Commission Implementing Regulation (EU) 2019/1590 of 26 September 2019 amending Implementing Regulation (EU) 2019/159 imposing definitive safeguard measures against imports of certain steel products

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports ¹, and in particular Articles 16 and 20 thereof,

Having regard to Regulation (EU) 2015/755 of the European Parliament and of the Council of 29 April 2015 on common rules for imports from certain third countries ², and in particular Articles 13 and 16 thereof,

Whereas:

1. BACKGROUND

• (1) By Implementing Regulation (EU) 2019/159, the European Commission (‘the Commission’) imposed definitive safeguard measures on certain steel products (‘the definitive Regulation’) ³. The measures imposed by that regulation consist of a tariff-rate quota (‘TRQ’) with respect to 26 steel product categories, set at a level high enough to preserve traditional trade flows. A 25 % tariff duty would apply only beyond that set quantitative level of traditional trade flows on a per-product-category basis.

• (2) Recital (161) and Article 9 of the definitive Regulation noted that, based on the Union interest, the Commission ‘may have to adjust the level or allocation of the tariff-rate quota. .. in case of changes of circumstances during the period of imposition of the measures’ and that such a review should commence ‘no later than 1 July 2019’.

• (3) In light of that consideration, on 17 May 2019 ⁴, the Commission initiated a review of the definitive Regulation and invited parties to make their views known, submit information, and provide supporting evidence concerning the five grounds of review identified by the Commission for the 26 product categories concerned in the Notice of Initiation of the Review Investigation. As per Section 3 thereof, these grounds of review concerned:

• (a) Level and allocation of TRQs for a number of specific product categories;

• (b) Crowding out of traditional trade flows;

• (c) Potential detrimental effects in achieving the integration objectives pursued with preferential trading partners;

• (d) Update of the list of developing WTO member countries excluded from the scope of the measures based on updated import statistics; and

• (e) Other changes of circumstances that may require an adjustment to the level of allocation of the TRQ.

• (4) The Commission received submissions from over 150 different parties. Interested parties were also allowed to make comments on and formulate rebuttals to each other's submissions. As a result, the Commission received over 50 additional rebuttal submissions.

• (5) Following an in-depth analysis of all the submissions received, the Commission arrived at the following findings. These are organized in Section 2 below within five different sub-sections corresponding to the five grounds of review identified in recital (3) above.

2. FINDINGS OF THE INVESTIGATION

2.A.   Level and allocation of TRQs for a number of specific product categories

• (6) As already announced in recital (161) of the definitive Regulation, the Commission's review of the existing measures concerned any product category subject to measures, including (but not limited to) product categories 3, 4, 6 and 16. For those specific product categories, the Commission had received a considerable number of comments during the investigation leading to the adoption of the definitive safeguard measures. Those product categories had also been the object of numerous exchanges in the context of bilateral consultations with the Union's trading partners.

• (7) That being said, all 26 product categories had been subject to daily monitoring by the Commission.

• (8) In the Notice of Initiation of the Review Investigation, the Commission announced that it would investigate whether changed circumstances had occurred since the adoption of the definitive measures, including whether there was evidence of a substantial increase or contraction in Union demand or the imposition of trade defence measures on certain product categories. Those instances would make it necessary to adjust the level or allocation of the TRQ in place.

• (9) To identify substantial changes in demand, the Commission explained that it was looking into the evolution of the use of the TRQ concerned to see whether quotas had been exhausted or whether their use did not reflect traditional trade flows.

• (10) At the point of initiation of the review investigation, the Commission found such potential abnormal patterns of trade in product categories 4B, 5, 13, 15, 16, 17, and 25. For those categories, either certain annual country-specific quotas or the corresponding residual quota, which was calculated to last until the end of June 2019, had already been exhausted or were about to be exhausted within only two months from the imposition of the definitive safeguard measures.

• (11) For the purposes of its review, Commission analysed in detail the development of the 26 product categories, not only on the basis of its daily monitoring, but more specifically also for their development during the period from 2 February 2019 to the end of June 2019. Through that analysis, the Commission sought to determine whether any possible abnormal use pattern originate in a genuine substantial increase of Union demand, or whether those use patterns of the TRQs are the result of speculative stockpiling activities, or, in fact, of trade diversion caused by distortive trade measures taken abroad.

Comments made by interested parties

• (12) In their submissions, many interested parties requested either an increase in the level of TRQ or a different system for the allocation or use of quotas for the product categories they import. Only a few interested parties submitted meaningful evidence supporting the conclusion of a potential imbalance between the available quantitative limits set by the TRQ and existing (or developing) EU demand or other changed circumstances. The majority of these comments focused on the following product categories that will be individually discussed in this section: category 1 (hot rolled sheets and strips), category 4B (automotive metallic coated sheets), category 16 (wire rod) and category 25 (large welded tubes).

• (13) For the other product categories mentioned either in the review clause or in the Notice of Initiation of the Review Investigation (that is, product categories 3 (electrical sheets), 5 (organic coated sheets), 6 (tin mill products), 13 (rebars), 15 (stainless wire rod) and 17 (angles, shapes and sections)), the comments received were limited. No submission received provided evidence pointing to problems of offer shortfall (i.e. low quantitative limits set by the TRQ concerned) caused by increased demand, or any other changed circumstances. However, numerous submissions claimed crowding-out problems with respect to product category 13 that will be also individually analyzed in this section under sub-section 2.B below.

Commission analysis

• (14) At the end of the first annual period of measures on 30 June 2019, for 24 out of the 26 product categories, the actual import volumes remained below their respective quantitative level set by the TRQ, either from one or more country-specific TRQ and/or from the global TRQ. In other words, only for two product categories, i.e. category 13 (rebars) and category 14 (stainless steel bars) the total quotas (country-specific and residual) made available under the measures were fully exhausted closely towards the end of June 2019.

• (15) Overall, 1,3 million tonnes of the TRQ available for the period 2 February – 30 June 2019 remained unused. In addition, the Commission confirmed that during the period when provisional measures were in place (18 July 2018 - 1 February 2019) around two million tonnes of quota space remained unused. Therefore, during the first year of application of the safeguard measures, over 3,2 million tonnes free-of-duty imports were not used.

• (16) On that basis, the Commission concluded that the TRQ levels established pursuant to the ongoing safeguard measures did not unduly restrict trade flows but rather ensured that traditional trade flows were maintained commensurate with the Union market needs. No evidence of alleged offer shortfall caused by increased demand had been provided by interested parties.

Specific assessment: Category 1 – Hot-rolled flat products

• (17) For all product categories subject to definitive safeguard measures except for category 1, the TRQ system adopted by the Commission was a combination of country-specific and residual TRQs. In so doing, the Commission aimed at preserving the traditional trade volumes not only in volume but also in origin terms.

• (18) However, the Commission considered that this preferred TRQ system was not appropriate for product category 1 due to the following particular circumstances. Indeed, five of the main historical exporting countries ⁵, representing close to 60 % of imports in the period 2015-2017, had been made subject to anti-dumping and/or countervailing measures during that same period ⁶. This significantly affected their level of imports.

• (19) Therefore, the Commission concluded these countries would normally no longer be in a position to export to the Union at their historical level, i.e. based on the average level of their Union imports in the last three years (2015-2017). The Commission, therefore, decided that it was in the Union's interest to adopt a single system of global TRQs, administered on a quarterly basis, in order to avoid the risk of shortage that a country-specific allocation could unduly generate.

• (20) In their comments during this review, some interested parties, including the Union industry and several exporting countries, requested the Commission to implement a system of country-specific TRQs also for product category 1. These parties argue that the current evolution of imports would create an imbalance in the import flows to the detriment of certain supplying countries that would in turn create certain market disturbances.

• (21) In reaction thereto, the Commission analyzed the import evolution of product category 1 during 2018 and the first half of 2019. It observed that, vis-à-vis Russia as supplying country, despite being subjected to anti-dumping measures (which resulted in a relevant decrease of its import volume in 2017), its exports during the period January 2018-June 2019 recovered a substantial part of its historical trading volume. Russia accounted for 16 % of TRQ use in the period February-June 2019 ⁷. In addition, other countries subject to anti-dumping measures, namely Brazil and Ukraine, have continued exporting to the Union ⁸, albeit in much more limited quantities than before the imposition of anti-dumping duties.

• (22) In view of the above-described evolution of imports, most notably from Russia, which could not be foreseen when the definitive safeguard measures were adopted, the Commission found now that the level of imports significantly affected by trade defence measures is substantially lower than expected. Furthermore, given the consistently-high use rate of the TRQ in the two quarters subject to definitive safeguard measures (February-June 2019) by other exporting countries, notably Turkey, India and the Republic of Serbia with respective shares of 40 %, 15 % and 12 %, the potential risk of shortage of supply that was anticipated when imposing definitive measures is now found to be substantially lower.

• (23) Accordingly, in the light of the above changed circumstances, the Commission considered that it would be in the Union's interest to amend the TRQ allocation for product category 1 and introduce a mechanism that ensures the preservation of trade flow origins akin to that used for the other product categories to the best extent possible.

• (24) The Commission observed that the difficulty of introducing such a system lies in the nature of product category 1. As previously explained in recital (19), relying on the historical average imports of 2015-2017 for fixing the country-specific quotas would cause substantial offer shortfall. On the other hand, using 2018 being the first full year with anti-dumping and countervailing measures in place, could lead to an improper allocation. That is because 2018 import volumes were also influenced by the entry-into-force of the safeguard measures (in July 2018), as well as by the presence of import volumes resulting from trade diversion from third countries that was already established in the definitive Regulation with respect to category 1.

• (25) In these circumstances, and in the absence of proper representative import data over a sufficiently long and reliable period, the Commission considered that the most appropriate way to ensure the preservation of traditional trade flows for category 1, in both volume and origin terms, would be to establish a limitation to the share in the global quota any single exporting country can reach during a respective quarter.

• (26) In order to determine this cap, the Commission analysed the historical import data (2013-2017) ⁹ of product category 1 and found that, during this period, no exporting country exceeded 25 % on average, and also that the highest share in any single year was achieved by Turkey in 2017 with 28 %. Accordingly, the Commission considered that no single exporting country should be allowed to exceed a share of 30 % of the global TRQ available per quarter during the remaining duration of the measures.

• (27) This threshold should give enough room to exporting countries to fill the market shares left open by supplying countries subjected to anti-dumping or countervailing measures, while preserving as much as possible traditional trade flows and ensuring enough diversity of supply for users in the Union, so as to minimize any potential risk of shortage of supply ¹⁰.

• (28) Through this adjustment to the allocation of the TRQ, the Commission considered to strike an appropriate balance between the legitimate rights of the different parties in line with the Union interest.

Specific assessment: Category 4B – Metallic coated sheet used primarily in the automotive sector

• (29) In the definitive Regulation, the Commission decided that it was in the Union interest to split category 4 (metallic coated sheets) into two subcategories: 4A and 4B. The objective of that split was to preserve, to the best extent possible, the traditional level of imports for the EU automotive sector. Indeed, given the high number of product types contained in category 4, the Commission had identified a serious risk that the steel types needed by the EU automotive sector could be crowded out by other ‘standard’ sub-categories. It is recalled that most of the standard types under this category are currently subject to anti-dumping measures, contrary to the more specialized products that were not covered in the respective request for anti-dumping measures.

• (30) As part of the review, the Commission received numerous submissions from interested parties affected by the split between the two sub-categories, inter alia from the EU automotive industry association (ACEA), the Governments and exporting producers of Korea and China. These submissions highlighted that the current sub-division is not entirely effective in meeting its intended objectives. Those interested parties also claimed a lack of clarity in the definition of the products as regards their classification per sub-category and, in particular, the fact that imports of the so-called automotive grades have been crowded out by the standard categories to the detriment of the automotive industry.

• (31) Interested parties submitted different proposals to enhance the effectiveness of the TRQ for this category. Notably, ACEA and the Government of China requested that the Commission grant an end-use exemption for the imports of steel grades within category 4B that are intended for the use of the automotive industry. Other interested parties like the Governments of Korea, Taiwan, and China requested, by way of alternative option, an increase in the level of the TRQ, and also a system that would ensure that the traditional volumes for the automotive sector are effectively shielded from imports of other types of steel. For its part, the Union steel industry concurred that the potential circumvention of anti-dumping measures of category 4A should be investigated and that a solution for the automotive sector be found, without, however, excluding category 4B from the scope of the measures.

• (32) The Commission's analysis upon review of the definitive measures confirms that traditional trade flows for products falling within category 4B have indeed been disturbed. According to Eurostat import statistics, China (which was allocated one of the biggest country-specific TRQ) fully exhausted its country-specific TRQ in one quarter (2 February – 31 March 2019) and subsequently used a significant amount of the global TRQ (over 75 %) in the last quarter of that same period (1 April – 30 June 2019).

• (33) Moreover, the Commission observed that China had exhausted – within one day only – its annual country-specific TRQ for second year of measures (1 July 2019 – 30 June 2020). It is therefore questionable whether these imports in fact consist of the so-called ‘automotive grades’ of imports. The said one-day exhaustion of the annual country-specific TRQ, in any event, also showed that traditional trade flows for this sub-category had been displaced. This trend would likely be further exacerbated if no adjustment were made to the functioning of the TRQ for category 4B to ensure adherence to the intended objective of preserving traditional level of imports from a variety of supplying countries for the automotive industry.

• (34) The Commission remained of the view that there were no grounds for excluding any of the product categories subject to the measures, be that through an explicit exclusion of product category 4B or by means of an end-use exemption ¹¹. The Commission thus rejected the requested end-use exemption of the automotive grades.

• (35) The Commission recognized however that it was in the Union's interest that traditional trade flows of product types used by the EU automotive sector were ring-fenced. One of the ways to achieve this objective is if the use of category 4B were restricted to only imports that can demonstrate an end-use in the automotive sector.

• (36) Accordingly, the Commission considered it in the Union interest to adjust the functioning of the TRQ for category 4, as follows. In order to benefit from the TRQ under category 4B, the steel product categories falling under this category, and which are, in fact, used for the manufacturing of automotive parts, must be placed under the end-use procedure referred to in Article 254 of Regulation (EU) No 952/2013 ¹². Once the TRQ allocated for category 4B is exhausted, the 25 % above-quota tariff would apply.

• (37) However, as certain CN codes currently grouped within category 4B are not exclusively used by the automotive industry, it was nonetheless necessary to adjust the allocation of codes between categories 4A and 4B in order to ensure that the relevant export of non-automotive products were preserved. To this end, the scope of 4A was extended and revised as follows: all CN codes previously solely grouped within category 4B would now also be part of category 4A. The scope of category 4A would, consequently, be extended. At the same time, the scope of category 4B would be kept unchanged.

• (38) Accordingly, imports of products falling under category 4B codes that are not destined for use in the automotive industry should in the future take place only under category 4A. Conversely, all imports of products that were destined for use in the automotive industry should take place under product category 4B and meet the end-use procedure requirements as explained in recital (36) above.

• (39) Because of this adjustment, India would be granted a single country-specific TRQ under 4A (combining the volumes of the country-specific TRQ allocated under 4A and 4B), as the information available to the Commission indicated that this country does not export for use in the automotive sector.

• (40) Following the information received in the framework of the consultations held with the Republic of Korea, the Commission has adjusted the level its country-specific TRQ in categories 4A and 4B. The part of the TRQ under category 4B corresponding to the CN codes which were previously listed exclusively under this category and which were not intended for the automotive use are now transferred to the Republic of Korea's country-specific TRQ under category 4A, so that they can continue to be exported to the Union market. The Commission considered that it was necessary in the Union's interest to introduce this adjustment to improve the efficacy of the definitive measures with regard to this category and ensure that the imports by the EU automotive industry were not unduly restricted.

Specific assessments: Category 16 – Wire rod

• (41) The Commission received multiple claims concerning this product category. First, the Commission was requested to adjust the level of the TRQ upwards to avoid any potential shortage of supply in the Union market. In particular, some parties had asked to increase the level of the TRQ by up to 20 % or to use the level of imports in the years 2016-2018 as the basis for a revision of the level of the TRQ. Others claimed that the TRQ should be adjusted completely to reflect a growth of demand in the Union.

• (42) Secondly, some interested parties argued that the Union producers had not increased (and were not capable of further increasing) capacity or production at the necessary level to meet the current and the future demand for wire rod in the Union. Moreover, they also claimed that the Union producers of wire rod primarily supplied their related downstream users, thus reducing the available quantities of wire rod destined to the open market, which undermined the position of those independent users, i.e. those that are not vertically integrated. As a result, independent users would be facing important limitations in accessing sufficient quantities of wire rod.

• (43) Thirdly, some interested parties claimed that the exhaustion of certain TRQs could not be due to stockpiling practices for this product category and that imports were rather made at regular and consistent levels until the relevant TRQs were exhausted.

• (44) Fourthly, several interested parties requested the Commission to grant country-specific TRQs to certain origins as they would supply specific product subcategories to the Union market. In the same vein, some interested parties argued that either certain subcategories should be excluded, or that the Commission should split this product category, allocating specific TRQs to the new subcategories.

• (45) Fifthly, some parties requested to split this category so that the subcategories used in the automotive sector would have their own TRQ.

• (46) Finally, one interested party argued that it was unable to produce a particular type of product as the safeguards had restricted the amount of a certain type of wire rod needed; several parties also asked that unused country-specific TRQ be transferred to the residual TRQ in the last quarter of each period (1 April – 30 June).

• (47) Within the framework of the review, the Commission assessed all these submissions carefully. In the first place, the Commission found that, although it had acknowledged in the Notice of Initiation of the Review Investigation that this category had experienced a particularly fast use of both certain country-specific TRQs and the global TRQ in the last quarter of the first annual period (that is, 1 April – 30 June 2019), the overall supply for this product does not appear to have been abnormally constrained. There were no signs of substantially increased demand that point to a change in circumstances. In fact, the analysis of the TRQ use showed that, while some countries had used their individual TRQ very quickly, in the last two weeks ¹³ of the last quarter of the first year under measures there was still quantitative space available in the TRQ from at least three countries of origin (Moldova, Switzerland and Ukraine), representing over 6 % of the total TRQ allocated for the period. At the end of the first year in which the measures were in force, there was still quantitative space in the TRQ available from one origin (Ukraine).

• (48) According to some submissions, in the EU construction sector, which is one of the main destinations for wire rod, demand grew at 2,8 % in 2018 and it is expected to continue growing at a rate of 1,6 % in 2019-2021. However, this pattern of growth was already integrated in the assessment that led to the definition of the current quantitative level of the TRQs. Indeed, when imposing definitive measures, the Commission topped up the traditional level of imports with an additional 5 % to update the historical data and take into account a normal increase in demand during the following years. Moreover, even if the liberalisation of the safeguard measures after their first year were to be amended downwards ¹⁴, it is de facto increasing the level of the available TRQs further to cope with the alleged increase in demand beyond foreseen growth. Based on this, the Commission considers that the current level of the TRQ for product category 16 was adequate and that there was no risk of shortage on the Union market.

• (49) As to the claim of artificial restriction in the offer by Union producers, according to the information available to the Commission, (that includes the verified questionnaire replies submitted by the Union producers in the framework of the investigation that lead to definitive measures) production and sales of the Union industry (in the free market) consistently increased during the period 2013-2017. In the same period, sales to related companies (captive sales) also increased although in much lower volumes. The data showed that the volume of sales to the free market (in the Union) was more than three times higher than the captive sales in the Union during the same period. In addition, there is no evidence showing that such a clear and consistent trend observed in the last years would have been drastically reversed recently. Therefore, the evidence available on file contradicted this claim.

• (50) Concerning potential stockpiling, the evidence on file contradicted the allegation that imports took place from all countries of origin at regular and consistent levels. In fact, while this was the case for a number of countries of origin, as well as for the residual TRQ in the third quarter (February-March 2019), the remaining most relevant origins (Turkey and Russia) exhausted the TRQ available for five months in a few days or weeks. This abnormal pattern was also confirmed for the first days of the second period of measures (Until 19 July 2019, Turkey had used 60 % of its annual country-specific TRQ). Moreover, the Commission also observed that the residual TRQ in the last quarter of the first period of measures (1 April to 30 June 2019) was exhausted exclusively by two countries (Turkey and Russia) already on the second day of the relevant quarter (that is, 2 April 2019), while, in the preceding quarter (2 February – 31 March 2019), that residual TRQ had been used, by several countries, at a steady pace throughout the quarter. Such unusually fast exhaustion of the TRQ level by some countries of origin cannot be regarded as ‘regular and consistent levels of trade’.

• (51) Concerning the request to split category 16, the Commission recalled that, in Regulation (EU) 2019/159, it exceptionally split two categories and explained the reasons behind this decision. After carefully analysing the submissions received in this respect, the Commission determined that no change of circumstances that would warrant a split of any additional category was demonstrated. The Commission observes that the submissions of the EU automotive industry (ACEA) did not even mention the need for a potential adjustment in this category. The Commission further noted that the mere fact that certain types within a product category were used in the automotive sector does not automatically qualify them for differential treatment under the measures. Rather, it would need to be shown that it would be in the Union's interest that such adjustment took place. The evidence supplied was, accordingly, not sufficient for the Commission to conclude that the adjustment is indeed in the Union's interest.

• (52) Concerning the impact of the definitive safeguard measures on the ability to produce a certain product for which a certain type of wire rod is needed, the Commission observed that the evidence supplied showed a consistent and steep downward trend of sales of that products from 2013 until 2018, i.e. before the safeguard measures were put in place. Therefore, this claim was not supported by sufficient evidence.

• (53) Therefore, the Commission considers that there was not sufficient evidence to justify a TRQ increase for this product category.

Specific assessment: Category 25 – Large welded tubes

• (54) Some parties submitted that the current allocation of TRQs for category 25 should be amended because of changed circumstances. In particular, some parties argued that a major gas pipe project (Nord Stream 2), for which a large amount of tubes from Russia were imported in 2017, would now be in its last stages and that, therefore, the allocation of TRQs for this product would not be appropriate as would not represent the current situation in the market. This claim would be supported by the import trends observed from Russia. As a result, those parties argued that there should no longer be any country-specific TRQs for this category, but rather a single global TRQ to avoid shortage of supply for other upcoming projects.

• (55) On the one hand, Russia is the country with the largest individual TRQ for this category (which accounts for around 70 % of the total TRQ). Under the review, the analysis by the Commission of the relevant import data showed that Russia's imports have consistently declined after a massive surge in 2017. Following this surge, Russia's level of imports already experienced a drastic decrease in 2018 (although still at relatively high volumes). This downward trend has however accelerated during the period of application of definitive safeguard measures. The analysis of the TRQ use showed that, as a result, Russia had largely underused its country-specific TRQ during the first year of measures (30 % use) ¹⁵. This underuse of the tariff-rate quota reflected the needs of the ad-hoc engineering project mentioned in recital (54).

• (56) On the other hand, other supplying countries for this product category had fully exhausted their country-specific TRQs and used up to 79 % of the global TRQ (the volume of this global TRQ being rather small comparatively).

• (57) In view of the changed circumstances related to the engineering project mentioned in recital (54) and the most recent evolution of the TRQ use observed, the Commission considered it necessary to replace the existing TRQ with a single global TRQ. This change in the TRQ system was deemed in line with the Union interest, since it was more apt to limit the risk of potential shortage of supply stemming from an inadequate allocation of TRQs, while ensuring, at the same time, adequate diversity of supply and equal opportunities for all potential suppliers to participate in any new engineering projects requiring this product category.

• (58) The Commission observed that the converse, that is, if the allocation of TRQs per country currently subject to the definitive measures were maintained, the participation of suppliers of other potential countries of origins in procurement processes for other ongoing or future projects could unduly be distorted. The same problem could also arise if the Commission were to set a cap per supplying country, as it decided to do for category 1. The Commission thus considered that maintaining the original situation would not be in the Union interest and that the change in the allocation of TRQs for this category was justified.

• (59) As for all global quotas under the existing measures, the global TRQ for category 25 should be administered on a quarterly basis.

General assessment: Claims concerning product categories

• (60) Whereas in the preceding recitals the merits of potential TRQ adjustments for the product categories that attracted the majority of comments by interested parties were discussed in detail, this subsection addresses in a more concise way the claims made in respect of the remaining product categories by means of arguments that are of general value for the corresponding categories for which the claims were made.

• (61) Some interested parties requested an increase in those country-specific TRQs that had been exhausted before the end of the relevant period. Some of these parties argued that the very fact that a country-specific TRQ was exhausted would be sufficient evidence to justify an increase in the TRQ. Along the same lines, some of these parties also noted that the level of the TRQs set by the definitive measures was too low, as for some product categories the import levels in 2018 were comparatively higher than the quantitative levels of the TRQs concerned.

• (62) First, the Commission noted that, except for two product categories, for the remaining twenty-four categories there was still quantitative TRQ space available from one or several countries of origin, or from the residual TRQ or from both. As mentioned in recital (15), the total unused TRQ space during the period the provisional measures were in place (from 18 July 2018 until 1 February 2019) and the first period of the definitive measures (from 2 February 2019 until 30 June 2019) exceeded 3 million tonnes. As such, the Commission disagreed with the claims that the overall quantitative level of the TRQs was set too low. Furthermore, the fact that certain TRQs within a given product category were exhausted before the end of the relevant period did not in itself constitute changed circumstances that would warrant an automatic increase of the TRQ, if no additional evidence was provided proving that the exhaustion was due to an increase in demand that was unforeseen when the definitive measures were adopted. The Commission recalled that the rationale of safeguard measures was to put in place emergency response measures with respect to increased imports of particular products. In contrast, many of the claims made in the review simply requested an increase in the quantitative level of the TRQ without supplying any kind of evidence of changed circumstances (such as, for instance, no risk of trade diversion). Therefore, the claims made on this basis were considered unsubstantiated.

• (63) Some interested parties requested the Commission to change the period used to calculate the TRQ. In many cases, these parties requested to use the period 2016-2018 to capture the most recent and, usually also, highest level of imports.

• (64) In Regulation (EU) 2019/159 and in light of Articles 15 of Regulation (EU) 2015/478 of the European Parliament and of the Council of 11 March 2015 on common rules for imports ¹⁶ (‘Regulation (EU) 2015/478’) as well as the principles of proportionality and non-discrimination, the Commission noted that the TRQs were calculated on the basis of the average level of imports in the last three representative years (2015-2017). The Commission recalled that, as explained in the Notice of Initiation of the Review Investigation, the objective of this review was to formulate very specific adjustments of the existing measures if, since their adoption, there was sufficient evidence that changed circumstances had occurred. Moreover, interested parties failed in any case to show how the period selected by the Commission would be incompatible with the relevant rules or principles of Union law. The Commission, accordingly, concluded that the period used to establish the TRQ concerned would not be revised in the framework of this review.

• (65) Some interested parties pointed to the fact that certain country-specific TRQs had not been fully used. In some cases, the level of use was in fact negligible. These parties asked the Commission to redistribute these volumes amongst other suppliers that may have exhausted their TRQs.

• (66) The Commission acknowledged that certain country-specific TRQ were not fully used and that in some specific cases, the use level was abnormally low. The Commission recalled that the allocation of TRQs to certain countries was done on the basis of historical imports in order to preserve traditional trade flows. In this respect, no interested party had supplied sufficient evidence showing that the abnormally-low use level was due to changed circumstances of a lasting nature for the relevant product types. Nor had interested parties provided such evidence for arguments that unused quotas were generating overall offer shortfall problems for the corresponding product categories, so that the existing allocation of the TRQs concerned could no longer be considered appropriate and warrant a review. Therefore, the Commission concluded that there was no sufficient reasons that would warrant depriving any historical supplier from its own quota.

• (67) As for the unused residual quotas at the end of each of the first three quarters of a period, some interested parties asked the Commission to likewise transfer all unused TRQs at the end of one period to the next period.

• (68) The Commission cannot accept this request. It should be noted that the level of TRQs available per period is calculated on an annual basis. Therefore, transferring unused quotas from one period to another would inflate the TRQs available in each period beyond the level of historical traditional imports and, consequently, would thus risk undermining the effectiveness of the measures.

• (69) Some interested parties similarly asked the Commission to grant country-specific TRQs to countries, even in situations where the imports from these countries in a given category would be below 5 % during the period considered relevant for the allocation of the TRQ (2015-2017).

• (70) The Commission recalled that the method of allocation of the TRQ was the same for all product categories and origins. The criterion for allocating a country-specific TRQ, as defined in the Regulation (EU) 2019/159, was that the imports of a country should account for at least 5 % of the average imports in a product category in the period 2015-2017. The submissions received in this respect do not provide any objective reason to change that approach. Moreover, under WTO rules, granting country-specific TRQs exceptionally when the threshold of 5 % is not met would constitute discrimination between interested parties. Therefore, the Commission could not accept these requests.

• (71) Other interested parties invoked different provisions included in bilateral trade agreements signed by the European Union with certain trading partners so as to obtain either an exemption from the measures or a preferential treatment vis-à-vis their imports.

• (72) The Commission noted that all bilateral trade agreements invoked by the parties envisaged the possibility to adopt safeguard measures. Therefore, no exemption on this basis can be claimed. The Commission also disagreed with the view that it should grant preferential treatment to some countries over others. Such bilateral agreements do not provide or impose on the Union any obligation for such differential treatment with respect to other parties subject to measures. Nor was any interested party able to point to any such provisions in the relevant agreements. Therefore, the Commission could not accept these requests.

• (73) Yet other interested parties claimed that an increase in the TRQ was necessary because the Union industry was not able to supply enough quantities in the Union market and hence could lead to shortages in the market.

• (74) The Commission recalled that, for the majority of product categories, there was still quota space available, both at the end of the period in which provisional measures were in place (1 February 2019) and at the end of the first period in which definitive measures were in place (30 June 2019). Therefore, the Commission considered that such claims were at odds with the actual quota use. Moreover, those parties did not provide any evidence showing any shortage of supply for any of the relevant product categories. Therefore, the Commission rejected these requests.

• (75) Some interested parties linked their claims for increased TRQs in certain categories to an alleged increase in demand in the sectors of the economy where these categories are used.

• (76) The Commission noted that these claims pointed at increases in demand that took place before the imposition of the definitive measures. In this regard, the Commission recalled that it had already covered such potential increases with top-up of 5 % over the traditional import levels, which was in effect since the entry–into-force of the definitive safeguard measures. As to demand evolution in subsequent periods, the information available to the Commission did not show any indication of substantial increase in demand, but, rather, pointed to a reduction in real steel consumption ¹⁷.

• (77) Some interested parties asked the Commission either to exclude certain subcategories of products or to split current product categories. In support of these claims, they alleged that it was in the Union interest to ensure that the imports of certain ‘niche’ product subcategories were not crowded out by the imports of other more standard product subcategories.

• (78) In this respect, the Commission highlighted that the scope of the review did not cover the exclusion or inclusion of product categories or subcategories under measures. Concerning the requests for splitting some product categories, the Commission referred to its explanation in recital (34) above.

• (79) Some interested parties insisted the Commission should introduce a licensing system to administer the TRQs.

• (80) In this respect, the Commission highlighted that, when devising a TRQ system, it was fundamental to ensure that its implementation is reasonably feasible. Given the large product scope of the current measures, the introduction of a licensing system would add such a degree of complexity whose comparative net benefits over its shortcomings were as of yet unclear. Unless proven otherwise, the Commission considered that the TRQ system currently in place was appropriate. The Commission stresses that no evidence had been provided under this review that would put into question the appropriateness of the current system of management of the TRQs.

• (81) Some interested parties asked the Commission to amend the current management of country-specific quotas, so that they were managed on a quarterly basis. These parties argued that the risks of stockpiling practices would thus be reduced and a smoother pace in the quota use would thus be ensured.

• (82) The Commission considered that the current system, whereby country-specific TRQs for historical suppliers are managed on a yearly basis, was in the Union's interest, as it does not unnecessarily or artificially restrict the choice of supply for Union importers and users at any particular point in time. Therefore, the Commission did not see any reasons to change it.

• (83) Some interested parties also asked for countries having exhausted their country-specific TRQ to be able to immediately access the residual quota. That possibility was currently limited to the fourth quarter of each period.

• (84) The Commission recalled that the possibility to access the residual TRQ in the last quarter of a period was introduced to reduce the risk that residual quotas remain unused and to avoid a potential shortage of supply on the Union market. As noted above, the Commission had been monitoring on a daily basis the use of the residual TRQs. Except for the findings on crowding out developed in Section 2.B below, the Commission thus noted that the quota use for most residual quotas was very high (in many cases it was fully exhausted). The Commission also observed that in the very few categories that presented a very low use level of the residual TRQ, most country-specific TRQs had not been fully exhausted either. Therefore, in view of these elements, the Commission concluded that allowing access to the last quarter of a period had so far effectively ensured that traditional trade flows in terms of origins were largely preserved ¹⁸, while minimizing the risk of shortage of supply.

2.B   ‘Crowding out’ of traditional trade flows

• (85) Under the definitive safeguard measures, once a country-specific TRQ in a given product category is exhausted, the corresponding country is allowed to access the global TRQ during the last quarter (i.e. 1 April 2019 - 30 June 2019). Although the global TRQ is in principle designed for the remaining countries not benefiting from country-specific TRQs, this mechanism was created to ensure that no residual TRQs remain unused at the end of every year under measures.

• (86) The Notice of Initiation of the Review Investigation pointed out that, for certain product categories, one or several countries benefiting from a country-specific TRQ had rapidly exhausted the residual TRQ during the last quarter, crowding out traditional import flows from other origins. The Commission therefore committed to investigating whether this fact had adversely affected the Union's interest, in particular regarding the need to maintain traditional trade flows, and, where appropriate, to decide on potential remedies for this situation.

Comments made by the parties

• (87) On the one hand, many interested parties, including supplying countries, exporters, users and the Union industry complained about the exclusionary effects the current system of access to the residual quota during the last quarter could generates for their interests. These parties requested the Commission to take immediate action to remedy the alleged imbalance concerned, in that a country already subject to a country specific TRQ should not be allowed to displace other historical suppliers, even if these were comparatively less important in terms of volumes imported. These parties therefore asked for a limitation to the use of the global residual TRQ in the last quarter of the respective year of the measures. On the other hand, a limited number of interested parties presented arguments to the contrary, disagreeing with any changes to the functioning of the current mechanism. In their opinion, any change to the system would endanger the full use of the residual TRQs.

Commission analysis

• (88) The Commission carried out an in-depth assessment of the mechanism currently in place for the management the global residual TRQs, including the carry-over of unused quotas from one quarter to another and the access during the fourth quarter for countries having exhausted their corresponding country-specific quota. This assessment showed that the existing mechanism has generally worked well and has ensured an unproblematic maximization of residual TRQs' use. In the vast majority of product categories subject to the definitive measures, the use of the global TRQ by suppliers having exhausted their country specific quota, even if they were able to take sometimes a large portion of the global TRQ during the last quarter, has not prevented smaller historical suppliers placed under the residual TRQ to continue exporting during the same period. In these circumstances, the unrestricted access to the global TRQ in the last quarter appeared to remain a crucial feature of the TRQ system in the Union interest that should be maintained as such.

• (89) However, the Commission's analysis also revealed that, in two product categories (that is, product categories 13 and 16) ¹⁹, two countries benefiting from a country-specific TRQ (Turkey and Russia) had almost exclusively exhausted the totality of the global TRQ in the last quarter of the first period of measures (1 April – 30 June 2019), and in some cases in a matter of days.

• (90) This was in particular the case in product category 13 (rebars), for which the global TRQ was exhausted on 27 May 2019, i.e. more than one month before the end of the quarter and despite the transfer of 23 % of the unused TRQ from the third quarter of 2018. In fact, the available volume was fully used by two countries benefiting from a country-specific TRQ (Turkey and Russia) that had crowded-out other, historically-smaller suppliers that were previously regularly using the global TRQ, such as Belarus and Serbia.

• (91) For product category 16 (non alloy and other alloy wire rod), the global TRQ was exhausted at the very beginning of the last quarter of the first period of measures (that is, on 2 April 2019) due to the massive use made by Turkey and to a lesser extent by Russia (they used 62 % and 33 % respectively of the total residual TRQ available for Q4). Smaller supplying countries, such as Bosnia and Herzegovina, Japan and South Korea, were therefore not able to export any longer without paying the 25 % above-quota tariff ²⁰.

• (92) In light of this analysis, the Commission found that, for these two product categories, the mechanism put in place to ensure that TRQs were fully exhausted has led to unintended effects. That is because the mechanism in place mainly allowed major suppliers to increase their level of exports beyond their traditional trade flows at the expense of smaller players that would have otherwise continued exporting up to the exhaustion of the residual quota.

• (93) The Commission considered that this development would run counter to the Union interest for two reasons. First, the exclusion of smaller exporting countries goes against the objective to preserve the traditional trade flows, also in terms of origin. Second, said development deprives the Union user industry of the supply of certain specialized types of steel under these categories that are only exported, in limited volumes, by smaller supplying countries.

• (94) The Commission, therefore, considered it necessary to put in place a quantitative cap for individual product origins. That is, during the last quarter of the two remaining periods of definitive measures, for product categories 13 and 16 (i.e. the categories where negative crowding-out effects have been observed), the use of the global TRQ will be limited to 30 % per supplying country. Under this limitation, not less than four supplying countries could make use of the TRQ.

• (95) The Commission deems this threshold to be appropriate for the following reasons: the import data assessed during the two quarters subject to definitive measures in 2019 has shown that no more than four exporting countries (in each of the two categories) had exported minimally-meaningful amounts ²¹ to the Union. The Commission considers that such a cap would not artificially restrict the access to the residual TRQ to any particular origin and would guarantee sufficient variety in the sources of supply for users in the Union.

• (96) In the Commission's view, this adjustment to the TRQ mechanism would strike an appropriate balance between, on the one hand, the objective to maximize TRQ use and, on the other, the aim to secure a minimum quantitative space for smaller supplying countries to continue exporting under the global TRQ without being excluded by major suppliers that have already exported volumes accounting for their traditional trade flows under their country-specific TRQ. This mechanism would also ensure that traditional trade flows in categories 13 and 16 are preserved in the interest of the Union, not only in volumes but also in terms of origin.

• (97) Some interested parties objected to the claims made about the existence of crowding-out, and argued instead that that export behavior of certain countries was simply the confirmation that the TRQ allocated was lower than required by the market.

• (98) In this respect, the Commission noted, as described in Section 2.A above, that, on the basis of its analysis of the data collected during the application of the definitive measures, the overall level of TRQs appears to be adequate so far and that, as explained in recitals (89) to (93), the Commission found negative crowding-out effects only in two product categories. For these latter categories, it is implementing an appropriate remedy that takes account of traditional trade flows of all supplying countries and balances the Union consumption interest against those trade flows.

2.C   Potential detrimental effects in achieving the integration objectives pursued with preferential trading partners

• (99) The Commission also investigated whether the functioning of the existing steel safeguard measures had caused any substantial risk to the stabilisation or economic development of certain preferential trading partners to an extent that would be detrimental to the integration objectives of their agreements with the Union. This in particular referred to the situation of some countries with whom the Union has concluded a Stabilisation and Association Agreement.

Comments made by the parties

• (100) Under the Review investigation, the Western Balkan states – Bosnia and Herzegovina, the Republic of North Macedonia and the Republic of Serbia– – have raised similar concerns and made similar claims as those concerns they already formulated before the adoption of the definitive safeguard measures.

• (101) These countries state that the definitive safeguard measures are limiting the expansion of their steel industry and their ability to export to the Union, posing risks of job losses, undermining their economic development, and compromising the integration and stabilisation objectives under their agreements with the Union. In particular, they claim that their country-specific TRQ in certain categories is too small and should be increased. They also claim that the current allocation of TRQs does not preserve traditional trade flows and, therefore, that TRQs should be re-distributed. These countries request an increase in the pace of liberalisation of the TRQs, arguing that demand in the Union has increased.

• (102) Serbia has notably reiterated that the average import volumes of the last three years used by the Commission to establish the TRQ levels, i.e. 2015 to 2017, is not representative of its historical trade with the Union. Serbia argued that that is particularly so since its sole steel plant had been on standstill during that period and that the plant's new owners managed to bring its traditional production and sales back to normal levels only recently. Serbia has claimed that such lower quota level is endangering the viability of the plant and producing serious negative effects for the development of the Western Balkan region as a whole. Finally, the Western Balkan states also request that, based on their special relations with the Union, they should be excluded from the scope of the measures on the same ground as countries that are members of the European Economic Area (‘EEA’).

• (103) Alternatively, they have made several claims and requests for specific product categories, namely: 1, 2, 5, 6, 16, 20 and 21.

Commission analysis

• (104) With regard to the request to be excluded from the scope of the measures, the Commission would like to recall that, as per Article 2 of the WTO Agreement on Safeguards, safeguard measures shall be applied to the product under investigation being imported irrespective of source. The only exceptions to these rules concern the specific situation of certain developing country members, or – as the case may be – obligations deriving from bilateral agreements. In this case, however, the Stabilisation and Association Agreements that the EU has concluded with the Western Balkans countries were found to confirm that imports may be subject to safeguard measures taken in accordance with the WTO Agreement on Safeguards.

• (105) Concerning the requests for increased TRQ in a number of product categories on alleged grounds of increased demand, the Commission already addressed these claims in its detailed analysis of TRQ use described in Section 2.A above. The Commission concluded that the level of quotas is adequate and proportionate to preserve traditional trade flows and that there was no evidence of substantial increase in Union demand justifying a change in the level of the TRQ. Furthermore, the fact that in most product categories there were still volumes available at the end of the first year of application of the safeguard measures (30 June 2019) meant that these measures did not generally limit the ability for third countries to export steel to the Union. Thus, the Commission could not conclude that the current TRQ caused a detrimental effect in achieving the envisaged integration objectives.

• (106) One of the Western Balkans countries claimed that the measures should guarantee certain volume of exports – particularly in product categories 1 and 6 – which it considered necessary to keep its domestic industry viable and its economy stable. However, the analysis of individual TRQ use in these two product categories showed that that countries' ability to export to the EU was not unduly limited by the measures. In fact, the average exported volumes by this country in the third and fourth quarter of the first year of application of the safeguard measures (from 2 February to 30 June 2019) indicated that it even outperformed its previous projections.

• (107) With regard to product categories 6, 20, and 21, the Western Balkan countries which exhausted their country-specific TRQ claimed that an increase in their TRQ was necessary in order to offset the negative effect of the safeguard measures on their economies.

• (108) Following those claims, the Commission carried-out an in depth analysis of the trend underlying their exhaustion of the TRQ concerned and the use of residual TRQ in the last quarter of the first year of measures (1 April – 30 June 2019). This analysis showed that although some Western Balkan countries had indeed exhausted their country-specific TRQ before the end of the first period of measures (that is, before 30 June 2019), they were able to continue exporting to the Union under the relevant residual quotas until their exhaustion, and this happened only a few weeks before the release of the new quotas for the second period of measures on 1 July 2019. This fact, coupled with the additional export margin that the quota increase resulting from the liberalisation of the measures had provided as of 1 July 2019, lead the Commission to conclude that these claims are not sufficiently substantiated and that there was no need to increase the corresponding TRQ.

• (109) Furthermore, the Commission observed that the adjustments to the functioning of the TRQ system proposed in previous sections (2.A and 2.B) – such as the 30 % per-country limitation to the use of the global TRQ for product categories 1, 13, and 16 ²² –, which will enter into effect as a result of this review, will, in any case, also contribute to address some of the concerns raised by Western Balkan countries, especially as regards the protection of traditional export flows by historical Union suppliers.

• (110) Finally, one country claimed that it should be allocated a country-specific TRQ in product category 16, based on its export volume in 2017, which were slightly above the 5 % threshold. However, as already explained by the Commission in recital (147) of t Regulation (EU) 2019/159, the allocation of country-specific TRQs for all exporting countries is based on the average of imports over the last three years, i.e. 2015 to 2017, and not exclusively on the last year of this period. Therefore, this request could not be accepted.

2.D   Update of the list of developing WTO member countries excluded from the scope of the measures based on updated import statistics

• (111) In accordance with Article 18 of Regulation (EU) 2015/478 and the international obligations of the Union, namely Article 9.1 of the WTO Agreement on Safeguards, safeguard measures should not apply to any product originating in a developing country member of the WTO as long as its share of imports of that product into the Union does not exceed 3 %, provided that developing country members of the WTO with less than a 3 % import share collectively account for not more than 9 % of total Union imports of the product concerned. Moreover, it is in the Union interest to adapt the list of developing countries excluded from the scope of the measures in order to avoid that certain developing countries unjustifiably benefit from the original exclusion.

• (112) Following the adoption of definitive safeguard measures by Regulation (EU) 2019/159, the Commission committed to reviewing, on a regular basis, the list of developing countries potentially excluded from the scope of the measures based on updated import statistics.

• (113) For establishing the list of exclusions from the definitive measures, the Commission used the then-available most recent data, i.e. the second half of 2017 and the first half of 2018. For the purpose of updating this list as part of the review investigation, the Commission used a more updated and consolidated set of statistics, i.e. the full year 2018. The Commission took the full year 2018 as the new reference period because it is the most representative period with consolidated statistics. Moreover using the full year avoids any seasonality effects. For the relevant calculations, the imports from countries excluded under Article 6 of the Commission Implementing Regulation (EU) 2019/159 were not taken into consideration.

Commission analysis

• (114) Based on the full year 2018 data, imports from the following countries – which were so far excluded from the scope of the measure –exceeded the 3 % threshold in some products categories. Therefore, as a result of this review they should now be subjected to the measures:

• (115) Imports from Indonesia in product categories 8 (Stainless Hot Rolled Sheets and Strips) and 9 (Stainless Cold Rolled Sheets and Strips), representing 10,12 % and 3,77 %, respectively;

• (116) As regards product category 24 (Other Seamless Tubes), the overall import share of all developing countries below 3 % taken altogether exceeded the 9 % threshold in 2018 (10,74 %). Therefore, imports of product category 24 from all developing countries will be subject to safeguard measures.

• (117) The Commission then assessed whether, for categories 8, 9 and 24, the developing countries concerned would qualify for a country-specific TRQ ²³. To this end, the Commission assessed whether in the period 2015-2017, the imports of these categories by the countries concerned amounted at least to 5 % of the total imports in that period in any category. The result showed that none of them qualified for a country-specific TRQ. Therefore, all of these countries will fall under the residual TRQ in the respective categories.

• (118) As regards exclusions from the scope of the safeguard measures, the outcome of this review are the following:

• (119) Imports from Brazil in product categories 8 (Stainless Hot Rolled Sheets and Strips) and 17 (Angles, Shapes and sections of Iron or Non Alloy Steel) will be excluded from the scope of the measures, as in 2018 the level of imports fell below 3 % (2,22 % and 2,52 %, respectively).

• (120) Imports from Ukraine in product categories 1 (Non Alloy and Other Alloy Hot Rolled Sheets and Strips) and 19 (Railway Material) will not be subject to the measures, as in 2018 the level of imports fell below 3 % (1,68 % and 0,6 % respectively).

• (121) Imports from Egypt in product category 12 (Non Alloy and Other Alloy Merchant Bars and Light Sections) will not be subject to the measures, as in 2018 the level of imports fell below 3 % (2,41 %).

• (122) Imports from India in product category 8 (Stainless Hot Rolled Sheets and Strips) will not be subject to the safeguard measures, as in 2018 the level of imports fell below 3 % (2,87 %).

• (123) Imports from Turkey in product category 10 (Stainless Hot Rolled Quarto Plates) will not be subject to the safeguard measures, as in 2018 the level of imports fell below 3 % (2,58 %).

• (124) Imports from China in product category 22 (Seamless Stainless Tubes and Pipes) will not be subject to the safeguard measures, as in 2018 the level of imports fell below 3 % (2,61 %).

• (125) The country-specific TRQs of those developing countries members of the WTO that will be excluded from the measures following the review will be transferred to the relevant residual TRQ. The precise quantitative amount of the TRQ to be transferred will be calculated once the first quarter of the relevant period is complete (that is, 1 July – 30 September 2019), in order to assess how much of the country-specific TRQ may have already been used. Once the calculation is carried out, the available TRQ will be transferred to the relevant residual TRQ within 20 working days.

• (126) Following this re-calculation exercise, the Commission updated the list of exclusions on the basis of the updated import figures as explained in recitals (114) to (124) for each of the 26 product categories subject to measures (the full updated list is enclosed in Annex II).

• (127) The Commission received several other submissions concerning this review issue. In particular, parties proposed to select different periods in order to calculate the amount of imports. Some parties also requested to be exempted despite acknowledging that they could be exceeding the relevant threshold. Other parties, which were so far excluded from the safeguard measures claimed that they should be given a period to adjust to the new situation whereby they would be subject to the measures. An interested party claimed that the Commission would not be allowed to make any developing country that was previously excluded subject to the measures, as it would run contrary to the WTO obligations of making the measure progressively less-restrictive throughout its lifespan. Lastly, some interested parties asked to obtain a country-specific TRQ if subjected to safeguard measures.

• (128) The Commission noted the following. First, in Regulation (EU) 2019/159, as well as in the Notice of Initiation of the Review Investigation, the Commission made it clear that it would update the list of developing countries that would be exempted from the definitive measures on the basis of more recently available data. Therefore, all interested parties were informed well in advance that such a revision was going to take place. Moreover, the Commission based itself on publicly available import data. Thus all interested parties could reasonably anticipate whether they would likely be subject to measures on account of their more recent development of imports in a given product category. Therefore, the claims that an adjustment period would be required are dismissed.

• (129) Second, in accordance with Article 18 of Regulation (EU) 2015/478, which mirrors Article 9.1 of the WTO Agreement on Safeguards, imports of such countries are to be excluded from the measures concerned ‘as long as that country's share of Union imports of the product concerned does not exceed 3 %, provided that developing country members of the WTO with less than a 3 % import share collectively account for not more than 9 % of total Union imports of the product concerned’.

• (130) Therefore, the exemption for developing countries is not unconditional for the whole duration of the measures. It was on this basis that the Commission decided to review the list of exemptions on the basis of more recent data. Furthermore, the Commission could not accept the claim that a country excluded at the stage of adoption of definitive measures, could not be made subject to measures in the framework of the review as this would be more restrictive. In fact, the Commission noted that the definitive safeguard measures were being progressively liberalized, including as a result of the review (see Section 2.E). The measures concerned are thus not more restrictive than at the end of the first year of the measures. The fact that a developing country which is no longer meeting the legal criteria to be excluded, is made subject to the measures is the mere fulfilment of EU and WTO obligations under Article 18 of Regulation (EU) 2015/478 and Article 9.1 of the WTO Agreement on Safeguards. Therefore, this claim was rejected.