Proposal for a COUNCIL REGULATION (EC) amending Regulation (EC) No 384/96 on protection against dumped imports from countries not members of the European Community
Date: 1996-04-10
Institutions: European Commission
Subjects: anti-dumping duty, anti-dumping legislation, common commercial policy, dumping, import, third country

COMMISSION  OF THE  EUROPEAN  COMMUNITIES 

Brussels,  10.04.1996 
COM(96)  145  final 

96/0103  (ACC) 

Proposal  for  a 

COUNCIL  REGULATION  (EC) 

amending Regulation (EC) No 384/96 on protection against dumped imports  from 
countries not members of the European Community 

(presented  by the  Commission) 

Explanatory  Memorandum 

On 28 April  Î995, a GATT panel released a report of its examination of a dispute between 
the Community and Japan concerning anti-dumping duties imposed by the Community 
against imports of audio cassettes from Japan. 

The panel found in favour of the Community on several points but on one issue it 
considered that Community legislation was not wholly in line with its international 
obligations. 

r 

This issue concerned the comparison between the prices on the domestic market of the 
exporting country ("normal value") and the prices from that country to the Community 
("export price") which is the basis for establishing dumping margins. More specifically, the 
point at issue was which adjustments should be made to either price for differences in the 
selling expenses incurred in making such sales in order to make them comparable. In this 
respect, the panel considered that Community legislation was too restrictive in confining 
allowances to a specific and exhaustive list. 

On the grounds that it is conceivable that differences, other than those listed in 
Community legislation, may (depending on the precise terms of sale agreed between buyer 
and seller at the time of sale) affect price levels and hence price comparability, it is 
considered important, in order to ensure legal certainty, to amend the Community's anti 
dumping legislation so that allowances could be made for such other costs. Clearly, any 
such allowance should be dependent on the exporter demonstrating an effect on price 
comparability as required by Article 2.4 of the new WTO Anti-Dumping Agreement. 

Moreover, it is also appropriate to clarify the requirements for an adjustment for 
differences in levels of trade when information on price effects for two levels of trade does 
not exist for the market concerned or when, despite prices being at the same level, an 
adjustment  may be appropriate for expenses, such as advertising, which in certain 
circumstances may be more suitably allocated to other levels of trade; 

The full contents of the panel report is still being examined by the relevant services of the 
Commission and an analysis of the report will be submitted to the Council in the near 
future. In the meantime, in order to avoid conflict with our trading partners, it is desirable 
to proceed with this amendment. 

Therefore, the Commission submits to the Council: 

• 

a proposal to amend paragraph  10 of Article 2 of Council Regulation (EC) No 384 of 
22.12.951 . 

1 OJ No L 56 of 6.3.96 

1 

Council Regulation (EC) 

amending Regulation (EC) No 384/96 on protection against dumped imports 
from countries not members of the European Community 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community, and in particular 
Article 113 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Parliament2 

Whereas by Regulation (EC) No 384 of 22 December 19953 the Council has adopted 
common rules for protection against dumped imports from countries which are not 
members of the European Community; 

Whereas paragraph 10 of Article 2 of Regulation (EC) No 384/96 provides for a limited 
number of allowances which can be made to the normal value and export prices before 
these are compared to establish whether dumping is taking place; whereas since it is 
conceivable that differences in selling expenses, other than those listed in the said 
Regulation, may in certain circumstances affect price comparability, it is prudent to 
eliminate the exclusive nature of this provision in relation to allowances. 

Whereas it is also appropriate to clarify the requirements for an adjustment for differences 
in levels of trade when information on price effects for two levels of trade does not exist 
for the market concerned or when, despite prices being at the same level, an adjustment 
may be appropriate for expenses, such as advertising, which in certain circumstances may 
be more suitably allocated to other levels of trade. 

HAS ADOPTED THIS REGULATION: 

3 OJ No L 56 of 6.3.96 

2> 

Regulation (EC) No  384/96  shall be amended as follows: 

Article 1 

1. 

Sub-paragraph (d) of Article 2.10 shall be replaced  by the following: 

(d) 

Level of trade 

An adjustment  for differences  in levels of trade, including any differences  which 
may arise in OEM (Original Equpment Manufacturer) sales, shall be granted 
where, in relation to the distribution chain in both markets, it is shown that the 
export price, including a constructed export price, is at a different  level of trade to 
the normal value. An effect  on price comparability must be demonstrated by 
evidence which confirms a clear distinction between the prices for the  different 
levels of trade on the domestic market of the exporting country.  However, where 
information relating to such price effects  does not exist for that market, or where 
certain functions are shown to relate to levels of trade other than those which are 
to be compared, a special adjustment  may be granted. 

2. 

The following  sub-paragraph (k) shall be added after Article 2.10 (j): 

(k) 

Other factors 

An adjustment  may also be made for differences  in other factors provided it is 
demonstrated that they affect  price comparability as required under this paragraph, 
in particular that customers take account of such differences  on their own market 
by agreeing to prices which are distinct from those agreed on the same market 
when there are no such differences." 

This Regulation shall apply to proceedings initiated after  1  January  1996. 

Article 2 

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

Done at Brussels, 

^ 

ISSN 0254-1475 

COM(96) 145 final 

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