Commission Implementing Regulation (EU) 2020/870 of 24 June 2020 imposing a definitive countervailing duty and definitively collecting the provisional countervailing duty imposed on imports of continuous filament glass fibre products originating in Egypt, and levying the definitive countervailing duty on the registered imports of continuous filament glass fibre products originating in Egypt

• (257) The initial allocation of the land to the ECJV for a purchase price of less than 1 USD/m² in accordance with the applicable legal framework thus certainly involved a financial contribution by the GOE ⁹⁰. The subsequent transfer of land between the ECJV and TEDA was in fact a transaction between related companies, based on a transfer price involving the same actors on both sides of the transaction.

• (258) Finally, concerning the sale of the land by Egypt TEDA to Jushi Egypt, the Commission noted that the majority shareholder of Egypt TEDA, owning 75 % of the shares, is the China Africa TEDA Investment Company, who also holds the majority of the seats on the Board of Directors of TEDA. The ultimate controller of the China Africa TEDA Investment Company is the China Development Bank, which has already been designated as a public body. Furthermore, TEDA itself describes its vision and mission as follows: ‘Vision: becoming an investment and operation player of an international industrial park supporting China, starting from Egypt, and facing Africa and even the whole world. Mission: pushing forward Chinese enterprises going outside, then pushing forward the internalization process of Chinese enterprises’ ⁹¹. TEDA also extensively refers in its publications to the attention, motivation and support from MOFCOM and Tianjin Municipal Government in the execution of its activities.

• (259) In light of the above considerations, the Commission established that the state controlled entities that provided land to Jushi Egypt are public bodies within the meaning of Article 2(b) read in conjunction with Article 3(1)(a)(i) of the basic Regulation. Indeed, the actions taken by TEDA under the direct control of the GOC and in the context of the GOE-GOC close cooperation can be attributed to the GOE as explained before in Section 3.2.3 as part of the set of preferential support to the GFR producer in Egypt.

• (260) In addition, even if the State-controlled entities were not to be considered as public bodies, on the basis of the evidence in recitals 219 to 224 as well as the evidence relating to the close cooperation between the GOC and the GOE, the Commission established that they would be considered entrusted and directed by the GOC and the GOE to carry out functions normally vested in the government within the meaning of Article 3(1)(a)(iv) of the basic Regulation. Thus, their conduct would be attributed to the GOE in any event.

• (261) Following final disclosure, both the GOE and the exporting producers stated that the Commission cannot consider that conducts of Chinese public bodies or private bodies entrusted or directed by the GOC constitute subsidies under the basic Regulation, as these conducts are not attributable to the government of the country of origin or export.

• (262) However, as already mentioned in recitals 258 to 262 above, the Commission considered that TEDA is not solely a Chinese public body, but a public body jointly controlled by the GOC and the GOE, and that actions under direct control of the GOC can be attributed to the GOE as well in view of the close cooperation of the GOC and the GOE. In this respect, the Commission noted that the shareholders of TEDA also include state-owned Egyptian public bodies, such as the the Egyptian Suez Canal Administration and the National Bank of Egypt, which are represented in the Board of Directors of TEDA. This shows that the GOE was in a position to acknowledge and adopt actions of TEDA. Finally, as mentioned in recital 263 above, even if TEDA were not to be considered a public body, the Commission considered that it would be entrusted or directed by the GOC and the GOE.

• (263) In addition to the provision of the land in 2011, Jushi Egypt purchased an adjacent plot of land from an Egyptian development company in 2016. This Egyptian developer in turn also had bought this land from the same plot of land of land awarded to the Egypt China Joint Venture Company in 1998. The Commission analysed whether the Egyptian developer had been entrusted or directed by the GOE to grant land to Jushi Egypt at preferential terms within the meaning of Article 3(1)(a)(iv) of the basic Regulation.

• (264) In this respect, the Commission noted that there was a clear involvement of the authorities of the SCZone in the sales transaction to Jushi Egypt. Indeed, the Egyptian developer needed to sell its plot because it did not have sufficient means to develop the land according to the industrial development clauses of its initial purchase contract with the GOE. In this context, article 3 of the purchase contract states that if the contract ‘is not approved by the General Authority for Suez Canal Special Economic Zone within six months, Party B (Jushi Egypt) shall have the right to consider Party A’s (the developer) breach of this Contract and then this Contract shall be automatically cancelled’. Furthermore, according to article 7 ‘Party B shall submit a written application to the General Authority for Suez Canal Special Economic Zone for the establishment of an industrial project by Party B on behalf of Party A and obtain approvals …. The General Authority for Suez Canal Special Economic Zone agrees to conduct land registration in the name of Party B, examine and approve the final land sales contract, and apply for land certificate in the notary office in the name of Party B.’

• (265) The GOE thus used a private body as a vehicle to carry out a financial contribution whereby the private body had no choice but to sell the land to Jushi Egypt and at the price and other conditions stipulated by the GOE. Therefore, the Commission concluded that, the Egyptian developer had been entrusted or directed by the State in the sense of Article 3(1)(a)(iv), first indent of the basic Regulation to pursue governmental policies also enshrined in the Cooperation Agreement and provide land at a preferential price to Jushi Egypt.

• (266) The Commission requested the GOE to provide statistics on land prices applicable in the SCZone, as well as the tender procedures relating to the purchase transactions by the developers. However, the GOE could not provide any statistics or any tender procedures relating to the period or the transactions considered. The GOE was only able to provide information relating to the tender procedures for the award of usufruct to TEDA of another piece of land in 2016.

• (267) Following final disclosure, the GOE and the exporting producers claimed that the Commission relied on incorrect facts in order to conclude that Wadi Degla was entrusted or directed by the GOE. More specifically, they claimed that:

• (1) Wadi Degla is not a developer, but a producer of polyethelyene pipes and fittings; and

• (2) The General Authority of the Suez Canal Economic Zone did not participate in the negotiations between Jushi Egypt and Wadi Degla but, simply, approved the sale of land and put its stamp on it.

• (268) On the first point, according to the information available to the Commission on the company’s website ⁹², Wadi Degla is a real estate developer with projects in various locations, including Ain Sokhna, not a producer of pipes and fittings.

• (269) On the second point, the Commission acknowledged that Wadi Degla wanted to sell its land among other reasons because it had not developed it in line with its legal obligations. However, the company could also have sold its land on the free market for a better price. The investigation revealed that Jushi management does not only explain why Wadi Degla wanted to sell its land, but also clearly indicates that the General Authority of the SCZone was involved in the negotiations for the sales transactions as the contract was approved by the Chairman of the SCZone.

(a) Conclusion

• (270) The findings of this investigation show that prices for land provision and acquisition in the SCZone are determined by the Egyptian authorities, and that the pricing applicable in the SCZone is non-transparent. Land was awarded at preferential terms by public bodies or by private bodies entrusted or directed by the State.

• (271) The provision of land for less than adequate remuneration by the GOE should therefore be considered a subsidy within the meaning of Article 3(1)(a)(iii) and Article 3(2) of the basic Regulation in the form of provision of goods which confers a benefit upon the recipient companies.

• (272) The programme is specific within the meaning of Article 4(2)(a) of the basic Regulation, since the provision of land to companies in the SETC-Zone for less than adequate remuneration is reserved to certain companies in a particular geographical area.

(b) Calculation of the subsidy amount

• (273) The amount of countervailable subsidy is calculated in terms of the benefit conferred on the recipients, which is found to exist during the investigation period. The benefit conferred on the recipients is calculated by taking into consideration the difference between the amount actually paid by the exporting producer for land and the amount that should normally have been paid on the basis of a market-based benchmark. The benefit for the purchase of land by Jushi Egypt was calculated as follows.

• (274) The GOE was not able to provide any information or statistics on purchase prices for land. The GOE only provided information on transactions regarding land usufruct. Indeed in 2016, a real estate valuation was performed by a committee of experts in order to establish a pricing map for the usufruct of land in the SCZone. Based on this study, the average yearly value of the land usufruct in the wider Suez Canal Economic Zone was determined. On the other hand, TEDA signed a land usufruct contract with the MDC in 2016 to further expand the existing SETC-Zone by 6 km². The Commission multiplied the average yearly value of the land usufruct in the SCZone by the duration of the land usufruct contract signed with TEDA for the expansion zone of 6 km². The Commission considered that this represented the total purchase value of undeveloped land for the developer.

• (275) In order to take into account the cost for the developer of developing the land, TEDA’s investment cost per m² was then calculated based on publicly available information. According to this information ⁹³, an investment of 230 million USD was foreseen for the expansion area of 6 km². A profit for the developer was also added.

• (276) The resulting price per m² of developed land was applied to the area bought by Jushi Egypt, and compared with the purchase price actually paid by Jushi Egypt. For the plot of land bought in 2011, the 2016 purchase price was corrected for inflation and GDP evolution. This evolution was calculated on the basis of inflation rates and evolution of GDP per capita at current prices in USD for Egypt as published by the IMF for 2016. For the plot of land bought in 2016, a markup was made to take into account the convenient geographical location of the plot for the buyer (next to Jushi Egypt’s existing facilities).

• (277) In accordance with Article 7(3) of the basic Regulation on allocating subsidy amounts for assets which are not depreciated, the subsidy amount has been allocated to the investigation period by applying an available appropriate Egypt’s lending interest rate during the investigation period, as published by the World Bank ⁹⁴, on an interest-free loan.

• (278) Following the final disclosure, Jushi Egypt claimed that the Commission made several errors in determining the benchmark for the sale of land, namely:

• (1) The value of a usufruct over the duration of a usufruct is not comparable to the full ownership of the land as an usufruct is by nature different from full ownership.

• (2) The hypothetical land valuation commissioned by the General Authority of the Suez Canal Economic Zone is not a comparable benchmark as it is a hypothetical price at which the General Authority of the Suez Canal Economic Zone has not managed to sell any parcel of land.

• (3) The full value of the usufruct right over a parcel of land is not the yearly rental price of the usufruct multiplied by the total duration of the usufruct, but the yearly rental price of the usufruct divided by the average return on investment. This is so because the initial yearly amount of the usufruct will lose value each year due to inflation. As a result, the Commission must divide the yearly price per square meter in USD by the average profit to be expected by TEDA for the land.

• (4) The investment cost of 230 million USD announced by TEDA Egypt consists of the price of the usufruct of the land as well as investment for building residential areas, services area and factories. The parcels of land purchased by Jushi Egypt contained none of these, as Jushi Egypt purchased bare land.

• (5) The Commission must use the exchange rate applicable at the time of sales to convert the benchmark in USD into EGP.

• (279) On the first point, the Commission acknowledged that full ownership is different from usufruct, but since the GOE was not able to provide any information or statistics on purchase prices for land, the Commission considered that this was the best available information to determine the benchmark.

• (280) On the second point, the Commission recalled that the valuation in question consisted of an independent study commissioned by the GOE, which provided the intrinsic value of the land, namely the price at which land should normally be sold. The fact that land parcels were not actually sold at this price by the GOE does not affect its intrinsic value.

• (281) On the third point, the Commission deemed that the value of a usufruct is normally determined as a percentage of the market value of the underlying asset (i.e. the value of the full ownership) depending on the duration of the usufruct, i.e. the longer the usufruct, the closer the value of the usufruct will be to the value of full ownership. Since full ownership of land is per definition indefinite in time, by multiplying the yearly usufruct rate by 50 years, the resulting benchmark calculated by the Commission would therefore always be below the actual value of the full ownership. In addition, the Commission noted that in the concrete example of the usufruct contract signed by TEDA in 2016, the full amount of the usufruct had to paid as a lump sum at the start date of the usufruct right. As there were no yearly rentals as such in practice, the claim thus becomes void.

• (282) On the fourth point, the Commission noted that Jushi Egypt indeed purchased land without buildings on it. However, this land already had access to all necessary utilities, roads, sewage treatment, public lighting, security, and other service facilities provided by TEDA. The price for a piece of land in a well-connected and developed zone cannot be compared with the price of a bare piece of desert. In addition, revenues of real estate developers, such as TEDA, normally stem from the sale of land and rental of the buildings and infrastructure provided within the zone. If the development cost was not factored into to the market price of the land, then there would be no incentive for developers to make any investment in the first place.

• (283) On the last point, the Commission noted that it adjusted the 2016 price based on the evolution of the Egyptian GDP in real terms since 2011. This means that inflation caused by the devaluation of the EGP compared to the USD was already factored into the GDP adjustment. Further adjustments for the exchange rate changes would thus result in double counting.

• (284) Based on the above arguments, the claims of the company were rejected.

• (285) All subsidies found were established for the total turnover of the company. The subsidy amount was then allocated to the turnover of the product concerned sold to the European Union.

• (286) The subsidy amount found for the provision of land for less than adequate remuneration amounted to 2,02 %.

3.5.   Revenue foregone

3.5.1.   Revenue foregone through Direct Tax Exemption and Reduction programmes

• (287) Following provisional and final disclosures, the GOE and the exporting producer noted that the 2016 special tax rule for treating foreign exchange losses as a tax loss cannot constitute a subsidy as it does not confer a benefit and is not specific. First, as this tax rule was taken to offset a loss caused by the government, no benefit is conferred. Second, as all entities similarly affected by the loss caused by the government could have recourse to this tax treatment, this scheme cannot be considered to be specific.

• (288) The Commission acknowledged in its provisional findings that this legislation was generally applicable to all companies in Egypt and was meant to offset the negative effects of the devaluation of the Egyptian currency. However, the Commission also stated that companies that are mainly export oriented and operate their business almost entirely in foreign currencies such as USD or EUR benefited disproportionately from this legislation. Indeed, these companies did not incur any significant actual losses as a consequence of the devaluation of the EGP, since the exchange rate losses suffered on their purchases/liabilities in USD could be offset by the exchange rate gains on their sales in USD. As a result, instead of offsetting a loss caused by the government, the legislation actually created a tax benefit, which specifically applied to this type of companies. Therefore, the Commission rejected the claim.

• (289) Accordingly, the recitals 93 to 102 of the provisional Regulation are hereby confirmed.

3.5.2.   Revenue foregone through Indirect Tax and Import Tariff Programmes

3.5.2.1.   Value Added Tax (‘VAT’) exemptions and import tariff rebates for the use of imported equipment

(a) Findings of the investigation

• (290) Following provisional disclosure, the GOE and the exporting producer raised various issues. First, it is not because Jushi Egypt did not always receive full timely VAT reimbursements from the GOE in the past (when they were not within the Suez Canal Economic Zone) that there is now a revenue forgone with respect to the tax treatment that applies to them under the Suez Canal Economic Zone.

• (291) Second, the Commission compared the challenged tax treatment with a hypothetical tax treatment extrapolated from Jushi Egypt’s situation before it entered the Suez Canal Economic Zone, instead of comparing the challenged tax treatment with Egypt’s VAT rules on the importation of equipment and raw materials.

• (292) Third, the Commission did not raise any question to, or discuss with, the GOE regarding the administration of VAT in Egypt during the verification visit.

• (293) Fourth, the GOE recalled that Article 27 of the SCM Agreement calls for a special and differential treatment of developing country Members of the WTO. The fact that the GOE did not always have the resources to pay back the due amount of VAT credit in time should thus not be punished by the Commission.

• (294) Fifth, the GOE recalled that the subsidy benchmark identified by the Commission is the situation of companies before joining the Suez Canal Economic Zone. Companies not under the Suez Canal Economic Zone eventually receive from the GOE part of the VAT paid, although not in a timely fashion and not in full. Therefore, the full amount of VAT normally payable cannot constitute the benefit as Jushi Egypt should receive part of this VAT payable back from the GOE. Furthermore, as Jushi Egypt’s VAT credit balance is now decreasing since Jushi Egypt receives more VAT receivable, the full amount of VAT normally payable would have been partially offset against this VAT receivable. Finally, in early 2020, the amounts due for VAT on imports by Jushi Egypt for the period 2017-2018 have been settled and offset against Jushi Egypt’s VAT credit by the GOE. As a result, there is no more benefit.

• (295) Finally, since the Commission correctly considered that no import duties should have been paid with regard to inputs for exported products, the Commission should have applied the same reasoning with regard to VAT on inputs for exported products. It follows that the Commission must, in order to calculate the benefit, allocate the amount of VAT due during the investigation period to the quantities of materials used for the production of goods sold on the domestic market only.

• (296) In response to these claims, the Commission would like to clarify that its aim is not to punish the GOE for a lack of resources or to criticize the VAT system in Egypt as such. At the same time, the Commission noted that Article 27 of the SCM Agreement does not play a role in the claim by the GOE in this context. The most relevant provision applicable in countervailing duty proceedings is paragraph (10) of Article 27, which only deals with certain de minimis thresholds, whereas the other provisions of Article 27 mainly deal with export subsidies of developing countries. In this case, the GOE is relying on Article 27 to justify the lack of repayment of VAT credits to taxpayers, for which this provision is irrelevant.

• (297) As for the claim concerning information requests on the VAT system, the Commission requested information on the working of the VAT system in Egypt from the start of the investigation, through the questionnaire. Furthermore, general questions on the amount of taxes collected from the exporting producers were raised during the verification visit. The Commission therefore deemed that it had received sufficient information during the investigation on the VAT framework as such.

• (298) However, the Commission noted that the VAT treatment is different for companies in the SCZone. Indeed, companies in the SCZone do not have to pay VAT upfront (‘scenario 1’). In contrast, comparably situated tax payers, namely companies outside the SCZone, do have to pay VAT upfront (‘scenario 2’). Whether this VAT is eventually due or has to be refunded is at that point in time irrelevant. What is important is that no revenue will initially be collected by the GOE in scenario 1, whereas revenue will initially be collected to the GOE in all cases in scenario 2.

• (299) According to the relevant normative framework in Egypt, at the settlement date, the final settlement amount would be due by the companies in scenario 1, whereas part of the revenue collected by the GOE would revert back to the companies in scenario 2 (in case VAT has to be refunded). If this settlement process is swift and reliable, then the benefit of not having to pay upfront under scenario 1 would be equal to the cash-flow advantage for all the time that it would have taken for the repayment. The Commission noted in this respect that the statutory deadline for such a settlement is 6 months from the date a credit is created.

• (300) However, the Commission found that in practice the settlement and the corresponding refund for companies operating under scenario 2 in Egypt occurred at best with very significant delays, and that the criteria for obtaining a refund were unclear. The Commission noted in this respect that the GOE did not dispute this fact as such. The cash-flow benefit for the companies within the SCZone thus stems from the fact that no VAT revenue is collected by the GOE at all from companies within the SCZone until the final settlement, the date of which is uncertain (scenario 1), in contrast to companies outside the SCZone, where revenue is collected immediately and refunded at a much later, uncertain date in time (scenario 2). As a result, companies within the SCZone benefit from a preferential VAT treatment compared to companies outside the SCZone. The amount not collected by the GOE with respect to companies within the SCZone amount to revenue foregone or not collected in the sense of Article 3(1)(a)(ii) of the basic Regulation.

• (301) To further illustrate this, in addition to the relevant VAT framework in Egypt, the Commission looked at the situation of the exporting producers before and after adhering to the SCZone. Indeed, before adhering to the SCZone, their situation was comparable to companies outside the SCZone during the investigation period as per scenario 2. In this respect, the GOE did not dispute the fact that Jushi Egypt had accumulated a very significant VAT credit before it adhered to the SCZone, and that the GOE was not in a position to reimburse this credit. The VAT credit situation of Jushi Egypt, which was created before it adhered to the SCZone, thus shows that the situation described in the previous recital corresponds to reality for companies outside the SCZone during the IP.

• (302) Concerning the fifth point raised by the GOE and the exporting producers, the final destination of the goods on which VAT is applied and the fact that Jushi Egypt could offset some VAT payables against its original VAT credit over time does not alter the findings of the Commission, as they do not affect the initial difference in treatment between companies in and outside of the zone, and in any event these offsets are not linked to a proactive refund by the GOE but rather to a VAT liability which happened to have been incurred by the company.

• (303) The Commission took note that the new VAT law in Egypt was only enacted shortly before the investigation period, and that the implementing legislation was not fully in place yet during the investigation period. In view of this transitional phase, the Commission understood the GOE’s argument that the settlement period for VAT reimbursements may be significantly delayed, given that the GOE is a developing country with a sub-optimal number of administration personnel in charge of the new system and with possible budgetary shortfalls that make it difficult to issue VAT reimbursements within the prescribed times. Therefore, taking into account these exceptional and hopefully temporary circumstances in Egypt, the Commission decided to take into account only the cash flow advantage to the exporting producer for the calculation of the benefit on VAT exemptions. The calculation methodology for calculating the benefit, as described in recital 258, was adapted accordingly.

• (304) Following final disclosure, the complainant claimed that the Commission’s findings are that companies outside the SCZone received VAT and tax refunds ‘at best with very significant delays’ and under unclear criteria, which the GOE did not dispute. It their understanding, any refund request to the Egyptian authorities is assessed and decided upon by a governmental committee specifically established to review refund requests. Under such conditions, and as the GOE stresses that as a developing country its systems are far from perfect, it is reasonable to conclude that the refund process is highly bureaucratic and arbitrary, and that only companies which have the necessary political connections receive a refund within a reasonable time or at all. According to the complainant, there is no evidence on the open file that ‘normal’ companies, i.e. without political connections, receive VAT and import tax repayments at all (or within any reasonable amount of time). The fact that Jushi Egypt has finally in 2020 received a refund for import duties and VAT paid before it became included in the SCZone is not such evidence, but rather supports the conclusion that only political connections allow companies to receive refunds. In other words, the Commission should treat both the SCZone exemption and the refund Jushi Egypt received for the periods before it was in the SCZone as subsidies in the form of revenue foregone.

• (305) On this point, the Commission reiterated that it decided to only take into account the cash flow advantage to the exporting producer for the calculation of the benefit on VAT exemptions in light of the fact that the new VAT law in Egypt was only enacted shortly before the investigation period, and that the implementing legislation was not fully in place yet during the investigation period. In view of this transitional phase, the Commission understood the GOE’s argument that the settlement period for VAT reimbursements may be significantly delayed, given that the GOE is a developing country with a sub-optimal number of administration personnel in charge of the new system and with possible budgetary shortfalls that make it difficult to issue VAT reimbursements within the prescribed times. Therefore, the claim was rejected.

• (306) In light of the above considerations and in the absence of other comments, the Commission confirmed its findings in recitals 53-66 of the provisional Regulation.

(b) Calculation of the subsidy amount

• (307) Concerning the revenue foregone in the form of a de facto VAT exemption, the benefit was initially calculated by taking the full amount of VAT normally payable but not paid during the investigation period on the purchases of imported equipment (during the IP). However, as mentioned in recital 256 above, following the comment on the provisional disclosure, the Commission decided to take into account only the cash flow advantage to the exporting producers for the calculation of the benefit on VAT exemptions. The calculation methodology for calculating the benefit was adapted accordingly, As a result, the cash flow benefit on the VAT withheld was considered to be equivalent to the average interest rate on deposits in Egypt during the IP (12,03 %), applied to the VAT amounts which were withheld for goods purchased since 2017.

• (308) The modified amount of subsidy established with regard to this type of subsidies concerning machinery during the investigation period for the exporting producers was 0,02 % for VAT exemptions and 0,17 % for import tariff waivers.

3.5.2.2.   VAT exemptions and import tariff waivers for imported input materials used in exported finished goods

(a) Findings of the investigation

• (309) Following provisional disclosure, the GOE and the exporting producer argued that Jushi Egypt had paid a deposit for customs duties at the start of 2019. They also provided additional evidence, according to which all customs duties for the years 2017 and 2018 had now been settled and paid. Furthermore, they claimed that even if the amounts due for customs duties had not been settled in 2020, the Commission could not request a perfect tax administration from a developing country, such as Egypt. In this regard, the GOE showed particular diligence in setting up the duty drawback system for Jushi Egypt as consumption reports were already established and monitored by the GOE within a few months after Jushi Egypt entered the Suez Canal Economic Zone. Three years later, the GOE recovered all customs duties and VAT due from Jushi Egypt. As a result, the GOE submitted that it had a proper duty drawback system in place so that no excess remission occurred.

• (310) Furthermore, according to the GOE, pursuant to Article 377 of the Egyptian Civil Code and the ruling of the Monetary Court No 915/43, the GOE has 5 years to recover import duties. As a result, there could be no revenue forgone from the GOE as long as this period had not expired, as the GOE was still entitled to and did recover the customs duties due on time.

• (311) Finally, Jushi Egypt argued that sales to Hengshi Egypt, a company buying GFR from Jushi Egypt and also established in the SCZone, are treated under Egyptian law in the same way as export sales in respect of import duties on raw materials, because Hengshi Egypt is located in the Suez Canal Economic Zone. Furthermore, Hengshi Egypt had no domestic sales at all as it exported all of its production. As a result, had Jushi Egypt not been exempted for import duties on raw materials, it would still not have incurred import duties on raw materials for domestic sales to Hengshi Egypt.

• (312) The Commission reviewed the evidence provided on the payment of the customs duties, and found that the GOE had initiated a verification at the premises of the exporting producer at the end of 2019, due to the Commission’s investigation. As a result of this verification, the GOE reclaimed a certain amount of customs duties on imported materials from the company, relating to the years 2017, 2018 and 2019. Based on the evidence provided, and given the impossibility to verify on spot this new evidence due to travelling restrictions linked to the COVID-19 pandemic, the Commission accepted the claim and deducted the amount of customs duties paid on imported materials relating to the investigation period in accordance with Article 15(1) of the basic Regulation.

• (313) However, the Commission did not consider that these settlements put into question the findings on the subsidy scheme as such. In this respect, the Commission noted that the recovery of the customs duties was triggered by the Commission’s investigation activities, rather than by the GOE’s own monitoring and verification framework for the collection of customs duties. The GOE also did not dispute the fact that there was no such framework in place during the investigation period. Concerning the temporary nature of the lack of a monitoring and verification, the Commission noted that although Jushi Egypt only joined the SCZone in 2017, the last legislative change in the framework for the collection of the customs duties already happened in 2015, when the responsibility for collecting customs duties was transferred to the General Authority of the SCZone. In addition, the detailed report of the Customs Authority, provided by the GOE as annex I of its comments on provisional disclosure, confirmed that the overall legislation for the collection of customs duties was already in place since 2006. The GOE thus had ample time to implement a functioning system for collecting customs duties.

• (314) Concerning sales from Jushi Egypt to Hengshi Egypt, the Commission noted that sales of inputs between companies located within the special zone were never subject to any taxes, thus showing that the SCZone was a special zone with several specific features that distinguish it from other zones.

• (315) Therefore, the fact that Hengshi Egypt only has export sales is in this sense irrelevant, and does not alter the Commission’s conclusions. The claims of the GOE and of the exporting producer concerning the validity of the Commission’s findings in general, and on the sales to Hengshi Egypt more specifically, were thus rejected.

• (316) Following the final disclosure, the complainant claimed that this is not a case where a government terminates a defined subsidy scheme as a consequence of an anti-subsidy investigation and that scheme is consequently no longer available. According to the complainant, the GOE has simply collected funds from Jushi Egypt in order to provide a benefit to the latter in the EU investigation, but without putting in place a proper collection framework. As there is no legal framework in place, it cannot be ensured that the GOE will collect future duties and VAT from Jushi Egypt suo moto, or even that the GOE will not pay back the collected funds to Jushi Egypt as soon as the Commission’s investigation is concluded. In other words, in the context of a cooperation agreement between China and Egypt, the GOE’s actions simply reflect an established and ongoing pattern of ad hoc benefits granted to Jushi Egypt, and in no way justify a different valuation of the benefit received by Jushi Egypt.

• (317) On this point, the Commission reiterated that it reviewed the evidence provided on the payment of the customs duties, and based on the evidence provided, and given the impossibility to verify on spot this new evidence due to travelling restrictions linked to the COVID-19 pandemic, the Commission accepted the claim and deducted the amount of customs duties paid on imported materials relating to the investigation period in accordance with Article 15(1) of the basic Regulation. In addition, it is factually not correct that there is no legal framework in place as evidenced by the legal basis described in recital 70 of the provisional Regulation. Also, the legislation is currently being implemented as explained in recitals 78-82 of the provisional Regulation. Finally, the claims that the GOE will pay back the collected funds to Jushi Egypt was not backed by any evidence. Consequently, these claims were rejected.

• (318) Following final disclosure, Jushi Egypt repeated the same comments regarding the calculation of VAT and import duty exemptions, ignoring the factual information and explanations disclosed by the Commission. As the comments submitted had already been dealt with, no further explanation was required.

• (319) In light of the above considerations and in the absence of other comments, the Commission confirmed its findings in recitals 69-86 of the provisional Regulation.

(b) Calculation of the subsidy amount

• (320) Following provisional disclosure, the Commission adapted the calculation methodology for the calculation of the benefit on the de facto VAT exemption, as mentioned in recital 256 above. As a result, the cash flow benefit on the VAT withheld was considered to be equivalent to the average interest rate on deposits in Egypt during the IP (12,03 %), applied to the VAT amounts which were withheld for materials purchased since 2017, and calculated pro rata for VAT amounts which were withheld during the IP. Since no information was available on the amount of the materials purchased before the IP, the Commission considered that this amount would be equivalent to the amounts found during the IP, adjusted by the difference in the cost of goods sold between the two periods.

• (321) The amount of subsidy established with regard to this type of subsidies concerning materials during the investigation period for the exporting producers was 1,08 % for VAT exemptions and 0,24 % for import tariff waivers.

3.6.   Conclusion on subsidisation

• (322) The definitive subsidy rates with regard to the set of measures described above expressed as a percentage of the CIF Union frontier price, duty unpaid, are as follows:

Table 1

Definitive subsidy rates

Company	Definitive subsidy rate
Jushi Egypt for Fiberglass Industry S.A.E.	13,1 %
All other companies	13,1 %

4. INJURY

4.1.   Definition of the Union industry and Union production

• (323) In the absence of any comments with respect to the definition of the Union industry and Union production, the Commission confirmed its conclusions set out in recitals 106 to 109 of the provisional Regulation.

4.2.   Union consumption

• (324) In the absence of any comments with respect to Union consumption, the Commission confirmed its conclusions set out in recitals 110 to 112 of the provisional Regulation.

4.3.   Imports from Egypt and price undercutting

• (325) The Commission received comments from the Egyptian exporting producer Jushi Egypt regarding price undercutting after provisional disclosure.

• (326) Jushi Egypt noted that when the Commission had calculated undercutting, they had removed sales costs and a reasonable amount of profit from the sales price of their related sales companies to the independent customer in the Union.

• (327) Jushi Egypt stated that they considered that this methodology did not comply with the judgement of the General Court in the case T-301/16, Jindal Saw Ltd and Jindal Saw Italia v European Commission, paragraph 187 (‘Jindal Saw’) ⁹⁵.

• (328) The Commission disagreed with the relevance given by Jushi Egypt to the judgement in Jindal Saw in this case. In Jindal Saw, the General Court considered that the Commission had committed an error by deducting the selling expenses of Jindal’s related importers in the Union from the sales to the first independent buyer, while the selling expenses of the Union industry related selling entities were not deducted from the Union industry sales prices to the first independent customer.

• (329) The Court therefore considered that the two prices were not compared symmetrically at the same level of trade in a situation where the exporting producers mostly sold into the Union through related selling entities, compared to the situation how the Union producers sold the product concerned.

• (330) The Commission noted that a comparison between this case and the Jindal case is not relevant, as the respective configuration of the export sales was different. While the sales of Jushi Group are predominantly direct sales from Egypt to the first independent customer in the Union, in the Jindal case almost all of the export sales of that exporting producer were made via related entities established in the EU.

• (331) Indeed, in this case two of the three sampled Union producers do not have related sales companies, and the third has a centralised sales and invoicing system with products shipped directly from the manufacturing plants. The Commission therefore considered that in this case there was no asymmetry with the sales channels of the exporting producer, and therefore the Jindal case is not applicable. Moreover, the use of the prices of the Jushi Group related sales entities would not have any relevant impact on the price effect analysis ⁹⁶.

• (332) Furthermore, the Commission also refers to recital 157 of the provisional Regulation that dealt with the conclusion that there was clear price depression during the investigation period. Therefore, in any event this claim is irrelevant as this finding of price depression would already be in itself sufficient to show the adverse price effects of subsidised imports according to Article 8(2) of the basic Regulation.

• (333) The Commission therefore confirmed its conclusions set out in recitals 122 and 123 of the provisional Regulation that the imports from Egypt during the investigation period significantly undercut the sales of the Union industry, and noted that in any event the finding on price depression set out at recital 157 of the provisional Regulation rendered this claim irrelevant.

• (334) Following final disclosure, Jushi Egypt repeated the same comments regarding the calculation of undercutting, ignoring the factual information and explanations disclosed by the Commission. As the comments submitted had already been dealt with, no further explanation was required.

4.4.   Economic situation of the Union industry

4.4.1.   General remarks

• (335) In the absence of comments, the Commission confirmed recitals 124 to 129 of the provisional Regulation.

4.4.2.   Macroeconomic indicators

4.4.2.1.   Production capacity and capacity utilisation

• (336) In the absence of any comments with respect to production, production capacity and capacity utilisation, the Commission confirmed the conclusions set out in recitals 131 to 132 of the provisional Regulation.

4.4.2.2.   Sales volume and market share

• (337) In the absence of any comments with respect to sales volume and market share, the Commission confirmed the conclusions set out in recital 134 of the provisional Regulation.

4.4.2.3.   Employment and productivity

• (338) In the absence of comments with respect to employment and productivity, the Commission confirmed the conclusions set out in recital 136 of the provisional Regulation.

4.4.2.4.   Magnitude of the amount of countervailable subsidies and recovery from past subsidisation or dumping

• (339) In the absence of any comments, the Commission confirmed its conclusions set out in recitals 138 and 139 of the provisional Regulation.

4.4.3.   Microeconomic indicators

• (340) Following final disclosure, Jushi Egypt commented on the calculation of the microeconomic indicators that were set out in the provisional Regulation, and requested more information on how these indicators were calculated.

• (341) The Commission referred Jushi Egypt to recital 126 of the provisional Regulation, which made clear that the microeconomic indicators were based on the data from the sampled Union producers, verified and then aggregated together.

• (342) The object of the aggregation was to ensure that the sample was treated as one data source, and not as three separate data sources with company-specific trends to explain. Aggregation allowed the Commission to take the entire sample as representative of the Union industry and use the data as a guide to the performance of all producers.

4.4.3.1.   Prices and factors affecting prices

• (343) In the absence of any comments, the Commission confirmed its conclusions set out in recitals 141 to 142 of the provisional Regulation.

4.4.3.2.   Labour costs

• (344) In the absence of any comments, the Commission confirmed its conclusions set out in recital 144 of the provisional Regulation.

4.4.3.3.   Stocks

• (345) In the absence of any comments, the Commission confirmed its conclusions set out in recital 146 of the provisional Regulation.

4.4.3.4.   Profitability, cash flow, investments, return on investments and ability to raise capital

• (346) In the absence of any comments on profitability, cash flow, investment, return on investments and ability to raise capital, the Commission confirmed its conclusions set out in recitals 149 to 153 of the provisional Regulation.

4.4.4.   Conclusion on injury

• (347) In the absence of any comments, the Commission confirmed its conclusions on injury set out in recitals 154 to 161 of the provisional Regulation.

5. CAUSATION

5.1.   Effects of the subsidised imports from Egypt

• (348) In the provisional Regulation, the Commission provisionally concluded that the subsidised imports from Egypt were causing material injury to the Union industry.

• (349) The Commission concluded that the increase of imports during the investigation period and the undercutting and depression of Union industry prices by the subsidised imports caused the Union industry to lose market share and profitability.

• (350) In the absence of comments the Commission confirmed its conclusions set out in recital 164 of the provisional Regulation.

5.2.   Other known factors

5.2.1.   Imports from third countries

• (351) In the absence of comments the Commission confirmed its conclusions set out in recitals 167 to 171 of the provisional Regulation.

5.2.2.   Export performance of the Union industry

• (352) The Commission received no comments on the exports of the Union industry.

• (353) In the absence of comments the Commission confirmed its conclusions set out in recital 174 of the provisional Regulation.

5.3.   Conclusion on causation

• (354) The Commission confirmed its conclusions on causation set out in recitals 175 to (176) of the provisional Regulation.

6. UNION INTEREST

6.1.   Interest of the Union industry

• (355) In the absence of comments, the Commission confirmed its conclusions set out in recitals 185 to 186 of the provisional Regulation.

6.2.   Interest of unrelated importers

• (356) In the absence of any further comments, the Commission confirmed its conclusions set out in recital 192 of the provisional Regulation.

6.3.   Interest of users

• (357) In the absence of any further comments, the Commission confirmed its conclusions set out in recital 207 of the provisional Regulation.

6.4.   Trade distorting effects of subsidies and restoring effective competition

• (358) In the absence of any further comments, the Commission confirmed its conclusions set out in recital 209 of the provisional Regulation.

6.5.   Conclusion on Union interest

• (359) In the absence of any further comments, the Commission confirmed its conclusions set out in recitals 210 to 213 of the provisional Regulation.

7. RETROACTIVE LEVYING OF COUNTERVAILING DUTIES ON THE REGISTERED IMPORTS

• (360) As mentioned in recital 220 of the provisional Regulation, 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 Commission Implementing Regulation (EU) 2020/199 ⁹⁷ (‘the registration Regulation’).

• (361) As set out in recital 222 of the provisional Regulation, the Commission has to decide whether anti-subsidy measures shall be retroactively collected on imports during the three week period of registration, given that there are imports of GFR from Egypt that have been registered.

• (362) The criteria for whether duties can be collected for the three weeks of pre-disclosure are set out in Article 16(4) of the basic Regulation. The Article states that duties can only be collected if:

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

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

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

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

• (363) The Commission considers that the registration Regulation complies with criterion (a), namely that the imports of GFR originating in Egypt have been registered in accordance with Article 24(5) of the basic Regulation.

• (364) The Commission considers that importers have been given an opportunity for comment under criterion (b) with the publication of the provisional Regulation and with the publication of the registration Regulation.

• (365) Following final disclosure, the Commission received comments from European users and distributors of GFR, stating that they considered that such opportunity to comment was not based on the Commission’s decision to register, but on the Commission’s proposal to collect duties.

• (366) While the Commission agrees that criterion (b) of Article 16(4) must be interpreted as giving an opportunity to parties to comment on the retroactive collection of duties on imports registered during the pre-disclosure period at this stage, the Commission notes that it disclosed the full analysis justifying the retroactive collection with all the most recent data available in Section 7 of the definitive disclosure. By doing so the Commission therefore gave all parties, including these users and distributors, an opportunity to comment as provided for by this provision, as also shown by the arguments and rebuttals detailed at recitals 322 to 326. Therefore the Commission rejected this claim.

• (367) For the purposes of the test in criterion (c) of Article 16(4) of the basic Regulation, the Commission started by analysing statistics on imports of GFR from Egypt taken from the Surveillance 2 database. The purpose of this analysis was to see whether ‘massive imports’ under the terms of criterion (c) had been identified for the period of registration. The latest available data is given in Table 2 below.

Table 2

Imports of GFR from Egypt

	Tonnes per week	Tonnes per month	Import price EUR per tonne
Investigation period (April 2018 to March 2019)	2 805	12 156	904
Post-investigation period (April 2019 to January 2020)	2 598	11 358	882
Period of registration (14 February to 6 March 2020)	3 858	15 432	813
Source: Surveillance 2 database, extracted on 26 March 2020.	Source: Surveillance 2 database, extracted on 26 March 2020.	Source: Surveillance 2 database, extracted on 26 March 2020.	Source: Surveillance 2 database, extracted on 26 March 2020.

• (368) A total of 11 574 tonnes of GFR was imported from Egypt during the three weeks of pre-disclosure. Given that this is a non-standard period, and in itself not comparable to other periods, the comparison has been done in terms of weeks (so 21 days divided by 3) and in terms of months (considering that a month is on average 4 weeks). Note that although the pre-disclosure period is 21 calendar days, the Surveillance 2 database contains only 15 data points, making daily calculations impractical.

• (369) Table 2 shows that in terms of quantity, imports of the product concerned were massive. The period of three weeks before the imposition of provisional measures shows a sharp upward trend, compared to those imports during the investigation period, and also during the period between April 2019 and January 2020, that is after the investigation period up until registration.

• (370) Therefore, the Commission concluded that imports during the three weeks of pre-disclosure were significantly higher on average than those during the investigation period. This finding supports the conclusion that imports during the three week period of pre-disclosure can be considered as massive under criterion (c).

• (371) Table 2 above also shows that imports continued after the end of the investigation period, in massive quantities.

• (372) The Commission also took note of the daily import data from the Surveillance 2 database.

• (373) The data shows that on one day of the three week pre-disclosure period, just over 3 000 tonnes of GFR was imported from Egypt, which is significantly higher than the average weekly importation during the investigation period.

• (374) This led further support to the conclusion that imports during the three week period of pre-disclosure can be considered to be massive under criterion (c) above.

• (375) The next stage of the test under criterion (c) is whether these imports, now considered massive, can have caused ‘injury which is difficult to repair’.

• (376) The Commission first noted that imports during the investigation period undercut and depressed the prices of the Union industry. The volume and prices of the imports of the product concerned have had a negative impact on the quantities sold and level of the prices charged in the Union market and the market share held by the Union industry. This resulted in substantial adverse effects on the overall performance and the financial situation of the Union industry. Thus, imports of the product concerned have been found to cause the injury suffered by the Union industry during the investigation period.

• (377) As shown in Table 2 above, the import price of GFR from Egypt continued to fall after the end of the investigation period, and in particular during the three weeks of pre-disclosure. The Commission therefore considered that imports during the pre-disclosure period were made at increased volumes and even at lower prices than during the investigation period, thereby causing further injury to the Union industry which will be difficult to repair but for the collection of those duties.

• (378) The Commission also found that given the quantities of GFR from Egypt imported into the Union during the three weeks prior to imposition of provisional duties, it could also be considered that importers were stockpiling Egyptian GFR, knowing on February 14 that provisional measures were to be imposed on March 6.

• (379) The Commission therefore considered that imports during the three-week period of pre-disclosure caused injury to the Union industry, which is difficult to repair, both in terms of quantity and in terms of price.

• (380) The Commission therefore concluded that criterion (c) was met and that in order to preclude the recurrence of injury these imports should have duties retroactively collected as per criterion (d).

• (381) Following final disclosure, the Commission received comments from importers and distributors of GFR, challenging several aspects of the Commission’s assessment above.

• (382) First, those importers and distributors disputed that the imports during the three-week period of pre-disclosure could be considered massive. Their submission suggested that the Commission should consider ‘massive imports’ to mean ‘there should be an increase of imports that is both sudden and dramatic’ and by comparing various data to the three-week period of pre-disclosure, including comparing monthly peak imports to other peak imports. On this basis, the submission suggests that no such increase has taken place.

• (383) Second, they also claimed that the Commission had not defined ‘injury which is difficult to repair’ and suggested their own definition, ‘permanent and irreparable harm to the Union industry’.

• (384) Third, the importers and distributors noted that the increase in imports during the three week period of pre-disclosure is equivalent to 0,4 % of yearly Union consumption. Given that the registration period is so short, this is to be expected and does not therefore enter into the analysis of whether injury is caused or otherwise.

• (385) Fourth, they further alleged that the reason that import prices fell after the end of the investigation period was because of price-cutting by the Union industry in order to maintain market share.

• (386) Fifth, those importers and distributors disagreed with the Commission’s finding that given the quantities of GFR from Egypt imported into the Union during the three weeks prior to imposition of provisional duties, it appeared that importers were stockpiling Egyptian GFR, having been informed on February 14 that provisional measures were to be imposed on March 6.

• (387) They stated that this was not the case, because imports in December and January were much lower, and therefore the imports just before the imposition of provisional duties were to make up for the lower imports previously.

• (388) According to their arguments set out above, the Commission should consider whether or not it is necessary to collect duties on the registered imports, as set out in Article 16(4)(d).

• (389) They asked the Commission to consider that, given that registration during the pre-disclosure period is in effect mandatory, that collection of duties on those registered imports should not also be in effect mandatory, otherwise the benefit of the pre-disclosure period for importers and distributors would be lost.

• (390) These comments are addressed below.

• (391) In relation to the first claim, the Commission disagrees with those parties’ interpretation of the term ‘massive imports’, which is legally baseless. The basic Regulation does not refer to an increase of imports, let alone placing any condition on ‘massive imports’ having to be ‘sudden and dramatic.’ As shown in Table 2 above, the Commission has compared already at a very granular level average quantities imported from Egypt per month and per week in order to determine whether imports were massive or not.

• (392) All the data confirm that these imports were massive and on an upward trend, as clearly explained in recitals 315 to 317. The Commission sees no reason to base its methodology on a comparison between peaks to other peaks. In any event, the fact that there may have been some peaks and troughs as selectively singled out by these parties in no way affects the conclusion that the requisite standard of ‘massive imports’ was met in these circumstances.

• (393) Furthermore, whether or not the massive imports during the three week period of pre-disclosure were ‘to compensate’ for the lower imports in December 2019 and January 2020 as also argued by these parties is irrelevant, as the basic Regulation does not discriminate regarding the motive for such massive imports.

• (394) The Commission therefore maintained its conclusion that the imports during the three-week period of pre-disclosure were massive under Article 16(4)(c) of the basic Regulation. This finding is further confirmed by the reasons described in recitals 402-405 below.

• (395) With regard to the second claim, once again, these parties suggested a definition that does not correspond to what is written in the basic Regulation. They then built their arguments on this incorrect standard. Specifically, injury that is difficult to repair as stated in the basic Regulation cannot be arbitrarily interpreted as meaning ‘permanent and irreparable injury’. This claim is therefore without legal basis. In any event, the Commission explained in recital 376 in conjunction with the analysis of various elements in the injury assessment how this requirement was considered to be met in this case.

• (396) In addition, the third claim concerning the market share of imports and questioning their potential for causing injury to the Union industry in such a short period is misleading.

• (397) First, the figure of 0,4 % presented by the parties as the imports market share for the registration period is completely speculative, since there is no information available in the file on the EU consumption after the investigation period. For the sake of argument, even considering that EU consumption had not changed after the investigation period as proposed by these parties, which again is speculative, imports during the three-week period of pre-disclosure would account for 1,12 % of EU consumption during the three-week period alone. This level of market share is normally considered not negligible and capable of causing injury during a whole year. In any event, already the absolute level of imports in itself as indicated in Table 2 above, which is a verified figure, is certainly not negligible.

• (398) Thus, the assertion that import volumes equivalent to 1,12 % market share in the period of merely three weeks could not be considered massive and would be insufficient to cause injury to the Union industry is in clear contradiction with the basic Regulation and the Commission’s consistent practice regarding negligible imports.

• (399) Secondly, the Commission restates its findings at recital 376 above and refers to all the elements proving how these massive imports from Egypt caused injury difficult to repair. This analysis is a holistic one based on an assessment of all the relevant evidence.

• (400) On the basis of this assessment, the Commission concluded that the quantities imported, in particular considering the significant volumes imported in this short period of time, were in absolute and relative terms significant enough to be considered massive within the meaning Article 16(4)(c) of the basic Regulation and thus able to cause injury difficult to repair.

• (401) With regard to the fourth claim of price-cutting by the Union industry in order to maintain market share, the Commission found that injury has been caused to the Union industry by the imports from Egypt taking market share from the Union industry, forcing them to cut prices to compete, even at the expense of their profitability. Therefore, the Commission cannot accept the justification that import prices have decreased as a response to a decrease in price by Union producers when in fact it found that subsidised imports were the cause of price depression in the Union market. On this basis, this claim had to be dismissed.

• (402) Finally, regarding the fifth claim, the Commission has no need to put the massive imports during the pre-disclosure period into a context and, therefore, the fact that import volumes just before the imposition of provisional duties were to make up for lower import volumes in December and January is irrelevant.

• (403) The Commission also disagrees with the premise by these parties that registration during the pre-disclosure period is in effect mandatory and that collection of duties on those registered imports should not also be in effect mandatory, and with their subsequent conclusion that this mean that the benefit of the pre-disclosure period for importers and distributors would be lost. First, the registration during the pre-disclosure period is not ‘in effect’ mandatory, but it is subject to the strict conditions listed in Article 16(4) based on all data and evidence available at the time of pre-disclosure. This has been confirmed in practice, when there was no registration in the pre-disclosure period when these conditions were not met ⁹⁸.

• (404) Second, the Commission is well aware that the retroactive collection of duties registered in the pre-disclosure period is also not mandatory, but is strictly subject to the fulfilment of all the relevant conditions laid down in Article 16(4) of the basic Regulation on the basis of the most recent data available at definitive stage. This can also be confirmed in practice ⁹⁹.

• (405) Third, the Commission refers to recital 4 of the Modernisation Regulation ¹⁰⁰ last amending the basic Regulation, which gives the reason for both the pre-disclosure period and the registration thereof. The recital directly states that ‘in order to limit the risk of a substantial rise in imports in the period of pre-disclosure, the Commission should register imports where possible’ considering ‘a prospective analysis of the risks associated and the likelihood that these circumstances would undermine the remedial effects of the measures.’

• (406) Even where the registration in this pre-disclosure period is not possible for instance because the relevant legal conditions are not met, the Commission should afterwards reflect the additional injury caused to the Union industry by a further substantial rise in imports during this period according to the same recital and Article 15(1), fifth subparagraph of the basic Regulation.

• (407) Therefore, the retroactive collection of duties in these situations, far from being automatic, is subject to massive imports during the pre-disclosure period, or to the additional injury caused by such increase in the absence of registration, and also the other conditions listed in Article 16(4) of the basic Regulation.

• (408) Contrary to what these parties argued, the rationale and the benefit of the pre-disclosure for importers and distributors introduced by the Modernisation Regulation was ‘to improve the transparency and predictability’ for the parties affected by the investigations, ‘in particular importers’ ¹⁰¹. The rationale for pre-disclosure was thus certainly not to give them an instrument to massively increase imports during the pre-disclosure period to benefit from the last window before the imposition of duties as they suggest. Therefore, this argument was also dismissed.

• (409) On the basis of all the above the Commission sees no evidence to change the conclusion that duties should be levied on the registered imports.

• (410) In accordance with Article 16(3) of the basic Regulation, the level of the duty to be collected retroactively should be set at the level of the provisional duties imposed by Implementing Regulation (EU) 2020/379, because the definitive countervailing duty imposed by this Regulation is higher than the provisional duty.

8. DEFINITIVE COUNTERVAILING MEASURES

• (411) In view of the conclusions reached with regard to subsidisation, injury, causation and Union interest, definitive countervailing duties should be imposed to remove the material injury caused to the Union industry by the subsidised imports from Egypt.

8.1.   Level of countervailing measures

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

• (413) Article 15(1), fourth subparagraph then states that ‘Where the Commission, on the basis of 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.’

• (414) 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.

• (415) Given that the definitive measures in this case will be based on the amount of countervailable subsidies established, the injury margin was not established.

8.2.   Definitive measures

• (416) Definitive countervailing measures should be imposed on imports of GFR originating in Egypt in accordance with the rules in Article 15(1) of the basic Regulation, which states that the definitive duty shall correspond to the total amount of countervailable subsidies established.

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

Company	Countervailing duty
Jushi Egypt for Fiberglass Industry S.A.E.	13,1 %
All other companies	13,1 %

• (418) The individual company countervailing duty rates specified in this Regulation were established on the basis of the findings of this investigation. Therefore, they reflect the situation found during that investigation with respect to those companies. Those duty rates (as opposed to the countrywide duty applicable to ‘all other companies’) are thus exclusively applicable to imports of the product concerned originating in Egypt and produced by those companies. Imported products concerned 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 those rates and shall be subject to the duty rate applicable to ‘all other companies’.