Proposal for a COUNCIL REGULATION amending Council Regulation (EC) No 2026/1997 on the protection against subsidised imports from countries not members of the European Communities

(presented by the Commission)

EXPLANATORY MEMORANDUM

First, on 31 December 1999, the application of certain provisions of the WTO Agreement on Subsidies and Countervailing Measures with regard to non-actionable subsidies expired. The rules in the Basic Antisubsidy Regulation on non-countervailable subsidies implementing the respective provisions in that Agreement need to be repealed to maintain the balance of rights and obligations of the Community under that Agreement.

Second, it is appropriate to amend two further provisions under the Basic Antisubsidy Regulation. One amendment relates to the determination of the amount of subsidy in cases of the provision by a government of goods or services below adequate remuneration; if there are no prevailing market terms or conditions in the country in question, certain other benchmarks can be used. The other amendment concerns the use of facts available; it is clarified that also prices on the world market or third country markets can be used.

2002/0208 (ACC)

Proposal for a COUNCIL REGULATION amending Council Regulation (EC) No 2026/1997 on the protection against subsidised imports from countries not members of the European Communities

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission [1],

[1] OJ C , , p. .

Whereas:

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

[2] OJ L 288, 21.10.1997, p.1.

(2) Article 6 of Regulation (EC) No 2026/97 sets forth certain guidelines for the calculation of the benefit to the recipient, including the market benchmark against which the amount of benefit is measured. It is prudent to provide for a clarification as to what rules should be followed in cases where a market benchmark does not exist in the country concerned. In such a situation the benchmark should be determined by adjusting the terms and conditions prevailing in the country concerned on the basis of actual factors available in that country. If this is not practicable because, inter alia, such prices or costs do no exist or are unreliable, then the appropriate benchmark should be determined by resorting to terms and conditions in other markets.

(3) Article 4 of Regulation (EC) No 2026/97 provides that certain subsidies for environment, research and regional development are non-countervailable. Furthermore, Article 10 (5) and (6) of that Regulation state that investigations can be initiated to determine whether subsidies have such non-countervailable status or must not be initiated if they relate to certain non-countervailable subsidies. The corresponding provisions in the WTO Agreement on Subsidies and Countervailing Measures were due to expire on 31 December 1999 unless the Members of the WTO decided otherwise. No such decision has been taken and therefore the relevant provisions do not apply anymore. Accordingly , it is necessary to assess whether the provisions on non-countervailable subsidies in Regulation (EC) No 2026/97 should be maintained. In this respect, major trading partners of the Community no longer apply these provisions in their countervailing investigations. In view of this, and in order to maintain the balance of rights and obligations under the WTO Agreement on Subsidies and Countervailing Measures, it is considered appropriate to repeal the provisions of Regulation (EC) No 2026/97 relating to non-countervailable subsidies.

(4) Article 28 (5) of Regulation (EC) No 2026/97 specifies that, in case of use of facts available, the information used shall be checked by reference to information from a number of sources. It is considered useful to specify that such sources can, where appropriate, also pertain to data concerning the world market or other representative markets.

(5) It is considered appropriate in the interests of legal certainty to provide that these amendments shall apply as soon as possible to all new investigations.

HAS ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 2026/97 is amended as follows:

1. In Article 6 (d) , the following text is added :

'If there are no such prevailing market terms and conditions for the product or service in question in the country of provision or purchase which can be used as appropriate benchmarks, the following rules shall apply:

(i) The terms and conditions prevailing in the country concerned shall be adjusted, on the basis of actual costs, prices and other factors available in that country, by an appropriate amount which reflects normal market terms and conditions; or

(ii) when appropriate, the terms and conditions prevailing in the market of another country or on the world market which are available to the recipient shall be used.'

2. Article 4 and Article 10 (5) and (6) are repealed.

3. In Article 28 (5), the following sentence is added :

'Such information may include relevant data pertaining to the world market or other representative markets, where appropriate.'

Article 2

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

It shall apply to all investigations initiated pursuant to Council Regulation (EC) No 2026/97 after the date of entry into force of this Regulation.

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

Done at Brussels,

For the Council

The President