Commission Implementing Regulation (EU) 2020/776 of 12 June 2020 imposing definitive countervailing duties on imports of certain woven and/or stitched glass fibre fabrics originating in the People's Republic of China and Egypt and amending Commission Implementing Regulation (EU) 2020/492 imposing definitive anti-dumping duties on imports of certain woven and/or stitched glass fibre fabrics originating in the People's Republic of China and Egypt

• (1085) The cooperating wind turbine producers argued that any price increase of GFF would severely affect their competiveness. They claimed that the proportion of GFF costs has to be assessed at the level of the production of blade and not an entire wind park. They further argued that the increase in costs due to the potential duties could not be passed on to the wind park developers due to the long-time lap between making an offer for a wind park project and the actual implementation. According to the wind turbine producers, the cost increase due to the duties will affect the long-term technological survival of the entire wind industry in the Union, since important research and development investments are essential to staying in the lead for the most efficient technology.

• (1086) The investigation has shown that turbine blades are not sold separately, but as a part of a wind turbine. Further to this, the project developers for wind parks regularly purchase additional wind park infrastructure from the wind turbine producers. Therefore, regarding the competitiveness of the wind turbine producers the cost for GFF should be set in relation to either the entire wind turbine or to the full wind park technology sold by the wind turbine producers and not just in relation to the manufacturing of blades as claimed, as this would not reflect the realities of the market.

• (1087) GFF together with epoxy raisin are the two main components used in the production of blades for wind turbines. Thus, GFF represents [10 %-35 %] of the raw material costs of a blade depending on the proportion of GFF on the one hand and other materials on the other hand used. However, the investigation has also shown that blade manufacturing is labour intensive and therefore the proportion of GFF in the total manufacturing costs of a blade is significantly lower and represents only [4 %-14 %]. This proportion further drops to between [0,1 %-2 %] in the total cost of a wind turbine and in the total costs of building of an entire wind park.

• (1088) Given the only minor part of GFF in the cost of a wind park [0,1 % to 2 %], the impact of the definitive duties on the GFF in the total cost of a wind park is considered to be negligible, especially since a large part of the GFF is sourced in the Union. The investigation has shown that the Union wind turbine producers also have considerable bargaining power to pass on the additional cost to wind park developers since collectively they are the main wind turbine suppliers on the Union market. Taking the minor part of GFF in the cost of a wind park, the profitability should stay at a level to maintain the level of research and development investments, which are essential to staying in the lead for the most efficient technology.

• (1089) Even though it cannot be excluded that the competitive nature of indirectly participating in the tendering process may make such pass-on difficult, it should be taken into consideration that unlike GFF producers, the cooperating wind turbine producers are in healthy financial condition with profit margins where the small impact of the duties would be easily absorbed. Furthermore, both cooperating wind turbine producers are not only selling the wind turbines but also associated follow-up maintenance services to wind park developers. These contracts are very lucrative. The attractiveness of the service part of the business is also reflected by the recent acquisition of the service department of an insolvent competitor ²⁰⁸ by one of the cooperating users.

• (1090) Therefore, the Commission established that any cost increase due to countervailing duties that could not be passed on to wind park developers could be easily absorbed by the wind turbine producers. In addition, as stated in recital (1083), wind turbine producers should also be able to change their suppliers to a GFF source not affected by subsidisation, be it in the Union or elsewhere.

• (1091) Given the above, all claims with regard to the competiveness of the wind turbine producers were rejected.

(iii) Relocation of the blade production

• (1092) The cooperating users further claimed that any increase in the production cost of blades would lead to the re-location of this production step outside the Union with thousands of job losses in the Union.

• (1093) As far as on-shore blade production is concerned, the investigation has shown that the relocation of this production is already taking place without the application of measures on GFF. This is due to the market growth of wind park projects outside the Union, combined with a decline of new wind park project development in the Union, and hitting, for instance, a 20-year low in Germany. Another reason is the high cost of labour involved in the production of blades. The investigation has shown that the production of blades is labour intensive and that labour costs exceed the cost of GFF by [300 %-700 %]. Lower labour costs in third countries are therefore a high incentive to relocate the blade production. The imposition of duties on GFF would play a minor role, if any at all.

• (1094) The investigation revealed further that for offshore blades transport costs play a more important role than the raw material costs of the blades, such as GFF. Offshore blades are longer and heavier than onshore blades, which makes transport more complex and expensive. Relocating production of offshore blade is therefore not likely to be caused by countervailing duties on the product concerned.

• (1095) Therefore, the claims with regard to the relocation of the blades production to other third countries was rejected.

(iv) Renewable energy policy

• (1096) One user argued that the imposition of measures would contradict the objectives set by the Union in its renewable energy policies, as it would increase significantly the production costs of wind turbines. It referred in support to the Commission’s European Industrial Initiative on wind energy, which includes the objective to reduce the manufacturing costs of wind turbines and their components by 20 % by 2020.

• (1097) As shown in recitals (1085) to (1090), the investigation does not support this claim, as it found that any countervailing measures would only have a negligible impact on the costs of wind turbine producers. In addition, that user also failed to demonstrate how countervailing measures on GFF, representing only a fraction of the costs of wind park technology, would prevent the steadily growing proportion of wind energy in Europe or prevent reaching the 2020 goal. That claim was therefore rejected.

7.2.2.   Ski producers and other users

• (1098) Several users from the skiing industry argued that the existence of GFF producers in the Union was essential to their supply stability, as they required a local partner for close cooperation and tailor-made GFF in lower volumes currently not produced outside the Union. Furthermore, they emphasised that the GFF industry in the Union was an essential partner in the improvement of their products and the development of new solutions. The research and development cooperation with the GFF producers in recent years has led to several efficiency gains, improved product performances and the development of new and more environmentally friendly products. Those users argued that Union ski producers cannot enter into the same level of cooperation with Chinese or Egyptian suppliers of GFF, as they would lose the ability to stay at the forefront of (green and sustainable) innovations and would themselves become more exposed to unfairly competing imports.

• (1099) The Commission found the arguments put forward compelling, especially as far as research and development is concerned in an R&D driven industry. No counter arguments on the points raised were received from the exporting producers. However, the Commission also noted that ski producers are less voluminous GFF users than the wind turbine producers.

• (1100) Other Union users did not come forward in the investigation.

• (1101) Therefore, the Commission concluded that there were no compelling reasons from the users not to impose countervailing measures, but rather that the survival of the Union GFF industry is important for several groups of users.

7.3.   Suppliers

• (1102) Two Union producers of GFR, the main input for GFF, as well as an association representing the Union GFR producers came forward and argued in favour of the imposition of countervailing measures. They claimed that it would be detrimental for the Union GFR producers to lose their main customers as this would threaten their own survival in the Union.

• (1103) Therefore, the Commission concluded that the imposition of measures is clearly in the interest of the Union GFR producers as suppliers for the GFF producers.

7.4.   Importers

• (1104) As mentioned in recital (85), only one independent importer came forward, but that imported only negligible volumes below 25 tonnes of GFF from the PRC. Since most high volume users require specific GFF made to order, it is not a product that is regularly imported in high volumes by independent traders.

• (1105) Therefore, the Commission concluded that there were no compelling reasons from unrelated importers not to impose measures as they only import negligible volumes of GFF.

7.5.   Cutting and kitting service providers

• (1106) Increasingly users, especially the wind turbine industry, demand GFF in form of kits, which are cut to shape and put together by sewing various layers of GFF, thereby enabling a faster production of the downstream industry. Over the last years, this has created a market for service providers in the Union. One cutting company came forward and argued in favour of the imposition of countervailing measures. Since Chinese and Egyptian exporting producers increasingly integrate these additional services, as opposed to the Union industry, the service providers would lose a substantial part of their business, if the Union producers would disappear from the market. According to estimates from cutters, the Union cutting industry employs more than 2 000 people.

• (1107) Therefore, the Commission concluded that the imposition of measures is clearly in the interest of the Union kitting and cutting service providers for the GFF producers.

7.6.   Other claims

• (1108) In their comments on the final disclosure, the GOE recalled that the European Union has helped Egypt to foster development under the Association Agreement and the Neighbourhood Policy and that measures would run counter this policy. The Commission noted that this is not a consideration that can be addressed under the analysis of the Union interest in accordance with Article 31 of the basic Regulation. In any event, the investigation did not put in question the efforts of Egypt to develop, modernize and support the income growth and the levels of employment.

7.7.   Conclusion on Union interest

• (1109) The Commission found that the imposition of measures is clearly in the interest of the Union GFF industry, whose survival is threatened by the subsidised imports of the product concerned. The survival of the Union GFF industry is important for the supply stability of their customers in the Union, especially for users who depend on a close local cooperation and require lower volumes of specific GFF, which cannot be purchased from the PRC or Egypt. For some users it is also essential to maintain the development of new GFF in the Union so that they themselves are not put in a disadvantageous position when competing with imports from outside the Union. Further, the survival of the Union GFF industry is also essential for the survival of their Union GFR suppliers and Union service providers for cutting and kitting.

• (1110) However, the imposition of measures, as shown in recitals (1077) to (1097) above would not have significant adverse effects for the wind turbine producers.

• (1111) On that basis, the Commission concluded that there were no compelling reasons that it was not in the Union interest to impose countervailing measures on imports of GFF originating in the PRC and Egypt.

8. DEFINITIVE COUNTERVAILING MEASURES

• (1112) In view of the conclusions reached with regard to subsidisation, injury, causation and Union interest, and in accordance with Article 15 of the basic Regulation, a definitive countervailing duty should be imposed.

8.1.   Level of the definitive countervailing measures

• (1113) Article 15(1), third subparagraph of the basic Regulation provides that the amount of the definitive countervailing duty shall not exceed the amount of countervailable subsidies established.

• (1114) Article 15(1), fourth subparagraph states that “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”.

• (1115) No such information has been submitted to the Commission, and therefore the level of the countervailing measures will be set with reference to Article 15(1), third subparagraph.

• (1116) On the basis of the above, the definitive countervailing duty rates, expressed on the CIF Union border price, customs duty unpaid, should be as follows:

• (1117) The anti-subsidy investigation was carried out in parallel with a separate anti-dumping investigation concerning the same product concerned originating from the PRC and Egypt, in which the Commission imposed anti-dumping measures limited to the injury elimination level. The Commission made sure that the imposition of a cumulated duty reflecting the level of subsidisation and the full level of dumping would not result in offsetting the effects of subsidisation twice (‘double-counting’) in accordance with Article 24(1) and Article 15(2) of the basic Regulation, as well as the relevant applicable jurisprudence.

• (1118) In the case of the PRC, the normal value was constructed in accordance with Article 2(6a) of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union ²⁰⁹ with reference to undistorted costs and profits in an appropriate external representative country. Consequently, in accordance with Article 15(2) of the basic Regulation and in order to avoid double counting, the Commission first imposed the definitive countervailing duty at the level of the established definitive amount of subsidisation and then imposed the remaining definitive anti-dumping duty, which corresponds to the relevant dumping margin reduced by the amount of the countervailing duty and up to the relevant injury elimination level established in the separate anti-dumping investigation. Since the Commission reduced the dumping margin found with the entire amount of subsidisation established in the PRC, there was no double counting issue within the meaning of Article 24(1) of the basic Regulation.

• (1119) In the case of Egypt, the Commission considered whether some of the subsidy schemes are export contingent subsidies, which have the effect to reduce export prices and thus increase accordingly the dumping margins, in order to decide whether it needs to reduce the dumping margin by the subsidy amounts found in relation to export contingent subsidies in accordance with Article 24(1) of the basic Regulation. Consequently, since the Commission did not countervail any export contingent subsidy schemes, it imposed the definitive countervailing duty at the level of the established definitive amount of subsidisation in addition to the anti-dumping duty established by Regulation (EU) 2020/492.

• (1120) Given the high rate of cooperation of Chinese and Egyptian exporting producers, the Commission found that the level of the highest duty imposed on the sampled companies would be representative as the ‘all other companies’. The ‘all other companies’ duty will be applied to those companies, which did not cooperate in this investigation.

• (1121) In accordance with Article 15(3) of the basic Regulation, the total subsidy amount for the cooperating exporting producers not included in the sample was calculated on the basis of the total weighted average amount of countervailing subsidies established for the cooperating exporting producers in the sample with the exclusion of negligible amounts as well as the amount of subsidies established for items, which are subject to the provisions of Article 28(1) of the basic Regulation. However, the Commission did not disregard findings based partially on facts available to determine those amounts. Indeed, the Commission considered that the facts available and used in those cases did not affect substantially the information needed to determine the amount of subsidisation in a fair manner, so that exporters who were not asked to cooperate in the investigation will not be prejudiced by using this approach.

• (1122) On the basis of the above, the rates at which such duties will be imposed are set as follows:

• (1123) In accordance with the methodology set out above in this section, in the case of CNBM Group and all other non-cooperating companies, the relevant dumping margin reduced by the definitive amount of subsidisation was lower than the injury elimination level established in the anti-dumping investigation. Therefore, the definitive countervailing duty was established at the level of the established definitive amount of subsidisation and a definitive anti-dumping duty was imposed at the level of the relevant dumping margin reduced by the amount of the countervailing duty. In the case of Yuntianhua Group, the definitive countervailing duty was established at the level of the established definitive amount of subsidisation and a definitive anti-dumping duty was imposed at the injury elimination level because this was lower than the relevant dumping margin reduced by the amount of the countervailing duty. With regard to Egypt, as clarified above at recital (1119) there was no potential issue of double counting.

• (1124) The individual company countervailing duty rate specified in this Regulation was established on the basis of the findings of the present investigation. Therefore, it reflects the situation found during the investigation with respect to the company concerned. This duty rate (as opposed to the countrywide duty applicable to ‘all other companies’) is thus exclusively applicable to imports of products originating in the country concerned and produced by the company mentioned. Imported products produced by any other company not specifically mentioned in the operative part of this Regulation, including entities related to those specifically mentioned, cannot benefit from these rates and shall be subject to the duty rate applicable to ‘all other companies’.

• (1125) A company may request the application of these individual duty rates if it changes subsequently the name of its entity. The request must be addressed to the Commission. 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.

• (1126) Further to the definitive disclosure, the complainant marked its overall agreement with the findings. At the same time, it noted that that disclosure did not address the interaction of the countervailing duties with the anti-dumping duties in the parallel proceeding. The complainant pointed out that there is no legal basis nor economic justification for simply limiting the overall level of combined anti-dumping and anti-subsidy measures, and that if the non-application of the lesser duty rule in the anti-subsidy proceeding has any meaning the fully countervailing duty must be imposed regardless of the application of the lesser duty rule in the anti-dumping proceeding. As for the Chinese exporting producers, the complainant submitted that anti-subsidy and anti-dumping duties can be cumulated even if the normal value is established in a representative country as explained at recital (1118), apart from the instances of export subsidies. In this respect, it argued that there is no necessary relation between degree of dumping and amount of government support and subsidies, if at all, and that subsidisation has major effects going beyond the impact on costs of production. The calculation of normal value based on a representative country cannot address the full impact of subsidisation and the distortions in the Chinese economy as a whole, and merely puts Chinese exporting producers on par with the other countries where this methodology does not apply and cumulation is allowed.

• (1127) The complainant added that there is no legal basis for a presumption that all costs and prices in the representative country are free of company-specific subsidies, and that it thus makes no sense in these cases to carry out anti-subsidy and anti-dumping investigations. In this context it referred to the relevant jurisprudence of the World Trade Organisation (‘WTO’), namely the dispute WT/DS 379 United States – Definitive Anti-dumping and Countervailing Duties on Certain Products from China ²¹¹ (‘DS 379’) where the WTO Appellate Body held that the offsetting of the same subsidisation twice by the concurrent imposition of anti-dumping duties calculated on the basis of an external representative country and countervailing duties was inconsistent with Article 19(3) of the WTO Agreement on Subsidies and Countervailing Measures. The complainant highlighted that the WTO Appellate Body also found that double counting would not “necessarily result in every instance of such concurrent application of duties”, but this would rather depend on whether and to what extent it is established that domestic subsidies have lowered the export price of a product in a particular case ²¹².

• (1128) Furthermore, the complainant referred to the situation concerning the PRC where the applicable anti-dumping duty is based on the injury margin because it is lower than the dumping margin, that is the case of Yuntianhua Group. In addition to all the arguments explained in the previous recitals, it argued that there is simply no possibility of double counting in this case, as an anti-dumping duty based on the injury margin is set entirely without reference to the normal value established on the basis of an external representative country. As a result, the issue of double counting does not even arise, and also the WTO jurisprudence in DS 379 is not applicable. The complainant concluded that since the repeal of the lesser duty rule in anti-subsidy proceedings, the combined anti-dumping and countervailing duties could no longer be limited by the injury margin.

• (1129) Following definitive disclosure, Yuntianhua Group claimed that the Commission failed to perform a double counting analysis to determine whether or to what degree the same subsidies would be offset twice by imposing anti-dumping measure and countervailing duties. The absence of the analysis would be in breach of the company’s rights of defence.

• (1130) With regard to possible double counting, the Yuntianhua Group also referred to the WTO case DS 379 similar to the complainant. It highlighted that according to that ruling among the factors taken into account to establish the appropriate amount of anti-subsidy duty, an investigating authority must consider evidence of whether and to what degree the same subsidies are being offset twice when anti-dumping and anti-subsidy duties are simultaneously imposed. This party referred to the Commission’s acknowledgment of the issue of double counting in recital (747) of the General Disclosure Document to infer that the facts in DS 379 are no different than those in this proceeding. On this basis, it concluded that the burden of proof to demonstrate the absence of double counting is on the Commission and that so far it has failed to disclose such analysis, thereby rendering deficient and incomplete the disclosure.

• (1131) According to Yuntianhua Group, the obligation to carry out a double counting analysis is not affected by the application of the lesser duty rule in the parallel anti-dumping proceeding, to the extent that the dumping margin completely overlaps with the subsidy margin. In this respect, this party argued that there is only one injury elimination level for both proceedings, meaning that the usual approach of combining first countervailing and then the anti-dumping duty reduced by the injury margin should apply. Therefore, if the Commission would impose the countervailing duty in full and only reduce the anti-dumping duty by the injury elimination level margin, that will be contrary to the basic anti-dumping Regulation and to the Commission’s findings in the parallel anti-dumping case, which concluded that a duty at the level of the injury elimination level is sufficient to eliminate the injury to the Union industry.

• (1132) The GOC also submitted comments on potential double counting to rebut the comments made by the complainant as set out at recitals (1126) to (1128) above. The GOC also relied on the WTO DS 379 ruling ²¹³ to conclude that double remedies are inconsistent with the relevant WTO rules and corresponding provisions of the basic Regulation referred to at recital (1127). With regard to this proceeding, the GOC argued that double counting would arise if the Commission would not cap the total countervailing and anti-dumping duty by the injury elimination level, because the same subsidisation would be addressed first via the dumping margin, and then again via the subsidy margin. The GOC highlighted that as concerns the CNBM Group the construction of normal value in the anti-dumping proceeding is based on undistorted numbers not affected by macro and micro subsidisation, and thus it already addresses the subsidisation in the PRC. With regard to the Yuntianhua Group, since their anti-dumping duty is based on the injury elimination level, if the countervailing duty would reflect the full amount of subsidisation, there would also be double counting because both investigations cover the same exports and the same alleged material injury, and the logic of domestic subsidies is that they equally affect the domestic and export sales. On the latter point, the GOC reasoned that the export price used as the basis for the injury margin calculation is lower to the extent of the amount of subsidisation found for the domestic subsidies. Thus, the alleged amount of subsidisation would be accounted for twice, that is also indirectly via the injury margin in the imposition of the anti-dumping duty. The GOC finally noted that the injury margins so established may also be inflated to the extent the Commission did not take into account the difference in the level of trade between the sales of the Chinese exporting producers and the EU industry. With respect to this last claim, the Commission noted that it has been addressed at recitals (977) and (978).

• (1133) As for the claims by the complainant, the Yuntianhua Group and the GOC concerning the breach of their right of defence due to the failure to disclose the analysis on the interaction of the anti-dumping and countervailing duties and on potential double counting, the Commission noted at the outset that it did not do so because at the time of disclosure in this proceeding the anti-dumping proceeding was still ongoing and there were no anti-dumping measures formally in force. Therefore, such an analysis would have pre-judged the outcome of the anti-dumping proceeding, and would in any event have been based on hypothetical levels of measures still subject to comments and analysis. The Commission could not possibly have performed the analysis requested by the parties in time for the disclosure of this proceeding, but did raise the attention of all parties and commit to looking into this issue as per recital (747) of the General Disclosure Document. In any event, the Commission noted that this section fully addresses these issues and all the comments raised by the parties so far, and that this section has been disclosed to the parties to afford in full their right of defence. Therefore, the claims of all parties on this issue were rejected.

• (1134) With regard to the issue of possible double counting and the reference to the relevant parts and context of the WTO ruling in DS 379 raised by the complainant, the Yuntianhua Group and the GOC, the Commission recalled that Article 19(3) of the WTO Agreement on Subsidies and Countervailing Measures is mirrored in the provision of Article 15(2) of the basic anti-subsidy Regulation. Therefore, it concluded that the WTO jurisprudence on that provision, and in particular its ruling in DS 379, constitutes relevant interpretation for the application of Article 15(2) of the basic Regulation in this proceeding. The Commission further recalled that the current investigations constitute the first parallel anti-dumping and countervailing investigations since the legislative changes introducing a new calculation methodology in anti-dumping cases under Article 2(6a) of the basic anti-dumping Regulation ²¹⁴, and new provisions on the application of the lesser duty rule in anti-dumping and anti-subsidy proceedings as part of the modernisation of trade defence investigations ²¹⁵. The Commission also noted that in any event, even in past combined anti-subsidy and anti-dumping proceedings before these legislative changes this issue did not arise in practice ²¹⁶.

• (1135) As concerns the DS 379 ruling, the Commission took note of all the references submitted by the parties. It first noted that the WTO Appellate Body clarified that double counting (or ‘double remedy’) refers to situations where the simultaneous application of countervailing and anti-dumping duties on the same imported products results in offsetting, at least to some extent, the same subsidisation twice, and this is likely to occur when the dumping margin is calculated by reference to a methodology relying inter alia to costs or prices from a third country ²¹⁷. In these cases, the anti-dumping duty may remedy or offset a domestic subsidy, to the extent that such subsidy has contributed to a lowering of the export price ²¹⁸. Double remedies may also occur when countervailing and anti-dumping duties are imposed on the same product in the context of domestic subsidies granted within market economies when an unsubsidised, constructed, or third country normal value is used in the anti-dumping investigations ²¹⁹. In situations of double counting, a countervailing duty would not be imposed “in the appropriate amounts” under Article 19(3) of the WTO SCM Agreement. The Commission also noted that the WTO Appellate Body specifically rejected the proposition that double counting necessarily arises in every instance of concurrent duties where the normal value is established on the basis of third country costs and prices. Instead, it ruled that this depends on whether and to what extent domestic subsidies have lowered the export price of a product, and on whether the investigating authority has taken the necessary corrective steps to adjust its methodology to take account of the factual situation ²²⁰. The Appellate Body concluded that the obligation to assess if a countervailing duty reflects “an appropriate amount” encompasses a requirement for the investigating authority to conduct a sufficiently diligent investigation into, and solicitation of, relevant facts, and to base its determination on positive evidence in the record ²²¹.

• (1136) By applying these principles to the interpretation of Article 15(2) of the basic Regulation in the present investigation, the Commission noted that its approach to deduct in full the subsidy amount from the dumping margin as it applied the methodology based on Article 2(6a) of the basic anti-dumping Regulation when constructing normal value was fully in line with these principles. The Commission acknowledged the complainant’s argument that it would be in principle possible to cumulate countervailing and anti-dumping duties even in this situation. However, it noted that there was no positive evidence in the file showing whether and to what extent the domestic subsidies in the PRC had an effect on the export price. There was also no evidence in the file that the undistorted values in the representative country used to construct normal value in the anti-dumping proceeding had benefited from domestic subsidisation, which could be an equally relevant element in this analysis. On this basis, the Commission rejected the claims of the complainant and accepted the claims by the Yuntianhua Group and the GOC on this aspect.

• (1137) With regard to the arguments by the complainant, the Yuntianhua Group and the GOC concerning the situation where the applicable anti-dumping duty is based on the injury elimination level because it is lower than the dumping margin pursuant to Article 9(4), second subparagraph of the basic anti-dumping Regulation, the Commission noted the following. First, it clarified that the situations of possible double counting covered in Articles 15(2) and 24(1) of the basic Regulation must be kept distinct from the application of the lesser duty rule, which has a different object and purpose. It then pointed out that the ruling in DS 379 is only relevant in the interpretation of Articles 15(2) and has no bearing with regard to the application of the lesser duty rule in accordance with Article 9(4) of the basic anti-dumping Regulation and Article 15(1) of the basic Regulation.

• (1138) As for this proceeding, the Commission first analysed whether there was an issue of double counting under Articles 15(2) and 24(1) of the basic Regulation, following the approach described above in this Section by fully deducting the subsidy amount from the dumping margin. The Commission then analysed whether the lesser duty rule was applicable in each proceeding further to the legislative changes mentioned at recital (1134). In the current anti-subsidy proceeding, since the lesser duty rule was not applicable pursuant to Article 15(1) of the basic Regulation, there was no need to analyse and even establish the injury elimination level. Therefore, the Commission applied in full the amount of subsidisation found. By contrast, in the parallel anti-dumping proceeding, the lesser duty rule applied pursuant to Article 9(4) of the basic anti-dumping Regulation. Therefore, the Commission calculated the injury elimination level, and after deducting the full amount of subsidisation from the dumping margin, it capped the applicable anti-dumping duty by the injury elimination level, which was the situation for the Yuntianhua Group.

• (1139) With regard to the arguments by the Yuntianhua Group and the GOC that there is only one and the same injury elimination level for both proceedings as they cover the same imports, and therefore imposing a combined duty going beyond this injury elimination level would imply double counting, the Commission noted that this argument mixes the two steps of preventing double counting of the respective subsidy amounts and dumping margins found, with the second step of analysing whether and how the lesser duty rule is relevant in this proceeding. As explained in the previous recital, further to the legislative changes in 2018 in this anti-subsidy investigation the Commission concluded that Article 15(1), fourth subparagraph of the basic Regulation was not applicable, whereas the lesser duty rule applied in the separate anti-dumping investigation concerning the same product. The rationale for the rule under Article 15(1), fourth subparagraph of the basic Regulation in anti-subsidy proceedings is detailed in particular at recital (10) of Regulation 2018/825, which sets out that “countervailable subsidies granted by third countries are particularly distortive of trade” and therefore “it is, in general, no longer possible to apply the lesser duty rule.” Therefore, the proposition by these parties that the combined countervailing and dumping duty should be capped by the injury elimination level as established for the purpose of the anti-dumping proceeding would be contrary to Article 15(1) of the basic regulation in conjunction with recital (10) of Regulation 2018/825. As for the argument raised by the GOC of ‘indirect’ double counting due to the fact that the export price used as the basis for the injury margin calculation is lower to the extent of the subsidy amount for the domestic subsidies found, the Commission noted once again an attempt to mix the issue of double counting of the respective subsidy amounts and dumping margins found with the separate step of the calculation of the injury elimination level for the purpose of the lesser duty rule. The lesser duty rule is relevant only in the separate anti-dumping investigation, and the export price used for the calculation of the injury elimination level is the actual price at CIF level with the necessary adjustments as explained at recitals (270)-(272) of Regulation (EU) 2020/492 in line with the practice in all anti-dumping (and anti-subsidy) proceedings where the lesser duty rule applies, without any adjustments made for the domestic subsidies found. Therefore, the Commission rejected the arguments made by the Yuntianhua Group and the GOC on this point.

• (1140) In light of all these considerations, the Commission confirmed the applicable duties to the various exporting producers as detailed in the table at recital (1122) and in Articles 1 and 2 of this Regulation.

• (1141) Following the additional definitive disclosure, the cooperating related Egyptian exporting producers noted that the benefit amounts transferred by Jushi Egypt to Hengshi Egypt had already been addressed by the Commission in the parallel anti-dumping proceeding. They submitted that in that proceeding when constructing normal value the Commission disregarded Hengshi Egypt’s recorded purchase price of rovings from Jushi Egypt and replaced it with Jushi Egypt’s sales price of rovings to unrelated domestic customers pursuant to Article 2(5) of the basic anti-dumping Regulation. According to these parties, this constitutes a breach of Article 24(1) of the basic anti-subsidy Regulation preventing double counting when export subsidies are at stake in parallel proceedings, because the Commission has already dealt with the amount of subsidy passed from Jushi Egypt to Hengshi Egypt through the sales of rovings in the anti-dumping proceeding.

• (1142) The Commission noted at the outset that it did not countervail any export contingent subsidy in Egypt as explained at recital (1119), and thus Article 24(1) is not applicable in this situation. Therefore, this claim could be dismissed already on this basis. In any event, the Commission noted that the adjustment made in the anti-dumping case concerned the fact that the sales price of rovings between these related entities did not reflect an arm’s length price. Hence, the price between the related entities was adjusted in line with the prevailing domestic market price from unrelated transactions in the Egyptian market because it did not reflect the market conditions, as explained in detail at recitals (310) to (332) of the definitive anti-dumping Regulation. The anti-subsidy investigation in Egypt does not deal at all with the subsidised provision of inputs, namely rovings, for less than adequate remuneration, let alone with an export subsidy for these rovings. Therefore, the legal basis for the adjustment, that is Article 2(5) of the basic anti-dumping Regulation, and its underlying context and circumstances have nothing to do with the situation of possible double counting as per Article 24(1) of the basic anti-subsidy Regulation. Therefore, the claim of this party is entirely baseless not only from both a factual and legal point of view, but even from a purely theoretical point of view. On this basis, the Commission dismissed this claim.

• (1143) Further to the additional definitive disclosure, the complainant disagreed with the methodology followed by the Commission on the combination of the duties. This party argued that the definitive disclosure did not address the complainant's point that where an anti-dumping duty is based on the injury margin, there is already in any event no risk of double counting, as the explanation at recital (1136) was considered insufficient. According to the complainant, there is no factual risk of double counting in cases where the dumping duty is limited to the injury margin, and therefore for exporting producers whose anti-dumping duty is based on the injury margin, the legally required combined duty level is the total of the countervailing duty plus the anti-dumping duty based on the injury margin with no deductions or adjustments. The complainant argued that this methodology led to the arbitrary result that exporting producers which did not cooperate in the anti-subsidy investigation were effectively rewarded with a lower combined duty rate, as they were subject to an anti-dumping duty of 33,6 % (dumping margin minus countervailing margin) lower than the injury elimination level of 37,6 %. Instead, the complainant suggested that their combined duty should be a total of 68,7 %, resulting from 31,1 % countervailing duty plus 37,6 % injury margin, leading to a total of 68,7 %. This would be a reward to (partial) non-cooperation.

• (1144) Furthermore, the complainant argued that by accepting the claims by the Yuntianhua Group and the GOC as per recital (1136), the Commission essentially rewarded (partial) non-cooperation and accepted unsubstantiated claims. According to this party, the absence of the relevant evidence as explained in the same recital cannot per se justify the application of the most conservative methodology especially in cases of (partial) non-cooperation, thereby raising the risk that the duties would not have the necessary remedial effect especially given the predatory character of the activities of the Chinese exporting producers as shown by their aggressive stockpiling. The complainant based its claim on the absence of company-specific data to show any actual impact of double counting at company level put forward by the Yuntianhua Group and the GOC, and on their comments being abstract and not specific and lacking any relevant factual evidence. While recognising that the WTO in DS 379 ruled that it is for the Commission as investigating authority to carry out a proper investigation to avoid the risk of double counting, the complainant argued that it is evidently for the exporting producers to provide evidence that double counting would result from the combination of their specific duties on the basis of their specific factual circumstances, which they have failed to do. The complainant also referred to the case of the CNBM Group, which did not even raise any double counting claims and would therefore essentially be rewarded for (partial) non-cooperation with no legal or factual justification.

• (1145) Based on the above arguments, the complainant requested that: (i) for companies cooperating only in the anti-dumping investigation, the Commission should impose combined duties equal to the total of the countervailing duty and the injury margin; (ii) for the CNBM Group and all non-cooperating exporting producers, the Commission should impose the full countervailing duty and anti-dumping duty based on the dumping margin as the company has not made any substantiated, company-specific claim supported by evidence concerning double counting; (iii) for the Yuntianhua Group and the exporting producers cooperating in both investigations, the combined duty levels are appropriate but the Commission should revise and clarify its methodology.

• (1146) The Commission disagreed with the claims raised by the complainant. With regard to the claim that the definitive disclosure did not address the argument raised by the complainant, the Commission reiterated that the explanations in this entire section, in particular at recitals (1135)-(1138) and specifically recital (1136) fully addressed this argument. Furthermore, the Commission noted that the injury margin is calculated in parallel with the dumping margin so that a comparison can be made in order to apply the lesser duty rule. When a duty is based on the injury margin, it does not mean that there was no dumping or that the dumping margin was completely irrelevant, as one of the required conditions to apply anti-dumping duties is that there be dumping above de minimis levels. Therefore, in situations where the injury margin is used to establish the actual duty because it is lower than the dumping margin in accordance with Article 9(4) of the basic anti-dumping Regulation and/or Article 15(2) of the basic anti-subsidy Regulation where relevant, it does not eliminate the actual existence of dumping (or subsidy) at a level higher than the injury elimination level. Therefore, also in these situations the potential for double counting is equally present where the relevant factual situation and the applicable jurisprudence show that this is the case This claim was therefore rejected.

• (1147) As for the claim concerning the Chinese exporting producers cooperating in the anti-dumping but not in the anti-subsidy proceeding, the complainant is suggesting essentially to add to the full subsidy margin the higher injury margin rather than the dumping margin. This party did not specify the legal or factual basis as well as the reason for this suggestion. The Commission noted that this suggested methodology would be contrary to Article 9(4) second subparagraph of the basic anti-dumping Regulation as applied in the anti-dumping proceeding per Sections 7.1 and 7.2 of the definitive anti-dumping Regulation, without there being any legal or factual justification put forward by the complainant other than the need not to reward non-cooperation. In this respect, the Commission recalled that partial or full non-cooperation is legally irrelevant for the application of the lesser duty rule pursuant to Article 9(4) of the basic anti-dumping Regulation, and that in any event these parties had cooperated in the anti-dumping investigation and not in the anti-subsidy investigation. Therefore, the Commission confirmed the validity of its methodology as explained at recitals (1117)-(1118) and (1136)-(1137) above for these exporting producers cooperating only with the anti-dumping investigation and rejected the claim by the complainant.

• (1148) With regard to the claims by the complainant concerning the treatment of the Yuntianhua Group and CNBM Group, which failed to submit company-specific evidence to show the actual impact of double counting at company level and effectively were rewarded despite their partial non-cooperation, the Commission noted the following. As the complainant itself admits and as is abundantly clear from the WTO DS 379 ruling explained in details at recitals (1135)-(1136), the Commission did not have any evidence on file showing that there was no potential double counting by the cumulation of anti-dumping and countervailing duty. Among the relevant elements for this purpose, some of which are listed at recital (1136), the predatory behaviour of the Chinese exporting producers shown by the aggressive stockpiling leading to a possible insufficient remedial effect of the duties as claimed by the complainant is not a relevant element for this purpose. Therefore, in the absence of any other relevant evidence on file for this purpose, the Commission rejected this claim.

• (1149) With regard to the last generic request by the complainant for the Yuntianhua Group and the exporting producers cooperating cooperating in both investigations to revise and clarify its methodology, the Commission noted that the complainant did not provide any further detail and did not explain how the Commission should revise and clarify this methodology. Furthermore, the Commission highlighted the inconsistency of this generic request with the agreement of principle by the complainant on the appropriateness of the combined duty. Therefore, the Commission dismissed this claim.

• (1150) The complainant finally asked the Commission to state in the definitive regulation that any claims for double counting adjustments could be accepted when determining the combined level of anti-dumping and countervailing duties only if supported by factual company-specific evidence that double counting would result, and that in the absence of such evidence a claim by an exporting producer claim of double counting must be rejected as unsubstantiated. In this respect, the Commission first stated that as a matter of principle regulations imposing provisional and/or definitive measures concern the specific product under investigation and the findings of the investigation, and thus cannot be used to make general policy statements or statements of principle applying in future investigations upon request by the parties. At the same time, the Commission reiterated that the relevant rules and jurisprudence in WTO DS379 as explained in detail at recitals (1135)-(1136) and (1148) above with regard to this investigation require a determination on the actual existence of double counting in parallel cases where a methodology like the one set out in Article 2(6a) of the basic anti-dumping Regulation is used on the basis of positive evidence in the record. The fact that in this specific case there exists no such evidence as the exporting producers have not been requested to submit the relevant evidence by any of the parties does not mean that in any future case this evidence could not be requested and constitute relevant evidence in the record for the Commission to make its determination on the potential existence of double counting in similar parallel proceedings.

• (1151) Following the additional definitive disclosure, the Yuntianhua Group also requested the Commission to disclose the exact dumping margin for Yuntianhua Group free of the double counting, and to clarify the deduction of the subsidies established in the PRC.

• (1152) Furthermore, the Yuntianhua Group referred to recital (85) of the additional disclosure and the fact that double counting should be addressed under Article 24(1) of the basic Regulation. This party argued that anti-dumping and anti-subsidy duties deal with one and the same situation, and therefore there is no legal basis to impose both duties in parallel.

• (1153) The Yuntianhua Group also took issue with the statement at recital (745) of the definitive disclosure that no information has been submitted to the Commission to justify the application of the injury margin in this case. This party argued that the Commission made a determination under Article 7(2b) of the basic anti-dumping Regulation to the effect that it is not in the Union interest not to apply the injury margin, and that while the Union interest assessment is identical in the definitive disclosure of the anti-subsidy proceeding the Commission reached the different conclusion not to apply the injury margin. This party further referred to the regulation imposing a provisional anti-dumping duty in the Hot-rolled Stainless Steel case ²²², where the Commission found that for the Union interest to justify an application of the injury margin it is sufficient that there is an impact on supply chains. Since in the anti-subsidy proceeding there is also a negative impact of the anti-subsidy duties on the users in the EU, although insufficient to justify a non-imposition of the countervailing duties, this party concludes that the Commission should at least apply the injury margin to The Yuntianhua Group in this anti-subsidy proceeding in analogy with the decision in the Hot-rolled Stainless Steel case.

• (1154) With regard to the Yuntianhua Group’s request for the disclosure of the “exact dumping margin”, the Commission noted that there has been no change to the dumping margins as stated in the regulation imposing anti-dumping measures. In addition to what explained above at recital (70), Yuntianhua Group’s dumping margin remains the one established during the anti-dumping investigation and disclosed to the group in the context of that proceeding. However, for certain parties, including the Yuntianhua Group, as explained above the concomitant imposition of anti-dumping and countervailing measures could result in double counting and/or the results of the application of the lesser duty rule must be taken into account from the date of imposition of the countervailing measures. Thus, the Commission must amend the anti-dumping rate accordingly in those cases. By the same logic, the Commission also notes that if in the future countervailing measures were to be repealed, the applicable anti-dumping duty rate would have to be amended proportionally in line with the margins imposed by the anti-dumping Regulation, as as per Article 2(3) of this Regulation.

• (1155) As for the calculation of the dumping duty for this party, as explained in recitals (1117)-(1118), in cases were the normal value was constructed according to Article 2(6a) of the basic anti-dumping Regulation the Commission fully avoided double counting. To that end, the Commission first imposed the full countervailing duty in the anti-subsidy investigation, and then amended the definitive antidumping duty. To calculate the amended antidumping duty, the Commission deducted from the established dumping margin the subsidy margin established in this proceeding. Specifically for the Yuntianhua Group, the Commission first imposed the countervailing duty at a level of 17,0 %. Then, in order to avoid double counting, the Commission deducted the full countervailing duty of 17,0 %, from the dumping margin of 64,7 % as established in the anti-dumping proceeding. This would result in an anti-dumping duty of 47,7 %. However, in accordance with the lesser duty rule, as set out in Article 7(2) of the basic anti-dumping Regulation, the final amount of the duty imposed in the anti-dumping investigation for the Yuntianhua Group was capped by the injury elimination level of 37,6 %.

• (1156) With regard to the second argument by the Yuntianhua Group based on Article 24(1) of the basic Regulation, the Commission recalled that, as explained at Recitals (1117)-(1118), in order to avoid double counting the Commission reduced the dumping duty rate established by the entire amount of subsidisation. Consequently, there was no double counting either the meaning of Article 24(1) of the basic Regulation as this party argued, or within the meaning of Article 15(2) of the basic Regulation. Therefore, the Commission dismissed this claim.

• (1157) As for the last claim of the Yuntianhua Group concerning the injury margin, the Commission referred to its statements at Recitals (1114) and (1139), where it explained that the injury margin is not relevant in this anti-subsidy investigation as the default rule under Article 15(1), fourth subparagraph is that the lesser duty rule is not applicable unless it can clearly conclude that the countervailing duty should be set at the injury elimination level if lower “on the basis of all the information submitted”. Since no party submitted any information to this effect under Article 15(1) of the basic Regulation, the Commission did not have to undertake any assessment in this respect as the countervailing duty must be based on the amount of countervailable subsidies established. Therefore, the requested application of the injury margin in this anti-subsidy proceeding would lack any legal basis and would be simply unlawful. This claim could therefore be already dismissed on this basis. In any event, the Commission noted that the reference to the precedent concerning the Hot-rolled Stainless Steel is both legally and factually irrelevant. From a legal point of view, this was an anti-dumping proceeding and the relevant analysis quoted by the party was based on Article 7(2b) of the basic anti-dumping Regulation. The legal framework for the application of the lesser duty rule has changed as a result of the legislative changes of 2018, and the conditions of application under Article 7(2) to 7(2b) of the basic anti-dumping Regulation are now different from those under Article 15(1) of the basic anti-subsidy Regulation. Furthermore, this party is mixing the particular Union interest test carried out in the context of Article 7(2b) of the basic anti-dumping Regulation, with the ordinary Union interest test carried out in accordance with Article 21 of the basic anti-dumping Regulation and its mirror provision Article 31 of the basic anti-subsidy Regulation, which are different given their context and purpose, and on whose latter provision this party relied for its argument. For all these reasons, the Commission rejected this claim.

8.2.   Special monitoring clause

• (1158) To minimise the risks of circumvention due to the high difference in duty rates, special measures are needed to ensure the application of the individual countervailing duties. The companies with individual countervailing duties must present a valid commercial invoice to the customs authorities of the Member States. The invoice must conform to the requirements set out in Article 1(3) of this Regulation. Imports not accompanied by that invoice should be subject to the countervailing duty applicable to ‘all other companies’.

• (1159) While presentation of this invoice is necessary for the customs authorities of the Member States to apply the individual rates of countervailing duty to imports, it is not the only element to be taken into account by the customs authorities. Indeed, even if presented with an invoice meeting all the requirements set out in Article 1(3) of this Regulation, the customs authorities of Member States should carry out their usual checks and should, like in all other cases, require additional documents (shipping documents, etc.) for the purpose of verifying the accuracy of the particulars contained in the declaration and ensure that the subsequent application of the lower rate of duty is justified, in compliance with customs law.

• (1160) Should the exports by one of the companies benefiting from lower individual duty rates increase significantly in volume after the imposition of the measures concerned, such an increase in volume could be considered as constituting in itself a change in the pattern of trade due to the imposition of measures within the meaning of Article 23(1) of the basic Regulation. In such circumstances and provided the conditions are met an anti-circumvention investigation may be initiated. This investigation may, inter alia, examine the need for the removal of individual duty rate(s) and the consequent imposition of a countrywide duty.

• (1161) In order to ensure a proper enforcement of the countervailing duty, the duty level for all other companies should not only apply to the non-cooperating exporting producers, but also to those producers, which did not have any exports to the Union during the investigation period.

9. REGISTRATION

• (1162) As mentioned in Section 1.2, the Commission made imports of GFF originating in the countries concerned subject to registration. Registration took place with a view to possibly collecting duties retroactively under Article 16(4) of the basic Regulation.

• (1163) Since no provisional duties were imposed, no retroactive application could occur. Thus, the registration of imports should be discontinued.

10. DISCLOSURE

• (1164) Interested parties were informed of the essential facts and considerations on the basis of which it was intended to recommend the imposition of a definitive countervailing duty on imports of certain woven and/or stitched glass fibre fabrics (‘GFF’) originating in the People's Republic of China and Egypt. Interested parties were given the opportunity to provide comments on the accuracy of the calculations specifically disclosed to them.

• (1165) In view of Article 109 of Regulation (EU, Euratom) 2018/1046 of the European Parliament and of the Council ²²³, when an amount is to be reimbursed following a judgment of the Court of Justice of the European Union, the interest to be paid should be the rate applied by the European Central Bank to its principal refinancing operations, as published in the C series of the Official Journal of the European Union on the first calendar day of each month.

• (1166) As explained in recitals (1117) - (1119) above, the Commission deducted from the dumping margin part of the subsidy amount in order to avoid double counting. Thus, should any modification or removal of the definitive countervailing duties occur, the level of anti-dumping duties should be automatically increased by the same proportion in order to reflect the actual extent of double counting as a result of this modification or removal. This change of the anti-dumping duties should take place as from the entry into force of this regulation.

• (1167) The measures provided for in this Regulation are in accordance with the opinion of the Committee established by Article 15(1) of Regulation (EU) 2016/1036 of the European Parliament and of the Council of 8 June 2016 on protection against dumped imports from countries not members of the European Union ²²⁴,

HAS ADOPTED THIS REGULATION:

Article 1

Article 2

Implementing Regulation (EU) 2020/492 is amended as follows:

• (1) Article 1(2) and (3) is replaced by the following:

‘2.   The definitive anti-dumping duty applicable to the net, free-at-Union-frontier price, before duty, of the product described in paragraph 1 and produced by the companies listed below shall be as follows:

Country concerned	Company	Definitive anti-dumping duty	TARIC additional code
PRC	Jushi Group Co. Ltd; Zhejiang Hengshi Fiberglass Fabrics Co. Ltd; Taishan Fiberglass Inc.	69,0  %	C531
PRC	PGTEX China Co. Ltd; Chongqing Tenways Material Corp.	37,6  %	C532
PRC	Other companies cooperating in both anti-subsidy and anti-dumping investigation listed in the Annex I	37,6  %	See Annex I
PRC	Other companies cooperating in anti-dumping investigation but not in anti-subsidy investigation listed in the Annex II	34,0  %	See Annex II
PRC	All other companies	69,0  %	C999
Egypt	Jushi Egypt For Fiberglass Industry S.A.E; Hengshi Egypt Fiberglass Fabrics S.A.E.	20,0  %	C533
Egypt	All other companies	20,0  %	C999

1. The application of the individual duty rates specified for the companies listed in paragraph 2 or in Annexes I or II shall be conditional upon presentation to the Member States’ customs authorities of a valid commercial invoice, on which shall appear a declaration dated and signed by an official of the entity issuing such invoice, identified by name and function, drafted as follows: “I, the undersigned, certify that the (volume) of (product concerned) sold for export to the European Union covered by this invoice was manufactured by (company name and address) (TARIC additional code) in (country concerned). I declare that the information provided in this invoice is complete and correct.” If no such invoice is presented, the duty applicable to all other companies shall apply.’

• (2) A new Article 1(5) is inserted:

‘5.   Should the definitive countervailing duties imposed by Article 1 of Commission Implementing Regulation (EU) 2020/776[^ntr*2-L_2020189EN.01000101-E0225] be modified or removed, the duties specified in paragraph 2 or in Annexes I or II will be increased by the same proportion limited to the actual dumping margin found or the injury margin found as appropriate per company and from the entry into force of this Regulation.

[^ntr*2-L_2020189EN.01000101-E0225]: Commission Implementing Regulation (EU) 2020/776 of 12 June 2020 imposing definitive countervailing duties on imports of certain woven and/or stitched glass fibre fabrics originating in the People's Republic of China and Egypt and amending Commission Implementing Regulation (EU) 2020/492 imposing definitive anti-dumping duties on imports of certain woven and/or stitched glass fibre fabrics originating in the People's Republic of China and Egypt (OJ L 189, 15.6.2020, p. 1).’ "

• (3) A new Article 1(6) is inserted: