COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT on Modernisation of Trade Defence Instruments Adapting trade defence instruments to the current needs of the European economy
Date: 2013-04-10
Institutions: European Commission
Subjects: administrative transparency, anti-dumping duty, anti-dumping measure, anti-subsidy proceeding, complaint to the Commission

EUROPEAN 
COMMISSION 

Brussels, 10.4.2013  
COM(2013) 191 final 

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

on  
Modernisation of Trade Defence Instruments 
Adapting trade defence instruments to the current needs of the European economy 

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COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE 
EUROPEAN PARLIAMENT 

on  
Modernisation of Trade Defence Instruments 
Adapting trade defence instruments to the current needs of the European economy 

1. 

INTRODUCTION 

1.1. 

The need for modernisation 

The European Union is a world leading trading power and greatly benefits from free trade and 
open  markets  globally.  In  some  instances,  however,  unfair  practices  by  certain  trading 
partners  and  third  country  exporters  can  be  prejudicial  to  industries  based  in  the  EU.  Trade 
defence  instruments  (TDI)  are  for  that  reason  an  important  tool  in  the  broader  EU  trade 
policy.  They  are  often  the  only  means  that  companies  can  invoke  to  react  to  unfair 
international trading practices. At the same time, the application of trade defence instruments 
can  have  an  impact  on  users  and  consumers.  The  EU  applies  very  high  standards  in  the 
administration  of  these  instruments  that  have  been  enacted  in  1995,  often  higher  than  those 
required by the World Trade Organisation (WTO) and as applied by many other users. 

However, the economic environment changes continuously and there is a need to periodically 
consider whether these changes require some adjustment to the TDI.  

The rules of the EU's TDI have remained largely unchanged for more than 15 years. The last 
substantive revision of the EU's TDI took place in 1995 in order to implement the conclusions 
of  the  Uruguay  round  of  multilateral  trade  negotiations.  Since  then,  the  only  significant 
legislative change was that adopted in 2004 when the decision making process in the Council 
was changed (simple majority to reject a Commission proposal instead of simple majority in 
favour).  

In 2006/2007,  a  reform –  the "Green Paper" - exercise was launched and showed that there 
was  a  wide  divergence  of  views  on  the  topic.  Subsequently,  Commissioner  De  Gucht 
indicated  during  his  hearing  before  the  INTA  Committee  of  the  European  Parliament  in 
January 2010, that he considered that the TDIs should be reviewed after the conclusion of the 
Doha Trade negotiations that are conducted under the auspices of the WTO. These talks have 
stalled. 

Against this backdrop, the Commission has decided to revisit the functioning of the EU's TDI 
with a view to updating them, but also bearing in mind that the multilateral WTO framework 
will  not  change  in  the  foreseeable  future.  This  Communication  sets  out  the  proposals  and 
changes that the Commission puts forward in order to modernise the instruments in line with 
the  Treaty  objective  to  contribute  to  free  and  fair  trade  (Article  3  (5)  Treaty  on  European 
Union).  

The guiding principle for the package put forward is that the EU's TDI should be improved in 
a pragmatic and balanced way for the benefit of all stakeholders. Producers, importers, and 
users,  be  they  large  companies  or  small  and  medium  enterprises,  should  have  user-friendly 
and efficient instruments at their disposal that respond to today's challenges when faced with 
unfair trading practices or with the prospect of TDI measures. The Commission has identified 
6  main  areas  requiring  changes  to  the  current  rules  in  order  to  address  the  changes  in  the 
economic environment.  

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The  proposals  take  into  account  the  public  consultation  on  modernisation  of  trade  defence 
instruments (open from 3 April to 3 July 2012)1, from the Commission's extensive experience 
in  the  daily  administration  of  these  instruments,  and  an  independent  evaluation  study, 
published in March 20122.  

1.2. 

The legal framework 

The EU's trade defence system is based on the rules of the WTO which allow its Members to 
address  unfair  trade  practices  by  exporting  countries  and  restore  a  level  playing  field.  Anti-
dumping,  the  most  frequently  used  TDI  (the  others  are  the  anti-subsidy  and  safeguard 
instruments), addresses imports of a product from a non-EU country, sold at prices lower than 
the normal value3, if they are injuring the EU industry. The anti-subsidy instrument deals with 
subsidised4 imports.  

In  such  cases,  the  affected  EU  industry  can  lodge  a  complaint  with  the  Commission, 
providing  evidence  of  the  unfair  practice  and  of  the  injury  it  has  caused.  If  the  complaint 
contains sufficient evidence, an investigation is opened which lasts for around 15 months in 
case of dumping (13 months in case of subsidies) and in which all parties concerned (Union 
producers, exporters, importers, users of the product and consumer organisations) are invited 
to participate. If the investigation confirms the allegations in the complaint, an anti-dumping 
or anti-subsidy duty will be imposed. Measures remain in force normally for 5 years but they 
can be reviewed during this period and renewed where appropriate.  

The  safeguard  instrument  is  the  third  TDI  and  is  not  at  issue  in  this  initiative,  not  least 
because the EU has very rarely used it.  

The so-called "WTO+ elements" of the EU's system, in particular the lesser duty rule and the 
Union interest test, ensure proportionality and balance in the application of the instruments. 
The  aim  of  this  initiative  is  to  keep  these  high  standards  but  to  adapt  and  improve  them  as 
necessary. 

Many  stakeholders  have  expressed  the  wish  that  the  Commission  shortens  AD/AS 
investigations. The Commission will seek to reduce in general the time needed for deciding 
provisional measures in AD/AS cases by two months. 

2. 

THE PROPOSALS 

This part of the Communication describes the Commission proposals to modernise the EU's 
TDIs. For each proposal it is specified whether or not a legislative change is required. In fact, 
an  important  number  of  these  proposals  require  a  change  of  the  Basic  Anti-Dumping  (AD) 
and Anti-Subsidy (AS) Regulations5. The proposed legislative changes are set out in detail in 
a  draft  Regulation  which  the  Commission  submits  to  the  Council  and  the  Parliament  for 
adoption  in  the  ordinary  legislative  procedure.  The  proposals  also  comprise  draft  guidelines 

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5 

Results  of  the  public  consultation  on  the  Modernisation  of  the  EU's  Trade  Defence  Instruments: 
http://ec.europa.eu/yourvoice/ipm/forms/dispatch?userstate=DisplayPublishedResults&form=MTDI 
Independent 

instruments:

evaluation 

defence 

trade 

of 

http://trade.ec.europa.eu/doclib/press/index.cfm?id=786 

The  normal  value  is  usually  based  on  the  prices  paid  or  payable,  in  the  ordinary  course  of  trade,  by 
independent  customers  in  the  exporting  country  or  on  the  full  cost  of  production  plus  a  reasonable 
profit. 
Subsidies are financial contributions by a government or a government body that confer a benefit to a 
recipient (Article 1 ASCM). 
Council  Regulation  (EC)  No  1225/2009  on  protection  against  dumped  imports  from  countries  not 
members of the European Community ( OJ L 343, 22.12.2009, p. 51.) and Council Regulation (EC) No 
597/2009  on  protection  against  subsidised  imports  from  countries  not  members  of  the  European 
Community (OJ L 188, 18.7.2009, p. 93.)  

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on  four  important  elements  of  the  EU's  TDI.  The  draft  guidelines  will  be  released  together 
with  this  Communication  in  the  form  of  Commission  staff  working  documents  for  public 
consultation  before  they  are  adopted  by  the  Commission.  By  adopting  these  guidelines,  the 
Commission exercises the discretion it enjoys and needs when applying EU TDI to concrete 
products. 

2.1. 

Increased transparency and predictability 

Transparency  in  the  implementation  of  the  TDIs  is  of  great  importance  and  therefore  the 
continued  increase  in  transparency  in  TDI  proceedings  is  a  priority.  Various  elements 
designed  to  enhance  transparency  of  the  proceedings  and  to  improve  predictability  for  all 
parties  concerned  are  being  proposed  in  order  to  take  account  of  concerns  expressed  by 
stakeholders. 

2.1.1.  Pre-disclosure of provisional anti-dumping and anti-subsidy measures 

Stakeholders have often expressed the desire to have a possibility to comment in advance on 
the  basis  used  for  the  imposition  of  provisional  anti-dumping  and  anti-subsidy  duties.  They 
claim that such a possibility would, for instance, help to eliminate errors, calculation mistakes 
etc.  which,  under  the  current  system,  are  only  removed  at  the  stage  of  definitive  measures. 
More fundamentally, stakeholders claim that they do not know if and how their business will 
be  affected  by  provisional  measures  because  they  are  unaware  of  the  level  at  which  duties 
might be imposed.  

In order to increase transparency in anti-dumping and anti-subsidy proceedings, it is proposed 
to  provide  interested  parties  with  a  pre-disclosure,  limited  in  scope,  two  weeks  before  the 
imposition of provisional measures. This would avoid that parties are taken by surprise by the 
imposition  of  provisional  measures  without  causing  any  significant  danger  of  stockpiling 
imports, because already today economic operators normally know the time frame of the EU's 
decision-making process and when the publication of provisional measures takes place. The 
current time lines of investigations would not be affected.  
The  limited  in  scope  pre-disclosure  would  be  comprised  of  (i)  a  summary  of  the  proposed 
measures  and  (ii)  the  relevant  calculations  of  the  dumping  and  injury  margins  for  each 
cooperating  exporter  and  the  Union  industry.  In  order  to  respect  the  time  limits  of  an 
investigation, parties would be granted a relatively short deadline, i.e. three working days to 
provide  comments  limited  to  the  calculations.  The  full  disclosure  of  provisional  measures, 
which in turn triggers the possibility to comment extensively on all aspects of such measures, 
would  continue  to  be  given,  as  under  the  current  system,  at  the  time  of  imposition.6  Thus 
calculation  errors  could  be  corrected  before  the  imposition  of  provisional  measures  which 
would increase the accuracy of the measures but without delaying the adoption process. 

This proposal requires a legislative change.  

2.1.2.  Advance notice of non-imposition of provisional measures 

Many stakeholders pointed out that they would like to be informed earlier if the Commission 
does  not  intend  to  impose  provisional  measures.  Indeed,  parties  often  find  out  that  no 
provisional  measures  are  imposed,  only  when  the  9-month  deadline  for  imposing  such 
measures  has  passed.  Advance  notice  would  help  improving  transparency  and  predictability 
of the business environment. In any event, should parties be informed in advance when it is 
intended  to  impose  measures  (as  envisaged  under  this  initiative)  then  it  would  appear 
reasonable to also inform them when it is intended not to impose provisional measures. It is 

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Article 20 (1) of the Basic AD Regulation / Article 30 of the Basic AS Regulation 

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therefore  proposed  to  inform  interested  parties  around  two  weeks  prior  to  the  9-month 
deadline, if it is envisaged or not to impose provisional measures. 

This proposal requires a legislative change.  

2.1.3.  Two  weeks  advance  notice  of  imposition  of  provisional  anti-dumping/anti-subsidy 

measures 

Importers often complain that goods already in transit at the time of imposition of provisional 
measures become subject to those measures, once they are cleared through customs. Since, as 
mentioned  above,  it  is  proposed  to  make  information  about  the  proposed  imposition  of 
provisional measures available to interested parties (around two weeks prior to imposition), it 
is  also  proposed  not  to  impose  measures  within  a  period  of  two  weeks  after  pre-disclosure. 
These  two  weeks  would  increase  predictability  for  all  parties  and  give  importers  more 
flexibility to deal with shipments already in transit while fully respecting the time limits. As 
pointed  out  in  section  2.1.1.,  two  weeks  would  not  endanger  the  effectiveness  of  any 
provisional measures, all the more so because the timing of provisional measures is generally 
well  known.  The  right  of  Member  States  to  request  immediate  imposition  of  provisional 
measures  pursuant  to  Article  7(5)  and  Article  12(4)  of  the  basic  AD  and  AS  regulations 
respectively is not affected by this proposal. 

This proposal requires a legislative change.  

2.1.4.  Guidelines 

Companies involved in TD investigations are often unaware of the very technical aspects of 
the investigations. However, it is in the interest of all parties that these aspects are well known 
and  that  the  relevant  information  is  easily  accessible.  With  this  in  mind,  it  is  proposed  to 
publish guidelines on four core elements of an investigation, i.e. the calculation of the injury 
margin,  the  choice  of  the  analogue  country  in  investigations  concerning  imports  from  non-
market  economy  countries,  the  Union  interest  test  and  the  duration  of  measures  and  expiry 
reviews.  

The  draft  guidelines  spring  from  the  Commission's  experience.  The  Commission  will  carry 
out a public consultation on the draft guidelines before adopting them.  

2.2. 

How to deal with threats of retaliation 

2.2.1.  Ex-officio initiations in case of threats of retaliation 

The public consultation has confirmed that there is a problem of retaliation against some EU 
producers who intend to lodge a complaint requesting the initiation of anti-dumping or anti-
subsidy investigations. As a result, EU producers are often reluctant to lodge a complaint or 
may withdraw from an investigation and thus be prevented from exercising their rights under 
EU and WTO law. 

A third of the respondents reported that they had been subject to retaliatory behaviour in the 
past. Retaliation includes any threat against the economic interests that the EU industry may 
have  in  the  exporting  country.  Such  threats  may  take  many  forms,  e.g.  threats  against 
production,  selling  activities,  investments,  creation  of  administrative  hurdles,  etc.  Threats 
against customers or suppliers of the Union industry are also relevant.  

In the experience of the Commission, such threats are indeed increasing. Therefore, up-to-date 
TDIs  need  to  provide  mechanisms  in  order  to  at  least  alleviate  the  pressure  resulting  from 
threats of retaliation. 

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The way forward is that the Commission opens, where possible, an ex-officio investigation in 
case Union producers are exposed to threats of retaliation and if there is sufficient prima facie 
evidence of injurious dumping/subsidisation.  

The evidence required at the initiation of an ex-officio case has to be of the same standard as 
that for the initiation of an investigation following an application by the EU industry pursuant 
to Article 5 and Article 10 of the Basic AD and AS Regulations respectively.  

Union producers who consider lodging an AD or AS complaint will be encouraged to contact 
the Commission in confidence where they are exposed to threats of retaliation. An outline of 
the type of information that is normally requested will be published on the Commission (DG 
Trade) web-site.  

In deciding whether or not to go ahead with an ex-officio investigation, the Commission will 
decide on the basis of the merits of the evidence available on injurious dumping/subsidisation. 
In addition, the Commission will also take into account available evidence as to whether any 
measures  would  have  disproportionate  economic  consequences  for  the  Union  as  whole, 
should the investigation confirm the existence of injurious dumping/subsidisation.  

The Commission suggests clarifying this point through the applicable legislation.  

2.2.2.  Obligation to cooperate for Union producers producing the like product  

Under  current  provisions  parties  are  not  obliged  to  cooperate  in  TD  proceedings.  For  the 
purpose of ex-officio investigations initiated by the Commission, it is proposed to introduce 
an  obligation  to  cooperate  for  Union  producers.  Such  an  obligation  is  necessary  in  order  to 
ensure  that  the  Commission  services  have  access  to  the  data  required  for  the  investigation. 
The obligation to cooperate comprises the duty to reply to the questionnaire that will be sent 
to the parties at the beginning of such investigations and to accept on-the-spot verification of 
its questionnaire reply by Commission officials.  

The details of Union producers communicating with the Commission will remain confidential 
and will not be revealed in the non-confidential file pursuant to Article 6(7) and Article 11(7) 
of the Basic AD and AS Regulations respectively.  

This proposal requires a legislative change.  

2.3. 

Effectiveness and enforcement 

2.3.1.  Ex-officio anti-circumvention investigations 

The  circumvention  of  trade  defence  measures  is  a  growing  problem  in  international  trade. 
Therefore,  improved  monitoring  of  trade  flows  by  the  Commission  will  ensure  earlier 
detection of such practices. Whenever the Commission is satisfied that such practices appear 
to be taking place, it will open an ex-officio anti-circumvention investigation.  

This proposal does not require a legislative change.   

2.3.2.  Non-application of the lesser-duty rule in anti-subsidy cases and where structural raw 

material distortions exist 

The  lesser-duty  rule  is  a  'WTO  plus'  element  in  the  EU's  TDI.  WTO  rules  allow  the 
imposition  of  anti-dumping  and  anti-subsidy  measures  at  the  level  of  the  dumping/subsidy 
margin.  The  EU  goes  beyond  this  minimum  requirement  set  by  the  WTO  and  imposes 
measures at a lower level than the dumping/subsidy margin if such lower level is sufficient to 
remove the injury of the Union industry.  

However, the application of the lesser-duty rule is not appropriate in the following situations. 
First,  subsidisation  by  third  country  governments  is  an  increasing  concern  and  in  some 

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respects  the  benefit  of  obtaining  a  lower  duty  via  the  lesser-duty-rule  may  encourage 
governments to continue subsidizing their economic operators.  

Second, third countries increasingly interfere in trade of raw materials with a view to keeping 
raw  materials  in  their  country  for  the  benefit  of  downstream  users.  As  a  consequence,  EU 
producers  do  not  compete  on  a  level  playing  field  with  such  third  country  downstream 
producers. It does not seem appropriate that such producers benefit from the lesser-duty rule 
under the EU's TDI system if they themselves benefit from structural raw material distortions. 

The  current  law  does  not  contain  any  provision  that  would  discourage  third  country 
governments  and  economic  operators  from  engaging  in  such  practices.  Therefore,  it  is 
proposed not to apply the lesser-duty rule:  

– 

– 

on a country-wide basis in cases of subsidisation,  

on a country-wide basis in cases of structural raw material distortions, 

This proposal requires a legislative change.   

2.4. 

Facilitate Cooperation 

2.4.1.  Registration and collection of information relating to Union interest 

Stakeholders  claim  that  cooperation  with  the  Commission  in  TD  investigations  may  be 
burdensome in certain cases. This is particularly true for small and medium sized enterprises. 
The  main  difficulties  encountered  by  stakeholders  include  the  significant  workload,  the 
burdensome  and  costly  procedures,  and  the  short  deadlines.  While  the  degree  of  difficulty 
varies between stakeholders, they all agree that due to the technical nature and complexity of 
TD investigations, many companies, especially SMEs often refrain from cooperating.  

In response to these difficulties, the Commission services have already simplified the type of 
information  requested  from  users.  In  addition,  it  is  proposed  in  future  to  grant  longer 
deadlines to all parties to register as interested parties and to reply to the questionnaires, i.e. 
29  days  instead  of  15  days  to  register  as  interested  party  and  51  days  instead  of  37  days  to 
submit the questionnaire reply. This applies for the Union interest part of the investigation but 
not for the investigation of dumping, subsidisation and injury. This should encourage parties 
to cooperate in trade defence investigations, and thus further strengthen the quality of findings 
underlying any decision on measures, while fully respecting the time limits.  

This proposal does not require a legislative change.   

2.4.2.  Simplification of refund procedures 

Stakeholders identified the need to increase transparency also regarding refund procedures.  

The  Commission  will  publish  updated  guidelines  on  refund  applications  in  the  Official 
Journal and on the Commission's (DG Trade) web-site. It is also proposed to publish on the 
web-site: an aide-memoire including a standard form to be filled in by the applicant and the 
cooperating producer, a contact list with all the contact points in the Member States, a list of 
pending refund applications, and whether a refund has been granted or rejected. Provided that 
the applicant has granted permission, the non-confidential version of the refund decision will 
also  be  published  on  DG  Trade's  web-site.  The  Union  industry  concerned  will  be  informed 
about  the  receipt  of  a  refund  application.  A  non-confidential  file  with  all  non-confidential 
documents of refund investigations will be created.  

This proposal does not require a legislative change.   

2.4.3.  Small and medium enterprises 

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Mainly due to their fragmentation and lack of resources it is often very difficult for Small and 
Medium  Sized  Enterprises  (SMEs)  to  cooperate  in  lengthy  and  complex  TDI  proceedings. 
Many  stakeholders  representing  various  interests  claim  that  the  SME  helpdesk  needs  to  be 
upgraded.  

The  SME  helpdesk  will  be  upgraded  to  provide  more  support  and  information  for  SME's 
concerned by a TDI proceeding.  

Furthermore,  specific  seminars  will  be  organised  for  SME's  throughout  the  Union  in 
cooperation  with  Member  States,  in  order  to  raise  awareness  about  TDIs.  Additionally,  the 
Commission will examine ways to facilitate the participation of SME’s in TDI proceedings in 
collaboration with DG Enterprise’s SME network, in particular with regard to the following 
issues:  (a)  standard  form  for  statistics  to  be  submitted  for  standing  purposes  and 
questionnaires  so  as  to  allow  SMEs  to  provide  the  necessary  data  in  the  least  burdensome 
manner;  (b)  considering  setting  the  investigation  period  to  coincide  with  the  financial  year 
whenever possible; (c) diminishing the burden caused by language barriers in a proportionate 
manner.  The  result  of  this  work  will  be  enshrined  in  Commission  guidelines.  This  proposal 
does not require a legislative change.  

2.5. 

Optimising review practice 

2.5.1.  Reimbursement  of  duties  paid  if  the  expiry  review  investigation  is  terminated 

without renewal of measures 

Expiry reviews may be initiated just before the end of the 5 year period of applicability of TD 
measures. The measures remain in force pending the outcome of these reviews which last for 
12 to 15 months. The AD/AS duties continue to be collected during this  period and are not 
reimbursed even if the investigation is terminated and the measures are repealed. However, in 
cases  where  the  investigation  has  shown  that  there  is  no  injurious  dumping/subsidisation  it 
seems unjustified to retain the duties.  

It is therefore proposed to reimburse duties collected during expiry review investigations, if 
the investigation does not result in a renewal of the measures. Such reimbursement will only 
be  granted  upon  application  to  national  customs  authorities  and  will  not  include  interest. 
While  creating  an  additional  administrative  burden,  it  is  not  reasonable  to  hold  operators 
liable for additional duties after formal expiry of the measure if there is no longer evidence to 
support renewal of the measure. 

Stakeholders  representing  producing  interests  argue  that,  since  provisional  measures  are  not 
imposed retroactively, the Union industry continues to suffer injury even after the initiation of 
the proceeding. Consequently the duties collected during an expiry review investigation serve 
as  a  compensation  for  the  lack  of  measures  between  the  initiation  and  the  imposition  of 
provisional measures. However, both EU and WTO law allow for the retroactive imposition 
of  measures  only  in  exceptional,  well-defined  circumstances  (a  substantial  rise  in  dumped 
imports,  over  a  relatively  short  period  of  time,  which  is  likely  to  seriously  undermine  the 
remedial effect of the measures7).  

This proposal requires a legislative change.   

2.5.2.  Expiry reviews combined with interim reviews 

TDI measures are imposed initially for a period of 5 years, after which they may be extended 
for  a  further  period  of  5  years  following  an  expiry  review.  Further  extensions  following 
additional  expiry  reviews  may  follow.  Given  that  the  provisions  on  expiry  reviews  do  not 

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Article 10.4 of the Basic AD Regulation, Article 16.4 of the Basic AS Regulation 

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allow  for  amending  the  level  of  duties,  the  measures  are  either  maintained  unchanged  or 
repealed. With the passage of time, the market situation may have changed significantly since 
the  measures  were  originally  imposed  (e.g.  different  Union  industry,  more  exporters  on  the 
market, new imports from other sources, etc.). Where parties consider that this is indeed the 
case, they will be encouraged to request an interim review in parallel to the initiation of the 
expiry  review.  This  will  allow  the  adaptation  of  the  level  of  the  measure,  as  appropriate,  to 
more accurately reflect the changed market situation.  

Therefore, it  is  proposed that the  notice of impending expiry  published around  nine months 
prior to the end of the 5 year period of application of measures, pursuant to Article 11(2) and 
Article 18(4) of the Basic AD and AS Regulations respectively, will highlight this possibility. 
Moreover,  a  reminder  could  be  published  on  the  DG  TRADE  website  for  the  benefit  of  all 
stakeholders concerned.  

This proposal does not require a legislative change.  

2.5.3.  Systematic initiation  of  interim reviews in case relevant anti-competitive behaviour 

of Union producers has been identified 

While it is true that the purpose and legal basis of TDI and EU competition laws are different, 
anti-competitive behaviour can distort injury findings, e.g. companies participating in a cartel 
will  have  higher  sales  prices  than  under  normal  competitive  conditions.  This,  in  turn, 
influences the price analysis which is an essential part of the injury examination pursuant to 
Article 3(3) and Article 8(3) of the Basic AD and AS Regulations respectively.  

The  Commission  will  in  future,  systematically  open  an  interim  review  of  the  AD/AS 
measures  in  force  where  the  Commission  has  found  that  Union  producers  have  engaged  in 
anti-competitive  behaviour.  This  will  only  apply  where  there  is  an  overlap  of  the  product 
concerned  and  the  time  periods.  The  interim  review  will  examine  if  and  to  what  extent  the 
existing  anti-dumping  or  anti-subsidy  measures  are  affected  by  any  such  anti-competitive 
behaviour. 

This proposal does not require a legislative change.  

2.6. 

Codification 

The legislative changes proposed hereunder, which are of a technical nature, are proposed in 
order  to  bring  EU  legislation  in  line  with  current  practice  or  developments  and  recent 
jurisprudence. Most of the changes have also been recommended in the recent evaluation of 
the EU's TDI8. 

2.6.1.  Registration of imports ex-officio 

Article  14(5)  of  the  Basic  AD  Regulation  and  Article  24(5)  of  the  Basic  AS  Regulation 
provide for the possibility to register imports in the context of an investigation. The purpose 
of registration is to facilitate the retroactive application of duties, if necessary. This provision 
is  routinely  applied  in  limited  circumstances  (e.g.  new  exporter  reviews,  anti-circumvention 
reviews).  The  current  texts  of  Article  14(5)  and  24(5)  provide  for  registration  following  a 
request by the Union industry. While  registration is also possible  on the Commission's own 
initiative this should also be stated in the legislation in the interest of clarity. This amendment 
would not extend the areas where registration can be used today. 

8 

Independent evaluation of trade defence instruments: 
http://trade.ec.europa.eu/doclib/press/index.cfm?id=786 

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2.6.2.  Update Article 11(9) of the Basic AD Regulation and Article 22(4) of the Basic AS 

Regulation 

Article  11(9)  provides:  "In  all  review  or  refund  investigations  carried  out  pursuant  to  this 
Article, the Commission shall, provided that circumstances have not changed, apply the same 
methodology  as  in  the  investigation  which  led  to  the  duty,  with  due  account  being  taken  of 
Article 2, and in particular paragraphs 11 and 12 thereof, and of Article 17." The application 
of  this  provision  in  practice  has  created  uncertainty,  in  particular  as  to  what  constitutes  a 
change  in  circumstances.  Furthermore,  it  has  sometimes  led  to  the  continued  use  of  clearly 
outdated methodologies which are no longer applied in other more recent cases. Article 22(4) 
of  the  Basic  AS  Regulation  contains  similar  rules.  Therefore,  in  order  to  ensure  greater 
coherence across the board, these two provisions should be deleted.  

2.6.3.  Ensure  that  exporting  producers  with  a  zero  or  de-minimis  dumping  margin  in  an 
original  investigation  (as  opposed  to  a  review  investigation)  will  not  be  subject  to 
any review 

Article  9(3)  of  the  Basic  AD  Regulation  stipulates,  inter  alia,  that  individual  exporting 
producers with a dumping margin of less than 2% shall not be subject to an AD duty but 'they 
shall  remain  subject  to  the  proceeding  and  may  be  reinvestigated  in  any  subsequent  review 
carried  out  for  the  country  concerned  pursuant  to  Article  11.'  In  a  WTO  dispute  settlement 
case  between  USA  and  Mexico9,  the  WTO  Appellate  Body  ruled  that  exporters  with  a 
dumping  margin  of  less  than  2%  in  an  original  investigation  must  not  be  subject  to  any 
subsequent  review  investigation,  as  this  would  amount  to  a  violation  of  Article  5.8  of  the 
WTO AD Agreement. Therefore, Article 9(3) will be modified in order to reflect this ruling. 
Instead  of  including  such  companies  in  reviews,  they  may  become  subject  to  new 
investigations pursuant to Article 5 of the Basic AD Regulation.  Similarly, Article 14(5) of 
the Basic AS Regulation will also be amended. 

2.6.4.  Provide  for  the  possibility  of  exemptions  also  for  related  parties  if  they  are  not 

involved in circumvention practices 

The purpose of Article 13(4) of the Basic AD Regulation is to ensure that companies subject 
to  anti-circumvention  investigations  are  exempted  from  any  anti-circumvention  measures  if 
they  can  demonstrate  that  they  are  not  engaging  in  circumvention  practices.  However,  this 
text  does  not  explicitly  provide  for  the  exemption  of  parties  who  are  not  engaged  in 
circumvention  practices  but  are  related  to  producers  subject  to  the  existing  measures. 
Therefore,  it  is  proposed  to  change  the  provisions  of  Article  13(4)  and  Article  23(6)  of  the 
Basic AD and AS Regulations respectively, in order to clarify the texts in this regard.  

2.6.5.  Clarify the definition of "a major proportion" of the Union industry 

An  AD  or  AS  investigation  may  not  be  initiated  unless  complainants  represent  a  "major 
proportion"  of  Union  producers,  i.e.  producers  must  represent  at  least  25%  of  the  total 
production of the product concerned in the EU.  

The Basic Regulations provide for maintaining the same threshold also for the injury analysis. 
However,  following  a  WTO  dispute  settlement  ruling  of  201110,  for  the  purposes  of 
demonstrating  injury,  a  "major  proportion"  during  the  investigation  does  not  automatically 

9 

10 

Appellate Body Report WT/DS295/AB/R of 29.11.2005, Mexico – Definitive anti-dumping measures 
on beef and rice –complaint with respect to rice. 
DS397 of 15 July 2011 in European Communities – Definitive Anti-Dumping Measures on Certain Iron 
or Steel Fasteners from China.  

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10 

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mean  the  25%  threshold  used  for  the  initiation  of  an  investigation.11  This  aspect  must  be 
established on a case-by-case basis. 

Therefore,  the  reference  to  Article  5(4)  as  contained  in  Article  4(1)  of  the  basic  AD 
Regulation should be deleted. Similarly, the reference to Article 10(8) as contained in Article 
9(1) of the Basic AS Regulation should be deleted, in order to comply with this ruling. 

2.6.6.  Sampling provisions should refer to Union producers and not to complainants, except 

for the standing test 

In  cases  where  a  large  number  of  producers,  exporters  or  importers  cooperate  in  an 
investigation sampling may be applied. The current practice of DG Trade, which is also that 
required under WTO law, is to select a sample from all Union producers, and not just from 
complainants (which is what is in fact stated in the basic regulations12).  

Therefore, the reference to complainants in the provisions mentioned in footnote 12 will be 
replaced by a reference to Union producers in order to reflect this practice. 

2.6.7.  Clarify  that  the  investigation  of  Union  interest  covers  all  Union  producers  and  not 

only complainants  

Although the Basic Regulations specifically refer only to "complainants", information for the 
purposes  of  the  Union  interest  test  is,  in  practice,  accepted  not  only  from  complainants  but 
also from other Union producers.13 

This  is  in  line  with  the  principle,  and  long-standing  practice,  that  the  probable  effects  of 
imposing measures or not should be examined for all different types of economic operators in 

11 

Investigations based on an industry complaint cannot be initiated if complainants do not meet the 25%  

threshold of initiation (see Article 5(4) of the basic AD Regulation and Article 10(6) of the Basic AS 
Regulation:  No  investigation  will  be  initiated  when  "Union  producers  expressly  supporting  the 
complaint  account  for  less  than  25%  of  total  production  of  the  like  product  produced  by  the  Union 
industry").  Article  4(1)  of  the  basic  AD  regulation  further  stipulates:  "For  the  purposes  of  this 
Regulation, the term 'Union industry' shall be interpreted as referring to the Union producers as a whole 
of  the  like  product  or  to  those  of  them  whose  collective  output  of  the  product  constitutes  a  major 
proportion, as defined in Article 5(4), of the total Union production of those products (…)" (emphasis 
added). Article 9(1) of the Basic AS Regulation contains similar text. However, the Appellate Body in 
DS397 of 15 July 2011 in European Communities – Definitive Anti-Dumping Measures on Certain Iron 
or Steel Fasteners from China ruled that the reference to a major proportion in Article 4(1) of the basic 
AD regulation in the context of the investigation, cannot automatically be equated with the minimum 
threshold of 25% set in Article 5(4) of the Basic AD Regulation, which refers to the initiation of a case. 
Thus, the Appellate Body rejected the linkage between both articles. The same applies by implication 
for Articles 9(1) and 10(6) of the basic AS Regulation. 
Article 17 of the basic AD Regulation and Article 27 of the basic AS Regulation allow the possibility to 
apply  sampling  in  AD/AS  investigations.  Both  regulations  stipulate  that  sampling  is  carried  out  "[i]n 
cases  where  the  number  of  complainants,  exporters  or  importers,  types  of  product  or  transactions  is 
large (…)" (emphasis added).  
Information for the purposes of the Union interest test is accepted not only from complainants but also 
from other Union producers. However, Article 21(2) of the Basic AD Regulation and Article 31(2) of 
the  Basic  AS  Regulation  stipulate  the  following:  "In  order  to  provide  a  sound  basis  on  which  the 
authorities  can  take  account  of  all  views  and  information  in  the  decision  as  to  whether  or  not  the 
imposition of measures is in the Community interest, the complainants, importers and their respective 
associations, representative users and representative consumer organisations may (…) make themselves 
known and provide information to the Commission. …" (emphasis added). The provisions quoted above 
do  not  reflect  the  current  practice  of  DG-Trade,  as  they  would  leave  unaddressed  the  situation  of 
producers in the Union that are not part of the complainants.  

12 

13 

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the EU. Therefore, the reference to complainants in the provisions mentioned in footnote 13 
will be replaced by a reference to Union producers in order to reflect this practice.  

3. 

CONCLUSION 

An  update  of  legislation  and  procedures  is  appropriate  so  as  to  provide  stakeholders  with 
modern tools to address the changes in the environment in which they operate.  

The  proposals  laid  out  in  this  document  aim  at  modernising  the  current  TD  system.  They 
tackle real problems and offer practical solutions. The different elements address concerns of 
stakeholders  representing  producing  interests  on  the  one  hand,  and  importing  and  consumer 
interests  on  the  other.  A  number  of  these  proposals,  in  particular  those  relating  to 
transparency, will be beneficial for all stakeholders concerned. There are also some proposals 
that  are  more  beneficial  to  producers  while  others  are  more  beneficial  to  importers  and 
consumers. For example, a more offensive approach against threats of retaliation, fraudulent 
or structurally distortive trade practices will strengthen our system and contribute to keeping 
production and employment in the EU. More predictability in relation to provisional measures 
and an optimised review practice will help importers and better satisfy consumers' interests. 
Taken  as  a  whole,  the  Commission  is  convinced  that  the  package  is  balanced.  We  are 
confident  that  with  this  modernisation  the  EU's  trade  defence  instruments  will  remain  a 
benchmark  internationally  and  provide,  inter  alia,  a  source  of  inspiration  for  the  desirable 
reform of WTO-rules on the subject.  

4. 

TIMELINE 

April 2013:  

– 

Adoption  by  the  Commission  of  this  Communication  and  the  legislative 
proposal.  After  adoption  the  legislative  proposal  will  follow  the  ordinary 
legislative procedure in Council and Parliament in the course of 2013/14.  

– 

 Launch of public consultation on draft guidelines. 

July 2013: 

– 

 End of public consultation on draft guidelines. 

Summer 2013: 

– 

 Analysis of responses to public consultation. 

The  changes  in  practice  proposed  in  this  Communication  which  are  not  affected  by  the 
legislative changes or the guidelines will be rolled out over the following months. 

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