TWENTY-FIRST ANNUAL REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT ON THE COMMUNITY'S ANTI-DUMPING, ANTI-SUBSIDY AND SAFEGUARD ACTIVITIES - OVERVIEW OF THE MONITORING OF THIRD COUNTRY ANTI-DUMPING, ANTI-SUBSIDY AND SAFEGUARD CASES - (2002)

CONTENTS

Executive summary

1. Overview of the legislation

1.1. Anti-dumping and anti-subsidy

1.1.1. The international framework

1.1.2. The Community legislation

1.1.2.1. The legislation covered by the Treaty establishing the European Community

1.1.2.2. The legislation covered by the Treaty establishing the European Coal and Steel Community (ECSC Treaty)

1.1.3. Changes to the Community legislation in 2002

1.1.3.1. Changes to the anti-dumping basic Regulation

1.1.3.2. Changes to the anti-subsidy basic Regulation

1.2. Safeguards

1.2.1. The international framework

1.2.2. The Community legislation

1.2.3. Proposal for a Regulation on safeguards and phasing out of certain quotas for imports originating in the People's Republic of China

1.3. Anti-subsidy and unfair pricing instrument for airline services

2. BASIC CONCEPTS

2.1. Anti-dumping and anti-subsidy

2.1.1. What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties

2.1.1.1. Dumping and subsidies

2.1.1.2. Material injury and causation

2.1.1.3. Community interest

2.1.2. Procedure

2.2. Safeguards

2.2.1. What are safeguard measures

2.2.2. Procedure

3. The Trade Defence Instruments' services

4. Co-operation with the European Parliament

5. General overview of anti-dumping and anti-subsidy investigations and measures

5.1. New investigations

5.2. Review investigations

6. Overview of activities in 2002

6.1. New investigations

6.1.1. Initiations

6.1.2. Provisional measures

6.1.3. Definitive measures

6.1.3.1. Overview

6.1.4. Investigations terminated without measures

6.2. Review investigations

6.2.1. Expiry reviews

6.2.1.1. Initiations

6.2.1.2. Reviews concluded with confirmation of duty(ies)

6.2.1.3. Details on some individual cases (in chronological order)

6.2.1.4. Reviews concluded by termination

6.2.1.5. Details on some individual cases (in chronological order)

6.2.2. Interim reviews

6.2.3. Other" interim" reviews

6.2.4. New exporter reviews

6.2.5. Absorption investigations

6.2.6. Circumvention investigations

6.3. Safeguard investigations

6.3.1. Safeguard on steel products

7. Monitoring of undertakings

8. Refunds

9. Judicial review : decisions by the Court of Justice / Court of First Instance

9.1. Overview of the judicial reviews in 2002

9.2. Cases pending

9.3. New cases

9.4. Judgments rendered by the Court of First Instance

9.4.1. Certain footwear with textile uppers originating, inter alia, in the People's Republic of China

9.4.2. Farmed Atlantic salmon originating in Norway

9.4.3. DRAMs originating in Japan

9.4.4. Certain electrolytic aluminium capacitors originating in Japan, Korea and Taiwan

9.4.5. Stainless steel fasteners originating , inter alia, in India

9.5. Order rendered by the Court of First Instance

9.5.1. Ferro-silicon originating in China, Kazakhstan, Russia and Ukraine

10. Anti-dumping and anti-subsidy investigations of third countries concerning imports from the Community or its Member States

10.1. Anti-dumping cases against the Community or its Member States

10.1.1. Overview

10.1.2. Details on some individual cases

10.1.2.1. USA - Low enriched uranium from France, Germany, the Netherlands and the UK

10.1.2.2. USA - Stainless steel bars from France, Germany, Italy and the UK

10.1.2.3. USA - Cold-rolled steel from Belgium, France, Germany, the Netherlands, Spain and Sweden

10.1.2.4. USA - Structural steel beams from Germany, Italy, Luxembourg and Spain

10.1.2.5. India - Cold rolled flat products of stainless steel from the Community

10.1.2.6. India - Hot-rolled coils, sheets and plates from the Community

10.1.2.7. India - Catalysts from Denmark

10.1.2.8. Turkey - Polyvinyl chloride from Belgium, Finland, Germany, Greece, Italy and the Netherlands

10.1.2.9. China - Catechol from the Community

10.1.2.10. China - Caprolactam from Belgium, Germany and the Netherlands

10.1.2.11. Thailand - Flat cold-rolled steel from the Community

10.1.2.12. South Africa - Self-copy paper from Belgium, Germany and the United Kingdom

10.1.2.13. Andean Community - Sorbitol from France

10.1.2.14. USA - Oil country tubular goods (OCTG) from Austria, France and Germany

10.1.2.15. India - X-ray baggage inspection multi energy systems (XBIS) from the Community

10.2. Anti-subsidy cases against the Community or its Member States

10.2.1. Overview

10.2.2. Details on some individual cases

10.2.2.1. USA - Low enriched uranium from France, Germany, the Netherlands and the United Kingdom (See anti-dumping case)

10.2.2.2. USA - Stainless steel bars from Italy (See anti-dumping case)

10.2.2.3. USA - Carbon and alloy wire rod from Germany

10.2.2.4. Australia - Canned tomatoes from Italy

10.2.2.5. Peru - Olive oil from the Community

10.2.2.6. USA - Cold-rolled carbon steel products from France

10.2.2.7. USA - Oil country tubular goods from Austria

11. Safeguard measures concerning the Community

11.1. Overview

11.2. Details on some individual cases

11.2.1. United States, China, Poland, Hungary, Czech Republic and Canada - Steel

11.2.2. Russia - Ball bearings from the Community

11.2.3. Russia - Wallpaper from the Community

11.2.4. Czech Republic - Steel pipes from the Community

11.2.5. Ukraine - Instant Coffee from the Community

11.2.6. Poland - Water Heaters from the Community

12. Activities in the framework of the World Trade Organization (WTO)

12.1. Dispute settlement in the field of anti-dumping, anti-subsidy and safeguards

12.1.1. Overview of the WTO dispute settlement procedure

12.1.2. Dispute settlement procedures initiated by the Community

12.1.2.1. USA - Privatisation methodology (countervailing duties) (DS212)

12.1.2.2. USA - Countervailing measures on corrosion-resistant carbon steel flat products from Germany (DS213)

12.1.2.3. USA - The Dumping and Subsidisation Offset Act (DS217/234)

12.1.2.4. Argentina - ceramic floor tiles (DS189)

12.1.2.5. USA - steel (201 safeguard) (DS248)

12.1.2.6. Argentina - canned peaches (DS238)

12.1.2.7. USA - Safeguard measures on circular welded carbon quality line pipe (DS 202/214)

12.1.2.8. USA - Cut-to-length plate from Germany and corrosion-resistant carbon steel flat products from Germany and France (DS262)

12.1.3. Dispute settlement procedures initiated by third countries against the Community.

12.1.3.1. India - anti-dumping duties on imports of cotton-type bed linen

12.1.3.2. Brazil - anti-dumping duties on malleable cast iron tube or pipe fittings

12.2. Other WTO activities

13. Conclusion

LIST OF ANNEXES

ANNEXES : SUMMARY

ANNEX A // New investigations initiated during the period 1 January - 31 December 2002

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX B // New investigations initiated

A. by product sector during the period 1998 - 2002 (31 December)

B. by country of export during the period 1998 - 2002 (31 December)

ANNEX C // New investigations concluded by the imposition of provisional duties during the period 1 January - 31 December 2002

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX D // New investigations concluded by the imposition of definitive duties during the period 1 January - 31 December 2002

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX E // New investigations terminated without imposition of measures during the period 1 January - 31 December 2002

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX F // Expiry reviews initiated or concluded during the period 1 January - 31 December 2002

ANNEX G // Interim reviews initiated or concluded during the period 1 January - 31 December 2002

ANNEX H // Other reviews concluded during the period 1 January - 31 December 2002

ANNEX I // New exporter reviews initiated or concluded during the period 1 January - 31 December 2002

A. Anti-dumping investigations

B. Anti-subsidy investigations (accelerated reviews)

ANNEX J // Anti-absorption investigations initiated or concluded during the period 1 January - 31 December 2002

ANNEX K // Anti-circumvention investigations initiated or concluded during the period 1 January 31 December 2002

ANNEX L // Safeguard investigations initiated or concluded during the period 1 January - 31 December 2002

ANNEX M // Undertakings accepted or repealed during the period 1 January - 31 December 2002

ANNEX N // Measures which expired during the period 1 January - 31 December 2002

ANNEX O // Definitive anti-dumping measures in force on 31 December 2002

A. Ranked by product

B. Ranked by country

ANNEX P // Definitive anti-subsidy measures in force on 31 December 2002

A. Ranked by product

B. Ranked by country

ANNEX Q // Undertakings in force on 31 December 2002

A. Ranked by product

B. Ranked by country

ANNEX R // Anti-dumping & anti-subsidy investigations pending on 31 December 2002 :

A. New investigations (ranked by product)

B. Review investigations (ranked by product)

C. Ranked by country (new & review investigations)

ANNEX S // Refunds during the period 1 January - 31 December 2002

ANNEXT // Court cases

A. Court cases pending before the Court of Justice and the Court of First Instance of the European Communities on 31 December 2002

B. Judgments, orders and other decisions rendered by the Court of Justice and the Court of First Instance of the European Communities during 2002

ANNEX U // Anti-dumping and anti-subsidy investigations of third countries concerning imports from the Community or its Member States during 2002

A. Anti-dumping investigations

B. Anti-subsidy investigations

ANNEX V // Third country safeguard actions during 2002

Executive summary

This report is submitted to the European Parliament following its resolution of 16 December 1981 on the Community's anti-dumping activities [1], and the report of the European Parliament's Committee on industry, external trade, research and energy [2].

[1] OJ C 11, 18.1.1982, p.37

[2] PE 141.178/fin of 30.11.1990, reporter Mr Gijs DE VRIES.

Moreover, the European Parliament adopted a report prepared by MEP Michel Hansenne in October 2002, based on the Commission's 19th Annual Report. Generally, the Parliament was supportive of the application of the anti-dumping instrument by the Community and brought forward suggestions to improve the present situation in some selected areas. Further details are given under heading 4.

This 2002 report also gives an overview of the Community legislation in force with regard to trade defence instruments. This chapter covers, inter alia, the adoption by the Council in 2002 of transitional provisions to be applied to products falling under the application of the ECSC Treaty. As the ECSC Treaty expired on 23 July 2002, it was necessary to specify that now all pending investigations, complaints and applications submitted pursant to the former ECSC legislation and all measures adopted under this legislation would be covered by the basic anti-dumping and anti-subsidy Regulations.

Furthermore, the Commission introduced two proposals amending the basic anti-dumping and anti-subsidy Regulations, which were adopted by the Council on 5 November 2002. The amendments consist, inter alia, of the recognition of Russia as a market economy country.

The report further summarises the developments in general policy. As last year, the report no longer contains a commentary on each individual case. It gives an overview of all investigations together with the most essential information, such as for instance the duty imposed. In turn, cases which merit some special attention are treated in more detail. Consequently, the report is more factual and condensed and covers the essential facts of the year. The detailed annexes which cover all cases ensure that the factual content of the report remains meaningful and sufficient to understand the activity in 2002.

As regards the 2002 activities, a total of 33 new investigations were concluded, of which 28 by the imposition of definitive anti-dumping or countervailing measures and 5 by termination. In a further 17 investigations, provisional measures were imposed.

As regards the expiry review investigations, 13 investigations were initiated and 6 terminated. In 12 cases, the investigations were concluded with confirmation of the duty. As for the interim review investigations, 36 were initiated, 10 terminated and 9 concluded with confirmation or amendment of the duty. Of the 36 initiations, however, 15 concerned partial interim reviews of a specific type, namely limited to the form of the existing measures which did not appear sufficient to counteract the dumping which has caused injury and/or which did not cater for situations in which imported goods had been damaged before entry into free circulation.

It should be noted that this version of the report has been extended to include the safeguard activities. This subject was only briefly mentioned in previous reports since the Community had not adopted any safeguard measures since the entry into force of the 1994 WTO Agreement. In 2002, however, the Community adopted such measures vis-à-vis steel products. In particular, definitive safeguard measures were imposed on 7 steel products; the investigation concerning 11 other steel products was terminated. Three products were still being investigated at the end of 2002 but the investigations were terminated at the beginning of 2003.

As in previous years, this issue continues to provide an overview on the Court cases relating to the trade policy instruments. During 2002, five Judgments and one Order were rendered by the Court of First Instance (CFI). 2002 can be considered a very successful year in terms of defending trade defence actions before the CFI. In 4 out of the 5 Judgments, the Court confirmed the practices of the European Institutions.

The report also includes an overview of the activities in relation to anti-dumping, anti-subsidy and safeguard measures adopted by third countries. In particular, at the end of 2002, 118 anti-dumping, 26 anti-subsidy and 39 safeguard measures were in force against the Community or its Member States. It is confirmed that the Community is still second only to China as most affected territory by third country trade defence actions.

The chapter on activities in the framework of the World Trade Organisation (WTO) covers both dispute settlement procedures initiated by and against the Community. Furthermore, it deals with other activities, such as the first phase of negotiations on the Anti-dumping and Subsidies Agreements, in which the Commission played an active role by submitting negotiating proposals.

The annexes to this report provide easy access to the activities in table form.

This report is also available to the general public. The 2001 version was released in more or less 500 copies. (Internet Website http://europa.eu.int/comm/trade/policy/dumping/reports.htm)

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.

Since that time, considerable efforts have been made to harmonise the rules relating to trade 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 protective measures can be adopted. The Community played an active role in the negotiation of these relevant criteria which are reflected in its own legislation.

1.1.2. The Community legislation

1.1.2.1. The legislation covered by the Treaty establishing the European Community

The Community'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 Community, entered into force in March 1996 and October 1997. These are in line with the Anti-Dumping and Anti-Subsidy Agreements adopted during the GATT/WTO negotiations. The basic texts are :

- Council Regulation (EC) No 384/96 of 22 December 1995 on protection against dumped imports from countries not members of the European Community [3]

[3] OJ L 56, 6.3.1996, p. 1, as last amended by Council Regulation (EC) No 1972/2002 (OJ L 305, 7.11.2002, p. 1)

- Council Regulation (EC) No 2026/97 of 6 October 1997 on protection against subsidized imports from countries not members of the European Community [4]

[4] OJ L 288, 21.10.1997, p. 1, as last amended by Council Regulation (EC) No 1973/2002 (OJ L 305, 7.11.2002, p. 4)

These regulations will overall be referred to as the "basic Regulation(s)".

The Community legislation contains a number of provisions aimed at ensuring a balanced application of the Community's Anti-Dumping and Anti-Subsidy rules on all interested parties. These provisions include the "Community interest test" and the "lesser duty rule", which go beyond the WTO obligations.

The Community interest test is a public interest clause and states that measures can only be taken if they are not contrary to the overall interest of the Community. This requires an analysis of all the economic interests involved, including those of the domestic industry, users, consumers and intermediaries.

The lesser duty rule requires the measures imposed by the Community to be lower than the dumping or subsidy margin, if such lower duty rate is sufficient to remove the injury suffered by the Community industry.

1.1.2.2. The legislation covered by the Treaty establishing the European Coal and Steel Community (ECSC Treaty)

During the existence of the ECSC Treaty, specific legal texts [5] existed for products falling under the application of the ECSC Treaty. These texts addressed unfair trade practices and, on the basis of these texts, a number of anti-dumping and anti-subsidy measures were taken.

[5] Commission Decision No 2277/96/ECSC of 28 November 1996 on protection against dumped imports from countries not members of the European Coal and Steel Community (OJ L 308, 29.11.1996, p. 11), as last amended by Commission Decision No 435/2001/ECSC (OJ L 63, 3.3.2001, p. 14); and Commission Decision No 1889/98/ECSC of 3 September 1998 on protection against subsidized imports from countries not members of the European Coal and Steel Community (OJ L 245, 4.9.1998, p. 3)

As the ECSC Treaty expired on 23 July 2002 after 50 years of existence, it was necessary to specify that now all products would be covered by the basic Regulation(s) and that all existing measures or pending investigations on ECSC products would be governed by these Regulations.

Therefore, the Council, by Regulation (EC) No 963/2002 [6], laid down transitional provisions, which provided for all anti-dumping and anti-subsidy measures adopted and for all pending investigations, complaints and applications submitted pursuant to Decisions Nos 2277/96/ECSC and 1889/98/ECSC to be governed by the provisions of the respective basic Regulations, with effect from 24 July 2002.

[6] OJ L 149, 7.6.2002, p. 3, as last amended by Council Regulation (EC) No 1310/2002 (OJ L 192, 20.7.2002, p. 9)

1.1.3. Changes to the Community legislation in 2002

1.1.3.1. Changes to the anti-dumping basic Regulation

On 5 November 2002, the Council adopted Regulation (EC) No 1972/2002 [7] amending the basic anti-dumping Regulation.

[7] OJ L 305, 7.11.2002, p. 1

The amendment consisted, inter alia, of the formal recognition of Russia as a market economy country in the context of trade defence instruments, which is an acknowledgement of the important progress achieved in Russia in respecting market economy principles. In practical terms, this means that the calculation of dumping margins will no longer be based on information from an analogue country, but that, in all cases, the Russian companies' own costs and prices will be taken in consideration.

Other amendments consist of the clarification of the terms "related parties", "commissions" and "particular market situation that does not permit a proper comparison". Furthermore, the regulation gives indications as to what has to be done when certain costs on the exporting country market are distorted and clarifies the use of facts available and of certain criteria for granting "individual duty" to certain exporters from non-market economy countries and countries in transition.

This change applies to all investigations initiated pursuant to the basic anti-dumping Regulation after the date of entry into force of Regulation (EC) No 1972/2002, i.e. 8 November 2002.

1.1.3.2. Changes to the anti-subsidy basic Regulation

On 5 November 2002, the Council adopted Regulation (EC) No 1973/2002 [8] amending the basic anti-subsidy Regulation.

[8] OJ L 305, 7.11.2002, p. 4

The amendments had two main aims : first, as a matter of "housekeeping", the expiry of the WTO provisions on non-actionable subsidies had to be implemented by repealing the corresponding provisions in the Community's legislation. Second, the rules on subsidies in the form of provision of cheap goods or services were clarified to also cover situations where there is no market for the goods or services in the country concerned. In such a case, the amendments foresee that adjustments are made or world market prices used.

Furthermore, this change applies to all investigations initiated pursuant to the basic anti-subsidy Regulation after the date of entry into force of Regulation (EC) No 1973/2002, i.e. 8 November 2002.

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 short-term temporary defence measure (a "safety valve") that applies to all imports of the product covered by a measure, irrespective of origin [9].

[9] However, 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 (e.g. the People's Republic of China's Protocol)

Safeguards should only be adopted after a comprehensive investigation which provides evidence of the existence of a) unforeseen developments leading to b) increased imports c) the existence of a serious injury for domestic producers and d) a causal link between the imports and the injury.

1.2.2. The Community legislation

The above-mentioned principles are all reflected in the relevant Community regulations. Additionally, the adoption of measures in the Community 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 Community's interest to do so. The current Community safeguard instruments are covered by the following regulations :

- Council Regulation (EC) No 3285/94 [10] on the common rules of imports and repealing Regulation (EC) No 518/94

[10] OJ L 349, 31.12.94, p. 53, as last amended by Regulation (EC) No 2474/2000 (OJ L 286, 11.11.2000, p. 1)

- Council Regulation (EC) No 519/94 [11] on common rules for imports from certain third countries and repealing Regulations (EEC) Nos 1765/82, 1766/82 and 3420/83

[11] OJ L 67, 10.3.94, p. 89, as last amended by Regulation (EC) No 1138/98 (OJ L 159, 3.6.1998, p. 1)

- Council Regulation (EC) No 517/94 [12] 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 Community import rules.

[12] OJ L 67, 10.3.94, p. 1, as last amended by Regulation (EC) No 1309/2002 (OJ L 192, 20.7.2002, p. 1)

These regulations will overall be referred to as the "basic safeguard Regulation(s)".

1.2.3. Proposal for a Regulation on safeguards and phasing out of certain quotas for imports originating in the People's Republic of China

In June 2002, the Commission submitted to the Council a proposal on a transitional product-specific safeguard mechanism for imports originating in the People's Republic of China and amending Council Regulation (EC) No 519/94 on common rules for imports from certain third countries [13]. The proposal was consequently adopted by the Council and published in March 2003 [14].

[13] OJ C 227 E, 24.9.2002, p. 555

[14] L 65, 8.3.2003, p. 1

The regulation is an exact transposition into Community law of provisions contained in the Accession Protocol of the People's Republic of China to the WTO. It has two main pillars,

- the first pillar provides for rules to establish a Transitional Product-Specific Safeguard Mechanism (TPSSM) for imports from the People's Republic of China. Under this mechanism, the Community is allowed to impose specific measures, inter alia, duties, if imports from the People's Republic of China into the Community increase rapidly so as to cause market disruption to the Community industry. Measures can only be imposed if the Community interest calls for intervention. The high procedural standards contained in the Community's existing trade defence instruments are also applicable to this specific instrument. No measures can be imposed beyond 11 December 2013, when the TPSSM will cease to exist according to the provisions of the Accession Protocol.

- the second pillar foresees the gradual phasing-out of certain non-textile quotas (footwear, tableware and ceramics) until the total abolition of quotas in 2005.

At the same time, the regulation ensures that Council Regulation (EC) No 519/94 is no longer applicable to the People's Republic of China.

1.3. Anti-subsidy and unfair pricing instrument for airline services

In March 2002, the Commission adopted its proposal for a trade defence instrument concerning the supply of airline service from non-EC Countries [15]. The proposal foresees the adoption of redressive measures if subsidised or unfairly priced airline services cause material injury to Community carriers on certain routes to and from the Community.

[15] Proposal for a Regulation of the European Parliament and of the Council concerning protection against subsidisation from countries not members of the European Community (COM(2002)110 final of 12.3.2002).

This is the first new proposal for a trade defence instrument in the services sector since a similar instrument was adopted in 1986 concerning maritime services. It was prompted by the crisis in the airline sector at the end of 2001 which led some third-country governments to subsidise their airlines. This created increasing difficulties for the Community industry which had to compete with third country airlines benefiting from generous subsidies, while they were subject to strict rules on government aid.

The proposal draws from existing instruments in the area of trade in goods, in particular the basic anti-subsidy Regulation. It foresees the imposition of measures on two tracks : first, if subsidised airline services supplied by non-Community carriers cause material injury, or, as a second track, if such state-controlled carriers benefit from non-commercial advantages and charge injurious fares below the normal fare rate.

The European Parliament has adopted a set of amendments to this proposal [16], which are currently discussed in the Council. Adoption of the proposal is expected for mid 2003.

[16] EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION (COM(2002)110 - C5-0133/2002 - 202/0067 (COD))

2. BASIC CONCEPTS

2.1. Anti-dumping and anti-subsidy

2.1.1. What is dumping and what are countervailable subsidies - the material conditions for the imposition of duties

2.1.1.1. Dumping and subsidies

Dumping is traditionally defined as price discrimination between national markets, or as selling below cost of production. The Community's anti-dumping legislation defines anti-dumping as selling a product in the Community at a price below its "normal value". This "normal value" is usually the actual sales price on the domestic market of the exporting country. Therefore, a country is selling at dumped prices if the prices in its home market are higher than its export prices (i.e. price discrimination) .

Where sales in the domestic market are not representative, for instance because they have only been made in small quantities, the normal value may then be established on another basis, such as the sales prices of other producers on the domestic market or the cost of production. In the latter case, a company is selling at dumped prices if its export prices are below the cost of production.

A certain segregation of the market exists in the majority of the cases where dumping occurs on a more than incidental basis. That segregation may be caused, amongst other reasons, by government regulation or consumer preferences. As a result, exporters are shielded, at least to a certain degree, from international competition on their domestic market.

Subsidies can have similar effects to sales at dumped prices. They involve a direct support from a government which has the effect of conferring a benefit to producers or exporters (e.g. grants, tax and duty exemptions, preferential loans at below commercial rates, export promotion schemes, etc.), all aimed at allowing the exporters to sell at low prices in the Community.

2.1.1.2. Material injury and causation

For measures to be taken against these unfair trading practices, it is not sufficient that companies are exporting their products to the Community at dumped or subsidised prices. Measures can only be taken if these exports cause material injury to Community producers, who cannot compete on an equal footing with exporters.

Typical injury indicators are that the dumped and/or subsidised import volumes increase over a certain period and import prices undercut the sales prices of the Community industry. As a consequence, the latter is forced to decrease production volumes and sales prices thus losing market shares, making losses or having to make employees redundant. In extreme cases, exporters may try to eliminate viable Community producers by using a predatory pricing strategy. In any event, the injury analysis requires that all relevant factors be taken into account before deciding whether the Community industry is in fact suffering "material injury".

A further condition for the imposition of measures is the need for "causality": the injury must be caused by the dumping or the subsidy. This condition is fulfilled when the injury to the Community industry coincides with the increase in dumped and subsidised imports. It is important to note that the dumped or subsidised imports do not have to be the only cause of the injury.

2.1.1.3. Community interest

Finally, it has to be established that the application of measures would not be contrary to the overall interest of the Community. In this respect, the interests of all relevant economic operators which might be affected by the outcome of the investigation must be taken into account.

2.1.2. Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic Regulations. These rules guarantee a transparent, fair and objective proceeding by granting significant procedural rights to interested parties. In addition, the results of an investigation are published in the Official Journal, and the Community is obliged to justify its decisions in this publication. Finally, it is ensured that each case is decided on its merits and the Commission does not hesitate to terminate a case if the conditions to impose measures are not met.

Whereas each investigation is different depending on the products and countries involved, all cases follow the same procedural rules. However certain preferential rules apply to Central and Eastern European Countries and Turkey. The rules relating to a new case are summarised below.

Initiation

A case normally starts with a sufficiently substantiated complaint from the Community industry manufacturing the same or a similar product to the one referred to in the complaint. After receipt of this complaint, the Commission assesses whether the complaint contains sufficient evidence to allow for the initiation of the case. A case is opened by a notice of initiation published in the Official Journal. In this notice, all interested parties, including users and, where appropriate, consumer organisations, are invited to participate and co-operate in the proceedings. Detailed questionnaires are sent to producers in the exporting countries and in the Community, traders (in particular importers) and other interested parties, such as users. These parties are also informed that they can request a hearing and ask for access to the non-confidential files which will help them defend their case.

The investigation up to the provisional measures

Following receipt of the replies to the questionnaire, investigations are carried out by Commission officials at the premises of the co-operating parties.

The main purpose of these visits is to verify whether the information given in the questionnaires is reliable. The verified information is subsequently used to calculate or determine the dumping margin and the injury factors, in particular the price undercutting margin and injury elimination level. These calculations often involve the processing of thousands of transactions, and require a complex analysis of production costs.

The results of the calculations and other findings are summarised in a working document, on the basis of which it is decided - after consultation of the Member States in the Advisory Committee - whether to impose provisional measures or to terminate the proceedings. In either eventuality, at this stage the decision is the Commission's responsibility.

The investigation up to the definitive stage

Following the publication in the Official Journal of a Commission regulation imposing provisional duties, interested parties which so request receive a full disclosure which allows them to verify the Commission's calculations and to submit comments. Comments can also be made at a hearing. These provisional submissions and comments are taken into account when a second, definitive, working document is prepared by the Commission.

After final disclosure and consultation of the Member States on the basis of the second working document, the Commission makes a proposal to the Council whether or not to confirm the provisional measures and impose definitive measures. Another possibility is that the Commission accepts undertakings offered by exporters, which undertake to respect minimum prices. In the latter case, no duties are generally imposed on the companies from which undertakings are accepted.

The Council decides on the adoption of the Commission proposal by simple majority vote, i.e. at least eight Member States have to be in favour of the Commission proposal. The regulation imposing definitive duties, and deciding on the collection of the provisional duties, is published in the Official Journal.

In view of the findings made, it may also be decided to terminate a case without the imposition of measures. The same procedure (disclosure, comments, hearing, working document) as described above applies. The termination of the case would generally be made by a Commission Decision after consultation of the Member States.

Timing

The procedure described above is subject to strict statutory time limits. Thus, a decision to impose provisional duties must be taken within nine months of the initiation and the total duration of an investigation is limited to fifteen months (13 months in anti-subsidy cases). This leads to significant time constraints, taking into account, inter alia, internal consultations and the necessity to publish regulations and decisions in all Community languages at the same time.

Anti-dumping or countervailing measures will normally remain in force for five years, and may consist of duties or undertakings concluded with exporters. Measures are taken on a countrywide basis, but individual treatment, i.e. the application of a company-specific duty, can be granted to exporters which have co-operated throughout the investigation. During the five-year period, interested parties may, under certain conditions, request a review of measures or the refund of anti-dumping duties paid. Measures may also be suspended for a certain period, subject to given criteria.

The basic Regulations provide for administrative reviews and distinguish between interim reviews, newcomer reviews and expiry reviews. Those procedures are initiated normally only on the basis of substantiated evidence and will normally not exceed 12 months in length.

The expiry review is intended to determine if the expiry of the measures would lead to continuation or recurrence of dumping and injury. During the five year period, the Commission may perform an interim review. Under the latter procedure, the Commission will consider whether the circumstances with regard to subsidy/dumping and injury have changed significantly or whether existing measures are achieving the intended results in removing the injury. Finally, the basic Regulations provide that a review shall be carried out to determine individual margins for new exporters in the exporting country concerned.

Judicial reviews

The procedural rights of the parties, including hearings and access to non-confidential files, are respected in the course of the proceeding, and a system of judicial review is in place to ensure their correct implementation. The competence to review anti-dumping and anti-subsidy cases lies with the Court of First Instance and the Court of Justice in Luxembourg. Furthermore, the possibility of recourse to the WTO dispute settlement mechanism exists for WTO members.

2.2. Safeguards

2.2.1. What are safeguard measures

Safeguard measures are a "safety valve" which allow temporary protection against the adverse effects of import surges. Under the Community legislation [17] implementing the WTO Safeguards Agreement, they can be applied under the following conditions : safeguard measures may be imposed if, as a result of unforeseen developments, a product is being imported into the Community in such increased quantities and/or on such terms and conditions as to cause, or threaten to cause, serious injury to Community producers of like or directly competitive products. Safeguard measures may only be imposed to the extent and for such time as may be necessary to prevent or remedy the injury.

[17] Council Regulation (EC) No 3285/94 on common rules for imports

2.2.2. Procedure

Investigations are carried out in accordance with the procedural rules laid down in the basic safeguard Regulations. These rules guarantee a transparent, fair and objective proceeding. In addition, the results of safeguard investigations are published in the Official Journal, and the Community is obliged to justify its decisions in this publication.

Initiation

The Commission is informed by one or more Member States should trends in imports of a certain product appear to call for safeguard measures. This information must contain evidence available, of the following criteria : a) the volume of imports, b) the price of imports, c) trends in certain economic factors such as production, capacity utilisation, stocks, sales, market share, prices, profits, employment, etc. and d) facts other than trends. Where there is a threat of serious injury, the Commission must also examine whether it is clearly foreseeable that a particular situation is likely to develop into actual injury.

This information is immediately passed on by the Commission to all other Member States, at which stage consultations are held within the Advisory Safeguard Committee. If there is sufficient evidence to justify an investigation, the Commission publishes a notice of initiation on the Official Journal within one month of receipt of the information and commences the investigation, acting in co-operation with the Member States.

Provisional measures

Provisional measures may be imposed at any stage of the investigation. They shall be applied in critical circumstances where delay would cause damage which would be difficult to repair, making immediate action necessary, and where a preliminary determination provides clear evidence that increased imports have caused, or are threatening to cause, serious injury.

The duration of the provisional measures can, however, not exceed 200 days (i.e. 6 months).

Definitive measures

If, at the end of the investigation, the Commission considers that definitive safeguard measures are necessary, it will take the necessary decisions no later than nine months from the initiation of the investigation, at which stage the results of the investigation are being published in the Official Journal. In exceptional circumstances, this time limit may be extended by a further maximum period of two months, provided a notice is published in the Official Journal specifying the duration of the extension and a summary of its reasons.

Safeguard measures shall be applied only to the extent to prevent or remedy serious injury, thereby maintaining as far as possible traditional trade flows. As to the form of the measures, the Community will choose the measures most suitable in order to achieve these objectives. These measures could consist of quantitative quotas, tariff quotas, etc.

Duration and review of the measures

The duration of safeguard measures must be limited to the period of time necessary to prevent or remedy serious injury and to facilitate adjustments on the part of the Community producers, but should not exceed four years, including the duration of the provisional measures, if any. Under certain circumstances, extensions may be necessary but the total period of application of safeguard measures should not exceed eight years.

If the duration of the measures exceeds one year, the measures must be progressively liberalised at regular intervals during the period of application. If the duration exceeds three years, the Commission should seek consultations with the Advisory Safeguard Committee in order to examine the effects of the measures, to determine the appropriateness of further liberalisation and to ascertain that the application of the measures is still necessary. Depending on the consultations, the measures may be revoked or amended.

3. THE TRADE DEFENCE INSTRUMENTS' SERVICES

A restructuring of the anti-dumping and anti-subsidy services took place in April 2002. This resulted in the creation of one Directorate covering all Trade Defence Instruments (TDI). The directorate now consists of 5 Units. Unit 1 is in charge of policy aspects (including WTO and complaints office) and Unit 2 monitors the activity of third countries on anti-dumping, anti-subsidy and safeguards. The other three units deal exclusively with investigations covering both the injury and dumping/subsidization aspects of the investigation.

4. CO-OPERATION WITH THE EUROPEAN PARLIAMENT

In the report prepared by MEP Michel Hansenne (mentioned in the introduction of this report), the European Parliament suggested a number of improvements to current practices, such as shorter deadlines for enforcing provisional measures and the introduction of deadlines in reviews. It called for better access of SMEs to trade defence instruments and more transparency, in particular by granting easier access to information and strenghtening the right to be heard. It took note of the new situation in regard to enlargement and requested the Commission to clarify whether present resources for handling trade defence instruments were sufficient. It underlined the importance of granting the Commission the means which it feels necessary to deal with the possible future improvements.

The European Parliament also urged the Commission to submit proposals within the WTO negotiations (Cancun Ministerial Conference) with the aim of harmonising investigations, improving transparency and preventing circumvention. It also insisted on making the lesser duty rule and the public interest test a WTO requirement, aspects which are already implemented at Community level. It further recommended to introduce general measures to reduce costs for companies under investigation. It also proposed a number of issues for improving the WTO Dispute settlement mechanism and asked for the WTO Safeguards Agreement to be added on the negotiation agenda.

In its reaction, the Commission welcomed this report and its recommendations. It was very timely as the Doha - WTO negotiations were about to gain momentum, with anti-dumping being high on the agenda.

The Commission generally acknowledged its interest to study the proposals put forward by the European Parliament, in particular in areas such as shortening deadlines, cost reductions and simplification of procedures for SMEs. At the same time, it stressed the need to assess the effect on its resources.

The Commission underlined that it had already put forward a number of issues, which fully coincide with the European Parliament's suggestions in the framework of the Doha negotiations on trade defence instruments (see heading 12.2). In particular, the Commission will continue to push that equally high standards are applied at world-wide level, thereby ensuring that the Community exporters are not put at a disadvantage.

The preparations for a smooth transition after the EU-enlargement are also well on the way. Contacts with the candidate countries have been established and information sessions have already been held and more are planned.

In this regard, the Trade Defence Instruments' services (TDI services) developed an "action plan" in order to ensure that the candidate countries are operative as of the first day of their accession. This "action plan" foresees that the TDI services will guide the candidate countries through the preparatory process of accession, inter alia, through a series of seminars and exchanges of views/information. These events are targeted at both candidate countries' administrations and at all economic operators concerned. They will take place both in Brussels and in the capitals of the candidate countries in order to reach as many participants as possible.

5. GENERAL OVERVIEW OF ANTI-DUMPING AND ANTI-SUBSIDY INVESTIGATIONS AND MEASURES

5.1. New investigations

At the end of 2002, the Community had 174 anti-dumping measures [18] and 19 countervailing measures in force. The anti-dumping measures covered 65 products and 34 countries (see Annex O); the countervailing measures covered 14 products and 8 countries (see Annex P). Of the measures, the large majority was in the form of duties; however, in a significant number of cases, undertakings were accepted.

[18] The measures are counted per product and country concerned.

Of the measures in force at the end of 2002, 32 concerned China, 24 India, 15 Taiwan, 12 Thailand, 11 the Republic of Korea, 11 Russia, 9 Indonesia, 6 Japan and 15 measures applied to countries with economies in transition or to non-market-economy countries, including Ukraine with 10 measures and Belarus with 5 measures. Thirty-one measures concerned one or more of the 10 Central and Eastern European Countries (CEEC) [19].

[19] These countries are : Romania, Bulgaria, Slovak Republic, Czech Republic, Slovenia, Hungary, Poland, Latvia, Lithuania and Estonia.

For a more realistic view of the impact of anti-dumping measures, however, one has to look at the trade volume of the products concerned, which varies considerably depending on the product sector. The biggest trade volumes are often generated by high technology, such as electronics, which are high-value products. It should be noted that in 2002, only 0,5% [20] of total imports into the Community was affected by anti-dumping or anti-subsidy measures.

[20] Source Comext.

TABLE 1

Anti-dumping and anti-subsidy new investigations

during the period 1 January 1998 - 31 December 2002 [21]

[21] The initiation of a case concerning several countries is accounted as separate investigations/proceedings per country involved.

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5.2. Review investigations

Anti-dumping measures, including price undertakings, may be subject, under the basic 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 circumvention investigations (Article 13).

Also anti-subsidy measures may be subject, under the basic 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 circumvention investigations (Article 23).

These reviews continue to represent a major part of the work of the Commission's TDI services. In the period from 1998 to 2002, a total of 198 review investigations were initiated. These review investigations represented almost 50% of all investigations.

In 2002, 55 reviews were initiated. Of these, 13 were expiry reviews, 36 interim reviews, 1 newcomer review, 2 accelerated reviews, 1 anti-absorption investigation and 2 circumvention investigations.

An overview of the review investigations in 2002 can be found in Annexes F to K. Table 2 provides statistical information for the years 1998 - 2002.

TABLE 2

Reviews of anti-dumping and anti-subsidy investigations

during the period 1 January 1998 - 31 December 2002 [22]

[22] The initiation of a case concerning several countries is accounted as separate investigations/proceedings per country involved.

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Details on the conclusions can be found under heading 6.2.

6. OVERVIEW OF ACTIVITIES IN 2002

6.1. New investigations

6.1.1. Initiations

In 2002, 23 investigations were initiated. Three of them concerned anti-subsidy investigations. They involved 13 different products from 14 different countries. Details of these investigations are given in Annex A. Most affected countries are China with 4 investigations, Russia and India with 3 investigations each, followed by Indonesia and the Faeroe Islands with 2 investigations each. As to the products, the most affected is the iron and steel sector and the chemical and allied sector.

In the five-year period from 1998 to 2002, 202 investigations were initiated on imports from 41 countries. The main sectors concerned by the investigations were iron and steel with 72 investigations, chemical and allied with 55 investigations and textiles and allied with 27 investigations. A breakdown of the product sectors is given in Annex B(A).

The main countries concerned during the period from 1998 to 2002 were India with 28 investigations, the People's Republic of China with 24 investigations, Korea with 20 investigations and Taiwan with 13 investigations. The investigations initiated over the last five years are broken down by country of export in Annex B(B).

The alphabetical list of cases initiated in 2002 can be found below, together with the name of the complainant. More information can be obtained from the Official Journal to which reference is given in Annex A.

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6.1.2. Provisional measures

In 2002, provisional duties were imposed in 17 proceedings, two of which concerned anti-subsidy proceedings. They involved imports from 13 different countries. As shown in Table 1 (see point 5.1), this figure compares to 18 in 2001 and 48 in 2000.

The alphabetical list of cases where provisional measures were imposed during 2002 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 C.

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6.1.3. Definitive measures

6.1.3.1. Overview

During 2002, definitive duties were imposed in 28 cases, three of which concerned anti-subsidy proceedings. They involved imports from 20 different countries and covered 9 products. India featured with 4 investigations, the People's Republic of China with 3 investigations, Ukraine, Indonesia and the Czech Republic with 2 investigations and all other countries with one investigation each.

The alphabetical list of cases where definitive measures were imposed during 2002 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. Annex D also gives some additional information on import and consumption volumes.

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Details on some individual cases (in chronological order)

1. Urea originating in Belarus, Bulgaria, Croatia, Estonia, Lithuania, Libya, Romania and the Ukraine

Urea is produced from natural gas and may take the form of a liquid or a solid. Urea is mainly used in the agricultural sector as a fertiliser and in the industrial sector as a raw material for certain glues and resins.

The investigation was originally initiated against 10 third countries. However, for two countries (Egypt and Poland), the injury margin was found to be de minimis and the proceeding against these two countries was terminated. Definitive measures were imposed against the remaining 8 countries by the Council on 19 January 2002, in the form of specific amounts of between EUR 4,12 to EUR 18,80 per tonne, whilst two offers of price undertakings were accepted from exporting producers in Bulgaria and Lithuania.

The economic interest of this case was quite high. Community consumption in the investigation period amounted to around 6,4 million tonnes and the value of the total imports from the countries concerned during the same period to around EUR 172 million.

This case was not only of importance in view of the economic interest involved, but also in view of several other aspects, such as the number of accession candidate countries involved, the first use of market economy treatment for Ukrainian companies and the calculation of injury margins at the level of individual Community producers rather than at the whole industry level.

Dumping

A relatively high number of accession candidate countries were subject to the proceeding. These countries enjoyed a preferential treatment as foreseen in the Europe Agreements [23] and the Declaration of the European Council of Essen of 28 November 1994 (Essen Declaration). This case was the first in which the Ukraine was recognised as an economy in transition and it was determined on an individual basis whether certain exporting producers operated under market economy conditions. As a result, market economy treatment was applied to two companies in the Ukraine. As such, domestic prices and costs for those companies were used as a basis to calculate the dumping margin. The request of a third Ukrainian company was rejected on the grounds that its prices and costs were not made in response to market forces. The State could, however, not interfere in this company's export activities as such. There was therefore no risk that anti-dumping measures could be circumvented and an individual duty was also calculated for this exporter, based on the exporter's own export prices. Normal value was based on domestic prices in an analogue country, in this case the USA.

[23] Bulgaria: OJ L 358, 31.12.1994, p.3; Estonia: OJ L 068, 9.3.1998, p.3; Lithuania: OJ L 051, 20.2.1998, p.3; Poland: OJ L 348, 31.12.1993, p.2; Romania: OJ L 357, 31.12.1994, p.2

Injury and causation of injury

The investigation showed that competition in the Community took place between individual exporting producers and Community producers. Significant price spreads were found with Community producers, depending upon whether they were based close to their main markets or to their suppliers of raw materials. This had a significant impact on the actual cost incurred by each producer and made price comparaisons at the whole Community level unreliable. As such, it was concluded that any injury to the Community industry should be assessed on the actual market situation and on the basis of specific data verified for each company. Accordingly, the injury margins were calculated by comparing prices of each Community producer to each co-operating exporting producer. On this basis, the injury margins found ranged between 3,89% and 21,04%.

Community interest

Another important aspect of this case was the interest shown by farmers and their representatives as major users of urea. As a result, the Commission carried out a review of the effect of all anti-dumping measures against fertilisers in order to assess the cumulative effect on farmers. This review was made independent of any particular proceeding. The results showed that, taken either in isolation or in conjunction with the other measures in force, the impact of the anti-dumping duties on urea would have only a minor impact on the costs of farmers. This impact was not sufficient to conclude that definitive measures were against the Community interest.

Taking all factors into account, definitive measures were imposed on the basis of the injury margins found, except for Lithuania where for the sole known exporting producer, the dumping margin was found to be lower than its injury margin. In application of the lesser duty rule, its duty was therefore based on the dumping margin found. For this company, the Commission accepted a price undertaking and likewise, the minimum price was calculated on the basis of the dumping margin.

2. Ferro-molybdenum originating in the People's Republic of China

For the first time, the European Commission had to withdraw a market economy status from a Chinese exporter because evidence revealed that the Chinese industry planned to abuse this exporter as a free channel for exports from other producers.

As usual in cases against China, the proceeding started with the invitation to all exporters to apply for market economy treatment (MET). This status is given to companies in countries with economies in transition, which can prove that they are independent from state influence and can take their business decision freely and based on commercial considerations. In this case, 6 exporters applied for MET, but only one exporter, representing about 4,5% of the total exports to the Community, passed the tests after investigation and verification by the Commission. At the stage of the imposition of provisional measures, the duty for this exporter was significantly lower than for all other exporters.

Once provisional measures were in place, the TDI services received an indication from a Community producer that the Chinese ferro-molybdenum industry was planning to circumvent the duties imposed, evidence of which came to light in the subsequent investigation by the Commission.

It was established that the China Chamber of Commerce and the association of Chinese Ferro-Molybdenum producers, Minmetals (CCCMC), had set up a grouping of Chinese FeMo producers, accounting for 70% of China's FeMo output, which agreed to apply price and quantitative restrictions on exports of FeMo to the Community. This grouping brought together 25 producers, most of which were state-owned and which consequently chose not to apply for MET or to co-operate with the proceeding. The producers concerned were granted specific export allocations which appeared to have been determined by taking into account the level of their provisional anti-dumping duties. Thus, companies with low duty levels were allocated disproportionately high quotas. The company which had been granted MET and had the lowest duty (3,6%) was allocated an export quota in excess of its production capacity, corresponding to more than one third of the entire quantity which the grouping intended to export to the Community. This, in view of the Commission, was a clear and deliberate attempt to channel exports from one company via another company with a lower anti-dumping duty for the purpose of avoiding to pay the much higher anti-dumping duties.

Consequently, the Commission withdrew the MET for the one company at definitive stage because of the evident attempt of abuse.

The exporter from whom MET was withdrawn, has filed an application for annulment before the Court of First Instance, where the case is pending.

3. Compact disk recordables originating in Taiwan

In June 2002, the Council imposed definitive anti-dumping duties on Taiwanese compact disk recordables (CD-Rs). The complaint was lodged by CECMA (the European Manufacturers' association) in March 2001. Provisional measures were imposed in December 2001.

CD-Rs are relatively recent high-tech products which became generally available to the public only around 1997/1998. In that period, the start-up of the first production facilities in the Community took place. The production of CD-Rs forms part of the recording media production sector, which covers a wide range of high-tech products.

The Community market for CD-Rs has boomed from 160 million in 1997 to around 2.000 million units in 2000. But the investigation showed that the Taiwanese CD-R production capacity was mushrooming to the extent that they could satisfy the entire estimated world market demand.

Investigation of Dumping and Injury

The investigation showed that Taiwanese CD-Rs were sold on the Community market below production costs and at between 17,7% to 29,9% below the price sold in Taiwan.

On the Community market, Taiwanese import prices decreased by up to 73%. However, between 1997 and 2000 (the period investigated), although Community producers had to follow the downward trend, Taiwanese prices on the Community market were still largely lower. By exercising a downward price pressure on the Community market, the Taiwanese exporters took full advantage of the market growth; whilst their market was around 6% in 1997 rising to 60% in 2000. In the meantime, the Community industry barely increased its market share from 12% to 13%.

This situation led to financial difficulties, losses and thus material injury for the Community industry. Moreover, Community producers had problems to raise additional capital and were forced to significantly reduce their investments. This is particularly damaging when a new high-tech product is affected. Injury to the Community industry was especially pronounced between 1999 and the investigation period, when Taiwanese imports into the Community market increased exponentially, whilst undercutting the Community industry's prices by 29% on average.

Causation and Community Interest

Other factors were addressed during the investigation, in particular the development of consumption, imports from third countries and the export performance of the Community industry, but it was concluded that the Taiwanese imports had been a major cause of the injury suffered.

The investigation revealed that not imposing measures would put at jeopardy not only the Community production of CD-Rs, but also the whole recording media production sector, which covers a wide range of products from diskettes to DVDs. No compelling reasons of Community interest were found to exist which would overturn the need to impose measures.It should be noted that the imposition of the anti-dumping measures has been challenged by two Taiwanese exporters. The case is still pending before the Court of First Instance.

4. Sulphanilic acid originating in the People's Republic of China and India (AD) and originating in India (AS)

Definitive anti-dumping duties for both countries and a countervailing duty for India were imposed by the Council on 4 July 2002. The duties were imposed at the level of the dumping and subsidy margins which were found to be lower than the injury elimination level. The overall duties imposed for the countries concerned were not very different, i.e. 21% in the case of China and 25,4% in the case of India. It should be noted that the overall duty for India comprises of an anti-dumping duty of 18,3% and a countervailing duty of 7,1%.

Regarding India, it is noted that the anti-dumping duty rate was set at the level of the dumping margin (24,6%) minus the rate of the export subsidies (6,3%) established during the investigation. This is standard practise followed by the Institutions in order to avoid unduly onerous protection.

The particular aspect of the anti-subsidy case was the fact that, in the course of the investigation, two subsidy schemes which were not initially alleged in the complaint were discovered. The scope of the investigation was thus extended in order to take into account these schemes. Both of these schemes were found to have conferred countervailable benefits to the exporter concerned and contributed to the imposed countervailing duty with 4 percentage points.

The anti-dumping part of the case was straightforward with no issues of special interest. However, it should be noted that a request of a Chinese producer for market economy treatment was rejected, because of restrictions in its import and export operations.

Finally, it is noted that the sole Indian exporting producer offered a price undertaking which was accepted by the Commission.

6.1.4. 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 therefrom, measures not in the interest of the Community).

In 2002, 2 new anti-dumping proceedings and 3 new anti-subsidy proceedings were concluded without measures, compared to 12 in 2001 and 32 in 2000.

The alphabetical list of cases which were terminated without the imposition of measures during 2002 can be found below. More information can be obtained from the Official Journal to which reference is given in Annex E.

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6.2. Review investigations

6.2.1. Expiry reviews

Article 11(2) and Article 18 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 2002, 14 measures were allowed to expire automatically. The references for these measures are set out in Annex N.

Since the expiry (or "sunset") provision of the basic Regulations came into force in 1985, a total of 327 measures have been allowed to expire automatically.

6.2.1.1. Initiations

During 2002, 13 expiry review investigations were initiated.

The alphabetical list of these cases can be found below, together with the name of the complainant. It should be noted that some expiry reviews may be carried out in parallel with interim reviews, which allow the amendment of the duty rates. In such case, these reviews are marked with an asterisk. More information can be obtained from the Official Journal to which reference is given in Annex F.

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6.2.1.2. Reviews concluded with confirmation of duty(ies)

During 2002, 12 expiry reviews were concluded with confirmation of duty. It should be noted that some expiry reviews may be carried out in parallel with interim reviews, which allow the amendment of the duty rates. These reviews are marked with an asterisk.

The alphabetical list of the cases which were concluded with confirmation of duty during 2002, together with the result of the investigation, can be found below. More information can be obtained from the Official Journal to which reference is given in Annex F.

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6.2.1.3. Details on some individual cases (in chronological order)

1. Colour television receivers (CTVs) originating in the People's Republic of China, the Republic of Korea, Malaysia and Thailand

This was a review of the measures imposed in April 1995 against Malaysia, the People's Republic of China, the Republic of Korea, Singapore and Thailand. Duties were re-imposed on imports from all countries, except for Singapore, as it was found unlikely that producers in this country would practice dumping in the future.

This case was challenging, as it raised two main difficulties.

The first issue was the complexity of the specific rules of origin applicable to imports of CTVs and the fact that the Commission had to make sure that the duty imposed could be effectively levied by customs authorities. As already reported in the 2001 Annual Report, a significant proportion of the CTVs imported from Turkey turned out to be in reality originating in countries for which anti-dumping duties were in place. Since these CTVs were incorrectly declared on importation as originating in Turkey, a significant amount of duty, conservatively estimated at EUR 35 to 90 million, was not collected. This resulted in the intervention of the European Anti-Fraud Office (OLAF), which opened an investigation in January 2002. This investigation is on-going.

Special provisions were now included in the operative part of the Regulation that allow a better determination of the origin of the CTVs and therefore ensure a more effective enforcement by customs authorities.

The second particularity was the fact that the Chinese side offered an unusual undertaking and the Commission, before accepting this offer, had to make sure that it was practical and effective. The undertaking was offered jointly by seven companies and the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCME). Therefore, many parties had to be dealt with in parallel. The offer combined price and quantitative elements. The seven producers offered to sell at defined prices until certain quantitative ceilings. The anti-dumping duty in force would only be levied if the relevant ceilings are exceeded.

During the negotiations of the undertaking, it turned out that wider European interests were at stake, namely operations of Community producers in the People's Republic of China. The Chinese side stressed that an overall balance had to be found. Usually, the Community industry criticises any proposals for an undertaking. This time, parts of the Community industry reacted positively and even encouraged the Commission to accept the proposed undertaking.

2. Polyester staple fibres (PSF) originating in Belarus

Definitive duties were imposed in July 1996 on polyester stable fibres (PSF) from Belarus, and extended in 1997 to cover polyester filament tow (PFT) to prevent circumvention of the original measures. As Belarus is considered not to be a market economy, the dumping margin was calculated on the basis of costs in an analogue country (Taiwan).

A review of the measures was opened in 2001 to investigate two opposing claims. On the one hand, the sole exporter in Belarus claimed that domestic prices in Taiwan had experienced lasting changes which resulted in a lower normal value and consequent decreased level of dumping. On the other hand, the Community producers claimed that the expiry of measures would result in a recurrence of injurious dumping.

It was found that whilst actual exports of PSF to the Community from the producer in Belarus had decreased between 1997 and 2001, the producer had maintained significant spare production capacity which was available to allow him to resume exports to the Community market. Furthermore, the producer was still found to be dumping, albeit at a lower level (21%), and was also dumping PSF in other third countries.

At the same time, the Community producers had been unable to fully benefit from an expanding domestic market and saw their margins eroded as increased costs outstripped any price rises. It thus emerged that the situation of the Community industry remained vulnerable. This vulnerability was contrasted with the ability and willingness of the producer in Belarus to sell large volumes of low-priced dumped imports of PSF.

In light of all factors, and in the absence of any foreseeable changes, it was concluded that the lapsing of measures would lead to the recurrence of dumped import from Belarus into the Community market. Accordingly, in October 2002, the Council imposed a definitive anti-dumping duty on (PSF) originating in Belarus, but reduced it from 43% to 21% on the basis of the revised dumping calculation.

6.2.1.4. Reviews concluded by termination

During 2002, 6 expiry reviews were concluded by termination. It should be noted that some expiry reviews may be carried out in parallel with interim reviews. These reviews are marked with an asterisk.

The alphabetical list of the cases which were concluded by termination during 2002, together with the result of the investigation, can be found below. More information can be obtained from the Official Journal to which reference is given in Annex F.

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6.2.1.5. Details on some individual cases (in chronological order)

1. Magnetic disks (3,5" microdisks) originating in Taiwan

An expiry review was initiated in April 1998 concerning measures initially imposed in October 1993 on imports originating in Japan, the People's Republic of China and Taiwan.

On 18 February 2002, the Council concluded that the measures should be maintained at their existing levels in respect of imports originating in Japan and the People's Republic of China but that the review should be terminated without the continuation of measures for imports originating in Taiwan.

The proceeding with respect to Taiwan was terminated on the grounds that the sole Taiwanese co-operating company, CIS Technology Inc., which has accounted for practically all the exports of the product concerned to the Community during the investigation period, had ceased production of 3,5" microdisks by closing its Storage Media Business Division. It was therefore considered that there was no serious risk of a recurrence of dumping from Taiwan.

6.2.2. 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 elapsed since the imposition of the definitive measure, following a request containing sufficient evidence by an exporter, an importer or by the Community producers. In carrying out the investigations, it is being considered, inter alia, whether the circumstances with regard to dumping and injury have changed significantly. Reviews can be limited to dumping/subsidization or injury aspects.

During 2002, a total of 36 interim reviews were initiated. However, 15 of these reviews were partial interim reviews of a specific type, namely limited to the form of the existing measures which did not appear sufficient to counteract the dumping which had caused injury and/or which did not cater for situations in which imported goods had been damaged before entry into free circulation.

Nine interim reviews were concluded with confirmation or amendment of duty and 10 investigations were terminated. The alphabetical list of cases which were concluded during 2002, together with the result of the investigation, can be found below. The asterisk refers to parallel interim and expiry reviews. More information can be obtained from the Official Journal to which reference is given in Annex G.

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6.2.3. Other" interim" reviews

A series of other reviews, not falling under Article 11(3) or Article 19 of the basic Regulations or for which no notice of initiation was published in the Official Journal, were concluded during 2002.

They more specifically concern :

- investigations which were conducted and concluded under the specific provisions of the Regulation imposing the original measures when sampling was used (bicycles, television camera systems);

- investigations carried out following an Appellate Body report and a panel report adopted by the Dispute Settlement Body of the World Trade Organisation (bed linen);

- Acceptance, voluntary withdrawal or breach of undertakings (quarto plates, flat pallets of wood, urea, seamless pipes and tubes, salmon, binder or baler twine).

More information can be obtained from the Official Journal to which reference is given in Annex H.

6.2.4. New exporter reviews

As far as the 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 Community following the investigation period, or that they have entered into an irrevocable contractual obligation to export a significant quantity to the Community.

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 establish promptly 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 2002, 1 new exporter review and 2 accelerated reviews were initiated. Since the Commission carried out the first reviews of this type in 1990, a total of 37 investigations have been initiated.

As to the investigations concluded with imposition/amendment of the duty, they concern 2 new exporter reviews and 2 accelerated reviews. Furthermore, one new exporter review and 3 accelerated reviews were concluded by termination.

More information can be obtained from the Official Journal to which reference is given in Annex I.

6.2.5. Absorption investigations

The possibility of "absorption" reviews, which deal with situations where the exporters directly or indirectly bear the cost of the duty and thereby increase the dumping margin without leading to sufficient movement in resale prices, is included in Article 12 and Article 19(3) of basic Regulations.

In 2002, one anti-absorption investigation was initiated. More information can be obtained from the Official Journal to which reference is given in Annex J.

6.2.6. 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 Community which 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.

In 2002, two investigations were initiated and one was concluded with extension of the duty. More information can be obtained from the Official Journal to which reference is given in Annex K.

6.3. Safeguard investigations

The Community has seldom made use of safeguard measures. In 2002, for the first time since the entry into force of the 1994 WTO Agreement, Community measures were introduced on certain steel imports, in response to a similar action taken by the USA (see chapter 11 for more details).

As a matter of principle, the Commission considers that safeguard measures should only be used as an exceptional tool in emergency situations. The Commission followed this line rigorously in the recent steel case. At WTO level, this position was shared by the Dispute Settlement Body on several occasions.

The Commission expects the Community'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 Community producers, if necessary at WTO level (see heading 12.1.2).

As regards conventional trade regimes, the Commission has agreed within the various bilateral agreements to which it is a party (Europe Agreements, Agreements with Mediterranean countries, FTAs with South Africa, Mexico, Chili, etc.) to introduce special safeguard clauses, which apply to cases, which arise between the partners. These clauses normally entail rights and obligations additional to those arising under WTO safeguard rules (in particular special notification and consultation procedures). In this regard, the Commission carefully monitors any cases, which are initiated by partners with which it has a preferential trade agreement.

6.3.1. Safeguard on steel products

In March 2002, the Commission received evidence that the increasingly protectionist stance of the US in relation to its steel market had caused a surge in imports of steel to the Community. On the basis of that evidence and preliminary enquiries, the Commission decided to carry out a full investigation.

Scope of the investigation

The investigation covered 21 steel products : non alloy hot rolled coils, non alloy hot rolled sheets and plates, non alloy hot rolled narrow strip, alloy hot rolled flat products, cold rolled sheets, electrical sheets (other than GOES), metallic coated sheets, organic coated sheets, tin mill products, quarto plates, wide flats, non alloy merchant bars and light sections, alloy merchant bars and light sections, rebars, stainless bars and light shapes, stainless wire rod, stainless steel wire, fittings (<609,6mm), flanges (other than of stainless steel), gas pipes and hollow sections.

Provisional measures

The circumstances in which provisional measures may be taken are strictly defined. They may only be taken in critical circumstances when increased imports are causing or threatening to cause serious injury to the Community producers, and where delay would cause damage which would be difficult to repair.

Preliminary enquiries by the Commission indicated that US protectionism had caused trade diversion resulting in increased Community imports which threatened to cause serious injury to the Community producers, who were in a critical situation. Imports of 15 products [24] had increased significantly - from 12,5 million tonnes in 2000 to 14,2 million tonnes in 2001, an increase of 13%.

[24] The products covered by provisional measures were non alloy hot rolled coils, non alloy hot rolled sheets and plates, non alloy hot rolled narrow strip, alloy hot rolled flat products, cold rolled sheets, electrical sheets (other than GOES), tin mill products, quarto plates, wide flats, non alloy merchant bars and light sections, alloy merchant bars and light sections, rebars, stainless wire rod, stainless steel wire, fittings (<609,6mm) and flanges (other than of stainless steel).

On 28 March 2002, the Commission adopted provisional safeguard measures in relation to those 15 products. The object of the measures was to prevent a further surge in imports, whilst maintaining access to the Community market. The measures applied for six months and took the form of tariff quotas set at generous levels (equal to average imports in the period 1999 - 2001 plus 10%), beyond which duties of between 14,9% and 26% applied. In accordance with WTO rules, the measures did not apply to imports from developing countries, except those with more than 3% of total Community imports of the product concerned.

The results of the investigation

In relation to seven steel products, the investigation confirmed that increasing US protectionism, culminating in the imposition of safeguard measures across a wide range of steel products on 6 March 2002, had caused a sudden, sharp and significant increase in imports to the Community. Taken as a whole, imports of these seven products had increased from 5,9 million tonnes in 1999 to 8,8 million tonnes in 2001.

In order to determine whether there was serious injury to the Community producers, the Commission evaluated all relevant factors of an objective and quantifiable nature having a bearing on their situation. The development of production capacity, production, capacity utilisation, employment, productivity, cash flow, return on capital employed, captive use, stocks, consumption, sales, market share, price, undercutting and profitability for the years 1997 to 2001 were each examined and evaluated. Overall, there was negative development of the economic indicators and the Commission therefore concluded that the Community producers of the seven products were suffering serious injury.

Finally, the Commission examined whether there were any compelling economic reasons not to take measures. Taking account all Community interests (including those of the Community producers, importers, and users), the Commission concluded that no such compelling reasons existed, and it was in the Community interest that measures be taken.

Definitive measures

Definitive safeguard measures were imposed on five primary steel products [25] and on two more sophisticated finished products [26] which were manufactured by a number of widely disseminated small to medium sized enterprises. More than 70.000 people are employed in the manufacture of these seven products in the Community.

[25] These are non alloy hot rolled coils, non alloy hot rolled sheets and plates, non alloy hot rolled narrow strip, alloy hot rolled flat products and cold rolled sheets.

[26] These are fittings (<609,6mm) and flanges (other than of stainless steel).

In conformity with WTO rules, the measures apply erga omnes. Existing restriction on imports from Russia, Kazakhstan and Ukraine continue to operate. The measures do not apply to imports from developing countries except those with more than 3% of total Community imports of the product concerned.

They took the form of tariff quotas establishing unrestricted import volumes at generous levels. Beyond this level, tariffs of between 17,5% and 26% apply. The measures will be progressively liberalised, and will expire on 28 March 2005.

For each product, the initial tariff quota was calculated by adding 10% to the average level of relevant Community imports in the last three years (1999 to 2001). The overall effect is to maintain existing levels of access to the Community market.

Those countries with a substantial interest in exporting to the Community were allocated a specific part of the quotas. Nevertheless, in order to ensure that all countries continued to have access to the Community market, a significant part remained for use by other countries. However, for one product, hot rolled coils, this approach would have led to excessive fragmentation of the quota, so a single global quota was put in place.

Continuation of the investigation, termination and surveillance

For the remaining fourteen products, the Commission proposed to terminate the investigation as the conditions for the imposition of definitive safeguard measures were not met.

However, as the Commission received new information concerning recent imports and their impact on the Community producers for three of the products concerned (tin mill products, quarto plates, rebars), it terminated in September 2002 the investigation vis-à-vis eleven products and continued its investigation into these three products. However, the continued investigation showed that the conditions for definitive safeguard measures were not met and these investigations were subsequently closed in January 2003.

In light of the uncertain situation of the international steel market, the Commission also established a system of retrospective surveillance for all fourteen products. In this way, the Commission has put in place a safety net without resorting to market barriers. More information can be obtained from the Official Journal to which reference is given in Annex L.

7. MONITORING OF UNDERTAKINGS

Undertakings are a form of anti-dumping or countervailing measures. They are accepted by the Commission if it is satisfied that they can effectively eliminate the injurious effects of dumping or subsidisation. To achieve this goal, exporters normally pledge to raise their prices. The necessary price increase stems from the findings of the investigation and directly depends on the level of dumping or subsidisation found, or on the injury elimination level, whichever is the lower.

In order to allow the Commission to monitor whether or not the undertakings are being respected, the parties concerned have to submit regular sales reports, normally every quarter. They also have to provide the Commission with any other information that is considered necessary, and to allow verification of such data and any other relevant information at their premises, even at short notice. In case of breach or withdrawal of undertakings, a duty is imposed.

At the beginning of 2002, there were undertakings in force accepted from 275 companies, covering 21 products originating in 21 different countries.

During 2002, the following changes to the portfolio of undertakings took place :

Definitive anti-dumping and/or countervailing duties were imposed on 34 companies following withdrawal of acceptance of their undertakings :

- 16 companies breached their undertaking (farmed Atlantic salmon originating in Norway - 10 companies; flat pallets of wood originating in Poland - 6 companies).

- 2 companies were related to a company that had breached its undertaking. The acceptance of their undertaking had to be withdrawn in order to avoid sales channelling through a related company (farmed Atlantic salmon originating in Norway - 1 company; flat pallets of wood originating in Poland - 1 company).

- 16 companies voluntarily withdrew their undertakings (quarto plates originating in Romania - 11 companies; seamless steel tubes originating in the Ukraine - 3 companies; steel wire ropes originating in Turkey - 1 company; binder or baler twine - 1 company in Hungary).

Undertakings of 68 companies came to an end for reasons other than withdrawal:

- The undertaking of 1 company lapsed since the country concerned was not included in the request for a review lodged at the end of the normal 5-year period (seamless steel tubes originating in Hungary - 1 company).

- The undertakings of 67 companies expired due to the expiry of measures (zinc originating in Poland - 2 companies; lighters originating in Mexico and Philippines - 2 companies; flat pallets of wood originating in Poland - 63 companies).

In addition, 22 offers for undertakings have been accepted:

- In 3 new proceedings undertakings from 10 companies were accepted (colour television receivers originating in China - 7 companies; sulphanilic acid originating in India - 1 company; tube and pipe fittings - 1 company in Slovakia, 1 company in Czech Rep.).

- In ongoing proceedings, 12 undertakings from new exporters have been accepted (farmed Atlantic salmon originating in Norway - 8 companies; PET chips originating in India - 1 company; Urea originating in Lithuania - 1 company; certain flat-rolled products of iron or non-alloy steel originating in India - 1 company and, before the expiry of the measures, from 1 company on wooden pallets from Poland).

This brings the total number of undertakings in force at the end of 2002 to 195, covering 27 proceedings corresponding to 20 products originating in 21 different countries. Details concerning the above can be found in Annex M and an overview of all undertakings in force can be found in Annex Q.

Due to the ever-increasing number of undertakings and to their complexity in nature, the Commission has continued to allocate additional resources to the monitoring of undertakings by way of internal re-allocation.

As undertakings have to provide the same remedial effect as the alternative duties would do, the examination, adaptation and drafting of undertaking offers has to be based on a double assessment of risk and effectiveness. This has led to situations in which undertakings were not considered to be acceptable, notably where an exporter did not provide sufficient co-operation and accurate data during an investigation, or where the trading patterns of the company allow too much scope for cross-compensation (i.e. the price increase charged for products subject to the undertaking being compensated through the granting of rebates on products not subject to the undertaking, if sold to the same customer in the Community).

Once undertakings are accepted, continued contacts with the Community industry remain essential to ensure that the necessary feedback is received on the effects of the undertakings on the market. In this way, the Commission can focus its monitoring activities more effectively.

8. REFUNDS

Article 11(8) of the basic anti-dumping Regulation allows importers to request the reimbursement of anti-dumping duties collected where it is shown that the dumping margin, on the basis of which duties were paid, has been eliminated, or reduced to a level below the duty in force.

The Commission continued to deal with a mixture of outstanding refund requests and new applications. Four new refund requests were lodged during the year. As usual, the Commission seeks to structure the various investigations in such a way as to best utilise its resources. During the year 2002, 3 decisions were adopted relating to separate applications. All related to imports of leather handbags from China. A further 2 cases relating to the same product are due to be investigated early 2003. Whilst one case which was suspended at the applicant's request has been re-opened, another different case has been suspended in similar circumstances.

The merits of 8 of the current refund cases were under consideration as the year closed.

The Commission also proceeded this year to the publication of its updated guidelines for potential applicants [27]. The purpose of the Commission Notice, of which the first version was published in 1986, is to indicate Commission practice in the treatment of applications for refunds of anti-dumping duties. This new Commission Notice is primarily for the benefit of potential applicants and clarifies the refund procedure, thus enhancing transparency. An aide-mémoire is attached to the Notice to assist potential applicants in the preparation of their submission.

[27] OJ C 127, 29.5.2002, p. 10

Notably, the following aspects have been modified or clarified:

- The new notice clarifies that a refund is calculated on the basis of the dumping margin determined for all the exports of the exporter concerned, and not on the basis of those exports imported by a single applicant.

- The deadlines to introduce and substantiate a refund application are explained in detail.

- The role of the Member States and the Commission in the reception and analysis of the refund applications is clarified.

- The practice of extrapolating findings from one investigation period to adjacent importations is formalised.

- The treatment of refund applications in cases where the original investigation used sampling of exporters is explained for the first time.

The new Notice, which was published in Official Journal C 127 of 29 May 2002, page 10, can also be found at http://europa.eu.int/comm/trade/index_en.htm.

Further details on refunds can be found in Annex S.

9. JUDICIAL REVIEW : DECISIONS BY THE COURT OF JUSTICE / COURT OF FIRST INSTANCE

9.1. Overview of the judicial reviews in 2002

In 2002, five Judgments and one Order relating to anti-dumping or anti-subsidy were rendered by the Court of First Instance (CFI) and none by the Court of Justice.

9.2. Cases pending

A list of the anti-dumping/anti-subsidy cases before the CFI and the Court of Justice still pending at the end of 2002 is given in Annex T (9 before the CFI and 4 before the Court of Justice).

9.3. New cases

Five new cases were lodged in 2002 (compared to 7 in 2000 and 6 in 2001), three before the CFI and two before the Court of Justice.

The three cases brought to the CFI in 2002 are dealing in particular with the following items:

- Determination and revocation of Market Economy Status [28];

[28] T-138/02, Nanjing Metalink v. Council, OJ C 169, 13.7.2002, p. 39

- Application of the third method set out in Article 2(11), i.e. under what circumstances are the Institutions entitled to make a comparison of a weighted average normal value with individual export prices; this method implies "zeroing" of non-dumped transactions [29].

[29] T-274/02, Ritek Corp et al v. Council, OJ C 289, 23.11.2002, p. 27

- Lack of retroactivity of the exclusion of certain types of like product from the scope of anti-dumping measures [30].

[30] T-350/02, Ikegami v. Council, [not published yet]

9.4. Judgments rendered by the Court of First Instance

The following summaries only mention some of the most important points of the Judgments and do not deal with all questions raised in these Judgments, nor with their specific facts.

9.4.1. Certain footwear with textile uppers originating, inter alia, in the People's Republic of China

- Case T-598/97 British Shoe Corporation Footwear Supplies Ltd. and others v. Council : Judgment of 28 February 2002 (ECR 2002 Page II-01155)

This case was decided on the issue of Locus standi. In this respect, the CFI first recalled the main principles governing admissibility of application lodged by an unrelated importer. The first one is that provisions of regulations imposing anti-dumping duties can be of individual concern to those importers whose resale prices were taken into account for the construction of export prices. The CFI also mentionned that the Court of Justice has held an action brought by an unrelated importer against such a regulation to be admissible where there were exceptional circumstances, in particular where that regulation seriously affected that importer's business activities (the judgment of the Court of Justice in Ca