EUROPEAN COMMISSION Brussels, 27.3.2019 SWD(2019) 141 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 37th Annual Report from the Commission to the Council and the European Parliament

on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade defence instruments by Third Countries targeting the EU in 2018



{COM(2019) 158 final}



COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL 37th Annual Report from the Commission to the Council and the European Parliament

on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities and the Use of trade defence instruments by Third Countries targeting the EU in 2018



Table of Contents 1. Overview of the legislation 1.1.Anti-dumping and anti-subsidy 1.1.1.The international framework 1.1.2.The EU legislation 1.2Safeguards 1.2.1.The international framework 1.2.2.The EU legislation 2. General overview of anti-dumping and anti-subsidy investigations and measures 2.1.Measures in place 2.2.New investigations 2.3Review investigations

3. Overview of activities in 2018 3.1.New investigations 3.1.1.Initiations 3.1.2.Provisional measures 3.1.3.Definitive measures 3.1.4.Details on individual cases with application of new provisional or definitive duties 3.1.5.Investigations terminated without measures 3.1.6.Details on some individual cases of termination without measures 3.2.Review investigations 3.2.1.Expiry reviews 3.2.2.Interim reviews 3.2.3.New exporter reviews 3.2.4.Absorption investigations 3.2.5.Anti-circumvention investigations 3.2.6.“Other” reviews (reinvestigations) 3.3.Safeguard investigations 4. Enforcement of anti-dumping/countervailing measures 4.1.Follow-up of measures

4.2.Monitoring of undertakings 4.3.OLAF activity 5. Refunds 6. TDI Modernisation 7. Information and Communication activities / Bilateral contacts 7.1.Small and medium sized enterprises (SMEs) 7.2.Bilateral contacts/information activities – EU economic operators including their key stakeholder associations and third countries 8. Judicial review: decisions given by the Court of Justice (CJ) and the General Court (GC) 8.1.Overview of the judicial reviews in 2018 8.2.Cases pending 8.3.New cases 8.4.Judgments rendered by the General Court (a selection) 8.5.Judgments rendered by the Court of Justice (a selection) 9. Activities by third countries targeting the EU

10. Activities in the framework of the WTO 10.1.Dispute settlement in the field of trade defence 10.2.Other WTO activities62 11. Activity of the hearing officer LIST OF ANNEXES ANNEX A ANNEX B ANNEX D ANNEX E ANNEX F ANNEX G ANNEX H ANNEX I ANNEX J ANNEX K ANNEX L ANNEX M ANNEX N

ANNEX O ANNEX P ANNEX Q ANNEX R ANNEX S ANNEX T ANNEX U110 1.Overview of the legislation 1.1.Anti-dumping and anti-subsidy 1.1.1.The international framework On an international level, unfair trading practices such as dumping and the granting of subsidies were identified as a threat to open markets as early as 1947, when the first GATT agreement was signed. The agreement contained specific provisions allowing GATT members to take action against these practices if they caused material injury to the domestic industry of a GATT member. Today's globalised trade environment is characterized by quicker and cheaper communication and transportation, as well as the coexistence of different models of economic governance. In such a world, trade defence instruments are more relevant than ever. Indeed, trade distortions that underlie the application of these instruments are widespread. Since the beginning of the GATT in 1947, considerable efforts have been made to harmonise the rules relating to trade defence instruments. During the last GATT round (the « Uruguay Round »), which led to the creation of the WTO and the detailed Anti-Dumping and Anti-Subsidy Agreements, much of the attention was focused on the procedural and material conditions to be fulfilled before measures can be adopted. The EU played an active role in the negotiation of these agreements, which are reflected in its own legislation. The EU applies its anti-dumping (AD) and anti-subsidy (AS) legislation with rigour and consistency. Unfortunately, many WTO Members lack this type of restraint, thereby affecting negatively also EU operators. The role that the EU plays as a prudent user has therefore also an exemplary function at WTO level. Against this backdrop, the EU also continues to play a leading active role in any efforts to update the WTO rulebook. 1.1.2.The EU legislation The EU’s anti-dumping and anti-subsidy legislation was first enacted in 1968 and has since been modified several times. The current basic texts, which form the legal basis of anti-dumping and anti-subsidy investigations in the EU, entered into force in March 1996 and October 1997 respectively. These are in line with the Anti-Dumping and Anti-Subsidy Agreements adopted during the GATT/WTO negotiations. These texts were codified in 2016 to reflect changes previously made. The basic texts are: –Regulation (EU) 2016/1036 of the European Parliament and of the Council on protection against dumped imports from countries not members of the European Union – Codified Version –Regulation (EU) 2016/1037 of the European Parliament and of the Council on protection against subsidised imports from countries not members of the European Union – Codified Version. These regulations will overall be referred to as the "basic anti-dumping (AD) Regulation" and the “basic anti-subsidy (AS) Regulation”. Both regulations were recently modified by Regulation (EU) 2017/2321 of 12 December 2017 and Regulation (EU) 2018/825 of 30 May 2018. The EU's legislation contains a number of provisions aimed at ensuring a balanced application of the EU’s anti-dumping and anti-subsidy rules on all interested parties. These provisions include the “EU interest test” and the “lesser duty rule”, which go beyond the Union's WTO obligations. The EU interest test is a public interest clause and provides that measures cannot be applied if it is established that they are contrary to the overall economic interest of the EU. This requires an analysis of all the economic interests involved, including those of the EU industry and its suppliers, downstream users, consumers and traders of the product concerned.

The lesser duty rule requires the measures imposed by the EU to be lower than the dumping or subsidy margin, if such lower duty rate is sufficient to remove the injury suffered by the EU industry. Such a “no-injury” rate is usually determined by using the cost of production of the EU industry and a reasonable profit margin (although, as a result of the recent TDI modernisation, the latter rules have been further elaborated, as explained below). In almost half of the cases, the anti-dumping measures for individual exporting companies are set at the level of the injury margin instead of the higher dumping margin. The EU is one of the few investigating authorities on a worldwide level that applies the lesser duty rule in such a coherent and comprehensive way. 1.2.Safeguards 1.2.1.The international framework The principle of liberalisation of imports was set under the GATT 1947 and strengthened under the 1994 WTO Agreements. As safeguard measures consist of the unilateral withdrawal or suspension of a tariff concession or of other trade liberalisation obligations formerly agreed, they have to be considered as an exception to this principle. Article XIX GATT 1994 and the WTO Agreement on Safeguards do not only impose strict conditions for the application of this "escape clause”, but also put in place a multilateral control mechanism under the WTO Committee on Safeguards. Under WTO rules, safeguard action has to be viewed as a temporary defence measure that applies to all imports of the product covered by a measure, irrespective of origin. As regards non-WTO members, safeguard measures may be selective and apply to products originating in a specific country. WTO Accession Protocols may also provide for such selective safeguard mechanisms, as was the case in China's Protocol of Accession, although the provision has now expired. Definitive WTO safeguards should only be adopted after a comprehensive investigation that provides evidence of the existence of a) unforeseen developments leading to b) increased imports, c) the existence of a serious injury or a threat of injury for EU producers and d) a causal link between the imports and the injury. 1.2.2.The EU legislation The above-mentioned principles are all reflected in the relevant EU regulations, except for the “unforeseen development requirement” (which is not found explicitly in the EU legislation nor in the WTO Agreement on Safeguards but has been confirmed as a self-standing condition by WTO jurisprudence, as per Article XIX of GATT 1994). Additionally, the adoption of measures in the EU requires an analysis of all interests concerned, i.e. the impact of the measures on producers, users and consumers. In other words, safeguard action can only be taken when it is in the EU’s interest to do so. The current EU safeguard instruments are covered by the following regulations: - Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports (codification), - 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 (recast), - Regulation (EU) 2015/936 on common rules for imports of textile products from certain third countries not covered by bilateral agreements, protocols or other arrangements, or by other specific EU import rules (recast). The first two regulations are referred to as the "basic safeguard Regulation(s)". 2.General overview of anti-dumping and anti-subsidy investigations and measures The number of new investigations initiated in 2018 remained similar compared to the previous year, with 10 initiations (compared to 11 in 2017). In addition, the Commission reopened three cases to implement findings following court rulings (see "Other reviews"). The number of measures imposed in 2018 somewhat decreased as compared to 2017: four new definitive measures (as compared to 12) and two provisional measures were imposed. At the same time, 8 investigations were terminated without the imposition of measures, which brought the total number of investigations concluded in 2018 to 12 (only slightly less than in 2017). Moreover, during 2018, as many as 21 review investigations were initiated. Among the latter, there were 17 initiations of expiry reviews. Seven such expiry reviews have been concluded in 2018, all with a confirmation of the duty. In other words, 2018 stood again as a busy year, with significant new casework and reviewing activity. Below are details on new investigations and review investigations. 2.1.Measures in place At the end of 2018, the EU had in force 93 definitive anti-dumping measures (which were extended in 27 cases) and 12 countervailing measures in force (which were extended in one case). The anti-dumping measures covered 67 products and 16 countries (see Annex O); the countervailing measures covered 12 products and four countries (see Annex P). The large majority of measures was in the form of duties. In one case, undertakings were in place. Of all the 120 anti-dumping measures in force at the end of 2018, the countries affected were China (85), Russia (9), USA (4), India and Korea (three each), Belarus, Indonesia, Taiwan, Thailand and Ukraine (two each), Brazil, Iran, Japan, Malaysia, South Africa and Turkey (one each). Of the 12 anti-subsidy measures and one extension in place, half concerned imports from China (6) whereas India was subject to four measures, USA to two measures and Turkey to one measure. 2.2.New investigations

In the five-year period from 2014 to 2018, 66 new investigations were initiated on imports from 22 countries. The sectors concerned by the investigations were: 'iron and steel' – 32 investigations, 'chemical and allied industries' – 19 investigations, 'other metal products' – five investigations, the 'mechanical engineering' sector and the 'wood and paper' sector – one investigation each, and finally 'other products' – 8 investigations. A breakdown of the product sectors is available in Annex B(A). The breakdown of the countries concerned by initiations during the period from 2014 to 2018 include China – 24 investigations, Russia – seven, India and Turkey – five, Brazil, Korea – three each, Taiwan, Ukraine and USA – two each, Argentina, Belarus, Bosnia and Herzegovina, Egypt, Georgia, Indonesia, Iran, Japan, North Macedonia, Malaysia, Mexico, Serbia, Trinidad and Tobago – one each. A table showing all the investigations initiated over the last five years broken down by country of export is available at Annex B(B). Table 1 below provides statistical information on the developments regarding new investigations for the years 2014 – 2018. TABLE 1 Evolution of new anti-dumping and anti-subsidy investigations during the period 1 January 2014 - 31 December 2018 2014 2015 2016 2017 2018 Investigations in progress at the beginning of the period 11 20 20 20 17 Investigations initiated during the period 16 14 15 11 10 Investigations in progress during the period 27 34 35 31 27 Investigations concluded : - imposition of definitive duty or acceptance of undertakings - terminations 3 4 11 3 7 8 12 2 4 8 Total investigations concluded during the period 7 14 15 14 12 Investigations in progress at the end of period 20 20 20 17 15 Provisional measures imposed during the period 2 10 9 2 2 2.3.Review investigations Anti-dumping measures, including price undertakings, may be subject, under the basic AD Regulation, to five different types of reviews: expiry reviews (Article 11(2)), interim reviews (Article 11(3)), newcomer investigations (Article 11(4)), absorption investigations (Article 12) and anti-circumvention investigations (Article 13). The Commission also carries out “other” reviews consisting in re-opening of investigations to implement court rulings. Also anti-subsidy measures may be subject, under the basic AS Regulation, to five different types of reviews: expiry reviews (Article 18), interim reviews (Article 19), absorption investigations (Article 19(3)), accelerated reviews (Article 20) and anti-circumvention investigations (Article 23). In addition, here also, the Commission can re-open investigations to implement court rulings. Reviews continue to represent a major part of the work of the Commission's TDI services. In the period from 2014 to 2018, 132 such review investigations were initiated. Reviews represented two-thirds of all TDI investigations initiated. In 2018, 24 reviews were initiated. These comprised 17 expiry reviews, three interim reviews, one anti-absorption investigation and three re-openings. An overview of the review investigations in 2018 can be found in Annexes F to K. Table 2 below provides statistical information for the years 2014 – 2018. TABLE 2 Reviews of anti-dumping and anti-subsidy investigations during the period 1 January 2014 - 31 December 2018 2014 2015 2016 2017 2018 Reviews in progress at the beginning of the period 41 36 33 29 28 Reviews initiated during the period 22 33 23 30 24 Reviews in progress during the period 63 69 56 59 52 Total reviews concluded during the period 27 36 27 31 22 Reviews in progress at the end of the period 36 33 29 28 30 3.Overview of activities in 2018 3.1.New investigations 3.1.1.Initiations

In 2018, eight new anti-dumping and two new anti-subsidy investigations were initiated. The anti-dumping investigations involved four different products from seven different countries. No country stood out in terms of number of these initiations. Details of the investigations are given in Annex A. The anti-subsidy investigations both concerned biodiesel-producing countries. Notably also, in 2018, the EU initiated three safeguard investigations. The list of cases initiated in 2018 can be found below, together with the names of the complainants. More information can be obtained from the Official Journal publications to which reference is given in Annex A. Product (Type of investigation: AD or AS) Origin Complainant Biodiesel (AS) Argentina European Biodiesel Board Solar Glass (AD) Malaysia EU ProSun Glass Hot-rolled sheet steel piles (AD) China EUROFER Urea and ammonium nitrate (AD) Russia Trinidad and Tobago USA Fertilizers Europe Hollow sections (AD) Russia North Macedonia Turkey Defence Committee of the welded steel tubes Industry of the European Union Biodiesel (AS) Indonesia European Biodiesel Board 3.1.2.Provisional measures In 2018, provisional duties were imposed in two anti-dumping investigations. It has to be noted that the latter run often in parallel to anti-dumping investigations, where the provisional anti-dumping duty already provides some relief to the Union industry. The list of cases where provisional measures were imposed during 2018 can be found below, together with the measures imposed. More information can be obtained from the Official Journal publications to which reference is given in Annex C. Product Origin Type and level of measure New and retreaded tyres for buses or lorries China AD: 52,85 – 82,17% Electric bicycles China AD: 21,8 – 83,6% 3.1.3.Definitive measures During 2018, definitive duties were imposed in three anti-dumping investigations and in one anti-subsidy investigation. The list of cases where definitive measures were imposed during 2018 can be found below, together with the measure(s) imposed. More information can be obtained from the Official Journal to which reference is given in Annex D. Product Origin Type and level of measure Cast iron articles China AD: 15,5 – 38,1% Corrosion resistant steels China AD: 17,2 – 27,9% New and retreaded tyres for buses or lorries China AD: 0,37 – 38,98 EUR CVD: 3,75 – 57,28 EUR 3.1.4.Details on individual cases with application of new provisional or definitive duties Electric bicycles from China On 8 September 2017, the Commission received a complaint lodged by the European Bicycle Manufacturers Association (EBMA) representing more than 25% of total Union production of electric bicycles regarding imports of electric bikes from China. The complaint contained evidence of dumping and of resulting material injury that was sufficient to justify the initiation of an investigation. On 20 October 2017, the Commission initiated an anti-dumping investigation in the matter and, on 21 December 2017, initiated a separate anti-subsidy investigation (not covered by this description). The complainant also submitted a request for registration of imports. The Commission agreed to make the product subject to registration from 4 May 2018 onwards. Product definition During the anti-dumping investigation there were several claims regarding the scope of the product given that it was not clear whether the product under investigation covered all types of cycles or only bicycles. There were also claims on the different use and consumer perception of electric bicycles compared to “speed” electric bicycles.

After examination of the different options and considering all comments, the Commission stated that the product scope of the complaint covered “cycles” including bicycles, tricycles and quadricycles and that the intended use and consumer perception overlap to a significant extent, therefore not warranting a product exclusion. Dumping One exporting producer requested Market Economy Treatment. The Commission decided to reject the request as it did not comply fully with the required criteria. In fact, the company failed to demonstrate that there was no significant State interference in the company’s business decisions and that costs of major inputs substantially reflected market values. Normal value had to be established on the basis of the price or constructed value in a market economy third country. The Commission tried to identify producers in several third countries but, based on the information received, only Switzerland appeared as a viable analogue country. However, parties contested the choice. They argued that Switzerland’s overall production scale is much smaller than China’s and that Swiss electric bicycles seemed to be significantly different from Chinese ones. Swiss electric bicycles use a different technology - they have a central motor whereas Chinese electric bicycles have predominantly hub motors. Also, Swiss manufacturers produce under their own brands and import their parts from the Union and Japan, whereas Chinese ones are mainly original equipment manufacturers (‘OEM’) for the Union importers and source domestically. Therefore, the Commission decided to construct the normal value on the basis of the prices actually paid or payable in the Union for the like product, due to the inappropriateness of Switzerland. The normal value of each product type was based on the actual sales price adjusted to include the target profit of the Union industry. Normal value was then compared to the export price for differences affecting prices and price comparability. The Commission adjusted the export prices using the data provided by the sampled exporting producers in their questionnaire replies and during the verification visits on bank charges, handling and loading charges in the exporting country, credit costs, and profits for traders. This resulted in dumping margins ranging from 34,6% to 106,4%. Injury and causation Confronted with an accelerating flow of dumped imports from China, the Union Industry was not able to capitalize on the growth of the electric bicycle market. Prices of dumped imports undercut the EU industry prices during the investigation period (1 October 2016 to 30 September 2017). The volume of imports from China more than tripled and the pace of import growth accelerated between 2016 and the investigation period. Moreover, the share of the Union market held by imports had increased from 17% in 2014 to 35% in the investigation period. In fact, between 2014 and the investigation period, Chinese imports grew by 250%, while the consumption in the Union increased at a much slower pace of 74%. All this had negative consequences on the situation of the Union industry. Thus, the Commission concluded that the Union industry had suffered material injury. Further, the Commission also analysed the effects of other factors such as the imports from countries other than China, investment and expansion of capacity, as well as the export performance of the Union industry. It concluded that the causal link between the Chinese dumped imports and the injury suffered by the Union industry could not be broken. Union interest and provisional measures The Commission concluded that the imposition of an anti-dumping duty would not be against the interest of the Union industry and considered provisionally that the imposition of measures would allow all producers to operate under conditions of fair trade on the Union market. In the absence of measures, a further deterioration of the Union industry's economic and financial situation was very likely to take place. The Collective of European Importers of Electric Bicycles disagreed with the imposition of anti-dumping measures. They argued that the imposition of duties was likely to disrupt, at least temporarily, their supply chains and threaten their financial position if they were not able to pass on the increased costs related to the duty to their customers. However, import statistics showed that Vietnam and Taiwan provided significant volumes of electric bicycles to European importers. It was also likely that other countries, which are well positioned in the manufacturing of conventional bicycles, could supply importers. The Commission also considered that the imposition of duties on imports of conventional bicycles from China did not have the effect of closing the Union market to imports and, on the contrary, expanded the number of countries supplying conventional bicycles. Therefore, the Commission found no compelling reason that it was not in the Union interest to impose provisional measures. To determine the level of the measures, the Commission first established the amount of duty necessary to eliminate the injury suffered by the Union industry. The Commission established that the injury would be eliminated if the Union industry were able to cover the costs of production and to obtain a profit before tax on sales that could be reasonably achieved under normal conditions of competition if there were no dumped imports. The target profit was provisionally set at 4,3%, which is the highest average profit margin of the Union industry during the period considered. The injury margins established ranged between 21,8% and 83,6%. On this basis, the Commission decided to impose a provisional anti-dumping duty in accordance with the lesser duty rule, ranging between 21,8% and 83,6%. On 17 January 2019, the Commission adopted a Regulation imposing definitive measures on electric bicycles. The injury margins were modified on the basis of data provided by the interested parties. The adjustment took into account certain costs for R&D and design incurred by the sampled Union producers. Subsequently, the injury margins were established between 18,8% and 79,3%. On 17 January 2019, the Commission also imposed countervailing duties on the same product in the range of 3,9% - 17,2%, as a result of a parallel anti-subsidy investigation. The definitive injury elimination level was reduced by the amount of the countervailing duties, in order to avoid double-counting. On this basis, the final anti-dumping duties were ultimately imposed in the range of 10,3% - 70,1%. Corrosion resistant steels from China On 7 February 2018, the Commission imposed definitive anti-dumping duties on imports of certain corrosion resistant steels originating in China. This followed an investigation that had been opened in December 2016, further to a complaint from the European Steel Association (EUROFER) on behalf of producers representing more than 53% of total production. Provisional measures were imposed in August 2017. Dumping

The Commission sampled exporting producers based on the largest volume of exports to the EU. The Commission did not receive any comments on the selected sample even though all parties and the authorities of the country concerned had been consulted. Three groups of exporting producers asked for individual treatment. The companies concerned argued that they were the only Chinese exporting producers supplying the Union. However, the Commission decided that no individual treatment could be granted as the number of entities to be additionally investigated and the number of different locations to be visited for the verification would have prevented the investigation from being completed on time. In addition, two groups of non-sampled cooperating producers submitted Market Economy Treatment (MET) claims with their request for individual treatment. Given that the claims for individual treatment were rejected, the MET requests were not assessed. Normal value The normal value was determined on the basis of data obtained from a producer in a market-economy third country. Interested parties contested the Commission’s first choice of Canada because of the alleged price difference of the like product and the relationship between a possible cooperating producer and one of the complainants. The Commission then selected Brazil as the analogue country. The choice was again contested by an exporting producer and the China Iron and Steel Association (CISA), which argued that the normal value in the analogue country was 21% higher than the target price for the Union industry and that the average sale price of the analogue country producer was higher than the (already high) prices in Brazil. It also raised doubts about the calculation used by the Commission. The Commission responded that in case exported products could not be directly matched with Brazilian normal values, the normal value was adjusted to take account of all physical differences. As for the quality of data and calculations, the data of the analogue country producer were verified for accuracy and found reliable and all the calculations were factually correct. Injury and causation The Union industry was in a vulnerable situation during the period considered. Even though the Union consumption grew by around 27% during the period, the sales volume of the Union industry on the Union market increased by only 5% and the Union industry lost 17% of market share. By contrast, the market share of the imports from China increased during the period by 93%. Imports from China increased by 146% over the period of analysis. Their prices per ton fell by 22%, exceeding the decrease in raw material prices of 20%. In addition, these imports significantly undercut EU industry prices, by 17% to 28%. Moreover, the industry suffered losses throughout the period considered (despite a minor improvement over that period). Consequently, the Commission concluded that the material injury to the Union industry was caused by the dumped imports and that the other factors, such as imports from third countries or export sales performance of EU producers, did not break the causal link between the Union material injury and the dumped imports, even if its effects were to be considered in a combined manner. Registration Imports of the products concerned were subject to registration from July to August 2017, when the provisional measures were imposed, with a view to possible collection of duties. However, the Commission found that a retroactive duty recollection was not necessary. Union interest and definitive measures It was concluded that the imposition of measures would contribute to the recovery of the Union industry by allowing price increases that would enable the industry to return to a profitable situation. Also, the investigation did not show that the potential impact on other actors would outweigh the benefits to the EU industry. Thus, it was considered that the measures would lead to a level playing field, still allowing for imports from the country concerned, at fair prices. Given the findings, the Commission imposed a definitive anti-dumping duty ranging between 17,2% and 27,9%, depending on the exporting company. New and retreaded tyres for buses or lorries from China In August 2017, the Commission initiated an anti-dumping investigation on imports of certain pneumatic tyres, new or retreaded, of rubber, used for buses or lorries imported from China. This followed a complaint lodged by a coalition against unfair tyre imports, on behalf of producers representing more than 45% of the total EU production. On 7 May 2018, the Commission imposed provisional anti-dumping duties on imports of the products concerned. In October 2017, the Commission also initiated a separate anti-subsidy investigation on the product. Product definition The tyre market is segmented in three tiers. Tier 1 tyres cover premium new tyres with the flagship brand of main manufacturers. Brand recognition is a key factor for tyres in this tier and justifies significantly higher prices for expected high performance as well as particularly strong marketing investments. The quality of tier 1 tyres ensures a high level of retreadability of the tyres, which are designed to be ‘multi-life’ tyres further increasing the significantly higher mileage of the original product.

Tier 2 tyres cover most non-premium tyres, both new and retreaded tyres, with prices ranging between approximately 65% and 80% of the price of tier 1 tyres. Retreaded tyres can be classified under tier 2 or tier 3. While some Chinese tyres are retreadable, there is very little retreading performed in China. Retreading is, however, quite widespread in the Union and in other markets. Following further product analysis and after consulting all interested parties, the Commission determined that main EU producers focused on the so-called 'tier 1' and 'tier 2' tyres. These products are, however, often hard to distinguish from 'tier 3' tyres - new and retreaded tyres with lower mileage performances and very limited retreadability, which are also cheaper than 'tier 1' and 'tier 2' tyres. Dumping Market Economy Treatment (MET) claims were introduced by two exporting producers out of the four that were sampled. However, the Commission found that none of the exporters fulfilled the MET criteria, and so the status could not be granted. More specifically, both failed to demonstrate that they had one set of clear independently audited accounts and that their operations were not subject to significant market distortions. Additionally, one of them failed to demonstrate that its business decisions were made without significant State interference and that costs of major inputs substantially reflect market values. The normal value of the exports was based on data obtained from a producer in a market-economy third country. The Commission concluded that the most appropriate analogue country in this case was Brazil, given that its volumes were substantially representative, it had similar conditions of access to raw materials and both China and Brazil were comparable in terms of economic development. Normal value was then compared to the export price. All sampled exporting producers claimed that the method for constructing the normal value, which the Commission applied at the provisional stage resulted in extraordinarily high dumping margins and produced results that did not appear to correspond to reality: the normal value was not inferior for tiers 2 and 3, although in reality the former tyres are always cheaper. The exporting producers urged the Commission to adjust the normal value, which the Commission accepted. The Commission finally constructed the normal value for the non-matching product types taking into account the differences identified in the costs of manufacturing between the three tiers. Injury and causation The exporting producers sampled were mapped out according to tiers, which resulted in several asking the Commission to move them from the ‘tier 3’ allocation to ‘tier 2’. After analysis, the Commission agreed to two of those requests. Prices of dumped imports from China significantly undercut EU industry prices during the investigation period and injury indicators showed that the industry had been under increasing pressure. In fact, it experienced a reduction of production capacity, investment and employment, as well as a significant loss of market share (the import volumes from China increased significantly resulting in an increase of the market share of Chinese imports, in a growing market, from 17,1% to 21,3%). This was of particular concern for 'tier 3' tyres, where Chinese imports were mainly focused, forcing many EU producers in that tier, especially SMEs, to exit the market. Thus, the Commission concluded that the material injury to the Union industry was caused by the dumped imports and that the other factors, such as imports from third countries or the interconnection between the new and retreaded tyres, did not break the causal link between the Union material injury and the dumped imports. Union interest It was determined that the imposition of the anti-dumping measures on the EU producers would be positive for the Union industry, especially for SMEs. They would be able to benefit from the growing consumption in a market governed by fair conditions. EU producers would be able to increase their sales and regain a part of the market share lost. This would in turn increase the EU production and the capacity utilisation rate. In fair market conditions, the EU industry would be able to improve their financial situation. Furthermore, the available capacity in the EU industry and imports from other countries would provide alternative offers of supply. Given the interconnection between the retreading business and the production of retreadable tyres, the proposed measures would also improve the viability of the retreading segment. This would bring relief in terms of employment, in particular since the retreading segment of the tyre, located throughout the EU, is labour-intensive. The situation of importers was also analysed. The Chinese imports of the product concerned represented a significant share of their turnover in the investigation period. Their business model is mainly based on contracts with Chinese exporting producers, although they also have alternative sources (either domestically or from other third countries). Therefore, the imposition of measures would have an impact on their activity. In addition, another business model was found to rely on a ‘container-only trading strategy’. In this case, importers have more flexibility to change sources of supply. This method was used by some non-sampled companies, which only represented 2% of the total Chinese imports. However, their low level of cooperation suggested that the imposition of measures would not have any significant impact on their activity. Moreover, it is a long-standing Union policy to reduce waste and to manage raw materials in a sustainable way. Retreading is crucial for a sustainable circular economy. In fact, several interested parties underlined that premium tyre manufacturers produce new high quality tyres designed to have a long life cycle as they can be retreaded. Without the retreading business, competition in the tyre industry will end up in a race to the bottom, resulting in industrial depletion, loss of value through the supply chain while minimising the quality of the offer in the Union. Accordingly, measures that also protect high quality tyre producers in the Union, as opposed to single-use tyres, would also foster policy coherence with the Union objectives on waste reduction and circular economy, as they would support the continued existence of a viable retreading business in the Union. Moreover, given that mostly SMEs are active in this sector, measures would also be in line with the Commission's objective to support SMEs. On this basis, the Commission concluded that measures would not be against EU interest. Registration Imports of these products were subject to registration from February until May 2018, when the provisional measures were imposed, with a view to possible collection of duties from the imports taking place during those months. However, no significant rise in imports was observed during that time if compared to the flow observed during the investigated period. Therefore, the Commission concluded that duties would not be collected retroactively. Definitive measures Given the findings, the Commission imposed definitive anti-dumping duties ranging between 42,73 and 61,76 EUR per item. Subsequently, definitive countervailing duties were imposed on 9 November 2018. In order to avoid any double counting with the imposition of both anti-dumping and anti-subsidy measures, the anti-dumping measures were adjusted by the regulation imposing the anti-subsidy measures, with final anti-dumping duties ranging ultimately from 0,37 to 38,98 EUR per item, depending on the exporting company.

3.1.5.Investigations terminated without measures In accordance with the provisions of the respective basic Regulations, investigations may be terminated without the imposition of measures if a complaint is withdrawn or if measures are unnecessary (i.e. no dumping/no subsidies, no injury resulting from dumped or subsidised imports, measures not in the interest of the Union). In 2018, eight new proceedings (all were anti-dumping investigations) were terminated without measures, as compared to two in 2017. The list of cases which were terminated without the imposition of measures during 2018 can be found in the following table. More information can be obtained from the Official Journal publications to which reference is given in Annex E.



Product (Type of investigation: AD or AS) Origin Main reason for termination Cast iron articles (AD) India No dumping was established Ferro-silicon (AD) Egypt Ukraine Withdrawal of the complaint Low carbon ferrochrome China Russia Turkey Withdrawal of the complaint Silicon metal Bosnia and Herzegovina Brazil Withdrawal of the complaint 3.1.6.Details on some individual cases of termination without measures Low-carbon ferrochrome from China, Russia and Turkey On 23 June 2017, the European Commission initiated an anti-dumping investigation with regard to imports of low-carbon ferrochrome originating in China, Russia and Turkey, following a complaint lodged by the Association of European Ferro-alloy Producers (“Euroalliages’’) on behalf of the sole Union producer of low-carbon ferrochrome in the Union, Elektrowerk Weisweiler GmbH. Dumping The Commission verified all the information obtained by means of questionnaires and carried out verification visits to the premises of the Union producer, the users and the importer form a third country (Turkey). Injury and Union interest The Commission assessed the information provided for a determination of dumping, resulting injury and Union interest. After all the findings were duly processed and analysed, the Commission decided not to impose provisional measures due to lack of clarity regarding the scope of the product but also to continue the investigation. Termination On 22 May 2018, the complainant notified the Commission that it would like to withdraw its request. Since the complainant was the only Union producer, no opposition was raised. The Commission also found that termination would not be against the Union interest. Therefore, the Commission decided to terminate proceedings without the imposition of measures. 3.2.Review investigations 3.2.1.Expiry reviews Article 11(2) and Article 18 respectively of the basic Regulations provide for the expiry of measures after five years, unless an expiry review demonstrates that they should be maintained in their original form. In 2018, two anti-dumping measures and two anti-subsidy measures expired automatically. Two of these measures concern solar panels (see section 3.2.3).

The references for these measures are available in Annex N. Since the expiry provision of the basic Regulations came into force in 1985, a total of 512 measures have expired automatically. 3.2.1.1.Initiations During 2018, 15 expiry reviews of anti-dumping measures and two concerning anti-subsidy measures were initiated. The list of the expiry reviews initiated in 2018 can be found in the following table, together with the name of the complainant. It should be noted that some expiry reviews may be carried out in parallel with interim reviews. Where there are interim reviews and expiry reviews ongoing at the same time, these are indicated by an asterisk in the table below. More information can be obtained from the Official Journal to which reference is available in Annex F.



Product (Type of investigation: AD or AS) Origin Complainant Tube and pipe fittings (AD) Turkey Russia Rep. of Korea Malaysia Defence Committee of the Steel Butt-Welding Fittings Industry Bioethanol (AD) USA European Renewable Ethanol Association (e-PURE) Aluminium Foil in small rolls (AD) China ALEURO Converting Sp. z o.o. CeDo Sp. z o.o. Cuki Cofresco SpA Fora Folienfabrik GmbH ITS BV Rul-Let A/S SPHERE SA Wrapex Ltd Organic coated steel products (AD) China EUROFER Organic coated steel products (AS) China EUROFER Threaded tube or pipe cast fittings, of malleable cast iron (AD) China Thailand ATUSA - Berg Montana Fittings A.D Georg Fischer Fittings GmbH Odlewnia Zeliwa S.A. Livarna Titan d.o.o Ceramic tableware and kitchenware (AD) China FEPF – European Federation for Table-and Ornamentalware Polyethylene terephthalate (PET) (AS) India Committee of PET Manufacturers in Europe (C.P.M.E. aisbl) Tungsten electrodes (AD) China Two Union producers Bicycles (AD) China European Bicycle Manufacturers Association (‘EBMA’) Ironing boards (AD) China Colombo New Scal SpA Rörets Polska Sp. z o.o. Vale Mill (Rochdale) Ltd Sweetcorn in kernels (AD) Thailand Association Européenne des Transformateurs de Maïs Doux (AETMD) Peroxosulphates (AD) China RheinPerChemie GmbH United Initiators GmbH 3.2.1.2.Expiry reviews concluded with confirmation of duties During 2018, 7 expiry reviews were concluded with confirmation of the duties for a further period of five years. The list of the measures, which were renewed during 2018, together with the results of the investigations, can be found below. More information can be obtained from the Official Journal publications to which reference is given in Annex F. Product Origin Type and level of measure Steel ropes and cables China Confirmation of duty (AD) Duty rate: 60,4% Tartaric acid China Confirmation of duty (AD) Duty rates: 8,3% – 34,9% Oxalic acid China India Confirmation of duty (AD) Duty rates: 14,6% – 52,2% (China) 22.8% – 43.6% (India) Seamless pipes and tubes of iron or steel Russia Ukraine Confirmation of duty (AD) Duty rates: 24,1% – 35,8% (Russia) 12,3% – 25,7% (Ukraine) Level arch mechanisms China Confirmation of duty (AD) Duty rates: 27,1% – 47,4% 3.2.1.3.Details on some individual cases concluded by confirmation of duty Steel ropes and cables from China On 6 November 2016, the Commission received a request for review on the grounds that the expiry measures for steel ropes and cables from China would result in a likely continuation of dumping and recurrence of injury. This request was lodged by the Liaison Committee of EU Wire Rope Industries on behalf of producers representing more than 25% of the total EU production of steel ropes and cables. The measures at issue in the review request had been extended to imports of steel ropes and cables consigned from Morocco and the Republic of Korea, whether declared as originating in those countries or not following an anti-circumvention investigation. The Commission decided to initiate an expiry review after establishing that there was enough evidence in the request. Analogue country selection In the context of selecting an analogue country, two producers from market economy third countries replied to the questionnaires, one located in Turkey and one in the US. Even though Turkey had been preliminarily envisaged as an analogue country, the Commission finally decided to select the US as the quality of the information provided by the American producer was more comprehensive to establish a reliable normal value. Sampling The Commission received only one reply from an exporting producer out of 21 contacted in China. Dumping was established based on information provided by the sole cooperating exporting producer. This producer accounted for 100% of the total exports to the EU but only 1,3% of the total estimated production of China during the investigating period.

The Commission also sampled six Union producers, which represented 50,5% of the total Union industry’s production during the review investigation period. The Commission analysed the information provided and conducted verification visits to companies premises so as to determine the likelihood of continuation or recurrence of dumping and injury, as well as the Union interest. Likely continuation of injury and recurrence of dumping Following the application of the initial anti-dumping duties, the EU industry continued to recover from the effects of dumping. If the measures were allowed to lapse and the Chinese exporting producers maintained their export prices at a similar level, the Commission established that the undercutting margin would amount to 36,3%. Despite the effectiveness of the measures, the Chinese products remained present on the Union market keeping a market share of 1,2% during the review investigation period. The investigation also found that Chinese exporting producers achieved higher prices in the Union market than in other third countries. Therefore, it was concluded that the exporting producers in China have the potential and incentive to raise the volume of exports to the EU at dumped prices, which would undercut the prices offered by the Union industry in case the measures lapsed. In addition, if the Union industry were to lower prices to compete with imports from China, the industry’s profits would decline and many companies would have gone out of business, with a significant consequent impact on employment. Indeed, further deterioration of the Union industry's situation might even cause the shutdown of whole producing units. Thus, it was concluded that the already negative situation of the Union industry would be likely to further deteriorate. Despite its recovery, the Union industry had to face lower demand for bulk commodities and reductions in the oil price, which led to reduced activity in the sectors of mining, oil and gas. Thus, the demand for the products concerned reduced, which resulted in a decrease in production and sales volume. Therefore, almost all the injury indicators deteriorated. On that basis, it was concluded that the Union industry has suffered material injury although it had benefitted from the original measures, as it continued to recover from the effect of past injurious dumping for the first two years of the period considered (2013-2014). However, the recovery process stalled due to the reasons mentioned above. Union interest and definitive measures The Commission analysed all the interests at stake, including those of the Union industry, importers and users. The investigation found that should the measures expire, this would likely have a significant negative effect on the Union industry and that its currently fragile financial situation would deteriorate further. As for the interest of importers, no comments were received but a prior investigation had shown that the impact of continuing the measures would not be significant. Users did not manifest much interest and those that made themselves known stated that their use of the concerned product was marginal. The Commission therefore concluded that it was in the Union interest to maintain the measures, which were extended for five years. The definitive anti-dumping duty imposed in the case of China was also extended to imports of the same products consigned from Morocco and the Republic of Korea, whether declared as originating in those countries or not. 3.2.1.4.Reviews concluded by termination In 2018, no expiry review was concluded by the termination of measures in force. 3.2.2.Interim reviews Article 11(3) and Article 19 of the basic Regulations provide for the review of measures during their period of validity on the initiative of the Commission, at the request of a Member State or, provided that at least one year has lapsed since the imposition of the definitive measure, following a request containing sufficient evidence by an exporter, an importer or by the EU producers. In carrying out the investigations, it will be examined, inter alia, whether the circumstances with regard to dumping/subsidization and injury have changed significantly and whether these changes are of a lasting nature. Reviews can be limited to dumping/subsidization or injury aspects. During 2018, three interim reviews were initiated (two anti-dumping and one anti-subsidy). Six interim reviews were concluded during the same period - four confirming the duties unchanged and two amending the duties. The details of the cases can be found below. More information can be obtained from the Official Journal publications to which reference is given in Annex G. Product Origin Result of investigation Threaded tube or pipe cast fittings, of malleable cast iron China Thailand Withdrawal of the request Rainbow trout Turkey The changes presented by the applicant could not be considered of lasting nature Ammonium nitrate (dumping) Russia The changes presented by the applicant could not be considered of lasting nature Ammonium nitrate (injury) Russia Amendment of duty Polyethylene terephthalate (PET) India Amendment of duty 3.2.2.1.Details on individual cases Ammonium nitrate from Russia The Commission received a request for a partial interim review from eight European farmers associations limited in scope to the examination of injury on anti-dumping measures on ammonium nitrate originating in Russia. The applicants argued that they were suffering from the anti-dumping measures that have been in place on the product concerned for more than 20 years. On 17 August 2018, the Commission announced the initiation of a partial interim review limited in scope to the examination of injury. That same day, the Commission also announced the initiation of another partial interim review of the measures applicable to the product concerned originating in Russia but limited to the examination of dumping of Acron (the applicant of this second review). Product scope

Originally, the product concerned was defined as ammonium nitrate but was subsequently re-defined to solid fertilizers with specified ammonium nitrate content. This clarification aimed to cover also ammonium nitrate to which phosphorus and/or potassium nutrients (so-called ‘dirty’ or ‘stabilized’ ammonium nitrate) were added. The main raw material used in its production is natural gas, representing over 60% of the total cost of production. Partial interim review limited to dumping In that review, the Commission found that domestic gas prices in Russia are regulated by the State via federal laws and do not reflect normal market conditions, where prices are principally set by production costs and profit expectations. Therefore, the Commission considered that the circumstances regarding the gas market in Russia had not changed and, as a result, a modification of the measures was not warranted. During the review request, Acron also argued, among others, that the last time the dumping margins were set was in 2008 (before Russia’s accession to the World Trade Organisation (WTO)). When Russia joined the WTO in 2012, it committed to ensure that producers/distributors of natural gas would operate within the relevant regulatory framework on the basis of normal commercial considerations, the result of which was a regular gas price increase. In that respect, Acron argued that no WTO dispute settlement cases have been launched putting into question the fulfillment of those commitments. In response, the Commission stated that it was not taking any position with regard to Russia’s WTO commitments since this was not within the scope of the investigation. The objective was rather to determine whether there was a lasting change of circumstances that would warrant the recalculation of the anti-dumping duty. In this regard, the Commission found that Russian gas prices were still distorted, and that the absence of cases against Russia concerning a breach of its WTO commitments or the fact that Russian gas prices have been gradually increasing on the domestic market cannot automatically lead to conclude there were no price distortions. Therefore, the arguments presented by Acron were not considered as changes of a lasting nature. The applicant submitted a duly signed voluntary undertaking offer. The Commission analysed the undertaking offer and considered that its acceptance would be impractical. The company had two related companies in two Member States and one of them sold the like product to the Union market. The applicant also sold directly the Russian product to Union customers. If both would sell the product concerned to the same customers, the prices could be set in a way to compensate for the minimum import price subject to the undertaking, which would be very difficult to monitor. Consequently, on 12 November 2018, the Commission terminated the partial interim review without changing the dumping margin for Acron or accepting an undertaking from that company. Partial interim review limited to injury In that review, the Commission proceeded again first to assess whether any changes occurred in the circumstances which lead to the application of the current measures, and if so, whether these changes were to last. The Commission notably analysed the evolution of world markets and global changes for the concerned product. The Commission noted that Russian consumption of ammonium nitrate had more than tripled and the demand of third countries had also increased. Meanwhile, the Union’s agricultural consumption had decreased slightly and was expected to remain stable in the future. Thus, the EU market has become less attractive for Russian producers. Further, the situation in the US gas market had also changed. US shale gas production has increased steeply since 2000 and it was even expected to increase further in the future. The shale gas boom has led and still leads to the development of capacities of US producers' nitrogen fertilizers. Changes had also been taking place in the Union industry in the recent years. The level of concentration had increased through mergers and acquisitions and the applicant argued that the Union industry was capable of competing with Russian imports due to greater efficiencies gained from investments and restructuring. The situation was different from that of previous reviews where many small and medium size companies operated independently. However, despite the restructuring, there was still a healthy competition on the Union market with 10 companies competing with each other, and none of them had a market share of more than 20%. The Commission concluded that these global changes and the Union industry’s restructuring are of a lasting nature and can impact the injury situation, including the likelihood of recurrence of injury. Further, the Commission also assessed data on the economic situation of the Union industry. It concluded that the economic situation overall was non-injurious, although a number of injury indicators showed that the financial performance and economic state of the industry followed a negative trend, related notably to the decrease in prices. The Commission also used verified data from the cooperating companies and other Russian exporters in order to assess capacity and spare capacity in Russia. It concluded that significant volumes could still be exported and have a particularly strong effect on some neighbouring regions. Besides, Fertilizers Europe argued that Russian capacity might be extended in view of the Russian plan on fertilizers of March 2018. In terms of market for the products concerned, the domestic market was the main market for Russian producers. However, the Union market was found to also remain attractive for the latter. Prices in certain third countries were less appealing than Union prices, even though for some countries the opposite situation also applied. The Commission thus concluded that some Russian volumes might be redirected from less attractive third markets to the Union market if measures lapsed, given its size, geographic proximity and prices, with subsequent injurious effects for the EU industry. The Commission also made a prospective analysis of the evolution of Russian export prices. It found that the product concerned would likely be sold on the Union market at a price below the weighted average sales price of the Union producers charged to unrelated customers on the Union market. Based on the totality of evidence on the file, the Commission concluded that there was a likelihood that Russian producers could use their available spare capacity to export to the Union should the measures be terminated. It was also likely that some volumes that were at the time exported to third countries would be re-directed to the EU, given the relative attractiveness of the Union market and its proximity to Russia. As the Union industry was in a less prosperous state compared to the last expiry review, such increased volumes could cause injury to recur. The likely future evolution of Russian export prices was also a clear indication that injury could recur quickly. Therefore, the Commission concluded that there was a likelihood of recurrence of injury should the measures be removed. In response to the disclosure of the findings, COPA-COGECA, representing Union farmers and cooperatives, sent submissions and called for the anti-dumping measures to be terminated. COPA-COGECA claimed that the anti-dumping measures damaged the competitiveness of Union agricultural exports and family farm incomes. COPA-COGECA argued that by organizing themselves in cooperatives they would benefit from increased competition from Russian exporting producers, lowering farmers’ production costs. However, the Commission noted, as in previous expiry reviews, that farmers might not benefit from a potential price decrease following a potential termination of the measures since farmers usually buy from distributors who may not pass on any of the benefits. The Commission also noted that the cost of ammonium nitrate for farmers in the entire Union was not disproportionally high. Therefore, the Commission concluded that the termination of the measures was not justified on this basis. Amendment of the measures After an assessment of the evidence and the submissions provided by the parties, the Commission used an 8% profit margin for the injury calculation, which was in line with previous investigations concerning ammonium nitrate. The Union industry submitted a study that substantiated a 36% return on sales (ROS) target profit. Two Union producers reiterated the same claim and submitted that the Union industry had in the past achieved a two-digit profitability, which would justify a higher target. However, the Commission noted that profitability had fluctuated when measures were in place, both above and below the target profit. Thus, it concluded that the 8% target profit was still valid, and has set the new duty levels accordingly, differentiating the latter by product types. The amended anti-dumping measures were fixed between 28.78 and 32.71 EUR per ton. These findings were published on 14 November 2018,

Rainbow trout from Turkey On 26 February 2015, following an anti-subsidy investigation that related to the year 2013, the European Commission imposed definitive countervailing duties on imports of certain rainbow trout originating in Turkey. In July 2017, the Commission initiated a partial interim review of these measures, following a request from the Aegean Exporters Association (‘the applicant’). The request was supported by evidence that a change in the implementation of the direct production subsidies introduced in 2016 resulted in a substantial decrease of the level of subsidies to trout producers in Turkey. The applicant also argued that the change in the subsidy schemes was of a lasting nature. Therefore, the applicant claimed that the countervailing measures were no longer necessary and that they should be reviewed. Procedure In view of the large number of exporting producers, the Commission selected a final sample of six exporting producers/groups of exporting producers in Turkey that accounted for approximately 71% of the volume of imports of the product under review. The Commission considered that it was representative and would enable it to properly analyse the effects of the changes on all companies in that sector. After completion of verification visits, on 21 February 2018 the Commission disclosed the essential facts and considerations of the investigation to all interested parties. Subsidies countervailed in the original investigation In the original investigation, the Commission examined a number of measures from which the Turkish exporting producers of trout benefited or might have benefitted during the original investigation period (the year 2013). The main subsidies from which the Turkish producers of trout benefited during the original investigation period were direct subsidies granted to all trout producers on a ‘per kg’ basis. Under Decree No 2013/4463 on agricultural subsidies (‘the decree’), which provided for the subsidies in the original investigation period, subsidies were granted to all producers of trout possessing a valid production licence relating to a fish farming unit (sea, dam or inland site). A trout producer could have several production licences (fish farming units) in the same site. According to the Commission’s findings, the total amount of subsidies for the original investigation period amounted to 62,992,720 TL. Results of the review investigation The Commission found that the decree was changed in 2016. As a consequence, the volume of trout production eligible for direct subsidies decreased and thus resulted in a significant decrease of subsidies received by trout producers. However, the investigation showed that the actual impact of the legislative change of 2016 in terms of volume and value of the eligible production in comparison with the previous system was difficult to determine, and depended on the production volumes produced under each of the licences. Moreover, the Commission observed that, in 2017, the actual amount of direct subsidies to trout producers increased and that the decrees of 2016 and 2017 also introduced a number of new subsidies from which trout producers could benefit. Therefore, while the limitations introduced in 2016 might have led to a decrease in subsidisation via the direct subsidies, Turkey had simultaneously introduced new subsidies and/or amended existing subsidy measures. Second, the Commission analysed the overall evolution of the amounts of subsidies granted by Turkey since the original investigation. It reached the conclusion that between 2013 and 2016, the subsidies to trout producers decreased by 37%. After 2016, however, the level of subsidies to trout producers increased again, reaching a total amount comprised between 43 and 48,5 million TL in 2017. The Commission thus concluded that the decrease of existing subsidies after the legislative change in 2016 was temporary and that the amount of subsidies after 2016 was approaching the amount before the legislative change. The Commission observed that the system of implementation of direct subsidies was characterised by constant changes in the legal basis, the eligibility criteria and the actual amounts of subsidisation. As a matter of fact, not only the Commission found the decrease in subsidisation of trout producers in 2016 to be temporary, but also maintained that, since the conditions and amounts of subsidies were reviewed by Turkey on an annual basis, the introduced changes could not be considered as long lasting. Further, the Commission estimated that the total subsidies to trout producers might reach up to 56 million TL in 2018, i.e. around 6 million TL above the amount of 2015 – the year before the legislative change. Termination of the partial interim review Having concluded that the decrease observed in 2016 could not be considered as having a lasting nature, the Commission terminated the partial interim review investigation and maintained the measures in force unchanged. Polyethylene terephthalate (PET) from India In May 2013, the Council imposed a definitive countervailing duty on imports of certain polyethylene terephthalate (PET) originating in India, which was amended by the Commission in 2015 by Regulation 2015/1350, following two partial interim reviews pursuant to Article 19 of the basic Regulation. In September 2016, an Indian exporting producer, Dhunseri Petrochem Limited (‘DPL’) requested the Commission to amend the Regulation imposing the measures in force because of a reorganisation. The Commission considered that there was sufficient evidence that the circumstances with regard to subsidisation of DPL and its related companies had changed significantly and were of a lasting nature. Consequently, a partial interim review investigation pursuant to Article 19 of the basic Regulation was initiated, in order to establish the rate of subsidisation for the company's new structure. Another Indian exporting producer, Reliance Industries Limited (‘Reliance’) lodged a request for a partial interim review pursuant to Article 19 of the basic Regulation. The request was limited to the examination of the subsidisation of Reliance, which provided sufficient evidence that the continued application of the measures at their current level was no longer necessary to offset the countervailable subsidisation. The company alleged in particular that the overall subsidy level was reduced due to the termination of the Focus Product Scheme and the Focus Market Scheme and the reduction of amounts availed by the applicant with regard to other schemes, like the Advanced Authorisation Scheme and the Duty Drawback Scheme.

Having determined that the request contained sufficient evidence, the Commission announced the initiation of a partial interim review limited in scope to the examination of subsidisation for Reliance. The review investigation period covered the period from 1 April 2016 to 31 March 2017. Results of the investigation As far as the reorganisation of DPL and its related companies was concerned, the investigation confirmed that DPL transferred its entire PET production facility to a new company, IVDPIL in April 2016 and acquired 50% share of that company, thus ceasing to be an exporting producer of the product under review with effect from that date. The investigation also confirmed that DPL acquired 50% of stake in MPPL, an Indian manufacturer of PET which previously did not export the product under review to the Union. The purpose of the partial interim review was therefore to establish the rate of subsidisation applicable to the new group of companies resulting from the re-organisation undergone by DPL, IDIPL, and MPPL (the ‘Dhunseri group’). With regard to subsidisation, the Commission calculated the subsidy rates applicable to both the Dhunseri Group and Reliance. In order to establish the rates of subsidisation, the Commission investigated various subsidy programs and found that the exporting producers availed themselves of five of these programs during the review investigation period, i.e. Duty Drawback Scheme (DDS), Export Promotion Capital Goods Scheme (EPCGS), Merchandise Export from India Scheme (MEIS), Gujarat Electricity Duty Exemption Scheme (GEDES), and Advance Authorisation Scheme (AAS). As the benefit received by the exporting producers under the GEDES and AAS schemes was found to be negligible, the Commission mainly focused on the DDS, EPCGS and MEIS schemes. The latter were all found to provide subsidies within the meaning of Article 3(1)(a)(ii) and Article 3(2) of the basic Regulation. Furthermore, since the payment by the Government of India subsequent to exports made by exporters under these schemes was contingent upon export performance, it was deemed to be specific and countervailable under Article 4(4)(a) of the basic Regulation. The Commission considered that DDS and EPCGS could both not be considered permissible duty drawback systems within the meaning of Article 3(1)(a)(ii) of the basic Regulation. With particular regard to DDS, the Commission noted that the cash payment to the exporter was not necessarily linked to actual payments of import duties on raw materials, and was not a duty credit to offset import duties on past or future imports of raw materials. Amount of countervailable subsidies Significantly, when calculating the DDS subsidy amount, the Commission rejected Reliance’s claim that the benefit calculated on the basis of DDS should be restricted to the excess benefits as DDS should be considered as a duty drawback scheme permissible under Article 3(1)(a)(ii) of the basic Regulation. The claim was rejected since the Commission concluded during the on-the-spot verification that Reliance had benefited from the DDS even if it had not imported any of the two relevant raw materials during the review investigation period and since the total amount granted to Reliance represented the excess. This conclusion was reached on the basis of the information available, as Reliance failed to provide evidence that one of the two main raw material used to manufacture PET was entirely imported and import duties were paid. The Commission reached an opposite conclusion with regard to the Dhunseri group, since the company provided sufficient evidence in this respect, and the Commission showed the correctness of the evidence during a verification visit. Hence, the Commission calculated the level of subsidisation on the excess remission with regard to the Dhunseri group. The Commission recalled that the amount of subsidisation established for DPL and Reliance by Implementing Regulation (EU) 2015/1350 were respectively 3,2% and 6,2%, which translated into countervailing duties of respectively 35,69 EUR/tonne and 69,39 EUR/tonne. During the current partial interim reviews the Commission found the amount of countervailing subsidies, expressed ad valorem, to be 2,3% for the Dhunseri group and 4% for Reliance. The Commission established the following specific countervailing duties: 18,73 EUR/ton for Dhunseri group and 29,21 EUR/ton for Reliance. Lasting nature of changed circumstances with regard to subsidisation The Commission established that, during the review investigation period, the exporting producers concerned continued to benefit from countervailable subsidisation by the government, although at different rates. As far as Reliance was concerned, the most important subsidies in terms of subsidisation rates during the review investigation period were DDS and MEIS. The subsidisation rate for DDS was reduced several times by the government over the last seven years, reaching 1,5% of the FOB value during the review investigation period. As far as MEIS was concerned the rate of 2% of the FOB value that became applicable to PET in October 2015 remained unchanged since then. No significant change of subsidisation rate for EPCGS was expected after the review investigation period. As no evidence was adduced that the countervailed schemes would be discontinued or that their subsidisation levels would be either increased or decreased in the future, the Commission concluded that the circumstances that led to Reliance's new subsidisation rate were of a lasting nature. Hence, the level of the duties for Reliance was established on the basis of a 4% subsidy margin. With reference to the Dhunseri group, the investigation showed that the structure of the group changed significantly. Most importantly the group owned two PET plants during the review investigation period as compared to a single one during the previous interim review. The re-organisation involved several legal steps over a period of almost two years and reached its completion when it was sanctioned by the High Court of Kolkata in December 2017. The Commission hence considered that the change of structure was of a lasting nature and that the measures in force should be amended to reflect the new situation also in view of the previous conclusions on the current (and lower) level of subsidisation found in these reviews.

3.2.3.New exporter reviews As far as anti-dumping measures are concerned, Article 11(4) of the basic Regulation allows for a review ("newcomer" review) to be carried out in order to determine individual margins of dumping for new exporters located in the exporting country in question which did not export the product during the investigation period. Such parties have to show that they are genuine new exporters, i.e. that they are not related to any of the exporters or producers in the exporting country, which are subject to the anti-dumping measures, and that they have actually started to export to the EU following the investigation period, or that they have entered into an irrevocable contractual obligation to export a significant quantity to the EU. When a review for a new exporter is initiated, the duties are repealed with regard to that exporter, though its imports are made subject to registration under Article 14(5) of the basic Regulation in order to ensure that, should the review result in a determination of dumping in respect of such an exporter, anti-dumping duties may be levied retroactively to the date of the initiation of the review. As far as anti-subsidy measures are concerned, Article 20 of the basic Regulation allows for a review (accelerated review) to be carried out in order to promptly establish an individual countervailing duty. Any exporter whose exports are subject to a definitive countervailing duty but who was not individually investigated during the original investigation for reasons other than a refusal to co-operate with the Commission can request such review. In 2018, no new exporter review was initiated. Since the Commission carried out the first reviews of this type in 1990, a total of 77 such reviews were initiated so far. Two new exporter reviews were concluded in 2018 by an exemption (see details below). Bicycles from China (exemption review) On 29 May 2013, the Council extended the already existing definitive anti-dumping measures on imports of bicycles originating in China to those consigned from Indonesia, Malaysia, Sri Lanka and Tunisia, following an anti-circumvention investigation. On 13 September 2016, the Commission received a request from Look Design System SA, an exporting producer of bicycles based in Tunisia, for an exemption from the measures applicable to Tunisia. As the request contained sufficient evidence, the Commission initiated an investigation on 4 May 2017 to determine whether an exemption was warranted. Investigation The Commission notified the Union industry as well as the applicant and the authorities of the exporting country, which were given the opportunity to comment and make their views known. The Commission assessed all the information at its disposal and conducted a verification visit at the premises of the applicant in Tunisia. The investigation confirmed that the company fulfilled the three conditions necessary to be granted “new exporter” status: it had not exported the product under review during the original reporting period, it demonstrated that it did not have any links, direct or indirect, with any of the Tunisian exporting producers subject to the extended measures with regard to the product under review and the investigation showed that the applicant had started to export the product to the Union only after the original reporting period. The sources of raw materials and cost of production were also analysed. It was concluded that the parts mainly originated in other countries and that the raw materials originating in China represented less than 60% of the total value of the parts assembled. Moreover, there was no evidence of circumvention taking place through transshipments. The Commission concluded that the applicant was a genuine producer of bicycles and granted the producer an exemption from the measures applicable to Tunisia. Solar panels from China The Commission imposed definitive anti-dumping and countervailing measures on imports of solar panels originating in China in 2013. The measures consisted of an ad valorem duty ranging between 27,3% and 64,9%. In February 2016, following an anti-circumvention investigation, the Commission extended those measures to imports of the products consigned from Malaysia and Taiwan, with the exception of imports produced by certain companies specifically exempted from those measures. Following expiry reviews investigations described in the Annual Report on year 2017, these measures were extended for 18 months (instead of the normal five years period) based on Union interest reasons. Exemption investigation with regard to a Malaysian company On 18 July 2018, the Commission initiated an investigation in order to assess whether it should grant an exemption from the duties to a Malaysian exporting company of the concerned product. In the request, there seemed to be enough prima facie evidence that the applicant fulfilled the criteria for an exemption. The applicant was a wholly owned subsidiary of a Hong Kong-based company, which was also a subsidiary of a Chinese company, the ultimate parent company. The parent company was subject to both countervailing and anti-dumping duties. However, after carrying out further examinations in order to determine the relationship and possible circumvention of the existing measures, the Commission found that the Malaysian applicant was a genuine producer and had not been involved in circumvention activities. The Commission concluded that the Chinese ownership did not constitute a reason to reject the application and that the applicant should be added to the list of companies that are exempted from the existing countervailing and anti-dumping duties.

Expiry of measures On 13 March 2018, the Commission gave notice that both the anti-dumping and countervailing measures would expire on 3 September of the same year. The EU industry lodged a request for an expiry review in order to extend the existing measures. The Commission decided on 31 August 2018 to reject the requests. It noted that in a previous expiry review, measures were extended for a limited period of 18 month and the limitation was warranted because of Union interest grounds. The applicant did not provide any information that put into question the Union interest grounds previously established. The Commission also noted that the market situation had not changed sufficiently to justify a further extension of the measures, as the level of the measures had gradually decreased over time to allow the prices of the imports into the EU align progressively with world market prices. In its assessment, the Commission also took into account the new EU’s renewable energy targets. Therefore, on 3 September 2018, both the anti-dumping and countervailing measures on solar panels expired. 3.2.4.Absorption investigations Where there is sufficient information showing that, after the original investigation period and prior to or following the imposition of measures, export prices have decreased or that there has been no or insufficient movement in the resale prices or subsequent selling prices of the imported product in the EU, an absorption review may be opened to examine whether the measure has had effects on the above-mentioned prices. The duty may be increased to take account of such lower export prices. The possibility of absorption reviews is included in Articles 12 and 19(3) of the basic Regulations. In 2018, one anti-absorption investigation was initiated and no such investigation was concluded (Annex J). 3.2.5.Anti-circumvention investigations The possibility of investigations being re-opened in circumstances where evidence is brought to show that measures are being circumvented was introduced by Article 13 and Article 23 of the basic Regulations. Circumvention is defined as a change in the pattern of trade between third countries and the EU that stems from a practice, process or work for which there is insufficient due cause or economic justification other than the imposition of the duty. The duties may be extended to imports from third countries of like products, or parts thereof, if circumvention is taking place. Duties may also be extended to imports of a slightly modified like product from the country subject to current measures. In 2018, No anti-circumvention investigations were initiated. Two anti-circumvention investigations were terminated without the extension of duty. More information can be obtained from the Official Journal publications to which reference is given in Annex K. Hand pallet trucks and their essential parts from China (via Vietnam) On 18 July 2005, the Council imposed a definitive anti-dumping duty on imports of hand pallet trucks and their essential parts originating in China. The measures consisted of an ad valorem duty ranging between 7,6% and 46,7%. These measures were prolonged twice as a result of expiry reviews. On 6 June 2017, the Commission received a request to investigate a possible circumvention of the anti-dumping measures by imports coming from Vietnam. The request was lodged on behalf of Union producers representing over 60% of EU production of the products concerned. The request contained prima facie evidence showing that assembly operations taking place in Vietnam constituted circumvention as Chinese parts seemed to constitute more than 60% of the total value of the assembled product and the value added during the assembly operation was lower than 25% of the manufacturing costs. Complainants argued that this practice was undermining the effectiveness of the anti-dumping measures in place. The Commission decided to initiate an investigation on this basis. The Commission informed Chinese and Vietnamese authorities and followed the procedure by sending out questionnaires and carrying out verification visits to two companies in Vietnam. For both companies it was found that the parts from China did not constitute 60% or more of the total value of the parts of the assembled products. Consequently, the assembly operations carried out by the cooperating Vietnamese companies could not be considered as circumvention. In addition, as the two investigated companies represented 100% of the Vietnamese exports to the EU during the reporting period, it could not be established that measures in force with regard to China were being circumvented by such imports from Vietnam. The Commission terminated the investigation on 21 February 2018. 3.2.6.“Other” reviews (reinvestigations) These investigations fall outside Article 11(3) or Article 19 of the basic Regulations and focus on the implementation of court rulings. In 2018, the Commission initiated three such investigations. Two “other” reviews were concluded with a confirmation or re-imposition of the duty. More details can be found below. Three "other" reviews were terminated with a repeal of the measures. A list of the cases concerned is given in Annex H. More information can be obtained from the Official Journal publications to which reference is given in that Annex. Bicycles from China (via Sri Lanka) On 11 April 2017, the Commission published a notice partially reopening the anti-circumvention investigation concerning imports of bicycles consigned from Sri Lanka following a General Court judgment annulling the original anti-circumvention regulation on the concerned products to the extent it applied to Sri Lankan company City Cycle Industries.

On the same day, imports of the product concerned from City Cycle Industries were made subject to registration following a request by the European Bicycle Manufacturers Association and EU producer Maxcom Ltd. Dumping The Commission reassessed all the data available and found that the evidence submitted by the Sri Lankan company demonstrated that raw materials from China constituted more than 60% of the total value of the parts of the assembled product. In addition, because of the low investment required for assembly operations, and the fact that the Sri Lankan company already had the necessary know-how and experience for this type of activity, the applicants submitted that it was likely that City Cycle Industries will go back very quickly to circumventing practices. It was also found that the value added during the assembly operations was less than 25% of the manufacturing cost and therefore constituted circumvention. Injury The Court judgment is limited to the analysis of circumvention practices, which City Cycle Industries may have been engaged in. As a result, the findings that were not challenged, rejected or not examined by the General Court remain valid. The applicants submitted that a real risk persisted that City Cycle Industries' exports to the Union could resume in significant quantities given the ease of setting up assembly circumvention practices for bicycles on a large scale in Sri Lanka. In addition, it had a major customer in the Union for its products. Definitive measures On this basis, on 9 January 2018, the Commission re-extended the original measures to the Sri Lankan exporter, as from the date of registration. Biodiesel from Argentina and Indonesia On 19 November 2013, the Commission imposed definitive anti-dumping duties on imports of biodiesel originating in Argentina and Indonesia by means of Regulation 1194/2013 (‘the definitive Regulation’). In September 2016, the General Court of the European Union (‘GC’) annulled Articles 1 and 2 of the definitive Regulation to the extent that they applied to the applicants. The GC ruled that the institutions should not have taken the view that the price of the raw materials was not reasonably reflected in the records of the Argentinian and Indonesian exporting producers and should not have disregarded those records when constructing a normal value for biodiesel produced in these countries. In particular, the GC held that the institutions failed to establish to the requisite legal standard that there was an appreciable distortion of the prices of the main raw materials used for the production of biodiesel in Argentina and Indonesia because of different tax rates on raw materials and on biodiesel. The anti-dumping measures were also challenged by Argentina and Indonesia before the WTO adjudicating bodies. In both disputes, it was found, among other things, that the legal justification relied upon by the Union to proceed with a cost adjustment was incompatible with WTO law. Moreover, the Indonesia Panel Report found that the Union had failed to establish a profit-cap pursuant to Article 2.2.2 of the WTO Anti-Dumping Agreement when constructing the normal value. In addition, the Indonesia Report also found that there had been some company-specific calculation inconsistencies, as well as additional points on injury-related matters. In order to comply with its obligations under the GC’s judgments and the Reports adopted by the Dispute Settlement Body (DSB), the Commission decided to resume the anti-dumping proceeding at the very point at which the illegality occurred and thus to re-examine the methodology used for constructing the normal value. On 28 May 2018, a Notice was published re-opening the original investigations. Determination of the normal value and calculation of the dumping margins The Commission reassessed the findings of the original investigations on the issues identified by the GC and the WTO adjudicating bodies, determining anew the duty rates in respect of all Indonesian and Argentinian exporters. In view of the high negative dumping margins for two of the four sampled Indonesian companies, the Commission verified whether the weighted average countrywide dumping margin taking account of the negative margins was above de minimis as provided for in Article 9(3) of the basic Regulation. In this respect, it noticed that the amount of dumping in the Indonesian sample was 1,6% – that is below the 2% de minimis threshold. In view of the countrywide de minimis dumping margin, the Commission decided to terminate the investigation without measures as regards imports of biodiesel from Indonesia.

Revised injury findings based on the Reports As the investigation was terminated with regard to Indonesia, the Commission limited its causation analysis to dumped imports of biodiesel from Argentina, in order to determine the existence of a causal link between the dumped imports and the injury suffered by the Union industry, and assessed imports from Indonesia separately, as another factor that might also have caused injury. During the investigation period, almost half of all imports into the Union came from Indonesia at a price lower than Union prices as well as Argentinian prices. It was also noted that the exponential increase on imports volumes from Indonesia as well as their market share significantly contributed to the material injury suffered by the Union industry. The impact of the Indonesian exports added to other factors, among others overcapacity of Union industry and self-inflicted injury: On this basis, the Commission concluded that the effect of imports of biodiesel from Indonesia to the Union taken together with the other factors contributed to the injury suffered by the Union industry to such an extent that it could not be established that a genuine and substantial causal relationship between the dumped imports from Argentina and the material injury suffered by the Union industry actually existed. Conclusion On 18 October 2018, the Commission terminated the investigation, given that dumping margins from Indonesia were found to be de minimis and a genuine and substantial causal relationship between the dumped imports from Argentina and the material injury suffered by the Union industry, as required under Article 3(7) of the basic Regulation, could not be established. Anti-dumping measures were hence repealed. 3.3.Safeguard investigations Safeguard measures have always been and remain an instrument which the Commission would only apply in truly exceptional circumstances. Indeed, they are only used where it is clear that, applying the highest standards, such measures are necessary and justified because, due to unforeseen circumstances, there has been a surge in imports and this has caused or threatens to cause serious damage to the EU industry. The Commission expects the EU’s commercial partners to follow a similarly strict approach. However, more and more countries are adopting safeguard measures, often in circumstances which do not appear to be entirely in line with Article XIX of the GATT 1994, the WTO Agreement on Safeguards and other WTO rules. Consequently, the activities of the Commission in relation to safeguards is more and more driven towards the defence of the export interests of EU producers, if necessary at WTO level. Not all safeguard measures adopted by the EU constitute safeguards within the meaning of the WTO Agreement on Safeguards. Some of these measures are called ‘safeguards’ under particular regimes, such as the horizontal safeguards regulation or the safeguard investigations under the Generalised Scheme of Preferences (GSP). In April 2018, the Commission put forward a proposal for a horizontal bilateral safeguard regulation that will allow the Commission to use the bilateral safeguard clauses laid down in all future trade agreements. The objective of these safeguard clauses is to temporarily suspend tariff preferences where preferential imports increase to such an extent that they cause or threaten to cause serious injury to a particular EU industry. This horizontal regulation provides standard rules for the implementation of bilateral safeguard clauses, including the conditions and decision-making process. In the past, the EU adopted separate regulations for each individual FTA, which will no longer be necessary. The proposed Regulation has been politically approved by the co-legislators in December 2018. In terms of casework, in 2018, the EU initiated three safeguard investigations – one erga omnes on steel products and two bilateral ones against Cambodia and Myanmar on Indica rice under the rules of the Generalised Scheme of Preferences (Annex L). 3.3.1.Details on individual safeguard cases General safeguard measures on certain steel products The investigation into 26 different steel product categories was initiated ex officio on 26 March 2018, pursuant to Article 5 of Regulation (EU) 2015/478 and Article 3 of Regulation (EU) 2015/755. On 28 June 2018, the Commission extended the product scope of the safeguard investigation to two additional categories. The investigation covered the period from 2013 to 2017 (‘the period considered’). The most recent developments have also been considered (i.e. the period between July 2017 and June 2018). Provisional measures were imposed in July 2018, and on 31 January 2019 have been replaced by definitive measures. While the latter Regulation was not adopted in 2018, this section nevertheless describes the latest measures, due to their importance of the case. Product scope The product concerned is certain steel products, encompassing 28 product categories. The Commission decided to exclude two product categories for which imports decreased overall between 2013 and June 2018. Therefore, definitive measures only apply to 26 categories. Legal requirements i) Increase in imports The investigation showed that over the period considered and the most recent period, there had been a sudden, steep and significant increase in imports, in both absolute and relative terms, for the products concerned (+71%). This finding was further confirmed when analysing the level of imports at the level of the three product families (+64% for flat products; +97% for long products and +60% for tubes).

ii) Unforeseen developments The Commission established that the increase in imports of steel products in the Union was the result of unforeseen developments that finds its source in a number of factors establishing and aggravating imbalances in the international trade of the products concerned. These factors consisted of an unprecedented steelmaking overcapacity that persists, despite the important number of measures adopted worldwide to reduce it. This was aggravated by distortive subsidies and government support measures, which led to price depression, the increased use of trade restrictive practices, TDIs and the US Section 232 measures adopted in March 2018. iii) Threat of serious injury The Commission concluded that the situation of the Union industry deteriorated significantly in the period 2013-2016 and improved only partially in 2017. However, the Commission considered that the Union industry, despite the temporary improvement, was still in a fragile situation and under the threat of serious injury if the increasing trend in imports continued with the ensuing price depression and profitability drop below sustainable levels. At provisional stage, a critical element in the determination of a threat of injury was that the significant increase in imports observed since 2013 would not end but would further rise and reach serious injurious levels in the absence of remedial action. This expected trend was already confirmed by the most recent data analysed and is mostly caused by trade diversion resulting from the US Section 232 measures on steel products. Form of the measures The definitive safeguard measure took the form of a tariff-rate quota in order to prevent serious injury, but at the same time preserve as much as possible traditional trade flows. This level of tariff-rate quota was set at the average level of imports over the last three representative years. The Commission considered it necessary to modulate the tariff-rate quota level above the average import level for the last three years to take account of the competing interests between users and importers, on the one hand, and the Union industry, on the other hand. On this basis, the Commission considered that the quantitative level of the tariff-rate quota should be based on the average imports in the period 2015-2017 plus 5%. The Commission set an out-of-quota duty of 25% that would apply if the tariff-rate quota in a given product category is exhausted. In addition, the Commission concluded that a mixed approach to quota allocation (country-specific quota and global quota) would be the most appropriate. First, a country specific tariff-rate quota should be allocated to countries having a significant supplying interest, based on their imports over the last three years. A global tariff-rate quota (‘the residual quota’) based on the average of the remaining imports over the last three years sho