24th Annual Report from the Commission to the European Parliament on the community's anti-dumping, anti-subsidy and safeguard activities (2005) {SEC(2007) 440}
Date: 2007-04-10
Institutions: European Commission
Subjects: European Community, activity report, anti-dumping legislation, anti-subsidy proceeding, protective clause

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 10.4.2007 
COM(2007) 171 final 

24th ANNUAL REPORT FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT 

on the community's anti-dumping, anti-subsidy and safeguard activities 

(2005) 

{SEC(2007) 440} 

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INTRODUCTION 

This  2005  report  is  submitted  to  the  European  Parliament  following  its  resolution  of  16 
December 1981 on the Community’s anti-dumping activities, and the report of its Committee 
on industry, external trade, research and energy.  

Tthis short report provides an overview of the highlights during 2005, but is supported as in 
previous  years  by  a  more  detailed  Commission  Staff  Working  Document,  together  with 
detailed  annexes.  The  report  also  follows  the  same  general  structure  of  the  Working 
Document  and  all  its  headings  can  also  be  found  in  it  so  that  easy  reference  for  more 
comprehensive information is possible. 

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

This report has to be seen against the general background of EU trade policy as set out more 
recently in the Commission's Communication on "Global Europe"1. In this context the 
Commission adopted in December 2006 a "Green Paper" inviting a public reflection on how 
the EU can best use its trade defence instruments (TDI) in a changing global economic 
context. The results of this process will be reflected in future reports.  

1. 

OVERVIEW OF THE LEGISLATION 

Anti-dumping  (AD),  anti-subsidy  (AS)  and  safeguard  (SFG)  investigations  are 
conducted  on  the  basis  of  basic  Council  Regulations.  An  overview  of  the  existing 
legislation  is  given  in  the  Working  Document.  The  basic  AD  and  AS  texts  will 
hereafter be referred to as the "basic Regulation(s)".  

1.1. 

Changes to the Community legislation in 2005 

In  view  of  the  significant  progress  made  by  Ukraine  towards  the  establishment  of 
market  economy  conditions,  the  Council  adopted  the  Commission  proposal 
graduating this country to become a full market economy for AD investigations. This 
thus allows normal value for Ukrainian exporters and producers to be established on 
the basis of their prices and costs. Regulation (EC) No 2117/2005 entered into force 
on 30 December 2005. 

2. 

ENLARGEMENT 

Following  EU  enlargement  in  May  2004,  the  Commission,  during  2005,  continued 
its efforts aimed at ensuring a smooth integration of the administrations of the new 
Member States concerned in the area of trade defence. Apart from regular exchange 
of  information,  these  efforts  involved  holding  dedicated  training  and  stocktaking 
seminars. 

1 

http://ec.europa.eu/trade/issues/sectoral/competitiveness/global_europe_en.htm 

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In  2005,  the  Commission  also  concluded  the  monitoring  and  application  of  the 
special transitional measures in the form of undertakings that were taken in respect to 
four  cases  (ammonium  nitrate  from  Russia  and  Ukraine,  grain  oriented  electrical 
sheets  from  Russia  and  silicon  carbide  from  Ukraine)  in  order  to  avert  economic 
hardship/shock  to  users  and  consumers  in  the  new  Member  States  after  the  2004 
enlargement. 

On the basis of the positive experience with the 2004 enlargement, DG Trade set up 
an  Action  Plan  to  prepare  Bulgarian  and  Romanian  accession  in  the  area  of  trade 
defence.  

3. 

COUNTRY-WIDE MARKET ECONOMY STATUS (MES) 

Conceptually,  the  country-wide  criteria  for  determining  whether  a  country  can  be 
considered a full market economy for the purpose of AD investigations are inspired 
from those applicable to individual companies located in economies in transition to a 
market economy, which are set out in Article 2(7) of the basic Regulation.  

Significant work has been done in this respect during 2005. In particular, the request 
received  in  March  2002  from  Ukraine  was  assessed  and  the  Commission  proposed 
granting MES to this country as all criteria were met (see point 1.1).  

The  People’s  Republic  of  China’s  request  was  received  in  September  2003  and  a 
preliminary assessment was carried out by the Commission in June 2004. Following 
the assessment, a bilateral working group was set up to examine any progress made. 
At the EU-China summit in September 2005, this working group was up-graded, as 
"the  two  sides  agreed  to  launch  high-level  dialogues  to  address  outstanding  issues 
with a view to achieving positive progress on the issue of MES".  

During  2005,  Vietnam,  Mongolia  and  Armenia  provided  further  information  to 
complement  their  MES  request.  The  Commission  analysed  the  newly  submitted 
information and followed up with questions on issues that had not been sufficiently 
addressed in the replies. The Commission also analysed external sources for all three 
countries. It also requested further information from Kazakhstan. 

For all countries that are currently being examined, country-wide MES is conditional 
on the outstanding criteria being fulfilled. 

4. 

INFORMATION AND COMMUNICATION ACTIVITIES / BILATERAL CONTACTS 

The Trade Defence Helpdesk for Small and Medium Sized Enterprises (SME), set up 
in  December  2004,  continued 
in  addressing  specific  SME 
its  activity 
questions/problems  regarding  the  trade  defence  instruments.  The  Commission  also 
organised  or  participated  in  10  information  seminars  for  economic  operators  and 
third country administrations. 

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Furthermore,  in  December  2005,  the  Commission  received  the  results  of  an 
evaluation study of its trade defence instruments. 
(http://ec.europa.eu/trade/issues/respectrules/anti_dumping/legis/index_en.htm)  
The  evaluation  was  based  on  a  survey  of  stakeholders,  such  as  Member  States, 
Community  industry,  exporters,  importers  and  downstream  users.  The  evaluators 
made  a  positive  assessment  of  the  general  approach  of  the  Community  in  trade 
defence investigations. While confirming the balanced nature of the EC system and 
the  high standards  applied, the evaluation also suggests reflecting on  some specific 
issues  and  contains  some  interesting  proposals  for  improvements.  These  proposals 
could  contribute  to  improving  certain  aspects  of  our  current  system,  in  particular 
rights of parties and transparency.  

5. 

OVERVIEW OF AD, AS AND SFG INVESTIGATIONS AND MEASURES 

5.1. 

General 

At the end of 2005, the Community had 135 AD measures (see Annex O) and 12 AS 
measures (see Annex P) in force. 

In 2005, only 0.45% of total imports into the Community was affected by AD or AS 
measures. 

Please note that details on the issues hereafter are given in the  Working Document 
attached to this report. The references to the Annexes of the Working Document can 
be found beside the titles.  

5.2. 

New investigations (see Annexes A through E and Annex N) 

In  2005,  26  investigations  were  initiated2.  Provisional  duties  were  imposed  in  15 
proceedings. Nineteen cases were concluded with the imposition of definitive duties. 
Ten proceedings were concluded without measures.  

Another  27  measures,  of  which  7  countervailing  measures,  were  allowed  to  expire 
automatically following their 5-year duration.  

5.3. 

Review investigations 

Review  investigations  continue  to  represent  a  major  part  of  the  work  of  the  TDI 
services. They represented more than 64% of all investigations initiated. Table 2 in 
the Working Document provides statistical information for the years 2001-2005. 

5.3.1.  Expiry reviews (see Annex F) 

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

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Table  1  in  the  Working  Document  provides  statistical  information  on  the  new  investigations  for  the 
years 2001 – 2005 carried out under the provisions of Articles 5 and 10 of the basic Regulations. 

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During  2005,  23  expiry  review  investigations  were  initiated  of  which  7  concluded 
that there was a need for the duties to continue for a further five years. It should be 
noted that investigations initiated after  20 March 2004 are now under deadline, i.e. 
conclusions should be reached within 12 months but not later than 15 months from 
the date of initiation.  

5.3.2. 

Interim reviews (see Annex G) 

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 2005, a total of 22 interim reviews were initiated. Eighteen interim reviews 
were concluded with confirmation or amendment of duty and 3 investigations were 
concluded, thereby terminating the measures.  

5.3.3.  “Other” interim reviews (see Annex H) 

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 Official Journal, 
were concluded during 2005.  

They more specifically concern, inter alia, the acceptance, voluntary withdrawal or 
breach of undertakings, clarification of the product description, etc.  

5.3.4.  New exporter reviews (see Annex I) 

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 for new exporters located in the exporting country in 
question  which  did  not  export  the  product  during  the  investigation  period.  Such 
exporters  have  to  show  that  they  are  genuine  new  exporters  and  that  they  have 
actually started to export to the Community after the investigation period. As such, 
an  individual  duty,  which  is  usually  lower  than  the  country-wide  duty,  can  be 
calculated for them.  

In 2005, 5 new exporter review (of which 2 accelerated reviews) were initiated. Four 
investigations, of which 1 accelerated review, were concluded. One investigation was 
terminated thereby maintaining the original level of duty. 

5.3.5.  Absorption investigations (see Annex J) 

Where  there  is  sufficient  information  showing  that,  after  the  original  investigation 
period  and  prior  to  or  following  the  imposition  of  measures,  export  prices  have 
decreased or that there has been no or insufficient movement in the resale prices or 
subsequent selling prices of the imported product in the Community, an "absorption" 
review may be opened to examine whether the measure has had effects on the above-
mentioned  prices.  Dumping  margins  may  as  such  be  recalculated  and  the  duty 
increased to take account of such lower export prices. The possibility of "absorption" 
reviews is included in Articles 12 and 19(3) of basic Regulations. 

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In  2005,  one  anti-absorption  investigation  was  initiated  and  one  was  concluded 
without an increase of the duty. 

5.3.6.  Circumvention investigations (see Annex K) 

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

In 2005, 3 investigations were initiated and one was concluded with extension of the 
duty.  

5.4. 

Safeguard investigations (see Annex L) 

During  2005,  2  safeguard  investigations  were  initiated,  one  on  textile  products  and 
one on frozen strawberries. The investigation on textile products was terminated later 
in the year. Definitive measures were imposed on farmed salmon but these measures 
were  later  revoked.  At  the  end  of  2005,  only  one  safeguard  measure  was  still  in 
force, namely the one on imports of certain citrus fruits. 

6. 

ENFORCEMENT OF AD/AS MEASURES 

6.1. 

Follow-up of measures 

The  follow-up  activities  concerning  measures  in  force  were  centred  on  four  main 
areas: (1) to pre-empt fraud; (2) to monitor trade flows and market developments; (3) 
to  improve  the  effectiveness  with  the  appropriate  instruments  and  (4)  to  react  to 
irregular  practices.  These  activities  enabled  the  TDI  services  to  be  more  pro-active 
rather than simply reactive in the enforcement field. 

6.2.  Monitoring of undertakings (see Annexes M and Q) 

Monitoring  of  undertakings  forms  part  of  the  enforcement  activities,  since 
undertakings  are  a  form  of  AD  or  AS  measures.  They  are  accepted  by  the 
Commission if it is satisfied that they can effectively eliminate the injurious effects 
of dumping or subsidisation. 

At  the  beginning  of  2005,  there  were  undertakings  in  force  accepted  from  47 
companies. During 2005, the following changes to the portfolio of undertakings took 
place:  undertakings  of  16  companies  came  to  an  end  and  9  offers  for  undertakings 
have been accepted. This brings the total number of undertakings in force at the end 
of 2005 to 40. 

7. 

REFUNDS (SEE ANNEX T) 

Articles  11(8)  and  21(1)  of  the  basic  Regulations  allow  importers  to  request  the 
reimbursement  of  the  relevant  collected  duties  where  it  is  shown  that  the 
dumping/subsidy margin, on the basis of which duties were paid, has been eliminated 
or reduced to a level below that of the duty in force. 

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During  2005,  12  new  refund  requests  were  lodged.  Four  decisions  were  adopted 
rejecting refund requests whilst one other request was withdrawn. For the first time, 
applications were submitted claiming refunds of countervailing duties.  

8. 

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

In  2005,  five  judgments  relating  to  AD  or  AS  were  rendered  by  the  Court  of  First 
Instance and one by the Court of Justice. In 3 out of the 5 CFI judgments, the Court 
confirmed  the  Eurocoton  Judgment  (see  22nd  Annual  Report  to  the  European 
Parliament)  and  annulled  the  Council's  non-adoption  of  definitive  AD  measures 
proposed  by  the  Commission  on  the  ground  of  lack  of  reasoning.  The  fact  that  no 
positive simple majority was reached amongst Member States is not considered as an 
adequate reasoning; any rejection of proposed measures should be justified along the 
lines of the basic Regulation's provisions. The other 2 cases were withdrawn by the 
applicants. A detailed summary of the judgments is given in the Working Document. 

Six new cases were lodged in 2005, five before the CFI and one before the CoJ.  

A list of the AD/AS cases before the CFI and the CoJ still pending at the end of 2005 
is given in Annex S of the Working Document. 

9. 

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

9.1. 

Dispute settlement in the field of AD, AS and SFGs 

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

One dispute settlement procedure was concluded during 2005 and largely confirmed 
the Community’s approach. It concerned the anti-subsidy case on DRAMs from the 
Republic of Korea.  

Details are given in the Working Document attached to this report. 

9.2. 

Other WTO activities 

In  2005,  negotiations  under  the  Doha  Development  Agenda  have  intensified  and 
deepened with the discussion of proposals offering concrete legal texts for possible 
changes.  Besides  the  plenary  meetings,  the  Community  actively  participated  in 
bilateral  and  multilateral  meetings  aimed  at  discussing  in  more  detail  with  other 
WTO  Members  the  different  proposals  made.  In  this  context,  the  Community 
continued  to  be  committed  to  stronger  rules  on  transparency  and  enforcement, 
stricter rules on reviews, a mandatory "lesser duty rule"3 and public interest test, as 
well  as  reduced  costs  for  parties  to  cooperate  in  investigations,  and  defended  a 

3 

The lesser duty rule requires the measures imposed by the Community to be lower than the dumping or 
subsidy margin, if such lower duty rate is sufficient to remove the injury suffered by the Community 
industry. 

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number of proposals in this regard. In addition, the Community remained one of the 
most  active  members  in  the  working  group  on  questionnaires  and  verification 
outlines, which had been created on our initiative. 

On  subsidies  to  fisheries,  a  “middle  ground”  position  as  reflected  in  the  proposals 
tabled by the Community gathered support from an increasing number of countries. 
The  Community  also  advocated  a  strong  enforcement  and  transparency  mechanism 
that  would  ensure  that  any  new  disciplines  are  actually  implemented  by  all.  On 
industrial  subsidies,  the  discussions  gradually  focused  on  a  limited  number  of 
substantive issues. On procedure, the Community promoted improved rules on anti-
subsidy investigations. 

In  parallel  to  these  activities,  the  regular  work  of  the  Anti-dumping,  Subsidies  and 
Countervailing and Safeguards Committees was on-going. 

In  December  2005,  Ministers  agreed  in  Hong  Kong  to  intensify  and  accelerate  the 
negotiation  process,  on  the  basis  of  detailed  textual  proposals,  and  to  complete  the 
process of analysing proposals as soon as possible. In addition, Ministers mandated 
the Chair of the Group on Rules to prepare consolidated texts that shall be the basis 
for the final stage of the negotiations.  

10. 

CONCLUSION 

2005 was the first full year of the new, enlarged Commission. It was an average year 
in  trade  defence  activity  in  terms  of  the  initiation  of  new  cases  and  the  number  of 
measures  imposed.  However,  the  number  of  measures  that  expired  during  the  year 
significantly  increased  bringing  the  number  of  measures  in  force  back  to  147, 
compared to 156 in 2004 – reflecting the different stage of the economic cycle for the 
global economy compared to the end of the 1990s. It was “eventful” in a number of 
other aspects, such as the preparation for the further enlargement of the EU in 2007 
and the safeguard case on textile products and salmon.  

its  practice  of  ensuring 

This  report  shows  the  EC's  moderate  use  of  trade  defence  instruments,  while 
investigations  are  rigorously  and 
confirming 
professionally carried out. At the same time, where proven, the Community is ready 
to take a tough stand against unfair trade practices. Transparency goes hand in hand 
with the rigorous application of the trade defence instruments, reflecting the changes 
made to the legislative framework in 2004 and 2005. The Commission is committed 
to pursuing such a line in the future.  

that 

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