Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community
Date: 2012-02-07
Institutions: European Commission
Subjects: China, Dispute Settlement Body, World Trade Organisation, anti-dumping duty, anti-dumping measure, import (EU), market economy, originating product, third country

EUROPEAN COMMISSION 

Brussels, 7.2.2012  
COM(2012) 41 final 

2012/0019 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection 
against dumped imports from countries not members of the European Community 

EN 

   EN 

 
 
 
  
 
EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

On  28  July  2011,  the  Dispute  Settlement  Body  of  the  World  Trade  Organisation  ('DSB') 
adopted the Appellate Body Report and the Panel Report as modified by the Appellate Body 
Report in the case ‘European Communities — Definitive Anti-Dumping Measures on Certain 
Iron or Steel Fasteners from China'1 (‘Reports’).  

In  the  Reports,  it  was  found,  inter  alia,  that  Article  9(5)  of  Council  Regulation  (EC)  No 
1225/2009  of  30  November  2009  on  protection  against  dumped  imports  from  countries  not 
members  of  the  European  Community  ('the  Basic  Anti-Dumping  Regulation')2  was 
inconsistent  with  Articles  6.10,  9.2  and  18.4  of  the  WTO  Anti-Dumping  Agreement  and 
Article  XVI:4  of  the  WTO  Agreement.  Article  9(5)  of  the  Basic  Anti-Dumping  Regulation 
provides that individual exporting producers in non-market economy countries which do not 
receive  market  economy  treatment  pursuant  to  Article  2(7)(c)  of  the  Basic  Anti-Dumping 
Regulation will be subject to a countrywide duty rate unless such exporters can demonstrate 
that  they  meet  the  conditions  for  individual  treatment  laid  out  in  Article  9(5)  of  the  Basic 
Anti-Dumping  Regulation  ('the  DSB  finding  on  Article  9(5)  of  the  Basic  Anti-Dumping 
Regulation'). 

On  18  August  2011  the  European  Union  notified  the  DSB  that  it  intends  to  implement  the 
recommendations and rulings of the DSB in this dispute in a manner that respects its WTO 
obligations.  

On 19 January 2012 the European Union and China agreed that the reasonable period of time 
for implementing the DSB recommendations and rulings would be 14 months and two weeks 
from  the  date  the  DSB  adopted  the  Reports.  The  reasonable  period  of  time  will  therefore 
expire on 12 October 2012. 

The  purpose  of  this  legislative  proposal  is  to  implement  the  DSB  recommendations  and 
rulings on Article 9(5) of the Basic Anti-Dumping Regulation. 

2. 

3. 

• 

1 

2 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Not applicable. 

LEGAL ELEMENTS OF THE PROPOSAL 

Legal basis 

WTO, Report of the Appellate Body, AB-2011-2, 
WT/DS397/AB/R, 15 July 2011. WTO, Report of the Panel, 
WT/DS397/R,  29  September  2010.  The  reports  can  be  downloaded  from  the  WTO's  website 
(http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds397_e.htm) 
OJ L 343, 22.12.2009, p. 51. 

EN 

2 

   EN 

                                                 
 
 
The  legal  basis  for  this  proposal  is  Article  207(2)  of  the  Treaty  on  the  Functioning  of  the 
European Union, in accordance to which the European Parliament and the Council, acting by 
means  of  regulations  in  accordance  with  the  ordinary  legislative  procedure,  shall  adopt  the 
measures defining the framework for implementing the common commercial policy.  

This  proposal  amends  Council  Regulation  (EC)  No  1225/2009  the  Basic  Anti-Dumping 
Regulation,  which  was  based  on  the  equivalent  provision  of  the  Treaty  establishing  the 
European Community, i.e. Article 133. 

• 

Subsidiarity Principle 

Pursuant  to  Article  3(1)(e)  of  the  Treaty  on  the  Functioning  of  the  European  Union,  the 
proposal falls under exclusive competence of the Union. The subsidiarity principle therefore 
does not apply. 

• 

Proportionality Principle 

The proposal complies with the proportionality principle. 

• 

Choice of instruments 

Proposed instrument: Regulation of the European Parliament and of the Council. 

Other means would not be adequate for the following reason: a Regulation must be amended 
by a Regulation. 

4. 

BUDGETARY IMPLICATION  

Not applicable. 

5. 

OPTIONAL ELEMENTS  

Not applicable. 

EN 

3 

   EN 

2012/0019 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 1225/2009 of 30 November 2009 on protection 
against dumped imports from countries not members of the European Community 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 207 thereof, 

Having regard to Council Regulation (EC) No 1515/2001 on the measures that may be taken 
by  the  Community  following  a  report  adopted  by  the  WTO  Dispute  Settlement  Body 
concerning anti-dumping and anti-subsidy matters, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

On  28  July  2011,  the  Dispute  Settlement  Body  of  the  World  Trade  Organisation 
('DSB') adopted the Appellate Body Report and the Panel Report as modified by the 
Appellate  Body  Report  in  the  case  ‘European  Communities  —  Definitive  Anti-
Dumping Measures on Certain Iron or Steel Fasteners from China'3 (‘Reports’).  

In  the  Reports,  it  was  found,  inter  alia,  that  Article  9(5)  of  Council  Regulation  (EC) 
No  1225/20094  of  30  November  2009  on  protection  against  dumped  imports  from 
countries  not  members  of  the  European  Community  ('the  Basic  Anti-Dumping 
Regulation')  was  inconsistent  with  Articles  6.10,  9.2  and  18.4  of  the  WTO  Anti-
Dumping Agreement and Article XVI:4 of the WTO Agreement ('the DSB finding on 
Article  9(5)  of  the  Basic  Regulation').  Article  9(5)  of  the  Basic  Anti-Dumping 
Regulation  provides  that  individual  exporting  producers  in  non-market  economy 
countries which do not receive market economy treatment pursuant to Article 2(7)(c) 
of  the  Basic  Anti-Dumping  Regulation  will  be  subject  to  a  countrywide  duty  rate 
unless  such  exporters  can  demonstrate  that  they  meet  the  conditions  for  individual 
treatment ('IT') laid out in Article 9(5) of the Basic Anti-Dumping Regulation. 

3 

4 

WTO, Report of the Appellate Body, AB-2011-2, 
WT/DS397/AB/R, 15 July 2011. WTO, Report of the Panel, 
WT/DS397/R,  29  September  2010.  The  reports  can  be  downloaded  from  the  WTO's  website 
(http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds397_e.htm) 
OJ L 343, 22.12.2009, p. 51. 

EN 

4 

   EN 

                                                 
 
 
(3) 

(4) 

(5) 

(6) 

The  Appellate  Body  found  that  Article  9(5)  of  the  Basic  Anti-Dumping  Regulation 
established a presumption that exporting producers operating in non-market economy 
countries  are  not  entitled  to  individual  treatment  but,  in  order  to  qualify  for  such 
treatment, they bear the burden to demonstrate that they satisfy the criteria of the IT 
test.  According  to  the  Appellate  Body,  no  legal  basis  for  such  a  presumption  is 
provided for in the WTO covered agreements.  

However,  the  Appellate  Body  clarified  that  whether  determining  a  single  dumping 
margin and a single anti-dumping duty for a number of exporters is inconsistent with 
Articles  6.10  and  9.2  of  the  WTO  Anti-Dumping  Agreement  will  depend  on  the 
existence  of  a  number  of  situations,  which  would  signal  that,  albeit  legally  distinct, 
two or more exporters are in such a relationship that they should be treated as a single 
entity. These situations may include: (i) the existence of corporate and structural links 
between  the  exporters,  such  as  common  control,  shareholding  and  management;  (ii) 
the  existence  of  corporate  and  structural  links  between  the  State  and  the  exporters, 
such as common control, shareholding and management; and (iii) control or material 
influence by the State in respect of pricing and output. In this regard, the terms in the 
proposed amendments reflecting these situations should be applied in the light of the 
Appellate  Body's  clarifications  without  prejudice  to  terms  using  the  same  or  similar 
wording in other provisions of the Basic Anti-dumping Regulation. 

On 18 August 2011 the European Union notified the DSB that it intends to implement 
the recommendations and rulings of the DSB in this dispute in a manner that respects 
its WTO obligations.  

For that purpose, it is necessary to amend the provisions of Article 9(5) of the Basic 
Anti-Dumping Regulation, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Regulation (EC) No 1225/2009 is hereby amended as follows: 

1. Article 9 paragraph 5 shall be replaced by the following: 

"5. An anti-dumping duty shall be imposed in the appropriate amounts in each case, 
on a non-discriminatory basis on imports of a product from all sources found to be 
dumped  and  causing  injury,  except  for  imports  from  those  sources  from  which 
undertakings under the terms of this Regulation have been accepted.  

The  Regulation  imposing  anti-dumping  measures  shall  specify  the  duty  for  each 
supplier  or,  if  that  is  impracticable,  the  supplying  country  concerned.  Suppliers 
which are legally distinct from other suppliers or which are legally distinct from the 
State may nevertheless be considered as a single entity for the purpose of specifying 
the duty. For the application of this paragraph, account may be taken of factors such 
as the existence of structural or corporate links between the suppliers and the State or 
between suppliers, the control or material influence by the State in respect of pricing 
and output, or the economic structure of the supplying country." 

EN 

5 

   EN 

Article 2  

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

It  shall  apply  to  all  investigations  initiated  pursuant  to  Regulation  (EC)  No  1225/2009 
following the entry into force of this Regulation. 

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

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

EN 

6 

   EN