REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 30th Annual Report from the Commission to the European Parliament on the EU's Anti-Dumping, Anti-Subsidy and Safeguard activities (2011)
Date: 2012-10-19
Institutions: European Commission
Subjects: Court of Justice of the European Union, World Trade Organisation, anti-dumping duty, anti-dumping measure, anti-subsidy proceeding, import (EU), trade dispute

EUROPEAN 
COMMISSION 

Brussels, 19.10.2012 
COM(2012) 599 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT 

30th Annual Report from the Commission to the European Parliament on the EU's 
Anti-Dumping, Anti-Subsidy and Safeguard activities (2011) 

{SWD(2012) 346 final} 

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INTRODUCTION 

This  2011  report  is  submitted  to  the  European  Parliament  following  its  resolution  of  16 
December  1981  on  the  European  Union's  anti-dumping  activities,  and  the  report  of  its 
Committee on industry, external trade, research and energy.  

This short report provides an overview of the highlights during 2011 and is supplemented, as 
in  previous  years,  by  a  more  detailed  Commission  Staff  Working  Document,  together  with 
detailed  annexes.  This  report  follows  the  same  general  structure  of  the  Working  Document, 
including all its headings, for easy reference to more comprehensive information. 

The  present  report  and  the  full  Working  Document  are  also  available  to  the  public  at 
http://ec.europa.eu/trade/issues/respectrules/anti_dumping/legis/index_en.htm 

1. 

OVERVIEW OF THE LEGISLATION 

Anti-dumping  (AD),  anti-subsidy  (AS)  and  safeguard  (SFG)  investigations  are 
conducted  on  the  basis  of  basic  Council  Regulations.  An  overview  of  the  existing 
legislation  is  given  in  the  Working  Document.  The  basic  AD  and  AS  texts  will 
hereafter be referred to as the "basic Regulation(s)".  

2. 

BASIC CONCEPTS 

Heading  2  in  the  working  document  gives  an  overview  of  the  terminology  and 
procedures used in TDI investigations. 

3. 

TDI MODERNISATION  

In order to explore ways on how to improve the current system of the Trade Defence 
instruments  (TDI),  in  October  2011  the  Commission  launched  an  initiative  for  the 
Modernisation  of  TDI.  While  the  economic  environment  has  changed  significantly 
over  the  last  decade,  the  rules  of  the  European  Union's  trade  defence  instruments 
have remained substantially unchanged since the last legislative changes to the Basic 
Regulations  in  2004.  In  this  framework,  and  taking  into  account  the  difficult 
economic environment that companies are presently faced with, the Commission has 
decided to analyse the strong and weak points of the current TDI rules, with the aim 
of adapting and improving them in a balanced way, for the benefit of all stakeholders 
concerned. 

In  order  to  explore  possible  areas  of  improvement,  the  Commission  launched  a 
public  consultation  in  spring  2012.  In  preparing  the  public  consultation,  the 
Commission  took  into  account,  not  only  the  results  of  an  evaluation  study  on  the 
EU's  trade  defence  instruments  (see  below)  but  also  information  from  a  number  of 
interviews  with  experts.  The  modernisation  exercise 
is  on-going  and  any 
Commission proposal will not be adopted before November/December 2012. 

During 2011, work continued on an evaluation study of the European Union's trade 
defence instruments by an independent consultant. The final report was published at 
the start of 2012. The aim of the evaluation was to help the Commission design or 
improve  its  policy  interventions  and  to  monitor  their  effectiveness.  It  was  also 

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considered that it would help citizens exercise their right to scrutinize, criticise and 
influence the policies and activities conducted by the Commission on their behalf.  

4. 

COUNTRY-WIDE MARKET ECONOMY STATUS (MES) 

For  the  purposes  of  anti-dumping  investigations  a  country  can  be  considered  a  full 
market economy  if it fulfils  five criteria which are set  out  in detail  in  the Working 
document attached to this report.  

2011 saw the continued evaluation of four of the six requests for country-wide MES 
from  China,  Vietnam,  Armenia,  Kazakhstan,  Mongolia  and  Belarus.  All  countries, 
except Belarus and Armenia, continued to provide additional information in support 
of  their  claims  throughout  the  year  and  their  requests  are  at  various  stages  of 
progress. Already in  2010  the  Consultations with  the  authorities  of  the  Republic  of 
Belarus were put on hold due to the political situation in the country. In June 2010, 
additional  questions  on  further  developments  in  their  progress  towards  MES  were 
sent to Armenia. However, by the end of 2011, no new information had been sent to 
the Commission by Armenia. The other four applicant countries pursued their MES 
applications  and  are  at  different  stages  of  progress  in  terms  of  meeting  the  five 
criteria for MES. 

Work  continued  on  the  MES  request  from  China  including  the  11th  thematic  MES 
Working  Group  meeting  in  Brussels  in  November  2011.  At  the  working  group 
meeting  both  parties  discussed  China's  progress  in  the  area  of  Intellectual  Property 
Rights and Anti-monopoly law. In 2011, the study on the accounting practices in the 
People’s  Republic  of  China  was  finalised.  Unfortunately,  the  results  of  the  study 
were only partial and insufficient to make sound conclusions on China's progress in 
this field.   

The EU-Vietnam MES working group meeting took place in Brussels in December 
2011. The Vietnamese authorities replied to questions from the Commission on the 
outstanding  four  criteria.  It  was  agreed  that  Vietnam  would  send  additional 
information  on  issues  raised  during  the  meeting.  By  the  end  of  2011  no  further 
information had been sent to the Commission by Vietnam. 

Regarding Kazakhstan, in February 2011, a Note Verbale was sent to the Kazakhstan 
authorities setting out the main problems regarding the 5 MES criteria. While it had 
been agreed in 2010 to jointly develop a road map with Kazakhstan on the next steps 
to be taken on MES, no progress was made on this during 2011.  

A working group meeting with the Mongolian authorities took place in Ulan-Bator in 
September 2011. Information on Mongolia's progress on the MES criteria was shared 
and discussed.  

5. 

INFORMATION AND COMMUNICATION ACTIVITIES/ BILATERAL CONTACTS  

5.1. 

Small and medium sized enterprises (SMEs) 

In 2011, the Commission published the "Paper on Actions to Address the Difficulties 
Encountered by SMEs Involved in Trade Defence Instruments". It contains a number 
of  concrete  actions  which  could  be  easily  implemented  to  better  assist  SMEs  in  all 

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areas  of  trade  defence  and  on  which  a  certain degree of convergence was achieved 
with Member States. This paper, which was based on the results of the study carried 
out by an independent contractor, was discussed with, and approved by, the Member 
States in 2011. The objective of the study was to identify the needs of SMEs in the 
27 EU Member States when submitting a complaint or participating in trade defence 
investigations as an importer or as a user or as exporters in investigations initiated by 
third countries, given the important role that SMEs have in the EU's economy and the 
difficulties they face in participating in trade defence investigations. 

The Trade Defence Helpdesk for SMEs was set up in view of the complexity of TDI 
proceedings,  especially  for  SME's,  because  of 
their 
fragmentation. Its role is to address specific SME questions and problems regarding 
TDIs,  both  of  a  general  nature  or  case-specific.  A  part  of  the  TDI  website  is 
dedicated to SMEs, and refers to the Trade Defence Helpdesk contact points.  

their  small  size  and 

In 2011, these contact points received many requests for information, which were all 
immediately addressed. These requests concerned both the procedures and content of 
TDI proceedings. 

5.2. 

Bilateral contacts/information activities – industry and third countries 

Explaining  the  legislation  and  practice  of  the  EU's  trade  defence  activity  is  an 
important part of the work of the TDI services.   

A seminar on trade defence for officials from third countries took place in 2011.  In 
addition,  there  were  a  number  of  bilateral  contacts  dedicated  to  discussing  various 
trade defence related topics with a number of third countries including China, Korea, 
Turkey and Australia held in 2011. 
. 
There were also several meetings with key stakeholder associations and companies in 
2011, amongst which Business Europe and Eurocommerce.  

6. 

HEARING OFFICER 

2011 was the fifth year of activity for the Hearing Officer in DG Trade, who became 
operational  in  April  2007.  The  Hearing  Officer  acts  independently.  The  Hearing 
Officer  acts  independently  and  is  now  attached,  for  administrative  purposes,  to  the 
Commissioner for Trade. In 2011, he was attached for administrative purposes to the 
Director  General  of  DG  Trade.  The  formal  mandate  of  the  Hearing  Officer  was 
published early 20121. 

The  principal  role  of  the  Hearing  Officer  is  to  guarantee  the  effective  exercise  of 
rights of defence in trade proceedings before the European Commission. The rights 
of  defence  include  not  only  the  right  to  be  heard  and  to  have  access  to  the  file  but 
comprises a wider set of rights described in the EU Charter of Fundamental Rights as 
follows:  the  right  of  every  person  (i)  "to  be  heard,  before  any  individual  measure 
which  would  affect  him  or  her  adversely  is  taken",  (ii)  "to  have  his  or  her  affairs 
handled impartially, fairly and within a reasonable time" and (iii) "to have access to 
his  or  her  file,  while  respecting  the  legitimate  interests  of  confidentiality  and  of 

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professional  and  business  secrecy".  The  Hearing  Officer  also  advises  the  Director 
General of DG Trade on issues related to due process and on any issues arising out of 
trade proceedings, where appropriate. 

Requests for intervention by the Hearing Officer show a growing trend ever since the 
creation of the function in 2007. In 2011, the Hearing Officer had 81 interventions in 
35 trade defence cases and held 26 hearings, of which 4 were joint hearings of parties 
with  similar  interests.  The  interventions  were  requested  by  exporting  producers  in 
third  countries,  by  the  Union  industry,  by  users  and  importers  as  well  as  by 
Governments of third countries. The Hearing Officer intervened on issues covering 
all  stages  of  the  investigation  and  made  a  number  of  recommendations  to  the 
Commission  services  which  were  largely  followed.  The  main  aim  of  the  HO 
recommendations is to strengthen the rights of defence of stakeholders.   

The  main  issues  that  the  Hearing  Officer  faced  in  2011  can  be  grouped  in  three 
categories (i) content and quality of disclosure (ii) access to files and quality of non-
confidential  files  and  (iii)  disagreement  with  determinations,  findings  and 
conclusions.   

7. 

OVERVIEW  OF  ANTI-DUMPING,  ANTI-SUBSIDY  AND  SAFEGUARD  INVESTIGATIONS 
AND MEASURES 

7.1. 

General 

At  the  end  of  2011,  the  EU  had  117  AD  measures  (see  Annex  O)  and  10  AS 
measures (see Annex P) in force. 

In 2011, 0.25% of total imports into the EU were affected by AD or AS measures. 

Please note that details on the issues hereafter are given in the  Working  Document 
attached to this report. The references to the Annexes of the Working Document can 
be found beside the titles.  

7.2. 

New investigations (see Annexes A through E and Annex N) 

In  2011,  21  investigations  were  initiated2.  Provisional  duties  were  imposed  in  10 
proceedings.  13  cases  were  concluded  with  the  imposition  of  definitive  duties.  11 
investigations were concluded without measures. 21 measures expired automatically 
following their 5-year duration. 

7.3. 

Review investigations 

Review  investigations  continue  to  represent  a  major  part  of  the  work  of  the  TDI 
services.  In  the  period  2007-2011,  they  accounted  for  63%  of  all  investigations 
initiated.  Table  2  in  the  Working  Document  provides  statistical  information  for  the 
years 2007-2011. 

2 

Table  1  in  the  Working  Document  provides  statistical  information  on  the  new  investigations  for  the 
years 2007 – 2011 carried out under the provisions of Articles 5 and 10 of the basic Regulations. 

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7.3.1.  Expiry reviews (see Annex F) 

Articles  11(2)  and  18  of  the  basic  Regulations  provide  for  the  expiry  of  measures 
after five years, unless an expiry review demonstrates that they should be maintained 
in their original form.  

During  2011,  8  expiry  review  investigations  were  initiated.  8  expiry  reviews  were 
concluded  with  a  confirmation  of  the  duty  for  a  further  period  of  5  years.  4  expiry 
reviews were concluded by the termination of measures.  

7.3.2. 

Interim reviews (see Annex G) 

Articles  11(3)  and  19  of  the  basic  Regulations  provide  for  the  review  of  measures 
during their period of validity. Reviews can be limited to dumping/subsidization or 
injury aspects. 

During  2011,  a  total  of  9  interim  reviews  were  initiated.  7  interim  reviews  were 
concluded  with  confirmation  or  amendment  of  duty.  5  interim  reviews  were 
concluded with the termination of the measures.  

7.3.3.  “Other” interim reviews (see Annex H) 

There were 2 'other' reviews, i.e. not falling under Articles 11(3) or 19 of the basic 
Regulations, initiated during 2011  .  

7.3.4.  New exporter reviews (see Annex I) 

Articles 11(4) and 20 of the basic Regulations respectively provide for a “newcomer” 
and  “accelerated”  review  in  order  to  establish  an  individual  dumping  margin  or  an 
individual countervailing duty for new exporters located in the exporting country in 
question  which  did  not  export  the  product  during  the  investigation  period.  Such 
exporters  have  to  show  that  they  are  genuine  new  exporters  and  that  they  have 
actually  started  to  export  to  the  EU  after  the  investigation  period.  As  such,  an 
individual duty, which is usually lower than the country-wide duty, can be calculated 
for them.  

In 2011, 2 new exporter reviews were initiated.  

7.3.5.  Absorption investigations (see Annex J) 

Where  there  is  sufficient  information  showing  that,  after  the  original  investigation 
period  and  prior  to  or  following  the  imposition  of  measures,  export  prices  have 
decreased or that there has been no or insufficient movement in the resale prices or 
subsequent selling prices of the imported product in the EU, an "absorption" review 
may  be  opened  to  examine  whether  the  measure  has  had  effects  on  the  above-
mentioned  prices.  Dumping  margins  may  as  such  be  recalculated  and  the  duty 
increased to take account of such lower export prices. The possibility of "absorption" 
reviews is included in Articles 12 and 19(3) of basic Regulations. 

In 2011, there were no anti-absorption reviews initiated or concluded.  

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7.3.6.  Circumvention investigations (see Annex K) 

The possibility of investigations being re-opened in circumstances where evidence is 
brought to show that measures are being circumvented is foreseen in Articles 13 and 
23 of the basic Regulations. 

In  2011,  3  such  investigations  were  initiated.  4  anti-circumvention  investigations 
were  concluded  with  extension  of  the  measures  and  2  were  concluded  without 
extension of the measures.  

7.4. 

Safeguard investigations (see Annex L) 

During  2011,  no  safeguard  investigation  was  initiated.  1  safeguard  investigation, 
which  had  been  initiated  in  2010,  was  terminated  without  the  imposition  of 
measures.  

8. 

ENFORCEMENT OF AD/AS MEASURES 

8.1. 

Follow-up of measures 

The  follow-up  activities  concerning  measures  in  force  were  centred  on  four  main 
areas: (1) to pre-empt fraud; (2) to monitor trade flows and market developments; (3) 
to  improve  the  effectiveness  with  the  appropriate  instruments  and  (4)  to  react  to 
irregular  practices.  These  activities  enabled  the  TDI  services  to  pro-actively  in 
cooperation  with  Member  States  ensure  the  proper  enforcement  of  trade  defence 
measures in the European Union.  

8.2.  Monitoring of undertakings (see Annexes M and Q) 

Monitoring  of  undertakings  forms  part  of  the  enforcement  activities,  given  that 
undertakings  are  a  form  of  AD  or  AS  measures.  They  are  accepted  by  the 
Commission if it is satisfied that they can effectively eliminate the injurious effects 
of dumping or subsidisation. 

At  the  beginning  of  2011,  there  were  22  undertakings  in  force.  During  2011,  the 
following  changes  to  the  portfolio  of  undertakings  took  place:  undertakings  of  5 
companies came to an end due to the expiry/repeal of measures and an undertaking 
of one company was accepted. This brings the total number of undertakings in force 
at the end of 2011 to 18. 

9. 

REFUNDS (SEE ANNEX U) 

Articles  11(8)  and  21(1)  of  the  basic  Regulations  allow  importers  to  request  the 
reimbursement  of  the  relevant  collected  duties  where  it  is  shown  that  the 
dumping/subsidy margin has been eliminated or reduced to a level below that of the 
duty in force. 

During  2011,  26  new  refund  requests  were  submitted.  At  the  end  of  2011,  12 
investigations  were  on-going,  covering  18  requests.  In  2011,  24  Commission 

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Decisions  were  adopted:  12  granting  partial  refund  and  12  rejecting  the  refund 
requests. Seven requests were withdrawn. 

10. 

JUDICIAL REVIEW: DECISIONS GIVEN BY THE COURT OF JUSTICE (COJ) / GENERAL 
COURT (GC)  

In  2011,  the  Court  of  Justice  (COJ)  and  the  General  Court  (GC)  rendered  9 
judgments in total relating to the areas of anti-dumping or anti-subsidy. A summary 
of some of the judgments is given in the Working Document. 

There were 16 new cases lodged in 2011, 12 before the GC and 4 before the COJ.  

A list of the AD/AS cases before the GC and the COJ still pending at the end of 2011 
is given in Annex S of the Working Document. 

11. 

ACTIVITIES IN THE FRAMEWORK OF THE WORLD TRADE ORGANIZATION (WTO) 

11.1.  Dispute settlement in the field of AD, AS and SFGs  

The WTO provides for a rigorous procedure for the settlement of disputes between 
WTO Members concerning the application of the WTO agreements. 

In July 2011, the WTO Appellate Body issued a report on the dispute settlement case 
taken by China against the EU on anti-dumping measures on imports of certain iron 
or steel fasteners originating in China.   This was the first WTO challenge launched 
by China against the EU since it joined the WTO in 2001. The panel had circulated 
its report to WTO Members in December 2010 and in March 2011 the EU appealed 
certain aspects of the panel report. The Appellate Body issued its report in July 2011 
and at its meeting on 28 July 2011 the Dispute Settlement Body (DSB) adopted the 
Report.  While  the  large  majority  of  China's  claims  with  respect  to  the  fasteners 
regulation were rejected by the Panel and by the Appellate Body, certain aspects of 
that  regulation  were  considered  to  be  in  breach  of  WTO  law.  The  Panel  and  the 
Appelate Body also, found that Article 9(5) of the Basic Regulation was inconsistent 
with  the  European  Union's  obligations  the  WTO  AD Agreement.    In  September 
2011, the European Union informed the WTO DSB that it intended to implement the 
recommendations and rulings of the DSB in this dispute in a manner that respects its 
WTO  obligations.    In  February  2012,  the  Commission  proposed  to  the  European 
Parliament  and the  Council an amendment to the Basic Anti-Dumping Regulation 
to take account of the DSB Ruling3. 

In  October  2011  the  WTO  Panel  report  on  the  dispute  concerning  anti-dumping 
measures  on  certain  leather  footwear  from  China  was  issued.  The  panel  had  been 
established  in  May  2010.    The  panel  concluded  that,  in  the  great  majority  of  the 
issues  examined,  the  EU  acted  in  full  compliance  with  WTO  rules.  The  panel 
confirmed the findings reached in the fasteners dispute as regards Article 9(5) of the 
Basic Regulation.  Since the Regulations imposing measures on imports of footwear 
expired  in  March  2011,  the  Panel  concluded  that  there  was  no  basis  for  a 
recommendation  to  “bring  the  [expired]  measure[s]  into  conformity”  under 

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Article 19.1 of the DSU. However the Panel recommended that the European Union 
bring Article 9(5) of the Basic Regulation into conformity with its obligations under 
the WTO Agreements.   

11.2.  Other WTO activities  

In  2011,  the  Chair  of  the  DDA  Negotiating  Group  on  rules  launched  a  process  of 
informal  plurilateral  consultations  on  various  topics  where  it  was  felt  that  the  gaps 
remaining  among  Members  should  be  further  worked  on.  This  resulted  in  the 
circulation  of  a  new  text  on  anti-dumping  disciplines  highlighting  areas  of 
convergence and outstanding problematic issues, whereas progress on subsidies and 
fisheries  subsidies  negotiations  was 
in  a  report  (WTO  Document 
TN/RL/W/254  of  21  April  2011).    While  these  documents  accurately  reflected  the 
state  of  the  negotiations  in  those  areas,  it  did  not  prove  possible  to  take  the  latter 
forward  in  2011  partly  because  of  the  overall  dynamics  of  the  DDA  negotiations. 
Following resignation by the Chair Francis, a consensus among Members was found 
to appoint Ambassador McCook (Jamaica) as Chairman of the Negotiating Group on 
Rules.  His appointment was confirmed at a formal meeting held in February 2012. 
Subsequently,  the  Technical  Group,  a  subgroup  of  the  negotiating  group,  was 
convened twice (in February and April 2012). 

treated 

In parallel to these activities, participation by the Commission services in the regular 
work  of 
the  Anti-dumping,  Subsidies  and  Countervailing  and  Safeguards 
Committees  continued.  The  Committees  met  twice  in  regular  sessions  to  review 
notifications and raise issues of special interest. 

CONCLUSION 

2011 showed an increase in both the number of new cases initiated over the previous year, as 
well as the number of definitive measures imposed. The number of investigations terminated 
without  the  imposition  of  measures  also  increased  slightly  while  the  number  of  provisional 
measures  imposed  over  the  previous  year  dropped  by  almost  a  quarter.  Regarding  reviews, 
these continue to represent a significant part of the work of the services although the number 
of  reviews  initiated  dropped  by  almost  a  sixth  when  compared  to  2010.  The  number  of 
reviews terminated increased significantly when compared to 2010 figures.  

Finally, it should be recalled that the trade defence measures in place in 2011 affected only 
0.25% of total imports, reflecting the moderate and rules-based approach in the use of these 
instruments by the EU.   

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