Which objective(s) does the Commission pursue?

The initiative aims at improving and updating the two key trade defence instruments with a view of notably:

• Increasing transparency and predictability. Interested parties will be informed 3 weeks in advance of the decision to impose (or not) provisional or definitive measures and will be allowed to comment;

• Preventing retaliation. Special circumstances to initiate ex officio investigation will include threat of retaliation;

• Ensuring effectiveness and enforcement by a more focused application of the lesser duty rule in case of raw material distortions or subsidisation;

• Facilitating cooperation;

• Optimising review practice by reimbursing duties collected during the investigation to importers where measures are not extended after a review;

• Increasing legal certainty through the codification of practices stemming from ECJ and WTO rulings

It aims also at assisting SMEs in dealing with Trade Defence cases, both in their capacity as European producers as well as importers liable to payment of duties imposed. The transparency and predictability of the two instruments will be improved by adopting and publishing guidelines in due course.

Outcome of Legislative Procedure

Several amendments aim at further reducing the burden for SMEs when initiating and cooperating in trade defence investigations, these include standard forms or questionnaires in all EU languages. Suggested web-access to information aims at simplifying procedures for all interested parties.

The simplification and administration burden reductions brought by this modernisation can be summarised as follows:

• the investigation period for provisional measures has been cut from 9 months to 7 so as to have quicker relief for industry suffering from unfair trade, with the possibility of extending by one to 8 months after initiation;

• the system has been made more transparent and predictable for EU firms;

• the system will take into account the cost for EU firms of complying with the EU’s high environmental and social standards;

• a new early warning system will let firms know if provisional duties will be imposed so they can adapt to the new situation;

• a new "SME helpdesk" will make it easier for small and medium-sized firms and importers to take part in trade defence proceedings;

• changes to the application of the so-called 'lesser duty rule' will mean that in some cases the EU may be able to impose higher duties on subsidised or dumped goods sold at an artificially low price, where this is in the interest of the EU.

The legislative changes to the EU’s anti-dumping and anti-subsidy legislation entered into force on 8 June 2018. The changes applied to anti-dumping and anti-subsidy investigations initiated after that date.

The implementation of the changes had a significant impact on the day-to-day management of investigations, impacting both procedures and substantive issues.

As regards procedures, the main changes implemented are:

- Provisional anti-dumping measures were imposed within seven or eight months maximum after the initiation of the investigation, instead of nine months, which applied previously. The entire anti-dumping investigation now takes a maximum of 14 months. This has resulted in a stricter application of deadlines throughout all steps of the anti-dumping investigations, including extensions granted to interested parties for replying to questionnaires, arranging verification visits as well as streamlining the decision making process.  

- All interested parties were informed before provisional measures are imposed or not (pre-disclosure). The modernisation changes introduced in June 2018 provided for a pre-disclosure period of three weeks. As a result, all companies were informed in advance which exporters would be subject to duties and at which rates. In addition, the Commission also informed interested parties if no provisional measures were going to be applied. This information was made publicly available online, for each investigation opened after 7 June 2018. During the three week period the Commission registered imports, where warranted, to avoid stockpiling of imports which could undermine the remedial effect of the duties.  This allowed for the retroactive collection of duties for that period, where it was considered necessary. 

- The European Parliament and the Council required the Commission to review the application of this new pre-disclosure rule within two years. That review examined whether or not pre-disclosure had led to stockpiling and additional injury to the EU industry. The review found that no such stockpiling had occurred in the investigations and, as a result, the pre-disclosure period was changed to four weeks, applicable from 11 August 2020.

As regards substantive issues, the main changes implemented are:

- The application of the ‘lesser duty rule’ (LDR). Under WTO rules, measures can be imposed at the level of the dumping or subsidy margin. However, prior to the legislative changes in June 2018, the EU always applied the lesser duty rule. This means measures were always imposed at a level lower than the full extent of dumping or subsidisation, if a lower level, called the ‘injury margin’, is enough to remove the injury suffered by the EU industry.  However, this is now changed and in cases initiated after 8 June 2018 the following applied:

o In anti-dumping cases where there was evidence that important raw material costs were distorted, the duty is applied at the level of the dumping margin;

o In all anti-subsidy cases the LDR has not been applied - this is now the default and the LDR will only apply in anti-subsidy cases where it is proven that imposing a duty at the level of the higher subsidisation margin would be against the Union interest.

- When the duty is based on the injury margin, the non-injurious price now includes future cost increases reflecting the cost of compliance with multilateral environmental agreements and International Labour Organisation Conventions

- TDI measures can now also be applied to imports destined for the continental shelf and exclusive economic zones of Member States, where the consumption of the product concerned there is significant. A specific customs tool was developed setting out the rules on how the collection of TDI duties in the continental shelf / exclusive economic zone of Member States works - Commission Implementing Regulation (EU) 2019/1131 of 2 July 2019.

- Where expiry reviews initiated after 8 June result in the measures not being renewed, any anti-dumping or anti-subsidy duties collected while those expiry reviews were ongoing would be repaid. 

Other changes implemented since the modernisation of the trade defence instruments in June 2018, include:

-  the creation of a dedicated web page to help SMEs affected by the trade defence instruments, strengthening the SME helpdesk as well as issuing a specific TDI guide for SMEs.

- Improvements to the Annual Report on the EU’s trade defence activity to the European Parliament and the Council including information on how TDI cases have addressed third countries’ compliance with international social and environmental legislation, information on TDI investigations and measures taken by countries against the EU and its Member States, as well as information on the activities of the Hearing Officer and the SME Helpdesk.