Council Regulation (EC) No 3284/94 of 22 December 1994 on protection against subsidized imports from countries not members of the European Community
Date: 1994-12-22
Institutions: Council of the European Union
Subjects: agricultural product, countervailing charge, economic survey, export subsidy, market protection, third country













EUR-Lex - 31994R3284 - EN






Avis juridique important




|



31994R3284

Council Regulation (EC) No 3284/94 of 22 December 1994 on protection against subsidized imports from countries not members of the European Community  


Official Journal L 349 , 31/12/1994 P. 0022 - 0052 Finnish special edition: Chapter 11 Volume 34 P. 0035  Swedish special edition: Chapter 11 Volume 34 P. 0035  





COUNCIL REGULATION  (EC) No 3284/94 of 22 December 1994 on protection against subsidized imports from countries not  members of the European CommunityTHE COUNCIL OF THE EUROPEAN UNION, Having regard to the Treaty establishing the European Community, and in particular Article 113  thereof, Having regard to the Regulations establishing the common organization of agricultural markets and  the Regulations adopted pursuant to Article 235 of the Treaty applicable to goods manufactured from  agricultural products, and in particular the provisions of those Regulations which allow for  derogation from the general principle that protective measures at frontiers may be replaced solely  by the measures provided for in those Regulations, Having regard to the proposal from the Commission, Having regard to the Opinion of the European Parliament (1), Whereas, by Regulation (EEC) No 2423/88 (2), the Council adopted common rules for protection  against dumped or subsidized imports from countries which are not members of the European  Community; Whereas, these rules were adopted in accordance with existing international obligations, in  particular those arising from Article VI of the General Agreement on Tariffs and Trade ('the  GATT`), from the Agreement on Implementation of Article VI of the GATT ('the 1979 Anti-Dumping  Code`) and from the Agreement on Interpretation and Application of Articles VI, XVI and XXIII of  the GATT ('the 1979 Subsidies Code`); Whereas, the conclusion of the Uruguay Round of multilateral trade negotiations has led to the  establishment of the World Trade Organization ('the WTO`); Whereas, Annex 1A to the Agreement establishing the WTO ('the WTO Agreement`) contains, inter alia,  the General Agreement on Tariffs and Trade 1994 ('the GATT 1994`), an Agreement on Agriculture  ('the Agreement on Agriculture`), a new Agreement on implementation of Article VI of the GATT 1994  ('the Anti-Dumping Agreement`), and a new Agreement on Subsidies and Countervailing Measures ('the  Subsidies Agreement`); Whereas, in order to reach greater transparency and effectiveness in the application by the  Community of the rules laid down in the Anti-Dumping Agreement and the Subsidies Agreement  respectively, it is considered necessary to adopt two separate Regulations which will lay down in  sufficient detail the requirements for the application of each of these commercial defence  instruments; Whereas, it is therefore appropriate to amend Community rules governing the application of  countervailing measures in the light of the new multilateral rules, with regard inter alia to the  procedures for initiation of proceedings and the conduct of subsequent investigations, including  the establishment and treatment of the facts, the application of provisional measures, the  imposition and collection of countervailing duties, the duration and review of countervailing  measures, and the public disclosure of information relating to countervailing investigations; Whereas, in view of the extent of the changes brought about by the new Agreements and to ensure an  adequate and transparent implementation of the new rules, it is appropriate to transpose the  language of the new Agreements into Community legislation to the extent possible; Whereas, furthermore, it seems advisable to explain, in adequate detail, when a subsidy shall be  deemed to exist, according to which principles it shall be countervailable (in particular whether  the subsidy has been granted specifically), and according to which criteria the amount of the  countervailable subsidy is to be calculated; Whereas, it is clear that in determining the existence of a subsidy it is necessary to demonstrate  that there has been a financial contribution by a government or any public authority within the  territory of a country, or that there has been any form of income or price support in the sense of  Article XVI of the GATT 1994, and that a benefit has thereby been conferred to the recipient  enterprise; Whereas, it is necessary to explain in sufficient detail which kind of subsidies are not  countervailable and which procedure shall be followed if during an investigation it is determined  that an investigated enterprise has received non-countervailable subsidies; Whereas, the Subsidies Agreement states that the provisions concerning non-countervailable  subsidies shall cease to apply five years after the date of entry into force of the WTO Agreement,  unless they are extended by mutual agreement of the Members of the WTO, and that it may therefore  be necessary to amend this Regulation accordingly, if the validity of those provisions is not so  extended; Whereas, the measures listed in Annex 2 to the Agreement on Agriculture are non-countervailable, to  the extent provided for in that Agreement; Whereas, it is desirable to lay down clear and detailed guidance on the factors which may be  relevant for the determination of whether the subsidized imports have caused material injury or are  threatening to cause injury; and whereas, in demonstrating that the volume and price levels of the  imports concerned are responsible for injury sustained by a Community industry, attention should be  given to the effect of other factors and in particular existing market conditions in the  Community; Whereas, it is advisable to define the term 'Community industry` and provide that parties related  to exporters may be excluded from such industry and to define the term 'related`; and whereas it is  also necessary to provide for countervailing duty action to be taken with regard to producers in a  region of the Community and to lay down guidelines on the definition of such a region; Whereas, it is necessary to set down who may lodge a countervailing duty complaint, including the  extent to which it should be supported by the Community industry, and the information on  countervailable subsidies, injury and causality which such complaint should contain; and whereas it  is also expedient to specify the procedures with regard to the rejection of complaints or the  initiation of proceedings; Whereas, it is necessary to lay down how interested parties shall be given notice of the  information which the authorities require, ample opportunity to present all relevant evidence and a  full opportunity for the defence of their interests; whereas, it is also desirable to set out  clearly the rules and procedures to be followed during the investigation, in particular that  interested parties have to make themselves known present their views and submit information within  specified time limits, if such views and information are to be taken into account; and whereas it  is also appropriate to set out the conditions under which an interested party may have access to,  and comment on, information presented by other interested parties; whereas there should also be  cooperation between the Member States and the Commission with regard to the collection of  information; Whereas, it is necessary to lay down the conditions under which provisional duties may be imposed,  including that they may not be imposed sooner than 60 days from initiation and no later than nine  months from initiation; whereas, such duties may in all cases be imposed by the Commission only for  a four-month period; Whereas, it is necessary to specify procedures for the acceptance of undertakings which eliminate  or offset the countervailable subsidies and injury instead of the imposition of provisional or  definitive duties; whereas it is also appropriate to lay down the consequences of violation or  withdrawal of undertakings and that provisional duties may be imposed in cases of suspected  violation or where further investigation is necessary to complete the findings; whereas, in  accepting undertakings, care should be taken that the proposed undertakings, and their enforcement,  do not lead to anti-competitive behaviour; Whereas, it is necessary to provide for the termination of cases, by termination without measures  or by conclusion with definitive measures, normally within 12 months, and in no case later than 13  months, from the initiation of the investigation; Whereas, an investigation should be terminated in case the amount of the subsidy is found to be de  minimis or if, particularly in case of imports originating in developing countries, the volume of  subsidized imports or the injury is negligible, and it is appropriate to define these criteria;  whereas, where measures are to be imposed, it is necessary to provide for the termination of  investigations and to lay down that measures should be less than the amount of countervailable  subsidies if such lesser amount would remove in injury, as well as to specify the method of  calculating the level of measures in cases of sampling; Whereas, it is necessary to provide for the retroactive collection of provisional duties as deemed  appropriate and to define the circumstances which may trigger the retroactive application of duties  to avoid the undermining of the definitive measures to be applied; whereas it is also necessary to  provide that duties may be applied retroactively in cases of violation or withdrawal of  undertakings; Whereas, it is necessary to provide that measures shall lapse after five years unless a review  investigation indicates that they should be maintained; whereas, it is also necessary to provide,  in cases where sufficient evidence is submitted of changed circumstances, for interim reviews or  for investigations to determine whether refunds of countervailing duties are warranted; Whereas, even though the Subsidies Agreement does not contain provisions concerning circumvention  of countervailing measures, the possibility of such circumvention exists, in terms similar, albeit  not identical, to the circumvention of anti-dumping measures; whereas it appears therefore  appropriate to enact an anti-circumvention provision in this Regulation; Whereas, it is expedient to permit the suspension of countervailing measures where there is a  temporary change in market conditions which make the continued imposition of such measures  temporarily inappropriate; Whereas, it is necessary to provide that imports under investigation may be made subject to  registration upon importation to enable measures to be subsequently applied against such imports; Whereas, to ensure a proper enforcement of measures, it is necessary that Member States monitor and  report to the Commission the import trade in products subject to investigation and subject to  measures and the amount of duties collected pursuant to Regulation; Whereas, it is necessary to provide for consultations of an Advisory Committee at regular and  specified stages of the investigation; whereas the Committee shall consist of representatives of  Member States with a representative of the Commission as chairman; Whereas, it is expedient to provide for verification visits to check information submitted on  countervailable subsidies and injury, though such visits should be dependent on proper replies to  questionnaires being received; Whereas, it is essential to provide for sampling in cases where the number of parties or  transactions are large in order to permit a timely completion of investigations; Whereas, it is necessary to provide that for parties who do not cooperate satisfactorily other  information may be used to establish findings and such information may be less favourable to the  party than if it had cooperated; Whereas, provision should be made for the treatment of confidential information so that business or  governmental secrets are not divulged; Whereas, it is essential that provision is made for the proper disclosure of the essential facts  and considerations to parties which qualify for such treatment and that such disclosure is made,  with due regard to the decision-making process in the Community, within a time period which permits  parties to defend their interests; Whereas, it is prudent to provide for an administrative system under which arguments can be  presented in relation to whether measures are in the Community interest, including the interests of  consumers, and to lay down the time periods within which such information has to be presented as  well as the disclosure rights of the parties concerned; Whereas, it is imperative to link the implementation of time limits to the establishment of the  necessary administrative structure within the Commission's services; whereas the Council,  therefore, should specify, in a decision to be adopted by qualified majority no later than 1 April  1995, when these time limits shall apply; Whereas, in applying the rules of the Subsidies Agreement it is essential, in order to maintain the  balance of rights and obligations which this Agreement sought to establish, that the Community take  account of their interpretation by the Community's major trading partners, as reflected in  legislation or established practice, HAS ADOPTED THIS REGULATION: Article 1 Principles 1.  This Regulation lays down provisions for protection against subsidized imports from countries  not members of the European Community. A countervailing duty may be imposed for the purpose of  offsetting any subsidy granted, directly or indirectly, for the manufacture, production, export or  transport of any product whose release for free circulation in the Community causes injury. 2.  For the purpose of this Regulation, a product is considered as being subsidized if it benefits  from a countervailable subsidy as defined in Articles 2 and 3 of this Regulation. 3.  Such subsidy may be granted by the government of the country of origin of the imported product,  or by the government of an intermediate country from which the product is exported to the  Community, known for the purpose of this Regulation as 'the country of export`. The term  'government` is defined, for the purposes of this Regulation as a government or any public body  within the territory of the country of origin or export. 4.  Notwithstanding the above, where products are not directly imported from the country of origin  but are exported to the Community from an intermediate country, the provisions of this Regulation  shall be fully applicable and the transaction or transactions shall, where appropriate, be regarded  as having taken place between the country of origin and the Community. 5.  For the purpose of this Regulation the term 'like product` shall be interpreted to mean a  product which is identical, i. e. alike in all respects to the product under consideration, or in  the absence of such a product, another product which although not alike in all respects, has  characteristics closely resembling those of the product under consideration. Article 2 Definition of a subsidy A subsidy shall be deemed to exist if: 1. (a) there is a financial contribution by a government (as defined in Article 1 (3)) in the  country of origin or export, that is to say, where: (i) a government practice involves a direct transfer of funds (for example grants, loans, equity  infusion), potential direct transfers of funds or liabilities (for example, loan guarantees); (ii) government revenue that is otherwise due, is foregone or not collected (for example, fiscal  incentives such as tax credits); in this regard, the exemption of an exported product from duties  or taxes borne by the like product when destined for domestic consumption, or the remission of such  duties or taxes in amount not in excess of those which have been accrued, shall not be deemed to be  a subsidy, provided that such an exemption is granted in accordance with the provisions of Annexes  I to III to this Regulation; (iii) a government provides goods or services other than general infrastructure, or purchases  goods; (iv) a government: - makes payments to a funding mechanism, or - entrusts or directs a private body to carry out one or more of the type of functions illustrated  in points (i) to (iii) which would normally be vested in the government, and the practice, in no  real sense, differs from practices normally followed by governments; or (b) there is any form of income or price support within the meaning of Article XVI of the GATT  1994; and 2. a benefit is thereby conferred. Article 3 Countervailability of subsidies A. PRINCIPLE 1.  Subsidies as defined in Article 2 shall be subject to countervailing measures only if they are  specific, as defined in paragraphs 2 to 4. B. SPECIFICITY 2.  In order to determine whether a subsidy, as defined in Article 2 is specific to an enterprise  or industry or group of enterprises or industries (hereinafter referred to as 'certain  enterprises`) within the jurisdiction of the granting authority, the following principles shall  apply: (a) Where the granting authority, or the legislation pursuant to which the granting authority  operates, explicitly limits access to a subsidy to certain enterprises, such subsidy shall be  specific. (b) Where the granting authority, or the legislation pursuant to which the granting authority  operates, establishes objective criteria or conditions governing the eligibility for, and the  amount of, a subsidy, specificity shall not exist, provided that the eligibility is automatic and  that such criteria and conditions are strictly adhered to. For the purpose of this Article, objective criteria or conditions mean criteria or conditions which  are neutral, which do not favour certain enterprises over others, and which are economic in nature  and horizontal in application, such as number of employees or size of enterprise. The criteria or conditions must be clearly spelled out by law, regulation, or other official  document, so as to be capable of verification. (c) If, notwithstanding any appearance of non-specificity resulting from the application of the  principles laid down in subparagraphs (a) and (b), there are reasons to believe that the subsidy  may in fact be specific, other factors may be considered. Such factors are: use of a subsidy  programme by a limited number of certain enterprises, predominant use by certain enterprises, the  granting of disproportionately large amounts of subsidy to certain enterprises, and the manner in  which discretion has been exercised by the granting authority in the decision to grant a subsidy.  In this regard, information on the frequency with which applications for a subsidy are refused or  approved and the reasons for such decisions shall, in particular, be considered. In applying this provision, account shall be taken of the extent of diversification of economic  activities within the jurisdiction of the granting authority, as well as of the length of time  during which the subsidy programme has been in operation. 3.  A subsidy which is limited to certain enterprises located within a designated geographical  region within the jurisdiction of the granting authority shall be specific. The setting or change  of generally applicable tax rates by all levels of government entitled to do so shall not be deemed  to be a specific subsidy for the purposes of this Regulation. 4.  Irrespective of the provisions of paragraphs 2 and 3, the following subsidies shall be deemed  to be specific: (a) Subsidies contingent, in law or in fact, whether solely or as one of several other conditions,  upon export performance, including those illustrated in Annex I to this Regulation. Subsidies shall be considered to be contingent in fact upon export performance when the facts  demonstrate that the granting of a subsidy, without having been made legally contingent upon export  performance, is in fact tied to actual or anticipated exportation or export earnings. The mere fact  that a subsidy is accorded to enterprises which export shall not for that reason alone be  considered to be an export subsidy within the meaning of this provision. (b) Subsidies contingent, whether solely or as one of several other conditions, upon the use of  domestic over imported goods. 5.  Any determination of specificity under the provisions of this Article shall be clearly  substantiated on the basis of positive evidence. C. NON-COUNTERVAILABLE SUBSIDIES 6.  The following subsidies shall not be subjected to countervailing measures: (a) Subsidies which are not specific within the meaning of paragraphs 2 and 3. (b) Subsidies which are specific, within the meaning of paragraphs 2 and 3, but which meet the  conditions provided for in paragraphs 7, 8 or 9. (c) The element of subsidy which may exist in any of the measures listed in Annex IV to this  Regulation. 7.  Subsidies for research activities conducted by firms or by higher education or research  establishments on a contract basis with firms shall not be subject to countervailing measures, if  the subsidies cover not more than 75 % of the costs of industrial research or 50 % of the costs of  pre-competitive development activity, and provided that such subsidies are limited exclusively to: (i) personnel costs (researchers, technicians and other supporting staff employed exclusively in  the research activity); (ii) costs of instruments, equipment, land and buildings used exclusively and permanently (except  when disposed of on a commercial basis) for the research activity; (iii) costs of consultancy and equivalent services used exclusively for the research activity;  including bought-in research, technical knowledge, patents, etc.; (iv) additional overhead costs incurred directly as a result of the research activity; (v) other running costs (such as those of materials, supplies and the like), incurred directly as a  result of the research activity. For the purpose of this paragraph: (a) the allowable levels of non-countervailable subsidy referred to in this paragraph shall be  established by reference to the total eligible costs incurred over the duration of an individual  project. In case of programmes which span both 'industrial research` and 'pre-competitive development  activity`, the allowable level of non-countervailable subsidy shall not exceed the simple average  of the allowable levels of non-countervailable subsidy applicable to the above two categories,  calculated on the basis of all eligible costs as set forth in points (i) to (v) of this paragraph; (b) the term 'industrial research` means planned search or critical investigation aimed at  discovery of new knowledge, with the objective that such knowledge may be useful in developing new  products, processes or services, or in bringing about a significant improvement to existing  products, processes or services; (c) the term 'pre-competitive development activity` means the translation of industrial research  findings into a plan, blueprint or design for new, modified or improved products, processes or  services whether intended for sale or use, including the creation of a first prototype which would  not be capable of commercial use. It may further include the conceptual formulation and design of  products, processes or services alternatives and initial demonstration or pilot projects, provided  that these same projects cannot be converted or used for industrial application or commercial  exploitation. It does not include routine or periodic alterations to existing products, production  lines, manufacturing process, services, and other on-going operations even though those alterations  may represent improvements. The provisions of this paragraph shall not apply to civil aircraft (as defined in the 1979  Agreement on Trade in Civil Aircraft, as amended, or in any later Agreement amending or replacing  such Agreement). 8.  Subsidies to disadvantaged regions within the territory of the country of origin and/or export,  given pursuant to a general framework of regional development, and which would be non-specific if  the criteria laid down in paragraphs 2 and 3 were applied to each eligible region concerned, shall  not be subject to countervailing measures provided that: (i) each disadvantaged region is a clearly designated contiguous geographical area with a definable  economic and administrative identity; (ii) the region is considered as disadvantaged on the basis of neutral and objective criteria,  indicating that the region's difficulties arise out of more than temporary circumstances; such  criteria must be clearly spelled out by law, regulation, or other official document, so as to be  capable of verification; (iii) the criteria include a measurement of economic development which shall be based on at least  one of the following factors: - one of either income per capita or household income per capita, or GDP per capita, which must not  be above 85 % of the average for the territory of the country of origin or export concerned, - unemployment rate, which must be at least 110 % of the average for the territory of the country  of origin or export concerned; as measured over a three-year period; such measurement, however, may be a composite one and may  include other factors. For the purpose of this paragraph: (a) a 'general framework of regional development` means that regional subsidy programmes are part  of an internally consistent and generally applicable regional development policy and that regional  development subsidies are not granted in isolated geographical points having no, or virtually no  influence on the development of a region; (b) 'neutral and objective criteria` means criteria which do not favour certain regions beyond what  is appropriate for the elimination or reduction of regional disparities within the framework of the  regional development policy. In this regard, regional subsidy programmes shall include ceilings on  the amount of subsidy which can be granted to each subsidized project. Such ceilings must be  differentiated according to the different levels of development of eligible regions and must be  expressed in terms of investment costs or the cost of job creation. Within such ceilings, the  distribution of subsidy shall be sufficiently broad and even to avoid the predominant use of a  subsidy by, or the granting of disproportionately large amounts of subsidy to, certain enterprises.  This subparagraph shall be applied in the light of the criteria set out in paragraphs 2 and 3. 9.  Subsidies to promote adaptation of existing facilities to new environmental requirements  imposed by law and/or regulations which result in greater constraints and financial burden on  firms, shall not be subject to countervailing measures, provided that the subsidy: (i) is a one-time non-recurring measure; and (ii) is limited to 20 % of the cost of adaptation; and (iii) does not cover the cost of replacing and operating the subsidized investment, which must be  fully borne by firms; and (iv) is directly linked to and proportionate to a firm's planned reduction of nuisances and  pollution, and does not cover any manufacturing cost savings which may be achieved; and (v) is available to all firms which can adopt the new equipment and/or production processes. For the purpose of this paragraph the term 'existing facilities` means facilities having been in  operation for at least two years at the time when new environmental requirements are imposed. Article 4 Calculation of the amount of the countervailable subsidy A. PRINCIPLE 1.  The amount of countervailable subsidies, for the purpose of this Regulation, shall be  calculated in terms of the benefit conferred to the recipient which is found to exist during the  investigation period for subsidization. Normally this period shall be the most recent accounting  year of the beneficiary, but may be any other period of at least six months prior to the initiation  of the investigation for which reliable financial and other relevant data are available. B. CALCULATION OF BENEFIT TO THE RECIPIENT 2.  As regards the calculation of benefit to the recipient, the following rules shall apply: (a) Government provision of equity capital shall not be considered as conferring a benefit, unless  the investment can be regarded as inconsistent with the usual investment practice (including for  the provision of risk capital) of private investors in the territory of the country of origin  and/or export. (b) A loan by a government shall not be considered as conferring a benefit, unless there is a  difference between the amount that the firm receiving the loan pays on the government loan and the  amount that the firm would pay for a comparable commercial loan which the firm could actually  obtain on the market. In this case the benefit shall be the difference between the two amounts. (c) A loan guarantee by a government shall not be considered as conferring a benefit, unless there  is a difference between the amount that the firm receiving the guarantee pays on a loan guaranteed  by the government and the amount that the firm would pay for a comparable commercial loan in the  absence of the government guarantee. In this case the benefit shall be the difference between these  two amounts adjusted for any differences in fees. (d) The provision of goods or services or purchases of goods by a government shall not be  considered as conferring a benefit unless the provision is made for less than adequate  remuneration, or the purchase is made for more than adequate remuneration. The adequacy of  remuneration shall be determined in relation to prevailing market conditions for the product or  service in question in the country of provision or purchase (including price, quality,  availability, marketability, transportation and other conditions of purchase or sale). C. GENERAL PROVISIONS ON CALCULATION 3.  The amount of countervailable subsidies shall be determined according to the following  provisions: (a) The amount of the countervailable subsidies shall be determined per unit of the subsidized  product exported to the Community. (b) In establishing this amount the following elements may be deducted from the total subsidy: (i) any application fee, or other costs necessarily incurred in order to qualify for, or to obtain,  the subsidy; (ii) export taxes, duties or other charges levied on the export of the product to the Community  specifically intended to offset the subsidy. Where an interested party claims a deduction, it must prove that the claim is justified. (c) Where the subsidy is not granted by reference to the quantities manufactured, produced,  exported or transported, the amount of countervailable subsidy shall be determined by allocating  the value of the total subsidy, as appropriate, over the level of production, sales or exports of  the products concerned during the investigation period for subsidization. (d) Where the subsidy can be linked to the acquisition or future acquisition of fixed assets, the  amount of the countervailable subsidy shall be calculated by spreading the subsidy across a period  which reflects the normal depreciation of such assets in the industry concerned. The amount so  calculated which is attributable to the investigation period, including that which derives from  fixed assets acquired before this period, shall be allocated as described in subparagraph (c). Where the assets are non-depreciating, the subsidy shall be valued as an interest-free loan, and be  treated in accordance with paragraph 2 (b). (e) Where a subsidy cannot be linked to the acquisition of fixed assets, the amount of the benefit  received during the investigation period shall in principle be attributed to this period, and  allocated as described in subparagraph 3 (c), unless special circumstances arise justifying  attribution over a different period. Article 5 Determination of injury 1.  Pursuant to this Regulation, the term 'injury` shall, unless otherwise specified, be taken to  mean material injury to the Community industry, threat of material injury to the Community industry  or material retardation of the establishment of such an industry, and shall be interpreted in  accordance with the provisions of this Article. 2.  A determination of injury shall be based on positive evidence and involve an objective  examination of both (a) the volume of the subsidized imports and the effect of the subsidized  imports on prices in the Community market for like products, and (b) the consequent impact of these  imports on the Community industry. 3.  With regard to the volume of the subsidized imports, consideration shall be given as to whether  there has been a significant increase in subsidized imports, either in absolute terms or relative  to production or consumption in the Community. With regard to the effect of the subsidized imports  on prices, consideration shall be given as to whether there has been a significant price  undercutting by the subsidized imports as compared with the price of a like product of the  Community, or whether the effect of such imports is otherwise to depress prices to a significant  degree or prevent price increases, which otherwise would have occurred, to a significant degree. No  one or several of these factors can necessarily give decisive guidance. 4.  Where imports of a product from more than one country are simultaneously subject to  countervailing duty investigations, the effects of such imports shall be cumulatively assessed only  if it is determined that: (1) the amount of countervailable subsidies established in relation to  the imports from each country is more than de minimis as defined in Article 11 (5) and that the  volume of imports from each country is not negligible; and (2) a cumulative assessment of the  effects of the imports is appropriate in light of the conditions of competition between imported  products and the conditions of competition between the imported products and the like Community  product. 5.  The examination of the impact of the subsidized imports on the Community industry concerned  shall include an evaluation of all relevant economic factors and indices having a bearing on the  state of the industry, including: the fact that an industry is still in the process of recovering  from the effects of past subsidization or dumping, the magnitude of the amount of countervailable  subsidies, actual and potential decline in sales, profits, output, market share, productivity,  return on investments, utilization of capacity; factors affecting Community prices; actual and  potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise  capital or investments and, in the case of agriculture, whether there has been an increased burden  on Government support programmes. This list is not exhaustive, nor can one or several of these  factors necessarily give decisive guidance. 6.  It must be demonstrated, from all the relevant evidence presented in relation to paragraph 2,  that the subsidized imports are causing injury within the meaning of this Regulation. Specifically,  this shall entail a demonstration that the volume and/or price levels identified pursuant to  paragraph 3 are responsible for an impact on the Community industry as provided for in paragraph 5,  and that this impact exists to a degree which enables it to be classified as material. 7.  Known factors other than the subsidized imports which at the same time are injuring the  Community industry shall also be examined to ensure that injury caused by these other factors is  not attributed to the subsidized imports pursuant to paragraph 6. Factors which may be considered  in this respect include, inter alia, the volume and prices of non-subsidized imports, contraction  in demand or changes in the patterns of consumption, trade restrictive practices of and competition  between the foreign and Community producers, developments in technology and the export performance  and productivity of the Community industry. 8.  The effect of the subsidized imports shall be assessed in relation to the production of the  Community industry of the like product when available data permit the separate identification of  that production on the basis of such criteria as the production process, producers' sales and  profits. If such separate identification of that production is not possible, the effects of the  subsidized imports shall be assessed by the examination of the production of the narrowest group or  range of products, which includes the like product, for which the necessary information can be  provided. 9.  A determination of a threat of material injury shall be based on facts on not merely on  allegation, conjecture or remote possibility. The change in circumstances which would create a  situation in which the subsidy would cause injury must be clearly foreseen and imminent. 10.  In making a determination regarding the existence of a threat of material injury,  consideration should be given to, inter alia, such factors as: (i) the nature of the subsidy or subsidies in question and the trade effects likely to arise  therefrom; (ii) a significant rate of increase of subsidized imports into the Community market indicating the  likelihood of substantially increased imports; (iii) sufficient freely disposable or an imminent, substantial increase in capacity of the exporter  indicating the likelihood of substantially increased subsidized exports to the Community market,  taking into account the availability of other export markets to absorb any additional exports; (iv) whether imports are entering at prices that would, to a significant degree, depress prices or  prevent price increases which otherwise would have occurred, and would likely increase demand for  further import; and (v) inventories of the product being investigated. 11.  No one of the factors listed above by itself can necessarily give decisive guidance but the  totality of the factors considered must lead to the conclusion that further subsidized exports are  imminent and that, unless protective action is taken material injury would occur. Article 6 Definition of Community industry 1.  For the purposes of this Regulation, the term 'Community` industry shall be interpreted as  referring to the Community producers as a whole of the like product or to those of them whose  collective output of the products constitutes a major proportion, as defined in Article 7 (8), of  the total Community production of those products, except that: (i) when producers are related to the exporters or importers or are themselves importers of the  allegedly subsidized product, the term 'the Community industry` may be interpreted as referring to  the rest of the producers; (ii) in exceptional circumstances the territory of the Community may, for the production in  question, be divided into two or more competitive markets and the producers within each market may  be regarded as a separate industry if (a) the producers within such market sell all or almost all  of their production of the product in question in that market, and (b) the demand in that market is  not to any substantial degree supplied by producers of the product in question located elsewhere in  the Community. In such circumstances, injury may be found to exist even where a major proportion of  the total Community industry is not injured, provided there is a concentration of subsidized  imports into such an isolated market and provided further that the subsidized imports are causing  injury to the producers of all or almost all of the production within such market. 2.  For the purpose of paragraph 1, producers shall be considered to be related to exporters or  importers only if (a) one of them directly or indirectly controls the other; or (b) both of them  are directly or indirectly controlled by a third person; or (c) together they directly or  indirectly control a third person, provided that there are grounds for believing or suspecting that  the effect of the relationship is such as to cause the producer concerned to behave differently  from non-related producers. For the purpose of this paragraph, one shall be deemed to control  another when the former is legally or operationally in a position to exercise restraint or  direction over the latter. 3.  Where the Community industry has been interpreted as referring to the producers in a certain  region, the exporters or the Government granting countervailable subsidies shall be given an  opportunity to offer undertakings pursuant to Article 10 in respect of the region concerned. In  such cases, when evaluating whether the measures are in the Community interest, special account  shall be taken of the interest of the region. If an adequate undertaking is not offered promptly or  the situations set out in Article 10 (9) and (10) apply, a provisional or definitive countervailing  duty may be imposed in respect of the Community as a whole. In such cases the duties may, if  practicable, be limited to specific producers or exporters. 4.  The provisions of Article 5 (8) shall apply to this Article. Article 7 Initiation of proceedings 1.  Except as provided for in paragraph 10, an investigation to determine the existence, degree and  effect of any alleged subsidy shall be initiated upon a written complaint by any natural or legal  person, or any association not having legal personality, acting on behalf of the Community  industry. (i) The complaint may be submitted to the Commission, or a Member State, which shall forward it to  the Commission. The Commission shall send Member States a copy of any complaint it receives. The  complaint shall be deemed to have been lodged on the first working day following its delivery to  the Commission by registered mail or the issuing of an acknowledgement of receipt by the  Commission. (ii) Where, in the absence of any complaint, a Member State is in possession of sufficient evidence  of subsidization and of injury resulting therefrom for the Community industry it shall immediately  communicate such evidence to the Commission. 2.  A complaint pursuant to paragraph I shall include sufficient evidence of the existence of  countervailable subsidies (including, if possible, of their amount), injury and a causal link  between the allegedly subsidized imports and the alleged injury. The complaint shall contain such  information as is reasonably available to the complainant on the following: (i) identity of the complainant and a description of the volume and value of the Community  production of the like product by the complainant. Where a written complaint is made on behalf of  the Community industry, the complaint shall identify the industry on behalf of which the complaint  is made by a list of all known Community producers of the like product (or associations of  Community producers of the like product) and, to the extent possible, a description of the volume  and value of Community production of the like product accounted for by such producers; (ii) a complete description of the allegedly subsidized product, the names of the country or  countries of origin and/or export in question, the identity of each known exporter or foreign  producer and a list of known persons importing the product in question; (iii) evidence with regard to the existence, amount, nature and countervailability of the subsidies  in question; (iv) information on the evolution of the volume of the allegedly subsidized imports, the effect of  these imports on prices of the like product in the Community market and the consequent impact of  the imports on the Community industry, as demonstrated by relevant factors and indices having a  bearing on the state of the Community industry, such as those listed in Article 5 (3) and (5). 3.  The Commission shall, to the degree possible, examine the accuracy and adequacy of the evidence  provided in the complaint to determine whether there is sufficient evidence to justify the  initiation of an investigation. 4.  An investigation may be initiated in order to determine whether or not the alleged subsidies  are specific within the meaning of Article 3 (2) and (3) of this Regulation. 5.  An investigation may also be initiated in respect of subsidies non-countervailable according to  Article 3 (7), (8) or (9) in order to determine whether or not the conditions laid down in those  paragraphs have been met. 6.  If a subsidy is granted pursuant to a subsidy programme which has been notified in advance of  its implementation to the WTO Committee on Subsidies and Countervailing Measures in accordance with  the provision of Article 8 of the Subsidies Agreement, and in respect of which the Committee has  failed to determine that the relevant conditions laid down in Article 8 of the Subsidies Agreement  have not been met, an investigation shall not be initiated in respect of a subsidy granted pursuant  to such a programme, unless a violation of Article 8 of the Subsidies Agreement has been  ascertained by the competent WTO Dispute Settlement Body or through arbitration as provided in  Article 8 (5) of the Subsidies Agreement. 7.  An investigation may also be initiated in respect of measures of the type listed in Annex IV to  this Regulation, to the extent that they contain an element of subsidy as defined by Article 2, in  order to determine whether the measures in question fully conform to the provisions of Annex IV. 8.  An investigation shall not be initiated pursuant to paragraph 1 unless it has been determined,  on the basis of an examination of the degree of support for, or opposition to, the complaint  expressed by Community producers of the like product, that the complaint has been made by or on  behalf of the Community industry. The complaint shall be considered to have been made by or on  behalf of the Community industry if it is supported by those Community producers whose collective  output constitutes more than 50 % of the total production of the like product produced by that  portion of the Community industry expressing either support for or opposition to the complaint.  However, no investigation shall be initiated when Community producers expressly supporting the  complaint account for less than 25 % of total production of the like product produced by the  Community industry. 9.  The Commission shall avoid, unless a decision has been made to initiate an investigation, any  publicising of the complaint for the initiation of an investigation. However, as soon as possible  after the receipt of a properly documented complaint pursuant to this Article, and in any event  before the initiation of an investigation, the Commission shall notify the government of the  country of origin and/or export concerned, and this government shall be invited for consultations  with the aim of clarifying the situation as to matters referred to in paragraph 2 and arriving at a  mutually agreed solution. 10.  If in special circumstances, the Commission decides to initiate an investigation without  having received a written complaint by or on behalf of the Community industry for the initiation of  such investigation, this shall be done on the basis of sufficient evidence of the existence of  countervailable subsidies, injury and causal link, as described in paragraph 2, to justify the  initiation of an investigation. 11.  The evidence of both subsidies and injury shall be considered simultaneously in the decision  whether or not to initiate an investigation. A complaint shall be rejected where there is  insufficient evidence of either countervailable subsidies or of injury to justify proceeding with  the case. Pursuant to this Article, proceedings shall not be initiated against countries whose  imports represent a market share of below 1 %, unless such countries collectively account for 3 %,  or more, of Community consumption. 12.  The complaint may be withdrawn prior to initiation, in which case it shall be considered not  to have been lodged. 13.  Where, after consultation, it is apparent that there is sufficient evidence to justify  initiating proceedings the Commission shall initiate proceedings within 45 days of the lodging of  the complaint and publish a notice in the Official Journal of the European Communities. Where  insufficient evidence has been presented, the complainant shall, after consultation, be so informed  within 45 days of the date on which the complaint is lodged with the Commission. 14.  The notice of initiation of the proceeding shall announce the initiation of an investigation,  indicate the product and countries concerned, give a summary of the information received and  provide that all relevant information is to be communicated to the Commission; it shall state the  periods within which interested parties may make themselves known, present their views in writing  and submit information, if such views and information are to be taken into account during the  investigation; it shall also state the period within which interested parties may apply to be heard  by the Commission in accordance with Article 8 (5). 15.  The Commission shall advise the exporters, importers and representative associations of  importers or exporters known to it to be concerned, as well as the government of the country of  origin and/or export and the complainants, of the initiation of the proceedings and, with due  regard to the protection of confidential information, provide the full text of the written  complaint received pursuant to paragraph 1 to the known exporters, and to the authorities of the  country of origin and/or export, and make it available, upon request, to other interested parties  involved. Where the number of exporters involved is particularly high, the full text of the written  complaint should instead be provided only to the authorities of the country of origin and/or export  or to the relevant trade association. 16.  A countervailing duty investigation shall not hinder the procedures of customs clearance. Article 8 The investigation 1.  Following the initiation of the proceedings, the Commission, acting in cooperation with the  Member States, shall commence an investigation at Community level. Such investigation shall cover  both subsidization and injury and these shall be investigated simultaneously. For the purpose of a  representative finding, an investigation period shall be selected which, in the case of  subsidization, shall normally cover the investigation period provided for in Article 4 (1).  Information relating to a period subsequent to the investigation period shall, normally, not be  taken into account. 2.  Parties receiving questionnaires used in a countervailing duty investigation shall be given at  least 30 days for reply. The time limit for exporters shall be counted from the date of receipt of  the questionnaire, which for this purpose shall be deemed to have been received one week from the  day on which it was sent to the respondent or transmitted to the appropriate diplomatic  representative of the country of origin and/or export. An extension of the 30 day period may be  granted, taking due account of the time limits of the investigation and provided the party gives a  good reason, in terms of its particular circumstances, for such extension. 3.  The Commission may request Member States to supply information, and Member States shall take  whatever steps are necessary in order to give effect to such requests. They shall send to the  Commission the information requested together with the results of all inspections, checks or  investigations carried out. Where this information is of general interest or where its transmission  has been requested by a Member State, the Commission shall forward it to the Member States,  provided it is not confidential, in which case a non-confidential summary shall be forwarded. 4.  The Commission may request Member States to carry out all necessary checks and inspections,  particularly amongst importers, traders and Community producers, and to carry out investigations in  third countries, provided the firms concerned give their consent and the government of the country  in question has been officially notified and raises no objection. Member States shall take whatever  steps are necessary in order to give effect to such requests from the Commission. Officials of the  Commission shall be authorized, if the Commission or a Member State so requests, to assist the  officials of Member States in carrying out their duties. 5.  The interested parties, which have made themselves known in accordance with Article 7 (14),  shall be heard if they have, within the period prescribed in the notice published in the Official  Journal of the European Communities, made a written request for a hearing showing that they are an  interested party likely to be affected by the result of the proceedings and that there are  particular reasons why they should be heard. 6.  Opportunities shall, on request, be provided for the importers, exporters and the complainants,  which have made themselves known in accordance with Article 7 (14), and the government of the  country of origin and/or export, to meet those parties with adverse interests so that opposing  views may be presented and rebuttal arguments offered. Provision of such opportunities must take  account of the need to preserve confidentiality and of the convenience to the parties. There shall  be no obligation on any party to attend a meeting, and failure to do so shall not be prejudicial to  that party's case. Oral information provided pursuant to this paragraph shall be taken into account  by the Commission in so far as it is subsequently reproduced in writing. 7.  The complainants, the government of the country of origin and/or export, importers and  exporters and their representative associations, users and consumer organizations, which have made  themselves known in accordance with Article 7 (14), may, upon written request, inspect all  information made available to the Commission by any party to an investigation, as distinct from  internal documents prepared by the authorities of the Community or its Member States, provided that  it is relevant to the defence of their interests and not confidential within the meaning of Article  20, and that it is used in the investigation. Such parties may respond to such information and  their comments may be taken into consideration, to the extent that they are sufficiently  substantiated in the response. 8.  Except in circumstances provided for in Article 19 the information supplied by interested  parties and upon which findings are based shall be examined for accuracy to the degree possible. 9.  For proceedings initiated pursuant to Article 7 (13), an investigation shall, whenever  possible, be concluded within one year. In any event, such investigations shall in all cases by  concluded within 13 months of initiation, in accordance with the findings made pursuant to Article  10 for undertakings or the findings made pursuant to Article 11 for definitive action. 10.  Throughout the investigation the Commission shall afford the government of the country of  origin and/or export a reasonable opportunity to continue consultations with a view to clarifying  the factual situation and arriving at a mutually agreed solution. Article 9 Provisional measures 1.  Provisional measures may be applied if proceedings have been initiated in accordance with the  provisions of Article 7, a public notice has been given to that effect and interested parties have  been given adequate opportunities to submit information and make comments in accordance with  paragraph 14 of Article 7, a provisional affirmative determination has been made that the imported  product benefits from countervailable subsidies and of consequent injury to the Community industry,  and the Community interest calls for intervention to prevent such injury. The provisional measures  shall be imposed no sooner than 60 days from the initiation of the proceedings but no later than  nine months from the initiation of the proceedings. 2.  The amount of the provisional countervailing duty shall not exceed the total amount of  countervailable subsidies as provisionally established but it should be less than this amount, if  such lesser duty would be adequate to remove the injury to the Community industry. 3.  Provisional measures shall take the form of a security and the release of the products  concerned for free circulation in the Community shall be conditional upon the provision of such  security. 4.  The Commission shall take provisional action after consultation or, in cases of extreme  urgency, after informing the Member States. In this latter case, consultations shall take place 10  days, at the latest, after notification to the Member States of the action taken by the  Commission. 5.  Where a Member State requests immediate intervention by the Commission and the conditions of  paragraph 1 of Article 9 are met, the Commission shall, within a maximum of five working days of  receipt of the request, decide whether a provisional countervailing duty should be imposed. 6.  The Commission shall forthwith inform the Council and the Member States of any decision taken  pursuant to this Article. The Council, acting by qualified majority, may decide differently. 7.  Provisional countervailing duties shall have a maximum period of validity of four months. Article 10 Undertakings 1.  Investigations may be terminated without the imposition of provisional or definitive duties  upon acceptance of satisfactory voluntary undertakings under which: (i) the government of the country of origin and/or export agrees to eliminate or limit the subsidy  or take other measures concerning its effects; or (ii) any exporter undertakes to revise its prices or to cease exports to the area in question as  long as such exports benefit from countervailable subsidies, so that the Commission, after  consultation, is satisfied that the injurious effect of the subsidies is eliminated. Price  increases under such undertakings shall not be higher than necessary to offset the amount of  countervailable subsidies, and should be less than the amount of countervailable subsidies if such  increases would be adequate to remove the injury to the Community industry. 2.  Undertakings may be suggested by the Commission, but no government or exporter shall be obliged  to enter into such an undertaking. The fact that governments or exporters do not offer such  undertakings, or do not accept an invitation to do so, shall in no way prejudice the consideration  of the case. However, it may be determined that a threat of injury is more likely to be realized if  the subsidized imports continue. Undertakings shall not be sought or accepted from governments or  exporters unless a provisional affirmative determination of subsidization and injury caused by such  subsidization has been made. Save in exceptional circumstances, undertakings may not be offered  later than the end of the period during which representations may be made pursuant to Article 21  (5). 3.  Undertakings offered need not be accepted if their acceptance is considered impractical, for  example, if the number of actual or potential exporters is too great, or for other reasons,  including reasons of general policy. The exporter and/or the government of the country of origin  and/or export concerned may be provided with the basis on which it is intended to propose the  rejection of the offer of an undertaking and may be given an opportunity to make comments thereon.  The reason for rejection shall be set out in the definitive decision. 4.  Parties which offer an undertaking shall be required to provide a non-confidential version of  such undertaking, so that it may be made available to interested parties to the investigation.5.  Where undertakings are, after consultation, accepted, and there is no objection raised within  the Advisory Committee, the investigation shall be terminated. In all other cases, the Commission  shall submit to the Council forthwith a report on the results of the consultation, together with a  proposal that the proceedings be terminated. The proceedings shall stand terminated if, within one  month, the Council, acting by qualified majority, has not decided otherwise. 6.  If the undertakings are accepted, the investigation of subsidization and injury shall normally  be completed. In such a case, if a negative determination of subsidization or injury is made, the  undertaking shall automatically lapse except in cases where such a determination is due in large  part to the existence of an undertaking. In such cases, the authorities may require that an  undertaking be maintained for a reasonable period. In the event that an affirmative determination  of subsidization and injury is made, the undertaking shall continue consistent with its terms and  the provisions of this Regulation. 7.  The Commission shall require any government or exporter from whom undertakings have been  accepted to provide, periodically, information relevant to the fulfilment of such undertaking, and  to permit verification of pertinent data. Non-compliance with such requirements shall be construed  as a violation of the undertaking. 8.  Where undertakings are accepted from certain exporters during the course of an investigation,  they shall, for the purpose of Article 13, be deemed to take effect from the date on which the  investigation is concluded for the country of origin and/or export. 9.  In case of violation or withdrawal of undertakings by any party, a definitive duty shall be  imposed in accordance with Article 11, on the basis of the facts established within the context of  the investigation which led to the undertaking, provided that such investigation was concluded with  a final determination on subsidization and injury, and the exporter concerned, or the government of  the country of origin and/or export, except in the case of withdrawal of undertakings by the  exporter or such government, has been given an opportunity to comment. 10.  A provisional duty may, after consultation, be imposed in accordance with Article 9 on the  basis of the best information available, where there is reason to believe that an undertaking is  being violated, or in case of violation or withdrawal of undertakings where the investigation which  led to the undertaking was not concluded. Article 11 Termination without measures and imposition of definitive duties 1.  Where the complaint is withdrawn, proceedings may be terminated unless such termination would  not be in the Community interest. 2.  Where, after consultation, protective measures are unnecessary and there is no objection raised  within the Advisory Committee, the investigation or proceedings shall be terminated. In all other  cases, the Commission shall submit to the Council forthwith a report on the results of the  consultation, together with a proposal that the proceedings be terminated. The proceedings shall  stand terminated if, within one month, the Council, acting by a qualified majority, has not decided  otherwise. 3.  There shall be immediate termination of the proceedings where it is determined that the amount  of countervailable subsidies is de minimis, in accordance with the provisions of paragraph 5, or  where the volume of subsidized imports, actual or potential, or the injury, is negligible. 4.  For all proceedings initiated pursuant to Article 7 (13), injury shall normally be regarded as  negligible where the market share of the imports is less than the amounts set out in Article 7  (11). With regard to investigations concerning imports from developing countries, the volume of  subsidized imports shall also be considered negligible if it represents less than 4 % of the total  imports of the like product in the Community, unless imports from developing countries whose  individual shares of total imports represent less than 4 % collectively account for more than 9 %  of the total imports of the like product in the Community. 5.  For the same investigations, the amount of the countervailable subsidies shall be considered to  be de minimis if such amount is less than 1 % ad valorem, except that (a) as regards investigations concerning imports from developing countries the de minimis threshold  shall be 2 % ad valorem; and (b) for those developing countries Members of the two referred to in Annex VII of the Subsidies  Agreement as well as for developing countries Members of the WTO which have completely eliminated  export subsidies as defined in Article 3 (4) (a) of this Regulation, the de minimis subsidy  threshold shall be 3 % ad valorem; where the application of this provision depends on the  elimination of export subsidies, it shall apply from the date that the elimination of export  subsidies is notified to the WTO Committee on Subsidies and Countervailing Measures, and for so  long as export subsidies are not granted by the developing country concerned; this provision shall  expire eight years from the date of entry into force of WTO Agreement; provided that it is only the investigation that shall be terminated where the amount of the  countervailable subsidies is below the relevant de minimis level for individual exporters and they  shall remain subject to the proceedings and may be re-investigated in any subsequent review carried  out for the country concerned pursuant to Article 13. 6.  Where the facts as finally established show the existence of countervailable subsidies and  injury caused thereby, and the Community interest calls for intervention in accordance with Article  22, a definitive countervailing duty shall be imposed by the Council, acting by simple majority on  a proposal submitted by the Commission after consultation of the Advisory Committee, unless the  subsidy or subsidies are withdrawn or it has been demonstrated that the subsidies no longer confer  any benefit on the exporters involved. Where provisional duties are in force, a proposal for  definitive action shall be submitted to the Council not later than one month before the expiry of  such duties. The amount of the countervailing duty shall not exceed the amount of countervailable  subsidies from which the exporters have been found to benefit, established pursuant to this  Regulation, but should be less than the total amount of countervailable subsidies, if such lesser  duty would be adequate to remove the injury to the Community industry. 7.  A countervailing duty shall be imposed in the appropriate amounts in each case, on a  non-discriminatory basis, on imports of a product from all sources found to benefit from  countervailable subsidies and causing injury, except as to imports from those sources from which  undertakings under the terms of this Regulation have been accepted. The Regulation shall specify  the duty for each supplier, or, if that is impracticable, the supplying country concerned. 8.  When the Commission has limited its examination in accordance with Article 18, any  countervailing duty applied to imports from exporters or producers which have made themselves known  in accordance with Article 18 but were not included in the examination shall not exceed the  weighted average amount of countervailable subsidies established for the parties in the sample. For  the purpose of this paragraph, the Commission shall disregard any zero and de minimis amounts of  countervailable subsidies and amounts of countervailable subsidies established under the  circumstances referred to in Article 19. The authorities shall apply individual duties to imports  from any exporter or producer which is granted individual treatment as provided for in Article 18. Article 12 Retroactivity 1.  Provisional measures and definitive countervailing duties shall only by applied to products  which enter for consumption after the time when the decision taken under Article 9 (1) and Article  11 (6), respectively, enters into force, subject to the exceptions set out in this Regulation. 2.  Where a provisional duty has been applied and the facts as finally established show the  existence of countervailable subsidies and injury, the Council shall decide, irrespective of  whether a definitive countervailing duty is to be imposed, what proportion of the provisional duty  is to be definitively collected. For this purpose, 'injury` shall not include material retardation  of the establishment of a Community industry, nor threat of material injury, except where it is  found that this would, in the absence of provisional measures, have developed into material injury.  In all other cases involving such threat or retardation, any provisional amounts shall be released  and definitive duties can only be imposed from the date that a final determination of threat or  material retardation is made. 3.  If the definitive countervailing duty is higher than the provisional duty, the difference shall  not be collected. If the definitive duty is lower than the provisional duty, the duty shall be  recalculated. Where a final determination is negative, the provisional duty shall not be  confirmed. 4.  A definitive countervailing duty may be levied on products which were entered for consumption  not more than 90 days prior to the date of application of provisional measures but not prior to the  initiation of the investigation, provided that the imports have been registered in accordance with  Article 15 (5), the importers concerned have been given an opportunity to comment by the Commission  and it is found that: (i) there exist critical circumstances where for the subsidized product in question injury which is  difficult to repair is caused by massive imports in a relatively short period of a product  benefiting from countervailable subsidies under the terms of this Regulation; and, (ii) where it is deemed necessary, in order to preclude the recurrence of such injury, to assess  countervailing duties retroactively on those imports. 5.  In cases of violation or withdrawal of undertakings definitive duties may be levied in  accordance with this Regulation on goods entered for consumption not more than 90 days before the  application of provisional measures provided that the imports have been registered in accordance  with Article 15 (5) and that any such retroactive assessment shall not apply to imports entered  before the violation or withdrawal of the undertaking. Article 13 Duration, reviews and refunds  1.  A countervailing measure shall remain in force only as long as and to the extent necessary to  counteract the countervailable subsidies which are causing injury. A. Expiry reviews 2.  A definitive countervailing measure shall expire five years from its imposition or five years  from the date of the most recent review which has covered both subsidization and injury, unless it  is determined in a review that the expiry would be likely to lead to continuation or recurrence of  subsidization and injury. Such an expiry review shall be initiated on the initiative of the  Commission or upon a request made by or on behalf of the Community producers and the measure shall  remain in force pending the outcome of such review. 3.  An expiry review shall be initiated where the request contains sufficient evidence that the  removal of measures would be likely to result in a continuation or recurrence of subsidization and  injury. Such a likelihood may, for example, be indicated by evidence of continued subsidization and  injury or evidence that the removal of injury is partly or solely due to the existence of measures  or evidence that the circumstances of the exporters, or market conditions, are such that they would  indicate the likelihood of further injurious subsidization. 4.  In carrying out investigations under this section, the exporters, importers, the government of  the country of origin and/or export and the complainants shall be provided with the opportunity to  amplify, rebut or comment on the matters set out in the review request and conclusions shall be  reached with due account taken of all relevant and duly supported evidence presented in relation to  the question of whether the removal of measures would be likely, or unlikely, to lead to the  continuation or recurrence of subsidization and injury. 5.  Under this section, a notice of impending expiry shall be published in the Official Journal of  the European Communities at an appropriate time as defined in this paragraph in the final year of  the period of application of the measures. Thereafter, the Community producers shall, no later than  three months before the end of the five-year period, be entitled to lodge a review request in  accordance with paragraph 3. A notice announcing the actual expiry of measures under this section  shall also be published. B. Interim reviews 6.  The need for the continued imposition of measures may also be reviewed, where warranted on the  initiative of the Commission or at the request of a Member State or, provided that a reasonable  period of time of at least one year has elapsed since the imposition of the definitive measure,  upon a request by any exporter, importer or the Community producers or the government of the  country of origin and/or export which contains sufficient evidence substantiating the need for such  an interim review. 7.  An interim review shall be initiated where the request contains sufficient evidence that the  continued imposition of the measure is no longer necessary to offset the countervailable subsidy  and/or the injury would be unlikely to continue or recur if the measure were removed or varied, or  that the existing measure is not, or is no longer, sufficient to counteract the countervailable  subsidy which is causing injury. 8.  Where the countervailing duties imposed are less than the amount of countervailable subsidies  found, an interim review shall be initiated if the Community producers provide sufficient evidence  that the duties have led to no movement or insufficient movement of resale prices of the imported  product in the Community. If the investigation proves the allegations to be correct, countervailing  duties may be increased to achieve the price increase required to remove injury, although the  increased duty level shall not exceed the amount of the countervailable subsidies. 9.  In carrying out investigations under this section, the Commission may, inter alia, consider  whether the circumstances with regard to subsidization and injury have changed significantly, or  whether existing measures are achieving the intended results in removing the injury previously  established in accordance with Article 5 of this Regulation. In these respects, account shall be  taken of all relevant and duly supported evidence in the final determination. C. Accelerated reviews 10.  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  cooperate with the Commission, shall be entitled, upon request, to an accelerated review in order  that the Commission promptly establish an individual countervailing duty rate for that exporter.  Such a review shall be initiated after consultation of the Advisory Committee and Community  producers have been given an opportunity to comment. D. General provisions on reviews 11.  The relevant provisions of Articles 7 and 8, excluding those relating to time limits, shall  apply to any review carried out pursuant to paragraphs 2 to 5, 6 to 9 and 10. Any such review shall  be carried out expeditiously and shall normally be concluded within 12 months of the date of  initiation of the review. 12.  Reviews pursuant to this Article shall be initiated by the Commission after consultation of  the Advisory Committee. Where warranted by reviews, measures shall be repealed or maintained  pursuant to paragraphs 2 to 5, or repealed, maintained or amended pursuant to paragraphs 6 to 9 and  10, by the Community institution responsible for their introduction. Where measures are repealed  for individual exporters, but not for the country as a whole, such exporters shall remain subject  to the proceedings and may be re-investigated in any subsequent review carried out for that country  pursuant to this Article. 13.  Where a review of measures pursuant to paragraphs 6 to 9 is in progress at the end of the  period of application of measures as defined in paragraphs 2 to 5, the measures shall also be  investigated under the provisions of paragraphs 2 to 5. E. Refunds 14.  Notwithstanding paragraphs 2 to 5, an importer may request reimbursement of duties collected  where it is shown that the amount of countervailable subsidies, on the basis of which duties were  paid, has been eliminated, or reduced to a level which is below the level of the duty in force. 15.  In order to request a refund of countervailing duties, the importer shall submit an  application to the Commission. The application shall be submitted via the Member State in the  territory of which the products were released for free circulation within six months of the date on  which the amount of the definitive duties to be levied was duly determined by the competent  authorities or the date on which a decision was made definitively to collect the amounts secured by  way of provisional duty. Member States shall forward the request to the Commission forthwith. 16.  An application for refund shall only be considered to be duly supported by evidence where it  contains precise information on the amount of refund of countervailing duties claimed and all  customs documentation relating to the calculation and payment of such amount. It shall also include  evidence, for a representative period, on the amount of countervailable subsidies for the exporter  or producer to which the duty applies. In cases where the importer is not associated to the  exporter or producer concerned and such information is not immediately available or the exporter or  producer is unwilling to release it to the importer, the application shall contain a statement from  the exporter or producer that the amount of countervailable subsidies has been reduced or  eliminated, as specified in this Article, and that the relevant supporting evidence shall be  provided to the Commission. It shall be understood that where such evidence is not forthcoming from  the exporter or producer, within a reasonable period of time, the application shall be rejected. 17.  The Commission shall, after consultation of the Advisory Committee, decide whether and to what  extent the application should be granted or it may decide at any time to initiate an interim review  and the information and findings from such review, carried out in accordance with the provisions  applicable for such reviews, shall be used to determine whether and to what extent a refund is  justified. Refunds of duties shall normally take place within 12 months, and in no case more than  18 months after the date on which a request for a refund, duly supported by evidence, has been made  by an importer of the product subject to the countervailing duty. The payment of any refund  authorized should normally be made by Member States within 90 days of the above-noted decision. F. Final provision 18.  In all review or refund investigations carried out pursuant to this Article, the Commission  shall apply, in so far as circumstances have not changed, the same methodology as in the  investigation which led to the duty, with due account taken of the provisions set out in Article 4  and Article 18 of this Regulation. Article 14 Circumvention 1.  Countervailing duties imposed pursuant to this Regulation may be extended to apply to imports  from third countries of like products, or parts thereof, when circumvention of the measures in  force is taking place. Circumvention shall be 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, and there  is evidence that the remedial effects of the duty are being undermined, in terms of the prices  and/or quantities of the like products, and the imported like product and/or parts thereof still  benefit from the subsidy. 2.  Investigations shall be initiated pursuant to this Article where the request contains  sufficient evidence on the factors set out in paragraph 1. Initiations shall be made, after  consultation of the Advisory Committee, by Commission Regulation which shall also instruct the  customs authorities to make imports subject to registration in accordance with Article 15 (5) or  request guarantees. Investigations shall be carried out by the Commission, which may be assisted by  customs authorities, and shall be concluded within nine months. Where the facts, as finally  ascertained, justify the extension of measures this shall be done by the Council, acting by simple  majority on a proposal from the Commission, from the date that registration was imposed pursuant to  Article 15 (5) or guarantees were requested. The relevant procedural provisions of this Regulation  with regard to initiations and the conduct of investigations shall apply pursuant to this Article. 3.  Products shall not be subject to registration pursuant to Article 15 (5) or measures where they  are accompanied by a customs certificate declaring that the importation of the goods does not  constitute circumvention. These certificates may be issued to importers, upon written application,  by the authorities following authorization by a decision of the Commission, after consultation of  the Advisory Committee, or the decision of the Council imposing measures and they shall remain  valid for the period, and under the conditions set down therein.4.  Nothing in this Article shall preclude the normal application of the provisions in force  concerning customs duties.  Article 15 General provisions 1.  Provisional or definitive countervailing duties shall be imposed by Regulation, and collected  by Member States in the form, at the rate specified and according to the other criteria laid down  in the Regulation imposing such duties. Such duties shall also be collected independently of the  customs duties, taxes and other charges normally imposed on imports. No product shall be subject to  both anti-dumping and countervailing duties to compensate for the same situation arising from  dumping or export subsidization. 2.  Regulations imposing provisional or definitive countervailing duties, or Regulations or  Decisions accepting undertakings or terminating investigations or proceedings, shall be published  in the Official Journal of the European Communities. Such Regulations or Decisions shall contain,  in particular, and with due regard to the protection of confidential information the names of the  exporters, if practical, or countries involved, a description of the product and a summary of the  facts and considerations relevant to the countervailable subsidies and injury determinations. In  each case, a copy of the Regulation or Decision shall be sent to known interested parties. The  provisions of this paragraph shall apply mutatis mutandis to reviews. 3.  Special provisions, in particular with regard to the common definition of the concept of  origin, as contained in Council Regulation (EEC) No 2913/92 of 12 October 1992 establishing the  Community Customs Code (1), may be adopted in, or pursuant to this Regulation. 4.  In the Community interest, measures imposed pursuant to this Regulation may, after consultation  of the Advisory Committee, be suspended by a decision of the Commission for a period of nine  months. The suspension may be extended for a further period, not exceeding one year, if the Council  so decides, by simple majority, on a proposal from the Commission. Measures may only be suspended  where market conditions have temporarily changed to an extent that injury would be unlikely to  resume as a result of the suspension, and provided that the Community industry has been given an  opportunity to comment and these comments have been taken into account. Measures may, at any time  and after consultation, be reinstated if the reason for suspension is no longer applicable. 5.  The Commission may, after consultation of the Advisory Committee, direct the customs  authorities to take the appropriate steps to register imports, so that measures may subsequently be  applied against these imports from the date of such registration. Imports may be made subject to  registration following a request from the Community industry which contains sufficient evidence to  justify such action. Registration shall be introduced by Regulation which shall specify the purpose  of the action and, if appropriate, the estimated amount of possible future liability. Imports may  not be made subject to registration for a period longer than nine months. 6.  Member States shall report to the Commission, on a monthly basis, the import trade of products  subject to investigation and subject to measures, and the amount of duties collected pursuant to  this Regulation. Article 16 Consultations 1.  Any consultations provided for in this Regulation, except those referred to in Article 7 (9)  and 8 (10), shall take place within an Advisory Committee, which shall consist of representatives  of each Member State, with a representative of the Commission as chairman. Consultations shall be  held immediately on request by a Member State or on the initiative of the Commission, and in any  event within a time frame which allows the time limits set by this Regulation to be respected. 2.  The Committee shall meet when convened by its chairman. He shall provide the Member States, as  promptly as possible, with all relevant information. 3.  Where necessary, consultation may be in writing only; in such case the Commission shall notify  the Member States and shall specify a period within which they shall be entitled to express their  opinions or to request an oral consultation, which the chairman shall arrange, provided that such  oral consultation can be held within a time frame which allows the time limits set by this  Regulation to be respected. 4.  Consultation shall in particular cover: (i) the existence of countervailable subsidies and the methods of establishing their amount; (ii) the existence and extent of injury; (iii) the causal link between the subsidized imports and injury; (iv) the measures which, in the circumstances, are appropriate to prevent or remedy the injury  caused by the countervailable subsidies and the ways and means for putting such measures into  effect. Article 17 Verification visits 1.  The Commission shall, where it considers it appropriate, carry out visits to examine the  records of importers, exporters, traders, agents, producers, trade associations and organizations,  to verify information provided on subsidization and injury. In the absence of a proper and timely  reply a verification visit may not be carried out. 2.  The Commission may carry out investigations in third countries as required, provided it obtains  the agreement of the firms concerned, it notifies the representatives of the government of the  country in question and the latter does not object to the investigation. As soon as the agreement  of the firms concerned has been obtained the Commission should notify the authorities of the  country of origin and/or export of the names and addresses of the firms to be visited and the dates  agreed. 3.  The firms concerned shall be advised of the nature of the information to be verified during  verification visits and of any further information which needs to be provided during such visits,  though this should not preclude requests being made during the verification for further details to  be provided in the light of information obtained. 4.  In investigations carried out pursuant to this paragraph, the Commission shall be assisted by  officials of those Member States who so request. Article 18 Sampling 1.  In cases where the number of complainants, exporters or importers, types of product or  transactions is large, the investigation may be limited to a reasonable number of parties, products  or transactions by using samples which are statistically valid on the basis of information  available to it at the time of the selection, or to the largest representative volume of the  production, sales or exports which can reasonably be investigated within the time limit available. 2.  The final selection of parties, types of products or transactions made under these sampling  provisions shall rest with the Commission, though preference shall be given to choosing a sample in  consultation with, and with the consent of, the parties concerned, provided such parties make  themselves known and make sufficient information available, within three weeks of initiation, to  enable a representative sample to be chosen. 3.  In cases where the examination has been limited in accordance with this Article, an individual  amount of countervailable subsidization shall, nevertheless, be calculated for any exporter or  producer not initially selected who submits the necessary information within the time limits  provided for in this Regulation, except where the number of exporters or producers is so large that  individual examinations would be unduly burdensome and prevent the timely completion of the  investigation. 4.  Where it is decided to sample and there is a degree of non-cooperation by some or all of the  parties selected which is likely to materially affect the outcome of the investigation, a new  sample may be selected. However, if a material degree of non-cooperation persists of there is  insufficient time to select a new sample the relevant provisions of Article 19 shall apply. Article 19 Non-cooperation 1.  In cases in which any interested party refuses access to, or otherwise does not provide,  necessary information within the time limits as provided for in this Regulation, or significantly  impedes the investigation, preliminary or final findings, affirmative or negative, may be made on  the basis of the facts available. Where it is found that any interested party has supplied false or  misleading information the information shall be disregarded and use may be made of the facts  available. Interested parties should be made aware of the consequences of non-cooperation. 2.  A lack of a computerized response shall not be deemed to constitute non-cooperation provided  that the interested party shows that presenting the response as requested would result in an  unreasonable extra burden or unreasonable additional cost. 3.  Where the information presented by an interested party may not be ideal in all respects it  should not be disregarded, provided that any deficiencies are not such as to cause undue difficulty  in arriving at a reasonably accurate finding and provided the information is appropriately  submitted in timely fashion, is verifiable and the party has acted to the best of its ability. 4.  If evidence or information is not accepted, the supplying party should be informed forthwith of  the reasons thereof and have an opportunity to provide further explanations within the time limit  specified. If the explanations are considered unsatisfactory, the reasons for rejection of such  evidence or information should be disclosed and given in any published findings. 5.  If determinations, including those with respect to the amount of countervailable subsidies, are  based on the provisions of paragraph 1, including the information supplied in the complaint, it  should, where practicable and with due regard to the time limits of the investigation, be checked  by reference to information from other independent sources which may be available, such as  published price lists, official import statistics and customs returns, or information obtained from  other interested parties during the investigation. 6.  If an interested party does not cooperate, or only cooperates partially, and thus relevant  information is being withheld, the result could be less favourable to the party than if it had  cooperated. Article 20 Confidentiality 1.  Any information which is by nature confidential, (for example, because its disclosure would be  of significant competitive advantage to a competitor or because its disclosure would have a  significantly adverse effect upon a person supplying the information or upon a person from whom he  acquired the information) or which is provided on a confidential basis by parties to an  investigation shall, upon good cause shown, be treated as such by the authorities. 2.  Interested parties providing confidential information shall be required to furnish  non-confidential summaries thereof. These summaries shall be in sufficient detail to permit a  reasonable understanding of the substance of the information submitted in confidence. In  exceptional circumstances, such parties may indicate that such information is not susceptible of  summary. In such exceptional circumstances, a statement of the reasons why summarization is not  possible must be provided. 3.  If it is considered that a request for confidentiality is not warranted and if the supplier of  the information is either unwilling to make the information available or to authorize its  disclosure in generalized or summary form, such information may be disregarded unless it can be  satisfactorily demonstrated from appropriate sources that the information is correct. Requests for  confidentiality should not be arbitrarily rejected. 4.  This Article shall not preclude the disclosure of general information by the Community  authorities, and in particular the reasons on which decisions taken pursuant to this Regulation are  based, nor disclosure of the evidence relied on by the Community authorities in so far as is  necessary to explain those reason in court proceedings. Such disclosure must take into account the  legitimate interest of the parties concerned that their business or governmental secrets should not  be divulged. 5.  The Council, the Commission and the Member States, or the officials of any of these, shall not  reveal any information received pursuant to this Regulation for which confidential treatment has  been requested by its supplier without specific permission from the supplier. Exchanges of  information between the Commission and Member States, any information relating to consultations  made pursuant to Article 16 or consultations described in Articles 7 (9) and (10), or any internal  documents prepared by the authorities of the Community or its Member States, shall be not be  divulged except as specifically provided for in this Regulation. 6.  Information received pursuant to this Regulation shall be used only for the purpose for which  it was requested. Article 21 Disclosure 1.  The complainants, importers and exporters and their representative associations, and  representatives of the country of origin and/or export may request disclosure of the details  underlying the essential facts and considerations, on the basis of which provisional measures have  been imposed. Requests for such disclosure shall be made in writing immediately following the  imposition of provisional measures and the disclosure shall be made in writing as soon as possible  thereafter. 2.  The parties mentioned in paragraph 1 may request final disclosure of the essential facts and  considerations on the basis of which it is intended to recommend the imposition of definitive  measures, or the termination of an investigation or proceedings without the imposition of measures,  with particular attention being paid to the disclosure of any facts or considerations which are  different from those used for any provisional measures. 3.  Requests for final disclosure, as defined in paragraph 2, shall be addressed to the Commission  in writing and be received, in cases where a provisional duty has been applied, not later than one  month after publication of the imposition of that duty. Where a provisional duty has not been  applied parties shall be provided with an opportunity to request final disclosure within time  limits set by the Commission. 4.  Final disclosure shall be given in writing. It shall be made, with due regard paid to the  protection of business or governmental secrets, as soon as possible, and normally, not later than  one month prior to a definitive decision or the submission by the Commission of any proposal for  final action pursuant to Article 11. Where the Commission is not in a position to disclose certain  facts or considerations at that time, these shall be disclosed as soon as possible thereafter.  Disclosure shall not prejudice any subsequent decision which may be taken by the Commission or the  Council but where such decision is based on any different facts and considerations these shall be  disclosed as soon as possible. 5.  Representations made after final disclosure is given shall be taken into consideration only if  received within a period to be set by the Commission in each case, which shall be at least 10 days,  due consideration being given to the urgency of the matter. Article 22 Community interest 1.  Pursuant to this Regulation, a determination as to whether the Community interest calls for  intervention shall be based on an assessment of all the various interests taken as a whole,  including the interests of the domestic industry and users and consumers, and a determination  pursuant to this Article shall only be made where all parties have been given the opportunity to  make their views known pursuant to paragraph 2. In such an examination, the need to eliminate the  trade distorting effects of injurious subsidization and to restore effective competition shall be  given special consideration. Measures, as determined on the basis of subsidization and injury  found, may not be applied where the authorities, on the basis of all the information submitted, can  safely conclude that it is not in the Community interest to apply such measures. 2.  In order to provide a sound basis on which the authorities can take account of all views and  information in the decision on whether, or not, the imposition of measures is in the Community  interest, the complainants, importers and their representative associations, representative users  and representative consumer organizations may, within the time limits specified in the notice of  initiation of the countervailing duty investigation, make themselves known and provide information  to the Commission. Such information, or appropriate summaries thereof, shall be made available to  the other parties specified in this Article, and they shall be entitled to respond to such  information. 3.  The parties which have acted in conformity with paragraph 2 may request a hearing. Such  requests shall be granted when they are submitted within the time limits set in paragraph 2, and  when they set out the reasons, in terms of the Community interest, why the parties should be  heard. 4.  The parties which have acted in conformity with paragraph 2 may provide comments on the  application of any provisional duties imposed. Such comments shall be received within one months of  the application of such measures if they are to be taken into account and they, or appropriate  summaries thereof, shall be made available to other parties who shall be entitled to respond to  such comments. 5.  The Commission shall examine the information which is properly submitted, and the extent to  which it is representative, and the results of such analysis, together with an opinion on its  merits, shall be transmitted to the Advisory Committee. The balance of views expressed in the  Committee shall be taken into account by the Commission in any proposal made pursuant to Article  11. 6.  The parties which have acted in conformity with paragraph 2, may request the facts and  considerations on which final decisions are likely to be taken to be made available to them. Such  information shall be made available to the extent possible and without prejudice to any subsequent  decision taken by the Commission or the Council. 7.  Pursuant to this Article, information shall only be taken into account where it is supported by  actual evidence which substantiates its validity. Article 23 Relationships between countervailing duty measures and multilateral remedies If an imported product is made subject to any countermeasures imposed following recourse to the  dispute settlement procedures of the Subsidies Agreement, and such measures are appropriate to  remove the injury caused by the countervailable subsidies, any countervailing duty imposed with  regard to that product shall immediately be suspended, or repealed, as appropriate. Article 24 Final provisions This Regulation shall not preclude the application of: (i)  any special rules laid down in agreements concluded between the Community and third  countries; (ii) the Community Regulations in the agricultural sector and Council Regulations (EC) No 3448/93  laying down the trade arrangements applicable to certain goods resulting from the processing of  agricultural products, Regulation (EEC) No 2730/75 of the Council of 29 October 1975 on glucose and  lactose (2) and Regulation (EEC) No 2783/75 of the Council of 29 October 1975 on the common system  of trade for ovalbumin and lactalbumin (31); this Regulation shall operate by way of complement to  those Regulations and in derogation from any provisions thereof which preclude the application of  countervailing duties; (iii) special measures, provided that such action does not run counter to obligations under the  GATT. Article 25 Repeal of existing legislation Regulation (EEC) No 2423/88 is hereby repealed. References to the repealed Regulation shall be  construed as references to this Regulation. Article 26 Entry into force This Regulation shall enter into force on 1 January 1995. It shall apply to proceedings and interim review investigations initiated after 1 September 1994  and to expiry review investigations for which the notice of impending expiry of measures has been  published after the same date. However, for proceedings initiated pursuant to Article 7 (13), the  references to time limits shall only apply after a date which the Council shall specify in a  Decision to be adopted by a qualified majority no later than 1 April 1995 on the basis of a  Commission proposal to be submitted to the Council once the necessary budgetary resources have been  made available. This Regulation shall be binding in its entirety and directly applicable in all  Member States. Done at Brussels, 22 December 1994. For the Council The President H. Seehofer (1) Opinion delivered on 14 December 1994 (not yet published in the Official  Journal). (2) OJ No L 209, 2. 8. 1988, p. 1. Regulation as amended by Regulation (EC) No 521/94 (OJ No L 66,  10. 3. 1994, p. 7) and Regulation (EC) No 522/94 (OJ No L 66, 10. 3. 1994, p. 10). (1) OJ No L 302, 19. 10. 1992, p. 1. (1) OJ No L 318, 20 12. 1993, p. 18. (2) OJ No L 281, 1. 11. 1975, p. 20. Regulation as last amended by Regulation (EEC) No 222/88 (OJ  No L 28, 1. 2. 1988, p. 1). (3) OJ No L 282, 1. 11. 1975, p. 104. Regulation as last amended by Regulation (EEC) No 4001/87 (OJ  No L 377, 31. 12. 1987, p. 44). ANNEX I ILLUSTRATIVE OF EXPORT SUBSIDIES (a) The provision by governments of direct  subsidies to a firm or an industry contingent upon export performance. (b) Currency retention schemes or any similar practices which involve a bonus on exports. (c) Internal transport and freight charges on export shipments, provided or mandated by  governments, on terms more favourable than for domestic shipments. (d) The provision by governments or their agencies either directly or indirectly through  government-mandated schemes, of imported or domestic products or services for use in the production  of exported goods, on terms or conditions more favourable than for provision of like or directly  competitive products or services for use in the production of goods for domestic consumption, if  (in the case of products) such terms or conditions are more favourably than those commercially  available (1) on world markets to their exporters. (e) The full or partial exemption, remission, or deferral specifically related to exports, of  direct taxes (1) or social welfare charges paid or payable by industrial or commercial enterprises  (2). (f) The allowance of special deductions directly related to exports or export performance, over and  above those granted in respect of production for domestic consumption, in the calculation of the  base on which taxes are charged. (g) The exemption or remission, in respect of the production and distribution of exported products,  of indirect taxes (1) in excess of those levied in respect of the production and distribution of  like products when sold for domestic consumption. (h) The exemption remission or deferral of prior-stage cumulative indirect taxes (2) on goods or  services used in the production of exported products in excess of the exemption, remission or  deferral of like prior-stage cumulative indirect taxes on goods or services used in the production  of like products when sold for domestic consumption; provided, however, that prior-stage cumulative  indirect taxes may be exempted, remitted or deferred on exported products even when not exempted,  remitted or deferred on like products when sold for domestic consumption, if the prior-stage  cumulative indirect taxes are levied on inputs that are consumed in the production of the exported  product (making normal allowance for waste) (3). This item shall be interpreted in accordance with  the guidelines on comsumption of inputs in the production process contained in Annex II. (i) The remission or drawback of import charges in excess of those levied on imported inputs that  are consumed in the production of the exported product (making normal allowance for waste);  provided, however, that in particular cases a firm may use a quantity of home market inputs equal  to, and having the same quality and characteristics as, the imported inputs as a substitute for  them in order to benefit from this provision if the import and the corresponding export operations  both occur within a reasonable time period, not to exceed two years. This item shall be interpreted  in accordance with the guidelines on consumption of inputs in the production process contained in  Annex II and the guidelines in the determination of substitution drawback systems as export  subsidies contained in Annex III. (j) The provision by governments (or special institutions controlled by governments) of export  credit guarantee or insurance programmes, of insurance or guarantee programmes against increases in  the cost of exported products or of exchange risk programmes, at premium rates which are inadequate  to cover the long-term operating costs and losses of the programmes. (k) The grant by governments (or special institutions controlled by and/or acting under the  authority of governments) of export credits at rates below those which they actually have to pay  for the funds so employed (or would have to pay if they borrowed on international capital markets  in order to obtain funds of the same maturity and other credit terms and denominated in the same  currency at the export credit), or the payment by them of all or part of the costs incurred by  exporters or financial institutions in obtaining credits, in so far as they are used to secure a  material advantage in the field of export credit terms. Provided, however, that if a Member of the WTO is a party to an international undertaking on  official export credits to which at least 12 original such Members are parties as of 1 January 1979  (or a successor undertaking which has been adopted by those original Members), or if in practice a  Member of the WTO applied the interest rates provisions of the relevant undertaking, an export  credit practice which is in conformity with those provisions shall not be considered an export  subsidy. (l) Any other charge on the public account constituting an export subsidy in the sense of Article  XVI of GATT 1994. (1) The term 'commercially available` means that the choice between domestic and imported  products is unrestricted and depends only on commercial considerations. (2) For the purpose of this Regulation and its Annexes:- the term 'direct taxes` shall mean tax on  wages, profits, interests, rents, royalties, and all other forms of income, and taxes on the  ownership of real property,-the term 'import charges` shall mean tariffs, duties, and other fiscal  charges not elsewhere enumerated that are levied on imports,- the term 'indirect taxes` shall mean  sales, excise, turnover, value added, franchise, stamp, transfer, inventory and equipment taxes,  border taxes and all taxes other than direct taxes and import charges,-'prior-stage` indirect taxes  are those levied on goods or services used directly or indirectly in making the product,-  'cumulative` indirect taxes are multi-staged taxes levied where there is no mechanism for  subsequent crediting of the tax if the goods or services subject to tax at one stage of production  are used in a succeeding state of production,- 'remission` of taxes includes the refund or rebate  of taxes,- 'remission of drawback` includes the full or partial exemption or deferral of import  charges. (3) Deferral may not amount to an export subsidy where, for example, appropriate interest charges  are collected. (4) Paragraph (h) does not apply to value-added tax systems and border-tax adjustment in lieu  thereof; the problem of the excessive remission of value-added taxes is exclusively covered by  paragraph (g).  ANNEX II GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION PROCESS  (1) I 1. Indirect tax rebate schemes can allow for exemption, remission or deferral of prior-stage  cumulative indirect taxes levied on inputs that are consumed in the production of the exported  product (making normal allowance for waste). Similarly, drawback schemes can allow for the  remission or drawback of import charges levied on inputs that are consumed in the production of the  exported product (making normal allowance for waste). 2. The Illustrative list of export subsidies in Annex I makes reference to the term 'inputs that  are consumed in the production of the exported product` in paragraphs (h) and (i). Pursuant to  paragraph (h), indirect tax rebate schemes can constitute an export subsidy to the extent that they  result in exemption, remission or deferral of prior-stage cumulative indirect taxes in excess of  the amount of such taxes actually levied on inputs that are consumed in the production of the  exported product. Pursuant to paragraph (i), drawback schemes can constitute an export subsidy to  the extent that they result in a remission or drawback of import charges in excess of those  actually levied on inputs that are consumed in the production of the exported product. Both  paragraphs stipulate that normal allowance for waste must be made in findings regarding consumption  of inputs in the production of the exported product. Paragraph (i) also provides for substitution,  where appropriate. II 3. In examining whether inputs are consumed in the production of the exported product, as part of a  countervailing duty investigation, the Commission must normally proceed on the following basis: 4. Where it is alleged that an indirect tax rebate scheme, or a drawback scheme, conveys a subsidy  by reason of over-rebate or excess drawback of indirect taxes or import charges on inputs consumed  in the production of the exported product, the Commission must normally first determine whether the  government of the exporting country has in place and applies a system or procedure to confirm which  inputs are consumed in the production of the exported product and in what amounts. Where such a  system or procedure is determined to be applied, the Commission must normally then examine the  system or procedure to see whether it is reasonable, effective for the purpose intended, and based  on generally accepted commercial practices in the country of export. The Commission may deem it  necessary to carry out, in accordance with Article 17 (2), certain practical tests in order to  verify information or to satisfy itself that the system or procedure is being effectively applied. 5. Where there is no such system or procedure, where it is not reasonable, or where it is  instituted and considered reasonable but is found not to be applied or not to be applied  effectively, a further examination by the exporting country based on the actual inputs involved  will normally need to be carried out in the context of determining whether an excess payment  occurred. If the Commission deems it necessary, a further examination may be carried out in  accordance with paragraph 4. 6. The Commission must normally treat inputs as physically incorporated if such inputs are used in  the production process and are physically present in the product exported. An input need not be  present in the final product in the same form in which it entered the production process. 7. In determining the amount of a particular input that is consumed in the production of the  exported product, a 'normal allowance for waste` must normally be taken into account, and such  waste must normally be treated as consumed in the production of the exported product. The term  'waste` refers to that portion of a given input which does not serve an independent function in the  production process, is not consumed in the production of the exported product (for reasons such as  inefficiencies) and is not recovered, used or sold by the same manufacturer. 8. The Commission's determination of whether the claimed allowance for waste is 'normal` must  normally take into account the production process, the average experience of the industry in the  country of export, and other technical factors, as appropriate. The Commission must bear in mind  that an important question is whether the authorities in the exporting country have reasonably  calculated the amount of waste, when such an amount is intended to be included in the tax or duty  rebate or remission. (1) Inputs consumed in the production processes are inputs physically incorporated,  energy, fuels and oil used in the production process and catalysts which are consumed in the course  of their use to obtain the exported product.  ANNEX III GUIDELINES IN THE DETERMINATION OF SUBSTITUTION DRAWBACK SYSTEMS AS EXPORT  SUBSIDIES I 1. Drawback systems can allow for the refund or drawback of import charges on inputs which are  consumed in the production process of another product and where the export of this latter product  contains domestic inputs having the same quality and characteristics as those submitted for the  imported inputs. Pursuant to paragraph (i) of the Illustrative list of export subsidies in Annex I,  substitution drawback systems can constitute an export subsidy to the extent that they result in an  excess drawback of the import charges levied initially on the imported inputs for which drawback is  being claimed. II 2. In examining any substitution drawback system as part of a countervailing duty investigation  pursuant to this Regulation, the Commission must normally proceed on the following basis: 3. Paragraph (i) of the Illustrative list stipulates that home market inputs may be substituted for  imported inputs in the production of a product for export provided such inputs are equal in  quantity to, and have the same quality and characteristics as, the imported inputs being  substituted. The existence of a verification system or procedure is important because it enables  the government of the exporting country to ensure and demonstrate that the quantity on inputs for  which drawback is claimed does not exceed the quantity of similar products exported, in whatever  form, and that there is not drawback of import charges in excess of those originally levied on the  imported inputs in question. 4. Where it is alleged that a substitution drawback system conveys a subsidy, the Commission must  normally first proceed to determine whether the government of the exporting country has in place  and applies a verification system or procedure. Where such a system or procedure is determined to  be applied, the Commission shall normally then examine the verification procedures to see whether  they are reasonable, effective for the purpose intended, and based on generally accepted commercial  practices in the country of export. To the extent that the procedures are determined to meet this  test and are effectively applied, no subsidy will be presumed to exist. It may be deemed necessary  by the Commission to carry out, in accordance with Article 17 (2), certain practical tests in order  to verify information or to satisfy itself that the verification procedures are being effectively  applied. 5. Where there are no verification procedures, where they are not reasonable, or where such  procedures are instituted and considered reasonable but are found not to be actually applied or not  to be applied effectively, there may be a subsidy. In such cases, further examination by the  exporting country based on the actual transactions involved would need to be carried out to  determinate whether an excess payment occurred. If the Commission deems it necessary, a further  examination would be carried out in accordance with paragraph 4. 6. The existence of a substitution drawback provision under which exporters are allowed to select  particular import shipments on which drawback is claimed should not of itself be considered to  convey a subsidy. 7. An excess drawback of import charges in the sense of paragraph (i) would be deemed to exist  where governments paid interest on any monies refunded under their drawback schemes to the extent  of the interest actually paid or payable. ANNEX IV (This Annex reproduces Annex 2 to the Agreement on Agriculture. Any terms or  expression which are not explained herein or which are not self-explanatory are to be interpreted  in the context of that Agreement) DOMESTIC SUPPORT: THE BASIS OF EXEMPTION FROM THE REDUCTION COMMITMENTS 1. Domestic  support measures for which exemption from the reduction commitments is claimed shall meet the  fundamental requirement that they have no, or at most minimal trade-distorting effects of effects  on production. Accordingly, all measures for which exemption is claimed shall conform to the  following basic criteria: (a) the support in question shall be provided through a publicly-funded government programme  (including government revenue foregone) not involving transfers from consumers; and, (b) the support in question shall not have the effect of providing price support to producers; plus policy-specific criteria and conditions as set out below. Government service programmes 2. General services Policies in this category involve expenditures (or revenue foregone) in relation to programmes  which provide services to benefits to agriculture or the rural community. They shall not involve  direct payments to producers or processors. Such programmes, which include but are not restricted  to the following list, shall meet the general criteria in paragraph 1 and policy-specific  conditions where set out below:(a) research, including general research, research in connection with environmental programmes, and  research programmes relating to particular products; (b) pest and disease control, including general and product-specific pest and disease control  measures, such as early-warning systems, quarantine and eradication; (c) training services, including both general and specific training facilities; (d) extension and advisory services, including the provision of means to facilitate the transfer of  information and the results of research to producers and consumers; (e) inspection services, including general inspection services and the inspection of particular  products for health, safety, grading or standardization purposes; (f) marketing and promotion services, including market information, advice and promotion relating  to particular products but excluding expenditure for unspecified purposes that could be used by  sellers to reduce their selling price or confer a direct economic benefit to purchasers; and (g) infrastructural services, including: electricity reticulation, roads and other means of  transport, market and port facilities, water supply facilities, dams and drainage schemes, and  infrastructural works associated with environmental programmes. In all cases the expenditure shall  be directed to the provision or construction of capital works only, and shall exclude the  subsidized provision of on-farm facilities other than for the reticulation of generally available  public utilities. It shall not include subsidies to inputs or operating costs, or preferential user  charges. 3. Public stockholding for food security purposes (1) Expenditures (or revenue foregone) in relation to the accumulation and holding of stocks of  products which form an integral part of a food security programme identified in national  legislation. This may include government aid to private storage of products as part of such a  programme. The volume and accumulation of such stocks shall correspond to predetermined targets related solely  to food security. The process of stock accumulation and disposal shall be financially transparent.  Food purchases by the government shall be made at current market prices and sales from food  security stocks shall be made at no less than the current domestic market price for the product and  quality in question. 4. Domestic food aid (1) Expenditures (or revenue foregone) in relation to the provision of domestic food aid to sections of  the population in need. Eligibility to receive the food aid shall be subject to clearly-defined criteria related to  nutritional objectives. Such aid shall be in the form of direct provision of food to those  concerned or the provision of means to allow eligible recipients to buy food either at market or at  subsidized prices. Food purchases by the government shall be made at current market prices and the  financing and administration of the aid shall be transparent. 5. Direct payments to producers Support provided through direct payments (or revenue foregone, including payments in kind) to  producers for which exemption from reduction commitments is claimed shall meet the basic criteria  set out in paragraph 1, plus specific criteria applying to individual types of direct payment as  set out in paragraphs 6 through 13. Where exemption from reduction is claimed for any existing or  new type of direct payment other than those specified in paragraphs 6 through 13, it shall conform  to criteria (b) through (e) in paragraph 6, in addition to the general criteria set out in  paragraph 1. 6. Decoupled income support (a) Eligibility for such payments shall be determined by clearly-defined criteria such as income,  status as a producer or landowner, factor use or production level in a defined and fixed base  period. (b) The amount of such payments in any given year shall not be related to, or based on, the type or  volume of production (including livestock units) undertaken by the producer in any year after the  base period. (c) The amount of such payments in any given year shall not be related to, or based on, the prices,  domestic or international, applying to any production undertaken in any year after the base  period. (d) The amount of such payments in any given years shall not be related to, or based on, the  factors of production employed in any year after the base period. (e) No production shall be required in order to receive such payments. 7. Government financial participation in income insurance and income safety-net programmes (a) Eligibility for such payments shall be determined by an income loss, taking into account only  income derived from agriculture, which exceeds 30 % of average gross income or the equivalent in  net income terms (excluding any payments from the same or similar schemes) in the preceding  three-year period or a three-year average based on the preceding five-year period, excluding the  highest and the lowest entry. Any producer meeting this condition shall be eligible to receive the  payments. (b) The amount of such payments shall compensate for less than 70 % of the producer's income loss  in the year the producer becomes eligible to receive this assistance. (c) The amount of any such payments shall relate solely to income; it shall not relate to the type  or volume of production (including livestock units) undertaken by the producer; or to the prices,  domestic or international, applying to such production; or to the factors of production employed. (d) Where a producer receives in the same year payments pursuant to this paragraph and pursuant to  paragraph 8 (relief from natural disasters), the total of such payments shall be less than 100 % of  the producer's total loss. 8. Payments (made either directly or by way of a government financial participation in crop  insurance schemes) for relief from natural disasters (a) Eligibility for such payments shall arise only following a formal recognition by government  authorities that a natural or like disaster (including disease outbreaks, pest infestations,  nuclear accidents, and war on the territory of the Member concerned) has occurred or is occurring;  and shall be determined by a production loss which exceeds 30 % of the average of production in the  preceding three-year period or a three-year average based on the preceding five-year period,  excluding the highest and the lowest entry. (b) Payments made following a disaster shall be applied only in respect of losses of income,  livestock (including payments in connection with the veterinary treatment of animals), land or  other production factors due to the natural disaster in question. (c) Payments shall compensate for not more than the total cost of replacing such losses and shall  not require or specify the type or quantity of future production. (d) Payments made during a disaster shall not exceed the level required to prevent or alleviate  further loss as defined in criterion (b). (e) Where a producer receives in the same year payments pursuant to this paragraph and pursuant to  paragraph 7 (income insurance and income safety-net programmes), the total of such payments shall  be less than 100 % of the producer's total loss. 9. Structural adjustment assistance provided through producer retirement programmes (a) Eligibility for such payments shall be determined by reference to clearly defined criteria in  programmes designed to facilitate the retirement of persons engaged in marketable agricultural  production, or their movement to non-agricultural activities. (b) Payments shall be conditional upon the total and permanent retirement of the recipients from  marketable agricultural production. 10. Structural adjustment assistance provided through resource retirement programmes (a) Eligibility for such payments shall be determined by reference to clearly defined criteria in  programmes designed to remove land or other resources, including livestock, from marketable  agricultural production. (b) Payments shall be conditional upon the retirement of land from marketable agricultural  production for a minimum of three years, and in the case of livestock on its slaughter or  definitive permanent disposal. (c) Payments shall not require or specify any alternative use for such land or other resources  which involves the production of marketable agricultural products. (d) Payments shall not be related to either type or quantity of production or to the prices,  domestic or international, applying to production undertaken using the land or other resources  remaining in production. 11. Structural adjustment assistance provided through investment aids (a) Eligibility for such payments shall be determined by reference to clearly-defined criteria in  government programmes designed to assist the financial or physical restructuring of a producer's  operations in response to objectively demonstrated structural disadvantages. Eligibility for such  programmes may also be based on a clearly-defined government programme for the reprivatization of  agricultural land. (b) The amount of such payments in any given year shall not be related to, or based on the type or  volume of production (including livestock units) undertaken by the producer in any year after the  base period other than as provided for under criterion (e). (c) The amount of such payments in any given year shall not be related to, or based on, the prices,  domestic or international, applying to any production undertaken in any year after the base  period. (d) The payments shall be given only for the period of time necessary for the realization of the  investment in respect of which they are provided. (e) The payments shall not mandate or in any way designate the agricultural products to be produced  by the recipients except to require them not to produce a particular product. (f) The payments shall be limited to the amount required to compensate for the structural  disadvantage. 12. Payments under environmental programmes (a) Eligibility for such payments shall be determined as part of a clearly-defined government  environmental or conservation programme and be dependent on the fulfilment of specific conditions  under the government programme, including conditions related to production methods or inputs. (b) The amount of payment shall be limited to the extra costs or loss of income involved in  complying with the government programme. 13. Payments under regional assistance programmes (a) Eligibility for such payments shall be limited to producers in disadvantaged regions. Each such  region must be a clearly designated contiguous geographical area with a definable economic and  administrative identity, considered as disadvantaged on the basis of neutral and objective criteria  clearly spelt out in a law or regulation and indicating that the region's difficulties arise out of  more than temporary circumstances. (b) The amount of such payments in any given year shall not be related to, or based on, the type or  volume of production (including livestock units) undertaken by the producer in any year after the  base period other than to reduce that production. (c) The amount of such payments in any given year shall not be related to, or based on, the prices,  domestic or international, applying to any production undertaken in any year after the base  period. (d) Payments shall be available only to producers in eligible regions, but generally available to  all producers within such regions. (e) Where related to production factors, payments shall be made at a degressive rate above a  threshold level of the factor concerned. (f) The payments shall be limited to the extra costs of loss of income involved in undertaking  agricultural production in the prescribed area. (1) For the purpose of paragraph 3 of this Annex, governmental stockholding  programmes for food security purposes in developing countries whose operation is transparent and  conducted in accordance with officially published objective criteria or guidelines shall be  considered to be in conformity with the provisions of this paragraph, including programmes under  which stocks of foodstuffs for food security purposes are acquired and released at administered  prices, provided that the difference between the acquisition price and the external reference price  is accounted for in the AMS. (1) For the purposes of paragraphs 3 and 4 of this Annex, the provision of foodstuffs at subsidized  prices with the objective of meeting food requirements of urban and rural poor in developing  countries on a regular basis at reasonable prices shall be considered to be in conformity with the  provisions of this paragraph.