CELEX: 51979PC0304
Language: en
Date: 1979-06-07
Title: Proposal for a COUNCIL REGULATION (EEC) amending Regulation (EEC) No 459/68 on protection against dumping or the granting of bounties or subsidies by countries which are not members of the European Economic Community (submitted to the Council by the Commission)

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DOCUMENTS "COM"
COM (79) 304
Vol. 1979/0116
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 ---pagebreak---                                                                 COM(79 ) 304 final..
      COMMISSION                                                Brussels , 7 June 1979
        OF THE
EUROPEAN COMMUNITIES                                            FOR OFFICIAL USE ONLY
    General Secretariat
                                          Proposal for a
                                     COUNCIL REGULATION ( EEC )
           amending Regulation ( EEC ) No 459/ 68 on protection against dumping or the
           granting of bounties or subsidies by countries which are not members of
                                 the European Economic Community
                           ( submitted to the Council by the Commission )
           C0M(79 ) 304 final .
 ---pagebreak---                          EXPLANATORY MEMORANDUM
  Since the adoption of the EEC anti-dumping Regulation no 459/68 , experience
  has shown that it is necessary, in order to avoid uncertainty among
  exporters , importers and the authorities charged with administering
  the Regulation, to clarify certain concepts contained therein .   The
  present proposal is intended to achieve this end .
  The Commission draws the Council 's attention to the fact that its
 proposal takes account of the following elements :
.- conformity with the Community 's international obligations resulting from
    Article VI of the General Agreement on Tariffs and Trade ( GATT) and the
    1968 Ant i -Dumping Code ;
 - guidance given recently by the European Court of Justice and in
    particular by the opinions expressed by the Advocate General ;
 - established practice of the Community 's major trading partners;
 - official position - adopted by the Community during the recent GATT
    discussions on the priority problems and issues in the field of anti-
    dumping policy .
 As the results of the GATT Multilateral Trade Negotiations have not yet
been officially adopted by the Community and as they would not in any
event be required to be implemented before 1 January 1980 the present
proposal does not therefore seek their implementation which would
require a separate proposal .
 ---pagebreak---                                 Proposal for a
                           COUNCIL REGULATION ( EEC )
 amending Regulation ( EEC ) No 459/ 68 on protection against dumping or the
 granting of bounties or subsidies by countries which are not members of
 the European Economic Community
THE COUNCIL OF THE EUROPEAN COMMUNITIES­
                                        »
Having regard to the Treaty establishing the European Economic Community,
and in particular Article 113 thereof ,
Having regard to the proposal from the Commission,
Whereas the Community has adopted common rules on protection against
dumping or the granting of bounties or subsidies by countries which are
not members of the Community and whereas , for products to which the Treaty
establishing the European Economic Community relates , these rules are
                                                      1
contained, in Council Regulation ( EEC ) No 459/ 68 as last amended by
Regulation ( EEC ) No 1411/772;
Whereas these Community rules are, in large measure, transposed from the
Agreement on implementation of Article VI of the General Agreement on
Tariffs and Trade, known as the Anti-dumping Code ;
Whereas the experience acquired in the application of certain of these
rules demonstrates that it is expedient to clarify certain concepts which
are contained in the said rules , taking account inter alia of the
established practice of the Community 's major trading partners and of the
Community in the coal and steel sector as laid down by Commission
Recommendation No 77/329/ ECSC"^ as last amended by Recommendation No
158/ 79/ ECSC4;
Whereas in particular it is necessary to align more closely the definition
of dumping to the language contained in Article VI of the GATT and the
Anti-dumping Code by introducing the term " normal value" and setting out
the ways in which it may be determined;
1 0J No  L  93,  17.4.68, p , 1
20J  No  L 160,  30.6,77, p . 4
30J  No  L 114,   5.5.77, p . 6
4ÓJ  No  L  21 , 30. 1.79, P. 14
 ---pagebreak--- Whereas    it is necessary to define more precisely the method of calculation
of constructed value to be used in situations when the price of the like
product on the domestic market does not permit a proper comparison and
particularly in those cases where no profit is realized in the domestic
market of the country of origin of the product under consideration;
Whereas it is necessary to clarify those situations in which sales may be
considered as not having been made in the ordinary course of trade , in
particular with regard to cases where a product is sold at prices which are
lessthan its cost of production, and to define more precisely the method
oF determining^normal value;
Whereas it is necessary to clarify that , in the case of imports from state-
trading countries , normal value is determined on the basis of prices or
costs of a like product in a market economy country or , if necessary ,
from such prices in the Community ;
Whereas it is appropriate to give a definition of export price and to
indicate more precisely the allowances to be made in those cases where
reconstruction of such price from the first open market price is required;
Whereas , insofar as allowances applicable in making comparisons between
export price and normal value are concerned, it is advisable to establish
that the onus of proof falls on the person claiming the allowances ;
Whereas / in order to remove possible misunderstanding it is necessary to
redefine the term " margin of dumping " and to provide for methods of
calculation where prices and margins vary;
Whereas , with regard to injury, it is necessary to clarify the rules
regarding the determination of injury and in particular to ensure that
injuries caused by other factors may not be attributed to dumping but must
be isolated therefrom ;
Whereas it is essential to clarify the circumstances under which interested
parties may have access to information used in the course of investigations
 ---pagebreak---                                        - 3 -
Whereas , in order to discourage the continuation of dumping , it is necessary
to create , in cases where the facts as finally established show that there
is dumping and injury , the possibility of definitive collection of provisional
duties even if specific reasons , for example the acceptance of an undertaking ,
make the imposition of a definitive anti-dumping duty unnecessary;
Whereas it is necessary for practical reasons to modify certain of the rules
governing the extension of provisional anti-dumping measures ;
Whereas it is necessary to establish a simplified procedure for the consideration
of applications for refunds of anti-dumping duties ;
Whereas it seems opportune to authorize the Commission to lay down , in
conformity with the Community 's international obligations , provisions to
implement the rules on allowances and the treatment of information ;
Whereas the modifications contained herein do not prejudice any subsequent
adaptation of the Community 's anti-dumping regulation which could result from
the Multilateral Trade Negotiations , within the framework of the General
Agreement on Tariffs and Trade ,
HAS ADOPTED THIS REGULATION :
                                     Article 1
Regulation ( EEC ) No 459/ 68 is hereby amended as follows :
1.    Article 3 shall read as follows :
" 1 . A product introduced into Community commerce shall be considered to have
  been dumped if its export price to the Community is less than the normal
  value of the like product .
2.    a ) For the purposes of this Article , the normal value shall be :
          aa ) The comparable price , in the ordinary course of trade; for the
          like product when destined for consumption in the exporting country
          of origin , or ,
 ---pagebreak---                                       - 4 -
     bb) When there are no sales of the like product In the ordinary course
     of trade in the domestic market of the exporting country or when, because
     of the particular market situation such sales do not permit a proper
     comparison,
          i ) the comparable price of the like product when exported to any
          third country, which may be the highest such export price but should
         be a representative price; or
          ii ) the constructed value, that is to say, the cost of production,
          including general expenses, in the country of origin plus a reasonable
         amount for profit ; as a general rule the addition for profit shall
         not exceed the profit normally realized on sales of products of the
         same* general category in the domestic market of the country of origin .
         If no such profit is realized the Commission shall determine the
         addition on any reasonable basis using the best evidence available .
 b) Whenever there are reasonable grounds to believe or suspect that the price
 at which a product is sold for consumption in the country of origin is less
 than its cost of production, sales at such prices may be considered as not
 having been, made in the ordinary course of trade if they
    aa ) have been made over an extended period of time and in substantial
    quantities and
    bb) are not at prices which permit recovery of all costs within a
                 period of time in the monrral course of trade.
In such circumstances the normal value may be determined on the basis of the
remaining sales in the domestic market made at not less than cost of
production or of export sales to third countries or of the constructed value
or by adjusting the above-mentioned price below cost of production in order
to eliminate loss and provide for a reasonable profit . Such normal value
calculations shall be based on the best evidence available .
 ---pagebreak---                                       - 5 -
 c ) In the case of imports from countries to which Regulation ( EEC )
               1     .             .2 ;
 No 109 / 70      and Mo 2532 /78                 apply, or from other countries
 with a similar economic structure, normal value shall be determined in
 an appropriate and not unreasonable manner on one of the following bases :
     aa ) the prices at which a like product of a third country to which the
     above-mentioned Regulations do not apply is sold either
          i ) for consumption in the domestic market of that country , or
          ii .) to other countries , including the Community; or
     bbi) the constructed value of a like product in a third country to which
     the.above-mentioned Regulations do not apply; or
     cc ) if neither prices nor constructed value as established under aa )
     or bb ) above provide an adequate basis, the price in the Community , if
     necessary duly adjusted to reflect reasonable profits .
d) Where a product is not imported directly from the country of origin
but is -exported to the Community from an intermediate country , the normal
value shall normally be the comparable price of the like product on the
domestic market of the country of export .
However , comparison may be made with the price in the country of origin if ,
for example , the product is merely transhipped through the country of
export or such products are not produced in the country of export , or
there is no comparable price for it in the country of export .
      Regulation establishing common rules for imports from state-trading
      countries      ( 0J No L 19 , 26.1.79, p; 1 )
      Regulation establishing common rules for imports from the People 's
      Republic of China       ( 0J No L 306 , 31.10.78 , p. 1 )
 ---pagebreak---   a ) The export price shall be the price actually paid or payable for
  the product sold for export to the Community.
  b ) In cases where there is no export price or where it appears that
  there is an association or a compensatory arrangement between the
                                  i •
  exporter and the importer or a third party, the export price may be
  constructed on the basis of the price at which the imported product is
 first resold to an independent buyer , or if the product is not resold
 to an independent buyer or not resold in the condition imported, on any
 reasonable basis .   In such cases allowance shall be made for all costs
 incurred between importation and resale, including all duties and taxes,
 and for a reasonable profit .
 a ) In order to effect a fair comparison, the export price and the normal
 value shall be compared at the sale level of trade , normally at the
 ex-factory level , and as nearly as possible at the same time .
b) Due allowance shall be made in each case, on its merits , for differences
 in conditions and terms of sale, for differences in taxation, and for
other differences affecting price comparability, provided that where such
allowances are claimed by interested parties they can satisfactorily
demonstrate to the Commission that such allowances are justified .
c ) No product shall be considered to have been dumped by reason of the
exemption of such product from duties or taxes borne by the like product
when destined for consumption in the country of origin or exportation ,
or by reason of the refund of such duties or taxes .
"Margin of dumping" means the amount by which the normal value exceeds
the export price .
Where prices vary, dumping margins may be established on a transaction
by transaction basis or by reference to preponderant , representative
or weighted average prices .
Where varying dumping margins are found, weighted averages may be
established ."
 ---pagebreak---                                  - 7 -
2.   Paragraphs 1 , 2 and 3 of Article 4 shall read as follows :
"1 .  The evaluation of the effects^of the dumped imports on the industry
 in question shall be based on examination of all factors having a bearing
 on the state of the industry in question, such as developments and prospects
 with regard to turnover , market share, profits , prices ( including the extent
 to which the delivered, duty-paid price is lower or higher than the most
 representative comparable price of the like product prevailing in the
 ordinary course of trade within the Community), employment , volume of
 dumped and other imports , utilization of capacity of Community industry,
 productivity , and restrictive trade practices .   No one or more of these
 factors can necessari ly give decisive guidance .
          »
•2.   In order to establish whether dumped imports are causing injury , all
 other factors which individually or in combination may be adversely
 affecting the Community industry shall be examined .    The factors to be
 considered are , among others , the volume and prices of undumped imports
 of the product in question, competition between the Community producers
 themselves , contraction in demand due to substitution of other products
 or to changes in consumer tastes and export performance .
 3.   a ) No injury can be attributed to dumping unless the dumped imports are
      demonstrably the principal cause of such injury .   For the purpose of
      such demonstration, the consequences of the dumping positively found to
      be such shall be weighed against each of the other known factors which
      at the same time may be injuring the industry .   The injuries caused by
      such other factors must not be attributed to the dumped imports .
      b) A determination of injury shall in all cases be based on positive
      findings and not merely on allegation, conjecture or remote
      possibility .  In the case of threat of injury, the change in circum­
      stances which would create a situation in which dumping would cause
      injury must be clearly foreseen and imminent ."
 ---pagebreak--- Paragraph 4 of Article 10 shall read as follows :
  a ) The complainant and the importers and exporters known to be
  concerned/ as well as the representatives of the exporting country,
  may inspect all information made available to the Commission by any
  party to an investigation as distinguished from internal documents
  prepared by the Community authorities provided that it is relevant
  to the defence of their interests and not confidential within the
  meaning of Article 11 and that it is used by the Commission in the
  anti-dumping investigation .  To this end, they shall address a
  written request to the Commission/ indicating the information required .
  b) Exporters and importers of the product subject to the investigation
  may request to be informed by the Commission service conducting the
  investigation of the essential facts and considerations on the basis
 of which it intends to advise imposition of definitive duties or
 definitive collection of amounts secured by way of provisional duty ."
Paragraph 2 a ) of Article 14 shall read as follows :
 a ) Anti-dumping procedures may be terminated without imposition of
 anti-dumping duties or provisional measures where, during the
 examination of the matter/ the exporters give a voluntary undertaking
 to revise their prices so that the margin of dumping is eliminated
 or to cease to export the product in question to the Community/
 provided that the Commission/ after hearing the opinions expressed
 within the Committee/ considers this acceptable . Such termination
 shall be decided in conformity with the procedure laid down in the
 foregoing paragraph . It does not preclude the definitive collection
 of amounts secured by way of provisional duties pursuant to Article 17(2 ).
 ---pagebreak---                           /
                                   f9
                    0
  5.
                    h
                    .  «rl V
       Paragraph 2 of "Article 16 shall read as follows
                             \
                      {       \ ■
  "2 .  Not less than one month before expiry of the period of three months
                                        t •
    laid down in Article 15(2 ) ( a ), the Commission shall , without prejudice
   to the provisions of Article 18, submit a proposal to the Council either
   for Community action under Article 17 or, if exporters and importers
   representing a significant proportion of the trade involved so request
   or do not object , and if examination of the matter has not yet been
   completed, for the extension of the provisional measures for a period
   not exceeding three months .
   In the latter case the Council shall act by a qualified majority ."
• 6.'  Paragraphs 1 and 2 of Article 17 shall read as follows :
  "1 .  Where the facts as finally established show that there is dumping and
   injury, and the interests of the Community call for Community intervention,
   the Commission shall , after hearing the opinions expressed within the
   Committee , submit a proposal to the Council .     The Council shall act by
   a qualified majority .
   2.   a ) Where Article 15(1 ) has been applied, the Council shall decide ,
        subject to the provisions of Article 15(2 ), and independently of
        whether a definitive anti-dumping duty is to be imposed, what
        proportion of the amounts secured by way of provisional duty is to
        be definitively collected .     The Council shall act by qualified
        majority on a proposal from the Commission .
        b) The definitive collection of such amount shall not be decided upon
        unless the facts as finally established show that there has been .
        dumping and material injury ( and not merely threat of material injury
        or of material retardation of the establishment of a Community industry )
        or that such injury would have been caused if provisional action had
        not been taken ."
 ---pagebreak---                                    - 10 -
  7.    Paragraph 4 of Article 19 shall read as follows :
  "4 . a ) Where, subsequent to the application of an anti-dumping duty, an
  v ; . importer can show that the dpty calculated exceeds the actual dumping
         margin within the meaning of Article 3(5 ), the amount in excess of
         the margin shall be reimbursed; where provisional measures were taken,
       . - he same shall apply in ronpect of release of securities .
         b) For this purpos ?, the importer may, within three months of the date
         on which the products were entered for consumption, submit an
         application to the Member State in whose territory they were so
         entered . That Member State shall forward the application to the
         Commission as soon as possible, either with or without an opinion as
          to its merits . The Commission shall inform other Member States forth­
         with and give its opinion on the matter . If Member States agre <=> with
         the opinion given by the Commission or do not object to vt within
        twenty days of being informed, the Member Stara in question shall act
         in accordance with the said opinion . In all other cases ,, the Commission
        shall , after considering any opinion given by the Member States ,
        decide whether and to what extent the Member State should gram, tlv-
        application ."
 8.     The following Article 21 a shall be inserted :
 "The Ccmiission is authorized to lay down, after having consulted tic
  Cornmv'- '    md in conformity with the Community 's international obi 4 to': ions .,
  f rovis\cn .o to implement the rules of this Regulation relating tor
  a ) Allowances affecting price comparability between normal
  expoi J: price ( Article 3(3 ) and ( 4);
  b) Treatment of information received during the investigation ' K      ' c 1 -T
  nnd 11 )."
V » hs reference to Article 3 ( 5 ) contained in Article 22 shall b " rpplcr.c-d
    br ? reference to Article 3.(4 ) ( c ).
 ---pagebreak---                              - 11 -
                            Article 2
                                » *
This Regulation shall enter into force on the day of its publication
in the Official Journal of the European Communities .
This Regulation shall be binding in its entirety and directly
applicable in all Member States .
Done at Brussels .