Proposal for a Council Regulation further amending Council Regulation (EC) No 384/1996 on the protection against dumped imports from countries not members of the European Communities
Date: 2002-08-19
Institutions: European Commission
Subjects: anti-dumping duty, anti-dumping legislation, common commercial policy, dumping, import, third country

C 331 E/172

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Official Journal of the European Communities

31.12.2002

Proposal for a Council Regulation further amending Council Regulation (EC) No 384/96 on the
protection against dumped imports from countries not members of the European Communities

(2002/C 331 E/31)

COM(2002) 467 final — 2002/0204(ACC)

(Submitted by the Commission on 19 August 2002)

EXPLANATORY MEMORANDUM

Council Regulation No 384/96 on the protection against dumped imports from countries not Members of
the European Community (the ‘Basic Regulation’) requires amendment for two reasons.

First, in the interests of transparency and legal certainty, most of the amendments provide for clarifications
to the Basic Regulation in the light of experience gained up to now in current anti-dumping practice.

The amendments provide for a clarification of the terms ‘related parties’ (for the purpose of determining
dumping) and ‘commissions’ and provide guidance of the content of a ‘particular market situation’ that
does not permit a proper comparison. They also give indications as to what has to be done when certain
costs are distorted. Another amendment concerns the use of facts available; where it is clarified that also
prices on the world market or other representative markets can be used.

They also specify the criteria for granting ‘individual treatment’ to certain exporters from non-market
economy countries and countries in transition, i.e. an individual rate of duty (calculated by comparing the
normal value for the non-market economy country as a whole with the exporter's individual export prices).

Second, in view of the significant progress made by the Russian Federation towards the establishment of
market economy conditions, as recognised by conclusions of the Russia-European Summit on 29 May
2002, it is appropriate to grant the Russian Federation full market economy status. Consequently, this
country will be taken out of the list of countries with an economy in transition, i.e. countries to which
market economy status is granted on a company-by-company basis. This means that normal value for
Russian exporters and producers will be established in accordance with the provisions of paragraphs 1 to 6
of Article 2 of the Basic Regulation.

THE COUNCIL OF THE EUROPEAN UNION,

dumped imports from countries which are not members of
the European Communities.

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

Having regard to the proposal from the Commission,

Whereas:

(1) By Regulation (EC) No 384/96 of 22 December 1995 (1),
the Council adopted common rules for protection against

(2) It is expedient to give guidance as to when parties may be
considered as being related for the purpose of determining
dumping. Article 143 of Commission Regulation (EEC)
2454/93 of 2 July 1993 concerning the implementation
of the Community Customs Code (2) contains such a defi-
nition which reflects the definition set out in Art. 15.4 of
the Agreement on the Implementation of Article VII of the
General Agreement on Tariffs and Trade 1994 (3).

(1) OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Regulation

(EC) No 2238/2000 (OJ L 257, 11.10.2000, p. 2).

(2) OJ L 253, 11.10.1993, p. 1 as last amended by Regulation (EC)

No 444/2002 (OJ L 68, 11.3.2002, p. 11).

(3) OJ L 336, 23.12.1994, p. 119.

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the

(3) Article 2(3) of Regulation (EC) No 384/96 stipulates, inter
alia, that where because of a particular market situation
sales of
like product do not permit a proper
comparison, the normal value shall be calculated on the
basis of the cost of production in the country of origin plus
a reasonable amount for selling, general and administrative
costs and for profits, or on the basis of the export prices, in
the ordinary course of
to an appropriate third
trade,
country. It is prudent to provide for a clarification as to
what circumstances could be considered as constituting a
particular market situation in which sales of
the like
product do not permit a proper comparison. Such circum-
stances can, for example, occur because of the existence of
barter-trade
processing
arrangements or other market impediments. As a result
market
supply and
demand which in turn may have an impact on the
relevant costs and prices and may also result in domestic
prices being out of line with world-market prices or prices
in other representative markets. Obviously, any clarification
given in this context cannot be of an exhaustive nature in
view of
the wide variety of possible particular market
situations not permitting a proper comparison.

signals may not properly reflect

non-commercial

other

and

the

in particular

the product under consideration,

(4) It is considered appropriate to give some guidance as to
what has to be done if, pursuant to Article 2(5) of Regu-
lation (EC) No 384/96,
the records do not reasonably
reflect the costs associated with the production and sale
of
in
situations where because of a particular market situation
like product do not permit a proper
sales of
comparison.
the relevant data
should be obtained from sources which are unaffected by
such distortions. Such sources can be the costs of other
producers or exporters in the same country or, where such
information is not available or cannot be used, any other
reasonable
information from other
representative markets. The relevant data can be used
either for adjusting certain items of the records of the
party under consideration or, where this is not possible,
for establishing the costs of the party under consideration.

In such circumstances,

including

basis,

for

that

inter alia,

(5) Article 2(7) of Regulation (EC) No 384/96, as amended by
Regulation (EC) No 905/98 (1)
and Regulation (EC)
No 2238/2000 (2) provides,
in case of
imports from the Russian Federation, normal value may
be determined in accordance with the rules applicable in
market-economy countries
those producers which
demonstrate that market conditions prevail in relation to
the manufacture and sale of the product concerned. In view
of
the very significant progress made by the Russian
Federation towards the establishment of market economy
conditions, as recognised by the conclusions of the Russia-
European Union Summit on 29 May 2002,
it is appro-
priate to allow normal value for Russian exporters and
to be established in accordance with the
producers
to (6) of Regulation (EC)
provisions of Article 2(1)
No 384/96.

(6) Pursuant to Article 2(10)(i) of Regulation (EC) No 384/96,
adjustments to normal value and export price are made
when commissions are paid.
in
line with the consistent practice of the Commission and
the Council, that such adjustments shall also be made, if
the parties do not act on the basis of a principal — agent
relationship, but achieve the same economic result by
acting as buyer and seller.

It is prudent to clarify,

(7) Regulation (EC) No 384/96 does not indicate the criteria
according to which an exporter for which a normal value is
established pursuant to Article 2(7)(a) may be assigned an
individual rate of duty calculated by comparing this normal
value with the exporter's individual export prices.
is
appropriate in the interests of
transparency and legal
certainty to lay down clear criteria for the granting of
such individual treatment.

It

Export prices of exporters falling under Article 2(7)(a) of
Regulation (EC) No 384/96 may therefore be taken into
account where the export activities of the company are
the
freely determined, where ownership and control of
company are sufficiently independent and where State
interference is not such as to permit circumvention of
individual anti-dumping measures.

that

Such individual treatment may be granted to exporters for
which it can be demonstrated, on the basis of substantiated
claims, that, in the case of wholly or partly foreign owned
firms or joint ventures, they are free to repatriate capital
and profits;
and
export prices
conditions and terms of sale are freely determined and
the
that exchange rate conversions are carried out at
market
the
shall also be demonstrated that
majority of shares belong to private persons and that
State officials appearing on the Board of Directors or
holding key management positions
in a
minority or that the company is sufficiently independent
from State interference.

and quantities

either

rate.

are

It

(8) Article 18(5) of Regulation (EC) No 384/96 specifies that,
in case of use of facts available, the information used shall
be checked by reference to information from a number of
sources. It is considered useful to specify that such sources
can, where appropriate, also pertain to data concerning the
world market or other representative markets.

(1) OJ L 128, 30.4.1998, p. 18.
(2) OJ L 257, 11.10.2000, p. 2.

(9) In the interests of legal certainty, it is necessary to provide
that these amendments shall apply as soon as possible to
all new investigations.

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HAS ADOPTED THIS REGULATION:

6. Article 9(5) is replaced by the following:

Article 1

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

1. In Article 2(1), the following sentence is added:

‘In order to determine whether two parties are associated
account may be taken of the definition of related parties set
in Article 143 of Commission Regulation (EEC)
out
2454/93 of 2 July 1993 concerning the implementation
of the Community Customs Code (1).

___________
(1) OJ L 253, 11.10.1993, p. 1.’

2. In Article 2(3), the following sentence is added:

‘A particular market situation for the product concerned in
the meaning of the preceding sentence may be deemed to
exist, inter alia, when prices are artificially low, when there
is
are
trade,
barter
non-commercial processing arrangements.’

or when

significant

there

3. In Article 2(5), the following sentence is inserted after the

first sentence:

‘If costs associated with the production and sale of the
product under investigation are not reasonably reflected in
the records of the party concerned, they shall be adjusted or
established on the basis of the costs of other producers or
exporters in the same country or, where such information is
not available or cannot be used, on any other reasonable
basis,
representative
markets.’

including information from other

4. In Article 2(7)(b) first sentence, the word ‘Russian Feder-

ation’ is deleted.

5. In Article 2(10)(i), the following sentence is added:

‘The term “commissions” shall be understood to include the
mark-up received by a trader of the product or the like
product if the functions of such a trader are similar to
those of an agent working on a commission basis.’

‘5.
An anti-dumping duty shall be imposed in the appro-
priate amounts in each case, on a non-discriminatory basis
from all sources found to be
on imports of a product
dumped and causing injury, except as to imports from
those sources from which undertakings under the terms
of
this Regulation have been accepted. The Regulation
imposing the duty shall specify the duty for each supplier
if that is impracticable, and in general where Article
or,
2(7)(a) applies, the supplying country concerned.

Where Article 2(7)(a) applies, an individual duty shall,
however, be specified for the exporters which can demon-
strate, on the basis of properly substantiated claims that:

(a)

in the case of wholly or partly foreign owned firms or
joint ventures, exporters are free to repatriate capital
and profits;

(b) export prices and quantities, and conditions and terms

of sale are freely determined;

(c) the majority of the shares belong to private persons.
State officials appearing on the board of Directors or
holding key management positions shall either be in
the
minority or
company is nonetheless sufficiently independent from
State interference;

it must be demonstrated that

(d) exchange rate conversions are carried out at the market

rate; and

(e) State interference is not such as to permit circumvention
of measures if individual exporters are given different
rates of duty.’

7. In Article 18(5), the following sentence is added:

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

Article 2

This Regulation shall enter into force on the day following that
of
the European
Communities.

its publication in the Official

Journal of

It shall apply to all investigations initiated pursuant to Council
Regulation (EC) No 384/96 after the date of entry into force of
this Regulation.

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