22nd Annual Report from the Commission to the European Parliament on the Community’s anti-dumping, anti-subsidy and Safeguard activities (2003) {SEC(2004)1707}
Date: 2004-12-27
Institutions: European Commission
Subjects: activity report, anti-dumping legislation, anti-subsidy proceeding, common commercial policy, common tariff policy, trade dispute

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.12.2004 
COM(2004) 828 final 

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22nd ANNUAL REPORT FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

ON THE COMMUNITY’S ANTI-DUMPING, ANTI-SUBSIDY AND SAFEGUARD 
ACTIVITIES (2003) 

{SEC(2004)1707} 

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INTRODUCTION 

This  2003  report  is  submitted  to  the  European  Parliament  following  its  resolution  of  16 
December 1981 on the Community’s anti-dumping activities1, and the report of the European 
Parliament’s Committee on industry, external trade, research and energy2.  

For  administrative  reasons,  this  report  is  limited  to  10  pages  and  concentrates  mainly  on 
activities  during  the  year  2003.  More  detailed  information  can  however  be  found  in  the 
working document (WD) attached to this report, which is available in English only. The WD 
also contains the Annexes to which reference is made throughout the report. 

Furthermore,  this  edition  no  longer  includes  an  overview  of  the  activities  in  relation  to 
measures  adopted  by  third  countries  against  imports  from  the  Community  or  its  Member 
States. These activities will now be dealt with in a separate report, which is submitted at the 
same time as the current report. 

The present report and the full WD are also available to the public at 
http://europa.eu.int/comm/trade/issues/respectrules/anti_dumping/legis/index_en.htm 

1. 

OVERVIEW OF THE LEGISLATION 

1.1. 

Changes  to  the  Community  anti-dumping  (AD)  and  anti-subsidy  (AS) 
legislation in 2003 

The  current  basic  texts  (Council  Regulations  (EC)  No  384/963  and  (EC)  No 
2026/974) will overall be referred to as the "basic Regulation(s)". 

Experience in 2003, during which two proposals of the Commission (COM) for the 
imposition  of  definitive  AD  measures  did  not  find  the  necessary  majority  in  the 
Council, highlighted a number of shortcomings in the decision-making process in the 
area of trade defence instruments (TDI). 

In order to address this problem, the COM adopted and submitted to the Council on 
26  June  20035  a  proposal  for  a  Regulation  amending  the  basic  Regulations.  This 
proposal covered the decision-making process only. 

Subsequent  discussions  in  the  Council  led  the  COM  to  adopt  and  submit  to  the 
Council on 15 December 20036 a modified proposal, which was adopted on 8 March 
20047.  Along  with  changes  on  the  decision-making  process,  the  Regulation 
introduces  greater  transparency,  efficiency  and  predictability  in  the  use  of  the  TDI. 

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OJ C 11, 18.1.1982, p. 37. 
PE 141.178/fin of 30.11.1990, reporter Mr Gijs DE VRIES. 
OJ  L  56,  6.3.1996,  p.  1.  Regulation  as  last  amended  by  Council  Regulation  (EC)  No  461/2004 
(OJ L 77, 13.3.2004, p. 12). 
OJ  L  288,  21.10.1997,  p.  1.  Regulation  as  last  amended  by  Council  Regulation  (EC)  No  461/2004 
(OJ L 77, 13.3.2004, p. 12). 
COM(2003) 380 final. 
COM(2003) 799 final. 
Council Regulation (EC) No 461/2004 of 8 March 2004 (OJ L 77, 13.3.2004, p. 12). 

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Indeed,  under  the  new  rules,  measures  will  be  considered  adopted  unless  a  simple 
majority opposes. Furthermore, it introduces mandatory deadlines for the completion 
of review investigations and clearer rules on enforcement of trade defence measures. 

By introducing mandatory deadlines for the completion of review investigations and 
by making the TDI in general more transparent, account has been taken of a number 
of requests voiced by the European Parliament8. 

1.2. 

Changes to the Community safeguards (SFG) legislation in 2003 

The  basic  SFG  regulations  (Council  Regulations  (EC)  No  3285/949,  (EC)  No 
519/9410  and  (EC)  No  517/9411)  will  overall  be  referred  to  as  the  "basic  SFG 
Regulation(s)". 

The proposal which was submitted in 2002 by the COM for a Council Regulation on 
a  “Transitional  Product-Specific  Safeguard  Mechanism”  (‘TPSSM’)  for  imports 
originating  in  China,  was  adopted  on  3  March  200312.  The  regulation  is  a 
transposition into Community law of provisions contained in the Accession Protocol 
of the People's Republic of China to the WTO.  

In November 2003, the second pillar of the TPSSM Regulation – which foresees the 
gradual phasing-out of certain non-textile quotes - was amended, thereby increasing 
the quotas in view of the enlargement on 1 May 200413. 

1.3. 

Council Regulation on measures that the Community may take in relation to the 
combined effect of AD or AS measures with SFG measures 

Following  a  proposal  by  the  COM,  the  Council  adopted  and  published  in  March 
200314  the  so-called  “double  protection”  Regulation.  The  Regulation  specifies  that 
where the COM considers that a combination of AD or AS measures with SFG tariff 
measures  on  imports  of  the  same  product  could  lead  to  effects  greater  than  is 
desirable  in  terms  of  the  Community’s  trade  defence  policy,  it  may  propose  to  the 
Council to amend, suspend or repeal existing AD/AS measures, to exempt imports in 
whole  or  part  from  AD  or  countervailing  duties  or  to  adopt  any  other  special 
measures considered appropriate in the circumstances. 

In  applying  for  the  first  time  this  “double  protection”  Regulation,  the  Council, 
following  a  proposal  by  the  COM,  adopted  on  6  May  2003  an  amendment  to  the 
Regulations  imposing  definitive  measures  on  hot-rolled  coils  and  tube  and  pipe 
fittings15. 

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Resolution PE 316.244 of 3 October 2002. 
OJ  L  349,  31.12.1994,  p.  53.  Regulation  as  last  amended  by  Regulation  (EC)  No  2474/2000 
(OJ L 286, 11.11.2000, p. 1). 
OJ  L  67,  10.3.1994,  p.  89.  Regulation  as  last  amended  by  Regulation  (EC)  No  427/2003 
(OJ L 65, 8.3.2003, p. 1). 
OJ  L  67,  10.3.1994,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  2309/2003 
(OJ L 342, 30.12.2003, p. 21). 
OJ L 65, 8.3.2003, p. 1. 
OJ L 295, 13.11.2003, p. 43. 
OJ L 69, 13.3.2003, p. 8. 
OJ L 114, 8.5.2003, p. 1. 

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1.4. 

Anti-subsidy and unfair pricing instrument for airline services 

In  March  2002,  the  COM  adopted  its  proposal  for  a  trade  defence  instrument 
concerning the supply of airline service from non-EC Countries16. The first reading 
of the Parliament took place in January 2003, following which an amended proposal 
was adopted by the COM in May 2003 taking into account modifications suggested 
by the Parliament. 

The Common Position was adopted by the Council in December 2003. The second 
reading at the Parliament took place in March 2004 and was followed shortly by the 
approval of the Council. The Regulation entered into force in May 200417. 

1.5. 

Notice on the consequences of the Severe Acute Respiratory Syndrome (‘SARS’) 

In  view  of  the  significant  threat  of  SARS  transmission  and  the  subsequent 
impossibility of verifications on spot in the framework of AD/AS investigations, the 
COM decided to publish a notice in the Official Journal (OJ)18. The notice outlined 
on how the COM would proceed in the above-mentioned cases and gave interested 
parties the opportunity to comment on the proposed approach. Indeed, it was decided 
to stay within the mandatory deadlines of the investigations and to base the findings 
on the verified or other proven facts on the record of the investigation.  

2. 

BASIC CONCEPTS 

As  to  the  basic  concepts  on  AD,  AS  and  SFG  investigations,  reference  is  made  to 
heading 2 of the WD attached to this report. 

3. 

ENLARGEMENT 

As far as enlargement is concerned, the TDI services continued their efforts to ensure 
a smooth transition. These consisted, inter alia, in identifying the specific challenges 
posed by enlargement in the field of TDI, in implementing an “action plan” to assist 
the acceding countries, in organising a series of seminars for the administrations and 
economic  operators  and  in  creating  a  website  (See  following  links  for  consultation 
http://europa.eu.int/comm/trade/issues/respectrules/tdi_enlarg/index_en.htm 
and 
http://europa.eu.int/comm/trade/issues/respectrules/tdi_enlarg/contacts.htm. 

Furthermore,  a  TDI  “Enlargement  Task  Force”  was  set  up,  in  order  to  examine 
whether the extension of trade defence measures to the enlarged Community would 
cause, in individual cases, an “economic hardship” to their industries. To this end, all 
interested  parties  were  urged  to  identify  such  cases  and  meetings  were  held  with 
them, which resulted in about 50 submissions of this kind.  

Most  importantly,  it  should  be  noted  that,  from  the  day  of  enlargement,  any  trade 
defence  measures  taken  by  the  acceding  countries  lapsed  and  the  Community’s 
measures were automatically extended to cover the EU-25.  

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COM(2002) 110 final of 12.3.2002. 
OJ L 162, 30.4.2004, p. 1. 
OJ C 191, 13.8.2003, p. 2. 

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4. 

OVERVIEW OF AD AND AS INVESTIGATIONS AND MEASURES 

4.1. 

General 

At the end of 2003, the Community had 156 AD measures19 (see Annex O) and 17 
countervailing measures (see Annex P) in force. Of the measures, the large majority 
was  in  the  form  of  duties;  however,  in  a  number  of  cases,  undertakings  were 
accepted. 

It should be noted that in 2003, only 0,3%20 of total imports into the Community was 
affected by AD or AS measures. 

4.2. 

New investigations 

Table 1 in the WD provides statistical information on the new investigations for the 
years 1999 – 2003. One notices a decrease in the number of investigations initiated 
and  in  the  number  of  provisional  and  definitive  measures  imposed  during  2003  in 
comparison  to  the  previous  years.  A  number  of  factors  are  behind  this  sharp  fall. 
First,  the  stabilisation  of  the  steel  market  following  the  imposition  in  2002  of  the 
safeguard measures. Second, no further investigations were initiated on imports from 
the 10 countries acceding to the EU. And third, the submission of complaints by the 
Community  industry  and  the  consequent  initiation  of  investigations  have  always 
shown to be of a cyclic character. 

During 2003, 8 new investigations were initiated pursuant to Articles 5 and 10 of the 
basic Regulations. In 10 cases, provisional measures were imposed. 

5 cases were concluded with the imposition of definitive measures, 2 of which merit 
to  be  highlighted  here.  DRAMs  from  Korea  is  an  example  of  a  case  where  a 
company  (Hynix)  was  allowed,  despite  their  dire  financial  situation  –  to  continue 
their operations via government subsidies. The measures were challenged by Hynix 
before the Court of First Instance21 and by the Government of Korea under the WTO 
Dispute Settlement Understanding22. 

The case paracresol from China is an example of a case where users participated very 
actively  in  the  investigation.  One  user  claimed  that  paracresol  was  in  short  supply 
after  the  imposition  of  provisional  measures.  In  fact,  the  supply  problem  had 
subsided before the imposition of definitive measures. One of the Chinese exporters 
challenged the measures before the Court of First Instance23. 

21  proceedings  were  terminated  without  the  imposition  of  measures.  8  of  these 
concern cases which did not obtain the required majority in the Council (hot-rolled 
coils and carbon blacks). The Eurocoton Judgment (see point 7) will in future play an 
important role should a similar situation arise. 

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The measures are counted per product and country concerned. 
Source Comext. 
T-383/03, Hynix Semiconductor Inc. v. Council, OJ C 21, 24.1.2004, p. 43. 
WT/DS299/1/Rev.1/Add.1 of 2 September 2003. 
T-413/03, Shandong Reipu Biochemicals Co. Ltd. v. Council, OJ C 59, 6.3.2004, p. 24. 

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Another  21  measures  were  allowed  to  expire  automatically  following  their  5-year 
duration. 

Details on the above-mentioned investigations and a description of certain cases are 
given in the WD attached  to this report. The references to the OJs can be found in 
Annexes A through E and Annex N.  

4.3. 

Review investigations 

Review  investigations  continue  to  represent  a  major  part  of  the  work  of  the  TDI 
services.  These  review  investigations  represented  almost  51%  of  all  investigations 
initiated.  Table  2  in  the  WD  provides  statistical  information  for  the  years  1999  - 
2003. 

4.3.1.  Expiry reviews 

Articles  11(2)  and  18  of  the  basic  Regulations  provide  for  the  expiry  of  measures 
after 5 years, unless an expiry review demonstrates that they should be maintained in 
their original form. 

In 2003, 5 expiry reviews were initiated and 4 were concluded with confirmation of 
duty. 5 reviews were terminated. 

Details are given in the WD attached to this report. The references to the OJs can be 
found in Annex F.  

4.3.2. 

Interim reviews 

Articles  11(3)  and  19  of  the  basic  Regulations  provide  for  the  review  of  measures 
during their period of validity. Reviews can be limited to dumping/subsidization or 
injury aspects. 

During 2003, a total of 9 interim reviews were initiated. Eleven interim reviews were 
concluded  with  confirmation  or  amendment  of  duty  and  18  investigations  were 
terminated.  All  these  investigations  covered  a  wide  range  of  products.  Of  the  29 
investigations concluded, 12 concerned imports from China. 

Details are given in the WD attached to this report. The references to the OJs can be 
found in Annex G.  

4.3.3.  “Other” interim reviews 

A  series  of  other  reviews,  not  falling  under  Articles  11(3)  or  19  of  the  basic 
Regulations  or  for  which  no  notice  of  initiation  was  published  in  the  OJ,  were 
concluded during 2003.  

They  more  specifically  concern,  inter  alia,  name  changes  of  companies  benefiting 
from individual AD duties, new exporters requests, acceptance, voluntary withdrawal 
or breach of undertakings, etc. 

More information can be obtained from the OJ to which reference is given in Annex 
H of the WD. 

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4.3.4.  New exporter reviews 

Articles 11(4) and 20 of the basic Regulations respectively provide for a “newcomer” 
and  “accelerated”  review  in  order  to  establish  an  individual  dumping  margin  or  an 
individual countervailing duty.  

In  2003,  3  new  exporter  review  and  4  accelerated  reviews  were  initiated.  No 
investigations were concluded during 2003. 

More information can be obtained from the OJ to which reference is given in Annex 
I of the WD. 

4.3.5.  Absorption investigations 

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

In  2003,  one  anti-absorption  investigation  was  initiated.  No  investigations  were 
concluded during 2003. 

More information can be obtained from the OJ to which reference is given in Annex 
J of the WD.  

4.3.6.  Circumvention investigations 

The possibility of investigations being re-opened in circumstances where evidence is 
brought to show that measures are being circumvented was introduced by Articles 13 
and 23 of the basic Regulations. 

In 2003, 4 investigations were initiated and 2 were concluded with extension of the 
duty More information  can  be obtained from the OJ to which reference is given in 
Annex K of the WD. 

4.4. 

Safeguard investigations 

In  January  2003,  the  COM  terminated  the  since  2002  on-going  review  on  3  steel 
products. Furthermore, in December 2003, the COM repealed its SFG measures on 
steel products. 

In July 2003, 2 SFG investigations were initiated relating to citrus fruits (satsumas): 
one pursuant to the WTO general erga omnes rules for which provisional measures 
were imposed in November 2003; the other one pursuant to the TPSSM Regulation, 
which was terminated in December 2003. 

5. 

MONITORING OF UNDERTAKINGS 

Undertakings are a form of AD or countervailing measure. They are accepted by the 
COM  if  it  is  satisfied  that  they  can  effectively  eliminate  the  injurious  effects  of 
dumping or subsidisation.  

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At  the  beginning  of  2003,  there  were  undertakings  in  force  accepted  from  195 
companies. During 2003, the following changes to the portfolio took place: definitive 
AD and/or countervailing duties were imposed on 4 companies following withdrawal 
of acceptance of their undertakings, undertakings of 119 companies came to an end 
for  reasons  other  than  withdrawal  (included  here  are  the  117  undertakings  in  the 
salmon  case  which  expired  with  the  measures)  and  4  offers  for  undertakings  were 
accepted. This brings the total number of undertakings in force at the end of 2003 to 
76. 

Details concerning the above can be found in Annex M of the WD and an overview 
of all undertakings in force can be found in Annex Q. 

6. 

REFUNDS 

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

During 2003, 6 new refund requests were lodged, 2 decisions were adopted rejecting 
refund requests whilst 5 other requests were withdrawn.  

Further details on refunds can be found in Annex T of the WD. 

7. 

JUDICIAL REVIEW: DECISIONS GIVEN BY THE COURT OF JUSTICE (COJ) / COURT OF 
FIRST INSTANCE (CFI) 

In  2003,  2  judgments  relating  to  TDI  were  rendered  by  the  CFI  (ferro-silicon  and 
lamps) and 3 by the CoJ (seamless pipes and tubes, salmon and cotton fabrics). The 
latter, the so-called Eurocoton case24, can be regarded as a landmark judgment as it 
confirmed that the Council has to provide reasons in the light of the basic Regulation 
if  a  COM  proposal  does  not  obtain  the  necessary  majority  in  the  Council  as  a 
consequence of which no measures will be imposed. Summaries of these judgments 
are given in the WD attached to this report.  

A list of the cases still pending at the end of 2003 is given in Annex S of the WD. 

8. 

ACTIVITIES IN THE FRAMEWORK OF THE WORLD TRADE ORGANIZATION (WTO) 

8.1. 

Dispute settlement in the field of AD, AS and SFG 

The WTO provides for a rigorous procedure for the settlement of disputes between 
WTO Members concerning the application of the WTO agreements.  

The two dispute settlement procedures initiated against the Community, which were 
summarized in the 2002 report, were concluded during 2003.  

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Case C-76/01P, Eurocoton v. Council, Judgment of 30 September 2003 (not yet published). 

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As  concerns  the  cotton-type  bed  linen  procedure  initiated  by  India,  there  was  no 
specific  follow-up  of  the  Appellate  Body  report  since,  on  17  December  2003,  a 
partial  interim  review  was  terminated  without  the  imposition  of  measures25  for 
reasons unconnected with the result of the WTO dispute settlement case.  

As  concerns  the  malleable  tube  or  pipe  fittings  procedure  initiated  by  Brazil,  the 
panel  and  Appellate  Body  reports  were  issued  on  7  March  2003  and  22  July  2003 
respectively.  They  rejected  the  vast  majority  of  the  more  than  40  original  claims 
made  by  Brazil.  The  claims  accepted  by  the  panel  and  Appellate  Body  led  to  a 
reduction  of  the  duty  from  34,8  to  32%.  The  implementation  was  concluded  with 
Council Regulation 436/200426. 

8.2. 

Other WTO activities 

The year 2003 saw the continuation of the first phase of the negotiations on the WTO 
Anti-dumping and Subsidies Agreements, as agreed at the 4th Ministerial Conference 
in  Doha.  The  COM  has  continued  to  play  an  active  role  by  submitting  negotiating 
proposals both on anti-dumping and subsidies27. 

In parallel to these activities, the regular work of the Committees was on-going.  

9. 

CONCLUSION 

Although the year 2003 distinguishes itself in comparison with the previous years by 
a  decrease  in  the  number  of  investigations  initiated  and  measures  imposed,  it  has 
been  “eventful”  in  a  number  of  other  aspects,  such  as  the  safeguards  on  steel  and 
citrus  fruits,  the  proposal  on  changing  of  the  decision-making  process  and  the 
introduction of deadlines in reviews. 

As in previous years also this year’s report shows that the EC is a cautious user of 
TDI.  When  applied,  TDI  are  subject  to  the  highest  level  of  discipline  and  restraint 
while  providing  effective guarantees against unfair trade practices. Transparency in 
the  use  of  TDI  is  regarded  as  essential,  and  this  high  standard  has  been  further 
increased  through  changes  to  the  legislative  framework  in  2004.  The  COM  is 
determined to continue to pursue this line of policy in the future. 

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OJ L 333, 20.12.2003, p. 3. 
OJ L 72, 11.3.2004, p. 15. 
EC submissions on anti-dumping: WTO document TN/RL/W/67 of 7 March 2003 and TN/RL/W/138 
of 17 July 2003; EC submission on fisheries subsidies: WTO document TN/RL/W/82 of 23 April 2003. 

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