Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Council Regulation (EC) No 1225/2009 on protection against dumped imports from countries not members of the European Community
Date: 2012-06-08
Institutions: European Commission
Subjects: administrative procedure, anti-dumping legislation, import (EU), judgment of the Court (EU), originating product, third country

EUROPEAN COMMISSION 

Brussels, 8.6.2012  
COM(2012) 270 final 

2012/0145 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

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

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

On  2  February  2012,  the  European  Court  of  Justice  in  case  C-249/101  P  -  Brosmann  and 
others v. Council ('Brosmann') annulled Council Regulation (EC) No 1472/2006 of 5 October 
2006  imposing  a  definitive  anti-dumping  duty  and  collecting  definitely  the  provisional  duty 
imposed  on  imports  of  certain  footwear  with  uppers  of  leather  originating  in  the  People’s 
Republic of China and Vietnam in so far as it relates to the applicants. In its judgement, the 
Court  of  Justice  ruled  that  the  sampling  technique  laid  down  in  Article  17  of  Council 
Regulation (EC) No 1225/2009 may not be applied for the purposes of the determination of 
claims of individual market economy treatment made under Article 2(7)(c). In its judgment, 
the Court found that under Article 2(7)(c) the cooperating producers, which are not part of the 
sample, are entitled to have their claim of market economy treatment examined, regardless of 
whether an individual dumping margin was to be calculated for those companies outside the 
sample. The European Court of Justice also pointed out that the determination under Article 
2(7)(c) is to be made within three months after the initiation of the investigation.  

The ruling by the European Court of Justice on the application of Council Regulation (EC) No 
1225/2009 would require that the Commission examine all applications for market economy 
treatment filed by  cooperating  producers  who  are not part of  the sample, irrespective of  the 
number  of  producers.  However,  such  a  practice  would  impose  a  disproportionate 
administrative  burden  on  the  investigating  authorities  of  the  Union.  Therefore,  it  is 
appropriate  to  amend  Regulation  (EC)  No  1225/2009,  in  particular  with  regard  to  the  time 
limit of three months for the Commission to decide on the applications for market economy 
treatment. 

It should also be noted that the use of the sampling technique provided for in Article 17 of 
Council  Regulation  (EC)  No  1225/2009  for  the  purposes  of  the  determination  of  claims  of 
market economy treatment to be made under Article 2(7)(c) of that Regulation is not in breach 
of the obligations of the Union under the World Trade Organisation rules. For example, the 
panel  of  the  Dispute  Settlement  Body  of  the  World  Trade  Organisation  in  dispute  DS405 
(European  Union  —  Anti-Dumping  measures  on  Certain  Footwear  from  China,  report 
adopted  on  22  February  2012)  found  that  China  did  not  establish  that  the  European  Union 
acted inconsistently with Articles 2.4 and 6.10.2 of the Anti-dumping Agreement, Paragraph 
15(a)(ii) of China's Accession Protocol, and Paragraphs 151(e) and (f) of China's Accession 
Working  Party  Report,  by  failing  to  examine  the  market  economy  treatment  applications  of 
the  cooperating  Chinese  producers  that  are  not  part  of  the  sample  for  the  limited  original 
investigation.  

Therefore,  taking  into  account  this  background  and  for  reasons  of  legal  certainty,  it  is 
considered  appropriate  to  introduce  a  provision  clarifying  that  the  decision  to  limit  the 
investigation to a reasonable number of producers by using samples on the basis of Article 17 
of  Council  Regulation  (EC)  No  1225/2009  also  applies  to  the  parties  subject  to  a  market 
economy treatment examination, in accordance with Article 2(7)(b) and (c). Consequently, it 
is also appropriate to clarify that a determination under Article 2(7)(c) should not be made for 

1 

Case C-249/10 P – Brosmann Footwear (HK) and Others v Council, Judgement of 2 February 2012 (not 
yet published in the ECR).  

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producers that are not part of the sample unless such producers request and obtain individual 
examination in accordance with Article 17(3). 

Furthermore, it is considered appropriate to clarify that the anti-dumping duty to be applied to 
imports from producers, which have made themselves known in accordance with Article 17 
but  were  not  included  in  the  examination,  shall  not  exceed  the  weighted  average  margin  of 
dumping  established  for  the  parties  in  the  sample,  irrespective  of  whether  the  normal  value 
established  for  such  parties  was  determined  on  the  basis  of  Articles  2(1)  to  2(6)  or  Article 
2(7)(a). 

Lastly, the three month time limit by which a determination pursuant to Article 2(7)(c) should 
be  made,  has  proved  impracticable  in  many  anti-dumping  proceedings,  in  particular  where 
sampling is applied in accordance with Article 17. In its proposal to amend certain regulations 
in order to ensure consistency with the provisions introduced by the Treaty of Lisbon ('Trade 
Omnibus  I')2,  the  Commission  included  an  amendment  to  extend  the  time  limit  in  Article 
2(7)(c)  of  Council  Regulation  (EC)  No  1225/2009  to  six  months  (point  1  of  Heading  24  in 
Annex  to  'Trade  Omnibus  I').  However,  in  view  of  the  Brosmann  ruling  on  such  time  limit 
(which intervened one year after the Omnibus I proposal was made), it is considered that an 
extension of the time limit to six months is no longer adequate for reasons of legal certainty. 
Instead, it is considered more appropriate to remove this time limit from Council Regulation 
(EC)  No  1225/2009.  Therefore  the  Commission  should  discontinue  its  efforts  to  amend  the 
time  limit  in  Article  2(7)(c)  in  the  context  of  the  Trade  Omnibus  I  proposal,  and  should 
inform the Council and the Parliament of its intentions.  

In the interest of legal certainty and the principle of sound administration, it is necessary to 
provide  that  these  amendments  should  apply  as  soon  as  possible  to  all  new  and  pending 
investigations. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Not applicable. 

3. 

• 

LEGAL ELEMENTS OF THE PROPOSAL 

Legal basis 

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  which  was  based  on  the 
equivalent provision of the Treaty establishing the European Community, i.e. Article 133. 

2 

Proposal for a regulation of the European Parliament and of the Council amending certain regulations 
relating  to  the  common  commercial  policy  as  regards  the  procedures  for  the  adoption  of  certain 
measures (COM(2011) 82 final). 

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• 

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. 

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2012/0145 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Council Regulation (EC) No 1225/2009 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 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) 

In Case C-249/10 P3, the European Court of Justice ruled that the sampling technique 
provided for in Article 17 of Council Regulation (EC) No 1225/2009 of 30 November 
2009  on  protection  against  dumped  imports  from  countries  not  members  of  the 
European  Community4  may  not  be  applied  for  the  purposes  of  the  determination  of 
claims  of  market  economy  treatment  to  be  made  under  Article  2(7)(c)  of  that 
Regulation.  

The  ruling  by  the  European  Court  of  Justice  would  require  that  the  Commission 
examine all applications for market economy treatment filed by cooperating exporting 
producers  who  are  not  part  of  the  sample,  irrespective  of  whether  the  number  of 
cooperating  producers 
impose  a 
disproportionate  administrative  burden  on  the  investigating  authorities  of  the  Union. 
Therefore, is it appropriate to amend Council Regulation (EC) No 1225/2009. 

large.  However,  such  a  practice  would 

is 

(3)  Moreover,  the  use  of  the  sampling  technique  provided  for  in  Article  17  of  Council 
Regulation  (EC)  No  1225/2009  for  the  purposes  of  the  determination  of  claims  of 
market  economy  treatment  to  be  made  under  Article  2(7)(c)  of  that  Regulation  is 
allowed  under  the  rules  of  World  Trade  Organisation.  For  example,  the  panel  of  the 
Dispute  Settlement  Body  of  the  World  Trade  Organisation  in  dispute  DS405 
(European Union — Anti-Dumping measures on Certain Footwear from China, report 
adopted  on  22  February  2012)  found  that  China  did  not  establish  that  the  European 
the  Anti-
Union  acted 

inconsistently  with  Articles 2.4  and  6.10.2  of 

3 
4 

Case C-249/10 P - Brosmann Footwear (HK) and Others v Council, Judgment of 2 February 2012. 
OJ L 343, 22.12.2009, p. 51. 

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dumping Agreement,  Paragraph  15(a)(ii)  of  China's  Accession  Protocol,  and 
Paragraphs  151(e)  and  (f)  of  China's  Accession  Working  Party  Report,  by  failing  to 
examine  the  market  economy  treatment  applications  of  the  cooperating  Chinese 
exporting producers that are not part of the sample for the original investigation.  

Therefore, taking into account this background and for reasons of legal certainty, it is 
considered appropriate to introduce a provision clarifying that the decision to limit the 
investigation  to  a  reasonable  number  of  parties  by  using  samples  on  the  basis  of 
Article 17 of Council Regulation (EC) No 1225/2009 also applies to the parties subject 
to an examination in accordance with Article 2(7)(b) and (c). Consequently, it is also 
appropriate to clarify that a determination under Article 2(7)(c) should not be made for 
exporting producers that are not part of the sample, unless such producers request and 
obtain individual examination in accordance with Article 17(3). 

Furthermore,  it  is  considered  appropriate  to  clarify  that  the  anti-dumping  duty  to  be 
applied to imports from exporters or producers which have made themselves known in 
accordance with Article 17, but were not included in the examination shall not exceed 
the  weighted  average  margin  of  dumping  established  for  the  parties  in  the  sample, 
irrespective of whether the normal value established for such parties was determined 
on the basis of Articles 2(1) to 2(6) or Article 2(7)(a). 

Lastly, the three month time-limit by which a determination pursuant to Article 2(7)(c) 
should be made has proved impracticable, in particular in proceedings where sampling 
in  accordance  with  Article  17  is  applied.  It  is  therefore  considered  appropriate  to 
remove this time-limit. 

In  the  interests  of  legal  certainty  and  the  principle  of  sound  administration,  it  is 
necessary  to  provide  that  these  amendments  should  apply  as  soon  as  possible  to  all 
new and pending investigations. 

(4) 

(5) 

(6) 

(7) 

(8) 

Council Regulation (EC) No 1225/2009 should therefore be amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

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

(1) Article 2(7) is amended as follows: 

(a) The penultimate sentence of subparagraph (c) is modified as follows: 

The terms "within three months of the initiation of the investigation" are deleted. 

(b) The following subparagraph (d) is added: 

"(d)  When  the  Commission  has  limited  its  examination  in  accordance  with  Article 
17,  a  determination  pursuant  to  subparagraphs  (b)  and  (c)  shall  be  limited  to  the 
parties  included  in  the  examination  and  any  producer  that  receives  individual 
treatment pursuant to Article 17(3)". 

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(2) In Article 9(6), the first sentence is replaced by the following: 

"When  the  Commission  has  limited  its  examination  in  accordance  with  Article  17, 
any  anti-dumping  duty  applied  to  imports  from  exporters  or  producers  which  have 
made themselves known in accordance with Article 17 but were not included in the 
examination  shall  not  exceed  the  weighted  average  margin  of  dumping  established 
with respect to the parties in the sample, irrespective of whether the normal value for 
such parties is determined on the basis of Articles 2(1) to 2(6) or Article 2(7)(a)." 

This  Regulation  shall  apply  to  all  new  and  pending  investigations  at  the  time  of  entry  into 
force of this Regulation.  

Article 2  

Article 3 

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

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

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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