Proposal for a COUNCIL REGULATION on the measures that may be taken by the Community following a report adopted by the WTO Dispute Settlement Body concerning anti-dumping and anti-subsidy measures (presented by the Commission)

EXPLANATORY MEMORANDUM

This proposal for a Council Regulation is presented with a view to providing the Community with the necessary legal framework to implement the recommendations of reports adopted by the World Trade Organization (WTO) Dispute Settlement Body (DSB) in the field of anti-dumping and anti-subsidy measures, insofar as the Community institutions consider such action appropriate.

Anti-dumping and anti-subsidy actions are governed by specific Council Regulations (basic regulations) [1] which transpose into Community law the WTO Agreement on implementation of Article VI of the GATT and the WTO Agreement on Subsidies and Countervailing measures. However, these basic regulations do not specify the actions that can be taken and the procedures to be followed to implement reports adopted by the WTO DSB.

[1] Council Regulations (EC) No 384/96 for anti-dumping and Council Regulation (EC) No 2026/97 for anti-subsidy measures.

The absence of specific rules for implementation did not have, until now, any practical consequences. However, on 12 March 2001, the WTO DSB adopted a report by a WTO panel as modified by the Appellate Body on the case 'European Communities - anti-dumping duties on imports of cotton-type bed linen from India'. The Community considers it appropriate in this instance to bring certain existing measures into conformity with a number of findings in this report.

Although WTO rules do not oblige the Community to implement a report adopted by the DSB, in certain circumstances the Community might find it appropriate to amend anti-dumping or anti-subsidy regulations in order to bring them in line with such reports. By this proposal, it is foreseen to permit the Council, where it is considered appropriate, acting by simple majority on a proposal from the Commission, to bring a measure taken under the basic Regulations into conformity with the recommendations and rulings contained in a report adopted by the DSB. The appropriate act may be, depending on the circumstances of the measure at hand and on the recommendations and rulings of the DSB, to amend, repeal, suspend or review the measure. It is also specified that the Council may adopt any special measures which it considers appropriate in the circumstances.

The proposal also specifies the rules and procedures to be followed when a review is deemed the most appropriate implementation course of action.

Contrary to any challenges before the European Courts, recourse to the WTO Dispute Settlement Understanding is not subject to time limits. Thus, the recommendations in reports adopted by the DSB only have prospective effect. Consequently, the proposal specifies that any measures taken under this Regulation will take effect from the date of their entry into force, unless otherwise specified, and, therefore, do not provide the basis for the reimbursement of the duties collected prior to that date.

It is therefore proposed that the Council adopt the present proposal for a Council Regulation on the measures that may be taken by the Community following a report adopted by the WTO DSB concerning anti-dumping or anti-subsidy measures.

2001/0146 (ACC)

Proposal for a COUNCIL REGULATION on the measures that may be taken by the Community following a report adopted by the WTO Dispute Settlement Body concerning anti-dumping and anti-subsidy measures.

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 133 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas:

(1) By Regulation (EC) No 384/96 of 22 December 1995 [2],the Council has adopted common rules for protection against dumped imports from countries which are not members of the European Community.

[2] OJ L56, 6.3.1996, p. 1, as last amended by Regulation (EC) No 2238/2000, OJ L257, 11.10.2000, p. 2.

(2) By Regulation (EC) No 2026/97 of 6 October 1997 [3],the Council has adopted common rules for protection against subsidised imports from countries which are not members of the European Community.

[3] OJ L288, 21.10.1997, p. 1.

(3) Under the Marrakesh Agreement establishing the World Trade Organization ("WTO"), an Understanding on Rules and Procedures Governing the Settlement of Disputes (« DSU ») was reached. Pursuant to the DSU, the Dispute Settlement Body (« DSB ») was established.

(4) With a view to permit the Community, where it considers this appropriate, to bring a measure taken under Regulation (EC) No 384/96 or Regulation (EC) No 2026/97 into conformity with the recommendations and rulings contained in a report adopted by the DSB, specific provisions must be introduced.

(5) The Community institutions may consider it appropriate to repeal, amend or adopt any other special measures with respect to measures taken under Regulation (EC) No 384/96 or Regulation (EC) No 2026/97, including measures which have not been the subject of dispute settlement under the DSU, in order to take account of the legal interpretations made in a report adopted by the DSB. In addition, the Community institutions should be able, where appropriate, to suspend or review such measures.

(6) Recourse to the DSU is not subject to time limits. The recommendations in reports adopted by the DSB only have prospective effect. Consequently, it is appropriate to specify that any measures taken under this Regulation will take effect from the date of their entry into force, unless otherwise specified, and, therefore, do not provide any basis for the reimbursement of the duties collected prior to that date.

HAS ADOPTED THIS REGULATION:

Article 1

1. Whenever the DSB adopts a Report concerning a Community measure taken pursuant to Council Regulation (EC) No 384/96, Regulation (EC) No 2026/97 or to this Regulation ("disputed measure"), the Council may, acting by simple majority on a proposal submitted by the Commission after consultation of the Advisory Committee established pursuant to Article 15 of Council Regulation (EC) No 384/96 or Article 25 of Regulation (EC) No 2026/97 ("Advisory Committee"), take one or more of the following measures, whichever it considers appropriate :

a. repeal or amend the disputed measure or;

b. adopt any other special measures which are deemed to be appropriate in the circumstances.

2. For the purpose of taking measures under paragraph 1, the Commission may request interested parties to provide all necessary information in order to complete the information obtained during the investigation that resulted in the adoption of the disputed measure.

3. Insofar as it is appropriate to conduct a review before or at the same time as taking any measures under paragraph 1, such review shall be initiated by the Commission , after consultation of the Advisory Committee.

4. Insofar as it is appropriate to suspend the disputed or amended measure, such suspension shall be granted for a limited period of time by the Council, acting by simple majority on a proposal submitted by the Commission after consultation of the Advisory Committee.

Article 2

1. The Council may also take any of the measures mentioned in Article 1(1) in order to take into account the legal interpretations made in a report adopted by the DSB with regard to a non-disputed measure, if it considers this appropriate.

2. For the purpose of taking measures under paragraph 1, the Commission may request interested parties to provide all necessary information in order to complete the information obtained during the investigation that resulted in the adoption of the non-disputed measure.

3. Insofar as it is appropriate to conduct a review before or at the same time as taking any measures under paragraph 1, such review shall be initiated by the Commission after consultation of the Advisory Committee.

4. Insofar as it is appropriate to suspend the non-disputed or amended measure, such suspension shall be granted for a limited period of time by the Council, acting by simple majority on a proposal submitted by the Commission after consultation of the Advisory Committee.

Article 3

Any measures adopted pursuant to this Regulation shall take effect from the date of their entry into force and shall not serve as basis for the reimbursement of the duties collected prior to that date, unless otherwise provided for.

Article 4

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

It applies to reports adopted after 1 January 2001 by the DSB.

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

Done at Brussels,

For the Council

The President