On December 12, 2017, the European Parliament and Council signed the new regulation (EU) 2017/2321 amending the current anti-dumping methodology. This follows the Council’s approval, with amendments, on December 4, 2017. The final text of the regulation was published today in the Official Journal. It will enter into force tomorrow (December 20, 2017). (See our previous posts for further detail on the new anti-dumping methodology and the political agreement on the new methodology.)
These new rules stipulate that if the existence of “significant distortions” has been established by the complainant, the Commission may use an alternative methodology for calculating dumping margins for imports from third countries. In such cases, the normal value shall be constructed exclusively on the basis of costs of production and sale reflecting undistorted prices or benchmarks. These may include benchmarks or corresponding costs in another country with a similar level of economic development as the exporting country.
This new framework notably removes the former distinction between market and non-market economies (“NMEs”). The alternative methodology can now be used for any WTO country, instead of being restricted to the WTO members marked as NME. The amendments also include changes regarding the investigation of subsidy complaints by the Commission. To that end, the regulation will now enable the Commission to assess any additional subsidy scheme identified in the course of an investigation. In the event that these schemes are not covered by the notice of initiation, the notice will be amended accordingly. The amended version will then be published in the Official Journal.
The most noteworthy modifications made to the Commission’s proposal are the following. First, respect for social and environmental rules and standards is now an important criterion that has been added to the regulation. For example, when preparing reports on significant distortions in particular countries or sectors, the Commission should take into account social and environmental rules and conventions where appropriate. This also applies to the Commission’s sourcing of data in representative countries as part of the calculation of the normal value for products from exporting countries with significant distortions. Where there is more than one such representative country, preference will be given to countries with an adequate level of social and environmental protection. Second, the Commission may also, in addition to other elements, take into account undistorted domestic costs when calculating the normal value for products from exporting countries with significant distortions. Finally, the regulation emphasizes that it is “without prejudice to establishing whether or not any WTO Member is a market economy”.
If you have any questions regarding the above, do not hesitate to contact fclaprevote@cgsh.com or tmuelleribold@cgsh.com or your usual contact at the firm.