Commission Implementing Regulation (EU) 2022/806 of 23 May 2022 amending 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 and Implementing Regulation (EU) 2020/776 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 imposing the definitive anti-dumping duties and the definitive countervailing duties on imports of certain woven and/or stitched glass fibre fabrics originating in the People’s Republic of China and Egypt brought to an artificial island, a fixed or floating installation or any other structure in the continental shelf of a Member State or the exclusive economic zone declared by a Member State pursuant to UNCLOS

THE EUROPEAN COMMISSION,

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

Having regard to 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 (1) (‘the basic anti-dumping Regulation’), and in particular Article 9(4) and Article 14a thereof,

Having regard to Regulation (EU) 2016/1037 of the European Parliament and of the Council of 8 June 2016 on protection against subsidised imports from countries not members of the European Union (2) (‘the basic anti-subsidy Regulation’), and in particular Article 15(1) and Article 24a thereof,

Whereas:

(1) On 16 June 2020, the European Commission (‘the Commission’) imposed definitive anti-dumping duties and definitive countervailing duties on imports of certain woven and/or stitched glass fibre fabrics (‘GFF’) originating in the People’s Republic of China (‘the PRC’) and Egypt by, respectively, Commission Implementing Regulation (EU) 2020/492 (‘GFF AD Regulation’) (3) and Commission Implementing Regulation (EU) 2020/776 (‘GFF AS Regulation’) (4) (‘the existing measures’).

(2) Regulation (EU) 2018/825 of the European Parliament and of the Council (5), which entered into force on 8 June 2018 (‘TDI Modernisation package’), introduced the new Articles 14a and 24a into, respectively, the basic anti-dumping Regulation and the basic anti-subsidy Regulation.

(3) According to these Articles, an anti-dumping or countervailing duty may also be imposed on any dumped or subsidised product brought in significant quantities to an artificial island, a fixed or floating installation or any other structure in the continental shelf of a Member State or the exclusive economic zone declared by a Member State pursuant to UNCLOS (‘the CS/EEZ’) (6), where this would cause injury to the Union industry.

(4) The same Articles provided that the Commission should adopt implementing acts laying down the conditions for the incurrence of such duties, as well as the procedures relating to the notification and declaration of such products and the payment of such duties, including recovery, repayment and remission (‘customs tool’), and that the Commission should only impose such duties as of the date the customs tool is operational. The customs tool (7) became applicable on 2 November 2019.

(5) On 27 May 2021, the Commission published a Notice (8) reopening the investigations leading to the anti-dumping and countervailing measures on imports of certain woven and/or stitched glass fibre fabrics originating in the PRC and Egypt.

(6) The reopening was limited in scope to the examination of whether the measures should be applied to certain woven and/or stitched glass fibre fabrics originating in PRC and Egypt (‘the countries concerned’) brought in significant quantities to the CS/EEZ as the customs tool was not applicable when the investigations that led to the existing measures were initiated and, thus, the Commission could not conclude on whether the extension of the duties to the CS/EEZ was appropriate.

(7) The Commission had at its disposal sufficient evidence showing that GFF originating in the PRC and Egypt were being brought in significant quantities under the inward processing regime in order to be processed into wind blades that were then exported to offshore wind parks in the CS/EEZ, and that this would cause injury to the Union industry. Part of this evidence was provided by the EU Industry. A note to the file containing the evidence available to the Commission was available to interested parties.

(8) The Commission notified the interested parties that cooperated in the investigations that led to the existing measures, namely the Mission of the People’s Republic of China, the Mission of Egypt, the exporting producers and their related companies in the PRC and Egypt, Union producers, unrelated importers in the Union, and users in the Union about the reopening of the investigations.

(9) Interested parties were given the opportunity to make their views known in writing and to request a hearing with the Commission and/or the Hearing officer in trade proceedings within the time-limit set out in the Notice. None of the interested parties requested a hearing either with the Commission or the Hearing officer in trade proceedings.

(10) The Commission sent a questionnaire to the interested parties that cooperated in the investigations that led to the existing measures.

(11) The Commission received questionnaire replies from four Union producers, the Union industry’s association and one user.

(12) No questionnaire reply was received from the exporting producers. The Commission notified the Missions of the PRC and Egypt that due to the insufficient cooperation from the exporting producers in the PRC and Egypt, it intended to apply Article 18 of the basic anti-dumping Regulation and Article 28 of the basic anti-subsidy Regulation respectively and therefore base its findings on the facts available. No comments were received in response to this notification.

(13) The investigation period was the same as during the original investigations, i.e. 1 January 2018 to 31 December 2018 (‘original period of investigation’).

(14) The product under investigation is the same as in the investigations that led to the imposition of the existing measures i.e. fabrics of woven and/or stitched continuous filament glass fibre rovings and/or yarns with or without other elements, excluding products which are impregnated or pre-impregnated (pre-preg), and excluding open mesh fabrics with cells with a size of more than 1,8 mm in both length and width and weighing more than 35 g/m2, currently falling under CN codes ex 7019 61 00, ex 7019 62 00, ex 7019 63 00, ex 7019 64 00, ex 7019 65 00, ex 7019 66 00, ex 7019 69 10, ex 7019 69 90, and ex 7019 90 00 (TARIC codes 7019610081, 7019610083, 7019610084, 7019620081, 7019620083, 7019620084, 7019630081, 7019630083, 7019630084, 7019640081, 7019640083, 7019640084, 7019650081, 7019650083, 7019650084, 7019660081, 7019660083, 7019660084, 7019691081, 7019691083, 7019691084, 7019699081, 7019699083, 7019699084, 7019900081, 7019900083 and 7019900084), and originating in the People’s Republic of China and Egypt (‘the product under investigation’).

(15) The Mission of Egypt questioned the legality of the new provisions of the anti-dumping and anti-subsidy basic Regulations (Articles 14a and 24a of the respective basic Regulations) under the United Nations Convention on the Law of the Sea (‘UNCLOS’) and the Union Customs Rules.

(16) The Commission rejected the claim. Article 1(2) of Regulation (EU) No 952/2013 of the European Parliament and of the Council (9) explicitly provides that certain provisions of the customs legislation may apply outside the customs territory of the Union within the framework of legislation governing specific fields or of international convention. UNCLOS is part of Union law. The Exclusive Economic Zone is governed by Part V of UNCLOS, whereas the Continental Shelf is contained in Part VI of UNCLOS. Article 56 of UNCLOS defines ‘Rights, jurisdiction and duties of the coastal State in the exclusive economic zone’, which include ‘the establishment and use of artificial islands, installations and structures’. Article 60(2) of UNCLOS provides that ‘the coastal State shall have exclusive jurisdiction over such artificial islands, installations and structures, including jurisdiction with regard to customs, fiscal, health, safety and immigration laws and regulations’. The list of matters enumerated in this provision is not exhaustive. Article 80 of UNCLOS renders applicable Article 60 also for the Continental Shelf. The International Tribunal for the Law of the Sea has provided further guidance on the above provision of UNCLOS. It held in its M/V ‘Saiga’ judgment that ‘[i]n the exclusive economic zone, the coastal State has jurisdiction to apply customs laws and regulations in respect of artificial islands, installations and structures (Article 60, paragraph 2). In the view of the Tribunal, the Convention does not empower a coastal State to apply its customs laws in respect of any other parts of the exclusive economic zone not mentioned above’ (10). On that basis, under UNCLOS, the Union has the competence to levy anti-dumping and countervailing duties, which are part of the ‘customs, fiscal laws and regulations’. Indeed, the rule-making authority of the Union also extends to the areas on which the Member States have sovereign rights under public international law (11). In sum, the Commission concluded that there is no reason to grant the request by the Mission of Egypt not to apply Articles 14a and 24a of the respective basic Regulations.

(18) Two users originally cooperated in the investigation: Siemens Gamesa Renewable Energy, S.A (‘SGRE’) and Vestas Wind Systems A/S (‘Vestas’). However, after reopening of the investigations, only SGRE submitted a questionnaire reply.

(19) As stated in recital (469) of the GFF AD regulation and recital (1079) of the GFF AS regulation, these two users are among the biggest wind turbine producers in the Union, together consuming above 20 % of the entire Union demand of GFF. They together import above 30 % of all imports from the countries concerned.

(20) As stated in recital (464) of the GFF AD Regulation and recital (1075) of the GFF AS Regulation, wind turbine producers are the biggest users of GFF accounting for around 60–70 % of the GFF demand in the Union. The other users include boat (around 11 %), truck (around 8 %) and sport equipment (around 2 %) producers, as well as pipe rehabilitation system providers (around 8 %).

(21) The wind turbine producers use GFF for the fabrication of blades for wind tower installations on the continent being then shipped and installed on shore or off shore on the CS/EEZ.

(22) According to Table 2 of the GFF AD Regulation and GFF AS Regulation, the total consumption of GFF amounted to 168 270 tonnes in the investigation period.

(23) During the investigation period of the original investigation, approx. 2 600 MW of new offshore wind capacities was added in the EU. One 8 MW offshore wind turbine uses 60 tonnes of GFF for the three wind blades. Accordingly, the EU28 offshore installations in 2018 required approx. 19 958 tonnes of GFF, and EU27 offshore installations approx. 10 118 tonnes.

(24) In 2018 there were no imports under the inward processing regime from Egypt. As a Party to the pan-Euro-Mediterranean convention, Egypt benefits from preferential tariff treatment. Thus, imports of GFF from Egypt are subject to 0 % preferential tariffs as opposed to 5-7 % MFN tariffs. It follows that in 2018 there was no economic justification for parties to import GFF under the inward processing regime from Egypt.

(25) In the reply to the questionnaire, SGRE indicated that it did not import any GFF from Egypt destined for use in the CS/EEZ during the investigation period. Vestas did not provide any questionnaire response shedding light on this matter. In this respect, the Commission noted that already during the original investigation, Vestas failed to identify separately imports originating in Egypt. However, based on the information submitted in the original investigation, and in particular the data provided directly by Egyptian exporters, Vestas imported significant quantities of GFF from Egypt under the normal regime, amounting to between 5 % and 8 % of EU28 imports and between 2 % and 5 % of EU28 consumption (13). These shares would be significantly higher as a proportion of EU27 figures.

(26) At the same time, Vestas had significant new EU offshore installations in 2018, accounting for 30-50 % of all such new installations in the EU28 and EU27. This indicates that significant quantities of Egyptian GFF were brought into the CS/EEZ during the investigation period of the original investigation. There is no information on file contradicting this conclusion.

(27) This conclusion is further supported by the fact that imports of GFF originating in Egypt took place immediately after the imposition of measures under the inward processing regime (more than 230 tonnes in the second half of 2020).

(28) Therefore, on the basis of the evidence available, the Commission concluded that significant quantities were brought into the CS/EEZ from Egypt, contributing to the injury already established in the original investigation.

(29) In 2018 the volume of GFF imports under inward processing procedure from China amounted to 5 343 tonnes. Out of this, the imports of the Member States with offshore installations amounted to 4 835 tonnes—15 % of which corresponded to the UK.

(30) In reply to the questionnaire, SGRE reported imports of GFF from the PRC under both inward processing regime and normal regime for the CS/EEZ in the Union. Inward processing volumes for EU27 alone represented between 1 % and 3 % of total EU28 GFF consumption and between 4 % and 7 % of total EU28 GFF imports in the investigation period (14). This implies that the share in EU27 imports and EU27 consumption would be even larger. As these quantities are above de minimis levels, they are on their own significant enough to cause injury—and thus to contribute to the injury already established in the original investigation. Moreover, the Commission recalled that the injury analysis in the original investigation was made by cumulating imports from Egypt and the PRC. Therefore, any increase in imports channelled to the CS/EEZ can only further contribute to the injury as found in the original investigation.

(31) The parties were informed of the essential facts and considerations on the basis of which it was intended to extend the measures to certain woven and/or stitched glass fibre fabrics originating in the PRC and Egypt to the CS/EEZ. They were also granted a period within which they could make representations subsequent to this disclosure.

(32) In their comments to final disclosure, SGRE claimed that the Commission was bound to carry out a full injury analysis under the basic Regulations before it could conclude any extension of the measures to a new territory, namely the CS/EEZ. It further argued that the Commission limited its injury analysis to the volume of imports of GFF from China to the CS/EEZ in 2018 and failed to examine the trend of imports in the CS/EEZ over the period concerned i.e. 2015 to 2018.

(33) Moreover, SGRE argued that the Commission should have assessed whether it was in the Union interest to impose measures in relation to these imports. It was argued that the fact that Union interest did not prevent the imposition of the initial measures does not sine qua non mean that the Union interest would not prevent the extension of the measures to the CS/EEZ. SGRE claimed that the extension of the anti-dumping and countervailing measures on imports of GFF from China and Egypt to imports of GFF from China and Egypt to CS/EEZ would not be in the Union’s interest as it would contradict the EU’s renewable energy policy of supporting the attractiveness and the competitiveness of the EU wind energy which was faced with price pressure and overall profitability issues due to current market conditions. It further argued that the Union producers do not have enough production capacity to meet growing demand. It was stated that since the imposition of the anti-dumping and countervailing measures in 2020, the EU GFF industry has not sufficiently increased its production and production capacity of GFF to cover the growing EU demand. The Commission noted that no evidence was submitted in this regard, apart from a chart indicating the forecast of the offshore wind installations in Europe during the period 2020 and 2030.

(34) SGRE also claimed that the extension of the anti-dumping and countervailing measures on imports of GFF from China and Egypt to imports of GFF from China and Egypt to CS/EEZ would force user such as SGRE to expand or shift their production of offshore wind turbine blades from EU countries to non-EU countries, thus affecting the Union employment and suppliers.

(35) SGRE further argued that the extension of the anti-dumping and countervailing measures on imports of GFF from China and Egypt to imports of GFF from China and Egypt to CS/EEZ would lead to an increase in costs on the users of the product concerned.

(36) The Commission noted that the Notice of reopening clearly stated that the reopening of the original investigations was limited in scope only to the examination of whether the measures should apply to GFF originating in PRC and Egypt brought in significant quantities to the CS/EEZ. The information contained in the note to the file leading to the reopening confirmed this limited scope. The scope of this investigation follows directly from the wording of Article 14a of the basic anti-dumping Regulation and Article 24a of the basic anti-subsidy Regulation and is also fully in line with Recital (24) of the TDI Modernisation Package (15). The required legal standard in these provisions is that the dumped and/or subsidised product brought in significant quantities to the CS/EEZ ‘would cause injury to the Union industry.’

(37) As clearly spelled out in the Notice of reopening, the particularity of the situation leading to this investigation was the fact that the customs tool provided in Articles 14a and 24a was not applicable at the time of the initiation of the initial investigation. Pursuant to Articles 14a(2) and 24a(2), the customs tool became then available and led to the reopening of the investigation. Nevertheless, as also specified in the Notice of reopening, in the original investigations leading to the imposition of anti-dumping and countervailing duties the Commission already included in its examination imports of the product concerned under inward processing and concluded that the Union industry suffered material injury during the period concerned. The injury analysis in the original investigations covered not only 2018, but the entire period concerned i.e. 2015-2018. The present investigation relied on those findings and aimed to ascertain whether the extension of the duties to the CS/EEZ was appropriate. Therefore, whether the dumped/subsidised product brought in significant quantities in the CS/EEZ would cause injury to the Union was already confirmed in the Regulation imposing the duties. The re-opening of the investigation confirmed the existence of those quantities and the appropriateness of extending the current measures to protect the Union industry.

(38) Given this situation and the relevant legal standard, the Commission relied on the data, evidence and findings concerning injury in the original investigations. The current investigation found that there were dumped and subsidised imports brought in the CS/EEZ in significant quantities, and that they would cause further injury to the Union industry, as they could only aggravate its injurious situation. These claims were therefore rejected.