Two new European Union (EU) regulations shall enter into force on 20th July, which shall be directly applicable in all countries of the EU, without the need for their transposition into the respective national law, meaning that they may be directly invoked:
- EU Regulation 2016/1037 of the European Parliament and Council of 8th June 2016 regarding protection against subsidised imports from countries not members of the European Union, which repeals CE Regulation number 597/2009, which establishes the standards and conditions for the application of compensatory measures; and
- EU Regulation 2016/1036 of the European Parliament and Council of 8th June 2016, regarding protection against dumped imports from countries not members of the European Union, which repeals CE Regulation number 1225/2009, which establishes the procedure for the imposition of antidumping measures in the EU.
(both were published in the Official Journal of the European Union of 30th June 2016)
According to EU Regulation 2016/1037, a subsidy is deemed to exist when there has been a financial contribution by the public authorities or a public body within the territory of a country, or any type of payment or price support mechanism along the lines of article XVI of the GATT of 1984, and as a consequence the subsidised company has obtained a profit.
Likewise, under EU Regulation 2016/1036, it is deemed that a product is the object of dumping when its export price to the Union is less, in normal commercial operations, than the comparable price established for a similar product in the exporting country.
In such cases, how can fair competition be re-established for the product in question in the EU market?
If an EU industry, to be understood as the unit of manufacturers of the Union of similar products or those amongst which joint production constitutes a principal part of the total production of the Union of said products, believe they are suffering a prejudice derived from the importation of a similar product from a country not member of the EU which is subsidised or is the object of dumping, it is possible to file a claim before the Commission or a Member State, for referral to the Commission.
The claim shall be deemed to have been filed by the EU industry or in its name when it has been backed by EU manufacturers, the joint production of which represents more than 50% of the total production of the similar product manufactured by the Union industry which manifests its support or opposition to the claim. However, it should be taken into account that no investigation shall be initiated when the Union manufacturers represent less than 25 % of total production of the similar product manufactured by the Union industry.
On the other hand, in the absence of a claim, when a member State has sufficient proof regarding the granting of subsidies or dumping practices and the resulting damage to the Union industry, said proof shall be conveyed to the Commission.
Consequently, the Commission shall determine whether sufficient proof exists to justify the opening of an investigation, and in any case, before proceeding to open an investigation, the Government of the country of origin or the concerned exporting country shall be informed.
During the investigation procedure, the Commission may establish compensatory or provisional antidumping rights, which must be assured by a guarantee, provided that, among other conditions:
– a preliminary determination that the imported products is benefitted by subsidies or dumping exists;
– a preliminary determination of damage to the EU industry exists;
– the interests of the EU require intervention to prevent said damage.
Finally, when the definitive verification of the facts shows that compensatory or dumping rights exist which are causing damage, and that the interests of the EU require intervention, the Commission shall impose definitive compensatory or antidumping rights, which shall expire five years after their imposition, unless they are the object of reconsideration. Said compensatory or antidumping rights, both provisional and definitive, shall be established via regulation to be published in the Official Journal of the European Union and shall be perceived by member States, in the form, type and other methods of application as set forth in the corresponding regulations (usually the customs authorities of the affected Member state).
Carla Villavicencio
Vilá Abogados
For more information, please contact:
8th July 2016
