COMMISSION IMPLEMENTING REGULATION (EU) 2022/664

of 21 April 2022

amending Implementing Regulation (EU) 2019/159 imposing a definitive safeguard measure against imports of certain steel products

THE EUROPEAN COMMISSION,

Having regard to Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports (1) and in particular Articles 16 and 20 thereof,

Having regard to Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (2), and in particular Articles 13 and 16 thereof,

Whereas:

1. BACKGROUND

(1) By Commission Implementing Regulation (EU) 2018/1013 (3) the European Commission (‘the Commission’) imposed a provisional safeguard measure on certain steel products (‘the provisional measure’).

(2) By Commission Implementing Regulation (EU) 2018/1712 (4) and in application of the provisions of the Economic Partnership Agreement (‘EPA’) between the Southern African Development Community (‘SADC’) and the European Union (5), the Commission excluded these countries from the application of the safeguard measure.

(3) By Commission Implementing Regulation (EU) 2019/159 (6), the Commission imposed a definitive safeguard measure on certain steel products (‘the definitive safeguard measure’), which consists of tariff-rate quotas (‘TRQs’) with respect to certain steel products (‘the product concerned’) encompassing 26 product categories, set at levels preserving traditional trade flows on a per-product-category basis. A 25 % tariff duty applies only if the quantitative thresholds of these TRQs are exceeded.

(4) By Commission Implementing Regulation (EU) 2021/1029 (7), the Commission prolonged the duration of the safeguard measure until 30 June 2024.

(5) By Commission Implementing Regulation (EU) 2022/434 (8) the Commission adjusted the distribution of quota volumes in certain product categories following the imposition of an import ban on products from Russia and Belarus.

(6) Certain countries with which the Union has signed an Economic Partnership Agreement (‘certain EPA countries’) (9) were excluded from the application of the definitive measure, and its subsequent amendments, including its prolongation. The exclusion of certain EPA countries from the definitive safeguard measure was justified by the provisions of Article 33 of the EPA. However, the exclusion provided for in the EPA was limited in time and it has now expired as regards certain EPA countries. Accordingly, and in order to respect the Most Favoured Nation (‘MFN’) obligation under WTO rules, certain EPA countries (10) should be brought within the scope of application of the safeguard measure (11).

2. ANALYSIS

2.1. Increased imports

(7) The import data of certain EPA countries was not part of the finding of increased imports made by the Commission in the Definitive Safeguard Regulation (12). This was in application of the principle of parallelism (13), whereby the investigating authority cannot consider in its analysis of whether imports had increased imports from those origins excluded from the application of the measure.

(8) Since imports from certain EPA countries can no longer benefit from the exclusion under the EPA, the Commission needs to reassess the original finding of increased imports by incorporating the import data from certain EPA countries.

(9) The evolution of imports in the period considered in the Definitive Safeguard Regulation, updated by including certain EPA countries import volumes, is shown in the following tables: first, for the product concerned (Table 1); and then, as a supplementary analysis, on a per product family basis (Table 2). Table 1 Import volume (after inclusion of certain EPA countries) and market share 2013 2014 2015 2016 2017 MRP Imports (000 tonnes) 18 454 22 012 26 693 29 283 30 271 31 476 Index 2013=100 100 119 145 159 164 171 Market share 12,78 % 14,48 % 16,97 % 17,97 % 18,19 % 18,88 % Source: Eurostat and 2018 Union Industry questionnaire replies.

(10) Imports increased in absolute terms by 71 % during the period of analysis, and in relative terms with market shares increasing from 12,78 % to 18,88 % from 2013 to MRP. Table 2 Import volume (after inclusion of certain EPA countries) and market share – per product family 2013 2014 2015 2016 2017 MRP Flat products Imports (000 tonnes) 12 405 14 301 18 509 20 405 20 457 20 342 Index 2013=100 100 115 149 165 165 164 Market share 14,28 % 15,88 % 19,50 % 20,80 % 21,03 % 21,01 % Long products Imports (000 tonnes) 4 039 5 308 6 042 6 560 6 474 7 913 Index 2013=100 100 131 150 162 160 196 Market share 8,67 % 10,69 % 11,82 % 12,42 % 11,82 % 14,02 % Tubes Imports (000 tonnes) 2 010 2 403 2 142 2 317 3 339 3 221 Index 2013=100 100 120 107 115 166 160 Market share 20,47 % 20,85 % 19,96 % 20,15 % 25,35 % 25,75 % Source: Eurostat and 2018 Union Industry questionnaire replies.

(11) Imports increased in all three product families (flat products, long products and tubes) in absolute terms by respectively 64 %, 96 % and 60 % during 2013-MRP. In the same period, imports also increased in relative terms with market shares increasing respectively from 14,28 % to 21,01 %, 8,67 % to 14,02 % and 20,47 % to 25,75 %.

(12) Therefore, the Commission confirmed that, after the inclusion of imports from certain EPA countries, there had been an increase of imports, both in absolute and relative terms for the product concerned in the period considered. In fact, this increase in imports is even larger than the one established by the Commission in the Definitive Safeguard Regulation. Thus, the Commission confirmed the findings of the definitive measure that an increase in imports of the product concerned took place, and that finding was further corroborated by the supplementary analysis undertaken at the level of each of the three product families.

2.2. Unforeseen developments

(13) In recitals (48) to (62) of the Definitive Safeguard Regulation (14), the Commission described in detail the unforeseen developments it had identified which had led to the increase in imports.

(14) The nature of those unforeseen developments encompasses a wide array of actions, developments and measures affecting the steel market on a worldwide scale. The addition into the analysis of certain EPA countries, which represent a minor share in the overall level of world steel production capacity (15) can therefore not change the findings made by the Commission in the Definitive Safeguard Regulation in this respect.

(15) Therefore, the findings regarding unforeseen developments of the Definitive Safeguard Regulation are confirmed.

2.3. Threat of serious injury, causation and Union interest

(16) The addition of certain EPA countries’ imports into the analysis in any event has shown that the level of increased imports was even larger than in their absence. Therefore, the findings with regard to threat of serious injury, causation and Union interest made in the Definitive Safeguard Regulation remain valid.

2.4. Conclusion

(17) In view of the above findings, the Commission confirmed that after the inclusion in the analysis of the imports from certain EPA countries, the original findings with regard to increase in imports, unforeseen developments, threat of serious injury, causation and Union interest remain valid.

3. UPDATE OF LIST OF DEVELOPING COUNTRIES SUBJECT TO MEASURES

(18) The Commission calculated whether, in application of Article 18 of Regulation (EU) 2015/478 regarding developing countries member of the WTO, any of the certain EPA countries exceeded the relevant threshold of imports in each product category. The Commission based its calculation on the data concerning the year 2019 imports dataset in order to ensure consistency with the approach used for the measure currently in place.

(19) The changes to the developing country exclusions are as follows: — South Africa is included under the measure in product categories 8, 9 and 10.

4. LEVEL AND ALLOCATION OF TRQS

(20) By including imports from certain EPA countries under the measure, the level of TRQs for each product category and allocation of TRQs (where appropriate) needs to be revised in line with the principle of parallelism, so that the volumes of quotas available correspond to the historical volumes of imports (16) from the countries subject to the measure.

(21) In terms of the methodology used, the Commission followed the same approach underpinning the calculation and allocation of quotas in the Definitive Safeguard Regulation, only updating the figures resulting from the addition of imports from certain EPA countries.

(22) The baseline to calculate the TRQ volume was based on the reference period (namely average imports in the period 2015-2017). Therefore, the Commission recalculated the average volume of imports in the reference period (17), per product category, including where appropriate imports from certain EPA countries (18).

(23) The Commission recalculated the volume of TRQs by adding to the average volume of imports in the reference period the subsequent increases of quota that have taken place since the imposition of the definitive safeguard measure (19). The Commission also took into account the changes in quota introduced by Regulation (EU) 2022/434.

(24) For the periods as of 1 July 2022 onwards, the Commission added, where applicable, the quota volumes corresponding to certain EPA countries’ imports.

(25) For the quarter April-June 2022, which was ongoing when this Regulation entered into force, the Commission recalculated proportionally the amount of quota that will be added, where applicable, to the quota volumes initially available in the ongoing quarter (20) from the day this Regulation is applicable (1 May 2022) until 30 June 2022, when the current safeguard period (21) will conclude.

(26) Regarding the allocation of quotas, and in order to determine whether any of the certain EPA countries qualified for a country-specific quota (22) the Commission assessed, for each of these countries (23), whether their level of imports was least 5% of total imports in the reference period (in each product category).

(27) As explained in recital (20) above, only South Africa exceeds the relevant thresholds of Article 18 of Regulation (EU) 2015/478 and it is therefore not benefitting from the developing country exemption. The Commission thus assessed the situation of South Africa in the three product categories where it is subject to the measure. The result is as follows:

(28) Category 8 is administered globally. Therefore, South Africa will be part of the global quota. The proportional share of its historical import volumes will be added to the global quota volumes in this category. For categories 9 and 10, South Africa will receive country-specific quotas in line with its historical import volumes.

(29) An Implementing Regulation to be published once the ongoing functioning review investigation initiated on 17 December 2021 ends, will update the TRQ volumes in the Annex for the period starting on 1 July 2022. This Regulation will apply as of 1 May 2022 in order to provide sufficient notice to all economic operators.

(30) The measures provided for in this Regulation are in accordance with the opinion of the Committee on Safeguards established under Article 3(3) of Regulation (EU) 2015/478 and Article 22(3) of Regulation (EU) 2015/755 respectively,

HAS ADOPTED THIS REGULATION:

Article 1 Regulation (EU) 2019/159 is amended as follows: (1) point III.2 in Annex III is replaced by Annex I to this Regulation; (2) Annex IV is replaced by Annex II to this Regulation; (3) the text in Article 6, paragraph 2, is replaced by ‘Mozambique shall also not be subject to the measures set out in Article 1.’.

Article 2 This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union. It shall apply as of 1 May 2022.

This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 21 April 2022. For the Commission The President Ursula VON DER LEYEN

(1) Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports (OJ L 83, 27.3.2015, p. 16).

(2) Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries (OJ L 123, 19.5.2015, p. 33).

(3) Commission Implementing Regulation (EU) 2018/1013of 17 July 2018 imposing provisional safeguard measures with regard to imports of certain steel products (OJ L 181, 18.7.2018, p. 39).

(4) Commission Implementing Regulation (EU) 2018/1712 of 13 November 2018 amending Implementing Regulation (EU) 2018/1013 imposing provisional safeguard measures with regard to imports of certain steel products (OJ L 286, 14.11.2018, p. 17).

(5) OJ L 250, 16.9.2016, p. 3.

(6) Commission Implementing Regulation (EU) 2019/159 of 31 January 2019 imposing a definitive safeguard measure against imports of certain steel products (OJ L 31, 1.2.2019, p. 27) (‘Definitive Safeguard Regulation’).

(7) Commission Implementing Regulation (EU) 2021/1029 of 24 June 2021 amending Commission Implementing Regulation (EU) 2019/159 to prolong the safeguard measure on imports of certain steel products (OJ L 225 I, 25.6.2021, p. 1).

(8) Commission Implementing Regulation (EU) 2022/434 of 15 March 2022 amending Regulation (EU) 2019/159 imposing a definitive safeguard measure against imports of certain steel products (OJ L 88, 16.3.2022, p. 181).

(9) Botswana, Cameroon, Eswatini, Fiji, Ghana, Ivory Coast, Lesotho, Namibia and South Africa.

(10) Certain EPA countries are developing countries and WTO members, therefore they can benefit from ‘developing country’ exclusions, when the relevant conditions are met, in line with EU and WTO rules.

(11) This does not apply to Mozambique as the EPA entered into provisional application for Mozambique on 4 February 2018. Thus, the exemption under the EPA remains in force.

(12) See recitals (27) to (47) of Commission Implementing Regulation (EU) 2019/159.

(13) Appellate Body Report, Argentine – Safeguard Measures on Imports of Footwear (WT/DS121/AB/R), 14 December 1999, para. 113.

(14) As well as the findings in recitals (30) to (36) of the provisional measure.

(15) See, as an example, ‘OECD: Latest Developments in Steelmaking Capacity, 2021’, Table 6. Available at: https://www.oecd.org/industry/ind/latest-developments-in-steelmaking-capacity-2021.pdf

(16) In addition to liberalisation and other changes to the quotas that may have taken place.

(17) See recital (146) of Definitive Safeguard Regulation.

(18) The Commission only updated the volumes of those categories that registered imports from SADC countries in the reference period. If in the reference period there were no imports from these countries in a given category, then the TRQ volumes for such category remain unchanged.

(19) The level of quotas was topped-up by 5 % upon entry into force of the definitive safeguard measure, and it was subsequently increased by 3 % every 1 July as a result of progressive liberalisation.

(20) The quota volumes initially available in this quarter were defined last by Commission Implementing Regulation (EU) 2022/434.

(21) The current safeguard period refers to the period 1 July 2021 – 30 June 2022.

(22) See recital (147) of the Definitive Safeguard Regulation.

(23) Where they were not below the threshold for developing country exclusions as per Article 18 Regulation (EU) 2015/478.