Proposal for a Council Regulation (EC) No …/… of […] on protection against subsidised imports from countries not members of the European Community (Codified version)
Date: 2008-06-24
Institutions: European Commission
Subjects: World Trade Organisation, countervailing charge, export subsidy, import policy, import restriction, third country

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 24.6.2008 
COM(2008) 386 final 

2008/0129 (CNS) 

Proposal for a 

COUNCIL REGULATION (EC) No …/… 

of […] 

on protection against subsidised imports from countries not members of the European 
Community 

(Codified version) 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

In  the  context  of  a  people’s  Europe,  the  Commission  attaches  great  importance  to 
simplifying  and  clarifying  Community  law  so  as  to  make  it  clearer  and  more 
accessible to the ordinary citizen, thus giving him new opportunities and the chance 
to make use of the specific rights it gives him. 

This aim cannot be achieved so long as numerous provisions that have been amended 
several times, often quite substantially, remain scattered, so that they must be sought 
partly  in  the  original  instrument  and  partly  in  later  amending  ones.  Considerable 
research work, comparing many different instruments, is thus needed to identify the 
current rules. 

For  this  reason  a  codification  of  rules  that  have  frequently  been  amended  is  also 
essential if Community law is to be clear and transparent. 

On  1  April  1987  the  Commission  therefore  decided1  to  instruct  its  staff  that  all 
legislative acts should be codified after no more than ten amendments, stressing that 
this  is  a  minimum  requirement  and  that  departments  should  endeavour  to  codify  at 
even  shorter  intervals  the  texts  for  which  they  are  responsible,  to  ensure  that  the 
Community rules are clear and readily understandable. 

The  Conclusions  of 
the  Edinburgh  European  Council 
(December 1992) confirmed this2, stressing the importance of codification as it offers 
certainty as to the law applicable to a given matter at a given time. 

the  Presidency  of 

Codification  must  be  undertaken  in  full  compliance  with  the  normal  Community 
legislative procedure. 

Given  that  no  changes  of  substance  may  be  made  to  the  instruments  affected  by 
codification, the European Parliament, the Council and the Commission have agreed, 
by  an  interinstitutional  agreement  dated  20  December  1994,  that  an  accelerated 
procedure may be used for the fast-track adoption of codification instruments. 

is 

this  proposal 

to  undertake  a  codification  of  Council 
The  purpose  of 
Regulation (EC)  No  2026/97  of  6  October  1997  on  protection  against  subsidized 
imports  from  countries  not  members  of  the  European  Community3.  The  new 
Regulation  will  supersede  the  various  acts  incorporated  in  it4;  this  proposal  fully 
preserves  the  content  of  the  acts  being  codified  and  hence  does  no  more  than 
bringing  them  together  with  only  such  formal  amendments  as  are  required  by  the 
codification exercise itself. 

COM(87) 868 PV. 
See Annex 3 to Part A of the Conclusions. 
Carried out pursuant to the Communication from the Commission to the European Parliament and the 
Council – Codification of the Acquis communautaire, COM(2001) 645 final. 
See Annex V to this proposal. 

1. 

2. 

3. 

4. 

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3 

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5. 

The codification proposal was drawn up on the basis of a preliminary consolidation, 
in  all  official  languages,  of  Regulation  (EC) No 2026/97  and  the  instruments 
amending  it,  carried  out  by  the  Office  for  Official  Publications  of  the  European 
Communities, by means of a data-processing system. Where the Articles have been 
given new numbers, the correlation between the old and the new numbers is shown 
in a table contained in Annex VI to the codified Regulation. 

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(cid:208) 2026/97 
2008/0129 (CNS) 

Proposal for a 

COUNCIL REGULATION (EC) No […/…] 

of  

on protection against subsidised imports from 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  Regulations  establishing  the  common  organisation  of  agricultural 
markets and the Regulations adopted pursuant to Article 308 of the Treaty applicable to goods 
manufactured from agricultural products, and in particular the provisions of those Regulations 
which  allow  for  derogation  from  the  general  principle  that  protective  measures  at  frontiers 
may be replaced solely by the measures provided for in those Regulations, 

Having regard to the proposal from the Commission, 

Having regard to the opinion of the European Parliament1, 

Having regard to the opinion of the European Economic and Social Committee2, 

Whereas: 

(1) 

Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection  against 
subsidized imports from countries not members of the European Community3 has been 
substantially amended several times4. In the interests of clarity and rationality the said 
Regulation should be codified.  

(cid:208)  

1 
2 
3 

4 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
OJ  L  288,  21.10.1997,  p.  1.  Regulation  as  last  amended  by  Regulation  (EC)  No  461/2004  (OJ  L  77, 
13.3.2004, p. 12). 
See Annex V. 

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(2) 

The  conclusion  of  the  Uruguay  Round  of  multilateral  trade  negotiations  led  to  the 
establishment of the World Trade Organization (‘the WTO’). 

(cid:208) 2026/97 Recital 3 (adapted) 

(cid:208) 2026/97 Recital 4 (adapted) 

(3) 

Annex 1A to the Agreement establishing the WTO ('the WTO Agreement'), approved 
by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on 
behalf of the European Community, as regards matters within its competence, of the 
agreements  reached  in  the  Uruguay  Round  multilateral  negotiations  (1986-1994)5, 
contains,  inter  alia,  the  General  Agreement  on  Tariffs  and  Trade  1994  (‘the 
GATT 1994’),  an  Agreement  on  Agriculture  ('the  Agreement  on  Agriculture'),  an 
Agreement on implementation of Article VI of the GATT 1994 (hereinafter referred to 
as  ‘the  1994  Anti-Dumping  Agreement’)  and  an  Agreement  on  Subsidies  and 
Countervailing Measures (‘the Subsidies Agreement’). 

(cid:208) 2026/97 Recital 5 (adapted) 

(4) 

In  order  to  reach  greater  transparency  and  effectiveness  in  the  application  by  the 
Community  of  the  rules  laid  down  in  the  1994  Anti-Dumping  Agreement  and  the 
Subsidies  Agreement  respectively,  ⌦ the  adoption  of ⌫  two  separate  Regulations 
which ⌦ would ⌫ lay down in sufficient detail the requirements for the application 
of  each  of  these  commercial  defence  instruments  ⌦ has  been  considered  as 
necessary ⌫. 

(5) 

In  ⌦ order ⌫  to  ensure  an  adequate  and  transparent  implementation  of  the  rules 
⌦ provided  for  in  those  two  Agreements ⌫,  it  is  appropriate  to  transpose 
⌦ their ⌫ language into Community legislation to the best extent possible. 

(cid:208) 2026/97 Recital 7 (adapted) 

(6) 

Furthermore, it seems advisable to explain, in adequate detail, when a subsidy shall be 
deemed to exist, according to which principles it shall be countervailable (in particular 
whether the subsidy has been granted specifically), and according to which criteria the 
amount of the countervailable subsidy is to be calculated. 

(cid:208) 2026/97 Recital 8 

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OJ L 336, 23.12.1994, p. 1. 

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(7) 

(8) 

(9) 

(cid:208) 2026/97 Recital 9 

In determining the existence of a subsidy, it is necessary to demonstrate that there has 
been a financial contribution by a government or any public body within the territory 
of a country, or that there has been some form of income or price support within the 
meaning  of  Article  XVI  of  the  GATT  1994,  and  that  a  benefit  has  thereby  been 
conferred on the recipient enterprise. 

(cid:208) 1973/2002 Recital 2 (adapted) 

fFor the calculation of the benefit to the recipient, in cases where a market benchmark 
does  not  exist  in  the  country  concerned,  the  benchmark  should  be  determined  by 
adjusting the terms and conditions prevailing in the country concerned on the basis of 
actual  factors  available  in  that  country.  If  this  is  not  practicable  because,  inter  alia, 
such  prices  or  costs  do  no  exist  or  are  unreliable,  then  the  appropriate  benchmark 
should be determined by resorting to terms and conditions in other markets. 

(cid:208) 2026/97 Recital 13 

It is desirable to lay down clear and detailed guidance as to the factors which may be 
relevant for the determination of whether the subsidised imports have caused material 
injury  or  are threatening to  cause injury. In demonstrating that the volume and price 
levels of the imports concerned are responsible for injury sustained by a Community 
industry,  attention  should  be  given  to  the  effect  of  other  factors  and  in  particular 
prevailing market conditions in the Community. 

(cid:208) 2026/97 Recital 14 

(10) 

It  is  advisable  to  define  the  term  ‘Community  industry’  and  to  provide  that  parties 
related  to  exporters  may  be  excluded  from  such  industry,  and  to  define  the  term 
‘related’. It is also necessary to provide for countervailing duty action to be taken on 
behalf of producers in a region of the Community and to lay down guidelines on the 
definition of such region. 

(cid:208) 2026/97 Recital 15 

(11) 

It is necessary to lay down who may lodge a countervailing duty complaint, including 
the  extent  to  which  it  should  be  supported  by  the  Community  industry,  and  the 
information on  countervailable  subsidies, injury and causation which such complaint 
should  contain.  It  is  also  expedient  to  specify  the  procedures  for  the  rejection  of 
complaints or the initiation of proceedings. 

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(cid:208) 2026/97 Recital 16 

(12) 

It  is  necessary  to  lay  down  the  manner  in  which  interested  parties  should  be  given 
notice  of  the  information  which  the  authorities  require,  and  should  have  ample 
opportunity  to  present  all  relevant  evidence  and  to  defend  their  interests.  It  is  also 
desirable  to  set  out  clearly  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. It is also appropriate to set out the 
conditions  under  which  an  interested  party  may  have  access  to,  and  comment  on, 
information  presented  by  other  interested  parties.  There  should  also  be  cooperation 
between the Member States and the Commission in the collection of information. 

(13) 

It  is  necessary  to  lay  down  the  conditions  under  which  provisional  duties  may  be 
imposed, including conditions whereby they may be imposed no earlier than 60 days 
from initiation and not later than nine months thereafter. Such duties may in all cases 
be imposed by the Commission only for a four-month period. 

(cid:208) 2026/97 Recital 17 

(cid:208) 2026/97 Recital 18 

(14) 

It is necessary to specify procedures for the acceptance of undertakings eliminating or 
offsetting  the  countervailable  subsidies  and  injury  in  lieu  of  the  imposition  of 
provisional or definitive duties. It is also appropriate to lay down the consequences of 
breach or withdrawal of undertakings and that provisional duties may be imposed in 
cases of suspected violation or where further investigation is necessary to supplement 
the  findings.  In  accepting  undertakings,  care  should  be  taken  that  the  proposed 
undertakings, and their enforcement, do not lead to anti-competitive behaviour. 

(cid:208) 461/2004 Recital 18 (adapted) 

(15) 

It is considered appropriate to allow withdrawal of an undertaking and application of 
the  duty  by  one  single  legal  act.  It  is  also  necessary  to  ensure  that  the  withdrawal 
procedure  is  terminated  within  a  time  limit  of  normally  six  months  and  in  no  case 
more  than  nine  months  in  order  to  ensure  a  proper  enforcement  of  the  measure  in 
force. 

(16) 

It is necessary to provide that the termination of cases should, irrespective of whether 
definitive measures are adopted or not, normally take place within 12 months, and in 
no case later than 13 months, from the initiation of the investigation. 

(cid:208) 2026/97 Recital 19 

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(cid:208) 2026/97 Recital 20 

(17)  An  investigation  or  proceeding  should  be  terminated  whenever  the  amount  of  the 
subsidy is found to be de minimis or if, particularly in the case of imports originating 
in developing countries, the volume of subsidised imports or the injury is negligible, 
and it is appropriate to define those criteria. Where measures are to be imposed, it is 
necessary  to  provide  for  the  termination  of  investigations  and  to  lay  down  that 
measures  should  be  less  than  the  amount  of  countervailable  subsidies  if  such  lesser 
amount  would  remove  the  injury,  and  also  to  specify  the  method  of  calculating  the 
level of measures in cases of sampling. 

(cid:208) 2026/97 Recital 21 

(18) 

It is necessary to provide for the retroactive collection of provisional duties if that is 
deemed appropriate and to define the circumstances which may trigger the retroactive 
application of duties in order to avoid the undermining of the definitive measures to be 
applied. It is also necessary to provide that duties may be applied retroactively in cases 
of breach or withdrawal of undertakings. 

(19) 

It  is  necessary  to  provide  that  measures  are  to  lapse  after  five  years  unless  a  review 
indicates that they should be maintained. It is also necessary to provide, in cases where 
sufficient evidence is submitted of changed circumstances, for interim reviews or for 
investigations to determine whether refunds of countervailing duties are warranted. 

(cid:208) 2026/97 Recital 22 

(cid:208) 461/2004 Recital 20 (adapted) 

(20)  Reinvestigations  are  initiated  on  the  basis  of  evidence  submitted  by  the  Community 
industry. Other interested parties may equally have an interest in such reinvestigations 
which are aiming at correcting the effects of the absorption of the duty by the exporter. 
It  is  therefore  necessary  to  extend  the  possibility  of  requesting  the  initiation  of  anti-
absorption investigations to any other interested party. It is also necessary, in order to 
assess  whether  absorption  exists  or  not,  to  include  into  the  notion  of  movement  of 
prices the decrease of export prices since this is one of the possible situations in which, 
by  lowering  the  price  level  on  the  Community  market,  the  remedial  effect  of  the 
measure may be undermined. 

(cid:208) 2026/97 Recital 23 

(21)  Even  though  the  Subsidies  Agreement  does  not  contain  provisions  concerning 
circumvention  of  countervailing  measures,  the  possibility  of  such  circumvention 
exists,  in  terms  similar,  albeit  not  identical,  to  the  circumvention  of  anti-dumping 
measures. It appears therefore appropriate to enact an anti-circumvention provision in 
this Regulation. 

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(22) 

It  is  desirable  to  clarify  which  parties  have  the  right  to  request  the  initiation  of  anti-
circumvention investigations. 

(cid:208) 461/2004 Recital 23 (adapted) 

(cid:208) 461/2004 Recital 24 (adapted) 

(23) 

It is also desirable to clarify which practices constitute circumvention of the measures 
in  place.  Circumvention  practices  may  take  place  either  inside  or  outside  the 
Community.  It  is  consequently  necessary  to  provide  that  exemptions  from  the 
extended duties which may be granted to importers may also be granted to exporters 
when  duties  are  being  extended  to  address  circumvention  taking  place  outside  the 
Community. 

(24) 

It  is  expedient  to  permit  the  suspension  of  countervailing  measures  where  there  is  a 
temporary change in market conditions which makes the continued imposition of such 
measures temporarily inappropriate. 

(cid:208) 2026/97 Recital 24 

(25) 

It  is  necessary  to  provide  that  imports  under  investigation  may  be  made  subject  to 
registration upon importation in order to enable measures to be subsequently applied 
against such imports. 

(cid:208) 2026/97 Recital 25 

(cid:208) 2026/97 Recital 26 and 
461/2004 Recital 27 (adapted) 

(26) 

In order to ensure proper enforcement of measures, it is necessary that Member States 
monitor,  and  report  to  the  Commission,  the  import  trade  in  products  subject  to 
investigation or subject to measures, and also the amount of duties collected under this 
Regulation.  It  is  ⌦ also ⌫  necessary  to  provide  for  the  possibility  for  the 
Commission  to  request  Member  States  to  supply,  subject  to  the  respect  of 
confidentiality  rules,  information  to  be  used  for  monitoring  price  undertakings  and 
verifying the level of effectiveness of the measures in force. 

(27) 

It  is  necessary  to  provide  for  consultation  of  an  Advisory  Committee  at  regular  and 
specified stages of the investigation. The Committee should consist of representatives 
of Member States with a representative of the Commission as chairman. 

(cid:208) 2026/97 Recital 27 

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(28) 

It  is  expedient  to  provide  for  verification  visits  to  check  information  submitted  on 
countervailable subsidies and injury, such visits being, however, conditional on proper 
replies to questionnaires being received. 

(cid:208) 2026/97 Recital 28 

(29) 

It  is  essential  to  provide  for  sampling  in  cases  where  the  number  of  parties  or 
transactions  is  large  in  order  to  permit  completion  of  investigations  within  the 
appointed time limits. 

(cid:208) 2026/97 Recital 29 

(30) 

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. 

(cid:208) 2026/97 Recital 30 

(31)  Provision  should  be  made  for  the  treatment  of  confidential  information  so  that 

business or governmental secrets are not divulged. 

(cid:208) 2026/97 Recital 31 

(32) 

It  is  essential  that  provision  be  made  for  proper  disclosure  of  essential  facts  and 
considerations to parties which qualify for such treatment and that such disclosure be 
made,  with  due  regard  to  the  decision-making  process  in  the  Community,  within  a 
time period which permits parties to defend their interests.  

(cid:208) 2026/97 Recital 32 

(cid:208) 2026/97 Recital 33 

(33) 

It  is  prudent  to  provide  for  an  administrative  system  under  which  arguments  can  be 
presented  as  to  whether  measures  are  in  the  Community  interest,  including  the 
interests  of  consumers,  and  to  lay  down  the  time  periods  within  which  such 
information  has  to  be  presented,  together  with  the  disclosure  rights  of  the  parties 
concerned. 

(34) 

In applying the  rules of the  Subsidies  Agreement  it  is  essential,  in  order  to  maintain 
the balance of rights and obligations which this Agreement sought to establish, that the 

(cid:208) 2026/97 Recital 34 

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Community  take  account  of  their  interpretation  by  the  Community's  major  trading 
partners, as reflected in legislation or established practice, 

HAS ADOPTED THIS REGULATION: 

(cid:208) 2026/97 

Article 1 

Principles 

1. A countervailing duty may be imposed for the purpose of offsetting any subsidy granted, 
directly  or  indirectly,  for  the  manufacture,  production,  export  or  transport  of  any  product 
whose release for free circulation in the Community causes injury. 

2. Notwithstanding paragraph 1, where products are not directly imported from the country of 
origin but are exported to the Community from an intermediate country, the provisions of this 
Regulation  shall  be  fully  applicable  and  the  transaction  or  transactions  shall,  where 
appropriate,  be  regarded  as  having  taken  place  between  the  country  of  origin  and  the 
Community. 

(cid:208) 2026/97 (adapted) 

⌦ Article 2 ⌫ 

⌦ Definitions ⌫ 

For the purpose of this Regulation: 

(cid:208) 2026/97 

(a) 

(b) 

(c) 

a product is considered to be subsidised if it benefits from a countervailable subsidy 
as  defined  in  Article  3.Such  subsidy  may  be  granted  by  the  government  of  the 
country of origin of the imported product, or by the government of an intermediate 
country  from  which  the  product  is  exported  to  the  Community,  known  for  the 
purpose of this Regulation as ‘the country of export’; 

(cid:208) 2026/97 (adapted) 

 ‘government’  ⌦ shall  mean ⌫  a  government  or  any  public  body  within  the 
territory of the country of origin or export; 

 ‘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 

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product, another product which although not alike in all respects, has characteristics 
closely resembling those of the product under consideration; 

(d) 

 ‘injury’  shall,  unless  otherwise  specified,  mean  material  injury  to  the  Community 
industry, threat of material injury to the Community industry or material retardation 
of the establishment of such an industry and shall be interpreted in accordance with 
the provisions of Article ⌦ 8 ⌫. 

(cid:208) 2026/97 

Article 3 

Definition of a subsidy 

A subsidy shall be deemed to exist if: 

(1)(a) 

there is a financial contribution by a government in the country of origin or export, 
that is to say, where: 

(i) 

a government practice involves a direct transfer of funds (for example, grants, 
loans,  equity  infusion),  potential  direct  transfers  of  funds  or  liabilities  (for 
example, loan guarantees), 

(ii)  government  revenue  that  is  otherwise  due  is  forgone  or  not  collected  (for 
example, fiscal incentives such as tax credits). In this regard, the exemption of 
an  exported  product  from  duties  or  taxes  borne  by  the  like  product  when 
destined for domestic consumption, or the remission of such duties or taxes in 
amounts not in excess of those which have been accrued, shall not be deemed 
to be a subsidy, provided that such an exemption is granted in accordance with 
the provisions of Annexes I, II and III, 

(iii)  a  government  provides  goods  or  services  other  than  general  infrastructure,  or 

purchases goods, 

(iv)  a government: 

– 

– 

makes payments to a funding mechanism, or 

entrusts or directs a private body to carry out one or more of the type of 
functions illustrated in points (i), (ii) and (iii) which would normally be 
vested in the government, and the practice, in no real sense, differs from 
practices normally followed by governments; or 

(b) 

there is any form of income or price  support within the meaning of Article XVI of 
the GATT 1994; and 

(2) A benefit is thereby conferred. 

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Article 4 

Countervailable subsidies 

1. Subsidies shall be subject to countervailing measures only if they are specific, as defined in 
paragraphs 2, 3 and 4. 

2. In order to determine whether a subsidy is specific to an enterprise or industry or group of 
enterprises or industries (hereinafter referred to as ‘certain enterprises’) within the jurisdiction 
of the granting authority, the following principles shall apply: 

(a) 

(b) 

(c) 

where  the  granting  authority,  or  the  legislation  pursuant  to  which  the  granting 
authority  operates,  explicitly  limits  access  to  a  subsidy  to  certain  enterprises,  such 
subsidy shall be specific; 

where  the  granting  authority,  or  the  legislation  pursuant  to  which  the  granting 
authority  operates,  establishes  objective  criteria  or  conditions  governing  the 
eligibility for, and the amount of, a subsidy, specificity shall not exist, provided that 
the eligibility is automatic and that such criteria and conditions are strictly adhered 
to; 

(cid:208) 2026/97 (adapted) 

if, notwithstanding any appearance of non-specificity resulting from the application 
of the principles laid down in ⌦ points ⌫ (a) and (b), there are reasons to believe 
that  the  subsidy  may  in  fact  be  specific,  other  factors  may  be  considered.  Such 
factors are: use of a subsidy programme by a limited number of certain enterprises; 
predominant  use  by  certain  enterprises;  the  granting  of  disproportionately  large 
amounts  of  subsidy  to  certain  enterprises;  and  the  manner  in  which  discretion  has 
been  exercised  by  the  granting  authority  in  the  decision  to  grant  a  subsidy.  In  this 
regard,  information  on  the  frequency  with  which  applications  for  a  subsidy  are 
refused  or  approved  and  the  reasons  for  such  decisions  shall,  in  particular,  be 
considered. 

For the purpose of ⌦ point b) ⌫, objective criteria or conditions mean criteria or conditions 
which  are  neutral,  which  do  not  favour  certain  enterprises  over  others,  and  which  are 
economic  in  nature  and  horizontal  in  application,  such  as  number  of  employees  or  size  of 
enterprise. 

The  criteria  or  conditions  must  be  clearly  set  out  by  law,  regulation,  or  other  official 
document, so as to be capable of verification. 

(cid:208) 2026/97 

In  applying  the  first,  ⌦ second  and  third ⌫  subparagraphs,  account  shall  be  taken  of  the 
extent  of  diversification  of  economic  activities  within  the  jurisdiction  of  the  granting 

(cid:208) 2026/97 (adapted) 

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authority, as well as of the length of time during which the subsidy programme has been in 
operation. 

(cid:208) 2026/97 

3. A subsidy which is limited to certain enterprises located within a designated geographical 
region  within  the  jurisdiction  of  the  granting  authority  shall  be  specific.  The  setting  or 
changing of generally applicable tax rates by all levels of government entitled to do so shall 
not be deemed to be a specific subsidy for the purposes of this Regulation. 

4.  Notwithstanding  paragraphs  2  and  3,  the  following  subsidies  shall  be  deemed  to  be 
specific: 

(a) 

(b) 

subsidies  contingent,  in  law  or  in  fact,  whether  solely  or  as  one  of  several  other 
conditions, upon export performance, including those illustrated in Annex I; 

subsidies contingent, whether solely or as one of several other conditions, upon the 
use of domestic over imported goods. 

(cid:208) 2026/97 (adapted) 

⌦ For  the  purposes  of  point  (a), ⌫  subsidies  shall  be  considered  to  be  contingent  in  fact 
upon export performance when the facts demonstrate that the granting of a subsidy, without 
having  been  made  legally  contingent  upon  export  performance,  is  in  fact  tied  to  actual  or 
anticipated  exportation  or  export  earnings.  The  mere  fact  that  a  subsidy  is  accorded  to 
enterprises which export shall not for that reason alone be considered to be an export subsidy 
within the meaning of this provision. 

5.  Any  determination  of  specificity  under  the  provisions  of  this  Article  shall  be  clearly 
substantiated on the basis of positive evidence. 

(cid:208) 2026/97 

Article 5 

Calculation of the amount of the countervailable subsidy 

(cid:208) 2026/97 (adapted) 

The amount of countervailable subsidies shall be calculated in terms of the benefit conferred 
on  the  recipient  which  is  found  to  exist  during  the  investigation  period  for  subsidisation. 
Normally this period shall be the most recent accounting year of the beneficiary, but may be 
any  other  period  of  at  least  six  months  prior  to  the  initiation  of  the  investigation  for  which 
reliable financial and other relevant data are available. 

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(cid:208) 2026/97 

Article 6 

Calculation of benefit to the recipient 

As regards the calculation of benefit to the recipient, the following rules shall apply: 

(a) 

(b) 

(c) 

(d) 

government  provision  of  equity  capital  shall  not  be  considered  to  confer  a  benefit, 
unless  the  investment  can  be  regarded  as  inconsistent  with  the  usual  investment 
practice  (including  for  the  provision  of  risk  capital)  of  private  investors  in  the 
territory of the country of origin and/or export; 

a loan by a government shall not be considered to confer a benefit, unless there is a 
difference  between  the  amount  that  the  firm  receiving  the  loan  pays  on  the 
government  loan  and  the  amount  that  the  firm  would  pay  for  a  comparable 
commercial loan which the firm could actually obtain on the market. In that event the 
benefit shall be the difference between these two amounts; 

a loan guarantee by a government shall not be considered to confer a benefit, unless 
there is a difference between the amount that the firm receiving the guarantee pays 
on a loan guaranteed by the government and the amount that the firm would pay for a 
comparable commercial loan in the absence of the government guarantee. In this case 
the  benefit  shall  be  the  difference  between  these  two  amounts,  adjusted  for  any 
differences in fees; 

the provision of goods or services or purchase of goods by a government shall not be 
considered  to  confer  a  benefit,  unless  the  provision  is  made  for  less  than  adequate 
remuneration  or  the  purchase  is  made  for  more  than  adequate  remuneration.  The 
adequacy  of  remuneration  shall  be  determined  in  relation  to  prevailing  market 
conditions  for  the  product  or  service  in  question  in  the  country  of  provision  or 
purchase  (including  price,  quality,  availability,  marketability,  transportation  and 
other conditions of purchase or sale). 

(cid:208) 1973/2002 Art. 1, pt. 1 

If there are no such prevailing market terms and conditions for the product or service 
in question in the country of provision or purchase which can be used as appropriate 
benchmarks, the following rules shall apply: 

(i) 

the terms and conditions prevailing in the country concerned shall be adjusted, 
on the basis of actual costs, prices and other factors available in that country, 
by an appropriate amount which reflects normal market terms and conditions; 
or 

(ii)  when appropriate, the terms and conditions prevailing in the market of another 
country  or  on  the  world  market  which  are  available  to  the  recipient  shall  be 
used. 

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(cid:208) 2026/97 

Article 7 

General provisions on calculation 

1. The amount of the countervailable subsidies shall be determined per unit of the subsidised 
product exported to the Community. 

In establishing this amount the following elements may be deducted from the total subsidy: 

(a) 

(b) 

any application fee, or other costs necessarily incurred in order to qualify for, or to 
obtain, the subsidy; 

export  taxes,  duties  or  other  charges  levied  on  the  export  of  the  product  to  the 
Community specifically intended to offset the subsidy. 

Where an interested party claims a deduction, it must prove that the claim is justified. 

2.  Where  the  subsidy  is  not  granted  by  reference  to  the  quantities  manufactured,  produced, 
exported  or  transported,  the  amount  of  countervailable  subsidy  shall  be  determined  by 
allocating the value of the total subsidy, as appropriate, over the level of production, sales or 
exports of the products concerned during the investigation period for subsidisation. 

3. Where the subsidy can be linked to the acquisition or future acquisition of fixed assets, the 
amount of the countervailable subsidy shall be calculated by spreading the subsidy across a 
period which reflects the normal depreciation of such assets in the industry concerned.  

The  amount  so  calculated  which  is  attributable  to  the  investigation  period,  including  that 
which derives from fixed assets acquired before this period, shall be allocated as described in 
paragraph 2. 

Where the assets are non-depreciating, the subsidy shall be valued as an interest-free loan, and 
be treated in accordance with Article 6(b). 

4.  Where  a  subsidy  cannot  be  linked  to  the  acquisition  of  fixed  assets,  the  amount  of  the 
benefit received during the investigation period shall in principle be attributed to this period, 
and  allocated  as  described  in  paragraph  2,  unless  special  circumstances  arise  justifying 
attribution over a different period. 

Article 8 

Determination of injury 

1. A determination of injury shall be based on positive evidence and shall involve an objective 
examination of both: 

(a) 

the  volume  of  the  subsidised  imports  and  the  effect  of  the  subsidised  imports  on 
prices in the Community market for like products; and 

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(b) 

the consequent impact of those imports on the Community industry. 

2.  With  regard  to  the  volume  of  the  subsidised  imports,  consideration  shall  be  given  to 
whether there has been a significant increase in subsidised imports, either in absolute terms or 
relative  to  production  or  consumption  in  the  Community.  With  regard  to  the  effect  of  the 
subsidised  imports  on  prices,  consideration  shall  be  given  to  whether  there  has  been 
significant price undercutting by the subsidised imports as compared with the price of a like 
product  of  the  Community  industry,  or  whether  the  effect  of  such  imports  is  otherwise  to 
depress prices to a significant degree or prevent price increases which would otherwise have 
occurred,  to  a  significant  degree.  No  one  or  more  of  these  factors  can  necessarily  give 
decisive guidance. 

3.  Where  imports  of  a  product  from  more  than  one  country  are  simultaneously  subject  to 
countervailing duty investigations, the effects of such imports shall be cumulatively assessed 
only if it is determined that: 

(a) 

(b) 

the  amount  of  countervailable  subsidies  established  in  relation  to  the  imports  from 
each country is more than de minimis as defined in Article 14(5) and that the volume 
of imports from each country is not negligible; and 

a  cumulative  assessment  of  the  effects  of  the  imports  is  appropriate  in  light  of  the 
conditions  of  competition  between  imported  products  and  the  conditions  of 
competition between the imported products and the like Community product. 

4.  The  examination  of  the  impact  of  the  subsidised  imports  on  the  Community  industry 
concerned  shall  include  an  evaluation  of  all relevant  economic  factors  and  indices  having  a 
bearing on the state of the industry, including: the fact that an industry is still in the process of 
recovering from the effects of past subsidisation or dumping, the magnitude of the amount of 
countervailable subsidies, actual and potential decline in sales, profits, output, market share, 
productivity,  return  on  investments,  utilisation  of  capacity;  factors  affecting  Community 
prices;  actual  and  potential  negative  effects  on  cash  flow,  inventories,  employment,  wages, 
growth, ability to raise capital or investments and, in the case of agriculture, whether there has 
been an increased burden on government support programmes. This list is not exhaustive, nor 
can any one or more of these factors necessarily give decisive guidance. 

(cid:208) 2026/97 (adapted) 

5. It must be demonstrated, from all the relevant evidence presented in relation to paragraph 1, 
that the subsidised imports are causing injury . Specifically, this shall entail a demonstration 
that the volume and/or price levels identified pursuant to paragraph 2 are responsible for an 
impact on the Community industry as provided for in paragraph 4, and that this impact exists 
to a degree which enables it to be classified as material. 

6.  Known  factors  other  than  the  subsidised  imports  which  are  injuring  the  Community 
industry at the same time shall also be examined to ensure that injury caused by these other 
factors is not attributed to the subsidised imports pursuant to paragraph 5. Factors which may 
be  considered  in  this  respect  include  the  volume  and  prices  of  non-subsidised  imports, 

(cid:208) 2026/97 

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contraction  in  demand  or  changes  in  the  patterns  of  consumption,  restrictive  trade  practices 
of,  and  competition  between,  third  country  and  Community  producers,  developments  in 
technology and the export performance and productivity of the Community industry. 

7. The effect of the subsidised imports shall be assessed in relation to the production of the 
Community industry of the like product when available data permit the separate identification 
of that production on the basis of such criteria as the production process, producers' sales and 
profits.  If  such  separate  identification  of  that  production  is  not  possible,  the  effects  of  the 
subsidised imports shall be assessed by examination of the production of the narrowest group 
or range of products including the like product, for which the necessary information can be 
provided. 

8.  A  determination  of  a  threat  of  material  injury  shall  be  based  on  facts  and  not  merely  on 
allegation, conjecture or remote possibility. The change in circumstances which would create 
a situation in which the subsidy 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) 

(d) 

the nature of the subsidy or subsidies in question and the trade effects likely to arise 
there from; 

a  significant  rate  of  increase  of  subsidised  imports  into  the  Community  market 
indicating the likelihood of substantially increased imports; 

sufficient  freely  disposable  capacity  of  the  exporter  or  an  imminent  substantial 
increase  in  such  capacity  indicating  the  likelihood  of  substantially  increased 
subsidised exports to the Community, account being taken of the availability of other 
export markets to absorb any additional exports; 

whether  imports  are  entering  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 subsidised  exports 
are imminent and that, unless protective action is taken, material injury will occur. 

Article 9 

Definition of Community industry 

1. For the purposes of this Regulation, the term ‘Community industry’ shall be interpreted as 
referring  to  the  Community  producers  as  a  whole  of  the  like  products  or  to  those  of  them 
whose  collective  output  of  the  products  constitutes  a  major  proportion,  as  defined  in 
Article 10(6), of the total Community production of those products, except that: 

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(a) 

(b) 

when producers are related to the exporters or importers or are themselves importers 
of  the  allegedly  subsidised  product,  the  term  ‘Community  industry’  may  be 
interpreted as referring to the rest of the producers; 

in exceptional circumstances the territory of the Community may, for the production 
in  question,  be  divided  into  two  or  more  competitive  markets  and  the  producers 
within each market may be regarded as a separate industry if: 

(i) 

the producers within such a market sell all or almost all of their production of 
the product in question in that market, and 

(ii) 

the demand in that market is not to any substantial degree met by producers of 
the product in question located elsewhere in the Community. 

In such circumstances, injury may be found to exist even where a major portion of 
the total Community industry is not injured, provided that there is a concentration of 
subsidised  imports  into  such  an  isolated  market  and  provided  further  that  the 
subsidised  imports  are  causing  injury  to  the  producers  of  all  or  almost  all  of  the 
production within such a market. 

2. For the purpose of paragraph 1, producers shall be considered to be related to exporters or 
importers only if: 

(a) 

(b) 

(c) 

one of them directly or indirectly controls the other; or 

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

together  they  directly  or  indirectly  control  a  third  person,  provided  that  there  are 
grounds  for  believing  or  suspecting  that  the  effect  of  the  relationship  is  such  as  to 
cause the producer concerned to behave differently from non-related producers. 

For the purpose of this paragraph, one shall be deemed to control another when the former is 
legally or operationally in a position to exercise restraint or direction over the latter. 

3.  Where  the  Community  industry  has  been  interpreted  as  referring  to  the  producers  in  a 
certain  region,  the  exporters  or  the  government  granting  countervailable  subsidies  shall  be 
given  an  opportunity  to  offer  undertakings  pursuant  to  Article  13  in  respect  of  the  region 
concerned.  In  such  cases,  when  evaluating  the  Community  interest  of  the  measures,  special 
account shall be taken of the interest of the region. If an adequate undertaking is not offered 
promptly or if the situations set out in Article 13(9) and (10) apply, a provisional or definitive 
countervailing duty may be imposed in respect of the Community as a whole. In such cases 
the duties may, if practicable, be limited to specific producers or exporters. 

4. The provisions of Article 8(7) shall apply to this Article. 

Article 10 

Initiation of proceedings 

1. Except as provided for in paragraph 8, an investigation to determine the existence, degree 
and effect of any alleged subsidy shall be initiated upon a written complaint by any natural or 

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legal  person,  or  any  association  not  having  legal  personality,  acting  on  behalf  of  the 
Community industry. 

The  complaint  may  be  submitted  to  the  Commission,  or  to  a  Member  State,  which  shall 
forward  it  to  the  Commission.  The  Commission  shall  send  Member  States  a  copy  of  any 
complaint it receives. The complaint shall be deemed to have been lodged on the first working 
day  following  its  delivery  to  the  Commission  by  registered  mail  or  the  issuing  of  an 
acknowledgement of receipt by the Commission. 

Where,  in  the  absence  of  any  complaint,  a  Member  State  is  in  possession  of  sufficient 
evidence  of  subsidisation  and  of  resultant  injury  to  the  Community  industry,  it  shall 
immediately communicate such evidence to the Commission. 

2. A complaint as referred to in paragraph 1 shall include sufficient evidence of the existence 
of countervailable subsidies (including, if possible, of their amount), injury and a causal link 
between the allegedly subsidised imports and the alleged injury. The complaint shall contain 
such information as is reasonably available to the complainant on the following: 

(a) 

(b) 

(c) 

(d) 

the  identity  of  the  complainant  and  a  description  of  the  volume  and  value  of  the 
Community  production  of  the  like  product  by  the  complainant.  Where  a  written 
complaint is made on behalf of the Community industry, the complaint shall identify 
the  industry  on  behalf  of  which  the  complaint  is  made  by  a  list  of  all  known 
Community producers of the like product (or associations of Community producers 
of the like product) and, to the extent possible, a description of the volume and value 
of Community production of the like product accounted for by such producers; 

a complete description of the allegedly subsidised product, the names of the country 
or countries of origin and/or export in question, the identity of each known exporter 
or foreign producer and a list of known persons importing the product in question; 

evidence  with  regard  to  the  existence,  amount,  nature  and  countervailability  of  the 
subsidies in question; 

information on changes in the volume of the allegedly subsidised imports, the effect 
of  those  imports  on  prices  of  the  like  product  in  the  Community  market  and  the 
consequent  impact  of  the  imports  on  the  Community  industry,  as  demonstrated  by 
relevant factors and indices having a bearing on the state of the Community industry, 
such as those listed in Article 8 (2) and (4). 

3.  The  Commission  shall,  as  far  as  possible,  examine  the  accuracy  and  adequacy  of  the 
evidence provided in the complaint, in order to determine whether there is sufficient evidence 
to justify the initiation of an investigation. 

4. An investigation may be initiated in order to determine whether or not the alleged subsidies 
are ‘specific’ within the meaning of Article 4(2) and (3). 

5.  An  investigation  may  also  be  initiated  in  respect  of  measures  of  the  type  listed  in 
Annex IV,  to  the  extent  that  they  contain  an  element  of  subsidy  as  defined  by  Article  3,  in 
order to determine whether the measures in question fully conform to the provisions of that 
Annex. 

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6.  An  investigation  shall  not  be  initiated  pursuant  to  paragraph  1  unless  it  has  been 
determined, on the basis of an examination as to the degree of support for, or opposition to, 
the complaint expressed by Community producers of the like product, that the complaint has 
been made by or on behalf of the Community industry. The complaint shall be considered to 
have  been  made  by  or  on  behalf  of  the  Community  industry  if  it  is  supported  by  those 
Community  producers  whose  collective  output  constitutes  more  than  50%  of  the  total 
production of the like product produced by that portion of the Community industry expressing 
either support for or opposition to the complaint. However, no investigation shall be initiated 
when Community producers expressly supporting the complaint account for less than 25% of 
total production of the like product produced by the Community industry. 

7. The authorities shall, unless a decision has been made to initiate an investigation, avoid any 
publicising  of  the  complaint  seeking  the  initiation  of  an  investigation.  However,  as  soon  as 
possible after receipt of a properly documented complaint pursuant to this Article, and in any 
event  before  the  initiation  of  an  investigation,  the  Commission  shall  notify  the  country  of 
origin  and/or  export  concerned,  which  shall  be  invited  for  consultations  with  the  aim  of 
clarifying  the  situation  as  to  matters  referred  to  in  paragraph  2  and  arriving  at  a  mutually 
agreed solution. 

8.  If,  in  special  circumstances,  the  Commission  decides  to  initiate  an  investigation  without 
having  received  a  written  complaint  by  or  on  behalf  of  the  Community  industry  for  the 
initiation  of  such  investigation,  this  shall  be  done  on  the  basis  of  sufficient  evidence  of  the 
existence of countervailable subsidies, injury and causal link, as described in paragraph 2, to 
justify such initiation. 

9.  The  evidence  both  of  subsidies  and  of  injury  shall  be  considered  simultaneously  in  the 
decision  on  whether  or  not  to  initiate  an  investigation.  A  complaint  shall  be  rejected  where 
there  is  insufficient  evidence  of  either  countervailable  subsidies  or  of  injury  to  justify 
proceeding with the case. Proceedings shall not be initiated against countries whose imports 
represent a market share of below 1%, unless such countries collectively account for 3% or 
more of Community consumption. 

10. The complaint may be withdrawn prior to initiation, in which case it shall be considered 
not to have been lodged. 

11. Where, after consultation, it is apparent that there is sufficient evidence to justify initiating 
a proceeding, the Commission shall do so 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 complainant shall, after consultation, be so informed within 
45 days of the date on which the complaint is lodged with the Commission. 

12.  The  notice  of  initiation  of  the  proceedings  shall  announce  the  initiation  of  an 
investigation,  indicate  the  product  and  countries  concerned,  give  a  summary  of  the 
information received, and provide that all relevant information is to be communicated to the 
Commission;. 

It shall state the periods within which interested parties may make themselves known, present 
their views in writing and submit information, if such views and information are to be taken 
into  account  during  the  investigation.  It  shall  also  state  the  period  within  which  interested 
parties may apply to be heard by the Commission in accordance with Article 11(5). 

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13. The Commission shall advise the exporters, importers and representative associations of 
importers  or  exporters  known  to  it  to  be  concerned,  as  well  as  the  country  of  origin  and/or 
export and the complainants, of the initiation of the proceedings and, with due regard to the 
protection of confidential information, provide the full text of the written complaint referred 
to in paragraph 1 to the known exporters and to the authorities of the country of origin and/or 
export,  and  make  it  available  upon  request  to  other  interested  parties  involved.  Where  the 
number of exporters involved is particularly high, the full text of the written complaint may 
instead  be  provided  only  to  the  authorities  of  the  country  of  origin  and/or  export  or  to  the 
relevant trade association. 

14. A countervailing duty investigation shall not hinder the procedures of customs clearance. 

Article 11 

The investigation 

1. Following the initiation of the proceeding, the Commission, acting in cooperation with the 
Member  States,  shall  commence  an  investigation  at  Community  level.  Such  investigation 
shall cover both subsidisation and injury, and these shall be investigated simultaneously.  

For the purpose of a representative finding, an investigation period shall be selected which, in 
the case of subsidisation shall, normally, cover the investigation period provided for in Article 
5.  

Information relating to a period subsequent to the investigation period shall not, normally, be 
taken into account. 

2. Parties receiving questionnaires used in a countervailing duty investigation shall be given at 
least 30 days to reply. The time limit for exporters shall be counted from the date of receipt of 
the  questionnaire,  which  for  this  purpose  shall  be  deemed  to  have  been  received  one  week 
from  the  day  on  which  it  was  sent  to  the  respondent  or  transmitted  to  the  appropriate 
diplomatic representative of the country of origin and/or export. An extension to the 30-day 
period  may  be  granted,  due  account  being  taken  of  the  time  limits  of  the  investigation, 
provided  that  the  party  shows  due  cause  for  such  extension,  in  terms  of  its  particular 
circumstances. 

3.  The  Commission  may  request  Member  States  to  supply  information,  and  Member  States 
shall take whatever steps are necessary in order to give effect to such requests.  

They shall send to the Commission the information requested together with the results of all 
inspections, checks or investigations carried out.  

Where this information is of general interest or where its transmission has been requested by a 
Member  State,  the  Commission  shall  forward  it  to  the  Member  States,  provided  it  is  not 
confidential, in which case a non-confidential summary shall be forwarded. 

4.  The  Commission  may  request  Member  States  to  carry  out  all  necessary  checks  and 
inspections,  particularly  amongst  importers,  traders  and  Community  producers,  and  to  carry 
out investigations in third countries, provided that the firms concerned give their consent and 
that  the  government  of  the  country  in  question  has  been  officially  notified  and  raises  no 
objection.  

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Member States shall take whatever steps are necessary in order to give effect to such requests 
from the Commission.  

Officials  of  the  Commission  shall  be  authorised,  if  the  Commission  or  a  Member  State  so 
requests, to assist the officials of Member States in carrying out their duties. 

(cid:208) 2026/97 (adapted) 

5.  The  interested  parties  which  have  made  themselves  known  in  accordance  with  ⌦ the 
second  subparagraph  of ⌫  Article  10(12),  shall  be  heard  if  they  have,  within  the  period 
prescribed  in  the  notice  published  in  the  Official  Journal  of  the  European  Union,  made  a 
written 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. 

6.  Opportunities  shall,  on  request,  be  provided  for  the  importers,  exporters  and  the 
complainants,  which  have  made  themselves  known  in  accordance  with  ⌦ the  second 
subparagraph  of ⌫  Article  10(12),  and  the  government  of  the  country  of  origin  and/or 
export,  to  meet  those  parties  having  adverse  interests,  so  that  opposing  views  may  be 
presented and rebuttal arguments offered. 

(cid:208) 2026/97 

Provision of such opportunities must take account of the need to preserve confidentiality and 
of the convenience to the parties. 

There shall be no obligation on any party to attend a meeting, and failure to do so shall not be 
prejudicial to that party's case. 

Oral  information  provided  under  this  paragraph  shall  be  taken  into  account  by  the 
Commission in so far as it is subsequently confirmed in writing. 

(cid:208) 2026/97 (adapted) 

themselves  known 

7.  The  complainants,  the  government  of  the  country  of  origin  and/or  export,  importers  and 
exporters and their representative associations, users and consumer organisations, which have 
in  accordance  with  ⌦ the  second  subparagraph  of ⌫ 
made 
Article 10(12),  may,  upon  written  request,  inspect  all  information  made  available  to  the 
Commission by any party to an investigation, as distinct from internal documents prepared by 
the authorities of the Community or its Member States, which is relevant to the presentation 
of their cases and is not confidential within the meaning of Article 29, and that it is used in the 
investigation. 

Such  parties  may  respond  to  such  information  and  their  comments  shall  be  taken  into 
consideration wherever they are sufficiently substantiated in the response. 

(cid:208) 2026/97 

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8. Except in circumstances provided for in Article 28, the information which is supplied by 
interested parties and upon which findings are based shall be examined for accuracy as far as 
possible. 

9.  For  proceedings  initiated  pursuant  to  Article  10(11),  an  investigation  shall,  whenever 
possible, be concluded within one year. In any event, such investigations shall in all cases be 
concluded within 13 months of initiation, in  accordance with the findings made pursuant to 
Article 13 for undertakings or the findings made pursuant to Article 15 for definitive action. 

10.  Throughout  the  investigation,  the  Commission  shall  afford  the  country  of  origin  and/or 
export a reasonable opportunity to continue consultations with a view to clarifying the factual 
situation and arriving at a mutually agreed solution. 

Article 12 

Provisional measures 

1. Provisional duties may be imposed if: 

(a) 

proceedings have been initiated in accordance with Article 10; 

(b) 

(c) 

a notice has been given to that effect and interested parties have been given adequate 
opportunities to submit information and make comments in accordance with ⌦ the 
second subparagraph of ⌫ Article 10(12); 

(cid:208) 2026/97 (adapted) 

a  provisional  affirmative  determination  has  been  made  that  the  imported  product 
benefits from countervailable subsidies and of consequent injury to the Community 
industry; and 

(cid:208) 2026/97 

(d) 

the Community interest calls for intervention to prevent such injury. 

The  provisional  duties  shall  be  imposed  no  earlier  than  60  days  from  the  initiation  of  the 
proceedings but no later than nine months from the initiation of the proceedings. 

The  amount  of  the  provisional  countervailing  duty  shall  not  exceed  the  total  amount  of 
countervailable subsidies as provisionally established but it should be less than this amount, if 
such lesser duty would be adequate to remove the injury to the Community industry. 

2. Provisional duties shall be secured by a guarantee and the release of the products concerned 
for  free  circulation  in  the  Community  shall  be  conditional  upon  the  provision  of  such 
guarantee. 

3.  The  Commission  shall  take  provisional  action  after  consultation  or,  in  cases  of  extreme 
urgency, after informing the Member States. In this latter case, consultations shall take place 

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10  days,  at  the  latest,  after  notification  to  the  Member  States  of  the  action  taken  by  the 
Commission. 

4. Where a Member State requests immediate intervention by the Commission and where the 
conditions  of  the  first  and  second  subparagraphs  of  paragraph  1  are  met,  the  Commission 
shall, within a maximum of five working days from receipt of the request, decide whether a 
provisional countervailing duty shall be imposed. 

5. The Commission shall forthwith inform the Council and the Member States of any decision 
taken  under  paragraphs  1  to  4.  The  Council,  acting  by  a  qualified  majority,  may  decide 
differently. 

6. Provisional countervailing duties shall be imposed for a maximum period of four months. 

Article 13 

Undertakings 

(cid:208) 461/2004 Art. 2, pt. 1 

1. Upon condition that a provisional affirmative determination of subsidisation and injury has 
been  made,  the  Commission  may  accept  satisfactory  voluntary  undertakings  offers  under 
which: 

(a) 

(b) 

the  country  of  origin  and/or  export  agrees  to  eliminate  or  limit  the  subsidy  or  take 
other measures concerning its effects; or 

any exporter undertakes to revise its prices or to cease exports to the area in question 
as  long  as  such  exports  benefit  from  countervailable  subsidies,  so  that  the 
Commission, after specific consultation of the Advisory Committee, is satisfied that 
the injurious effect of the subsidies is thereby eliminated. 

In such a case and as long as such undertakings are in force, the provisional duties imposed by 
the  Commission  in  accordance  with  Article  12(3)  and  the  definitive  duties  imposed  by  the 
Council in accordance with Article 15(1) shall not apply to the relevant imports of the product 
concerned manufactured by the companies referred to in the Commission decision accepting 
undertakings and in any subsequent amendment of such decision. 

Price  increases  under  such  undertakings  shall  not  be  higher  than  is  necessary  to  offset  the 
amount  of  countervailable  subsidies,  and  should  be  less  than  the  amount  of  countervailable 
subsidies  if  such  increases  would  be  adequate  to  remove  the  injury  to  the  Community 
industry. 

2.  Undertakings  may  be  suggested  by  the  Commission,  but  no  country  or  exporter  shall  be 
obliged  to  enter  into  such  an  undertaking.  The  fact  that  countries  or  exporters  do  not  offer 

(cid:208) 2026/97 

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such  undertakings,  or  do  not  accept  an  invitation  to  do  so,  shall  in  no  way  prejudice 
consideration of the case. 

However,  it  may  be  determined  that  a  threat  of  injury  is  more  likely  to  be  realised  if  the 
subsidised imports continue. Undertakings shall not be sought or accepted from countries or 
exporters unless a provisional affirmative determination of subsidisation and injury caused by 
such subsidisation has been made. 

Save in exceptional circumstances, undertakings may not be offered later than the end of the 
period during which representations may be made pursuant to Article 30(5). 

3.  Undertakings  offered  need  not  be  accepted  if  their  acceptance  is  considered  impractical, 
such as where the  number of actual  or potential exporters is too great, or for other reasons, 
including reasons of general policy. The exporter and/or the country of origin and/or export 
concerned may be provided with the reasons for which it is proposed to reject the offer of an 
undertaking  and  may  be  given  an  opportunity  to  make  comments  thereon.  The  reasons  for 
rejection shall be set out in the definitive decision. 

4. Parties which offer an undertaking shall be required to provide a non-confidential version 
of such undertaking, so that it may be made available to interested parties to the investigation. 

5. Where undertakings are, after consultation, accepted, and where there is no objection raised 
within the Advisory Committee, the investigation shall be terminated. In all other cases, the 
Commission shall submit to the Council forthwith a report on the results of the consultation, 
together  with  a  proposal  that  the  investigation  be  terminated.  The  investigation  shall  be 
deemed  terminated  if,  within  one  month,  the  Council,  acting  by  qualified  majority,  has  not 
decided otherwise. 

6.  If  the  undertakings  are  accepted,  the  investigation  of  subsidisation  and  injury  shall 
normally be completed. In such a case, if a negative determination of subsidisation or injury is 
made, the undertaking shall automatically lapse, except in cases where such a determination is 
due in large part to the existence of an undertaking. In such cases, it may be required that an 
undertaking be maintained for a reasonable period.  

In  the  event  that  an  affirmative  determination  of  subsidisation  and  injury  is  made,  the 
undertaking shall continue consistent with its terms and the provisions of this Regulation. 

7. The Commission shall require any country or exporter from whom undertakings have been 
accepted to provide, periodically, information relevant to the fulfillment of such undertaking, 
and to permit verification of pertinent data. Non-compliance with such requirements shall be 
construed as a breach of the undertaking. 

8.  Where  undertakings  are  accepted  from  certain  exporters  during  the  course  of  an 
investigation,  they  shall,  for  the  purpose  of  Articles  18,  19,  20  and  22,  be  deemed  to  take 
effect from the date on which the investigation is concluded for the country of origin and/or 
export. 

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(cid:208) 461/2004 Art. 2, pt. 2 

9. In case of breach or withdrawal of undertakings by any party to the undertaking, or in case 
of  withdrawal  of  acceptance  of  the  undertaking  by  the  Commission,  the  acceptance  of  the 
undertaking shall, after consultation, be withdrawn by Commission Decision or Commission 
Regulation,  as  appropriate,  and  the  provisional  duty  which  has  been  imposed  by  the 
Commission in accordance with Article 12 or the definitive duty which has been imposed by 
the  Council  in  accordance  with  Article  15(1),  shall  apply,  provided  that  the  exporter 
concerned, or the country of origin and/or export has, except in the case of withdrawal of the 
undertaking by the exporter or such country, been given an opportunity to comment. 

Any interested party or Member State may submit information, showing prima facie evidence 
of a breach of an undertaking. The subsequent assessment of whether or not a breach of an 
undertaking has occurred shall normally be concluded within six months, but in no case later 
than nine months following a duly substantiated request.  

The  Commission  may  request  the  assistance  of  the  competent  authorities  of  the  Member 
States in the monitoring of undertakings. 

10. A provisional duty may, after consultation, be imposed in accordance with Article 12 on 
the  basis  of  the  best  information  available,  where  there  is  reason  to  believe  that  an 
undertaking is being breached, or in case of breach or withdrawal of an undertaking where the 
investigation which led to the undertaking has not been concluded. 

(cid:208) 2026/97 

Article 14 

Termination without measures 

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

2.  Where,  after  consultation,  protective  measures  are  unnecessary  and  there  is  no  objection 
raised within the Advisory Committee, the investigation or proceeding shall be terminated. In 
all other cases, the Commission shall submit to the Council forthwith a report on the results of 
the consultation, together with a proposal that the proceeding be terminated. The proceeding 
shall be deemed terminated if, within one month, the Council, acting by a qualified majority, 
has not decided otherwise. 

3.  There  shall  be  immediate  termination  of  the  proceeding  where  it  is  determined  that  the 
amount of countervailable subsidies is de minimis, in accordance with paragraph 5, or where 
the volume of subsidised imports, actual or potential, or the injury, is negligible. 

4. For a proceeding initiated pursuant to Article 10(11), injury shall normally be regarded as 
negligible  where  the  market  share  of  the  imports  is  less  than  the  amounts  set  out  in 
Article 10(9).  With  regard  to  investigations  concerning  imports  from  developing  countries, 
the volume of subsidised imports shall also be considered negligible if it represents less than 

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4% of the total imports of the like product in the Community, unless imports from developing 
countries whose individual shares of total imports represent less than 4% collectively account 
for more than 9% of the total imports of the like product in the Community. 

5. Provided that it is only the investigation that shall be terminated where the amount of the 
countervailable subsidies is below the relevant de minimis level for individual exporters, who 
shall remain subject to the proceedings and may be re-investigated in any subsequent review 
carried  out  for  the  country  concerned  pursuant  to  Articles  18  and  19,  the  amount  of  the 
countervailable subsidies shall be considered to be de minimis if such amount is less than 1% 
ad valorem, except that: 

(a) 

(b) 

as  regards  investigations  concerning  imports  from  developing  countries  the  de 
minimis threshold shall be 2% ad valorem; and 

[for those developing countries Members of the WTO referred to in Annex VII to the 
Subsidies  Agreement  as  well  as  for  developing  countries  Members  of  the  WTO 
which  have  completely  eliminated  export  subsidies  as  defined  in  Article  4(4)(a)  of 
this Regulation, the de minimis subsidy threshold shall be 3% ad valorem; where the 
application of this provision depends on the elimination of export subsidies, it shall 
apply  from  the  date  on  which  the  elimination  of  export  subsidies  is  notified  to  the 
WTO  Committee  on  Subsidies  and  Countervailing  Measures,  and  for  so  long  as 
export subsidies are not granted by the developing country concerned. This provision 
shall expire eight years from the date of entry into force of the WTO Agreement.] 

[INSÉREZ COMME ALTERNATIVE, au cas où le point b) est, en effet, obsolète] 

[5. The amount of the countervailable subsidies shall be considered to be de minimis if such 
amount is less than 1% ad valorem, except that as regards investigations concerning imports 
from developing countries the de minimis threshold shall be 2% ad valorem, provided that it 
is  only  the  investigation  that  shall  be  terminated  where  the  amount  of  the  countervailable 
subsidies  is  below  the  relevant  de  minimis  level  for  individual  exporters,  who  shall  remain 
subject  to  the  proceedings  and  may  be  re-investigated  in  any  subsequent  review  carried  out 
for the country concerned pursuant to Articles 18 and 19.] 

Article 15 

Imposition of definitive duties 

(cid:208) 461/2004 Art. 2, pt. 3 

1. Where the facts as finally established show the existence of countervailable subsidies and 
injury caused thereby, and the Community interest calls for intervention in accordance with 
Article  31,  a  definitive  countervailing  duty  shall  be  imposed  by  the  Council,  acting  on  a 
proposal submitted by the Commission after consultation of the Advisory Committee. 

The proposal shall be adopted by the Council unless it decides by a simple majority to reject 
the proposal, within a period of one month after its submission by the Commission. 

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28 

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Where  provisional  duties  are  in  force,  a  proposal  regarding  definitive  action  shall  be 
submitted not later than one month before the expiry of such duties. 

No  measures  shall  be  imposed  if  the  subsidy  or  subsidies  are  withdrawn  or  it  has  been 
demonstrated that the subsidies no longer confer any benefit on the exporters involved. 

The  amount  of  the  countervailing  duty  shall  not  exceed  the  amount  of  countervailable 
subsidies established but it should be less than the total amount of countervailable subsidies if 
such lesser duty would be adequate to remove the injury to the Community industry. 

(cid:208) 2026/97 

2. A countervailing duty shall be imposed in the appropriate amounts in each case, on a non-
discriminatory  basis,  on  imports  of  a  product  from  all  sources  found  to  benefit  from 
countervailable  subsidies  and  causing  injury,  except  as  to  imports  from  those  sources  from 
which  undertakings  under  the  terms  of  this  Regulation  have  been  accepted.  The  regulation 
imposing  the  duty  shall  specify  the  duty  for  each  supplier,  or,  if  that  is  impracticable,  the 
supplying country concerned. 

3.  When  the  Commission  has  limited  its  examination  in  accordance  with  Article  27,  any 
countervailing  duty  applied  to  imports  from  exporters  or  producers  which  have  made 
themselves  known  in  accordance  with  Article  27  but  were  not  included  in  the  examination 
shall not exceed the weighted average amount of countervailable subsidies established for the 
parties in the sample. 

For the purpose  of this paragraph, the Commission shall disregard any zero and  de minimis 
amounts of countervailable subsidies and amounts of countervailable subsidies established in 
the circumstances referred to in Article 28. 

Individual  duties  shall  be  applied  to  imports  from  any  exporter  or  producer  for  which  an 
individual amount of subsidisation has been calculated as provided for in Article 27. 

Article 16 

Retroactivity 

1. Provisional measures and definitive countervailing duties shall only be applied to products 
which enter free circulation after the time when the measure taken pursuant to Article 12(1) or 
Article 15(1), as the case may be, enters into force, subject to the exceptions set out in this 
Regulation. 

2.  Where  a  provisional  duty  has  been  applied  and  the  facts  as  finally  established  show  the 
existence  of  countervailable  subsidies  and  injury,  the  Council  shall  decide,  irrespective  of 
whether a definitive countervailing duty is to be imposed, what proportion of the provisional 
duty is to be definitively collected. 

For  this  purpose,  ‘injury’  shall  not  include  material  retardation  of  the  establishment  of  a 
Community industry, not threat of material injury, except where it is found that this would, in 
the  absence  of  provisional  measures,  have  developed  into  material  injury.  In  all  other  cases 

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29 

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involving such threat or retardation, any provisional amounts shall be released and definitive 
duties can only be imposed from the date on which a final determination of threat or material 
retardation is made. 

3. If the definitive countervailing duty is higher than the provisional duty, the difference shall 
not  be  collected.  If  the  definitive  duty  is  lower  than  the  provisional  duty,  the  duty  shall  be 
recalculated.  Where  a  final  determination  is  negative,  the  provisional  duty  shall  not  be 
confirmed. 

4.  A  definitive  countervailing  duty  may  be  levied  on  products  which  were  entered  for 
consumption not more than 90 days prior to the date of application of provisional measures 
but not prior to the initiation of the investigation. 

⌦ The first subparagraph shall apply, ⌫ provided that: 

(cid:208) 2026/97 (adapted) 

(a) 

(b) 

(c) 

the imports have been registered in accordance with Article 24(5); 

(cid:208) 2026/97 

the  importers  concerned  have  been  given  an  opportunity  to  comment  by  the 
Commission;  

there  are  critical  circumstances  where  for  the  subsidised  product  in  question  injury 
which is difficult to repair is caused by massive imports in a relatively short period of 
a  product  benefiting  from  countervailable  subsidies  under  the  terms  of  this 
Regulation; and 

(d) 

it is deemed necessary, in order to preclude the recurrence of such injury, to assess 
countervailing duties retroactively on those imports. 

5. In cases of breach or withdrawal of undertakings, definitive duties may be levied on goods 
entered  for  free  circulation  not  more  than  90  days  before  the  application  of  provisional 
measures, provided that the imports have been registered in accordance with Article 24(5) and 
that any such retroactive assessment shall not apply to imports entered before the breach or 
withdrawal of the undertaking. 

Article 17 

Duration 

A  countervailing  measure  shall  remain  in  force  only  as  long  as,  and  to  the  extent  that,  it  is 
necessary to counteract the countervailable subsidies which are causing injury. 

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Article 18 

Expiry reviews 

1. A definitive countervailing measure shall expire five years from its imposition or five years 
from  the  date  of  the  most  recent  review  which  has  covered  both  subsidisation  and  injury, 
unless it is determined in a review that the expiry would be likely to lead to a continuation or 
recurrence  of  subsidisation  and  injury.  Such  an  expiry  review  shall  be  initiated  on  the 
initiative  of  the  Commission,  or  upon  a  request  made  by  or  on  behalf  of  Community 
producers, and the measure shall remain in force pending the outcome of such review. 

2. An expiry review shall be initiated where the request contains sufficient evidence that the 
expiry  of  the  measures  would  be  likely  to  result  in  a  continuation  or  recurrence  of 
subsidisation  and  injury.  Such  a  likelihood  may,  for  example,  be  indicated  by  evidence  of 
continued  subsidisation  and  injury  or  evidence  that  the  removal  of  injury  is  partly  or  solely 
due  to  the  existence  of  measures  or  evidence  that  the  circumstances  of  the  exporters,  or 
market  conditions,  are  such  that  they  would  indicate  the  likelihood  of  further  injurious 
subsidisation. 

3.  In  carrying  out  investigations  under  this  Article,  the  exporters,  importers,  the  country  of 
origin and/or export and the Community producers shall be provided with the opportunity to 
amplify, rebut or comment on the matters set out in the review request, and conclusions shall 
be reached with due account taken of all relevant and duly documented evidence presented in 
relation to the question as to whether the expiry of measures would be likely, or unlikely, to 
lead to the continuation or recurrence of subsidisation and injury. 

4.  A  notice  of  impending  expiry  shall  be  published  in  the  Official  Journal  of  the  European 
Union at an appropriate time in the final year of the period of application of the measures as 
defined in this Article. Thereafter, the Community producers shall, no later than three months 
before the end of the five-year period, be entitled to lodge a review request in accordance with 
paragraph 2. A notice announcing the actual expiry of measures under this Article shall also 
be published. 

Article 19 

Interim reviews 

1. The need for the continued imposition of measures may also be reviewed, where warranted, 
on  the  initiative  of  the  Commission  or  at  the  request  of  a  Member  State  or,  provided  that  a 
reasonable period of time of at least one year has elapsed since the imposition of the definitive 
measure,  upon  a  request  by  any  exporter,  importer  or  by  the  Community  producers  or  the 
country of origin and/or export which contains sufficient evidence substantiating the need for 
such an interim review. 

2. An interim review shall be initiated where the request contains sufficient evidence that the 
continued  imposition  of  the  measure  is  no  longer  necessary  to  offset  the  countervailable 
subsidy  and/or  that  the  injury  would  be  unlikely  to  continue  or  recur  if  the  measure  were 
removed or varied, or that the existing measure is not, or is no longer, sufficient to counteract 
the countervailable subsidy which is causing injury. 

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(cid:208) 461/2004 Art. 2, pt. 4 

3.  Where  the  countervailing  duties  imposed  are  less  than  the  amount  of  countervailable 
subsidies found, an interim review may be initiated if the Community producers or any other 
interested party submit, normally within two years from the entry into force of the measures, 
sufficient  evidence  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 movement, or 
insufficient  movement  of  resale  prices  of  the  imported  product  in  the  Community.  If  the 
investigation  proves  the  allegations  to  be  correct,  countervailing  duties  may  be  increased  to 
achieve the price increase required to remove injury. However, the increased duty level shall 
not exceed the amount of the countervailable subsidies. 

The interim review may also be initiated, under the conditions set out above, at the initiative 
of the Commission or at the request of a Member State. 

(cid:208) 2026/97 (adapted) 

4.  In  carrying  out  investigations  pursuant  to  this  Article,  the  Commission  may  inter  alia 
consider  whether  the  circumstances  with  regard  to  subsidisation  and  injury  have  changed 
significantly, or whether existing measures are achieving the intended results in removing the 
injury previously ⌦ determined ⌫ under Article 8. In these respects, account shall be taken 
in the final determination of all relevant and duly documented evidence. 

(cid:208) 2026/97 

Article 20 

Accelerated reviews 

Any exporter whose exports are subject to a definitive countervailing duty but who was not 
individually investigated during the original investigation for reasons other than a refusal to 
cooperate  with  the  Commission,  shall  be  entitled,  upon  request,  to  an  accelerated  review  in 
order that the Commission may promptly establish an individual countervailing duty rate for 
that exporter. 

Such  a  review  shall  be  initiated  after  consultation  of  the  Advisory  Committee  and  after 
Community producers have been given an opportunity to comment. 

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Article 21 

Refunds 

1.  Notwithstanding  Article  18,  an  importer  may  request  reimbursement  of  duties  collected 
where it is shown that the amount of countervailable subsidies, on the basis of which duties 
were  paid,  has  been  either  eliminated  or  reduced  to  a  level  which  is  below  the  level  of  the 
duty in force. 

2. In requesting a refund of countervailing duties, the importer shall submit an application to 
the Commission. The application shall be submitted via the Member State in the territory of 
which the products were released for free circulation, within six months of the date on which 
the  amount  of  the  definitive  duties  to  be  levied  was  duly  determined  by  the  competent 
authorities  or  of  the  date  on  which  a  decision  was  made  definitively  to  collect  the  amounts 
secured  by  way  of  provisional  duty.  Member  States  shall  forward  the  request  to  the 
Commission forthwith. 

3. An application for refund shall be considered to be duly supported by evidence only where 
it contains precise information on the amount of refund of countervailing duties claimed and 
all  customs  documentation  relating  to  the  calculation  and  payment  of  such  amount.  It  shall 
also include evidence, for a representative period, of the amount of countervailable subsidies 
for  the  exporter  or  producer  to  which  the  duty  applies.  In  cases  where  the  importer  is  not 
associated with the exporter or producer concerned and such information is not immediately 
available,  or  where  the  exporter  or  producer  is  unwilling  to  release  it  to  the  importer,  the 
application  shall  contain  a  statement  from  the  exporter  or  producer  that  the  amount  of 
countervailable subsidies has been reduced or eliminated, as specified in this Article, and that 
the relevant supporting evidence will be provided to the Commission. Where such evidence is 
not  forthcoming  from  the  exporter  or  producer  within  a  reasonable  period  of  time  the 
application shall be rejected. 

4. The Commission shall, after consultation of the Advisory Committee, decide whether and 
to what extent the application should be granted, or it may decide at any time to initiate an 
interim  review,  whereupon  the  information  and  findings  from  such  review,  carried  out  in 
accordance  with  the  provisions  applicable  for  such  reviews,  shall  be  used  to  determine 
whether and to what extent a refund is justified. 

Refunds of duties shall normally take place within 12 months, and in no circumstances more 
than 18 months after the date on which a request for a refund, duly supported by evidence, has 
been made by an importer of the product subject to the countervailing duty. 

The  payment  of  any  refund  authorised  should  normally  be  made  by  Member  States  within 
90 days of the decision referred to in the first subparagraph. 

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Article 22 

General provisions on reviews and refunds 

(cid:208) 461/2004 Art. 2, pt. 5 

1.  The  relevant  provisions  of  this  Regulation  with  regard  to  procedures  and  the  conduct  of 
investigations,  excluding  those  relating  to  time  limits,  shall  apply  to  any  review  carried  out 
pursuant to Articles 18, 19 and 20. 

Reviews carried out pursuant to Articles 18 and 19 shall be carried out expeditiously and shall 
normally be concluded within 12 months of the date of initiation of the review. In any event, 
reviews  pursuant  to  Articles  18  and  19  shall  in all  cases  be  concluded  within  15  months  of 
initiation. 

Reviews pursuant to Article 20 shall in all cases be concluded within nine months of the date 
of initiation. 

If a review carried out pursuant to Article 18 is initiated while a review under Article 19 is 
ongoing in the same proceeding, the review pursuant to Article 19 shall be concluded at the 
same time as foreseen above for the review pursuant to Article 18. 

The Commission shall submit a proposal for action to the Council not later than one month 
before the expiry of the above deadlines. 

If the investigation is not completed within the above deadlines, the measures shall: 

(a) 

(b) 

expire in investigations pursuant to Article 18; 

expire  in  the  case  of  investigations  carried  out  pursuant  to  Articles  18  and  19  in 
parallel,  where  either  the  investigation  pursuant  to  Article  18  was  initiated  while  a 
review under Article 19 was ongoing in the same proceeding or where such reviews 
were initiated at the same time; or 

(c) 

remain unchanged in investigations pursuant to Articles 19 and 20. 

A  notice  announcing  the  actual  expiry  or  maintenance  of  the  measures  pursuant  to  this 
paragraph shall be published in the Official Journal of the European Union. 

(cid:208) 2026/97 

2.  Reviews  pursuant  to  Articles  18,  19  and  20  shall  be  initiated  by  the  Commission  after 
consultation of the Advisory Committee. 

3.  Where  warranted  by  reviews,  measures  shall  be  repealed  or  maintained  pursuant  to 
Article 18,  or  repealed,  maintained  or  amended  pursuant  to  Articles  19  and  20,  by  the 
Community institution responsible for their introduction. 

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4. Where measures are repealed for individual exporters, but not for the country as a whole, 
such  exporters  shall  remain  subject  to  the  proceeding  and  may  be  re-investigated  in  any 
subsequent review carried out for that country pursuant to this Article. 

5. Where a review of measures pursuant to Article 19 is in progress at the end of the period of 
application of measures as defined in Article 18, the measures shall also be investigated under 
the provisions of Article 18. 

6.  In  all  review  or  refund  investigations  carried  out  pursuant  to  Articles  18  to  21,  the 
Commission  shall,  provided  that  circumstances  have  not  changed,  apply  the  same 
methodology  as in  the investigation which led to the duty, with due account being  taken of 
Articles 5, 6, 7 and 27. 

Article 23 

Circumvention 

(cid:208) 461/2004 Art. 2, pt. 6 

1. Countervailing duties imposed pursuant to this Regulation may be extended: 

(a) 

(b) 

to imports from third countries, of the like product, whether slightly modified or not; 
or 

to imports of the slightly modified like product from the country subject to measures; 
or 

(c)  ⌦ to ⌫ parts thereof, when circumvention of the measures in force is taking place.  

(cid:208) 461/2004 Art. 2, pt. 6 (adapted) 

(cid:208) 461/2004 Art. 2, pt. 6 

2.  Countervailing  duties  not  exceeding  the  residual  countervailing  duty  imposed  in 
accordance  with  Article  15(2)  may  be  extended  to  imports  from  companies  benefiting  from 
individual duties in the countries subject to measures when circumvention of the measures in 
force is taking place.  

3. Circumvention shall be defined as a change in the pattern of trade between third countries 
and the Community or between individual companies in the country subject to measures and 
the Community, which stems from a practice, process or work for which there is insufficient 
due cause or economic justification other than the imposition of the duty, and where there is 
evidence of injury or that the remedial effects of the duty are being undermined in terms of 
the prices and/or quantities of the like product and that the imported like product and/or parts 
thereof still benefit from the subsidy. 

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The practice, process or work referred to in ⌦ the first subparagraph ⌫ includes, inter alia: 

(cid:208) 461/2004 Art. 2, pt. 6 (adapted) 

(cid:208) 461/2004 Art. 2, pt. 6 

(a) 

(b) 

(c) 

the slight modification of the product concerned to make it fall under customs codes 
which are normally not subject to the measures, provided that the modification does 
not alter its essential characteristics;  

the consignment of the product subject to measures via third countries; and  

the re-organisation by exporters or producers of their patterns and channels of sales 
in the country subject to measures in order to eventually have their products exported 
to the  Community through  producers benefiting from an individual duty rate lower 
than that applicable to the products of the manufacturers. 

(cid:208) 461/2004 Art. 2, pt. 7 

4. Investigations shall be initiated pursuant to this Article on the initiative of the Commission 
or  at  the  request  of  a  Member  State  or  of  any  interested  party  on  the  basis  of  sufficient 
evidence regarding the factors set out in paragraphs 1, 2 and 3. Initiations shall be made, after 
consultation of the Advisory Committee, by Commission Regulation which may also instruct 
the  customs  authorities  to  make  imports  subject  to  registration  in  accordance  with  Article 
24(5) or to request guarantees. 

Investigations  shall  be  carried  out  by  the  Commission,  which  may  be  assisted  by  customs 
authorities and shall be concluded within nine months. 

When the facts as finally ascertained justify the extension of measures, this shall be done by 
the  Council,  acting  on  a  proposal  submitted  by  the  Commission  after  consultation  of  the 
Advisory  Committee.  The  proposal  shall  be  adopted  by  the  Council  unless  it  decides  by  a 
simple  majority to reject the proposal, within a period of one month after its submission by 
the Commission. 

The extension shall take effect from the date on which registration was imposed pursuant to 
Article 24(5) or on which guarantees were requested. The relevant procedural  provisions of 
this  Regulation  with  regard  to  initiations  and  the  conduct  of  investigations  shall  apply 
pursuant to this Article. 

.5.  Imports  shall  not  be  subject  to  registration  pursuant  to  Article  24(5)  or  measures  where 
they are traded by companies which benefit from exemptions. 

6.  Requests  for  exemptions  duly  supported  by  evidence  shall  be  submitted  within  the  time 
limits established in the Commission Regulation initiating the investigation. 

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Where  the  circumventing  practice,  process  or  work  takes  place  outside  the  Community, 
exemptions may be granted to producers of the product concerned that can show that they are 
not related to any producer subject to the measures and that are found not to be engaged in 
circumvention practices as defined in ⌦ paragraph 3 ⌫. 

(cid:208) 461/2004 Art. 2, pt. 7 (adapted) 

(cid:208) 461/2004 Art. 2, pt. 7 

Where  the  circumventing  practice,  process  or  work  takes  place  inside  the  Community, 
exemptions may be granted to importers that can show that they are not related to producers 
subject to the measures. 

These  exemptions  are  granted  by  decision  of  the  Commission  after  consultation  of  the 
Advisory Committee or decision of the Council imposing measures and shall remain valid for 
the period and under the conditions set down therein. 

Provided that the conditions set in Article 20 are met, exemptions may also be granted after 
the conclusion of the investigation leading to the extension of the measures. 

7. Provided that at least one year has lapsed from the extension of the measures, and in case 
the  number  of  parties  requesting  or  potentially  requesting  an  exemption  is  significant,  the 
Commission  may  decide  to  initiate  a  review  of  the  extension  of  the  measures.  Any  such 
review shall be conducted in accordance with the provisions of Article 22(1) as applicable to 
reviews under Article 19. 

(cid:208) 2026/97 

Article 24 

General provisions 

1.  Provisional  or  definitive  countervailing  duties  shall  be  imposed  by  Regulation,  and 
collected  by  Member  States  in  the  form,  at  the  rate  specified  and  according  to  the  other 
criteria laid down in the Regulation imposing such duties. Such duties shall also be collected 
independently of the customs duties, taxes and other charges normally imposed on imports. 

No product shall be subject to both anti-dumping and countervailing duties for the purpose of 
dealing with one and the same situation arising from dumping or from export subsidisation. 

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

Such  Regulations  or  Decisions  shall  contain  in  particular,  and  with  due  regard  to  the 
protection  of  confidential  information,  the  names  of  the  exporters,  if  possible,  or  of  the 
countries involved, a description of the product and a summary of the facts and considerations 

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relevant to the subsidy and injury determinations. In each case, a copy of the Regulation or 
Decision  shall  be  sent  to  known  interested  parties.  The  provisions  of  this  paragraph  shall 
apply mutatis mutandis to reviews. 

3.  Special  provisions,  in  particular  with  regard  to  the  common  definition  of  the  concept  of 
origin, as contained in Council Regulation (EEC) No 2913/926, may be adopted pursuant to 
this Regulation. 

(cid:208) 461/2004 Art. 2, pt. 8 

4.  In  the  Community  interest,  measures  imposed  pursuant  to  this  Regulation  may,  after 
consultation of the Advisory Committee, be suspended by a decision of the Commission for a 
period of nine months. The suspension may be extended for a further period, not exceeding 
one year, if the Council so decides, acting on a proposal from the Commission. 

The proposal shall be adopted by the Council unless it decides by a simple majority to reject 
the proposal, within a period of one month after its submission by the Commission. 

Measures  may  only  be  suspended  where  market  conditions  have  temporarily  changed  to  an 
extent that injury would be unlikely to resume as a result of the suspension, and provided that 
the Community industry has been given an opportunity to comment and these comments have 
been taken into account. Measures may, at any time and after consultation, be reinstated if the 
reason for suspension is no longer applicable. 

(cid:208) 2026/97 

5.  The  Commission  may,  after  consultation  of  the  Advisory  Committee,  direct  the  customs 
authorities  to  take  the  appropriate  steps  to  register  imports,  so  that  measures  may 
subsequently be applied against those imports from the date of such registration. 

Imports  may  be  made  subject  to  registration  following  a  request  from  the  Community 
industry which contains sufficient evidence to justify such action. 

Registration shall be introduced by Regulation which shall specify the purpose of the action 
and,  if  appropriate,  the  estimated  amount  of  possible  future  liability.  Imports  shall  not  be 
made subject to registration for a period longer than nine months. 

6. Member States shall report to the Commission every month on the import trade of products 
subject  to  investigation  and  to  measures,  and  on  the  amount  of  duties  collected  pursuant  to 
this Regulation. 

7. Without prejudice to paragraph 6, the Commission may request Member States, on a case 
by  case  basis,  to  supply  information  necessary  to  monitor  efficiently  the  application  of 

(cid:208) 461/2004 Art. 2, pt. 9 

6 

OJ L 302, 19.10.1992, p. 1.  

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measures.  In  this  respect,  the  provisions  of  Articles  11(3)  and  (4)  shall  apply.  Any  data 
submitted  by  Member  States  pursuant  to  this  Article  shall  be  covered  by  the  provisions  of 
Article 29(6). 

(cid:208) 2026/97 

Article 25 

Consultations 

1. Any consultations provided for in this Regulation, except those referred to in Articles 10(7) 
and  11(10),  shall  take  place  within  an  Advisory  Committee,  which  shall  consist  of 
representatives of each Member State, with a representative of the Commission as chairman. 
Consultations shall be held immediately on request by a Member State or on the initiative of 
the Commission, and in any event within a period of time which allows the time limits set by 
this Regulation to be adhered to. 

2. The Committee shall meet when convened by its chairman. He shall provide the Member 
States, as promptly as possible, but no later than 10 working days before the meeting, with all 
relevant information. 

(cid:208) 461/2004 Art. 2, pt. 10 

(cid:208) 2026/97 

3. Where necessary, consultation may be in writing only. In that event, the Commission shall 
notify  the  Member  States  and  shall  specify  a  period  within  which  they  shall  be  entitled  to 
express  their  opinions  or  to  request  an  oral  consultation  which  the  chairman  shall  arrange, 
provided that such oral consultation can be held within a period of time which allows the time 
limits set by this Regulation to be adhered to. 

4. Consultation shall cover, in particular: 

(a) 

(b) 

(c) 

(d) 

the  existence  of  countervailable  subsidies  and  the  methods  of  establishing  their 
amount; 

the existence and extent of injury; 

the causal link between the subsidised imports and injury; 

the measures which, in the circumstances, are appropriate to prevent or remedy the 
injury  caused  by  the  countervailable  subsidies  and  the  ways  and  means  of  putting 
such measures into effect. 

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Article 26 

Verification visits 

1.  The  Commission  shall,  where  it  considers  it  appropriate,  carry  out  visits  to  examine  the 
trade  associations  and 
records  of 
organisations, to verify information provided on subsidisation and injury. In the absence of a 
proper and timely reply a verification visit may not be carried out. 

traders,  agents,  producers, 

importers,  exporters, 

2. The Commission may carry out investigations in third countries as required, provided that 
it  obtains  the  agreement  of  the  firms  concerned,  that  it  notifies  the  country  in  question  and 
that  the  latter  does  not  object  to  the  investigation.  As  soon  as  the  agreement  of  the  firms 
concerned  has  been  obtained  the  Commission  should  notify  the  country  of  origin  and/or 
export of the names and addresses of the firms to be visited and the dates agreed. 

3. The firms concerned shall be advised of the nature of the information to be verified during 
verification  visits  and  of  any  further  information  which  needs  to  be  provided  during  such 
visits, though this should not preclude requests made during the verification for further details 
to be provided in the light of information obtained. 

4.  In  investigations  carried  out  pursuant  to  paragraphs  1,  2  and  3,  the  Commission  shall  be 
assisted by officials of those Member States who so request. 

Article 27 

Sampling 

1.  In  cases  where  the  number  of  complainants,  exporters  or  importers,  types  of  product  or 
transactions is large, the investigation may be limited to: 

(a) 

(b) 

a reasonable number of parties, products or transactions by using samples which are 
statistically valid on the basis of information available at the time of the selection; or 

to  the  largest  representative  volume  of  the  production,  sales  or  exports  which  can 
reasonably be investigated within the time available. 

2. The selection of parties, types of products or transactions made under this Article shall rest 
with the Commission, though preference shall be given to choosing a sample in consultation 
with,  and  with  the  consent  of,  the  parties  concerned,  provided  that  such  parties  make 
themselves known and make sufficient information available, within three weeks of initiation 
of the investigation, to enable a representative sample to be chosen. 

(cid:208) 2026/97 (adapted) 

3.  In  cases  where  the  examination  has  been  limited  in  accordance  with  this  Article,  an 
individual  amount  of  countervailable  subsidisation  shall  be  calculated  for  any  exporter  or 
producer not initially selected who submits the necessary information within the time limits 
provided for in this Regulation, except where the number of exporters or producers is so large 
that individual examinations would be unduly burdensome and would prevent completion of 
the investigation in good time. 

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(cid:208) 2026/97 
(cid:206)1 1973/2002 Art. 1 pt. 3 

4. Where it is decided to sample and there is a degree of non-cooperation by some or all of the 
parties  selected  which  is  likely  to  materially  affect  the  outcome  of  the  investigation,  a  new 
sample may be selected. 

However, if a material degree of non-cooperation persists or there is insufficient time to select 
a new sample, the relevant provisions of Article 28 shall apply. 

Article 28 

Non-cooperation 

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

Interested parties should be made aware of the consequences of non-cooperation. 

2. Failure to give a computerised response shall not be deemed to constitute non-cooperation, 
provided that the interested party shows that presenting the response as requested would result 
in an unreasonable extra burden or unreasonable additional cost. 

3. Where the information submitted by an interested party is not ideal in all respects it should 
nevertheless not be disregarded, provided that any deficiencies are not such as to cause undue 
difficulty in arriving at a reasonably accurate finding and that the information is appropriately 
submitted in good time and is verifiable, and that the party has acted to the best of its ability. 

4. If evidence or information is not accepted, the supplying party shall be informed forthwith 
of  the  reasons  therefore  and  shall  be  granted  an  opportunity  to  provide  further  explanations 
within the time limit specified. If the explanations are considered unsatisfactory, the reasons 
for  rejection  of  such  evidence  or  information  shall  be  disclosed  and  given  in  published 
findings. 

5.  If  determinations,  including  those  regarding  the  amount  of  countervailable  subsidies,  are 
based on the provisions of paragraph 1, including the information supplied in the complaint, it 
shall, where practicable and with due regard to the time limits of the investigation, be checked 
by reference to information from other independent sources which may be available, such as 
published  price  lists,  official  import  statistics  and  customs  returns,  or  information  obtained 
from  other  interested  parties  during  the  investigation.  (cid:206)1 Such  information  may  include 
relevant  data  pertaining  to  the  world  market  or  other  representative  markets,  where 
appropriate.  

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41 

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6.  If  an  interested  party  does  not  cooperate,  or  cooperates  only  partially,  so  that  relevant 
information is thereby withheld, the result may be less favourable to the party than if it had 
cooperated. 

Article 29 

Confidentiality 

1. Any information which is by nature confidential (for example, because its disclosure would 
be of significant competitive advantage to a competitor or would have a significantly adverse 
effect upon a person supplying the information or upon a person from whom he has acquired 
the  information),  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. 

2.  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.  In 
exceptional circumstances, such parties may indicate that such information is not susceptible 
of  summary.  In  such  exceptional  circumstances,  a  statement  of  the  reasons  why 
summarisation is not possible must be provided. 

3. If it is considered that a request for confidentiality is not warranted and if the supplier of 
the  information  is  either  unwilling  to  make  the  information  available  or  to  authorise  its 
disclosure in generalised or summary form, such information may be disregarded unless it can 
be  satisfactorily  demonstrated  from  appropriate  sources  that  the  information  is  correct. 
Requests for confidentiality shall not be arbitrarily rejected. 

4.  This  Article  shall  not  preclude  the  disclosure  of  general  information  by  the  Community 
authorities,  and  in  particular  of  the  reasons  on  which  decisions  taken  pursuant  to  this 
Regulation are based, nor disclosure of the evidence relied on by the Community authorities 
in so far as is necessary to explain those reasons in court proceedings. Such disclosure must 
take  into  account  the  legitimate  interests  of  the  parties  concerned  that  their  business  or 
governmental secrets should not be divulged. 

5. The Council, the Commission and the Member States, or the officials of any of these, shall 
not  reveal  any  information  received  pursuant  to  this  Regulation  for  which  confidential 
treatment  has  been  requested  by  its  supplier,  without  specific  permission  from  the  supplier. 
Exchanges of information between the Commission and Member States, or any information 
relating  to  consultations  made  pursuant  to  Article  25,  or  consultations  described  in 
Articles 10(7)  and  11(10),  or  any  internal  documents  prepared  by  the  authorities  of  the 
Community or its Member States, shall not be divulged except as specifically provided for in 
this Regulation. 

6.  Information  received  pursuant  to  this  Regulation  shall  be  used  only  for  the  purpose  for 
which it was requested. 

(cid:208) 461/2004 Art. 2, pt. 11 

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42 

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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 
concerning the same like product. 

(cid:208) 2026/97 

Article 30 

Disclosure 

1.  The  complainants,  importers  and  exporters  and  their  representative  associations,  and  the 
country of origin and/or export, may request disclosure of the details underlying the essential 
facts  and  considerations  on  the  basis  of  which  provisional  measures  have  been  imposed. 
Requests for such disclosure shall be made in writing immediately following the imposition 
of  provisional  measures,  and  the  disclosure  shall  be  made  in  writing  as  soon  as  possible 
thereafter. 

2. The parties mentioned in paragraph 1 may request final disclosure of the essential facts and 
considerations on the basis of which it is intended to recommend the imposition of definitive 
measures,  or  the  termination  of  an  investigation  or  proceedings  without  the  imposition  of 
measures, particular attention being paid to the disclosure of any facts or considerations which 
are different from those used for any provisional measures. 

3.  Requests  for  final  disclosure  shall  be  addressed  to  the  Commission  in  writing  and  be 
received, in cases where a provisional duty has been applied, not later than one month after 
publication  of  the  imposition  of  that  duty.  Where  a  provisional  duty  has  not  been  imposed, 
parties shall be provided with an opportunity to request final disclosure within time limits set 
by the Commission. 

4.  Final  disclosure  shall  be  given  in  writing.  It  shall  be  made,  due  regard  being  had  to  the 
protection of  confidential information, as soon as possible and, normally,  not  later than  one 
month prior to a definitive decision or the submission by the Commission of any proposal for 
final  action  pursuant  to  Articles  14  and  15.  Where  the  Commission  is  not  in  a  position  to 
disclose  certain  facts  or  considerations  at  that  time,  these  shall  be  disclosed  as  soon  as 
possible thereafter. 

Disclosure  shall  not  prejudice  any  subsequent  decision  which  may  be  taken  by  the 
Commission  or  the  Council  but  where  such  decision  is  based  on  any  different  facts  and 
considerations these shall be disclosed as soon as possible. 

5. Representations made after final disclosure is given shall be taken into consideration only if 
received  within  a  period  to  be  set  by  the  Commission  in  each  case,  which  shall  be  at  least 
10 days, due consideration being given to the urgency of the matter. 

Article 31 

Community interest 

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1.  A  determination  as  to  whether  the  Community  interest  calls  for  intervention  should  be 
based on an appraisal of all the various interests taken as a whole, including the interests of 
the domestic industry and users and consumers; a determination pursuant to this Article shall 
be made only where all parties have been given the opportunity to make their views known 
pursuant  to  paragraph  2.  In  such  an  examination,  the  need  to  eliminate  the  trade-distorting 
effects  of  injurious  subsidisation  and  to  restore  effective  competition  shall  be  given  special 
consideration.  Measures,  as  determined  on  the  basis  of  subsidisation  and  injury  found,  may 
not be applied where the authorities, on the basis of all the information submitted, can clearly 
conclude that it is not in the Community interest to apply such measures. 

2. In order to provide a sound basis on which the authorities can take account of all views and 
information  in  the  decision  as  to  whether  or  not  the  imposition  of  measures  is  in  the 
Community  interest,  the  complainants,  importers  and  their  representative  associations, 
representative  users  and  representative  consumer  organisations  may,  within  the  time  limits 
specified in the notice of initiation of the countervailing duty investigation, make themselves 
known  and  provide  information  to  the  Commission.  Such  information,  or  appropriate 
summaries thereof, shall be made available to the other parties specified in this paragraph, and 
they shall be entitled to respond to such information. 

3. The parties which have acted in conformity with paragraph 2 may request a hearing. Such 
requests shall be granted when they are submitted within the time limits set in paragraph 2, 
and when they set out the reasons, in terms of the Community interest, why the parties should 
be heard. 

4. The parties which have acted in conformity with paragraph 2 may provide comments on the 
application of any provisional duties  imposed.  Such  comments  shall be  received within one 
month  of  the  application  of  such  measures  if  they  are  to  be  taken  into  account  and  they,  or 
appropriate summaries thereof, shall be made available to other parties who shall be entitled 
to respond to such comments. 

5. The Commission shall examine the information which is properly submitted and the extent 
to which it is representative, and the results of such analysis, together with an opinion on its 
merits, shall be transmitted to the Advisory Committee. The balance of views expressed in the 
Committee shall be taken into account by the Commission in any proposal made pursuant to 
Articles 14 and 15. 

6. The parties which have acted in conformity with paragraph 2 may request that the facts and 
considerations on which final decisions are likely to be taken be made available to them. Such 
information  shall  be  made  available  to  the  extent  possible  and  without  prejudice  to  any 
subsequent decision taken by the Commission or the Council. 

7. Information shall be taken into account only where it is supported by actual evidence which 
substantiates its validity. 

Article 32 

Relationships between countervailing duty measures and multilateral remedies 

If an imported product is made subject to any countermeasures imposed following recourse to 
the  dispute  settlement  procedures  of  the  Subsidies  Agreement,  and  such  measures  are 
appropriate to remove the injury caused by the countervailable subsidies, any countervailing 

EN 

44 

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duty  imposed  with  regard  to  that  product  shall  immediately  be  suspended,  or  repealed,  as 
appropriate. 

Article 33 

Final provisions 

This Regulation shall not preclude the application of: 

(a) 

(b) 

any  special  rules  laid  down  in  agreements  concluded  between  the  Community  and 
third countries; 

the Community regulations in the agricultural sector and Council Regulations (EC) 
[No 3448/93]7, (EEC) No 2730/758 and [(EEC) No 2783/75]9. This Regulation shall 
operate  by  way  of  complement  to  those  regulations  and  in  derogation  from  any 
provisions thereof which preclude the application of countervailing duties; 

(c) 

special measures, provided that such action does not run counter to obligations under 
the GATT. 

(cid:208)  

Article 34 

Repeal 

Regulation (EC) No 2026/97 is repealed. 

References to the repealed Regulation shall be construed as references to this Regulation and 
shall be read in accordance with the correlation table in Annex VI. 

(cid:208) 2026/97 (adapted) 

Article 35 

Entry into force 

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

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

(cid:208) 2026/97 

7 
8 
9 

[OJ L 318, 20.12.1993, p. 18.] 
OJ L 281, 1.11.1975, p. 20.  
[OJ L 282, 1.11.1975, p. 104. ] 

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Done at Brussels,  

For the Council 
The President 

EN 

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(cid:208) 2026/97 (adapted) 

ANNEX I 

ILLUSTRATIVE LIST OF EXPORT SUBSIDIES 

The provision by governments of direct subsidies to a firm or an industry contingent 
upon export performance. 

Currency  retention  schemes  or  any  similar  practices  which  involve  a  bonus  on 
exports. 

Internal transport and freight charges on export shipments, provided or mandated by 
governments, on terms more favourable than for domestic shipments. 

The provision by governments or their agencies either directly or indirectly through 
government-mandated schemes, of imported or domestic products or services for use 
in the production of exported goods, on terms or conditions more favourable than for 
provision  of  like  or  directly  competitive  products  or  services  for  use  in  the 
production  of  goods  for  domestic  consumption,  if  (in  the  case  of  products)  such 
terms or conditions are more favourable than those commercially available1 on world 
markets to their exporters. 

The full or partial exemption, remission, or deferral specifically related to exports, of 
direct  taxes2  or  social  welfare  charges  paid  or  payable  by  industrial  or  commercial 
enterprises3. 

The  allowance  of  special  deductions  directly  related  to  exports  or  export 
performance,  over  and  above  those  granted  in  respect  of  production  for  domestic 
consumption, in the calculation of the base on which direct taxes are charged. 

The  term  'commercially  available'  means  that  the  choice  between  domestic  and  imported  products  is 
unrestricted and depends only on commercial considerations. 
For the purpose of this Regulation: 
- the term 'direct taxes' shall mean taxes on wages, profits, interests, rents, royalties, and all other forms 
of income, and taxes on the ownership of real property, 
- the term 'import charges' shall mean tariffs, duties, and other fiscal charges not elsewhere enumerated 
in this note that are levied on imports, 
- the term 'indirect taxes' shall mean sales, excise, turnover, value added, franchise, stamp, transfer, 
inventory and equipment taxes, border taxes and all taxes other than direct taxes and import charges, 
- 'prior-stage' indirect taxes are those levied on goods or services used directly or indirectly in making 
the product, 
- 'cumulative' indirect taxes are multi-staged taxes levied where there is no mechanism for subsequent 
crediting of the tax if the goods or services subject to tax at one stage of production are used in a 
succeeding state of production, 
- 'remission' of taxes includes the refund or rebate of taxes, 
- 'remission or drawback' includes the full or partial exemption or deferral of import charges. 
Deferral  may  not  amount  to  an  export  subsidy  where,  for  example,  appropriate  interest  charges  are 
collected. 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

1 

2 

3 

EN 

47 

   EN 

 
 
                                                 
(g) 

(h) 

4 

5 

6 

The exemption or remission, in respect of the production and distribution of exported 
products, of indirect taxes4 in excess of those levied in respect of the production and 
distribution of like products when sold for domestic consumption. 

The  exemption,  remission  or  deferral  of  prior-stage  cumulative  indirect  taxes5  on 
goods  or  services  used  in  the  production  of  exported  products  in  excess  of  the 
exemption,  remission  or  deferral  of  like  prior-stage  cumulative  indirect  taxes  on 
goods  or  services  used  in  the  production  of  like  products  when  sold  for  domestic 
consumption;  provided,  however,  that  prior-stage  cumulative  indirect  taxes  may  be 
exempted,  remitted  or  deferred  on  exported  products  even  when  not  exempted, 
remitted  or  deferred  on  like  products  when  sold  for  domestic  consumption,  if  the 
prior-stage  cumulative  indirect  taxes  are  levied  on  inputs  that  are  consumed  in  the 
production of the exported product (making normal allowance for waste)6. This item 
shall be interpreted in accordance with the guidelines on consumption of inputs in the 
production process contained in Annex II. 

For the purpose of this Regulation: 
- the term 'direct taxes' shall mean taxes on wages, profits, interests, rents, royalties, and all other forms 
of income, and taxes on the ownership of real property, 
- the term 'import charges' shall mean tariffs, duties, and other fiscal charges not elsewhere enumerated 
in this note that are levied on imports, 
- the term 'indirect taxes' shall mean sales, excise, turnover, value added, franchise, stamp, transfer, 
inventory and equipment taxes, border taxes and all taxes other than direct taxes and import charges, 
- 'prior-stage' indirect taxes are those levied on goods or services used directly or indirectly in making 
the product, 
- 'cumulative' indirect taxes are multi-staged taxes levied where there is no mechanism for subsequent 
crediting of the tax if the goods or services subject to tax at one stage of production are used in a 
succeeding state of production, 
- 'remission' of taxes includes the refund or rebate of taxes, 
- 'remission or drawback' includes the full or partial exemption or deferral of import charges. 
For the purpose of this Regulation: 
- the term 'direct taxes' shall mean taxes on wages, profits, interests, rents, royalties, and all other forms 
of income, and taxes on the ownership of real property, 
- the term 'import charges' shall mean tariffs, duties, and other fiscal charges not elsewhere enumerated 
in this note that are levied on imports, 
- the term 'indirect taxes' shall mean sales, excise, turnover, value added, franchise, stamp, transfer, 
inventory and equipment taxes, border taxes and all taxes other than direct taxes and import charges, 
- 'prior-stage' indirect taxes are those levied on goods or services used directly or indirectly in making 
the product, 
- 'cumulative' indirect taxes are multi-staged taxes levied where there is no mechanism for subsequent 
crediting of the tax if the goods or services subject to tax at one stage of production are used in a 
succeeding state of production, 
- 'remission' of taxes includes the refund or rebate of taxes, 
- 'remission or drawback' includes the full or partial exemption or deferral of import charges. 
 ⌦ point ⌫ (h) does not apply to value-added tax systems and border-tax adjustment in lieu thereof; 
the problem of the excessive remission of value-added taxes is exclusively covered by ⌦ point ⌫ (g). 

EN 

48 

   EN 

 
                                                 
(i) 

(j) 

(k) 

The remission or drawback of import charges7
 in excess of those levied on imported 
inputs that are consumed in the production of the exported product (making normal 
allowance  for  waste);  provided,  however,  that  in  particular  cases  a  firm  may  use  a 
quantity  of  home  market  inputs  equal  to,  and  having  the  same  quality  and 
characteristics as, the imported inputs as a substitute for them in order to benefit from 
this  provision  if  the  import  and  the  corresponding  export  operations  both  occur 
within  a  reasonable  time  period,  not  to  exceed  two  years.  This  item  shall  be 
interpreted  in  accordance  with  the  guidelines  on  consumption  of  inputs  in  the 
production process contained in Annex II and the guidelines in the determination of 
substitution drawback systems as export subsidies contained in Annex III. 

The provision by governments (or special institutions controlled by governments) of 
export  credit  guarantee  or  insurance  programmes,  of  insurance  or  guarantee 
programmes  against  increases  in  the  cost  of  exported  products  or  of  exchange  risk 
programmes, at premium rates which are inadequate to cover the long-term operating 
costs and losses of the programmes. 

The grant by governments (or special institutions controlled by and/or acting under 
the  authority  of  governments)  of  export  credits  at  rates  below  those  which  they 
actually  have  to  pay  for  the  funds  so  employed  (or  would  have  to  pay  if  they 
borrowed  on  international  capital  markets  in  order  to  obtain  funds  of  the  same 
maturity and other credit terms and denominated in the same currency as the export 
credit),  or  the  payment  by  them  of  all  or  part  of  the  costs  incurred  by  exporters  or 
financial institutions in obtaining credits, insofar as they are used to secure a material 
advantage in the field of export credit terms. 

Provided,  however,  that  if  a  Member  of  the  WTO  is  a  party  to  an  international 
undertaking on official export credits to which at least 12 original such Members are 
parties as of 1 January 1979 (or a successor undertaking which has been adopted by 
those original Members), or if in practice a Member of the WTO applies the interest 
rates  provisions  of  the  relevant  undertaking,  an  export  credit  practice  which  is  in 
conformity with those provisions shall not be considered an export subsidy. 

(l) 

Any other charge on the public account constituting an export subsidy in the sense of 
Article XVI of the GATT 1994. 

________________

7 

For the purpose of this Regulation: 
- the term ‘direct taxes’ shall mean taxes on wages, profits, interests, rents, royalties, and all other forms 
of income, and taxes on the ownership of real property, 
- the term 'import charges' shall mean tariffs, duties, and other fiscal charges not elsewhere enumerated 
in this note that are levied on imports, 
- the term 'indirect taxes' shall mean sales, excise, turnover, value added, franchise, stamp, transfer, 
inventory and equipment taxes, border taxes and all taxes other than direct taxes and import charges, 
- 'prior-stage' indirect taxes are those levied on goods or services used directly or indirectly in making 
the product, 
- 'cumulative' indirect taxes are multi-staged taxes levied where there is no mechanism for subsequent 
crediting of the tax if the goods or services subject to tax at one stage of production are used in a 
succeeding state of production, 
- 'remission' of taxes includes the refund or rebate of taxes, 
- 'remission or drawback' includes the full or partial exemption or deferral of import charges. 

EN 

49 

   EN 

 
                                                 
GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION PROCESS1  

ANNEX II 

1. 

2. 

3. 

4. 

1 

I 

Indirect tax rebate schemes can allow for exemption, remission or deferral of prior-
stage cumulative indirect taxes levied on inputs that are consumed in the production 
of  the  exported  product  (making  normal  allowance  for  waste).  Similarly,  drawback 
schemes can allow for the remission or drawback of import charges levied on inputs 
that  are  consumed  in  the  production  of  the  exported  product  (making  normal 
allowance for waste). 

(cid:208) 2026/97 (adapted) 

The  illustrative  list  of  export  subsidies  in  Annex  I  makes  reference  to  the  term 
‘inputs that are consumed in the production of the exported product’ in ⌦ points ⌫ 
(h) and (i). Pursuant to ⌦ point ⌫ (h), indirect tax rebate schemes can constitute an 
export  subsidy  to  the  extent  that  they  result  in  exemption,  remission  or  deferral  of 
prior-stage cumulative indirect taxes in excess of the amount of such taxes actually 
levied  on  inputs  that  are  consumed  in  the  production  of  the  exported  product. 
Pursuant to ⌦ point ⌫ (i), drawback schemes can constitute an export subsidy to 
the extent that they result in a remission or drawback of import charges in excess of 
those actually levied on inputs that are consumed in the production of the exported 
product. Both ⌦ points ⌫ stipulate that normal allowance for waste must be made 
in  findings  regarding  consumption  of  inputs  in  the  production  of  the  exported 
product. ⌦ Point ⌫ (i) also provides for substitution, where appropriate. 

(cid:208) 2026/97 

II 

In examining whether inputs are consumed in the production of the exported product, 
as  part  of  a  countervailing  duty  investigation  pursuant  to  this  Regulation,  the 
Commission must normally proceed on the following basis. 

Where  it  is  alleged  that  an  indirect  tax  rebate  scheme,  or  a  drawback  scheme, 
conveys a subsidy by reason of over-rebate or excess drawback of indirect taxes or 
import  charges  on  inputs  consumed  in  the  production  of  the  exported  product,  the 
Commission must normally first determine whether the government of the exporting 
country has in place and applies a system or procedure to confirm which inputs are 
consumed  in  the  production  of  the  exported  product  and  in  what  amounts.  Where 
such  a  system  or  procedure  is  determined  to  be  applied,  the  Commission  must 
normally  then  examine  the  system  or  procedure  to  see  whether  it  is  reasonable, 

Inputs consumed in the production process are inputs physically incorporated, energy, fuels and oil used 
in  the  production  process  and  catalysts  which  are  consumed  in  the  course  of  their  use  to  obtain  the 
exported product. 

EN 

50 

   EN 

 
 
 
                                                 
effective  for  the  purpose  intended,  and  based  on  generally  accepted  commercial 
practices in the country of export. The Commission may deem it necessary to carry 
out,  in  accordance  with  Article  26(2),  certain  practical  tests  in  order  to  verify 
information  or  to  satisfy  itself  that  the  system  or  procedure  is  being  effectively 
applied. 

(cid:208) 2026/97 (adapted) 

Where there is no such system or procedure, where it is not reasonable, or where it is 
instituted  and  considered  reasonable  but  is  found  not  to  be  applied  or  not  to  be 
applied  effectively,  a  further  examination  by  the  exporting  country  based  on  the 
actual  inputs  involved  will  normally  need  to  be  carried  out  in  the  context  of 
determining  whether  an  excess  payment  occurred.  If  the  Commission  deems  it 
necessary, a further examination may be carried out in accordance with ⌦ point ⌫ 
4. 

(cid:208) 2026/97 

The Commission must normally treat inputs as physically incorporated if such inputs 
are used in the production process and are physically present in the product exported. 
An input need not be present in the final product in the same form in which it entered 
the production process. 

In determining the amount of a particular input that is consumed in the production of 
the  exported  product,  a  ‘normal  allowance  for  waste’  must  normally  be  taken  into 
account, and such waste must normally be treated as consumed in the production of 
the exported product. The term ‘waste’ refers to that portion of a given input which 
does not serve an independent function in the production process, is not consumed in 
the production of the exported product (for reasons such as inefficiencies) and is not 
recovered, used or sold by the same manufacturer. 

The  Commission's  determination  of  whether  the  claimed  allowance  for  waste  is 
‘normal’  must  normally  take  into  account  the  production  process,  the  average 
experience  of  the  industry  in  the  country  of  export,  and  other  technical  factors,  as 
appropriate.  The  Commission  must  bear  in  mind  that  an  important  question  is 
whether  the  authorities  in  the  exporting  country  have  reasonably  calculated  the 
amount of waste, when such an amount is intended to be included in the tax or duty 
rebate or remission. 

______________ 

5. 

6. 

7. 

8. 

EN 

51 

   EN 

 
 
 
ANNEX III 

GUIDELINES IN THE DETERMINATION OF SUBSTITUTION DRAWBACK 
SYSTEMS AS EXPORT SUBSIDIES 

(cid:208) 2026/97 (adapted) 

I 

Drawback systems can allow for the refund or drawback of import charges on inputs which 
are consumed in the production process of another product and where the export of this latter 
product  contains  domestic  inputs  having  the  same  quality  and  characteristics  as  those 
submitted  for  the  imported  inputs.  Pursuant  to  ⌦ point ⌫  (i)  of  Annex  I,  substitution 
drawback systems can constitute an export subsidy to the extent that they result in an excess 
drawback of the import charges levied initially on the imported inputs for which drawback is 
being claimed. 

(cid:208) 2026/97 

II 

In examining any substitution drawback system as part of a countervailing duty investigation 
pursuant to this Regulation, the Commission must normally proceed on the following basis: 

1. 

2. 

(cid:208) 2026/97 (adapted) 

 ⌦ point ⌫ (i) of Annex I stipulates that home market inputs may be substituted for 
imported  inputs  in  the  production  of  a  product  for  export  provided  such  inputs  are 
equal in quantity to, and have the same quality and characteristics as, the imported 
inputs  being  substituted.  The  existence  of  a  verification  system  or  procedure  is 
important because it enables the government of the exporting country to ensure and 
demonstrate  that  the  quantity  of  inputs  for  which  drawback  is  claimed  does  not 
exceed the quantity of similar products exported, in whatever form, and that there is 
not drawback of import charges in excess of those originally levied on the imported 
inputs in question; 

(cid:208) 2026/97 

where  it  is  alleged  that  a  substitution  drawback  system  conveys  a  subsidy,  the 
Commission must normally first proceed to determine whether the government of the 
exporting country has in place and applies a verification system or procedure. Where 
such  a  system  or  procedure  is  determined  to  be  applied,  the  Commission  shall 
normally  then  examine  the  verification  procedures  to  see  whether  they  are 
reasonable,  effective  for  the  purpose  intended,  and  based  on  generally  accepted 
commercial practices in the country of export. To the extent that the procedures are 
determined to meet this test and are effectively applied, no subsidy will be presumed 

EN 

52 

   EN 

 
 
 
 
 
3. 

4. 

5. 

to exist. It may be deemed necessary by the Commission to carry out, in accordance 
with Article 26(2), certain practical tests in order to verify information or to satisfy 
itself that the verification procedures are being effectively applied; 

where there are no verification procedures, where they are not reasonable, or where 
such  procedures  are  instituted  and  considered  reasonable  but  are  found  not  to  be 
actually  applied  or  not  to  be  applied  effectively,  there  may  be  a  subsidy.  In  such 
cases, further examination by the exporting country based on the actual transactions 
involved  would  need  to  be  carried  out  to  determine  whether  an  excess  payment 
occurred.  If  the  Commission  deems  it  necessary,  a  further  examination  may  be 
carried out in accordance with point 2; 

the existence of a substitution drawback provision under which exporters are allowed 
to  select  particular  import  shipments  on  which  drawback  is  claimed  should  not  of 
itself be considered to convey a subsidy; 

(cid:208) 2026/97 (adapted) 

an  excess  drawback  of  import  charges  within  the  meaning  of  ⌦ point ⌫ (i)  of 
Annex I would be deemed to exist where governments paid interest on any monies 
refunded under their drawback schemes, to the extent of the interest actually paid or 
payable. 

_____________

EN 

53 

   EN 

 
 
(cid:208) 2026/97 

ANNEX IV 

(This Annex reproduces Annex 2 to the Agreement on Agriculture. Any terms or expressions 
which are not explained herein or which are not self-explanatory are to be interpreted in the 
context of that Agreement.) 

DOMESTIC SUPPORT: THE BASIS OF EXEMPTION FROM THE REDUCTION 
COMMITMENTS 

1. 

Domestic support measures for which exemption from the reduction commitments is 
claimed  shall  meet  the  fundamental  requirement  that  they  have  no,  or  at  most 
minimal, trade-distorting effects or effects on production. Accordingly, all measures 
for which exemption is claimed shall conform to the following basic criteria: 

(a) 

the  support  in  question  shall  be  provided  through  a  publicly-funded 
government  programme  (including  government  revenue  foregone)  not 
involving transfers from consumers; and 

(b) 

the support in question shall not have the effect of providing price support to 
producers;  

plus policy-specific criteria and conditions as set out below. 

Government service programmes 

2. 

General services 

(cid:208) 2026/97 (adapted) 

Policies  in  this  category  involve  expenditures  (or  revenue  foregone)  in  relation  to 
programmes  which  provide  services  or  benefits  to  agriculture  or  the  rural 
community. They shall not involve direct payments to producers or processors. Such 
programmes, which include but are not restricted to the following list, shall meet the 
general criteria in ⌦ point ⌫ 1 and policy-specific conditions where set out below: 

(cid:208) 2026/97 

(a) 

including  general 

research, 
in  connection  with 
environmental  programmes,  and  research  programmes  relating  to  particular 
products; 

research, 

research 

(b)  pest  and  disease  control,  including  general  and  product-specific  pest  and 
disease  control  measures,  such  as  early-warning  systems,  quarantine  and 
eradication; 

(c) 

training services, including both general and specific training facilities; 

EN 

54 

   EN 

 
 
 
 
(d) 

extension and advisory services, including the provision of means to facilitate 
the  transfer  of  information  and  the  results  of  research  to  producers  and 
consumers; 

(e) 

inspection services, including general inspection services and the inspection of 
particular products for health, safety, grading or standardisation purposes; 

(f)  marketing  and  promotion  services,  including  market  information,  advice  and 
promotion  relating  to  particular  products  but  excluding  expenditure  for 
unspecified purposes that could be used by sellers to reduce their selling price 
or confer a direct economic benefit to purchasers; and 

(g) 

infrastructural  services,  including:  electricity  reticulation,  roads  and  other 
means of transport, market and port facilities, water supply facilities, dams and 
drainage  schemes,  and  infrastructural  works  associated  with  environmental 
programmes. In all cases the expenditure shall be directed to the provision or 
construction of capital works only, and shall exclude the subsidised provision 
of on-farm facilities other than for the reticulation of generally available public 
utilities.  It  shall  not  include  subsidies  to  inputs  or  operating  costs,  or 
preferential user charges. 

3. 

Public stockholding for food security purposes1 

Expenditures  (or  revenue  foregone)  in  relation  to  the  accumulation  and  holding  of 
stocks  of  products  which  form  an  integral  part  of  a  food  security  programme 
identified in national legislation. This may include government aid to private storage 
of products as part of such a programme. 

The  volume  and  accumulation  of  such  stocks  shall  correspond  to  predetermined 
targets  related  solely  to  food  security.  The  process  of  stock  accumulation  and 
disposal shall be financially transparent. Food purchases by the government shall be 
made at current market prices and sales from food security stocks shall be made at no 
less than the current domestic market price for the product and quality in question. 

4. 

Domestic food aid2 

Expenditure (or revenue foregone) in relation to the provision of domestic food aid to 
sections of the population in need. 

Eligibility to receive the food aid shall be subject to clearly-defined criteria related to 
nutritional  objectives.  Such  aid  shall  be  in  the  form  of  direct  provision  of  food  to 
those  concerned  or  the  provision  of  means  to  allow  eligible  recipients  to  buy  food 

1 

2 

For  the  purpose  of  point  3  of  this  Annex,  governmental  stockholding  programmes  for  food  security 
purposes  in  developing  countries  whose  operation  is  transparent  and  conducted  in  accordance  with 
officially  published  objective  criteria  or  guidelines  shall  be  considered  to  be  in  conformity  with  the 
provisions  of  this  point,  including  programmes  under  which  stocks  of  foodstuffs  for  food  security 
purposes  are  acquired  and  released  at  administered  prices,  provided  that  the  difference  between  the 
acquisition price and the external reference price is accounted for in the AMS. 
For the purposes of points 3 and 4 of this Annex, the provision of foodstuffs at subsidized prices with 
the objective of meeting food requirements of urban and rural poor in developing countries on a regular 
basis at reasonable prices shall be considered to be in conformity with the provisions of this point. 

EN 

55 

   EN 

 
                                                 
either at market or at subsidised prices. Food purchases by the government shall be 
made at current market prices and the financing and administration of the aid shall be 
transparent. 

5. 

Direct payments to producers 

(cid:208) 2026/97 (adapted) 

Support provided through direct payments (or revenue foregone, including payments 
in kind) to producers for which exemption from reduction commitments as claimed 
shall meet the basic criteria set out in ⌦ point ⌫ 1, plus specific criteria applying 
to  individual  types  of  direct  payment  as  set  out  in  ⌦ points ⌫  6  to  13.  Where 
exemption from reduction is claimed for any existing or new type of direct payment 
other than those specified in ⌦ points ⌫ 6 to 13, it shall conform to criteria ⌦ set 
out in points 6 ⌫ (b) to (e) , in addition to the general criteria set out in ⌦ point ⌫ 
1. 

6. 

Decoupled income support 

(cid:208) 2026/97 

(a)  Eligibility  for  such  payments  shall  be  determined  by  clearly-defined  criteria 
such  as  income,  status  as  a  producer  or  landowner,  factor  use  or  production 
level in a defined and fixed base period. 

(b)  The  amount  of  such  payments  in  any  given  year  shall  not  be  related  to,  or 
based  on,  the  type  or  volume  of  production  (including  livestock  units) 
undertaken by the producer in any year after the base period. 

(c)  The  amount  of  such  payments  in  any  given  year  shall  not  be  related  to,  or 
based  on,  the  prices,  domestic  or  international,  applying  to  any  production 
undertaken in any year after the base period. 

(d)  The  amount  of  such  payments  in  any  given  year  shall  not  be  related  to,  or 
based on, the factors of production employed in any year after the base period. 

(e)  No production shall be required in order to receive such payments. 

7. 

Government  financial  participation  in  income  insurance  and  income  safety-net 
programmes 

(a)  Eligibility  for  such  payments  shall  be  determined  by  an  income  loss,  taking 
into  account  only  income  derived  from  agriculture,  which  exceeds  30%  of 
average  gross  income  or  the  equivalent  in  net  income  terms  (excluding  any 
payments from the same or similar schemes) in the preceding three-year period 
or a three-year average based on the preceding five-year period, excluding the 
highest  and  the  lowest  entry.  Any  producer  meeting  this  condition  shall  be 
eligible to receive the payments. 

EN 

56 

   EN 

 
 
 
(b)  The  amount  of  such  payments  shall  compensate  for  less  than  70%  of  the 
producer's income loss in the year the producer becomes eligible to receive this 
assistance. 

(c)  The  amount  of  any  such  payments  shall  relate  solely  to  income;  it  shall  not 
relate  to  the  type  or  volume  of  production  (including  livestock  units) 
undertaken  by  the  producer;  or  to  the  prices,  domestic  or  international, 
applying to such production; or to the factors of production employed. 

(d)  Where  a  producer  receives  in  the  same  year  payments  pursuant  to  this 
⌦ point ⌫ and pursuant to ⌦ point ⌫ 8 (relief from natural disasters), the 
total of such payments shall be less than 100% of the producer's total loss. 

(cid:208) 2026/97 (adapted) 

8. 

Payments (made either directly or by way of a government financial participation in 
crop insurance schemes) for relief from natural disasters 

(a)  Eligibility for such payments shall arise only following a formal recognition by 
government  authorities  that  a  natural  or  like  disaster  (including  disease 
outbreaks, pest infestations, nuclear accidents,  and  war  on  the  territory  of  the 
Member concerned) has occurred or is occurring; and shall be determined by a 
production  loss  which  exceeds  30 %  of  the  average  of  production  in  the 
preceding  three-year  period  or  a  three-year  average  based  on  the  preceding 
five-year period, excluding the highest and the lowest entry. 

(b)  Payments made following a disaster shall be applied only in respect of losses 
of  income,  livestock  (including  payments  in  connection  with  the  veterinary 
treatment  of  animals),  land  or  other  production  factors  due  to  the  natural 
disaster in question. 

(c)  Payments shall compensate for not more than the total cost  of replacing such 
losses and shall not require or specify the type or quantity of future production. 

(d)  Payments made during a disaster shall not exceed the level required to prevent 
or alleviate further loss as defined in criterion ⌦ set out in point ⌫ (b). 

(e)  Where  a  producer  receives  in  the  same  year  payments  pursuant  to  this 
⌦ point ⌫  and  pursuant  to  ⌦ point ⌫  7  (income  insurance  and  income 
safety-net programmes), the total of such payments shall be less than 100% of 
the producer's total loss. 

EN 

57 

   EN 

 
 
9. 

Structural adjustment assistance provided through producer retirement programmes 

(cid:208) 2026/97 

(a)  Eligibility  for  such  payments  shall  be  determined  by  reference  to  clearly 
defined criteria in programmes designed to facilitate the retirement of persons 
engaged  in  marketable  agricultural  production,  or  their  movement  to  non-
agricultural activities. 

(b)  Payments shall  be  conditional upon the total and permanent retirement of the 

recipients from marketable agricultural production. 

10. 

Structural adjustment assistance provided through resource retirement programmes 

(a)  Eligibility  for  such  payments  shall  be  determined  by  reference  to  clearly 
defined  criteria  in  programmes  designed  to  remove  land  or  other  resources, 
including livestock, from marketable agricultural production. 

(b)  Payments  shall  be  conditional  upon  the  retirement  of  land  from  marketable 
agricultural  production  for  a  minimum  of  three  years,  and  in  the  case  of 
livestock on its slaughter or definitive permanent disposal. 

(c)  Payments shall not require or specify any alternative use for such land or other 

resources which involves the production of marketable agricultural products. 

(d)  Payments shall not be related to either type or quantity of production or to the 
prices, domestic or international, applying to production undertaken using the 
land or other resources remaining in production. 

11. 

Structural adjustment assistance provided through investment aids 

(a)  Eligibility  for  such  payments  shall  be  determined  by  reference  to  clearly-
defined criteria in government programmes designed to assist the financial or 
physical  restructuring  of  a  producer's  operations  in  response  to  objectively 
demonstrated  structural  disadvantages.  Eligibility  for  such  programmes  may 
also  be  based  on  a  clearly  defined  government  programme  for 
the 
reprivatisation of agricultural land. 

(b)  The  amount  of  such  payments  in  any  given  year  shall  not  be  related  to,  or 
based  on,  the  type  or  volume  of  production  (including  livestock  units) 
undertaken  by  the  producer  in  any  year  after  the  base  period  other  than  as 
provided for under criterion (e). 

(c)  The  amount  of  such  payments  in  any  given  year  shall  not  be  related  to,  or 
based  on,  the  prices,  domestic  or  international,  applying  to  any  production 
undertaken in any year after the base period. 

(d)  The  payments  shall  be  given  only  for  the  period  of  time  necessary  for  the 

realisation of the investment in respect of which they are provided. 

EN 

58 

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(e)  The  payments  shall  not  mandate  or  in  any  way  designate  the  agricultural 
products to be produced by the recipients except to require them not to produce 
a particular product. 

(f)  The  payments  shall  be  limited  to  the  amount  required  to  compensate  for  the 

structural disadvantage. 

12. 

Payments under environmental programmes 

(a)  Eligibility  for  such  payments  shall  be  determined  as  part  of  a  clearly-defined 
government  environmental  or  conservation  programme  and  be  dependent  on 
the  fulfillment  of  specific  conditions  under  the  government  programme, 
including conditions related to production methods or inputs. 

(b)  The  amount  of  payment  shall  be  limited  to  the  extra  costs  or  loss  of  income 

involved in complying with the government programme. 

13. 

Payments under regional assistance programmes 

(a)  Eligibility  for  such  payments  shall  be  limited  to  producers  in  disadvantaged 
regions.  Each  such  region  must  be  a  clearly  designated  contiguous 
geographical  area  with  a  definable  economic  and  administrative  identity, 
considered  as  disadvantaged  on  the  basis  of  neutral  and  objective  criteria 
clearly  spelt  out  in  a  law  or  regulation  and  indicating  that  the  region's 
difficulties arise out of more than temporary circumstances. 

(b)  The  amount  of  such  payments  in  any  given  year  shall  not  be  related  to,  or 
based  on,  the  type  or  volume  of  production  (including  livestock  units) 
undertaken  by  the  producer  in  any  year  after  the  base  period  other  than  to 
reduce that production. 

(c)  The  amount  of  such  payments  in  any  given  year  shall  not  be  related  to,  or 
based  on,  the  prices,  domestic  or  international,  applying  to  any  production 
undertaken in any year after the base period. 

(d)  Payments shall be available only to producers in eligible regions, but generally 

available to all producers within such regions. 

(e)  Where  related  to  production  factors,  payments  shall  be  made  at  a  degressive 

rate above a threshold level of the factor concerned. 

(f)  The payments shall be limited to the extra costs or loss of income involved in 

undertaking agricultural production in the prescribed area. 

_____________ 

EN 

59 

   EN 

 
(cid:207) 

ANNEX V 

Repealed Regulation with list of its successive amendments 

Council Regulation (EC) No 2026/97 
(OJ L 288, 21.10.1997, p. 1) 

Council Regulation (EC) No 1973/2002 
(OJ L 305, 7.11.2002, p. 4) 

Council Regulation (EC) No 461/2004 
(OJ L 77, 13.3.2004, p. 12) 

_____________ 

Only Article 2 

EN 

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   EN 

 
 
 
 
ANNEX VI 

CORRELATION TABLE 

Regulation (EC) No 2026/97 

This Regulation 

Article 1(1) 

Article 1(1) 

Article 1(2) initial wording 

Article 2, initial wording 

Article 1(2) final wording 

Article 2(a) initial sentence 

Article 1(3) first subparagraph 

Article 2(a) final sentence 

Article 1(3) second subparagraph 

Article 1(4) 

Article 1(5) 

Article 2 

Article 3(1) 

Article  3(2) 
wording 

first 

subparagraph, 

initial 

Article 2(b) 

Article 1(2) 

Article 2(c) 

Article 3 

Article 4(1) 

Article  4(2) 
wording 

first 

subparagraph, 

initial 

Article 3(2) first subparagraph, point (a) 

Article 4(2) first subparagraph, point (a) 

Article 3(2) first subparagraph, point (b), first 
sentence 

Article 4(2) first subparagraph, point (b) 

Article  3(2)  first  subparagraph,  point  (b), 
second sentence 

Article 4(2) second subparagraph 

Article 3(2) first subparagraph, point (b), third 
sentence 

Article 4(2) third subparagraph 

Article 3(2) first subparagraph, point (c) 

Article 4(2) first subparagraph, point (c) 

Article 3(2) second subparagraph 

Article 4(2) fourth subparagraph 

Article 3(3) 

Article  3(4) 
wording 

first 

subparagraph, 

initial 

Article 4(3) 

Article  4(4) 
wording 

first 

subparagraph, 

initial 

Article 3(4)  first  subparagraph,  point (a) first 
sentence 

Article 4(4) first subparagraph, point (a) 

Article  3(4)  first  subparagraph,  point  (a)  Article 4(4) second subparagraph 

EN 

61 

   EN 

 
second and third sentences 

Article 3(4) first subparagraph, point (b) 

Article 4(4) first subparagraph, point (b) 

Article 3(5) 

Article 5 

Article 6 

Article 4(5) 

Article 5 

Article 6 

Article 7(1) and (2) 

Article 7(1) and (2) 

Article 7(3) first subparagraph, first sentence  Article 7(3) first subparagraph 

Article  7(3) 
sentence 

first  subparagraph,  second 

Article 7(3) second subparagraph 

Article 7(3) second subparagraph 

Article 7(3) third subparagraph 

Article 7(4) 

Article 8(1) 

Article 7(4) 

Article 2(d) 

Article 8(2) to (9) 

Article 8(1) to (8) 

Article 9 

Article 10(1) to (4) 

Article 10(7) to (13) 

Article 9 

Article 10(1) to (4) 

Article 10(5) to (11) 

Article 10(14) first sentence 

Article 10(12) first subparagraph 

Article 10(14) second and third sentences 

Article 10(12) second subparagraph 

Article 10(15) and (16) 

Article 10(13) and (14) 

Article 11(1) first and second sentences 

Article 11(1) first subparagraph 

Article 11(1) third sentence 

Article 11(1) second subparagraph 

Article 11(1) fourth sentence 

Article 11(1) third subparagraph 

Article 11(2) 

Article 11(2) 

Article 11(3) first sentence 

Article 11(3) first subparagraph 

Article 11(3) second sentence 

Article 11(3) second subparagraph 

Article 11(3) third sentence 

Article 11(3) third subparagraph 

Article 11(4) first sentence 

Article 11(4) first subparagraph 

EN 

62 

   EN 

 
Article 11(4) second sentence 

Article 11(4) second subparagraph 

Article 11(4) third sentence 

Article 11(4) third subparagraph 

Article 11(5) 

Article 11(5) 

Article 11(6) first sentence 

Article 11(6) first subparagraph 

Article 11(6) second sentence 

Article 11(6) second subparagraph 

Article 11(6) third sentence 

Article 11(6) third subparagraph 

Article 11(6) fourth sentence 

Article 11(6) fourth subparagraph 

Article 11(7) first sentence 

Article 11(7) first subparagraph 

Article 11(7) second sentence 

Article 11(7) second subparagraph 

Article 11(8), (9) and (10) 

Article 11(8), (9) and (10) 

Article 12 

Article 13(1) 

Article 12 

Article 13(1) 

Article 13(2) first and second sentences 

Article 13(2) first subparagraph 

Article 13(2) third and fourth sentences 

Article 13(2) second subparagraph 

Article 13(2) fifth sentence 

Article 13(2) third subparagraph 

Article 13(3), (4) and (5) 

Article 13(3), (4) and (5) 

Article 13(6) first, second and third sentences  Article 13(6) first subparagraph 

Article 13(6) fourth sentence 

Article 13(6) second subparagraph 

Article 13(7) and (8) 

Article 13(7) and (8) 

Article 13(9) first subparagraph 

Article 13(9) first subparagraph 

Article  13(9)  second  subparagraph,  first  and 
second sentences 

Article 13(9) second subparagraph 

Article  13(9)  second  subparagraph, 
sentence 

third 

Article 13(9) third subparagraph 

Article 13(10) 

Article 14(1) to (4) 

Article 14(5) initial wording 

Article 13(10) 

Article 14(1) to (4) 

Article  14(5)  initial  wording,  last  part  of  the 
sentence 

EN 

63 

   EN 

 
Article 14(5) (a) and (b) 

Article 14(5) (a) and (b) 

Article 14(5) last wording 

Article  14(5)  initial  wording,  first  part  of  the 
sentence 

[WHEN 14(5)(b) IS OBSOLETE]: 

[Article  14(5),  initial  wording,  point  (a)  and 
last wording 

Article 14(5)] 

[Article 14(5)(b) 

-] 

Article 15(1) first sentence 

Article 15(1) first subparagraph 

Article 15(1) second sentence 

Article 15(1) second subparagraph 

Article 15(1) third sentence 

Article 15(1) third subparagraph 

Article 15(1) fourth sentence 

Article 15(1) fourth subparagraph 

Article 15(1) fifth sentence 

Article 15(1) fifth subparagraph 

Article 15(2) 

Article 15(2) 

Article 15(3) first sentence 

Article 15(3) first subparagraph 

Article 15(3) second sentence 

Article 15(3) second subparagraph 

Article 15(3) third sentence 

Article 15(3) third subparagraph 

Article 16(1) 

Article 16(1) 

Article 16(2) first sentence 

Article 16(2) first subparagraph 

Article 16(2) second and third sentences 

Article 16(2) second subparagraph 

Article 16(3) 

Article 16(3) 

Article 16(4) initial wording, first part 

Article 16(4) first subparagraph 

Article 16(4) initial wording, second part 

Article 16(4) (a) and (b) 

Article  16(4)  second  subparagraph,  initial 
wording and points (a) and (b) 

Article 16(4) second subparagraph, points (c) 
and (d) 

Article 16(5) 

Article 17 

Article 18 

Article 16(5) 

Article 17 

Article 18 

EN 

64 

   EN 

 
 
Article 19 

Article 19 

Article 20, first sentence 

Article 20, first paragraph 

Article 20, second sentence 

Article 20, second paragraph 

Article 21(1), (2) and (3) 

Article 21(1), (2) and (3) 

Article 21(4) first sentence 

Article 21(4) first subparagraph 

Article 21(4) second sentence 

Article 21(4) second subparagraph 

Article 21(4) third sentence 

Article 21(4) third subparagraph 

Article 22(1) first subparagraph, first sentence  Article 22(1) first subparagraph 

Article  22(1)  first  subparagraph,  second  and 
third sentences 

Article 22(1) second subparagraph 

Article  22(1) 
sentence 

Article  22(1) 
sentence 

first  subparagraph, 

fourth 

Article 22(1) third subparagraph 

first 

subparagraph, 

fifth 

Article 22(1) fourth subparagraph 

Article 22(1) second subparagraph 

Article 22(1) fifth subparagraph 

Article  22(1) 
wording 

third  subparagraph, 

initial 

Article  22(1)  sixth  subparagraph, 
wording 

initial 

Article 22(1) third subparagraph, first, second 
and third indents 

Article  22(1)  sixth  subparagraph,  points  (a), 
(b) and (c) 

Article 22(1) fourth subparagraph 

Article 22(1) seventh subparagraph 

Article 22(2) first sentence 

Article 22(2) second sentence 

Article 22(2) third sentence 

Article 22(3) 

Article 22(4) 

Article 22(2) 

Article 22(3) 

Article 22(4) 

Article 22(5) 

Article 22(6) 

Article  23(1) 
sentence, 
extended” 

first 

subparagraph, 

Article 23(1) initial wording 

from  “Countervailing” 

first 
to  “be 

Article  23(1) 
sentence, 
countries” to “is taking place” 

first 
from  “to 

subparagraph, 
from 
imports 

Article 23(1)(a),(b) and (c) 

first 
third 

EN 

65 

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Article  23(1)  first  subparagraph,  second 
sentence 

Article 23(2) 

Article  23(1) 
sentence 

first 

subparagraph, 

third 

Article 23(3) first subparagraph 

Article 23(1) second subparagraph, from “The 
practice” to “inter alia” 

Article  23(3)  second  subparagraph,  initial 
wording 

Article 23(1) second subparagraph, from “the 
slight modification” to “the manufacturers” 

Article 23(3) second subparagraph, points (a), 
(b) and (c) 

Article 23(2) first and second sentences 

Article 23(4) first subparagraph 

Article 23(2) third sentence 

Article 23(4), second subparagraph 

Article 23(2) fourth and fifth sentences 

Article 23(4) third subparagraph 

Article 23(2) sixth and seventh sentence 

Article 23(4) fourth subparagraph 

Article 23(3) first subparagraph, first sentence  Article 23(5) 

Article  23(3)  first  subparagraph,  second 
sentence 

Article 23(6) first subparagraph 

Article  23(3) 
sentence 

Article  23(3) 
sentence 

first 

subparagraph, 

third 

Article 23(6) second subparagraph 

first  subparagraph, 

fourth 

Article 23(6) third subparagraph 

Article 23(3) second subparagraph 

Article 23(6) fourth subparagraph 

Article 23(3) third subparagraph 

Article 23(6) fifth subparagraph 

Article 23(3) fourth subparagraph 

Article 23(7) 

Article 24(1) first and second sentences 

Article 24(1) first subparagraph 

Article 24(1) third sentence 

Article 24(1) second subparagraph 

Article 24(2) first sentence 

Article 24(2) first subparagraph 

Article 24(2) second and third sentences 

Article 24(2) second subparagraph 

Article 24(3) 

Article 24(3) 

Article 24(4) first and second sentences 

Article 24(4) first subparagraph 

Article 24(4) third sentence 

Article 24(4) second subparagraph 

Article 24(4) fourth and fifth sentences 

Article 24(4) third subparagraph 

EN 

66 

   EN 

 
Article 24(5) first sentence 

Article 24(5) first subparagraph 

Article 24(5) second sentence 

Article 24(5) second subparagraph 

Article 24(5) third and fourth sentences 

Article 24(5) third subparagraph 

Article 24(6) and (7) 

Article 24(6) and (7) 

Article 25 

Article 26 

Article 25 

Article 26 

Article 27(1), (2) and (3) 

Article 27(1), (2) and (3) 

Article 27(4) first sentence 

Article 27(4) first subparagraph 

Article 27(4) second sentence 

Article 27(4) second subparagraph 

Article 28 

Article 28 

Article 29(1) to (5) 

Article 29(1) to (5) 

Article 29(6) first sentence 

Article 29(6) first subparagraph 

Article 29(6) second sentence 

Article 29(6) second subparagraph 

Article 30(1), (2) and (3) 

Article 30(1), (2) and (3) 

Article 30(4), first, second and third sentences  Article 30(4), first subparagraph 

Article 30(4), final sentence  

Article 30(4), second subparagraph 

Article 30(5) 

Article 30(5) 

Article 31 

Article 32 

Article 33 

Article 34 

_ 

Article 35 

Annex I to IV 

_ 

_ 

EN 

Article 31 

Article 32 

Article 33 

_ 

Article 34 

Article 35 

Annex I to IV 

Annex V 

Annex VI 

_____________ 

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   EN