Proposal for a COUNCIL REGULATION extending the definitive countervailing duty imposed by Regulation (EC) No 598/2009 on imports of biodiesel originating in the United States of America to imports of biodiesel consigned from Canada, whether declared as originating in Canada or not, and    extending the definitive countervailing duty imposed by Regulation (EC) No 598/2009 to imports of biodiesel in a blend containing by weight 20 % or less of biodiesel originating in the United States of America, and   terminating the investigation in respect of imports consigned from Singapore
Date: 2011-04-11
Institutions: European Commission
Subjects: Canada, Singapore, United States, biofuel, countervailing charge, import, motor fuel, originating product

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EUROPEAN COMMISSION 

Brussels, 11.4.2011 
COM(2011) 191 final 

2011/0076 (NLE) 

Proposal for a 

COUNCIL REGULATION 

extending the definitive countervailing duty imposed by Regulation (EC) No 598/2009 on 
imports of biodiesel originating in the United States of America to imports of biodiesel 
consigned from Canada, whether declared as originating in Canada or not, and  

extending the definitive countervailing duty imposed by Regulation (EC) No 598/2009 to 
imports of biodiesel in a blend containing by weight 20 % or less of biodiesel originating 
in the United States of America, and 

terminating the investigation in respect of imports consigned from Singapore 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

•  Grounds for and objectives of the proposal 

This proposal concerns the application of Council Regulation (EC) No 597/2009 of 
11 June 2009 on protection against subsidised imports from countries not members 
of the European Community ('the basic Regulation') in the investigation concerning 
the  possible  circumvention  of  countervailing  measures  imposed  by  Council 
Regulation  (EC)  No  598/2009  on  imports  of  biodiesel  originating  in  the  United 
States  of  America  by  imports  of  biodiesel  consigned  from  Canada  and  Singapore, 
whether  declared  as  originating  in  Canada  and  Singapore  or  not  and  by  imports  of 
biodiesel in a blend containing by weight 20 % or less of biodiesel originating in the 
United States of America. 

•  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 in the basic Regulation. 

•  Existing provisions in the area of the proposal 

Council Regulation (EC) No 598/2009 imposing a definitive countervailing duty on 
imports of biodiesel originating in the United States of America. 

•  Consistency with other policies and objectives of the Union 

Not applicable. 

2. 

CONSULTATION  OF 
ASSESSMENT 

INTERESTED 

PARTIES  AND 

IMPACT 

•  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 
Regulation. 

•  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 contain provisions for a general impact assessment but 
contains an exhaustive list of conditions that have to be assessed. 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

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•  Summary of the proposed action 

The  attached  proposal  for  a  Council  Regulation  is  based  on  the  findings  of  an 
investigation  concerning  the  possible  circumvention  of  the  countervailing  measures 
imposed  by  Council  Regulation  (EC)  No  598/2009  on  imports  of  biodiesel 
originating in the United States of America by imports of biodiesel consigned from 
Canada and Singapore, whether declared as originating in Canada and Singapore or 
not  and  by  imports  of  biodiesel  in  a  blend  containing  by  weight  20  %  or  less  of 
biodiesel originating in the United States of America.  

The  investigation  concluded  that  the  definitive  countervailing  duty  imposed  on 
imports  of  biodiesel  originating  in  the  USA  was  circumvented  by  transhipment  via 
Canada pursuant  to Article  23 of the  basic Regulation. In  accordance  with the  first 
sentence  of  Article  23(1)  of  the  basic  Regulation,  it  is  therefore  proposed  that  the 
measures in force on imports of biodiesel originating in the USA, should be extended 
to  imports  of  the  same  product  consigned  from  Canada,  whether  declared  as 
originating in Canada or not. 

The investigation also concluded that the definitive countervailing duty imposed on 
imports  of  biodiesel  originating  in  the  USA  was  circumvented  by  imports  into  the 
Union of biodiesel in a blend containing by weight 20 % or less of biodiesel pursuant 
to Article 23 of the basic Regulation. In accordance with the first sentence of Article 
23(1) of the basic Regulation, it is therefore proposed that the measures in force on 
imports  of  biodiesel  originating  in  the  USA,  should  be  extended  to  imports  of 
biodiesel in a blend containing by weight 20 % or less of biodiesel. 

Regarding  the  alleged  possible  circumvention  via  transhipment  via  Singapore,  the 
investigation concluded that the remedial effects of the countervailing measures have 
not been undermined in terms of quantities from Singapore. It is therefore proposed 
to 
the  possible  circumvention  of 
countervailing measures by imports of biodiesel consigned from Singapore. 

investigation  concerning 

terminate 

the 

It is therefore proposed that the Council adopt the attached proposal for a Regulation 
which should be published no later than 11 May 2011. 

•  Legal basis 

Council  Regulation  (EC)  No  597/2009  of  11  June  2009  on  protection  against 
subsidised imports from countries not members of the European Community. 

•  Subsidiarity principle 

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

•  Proportionality principle 

The proposal complies with the proportionality principle for the following reasons: 

The form of action is described in the above-mentioned basic Regulation and leaves 
no scope for national decision. 

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Indication  of  how  financial  and  administrative  burden  falling  upon  the  Union, 
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 for the following reason: 

Other means would not be adequate because the basic Regulation does not provide 
for alternative options. 

4. 

BUDGETARY IMPLICATION 

The proposal has no implication for the Union budget. 

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2011/0076 (NLE) 

Proposal for a 

COUNCIL REGULATION 

extending the definitive countervailing duty imposed by Regulation (EC) No 598/2009 on 
imports of biodiesel originating in the United States of America to imports of biodiesel 
consigned from Canada, whether declared as originating in Canada or not, and  

extending the definitive countervailing duty imposed by Regulation (EC) No 598/2009 to 
imports of biodiesel in a blend containing by weight 20 % or less of biodiesel originating 
in the United States of America, and 

terminating the investigation in respect of imports consigned from Singapore 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union,  

Having  regard  to  Council  Regulation  (EC)  No  597/2009  of  11  June  2009  on  protection 
against  subsidised  imports  from  countries  not  members  of  the  European  Community1  (‘the 
basic Regulation’), and in particular Article 23 thereof, 

Having regard to the proposal submitted by the European Commission after having consulted 
the Advisory Committee, 

Whereas: 

1. 

PROCEDURE 

1.1. 

Existing measures  

(1) 

(2) 

The  Commission,  by  Regulation  (EC)  No  194/20092  imposed  a  provisional 
countervailing  duty  on  imports  of  biodiesel  originating  in  the  United  States  of 
America.  

By Regulation (EC) No 598/20093 (the 'definitive Regulation'), the Council imposed a 
definitive countervailing duty ranging from 211,2 € to 237 € per tonne on imports of 
biodiesel,  as  defined  in  Article  1(1)  of  the  said  Regulation  ('the  product  concerned') 
originating in the United States of America ('the existing measures'). The investigation 

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OJ L 188, 18.7.2009, p. 93. 
OJ L 67, 12.3.2009, p. 50. 
OJ L 179, 10.7.2009, p. 1. 

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leading  to  the  adoption  of  the  definitive  Regulation  is  hereafter  referred  to  as  'the 
original investigation'. 

(3) 

It should also be noted that by Regulation (EC) No 599/20094, the Council imposed a 
definitive  anti-dumping  duty  ranging  from  0  €  to  198  €  per  tonne  on  imports  of  the 
product concerned. 

1.2. 

Request 

(4) 

(5) 

(6) 

(7) 

(8) 

On 30 June 2010, the Commission received a request pursuant to Article 23(4) of the 
basic  Regulation  to  investigate  the  possible  circumvention  of  the  countervailing 
measures imposed on imports of the product concerned. The request was submitted by 
the European Biodiesel Board ('EBB') on behalf of the Union producers of biodiesel. 

The  request  alleged  that  the  countervailing  measures  on  imports  of  the  product 
concerned  are  being  circumvented  by  means  of  transhipment  via  Canada  and 
Singapore and by exports of biodiesel in a blend containing by weight 20 % or less of 
biodiesel. 

The request alleged that a significant change in pattern of trade involving exports from 
the  United  States  of  America  ('USA'),  Canada  and  Singapore  has  taken  place 
following  the  imposition  of  measures  on  the  product  concerned,  and  that  there  is 
insufficient  due  cause  or  justification  other  than  the  imposition  of  the  duty  for  this 
change.  This  change  in  pattern  of  trade  stemmed  allegedly  from  the  transhipment  of 
the product concerned via Canada and Singapore. 

The request further alleged that following the imposition of the measures, exports of 
biodiesel in blends containing 20 % or less of biodiesel from the USA begun to arrive 
into the Union, allegedly taking advantage of the biodiesel content threshold set in the 
description of the product concerned. 

that 

the  request  alleged 

the  remedial  effects  of 

the  existing 
Furthermore, 
countervailing measures on the product concerned are being undermined both in terms 
of quantity and price. It was alleged that significant volumes of imports of biodiesel in 
pure form or in a blend containing by weight more than 20% of biodiesel from Canada 
and Singapore and of biodiesel in blends containing 20 % or less of biodiesel, appear 
to  have  replaced  imports  of  the  product  concerned.  In  addition,  there  was  sufficient 
evidence  that  this  increased  volume  of  imports  were  made  at  prices  well  below  the 
non-injurious price established in the investigation that led to the existing measures. 

(9) 

Finally,  the  request  alleged  that  the  prices  of  the  product  concerned  continue  to  be 
subsidised as previously established. 

1.3. 

Initiation 

(10)  Having  determined,  after  consulting  the  Advisory  Committee,  that  sufficient  prima 
facie evidence existed for the initiation of an investigation pursuant to Article 23 of the 
basic  Regulation,  the  Commission  initiated  an  investigation  by  Regulation  (EU)  No 

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OJ L 179, 10.7.2009, p. 26. 

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721/20105  (the  'initiation  Regulation').  Pursuant  to  Article  24(5)  of  the  basic 
Regulation,  the  Commission,  by  the  initiation  Regulation,  also  directed  the  customs 
authorities  to  register  imports  consigned  from  Canada  and  Singapore  as  well  as 
imports originating in the USA of biodiesel in a blend containing by weight 20 % or 
less  of  fatty-acid  mono-alkyl  esters  and/or  paraffinic  gasoil  obtained  from  synthesis 
and/or hydro-treatment, of non-fossil origin. 

(11)  The  Commission  also  initiated  a  parallel  investigation  by  Regulation  (EU)  No 
720/20106  concerning  the  possible  circumvention  of  anti-dumping  measures  on 
imports  of  biodiesel  originating  in  the  USA  by  imports  of  biodiesel  consigned  from 
Canada and Singapore and by imports of biodiesel in a blend containing by weight 20 
% or less of biodiesel originating in the USA. 

1.4. 

Investigation 

(12)  The Commission officially advised the authorities of the USA, Canada and Singapore. 
Questionnaires  were  sent  to  known  producers/exporters  in  USA,  Canada  and 
Singapore. Interested parties were given the opportunity to make their views known in 
writing and to request a hearing within the time limit set in the initiation Regulation. 

(13)  The following companies submitted replies to the questionnaires and verification visits 

were subsequently carried out at their premises: 

Producers/exporters in Canada 

- BIOX Corporation 

- Rothsay Biodiesel 

Traders in Singapore 

- Trafigura Pte Ltd. 

- Wilmar Trading Pte Ltd. 

Producers/exporters in the USA: 

- Archer Daniels Midland Company 

- BP Products North America Inc 

- Louis Dreyfus Corporation  

Related importers 

- BP Oil International Limited 

- Cargill BV  

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OJ L 211, 12.8.2010, p. 6. 
OJ L 211, 12.8.2010, p. 1. 

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(14)  Moreover, visits were made to the relevant competent authorises of the Government of 

Canada and the Government of Singapore. 

1.5. 

Investigation period 

(15)  The investigation period covered the period  from  1 April 2009 to  30  June 2010 (the 
'IP'). Data was collected for the period from 2008 up to the end of the IP to investigate 
the alleged change in the pattern of trade. 

2. 

PRODUCT  FORMING  THE  OBJECT  OF  THE  CIRCUMVENTION 
INVESTIGATION 

(16)  The product concerned by the possible circumvention, i.e. the product at issue in the 
original investigation, is fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained 
from  synthesis  and/or  hydro-treatment,  of  non-fossil  origin,  commonly  known  as 
'biodiesel',  in  pure  form  or  in  a  blend  containing  by  weight  more  than  20%  of  fatty-
acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-
treatment,  of  non-fossil  origin,  currently  falling  within  CN  codes  ex  1516  20  98,  ex 
1518 00 91, ex 1518 00 99, ex 2710 19 41, 3824 90 91, ex 3824 90 97, and originating 
in the United States of America ('the product concerned').  

(17)  The product under investigation in the circumvention investigation is twofold. Firstly, 
regarding the allegations of transhipment through Canada and Singapore, it is identical 
to  the  product  at  issue  in  the  original  investigation,  as  described  in  the  previous 
paragraph.  Regarding  shipments  directly  from 
the  product  under 
investigation  is  biodiesel  in  a  blend  containing  by  weight  20%  or  less  of  fatty-acid 
mono-alkyl  esters  and/or  paraffinic  gasoil  obtained  from  synthesis  and/or  hydro-
treatment, of non-fossil origin, originating in the United States of America. 

the  USA, 

3. 

IMPORTS  OF  BIODIESEL  TO  THE  UNION  VS.  EXPORTS  FROM  THE 
USA 

(18)  Following  the  imposition  of  provisional  countervailing  measures  in  March  2009, 
imports of the product concerned have practically ceased. The below table summarises 
the situation: 

IMPORTS OF BIODIESEL and certain BIODIESEL BLENDS INTO THE 
EUROPEAN UNION 

under CN code 3824 90 91 (in tonnes) 

Source: Eurostat 

2008  share 

2009 share 

IP 

share 

USA 

1.487.790 

83,62%

381.227

22,29%

24 

0,00%

Canada 

1.725 

0,10%

140.043

8,19%

197.772 

9,28%

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Singapore 

179 

0,01%

20.486

1,20%

32.078 

1,50%

(19)  The above Eurostat data cover all biodiesel containing 96,5% or more of esters. 

(20) 

In comparison, the USA report exports of biodiesel and all biodiesel blends under code 
HTS  3824  90  40  00  (mixtures  of  fatty  substances,  animal  or  vegetable  origin)  as 
follows: 

US EXPORTS OF BIODIESEL AND BIODIESEL BLENDS 

under code HTS 3824 90 40 00 (in tonnes) 

Source: DOC 

European Union 

2.241.473  

335.577  

358.291

2008  

2009  

IP 

Canada 

Singapore 

967  

128.233  

161.841

311  

42.056  

27.415

2.242.751  

505.866  

547.547

(21)  Comparing  the  two  above  tables  leads  to  the  conclusion  that  the  358.291  tonnes 
exported to the Union during the IP are blends with a biodiesel content of 96,5% and 
below.  

4. 

CANADA 

4.1. 

General considerations 

(22)  There  was  a  high  level  of  cooperation  by  producers/exporters  in  Canada.  Two 
producers  representing  approximately  90%  of  Canadian  production  of  biodiesel 
submitted  a  questionnaire  reply  and  fully  co-operated  with  the  investigation. 
Moreover, the Canadian Renewable Fuels Association and relevant authorities of the 
Government of Canada cooperated with the investigation. 

(23) 

In  accordance  with  Article  23(3)  of  the  basic  Regulation,  the  assessment  of  the 
existence  of  circumvention  should  be  made  by  analysing  successively  whether  there 
was  a  change  in  the  pattern  of  trade  between  USA,  Canada  and  the  Union,  if  this 
change stemmed from a practice, process or work for which there was insufficient due 
cause  or  economic  justification  other  than  the  imposition  of  the  duty,  if  there  was 
evidence of injury or that the remedial effects of the duty were being undermined in 
terms  of  the  prices  and/or  quantities  of  the  like  product,  and  that  the  imported  like 
product still benefit from the subsidy. 

4.2. 

Change in patterns of trade 

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4.2.1. 

Imports into the Union 

(24) 

Imports  of  biodiesel  from  the  USA  dropped  from  1.487.790  tonnes  in  2008,  to 
381.227 tonnes in 2009 and to close to zero during the IP. 

(25)  On the other hand, according to Eurostat data total imports of biodiesel from Canada 
to  the  Union  increased  significantly  between  2008  and  the  IP  from  1.725  tonnes  in 
2008 to 140.043 tonnes in 2009 and 197.772 tonnes in the IP. 

4.2.2.  US exports of biodiesel to Canada 

(26)  There  are  no  customs  duties  applicable  for  sales  of  biodiesel  between  the  USA  and 

Canada or other kinds of imports restrictions. 

(27)  According the USA statistics, exports of biodiesel from the USA to Canada increased 
from 967 tonnes in 2008 to 128.233 tonnes in 2009 and 161.841 tonnes in the IP. 

(28)  A comparison of the export statistics provided by the US authorities with the import 
statistics  provided  on-spot  by 
the  Canadian  authorities  showed  significant 
discrepancies on a monthly basis. According to the Canadian statistics, imports of US 
biodiesel increased from 11.757 tonnes in 2008 to 18.673 tonnes in 2009 and 174.574 
tonnes in the IP. 

(29)  According to the Canadian authorities, there is no specific code to declare biodiesel. 
They noted that Canada and the USA exchange import data for use as their respective 
export  data.  As  such,  at the six-digit level Canadian  import data  and  US  export data 
should match, which they do quite closely under HTS 38.24.90. However, beyond six 
digits they each have their own classification systems. Also it should be noted that the 
Canadian  statistics  only  cover  imports  which  have  been  customs  cleared  in  Canada 
and not transhipped goods. 

(30) 

In conclusion, despite the discrepancies between the two data sources, it is clear that 
US  export  of  biodiesel  to  Canada  increased  from  2008  to  the  IP,  and  in  particular 
following  the imposition  of  countervailing measures. The  Canadian biodiesel market 
is  currently  not  able  to  absorb  such  quantities  of  biodiesel.  Genuine  Canadian 
biodiesel producers are in fact export oriented.  

4.2.3.  Production in Canada and sales of genuine Canadian biodiesel to the Union 

(31)  The  two  cooperating  producers  in  Canada  did  not  purchase  any  biodiesel  from  the 

USA or from any other sources during the IP. 

(32)  Production of biodiesel in Canada is an infant industry. Some six production facilities 
were in place during the IP, but the two facilities in Eastern Canada, which are in fact 
owned  and  run  by  the  two  cooperating  producers,  alone  account  for  approximately 
90% of total production.  

(33)  From  the  production  volumes  sold  by  the  cooperating  producers,  sales  where  end-
customers  were  certainly  in  North  America,  i.e.  in  the  USA  or  Canada  were 
determined. The remainder of the sales were sold to customers who either traded the 
goods and/or blended the goods with other biodiesel. The two companies did not know 
whether the customers sold the products to the Union as Canadian biodiesel, whether 

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they blended it, or whether the biodiesel was sold to final customers in the USA or in 
Canada. 

(34)  Even if in an extreme case it was assumed that all "genuine" Canadian biodiesel ended 
up in the Union, this would account for only 20% of total imports in the Union market 
from Canada during the IP. 

4.3. 

Conclusion on the change in the pattern of trade 

(35)  The reconciliation of statistics with the data obtained from the cooperating producers 
showed  that  Canadian  biodiesel  producers  could  not  have  produced  the  volume 
exported from Canada into the Union. This therefore strongly suggests that the surge 
of  imports  from  Canada  to  the  Union  market  relates  to  exports  of  US  biodiesel 
consigned from Canada. 

(36)  The overall decrease of US exports to the Union as from 2008 and the parallel increase 
of exports from Canada to the Union and of exports from the USA to Canada after the 
imposition of the original measures can thus be considered as a change in the pattern 
of trade.  

4.4. 

Insufficient due cause or economic justification other than the imposition of the 
countervailing duty 

(37)  The investigation did not bring to light any other due cause or economic justification 
for the transhipment than the avoidance of the payment of the countervailing duty in 
force on biodiesel originating in the USA. 

4.5. 

Undermining the remedial effect of the countervailing duty 

(38)  Eurostat  data  was  used  to  assess  whether  the  imported  products  had,  in  terms  of 
quantities, undermined the remedial effects of the countervailing measures in force on 
imports of biodiesel from the USA. The quantities and prices of exports from Canada 
were  compared  with  the  injury  elimination  level  established  in  the  original 
investigation. 

(39)  As mentioned above, imports from Canada into the Union increased from 1.725 tonnes 
in 2008 to 197.772 tonnes during the IP, the latter representing a share of imports of 
9,2  %.  The  increase  of  imports  from  Canada  could  not  be  considered  to  be 
insignificant  bearing  in  mind  the  size  of  the  Union  market  as  determined  in  the 
original  investigation.  Considering  the  non-injurious  price  level  established  in  the 
original  investigation,  Canadian  imports  into  the  Union  during  the  IP  showed 
underselling  in  the  region  of  50  %,  while  undercutting  the  Union  producers'  sales 
prices by approximately 40 %. 

(40) 

It  was  therefore  concluded  that  the  measures  are  being  undermined  in  terms  of 
quantities and prices.  

4.6. 

Evidence of subsidisation 

(41)  Regarding subsidisation, it should be noted that the US biodiesel tax credit, the main 
subsidy  scheme  found  in  the  original  investigation,  was  retroactively  reinstated  in 

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December  2010.  On  this  basis,  it  is  concluded  that  the  imported  like  product  still 
benefited from subsidies during the IP. 

4.7. 

Conclusion 

(42)  The  investigation  concluded  that  the  definitive  countervailing  duties  imposed  on 
imports  of  biodiesel  originating  in  the  USA  were  circumvented  by  transhipment  via 
Canada pursuant to Article 23 of the basic Regulation. 

5. 

SINGAPORE 

(43)  Two  traders  located  in  Singapore  cooperated  with  the  investigation.  In  addition, 

cooperation was received from relevant authorities of the Government of Singapore. 

(44)  The criteria for the assessment of the existence of circumvention have been described 

in recital (23) above. 

(45)  According to Eurostat figures total exports of biodiesel from Singapore to the Union 
increased from 179 tonnes in 2008 to 20.486 tonnes in 2009 and to 32.078 tonnes in 
the IP. Exports from the USA to Singapore have also increased over the same period. 

(46)  According to the Singaporean authorities the biodiesel produced locally is sold mostly 
within  Singapore  to  cater  to  domestic  demand.  However,  they  do  note  a  growing 
industry in Singapore with the recent construction of new production facilities. 

(47)  Exports from Singapore have traditionally been low. Imports of biodiesel to the Union 
were  closer  examined  in  the  Article  14(6)  database  and  checked  with  the  relevant 
national customs authorities. It appears that imports have arrived in a few spikes. The 
analysis showed that the majority of these imports were genuine Singaporean origin. 
However, not all imports could be accounted for. 

(48)  Compared  to  the  Union  consumption  established  in  the  original  investigation  the 
import volumes from Singapore to the Union which could not be accounted for were 
found  to  be  extremely  low.  Furthermore,  their  share  of  Union  consumption,  taking 
account of EBB's estimation of the considerable increase in Union consumption since 
the original investigation, would be negligible. 

(49) 

In  view  of  the  above,  it  can  be  concluded  that  the  remedial  effects  of  the 
countervailing  measures  have  not  been  undermined  in  terms  of  quantities  from 
Singapore.  

(50)  Regarding  transhipment,  it  is  well-known  that  Singapore  is  a  huge  shipping  hub  in 
Asia  where  regional  ships  arrive  in  Singapore  and  unload  goods  which  are  later 
reloaded to ships sailing to e.g. Europe. In this investigation, one of the co-operating 
traders transhipped biodiesel with Malaysian or Indonesian origin through Singapore 
with  final  destination  in  the  Union.  During  the  IP,  this  trader  alone  exported  a 
significant  quantity  of  biodiesel  to  the  Union  via  transhipment  in  Singapore  and 
customs  cleared  the  biodiesel  in  the  Union  as  Malaysian  or  Indonesian  origin.  The 
verification  did  not  reveal  indications  to  put  in  question  the  declared  Indonesian  or 
Malaysian origin. 

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(51) 

In  the  light  of  the  above,  the  investigation  concerning  the  possible  circumvention  of 
countervailing measures by imports of biodiesel consigned from Singapore should be 
terminated. 

6. 

USA  

6.1. 

Preliminary remarks 

(52)  Five  US  producers  of  biodiesel  or  biodiesel  blends  cooperated  in  the  investigation, 
three  of  which  were  included  in  the  sample  of  the  original  investigation.  The  US 
Government cooperated by providing exports statistics and their interpretation of the 
statistics.  

(53)  All  three  producers  which  were  included  in  the  sample  in  the  original  investigation 

had stopped exporting biodiesel after the imposition of definitive measures.  

(54)  Only  one  of  the  five  cooperating  companies,  BP  North  America  which  did  not 
cooperate in the original investigation, exported biodiesel blends containing by weight 
20% or less of biodiesel ('B20 or below') to the Union in the IP.  

(55)  The  National  Biodiesel  Board  (‘NBB’)  which  represents  the  US  biodiesel  industry 
argued that a product which was according to them explicitly found to be outside of 
the  product  scope  of  the  existing  measures  cannot  become  subject  to  countervailing 
measures without a de novo anti-subsidy investigation. NBB argued that the definitive 
Regulation in explicit terms established the "product concerned" and "like product" at 
the  level  of  biodiesel  or  biodiesel  in  blends  with  biodiesel  representing  more  than 
20%. According to NBB, this was not an artificial threshold but corresponded to the 
market  reality  found  during  the  original  investigation.  It  was  e.g.  found  that  the 
threshold  of  20%  was  appropriate  to  allow  a  clear  distinction  between  the  various 
types of blends which were available on the US market. 

(56) 

(57) 

In  the  view  of  NBB  and  other  interested  parties,  an  anti-circumvention  investigation 
can only extend countervailing measures on a product concerned to a like product that 
is only a slightly modified product compared to the product concerned. Again, NBB 
argued that the Council itself in the definitive Regulation had established that biodiesel 
in blends with a volume of biodiesel of 20% or less is not a like product. Therefore, 
according to NBB, in the structure of the provisions of the basic Regulation there is no 
other  option  but  to  initiate  a  new  investigation  in  order  to  determine  whether  these 
blends should become subject to measures. 

In reply to these arguments, it should first of all be noted that the purpose of the anti-
circumvention  provisions  in  Article  23  of  the  basic  Regulation  is  to  counteract  any 
alleged  attempts  to  evade  the  measures  in  force.  If  sufficient  prima  facie  evidence 
exists showing that circumvention  is taking place in  the  meaning of Article  23(3) of 
the  basic  Regulation,  the  Commission  will  initiate  an  investigation  in  order  to 
determine whether circumvention takes place. In accordance with Article 23(3) of the 
basic  Regulation,  the  assessment  of  the  existence  of  circumvention  should  be  made 
e.g.  by  analysing  successively  whether  there  was  a  change  in  the  pattern  of  trade 
between USA and the Union, if this change stemmed from a practice, process or work 
for  which  there  was  insufficient  due  cause  or  economic  justification  other  than  the 
imposition of the duty and if there was evidence of injury or that the remedial effects 
of the duty were being undermined in terms of the prices and/or quantities. 

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(58) 

(59) 

It  should  also  be  recalled  that  an  anti-circumvention  investigation  is  not  a  review  of 
the product scope based on Article 19 of the basic Regulation and does not change the 
definition of the product concerned and the like product. The provisions under Article 
23 of the basic Regulation provide for the relevant legal basis for an investigation of 
whether there is circumvention with regard to a product subject to measures.  

In this respect, the request the Commission received pursuant to Article 23(4) of the 
basic  Regulation  alleged  that  following  the  imposition  of  the  measures,  exports  of 
biodiesel  in  blends  containing  20  %  or  less  biodiesel  from  the  USA  begun  to  arrive 
into the Union, allegedly taking advantage of the biodiesel content threshold set in the 
description of the product concerned and the like product. The investigation examined 
whether such practice could be considered as circumvention pursuant to the provisions 
of  Article  23  of  the  basic  Regulation.  Finally,  it  should  be  noted  that  alleged 
circumvention  practices  can  only  be  examined  under  Article  23  of  the  basic 
Regulation. 

6.2. 

Exports of B20 or below from the USA to the Union 

(60)  As mentioned above in recital (20) above, the US HTS code 3824 90 40 00 contains 
also blends with a biodiesel content of 96,5 % and below. According to the US export 
statistics a total quantity of 358.291 tonnes of this type of blend was exported to the 
Union during the IP.  

(61)  BP Products North America ('BPNA') during the IP exported a significant proportion 

of the above-mentioned quantity. 

(62)  BPNA  did  not  participate  in  the  original  investigation  because  it  started  up  its 
biodiesel activities only in the beginning of 2009 in anticipation of a growing biodiesel 
market in the future, in response to government mandates both in the USA and abroad. 
BPNA started to export to the Union in December 2009. In this respect it is recalled 
that definitive measures were imposed in July 2009. 

(63) 

In the Union, BP sold US origin biodiesel blend containing by weight 15% or less of 
biodiesel  ('B15')  in  the  UK,  France  and  the  Netherlands.  In  all  cases,  the  product  is 
further blended in order to respect the relevant legislation in force in certain Member 
States to promote the consumption of biofuels at the pump because they are currently 
considered environmentally sustainable.  

(64)  BPNA  argued  that  blends  less  than  15%  are  not  a  like  product  for  the  product 
concerned.  The  characteristics  and  market  realities  are  very  different.  The  logistics 
involved  (including  shipping  restrictions)  in  the  production  and  importing  of  lower 
blends  are  very  different  to  those  of  higher  grades.  According  to  BPNA,  when 
transporting blends less than 15 %, such products are classified as a petroleum product 
for shipping as opposed to a chemical product which makes the shipment less costly. 
BPNA also argued that there are differences in performance between higher and lower 
grade biodiesel blends when used in diesel engines.  

(65)  The object of a circumvention investigation is to establish whether biodiesel in a blend 
contained by weight 20 % or less of biodiesel has circumvented the measures in force. 
It  may  well  be  the  case  that  lower  blends  attract  lower  shipping  costs.  However,  it  t 
should  be  noted  that  a  blend  of  B20  and  below  is  effectively  only  a  different 
composition  of  the  blend,  in  comparison  to  the  process  of  producing  biodiesel  in  a 

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blend above B20. It is a simple process to change the composition of a blend. Putting 
into existence B20 and below is considered to be merely a slight modification of the 
product concerned, the only difference being the biodiesel proportion in the blend. It 
should also be noted that the product concerned as well as B20 and below ultimately 
are destined for the same uses in the Union. Furthermore, biodiesel in blends of B20 
and  below  as  well  as  biodiesel in  blends  above  B20  have  the  same  essential 
characteristics.  

6.3. 

Change in patterns of trade 

(66) 

(67) 

Imports  of  the  product  concerned  from  the  USA  dropped  from  1.487.790  tonnes  in 
2008 to 381.227 tonnes in 2009 and to close to zero during the IP. 

In this regard, it should be noted that though there was mandatory blending of e.g. B5 
in  the  Union  during  the  original  investigation,  exports  of  B20  and  below  from  the 
USA  to  the  Union  only  came  into  existence  following  the  imposition  of  definitive 
measures. During the original investigation, mainly exports of B99,9 were exported to 
the  Union  according  to  the  data  obtained  from  the  sampled  co-operating  exporting 
producers.  The  reason  for  this  was  that  it  maximised  the  subsidy  on  the  exported 
goods (1$ biodiesel tax credit per gallon). 

(68) 

It is therefore difficult to see what the economic justification would be for starting to 
export  B20  and  below  other  than  the  avoidance  of  the  countervailing  measures  in 
place.  

(69)  The proportion of biodiesel in the blend is still subsidised and the importer avoids the 
payment  of  the  countervailing  duty  due.  In  this  respect,  it  should  be  noted  that  the 
countervailing duty on blends is applicable in proportion to the biodiesel in the blend, 
i.e.  in  the  case  of  imports  of  B15  the  countervailing  duty  not  paid  would  be  up  to 
around 35 € per tonne. 

6.4. 

Insufficient due cause or economic justification other than the imposition of the 
countervailing duty 

(70)  According  to  BNPA,  the  creation  of  less  than  B15  biodiesel  was  not  created 
specifically  to  avoid  duties.  The  company  argued  that  it  did  not  participate  in  the 
original investigation because it started up its biodiesel activities beginning of 2009 in 
anticipation of a future active biodiesel market in response to government mandates, 
both  in  the  USA  and  abroad.  The  specific  structure  of  the  company,  its  activity  as  a 
petroleum company and its logistic presence in the USA, made blending in the USA 
and  exporting  to  the  Union  a  logical  commercial  decision.  The  blend  exported  was 
always B15 and below, because of the less stringent security measures: up to B15 the 
blend is not considered a chemical product according to maritime regulations. 

(71) 

It is noted that this company's activity in regard to exports to the Union only started 
after the imposition of measures. It is considered that there is insufficient due cause or 
economic justification other than the avoidance of the payment of the countervailing 
duty in force on biodiesel originating in the USA. 

6.5. 

Undermining the remedial effect of the countervailing duty 

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(72)  Considering the non-injurious price level of the original investigation, US imports of 
B20  and  below  into  the  Union  during  the  IP  showed  both  undercutting  and 
underselling.  The  exports  of  B20  and  below  only  came  into  existence  following  the 
imposition of definitive measures and the quantities involved are not insignificant. 

(73) 

It  was  therefore  concluded  that  the  measures  are  being  undermined  in  terms  of 
quantities and prices.  

6.6. 

Evidence of subsidisation 

(74)  Regarding subsidisation, it should be noted that the US biodiesel tax credit, the main 
subsidy  scheme  found  in  the  original  investigation,  was  retroactively  reinstated  in 
December  2010.  On  this  basis,  it  is  concluded  that  the  imported  like  product  still 
benefited from subsidies during the IP. 

6.7. 

Conclusion  

(75)  The  investigation  concluded  that  the  definitive  countervailing  duties  imposed  on 
imports  of  biodiesel  originating  in  the  USA  were  circumvented  by  imports  into  the 
Union of biodiesel in a blend containing by weight 20 % or less of biodiesel. 

(76) 

It was concluded that the only economic justification for exporting blends of B20 and 
below  was  prompted  by  the  subsidisation  in  the  USA  on  the  one  hand,  and  the 
avoidance of paying any countervailing duties when importing into the Union on the 
other hand.  

(77)  BPNA requested an exemption from the possible extended measures. However, as the 
investigation clearly showed that imports of B20 and below were only done in order to 
circumvent the measures in force, such exemption cannot be granted. Pursuant to the 
provisions  of  Article  23(6)  of  the  basic  Regulation,  exemptions  may  be  granted  to 
producers  of  the  product  concerned  that  can  show  that  there  are  not  related  to  any 
producer subject to  measures  and that are found not to be engaged  in circumvention 
practices.  In  these  investigations,  it  was  found  that  BPNA  is  involved  in  the 
circumvention  practices  by  starting  to  export  B20  and  below  after  the  imposition  of 
anti-dumping  and  countervailing  measures  without  sufficient  due  cause  or  economic 
justification  other  than  the  imposition  of  the  measures.  Moreover,  there  is  evidence 
that the effects of the measures are being undermined in terms of prices and quantities, 
and the imported product is still being subsidised. 

(78)  Some  biodiesel  producers  cooperating  in  the  original  investigations  requested 
exemptions from any extended measures due to circumvention. It was found that these 
US  producers  did  not  produce  or  sell  biodiesel  B20  and  below.  Pursuant  to  Article 
23(6) of the basic Regulation, only producers' request for exemption can be considered 
in the course of an anti-circumvention investigation. However, it should be noted that 
Article 23 of the basic Regulation contains new-comer provisions. 

7. 

MEASURES 

7.1. 

Canada 

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(79)  Given the above, it was concluded that the definitive countervailing duty imposed on 
imports  of  biodiesel  originating  in  the  USA  was  circumvented  by  transhipment  via 
Canada pursuant to Article 23 of the basic Regulation. 

(80) 

(81) 

In  accordance  with  the  first  sentence  of  Article  23(1)  of  the  basic  Regulation,  the 
measures in force on imports of the product concerned originating in the USA, should 
be therefore extended to imports of the same product consigned from Canada, whether 
declared as originating in Canada or not. 

In  order  to  avoid  evasion  of  the  duty  by  unverifiable  allegations  that  the  product 
transhipped through Canada has been produced by a company subject to an individual 
duty  in  the  definitive  Regulation,  the  measure  to  be  extended  should  be  the  one 
established for 'All other companies' in Article 1(2) of Regulation (EC) No 598/2009, 
which is a definitive countervailing duty of 237 € per tonne. 

(82)  The  countervailing  duty  on  blends  shall  be  applicable  in  proportion  in  the  blend,  by 
weight,  of  the  total  content  of  fatty-acid  mono  alkyl  esters  and  of  paraffinic  gasoil 
obtained  from  synthesis  and/or  hydro-treatment,  of  non-fossil  origin  (biodiesel 
content). 

(83) 

In accordance with Articles 23(4) and 24(5) of the basic Regulation, which provides 
that  any  extended  measure  should  apply  to  imports  which  entered  the  Union  under 
registration imposed by the initiation Regulation, duties should be collected on those 
registered imports of biodiesel consigned from Canada. 

7.2. 

USA 

(84)  Given the above, it was concluded that the definitive countervailing duty imposed on 
imports  of  biodiesel  originating  in  the  USA  was  circumvented  by  imports  into  the 
Union of biodiesel in a blend containing by weight 20 % or less of biodiesel pursuant 
to Article 23 of the basic Regulation. 

(85) 

In  accordance  with  the  first  sentence  of  Article  23(1)  of  the  basic  Regulation,  the 
measures in force on imports of the product concerned originating in the USA should 
therefore be extended to imports of biodiesel in a blend containing by weight 20 % or 
less of biodiesel. 

(86)  The measures to be extended should be those established in Article 1(2) of Regulation 

(EC) No 598/2009. 

(87)  The  extended  countervailing  duty  on  blends  shall  be  applicable  in  proportion  in  the 
blend, by weight, of the total content of fatty-acid mono alkyl esters and of paraffinic 
gasoil obtained from synthesis and/or hydro-treatment, of non-fossil origin (biodiesel 
content). 

(88) 

In accordance with Articles 23(4) and 24(5) of the basic Regulation, which provides 
that  any  extended  measure  should  apply  to  imports  which  entered  the  Union  under 
registration imposed by the initiation Regulation, duties should be collected on those 
registered imports of biodiesel in a blend containing by weight 20 % or less biodiesel 
originating in the USA 

8. 

TERMINATION OF THE INVESTIGATION AGAINST SINGAPORE 

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(89) 

In view of the findings regarding Singapore, the investigation concerning the possible 
circumvention  of  countervailing  measures  by  imports  of  biodiesel  consigned  from 
Singapore should be terminated and the registration of imports of biodiesel consigned 
from Singapore introduced by the initiation Regulation should be discontinued. 

9. 

REQUEST FOR EXEMPTION 

(90)  The two cooperating companies in Canada submitting a questionnaire reply requested 
an exemption from the possible extended measures in accordance with Article 23(6) of 
the basic Regulation. 

(91) 

(92) 

It  was  found  that  the  two  co-operating  Canadian  producers  were  not  engaged  in  the 
circumvention  practices  which  are  subject  of  this  investigation.  Furthermore,  these 
producers could demonstrate that they are not related to any of US producers/exporters 
of biodiesel. Therefore, their requests for exemption can be granted.  

It  is  considered  that  special  measures  are  needed  in  this  case  in  order  to  ensure  the 
proper application of such exemptions. These special measures are the requirements of 
the  presentation  to  the  Customs  authorities  of  the  Member  States  of  a  valid 
commercial invoice, which shall conform to the requirements set out in the Annex to 
this Regulation. Imports not accompanied by such an invoice shall be made subject to 
the extended countervailing duty. 

(93)  One cooperating party in the USA that submitted a questionnaire reply also requested 
an exemption from the possible extended measures in accordance with Article 23(6) of 
the basic Regulation. 

(94)  As explained in recital (77) above, the investigation clearly showed that this party was 
engaged  in  the  circumvention  practices  by  importing  B20  and  below.  Consequently, 
such exemption cannot be granted.  

(95)  However, it should be underlined that, should any exporting producer(s) concerned not 
be availing from subsidisation anymore, such parties can request a review pursuant to 
Article 19 of the basic Regulation. 

10. 

DISCLOSURE 

(96)  All interested parties were informed of the essential facts and considerations leading to 
the above conclusions and were invited to comment. The oral and written comments 
submitted by the parties were considered. 

HAS ADOPTED THIS REGULATION: 

Article 1 

1. 

The  definitive  countervailing  duty  imposed  by  Regulation  (EC)  No  598/2009  on 
imports  of  fatty-acid  mono-alkyl  esters  and/or  paraffinic  gasoil  obtained  from 
synthesis  and/or  hydro-treatment,  of  non-fossil  origin,  commonly  known  as 
'biodiesel', in pure form or in a blend containing by weight more than 20% of fatty-
acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-
treatment, of non-fossil origin, originating in the United States of America, is hereby 

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extended to imports into the Union of fatty-acid mono-alkyl esters and/or paraffinic 
gasoil  obtained  from  synthesis  and/or  hydro-treatment,  of  non-fossil  origin, 
commonly  known  as  'biodiesel',  in  pure  form  or  in  a  blend  containing  by  weight 
more than 20% of fatty-acid mono-alkyl esters and/or paraffinic gasoil obtained from 
synthesis  and/or  hydro-treatment,  of  non-fossil  origin,  consigned  from  Canada, 
whether declared as originating in Canada or not, currently falling within CN codes 
ex 1516 20 98 (TARIC code 1516 20 98 21), ex 1518 00 91 (TARIC code 1518 00 
91 21), ex 1518 00 99 (TARIC code 1518 00 99 21), ex 2710 19 41 (TARIC code 
2710  19  41  21),  ex  3824  90  91  (TARIC  code  3824  90  91  10)  and  ex  3824  90  97 
(TARIC  code  3824  90  97  01),  with  the  exception  of  those  produced  by  the 
companies listed below: 

Country 

Company 

TARIC additional code

Canada  BIOX Corporation, Oakville, Ontario, Canada

Canada  Rothsay Biodiesel, Guelph, Ontario, Canada 

B107 

B108 

The measure to be extended shall be the one established for 'All other companies' in Article 
1(2) of Regulation (EC) No 598/2009, which is a definitive countervailing duty of 237 € per 
tonne net. 

The countervailing duty on blends shall be applicable in proportion in the blend, by weight, of 
the  total  content  of  fatty-acid  mono-alkyl  esters  and  of  paraffinic  gasoil  obtained  from 
synthesis and/or hydro-treatment, of non-fossil origin (biodiesel content). 

2. 

3. 

The  application  of  exemptions  granted  to  the  companies  specifically  mentioned  in 
paragraph 1 or authorised by the Commission in accordance with Article 4(2) shall 
be conditional upon presentation to the customs authorities of the Member States of a 
valid  commercial  invoice,  which  shall  conform  to  the  requirements  set  out  in  the 
Annex.  If  no  such  invoice  is  presented,  the  countervailing  duty  as  imposed  by 
paragraph 1 shall apply. 

The  duty  extended  by  paragraph  1  of  this  Article  shall  be  collected  on  imports 
consigned from Canada, whether declared as originating in Canada or not, registered 
in accordance with Article 2 of Regulation (EU) No 721/2010 and Articles 23(4) and 
24(5) of Regulation (EC) No 597/2009, with the exception of those produced by the 
companies listed in paragraph 1. 

4. 

The provisions in force concerning customs duties shall apply. 

Article 2 

1. 

The  definitive  countervailing  duty  imposed  by  Regulation  (EC)  No  598/2009  on 
imports  of  fatty-acid  mono-alkyl  esters  and/or  paraffinic  gasoil  obtained  from 
synthesis  and/or  hydro-treatment,  of  non-fossil  origin,  commonly  known  as 
'biodiesel', in pure form or in a blend containing by weight more than 20% of fatty-
acid mono-alkyl esters and/or paraffinic gasoil obtained from synthesis and/or hydro-
treatment, of non-fossil origin, originating in the United States of America, is hereby 

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extended to imports into the Union of biodiesel in a blend containing by weight 20% 
or  less  of  fatty-acid  mono-alkyl  esters  and/or  paraffinic  gasoil  obtained  from 
synthesis  and/or  hydro-treatment,  of  non-fossil  origin,  originating  in  the  United 
States  of  America,  and  currently  falling  within  CN  codes  ex  1516  20  98  (TARIC 
code 1516 20 98 30), ex 1518 00 91 (TARIC code 1518 00 91 30), ex 1518 00 99 
(TARIC code 1518 00 99 30), ex 2710 19 41 (TARIC code 2710 19 41 30) and ex 
3824 90 97 (TARIC code 3824 90 97 04). 

The measure to be extended shall be those established in Article 1(2) of Regulation (EC) No 
598/2009. 

The countervailing duty on blends shall be applicable in proportion in the blend, by weight, of 
the  total  content  of  fatty-acid  mono-alkyl  esters  and  of  paraffinic  gasoil  obtained  from 
synthesis and/or hydro-treatment, of non-fossil origin (biodiesel content). 

2. 

The  duties  extended  by  paragraph  1  of  this  Article  shall  be  collected  on  imports 
originating in the United States of America, registered in accordance with Article 2 
of Regulation (EU) No 721/2010 and Articles 23(4) and (24(5) of Regulation (EC) 
No 597/2009. 

3. 

The provisions in force concerning customs duties shall apply. 

Article 3 

The  investigation  initiated  by  Regulation  (EU)  No  721/2010  concerning  the  possible 
circumvention  of  countervailing  measures  imposed  by  Regulation  (EC)  No  598/2009  on 
imports  of  biodiesel  originating  in  the  United  States  of  America  by  imports  of  biodiesel 
consigned from Singapore, whether declared as originating in Singapore or not, and making 
such imports subject to registration, is hereby terminated. 

Article 4 

1. 

Requests for exemption from  the duty  extended by Article 1  and  Article 2 shall be 
made in writing in one of the official languages of the European Union and must be 
signed by a person authorised to represent the entity requesting the exemption. The 
request must be sent to the following address: 

European Commission 

Directorate-General for Trade 

Directorate H 

Office: N-105 04/92 

1049 Brussels 

BELGIUM 

Fax: + 32 2 295 505 

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2. 

In accordance with Article 23(6) of Regulation (EC) No 597/2009, the Commission, 
after consulting the Advisory Committee, may authorise, by decision, the exemption 
of  imports  from  companies  which  do  not  circumvent  the  countervailing  measures 
imposed by Regulation (EC) No 598/2009, from the duty extended by Article 1 and 
by Article 2. 

Customs authorities are hereby directed to discontinue the registration of imports, established 
in accordance with Article 2 of Regulation (EU) No 721/2010. 

Article 5 

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

Article 6 

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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ANNEX 

A  declaration  signed  by  an  official  of  the  entity  issuing  the  commercial  invoice,  in  the  following 
format, must appear on the valid commercial invoice referred to in Article 1(2): 

1. The name and the function of the official of the entity issuing the commercial invoice. 

2. The following declaration: 'I, the undersigned, certify that the (volume) of (product concerned) sold 
for  export  to  the  European  Union  covered  by  this  invoice  was  manufactured  by  (company  name  and 
address)  (TARIC  additional  code)  in  (country  concerned).  I  declare  that  the  information  provided  in 
this invoice is complete and correct.' 

3. Date and signature. 

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