Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (codification)

Article 1

Principles

Article 2

Definitions

For the purposes of this Regulation:

(a) a product is considered to be subsidised if it benefits from a countervailable subsidy as defined in Articles 3 and 4. Such subsidy may be granted by the government of the country of origin of the imported product, or by the government of an intermediate country from which the product is exported to the Union, known for the purposes of this Regulation as ‘the country of export’;

(b) ‘government’ means a government or any public body within the territory of the country of origin or export;

(c) ‘like product’ means a product which is identical, that is to say, alike in all respects, to the product under consideration, or, in the absence of such a product, another product which, although not alike in all respects, has characteristics closely resembling those of the product under consideration;

(d) ‘injury’, unless otherwise specified, means material injury to the Union industry, threat of material injury to the Union industry or material retardation of the establishment of such an industry, and shall be interpreted in accordance with the provisions of Article 8.

Article 3

Definition of a subsidy

A subsidy shall be deemed to exist if:

(i) a government practice involves a direct transfer of funds (for example, grants, loans, equity infusion), potential direct transfers of funds or liabilities (for example, loan guarantees); (ii) government revenue that is otherwise due is forgone or not collected (for example, fiscal incentives such as tax credits). In this regard, the exemption of an exported product from duties or taxes borne by the like product when destined for domestic consumption, or the remission of such duties or taxes in amounts not in excess of those which have been accrued, shall not be deemed to be a subsidy, provided that such an exemption is granted in accordance with the provisions of Annexes I, II and III; (iii) a government provides goods or services other than general infrastructure, or purchases goods; (iv) a government: — makes payments to a funding mechanism, or — entrusts or directs a private body to carry out one or more of the type of functions illustrated in points (i), (ii) and (iii) which would normally be vested in the government, and the practice, in no real sense, differs from practices normally followed by governments; or (b) there is any form of income or price support within the meaning of Article XVI of the GATT 1994; and

Article 4

Countervailable subsidies

In order to determine whether a subsidy is specific to an enterprise or industry or group of enterprises or industries (‘certain enterprises’) within the jurisdiction of the granting authority, the following principles shall apply:

(a) where the granting authority, or the legislation pursuant to which the granting authority operates, explicitly limits access to a subsidy to certain enterprises, such a subsidy shall be specific;

(b) where the granting authority, or the legislation pursuant to which the granting authority operates, establishes objective criteria or conditions governing the eligibility for, and the amount of, a subsidy, specificity shall not exist, provided that the eligibility is automatic and that such criteria and conditions are strictly adhered to;

(c) if, notwithstanding any appearance of non-specificity resulting from the application of the principles laid down in points (a) and (b), there are reasons to believe that the subsidy may in fact be specific, other factors may be considered. Such factors are: use of a subsidy programme by a limited number of certain enterprises; predominant use by certain enterprises; the granting of disproportionately large amounts of subsidy to certain enterprises; the manner in which discretion has been exercised by the granting authority in the decision to grant a subsidy. In this regard, information on the frequency with which applications for a subsidy are refused or approved and the reasons for such decisions shall, in particular, be considered.

For the purpose of point (b), ‘objective criteria or conditions’ means criteria or conditions which are neutral, which do not favour certain enterprises over others, and which are economic in nature and horizontal in application, such as number of employees or size of enterprise.

The criteria or conditions must be clearly set out by law, regulation, or other official document, so as to be capable of verification.

In applying point (c) of the first subparagraph, account shall be taken of the extent of diversification of economic activities within the jurisdiction of the granting authority, as well as of the length of time during which the subsidy programme has been in operation.

Notwithstanding paragraphs 2 and 3, the following subsidies shall be deemed to be specific:

(a) subsidies contingent, in law or in fact, whether solely or as one of several other conditions, upon export performance, including those illustrated in Annex I;

(b) subsidies contingent, whether solely or as one of several other conditions, upon the use of domestic over imported goods.

For the purposes of point (a), subsidies shall be considered to be contingent in fact upon export performance when the facts demonstrate that the granting of a subsidy, without having been made legally contingent upon export performance, is in fact tied to actual or anticipated exportation or export earnings. The mere fact that a subsidy is accorded to enterprises which export shall not, for that reason alone, be considered to be an export subsidy within the meaning of this provision.

Article 5

Calculation of the amount of the countervailable subsidy

The amount of countervailable subsidies shall be calculated in terms of the benefit conferred on the recipient which is found to exist during the investigation period for subsidisation. Normally this period shall be the most recent accounting year of the beneficiary, but may be any other period of at least six months prior to the initiation of the investigation for which reliable financial and other relevant data are available.

Article 6

Calculation of benefit to the recipient

As regards the calculation of benefit to the recipient, the following rules shall apply:

(a) government provision of equity capital shall not be considered to confer a benefit, unless the investment can be regarded as inconsistent with the usual investment practice, including for the provision of risk capital, of private investors in the territory of the country of origin and/or export;

(b) a loan by a government shall not be considered to confer a benefit, unless there is a difference between the amount that the firm receiving the loan pays on the government loan and the amount that the firm would pay for a comparable commercial loan which the firm could actually obtain on the market. In that event the benefit shall be the difference between those two amounts;

(c) a loan guarantee by a government shall not be considered to confer a benefit, unless there is a difference between the amount that the firm receiving the guarantee pays on a loan guaranteed by the government and the amount that the firm would pay for a comparable commercial loan in the absence of the government guarantee. In that case the benefit shall be the difference between those two amounts, adjusted for any differences in fees;

(d) the provision of goods or services or purchase of goods by a government shall not be considered to confer a benefit, unless the provision is made for less than adequate remuneration or the purchase is made for more than adequate remuneration. The adequacy of remuneration shall be determined in relation to prevailing market conditions for the product or service in question in the country of provision or purchase, including price, quality, availability, marketability, transportation and other conditions of purchase or sale. If there are no such prevailing market terms and conditions for the product or service in question in the country of provision or purchase which can be used as appropriate benchmarks, the following rules shall apply: (i) the terms and conditions prevailing in the country concerned shall be adjusted, on the basis of actual costs, prices and other factors available in that country, by an appropriate amount which reflects normal market terms and conditions; or (ii) when appropriate, the terms and conditions prevailing in the market of another country or on the world market which are available to the recipient shall be used.

Article 7

General provisions on calculation

In establishing that amount, the following elements may be deducted from the total subsidy:

(a) any application fee or other costs necessarily incurred in order to qualify for, or to obtain, the subsidy;

(b) export taxes, duties or other charges levied on the export of the product to the Union specifically intended to offset the subsidy.

Where an interested party claims a deduction, it must prove that the claim is justified.

The amount so calculated which is attributable to the investigation period, including that which derives from fixed assets acquired before that period, shall be allocated as described in paragraph 2.

Where the assets are non-depreciating, the subsidy shall be valued as an interest-free loan, and be treated in accordance with Article 6(b).

Article 8

Determination of injury

A determination of injury shall be based on positive evidence and shall involve an objective examination of:

(a) the volume of the subsidised imports and the effect of the subsidised imports on prices in the Union market for like products; and

(b) the consequent impact of those imports on the Union industry.

Where imports of a product from more than one country are simultaneously subject to countervailing duty investigations, the effects of such imports shall be cumulatively assessed only if it is determined that:

(a) the amount of countervailable subsidies established in relation to the imports from each country is more than de minimis as defined in Article 14(5) and the volume of imports from each country is not negligible; and

(b) a cumulative assessment of the effects of the imports is appropriate in the light of the conditions of competition between imported products and the conditions of competition between the imported products and the like Union product.

In making a determination regarding the existence of a threat of material injury, consideration should be given to factors such as:

(a) the nature of the subsidy or subsidies in question and the trade effects likely to arise therefrom;

(b) a significant rate of increase of subsidised imports into the Union market indicating the likelihood of substantially increased imports;

(c) whether there is sufficient freely disposable capacity on the part of the exporter or an imminent and substantial increase in such capacity indicating the likelihood of substantially increased subsidised exports to the Union, account being taken of the availability of other export markets to absorb any additional exports;

(d) whether imports are entering at prices that would, to a significant degree, depress prices or prevent price increases which otherwise would have occurred, and would probably increase demand for further imports;

(e) inventories of the product being investigated.

No one of the factors listed above by itself can necessarily give decisive guidance, but the totality of the factors considered shall be such as to lead to the conclusion that further subsidised exports are imminent and that, unless protective action is taken, material injury will occur.

Article 9

Definition of Union industry

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 products or to those of them whose collective output of the products constitutes a major proportion of the total Union production of those products, except that:

(a) when producers are related to the exporters or importers, or are themselves importers of the allegedly subsidised product, the term ‘Union industry’ may be interpreted as referring to the rest of the producers;

(b) in exceptional circumstances, the territory of the Union may, for the production in question, be divided into two or more competitive markets and the producers within each market may be regarded as a separate industry if: (i) the producers within such a market sell all or almost all of their production of the product in question in that market; and (ii) the demand in that market is not to any substantial degree met by producers of the product in question located elsewhere in the Union. In such circumstances, injury may be found to exist even where a major portion of the total Union industry is not injured, provided that there is a concentration of subsidised imports into such an isolated market and provided further that the subsidised imports are causing injury to the producers of all or almost all of the production within such a market.

For the purpose of paragraph 1, producers shall be considered to be related to exporters or importers only if:

(a) one of them directly or indirectly controls the other;

(b) both of them are directly or indirectly controlled by a third person; or

(c) together they directly or indirectly control a third person, provided that there are grounds for believing or suspecting that the effect of the relationship is such as to cause the producer concerned to behave differently from non-related producers.

For the purpose of this paragraph, one shall be deemed to control another when the former is legally or operationally in a position to exercise restraint or direction over the latter.

Article 10

Initiation of proceedings

Complaints may also be submitted jointly by the Union industry, or by any natural or legal person or any association not having legal personality acting on behalf thereof, and trade unions, or be supported by trade unions. This does not affect the possibility for the Union industry to withdraw the complaint.

The complaint may be submitted to the Commission or to a Member State, which shall forward it to the Commission. The Commission shall send Member States a copy of any complaint it receives. The complaint shall be deemed to have been lodged on the first working day following its delivery to the Commission by registered mail or the issuing of an acknowledgement of receipt by the Commission.

Where, in the absence of any complaint, a Member State is in possession of sufficient evidence of subsidisation and of resultant injury to the Union industry, it shall immediately communicate such evidence to the Commission.

The SME Helpdesk shall make available standard forms for statistics to be submitted for standing purposes and questionnaires.

A complaint under paragraph 1 shall include sufficient evidence of the existence of countervailable subsidies (including, if possible, of their amount), injury and a causal link between the allegedly subsidised imports and the alleged injury. The complaint shall contain such information as is reasonably available to the complainant on the following:

(a) the identity of the complainant and a description of the volume and value of the Union production of the like product by the complainant. Where a written complaint is made on behalf of the Union industry, the complaint shall identify the industry on behalf of which the complaint is made by a list of all known Union producers of the like product (or associations of Union producers of the like product) and, to the extent possible, a description of the volume and value of Union production of the like product accounted for by such producers;

(b) a complete description of the allegedly subsidised product, the names of the country or countries of origin or export in question, the identity of each known exporter or foreign producer and a list of known persons importing the product in question;

(c) evidence with regard to the existence, amount, nature and countervailability of the subsidies in question;

(d) the changes in the volume of the allegedly subsidised imports, the effect of those imports on prices of the like product in the Union market and the consequent impact of the imports on the Union industry, as demonstrated by relevant factors and indices having a bearing on the state of the Union industry, such as those listed in Article 8(2) and (4).

The Commission shall also offer consultations to the country of origin and/or export concerned with regard to other subsidies identified in the course of the investigation. In those situations, the Commission shall send to the country of origin and/or export a summary of the main elements concerning other subsidies, in particular those referred to in point (c) of paragraph 2. If the additional subsidies are not covered by the notice of initiation, the notice of initiation shall be amended and the amended version published in the Official Journal of the European Union. All interested parties shall be given additional and sufficient time to comment.

It shall state the periods within which interested parties may make themselves known, present their views in writing and submit information, if such views and information are to be taken into account during the investigation. It shall also state the period within which interested parties may apply to be heard by the Commission in accordance with Article 11(5).

Article 11

The investigation

For the purpose of a representative finding, an investigation period shall be selected which in the case of subsidisation shall, normally, cover the investigation period provided for in Article 5.

Information relating to a period subsequent to the investigation period shall not, normally, be taken into account.

They shall send to the Commission the information requested together with the results of all inspections, checks or investigations carried out.

Where that information is of general interest or where its transmission has been requested by a Member State, the Commission shall forward it to the Member States, provided that it is not confidential, in which case a non-confidential summary shall be forwarded.

Member States shall take whatever steps are necessary in order to give effect to such requests from the Commission.

Officials of the Commission shall be authorised, if the Commission or a Member State so requests, to assist the officials of Member States in carrying out their duties.

Provision of such opportunities shall take account of the need to preserve confidentiality and of the convenience to the parties.

There shall be no obligation on any party to attend a meeting, and failure to do so shall not be prejudicial to that party's case.

Oral information provided under this paragraph shall be taken into account by the Commission in so far as it is subsequently confirmed in writing.

Such parties may respond to such information and their comments shall be taken into consideration wherever they are sufficiently substantiated in the response.

Article 12

Provisional measures

Provisional duties may be imposed if:

(a) proceedings have been initiated in accordance with Article 10;

(b) a notice has been given to that effect and interested parties have been given an adequate opportunity to submit information and make comments in accordance with the second subparagraph of Article 10(12);

(c) a provisional affirmative determination has been made that the imported product benefits from countervailable subsidies and consequent injury to the Union industry; and

(d) the Union interest calls for intervention to prevent such injury.

The provisional duties shall be imposed no earlier than 60 days from the initiation of the proceedings but no later than nine months from the initiation of the proceedings.

The amount of the provisional countervailing duty shall correspond to the total amount of countervailable subsidies as provisionally established.

Where the Commission, on the basis of all the information submitted, can clearly conclude provisionally that it is not in the Union’s interest to impose the provisional duty at that amount, the provisional countervailing duty shall be the amount adequate to remove the injury to the Union industry, if this is lower than the total amount of countervailable subsidies.

Provisional duties shall not be imposed within a period of three weeks after the information is sent to interested parties under Article 29a (period of pre-disclosure). The provision of such information shall not prejudice any subsequent related decision that may be taken by the Commission.

The Commission shall review by 9 June 2020, whether a substantial rise in imports has occurred during the period of pre-disclosure and whether, if such rise has occurred, it has caused additional injury to the Union industry, despite the measures that the Commission might have taken based on Article 24(5a) and Article 15(1). It shall rely in particular on data collected on the basis of Article 24(6) and any relevant information at its disposal. The Commission shall adopt a delegated act in accordance with Article 32b to amend the duration of the period of pre-disclosure to two weeks in the case of a substantial rise of imports that have caused additional injury and to four weeks where this is not the case.

The Commission shall make public on its website its intention to impose provisional duties, including information on the possible duty rates, at the same time when it provides interested parties with the information pursuant to Article 29a.

Article 13

Undertakings

Where a provisional affirmative determination of subsidisation and injury has been made, the Commission may, in accordance with the advisory procedure referred to in Article 25(2), accept satisfactory voluntary undertakings offers under which:

(a) the country of origin and/or export agrees to eliminate or limit the subsidy or take other measures concerning its effects; or

(b) any exporter undertakes to revise its prices or to cease exports to the area in question as long as such exports benefit from countervailable subsidies, if the injurious effect of the subsidies is thereby eliminated.

In such a case and as long as such undertakings are in force, provisional duties imposed by the Commission in accordance with Article 12(3), or definitive duties imposed in accordance with Article 15(1), as the case may be, shall not apply to the relevant imports of the product concerned manufactured by the companies referred to in the Commission decision accepting undertakings, as subsequently amended.

Price increases under such undertakings shall not be higher than necessary to offset the amount of countervailable subsidies.

Where the Commission, on the basis of all the information submitted, can clearly conclude provisionally that it is not in the Union’s interest to determine the price increase under such undertakings, in accordance with the third subparagraph of paragraph 1 of this Article, the increase under such undertakings shall be less than the amount of countervailable subsidies if such increase would be adequate to remove the injury to the Union industry.

However, it may be determined that a threat of injury is more likely to be realised if the subsidised imports continue. Undertakings shall not be sought or accepted from countries or exporters unless a provisional affirmative determination of subsidisation and injury caused by such subsidisation has been made.

Save in exceptional circumstances, undertakings may not be offered later than five days prior to the end of the period during which representations may be made pursuant to Article 30(5), so as to ensure the opportunity to comment for other parties.

Furthermore, before accepting any such offer, the Union industry shall be given an opportunity to comment with regard to the main features of the undertaking.

In the event that an affirmative determination of subsidisation and injury is made, the undertaking shall continue in accordance with its terms and the provisions of this Regulation.

Any interested party or Member State may submit information, showing prima facie evidence of a breach of an undertaking. The subsequent assessment of whether or not a breach of an undertaking has occurred shall normally be concluded within six months, but in no case later than nine months following a duly substantiated request.

The Commission may request the assistance of the competent authorities of the Member States in the monitoring of undertakings.

Article 14

Termination without measures

Article 15

Imposition of definitive duties

No measures shall be imposed if the subsidy or subsidies are withdrawn or it has been demonstrated that the subsidies no longer confer any benefit on the exporters involved.

The amount of the countervailing duty shall not exceed the amount of countervailable subsidies established.

Where the Commission, on the basis of all the information submitted, can clearly conclude that it is not in the Union’s interest to determine the amount of measures in accordance with the third subparagraph, the amount of the countervailing duty shall be less if such lesser duty would be adequate to remove the injury to the Union industry.

Where the Commission has not registered imports, but where the Commission finds, based on an analysis of all relevant information at its disposal when adopting definitive measures, that a further substantial rise in imports subject to the investigation occurs during the period of pre-disclosure, the Commission shall reflect the additional injury resulting from such increase in the determination of the injury margin for a period no longer than that referred to in Article 18(1).

The Regulation imposing the duty shall specify the duty for each supplier, or, if that is impracticable, the supplying country concerned.

For the purpose of this paragraph, the Commission shall disregard any zero and de minimis amounts of countervailable subsidies and amounts of countervailable subsidies established in the circumstances referred to in Article 28.

Individual duties shall be applied to imports from any exporter or producer for which an individual amount of subsidisation has been calculated as provided for in Article 27.

Article 16

Retroactivity

For that purpose, ‘injury’ shall not include material delay of the establishment of a Union industry, nor threat of material injury, except where it is found that this would, in the absence of provisional measures, have developed into material injury. In all other cases involving such threat or delay, any provisional amounts shall be released and definitive duties can only be imposed from the date on which a final determination of threat or material delay is made.

A definitive countervailing duty may be levied on products which were entered for consumption no more than 90 days prior to the date of application of provisional measures but not prior to the initiation of the investigation, provided that:

(a) the imports have been registered in accordance with Article 24(5);

(b) the importers concerned have been given an opportunity to comment by the Commission;

(c) there are critical circumstances where for the subsidised product in question injury which is difficult to repair is caused by massive imports in a relatively short period of a product benefiting from countervailable subsidies under the terms of this Regulation; and

(d) it is deemed necessary, in order to preclude the recurrence of such injury, to assess countervailing duties retroactively on those imports.

Article 17

Duration

A countervailing measure shall remain in force only as long as, and to the extent that, it is necessary to counteract the countervailable subsidies which are causing injury.

Article 18

Expiry reviews

If, following an investigation pursuant to this Article, the measure expires, any duties collected from the date of the initiation of such investigation on goods that were customs-cleared shall be repaid provided that this is requested from national customs authorities and granted by those authorities in accordance with the applicable Union customs legislation concerning repayment and remission of duty. Such repayment shall not give rise to the payment of interest by the national customs authorities concerned.

Article 19

Interim reviews

The interim review may also be initiated, under the conditions set out above, at the initiative of the Commission or at the request of a Member State.

Article 20

Accelerated reviews

Any exporter whose exports are subject to a definitive countervailing duty but which was not individually investigated during the original investigation for reasons other than a refusal to cooperate with the Commission, shall be entitled, upon request, to an accelerated review in order that the Commission may promptly establish an individual countervailing duty rate for that exporter.

Such a review shall be initiated after Union producers have been given an opportunity to comment.

Article 21

Refunds

Refunds of duties shall normally take place within 12 months and in no circumstances more than 18 months after the date on which a request for a refund, duly supported by evidence, has been made by an importer of the product subject to the countervailing duty.

The payment of any refund authorised should normally be made by Member States within 90 days of the decision referred to in the first subparagraph.

Article 22

General provisions on reviews and refunds

Reviews carried out pursuant to Articles 18 and 19 shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review. In any event, reviews pursuant to Articles 18 and 19 shall in all cases be concluded within 15 months of initiation.

Reviews pursuant to Article 20 shall in all cases be concluded within nine months of the date of initiation.

If a review carried out pursuant to Article 18 is initiated while a review under Article 19 is ongoing in the same proceedings, the review pursuant to Article 19 shall be concluded at the same time as provided for above for the review pursuant to Article 18.

If the investigation is not completed within the deadlines specified in the second, third and fourth subparagraphs, the measures shall:

(a) expire in investigations pursuant to Article 18;

(b) expire in the case of investigations carried out pursuant to Articles 18 and 19 in parallel, where either the investigation pursuant to Article 18 was initiated while a review under Article 19 was ongoing in the same proceedings or where such reviews were initiated at the same time; or

(c) remain unchanged in investigations pursuant to Articles 19 and 20.

A notice announcing the actual expiry or maintenance of the measures pursuant to this paragraph shall be published in the Official Journal of the European Union.

Article 23

Circumvention

The practice, process or work referred to in the first subparagraph includes, inter alia:

(a) the slight modification of the product concerned to make it fall under customs codes which are normally not subject to the measures, provided that the modification does not alter its essential characteristics;

(b) the consignment of the product subject to measures via third countries;

(c) the reorganisation by exporters or producers of their patterns and channels of sales in the country subject to measures in order to eventually have their products exported to the Union through producers benefiting from an individual duty rate lower than that applicable to the products of the manufacturers.

Investigations shall be carried out by the Commission. The Commission may be assisted by customs authorities and the investigations shall be concluded within nine months.

Where the facts as finally ascertained justify the extension of measures, this shall be done by the Commission acting in accordance with the examination procedure referred to in Article 25(3).

The extension shall take effect from the date on which registration was imposed pursuant to Article 24(5) or on which guarantees were requested. The relevant procedural provisions of this Regulation with regard to the initiation and the conduct of investigations shall apply pursuant to this Article.

Where the circumventing practice, process or work takes place outside the Union, exemptions may be granted to producers of the product concerned that are found not to be engaged in circumvention practices as defined in paragraph 3.

Where the circumventing practice, process or work takes place inside the Union, exemptions may be granted to importers that can show that they are not engaged in circumvention practices as defined in paragraph 3.

Those exemptions shall be granted by decision of the Commission and shall remain valid for the period and under the conditions set down therein. The Commission shall provide information to the Member States once it has concluded its analysis.

Provided that the conditions set in Article 20 are met, exemptions may also be granted after the conclusion of the investigation leading to the extension of the measures.

Article 24

General provisions

No product shall be subject to both anti-dumping and countervailing duties for the purpose of dealing with one and the same situation arising from dumping or from export subsidisation.

Such Regulations or Decisions shall contain in particular, and with due regard to the protection of confidential information, the names of the exporters, if possible, or of the countries involved, a description of the product and a summary of the facts and considerations relevant to the subsidy and injury determinations. In each case, a copy of the Regulation or Decision shall be sent to known interested parties. The provisions of this paragraph shall apply mutatis mutandis to reviews.

Measures may only be suspended where market conditions have temporarily changed to an extent that injury would be unlikely to resume as a result of the suspension, and provided that the Union industry has been given an opportunity to comment and those comments have been taken into account. Measures may at any time be reinstated in accordance with the advisory procedure referred to in Article 25(2) if the reason for suspension is no longer applicable.

Article 24a

Continental shelf of a Member State or exclusive economic zone

Article 25

Committee procedure

Article 26

Verification visits

Article 27

Sampling

However, if a material degree of non-cooperation persists or there is insufficient time to select a new sample, the relevant provisions of Article 28 shall apply.

Article 28

Non-cooperation

Where it is found that any interested party has supplied false or misleading information, that information shall be disregarded and use may be made of the facts available.

Interested parties shall be made aware of the consequences of non-cooperation.

Such information may include relevant data pertaining to the world market or other representative markets, where appropriate.

Article 29

Confidentiality

This provision shall not preclude the use of information received in the context of one investigation for the purpose of initiating other investigations within the same proceedings concerning the same like product.

Article 29a

Information at provisional stage

Article 30

Disclosure

Disclosure shall not prejudice any subsequent decision which may be taken by the Commission, but where such a decision is based on any different facts and considerations they shall be disclosed as soon as possible.

Article 31

Union interest

Article 32

Relationships between countervailing duty measures and multilateral remedies

If an imported product is made subject to any countermeasures imposed following recourse to the dispute settlement procedures of the Subsidies Agreement, and such measures are appropriate to remove the injury caused by the countervailable subsidies, any countervailing duty imposed with regard to that product shall immediately be suspended, or repealed, as appropriate.

Article 32a

Report

That report shall include information about the application of provisional and definitive measures, the termination of investigations without measures, undertakings, reinvestigations, reviews, significant distortions and verification visits, and the activities of the various bodies responsible for monitoring the implementation of this Regulation and fulfilment of the obligations arising therefrom. The report shall also cover the use of trade defence instruments by third countries targeting the Union and appeals against the measures imposed. It shall include the activities of the Hearing Officer of the Commission’s Directorate General for Trade and those of the SME Helpdesk in relation to the application of this Regulation.

The Report shall also include how social and environmental standards have been considered and taken into account in the investigations. Such standards shall cover those embodied in multilateral environmental agreements to which the Union is party and in ILO Conventions listed in Annex Ia to this Regulation, as well as equivalent national legislation of the exporting country.

Article 32b

Exercise of the delegation

Article 33

Final provisions

This Regulation shall not preclude the application of:

(a) any special rules laid down in agreements concluded between the Union and third countries;

(b) the Union Regulations in the agricultural sector and Council Regulations (EC) No 1667/2006 (⁴), (EC) No 614/2009 (⁵) and (EC) No 1216/2009 (⁶). This Regulation shall operate by way of complement to those Regulations and in derogation from any provisions thereof which preclude the application of countervailing duties;

(c) special measures, provided that such action does not run counter to obligations under the GATT 1994.

Article 34

Report

The Commission shall include information on the implementation of this Regulation in its annual report on the application and implementation of trade defence measures presented to the European Parliament and to the Council pursuant to Article 23 of Regulation (EU) 2016/1036.

Article 35

Repeal

Regulation (EC) No 597/2009 is repealed.

References to the repealed Regulation shall be construed as references to this Regulation and shall be read in accordance with the correlation table in Annex VI.

Article 36

Entry into force

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

ANNEX I

ILLUSTRATIVE LIST OF EXPORT SUBSIDIES

(a) The provision by governments of direct subsidies to a firm or an industry contingent upon export performance.

(b) Currency retention schemes or any similar practices which involve a bonus on exports.

(c) Internal transport and freight charges on export shipments, provided or mandated by governments, on terms more favourable than for domestic shipments.

(d) The provision by governments or their agencies either directly or indirectly through government-mandated schemes, of imported or domestic products or services for use in the production of exported goods, on terms or conditions more favourable than for provision of like or directly competitive products or services for use in the production of goods for domestic consumption, if (in the case of products) such terms or conditions are more favourable than those commercially available (⁷) on world markets to their exporters.

(e) The full or partial exemption, remission, or deferral (⁸) specifically related to exports, of direct taxes (⁹) or social welfare charges paid or payable by industrial or commercial enterprises.

(f) The allowance of special deductions directly related to exports or export performance, over and above those granted in respect of production for domestic consumption, in the calculation of the base on which direct taxes are charged.

(g) The exemption or remission, in respect of the production and distribution of exported products, of indirect taxes (¹⁰) in excess of those levied in respect of the production and distribution of like products when sold for domestic consumption.

(h) The exemption, remission or deferral of prior-stage cumulative indirect taxes (10)  on goods or services used in the production of exported products in excess of the exemption, remission or deferral of like prior-stage cumulative indirect taxes on goods or services used in the production of like products when sold for domestic consumption; provided, however, that prior-stage cumulative indirect taxes may be exempted, remitted or deferred on exported products even when not exempted, remitted or deferred on like products when sold for domestic consumption, if the prior-stage cumulative indirect taxes are levied on inputs that are consumed in the production of the exported product (making normal allowance for waste) (¹¹). This item shall be interpreted in accordance with the guidelines on consumption of inputs in the production process contained in Annex II.

(i) The remission or drawback of import charges (10)  in excess of those levied on imported inputs that are consumed in the production of the exported product (making normal allowance for waste); provided, however, that in particular cases a firm may use a quantity of home market inputs equal to, and having the same quality and characteristics as, the imported inputs as a substitute for them in order to benefit from this provision if the import and the corresponding export operations both occur within a reasonable time period, not to exceed two years. This item shall be interpreted in accordance with the guidelines on consumption of inputs in the production process contained in Annex II and the guidelines in the determination of substitution drawback systems as export subsidies contained in Annex III.

(j) The provision by governments (or special institutions controlled by governments) of export credit guarantee or insurance programmes, of insurance or guarantee programmes against increases in the cost of exported products or of exchange risk programmes, at premium rates which are inadequate to cover the long-term operating costs and losses of the programmes.

(k) The grant by governments (or special institutions controlled by and/or acting under the authority of governments) of export credits at rates below those which they actually have to pay for the funds so employed (or would have to pay if they borrowed on international capital markets in order to obtain funds of the same maturity and other credit terms and denominated in the same currency as the export credit), or the payment by them of all or part of the costs incurred by exporters or financial institutions in obtaining credits, in so far as they are used to secure a material advantage in the field of export credit terms. Provided, however, that if a Member of the WTO is a party to an international undertaking on official export credits to which at least 12 original such Members are parties as of 1 January 1979 (or a successor undertaking which has been adopted by those original Members), or if in practice a Member of the WTO applies the interest rates provisions of the relevant undertaking, an export credit practice which is in conformity with those provisions shall not be considered an export subsidy.

(l) Any other charge on the public account constituting an export subsidy in the sense of Article XVI of the GATT 1994.

ANNEX Ia

ILO CONVENTIONS REFERRED TO IN THIS REGULATION

ANNEX II

GUIDELINES ON CONSUMPTION OF INPUTS IN THE PRODUCTION PROCESS

(¹²)

1.Indirect tax rebate schemes can allow for exemption, remission or deferral of prior-stage cumulative indirect taxes levied on inputs that are consumed in the production of the exported product (making normal allowance for waste). Similarly, drawback schemes can allow for the remission or drawback of import charges levied on inputs that are consumed in the production of the exported product (making normal allowance for waste).

2.The illustrative list of export subsidies in Annex I makes reference to the term ‘inputs that are consumed in the production of the exported product’ in points (h) and (i). Pursuant to point (h), indirect tax rebate schemes can constitute an export subsidy to the extent that they result in exemption, remission or deferral of prior-stage cumulative indirect taxes in excess of the amount of such taxes actually levied on inputs that are consumed in the production of the exported product. Pursuant to point (i), drawback schemes can constitute an export subsidy to the extent that they result in a remission or drawback of import charges in excess of those actually levied on inputs that are consumed in the production of the exported product. Both points stipulate that normal allowance for waste must be made in findings regarding consumption of inputs in the production of the exported product. Point (i) also provides for substitution, where appropriate.

3.In examining whether inputs are consumed in the production of the exported product, as part of a countervailing duty investigation pursuant to this Regulation, the Commission must normally proceed on the following basis.

4.Where it is alleged that an indirect tax rebate scheme, or a drawback scheme, conveys a subsidy by reason of over-rebate or excess drawback of indirect taxes or import charges on inputs consumed in the production of the exported product, the Commission must normally first determine whether the government of the exporting country has in place and applies a system or procedure to confirm which inputs are consumed in the production of the exported product and in what amounts. Where such a system or procedure is determined to be applied, the Commission must normally then examine the system or procedure to see whether it is reasonable, effective for the purpose intended, and based on generally accepted commercial practices in the country of export. The Commission may deem it necessary to carry out, in accordance with Article 26(2), certain practical tests in order to verify information or to satisfy itself that the system or procedure is being effectively applied.

5.Where there is no such system or procedure, where it is not reasonable, or where it is instituted and considered reasonable but is found not to be applied or not to be applied effectively, a further examination by the exporting country based on the actual inputs involved will normally need to be carried out in the context of determining whether an excess payment occurred. If the Commission deems it necessary, a further examination may be carried out in accordance with point 4.

6.The Commission must normally treat inputs as physically incorporated if such inputs are used in the production process and are physically present in the product exported. An input need not be present in the final product in the same form in which it entered the production process.

7.In determining the amount of a particular input that is consumed in the production of the exported product, a ‘normal allowance for waste’ must normally be taken into account, and such waste must normally be treated as consumed in the production of the exported product. The term ‘waste’ refers to that portion of a given input which does not serve an independent function in the production process, is not consumed in the production of the exported product (for reasons such as inefficiencies) and is not recovered, used or sold by the same manufacturer.

8.The Commission's determination of whether the claimed allowance for waste is ‘normal’ must normally take into account the production process, the average experience of the industry in the country of export, and other technical factors, as appropriate. The Commission must bear in mind that an important question is whether the authorities in the exporting country have reasonably calculated the amount of waste, when such an amount is intended to be included in the tax or duty rebate or remission.

ANNEX III

GUIDELINES IN THE DETERMINATION OF SUBSTITUTION DRAWBACK SYSTEMS AS EXPORT SUBSIDIES

I

Drawback systems can allow for the refund or drawback of import charges on inputs which are consumed in the production process of another product and where the export of this latter product contains domestic inputs having the same quality and characteristics as those submitted for the imported inputs. Pursuant to point (i) of Annex I, substitution drawback systems can constitute an export subsidy to the extent that they result in an excess drawback of the import charges levied initially on the imported inputs for which drawback is being claimed.

II

In examining any substitution drawback system as part of a countervailing duty investigation pursuant to this Regulation, the Commission must normally proceed on the following basis:

ANNEX IV

(This Annex reproduces Annex 2 to the Agreement on Agriculture. Any terms or expressions which are not explained herein or which are not self-explanatory are to be interpreted in the context of that Agreement.)

DOMESTIC SUPPORT: THE BASIS OF EXEMPTION FROM THE REDUCTION COMMITMENTS

plus policy-specific criteria and conditions as set out below. Government service programmes

Policies in this category involve expenditures (or revenue foregone) in relation to programmes which provide services or benefits to agriculture or the rural community. They shall not involve direct payments to producers or processors. Such programmes, which include but are not restricted to the following list, shall meet the general criteria in point 1 and policy-specific conditions where set out below:

Expenditures (or revenue foregone) in relation to the accumulation and holding of stocks of products which form an integral part of a food security programme identified in national legislation. This may include government aid to private storage of products as part of such a programme. The volume and accumulation of such stocks shall correspond to predetermined targets related solely to food security. The process of stock accumulation and disposal shall be financially transparent. Food purchases by the government shall be made at current market prices and sales from food security stocks shall be made at no less than the current domestic market price for the product and quality in question.

Expenditure (or revenue foregone) in relation to the provision of domestic food aid to sections of the population in need. Eligibility to receive the food aid shall be subject to clearly-defined criteria related to nutritional objectives. Such aid shall be in the form of direct provision of food to those concerned or the provision of means to allow eligible recipients to buy food either at market or at subsidised prices. Food purchases by the government shall be made at current market prices and the financing and administration of the aid shall be transparent.

Support provided through direct payments (or revenue foregone, including payments in kind) to producers for which exemption from reduction commitments as claimed shall meet the basic criteria set out in point 1, plus specific criteria applying to individual types of direct payment as set out in points 6 to 13. Where exemption from reduction is claimed for any existing or new type of direct payment other than those specified in points 6 to 13, it shall conform to criteria set out in points 6(b) to (e), in addition to the general criteria set out in point 1.

ANNEX V

REPEALED REGULATION WITH THE AMENDMENT THERETO

Council Regulation (EC) No 597/2009 (OJ L 188, 18.7.2009, p. 93)
Regulation (EU) No 37/2014 of the European Parliament and of the Council (OJ L 18, 21.1.2014, p. 1)	Only point 18 of the Annex

ANNEX VI

CORRELATION TABLE

Regulation (EC) No 597/2009	This Regulation
Articles 1 to 11	Articles 1 to 11
Article 12(1) to (4)	Article 12(1) to (4)
Article 12(6)	Article 12(5)
Articles 13 and 14	Articles 13 and 14
Article 15(1)	Article 15(1)
Article 15(2), first sentence	Article 15(2), first subparagraph
Article 15(2), second sentence	Article 15(2), second subparagraph
Article 15(3)	Article 15(3)
Articles 16 to 27	Articles 16 to 27
Article 28(1) to (4)	Article 28(1) to (4)
Article 28(5), first sentence	Article 28(5), first subparagraph
Article 28(5), second sentence	Article 28(5), second subparagraph
Article 28(6)	Article 28(6)
Articles 29 to 33	Articles 29 to 33
Article 33a	Article 34
Article 34	Article 35
Article 35	Article 36
Annexes I to IV	Annexes I to IV
Annex V	—
Annex VI	—
—	Annex V
—	Annex VI