Proposal for a Council Regulation concerning balancing mechanism applicable to imports from certain countries not members of the European Community
Date: 2005-08-29
Institutions: European Commission
Subjects: World Trade Organisation, competition law, countervailing charge, export subsidy, import policy, originating product, third country

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 29.8.2005 
COM(2005) 398 final 

Proposal for a 

COUNCIL REGULATION 

concerning balancing mechanism applicable to imports from certain countries not 
members of the European Community 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

1)  CONTEXT OF THE PROPOSAL 

110 

•  Grounds for and objectives of the proposal 

This  proposal  concerns  a  need  that  has  arisen  to  address  artificial  pricing  practices, 
such as dual pricing or export taxes, which confer an unfair competitive advantage to 
certain  economic  operators  in  third  countries.  These  artificial  pricing  practices  are 
predominantly found among non-WTO countries. 

120 

•  General context 

The  competitive  position  of  the  Community  industry  is  being  adversely  affected  by 
imports benefiting from such pricing or other practices bestowed on these imports by 
governments  or  state-controlled  enterprises.  The  benefit  results  from  pricing  or  other 
practices  where  the  domestic  industry  in  the  countries  concerned  is  sourcing  certain 
products  at  prices  which  are  well  below  the  export/world  market  prices,  which  they 
otherwise would have had to pay in the normal course of trade. Such products are often 
used or consumed for the production of downstream products which are subsequently 
exported  to  the  Community  or  third  country  markets,  thereby  causing  injury  to  the 
Community industry. 

The  artificial  cost  advantage  created  through  dual  pricing  practices  applied  by  third 
countries  is  undermining  the  competitiveness  of  the  EU  industry  in  many  ways.  The 
imports of artificially low priced products from these countries are penetrating the EU 
market and have already captured a significant percentage of that market. 

Such  dual  pricing  practices  result  in  attractive  investment  conditions  in  the  third 
countries  concerned  but  they  also  succeed  in  distorting  the  level-playing  field  for 
investments in the highly globalised industrial sectors concerned. 

For the Community producers not to be placed at a competitive disadvantage and suffer 
injury there is an urgent need, in view of the critical situation faced by the Community 
producers in certain sectors, for an instrument to offer protection against imports into 
the  Community  that  are  benefiting,  directly  or  indirectly,  from  such  pricing  or  other 
practices. 

139 

141 

•  Existing provisions in the area of the proposal 

There are no existing provisions in the area of the proposal. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

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2)  CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

•  Consultation of interested parties 

The  Commission  informed  the  industry  and  the  Member  States  in  the  relevant  trade 
committees about the drafting process and adapted the draft proposal according to the 
comments and suggestions received. 

•  Collection and use of expertise 

There was no need for external expertise. 

•  Impact assessment 

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229 

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The proposal for balancing mechanism does not foresee a general impact assessment. 

However, the proposal contains exhaustive list of conditions and criteria that have to be 
assessed before the imposition of balancing measures. 

3)  LEGAL ELEMENTS OF THE PROPOSAL 

305 

•  Summary of the proposed action 

Objective: The balancing mechanism opens up a possibility for action against imports 
benefiting,  directly  or  indirectly,  from  pricing  or  other  practices  (e.g.  dual  pricing, 
export  taxes)  of  governments  or  state-controlled  enterprises,  which  result  in  different 
price  levels  for  input  products  depending  on  whether  they  are  used  or  consumed 
domestically  or  exported  and  where  such  imports  are  causing  or  threatening  to  cause 
injury to the Community industry.  

Scope: The mechanism will be applied on imports originating in countries which (i) are 
not members of the World Trade Organisation (WTO); or (ii) while being members of 
the WTO, have a provision in their WTO accession protocol allowing  for  use  of this 
mechanism.  The  mechanism  shall  not  apply  to  imports  from  a  non-WTO  member 
where  that  country  has  a  bilateral  deal  with  the  Community  in  the  context  of  that 
country's WTO accession, which satisfactorily addresses the pricing practice and it is 
considered  that  that  country  is,  in  fact,  progressively  eliminating  the  trade  distorting 
effects  of  the  pricing  practice  within  a  maximum  period  of  five  years  of  the  date  of 
conclusion of that bilateral deal. 

Initiation  threshold:  The  Community  industry  has  a  right  to  initiation  of  an 
investigation  on  the  basis  of  a  duly  substantiated  complaint.  Additionally,  the 
Commission can act ex-officio if there is sufficient evidence at hand.  

Investigation: The proposal provides for all main features of a trade in goods type of 
investigation  but  in  a  simplified  manner  in  order  to  allow  the  surgical  use  of  this 
instrument.  The  investigations  carried  out  under  the  proposed  balancing  mechanism 
respect  the  due  process  requirements,  such  as:  public  notice  of  initiation,  interested 
parties  have  right  to  be  heard,  confidential  treatment  of  the  provided  information  is 
ensured,  interested  parties  can  have  access  to  information  which  is  relevant  to  the 

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presentation of their case, consultation with third country government, etc. 

Decision-making  procedure:  Member  States  will  be  consulted  at  every  stage  of  the 
proceeding  in  a  Committee  under  the  advisory  comitology  procedure,  in  line  with 
Council Decision 1999/468/EC of 28 June 1999.  

Balancing  measures:  Balancing  measures  in  the  form  of  duties,  undertakings,  or  in 
other  appropriate  forms  will  be  imposed  on  imports  which,  directly  or  indirectly, 
benefit  from  the  pricing  practice.  The  level  of  the  measure  will  be  calculated  on  the 
basis of: a) the pricing differential between the input product on domestic and export 
markets  and  b)  the  extent  to  which  the  input  product  has  been  used/consumed  in  the 
production  of  the  product  under  consideration  (downstream  product).  The  level  of  a 
balancing measure shall not exceed the level of a benefit found. Provisional measures 
shall be imposed no earlier than 60 days from the initiation of the proceedings and may 
have  a  duration  of  six  months.  Measures  may  be  reviewed  if  warranted.  Similar  to 
other  trade  defence  instruments,  there  is  no  specification  regarding  levying  of  the 
balancing duties. Balancing measures shall not normally be imposed cumulatively with 
other  trade  defence  measures.  The  mechanism  will  follow  the  general  practice,  i.e. 
duties will be levied by the Member States authorities and they will be remitted to the 
Community budget in line with existing provisions applied within the European Union 
on anti-dumping and countervailing duties.  

•  Legal basis 

Treaty establishing the European Community, and in particular Article 133. 

•  Subsidiarity principle 

The proposal falls under the exclusive competence of the Community. The subsidiarity 
principle therefore does not apply. 

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reason(s). 

The form of action presented in the proposal for a balancing mechanism does not leave 
scope for national decision. 

Indication  of  how  financial  and  administrative  burden  falling  upon  the  Community, 
national governments, regional and local authorities, economic operators and citizens is 
minimised and proportionate to the objective of the proposal is not applicable. 

•  Choice of instruments 

Proposed instruments: Regulation. 

Other means would not be adequate for the following reason(s). 

The proposed balancing mechanism is a framework legal act which will allow for the 
imposition  of  trade  defence  measures.  The  framework  legal  act  requires  a  Council 
Regulation as the appropriate legal form.  

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4)  BUDGETARY IMPLICATION 

409 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

concerning balancing mechanism applicable to imports from certain 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 
133 thereof, 

Having regard to the proposal from the Commission1, 

Whereas: 

(1) 

(2) 

(3) 

The  competitive  position  of  Community  industry  could  be  adversely  affected  by 
imports  benefiting  from  pricing  or  other  practices  applied  by  governments  or  state 
controlled enterprises in third countries. 

Such  benefit  may  result  from  pricing  or  other  policies  having  an  equivalent  effect, 
such  as  export  taxes,  set  or  implemented  by  third  country  governments  or  state 
controlled enterprises leading to different price levels of goods depending on whether 
these goods are destined for export or for domestic consumption or use. 

For  the  Community  producers  not  to  be  placed  at  a  competitive  disadvantage  and 
suffer injury, there is a need for an instrument to offer protection against imports that 
are benefiting, directly or indirectly, from such pricing or other practices applied by a 
third  country  government  or  state  controlled  enterprise  of  a  country  which  is  not 
member  of  the  World  Trade  Organisation,  or  a  country  which  is  a  member  of  the 
WTO but where a provision in that member’s WTO accession protocol allows for the 
application of this regulation. The mechanism shall not apply to imports from a non-
WTO  member  where  that  country  has  a  bi-lateral  deal  with  the  Community  in  the 
context  of  that  country’s  WTO  accession,  which  satisfactorily  addresses  the  pricing 
practice and it is considered that that country is, in fact, progressively eliminating the 
trade distorting effects of the pricing practice within a maximum period of five years 
of the date of conclusion of that bi-lateral deal. 

(4) 

It is necessary to define the balancing mechanism to be applied to imports benefiting 
from  pricing  or  other  similar  policies.  Such  policies  are  considered  to  distort 
competition amongst economic operators concerned and need to be remedied in order 
to  restore  fair  conditions  of  trade.  The  mechanism  should  be  applied  in  a  non-
discriminatory way. 

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OJ C , , p. . 

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(5) 

It should be further made clear that the benefit shall be calculated on the basis of the 
different  price  levels  for  the  input  product,  depending  on  whether  such  product  is 
destined  for  export  or  for  domestic  consumption  or  use  and  taking  into  account,  if 
appropriate,  the  extent  to  which  the  input  product  is  consumed  or  used  in  the 
production of the product under consideration. 

(6) 

It is essential to define the terms “input product” and “product under consideration”. 

(7) 

(8) 

(9) 

(10) 

(11) 

It  is  furthermore  desirable  to  lay  down  clear  and  detailed  guidance  as  to  the  factors 
which may be relevant for the determination of whether the pricing or other practices 
applied by a third country government or state controlled enterprise have caused injury 
or  are  threatening  to  cause  injury,  attention  should  be  given  to  the  effect  of  other 
factors,  and  consideration  should  be  given  to  all  relevant  and  known  factors  and 
economic indicators which have a bearing on the state of the industry, and in particular 
prevailing market conditions in the Community.  

It is necessary to specify who may lodge a complaint and the information that such a 
complaint  should  contain;  a  complaint  should  be  rejected  where  there  is  insufficient 
prima facie evidence regarding the pricing or other practice, injury and causality. 

It  is  desirable  to  lay  down  the  procedure  to  be  followed  in  the  investigation  for 
imposition of balancing measures. 

It  is  necessary  to  lay  down  the  manner  in  which  interested  parties  should  be  given 
notice of the information which the investigating authorities require; interested parties 
should  have  ample  opportunity  to  present  all  relevant  evidence  and  to  defend  their 
interests. 

It  is  also  necessary  to  set  out  the  rules  and  procedures  to  be  followed  during  the 
investigation, in particular the rules whereby interested parties are 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;  whilst  respecting  commercial 
confidentiality,  it  is  necessary  to  allow  interested  parties  to  access  all  information 
pertaining to the investigation which is relevant to the presentation of their case; it is 
necessary  to  provide  that,  where  parties  do  not  cooperate  satisfactorily,  other 
information may be used to establish findings and that such information may be less 
favourable to the parties than if they had cooperated. 

(12) 

It is necessary to lay down the conditions under which provisional measures may be 
imposed;  such  measures  may  in  all  cases  be  imposed  by  the  Commission  only  for  a 
six-month period. 

(13)  An  investigation  or  proceeding  should  be  terminated  whenever  there  is  no  need  to 
impose  measures;  a  proceeding  should  not  be  terminated  unless  the  termination 
decision is accompanied by a statement of the reasons therefore. 

(14)  The  level  of  balancing  measures  should  not  exceed  the  level  of  benefit  found  if 
measures  are  imposed  on  imports  of  the  product  under  consideration  which  benefit 
from the pricing practice due to injury caused by such imports.  

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(15)  Preference  should  be  given  to  duties  when  it  comes  to  the  imposition  of  balancing 
measures; where duties prove not to be appropriate, other balancing measures, such as 
quantitative restrictions, may be considered. 

(16)  Balancing  measures  and  anti-dumping  and/or  countervailing  measures  shall  not  be 
cumulatively  imposed  on  imports  of  a  product  unless  it  is  found  that  the  dumping 
and/or subsidisation cannot be attributed to the effect of the pricing or other practice. 

(17) 

(18) 

(19) 

(20) 

It is necessary to specify procedures for the acceptance of undertakings eliminating or 
offsetting  the  benefit  resulting  from  pricing  or  other  practice  and  the  injury  caused 
instead of the imposition of provisional or definitive measures; it is also appropriate to 
lay down the consequences of breach or withdrawal of undertakings. 

It is necessary to provide for review of the measures imposed in cases where sufficient 
evidence  is  submitted  of  changed  circumstances  or  situations  where  the  remedial 
effects  of  the  balancing  measures  are  undermined.  In  the  latter  case,  it  may  be 
appropriate to extend measures in force to imports of the product under consideration 
from other countries. 

In accordance with Article 2 of Council Decision 1999/468/EC of 28 June 1999 laying 
down  the  procedures  for  the  exercise  of  implementing  powers  conferred  on  the 
Commission2, measures for the implementation of this Regulation should be adopted 
by use of the advisory procedure provided for in Article 3 of that Decision. 

It is necessary to ensure that any balancing measures taken under this Regulation are 
in  full  accordance  with  the  Community  interest;  the  assessment  of  the  Community 
interest involves the identification of any compelling reasons which would lead to the 
clear conclusion that the taking of measures would not be in the overall interest of the 
Community.  Such  compelling  reasons  could,  for  example,  include  cases  where  the 
disadvantage 
interested  parties  would  be  clearly 
disproportionate to any advantages given to the Community industry by the imposition 
of measures. 

to  consumers  or  other 

(21)  For  the  purpose  of  Articles  217(1)  and  218(2)  of  the  Community  Customs  Code3, 
provisional  and  definitive  balancing  measures  shall  be  treated  respectively  as 
provisional and definitive anti-dumping or countervailing duties. 

(22)  The form and level of balancing measures and their enforcement should be set out in 

detail in a Regulation imposing these measures, 

2 
3 

OJ L 184, 17.7.1999, p. 23. 
OJ L 302, 19.10.1992, p. 1. Regulation as last amended by the Act of Accession of 2003. 

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HAS ADOPTED THIS REGULATION: 

Article 1 

Principles 

1. 

Balancing  measures  may  be  imposed  on  products  declared  for  release  for  free 
circulation  in  the  Community  originating  in  a  third  country,  for  the  purpose  of 
offsetting  a  benefit  resulting  from  pricing  practices,  or  other  practices  having  an 
equivalent  effect,  of  that  same  third  country  government  or  a  state-controlled 
enterprise within its territory, which result in different price levels for input products 
depending  on  whether  such  input  products  are  destined  for  export  or  for  domestic 
consumption or  use  and  where injury is thereby  caused to  the Community industry 
by exports of the product under consideration to the Community market.  

2. 

Balancing measures may be imposed on imports originating in:  

a) 

b) 

countries not members of the World Trade Organisation, or 

a  member  of  the  WTO  where  a  provision  in  that  member’s  WTO  accession 
protocol allows for the application of this regulation.  

3. 

This  Regulation  shall  not  apply  to  imports  from  a  non-WTO  member  where  that 
country  has  a  bilateral  deal  with  the  Community  in  the  context  of  that  country’s 
WTO  accession,  which  satisfactorily  addresses  the  pricing  practice  and  it  is 
considered that that country is, in fact, progressively eliminating the trade distorting 
effects of the pricing practice within a maximum period of five years of the date of 
conclusion of that bilateral deal.  

Article 2 

Definitions 

For the purposes of this Regulation:  

a) 

b) 

c) 

d) 

the  term  "injury"  shall  be  taken  to  mean  material  injury  to  the  Community 
industry or threat of material injury, to the Community industry, determined in 
accordance with Article 5; 

the term "Community industry" shall be interpreted as referring to Community 
producers of the like product; 

the term “input product” shall be taken to mean the product that is alleged to be 
subject,  directly  or  indirectly,  to  pricing  or  other  practices  which  are  under 
investigation pursuant this Regulation; 

the  term  "product  under  consideration"  shall  be  interpreted  to  mean  the 
imported product where the input product has been, directly or indirectly, used 
or consumed in the production process of that product; 

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e) 

f) 

g) 

the  term  "like  product"  shall  be  interpreted  to  mean  a  product  which  is 
identical, that is to say, 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; 

the term “government” is defined as a government or any public body within 
the territory of the third country concerned; 

an enterprise shall be deemed to be “state controlled” if the government or any 
other  public  body  within  the  territory  of  a  third  country  concerned  owns, 
directly or indirectly, more than 50 per cent of the equity interest in it, or has 
the  power  to  name  a  majority  of  its  directors  or  otherwise  legally  control  or 
direct its actions. 

Article 3 

Pricing practices 

A benefit from pricing practices or other practices having an equivalent effect implemented 
by a third country government or a state-controlled enterprise shall be deemed to exist if such 
practices result in different price levels of products depending on whether such products are 
destined for export or for domestic consumption or use. 

Article 4 

Calculation of the balancing amount of the measure 

1. 

2. 

3. 

The benefit shall be calculated on the basis of the different price levels for the input 
product  depending  on  whether  such  product  is  destined  for  export  or  for  domestic 
consumption or use and taking into account, if appropriate, the extent  to which  the 
input  product  is,  directly  or  indirectly,  consumed  or  used  in  the  production  of  the 
product  under  consideration.  Due  account  shall  be  taken  of  the  fact  that  the  price 
levels  of  the  input  product  may  be  set  by  reference  to  products  other  than  those 
destined for export or domestic consumption or use. Due account shall also be taken 
of  differences  which  affect  comparability  between  the  input  product  destined  for 
export  and  that  destined  for  domestic  consumption  or  use.  Allowance  for  such 
differences shall be made in each case, on its merits, for factors which are claimed 
and  demonstrated  to  affect  the  comparability  of  prices,  quality,  availability, 
transportation and other conditions of purchase and sale.  

The  determination  of  the  benefit  may  be  made  on  the  basis  of  generally  available 
information for the industry concerned, including statistics concerning prices of the 
input  product  and  the  product  under  consideration,  and  guidelines  and  standards 
pertaining to the extent of the consumption or use of the input product in the product 
under consideration. 

For  the  products  listed  in  the  Annex  to  this  Regulation  the  determination  of  the 
benefit shall be made on the basis of the methodology set out in the Annex, with due 
account being taken, in accordance with paragraph 1, of differences which affect the 

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comparability  between  the  input  product  destined  for  export  and  that  destined  for 
domestic  consumption  or  use.  The  Annex  shall  be  amended  as  appropriate  in 
accordance with the procedure laid down in Article 13(2). 

Article 5 

Determination of injury 

1. 

The determination of injury shall be based on positive evidence and shall involve an 
objective examination of: 

a) 

b) 

and 

the  volume  and  prices  of  imports  of  the  product  under  consideration  into  the 
Community market and their effect on the Community industry prices for the 
like product;  

the consequent impact of the respective imports on the Community industry as 
indicated by trends in a number of economic indicators such as sales volumes, 
utilisation  of  capacity,  market  share,  profits  and  losses,  return  on  capital, 
investment and employment. 

No one or more of these factors can necessarily give decisive guidance. 

2. 

3. 

4. 

It  shall  be  demonstrated,  from  all  the  relevant  evidence  presented  in  relation  to 
paragraph 1,  that  the  product  under  consideration  is  causing  injury  within  the 
meaning of this Regulation. 

Known factors other than the imports of the product under consideration which are 
injuring the Community industry at the same time shall also be examined to ensure 
the  injury  caused  by  these  other  factors  is  not  attributed  to  the  product  under 
consideration. 

A  determination  of  threat  of  injury  shall  be  based  on  facts  and  not  merely  on 
allegation,  conjecture  or  remote  possibility.  The  change  in  circumstance  which 
would  create  a situation  in  which  the  pricing  practices  would  cause  injury  must  be 
clearly foreseen and imminent. In making a determination regarding the existence of 
a threat of material injury, consideration should be given to, inter alia, such factors 
as: 

a) 

b) 

c) 

the  nature  of  the  pricing  or  other  practices  in  question  and  the  trade  effects 
likely to arise therefrom; 

a significant rate of increase of imports of the product under consideration into 
the  Community  market  indicating  the  likelihood  of  substantially  increased 
imports;  

sufficient  freely  disposable  capacity  of  the  exporter  of  the  product  under 
consideration  or  an  imminent  and  substantial  increase  in  such  capacity 
indicating  the  likelihood  of  substantially  increased  exports  to  the  Community 

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market,  account  being  taken  of  the  availability  of  other  export  markets  to 
absorb any additional exports;  

d)  whether imports are entering the Community market at prices that would, to a 
significant  degree,  depress  prices  or  prevent  price  increases  which  otherwise 
would have occurred, and would probably increase demand for further imports; 
and 

e) 

inventories of the product being investigated. 

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  exports  by  the 
country or countries engaging in pricing or other practices of the product under consideration 
to  the  Community  market  are  imminent  and  that,  unless  protective  action  is  taken,  material 
injury will occur. 

Article 6 

Initiation 

1. 

2. 

3. 

4. 

5. 

An investigation under this Regulation shall be initiated upon a written complaint on 
behalf of the Community industry by any natural or legal person or any association, 
or on the Commission’s own initiative, where there is sufficient prima facie evidence 
of the existence of pricing or other practices within the meaning of this Regulation, 
injury and a causal link between the imports and the alleged injury.  

When it is apparent that there is sufficient prima facie evidence to justify initiating of 
a  proceeding,  the  Commission  shall,  acting  in  accordance  with  the  procedure  laid 
down  in  Article  13(2),  initiate  the  proceeding  within  45  days  of  the  lodging  of  the 
complaint and shall publish a notice in the Official Journal of the European Union.  

Where  insufficient  evidence  has  been  presented,  the  Commission  shall,  acting  in 
accordance  with  the  procedure  laid  down  in  Article  13(2),  inform  the  complainant 
within  45  days  of  the  date  on  which  the  complaint  has  been  lodged  with  the 
Commission.  

The  notice  of  initiation  of  the  proceedings  shall  announce  the  initiation  of  an 
investigation, indicate the scope of the investigation, the product under consideration, 
the third countries whose governments allegedly implement the pricing practices, the 
nature  of  the  practice  and  the  period  within  which  interested  parties  may  make 
themselves  known,  present  their  views  in  writing  and  submit  information,  if  such 
views are to be taken into account during the investigation. The notice shall also state 
the period within which interested parties may apply to be heard by the Commission.  

The  Commission  shall  inform  the  interested  parties,  notably,  the  exporters  and 
importers  of  the  product  under  consideration,  the  government  of  the  country  of 
origin,  the  complainants  and  other  Community  producers  of  the  initiation  of  the 
proceedings.  

The Commission may, at any time before initiating and during a proceeding, invite 
the government of the country of origin concerned to take part in consultations with 

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the  aim  of  clarifying  the  situation  as  to  the  matters  referred  to  in  paragraph  2  and 
arriving at a mutually agreed solution.  

Article 7 

Investigation 

1. 

2. 

3. 

4. 

1. 

Following  the  initiation  of  the  proceeding,  the  Commission  shall  commence  an 
investigation  which  shall  cover  both  the  pricing  or  other  practices  and  injury.  This 
investigation  shall  normally  be  concluded  within  six  months,  but  not  later  than 
twelve months, of the date of the initiation of the investigation.  

The interested parties which have made themselves known in accordance with time 
limits set forth in the notice of initiation, shall be heard if they have made a timely 
request for a hearing showing that they are an interested party likely to be affected by 
the result of the proceeding and that there are particular reasons why they should be 
heard.  

In cases in which an interested party refuses access to, or otherwise does not provide, 
necessary information within the appropriate time limits, or significantly impedes the 
investigation, provisional or final findings, affirmative or negative, may be made on 
the basis of 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. 

Any  information  which  is  by  nature  confidential  or  which  is  provided  on  a 
confidential  basis  by  parties  to  an  investigation  shall,  if  good  cause  is  shown,  be 
treated  as  such  by  the  authorities.  Interested  parties  providing  confidential 
information  shall  be  required  to  furnish  non-confidential  summaries  thereof.  Those 
summaries  shall  be  in  sufficient  detail  to  permit  a  reasonable  understanding  of  the 
substance of the information submitted in confidence and to allow interested parties 
access  to  all  information  pertaining  to  the  investigation  which  is  relevant  to  the 
presentation of their case. Information received pursuant to this Regulation shall be 
used  only  for  the  purpose  for  which  it  was  requested.  This  provision  shall  not 
preclude the use of  information  received in the context of one  investigation for the 
purpose  of  initiating  other  investigations  within  the  same  proceeding  in  relation  to 
the product under consideration. 

Article 8 

Provisional measures 

Provisional measures may be imposed on imports of the product under consideration 
if  a  provisional  affirmative  determination  has  been  made  that  the  product  under 
consideration  benefits  from  pricing  or  other  practices  and  consequent  injury  to  the 
Community industry has occurred and the Community interest calls for intervention 
to  prevent  such  injury.  Those  measures  shall  be  imposed  in  accordance  with  the 
procedure laid down in Article 13(2).  

EN 

13 

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2. 

3. 

1. 

2. 

1. 

2. 

3. 

4. 

Provisional measures shall be secured by a guarantee and the release of the product 
under  consideration  originating  in  the  country  engaged  in  the  pricing  or  other 
practices  for  free  circulation  in  the  Community  shall  be  conditional  upon  the 
provision of such guarantee.  

The provisional measures shall be imposed no earlier than 60 days from the initiation 
of the proceedings.  Those  measures  shall be imposed for a maximum period of six 
months. 

Article 9 

Termination without measures 

Where  the  complaint  is  withdrawn,  the  proceeding  may  be  terminated  by  the 
Commission unless such termination would not be in the Community interest.  

Where  balancing  measures  are  unnecessary,  the  proceeding  shall  be  terminated  in 
accordance with the procedure laid down in Article 13(2). Any decision to terminate 
a proceeding shall be accompanied by a statement of the reasons therefor.  

Article 10 

Definitive measures 

Where the facts as finally established show the existence of pricing or other practices 
and injury caused by imports of the product under consideration into the Community 
market, and the Community interest calls for intervention in accordance with Article 
14,  a  definitive  measure  shall  be  imposed  on  the  product  under  consideration  in 
accordance with the procedure laid down in Article 13(2).  

The level of balancing measures imposed to offset the benefit from pricing or other 
practices as foreseen in paragraph 1 of this Article shall not exceed the level of the 
benefit found and shall preferably take the form of duties.  

Where  a  provisional  balancing  duty  has  been  applied  and  where  the  definitive 
balancing  duty  is  higher  than  the  provisional  duty,  the  difference  shall  not  be 
collected.  If  the  definitive  balancing  duty  is  lower  than  the  provisional  duty,  the 
provisional  duty  shall  be  recalculated.  Where  a  final  determination  is  negative,  the 
provisional duty shall not be confirmed. 

A balancing measure shall remain in force only as long as, and to the extent that it is 
necessary, to counteract the pricing or other practices which are causing injury. 

Article 11 

Undertakings 

1. 

Investigations may be terminated without the imposition of provisional or definitive 
measures upon receipt of satisfactory voluntary undertakings under which:  

EN 

14 

   EN 

 
a) 

b) 

the  third  country  government  that  implements  the  pricing  or  other  practices 
agrees to eliminate or limit the practice or take other measures concerning its 
effects; or 

any  exporter  undertakes  to  revise  its  prices  or  to  cease  exports  to  the 
Community market as long as such exports benefit, directly or indirectly, from 
pricing  or  other  practices  so  that  the  injurious  effects  of  the  pricing  or  other 
practices are eliminated. 

Undertakings  shall  be  accepted  in  accordance  with  the  procedure  laid  down  in 
Article 13(2). 

In case of breach or withdrawal of undertakings by any party, a balancing measure 
shall  be  imposed  in  accordance  with  Article  10,  on  the  basis  of  the  facts  available 
within the context of the investigation which led to the undertaking. 

Article 12 

Reviews 

The  need  for  the  continued  imposition  of  measures  in  their  initial  form  may  be 
reviewed, where warranted, on the initiative of the Commission or upon the request 
of a Member State, or upon a request by any exporter, importer or by the Community 
producers  or  the  government  of  the  country  of  origin  provided  that  a  period  of  at 
least one year has elapsed since the imposition of the definitive measure.  

Reviews  shall  be  initiated  by  the  Commission  acting  in  accordance  with  the 
procedure  laid  down  in  Article  13(2).  The  relevant  provisions  of  Articles  6  and  7 
shall apply to reviews under paragraph 1.  

Reviews  shall  assess  the  continued  existence  of  pricing  or  other  practices  and/or 
injury  caused  thereby  together  with  a  determination  as  to  whether  the  Community 
interest  calls  for  continued  intervention.  Reviews  may  also  assess  situations  where 
the remedial effects of a balancing measure are being undermined by circumvention 
of the measure in force, or in cases when the balancing measures have led to no or 
insufficient  movement  in  resale  or  subsequent  selling  prices  in  the  Community 
market. 

Where  warranted  by  reviews,  balancing  measures  shall  be  repealed,  amended, 
extended or maintained, as appropriate in accordance with the procedure laid down 
in Article 13(2).  

2. 

3. 

1. 

2. 

3. 

4. 

EN 

15 

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Article 13 

Committee 

1. 

2. 

The Commission shall be assisted by the Advisory Committee instituted by Article 
25 of Council Regulation (EC) No 2026/974. 

Where  reference  is  made  to  this  paragraph,  the  advisory  procedure  laid  down  in 
Article  3  of  Decision  1999/468/EC  shall  apply,  in  compliance  with  Article  7(3) 
thereof. 

Article 14 

Community interest 

A  determination  under  Articles  8(1),  9(2),  10(1)  and  10(3)  as  to  whether  the  Community 
interest  calls  for  intervention  or  whether  measures  are  repealed,  amended  or  maintained  in 
accordance  with  Article  12(4)  should  be  based  on  an  appraisal  of  all  the  various  interests 
taken as a whole. Measures may not be applied where it can be clearly concluded that this is 
not in the Community interest.  

Article 15 

General provisions 

Provisional  or  definitive  balancing  measures  shall  be  imposed  by  Regulation,  and 
enforced by Member States in the form, at the level specified and according to the 
other criteria laid down in the Regulation imposing such measures. If measures other 
than duties are imposed, the Regulation shall define the precise form of the measures 
in accordance with the provisions of this Regulation.  

Special provisions, in particular with regard to the common definition of the concept 
of  origin,  as  contained  in  Council  Regulation  (EEC)  No  2913/925  may  be  adopted 
pursuant to this Regulation.  

For  the  purpose  of  Articles  217(1)  and  218(2)  of  Council  Regulation  (EEC)  No 
2913/926, provisional and definitive balancing measures shall be treated respectively 
as provisional and definitive anti-dumping or countervailing duties.  

Regulations imposing provisional or definitive balancing measures, and Regulations 
or  Decisions  accepting  undertakings  or  terminating  investigations  or  proceedings, 
shall be published in the Official Journal of the European Union. 

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). 
OJ L 302, 19.10.1992, p. 1. Regulation as last amended by the Act of Accession of 2003. 
OJ L 302, 19.10.1992, p. 1. Regulation as last amended by the Act of Accession of 2003. 

1. 

2. 

3. 

4. 

4 

5 
6 

EN 

16 

   EN 

 
                                                 
5. 

6. 

No  product  shall  be  subject  to  balancing  measures  and  to  anti-dumping  and/or 
countervailing measures for the purpose of dealing with one and the same situation 
arising from pricing or other practices within the meaning of Article 3 and dumping 
and/or subsidisation.  

The provisions of this Regulation shall be applied without prejudice, and taking into 
account, as appropriate, any special rules agreed between the Communities and any 
third country or countries. 

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

Article 16 

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

Done at Brussels,  

For the Council 
The President 

EN 

17 

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ANNEX  

Methodology for calculating the benefit as referred to in Article 4 

Methodology for determination of benefit: 

The formula below shall be applied, where: 

W is the world market price per tonne for the input product during the last calendar year; 

X is the world market price per tonne for the reference product by which the price of the input 
product is determined; 

Y is the % discount applied on the world market price for the reference product as provided 
for in the legal framework of the third country concerned; 

Z is the ratio of  units  of  the input product consumed or used in producing one  tonne of the 
product under consideration (see table below) e.g. 5 tonnes of input product used to produce 1 
tonne of the product under consideration , then Z = 5. 

Formula: 

[W-(X/100 x (100-Y))] x Z (X x Y%) x Z = benefit per tonne 

The above-mentioned formula shall be applied in calculating the balancing amount of the 
measure for the products listed in the table below.  
Product under 
consideration 

Ratio of units of the input product (Z) 

CN code 

Propane 

2.5 
6.3 
- 
- 
- 
0.1 
0.7 
0.7 
- 

1.5 

3.9 

Ethylene 
2901 21 00 
Propene (propylene)   2901 22 00 
2901 24 10 
Buta-1,3-diene 
2902 11 00  
Cyclohexane 
2902 20 00 
Benzene 
2902 43 00 
p-Xylene 
2902 50 00 
Styrene 
2902 60 00 
Ethylbenzene 
Derivatives 
2904 20 00 
containing only nitro 
or only nitroso 
groups 

2905 31 00 

2905 32 00 

2909 19 00 

- 

Ethylene glycol 
(ethanediol) 
Propylene glycol 
(propane-1,2-diol) 
 Acyclic ethers and 
their halogenated, 
sulphonated, nitrated 
or nitrosated 
derivatives other 
than diethyl ether 

Butanes 
(mixed) 
3.2 
5.3 
6.3 
- 
- 
0.2 
1.0 
0.9 
- 

Light 
naphtha 
3.2 
1.0 
2.2 
2.9 
3.1 
3.1 
1.0 
0.9 
2.0 

1.9 

3.3 

- 

1.9 

0.6 

2.0 

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2909 41 00 

1.8 

3901 10 10 

2.5 

2.3 

3.3 

2.3 

3.3 

3901 10 90 

2.5 

3.3 

3.3 

3901 20 10 
3901 20 90 

3902 10 00 

3903 11 00 

3903 19 00 
3903 30 00 

2.6 

6.4 

0.7 

0.7 
- 

3903 20 00 

2.6 

3904 10 00 

1.1 

3.4 

5.4 

1.0 

1.0 
4.9 

2.4 

1.5 

3.4 

1.0 

1.0 

1.0 
1.3 

1.1 

1.5 

2,2’-Oxydiethanol 
(diethylene glycol, 
digol) 
Linear polyethylene 
having a specific 
gravity of less than 
0,94 
Other polyethylene 
having a specific 
gravity of less than 
0,94 
Polyethylene having 
a specific gravity of 
0,94 or more 
Polypropylene, in 
primary forms 
Polystyrene 
expansible  
Polystyrene 
Acrylonitrile-
butadiene-styrene 
(ABS) copolymers, 
in primary forms 
Styrene-acrylonitrile 
(SAN) copolymers, 
in primary forms 
Poly(vinyl chloride), 
not mixed with any 
other substances, in 
primary forms 

EN 

19 

   EN