EN Official Journal of the European Union C 440/22

Notice of initiation of an anti-subsidy proceeding concerning imports of electric bicycles originating in the People's Republic of China

(2017/C 440/11)

The European Commission (‘the Commission’) has received a complaint pursuant to Article 10 of Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (1) (‘the basic Regulation’), alleging that imports of electric bicycles, originating in the People's Republic of China, are being subsidised and are thereby causing material injury to the Union industry.

1. Complaint

The complaint was lodged on 8 November 2017 by the European Bicycle Manufacturers Association (‘EBMA’) on behalf of producers (‘the complainants’) representing more than 25 % of the total Union production of electric bicycles.

2. Product under investigation

The product subject to this investigation is cycles, with pedal assistance, with an auxiliary electric motor (‘the product under investigation’).

3. Allegation of subsidisation

The product allegedly being subsidised is the product under investigation, originating in the People's Republic of China (‘the country concerned’), currently falling within CN codes 8711 60 10 and ex 8711 60 90 (TARIC code 8711609010). These codes are given for information only.

The complaint includes sufficient evidence that the producers of the product under investigation from the country concerned have benefitted from a number of subsidies granted by the Government of the People's Republic of China.

The alleged subsidy practices consist, inter alia, of (1) direct transfers of funds and potential direct transfers of funds or liabilities, (2) government revenue forgone or not collected, and (3) government provision of goods or services for less than adequate remuneration. The complaint contained evidence, for example, of various grants as subsidies for environmental protection and subsidies for technology, innovation and development; provision of loans and credit lines provided by State-owned banks and other financial institutions at preferential terms, and provision of export credits and export guarantees and insurance by State-owned banks and other financial institutions; income tax reductions and exemptions, import tariff rebates and VAT exemptions and rebates; and government provision of land and energy for less than adequate remuneration. The complainants allege that the above measures are subsidies since they involve a financial contribution from the Government of the People's Republic of China or other regional and local governments (including public bodies) and confer a benefit to the exporting producers of the product under investigation. They are alleged to be limited to certain enterprises or industry or group of enterprises and are therefore specific and countervailable. On this basis the alleged subsidy amounts appear to be significant for the country concerned.

In view of Article 10(2) and (3) of the basic Regulation, the Commission prepared a memorandum on sufficiency of evidence containing the Commission's assessment on all the evidence at its disposal and on the basis of which the Commission initiates the investigation. This memorandum can be found in the file for inspection by interested parties.

The Commission reserves the right to investigate other relevant subsidy practices.

4. Allegation of injury and causation

The complainants have provided sufficient evidence that imports of the product under investigation from the country concerned have increased overall in absolute terms and have increased in terms of market share.

The evidence provided by the complainant shows that the volume and the prices of the imported product under investigation have had, among other consequences, a negative impact on the quantities sold and the market share held by the Union industry as well as on the Union's prices that could not been raised to a reasonable level due to the downwards price pressure of the imported product under investigation resulting in substantial adverse effects on the overall performance of the Union industry.

5. Procedure

Having determined, after informing the Member States, that the complaint has been lodged by or on behalf of the Union industry and that there is sufficient evidence to justify the initiation of a proceeding, the Commission hereby initiates an investigation pursuant to Article 10 of the basic Regulation.

The investigation will determine whether the product under investigation originating in the country concerned is being subsidised and whether these subsidised imports have caused or threaten to cause injury to the Union industry. If the conclusions are affirmative, the investigation will examine whether the imposition of measures would not be against the Union interest.

The Government of the People's Republic of China has been invited for consultations.

5.1. Investigation period and period considered

The investigation of subsidisation and injury will cover the period from 1 October 2016 to 30 September 2017 (‘the investigation period’). The examination of trends relevant for the assessment of injury will cover the period from 1 January 2014 to the end of the investigation period (‘the period considered’).

5.2. Procedure for the determination of subsidisation

Exporting producers (2) of the product under investigation from the country concerned and the authorities of the country concerned are invited to participate in the Commission investigation. Other parties from which the Commission will seek relevant information to determine the existence and amount of countervailable subsidies conferred upon the product under investigation are also invited to cooperate with the Commission to the fullest extent possible.

5.2.1. Investigating exporting producers

Procedure for selecting exporting producers to be investigated in the country concerned

(a) Sampling

In view of the potentially large number of exporting producers in the country concerned and involved in this proceeding, and in order to complete the investigation within the statutory time limits, the Commission may limit the exporting producers to be investigated to a reasonable number by selecting a sample (this process is also referred to as ‘sampling’). The sampling will be carried out in accordance with Article 27 of the basic Regulation.

In order to enable the Commission to decide whether sampling is necessary, and if so, to select a sample, all exporting producers, or representatives acting on their behalf, are hereby requested to make themselves known to the Commission. These parties have to do so within 15 days of the date of publication of this Notice in the Official Journal of the European Union, unless otherwise specified, by providing the Commission with information on their company(ies) requested in Annex I to this Notice.

In order to obtain information it deems necessary for the selection of the sample of exporting producers, the Commission will also contact the authorities of the country concerned and may contact any known associations of exporting producers.

All interested parties wishing to submit any other relevant information regarding the selection of the sample, excluding the information requested above, must do so within 21 days of the publication of this Notice in the Official Journal of the European Union, unless otherwise specified.

If a sample is necessary, the exporting producers may be selected based on the largest representative volume of exports to the Union which can reasonably be investigated within the time available. All known exporting producers, the authorities of the country concerned and associations of exporting producers will be notified by the Commission, via the authorities of the country concerned if appropriate, of the companies selected to be in the sample.

In order to obtain information it deems necessary for its investigation with regard to exporting producers, the Commission will send questionnaires to the exporting producers selected to be in the sample, to any known association of exporting producers, and to the authorities of the country concerned.

All exporting producers, selected to be in the sample, and the authorities of the country concerned will have to submit a completed questionnaire within 37 days from the date of notification of the sample selection, unless otherwise specified.

Without prejudice to the application of Article 28 of the basic Regulation companies that have agreed to their possible inclusion in the sample but are not selected to be in the sample will be considered to be cooperating (‘non-sampled cooperating exporting producers’). Without prejudice to section (b) below, the countervailing duty that may be applied to imports from non-sampled cooperating exporting producers will not exceed the weighted average amounts of subsidisation established for the exporting producers in the sample (3).

(b) Individual amount of countervailable subsidisation for companies not included in the sample

Non-sampled cooperating exporting producers may request, pursuant to Article 27(3) of the basic Regulation, that the Commission establish their individual subsidy amount. The exporting producers wishing to claim an individual amount of subsidisation must request a questionnaire and return it duly completed within 37 days of the date of notification of the sample selection, unless otherwise specified.

However, exporting producers claiming an individual subsidy amount should be aware that the Commission may nonetheless decide not to determine their individual subsidy amount if, for instance, the number of exporting producers is so large that such determination would be unduly burdensome and would prevent the timely completion of the investigation.

5.2.2. Investigating unrelated importers (4) (5)

Unrelated importers of the product under investigation from the country concerned to the Union are invited to participate in this investigation.

In view of the potentially large number of unrelated importers involved in this proceeding and in order to complete the investigation within the statutory time limits, the Commission may limit to a reasonable number the unrelated importers that will be investigated by selecting a sample (this process is also referred to as ‘sampling’). The sampling will be carried out in accordance with Article 27 of the basic Regulation.

In order to enable the Commission to decide whether sampling is necessary and, if so, to select a sample, all unrelated importers, or representatives acting on their behalf, are hereby requested to make themselves known to the Commission. These parties must do so within 15 days of the date of publication of this Notice in the Official Journal of the European Union, unless otherwise specified, by providing the Commission with the information on their company(ies) requested in Annex II to this Notice.

In order to obtain information it deems necessary for the selection of the sample of unrelated importers, the Commission may also contact any known associations of importers.

All interested parties wishing to submit any other relevant information regarding the selection of the sample, excluding the information requested above, must do so within 21 days of the publication of this Notice in the Official Journal of the European Union, unless otherwise specified.

If a sample is necessary, the importers may be selected based on the largest representative volume of sales of the product under investigation originating in the country concerned in the Union which can reasonably be investigated within the time available. All known unrelated importers and associations of importers will be notified by the Commission of the companies selected to be in the sample.

In order to obtain information it deems necessary for its investigation, the Commission will send questionnaires to the sampled unrelated importers and to any known association of importers. These parties must submit a completed questionnaire within 37 days from the date of the notification of the sample selection, unless otherwise specified.

5.3. Procedure for the determination of injury and investigating Union producers

A determination of injury is based on positive evidence and involves an objective examination of the volume of the subsidised imports, their effect on prices on the Union market and the consequent impact of those imports on the Union industry. In order to establish the situation of the Union industry, Union producers of the product under investigation are invited to participate in the Commission investigation.

Investigating Union producers

In view of the large number of Union producers involved in this proceeding and in order to complete the investigation within the statutory time limits, the Commission has decided to limit to a reasonable number the Union producers that will be investigated by selecting a sample (this process is also referred to as ‘sampling’). The sampling is carried out in accordance with Article 27 of the basic Regulation.

The Commission has provisionally selected a sample of Union producers. Details can be found in the file for inspection by interested parties. Interested parties are hereby invited to consult the file (for this they should contact the Commission using the contact details provided in section 5.7 below). Other Union producers, or representatives acting on their behalf, that consider that there are reasons why they should be included in the sample must contact the Commission within 15 days of the date of publication of this Notice in the Official Journal of the European Union. All interested parties wishing to submit any other relevant information regarding the selection of the sample must do so within 21 days of the publication of this Notice in the Official Journal of the European Union, unless otherwise specified.

All known Union producers and/or associations of Union producers will be notified by the Commission of the companies finally selected to be in the sample.

In order to obtain information it deems necessary for its investigation, the Commission will send questionnaires to the sampled Union producers and to any known association of Union producers. These parties must submit a completed questionnaire within 37 days from the date of the notification of the sample selection, unless otherwise specified.

5.4. Procedure for the assessment of Union interest

Should the existence of subsidisation and injury caused thereby be established, a decision will be reached, pursuant to Article 31 of the basic Regulation, as to whether the adoption of anti-subsidy measures would not be against the Union interest. Union producers, importers and their representative associations, users and their representative associations, and representative consumer organisations are invited to make themselves known within 15 days of the date of publication of this Notice in the Official Journal of the European Union, unless otherwise specified. In order to participate in the investigation, the representative consumer organisations have to demonstrate, within the same deadline, that there is an objective link between their activities and the product under investigation.

Parties that make themselves known within the above deadline may provide the Commission with information on the Union interest within 37 days of the date of publication of this Notice in the Official Journal of the European Union, unless otherwise specified. This information may be provided either in a free format or by completing a questionnaire prepared by the Commission. In any case, information submitted pursuant to Article 31 of the basic Regulation will only be taken into account if supported by factual evidence at the time of submission.

5.5. Other written submissions

Subject to the provisions of this Notice, all interested parties are hereby invited to make their views known, submit information and provide supporting evidence. Unless otherwise specified, this information and supporting evidence must reach the Commission within 37 days of the date of publication of this Notice in the Official Journal of the European Union.

5.6. Possibility to be heard by the Commission investigation services

All interested parties may request to be heard by the Commission investigation services. Any request to be heard should be made in writing and should specify the reasons for the request. For hearings on issues pertaining to the initial stage of the investigation the request must be submitted within 15 days of the date of publication of this Notice in the Official Journal of the European Union. Thereafter, a request to be heard must be submitted within the specific deadlines set by the Commission in its communication with the parties.

5.7. Instructions for making written submissions and sending completed questionnaires and correspondence

Information submitted to the Commission for the purpose of trade defence investigations shall be free from copyrights. Interested parties, before submitting to the Commission information and/or data which is subject to third party copyrights, must request specific permission to the copyright holder explicitly allowing a) the Commission to use the information and data for the purpose of this trade defence proceeding and b) to provide the information and/or data to interested parties to this investigation in a form that allows them to exercise their rights of defence.

All written submissions, including the information requested in this Notice, completed questionnaires and correspondence provided by interested parties for which confidential treatment is requested shall be labelled ‘Limited’ (6). Parties submitting information in the course of this investigation are invited to reason their request for confidential treatment.

Parties providing ‘Limited’ information are required to furnish non-confidential summaries of it pursuant to Article 29(2) of the basic Regulation, which will be labelled ‘For inspection by interested parties’. These summaries should be sufficiently detailed to permit a reasonable understanding of the substance of the information submitted in confidence. If a party providing confidential information fails to show good cause for a confidential treatment request or does not furnish a non-confidential summary of it in the requested format and quality, the Commission may disregard such information unless it can be satisfactorily demonstrated from appropriate sources that the information is correct.

Interested parties are invited to make all submissions and requests by email including scanned powers of attorney and certification sheets, with the exception of voluminous replies which shall be submitted on a CD-ROM or DVD by hand or by registered mail. By using email, interested parties express their agreement with the rules applicable to electronic submissions contained in the document ‘CORRESPONDENCE WITH THE EUROPEAN COMMISSION IN TRADE DEFENCE CASES’ published on the website of the Directorate-General for Trade: http://trade.ec.europa.eu/doclib/docs/2011/june/tradoc_148003.pdf The interested parties must indicate their name, address, telephone and a valid email address and they should ensure that the provided email address is a functioning official business email which is checked on a daily basis. Once contact details are provided, the Commission will communicate with interested parties by email only, unless they explicitly request to receive all documents from the Commission by another means of communication or unless the nature of the document to be sent requires the use of a registered mail. For further rules and information concerning correspondence with the Commission including principles that apply to submissions by email, interested parties should consult the communication instructions with interested parties referred to above.

Commission address for correspondence:

European Commission Directorate-General for Trade Directorate H Office: CHAR 04/039 1049 Bruxelles/Brussel BELGIQUE/BELGIË Email addresses : TRADE-AS646-EBIKES-SUBSIDY@ec.europa.eu TRADE-AS646-EBIKES-INJURY@ec.europa.eu

6. Non-cooperation

In cases where any interested party refuses access to or does not provide the necessary information within the time limits, or significantly impedes the investigation, provisional or final findings, affirmative or negative, may be made on the basis of facts available, in accordance with Article 28 of the basic Regulation.

Where it is found that any interested party has supplied false or misleading information, the information may be disregarded and use may be made of facts available.

If an interested party does not cooperate or cooperates only partially and findings are therefore based on facts available in accordance with Article 28 of the basic Regulation, the result may be less favourable to that party than if it had cooperated.

Failure to give a computerised response shall not be deemed to constitute non-cooperation, provided that the interested party shows that presenting the response as requested would result in an unreasonable extra burden or unreasonable additional cost. The interested party should immediately contact the Commission.

7. Hearing Officer

Interested parties may request the intervention of the Hearing Officer in trade proceedings. The Hearing Officer acts as an interface between the interested parties and the Commission investigation services. The Hearing Officer reviews requests for access to the file, disputes regarding the confidentiality of documents, requests for extension of time limits and requests by third parties to be heard. The Hearing Officer may organise a hearing with an individual interested party and mediate to ensure that the interested parties' rights of defence are being fully exercised.

A request for a hearing with the Hearing Officer should be made in writing and should specify the reasons for the request. For hearings on issues pertaining to the initial stage of the investigation the request must be submitted within 15 days of the date of publication of this Notice in the Official Journal of the European Union. Thereafter, a request to be heard must be submitted within specific deadlines set by the Commission in its communication with the parties.

For further information and contact details interested parties may consult the Hearing Officer's web pages on DG Trade's website http://ec.europa.eu/trade/trade-policy-and-you/contacts/hearing-officer/

8. Schedule of the investigation

The investigation will be concluded, pursuant to Article 11(9) of the basic Regulation within 13 months of the date of the publication of this Notice in the Official Journal of the European Union. In accordance with Article 12(1) of the basic Regulation, provisional measures may be imposed no later than nine months from the publication of this Notice in the Official Journal of the European Union.

9. Processing of personal data

Any personal data collected in this investigation will be treated in accordance with Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data (7).

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

(2) An exporting producer is any company in the country concerned which produces and exports the product under investigation to the Union market, either directly or via a third party, including any of its related companies involved in the production, domestic sales or exports of the product under investigation.

(3) Pursuant to Article 15(3) of the basic Regulation, any zero and de minimis amounts of countervailable subsidies and amounts of countervailable subsidies established in the circumstances referred to in Article 28 of the basic Regulation shall be disregarded.

(4) Only importers not related to exporting producers can be sampled. Importers that are related to exporting producers have to fill in Annex I to the questionnaire for these exporting producers. In accordance with Article 127 of Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation (EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs Code (OJ L 343, 29.12.2015, p. 558), two persons shall be deemed to be related if: (a) they are officers or directors of the other person's business; (b) they are legally recognised partners in business; (c) they are employer and employee; (d) a third party directly or indirectly owns, controls or holds 5 % or more of the outstanding voting stock or shares of both of them; (e) one of them directly or indirectly controls the other; (f) both of them are directly or indirectly controlled by a third person; (g) together they control a third person directly or indirectly; or (h) they are members of the same family. Persons shall be deemed to be members of the same family only if they stand in any of the following relationships to one another: (i) husband and wife, (ii) parent and child, (iii) brother and sister (whether by whole or half blood), (iv) grandparent and grandchild, (v) uncle or aunt and nephew or niece, (vi) parent-in-law and son-in-law or daughter-in-law, (vii) brother-in-law and sister-in-law. In this context ‘person’ means any natural or legal person.

(5) The data provided by unrelated importers may also be used in relation to aspects of this investigation other than the determination of subsidisation.

(6) A ‘Limited’ document is a document which is considered confidential pursuant to Article 29 of Regulation (EU) 2016/1037 and Article 12 of the WTO Agreement on Subsidies and Countervailing Measures. It is also a document protected pursuant to Article 4 of Regulation (EC) No 1049/2001 of the European Parliament and of the Council (OJ L 145, 31.5.2001, p. 43).

(7) OJ L 8, 12.1.2001, p. 1.

ANNEX I Text of image ☐ ‘Limited’ version (1) ☐ Version ‘For inspection by interested parties’ (tick the appropriate box) ANTI-SUBSIDY PROCEEDING CONCERNING IMPORTS OF ELECTRIC BICYCLES ORIGINATING IN THE PEOPLE’S REPUBLIC OF CHINA INFORMATION FOR THE SELECTION OF THE SAMPLE OF EXPORTING PRODUCERS IN THE PEOPLE’S REPUBLIC OF CHINA This form is designed to assist exporting producers in the People’s Republic of China in responding to the request for sampling information made in point 5.2.1(a) of the notice of initiation. Both the ‘Limited’ version and the version ‘For inspection by interested parties’ should be returned to the Commission as set out in the notice of initiation. 1. IDENTITY AND CONTACT DETAILS Supply the following details about your company: Company name Address Contact person Email address Telephone Fax 2. TURNOVER AND SALES VOLUME Indicate the turnover in the accounting currency of the company during the period from 1 October 2016 to 30 September 2017 (‘the investigation period’) for sales (export sales to the Union for each of the 28 Member States (2) separately and in total, and domestic sales) of electric bicycles as defined in the notice of initiation and the corresponding volume. State the currency used. Pieces Value in accounting currency Specify the currency used Export sales to the Union, for each of the 28 Member States separately and in total, of the product under investigation, manufactured by your company Total: Name each Member State (1): Domestic sales of the product under investigation, manufactured by your company (1) Add additional rows where necessary. (1) This document is for internal use only. It is protected pursuant to Article 4 of Regulation (EC) No 1049/2001 of the European Parliament and of the Council (OJ L 145, 31.5.2001, p. 43). It is a confidential document pursuant to Article 29 of Regulation (EU) 2016/1037 of the European Parliament and of the Council (OJ L 176, 30.6.2016, p. 55) and Article 12 of the WTO Agreement on Subsidies and Countervailing Measures. (2) The 28 Member States of the European Union are: Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden, and the United Kingdom. Text of image 3. ACTIVITIES OF YOUR COMPANY AND RELATED COMPANIES (1) Give details of the precise activities of the company and all related companies (please list them and state the relationship to your company) involved in the production and/or selling (export and/or domestic) of the product under investigation. Such activities could include but are not limited to purchasing the product under investigation or producing it under sub-contracting arrangements, or processing or trading the product under investigation. Please list also all related companies involved in the production and/or selling of one or more of the following inputs used in the production of the product under investigation: engine (either hub or centre), battery, bicycle parts, Company name and location Activities Relationship 4. OTHER INFORMATION a) Please provide an English version of the company’s annual report and/or annual accounts for 2016. b) Please indicate the total amount of your company’s investments relating to the product under investigation for the years 2014, 2015, 2016 and the period from 1 October 2016 to 30 September 2017 (in the accounting currency of the company). (Specify the currency used) 2014 2015 2016 1.10.2016 to 30.9.2017 Total amount of investments c) Please indicate with regard to engine (either hub or centre), battery, and bicycle parts the percentage of the imported inputs used for the production of the product under investigation versus the same inputs produced locally for the investigation period. Only for the locally produced inputs please fill in the table below with regard to the main suppliers: Company name and location State owned (Yes/No) Share of State ownership d) Please indicate whether in 2014, 2015, 2016 and the period from 1 October 2016 to 30 September 2017 you generated electricity yourself and, if so, what was the percentage of such generation compared to the electricity purchased in the Chinese relevant market. e) Please list the land use rights granted to your company used in your manufacturing activities for the production of the product under investigation. f) Please provide any other relevant information which the company considers useful to assist the Commission in the selection of the sample. (1) In accordance with Article 127 of Commission Implementing Regulation (EU) 2015/2447 of 24 November 2015 laying down detailed rules for implementing certain provisions of Regulation (EU) No 952/2013 of the European Parliament and of the Council laying down the Union Customs Code (OJ L 343, 29.12.2015, p. 558), two persons shall be deemed to be related if: (a) they are officers or directors of the other person’s business; (b) they are legally recognised partners in business; (c) they are employer and employee; (d) a third party directly or indirectly owns, controls or holds 5 % or more of the outstanding voting stock or shares of both of them; (e) one of them directly or indirectly controls the other; (f) both of them are directly or indirectly controlled by a third person; (g) together they control a third person directly or indirectly; or (h) they are members of the same family. Persons shall be deemed to be members of the same family only if they stand in any of the following relationships to one another: (i) husband and wife, (ii) parent and child, (iii) brother and sister (whether by whole or half blood), (iv) grandparent and grandchild, (v) uncle or aunt and nephew or niece, (vi) parent-in-law and son-in-law or daughter-in-law, (vii) brother-in-law and sister-in-law. In this context ‘person’ means any natural or legal person. Text of image 5. INDIVIDUAL AMOUNT OF SUBSIDISATION The company declares that, in the event that it is not selected to be in the sample, it would like to receive a questionnaire and other claim forms in order to fill these in and thus claim an individual amount of subsidisation in accordance with section 5.2.1(b) of the notice of initiation. ☐ Yes ☐ No 6. CERTIFICATION By providing the above information, the company agrees to its possible inclusion in the sample. If the company is selected to be part of the sample, this will involve completing a questionnaire and accepting a visit at its premises in order to verify its response. If the company indicates that it does not agree to its possible inclusion in the sample, it will be deemed not to have cooperated in the investigation. The Commission’s findings for non-cooperating exporting producers are based on facts available and the result may be less favourable to that company than if it had cooperated. Signature of authorised official: Name and title of authorised official: Date: