duty drawback system for inputs used in exported finished goods led to revenue forgone, which constitute a countervailable subsidy within the meaning of Article 3(1)(a)(ii) of the basic Regulation, as they result in an excess drawback of the import charges levied initially on the imported inputs for which drawback is being claimed. The GOE did not provide a further examination of the transactions at issue either.

| (85) | These excess remissions are also specific within the meaning of Article 4(2)(a) of the basic Regulation as they are not generally applicable in Egypt, and apply only to the companies located in the SCZone. |
| --- | --- |

(85)

These excess remissions are also specific within the meaning of Article 4(2)(a) of the basic Regulation as they are not generally applicable in Egypt, and apply only to the companies located in the SCZone.

| (86) | Furthermore, the de facto VAT exemption on imported materials constitutes a financial contribution in the form of revenue forgone by the GOE within the meaning of Article 3(1)(a)(ii) of the basic Regulation as eligible enterprises are relieved from payment of VAT which would be otherwise due. It also confers a benefit on the recipient companies in the sense of Article 3(2) of the basic Regulation. The programme is specific within the meaning of Article 4(2)(a) of the basic Regulation, since the legislation limits the VAT exemption only to enterprises that are located within the SCZone. |
| --- | --- |

(86)

Furthermore, the de facto VAT exemption on imported materials constitutes a financial contribution in the form of revenue forgone by the GOE within the meaning of Article 3(1)(a)(ii) of the basic Regulation as eligible enterprises are relieved from payment of VAT which would be otherwise due. It also confers a benefit on the recipient companies in the sense of Article 3(2) of the basic Regulation. The programme is specific within the meaning of Article 4(2)(a) of the basic Regulation, since the legislation limits the VAT exemption only to enterprises that are located within the SCZone.

de facto

3.4.4.   Calculation of the subsidy amount

Calculation of the subsidy amount

| (87) | The amount of this countervailable subsidy is calculated in terms of the benefit conferred on the recipient, which is found to exist during the investigation period. |
| --- | --- |

(87)

The amount of this countervailable subsidy is calculated in terms of the benefit conferred on the recipient, which is found to exist during the investigation period.

| (88) | Concerning the import duties, the benefit conferred on the recipient is considered to be the difference between the amount of import duties due during the investigation period, and the actual amount of import duties paid during the investigation period. |
| --- | --- |

(88)

Concerning the import duties, the benefit conferred on the recipient is considered to be the difference between the amount of import duties due during the investigation period, and the actual amount of import duties paid during the investigation period.

| (89) | In order to determine the amount of import duties due, the Commission considered that the average consumption ratio for all types of finished goods is the same, since they all belong to the same general category of products. The Commission based the consumption ratio on the records of the exporting producer. Then, it first established the quantity of materials imported during the investigation period. Second, it calculated the ratio between the domestic sales in comparison with the total sales of Jushi Egypt. Third, the Commission applied this domestic sales ratio to the total volume of imported materials and it determined the quantity of imported materials for which import duties would be due. |
| --- | --- |

(89)

In order to determine the amount of import duties due, the Commission considered that the average consumption ratio for all types of finished goods is the same, since they all belong to the same general category of products. The Commission based the consumption ratio on the records of the exporting producer. Then, it first established the quantity of materials imported during the investigation period. Second, it calculated the ratio between the domestic sales in comparison with the total sales of Jushi Egypt. Third, the Commission applied this domestic sales ratio to the total volume of imported materials and it determined the quantity of imported materials for which import duties would be due.

| (90) | Finally, in order to establish the amount of benefit, the Commission calculated the amount of import duty payable for the quantities of materials used for the production of goods sold on the domestic market. |
| --- | --- |

(90)

Finally, in order to establish the amount of benefit, the Commission calculated the amount of import duty payable for the quantities of materials used for the production of goods sold on the domestic market.

| (91) | Concerning the revenue foregone in the form of a de facto VAT exemption, the benefit was calculated by taking the full amount of VAT normally payable but not paid during the investigation period on the purchases of imported inputs. |
| --- | --- |

(91)

Concerning the revenue foregone in the form of a de facto VAT exemption, the benefit was calculated by taking the full amount of VAT normally payable but not paid during the investigation period on the purchases of imported inputs.

de facto

| (92) | The amount of subsidy provisionally established with regard to this type of subsidies during the investigation period for the exporting producers was 7,42 %. |
| --- | --- |

(92)

The amount of subsidy provisionally established with regard to this type of subsidies during the investigation period for the exporting producers was 7,42 %.

3.5.   Income tax

Income tax

| (93) | The legal bases of this programme are:






  — | The Income Tax Law as enacted by law 91 of 2005, and |
| --- | --- | --- |

(93)

The legal bases of this programme are:

—

The Income Tax Law as enacted by law 91 of 2005, and

| — | Ministry of Investment Decree No 16 of 2017 adding an addendum (A) entitled ‘The effects of changes in currencies exchange rates’ to Egyptian Accounting Standard No 13. |
| --- | --- |

—

Ministry of Investment Decree No 16 of 2017 adding an addendum (A) entitled ‘The effects of changes in currencies exchange rates’ to Egyptian Accounting Standard No 13.

3.5.1.   Analysis

Analysis

| (94) | Jushi Egypt is subject to the normal Egyptian income tax of 22,5 %. |
| --- | --- |

(94)

Jushi Egypt is subject to the normal Egyptian income tax of 22,5 %.

| (95) | In 2016, the Egyptian government decided to change the fixed exchange rate of the Egyptian pound (‘EGP’) into a floating exchange rate, based on a recommendation from the International Monetary Fund. As a result, the Egyptian pound lost around half of its value against other major currencies such as the USD and the EUR within a month. In order to address this sudden currency fluctuation, the GOE issued a special accounting standard, as well as a special tax rule for treating foreign exchange differences. As a result, companies were allowed to deduct foreign exchange differences due to the devaluation of the EGP from their taxable income more extensively. |
| --- | --- |

(95)

In 2016, the Egyptian government decided to change the fixed exchange rate of the Egyptian pound (‘EGP’) into a floating exchange rate, based on a recommendation from the International Monetary Fund. As a result, the Egyptian pound lost around half of its value against other major currencies such as the USD and the EUR within a month. In order to address this sudden currency fluctuation, the GOE issued a special accounting standard, as well as a special tax rule for treating foreign exchange differences. As a result, companies were allowed to deduct foreign exchange differences due to the devaluation of the EGP from their taxable income more extensively.

| (96) | Although this legislation was generally applicable to all companies in Egypt and was meant to offset the negative effects of the devaluation of the Egyptian currency, it created a de facto substantial benefit for a limited number of companies in Egypt, i.e. companies that are export-oriented and operate their business almost entirely in foreign currencies such as USD or EUR. This particular category of companies did not incur any actual loss as a consequence of the devaluation of the EGP, but could benefit from the special accounting standard issued by the GOE for tax purposes. As a consequence, companies operating their business in a foreign currency appear to be loss making for tax purposes even though their financial situation can show healthy profits. On the contrary, Egyptian companies operating their business in EGP have suffered actual losses that had a real impact on their business, which was addressed by the special tax rule issued by the GOE. |
| --- | --- |

(96)

Although this legislation was generally applicable to all companies in Egypt and was meant to offset the negative effects of the devaluation of the Egyptian currency, it created a de facto substantial benefit for a limited number of companies in Egypt, i.e. companies that are export-oriented and operate their business almost entirely in foreign currencies such as USD or EUR. This particular category of companies did not incur any actual loss as a consequence of the devaluation of the EGP, but could benefit from the special accounting standard issued by the GOE for tax purposes. As a consequence, companies operating their business in a foreign currency appear to be loss making for tax purposes even though their financial situation can show healthy profits. On the contrary, Egyptian companies operating their business in EGP have suffered actual losses that had a real impact on their business, which was addressed by the special tax rule issued by the GOE.

de facto

| (97) | Jushi Egypt benefitted disproportionately from this measure, since the investigation showed that Jushi Egypt operates its business almost exclusively in USD or EUR and it has almost no transactions in Egyptian pounds. Indeed, it is almost exclusively export-oriented, imports almost all of its equipment, its loans are in foreign currencies as well as a major part of its materials. Indeed, As a result, the losses registered by Jushi Egypt because of the devaluation of the EGP, in particular because of the significant foreign currency loans, are not actual and are only used for tax purposes to decrease the taxable income. |
| --- | --- |

(97)

Jushi Egypt benefitted disproportionately from this measure, since the investigation showed that Jushi Egypt operates its business almost exclusively in USD or EUR and it has almost no transactions in Egyptian pounds. Indeed, it is almost exclusively export-oriented, imports almost all of its equipment, its loans are in foreign currencies as well as a major part of its materials. Indeed, As a result, the losses registered by Jushi Egypt because of the devaluation of the EGP, in particular because of the significant foreign currency loans, are not actual and are only used for tax purposes to decrease the taxable income.

| (98) | In addition, the tax deduction was supposed to be a temporary measure, applicable only to transactions affected at the time of the devaluation. Nevertheless, in the investigation period, Jushi Egypt still deducted substantial amounts from its taxable income under realized and unrealized foreign exchange differences. As a result, it was loss-making according to its income tax statements, even though its financial statements showed a healthy and sustainable profit. |
| --- | --- |

(98)

In addition, the tax deduction was supposed to be a temporary measure, applicable only to transactions affected at the time of the devaluation. Nevertheless, in the investigation period, Jushi Egypt still deducted substantial amounts from its taxable income under realized and unrealized foreign exchange differences. As a result, it was loss-making according to its income tax statements, even though its financial statements showed a healthy and sustainable profit.

3.5.2.   Conclusion

Conclusion

| (99) | In light of the above considerations, the Commission concluded that these tax benefits constitute revenue foregone by the GOE in the sense of Article 3(1)(a)(ii) of the basic Regulation and provided a benefit under Article 3(2) of the basic Regulation. |
| --- | --- |

(99)

In light of the above considerations, the Commission concluded that these tax benefits constitute revenue foregone by the GOE in the sense of Article 3(1)(a)(ii) of the basic Regulation and provided a benefit under Article 3(2) of the basic Regulation.

| (100) | In addition, they are de facto specific to the exporting producer Jushi Egypt, in accordance with Article 4(2)(c) of the basic Regulation, as it is used predominantly by a limited group of companies operating almost exclusively in foreign currencies. |
| --- | --- |

(100)

In addition, they are de facto specific to the exporting producer Jushi Egypt, in accordance with Article 4(2)(c) of the basic Regulation, as it is used predominantly by a limited group of companies operating almost exclusively in foreign currencies.

de facto

3.5.3.   Calculation of the subsidy amount

Calculation of the subsidy amount

| (101) | The benefit to Jushi Egypt was established on the basis of the information contained in the 2018 income tax declaration. Firstly, the amount deducted from the taxable income under the provision mentioned above in Section 3.5.1 was established. Secondly, the generally applicable tax rate of 22,5 % was applied to this deducted amount. Finally, this amount was expressed as a percentage of the total turnover of Jushi Egypt in the investigation period. |
| --- | --- |

(101)

The benefit to Jushi Egypt was established on the basis of the information contained in the 2018 income tax declaration. Firstly, the amount deducted from the taxable income under the provision mentioned above in Section 3.5.1 was established. Secondly, the generally applicable tax rate of 22,5 % was applied to this deducted amount. Finally, this amount was expressed as a percentage of the total turnover of Jushi Egypt in the investigation period.

| (102) | The subsidy amounts found for this direct tax programme amounted to 1,68 % for Jushi Egypt. |
| --- | --- |

(102)

The subsidy amounts found for this direct tax programme amounted to 1,68 % for Jushi Egypt.

3.6.   Other schemes

Other schemes

| (103) | Regarding all other schemes listed in recital (43) above, the Commission continues its investigation, including in view of the amendments of the Notice of Initiation referred to in recital (18) above. |
| --- | --- |

(103)

Regarding all other schemes listed in recital (43) above, the Commission continues its investigation, including in view of the amendments of the Notice of Initiation referred to in recital (18) above.

3.7.   Conclusion on subsidisation

Conclusion on subsidisation

| (104) | The Commission calculated the amount of countervailable subsidies for the exporting producer in accordance with the provisions of the basic Regulation by examining each subsidy or subsidy programme, and added these figures together to calculate a total amount of subsidisation for the exporting producer for the investigation period. To calculate the overall subsidisation below, the Commission first calculated the percentage subsidisation, being the subsidy amount as a percentage of the company’s total turnover. This percentage was then used to calculate the subsidy allocated to exports of the product concerned to the Union during the investigation period. The subsidy amount per tonne of product concerned exported to the Union during the investigation period was then calculated, and the margins below calculated as a percentage of the Costs, Insurance and Freight (‘CIF’) value of the same exports per tonne. |
| --- | --- |

(104)

The Commission calculated the amount of countervailable subsidies for the exporting producer in accordance with the provisions of the basic Regulation by examining each subsidy or subsidy programme, and added these figures together to calculate a total amount of subsidisation for the exporting producer for the investigation period. To calculate the overall subsidisation below, the Commission first calculated the percentage subsidisation, being the subsidy amount as a percentage of the company’s total turnover. This percentage was then used to calculate the subsidy allocated to exports of the product concerned to the Union during the investigation period. The subsidy amount per tonne of product concerned exported to the Union during the investigation period was then calculated, and the margins below calculated as a percentage of the Costs, Insurance and Freight (‘CIF’) value of the same exports per tonne.

| (105) | Given the full cooperation of Egyptian exporting producers, the amount for ‘all other companies’ was provisionally set at the level of the sole Egyptian exporting producer.

  Table 1


  Provisional subsidy rates







  Company | Provisional subsidy rate |
| --- | --- | --- |
| Jushi Egypt for Fiberglass Industry S.A.E. | 8,7 % |
| All other companies | 8,7 % |

(105)

Given the full cooperation of Egyptian exporting producers, the amount for ‘all other companies’ was provisionally set at the level of the sole Egyptian exporting producer.

Table 1

Table 1

Provisional subsidy rates

Provisional subsidy rates

Company

Provisional subsidy rate

Jushi Egypt for Fiberglass Industry S.A.E.

8,7 %

All other companies

8,7 %

4.   INJURY

INJURY

4.1.   Definition of the Union industry and Union production

Definition of the Union industry and Union production

| (106) | During the investigation period, seven producers in the Union manufactured the like product. They constitute the ‘Union industry’ within the meaning of Article 9(1) of the basic Regulation. |
| --- | --- |

(106)

During the investigation period, seven producers in the Union manufactured the like product. They constitute the ‘Union industry’ within the meaning of Article 9(1) of the basic Regulation.

| (107) | As indicated in recitals (31) and (32), the Commission selected a sample of Union producers. The sample contained three Union producers representing 68 % of the total Union production of the like product during the investigation period. |
| --- | --- |

(107)

As indicated in recitals (31) and (32), the Commission selected a sample of Union producers. The sample contained three Union producers representing 68 % of the total Union production of the like product during the investigation period.

| (108) | The Commission established the total Union production of GFR during the investigation period at around 695 000 tonnes, based on information gathered by the complainant and verified during the investigation.

  Table 2


  Union production | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Total Union production (tonnes) | 701 611 | 694 178 | 693 123 | 695 324 |
| Index | 100 | 99 | 99 | 99 |
| Source: Complainant |

(108)

The Commission established the total Union production of GFR during the investigation period at around 695 000 tonnes, based on information gathered by the complainant and verified during the investigation.

Table 2

Table 2

Union production

Union production

2016

2017

2018

IP

Total Union production (tonnes)

701 611

694 178

693 123

695 324

Index

Index

100

100

99

99

99

99

99

99

Source: Complainant

Source:

| (109) | Total Union production remained stable between 2016 and the end of the investigation period, showing a very slightly downward trend. |
| --- | --- |

(109)

Total Union production remained stable between 2016 and the end of the investigation period, showing a very slightly downward trend.

4.2.   Union consumption

Union consumption

| (110) | The Commission established the Union consumption of GFR by adding imports of GFR into the Union to the sales of the Union industry on the Union market. |
| --- | --- |

(110)

The Commission established the Union consumption of GFR by adding imports of GFR into the Union to the sales of the Union industry on the Union market.

| (111) | Union consumption developed as follows:

  Table 3


  Union consumption | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Total Union consumption (tonnes) | 978 454 | 1 045 331 | 1 058 263 | 1 027 982 |
| Index | 100 | 107 | 108 | 105 |
| Source: Complainant, Surveillance 2 database |

(111)

Union consumption developed as follows:

Table 3

Table 3

Union consumption

Union consumption

2016

2017

2018

IP

Total Union consumption (tonnes)

978 454

1 045 331

1 058 263

1 027 982

Index

Index

100

100

107

107

108

108

105

105

Source: Complainant, Surveillance 2 database

Source:

| (112) | The Union’s consumption of GFR rose between the beginning of the period considered and the end by 5 %; however, the year-on-year trend shows consumption slightly varying throughout the period. |
| --- | --- |

(112)

The Union’s consumption of GFR rose between the beginning of the period considered and the end by 5 %; however, the year-on-year trend shows consumption slightly varying throughout the period.

4.3.   Imports from the country concerned

Imports from the country concerned

4.3.1.   Volume and market share of the imports from the country concerned

Volume and market share of the imports from the country concerned

| (113) | The Commission established the volume of imports and their market share based on data from the Surveillance 2 (13) database. |
| --- | --- |

(113)

The Commission established the volume of imports and their market share based on data from the Surveillance 2 (13) database.

13

| (114) | GFR imports into the Union from the country concerned developed as follows:

  Table 4


  Import volume and market share | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Volume of imports from Egypt (tonnes) | 50 529 | 95 865 | 146 304 | 144 169 |
| Index | 100 | 190 | 290 | 285 |
| Market share (%) | 5 | 9 | 14 | 14 |
| Source: Surveillance 2 database |

(114)

GFR imports into the Union from the country concerned developed as follows:

Table 4

Table 4

Import volume and market share

Import volume and market share

2016

2017

2018

IP

Volume of imports from Egypt (tonnes)

50 529

95 865

146 304

144 169

Index

Index

100

100

190

190

290

290

285

285

Market share (%)

5

9

14

14

Source: Surveillance 2 database

Source: Surveillance 2 database

| (115) | Imports of GFR from Egypt increased rapidly from 2016 to 2018, nearly trebling in size. The market share of these imports, in the context of consumption rising by 5 %, therefore trebled as well. |
| --- | --- |

(115)

Imports of GFR from Egypt increased rapidly from 2016 to 2018, nearly trebling in size. The market share of these imports, in the context of consumption rising by 5 %, therefore trebled as well.

4.3.2.   Prices of imports from the country concerned and price undercutting

Prices of imports from the country concerned and price undercutting

| (116) | The evolution of average import prices in the period considered was as follows:

  Table 5


  Import price | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Import prices from Egypt (EUR per tonne) | 993 | 918 | 898 | 904 |
| Index | 100 | 92 | 90 | 91 |
| Source: Surveillance 2 database |

(116)

The evolution of average import prices in the period considered was as follows:

Table 5

Table 5

Import price

Import price

2016

2017

2018

IP

Import prices from Egypt (EUR per tonne)

993

918

898

904

Index

Index

100

100

92

92

90

90

91

91

Source: Surveillance 2 database

Source:

| (117) | The trend of import prices from Egypt is clearly downward during the period considered. During the IP, there was a difference of around 20 % between those import prices and the EU sales prices (Table 9). |
| --- | --- |

(117)

The trend of import prices from Egypt is clearly downward during the period considered. During the IP, there was a difference of around 20 % between those import prices and the EU sales prices (Table 9).

| (118) | The Commission determined the price undercutting during the investigation period by comparing:






  (1) | the weighted average prices per product type of the imports from the Egyptian producer to the first independent customer on the Union market, established on a Cost, Insurance, Freight (‘CIF’) basis, with appropriate adjustments for post-importation costs; and |
| --- | --- | --- |

(118)

The Commission determined the price undercutting during the investigation period by comparing:

(1)

the weighted average prices per product type of the imports from the Egyptian producer to the first independent customer on the Union market, established on a Cost, Insurance, Freight (‘CIF’) basis, with appropriate adjustments for post-importation costs; and

| (2) | the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market. |
| --- | --- |

(2)

the weighted average sales prices per product type of the sampled Union producers charged to unrelated customers on the Union market.

| (119) | The Commission made price comparisons on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts. |
| --- | --- |

(119)

The Commission made price comparisons on a type-by-type basis for transactions at the same level of trade, duly adjusted where necessary, and after deduction of rebates and discounts.

| (120) | Where the sale from the Egyptian producer to the first independent customer on the Union market was through a related sales company based in the EU, the price of the import was established on a CIF basis, but an adjustment was made to this price to take account of the SG&A and profit of the related importer. |
| --- | --- |

(120)

Where the sale from the Egyptian producer to the first independent customer on the Union market was through a related sales company based in the EU, the price of the import was established on a CIF basis, but an adjustment was made to this price to take account of the SG&A and profit of the related importer.

| (121) | The comparison on a type-by-type basis was possible due to the use of a common Product Control Number (‘PCN’) to describe the product types of GFR exported to the EU from Egypt and also sold by the sampled Union producers. |
| --- | --- |

(121)

The comparison on a type-by-type basis was possible due to the use of a common Product Control Number (‘PCN’) to describe the product types of GFR exported to the EU from Egypt and also sold by the sampled Union producers.

| (122) | The calculation showed a weighted average undercutting margin by the imports of Jushi Egypt on the Union market of 16 %. |
| --- | --- |

(122)

The calculation showed a weighted average undercutting margin by the imports of Jushi Egypt on the Union market of 16 %.

| (123) | Therefore the Commission provisionally established that the prices of Egyptian imports significantly undercut the prices of the Union industry. |
| --- | --- |

(123)

Therefore the Commission provisionally established that the prices of Egyptian imports significantly undercut the prices of the Union industry.

4.4.   Economic situation of the Union industry

Economic situation of the Union industry

4.4.1.   General remarks

General remarks

| (124) | In accordance with Article 8(5) of the basic Regulation, the examination of the impact of the subsidised imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered. |
| --- | --- |

(124)

In accordance with Article 8(5) of the basic Regulation, the examination of the impact of the subsidised imports on the Union industry included an evaluation of all economic indicators having a bearing on the state of the Union industry during the period considered.

| (125) | As mentioned in recitals (17) to (20), sampling was used for the determination of injury and the negative impact on the level of the sales prices, quantities sold, market share and profits of the Union industry. |
| --- | --- |

(125)

As mentioned in recitals (17) to (20), sampling was used for the determination of injury and the negative impact on the level of the sales prices, quantities sold, market share and profits of the Union industry.

| (126) | For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators based on data contained in the questionnaire replies from the sampled Union producers and based on the information provided by the complainant. The microeconomic indicators were based on the data from the sampled producers’ questionnaire replies. |
| --- | --- |

(126)

For the injury determination, the Commission distinguished between macroeconomic and microeconomic injury indicators. The Commission evaluated the macroeconomic indicators based on data contained in the questionnaire replies from the sampled Union producers and based on the information provided by the complainant. The microeconomic indicators were based on the data from the sampled producers’ questionnaire replies.

| (127) | Both sets of data were found to be representative of the economic situation of the Union industry. |
| --- | --- |

(127)

Both sets of data were found to be representative of the economic situation of the Union industry.

| (128) | The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the amount of subsidisation, and recovery from past subsidisation or dumping. |
| --- | --- |

(128)

The macroeconomic indicators are: production, production capacity, capacity utilisation, sales volume, market share, growth, employment, productivity, magnitude of the amount of subsidisation, and recovery from past subsidisation or dumping.

| (129) | The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital. |
| --- | --- |

(129)

The microeconomic indicators are: average unit prices, unit cost, labour costs, inventories, profitability, cash flow, investments, return on investments, and ability to raise capital.

4.4.2.   Macroeconomic indicators

Macroeconomic indicators

4.4.2.1.   Production capacity and capacity utilisation

| (130) | The total Union production capacity and capacity utilisation developed over the period considered as follows:

  Table 6


  Production capacity and capacity utilisation | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Production capacity (tonnes) | 759 107 | 760 104 | 753 688 | 751 098 |
| Index | 100 | 100 | 99 | 99 |
| Capacity utilisation (%) | 92 | 91 | 92 | 93 |
| Source: Complainant |

(130)

The total Union production capacity and capacity utilisation developed over the period considered as follows:

Table 6

Table 6

Production capacity and capacity utilisation

Production capacity and capacity utilisation

2016

2017

2018

IP

Production capacity (tonnes)

759 107

760 104

753 688

751 098

Index

Index

100

100

100

100

99

99

99

99

Capacity utilisation (%)

92

91

92

93

Source: Complainant

Source:

| (131) | Production capacity remained stable during the period considered. This is because capacity is based primarily on the number of furnaces feeding the production lines, and increasing capacity is a very capital intensive operation. |
| --- | --- |

(131)

Production capacity remained stable during the period considered. This is because capacity is based primarily on the number of furnaces feeding the production lines, and increasing capacity is a very capital intensive operation.

| (132) | Capacity utilisation of the Union industry also remained high and stable during the period considered. Once a furnace is in operation, it is economically necessary to keep the furnace going without a break. |
| --- | --- |

(132)

Capacity utilisation of the Union industry also remained high and stable during the period considered. Once a furnace is in operation, it is economically necessary to keep the furnace going without a break.

4.4.2.2.   Sales volume and market share

| (133) | The Union industry’s sales volume and market share developed over the period considered as follows:

  Table 7


  Sales volume and market share | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Sales volume on the Union market (tonnes) | 622 504 | 651 082 | 609 902 | 594 097 |
| Index | 100 | 105 | 98 | 95 |
| Market share (%) | 64 | 62 | 58 | 58 |
| Source: Complainant, import and export statistics |

(133)

The Union industry’s sales volume and market share developed over the period considered as follows:

Table 7

Table 7

Sales volume and market share

Sales volume and market share

2016

2017

2018

IP

Sales volume on the Union market (tonnes)

622 504

651 082

609 902

594 097

Index

Index

100

100

105

105

98

98

95

95

Market share (%)

64

62

58

58

Source: Complainant, import and export statistics

Source:

| (134) | The Union industry’s sales increased in absolute terms between 2016 and 2017, but then dropped back, losing 5 percentage points between 2016 and the end of the IP. The market share of the Union industry has been decreasing throughout the period considered from 64 % to 58 %. This drop has to be seen against the backdrop of consumption in the Union growing by 5 % and rising imports from Egypt at lower and decreasing prices. |
| --- | --- |

(134)

The Union industry’s sales increased in absolute terms between 2016 and 2017, but then dropped back, losing 5 percentage points between 2016 and the end of the IP. The market share of the Union industry has been decreasing throughout the period considered from 64 % to 58 %. This drop has to be seen against the backdrop of consumption in the Union growing by 5 % and rising imports from Egypt at lower and decreasing prices.

4.4.2.3.   Employment and productivity

| (135) | Employment and productivity developed over the period considered as follows:

  Table 8


  Employment and productivity | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Number of employees | 3 620 | 3 636 | 3 661 | 3 686 |
| Index | 100 | 100 | 101 | 102 |
| Productivity (tonne/employee) | 194 | 191 | 189 | 189 |
| Index | 100 | 99 | 98 | 97 |
| Source: Complainant |

(135)

Employment and productivity developed over the period considered as follows:

Table 8

Table 8

Employment and productivity

Employment and productivity

2016

2017

2018

IP

Number of employees

3 620

3 636

3 661

3 686

Index

Index

100

100

100

100

101

101

102

102

Productivity (tonne/employee)

194

191

189

189

Index

Index

100

100

99

99

98

98

97

97

Source: Complainant

Source:

| (136) | Both employment and productivity of the Union industry remained stable throughout the period considered. |
| --- | --- |

(136)

Both employment and productivity of the Union industry remained stable throughout the period considered.

4.4.2.4.   Magnitude of the amount of the countervailable subsidies and recovery from past subsidisation or dumping

| (137) | Given that the Commission is still investigating some of the subsidisation schemes, at this stage it is not possible to determine the exact magnitude of subsidisation. However, on the basis of the amount of subsidisation for certain schemes already set out above, and the provisional subsidy margin found, subsidisation cannot be considered negligible. |
| --- | --- |

(137)

Given that the Commission is still investigating some of the subsidisation schemes, at this stage it is not possible to determine the exact magnitude of subsidisation. However, on the basis of the amount of subsidisation for certain schemes already set out above, and the provisional subsidy margin found, subsidisation cannot be considered negligible.

| (138) | While there is no history of past subsidisation or dumping from Egypt, the sole exporting producer from Egypt is part of a company which has already been found to engage in dumping practices (as well as receive subsidies) in another country (China). In fact, Jushi Group announced that they would build a factory in Egypt to produce GFR and sell it to the EU market to avoid paying anti-dumping and countervailing duties in place against its GFR exports from China to the EU. Once the plant was operational, the data set out above shows that imports from Egypt at low prices started to enter the Union market, and increased rapidly during the period considered. |
| --- | --- |

(138)

While there is no history of past subsidisation or dumping from Egypt, the sole exporting producer from Egypt is part of a company which has already been found to engage in dumping practices (as well as receive subsidies) in another country (China). In fact, Jushi Group announced that they would build a factory in Egypt to produce GFR and sell it to the EU market to avoid paying anti-dumping and countervailing duties in place against its GFR exports from China to the EU. Once the plant was operational, the data set out above shows that imports from Egypt at low prices started to enter the Union market, and increased rapidly during the period considered.

| (139) | Thus, it is expected that Jushi Egypt engages and will engage in the same practices of the Jushi Group in China. |
| --- | --- |

(139)

Thus, it is expected that Jushi Egypt engages and will engage in the same practices of the Jushi Group in China.

4.4.3.   Microeconomic indicators

Microeconomic indicators

4.4.3.1.   Prices and factors affecting prices

| (140) | The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

  Table 9


  Sales prices in the Union | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Average unit sales price in the Union on the total market (EUR/tonne) | 1 167 | 1 123 | 1 139 | 1 136 |
| Index | 100 | 96 | 98 | 97 |
| Unit cost of production (EUR/tonne) | 1 035 | 1 027 | 1 086 | 1 107 |
| Index | 100 | 99 | 105 | 107 |
| Source: Sampled Union producers |

(140)

The weighted average unit sales prices of the sampled Union producers to unrelated customers in the Union developed over the period considered as follows:

Table 9

Table 9

Sales prices in the Union

Sales prices in the Union

2016

2017

2018

IP

Average unit sales price in the Union on the total market (EUR/tonne)

1 167

1 123

1 139

1 136

Index

Index

100

100

96

96

98

98

97

97

Unit cost of production (EUR/tonne)

1 035

1 027

1 086

1 107

Index

Index

100

100

99

99

105

105

107

107

Source: Sampled Union producers

Source:

| (141) | The weighted average unit sales price of the sampled Union producers to unrelated customers declined during the period considered by 3 %. |
| --- | --- |

(141)

The weighted average unit sales price of the sampled Union producers to unrelated customers declined during the period considered by 3 %.

| (142) | However the unit cost of production of the sampled Union producers increased during the period considered by 7 %. It is clear therefore that prices could not be increased to match production cost increases. |
| --- | --- |

(142)

However the unit cost of production of the sampled Union producers increased during the period considered by 7 %. It is clear therefore that prices could not be increased to match production cost increases.

4.4.3.2.   Labour costs

| (143) | The average labour costs of the sampled Union producers developed over the period considered as follows:

  Table 10


  Average labour costs per employee | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Average labour costs per employee (EUR) | 55 351 | 56 722 | 57 703 | 57 585 |
| Index | 100 | 102 | 104 | 104 |
| Source: Sampled Union producers |

(143)

The average labour costs of the sampled Union producers developed over the period considered as follows:

Table 10

Table 10

Average labour costs per employee

Average labour costs per employee

2016

2017

2018

IP

Average labour costs per employee (EUR)

55 351

56 722

57 703

57 585

Index

Index

100

100

102

102

104

104

104

104

Source: Sampled Union producers

Source:

| (144) | Average labour costs increased gradually during the period considered. |
| --- | --- |

(144)

Average labour costs increased gradually during the period considered.

4.4.3.3.   Inventories

| (145) | Stock levels of the sampled Union producers developed over the period considered as follows:

  Table 11


  Stocks | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Closing stocks (tonnes) | 80 078 | 63 974 | 86 975 | 95 397 |
| Index | 100 | 80 | 109 | 119 |
| Source: Sampled Union producers |

(145)

Stock levels of the sampled Union producers developed over the period considered as follows:

Table 11

Table 11

Stocks

Stocks

2016

2017

2018

IP

Closing stocks (tonnes)

80 078

63 974

86 975

95 397

Index

Index

100

100

80

80

109

109

119

119

Source: Sampled Union producers

Source:

| (146) | Stock levels of the sampled Union producers increased during the period considered, and reached their highest during the IP. |
| --- | --- |

(146)

Stock levels of the sampled Union producers increased during the period considered, and reached their highest during the IP.

4.4.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital

| (147) | Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

  Table 12


  Profitability, cash flow, investments and return on investments | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Profitability of sales in the Union to unrelated customers (% of sales turnover) | 12,6 | 10 | 7,4 | 5,2 |
| Cash flow (EUR) | 99 824 451 | 99 239 696 | 24 615 552 | 44 541 758 |
| Index | 100 | 99 | 55 | 45 |
| Investments (EUR) | 17 532 291 | 34 598 499 | 52 191 829 | 42 018 578 |
| Index | 100 | 197 | 298 | 240 |
| Return on investments (%) | 18 | 15 | 10 | 7 |
| Source: Sampled Union producers |

(147)

Profitability, cash flow, investments and return on investments of the sampled Union producers developed over the period considered as follows:

Table 12

Table 12

Profitability, cash flow, investments and return on investments

Profitability, cash flow, investments and return on investments

2016

2017

2018

IP

Profitability of sales in the Union to unrelated customers (% of sales turnover)

12,6

10

7,4

5,2

Cash flow (EUR)

99 824 451

99 239 696

24 615 552

44 541 758

Index

Index

100

100

99

99

55

55

45

45

Investments (EUR)

17 532 291

34 598 499

52 191 829

42 018 578

Index

Index

100

100

197

197

298

298

240

240

Return on investments (%)

18

15

10

7

Source: Sampled Union producers

Source:

| (148) | The Commission established the profitability of the three sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. The profitability is based on cost of goods sold. |
| --- | --- |

(148)

The Commission established the profitability of the three sampled Union producers by expressing the pre-tax net profit of the sales of the like product to unrelated customers in the Union as a percentage of the turnover of those sales. The profitability is based on cost of goods sold.

| (149) | Profitability dropped considerably during the period considered by 7 percentage points, or more than half. |
| --- | --- |

(149)

Profitability dropped considerably during the period considered by 7 percentage points, or more than half.

| (150) | In spite of low profit levels, the Union industry was generating a positive cash flow from its operations in the whole period considered. |
| --- | --- |

(150)

In spite of low profit levels, the Union industry was generating a positive cash flow from its operations in the whole period considered.

| (151) | The Union industry continued to invest during the whole period considered. Investments increased during the period considered, which is expected as the GFR industry needs constant investment to rebuild furnaces. |
| --- | --- |

(151)

The Union industry continued to invest during the whole period considered. Investments increased during the period considered, which is expected as the GFR industry needs constant investment to rebuild furnaces.

| (152) | The return on investments is the profit in percentage of the net book value of investments. The return on investment was low but positive as the industry was profitable. |
| --- | --- |

(152)

The return on investments is the profit in percentage of the net book value of investments. The return on investment was low but positive as the industry was profitable.

| (153) | The financial performance of the Union industry in terms of profits during the investigation period however limited its ability to raise capital. |
| --- | --- |

(153)

The financial performance of the Union industry in terms of profits during the investigation period however limited its ability to raise capital.

4.4.4.   Conclusion on injury

Conclusion on injury

| (154) | The period considered shows rapidly rising quantities of GFR imported from Egypt, with volumes trebling during the period considered. This should be seen in the context of increasing Union consumption, leading to a loss of market share for the Union industry. |
| --- | --- |

(154)

The period considered shows rapidly rising quantities of GFR imported from Egypt, with volumes trebling during the period considered. This should be seen in the context of increasing Union consumption, leading to a loss of market share for the Union industry.

| (155) | This drop in market share in particular, while consumption in the Union rises, is a clear sign of material injury. When consumption in the Union increases, the Union industry could be expected to be able to keep their market share stable and increase sales quantities. |
| --- | --- |

(155)

This drop in market share in particular, while consumption in the Union rises, is a clear sign of material injury. When consumption in the Union increases, the Union industry could be expected to be able to keep their market share stable and increase sales quantities.

| (156) | While production quantity remained stable, sales quantity and sales prices decreased. The Union industry could not respond to cost increases with price increases, and therefore while costs increased, profits fell from 12 % in 2016 to 5 % in the IP. |
| --- | --- |

(156)

While production quantity remained stable, sales quantity and sales prices decreased. The Union industry could not respond to cost increases with price increases, and therefore while costs increased, profits fell from 12 % in 2016 to 5 % in the IP.

| (157) | The Commission notes in particular the point that the Union industry suffered clear price depression during the period considered, in view of the fact that Egyptian imports were made at low prices which dramatically increased in quantity. In the absence of such imports the Commission expects that the Union industry would be able to pass their cost increases onto their customers. |
| --- | --- |

(157)

The Commission notes in particular the point that the Union industry suffered clear price depression during the period considered, in view of the fact that Egyptian imports were made at low prices which dramatically increased in quantity. In the absence of such imports the Commission expects that the Union industry would be able to pass their cost increases onto their customers.

| (158) | Price depression could also be observed on the basis of the evolution of unit cost of production of the Union industry compared to their unit sales price to unrelated customers in the EU and the import price of GFR from Egypt. |
| --- | --- |

(158)

Price depression could also be observed on the basis of the evolution of unit cost of production of the Union industry compared to their unit sales price to unrelated customers in the EU and the import price of GFR from Egypt.

| (159) | The Commission noted that for example from 2016 to 2017 the costs of the Union producers dropped by 1 %, but the Union sales price dropped by 4 % to compete with the falling import price from Egypt (which dropped by 8 %). |
| --- | --- |

(159)

The Commission noted that for example from 2016 to 2017 the costs of the Union producers dropped by 1 %, but the Union sales price dropped by 4 % to compete with the falling import price from Egypt (which dropped by 8 %).

| (160) | Between 2017 and 2018 the costs of the Union producers rose by 6 %, but their sales prices could only rise by 2 %, as the import price from Egypt continued to fall. |
| --- | --- |

(160)

Between 2017 and 2018 the costs of the Union producers rose by 6 %, but their sales prices could only rise by 2 %, as the import price from Egypt continued to fall.

| (161) | The Commission provisionally concludes therefore that the Union industry suffered material injury during the investigation period. |
| --- | --- |

(161)

The Commission provisionally concludes therefore that the Union industry suffered material injury during the investigation period.

5.   CAUSATION

CAUSATION

5.1.   Effects of the subsidised imports

Effects of the subsidised imports

| (162) | The Commission provisionally concluded that the Union industry suffered material injury during the investigation period, given the sharp decrease of profits and the fall in market share. These negative developments took place in the context of sharply increasing imports from Egypt at ever decreasing prices undercutting those of the Union industry subject to additional price pressure. |
| --- | --- |

(162)

The Commission provisionally concluded that the Union industry suffered material injury during the investigation period, given the sharp decrease of profits and the fall in market share. These negative developments took place in the context of sharply increasing imports from Egypt at ever decreasing prices undercutting those of the Union industry subject to additional price pressure.

| (163) | Moreover, the Commission notes the evidence on file that the plant in Egypt was opened by Jushi China for the express purpose of selling GFR to the Union market without payment of the duties in force against imports directly from China. |
| --- | --- |

(163)

Moreover, the Commission notes the evidence on file that the plant in Egypt was opened by Jushi China for the express purpose of selling GFR to the Union market without payment of the duties in force against imports directly from China.

| (164) | Therefore, the Commission considered that the subsidised imports of Egyptian GFR caused material injury to the Union industry. |
| --- | --- |

(164)

Therefore, the Commission considered that the subsidised imports of Egyptian GFR caused material injury to the Union industry.

5.2.   Other known factors

Other known factors

| (165) | The Commission also examined whether other known factors, individually or collectively, are capable of attenuating the causal link established between the subsidised imports and the injury provisionally found to exist to the effect that such link would no longer be genuine and substantial. |
| --- | --- |

(165)

The Commission also examined whether other known factors, individually or collectively, are capable of attenuating the causal link established between the subsidised imports and the injury provisionally found to exist to the effect that such link would no longer be genuine and substantial.

5.2.1.   Imports from third countries

Imports from third countries

| (166) | Other than imports from Egypt, imports from only three other countries, Malaysia, China and Norway, had a significant market share during the period considered. The volume of imports from other third countries developed over the period considered as follows:

  Table 13


  Imports from third countries











  Country | | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- | --- |
| Malaysia | Volume (tonnes) | 98 446 | 111 373 | 114 325 | 102 896 |
| | Index | 100 | 113 | 116 | 105 |
| | Market share (%) | 10 | 11 | 11 | 10 |
| | Average price | 930 | 941 | 986 | 976 |
| China | Volume (tonnes) | 79 374 | 58 456 | 50 177 | 49 034 |
| | Index | 100 | 74 | 63 | 62 |
| | Market share (%) | 8 | 6 | 5 | 5 |
| | Average price | 1 068 | 1 058 | 1 022 | 1 030 |
| Norway | Volume (tonnes) | 41 362 | 43 006 | 44 289 | 44 160 |
| | Index | 100 | 104 | 107 | 107 |
| | Market share (%) | 4 | 4 | 4 | 4 |
| | Average price | 1 156 | 1 126 | 1 101 | 1 094 |
| All other countries | Volume (tonnes) | 86 240 | 85 548 | 93 266 | 93 626 |
| | Index | 100 | 99 | 108 | 109 |
| | Market share (%) | 9 | 8 | 9 | 9 |
| | Average price | 1 199 | 1 148 | 1 104 | 1 130 |
| Source: Surveillance 2 database |

(166)

Other than imports from Egypt, imports from only three other countries, Malaysia, China and Norway, had a significant market share during the period considered. The volume of imports from other third countries developed over the period considered as follows:

Table 13

Table 13

Imports from third countries

Imports from third countries

Country

2016

2017

2018

IP

Malaysia

Volume (tonnes)

98 446

111 373

114 325

102 896

Index

Index

100

100

113

113

116

116

105

105

Market share (%)

10

11

11

10

Average price

930

941

986

976

China

Volume (tonnes)

79 374

58 456

50 177

49 034

Index

Index

100

100

74

74

63

63

62

62

Market share (%)

8

6

5

5

Average price

1 068

1 058

1 022

1 030

Norway

Volume (tonnes)

41 362

43 006

44 289

44 160

Index

Index

100

100

104

104

107

107

107

107

Market share (%)

4

4

4

4

Average price

1 156

1 126

1 101

1 094

All other countries

Volume (tonnes)

86 240

85 548

93 266

93 626

Index

Index

100

100

99

99

108

108

109

109

Market share (%)

9

8

9

9

Average price

1 199

1 148

1 104

1 130

Source: Surveillance 2 database

Source:

| (167) | Imports from China are already subject to both anti-dumping and anti-subsidy measures, and the market share for these imports is declining, as importers move from China origin GFR to Egypt origin GFR from the same Jushi Group. |
| --- | --- |

(167)

Imports from China are already subject to both anti-dumping and anti-subsidy measures, and the market share for these imports is declining, as importers move from China origin GFR to Egypt origin GFR from the same Jushi Group.

| (168) | Imports from Malaysia had a stable market share during the whole period considered. There is only one plant in Malaysia, owned by the Japanese group NEG, who also own plants in the Union. This plant only exports chopped strands to the EU. The Commission compared the price of chopped strands from Malaysia to the prices of chopped strands in the Union and found that the Malaysians were not apparently undercutting the Union prices. |
| --- | --- |

(168)

Imports from Malaysia had a stable market share during the whole period considered. There is only one plant in Malaysia, owned by the Japanese group NEG, who also own plants in the Union. This plant only exports chopped strands to the EU. The Commission compared the price of chopped strands from Malaysia to the prices of chopped strands in the Union and found that the Malaysians were not apparently undercutting the Union prices.

| (169) | Imports from Norway have a low and stable market share of 4 % during the period considered, and enter the Union at a high price. |
| --- | --- |

(169)

Imports from Norway have a low and stable market share of 4 % during the period considered, and enter the Union at a high price.

| (170) | Imports from other countries combined reached a market share of 9 %, stable throughout the period considered. Therefore, none of these other countries could have had any significant influence on the performance of Union industry. |
| --- | --- |

(170)

Imports from other countries combined reached a market share of 9 %, stable throughout the period considered. Therefore, none of these other countries could have had any significant influence on the performance of Union industry.

| (171) | Based on the above analysis, the Commission concluded that the imports from other countries had no bearing on the situation of the Union industry during the investigation period. In particular there is no correlation between the declining performance of the Union industry and the stable market shares of other sources of supply. |
| --- | --- |

(171)

Based on the above analysis, the Commission concluded that the imports from other countries had no bearing on the situation of the Union industry during the investigation period. In particular there is no correlation between the declining performance of the Union industry and the stable market shares of other sources of supply.

5.2.2.   Export performance of the Union industry

Export performance of the Union industry

| (172) | Export data was provided to the Commission by the complainant as follows:

  Table 14


  Export performance of the Union industry | 2016 | 2017 | 2018 | IP |
| --- | --- | --- | --- | --- | --- |
| Export volume (tonnes) | 49 370 | 44 660 | 38 704 | 46 119 |
| Index | 100 | 90 | 78 | 93 |
| Export sales as a percentage of EU sales (%) | 8 | 7 | 6 | 8 |
| Source: Complainant |

(172)

Export data was provided to the Commission by the complainant as follows:

Table 14

Table 14

Export performance of the Union industry

Export performance of the Union industry

2016

2017

2018

IP

Export volume (tonnes)

49 370

44 660

38 704

46 119

Index

Index

100

100

90

90

78

78

93

93

Export sales as a percentage of EU sales (%)

8

7

6

8

Source: Complainant

Source:

| (173) | The level of exports of the Union industry was limited and remained stable during the period considered. It did not exceed 8 % of its sales in any year of the period considered, as set out in the table above. |
| --- | --- |

(173)

The level of exports of the Union industry was limited and remained stable during the period considered. It did not exceed 8 % of its sales in any year of the period considered, as set out in the table above.

| (174) | Given the limited participation of export sales in the overall sales of the Union industry and the fact that they were virtually stable during the period considered, the export performance of the Union industry was found not to have contributed to the injury suffered by the Union industry. |
| --- | --- |

(174)

Given the limited participation of export sales in the overall sales of the Union industry and the fact that they were virtually stable during the period considered, the export performance of the Union industry was found not to have contributed to the injury suffered by the Union industry.

5.3.   Conclusion

Conclusion

| (175) | The Commission therefore provisionally concluded that the subsidised imports of GFR from Egypt caused material injury to the Union industry. |
| --- | --- |

(175)

The Commission therefore provisionally concluded that the subsidised imports of GFR from Egypt caused material injury to the Union industry.

| (176) | The Commission identified and assessed other factors which could potentially have contributed to the injury suffered by the Union industry, such as imports from other third countries and export performance of the Union industry. However, these other factors were found not to have had any effect on the situation of the Union industry, either individually or collectively. |
| --- | --- |

(176)

The Commission identified and assessed other factors which could potentially have contributed to the injury suffered by the Union industry, such as imports from other third countries and export performance of the Union industry. However, these other factors were found not to have had any effect on the situation of the Union industry, either individually or collectively.

6.   UNION INTEREST

UNION INTEREST

| (177) | In accordance with Article 31 of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt countervailing measures corresponding to the total amount of countervailable subsidies in this case, despite the determination of injurious subsidisation. The Commission based the determination of the Union interest on an analysis of all the various interests involved, including those of the Union industry, importers and consumers. |
| --- | --- |

(177)

In accordance with Article 31 of the basic Regulation, the Commission examined whether it could clearly conclude that it was not in the Union interest to adopt countervailing measures corresponding to the total amount of countervailable subsidies in this case, despite the determination of injurious subsidisation. The Commission based the determination of the Union interest on an analysis of all the various interests involved, including those of the Union industry, importers and consumers.

| (178) | GFR is an important material in many user applications in the European Union. |
| --- | --- |

(178)

GFR is an important material in many user applications in the European Union.

| (179) | It is mainly used as a raw material to reinforce thermoplastic and thermoset resins in the composites industry. GFR represents from 10 % to 60 % of the cost of manufacturing thermoplastic and thermoset resins, depending on the final product concerned. These are then used in a wide variety of applications by the Union downstream industry. The Union industry provided market intelligence showing that roughly half their sales go into the manufacture of thermoplastics. |
| --- | --- |

(179)

It is mainly used as a raw material to reinforce thermoplastic and thermoset resins in the composites industry. GFR represents from 10 % to 60 % of the cost of manufacturing thermoplastic and thermoset resins, depending on the final product concerned. These are then used in a wide variety of applications by the Union downstream industry. The Union industry provided market intelligence showing that roughly half their sales go into the manufacture of thermoplastics.

| (180) | GFR is also used as the main raw material to make glass fibre fabric (‘GFF’). It represents a significant input cost for manufacturing GFF, up to 70 %. The Commission notes that there are ongoing anti-dumping and anti-subsidy investigations concerning imports from GFF originating in the People’s Republic of China and Egypt (14). To date no measures have been imposed yet in these proceedings. |
| --- | --- |

(180)

GFR is also used as the main raw material to make glass fibre fabric (‘GFF’). It represents a significant input cost for manufacturing GFF, up to 70 %. The Commission notes that there are ongoing anti-dumping and anti-subsidy investigations concerning imports from GFF originating in the People’s Republic of China and Egypt (14). To date no measures have been imposed yet in these proceedings.

14

| (181) | Market intelligence from the Union industry showed that currently up to 20 % of GFR made by the Union industry goes into making GFF. However their market intelligence also showed that a higher percentage of all Chinese imports, and also imports from other countries, are used to make GFF. |
| --- | --- |

(181)

Market intelligence from the Union industry showed that currently up to 20 % of GFR made by the Union industry goes into making GFF. However their market intelligence also showed that a higher percentage of all Chinese imports, and also imports from other countries, are used to make GFF.

| (182) | To assess Union interest the Commission analysed the position of the Union industry, who are running at very high capacity utilisation and so in the short term would not be able to respond to large market signals, and possible other sources of supply not affected by measures in force. This analysis is developed in recitals (154), (170), and (176). |
| --- | --- |

(182)

To assess Union interest the Commission analysed the position of the Union industry, who are running at very high capacity utilisation and so in the short term would not be able to respond to large market signals, and possible other sources of supply not affected by measures in force. This analysis is developed in recitals (154), (170), and (176).

6.1.   Interest of the Union industry

Interest of the Union industry

| (183) | The Commission has found that the Union industry is suffering material injury, and that this injury is caused by the imports of GFR from Egypt. |
| --- | --- |

(183)

The Commission has found that the Union industry is suffering material injury, and that this injury is caused by the imports of GFR from Egypt.

| (184) | The Commission notes that the industry is running at very high capacity utilisation rates, which limits the possibility of further supply increases, however with the imposition of measures on Egypt this should allow the industry to install the further capacity that it needs to supply the Union market. |
| --- | --- |

(184)

The Commission notes that the industry is running at very high capacity utilisation rates, which limits the possibility of further supply increases, however with the imposition of measures on Egypt this should allow the industry to install the further capacity that it needs to supply the Union market.

| (185) | As the Commission found in the previous investigation against imports of GFR from China, the imposition of measures on unfair imports allows the industry to invest in capacity increases (15). |
| --- | --- |

(185)

As the Commission found in the previous investigation against imports of GFR from China, the imposition of measures on unfair imports allows the industry to invest in capacity increases (15).

15

| (186) | Given the finding of material injury being suffered by the Union industry, and that this material injury is caused by subsidised imports from Egypt, the Commission therefore provisionally concluded that the imposition of measures would be in the interest of the Union industry. |
| --- | --- |

(186)

Given the finding of material injury being suffered by the Union industry, and that this material injury is caused by subsidised imports from Egypt, the Commission therefore provisionally concluded that the imposition of measures would be in the interest of the Union industry.

6.2.   Interest of unrelated importers

Interest of unrelated importers

| (187) | Importers who cooperated with the investigation opposed the imposition of measures as it would restrict the sources of GFR coming into the market. They also raised the issue of certifying new sources of GFR and the complexity of this, even to the point where some of their clients still insist on imports from China – with the duty paid – as the company concerned is certified for use by their customers. |
| --- | --- |

(187)

Importers who cooperated with the investigation opposed the imposition of measures as it would restrict the sources of GFR coming into the market. They also raised the issue of certifying new sources of GFR and the complexity of this, even to the point where some of their clients still insist on imports from China – with the duty paid – as the company concerned is certified for use by their customers.

| (188) | The Commission noted that importers were continuing to import from China even with duties in force which are higher than the ones to be imposed on Egyptian sources. Therefore, any duty on imports of GFR from Egypt would not necessarily stop imports coming into the Union. |
| --- | --- |

(188)

The Commission noted that importers were continuing to import from China even with duties in force which are higher than the ones to be imposed on Egyptian sources. Therefore, any duty on imports of GFR from Egypt would not necessarily stop imports coming into the Union.

| (189) | Certification of sources of GFR is clearly a concern for some users of GFR, but in many sectors certification is not an issue, and where it is necessary, we can see that imports continue with the payment of the duties. The imposition of duties on certified imports will of course increase their costs, but there is no evidence on file showing that this increase cannot be passed on to the final customer, who has himself requested this particular GFR from this particular supplier. |
| --- | --- |

(189)

Certification of sources of GFR is clearly a concern for some users of GFR, but in many sectors certification is not an issue, and where it is necessary, we can see that imports continue with the payment of the duties. The imposition of duties on certified imports will of course increase their costs, but there is no evidence on file showing that this increase cannot be passed on to the final customer, who has himself requested this particular GFR from this particular supplier.

| (190) | The Commission visited two importers of GFR who imported from various sources worldwide and then resold the product without processing. For one importer GFR was an extremely small part of their business (less than 1 %) and so the effect of duties on imports from Egypt would be negligible on the importer’s performance. |
| --- | --- |

(190)

The Commission visited two importers of GFR who imported from various sources worldwide and then resold the product without processing. For one importer GFR was an extremely small part of their business (less than 1 %) and so the effect of duties on imports from Egypt would be negligible on the importer’s performance.

| (191) | For the other importer GFR was a more significant part of their business with very low profit margins. For this importer, given their very low margins, any increase in price would therefore lead to possible losses if the price increase could not be passed on to their customers. However this importer faced this issue before when the Commission imposed duties on imports of GFR from China at a higher level. |
| --- | --- |

(191)

For the other importer GFR was a more significant part of their business with very low profit margins. For this importer, given their very low margins, any increase in price would therefore lead to possible losses if the price increase could not be passed on to their customers. However this importer faced this issue before when the Commission imposed duties on imports of GFR from China at a higher level.

| (192) | The Commission therefore concluded that the imposition of duties would not be in the interest of importers on the grounds that it would increase their costs. |
| --- | --- |

(192)

The Commission therefore concluded that the imposition of duties would not be in the interest of importers on the grounds that it would increase their costs.

6.3.   Interest of users

Interest of users

| (193) | Several interested parties came forward and expressed their views on the user interest in imposing measures in this investigation, mainly through sending standard letters with no evidence of their assertions. |
| --- | --- |

(193)

Several interested parties came forward and expressed their views on the user interest in imposing measures in this investigation, mainly through sending standard letters with no evidence of their assertions.

| (194) | Some interested parties sent a standard letter supporting the measures, in order to keep the Union industry as a supplier, while other parties sent a standard letter opposing the measures, in order to keep their costs down. On analysis of these standard letters, they came from distributors of GFR in the EU or from suppliers of the Union industry. |
| --- | --- |

(194)

Some interested parties sent a standard letter supporting the measures, in order to keep the Union industry as a supplier, while other parties sent a standard letter opposing the measures, in order to keep their costs down. On analysis of these standard letters, they came from distributors of GFR in the EU or from suppliers of the Union industry.

| (195) | However the Commission did receive submissions from users of GFR in the Union expressing their views on the investigation. |
| --- | --- |

(195)

However the Commission did receive submissions from users of GFR in the Union expressing their views on the investigation.

| (196) | One group of users, who wished to remain anonymous in order to protect against a risk of negative consequences in their commercial relationships, held a hearing with the Commission and made a submission that measures would not be in the Union interest. |
| --- | --- |

(196)

One group of users, who wished to remain anonymous in order to protect against a risk of negative consequences in their commercial relationships, held a hearing with the Commission and made a submission that measures would not be in the Union interest.

| (197) | The Commission noted the issue of certification of certain GFR made in certain factories while inspecting the users, who noted that some users are obliged to use a particular GFR from a particular factory, regardless of whether a duty is in force or not. |
| --- | --- |

(197)

The Commission noted the issue of certification of certain GFR made in certain factories while inspecting the users, who noted that some users are obliged to use a particular GFR from a particular factory, regardless of whether a duty is in force or not.

| (198) | If measures are imposed on GFR from Egypt, and the user is obliged to use GFR from Egypt in their further processing, then they will see a cost increase which they may not be able to pass on to their customers. |
| --- | --- |

(198)

If measures are imposed on GFR from Egypt, and the user is obliged to use GFR from Egypt in their further processing, then they will see a cost increase which they may not be able to pass on to their customers.

| (199) | The group of anonymous users noted that glass fibres are an important critical-to-quality ingredient and current quality systems, for example thermoplastics for the automotive industry, would require a re-approval process if the user changed supplier. |
| --- | --- |

(199)

The group of anonymous users noted that glass fibres are an important critical-to-quality ingredient and current quality systems, for example thermoplastics for the automotive industry, would require a re-approval process if the user changed supplier.

| (200) | The same group also noted that even if a user has diverse suppliers, they would still use a specific supplier for a specific compound. |
| --- | --- |

(200)

The same group also noted that even if a user has diverse suppliers, they would still use a specific supplier for a specific compound.

| (201) | For those users that make other thermoplastics, their customers are less sensitive to the source of the raw material, as the GFR is mixed with resin and provides reinforcement to the thermoplastic, rather than remaining relatively unchanged as it does in the production of GFF. |
| --- | --- |

(201)

For those users that make other thermoplastics, their customers are less sensitive to the source of the raw material, as the GFR is mixed with resin and provides reinforcement to the thermoplastic, rather than remaining relatively unchanged as it does in the production of GFF.

| (202) | Although GFR represents up to 60 % of the cost of manufacturing, other sources of GFR without measures imposed are readily available, namely Malaysia and Norway. However given the price increase that measures would cause, the user inspected was against the imposition of measures. All thermoplastic users who expressed an opinion were against the imposition of measures. |
| --- | --- |

(202)

Although GFR represents up to 60 % of the cost of manufacturing, other sources of GFR without measures imposed are readily available, namely Malaysia and Norway. However given the price increase that measures would cause, the user inspected was against the imposition of measures. All thermoplastic users who expressed an opinion were against the imposition of measures.

| (203) | For those users that make glass fibre fabrics (GFF) they are in a completely different position, as GFR is the raw material for the production of GFF. The Commission visited one producer of GFF and user of GFR, who asked to remain anonymous for the purposes of this investigation. They opposed measures because when duties were imposed on GFR from China, prices of raw materials increased by 10 % but they were unable to pass this price increase on to their customers. |
| --- | --- |

(203)

For those users that make glass fibre fabrics (GFF) they are in a completely different position, as GFR is the raw material for the production of GFF. The Commission visited one producer of GFF and user of GFR, who asked to remain anonymous for the purposes of this investigation. They opposed measures because when duties were imposed on GFR from China, prices of raw materials increased by 10 % but they were unable to pass this price increase on to their customers.

| (204) | Four manufacturers of GFF who expressed an opinion were against the imposition of measures. However the Commission notes that one of the sampled Union producers of GFR, Owens Corning, is an integrated producer who also manufactures GFF in the Union. This group is in favour of measures on both GFR and GFF imports from Egypt. |
| --- | --- |

(204)

Four manufacturers of GFF who expressed an opinion were against the imposition of measures. However the Commission notes that one of the sampled Union producers of GFR, Owens Corning, is an integrated producer who also manufactures GFF in the Union. This group is in favour of measures on both GFR and GFF imports from Egypt.

| (205) | The Commission however also received submissions from two further GFF manufacturers in favour of measures on GFR from Egypt, in order to protect the whole value chain in Europe, and also encourage R & D. |
| --- | --- |

(205)

The Commission however also received submissions from two further GFF manufacturers in favour of measures on GFR from Egypt, in order to protect the whole value chain in Europe, and also encourage R & D.

| (206) | The conclusion for users is that given that GFR is the main raw material in their finished product, measures would not be in their interest as the measures would increase the costs of the users. However measures would be in the interest of integrated groups using their own produced GFR. |
| --- | --- |

(206)

The conclusion for users is that given that GFR is the main raw material in their finished product, measures would not be in their interest as the measures would increase the costs of the users. However measures would be in the interest of integrated groups using their own produced GFR.

| (207) | On balance, given the alternative sources of available supply not subject to measures, given that one integrated user was in favour of measures and since there is no evidence clearly showing that the additional costs from measures imposed on imports from Egypt could not be absorbed by the users, the Commission concluded the negative effects on the users did not clearly show that it is not in the Union’s interest to apply the measures. |
| --- | --- |

(207)

On balance, given the alternative sources of available supply not subject to measures, given that one integrated user was in favour of measures and since there is no evidence clearly showing that the additional costs from measures imposed on imports from Egypt could not be absorbed by the users, the Commission concluded the negative effects on the users did not clearly show that it is not in the Union’s interest to apply the measures.

6.4.   Trade-distorting effects of subsidies/restoring effective competition

Trade-distorting effects of subsidies/restoring effective competition

| (208) | Under Article 31(1) of the basic Regulation, special consideration shall be given to the need to eliminate the trade-distorting effects of injurious subsidisation and to restore effective competition. |
| --- | --- |

(208)

Under Article 31(1) of the basic Regulation, special consideration shall be given to the need to eliminate the trade-distorting effects of injurious subsidisation and to restore effective competition.

| (209) | The investigation has established that Jushi Egypt sells significant quantities of subsidised GFR at artificially low prices to the Union market. If this situation continues, Jushi Egypt will maintain their unfair competitive advantage, further weakening the already vulnerable situation of the Union industry. As a result, the subsidised Egyptian imports will increase their trade-distorting effects over time, and continue to deny a level playing field to the Union industry. |
| --- | --- |

(209)

The investigation has established that Jushi Egypt sells significant quantities of subsidised GFR at artificially low prices to the Union market. If this situation continues, Jushi Egypt will maintain their unfair competitive advantage, further weakening the already vulnerable situation of the Union industry. As a result, the subsidised Egyptian imports will increase their trade-distorting effects over time, and continue to deny a level playing field to the Union industry.

6.5.   Conclusion on Union interest

Conclusion on Union interest

| (210) | Measures are clearly in the interest of the Union industry. There is a limited negative impact on importers and users, in particular the GFF producers, which are the most vulnerable group, given their high proportion of GFR in their production costs. |
| --- | --- |

(210)

Measures are clearly in the interest of the Union industry. There is a limited negative impact on importers and users, in particular the GFF producers, which are the most vulnerable group, given their high proportion of GFR in their production costs.

| (211) | However the Commission notes that other sources of GFR are available without measures in force. The Commission also notes the extensive innovation of the Union industry in recent years, and that the Union producers are working with their users to produce the product they require to their own individual specifications. Such innovation would be at risk if injury continues to occur. |
| --- | --- |

(211)

However the Commission notes that other sources of GFR are available without measures in force. The Commission also notes the extensive innovation of the Union industry in recent years, and that the Union producers are working with their users to produce the product they require to their own individual specifications. Such innovation would be at risk if injury continues to occur.

| (212) | The Commission noted these comments regarding certification and approval processes however the imposition of measures is designed to level the playing field for all operators, and therefore users can continue to import the certified or approved GFR from Egypt by paying a fair market price. |
| --- | --- |

(212)

The Commission noted these comments regarding certification and approval processes however the imposition of measures is designed to level the playing field for all operators, and therefore users can continue to import the certified or approved GFR from Egypt by paying a fair market price.

| (213) | On the basis of the above, the Commission provisionally concluded that there were no compelling reasons that it was not in the Union interest to impose countervailing measures corresponding to the total amount of countervailable subsidies on imports of GFR originating in Egypt. |
| --- | --- |

(213)

On the basis of the above, the Commission provisionally concluded that there were no compelling reasons that it was not in the Union interest to impose countervailing measures corresponding to the total amount of countervailable subsidies on imports of GFR originating in Egypt.

7.   PROVISIONAL COUNTERVAILING MEASURES

PROVISIONAL COUNTERVAILING MEASURES

| (214) | Based on the conclusions reached by the Commission on subsidisation, material injury, causation and Union interest, and in accordance with Article 15(1) of the basic Regulation, a provisional countervailing duty should be imposed on imports of GFR originating in Egypt. |
| --- | --- |

(214)

Based on the conclusions reached by the Commission on subsidisation, material injury, causation and Union interest, and in accordance with Article 15(1) of the basic Regulation, a provisional countervailing duty should be imposed on imports of GFR originating in Egypt.

7.1.   Provisional measures

Provisional measures

| (215) | Provisional countervailing measures should be imposed on imports of GFR originating in Egypt, in accordance with the rules in Article 12(1) of the basic Regulation which states that the provisional duty shall correspond to the total amount of countervailable subsidies as provisionally established. |
| --- | --- |

(215)

Provisional countervailing measures should be imposed on imports of GFR originating in Egypt, in accordance with the rules in Article 12(1) of the basic Regulation which states that the provisional duty shall correspond to the total amount of countervailable subsidies as provisionally established.

| (216) | On the basis of the above, the provisional countervailing duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

  Table 15


  Provisional duty rates







  Company | Provisional countervailing duty |
| --- | --- | --- |
| Jushi Egypt for Fiberglass Industry S.A.E. | 8,7 % |
| All other companies | 8,7 % |

(216)

On the basis of the above, the provisional countervailing duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

Table 15

Table 15

Provisional duty rates

Provisional duty rates

Company

Provisional countervailing duty

Jushi Egypt for Fiberglass Industry S.A.E.

8,7 %

All other companies

8,7 %

| (217) | The individual company countervailing duty rate specified in this Regulation was established on the basis of the findings of this investigation. Therefore, it reflected the situation found during this investigation with respect to the sole exporting producer. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entity. |
| --- | --- |

(217)

The individual company countervailing duty rate specified in this Regulation was established on the basis of the findings of this investigation. Therefore, it reflected the situation found during this investigation with respect to the sole exporting producer. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entity.

| (218) | Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to the individual countervailing duty rate. |
| --- | --- |

(218)

Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to the individual countervailing duty rate.

| (219) | The company may request the application of the individual countervailing duty rate if it subsequently changes its name. The request must be addressed to the Commission (16). The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a notice informing about the change of name will be published in the Official Journal of the European Union. |
| --- | --- |

(219)

The company may request the application of the individual countervailing duty rate if it subsequently changes its name. The request must be addressed to the Commission (16). The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a notice informing about the change of name will be published in the Official Journal of the European Union.

16

Official Journal of the European Union

8.   REGISTRATION

REGISTRATION

| (220) | As mentioned in Recital (9) above, the Commission made imports of GFR subject to registration during the period of pre-disclosure under the requirements of Article 24(5a) of the basic Regulation by publishing the registration Regulation. |
| --- | --- |

(220)

As mentioned in Recital (9) above, the Commission made imports of GFR subject to registration during the period of pre-disclosure under the requirements of Article 24(5a) of the basic Regulation by publishing the registration Regulation.

| (221) | The registration Regulation only registered imports for the three weeks of pre-disclosure. Registration will cease when this Regulation comes into effect. |
| --- | --- |

(221)

The registration Regulation only registered imports for the three weeks of pre-disclosure. Registration will cease when this Regulation comes into effect.

| (222) | No decision on a possible retroactive application of anti-subsidy measures has been taken at this stage of the proceeding. Such a decision will be taken at definitive stage. |
| --- | --- |

(222)

No decision on a possible retroactive application of anti-subsidy measures has been taken at this stage of the proceeding. Such a decision will be taken at definitive stage.

9.   INFORMATION AT PROVISIONAL STAGE

INFORMATION AT PROVISIONAL STAGE

| (223) | In accordance with Article 29a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website. |
| --- | --- |

(223)

In accordance with Article 29a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website.

| (224) | Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them. |
| --- | --- |

(224)

Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them.

| (225) | The Commission received comments from Jushi Egypt. However, the comments did not concern the accuracy of the calculation. Therefore, the provisional countervailing duty remains unchanged. |
| --- | --- |

(225)

The Commission received comments from Jushi Egypt. However, the comments did not concern the accuracy of the calculation. Therefore, the provisional countervailing duty remains unchanged.

10.   FINAL PROVISIONS

FINAL PROVISIONS

| (226) | In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline. |
| --- | --- |

(226)

In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.

| (227) | The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation, |
| --- | --- |

(227)

The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,

HAS ADOPTED THIS REGULATION:

Article 1

1.   A provisional countervailing duty is imposed on imports of chopped glass fibre strands, of a length of not more than 50 mm; glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887); and mats made of glass fibre filaments excluding mats of glass wool, currently falling under CN codes 7019 11 00, ex 7019 12 00, 7019 31 00 (TARIC codes 7019120022, 7019120025, 7019120026 and 7019120039) and originating in Egypt.

2.   The rates of the provisional countervailing duty applicable to the net, free-at-Union-frontier price, before duty, of the product described in paragraph 1 and manufactured by the companies listed below, shall be as follows:

| Company | Provisional countervailing duty | TARIC additional code |
| --- | --- | --- |
| Jushi Egypt for Fiberglass Industry S.A.E. | 8,7 % | C540 |
| All other companies | 8,7 % | C999 |

Company

Provisional countervailing duty

TARIC additional code

Jushi Egypt for Fiberglass Industry S.A.E.

8,7 %

C540

All other companies

8,7 %

C999

3.   The release for free circulation in the Union of the product referred to in paragraph 1 shall be subject to the provision of a security deposit equivalent to the amount of the provisional duty.

4.   Unless otherwise specified, the provisions in force concerning customs duties shall apply.

Article 2

1.   Interested parties shall submit their written comments on this regulation to the Commission within 15 calendar days of the date of entry into force of this Regulation.

2.   Interested parties wishing to request a hearing with the Commission shall do so within 5 calendar days of the date of entry into force of this Regulation.

3.   Interested parties wishing to request a hearing with the Hearing Officer in trade proceedings shall do so within 5 calendar days of the date of entry into force of this Regulation. The Hearing Officer shall examine requests submitted outside this time limit and may decide whether to accept such requests if appropriate.

Article 3

1.   Customs authorities are hereby directed to discontinue the registration of imports established in accordance with Article 1 of Implementing Regulation (EU) 2020/199.

2.   Data collected regarding products which entered the Union for consumption not more than 3 weeks prior to the date of the entry into force of this regulation shall be kept until the entry into force of possible definitive measures, or the termination of this proceeding.

Article 4

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

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

Done at Brussels, 5 March 2020.

For the Commission

The President

Ursula VON DER LEYEN

---

(1)  
  OJ L 176, 30.6.2016, p. 55.

1

(2)  
  OJ C 192, 7.6.2019, p. 30.

2

(3)  
  OJ C 151, 3.5.2019, p. 4.

3

(4)  
  OJ C 48, 12.2.2020, p. 18.

4

(5)  Commission Implementing Regulation (EU) 2020/199 of 13 February 2020 making imports of continuous filament glass fibre products originating in Egypt subject to registration (OJ L 42, 14.2.2020, p. 10).

5

(6)  Company A requested anonymity on the grounds that they would expose themselves to a significant risk of commercial retaliation should it be perceived by certain producers to act in a manner that runs counter to their interests.

6

(7)  See Presidential Decree No (35) of the Arab Republic of Egypt, dated 15.2.2003.

7

(8)  Decree of the President of the Arab Republic of Egypt No 330 of the year 2015 ‘On the establishment of the Suez Canal Economic Zone’, 19 August 2015.

8

(9)  In July 2016, Egypt replaced the ‘general sales tax’ with VAT. While there are certain differences between the two tax regimes, both tax regimes permitted producers of goods to deduct the tax previously paid, thereby accumulating credits when the amount of tax paid exceeds the amount of tax collected from customers, notably export-oriented companies.

9

(10)  Art. 22, law 67 of 2016.

10

(11)  Indeed the majority of the VAT/other indirect tax receivables reported in the 2016-2018 Annual Reports refer to foreign purchases under the 10 % GST regime, which was in force until July 2016.

11

(12)  Several international publications on tax matters confirm that reimbursement of VAT paid upfront in Egypt is extremely difficult (LINK). The World Bank report ‘Doing Business in Egypt 2020’ ranks Egypt in 156th place out of 190 in tax matters.

12

(13)  Database of specific products under ‘surveillance’ or monitoring imported into the Union customs territory maintained by the Directorate-General for Taxation and Customs Union.

13

(14)  Anti-dumping proceeding published (OJ C 68, 21.2.2019, p. 29); anti-subsidy proceeding published (OJ C 167, 16.5.2019, p. 11).

14

(15)  Commission Implementing Regulation (EU) 2017/724 (OJ L 107, 25.4.2017, p. 4), recital (149).

15

(16)  European Commission, Directorate-General for Trade, Directorate H, Rue de la Loi 170, 1040 Brussels, Belgium.

16

---

DECISIONS

| 6.3.2020 | EN | Official Journal of the European Union | L 69/41 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/41

---

DECISION (EU) 2020/380 OF THE EUROPEAN CENTRAL BANK

of 18 February 2020

amending Decision (EU) 2016/245 laying down the rules on procurement (ECB/2020/10)

THE EXECUTIVE BOARD OF THE EUROPEAN CENTRAL BANK,

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Article 11.6 thereof,

Having regard to Decision ECB/2004/2 of 19 February 2004 adopting the Rules of Procedure of the European Central Bank (1), and in particular Article 19 thereof,

Whereas:

| (1) | In the light of developments in European Union case law and legislation as well as for the sake of clarity, certain rules laid down in Decision (EU) 2016/245 of the European Central Bank (ECB/2016/2) (2) need to be refined further or revised. |
| --- | --- |

(1)

In the light of developments in European Union case law and legislation as well as for the sake of clarity, certain rules laid down in Decision (EU) 2016/245 of the European Central Bank (ECB/2016/2) (2) need to be refined further or revised.

| (2) | The European Central Bank (ECB) ensures that appropriate measures are taken to effectively prevent, identify and remedy conflicts of interest of staff members arising in the conduct of procurement procedures in accordance with the Ethics Framework of the ECB (3), so as to avoid any distortion of competition and to ensure equal treatment of all tenderers. |
| --- | --- |

(2)

The European Central Bank (ECB) ensures that appropriate measures are taken to effectively prevent, identify and remedy conflicts of interest of staff members arising in the conduct of procurement procedures in accordance with the Ethics Framework of the ECB (3), so as to avoid any distortion of competition and to ensure equal treatment of all tenderers.

| (3) | The thresholds for public tender procedures laid down in Directive 2014/24/EU of the European Parliament and of the Council (4) have been changed by Commission Delegated Regulation (EU) 2017/2365 (5) and Commission Delegated Regulation (EU) 2019/1828 (6). Although Directive 2014/24/EU does not apply to it, the ECB intends to apply the same thresholds for its public tender procedures. |
| --- | --- |

(3)

The thresholds for public tender procedures laid down in Directive 2014/24/EU of the European Parliament and of the Council (4) have been changed by Commission Delegated Regulation (EU) 2017/2365 (5) and Commission Delegated Regulation (EU) 2019/1828 (6). Although Directive 2014/24/EU does not apply to it, the ECB intends to apply the same thresholds for its public tender procedures.

| (4) | In addition, the ECB intends to apply the same threshold for concessions as that set out in Directive 2014/23/EU of the European Parliament and of the Council (7). |
| --- | --- |

(4)

In addition, the ECB intends to apply the same threshold for concessions as that set out in Directive 2014/23/EU of the European Parliament and of the Council (7).

| (5) | Therefore, Decision (EU) 2016/245 (ECB/2016/2) should be amended accordingly, |
| --- | --- |

(5)

Therefore, Decision (EU) 2016/245 (ECB/2016/2) should be amended accordingly,

HAS ADOPTED THIS DECISION:

Article 1

Amendments

Decision (EU) 2016/245 (ECB/2016/2) is amended as follows:

| (1) | in Article 1, point (8) is replaced by the following:






  ‘(8) | “dynamic purchasing system” means a completely electronic process for purchasing commonly used deliverables, the characteristics of which, as generally available on the market, meet the ECB’s requirements;’; |
| --- | --- | --- |

(1)

in Article 1, point (8) is replaced by the following:

‘(8)

“dynamic purchasing system” means a completely electronic process for purchasing commonly used deliverables, the characteristics of which, as generally available on the market, meet the ECB’s requirements;’;

| (2) | in Article 2, paragraph 3 is amended as follows:






  (a) | point (h) is replaced by the following:






  ‘(h) | research and development services unless the benefits related to the services accrue exclusively to the ECB for its own use and the services provided are wholly remunerated by the ECB;’; |
| --- | --- | --- | --- |

(2)

in Article 2, paragraph 3 is amended as follows:

(a)

point (h) is replaced by the following:

‘(h)

research and development services unless the benefits related to the services accrue exclusively to the ECB for its own use and the services provided are wholly remunerated by the ECB;’;

| (b) | point (j) is replaced by the following:






  ‘(j) | contracts relating to the legal representation of the ECB during or in preparation for (i) judicial proceedings before the courts, tribunals or public authorities of a Members State or a third country or before international courts, tribunals or institutions or (ii) arbitration proceedings; and contracts for the exclusive services of notaries, trustees and court officials;’; |
| --- | --- | --- |

(b)

point (j) is replaced by the following:

‘(j)

contracts relating to the legal representation of the ECB during or in preparation for (i) judicial proceedings before the courts, tribunals or public authorities of a Members State or a third country or before international courts, tribunals or institutions or (ii) arbitration proceedings; and contracts for the exclusive services of notaries, trustees and court officials;’;

| (3) | in Article 4, paragraph 3 is replaced by the following:

  ‘3.   The following thresholds shall apply:






  (a) | for supply and service contracts: the threshold for public supply and service contracts awarded by contracting authorities set out in point (c) of Article 4 of Directive 2014/24/EU; |
| --- | --- | --- |

(3)

in Article 4, paragraph 3 is replaced by the following:

‘3.   The following thresholds shall apply:

(a)

for supply and service contracts: the threshold for public supply and service contracts awarded by contracting authorities set out in point (c) of Article 4 of Directive 2014/24/EU;

| (b) | for works contracts: the threshold for public works contracts set out in point (a) of Article 4 of Directive 2014/24/EU; |
| --- | --- |

(b)

for works contracts: the threshold for public works contracts set out in point (a) of Article 4 of Directive 2014/24/EU;

| (c) | for concession contracts: the threshold for concession contracts set out in Article 8(1) of Directive 2014/23/EU of the European Parliament and of the Council (*1). |
| --- | --- |

(c)

for concession contracts: the threshold for concession contracts set out in Article 8(1) of Directive 2014/23/EU of the European Parliament and of the Council (*1).

(*1)  Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (OJ L 94, 28.3.2014, p. 1).’;"

*1

| (4) | Article 8 is amended as follows:






  (a) | the title is replaced by the following:

  ‘
  Amendments to contracts during their term
  ’; |
| --- | --- | --- |

(4)

Article 8 is amended as follows:

(a)

the title is replaced by the following:

‘
  Amendments to contracts during their term
  ’;

Amendments to contracts during their term

| (b) | the first sentence of paragraph 1 is replaced by the following:

  ‘The ECB may amend a contract where the amendment, irrespective of its value, has been provided for in the initial procurement documents in clear, precise and unequivocal review clauses, which may include price revision clauses, or options.’; |
| --- | --- |

(b)

the first sentence of paragraph 1 is replaced by the following:

‘The ECB may amend a contract where the amendment, irrespective of its value, has been provided for in the initial procurement documents in clear, precise and unequivocal review clauses, which may include price revision clauses, or options.’;

| (c) | the first sentence of paragraph 2 is replaced by the following:

  ‘The ECB may amend a contract where the amendment, irrespective of its value, is not substantial.’; |
| --- | --- |

(c)

the first sentence of paragraph 2 is replaced by the following:

‘The ECB may amend a contract where the amendment, irrespective of its value, is not substantial.’;

| (d) | paragraph 3 is replaced by the following:

  ‘3.   In addition, the ECB may amend a contract in the following cases:






  (a) | where the need for an amendment has been brought about by circumstances which the ECB acting diligently, could not have foreseen, provided that the amendment does not alter the overall nature of the initial contract; or |
| --- | --- | --- |

(d)

paragraph 3 is replaced by the following:

‘3.   In addition, the ECB may amend a contract in the following cases:

(a)

where the need for an amendment has been brought about by circumstances which the ECB acting diligently, could not have foreseen, provided that the amendment does not alter the overall nature of the initial contract; or

| (b) | where additional products, services, or works have become necessary which cannot be technically or economically separated from the initial contract without significant inconvenience or substantial duplication of costs. |
| --- | --- |

(b)

where additional products, services, or works have become necessary which cannot be technically or economically separated from the initial contract without significant inconvenience or substantial duplication of costs.

However, the increase in price shall in each single case not exceed 50 % of the initial value of the contract.’;

| (e) | paragraph 6 is replaced by the following:

  ‘6.   A new procurement procedure shall be required for amendments to the initial contract during its term other than those provided for under paragraphs 1 to 5.’; |
| --- | --- |

(e)

paragraph 6 is replaced by the following:

‘6.   A new procurement procedure shall be required for amendments to the initial contract during its term other than those provided for under paragraphs 1 to 5.’;

| (5) | Article 9 is amended as follows:






  (a) | paragraph 1 is replaced by the following:

  ‘1.   The ECB shall award contracts of which the estimated value equals or exceeds the thresholds set out in Article 4(3) by open or restricted procedure. In justified cases the ECB may apply a negotiated procedure, a competitive dialogue or an innovation partnership, under the conditions set out in Articles 12 to 14.’; |
| --- | --- | --- |

(5)

Article 9 is amended as follows:

(a)

paragraph 1 is replaced by the following:

‘1.   The ECB shall award contracts of which the estimated value equals or exceeds the thresholds set out in Article 4(3) by open or restricted procedure. In justified cases the ECB may apply a negotiated procedure, a competitive dialogue or an innovation partnership, under the conditions set out in Articles 12 to 14.’;

| (b) | the following paragraphs 6 and 7 are added:

  ‘6.   The ECB may decide to award a contract in the form of separate lots and may determine the size and subject matter of such lots.


  7.   For the calculation of periods, dates and time-limits, Regulation (EEC, Euratom) No 1182/71 of the Council (*2) shall apply.


  (*2)  Regulation (EEC, Euratom) No 1182/71 of the Council of 3 June 1971 determining the rules applicable to periods, dates and time limits (OJ L 124, 8.6.1971, p. 1).’;" |
| --- | --- |

(b)

the following paragraphs 6 and 7 are added:

‘6.   The ECB may decide to award a contract in the form of separate lots and may determine the size and subject matter of such lots.

7.   For the calculation of periods, dates and time-limits, Regulation (EEC, Euratom) No 1182/71 of the Council (*2) shall apply.

(*2)  Regulation (EEC, Euratom) No 1182/71 of the Council of 3 June 1971 determining the rules applicable to periods, dates and time limits (OJ L 124, 8.6.1971, p. 1).’;"

*2

| (6) | in Article 11, paragraph 1 is deleted; |
| --- | --- |

(6)

in Article 11, paragraph 1 is deleted;

| (7) | Article 12 is amended as follows:






  (a) | paragraph 2 is replaced by the following:

  ‘2.   The ECB may also use the negotiated procedure if only irregular or unacceptable tenders have been obtained in response to an open or restricted procedure or a competitive dialogue. The ECB may refrain from publishing a new contract notice if it includes in the negotiated procedure all of, and only, the tenderers that participated in the initial procedure, were eligible, met the selection criteria and submitted their tenders in accordance with the formal tender requirements. If no tenders or no suitable tenders have been obtained, the ECB may also start a new negotiated procedure without publishing a new notice and without submitting new procurement documents to the tenderers, provided that the initial conditions of the contract are not substantially altered.’; |
| --- | --- | --- |

(7)

Article 12 is amended as follows:

(a)

paragraph 2 is replaced by the following:

‘2.   The ECB may also use the negotiated procedure if only irregular or unacceptable tenders have been obtained in response to an open or restricted procedure or a competitive dialogue. The ECB may refrain from publishing a new contract notice if it includes in the negotiated procedure all of, and only, the tenderers that participated in the initial procedure, were eligible, met the selection criteria and submitted their tenders in accordance with the formal tender requirements. If no tenders or no suitable tenders have been obtained, the ECB may also start a new negotiated procedure without publishing a new notice and without submitting new procurement documents to the tenderers, provided that the initial conditions of the contract are not substantially altered.’;

| (b) | in paragraph 5, the following sentence is added:

  ‘The ECB may award contracts on the basis of the initial tenders without negotiation.’; |
| --- | --- |

(b)

in paragraph 5, the following sentence is added:

‘The ECB may award contracts on the basis of the initial tenders without negotiation.’;

| (8) | in Article 18, paragraph 2 is replaced by the following:

  ‘2.   For the purpose of concluding a framework agreement, the ECB shall follow the procedures set out in Articles 10 to 14. The contract notice shall specify the scope and envisaged number of framework agreements to be awarded.
  Specific contracts based on the framework agreement shall be awarded in accordance with the procedures laid down in this Article.’; |
| --- | --- |

(8)

in Article 18, paragraph 2 is replaced by the following:

‘2.   For the purpose of concluding a framework agreement, the ECB shall follow the procedures set out in Articles 10 to 14. The contract notice shall specify the scope and envisaged number of framework agreements to be awarded.

Specific contracts based on the framework agreement shall be awarded in accordance with the procedures laid down in this Article.’;

| (9) | in Article 26, paragraph 4 is replaced by the following:

  ‘4.   The ECB shall ensure that the information provided by candidates and tenderers is treated and stored in accordance with the principles of confidentiality and integrity and, to the extent personal data is processed, with Regulation (EU) 2018/1725 of the European Parliament and of the Council (*3).


  (*3)  Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39).’;" |
| --- | --- |

(9)

in Article 26, paragraph 4 is replaced by the following:

‘4.   The ECB shall ensure that the information provided by candidates and tenderers is treated and stored in accordance with the principles of confidentiality and integrity and, to the extent personal data is processed, with Regulation (EU) 2018/1725 of the European Parliament and of the Council (*3).

(*3)  Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on the protection of natural persons with regard to the processing of personal data by the Union institutions, bodies, offices and agencies and on the free movement of such data, and repealing Regulation (EC) No 45/2001 and Decision No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39).’;"

*3

| (10) | Article 28 is replaced by the following:

  ‘Article 28
  Rectification of procurement documents and time limit for and preclusion of objections

  1.   If the ECB discovers a lack of precision, an omission or any other type of error in the text of the contract notice, invitation to tender or supporting documents, it shall rectify the error and inform all candidates or tenderers in writing.


  2.   If candidates or tenderers consider that the ECB’s requirements laid down in the contract notice, the invitation to tender or supporting documents are incomplete, inconsistent or illegal or that the ECB or another candidate or tenderer has infringed the applicable procurement rules, they shall notify their objections to the ECB within 15 days after they become aware of such an irregularity. If the irregularity affects the invitation to tender or other documents sent by the ECB, the time limit shall start to run from the date of receipt of the documents. In other cases, the time limit shall start to run from the time the candidates or tenderers become aware or could reasonably have become aware of the irregularity. The ECB may then either correct or supplement the requirements or remedy the irregularity, or reject the request indicating the reasons for doing so. Objections which are not communicated to the ECB within the time limit may not be raised at a later stage, and candidates or tenderers shall be precluded from raising them in an appeal procedure under Article 39 and in proceedings before the Court of Justice of the European Union.’; |
| --- | --- |

(10)

Article 28 is replaced by the following:

‘Article 28

Rectification of procurement documents and time limit for and preclusion of objections

1.   If the ECB discovers a lack of precision, an omission or any other type of error in the text of the contract notice, invitation to tender or supporting documents, it shall rectify the error and inform all candidates or tenderers in writing.

2.   If candidates or tenderers consider that the ECB’s requirements laid down in the contract notice, the invitation to tender or supporting documents are incomplete, inconsistent or illegal or that the ECB or another candidate or tenderer has infringed the applicable procurement rules, they shall notify their objections to the ECB within 15 days after they become aware of such an irregularity. If the irregularity affects the invitation to tender or other documents sent by the ECB, the time limit shall start to run from the date of receipt of the documents. In other cases, the time limit shall start to run from the time the candidates or tenderers become aware or could reasonably have become aware of the irregularity. The ECB may then either correct or supplement the requirements or remedy the irregularity, or reject the request indicating the reasons for doing so. Objections which are not communicated to the ECB within the time limit may not be raised at a later stage, and candidates or tenderers shall be precluded from raising them in an appeal procedure under Article 39 and in proceedings before the Court of Justice of the European Union.’;

| (11) | in Article 30, paragraph 3, the first sentence is deleted; |
| --- | --- |

(11)

in Article 30, paragraph 3, the first sentence is deleted;

| (12) | Article 34 is amended as follows:






  (a) | paragraph 2 is replaced by the following:

  ‘2.   The notification of the award decision shall be sent at least 10 days prior to the signature of the contract by the ECB if the notification is sent by fax or electronic means, or at least 15 days prior to the signature of the contract if other means of communication are used (“standstill period”). The ECB shall not sign the contract with the successful tenderer until this standstill period has elapsed.’; |
| --- | --- | --- |

(12)

Article 34 is amended as follows:

(a)

paragraph 2 is replaced by the following:

‘2.   The notification of the award decision shall be sent at least 10 days prior to the signature of the contract by the ECB if the notification is sent by fax or electronic means, or at least 15 days prior to the signature of the contract if other means of communication are used (“standstill period”). The ECB shall not sign the contract with the successful tenderer until this standstill period has elapsed.’;

| (b) | paragraph 3 is replaced by the following

  ‘3.   The ECB shall notify all concerned candidates or concerned tenderers whose applications or tenders are rejected of the reasons for rejecting their application or tender as well as the duration of the standstill period referred to in paragraph 2. The ECB shall notify any unsuccessful tenderer that has made an admissible tender, and who makes a request in writing, of the name of the successful tenderer as well as the characteristics and relative advantages of the successful tender.’; |
| --- | --- |

(b)

paragraph 3 is replaced by the following

‘3.   The ECB shall notify all concerned candidates or concerned tenderers whose applications or tenders are rejected of the reasons for rejecting their application or tender as well as the duration of the standstill period referred to in paragraph 2. The ECB shall notify any unsuccessful tenderer that has made an admissible tender, and who makes a request in writing, of the name of the successful tenderer as well as the characteristics and relative advantages of the successful tender.’;

| (13) | in Article 35, paragraph 8 is replaced by the following:

  ‘8.   The procurement procedure shall be carried out in accordance with the general principles set out in Article 3. Article 9(6) and (7), Article 13(5) and (6) and Articles 18, 19, 20, 26, 27, 28, 30 and 33 shall apply accordingly.’; |
| --- | --- |

(13)

in Article 35, paragraph 8 is replaced by the following:

‘8.   The procurement procedure shall be carried out in accordance with the general principles set out in Article 3. Article 9(6) and (7), Article 13(5) and (6) and Articles 18, 19, 20, 26, 27, 28, 30 and 33 shall apply accordingly.’;

| (14) | in Article 36, paragraph 2 is replaced by the following:

  ‘2.   Tenderers may, within 15 days of receipt of the notification, request the ECB to provide the reasons for rejecting their tender.
  Notwithstanding paragraph 1 and the first subparagraph of this paragraph, Article 34(1) to (4) shall apply when the ECB awards through the procedure specified in Article 35(4) a service contract referred to in Article 6(2) with a value net of VAT that exceeds or is equal to EUR 750 000, provided that there is a clear cross-border interest.’; |
| --- | --- |

(14)

in Article 36, paragraph 2 is replaced by the following:

‘2.   Tenderers may, within 15 days of receipt of the notification, request the ECB to provide the reasons for rejecting their tender.

Notwithstanding paragraph 1 and the first subparagraph of this paragraph, Article 34(1) to (4) shall apply when the ECB awards through the procedure specified in Article 35(4) a service contract referred to in Article 6(2) with a value net of VAT that exceeds or is equal to EUR 750 000, provided that there is a clear cross-border interest.’;

| (15) | Article 39 is amended as follows:






  (a) | paragraph 1 is replaced by the following:

  ‘1.   In public tender procedures under Chapter II, candidates and tenderers may challenge in writing the ECB’s decision to reject their application or tender within 10 days of receipt of the notification in accordance with Article 34(1) or the first sentence of Article 34(3). The appeal shall include all supporting information and reasoned objections with the exception of any objections which are precluded in accordance with Article 28(2).’; |
| --- | --- | --- |

(15)

Article 39 is amended as follows:

(a)

paragraph 1 is replaced by the following:

‘1.   In public tender procedures under Chapter II, candidates and tenderers may challenge in writing the ECB’s decision to reject their application or tender within 10 days of receipt of the notification in accordance with Article 34(1) or the first sentence of Article 34(3). The appeal shall include all supporting information and reasoned objections with the exception of any objections which are precluded in accordance with Article 28(2).’;

| (b) | paragraph 3 is replaced by the following:

  ‘3.   The appeal shall have suspensive effect in relation to the award of the contract;’ |
| --- | --- |

(b)

paragraph 3 is replaced by the following:

‘3.   The appeal shall have suspensive effect in relation to the award of the contract;’

| (c) | the following paragraph 4 is added:

  ‘4.   If the appeal is rejected, an additional standstill period of at least 10 days prior to the signature of the contract by the ECB if the notification is sent by fax or electronic means, or at least 15 days prior to the signature of the contract if other means of communication are used, shall apply. The PRB shall notify the appellant about the duration of the standstill period.’. |
| --- | --- |

(c)

the following paragraph 4 is added:

‘4.   If the appeal is rejected, an additional standstill period of at least 10 days prior to the signature of the contract by the ECB if the notification is sent by fax or electronic means, or at least 15 days prior to the signature of the contract if other means of communication are used, shall apply. The PRB shall notify the appellant about the duration of the standstill period.’.

Article 2

Entry into force

1.   This Decision shall enter into force on 1 May 2020.

2.   Tender procedures that were started before the entry into force of this Decision shall be completed in accordance with the provisions of Decision (EU) 2016/245 (ECB/2016/2) in force on the date when the tender procedure started. For the purpose of this provision a tender procedure is deemed to be started on the day on which the contract notice was sent to the Official Journal or, in cases where no such notice is required, on the day when the ECB invited one or more suppliers to submit a tender or a proposal.

Done at Frankfurt am Main, 18 February 2020.

The President of the ECB

Christine LAGARDE

---

(1)  
  OJ L 80, 18.3.2004, p. 33.

1

(2)  Decision (EU) 2016/245 of the European Central Bank of 9 February 2016 laying down the rules on procurement (ECB/2016/2) (OJ L 45, 20.2.2016, p. 15).

2

(3)  
  OJ C 204, 20.6.2015, p. 3.

3

(4)  Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement and repealing Directive 2004/18/EC (OJ L 94, 28.3.2014, p. 65).

4

(5)  Commission Delegated Regulation (EU) 2017/2365 of 18 December 2017 amending Directive 2014/24/EU of the European Parliament and of the Council in respect of the application thresholds for the procedures for the award of contracts (OJ L 337, 19.12.2017, p. 19).

5

(6)  Commission Delegated Regulation (EU) 2019/1828 of 30 October 2019 amending Directive 2014/24/EU of the European Parliament and of the Council in respect of the thresholds for public supply, service and works contracts, and design contests (OJ L 279, 31.10.2019, p. 25).

6

(7)  Directive 2014/23/EU of the European Parliament and of the Council of 26 February 2014 on the award of concession contracts (OJ L 94, 28.3.2014, p. 1).

7

---

GUIDELINES

| 6.3.2020 | EN | Official Journal of the European Union | L 69/46 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/46

---

GUIDELINE (EU) 2020/381. OF THE EUROPEAN CENTRAL BANK

of 21 February 2020

amending Guideline (EU) 2017/2335 on the procedures for the collection of granular credit and credit risk data (ECB/2020/11)

THE GOVERNING COUNCIL OF THE EUROPEAN CENTRAL BANK,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 127(2) and (5) thereof,

Having regard to the Statute of the European System of Central Banks and of the European Central Bank, and in particular Articles 5.1, 12.1 and 14.3 thereof,

Whereas:

| (1) | Pursuant to Regulation (EU) 2016/867 of the European Central Bank (ECB/2016/13) (1), national central banks (NCBs) may provide to reporting agents granular credit and credit risk data (hereinafter ‘credit data’), including credit data collected by another NCB, by establishing new, or enhancing existing, feedback loops or other information services from central credit registers (CCRs) to reporting agents. |
| --- | --- |

(1)

Pursuant to Regulation (EU) 2016/867 of the European Central Bank (ECB/2016/13) (1), national central banks (NCBs) may provide to reporting agents granular credit and credit risk data (hereinafter ‘credit data’), including credit data collected by another NCB, by establishing new, or enhancing existing, feedback loops or other information services from central credit registers (CCRs) to reporting agents.

| (2) | The purpose of these feedback loops is to support reporting agents in assessing debtors’ creditworthiness, as well as to improve their credit risk management. The feedback loops enable reporting agents to obtain a more complete overview of the indebtedness of a debtor or prospective debtor as the information available is collected not only by the relevant NCB but also by other NCBs. The provision of credit data to NCBs to establish or enrich feedback loops to reporting agents will therefore enhance the contribution of the European System of Central Banks (ESCB) to the stability of the financial system in line with its statutory mandate in accordance with Article 127(5) of the Treaty. While the number of NCBs initially participating in the feedback loop framework is limited, it may increase in the future as such participation is voluntary. In any case, the information made available through feedback loops on this initially limited scale remains crucial in preventing possible disruptions in the financial intermediation process as it enhances credit institutions’ credit risk analyses, in particular with regard to cross-border debtors, and thus ultimately contributes to financial stability. |
| --- | --- |

(2)

The purpose of these feedback loops is to support reporting agents in assessing debtors’ creditworthiness, as well as to improve their credit risk management. The feedback loops enable reporting agents to obtain a more complete overview of the indebtedness of a debtor or prospective debtor as the information available is collected not only by the relevant NCB but also by other NCBs. The provision of credit data to NCBs to establish or enrich feedback loops to reporting agents will therefore enhance the contribution of the European System of Central Banks (ESCB) to the stability of the financial system in line with its statutory mandate in accordance with Article 127(5) of the Treaty. While the number of NCBs initially participating in the feedback loop framework is limited, it may increase in the future as such participation is voluntary. In any case, the information made available through feedback loops on this initially limited scale remains crucial in preventing possible disruptions in the financial intermediation process as it enhances credit institutions’ credit risk analyses, in particular with regard to cross-border debtors, and thus ultimately contributes to financial stability.

| (3) | Within the current legal framework, NCBs may, on a voluntary basis, exchange and use subsets of credit data for the purpose of providing reporting agents access to them via feedback loops. The ESCB has committed to updating the legal framework in order to further harmonise the feedback loops provided to reporting agents by NCBs. |
| --- | --- |

(3)

Within the current legal framework, NCBs may, on a voluntary basis, exchange and use subsets of credit data for the purpose of providing reporting agents access to them via feedback loops. The ESCB has committed to updating the legal framework in order to further harmonise the feedback loops provided to reporting agents by NCBs.

| (4) | It is therefore necessary to establish an appropriate framework for this activity, which is subject to the provisions of Article 11 of Regulation (EU) 2016/867 (ECB/2016/13) regarding the rights and obligations of NCBs in relation to feedback loops. This framework should set out the obligations of the ECB and of the NCBs that participate in it (‘participating NCBs’), including in the testing period prior to the date the individual NCBs start participating, taking into account the constraints linked to the confidential nature of the information and the time needed for implementation. |
| --- | --- |

(4)

It is therefore necessary to establish an appropriate framework for this activity, which is subject to the provisions of Article 11 of Regulation (EU) 2016/867 (ECB/2016/13) regarding the rights and obligations of NCBs in relation to feedback loops. This framework should set out the obligations of the ECB and of the NCBs that participate in it (‘participating NCBs’), including in the testing period prior to the date the individual NCBs start participating, taking into account the constraints linked to the confidential nature of the information and the time needed for implementation.

| (5) | For participating NCBs, the AnaCredit feedback loop framework, should also define the scope of data to be provided for feedback loop purposes in accordance with Article 11(2) of Regulation (EU) 2016/867 (ECB/2016/13). In particular, it is necessary that credit data and related counterparty reference data are included within the scope in order to enable the reporting agents to better assess a debtor’s creditworthiness. |
| --- | --- |

(5)

For participating NCBs, the AnaCredit feedback loop framework, should also define the scope of data to be provided for feedback loop purposes in accordance with Article 11(2) of Regulation (EU) 2016/867 (ECB/2016/13). In particular, it is necessary that credit data and related counterparty reference data are included within the scope in order to enable the reporting agents to better assess a debtor’s creditworthiness.

| (6) | The standards for the protection and use of confidential statistical information collected by the ESCB as laid down in Articles 8 to 8c of Council Regulation (EC) No 2533/98 (2) apply to the framework. |
| --- | --- |

(6)

The standards for the protection and use of confidential statistical information collected by the ESCB as laid down in Articles 8 to 8c of Council Regulation (EC) No 2533/98 (2) apply to the framework.

| (7) | The NCBs that will participate in the feedback loop framework should be listed in an annex, together with the date from which they start participating and thus become participating NCBs. It is necessary to establish the procedure to be followed by an NCB which is not among the NCBs listed in the relevant annex and wishes to become a participating NCB, and the procedure for a participating NCB to terminate its participation. It is also necessary to establish the procedure to be followed where a participating NCB wishes to change the parameters for sharing the data in the table set out in the relevant annex. All such changes to that list (including to the date from which an NCB becomes a participating NCB) and table in the relevant annexes are to be made by means of technical amendments in accordance with Article 20 of Guideline (EU) 2017/2335 of the European Central Bank (ECB/2017/38) (3). |
| --- | --- |

(7)

The NCBs that will participate in the feedback loop framework should be listed in an annex, together with the date from which they start participating and thus become participating NCBs. It is necessary to establish the procedure to be followed by an NCB which is not among the NCBs listed in the relevant annex and wishes to become a participating NCB, and the procedure for a participating NCB to terminate its participation. It is also necessary to establish the procedure to be followed where a participating NCB wishes to change the parameters for sharing the data in the table set out in the relevant annex. All such changes to that list (including to the date from which an NCB becomes a participating NCB) and table in the relevant annexes are to be made by means of technical amendments in accordance with Article 20 of Guideline (EU) 2017/2335 of the European Central Bank (ECB/2017/38) (3).

| (8) | NCBs listed in the relevant annex should be able to test the necessary procedures prior to implementation. To allow for this, the ECB should transmit the ECB feedback loop dataset to those NCBs before the date when they become participating NCBs, solely for the purpose of testing and not for use in feedback loops. |
| --- | --- |

(8)

NCBs listed in the relevant annex should be able to test the necessary procedures prior to implementation. To allow for this, the ECB should transmit the ECB feedback loop dataset to those NCBs before the date when they become participating NCBs, solely for the purpose of testing and not for use in feedback loops.

| (9) | Therefore, Guideline (EU) 2017/2335 (ECB/2017/38) should be amended accordingly, |
| --- | --- |

(9)

Therefore, Guideline (EU) 2017/2335 (ECB/2017/38) should be amended accordingly,

HAS ADOPTED THIS GUIDELINE:

Article 1

Amendments

Guideline (EU) 2017/2335 (ECB/2017/38) is amended as follows:

| (1) | Article 1 is replaced by the following:

  ‘Article 1
  Scope
  This Guideline provides details on the NCBs’ obligations to transmit credit data and counterparty reference data collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13) to the ECB, including the NCBs’ responsibilities for registering counterparties in RIAD, and on the procedures for the transmission of such data. This Guideline also establishes a framework for NCBs to participate, on a voluntary basis, in arrangements for the transmission and sharing of certain subsets of credit data and the related counterparty reference data, for the purpose of establishing or enhancing feedback loops with reporting agents (hereinafter also referred to as the “AnaCredit feedback loop framework”).’; |
| --- | --- |

(1)

Article 1 is replaced by the following:

‘Article 1

Scope

This Guideline provides details on the NCBs’ obligations to transmit credit data and counterparty reference data collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13) to the ECB, including the NCBs’ responsibilities for registering counterparties in RIAD, and on the procedures for the transmission of such data. This Guideline also establishes a framework for NCBs to participate, on a voluntary basis, in arrangements for the transmission and sharing of certain subsets of credit data and the related counterparty reference data, for the purpose of establishing or enhancing feedback loops with reporting agents (hereinafter also referred to as the “AnaCredit feedback loop framework”).’;

| (2) | in Article 2, the following points are added:






  ‘(14) | “participating NCB” means an NCB listed in Annex IV that has started participating in the AnaCredit feedback loop framework from the date specified in that Annex; |
| --- | --- | --- |

(2)

in Article 2, the following points are added:

‘(14)

“participating NCB” means an NCB listed in Annex IV that has started participating in the AnaCredit feedback loop framework from the date specified in that Annex;

| (15) | “receiving NCB” means a participating NCB that receives an ECB feedback loop dataset in accordance with Article 16d; |
| --- | --- |

(15)

“receiving NCB” means a participating NCB that receives an ECB feedback loop dataset in accordance with Article 16d;

| (16) | “minimum dataset” means the minimum subset of credit data and related counterparty reference data collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13) by the participating NCBs as identified by the data attributes specified in Annex III; |
| --- | --- |

(16)

“minimum dataset” means the minimum subset of credit data and related counterparty reference data collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13) by the participating NCBs as identified by the data attributes specified in Annex III;

| (17) | “operational attribute” means a data attribute of the ECB feedback loop dataset which is only used for the management and the preparation of the ECB feedback loop dataset and of the feedback loops from the NCBs to the reporting agents, and is identified as an “operational attribute” in Annex III; |
| --- | --- |

(17)

“operational attribute” means a data attribute of the ECB feedback loop dataset which is only used for the management and the preparation of the ECB feedback loop dataset and of the feedback loops from the NCBs to the reporting agents, and is identified as an “operational attribute” in Annex III;

| (18) | “variable attribute” means a data attribute of the ECB feedback loop dataset that is not contained in the minimum dataset and that is not an operational attribute; |
| --- | --- |

(18)

“variable attribute” means a data attribute of the ECB feedback loop dataset that is not contained in the minimum dataset and that is not an operational attribute;

| (19) | “ECB feedback loop dataset” means the maximum subset of credit data and related counterparty reference data, as identified by the data attributes specified in Annex III, collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13) by the participating NCBs or, for the purposes of Article 16d(1), by the NCBs listed in Annex IV before they become participating NCBs; |
| --- | --- |

(19)

“ECB feedback loop dataset” means the maximum subset of credit data and related counterparty reference data, as identified by the data attributes specified in Annex III, collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13) by the participating NCBs or, for the purposes of Article 16d(1), by the NCBs listed in Annex IV before they become participating NCBs;

| (20) | “regular transmission” means the regular monthly transmission from the ECB to a receiving NCB, for feedback loop purposes, of the ECB feedback loop dataset in accordance with Article 16d; |
| --- | --- |

(20)

“regular transmission” means the regular monthly transmission from the ECB to a receiving NCB, for feedback loop purposes, of the ECB feedback loop dataset in accordance with Article 16d;

| (21) | “prospective debtor” means a legal entity or a part of a legal entity, resident in any country of the world, which applies for an instrument to an observed agent; |
| --- | --- |

(21)

“prospective debtor” means a legal entity or a part of a legal entity, resident in any country of the world, which applies for an instrument to an observed agent;

| (22) | “ad-hoc request” means a request from a participating NCB to the ECB for credit data and related counterparty reference data for instruments related to at least one prospective debtor; |
| --- | --- |

(22)

“ad-hoc request” means a request from a participating NCB to the ECB for credit data and related counterparty reference data for instruments related to at least one prospective debtor;

| (23) | “golden copy” means the official master version of the credit data and counterparty reference data that are collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13), and generated after verification by the ECB that such data meet the quality standards set out in that Regulation.’; |
| --- | --- |

(23)

“golden copy” means the official master version of the credit data and counterparty reference data that are collected pursuant to Regulation (EU) 2016/867 (ECB/2016/13), and generated after verification by the ECB that such data meet the quality standards set out in that Regulation.’;

| (3) | in Article 6, paragraph (5) is replaced by the following:

  ‘5.   If there is an arrangement between two relevant NCBs pursuant to Article 6(3) of Regulation (EU) 2016/867 (ECB/2016/13) which results in only one of them collecting and transmitting all the data (Templates 1 and 2) from an RMS foreign branch to the ECB, then:






  (a) | the NCB not transmitting data to the ECB may decide not to collect any data from this RMS foreign branch in accordance with Articles 8(5) and 16(3) of Regulation (EU) 2016/867 (ECB/2016/13) to avoid double reporting; |
| --- | --- | --- |

(3)

in Article 6, paragraph (5) is replaced by the following:

‘5.   If there is an arrangement between two relevant NCBs pursuant to Article 6(3) of Regulation (EU) 2016/867 (ECB/2016/13) which results in only one of them collecting and transmitting all the data (Templates 1 and 2) from an RMS foreign branch to the ECB, then:

(a)

the NCB not transmitting data to the ECB may decide not to collect any data from this RMS foreign branch in accordance with Articles 8(5) and 16(3) of Regulation (EU) 2016/867 (ECB/2016/13) to avoid double reporting;

| (b) | the ECB shall send the data transmitted in relation to the RMS foreign branch to the NCB not transmitting data to the ECB for use in accordance with Article 10(1) of Regulation (EU) 2016/867 (ECB/2016/13); and |
| --- | --- |

(b)

the ECB shall send the data transmitted in relation to the RMS foreign branch to the NCB not transmitting data to the ECB for use in accordance with Article 10(1) of Regulation (EU) 2016/867 (ECB/2016/13); and

| (c) | it is deemed that the NCB transmitting data from the RMS foreign branch to the ECB does not deny access to these data to the other NCB not transmitting data to the ECB for the purposes of a feedback loop in accordance with Article 16e of this Guideline.’; |
| --- | --- |

(c)

it is deemed that the NCB transmitting data from the RMS foreign branch to the ECB does not deny access to these data to the other NCB not transmitting data to the ECB for the purposes of a feedback loop in accordance with Article 16e of this Guideline.’;

| (4) | the following Chapter Va is inserted:

  ‘CHAPTER Va

  ANACREDIT FEEDBACK LOOP FRAMEWORK


  Article 16a
  Participation and termination of participation in the AnaCredit feedback loop framework

  1.   NCBs may participate in the AnaCredit feedback loop framework on a voluntary basis. The NCBs listed in Annex IV shall become participating NCBs for the purposes of this Guideline from the date specified in that Annex.


  2.   An NCB which is not listed in Annex IV may request to participate in the AnaCredit feedback loop framework by submitting prior written notice to the Governing Council specifying the date from which it proposes to become a participating NCB. The NCB shall be included in the list in Annex IV by means of a technical amendment to that Annex and, where necessary, to Annex III in accordance with Article 20.
  For the purposes of this paragraph, a technical amendment consists of the inclusion in Annex IV of the name of the NCB and the date from which it shall become a participating NCB and, where necessary, a specification of those data attributes in the ECB feedback loop dataset in Annex III in respect of which that NCB does not consent to sharing the related data for the purpose of providing feedback loops to reporting agents in accordance with Article 16c.


  3.   A participating NCB may request a change in its specification of data attributes as referred to in the second subparagraph of paragraph 2. The change shall take effect following a technical amendment to Annex III in accordance with Article 20.


  4.   A participating NCB may request the termination of its participation in the AnaCredit feedback loop framework by submitting prior written notice of no less than ninety days to the Governing Council. The termination shall take effect following a technical amendment to Annex IV, and where necessary, Annex III in accordance with Article 20. Any termination of participation shall not prejudice the continuation and survival of any of the rights and obligations of each of the other NCBs existing at or prior to the date that such termination takes effect.



  Article 16b
  Requirements for participation in the AnaCredit feedback loop framework
  Under the AnaCredit feedback loop framework, participating NCBs shall be required to:






  (a) | consent to receiving NCBs sharing with their resident reporting agents for feedback loop purposes, at least, the minimum dataset; and |
| --- | --- | --- |

(4)

the following Chapter Va is inserted:

‘CHAPTER Va

ANACREDIT FEEDBACK LOOP FRAMEWORK

ANACREDIT FEEDBACK LOOP FRAMEWORK

Article 16a

Participation and termination of participation in the AnaCredit feedback loop framework

1.   NCBs may participate in the AnaCredit feedback loop framework on a voluntary basis. The NCBs listed in Annex IV shall become participating NCBs for the purposes of this Guideline from the date specified in that Annex.

2.   An NCB which is not listed in Annex IV may request to participate in the AnaCredit feedback loop framework by submitting prior written notice to the Governing Council specifying the date from which it proposes to become a participating NCB. The NCB shall be included in the list in Annex IV by means of a technical amendment to that Annex and, where necessary, to Annex III in accordance with Article 20.

For the purposes of this paragraph, a technical amendment consists of the inclusion in Annex IV of the name of the NCB and the date from which it shall become a participating NCB and, where necessary, a specification of those data attributes in the ECB feedback loop dataset in Annex III in respect of which that NCB does not consent to sharing the related data for the purpose of providing feedback loops to reporting agents in accordance with Article 16c.

3.   A participating NCB may request a change in its specification of data attributes as referred to in the second subparagraph of paragraph 2. The change shall take effect following a technical amendment to Annex III in accordance with Article 20.

4.   A participating NCB may request the termination of its participation in the AnaCredit feedback loop framework by submitting prior written notice of no less than ninety days to the Governing Council. The termination shall take effect following a technical amendment to Annex IV, and where necessary, Annex III in accordance with Article 20. Any termination of participation shall not prejudice the continuation and survival of any of the rights and obligations of each of the other NCBs existing at or prior to the date that such termination takes effect.

Article 16b

Requirements for participation in the AnaCredit feedback loop framework

Under the AnaCredit feedback loop framework, participating NCBs shall be required to:

(a)

consent to receiving NCBs sharing with their resident reporting agents for feedback loop purposes, at least, the minimum dataset; and

| (b) | implement arrangements to include at least the credit data and counterparty reference data corresponding to the data attributes in the minimum dataset concerning any instrument related to a debtor or prospective debtor in the feedback loop which is provided to resident reporting agents.
  NCBs which do not comply with these requirements shall not participate in the AnaCredit feedback loop framework. |
| --- | --- |

(b)

implement arrangements to include at least the credit data and counterparty reference data corresponding to the data attributes in the minimum dataset concerning any instrument related to a debtor or prospective debtor in the feedback loop which is provided to resident reporting agents.

NCBs which do not comply with these requirements shall not participate in the AnaCredit feedback loop framework.

Article 16c

Sharing of the data corresponding to the variable attributes

1.   A participating NCB may, at its discretion, decide not to consent to receiving NCBs including any variable attribute in the data shared with their resident reporting agents, for the purposes of a feedback loop. The decisions by participating NCBs are indicated in Annex III. A receiving NCB may not include such variable attributes in the data shared with its resident reporting agents, for the purposes of a feedback loop.

2.   If a participating NCB decides not to consent to receiving NCBs including one or more variable attributes in the data shared with their resident reporting agents for the purposes of a feedback loop, the participating NCB shall not provide the equivalent set of data collected by other participating NCBs to its own reporting agents.

3.   Subject to paragraphs 1 and 2, a receiving NCB may, at its discretion, decide to include or exclude any variable attribute in the data shared with its resident reporting agents.

4.   If an NCB is responsible under Article 6 of this Guideline for reporting to the ECB credit data and counterparty reference data concerning an RMS foreign branch, the data corresponding to the variable attributes relating to that RMS foreign branch may be provided, for the purposes of a feedback loop, to a resident reporting agent by the participating NCB in the Member State in which the RMS foreign branch is resident or by the participating NCB in the Member State of the head office undertaking of the RMS foreign branch.

Article 16d

Data transmission by the ECB

1.   From 1 April 2020, the ECB shall transmit the ECB feedback loop dataset to each NCB listed in Annex IV prior to the date, as specified in that Annex, on which it becomes a participating NCB. The NCB shall not have the right to use the data received from the ECB for the purposes of a feedback loop in accordance with Article 16e until it becomes a participating NCB on the date specified in Annex IV. The NCB shall only use the data received from the ECB for the purposes of testing the arrangements referred to in Article 16b(b) prior to the implementation of such arrangements on the date on which it becomes a participating NCB and in accordance with Article 16e(9).

2.   The ECB shall transmit an ECB feedback loop dataset to each receiving NCB via regular transmissions, immediately after the generation of the golden copy.

3.   Each ECB feedback loop dataset transmitted via a regular transmission shall only relate to instruments where at least one debtor is a legal entity or is part of a legal entity which meets one of the following conditions:

| (a) | the debtor is resident in the Member State of the receiving NCB and the credit data relating to it are reported to the ECB by at least one other participating NCB; |
| --- | --- |

(a)

the debtor is resident in the Member State of the receiving NCB and the credit data relating to it are reported to the ECB by at least one other participating NCB;

| (b) | the debtor is not resident in the Member State of the receiving NCB and the credit data relating to it are reported to the ECB both by the receiving NCB and at least one other participating NCB; |
| --- | --- |

(b)

the debtor is not resident in the Member State of the receiving NCB and the credit data relating to it are reported to the ECB both by the receiving NCB and at least one other participating NCB;

| (c) | the debtor is a party to an instrument granted by or with an RMS foreign branch where that RMS foreign branch or the head office undertaking of that RMS foreign branch is resident in the Member State of the receiving NCB and the credit data and counterparty reference data relating to it are reported to the ECB by another NCB responsible under Article 6 for the reporting of the credit data and counterparty reference data of that RMS foreign branch to the ECB. |
| --- | --- |

(c)

the debtor is a party to an instrument granted by or with an RMS foreign branch where that RMS foreign branch or the head office undertaking of that RMS foreign branch is resident in the Member State of the receiving NCB and the credit data and counterparty reference data relating to it are reported to the ECB by another NCB responsible under Article 6 for the reporting of the credit data and counterparty reference data of that RMS foreign branch to the ECB.

4.   The ECB shall transmit to the receiving NCBs any revisions received relating to information previously included in regular transmissions in accordance with the revision policy referred to in point 4 of Annex V to Regulation (EU) 2016/867 (ECB/2016/13).

5.   A participating NCB may send to the ECB an ad-hoc request relating to a prospective debtor who has applied for an instrument to a reporting agent, or to any of their observed agents, resident in the Member State of the requesting participating NCB.

6.   The ECB shall transmit the ECB feedback loop dataset relating to the relevant prospective debtor to the requesting participating NCB in response to an ad-hoc request, provided that the ad-hoc request relates to a prospective debtor whose data are reported to the ECB.

7.   The ECB shall respond to an ad-hoc request by the end of the working day following the one in which the ad-hoc request was received.

8.   The ECB shall ensure that the information transmitted under this Article is identical to that transmitted by the NCBs to the ECB and that the information transmitted to each receiving NCB shall refer only to the instruments relating to debtors or prospective debtors specified in paragraphs 3 or 5.

Article 16e

Data sharing by the receiving NCBs with the reporting agents and applicable restrictions

1.   A receiving NCB has the right to use the data received from the ECB in accordance with Article 16d for the purposes of a feedback loop in accordance with the provisions of this Article.

2.   A feedback loop as referred to in paragraph 1 may be established by a receiving NCB with resident reporting agents, including small reporting agents that are granted a derogation in accordance with Article 16(1) of Regulation (EU) 2016/867 (ECB/2016/13) and reporting agents that report data on a reduced reporting frequency in accordance with Article 16(2) of Regulation (EU) 2016/867 (ECB/2016/13).

3.   The data used in feedback loops shall include, at least, the minimum dataset. The data used in feedback loops may in addition include the data corresponding to the variable attributes, provided that the receiving NCBs shall exclude data collected by other participating NCBs, where such other participating NCBs have not consented to sharing such data in accordance with Article 16c.

4.   A receiving NCB may not provide to a reporting agent credit data or counterparty reference data which are outside the scope of the ECB feedback loop dataset it has received. The receiving NCBs shall not share the operational attributes with their resident reporting agents.

5.   A participating NCB may identify certain information at instrument level as not usable for feedback loop purposes, for a limited period of time, because of restrictions in national legislation or the quality of the information. The data transmitted by the ECB to the receiving NCBs shall include such identification. A receiving NCB shall not include the identified information in the feedback loops to its resident reporting agents.

6.   Data collected by NCBs that are not participating in the AnaCredit feedback loop framework may not be used by participating NCBs for the purposes of establishing or maintaining a feedback loop, except in accordance with Article 11(5) of Regulation (EU) 2016/867 (ECB/2016/13), where it is deemed that access for such purposes is not denied by a non-participating NCB pursuant to Article 6(5) or where the data is on an institutional unit of a reporting agent established in a reporting Member State, which may always be used for feedback loops by the relevant NCB of the reporting agent, irrespective of where the institutional unit is resident.

7.   A receiving NCB may share with its resident reporting agents the data received from the ECB in accordance with this Article; it may provide data with the same level of granularity contained in the data transmission from the ECB or at a more aggregated level.

8.   When providing feedback loops to reporting agents, the receiving NCBs shall ensure that observed agents, reporting agents, creditors, servicers and originators the information on which has been transmitted by the ECB to the receiving NCBs cannot be identified.

9.   Receiving NCBs shall treat information received from the ECB in accordance with the national legal framework on data confidentiality and Articles 8 to 8c of Regulation (EC) No 2533/98.

10.   A receiving NCB shall inform its resident reporting population that, in accordance with Article 11 of Regulation (EU) 2016/867 (ECB/2016/13):

| (a) | reporting agents must use the subset of the credit data and counterparty reference data received via feedback loops and collected by other participating NCBs exclusively for managing credit risk and improving the quality of credit information available to them with regard to existing or prospective instruments; |
| --- | --- |

(a)

reporting agents must use the subset of the credit data and counterparty reference data received via feedback loops and collected by other participating NCBs exclusively for managing credit risk and improving the quality of credit information available to them with regard to existing or prospective instruments;

| (b) | it is forbidden for reporting agents to share the subset of data referred to in point (a) with other parties or commercial providers, except where data sharing with service providers is permitted in accordance with Article 11 of Regulation (EU) 2016/867 (ECB/2016/13); |
| --- | --- |

(b)

it is forbidden for reporting agents to share the subset of data referred to in point (a) with other parties or commercial providers, except where data sharing with service providers is permitted in accordance with Article 11 of Regulation (EU) 2016/867 (ECB/2016/13);

| (c) | without prejudice to an NCB’s discretion to give access to specific credit data to a reporting agent via a feedback loop, such access may be denied on a temporary basis when the reporting agent has not complied with its own statistical reporting obligations under Regulation (EU) 2016/867 (ECB/2016/13), in particular with regard to data quality and accuracy, or when the reporting agent has not complied with its obligations under points (a) or (b). In such cases the receiving NCB must inform the reporting agent that its access to the feedback loop is suspended; and |
| --- | --- |

(c)

without prejudice to an NCB’s discretion to give access to specific credit data to a reporting agent via a feedback loop, such access may be denied on a temporary basis when the reporting agent has not complied with its own statistical reporting obligations under Regulation (EU) 2016/867 (ECB/2016/13), in particular with regard to data quality and accuracy, or when the reporting agent has not complied with its obligations under points (a) or (b). In such cases the receiving NCB must inform the reporting agent that its access to the feedback loop is suspended; and

| (d) | reporting agents must protect the confidentiality of the subset of data referred to in point (a) in line with best practices and in accordance with the applicable national and Union law. |
| --- | --- |

(d)

reporting agents must protect the confidentiality of the subset of data referred to in point (a) in line with best practices and in accordance with the applicable national and Union law.

Article 16f

Participating NCBs’ responsibility for providing data access

1.   A receiving NCB is solely responsible for the establishment of a feedback loop or other information services from its CCR to reporting agents, including the procedure for providing data access to reporting agents and enforcing compliance by reporting agents with the requirements of Article 16e.

2.   Where legal entities or parts of legal entities about which credit data have been reported are entitled to access such data or require the rectification and/or deletion of such data, including where such data are provided to reporting agents for the purposes of a feedback loop or other information service from the relevant CCR, the relevant NCB must implement procedures to (a) provide access to the data, (b) require that incorrect data are to be rectified by reporting agents and (c) communicate to the reporting agents with whom the information has been shared.

3.   In the case of claims relating to information included in feedback loops and derived from the data transmission made by another NCB, the NCB receiving the claims shall liaise with the NCB which has transmitted the data to the ECB and cooperate in investigating the correctness of the information and in preparing the response to the debtor’s claim.’;

| (5) | the text set out in Annex I to this Guideline is added as Annex III to Guideline (EU) 2017/2335 (ECB/2017/38); |
| --- | --- |

(5)

the text set out in Annex I to this Guideline is added as Annex III to Guideline (EU) 2017/2335 (ECB/2017/38);

| (6) | the text set out in Annex II to this Guideline is added as Annex IV to Guideline (EU) 2017/2335 (ECB/2017/38). |
| --- | --- |

(6)

the text set out in Annex II to this Guideline is added as Annex IV to Guideline (EU) 2017/2335 (ECB/2017/38).

Article 2

Taking effect

1.   This Guideline shall take effect on the day of its notification to the NCBs of the Member States whose currency is the euro.

2.   The Eurosystem central banks shall comply with this Guideline from 1 April 2020.

Article 3

Addressees

This Guideline is addressed to all Eurosystem central banks.

Done at Frankfurt am Main, 21 February 2020.

For the Governing Council of the ECB

The President of the ECB

Christine LAGARDE

---

(1)  Regulation (EU) 2016/867 of the European Central Bank of 18 May 2016 on the collection of granular credit and credit risk data (ECB/2016/13) (OJ L 144, 1.6.2016, p. 44).

1

(2)  Council Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by the European Central Bank (OJ L 318, 27.11.1998, p. 8).

2

(3)  Guideline (EU) 2017/2335 of the European Central Bank of 23 November 2017 on the procedures for the collection of granular credit and credit risk data (ECB/2017/38) (OJ L 333, 15.12.2017, p. 66).

3

---

ANNEX I

‘ANNEX III

Data attributes for the purposes of feedback loops

| Data attributes comprised in the datasets transmitted by the ECB in accordance with Article 16d and arrangements for sharing data for the purpose of providing feedback loops to reporting agents |
| --- |
| Data attributes | Datasets (minimum or ECB feedback loop (1)) | Participating NCBs (2) that do not consent to sharing data in accordance with Article 16c(1) |
| Reference data
   (*1) |
| Country of the NCB | Minimum dataset | N.A. |
| Country of the creditor | ECB feedback loop dataset | ES does not consent to sharing |
| Debtor: Name | Minimum dataset | N.A. |
| Debtor: Legal Entity Identifier (LEI) | Minimum dataset | N.A. |
| Debtor: country | Minimum dataset | N.A. |
| Head office undertaking identifier | ECB feedback loop dataset | |
| Ultimate parent identifier | ECB feedback loop dataset | IT does not consent to sharing |
| Legal form | ECB feedback loop dataset | |
| Institutional sector | ECB feedback loop dataset | |
| Status of legal proceedings and Date of initiation of legal proceedings | ECB feedback loop dataset | SK and ES do not consent to sharing both the attributes
  AT does not consent to sharing both the attributes when they refer to “other legal measures” |
| Instrument data |
| Observed agent identifier
  (operational attribute) | ECB feedback loop dataset | |
| Contract identifier
  (operational attribute) | ECB feedback loop dataset | |
| Instrument identifier
  (operational attribute) | ECB feedback loop dataset | |
| Type of instrument | Minimum dataset | N.A. |
| Currency | ECB feedback loop dataset | AT does not consent to sharing |
| Inception date | ECB feedback loop dataset | AT and ES do not consent to sharing |
| Fiduciary instrument
  (operational attribute) | ECB feedback loop dataset | AT does not consent to sharing any data relating to the instruments for which the value of this attribute is “Fiduciary Instrument”, i.e. in the case of instruments placed in a fiduciary capacity which are reported by a reporting (observed) agent that is not the creditor of the instrument. |
| Legal final maturity date | ECB feedback loop dataset | AT and ES do not consent to sharing |
| Commitment amount at inception | ECB feedback loop dataset | |
| Purpose | ECB feedback loop dataset | AT does not consent to sharing |
| Recourse
  (operational attribute) | ECB feedback loop dataset | AT does not consent to sharing any data relating to instruments of the type “Trade receivables” when the value of this attribute is “No recourse”.
  PT does not consent to sharing any data relating to factoring instruments when the attribute is “No recourse” and the attribute “Arrears” is 0 or exists but is below 90 days past due. |
| Financial data |
| Observed agent identifier
  (operational attribute) | ECB feedback loop dataset | |
| Contract identifier
  (operational attribute) | ECB feedback loop dataset | |
| Instrument identifier
  (operational attribute) | ECB feedback loop dataset | |
| Outstanding nominal amount | Minimum datasets | N.A. |
| Off-balance sheet amount | Minimum datasets | N.A. |
| Arrears for the instrument | ECB feedback loop dataset | ES does not consent to sharing this attribute if it relates to instruments which are less than 90 days past due
  AT does not consent to sharing this attribute if it is filtered by the date of past due |
| Date of past due for the instrument | ECB feedback loop dataset | AT and ES do not consent to sharing.
  ES treats this attribute as an operational attribute in order to select instruments which are less than 90 days past due. |
| Transferred amount
  (operational attribute) | ECB feedback loop dataset | |
| Accrued interest | ECB feedback loop dataset | |
| Counterparty-instrument data |
| Observed agent identifier
  (operational attribute) | ECB feedback loop dataset | |
| Contract identifier
  (operational attribute) | ECB feedback loop dataset | |
| Instrument identifier
  (operational attribute) | ECB feedback loop dataset | |
| Counterparty identifier: creditor, servicer, originator
  (operational attribute) | ECB feedback loop dataset | |
| Counterparty identifier: debtor | Minimum dataset | N.A. |
| Counterparty role (operational attribute) | ECB feedback loop dataset | |
| Joint liabilities data |
| Observed agent identifier
  (operational attribute) | ECB feedback loop dataset | |
| Contract identifier
  (operational attribute) | ECB feedback loop dataset | |
| Instrument identifier
  (operational attribute) | ECB feedback loop dataset | |
| Counterparty identifier (3) | Minimum dataset | N.A. |
| Joint liability amount | Minimum dataset | N.A. |
| Accounting data |
| Observed agent identifier
  (Operational attribute) | ECB feedback loop dataset | |
| Contract identifier
  (Operational attribute) | ECB feedback loop dataset | |
| Instrument identifier
  (Operational attribute) | ECB feedback loop dataset | |
| Accumulated write-offs | ECB feedback loop dataset | AT does not consent to sharing |
| Protection received data |
| Observed agent identifier
  (Operational attribute) | ECB feedback loop dataset | |
| Protection identifier
  (Operational attribute) | ECB feedback loop dataset | |
| Protection provider identifier
  (Operational attribute) | ECB feedback loop dataset | |
| Type of protection | ECB feedback loop dataset | AT does not consent to sharing |
| Instrument-protection received data
   (4) |
| Observed agent identifier
  (operational attribute) | ECB feedback loop dataset | |
| Contract identifier
  (operational attribute) | ECB feedback loop dataset | |
| Instrument identifier
  (operational attribute) | ECB feedback loop dataset | |
| Protection identifier
  (operational attribute) | ECB feedback loop dataset | |

Data attributes comprised in the datasets transmitted by the ECB in accordance with Article 16d and arrangements for sharing data for the purpose of providing feedback loops to reporting agents

Data attributes

Datasets (minimum or ECB feedback loop (1))

Participating NCBs (2) that do not consent to sharing data in accordance with Article 16c(1)

Reference data
   (*1)

Country of the NCB

Minimum dataset

N.A.

Country of the creditor

ECB feedback loop dataset

ES does not consent to sharing

Debtor: Name

Minimum dataset

N.A.

Debtor: Legal Entity Identifier (LEI)

Minimum dataset

N.A.

Debtor: country

Minimum dataset

N.A.

Head office undertaking identifier

ECB feedback loop dataset

Ultimate parent identifier

ECB feedback loop dataset

IT does not consent to sharing

Legal form

ECB feedback loop dataset

Institutional sector

ECB feedback loop dataset

Status of legal proceedings and Date of initiation of legal proceedings

ECB feedback loop dataset

SK and ES do not consent to sharing both the attributes

AT does not consent to sharing both the attributes when they refer to “other legal measures”

Instrument data

Observed agent identifier

(operational attribute)

ECB feedback loop dataset

Contract identifier

(operational attribute)

ECB feedback loop dataset

Instrument identifier

(operational attribute)

ECB feedback loop dataset

Type of instrument

Minimum dataset

N.A.

Currency

ECB feedback loop dataset

AT does not consent to sharing

Inception date

ECB feedback loop dataset

AT and ES do not consent to sharing

Fiduciary instrument

(operational attribute)

ECB feedback loop dataset

AT does not consent to sharing any data relating to the instruments for which the value of this attribute is “Fiduciary Instrument”, i.e. in the case of instruments placed in a fiduciary capacity which are reported by a reporting (observed) agent that is not the creditor of the instrument.

Legal final maturity date

ECB feedback loop dataset

AT and ES do not consent to sharing

Commitment amount at inception

ECB feedback loop dataset

Purpose

ECB feedback loop dataset

AT does not consent to sharing

Recourse

(operational attribute)

ECB feedback loop dataset

AT does not consent to sharing any data relating to instruments of the type “Trade receivables” when the value of this attribute is “No recourse”.

PT does not consent to sharing any data relating to factoring instruments when the attribute is “No recourse” and the attribute “Arrears” is 0 or exists but is below 90 days past due.

Financial data

Observed agent identifier

(operational attribute)

ECB feedback loop dataset

Contract identifier

(operational attribute)

ECB feedback loop dataset

Instrument identifier

(operational attribute)

ECB feedback loop dataset

Outstanding nominal amount

Minimum datasets

N.A.

Off-balance sheet amount

Minimum datasets

N.A.

Arrears for the instrument

ECB feedback loop dataset

ES does not consent to sharing this attribute if it relates to instruments which are less than 90 days past due

AT does not consent to sharing this attribute if it is filtered by the date of past due

Date of past due for the instrument

ECB feedback loop dataset

AT and ES do not consent to sharing.

ES treats this attribute as an operational attribute in order to select instruments which are less than 90 days past due.

Transferred amount

(operational attribute)

ECB feedback loop dataset

Accrued interest

ECB feedback loop dataset

Counterparty-instrument data

Observed agent identifier

(operational attribute)

ECB feedback loop dataset

Contract identifier

(operational attribute)

ECB feedback loop dataset

Instrument identifier

(operational attribute)

ECB feedback loop dataset

Counterparty identifier: creditor, servicer, originator

(operational attribute)

ECB feedback loop dataset

Counterparty identifier: debtor

Minimum dataset

N.A.

Counterparty role (operational attribute)

ECB feedback loop dataset

Joint liabilities data

Observed agent identifier

(operational attribute)

ECB feedback loop dataset

Contract identifier

(operational attribute)

ECB feedback loop dataset

Instrument identifier

(operational attribute)

ECB feedback loop dataset

Counterparty identifier (3)

Minimum dataset

N.A.

Joint liability amount

Minimum dataset

N.A.

Accounting data

Observed agent identifier

(Operational attribute)

ECB feedback loop dataset

Contract identifier

(Operational attribute)

ECB feedback loop dataset

Instrument identifier

(Operational attribute)

ECB feedback loop dataset

Accumulated write-offs

ECB feedback loop dataset

AT does not consent to sharing

Protection received data

Observed agent identifier

(Operational attribute)

ECB feedback loop dataset

Protection identifier

(Operational attribute)

ECB feedback loop dataset

Protection provider identifier

(Operational attribute)

ECB feedback loop dataset

Type of protection

ECB feedback loop dataset

AT does not consent to sharing

Instrument-protection received data
   (4)

Observed agent identifier

(operational attribute)

ECB feedback loop dataset

Contract identifier

(operational attribute)

ECB feedback loop dataset

Instrument identifier

(operational attribute)

ECB feedback loop dataset

Protection identifier

(operational attribute)

ECB feedback loop dataset

---

(*1)  NCBs extract these attributes from RIAD, only if they are flagged as “F” meaning free, i.e. not confidential and may be made public or “R” meaning that, in addition to the uses allowed under Article 10(2)b, an attribute value may be shared with the reporting agent which provided that information, and, subject to any applicable confidentiality restrictions, with other reporting agents, i.e. restricted release only, in accordance with Guideline (EU) 2018/876 of the European Central Bank of 1 June 2018 on the Register of Institutions and Affiliates Data (ECB/2018/16) (OJ L 154, 18.6.2018, p. 3).

*1

(1)  See the definitions in Article 2.

1

(2)  The participating NCBs are indicated by the ISO country codes of their Member State.

2

(3)  At national level, in the regular transmission, the receiving NCB shares with resident reporting agents only the co-debtors (identifier and joint liability amount) that have loans with the resident reporting agents.

3

(4)  NCBs may use these attributes in order to flag in the feedback loops the instruments linked to protection items.’

4

---

ANNEX II

‘ANNEX IV

Participation in the AnaCredit feedback loop framework

The following NCBs are considered participating NCBs for the purposes of this Guideline, from the start date of participation indicated.

After 1 April 2020 and prior to the relevant start date of participation, the NCBs will receive the ECB feedback loop dataset for testing purposes in accordance with Article 16d(1).

| NCBs | Start date of participation |
| --- | --- |
| Nationale Bank van België/Banque Nationale de Belgique | 1 July 2021 |
| Banco de España | 1 July 2021 |
| Banca d'Italia | 1 July 2021 |
| Oesterreichische Nationalbank | 1 July 2021 |
| Banco de Portugal | 1 July 2021 |
| Národná banka Slovenska | 1 July 2021 |

NCBs

Start date of participation

Nationale Bank van België/Banque Nationale de Belgique

1 July 2021

Banco de España

1 July 2021

Banca d'Italia

1 July 2021

Oesterreichische Nationalbank

1 July 2021

Banco de Portugal

1 July 2021

Národná banka Slovenska

1 July 2021

---

Corrigenda

| 6.3.2020 | EN | Official Journal of the European Union | L 69/58 |
| --- | --- | --- | --- |

6.3.2020

EN

Official Journal of the European Union

L 69/58

---

Corrigendum to Decision No 1/2018 of the ECAA Joint Committee of 3 May 2018 with regard to the adoption of its rules of procedure 2019/1802

(
  Official Journal of the European Union L 274 of 28 October 2019
  )

On page 15:

for:

‘(*) This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.’,

read:

‘(*) Pursuant to UN Security Council Resolution 1244 of 10 June 1999.’

---