Proposal for a Council Regulation amending Regulation (EC) No 1628/2004 imposing a definitive countervailing duty on imports of certain graphite electrode systems originating in India and Regulation (EC) No 1629/2004 imposing a definitive anti-dumping duty on imports of certain graphite electrode systems originating in India
Date: 2008-11-25
Institutions: European Commission
Subjects: India, anti-dumping duty, electrical equipment, import, originating product

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 25.11.2008 
COM(2008) 793 final 

Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1628/2004 imposing a definitive countervailing duty on 
imports of certain graphite electrode systems originating in India and Regulation (EC) 
No 1629/2004 imposing a definitive anti-dumping duty on imports of certain graphite 
electrode systems originating in India 

(presented by the Commission) 

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EXPLANATORY MEMORANDUM 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

This  proposal  concerns  the  application  of  Council  Regulation  (EC)  No  2026/97  of  6 
October 1997 on protection against subsidized imports from countries not members of 
the  European  Community,  ('the  basic  Regulation')  in  the  anti-subsidy  proceeding 
concerning imports of graphite electrode systems originating in India. 

General context 

This proposal is made in the context of the implementation of the basic Regulation and 
is the result of an investigation which was carried out in line with the substantive and 
procedural requirements laid out therein. 

Existing measures in the area of the proposal 

Council  Regulation  (EC)  No  1628/2004  imposing a  definitive  countervailing  duty  on 
imports of graphite electrode systems originating in India and Council Regulation (EC) 
No  1629/2004  imposing  a  definitive  anti-dumping  duty  on  imports  of  graphite 
electrode systems originating in India. 

Consistency with the other policies and objectives of the Union 

Not applicable. 

CONSULTATION OF INTERESTED PARTIES AND IMPACT ASSESSMENT 

Consultation of interested parties 

Interested parties concerned by the proceeding have had the possibility to defend their 
interests during the investigation, in line with the provisions of the basic legislation. 

Collection and use of expertise 

There was no need for external expertise. 

Impact assessment 

This proposal is the result of the implementation of the basic Regulation. 

The  basic  Regulation  does  not  foresee  a  general  impact  assessment  but  contains  an 
exhaustive list of conditions that have to be assessed. 

LEGAL ELEMENTS OF THE PROPOSAL 

Summary of the proposed action 

On  2  October  2007,  the  Commission  initiated  on  its  own  initiative  a  partial  interim 
review, limited to the level of subsidisation, of the countervailing measures applicable 

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to imports into the Community of graphite electrode systems originating in India. 

The  review  was  initiated  since  there  was  sufficient  prima  facie  evidence  available  to 
the  Commission  that  the  circumstances  with  regard  to  subsidisation  on  the  basis  of 
which measures were established had changed and that these changes were of a lasting 
nature.  The  enclosed  Commission  proposal  for  a  Council  Regulation  contains  the 
findings of this review. 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which should be published in the Official Journal of the European Union no later than 
1 January 2009. 

Legal basis 

Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection  against 
subsidized  imports  from  countries  not  members  of  the  European  Community,  as  last 
amended by Council Regulation (EC) No 461/2004 of 8 March 2004. 

Subsidiarity principle 

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

Proportionality principle 

The proposal complies with the proportionality principle because the form of action is 
described  in  the  aforementioned  basic  Regulation  and  leaves  no  scope  for  national 
decision 

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

Choice of instruments 

Proposed instruments: Regulation. 

Other means would not be adequate because the aforementioned basic Regulation does 
not foresee alternative options. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Community budget. 

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Proposal for a 

COUNCIL REGULATION 

amending Regulation (EC) No 1628/2004 imposing a definitive countervailing duty on 
imports of certain graphite electrode systems originating in India and Regulation (EC) 
No 1629/2004 imposing a definitive anti-dumping duty on imports of certain graphite 
electrode systems originating in India 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty establishing the European Community,  

Having  regard  to  Council  Regulation  (EC)  No  2026/97  of  6  October  1997  on  protection 
against  subsidised  imports  from  countries  not  member  of  the  European  Community1  ('the 
basic Regulation'), and in particular Articles 15 and 19 thereof, 

Having  regard  to  the  proposal  submitted  by  the  Commission  after  consulting  the  Advisory 
Committee, 

Whereas: 

A. 

I. 

(1) 

PROCEDURE 

Previous investigation and existing measures 

The Council, by Regulation (EC) No 1628/20042, imposed a definitive countervailing 
duty  on  imports  of  graphite  electrodes  of  a  kind  used  for  electric  furnaces,  with  an 
apparent  density  of  1,65  g/cm3  or  more  and  an  electrical  resistance  of  6,0  µΩ.m  or 
less,  falling  within  CN  code  ex  8545  11  00  and  nipples  used  for  such  electrodes, 
falling  within  CN  code  ex  8545  90  90  whether  imported  together  or  separately, 
originating  in  India.  The  rate  of  the  duty  ranges  between  7,0%  and  15,7%  for 
individually named exporters with a residual duty rate of 15,7% imposed on imports 
from other exporters. 

(2) 

At  the  same  time,  by  Regulation  (EC)  No  1629/20043,  the  Council  imposed  a 
definitive anti-dumping duty on imports of the same product originating in India. 

II. 

Initiation of a partial interim review 

(3) 

Following  the  imposition  of  the  definitive  countervailing  duty  the  Government  of 
India  ('GOI')  made  submissions  that  the  circumstances  with  regard  to  two  subsidy 
schemes  (the  Duty  Entitlement  Passbook  Scheme  and  the  Income  Tax  Exemption 

1 
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3 

OJ L 288, 21.10.1997, p. 1. 
OJ L 295, 18.9.2004, p. 4. 
OJ L 295, 18.9.2004, p. 10.  

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under Section 80 HHC of the Income Tax Act) have changed and that these changes 
are  of  a  lasting  nature.  Consequently,  it  was  argued  that  the  level  of  subsidisation  is 
likely to have decreased and thus measures that have been established partly on these 
schemes should be revised. 

(4) 

(5) 

The  Commission  examined  the  evidence  submitted  by  the  GOI  and  considered  it 
sufficient  to  justify  the  initiation  of  a  review  in  accordance  with  the  provisions  of 
Article  19  of  the  basic  anti-subsidy  Regulation.  After  consultation  of  the  Advisory 
Committee,  the  Commission  initiated  an  ex  officio  partial  interim  review  of  the 
measures  in  force  by  a  notice  published  in  the  Official  Journal  of  the  European 
Union4. 

The  purpose  of  this  partial  interim  review  investigation  is  to  assess  the  need  for  the 
continuation,  removal  or  amendment  of  the  existing  measures  in  respect  of  those 
companies having benefited from one or both the changed subsidy schemes including, 
for those companies, in respect of other schemes where sufficient evidence is provided 
in line with the relevant provisions of the notice of initiation.. 

III. 

Investigation period 

(6) 

The investigation covered the period from 1 October 2006 to 30 September 2007 ('the 
review investigation period' or 'RIP'). 

IV. 

Parties concerned by the investigation 

(7) 

(8) 

(9) 

The  Commission  officially  informed  the  GOI,  the  two  Indian  exporting  producers 
listed in the notice of initiation of the partial interim review, as well as the Community 
producers,  of  the  initiation  of  the  partial  interim  review  investigation.  Interested 
parties  had  the  opportunity  to  make  their  views  known  in  writing  and  to  request  a 
hearing. The written and oral comments submitted by the parties were considered and, 
where appropriate, taken into account. 

The Commission sent questionnaires to  two co-operating exporting producers  and to 
the  GOI.  Replies  were  received  from  both  the  co-operating  exporting  producers  and 
the GOI. 

The  Commission  sought  and  verified  all  information  it  deemed  necessary  for  the 
determination of subsidisation. Verification visits were carried out at the premises of 
the following interested parties: 

1.  Government of India 

–  Ministry of Commerce, New Delhi 

2. 

Exporting producers in India 

–  Graphite India Limited (GIL), Kolkatta 

–  Hindustan Electro Graphite (HEG) Limited, Noida 

4 

OJ C 230, 2.10.2007, p. 9. 

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VI.  Disclosure and comments on procedure 

(10)  The  GOI  and  the  other  interested  parties  were  informed  of  the  essential  facts  and 
considerations upon which it was intended to propose the amendment of the duty rate 
applicable  to  the  two  co-operating  Indian  producers  and  maintain  the  existing 
measures  for  all  other  companies  which  did  not  co-operate  with  this  partial  interim 
review.  They  were  also  given  a  reasonable  time  to  comment.  All  submissions  and 
comments were taken duly into consideration as set out below. 

B. 

PRODUCT CONCERNED  

(11)  The  product  covered  by  this  review  is  the  same  product  as  the  one  concerned  by 
Council Regulation (EC) No 1628/2004, namely graphite electrodes of a kind used for 
electric  furnaces,  with  an  apparent  density  of  1,65  g/cm3  or  more  and  an  electrical 
resistance of 6,0 µΩ.m or less, falling within CN code ex 8545 11 00 and nipples used 
for such electrodes, falling within CN code ex 8545 90 90 whether imported together 
or separately, originating in India. 

C. 

I. 

SUBSIDIES 

Introduction 

(12)  On the basis of the information submitted by the GOI and the co-operating exporting 
producers and the replies to the Commission’s questionnaire, the following schemes, 
which allegedly involve the granting of subsidies, were investigated:  

(a)  Advance  Authorization  Scheme  (formerly  known  as  Advance  Licence 

Scheme),  

(b)  Duty Entitlement Passbook Scheme, 

(c)  Export Promotion Capital Goods Scheme, 

(d) 

Income Tax Exemption, 

(e)  Electricity Duty Exemption of the state of Madhya Pradesh. 

(13)  The schemes (a) to (c) specified above are based on the Foreign Trade (Development 
and Regulation) Act 1992 (No 22 of 1992) which entered into force on 7 August 1992 
('Foreign Trade Act'). The Foreign Trade Act authorises the GOI to issue notifications 
regarding the export and import policy. These are summarised in 'Export and Import 
Policy'  documents,  which  are  issued  by  the  Ministry  of  Commerce  every  five  years 
and updated regularly. One Export and Import Policy document is relevant to the RIP 
of this case, namely the one covering the period 1 September 2004 to 31 March 2009 
('EXIM-policy 04-09'). In addition, the GOI also sets out the procedures governing the 
EXIM-policy  04-09  in  a  'Handbook  of  Procedures  -  1  September  2004  to  31  March 
2009,  Volume  I'  ('HOP  I  04-09').  The  Handbook  of  Procedure  is  also  updated  on  a 
regular basis. 

(14)  The Income Tax Scheme specified above under (d) is based on the Income Tax Act of 

1961, which is amended yearly by the Finance Act. 

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(15)  The Electricity Duty Exemption scheme specified above under (e) is based on Section 

3-B of the Madhya Pradesh Electricity Duty Act of 1949. 

(16) 

In  accordance  with  Article  11(10)  of  the  basic  anti-subsidy  Regulation,  the 
Commission invited the GOI for additional consultations with respect to both changed 
and unchanged schemes with the aim of clarifying the factual situation as regards the 
alleged  schemes  and  arriving  at  a  mutually  agreed  solution.  Following  these 
consultations,  and  in  the  absence  of  a  mutually  agreed  solution  in  relation  to  these 
schemes,  the  Commission  included  all  these  schemes  in  the  investigation  of 
subsidisation. 

II. 

Specific Schemes 

1 

Advance Authorisation Scheme ('AAS') 

(a)  Legal basis 

(17)  The detailed description of the scheme is contained in paragraphs 4.1.1 to 4.1.14 of the 
EXIM-policy  04-09  and  chapters  4.1  to  4.30  of  the  HOP  I  04-09.  This  scheme  was 
called  Advance  Licence  Scheme  during  the  previous  review  investigation  that  led  to 
the  imposition  by  Council  Regulation  (EC)  No  1628/2004  of  the  definitive 
countervailing duty currently in force.  

(b)  Eligibility 

(18)  The AAS consists of six sub-schemes, as described below in more detail. Those sub-
schemes  inter  alia  differ  in  the  scope  of  eligibility.  Manufacturer-exporters  and 
merchant-exporters  "tied  to"  supporting  manufacturers  are  eligible  for  the  AAS 
physical  exports  and  for  the  AAS  for  annual  requirement.  Manufacturer–exporters 
supplying  the  ultimate  exporter  are  eligible  for  AAS  for  intermediate  supplies.  Main 
contractors  which  supply  to  the  "deemed  export"  categories  mentioned  in  paragraph 
8.2 of the EXIM-policy 04-09, such as suppliers of an export oriented unit ('EOU'), are 
eligible for AAS deemed export. Eventually, intermediate suppliers to manufacturer-
exporters  are  eligible  for  "deemed  export"  benefits  under  the  sub-schemes  Advance 
Release Order ('ARO') and back to back inland letter of credit. 

(c)  Practical implementation 

(19)  Advance authorisations can be issued for: 

(i)  Physical exports: This is the main sub-scheme. It allows for duty free import of 
input  materials  for  the  production  of  a  specific  resultant  export  product. 
"Physical"  in  this  context  means  that  the  export  product  has  to  leave  Indian 
territory. Import allowance and export obligation including the type of export 
product are specified in the licence. 

(ii)  Annual  requirement:  Such  an  authorisation  is  not  linked  to  a  specific  export 
product, but to a wider product group (e.g. chemical and allied products). The 
licence  holder  can  –  up  to  a  certain  value  threshold  set  by  its  past  export 
performance – import duty free any input to be used in manufacturing any of 
the  items  falling  under  such  a  product  group.  It  can  choose  to  export  any 

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resultant  product  falling  under  the  product  group  using  such  duty-exempt 
material.  

(iii)  Intermediate supplies: This sub-scheme covers cases where two manufacturers 
intend  to  produce  a  single  export  product  and  divide  the  production  process. 
The  manufacturer-exporter  produces  the  intermediate  product.  It  can  import 
duty  free  input  materials  and  can  obtain  for  this  purpose  an  AAS  for 
intermediate  supplies.  The  ultimate  exporter  finalises  the  production  and  is 
obliged to export the finished product.  

(iv)  Deemed  exports:  This  sub-scheme  allows  a  main  contractor  to  import  inputs 
free of duty which are required in manufacturing goods to be sold as “deemed 
exports”  to  the  categories  of  customers  mentioned  in  paragraph  8.2.(b)  to  (f), 
(g),(i)  and  (j)  of  the  EXIM  policy  04-09.  According  to  the  GOI,  deemed 
exports refer to those transactions in which the goods supplied do not leave the 
country.  A  number  of  categories  of  supply  is  regarded  as  deemed  exports 
provided the goods are manufactured in India, e.g. supply of goods to an EOU 
or to a company situated in a special economic zone ('SEZ').  

(v)  ARO: The AAS holder intending to source the inputs from indigenous sources, 
in lieu of direct import, has the option to source them against AROs. In such 
cases the Advance Authorisations are validated  as  AROs  and  are  endorsed  to 
the  indigenous  supplier  upon  delivery  of  the  items  specified  therein.  The 
endorsement  of  the  ARO  entitles  the  indigenous  supplier  to  the  benefits  of 
deemed exports as set out in paragraph 8.3 of the EXIM-policy 04-09 (i.e. AAS 
for intermediate supplies/deemed export, deemed export drawback and refund 
of terminal excise duty). The ARO mechanism refunds taxes and duties to the 
supplier instead of refunding the same to the ultimate exporter in the form of 
drawback/refund  of  duties.  The  refund  of  taxes/duties  is  available  both  for 
indigenous inputs as well as imported inputs.  

(vi)  Back to back inland letter of credit: This sub-scheme again covers indigenous 
supplies  to  an  Advance  Authorisation  holder.  The  holder  of  an  Advance 
Authorisation  can  approach  a  bank  for  opening  an  inland  letter  of  credit  in 
favour of an indigenous supplier. The authorisation will be invalidated by the 
bank for direct import, only in respect of the value and volume of items being 
sourced  indigenously  instead  of  importation.  The  indigenous  supplier  will  be 
entitled  to  deemed  export  benefits  as  set  out  in  paragraph  8.3  of  the  EXIM-
policy  04-09  (i.e.  AAS  for  intermediate  supplies/deemed  export,  deemed 
export drawback and refund of terminal excise duty). 

(20) 

It  was  established  that  during  the  RIP  one  of  the  co-operating  exporters  obtained 
concessions under the first sub-scheme, i.e. AAS physical exports. It is therefore not 
necessary to establish the countervailability of the remaining sub-schemes.  

(21)  Following the imposition by Council Regulation (EC) No 1628/2004 of the definitive 
countervailing  duty  currently  in  force,  the  GOI  has  modified  the  verification  system 
applicable  to  AAS.  In  concrete  terms,  for  verification  purposes  by  the  Indian 
authorities, an Advance Authorisation holder is legally obliged to maintain "a true and 
proper  account  of  consumption  and  utilisation  of  duty  free  imported/domestically 
procured goods" in a specified format (chapters 4.26, 4.30 and Appendix 23 HOP I 04-

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09), i.e. an actual consumption register. This register has to be verified by an external 
chartered accountant/cost and works accountant who issues a certificate stating that the 
prescribed  registers  and  relevant  records  have  been  examined  and  the  information 
furnished  under  Appendix  23  is  true  and  correct  in  all  respects.  Nevertheless,  the 
aforesaid provisions apply only to Advance Authorisations issued on or after 13 May 
2005.  For  all  Advance  Authorisations  or  Advance  Licenses  issued  before  that  date, 
holders are requested to follow the previously applicable verification provisions, i.e. to 
keep  a  true  and  proper  account  of  licence-wise  consumption  and  utilisation  of 
imported goods in the specified format of Appendix 18 (chapter 4.30 and Appendix 18 
HOP I 02-07).  

(22)  With  regard  to  the  sub-scheme  used  during  the  RIP  by  the  co-operating  exporting 
producer, i.e. physical exports, both the import allowance and the export obligation are 
fixed  in  volume  and  value  by  the  GOI  and  are  documented  on  the  Authorisation.  In 
addition, at the time of import and of export, the corresponding transactions are to be 
documented  by  Government  officials  on  the  Authorisation.  The  volume  of  imports 
allowed  under  this  scheme  is  determined  by  the  GOI  on  the  basis  of  standard  input-
output  norms  ('SIONs').  SIONs  exist  for  most  products,  including  the  product 
concerned, and are published in the HOP II 04-09. 

(23) 

Imported  input  materials  are  not  transferable  and  have  to  be  used  to  produce  the 
resulting  export  product.  The  export  obligation  must  be  fulfilled  within  a  prescribed 
time frame after issuance of the licence (24 months with two possible extensions of 6 
months each).  

(24)  The  review  investigation  established  that  the  Advanced  Licenses  used  for  importing 
raw materials during the RIP had been issued before 13 May 2005. Therefore, the new 
verification  requirements  stipulated  by  the  Indian  authorities  in  HOP  I  04-09,  as 
described in (21) above, had not yet been tested in practice. Furthermore, the company 
could  not  show  that  the  necessary  actual  consumption  and  stock  registers  had  been 
kept  in  the  format  required  by  chapter  4.30  and  Appendix  18  of  HOP  I  02-07,  as 
applicable  to  Advanced  Licenses  issued  before  13  May  2005.  Account  taken  of  this 
situation,  it  is  considered  that  the  investigated  exporter  was  not  able  to  demonstrate 
that the relevant EXIM provisions at the time were met. 

(d)  Disclosure comments 

(25)  The co-operating exporter who had made use of AAS during the RIP argued that it had 
voluntarily submitted the advance licenses used, although they were issued before 13 
May 2005, to verification by a certified accountant according to the requisites of the 
HOP I 04-09, and that this demonstrates that a proper verification system now exists 
under the new provisions of the HOP. 

(26)  A certificate in the form of Appendix 23 of the HOP, signed by a certified accountant 
and dated 1 February 2008, was indeed submitted to the Commission services during 
the verification at the company's premises. However, given that the advance licenses 
were dated as of 2004, and the new HOP provisions did not apply to them, it must be 
concluded  that  this  was  a  voluntary  exercise  by  the  company,  which  does  not 
demonstrate  that  an  effective  verification  system  was  actually  implemented  by  the 
GOI. Furthermore, it was not shown that the excess duty remission, as calculated by 
the certified accountant, was actually repaid to the government.  

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(e)  Conclusion 

(27)  The  exemption  from  import  duties  is  a  subsidy  within  the  meaning  of  Article 
2(1)(a)(ii) and Article 2(2) of the basic Regulation, i.e. a financial contribution of the 
GOI which conferred a benefit upon the investigated exporters.  

(28) 

In  addition,  AAS  for  physical  exports  is  clearly  contingent  in  law  upon  export 
performance,  and  therefore  deemed  to  be  specific  and  countervailable  under  Article 
3(4)(a)  of  the  basic  Regulation.  Without  an  export  commitment  a  company  cannot 
obtain benefits under these schemes. 

(29)  The  sub-scheme  used  in  the  present  case  cannot  be  considered  as  permissible  duty 
drawback  system  or  substitution  drawback  system  within  the  meaning  of  Article 
2(1)(a)(ii) of the basic Regulation. It does not conform to the strict rules laid down in 
Annex  I  item  (i),  Annex  II  (definition  and  rules  for  drawback)  and  Annex  III 
(definition and rules for substitution drawback) of the basic Regulation. The GOI did 
not effectively apply any verification system or procedure to confirm whether and in 
what amounts inputs were consumed in the production of the exported product (Annex 
II(II)(4)  of  the  basic  Regulation  and,  in  the  case  of  substitution  drawback  schemes, 
Annex III(II)(2) of the basic Regulation). The SIONs themselves cannot be considered 
a verification system of actual consumption, since they do not enable the GOI to verify 
with  sufficient  precision  what  amounts  of  inputs  were  consumed  in  the  export 
production.  Furthermore,  an  effective  control  done  by  the  GOI  based  on  a  correctly 
kept  actual  consumption  register  did  not  take  place  during  the  RIP.  In  addition,  the 
GOI did not carry out a further examination based on actual inputs involved, although 
this  would  normally  need  to  be  carried  out  in  the  absence  of  an  effectively  applied 
verification system (Annex II(II)(5) and Annex III(II)(3) to the basic Regulation).  

(30)  This sub-scheme is therefore countervailable. 

(f)  Calculation of the subsidy amount 

(31) 

In the absence of permitted duty drawback systems or substitution drawback systems, 
the countervailable benefit is the remission of total import duties normally due upon 
importation of inputs. In this respect, it is noted that the basic Regulation does not only 
provide for the countervailing of an "excess" remission of duties. According to Article 
2(1)(a)(ii)  and Annex I(i) of the basic Regulation only an excess remission of duties 
can  be  countervailed,  provided  the  conditions  of  Annexes  II  and  III  of  the  basic 
Regulation are met. However, these conditions were not fulfilled in the present case. 
Thus,  if  an  absence  of  an  adequate  monitoring  process  is  established,  the  above 
exception  for  drawback  schemes  is  not  applicable  and  the  normal  rule  of  the 
countervailing  of  the  amount  of  (revenue  forgone)  unpaid  duties,  rather  than  any 
purported  excess  remission,  applies.  As  set  out  in  Annexes  II(II)  and  III(II)  of  the 
basic  Regulation  the  burden  is  not  upon  the  investigating  authority  to  calculate  such 
excess  remission.  To  the  contrary,  according  to  Article  2(1)(a)(ii)  of  the  basic 
Regulation it only has to establish sufficient evidence to refute the appropriateness of 
an alleged verification system. 

(32)  The subsidy amount for the exporter which used the AAS was calculated on the basis 
of import duties forgone (basic customs duty and special additional customs duty) on 
the material imported under the sub-scheme used for the product concerned during the 

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RIP  (numerator).  In  accordance  with  Article  7(1)(a)  of  the  basic  Regulation,  fees 
necessarily  incurred  to  obtain  the  subsidy  were  deducted  from  the  subsidy  amount 
where  justified  claims  were  made.  In  accordance  with  Article  7(2)  of  the  basic 
Regulation, this subsidy amount has been allocated over the export turnover generated 
by  the  product  concerned  during  the  RIP  as  appropriate  denominator,  because  the 
subsidy is contingent upon export performance and was not granted by reference to the 
quantities manufactured, produced, exported or transported. 

(33)  The  subsidy  rate  established  in  respect  of  this  scheme  during  the  RIP  for  the  co-

operating producer concerned amounts to 0.3%. 

2. 

Duty Entitlement Passbook Scheme ('DEPBS') 

(a)  Legal Basis 

(34)  The  detailed  description  of  the  DEPBS  is  contained  in  paragraph  4.3  of  the  EXIM-

policy 04-09 and in chapter 4 of the HOP I 04-09.  

(b)  Eligibility 

(35)  Any manufacturer-exporter or merchant-exporter is eligible for this scheme.  

(c)  Practical implementation of the DEPBS 

(36)  An eligible exporter can apply for DEPBS credits which are calculated as a percentage 
of  the  value  of  products  exported  under  this  scheme.  Such  DEPBS  rates  have  been 
established  by  the  Indian  authorities  for  most  products,  including  the  product 
concerned.  They  are  determined  on  the  basis  of  SIONs,  taking  into  account  a 
presumed  import  content  of  inputs  in  the  export  product  and  the  customs  duty 
incidence on such presumed imports, regardless of whether import duties have actually 
been paid or not.  

(37)  To be eligible for benefits under this scheme, a company must export. At the point in 
time  of  the  export  transaction,  a  declaration  must  be  made  by  the  exporter  to  the 
authorities  in  India  indicating  that  the  export  is  taking  place  under  the  DEPBS.  In 
order  for  the  goods  to  be  exported,  the  Indian  customs  authorities  issue,  during  the 
dispatch  procedure,  an  export  shipping  bill.  This  document  shows,  inter  alia,  the 
amount  of  DEPBS  credit  which  is  to  be  granted  for  that  export  transaction.  At  this 
point  in  time,  the  exporter  knows  the  benefit  it  will  receive.  Once  the  customs 
authorities issue an export shipping bill, the GOI has no discretion over the granting of 
a  DEPBS  credit.  The  relevant  DEPBS  rate  to  calculate  the  benefit  is  that  which 
applied at the time the export declaration is made.  

(38)  DEPBS  credits  are  freely  transferable  and  valid  for  a  period  of  12  months  from  the 
date of issue. They can be used for payment of customs duties on subsequent imports 
of any goods unrestrictedly importable, except capital goods. Goods imported against 
such  credits  can  be  sold  on  the  domestic  market  (subject  to  sales  tax)  or  used 
otherwise. 

(39)  Applications  for  DEPBS  credits  are  electronically  filed  and  can  cover  an  unlimited 
amount of export transactions. De facto no strict deadlines exist to apply for DEPBS 
credits. The electronic system used to manage DEPBS does not automatically exclude 

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export transactions outside the deadline submission periods mentioned in chapter 4.47 
HOP  I  04-09.  Furthermore,  as  clearly  provided  in  chapter  9.3  HOP  I  04-09 
applications  received  after  the  expiry  of  submission  deadlines  can  always  be 
considered with the imposition of a penalty fee (i.e. 10 % on the entitlement). 

(d)  Disclosure Comments 

(40)  One co-operating exporter argued that all the DEPB credits obtained by the company 
had  been  used  to  import  materials  used  in  the  production  of  the  product  concerned, 
despite being in principle allowed to use them for other purposes, as stated above. This 
exporter claimed that therefore their actual use of DEPB was, in that respect, in line 
with a normal duty drawback system, and that therefore only the excess remission, if 
any should be countervailed. However, according to Article 2(1)(a)(ii) and Annex I(i) 
of  the  basic  Regulation  only  if  the  conditions  of  Annexes  II  and  III  of  the  basic 
Regulation  are  met  can  an  excess  remission  of  duties  can  be  countervailed.  These 
conditions, as explained in recital (43) were not fulfilled in the present case. Thus, the 
normal  rule  of  the  countervailing  of  the  amount  of  unpaid  duties  (revenue  forgone), 
rather than any purported excess remission, applies. 

(e)  Conclusions on the DEPBS 

(41)  The  DEPBS  provides  subsidies  within  the  meaning  of  Article  2(1)(a)(ii)  and  Article 
2(2) of the basic Regulation. A DEPBS credit is a financial contribution by the GOI, 
since  the  credit  will  eventually  be  used  to  offset  import  duties,  thus  decreasing  the 
GOI’s  duty  revenue  which  would  be  otherwise  due.  In  addition,  the  DEPBS  credit 
confers a benefit upon the exporter, because it improves its liquidity. 

(42)  The DEPBS is contingent in law upon export performance, and therefore deemed to be 

specific and countervailable under Article 3(4)(a) of the basic Regulation.  

(43)  This scheme cannot be considered a permissible duty drawback system or substitution 
drawback system within the meaning of Article 2(1)(a)(ii) of the basic Regulation. It 
does not conform to the strict rules laid down in Annex I item (i), Annex II (definition 
and rules for drawback) and Annex III (definition and rules for substitution drawback) 
of  the  basic  Regulation.  An  exporter  is  under  no  obligation  to  actually  consume  the 
goods imported free of duty in the production process and the amount of credit is not 
calculated in relation to actual inputs used. Moreover, there is no system or procedure 
in  place  to  confirm  which  inputs  are  consumed  in  the  production  process  of  the 
exported product or whether an excess payment of import duties occurred within the 
meaning of item (i) of Annex I and Annexes II and III of the basic Regulation. Lastly, 
an  exporter  is  eligible  for  the  DEPBS  benefits  regardless  of  whether  it  imports  any 
inputs  at  all.  In  order  to  obtain  the  benefit,  it  is  sufficient  for  an  exporter  to  simply 
export goods without demonstrating that any input material was imported. Thus, even 
exporters which procure all of their inputs locally and do not import any goods which 
can be used as inputs are still entitled to benefit from the DEPBS.  

(f)  Calculation of the subsidy amount 

(44) 

In  accordance  with  Articles  2(2)  and  5  of  the  basic  Regulation,  the  amount  of 
countervailable  subsidies  was  calculated  in  terms  of  the  benefit  conferred  on  the 
recipient, which is found to exist during the RIP. In this regard, it was considered that 

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the benefit is conferred on the recipient at the point in time when an export transaction 
is  made  under  this  scheme.  At  this  moment,  the  GOI  is  liable  to  forgo  the  customs 
duties,  which  constitutes  a  financial  contribution  within  the  meaning  of  Article 
2(1)(a)(ii)  of  the  basic  Regulation.  Once  the  customs  authorities  issue  an  export 
shipping  bill  which  shows,  inter  alia,  the  amount  of  DEPBS  credit  which  is  to  be 
granted for that export transaction, the GOI has no discretion as to whether or not to 
grant the subsidy and it has no discretion as to the amount of the subsidy. Furthermore, 
the co-operating exporting producers booked the DEPBS credits on an accrual basis as 
income at the stage of export transaction.  

(45)  Where justified claims were made, fees necessarily incurred to obtain the subsidy were 
deducted from the credits so established to arrive at the subsidy amount as numerator, 
pursuant to Article 7(1)(a) of the basic Regulation. In accordance with Article 7(2) of 
the  basic  Regulation  this  subsidy  amount  has  been  allocated  over  the  total  export 
turnover  during  the  review  investigation  period  as  appropriate  denominator,  because 
the subsidy is contingent upon export performance and it was not granted by reference 
to the quantities manufactured, produced, exported or transported. 

(46)  The  subsidy  rates  established  in  respect  of  this  scheme  during  the  RIP  for  the  co-

operating exporting producers amount to 6.2% and 5.7%. 

3. 

Export Promotion Capital Goods Scheme ('EPCGS') 

(a)  Legal basis 

(47)  The detailed description of the EPCGS is contained in chapter 5 of the EXIM-policy 

04-09 and in chapter 5 of the HOP I 04-09.  

(b)  Eligibility 

(48)  Manufacturer-exporters,  merchant-exporters  "tied  to"  supporting  manufacturers  and 

service providers are eligible for this scheme.  

(c)  Practical implementation 

(49)  Under  the  condition  of  an  export  obligation,  a  company  is  allowed  to  import  capital 
goods (new and -since April 2003- second-hand capital goods up to 10 years old) at a 
reduced rate of duty. To this end, the GOI issues, upon application and payment of a 
fee, an EPCGS licence. Until 31 March 2000, an effective duty rate of 11% (including 
a 10% surcharge) and, in case of high value imports, a zero duty rate was applicable. 
Since April 2000, the scheme provides for a reduced import duty rate of 5% applicable 
to all capital goods imported under the scheme. In order to meet the export obligation, 
the imported capital goods must be used to produce a certain amount of export goods 
during a certain period.  

(50)  The  EPCGS  licence  holder  can  also  source  the  capital  goods  indigenously.  In  such 
case,  the  indigenous  manufacturer  of  capital  goods  may  avail  of  the  benefit  for  duty 
free import of components required to manufacture such capital goods. Alternatively, 
the  indigenous  manufacturer  can  claim  the  benefit  of  deemed  export  in  respect  of 
supply of capital goods to an EPCGS licence holder.  

(d)  Conclusion on EPCG Scheme 

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(51)  The  EPCGS  provides  subsidies  within  the  meaning  of  Article  2(1)(a)(ii)  and  Article 
2(2) of the basic Regulation. The duty reduction constitutes a financial contribution by 
the  GOI,  since  this  concession  decreases  the  GOI’s  duty  revenue,  which  would  be 
otherwise  due.  In  addition,  the  duty  reduction  confers  a  benefit  upon  the  exporters, 
because the duties saved upon importation improve its liquidity. 

(52)  Furthermore,  the  EPCGS  is  contingent  in  law  upon  export  performance,  since  such 
licences cannot be obtained without a commitment to export. Therefore, it is deemed 
to be specific and countervailable under Article 3(4)(a) of the basic Regulation.  

(53)  Eventually, this scheme cannot be considered a permissible duty drawback system or 
substitution  drawback  system  within  the  meaning  of  Article  2(1)(a)(ii)  of  the  basic 
Regulation. Capital goods are not covered by the scope of such permissible systems, 
as set out in Annex I, item (i), of the basic Regulation, because they are not consumed 
in the production of the exported products. 

(e)  Calculation of the subsidy amount 

(54)  The  subsidy  amount  was  calculated,  in  accordance  with  Article  7(3)  of  the  basic 
Regulation, on the basis of the unpaid customs duty on imported capital goods spread 
across a period which reflects the normal depreciation period of such capital goods. In 
accordance  with  the  established  practice,  the  amount  so  calculated,  which  is 
attributable to the RIP, has been adjusted by adding interest during this period in order 
to  reflect  the  full  value  of  the  benefit  over  time.  The  commercial  long-term  interest 
rate during the review investigation period in India was considered appropriate for this 
purpose.  Where  justified  claims  were  maid,  fees  necessarily  incurred  to  obtain  the 
subsidy were deducted in accordance with Article 7(1)(a) of the basic Regulation from 
this sum to arrive at the subsidy amount as numerator. In accordance with Article 7(2) 
and  7(3)  of  the  basic  Regulation,  this  subsidy  amount  has  been  allocated  over  the 
export  turnover  during  the  RIP  as  appropriate  denominator,  because  the  subsidy  is 
contingent  upon  export  performance  and  it  was  not  granted  by  reference  to  the 
quantities manufactured, produced, exported or transported. 

(55)  The  subsidy  rates  established  in  respect  of  this  scheme  during  the  RIP  for  the  co-

operating producers amount to 0.7 % and 0.3%. 

(f)  Disclosure comments 

(56)  One co-operating exporter pointed out a mistake in the methodology initially used for 
calculating  the  benefits  of  EPCG,  in  particular  with  regard  to  the  amount  of  interest 
applied. This mistake, which affected both co-operating exporters, was corrected. 

4. 

Income Tax Exemption Scheme ('ITES') 

Section 80HHC of the Income Tax Act 1961 ('ITA') 

(57)  Under this scheme exporters could avail the benefit of a partial income tax exemption 
on  profits  derived  from  export  sales.  The  legal  basis  for  this  exemption  was  set  by 
Section 80HHC of the ITA.  

(58)  This provision was abolished for the assessment year 2005-2006 (i.e. for the financial 
year from 1 April 2004 to 31 March 2005) onwards and thus 80HHC of the ITA does 

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not confer any benefits after 31 March 2004. The co-operating exporting producers did 
not  avail  of  any  benefits  under  this  scheme  during  the  RIP.  Consequently,  since  the 
scheme has been withdrawn, it shall therefore not be countervailed, in accordance with 
Article 15(1) of the Regulation. 

Section 80IA of the ITA 

(a)  Legal basis  

(59)  The scheme is based on Section 80 I A of the ITA. This provision was brought into the 

ITA through the Finance Act of 2001.  

(b)  Eligibility 

(60)  Section  80  I  A  of  the  ITA  applies  to  companies  engaged  in  the  setting  up  of 
infrastructure facilities, including the generation and distribution of power, in any part 
of India. 

(c)  Practical implementation 

(61)  According to the provisions of the ITA Section 80 I A, an amount corresponding to the 
profit generated by the power generating activities is exempted from profit tax, for ten 
consecutive years within the first fifteen years of operation of the generating unit. The 
unit in question must be new and have started operation on or after the 1 April 2003 
and up to 31 March 2010.  

(62)  The  calculation  of  the  income  tax  deduction  forms  part  of  the  company's  annual  tax 
return, and is audited together with the company's profit and loss and other financial 
statement.  It  must  comply  with  the  rules  stipulated  in  the  ITA,  namely  that  the 
accounting valuation of the electricity generated must reflect its market value. It is the 
role  of  the  Income  Tax  authorities  to  verify  if  the  calculation  of  the  income  tax 
deduction  is  according  to  ITA  rules  and  the  companies'  audited  accounts.  The 
investigation  has  shown  evidence  that  the  authorities  have  in  practice  verified  the 
calculation and made adjustments to the calculations when justified. 

(63)  The  investigation  has  shown  that  both  investigated  exporting  producers  have  set  up 
captive  power  plants  as  part  of  their  graphite  production  units.  They  have  therefore 
requested  the  corresponding  deduction  in  income  tax,  according  to  the  provisions  of 
the ITA. 

(d)  Conclusion on ITES under Section 80 I A of the ITA 

(64)  The exemption from income tax is a subsidy within the meaning of Article 2(1)(a)(ii) 
and Article 2(2) of the basic Regulation, i.e. a financial contribution of the GOI which 
conferred a benefit upon the investigated exporters. 

(65)  However, the investigation has shown that access to the ITES under Section 80 I A of 
the ITA is not limited to certain enterprises in the sense of Article 3(2)(a) of the basic 
Regulation.  This  scheme  appears  to  be  available  to  all  companies  on  the  basis  of 
objective  criteria.  Neither  has  any  other  evidence  been  found  in  this  case  that  the 
scheme is specific. 

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(66)  Furthermore, it is tied to a product (electricity) other than the product concerned and 
benefits under the scheme therefore occur on the basis of an activity which is not the 
production of sales of the product concerned. In these circumstances, it is considered 
that any benefits accruing to the exporters concerned under this scheme should not be 
countervailed.  

3. 

Electricity Duty Exemption ('EDE') 

(67)  Under  the  Industrial  Promotion  Policy  of  2004,  the  State  of  Madhya  Pradesh  ('MP') 
offers  exemption  of  electricity  duty  to  industrial  companies  investing  in  electricity 
generation for captive consumption. 

(a)  Legal basis  

(68)  The  description  of  the  electricity  duty  exemption  scheme  applied  by  the  MP 

Government is set out in section 3-B of the Electricity Duty Act of 1949.  

(b)  Eligibility 

(69)  Any  industries  located  in  the  jurisdiction  of  the  MP  Government,  investing  in  new 

captive power plants.  

(c)  Practical implementation 

(70)  According to a 29 September 2004 notification of the MP Government, companies or 
persons  investing  in  new  captive  power  plants  of  more  than  10  KW  capacity  can 
obtain from the MP Electrical Inspectorate a certificate of exemption from electricity 
duty. The exemption is only given for electricity generated for self-consumption, and 
only  if  the  new  captive  power  plant  is  not  a  replacement  of  an  older  one.  The 
exemption is granted for a period of five years. 

(71)  A  notification  from  the  MP  Government  dated  of  5  April  2005  exempted  the  new 
power  plant  established  by  one  of  the  co-operating  exporting  producers  in  this 
investigation from electricity duty for a period of ten years. 

(d)  Disclosure comments 

(72)  The  co-operating  exporter  who  was  granted  an  exemption  from  electricity  duty 
claimed that the EDE scheme is not specific, and is applied without discrimination to 
all  eligible  companies.  According  to  that  exporter,  the  initial  policy  of  granting  an 
exemption  for  five  years  was  subsequently  revised  by  the  Government  of  Madhya 
Pradesh to confer an exemption for ten years. However, no published notification of 
such a policy change was submitted either by the co-operating exporter or by the GOI 
in their replies.  

(e)  Conclusion on EDE Scheme 

(73)  This  scheme  is  a  subsidy  within  the  meaning  of  Articles  2(1)(a)(ii)  and  2(2)  of  the 
basic Regulation. It constitutes a financial contribution by the MP Government, since 
this incentive decreases the state revenues which would be otherwise due. In addition, 
it confers a benefit upon the recipient company.  

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(74)  Although  the  Industrial  Promotion  Policy  of  2004  and  the  29  September  2004 
notification  of  the  MP  Government  foresee  a  period  of  exemption  of  five  years,  the 
exporting producer in question was granted an exemption of ten years. Therefore, this 
incentive does not appear to be granted according to criteria and conditions clearly set 
out by law, regulation, or other official document. 

(f)  Calculation of the subsidy amount 

(75)  The benefit to the exporting producer has been calculated on the basis of the amount of 
electricity  duty  normally  due  during  the  review  investigation  period  but  which 
remained  unpaid  under  this  scheme.  In  accordance  with  Article  7(2)  of  the  basic 
Regulation, the amount of subsidy (numerator) has then been allocated over total sales 
during  the  review  investigation  period  (denominator),  because  it  relates  to  all  sales, 
domestic  and  export,  and  it  was  not  granted  by  reference  to  the  quantities 
manufactured, produced, exported or transported.  

(76)  A  subsidy  margin  of  0.7%  was  thus  established  for  one  company  which  received 

benefits under the EDE.  

III.  Amount of countervailable subsidies 

(77) 

It  is  recalled  that  in  Council  Regulation  (EC)  No  1628/2004  the  amount  of 
countervailable  subsidies,  expressed  ad  valorem,  was  found  to  be  15.7%  and  7% 
respectively  for  the  two  exporting  producers  co-operating  with  the  present  partial 
interim review.  

(78)  During  the  present  partial  interim  review  the  amounts  of  countervailing  subsidies, 

expressed ad valorem, were found to be as listed hereunder:  

Company 

ALS 

DEPB 

EPCG 

EDE 

Total 

Graphite India Ltd. 

nil 

6,2% 

0,1% 

nil 

6,3% 

HEG Ltd. 

0,3% 

5,7% 

0,5% 

0,7% 

7,2% 

IV. COUNTERVAILING MEASURES 

(79) 

In line with the provisions of Article 19 of the basic anti-subsidy Regulation and the 
grounds of this partial interim review stated under point 3 of the notice of initiation, it 
is established that the level of subsidisation with regard to the co-operating producers 
has  changed  and,  therefore,  the  rate  of  countervailing  duty  imposed  by  Council 
Regulation (EC) No 1628/2004 has to be amended accordingly.  

(80)  The  countervailing  duty  under  review  resulted  from  parallel  anti-subsidy  and  anti-
dumping investigations ('the original investigations'). According to Article 24(1) of the 
basic  Regulation  and  Article  14(1)  of  Council  Regulation  (EC)  No  384/96  of  22 
December 1995 on protection against dumped imports from countries not members of 
the  European  Communities  the  anti-dumping  duties  imposed  by  Council  Regulation 
(EC)  No  1629/2004,  were  adjusted  to  the  extent  that  the  subsidy  amounts  and  the 
dumping margins arose from the same situation. 

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(81)  The  subsidy  schemes  investigated  and  found  to  be  countervailable  in  the  current 
review proceeding, with the exception of EDE, constituted export subsidies within the 
meaning of Article 3(4)(a) of the basic Regulation. 

(82) 

It is therefore appropriate that the anti-dumping duty be re-adjusted to reflect the new 
levels  of  subsidisation  found  in  the  present  review,  as  far  as  export  subsidies  are 
concerned.  Moreover,  in  accordance  with  Article  15(1)  of  the  basic  Regulation,  the 
level of countervailing duties should not be higher than the injury elimination margin 
found in the original investigation. As in the original investigation, given that the level 
of cooperation was high (100%) the residual subsidy margin was set at the level of the 
company with the highest individual margin. 

(83)  Accordingly, the levels of countervailing and anti-dumping duties should be adjusted 

as follows: 

Company 

Subsidy 
margin 

Dumping 
margin 

Injury 
elimination 
margin 

Counter-
vailing 
duty 

Anti-
dumping 
duty 

Graphite India Ltd. 

6,3% 

31,1% 

15,7% 

6,3% 

9,4% 

HEG Ltd. 

All others 

7,2% 

24,4% 

7,0% 

7,0% 

0% 

7,2% 

31,1% 

15,7% 

7,2% 

8,5% 

(84)  One  co-operating  exporter  claimed  that  since  the  present  partial  interim  review  was 

limited to the level of subsidisation, the anti-dumping duties should not be modified. 

(85) 

In this respect, it is recalled that the notice of initiation of the present review stated that 
"for  those  companies  which  are  subject  to  both  anti-dumping  and  countervailing 
measures,  the  anti-dumping  measure  may  be  adjusted  accordingly  should  there  be  a 
change in the countervailing measure." The change in the anti-dumping duties is not 
the  result  of  any  new  findings  concerning  the  level  of  dumping,  but  an  automatic 
consequence of the fact that the original dumping margins had been adjusted to reflect 
the level of export subsidies found, and that the latter have now been revised. 

(86)  The individual company countervailing duty rates specified in this Regulation reflect 
the situation found during the partial interim review. Thus, they are solely applicable 
to  imports  of  the  product  concerned  produced  by  these  companies.  Imports  of  the 
product concerned manufactured by any other company not specifically mentioned in 
the  operative  part  of  this  Regulation,  including  entities  related  to  those  specifically 
mentioned,  cannot  benefit  from  these  rates  and  shall  be  subject  to  the  duty  rate 
applicable to 'all other companies'.  

(87)  Any claim requesting the application of these individual countervailing duty rates (e.g. 
following  a  change  in  the  name  of  the  entity  or  following  the  setting  up  of  new 
production or sales entities) should be addressed to the Commission5 forthwith with all 
relevant information, in particular any modification in the company’s activities linked 
to  production,  domestic  and  export  sales  associated  with,  for  instance,  that  name 

5 

European  Commission,  Directorate  General  for  Trade,  Directorate  H,  Office  N-105  4/92,  1049 
Brussels, Belgium. 

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change  or  that  change  in  the  production  and  sales  entities.  If  appropriate,  and  after 
consultation  of  the  Advisory  Committee,  the  Commission  is  hereby  empowered  to 
amend the Regulation accordingly by updating the list of companies benefiting from 
individual duty rates, 

HAS ADOPTED THIS REGULATION: 

Article 1 

Paragraph 2 of Article 1 of Regulation (EC) No 1628/2004 shall be replaced by the following:  
"The rate of the definitive countervailing duty applicable to the net free-at-Community-
frontier price, before duty, for products produced by the companies listed below shall be as 
follows: 

Company 

Definitive duty 

TARIC additional 
code 

Graphite India Limited (GIL), 31 Chowringhee Road, 
Kolkatta — 700016, West Bengal 

6,3% 

A530 

Hindustan Electro Graphite (HEG) Limited, Bhilwara 
Towers,  A-12,  Sector-  1,  Noida  —  201301,  Uttar 
Pradesh 

All others 

" 

7,0% 

7,2% 

A531 

A999 

Article 2 

Paragraph 2 of Article 1 of Regulation (EC) No 1629/2004 shall be replaced by the following:  
"The rate of the definitive anti-dumping duty applicable to the net free-at-Community-frontier 
price, before duty, for products produced by the companies listed below shall be as follows: 

Company 

Definitive duty 

TARIC additional 
code 

Graphite India Limited (GIL), 31 Chowringhee Road, 
Kolkatta — 700016, West Bengal 

9,4% 

A530 

Hindustan Electro Graphite (HEG) Limited, Bhilwara 
Towers,  A-12,  Sector-  1,  Noida  —  201301,  Uttar 
Pradesh 

All others 

" 

0% 

A531 

8,5% 

A999 

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

Article 3 

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

Done at Brussels, […] 

For the Council 
The President 
[…] 

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