25th Annual Report from the Commission to the European Parliament on the community's anti-dumping, anti-subsidy and safeguard activities (2006) [SEC(2007) 1076]
Date: 2007-08-21
Institutions: European Commission
Subjects: European Community, activity report, anti-dumping legislation, anti-subsidy proceeding, protective clause

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 21.8.2007 
COM(2007) 479 final 

25th ANNUAL REPORT FROM THE COMMISSION TO  

THE EUROPEAN PARLIAMENT 

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

(2006) 

[SEC(2007) 1076] 

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INTRODUCTION 

This  2006  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.  

This short report provides an overview of the highlights during 2006, 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)".  

2. 

BASIC CONCEPTS 

Heading  2  in  the  working  document  gives  an  overview  of  the  terminology  and 
procedures used in TDI investigations. 

3. 

LAUNCHING OF THE TDI REVIEW PROCESS 

Since  the  last  substantial  review  of  the  EU's  TDI  back  in  1994,  important 
developments occurred both in the European and global economic context. In order 
to  consider  these  changes  and  to  see  if  eventual  adaptations  are  necessary,  the 
Commission published on 6 December 2006 a Green Paper2 on the functioning of the 
EU's  trade  defence  instruments  and  launched  a  three-month  long  public  reflection 
process  with  stakeholders.  The  Green  Paper  flows  from  the  recent  Communication 
on external competitiveness. 

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COM(2006) 567 final – available on 
http://ec.europa.eu/trade/issues/sectoral/competitiveness/global_europe_en.htm 
Europe's  trade  defence  instruments  in  a  changing  global  economy  -  A  Green  Paper  for  public 
consultation – COM(2006) 763 final, available on 
http://ec.europa.eu/trade/issues/respectrules/anti_dumping/comu061206_en.htm 

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Following  the  public  debate  and  after  having  evaluated  the  replies  received,  the 
Commission will communicate the results to stakeholders, draw conclusions and, if 
appropriate, propose modifications to the EU's trade defence instruments. 

4. 

ENLARGEMENT 

During 2006, the Commission continued to implement an Action Plan to prepare for 
the  accession  of  Bulgaria  and  Romania.  The  Action  Plan,  set  up  already  in  2005, 
included a number of activities similar to those that the Commission organized in the 
area of TDI already in relation to the 2004 EU enlargement (outlined in the 2004 and 
2005 annual reports). As before, the aim of these activities was to ensure as smooth 
as possible the integration of the administrations of the acceding countries in the area 
of trade defence. 

5. 

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  2006.  In  particular,  the 
Commission services prepared the second assessment of Vietnam's request for MES 
where  it  was  concluded  that  Vietnam  does  not  yet  fulfil  the  five  criteria  to  obtain 
MES.  

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. The high-
level  MES  working  group,  set  up  after  the  EU-China  summit  in  2005,  met  twice 
during 2006 and focussed on reform efforts of China in the field of the accounting 
and  financial  sectors.  At  the  EU-China  summit  in  September  2006,  both  sides 
expressed their satisfaction over the progress of the market economy status dialogue 
and the working group. The Commission services agreed at the summit to prepare an 
update of the 2004 preliminary assessment.  

During  2006,  the  work  on  MES  requests  received  from  Mongolia,  Kazakhstan  and 
Armenia continued. The Commission analysed the newly submitted information and 
followed up with questions on issues that had not been sufficiently addressed in the 
replies.  

6. 

INFORMATION AND COMMUNICATION ACTIVITIES / BILATERAL CONTACTS 

The Trade Defence Helpdesk for Small and Medium Sized Enterprises (SME), set up 
in  addressing  specific  SME 
its  activity 
in  December  2004,  continued 
questions/problems  regarding  the  trade  defence  instruments.  The  Commission  also 
organised or participated in 9 information seminars for economic operators and third 
country administrations. 

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7. 

OVERVIEW OF AD, AS AND SFG INVESTIGATIONS AND MEASURES 

7.1. 

General 

At the end of 2006, the Community had 134 AD measures (see Annex O) and 12 AS 
measures (see Annex P) in force. 

In  2006,  0,6%  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.  

7.2. 

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

In  2006,  36  investigations  were  initiated3.  Provisional  duties  were  imposed  in  13 
proceedings. Thirteen cases were concluded with the imposition of definitive duties. 
Eighteen proceedings were concluded without measures. Another nine anti-dumping 
measures were allowed to expire automatically following their 5-year duration. 

7.3. 

Review investigations 

Review  investigations  continue  to  represent  a  major  part  of  the  work  of  the  TDI 
services. They represented more than 63% of all investigations initiated. Table 2 in 
the Working Document provides statistical information for the years 2002-2006. 

7.3.1.  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.  

During 2006, 12 expiry review investigations were initiated of which 11 concluded 
that there was a need for the duties to continue for a further five years. Furthermore, 
8 expiry reviews were concluded by termination.  

7.3.2. 

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  2006,  a  total  of  18  interim  reviews  were  initiated.  Eleven  interim  reviews 
were concluded with confirmation or amendment of duty and 8 investigations were 
concluded, thereby terminating the measures.  

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Table  1  in  the  Working  Document  provides  statistical  information  on  the  new  investigations  for  the 
years 2002 – 2006 carried out under the provisions of Articles 5 and 10 of the basic Regulations. 

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7.3.3.  “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 2006.  

They more specifically concern, inter alia, the acceptance, voluntary withdrawal or 
breach  of  undertakings,  new  exporter  requests  in  sampling  cases,  suspension  of 
measures, etc.  

7.3.4.  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  2006,  one  new  exporter  review  was  initiated.  Two  investigations,  of  which  1 
accelerated  review,  were  concluded.  One  investigation  was  terminated  thereby 
maintaining the original level of duty. 

7.3.5.  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. 

In 2006, 2 anti-absorption investigation was initiated and one was concluded without 
an increase of the duty. 

7.3.6.  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 2006, 2 investigations were initiated. Three were concluded with extension of the 
duty and one without the extension of the duty.  

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7.4. 

Safeguard investigations (see Annex L) 

During  2006,  the  investigation  on  frozen  strawberries  was  terminated  without  the 
imposition of measures. At the end of 2006, only one safeguard measure was still in 
force, namely the one on imports of certain citrus fruits. 

8. 

ENFORCEMENT OF AD/AS MEASURES 

8.1. 

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. 

8.2.  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  2006,  there  were  undertakings  in  force  accepted  from  40 
companies. During 2006, the following changes to the portfolio of undertakings took 
place: undertakings of 22 companies came to an end and 24 offers for undertakings 
have been accepted. This brings the total number of undertakings in force at the end 
of 2006 to 43. 

9. 

REFUNDS (SEE ANNEX U) 

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. 

During 2006, 19 new refund requests were lodged. Thirteen cases were closed, one 
full and three partial refunds were granted and two refund requests were rejected. 

10. 

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

In  2006,  6  judgments  relating  to  AD  or  AS  were  rendered  by  the  Court  of  First 
Instance  (none  by  the  Court  of  Justice).  Furthermore,  in  4  cases,  the  applications 
were withdrawn by the applicants. A detailed summary of the judgments is given in 
the Working Document. 

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Nineteen new cases were lodged in 2006, 17 before the CFI and 2 before the CoJ.  

A list of the AD/AS cases before the CFI and the CoJ still pending at the end of 2006 
is given in Annex S of the Working Document. 

11. 

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

11.1.  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. 

In the salmon case, a panel was established on 22 June and its members were finally 
decided upon on 2 August 2006. Norway has chosen to challenge a very wide range 
of aspects of the anti-dumping proceeding concerned – from dumping through injury, 
causation  to  the  form  of  the  measures.  Following  first  written  submissions  by  both 
parties to the dispute, the first substantive meeting of the panel with the parties and 
third parties took place on 12 and 13 December 2006. 

The  final  panel  report  is  expected  to  be  issued  in  July  2007,  following  which  both 
parties will have the possibility to appeal. 

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

11.2.  Other WTO activities 

In  2006,  anti-dumping,  industrial  subsidies  and  fisheries  subsidies  negotiations 
intensified  and  deepened  with  the  discussion  of  proposals  offering  concrete  legal 
texts  for  possible  changes.  On  anti-dumping,  the  Community  submitted  proposals 
relating  to  additional  scrutiny  of  initiations  by  an  expert  group  and  to  a  regular 
transparency  mechanism  in  the  Anti-Dumping  Committee  of  Practices  of  User 
Countries.  On  subsidies  to  fisheries,  a  “middle  ground”  position  as  reflected  in  the 
proposals tabled by the Community continued to gather 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.  The  EU  submitted  a  textual  proposal  on  these  two  aspects  in 
April  2006.  On  industrial  subsidies,  the  discussions  gradually  focused  on  a  limited 
number of substantive issues, including the subsidisation practices addressed by the 
EU  in  its  textual  proposal  of  April  2006.  However,  because  the  gaps  between  key 
players remained too wide, the Director-General of the WTO decided to suspend the 
negotiations in all areas in July 2006. 

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Informal  technical  work  resumed  in  the  autumn  2006.  On  anti-dumping,  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 and 
is  chaired  by  a  Commission  official.  In  subsidies,  informal  contacts  between  key 
players  ensured  that  this  negotiating  area,  in  particular  the  issues  promoted  by  the 
EU, would remain on the table upon resumption of the negotiations. 

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

12. 

CONCLUSION 

The year 2006 was characterized, in comparison with previous years, by an increase 
in  the  number  of  cases  initiated  and  also  by  an  increase  in  the  number  of 
investigations terminated without the imposition of measures. It was an average year 
in terms of measures imposed. It was “eventful” in a number of other aspects, such as 
the  preparation  for  the  further  enlargement  of  the  EU  in  2007,  the  Green  Paper 
exercice  and  the  investigation  on  leather  footwear  originating  in  the  People's 
Republic of China.  

its  practice  of  ensuring 

This  report  shows  the  EC's  moderate  use  of  trade  defence  instruments,  while 
confirming 
investigations  are  rigorously  and 
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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