Proposal for a Council Regulation protecting against the effects of the application of the United States Anti-Dumping Act of 1916, and actions based thereon or resulting therefrom
Date: 2003-09-15
Institutions: European Commission
Subjects: United States, anti-dumping legislation, import, market protection, single market

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 15.9.2003
COM(2003) 543 final

Proposal for a

COUNCIL REGULATION

protecting against the effects of the application of the United States Anti-Dumping Act
of 1916, and actions based thereon or resulting therefrom

(presented by the Commission)

EXPLANATORY MEMORANDUM

In  the  US,  the  Anti-Dumping  Act  of  1916  provides  for  civil  and  criminal  proceedings  and
penalties  against  dumping  when  conducted  with  an  intent  to  destroy,  injure  or  prevent  the
establishment  of  an  American  industry,  or  to  restrain  or  monopolise  any  part  of  trade  and
commerce of such articles in the U.S.

The Anti-Dumping Act of 1916 was found incompatible with US obligations under the World
Trade  Organisation  agreements,  notably  by  providing  remedies  to  dumping  like  the
imposition  of  treble  damages,  fines,  and  imprisonment,  none  of  which  are  permitted  by  the
GATT 1994 and the Anti-dumping Agreement.

The US did not comply with the WTO rulings within the deadline of 20 December 2001. The
Community  then  requested  authorisation  to  apply  retaliatory  measures  in  the  form  of  a
Regulation  applicable  to  US  imports  and  equivalent  to  the  Anti-Dumping  Act  of  1916.  In
February  2002,  the  Community  accepted  to  suspend  the  arbitration  on  this  request  on  the
express consideration that a bill was pending in Congress to repeal the Anti-Dumping Act of
1916 and terminate the on-going cases before US courts.

To  date,  the  Anti-Dumping  Act  of  1916  is  yet  to  be  repealed.  On  the  litigation  side,  three
judicial proceedings are on-going against EC companies and two have been initiated after the
initial deadline by which the Anti-Dumping Act of 1916 should have been repealed. The EC
companies are facing substantial litigation costs and may ultimately be condemned to treble
damages.

The Common Commercial policy comprises the harmonious development of world trade and
the  progressive  abolition  of  restrictions  on  international  trade,  notably  by  ensuring  the
effective  benefit  of  the  rights  arising  from  the  WTO  agreements.  The  maintenance  and
application  of  the  Anti-Dumping  Act  of  1916  despite  its  clear  condemnation  impedes  the
attainment of those objectives.

Any  EC  exporter  to  the  US  may  be  affected  and  all  should  be  able  to  compete  on  the  US
market  on  equal  terms.  Recognition  and  enforcement  of  Court  or  administrative  decisions
based on the Anti-Dumping Act of 1916 may also be sought in any Member States where the
persons condemned have assets. Action at the Community level is therefore appropriate.

The proposed regulation provides relief to the EC companies facing claims based on the Anti-
Dumping  Act  of  1916.  The  protective  measures  are  limited  to  those  strictly  needed  to
neutralise the effects of the Anti-Dumping Act of 1916:

(1) 

(2) 

prohibit  the  recognition  and  enforcement  in  the  EC  of  Court  or  administrative
decisions based on the Anti-Dumping Act of 1916,

allow  EC  companies  or  individuals  to  counter-sue  to  recover  any  outlays,  costs,
damages and expenses caused by the application of the Anti-Dumping Act of 1916.

2

Proposal for a

COUNCIL REGULATION

protecting against the effects of the application of the United States Anti-Dumping Act
of 1916, and actions based thereon or resulting therefrom

THE COUNCIL OF THE EUROPEAN UNION,

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

Having regard to the proposal from the Commission (1),

Whereas:

(1)

(2)

(3)

(4)

(5)

1

2

3

4

The objectives of the Community include contributing to the harmonious development
of world trade and to the progressive abolition of restrictions on international trade.

In the United States of America ('US'), the Anti-Dumping Act of 1916 (2) provides for
civil and criminal proceedings and penalties against dumping when conducted with an
intent to destroy or injure an industry in the US, or to prevent the establishment of an
industry  in  the  US,  or  to  restrain  or  monopolise  any  part  of  trade  and  commerce  in
such articles in the US.

On 26 September 2000, the Dispute Settlement Body of the World Trade Organisation
(WTO), adopting the Appellate Body report (3) and the Panel report (4), as upheld by
the Appellate  Body report, found  the  Anti-Dumping  Act  of  1916  to  be  incompatible
with  the  US  obligations  under  the  WTO  agreements,  notably  by  providing  remedies
against dumping, such as the imposition of treble damages, fines, and imprisonment,
none  of  which  are  permitted  by  the  General  Agreement  on  Tariffs  and  Trade  1994
('GATT 1994') or by the Agreement on  Implementation of Article VI of the  General
Agreement on Tariffs and Trade 1994 ('AD Agreement').

The  US  failed  to  comply  with  the  Panel  and  Appellate  Body  recommendations  and
rulings  within  the  time-limit  of  20  December  2001.  As  a  result,  the  Community
requested  the  authorisation  to  suspend  the  application  to  the  US  of  its  obligations
under GATT 1994 and the AD Agreement.

In February 2002, the Community agreed to suspend the arbitration on its request, on
the  express  understanding  that  a  bill  was  pending  in  the  US  Congress  to  repeal  the
Anti-Dumping Act of 1916 and to terminate the on-going cases before US Courts.

OJ C , , p. .
Enacted under the heading of "unfair competition" in Title VIII of the Revenue Act of 1916; Title VIII
of that Act is codified at United States Code 71-74, cited as 15 U.S.C §72.
AB-2000-5 and AB-2000-6, 28 August 2000
United States – Anti-Dumping Act of 1916, Panel report (WT/DS/136/R, 31 March 2000).

3

                                                
(6)

(7)

(8)

(9)

The Anti-Dumping Act of 1916 has yet to be repealed and claims brought under this
Act  are  pending  before  US  Courts  against  persons  under  the  jurisdiction  of  the
Member States of the Community.

These judicial proceedings are causing substantial litigation costs and may ultimately
result in a judgement awarding treble damages.

By  its  maintenance  and  application,  the  Anti-Dumping  Act  of  1916  impedes  the
attainment of the aforementioned objectives, affects the established legal order and has
adverse effects on the interests of the Community and the interests of natural and legal
persons exercising rights under the Treaty establishing the European Community.

Under  these  exceptional  circumstances,  it  is  necessary  to  take  action  at  Community
level to protect the interests of the natural and legal persons under the jurisdiction of
the  Member  States,  in  particular  by  removing,  neutralising,  blocking  or  otherwise
counteracting the effects of the Anti-Dumping Act of 1916,

HAS ADOPTED THIS REGULATION:

Article 1

No judgement of a court or tribunal and no decision of an administrative authority located in
the United States of America giving effect, directly or indirectly, to the Anti-Dumping Act of
1916 or to actions based thereon or resulting therefrom, shall be recognised or be enforceable
in any manner.

Article 2

1.
Any  person  referred  to  in  Article  3  shall  be  entitled  to  recover  any  outlays,  costs,
damages  and  miscellaneous  expenses  incurred  by  him  as  a  result  of  the  application  of  the
Anti-Dumping Act of 1916 or by actions based thereon or resulting therefrom.

Recovery may be obtained as soon as an action under the Anti-Dumping Act of 1916

2.
is commenced.

3.
Recovery  may  be  obtained  from  the  natural  or  legal  person  or  any  other  entity  that
brought a claim under the Anti-Dumping Act of 1916 or from any person or entity related to
that person or entity. Persons or entities shall be deemed to be related if:

(a)

(b)

(c)

(d)

they are officers or directors of one another's businesses;

they are legally recognised partners in business;

one of them controls directly or indirectly the other;

both of them are directly or indirectly controlled by a third person

4.
Without prejudice to other means available and in accordance with applicable law, the
recovery  may  take  the  form  of  seizure  and  sale  of  assets  held  by  the  defendant,  including
shares held in a legal person incorporated within the Community.

4

The persons referred to in Article 2 shall be:

Article 3

(a)

(b)

(c)

(d)

any natural person being a resident in the Community,

any legal person incorporated within the Community,

any  natural  or  legal  person  referred  to  in  Article  1  (2)  of  Regulation  (EEC)  No
4055/86 (5),

any  other  natural  person  within  the  Community,  including  its  territorial  waters  and
air  space  and  in  any  aircraft  or  on  any  vessel  under  the  jurisdiction  or  control  of  a
Member State, acting in a professional capacity.

For the purposes of point (a), 'being a resident in the Community` shall be understood to mean
being legally established in the Community for a period of at least six months within the 12-
month  period  immediately  prior  to  the  date  on  which,  under  this  Regulation,  an  obligation
arises or a right is exercised.

This Regulation shall enter into force on the 20th day following that of its publication in the
Official Journal of the European Union.

Article 4

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

Done at Brussels,

For the Council
The President

5

OJ L 378, 31.12.1986, p. 1. Regulation as last amended by Regulation (EEC) No 3573/90 (OJ L 353,
17.12.1990, p. 16).

5