LegalizeCommission Implementing Regulation (EU) 2020/379 of 5 March 2020 imposing a provisional countervailing duty on imports of continuous filament glass fibre products originating in Egypt
This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.
6.3. Interest of users
- (193) Several interested parties came forward and expressed their views on the user interest in imposing measures in this investigation, mainly through sending standard letters with no evidence of their assertions.
- (194) Some interested parties sent a standard letter supporting the measures, in order to keep the Union industry as a supplier, while other parties sent a standard letter opposing the measures, in order to keep their costs down. On analysis of these standard letters, they came from distributors of GFR in the EU or from suppliers of the Union industry.
- (195) However the Commission did receive submissions from users of GFR in the Union expressing their views on the investigation.
- (196) One group of users, who wished to remain anonymous in order to protect against a risk of negative consequences in their commercial relationships, held a hearing with the Commission and made a submission that measures would not be in the Union interest.
- (197) The Commission noted the issue of certification of certain GFR made in certain factories while inspecting the users, who noted that some users are obliged to use a particular GFR from a particular factory, regardless of whether a duty is in force or not.
- (198) If measures are imposed on GFR from Egypt, and the user is obliged to use GFR from Egypt in their further processing, then they will see a cost increase which they may not be able to pass on to their customers.
- (199) The group of anonymous users noted that glass fibres are an important critical-to-quality ingredient and current quality systems, for example thermoplastics for the automotive industry, would require a re-approval process if the user changed supplier.
- (200) The same group also noted that even if a user has diverse suppliers, they would still use a specific supplier for a specific compound.
- (201) For those users that make other thermoplastics, their customers are less sensitive to the source of the raw material, as the GFR is mixed with resin and provides reinforcement to the thermoplastic, rather than remaining relatively unchanged as it does in the production of GFF.
- (202) Although GFR represents up to 60 % of the cost of manufacturing, other sources of GFR without measures imposed are readily available, namely Malaysia and Norway. However given the price increase that measures would cause, the user inspected was against the imposition of measures. All thermoplastic users who expressed an opinion were against the imposition of measures.
- (203) For those users that make glass fibre fabrics (GFF) they are in a completely different position, as GFR is the raw material for the production of GFF. The Commission visited one producer of GFF and user of GFR, who asked to remain anonymous for the purposes of this investigation. They opposed measures because when duties were imposed on GFR from China, prices of raw materials increased by 10 % but they were unable to pass this price increase on to their customers.
- (204) Four manufacturers of GFF who expressed an opinion were against the imposition of measures. However the Commission notes that one of the sampled Union producers of GFR, Owens Corning, is an integrated producer who also manufactures GFF in the Union. This group is in favour of measures on both GFR and GFF imports from Egypt.
- (205) The Commission however also received submissions from two further GFF manufacturers in favour of measures on GFR from Egypt, in order to protect the whole value chain in Europe, and also encourage R & D.
- (206) The conclusion for users is that given that GFR is the main raw material in their finished product, measures would not be in their interest as the measures would increase the costs of the users. However measures would be in the interest of integrated groups using their own produced GFR.
- (207) On balance, given the alternative sources of available supply not subject to measures, given that one integrated user was in favour of measures and since there is no evidence clearly showing that the additional costs from measures imposed on imports from Egypt could not be absorbed by the users, the Commission concluded the negative effects on the users did not clearly show that it is not in the Union’s interest to apply the measures.
6.4. Trade-distorting effects of subsidies/restoring effective competition
- (208) Under Article 31(1) of the basic Regulation, special consideration shall be given to the need to eliminate the trade-distorting effects of injurious subsidisation and to restore effective competition.
- (209) The investigation has established that Jushi Egypt sells significant quantities of subsidised GFR at artificially low prices to the Union market. If this situation continues, Jushi Egypt will maintain their unfair competitive advantage, further weakening the already vulnerable situation of the Union industry. As a result, the subsidised Egyptian imports will increase their trade-distorting effects over time, and continue to deny a level playing field to the Union industry.
6.5. Conclusion on Union interest
- (210) Measures are clearly in the interest of the Union industry. There is a limited negative impact on importers and users, in particular the GFF producers, which are the most vulnerable group, given their high proportion of GFR in their production costs.
- (211) However the Commission notes that other sources of GFR are available without measures in force. The Commission also notes the extensive innovation of the Union industry in recent years, and that the Union producers are working with their users to produce the product they require to their own individual specifications. Such innovation would be at risk if injury continues to occur.
- (212) The Commission noted these comments regarding certification and approval processes however the imposition of measures is designed to level the playing field for all operators, and therefore users can continue to import the certified or approved GFR from Egypt by paying a fair market price.
- (213) On the basis of the above, the Commission provisionally concluded that there were no compelling reasons that it was not in the Union interest to impose countervailing measures corresponding to the total amount of countervailable subsidies on imports of GFR originating in Egypt.
7. PROVISIONAL COUNTERVAILING MEASURES
- (214) Based on the conclusions reached by the Commission on subsidisation, material injury, causation and Union interest, and in accordance with Article 15(1) of the basic Regulation, a provisional countervailing duty should be imposed on imports of GFR originating in Egypt.
7.1. Provisional measures
- (215) Provisional countervailing measures should be imposed on imports of GFR originating in Egypt, in accordance with the rules in Article 12(1) of the basic Regulation which states that the provisional duty shall correspond to the total amount of countervailable subsidies as provisionally established.
- (216) On the basis of the above, the provisional countervailing duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:
Table 15
Provisional duty rates
| Company | Provisional countervailing duty |
|---|---|
| Jushi Egypt for Fiberglass Industry S.A.E. | 8,7 % |
| All other companies | 8,7 % |
- (217) The individual company countervailing duty rate specified in this Regulation was established on the basis of the findings of this investigation. Therefore, it reflected the situation found during this investigation with respect to the sole exporting producer. These duty rates are exclusively applicable to imports of the product concerned originating in the country concerned and produced by the named legal entity.
- (218) Imports of the product concerned produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, should be subject to the duty rate applicable to ‘all other companies’. They should not be subject to the individual countervailing duty rate.
- (219) The company may request the application of the individual countervailing duty rate if it subsequently changes its name. The request must be addressed to the Commission 16. The request must contain all the relevant information enabling to demonstrate that the change does not affect the right of the company to benefit from the duty rate which applies to it. If the change of name of the company does not affect its right to benefit from the duty rate which applies to it, a notice informing about the change of name will be published in the Official Journal of the European Union.
8. REGISTRATION
- (220) As mentioned in Recital (9) above, the Commission made imports of GFR subject to registration during the period of pre-disclosure under the requirements of Article 24(5a) of the basic Regulation by publishing the registration Regulation.
- (221) The registration Regulation only registered imports for the three weeks of pre-disclosure. Registration will cease when this Regulation comes into effect.
- (222) No decision on a possible retroactive application of anti-subsidy measures has been taken at this stage of the proceeding. Such a decision will be taken at definitive stage.
9. INFORMATION AT PROVISIONAL STAGE
- (223) In accordance with Article 29a of the basic Regulation, the Commission informed interested parties about the planned imposition of provisional duties. This information was also made available to the general public via DG TRADE’s website.
- (224) Interested parties were given three working days to provide comments on the accuracy of the calculations specifically disclosed to them.
- (225) The Commission received comments from Jushi Egypt. However, the comments did not concern the accuracy of the calculation. Therefore, the provisional countervailing duty remains unchanged.
10. FINAL PROVISIONS
- (226) In the interests of sound administration, the Commission will invite the interested parties to submit written comments and/or to request a hearing with the Commission and/or the Hearing Officer in trade proceedings within a fixed deadline.
- (227) The findings concerning the imposition of provisional duties are provisional and may be amended at the definitive stage of the investigation,
HAS ADOPTED THIS REGULATION:
Article 1
A provisional countervailing duty is imposed on imports of chopped glass fibre strands, of a length of not more than 50 mm; glass fibre rovings, excluding glass fibre rovings which are impregnated and coated and have a loss on ignition of more than 3 % (as determined by the ISO Standard 1887); and mats made of glass fibre filaments excluding mats of glass wool, currently falling under CN codes 7019 11 00, ex 7019 12 00, 7019 31 00 (TARIC codes 7019120022, 7019120025, 7019120026 and 7019120039) and originating in Egypt.
The rates of the provisional countervailing duty applicable to the net, free-at-Union-frontier price, before duty, of the product described in paragraph 1 and manufactured by the companies listed below, shall be as follows:
| Company | Provisional countervailing duty | TARIC additional code |
|---|---|---|
| Jushi Egypt for Fiberglass Industry S.A.E. | 8,7 % | C540 |
| All other companies | 8,7 % | C999 |
The release for free circulation in the Union of the product referred to in paragraph 1 shall be subject to the provision of a security deposit equivalent to the amount of the provisional duty.
Unless otherwise specified, the provisions in force concerning customs duties shall apply.
Article 2
Interested parties shall submit their written comments on this regulation to the Commission within 15 calendar days of the date of entry into force of this Regulation.
Interested parties wishing to request a hearing with the Commission shall do so within 5 calendar days of the date of entry into force of this Regulation.
Interested parties wishing to request a hearing with the Hearing Officer in trade proceedings shall do so within 5 calendar days of the date of entry into force of this Regulation. The Hearing Officer shall examine requests submitted outside this time limit and may decide whether to accept such requests if appropriate.
Article 3
Customs authorities are hereby directed to discontinue the registration of imports established in accordance with Article 1 of Implementing Regulation (EU) 2020/199.
Data collected regarding products which entered the Union for consumption not more than 3 weeks prior to the date of the entry into force of this regulation shall be kept until the entry into force of possible definitive measures, or the termination of this proceeding.
Article 4
This Regulation shall enter into force on the 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.
Done at Brussels, 5 March 2020.
For the Commission
The President
Ursula VON DER LEYEN
Commission Implementing Regulation (EU) 2020/199 of 13 February 2020 making imports of continuous filament glass fibre products originating in Egypt subject to registration (OJ L 42, 14.2.2020, p. 10).
Company A requested anonymity on the grounds that they would expose themselves to a significant risk of commercial retaliation should it be perceived by certain producers to act in a manner that runs counter to their interests.
See Presidential Decree No (35) of the Arab Republic of Egypt, dated 15.2.2003.
Decree of the President of the Arab Republic of Egypt No 330 of the year 2015 ‘On the establishment of the Suez Canal Economic Zone’, 19 August 2015.
In July 2016, Egypt replaced the ‘general sales tax’ with VAT. While there are certain differences between the two tax regimes, both tax regimes permitted producers of goods to deduct the tax previously paid, thereby accumulating credits when the amount of tax paid exceeds the amount of tax collected from customers, notably export-oriented companies.
Art. 22, law 67 of 2016.
Indeed the majority of the VAT/other indirect tax receivables reported in the 2016-2018 Annual Reports refer to foreign purchases under the 10 % GST regime, which was in force until July 2016.
Several international publications on tax matters confirm that reimbursement of VAT paid upfront in Egypt is extremely difficult (LINK). The World Bank report ‘Doing Business in Egypt 2020’ ranks Egypt in 156th place out of 190 in tax matters.
Database of specific products under ‘surveillance’ or monitoring imported into the Union customs territory maintained by the Directorate-General for Taxation and Customs Union.
Anti-dumping proceeding published (OJ C 68, 21.2.2019, p. 29); anti-subsidy proceeding published (OJ C 167, 16.5.2019, p. 11).
Commission Implementing Regulation (EU) 2017/724 (OJ L 107, 25.4.2017, p. 4), recital (149).
European Commission, Directorate-General for Trade, Directorate H, Rue de la Loi 170, 1040 Brussels, Belgium.
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